Monday, November 15, 2010

Zero Sum in Econolalaland

We have built a fairly impressive edifice on the idea of perpetual growth.  6.8 billion people being more or less fed in an adequate manner and alive and kicking to try again tomorrow.  You really do have to look at the effort expended and the results as kind of a miracle.

The miracle is, as such things usually are, based on faith.  We have always felt that there was enough of everything to do what we wished.  This simple faith allowed us to believe in a steady upward path, where the next year we would have more and would be better than the years behind us.  An entire industry/culture grew out of the perfectibility of the human race and our climb to the role of demigods.

But, suppose for a moment, that there are in fact constraints on the inputs supplied by the planet and the materials we use to fuel the material growth.  What if there are limits to the amount of oil in the ground?  What if after pulling down the Iron Range, we find that it is difficult to keep feeding the smelters?  What if the source of rare earth metals decides that it in their best interests to control the extraction and sale of the same in order to allow for growth later on?

Now, our old buddy Kondreitieff kinda thought that the world was a cyclical place.  There have been a bunch of graphs drawn using his ideas and for a long time, they pretty much matched reality.  Up through the great depression, it matched real world data just dandy.  Since then, it has been pretty suspect. 

What I am thinking happened is that the normal readjustments seen on the left side of the graft were successfully short circuited by going off the gold standard back in the 1930's, and then managing a short-term fix with Bretton-Woods and all of the other chicanery (Plaza Accords and other such rot).   Over all, it wasn't a bad run, but it would appear that the fixes are having to be applied fast and furious now.  Holding the edifice together appears to be quite problematic.  

You see, I would posit that economists and politicians forgot that economies and countries have long-term timelines.   The fixes that were put in place were simply overrides of well-established safety controls.  It did allow the machine to increase it's output, but it may have damaged the machine in the process.  

The system has all of the appearances of having this existential crisis.   The system has been allowed to grow out of its bounds.  The question seems to be for a lot of the world is how can we restart growth.  For most of us in the gloomy end of blogoland, the more cogent question is, how do we manage decline.


Muddome said...

I have no idea how overall society will manage the decline, if at all. Personally, my management plan is made up of critters and community, guns, gardens and greenhouses. And of course, learning all the various no-tech skills my great-grandparents had that will be essential to survival when the lights go out.

Mayberry said...

Management of the decline is where things get dicey. The PTB still wants to be in charge, at increasing levels, but the resources that allow this are becoming scarce. I don't see how, given our stubborn tendency to march in a straight line, major resource wars are not inevitable. Most folks just want the band to keep playing as the ship goes down...

russell1200 said...

If you like Cyclical history that isn't third grade silliness:

You would probably like Turchin. He comes at from number crunching biologists point of view. The first chapter of his Secular Cycle (which I have seen as pdf online) is an excellent summation that is not nearly as derogatory as Taunter's.

Kondreitieff get some respect from historians interested in cyclical dynamics(not economists), but I get a sense that they feel that it does not all come together as a package.