By Chris Trotter*
Timothy Snyder's book Bloodlands: Europe between Hitler and Stalin is not an easy read. Published in 2010, it catalogues in excruciating detail the intentional killing of tens-of-millions of helpless civilians by the Soviet and Nazi regimes between 1933 and 1945.
“Mr Snyder’s scrupulous and nuanced book steers clear of the sterile, sloganizing exchanges about whether Stalin was as bad as Hitler”, The Economist’s reviewer noted approvingly. “What it does do, admirably, is to explain and record. Both totalitarian empires turned human beings into statistics, and their deaths into a necessary step towards a better future. Mr Snyder’s book explains, with sympathy, fairness, and insight, how that happened, and to whom.”
Snyder’s relevance to the present global convulsions is not solely on account of the eagerness of some commentators to engage in the same transformation of living, breathing human beings into statistical sacrifices to “a better future” – although that eagerness is as telling as it is troubling. It is, rather, Snyder’s observation that: “Ideology cannot function without economics” that is of particular relevance to the intensifying debate over how best to steer the global economy out of its Covid-19 Pandemic-induced economic crisis.
When the Wall Street Crash of October 1929 set off a concatenating economic crisis across the entire planet, the initial response of political and business leaders was to reach for the remedies prescribed by the economic orthodoxy of their day. This was best summarised by the advice tendered to President Hebert Hoover by his Secretary of the Treasury, Andrew Mellon:
“Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people.”
About the only redeeming aspect of Mellon’s ruthless prescription is that it contained no suggestion that any sector or institution of the American economy was “too big to fail”. Banks collapsed alongside businesses large and small. Retrenchment and austerity played no favourites in the initial official responses to the unfolding global crisis: everybody (including, famously, Winston Churchill) was wiped out without distinction.
In Germany the response was every bit as tough as in America. Following the collapse of the Credit Anstalt Bank in 1931 – which moved the needle decisively from economic crisis to full-scale economic catastrophe – the Centre Party-led Government of Heinrich Bruning responded with a further tightening of credit and more swingeing wage cuts. The misery index, already sky-high, climbed even higher, forcing the Weimar Republic into the increasingly destructive hands of its enemies. With Communists to his Left and Nazis to his Right, Bruning had to rely on the emergency decrees of President Hindenburg to keep the engines of state from stalling altogether.
In the grip of crises as serious as the looming Covid-19 Depression, commentators are quick to reach for the cliché about those refusing to learn the lessons of history being condemned to repeat them. With reference to the disastrous consequences of the retrenchment policies of the early-1930s, however, it is very hard to deny that everyone – financiers, industrialists, politicians and journalists alike – have learned the lesson of that particular chapter of history by heart.
When the global financial system teetered on the brink of collapse in 2008-09, the world’s politicians moved with admirable speed to spend whatever it took to keep the banks’ doors open. Ten years later, with the head of the World Health Organisation imploring national health authorities to “test, test, test” against the Covid-19 virus, the defenders of twenty-first century economic orthodoxy are imploring their governments to “spend, spend, spend” to prevent the capitalist system from crashing and burning. Those governments have responded by spending like there’s no tomorrow.
Behind all this spending, however, looms a terrifying historical spectre. What if the true lesson to draw from the history of the Great Depression is not, as everyone supposes, to simply spend one’s way out of a crippling economic crisis? What if the true lesson to be drawn from the 1930s is: don’t be guided by the prevailing economic orthodoxy of your times? Because, if that is the lesson to be drawn, then all around the world the financiers, industrialists, politicians and journalists have got it wrong.
Is that why History’s spectre is so terrifying? Because it is shaking its grisly head at our incorrigible folly?
It is important to grasp that the economist generally accorded the honour of casting the market-driven economic orthodoxy of the Depression Era into the “dustbin of history”, John Maynard Keynes, only published his signature work, The General Theory of Employment, Interest and Money, in 1936 – well after the worst years of the world-wide crisis had passed. Indeed, it is possible to argue that all Keynes did was create a plausible theoretical explanation for the success of policies adopted more-or-less in desperation – because everything else had been tried and nothing had worked.
