Author Topic: steady state economy  (Read 4204 times)

kib

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steady state economy
« on: November 28, 2014, 09:08:38 AM »
I find myself wishing that I could live in more of a steady state or even a gift economy.  To be honest, I find the concept of a growth economy upsetting; it's so obviously not long term sustainable and has everyone at each others' throats as it destroys the 'earth ship' we all need in order to survive.

So ... Without ever having heard of MMM I've lived my life for years with many of his principles, and find myself retired at 50 with a healthy $800K+ net worth, no debt, yada yada and so on.  And yet I feel uncomfortable.  I have certainly not embraced steady state or gift economy in my life to this point.  I have real estate, and bank investments, no stock portfolio, but I feel so ambivalent!  On one hand I want to shift my model to something higher than a capitalist modality, and on the other hand, I feel both guilty, uneasy and maybe a little depressed about the idea of losing the high of making money and the satisfaction of numbers and charts going "in the right direction".

Does anyone else struggle with this?  Have you found a way to incorporate Badassity and capitalist withdrawal?

RichMoose

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Re: steady state economy
« Reply #1 on: November 28, 2014, 09:56:50 AM »
I would say that rampant consumerism, not a growth economy, destroys the "earth ship". The big problem with steady state or gift economies are that they lack a driver for competition. This ultimately leads to laziness or complacency. If there was no or little competition there would be little or no innovation, because there wouldn't be a desire or need to do more with less.

True, the fact that we compete for resources creates some harsh circumstances or even brutality in the form of wars etc. But it also means that farmland today produces over 8500kg of cereals per acre of farmland in densely populated countries like Belgium and the Netherlands, but only 2100kg per acre in Russia. That drops to less than 1000kg per acre in many African countries.

In my opinion, capitalism is the best system from all the options we have.

kib

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Re: steady state economy
« Reply #2 on: November 28, 2014, 12:44:00 PM »
So that would be a "no", then.  :-)

GordonCopestake

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Re: steady state economy
« Reply #3 on: November 28, 2014, 11:33:45 PM »
If someone would propose a viable alternative to our current economics people might listen. However I'm not aware of any alternatives that are workable long term.

MsRichLife

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Re: steady state economy
« Reply #4 on: November 29, 2014, 02:52:46 AM »
I don't have the time right now for a lengthy reply, but just wanted to say that I do feel similar to how you feel. I have been served well by the current capitalist system, but see that it has become increasingly distorted and inherently unsustainable. I get the sense that not many folks around this forum feel this way.

deborah

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Re: steady state economy
« Reply #5 on: November 29, 2014, 03:16:00 AM »
If you look at Guns, Germs and Steel (the book), it says that the two societies that contributed the most new ideas to the world were the ancient Chinese and the ancient Greek. neither of these was capitalist. Both appear to have been some of the more enlightened of the early societies.

The problem of self-sufficiency is that often it is just you hunkering down in your own little bit of earth (like a medieval hermit), not forming a society, or forming one that is an inflexible community that really only works for the able-bodied in their early adulthood with small children, and not giving the children flexible options.

kib

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Re: steady state economy
« Reply #6 on: November 29, 2014, 02:34:13 PM »
That's a good point, Deborah.  I've considered places like Dancing Rabbit which seem to operate on something of a gift/barter ideal within the community, although they are still dependent on the larger economy for the usual give and take of cash for taxes, cash for insurance and so on; big enough that the community isn't so rigid. 

There is a whole lot of psychological shift to the idea of a gift economy; we're totally not socialized to think of doing productive work as being its own reward, but most of the great thinkers and inventors seem to have been motivated by something far beyond making a buck; I think it's the financial incentivisor that's the artificial construction.

wtjbatman

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Re: steady state economy
« Reply #7 on: November 29, 2014, 03:56:15 PM »
If you don't like our earth ship, feel free to leave.

mozar

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Re: steady state economy
« Reply #8 on: November 29, 2014, 07:55:22 PM »
The best part about democracy is being able to express discontent, you know, free speech and all.

That said capitalism is just a highly sophisticated barter system. Instead of trading goods, we exchange cash for the good, which can be exchanged again. There are lots of different ways you can do capitalism though. I often argue that the US isn't a capitalist society, as much as socialist-crony capitalist market, where we capitalize gains and socialize losses. One could argue that we should go to an entirely free market but that was tried before and it was a disaster. 100 years ago the economy would completely collapse every ten years. Forget about being able to maintain a lifestyle for a number or years. Imagine losing your life savings every ten years because of rich people speculating. The great depression was so bad that the government decided to regulate the banks, which led to the Glass-Steagall Act.

On the other hand there could be greater government control, which leads to socialism, which makes people in the USA chafe. You have to choose either a high quality of life for most people and getting super rich quickly is unlikely, or a lower quality of life for most and a few people can get very rich (think rags to riches narrative). In the USA we have chosen the latter. I wouldn't be saving all my money if I lived in the former, and life wasn't such a struggle.