The other man associated with defeating the ruthless orthodoxy of Mellon and his kind is President Franklin D. Roosevelt – whose “New Deal” was for many years credited with hauling the United States out of the Great Depression. Few now remember that Roosevelt ran for office in 1932 on what was, by the standards of the time, a pretty orthodox economic platform. Had he not done so, he may not have won.
Roosevelt’s famous promise of a “New Deal” for the American voter, like Barack Obama’s stirring speeches about “hope” and “change”, played well on the hustings but were more rhetorical flourishes than detailed programmes of action. What led Roosevelt to the boundaries of orthodoxy and beyond was the dramatic deterioration in the American economy between the date of his election (November 1932) and his inauguration as President (March 1933). On the day he gave his inaugural address (in which he famously declared “the only thing we have to fear, is fear itself”) just about every bank in the United States had closed its doors.
It was the unprecedented scale of the economic crisis confronting his new administration that prompted the observation that defines Roosevelt’s presidency: “The country needs and unless I mistake its temper the country demands bold persistent experimentation. It is common sense to take a method and try it. If it fails admit it frankly and try another. But above all try something.”
It is precisely Roosevelt’s willingness to support what actually worked, rather than what was supposed to work, that separates him so decisively from Stalin and Hitler. All three men were required to grapple with the economic realities of their time, but only one of them did so unconstrained by rigid ideological orthodoxies. Roosevelt was no saint: by no means all of his decisions were correct or even ethical. At no point, however, did he ever lose sight of the fact that the statistics placed before him by his “New Dealers” – and then by his military advisers – represented living, breathing human beings.
Unlike Hitler and Stalin, Roosevelt created no “bloodlands”.
*Chris Trotter has been writing and commenting professionally about New Zealand politics for more than 30 years. His work may be found at http://bowalleyroad.blogspot.com. He writes a fortnightly column for interest.co.nz.
90 Comments
Interesting points. History implies FDR was certainly the man for the moment. The last President to successfully cross party lines with his think tank employing the like of Henry Stimpson for example. However noted historian Paul Johnson would claim FDR with regard to the recovery, was as over rated as his predecessor Hoover was under rated in that Hoover has already fashioned much of the recovery framework that FDR inherited. The two men hated one another, so much so that FDR denied Hoover security protection even though he had been the obvious target & recipient of multitudes of death threats during the depression.
Some interesting historical information, but I'm not sure if it applies today.
Everyone will agree there is money printing going on like you have never seen before, and its likely to continue; at least until the masses get fed up with it.
I'd encourage everyone to watch this: https://www.youtube.com/watch?v=F8lfLqnhuGs
Deflation looks unavoidable; as much as the moneyed men are in denial to this. Course we can understand why the're in denial because it cripples their ponzi scheme; and effectively shuts their private tax scheme down.
Maybe Gareth Morgan's UBI (Universal Basic Income) is required before (western) governments realise it. In essence with the $585 per week, its operation now.
This is a complete failure to step back and see the big picture.
Economic activity is up against planetary limits, and the combined bets had already overshot the underwrite.
Yet we are still comparing a fully-resourced planet with 2 billion inhabitants, to a resource-depleted, overpolluted, overpopulated one? Time we moved on.
I'm sure they're scared.
But I presume you mean sacred.
Sorry, they are merely members of an overshot species. The choices are self-limitation, or ever-increasing repetitions of what we are currently experiencing.
The fact that we - self included - want to keep living, is no reason for the five/six billion overshoot to be avoided fact-wise. That is the pathway to belief-based creeds like religion and growth-forever economics.
Hardly "extreme stuff", merely calling the numbers as they stand. Either accept the numbers and voluntarily act on them, or believe in fairy tales of human exceptionalism, exponential growthism and divine intervention, and discover the unpleasant realities of a cold hard universe.