In the end, I think it's more important to consider what humans actually do instead of wishing for something different. Bartering for goods is appealing because it forces you to live more simply, but if you can live more simply you can avoid the stress in the first place. Humans will always think of new ways to exchange goods and create currency (think beads, shells, gold coins, paper, now digital). I think about how we can get the most people to have a high quality of life.

kib

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Re: steady state economy
« Reply #9 on: November 30, 2014, 08:26:05 AM »
If capitalism the way it's practiced was simply an honest extended barter system for useful goods and services I wouldn't have such a problem with it; while I like the idea of a gift economy I think it's beyond us at this point.  What I disagree with is the hyper-focus on profit, the way the externalities of our growth system are completely ignored or foisted off on the poorest, making the system appear to be working because the damage is not visible to the privileged (you and me) when in fact it's rapidly turning a liveable world into a garbage pile.  Which, as I said, is where I start to feel queasy because my handlebar mustache was certainly grown and groomed by being hyper-focused on profit myself.

BlueMR2

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Re: steady state economy
« Reply #10 on: November 30, 2014, 12:30:52 PM »
If you don't like our earth ship, feel free to leave.

I've been trying to, but am having a hard time getting the requisite equipment together.  I'm going to need an interstellar class starship that's fully automated, just for starters...

MsRichLife

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Re: steady state economy
« Reply #11 on: November 30, 2014, 07:31:57 PM »
If you haven't already, check out Chris Martenson at Peak Prosperity. His explanation of the three levels of wealth really resonated with me.

Quote
We can think of wealth as coming in three layered forms; at the bottom of the pyramid is primary wealth, then secondary wealth, and finally tertiary wealth.

The original landed gentry were as wealthy as their lands were productive and their holdings expansive. Before the industrial revolution, in other words not too terribly long ago, this very basic connection was not only well understood, but it formed the basis for societal hierarchies.  There were wealthy people who owned land, and there was everybody else.

The reason for this is simple; land is the source of primary wealth.  Rich soils, concentrated ores, thick seams of coal near to the surface, oil, running water, and abundant fisheries are all examples of primary wealth.  Today we might call this our natural resource base but once upon a time owning it was the literal difference between a life of ease and a life of hardship.

Secondary wealth is what we make or transform from primary wealth.  Ore is transformed into steel, abundant fisheries lead to fish on the table, soil becomes food in the store, and trees become lumber.

The final layer, tertiary wealth, is all the paper abstractions that we layer upon the first two sources of wealth.  Derivatives, stocks, bonds and every other paper vehicle you can think of is a form of tertiary wealth.  Tertiary wealth is a claim on the other two forms. But that's all it is.  Tertiary wealth is a claim on sources of wealth, not a source of wealth itself.  The distinction is vital.

Without primary wealth there cannot be secondary wealth; and without secondary wealth there cannot be tertiary wealth.  They form a long chain of wealth that begins with the abundance of the earth and ends with some impressively complicated paper-based abstractions that even the brightest Wall Street minds don't seem to fully understand.  In fact, without the prior forms of wealth, tertiary wealth has no value at all. Which is very important to understand, because for many of us, tertiary wealth is all that we know. It seems very real to us and we base much of our future expectations based on how much if it we hold.   

What about money, how does it factor into the wealth story?  Money can be, and even should be, a store of wealth, but it is not wealth itself.  The same as a stock, bond, or derivative, money is a claim on something.  And that's all it is.  A claim.  It's not actually wealth itself.

Money has value because, and only because, it can be exchanged for something which, if we go far enough along the chain, is always a form of primary or secondary wealth. As long as money exists in a delicate balance with actual sources of wealth then it will retain its perceived value.  In times where money is over abundant or resources are scarce, the relationship can and usually will change dramatically, a process we call inflation or deflation depending on the circumstances.

As long as money, and stocks, bonds, derivatives and every other tertiary claim, are in a rough balance with real wealth, then everything is fine.  But history is littered with times when this balance got seriously out of whack, as it is today, and the defining feature of those times was what is usually called 'wealth destruction.'

http://www.peakprosperity.com/crashcourse/accelerated

kib

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Re: steady state economy
« Reply #12 on: December 02, 2014, 12:04:40 PM »
"As long as money, and stocks, bonds, derivatives and every other tertiary claim, are in a rough balance with real wealth, then everything is fine.  But history is littered with times when this balance got seriously out of whack, as it is today, and the defining feature of those times was what is usually called 'wealth destruction."

I agree, tertiary wealth creation is SO out of line with real wealth, and it's snowballing, a paper blizzard ultimately worth practically nothing.  But one thing missing from the equation is the fact that primary wealth is finite, inter-related, and alive.  If you kill the golden goose, whether that means carbon dioxide and methane glut or overfishing the oceans or strip mining mountainsides, eventually the primary wealth isn't worth anything and all of it comes crashing down. 

Thinking a little more on this, tertiary wealth based on nothing is dangerous.  But living in a world with the physical capacity to force a conversion of primary wealth far beyond what the system can sustain, a process with apparently no incentive or ability to regulate its appetite is, ultimately, even more dangerous, it's fatal.
« Last Edit: December 02, 2014, 01:20:29 PM by frufrau »