This 'basic human right' stuff is endemic - from Nat voters right across to Marama Davidson.
But you cannaé have unfettered 'rights' for an unlimited population of one species within a finite habitat. Doesn't matter how self-important members of that species think themselves, AJ.
Wow, what a leap. From accepting the bare faced problem, to extermination camps in one bound. I would phrase the whole issue more along the lines of reality deniers, intoxicated with their own self importance, demand acceleration of humanity and most of the biosphere, towards destruction. Shame many don't have the imagination to understand, there is a vast expanse of middle ground between steralising the planet with economic dogma and physically culling humans?
how do you sterilise the planet? As far as I can see there is plenty of food, technology is still racing ahead with electric cars, new reactors for clean energy, etc.
We do have problems with population growth in some regions but at the same time Asia is in rapid decline and that's 1 in 4 people just in China. Slowly countries like Iran are starting to see steep falls in birth rates. Many of the problems are around corruption and poor governance in places like Africa.
AJ, you need to see farrer, then.
Try downloading Catton's Overshoot, and then the Limits to Growth books, including the latest update.
And remember that the corruption and poor governance are often instigated by our economic system demanding slave wages and resources for nothing.
It appears locals will work in horticulture, provided the wages are supplemented by other income (in this case the government's COVID wage subsidy) which is not clawed back as a result of them taking on additional work (Jobseeker benefits are clawed back);
https://www.stuff.co.nz/business/farming/120894404/coronavirus-kiwis-gr…
I think this tells us that a form of UBI (i.e., what the COVID wage packet and the NZS are) is perhaps what is needed to solve our seasonal worker shortages in horticulture. The unemployment/jobseeker benefit is not a UBI - it is means-tested, and hence clawed back if you find part-time or casual work. I think the claw back is around 80cents on the dollar - so for each dollar you earn picking fruit you end up with 20cents in hand.
Heard of the 6th extinction event? https://www.theguardian.com/environment/2017/jul/10/earths-sixth-mass-e…
You agree we do have a population problem? In developed countries, it's just as much a consumption problem. So if humans are turning the planet into an unsurvivable hell hole, how does the concept of exponential economic growth mitigate this? Answer? It doesn't. It exacerbates the problem. What is economic growth but consumption growth? Do you get individuals to consume more, or create more individuals, or both?
there is a good reason people don't want to get where you and PDK are going. Yep mankind is seriously screwing up, but lots of good things happening too.
When it comes to survival then perhaps some races that see themselves as superior will fight for what left, all I know is that if life is not sacrosanct then bad things can happen.
I sometimes think things are not what they appear on the surface.
https://www.theguardian.com/society/2020/apr/10/uk-coronavirus-deaths-b…
You don't have a global cull, you use genetic testing and code everybody and limit breeding to those with a standard of genetics above a minimum threshold. Yes sounds like Hitler all over again doesn't it except Hitler was making the assumption that just because you made top level in SS you were somehow genetically superior. Yes pretty hard to accept, however the alternative is that we run head long straight into a brick wall at some point in the not so distant future and we get a huge number of people dying anyway. Like it or not the population growth WILL be limited either by choice or by force due to limited resources. Either way only the strongest will survive.
I propose we open our minds and listen to Mother Nature;
So, with the virus, is Gaia giving us a last chance to learn to love and value the local, to be small, to slow down and consume far less, to be humble, and to be beautiful again as a species within her vast lustrous earthly body?
As a mother, she is tough perhaps, but in the end possibly a strangely kind one if the virus makes us realise what will happen when climate change becomes unstoppable because of our endless lust for economic growth.
https://www.schumachercollege.org.uk/blog/gaia-and-the-coronavirus-by-s…
Good link Kate.
Shooting the messenger is a common was of avoiding an issue. If they actually asked what I suggested (rather than putting abhorrent concepts in the ether, attributing them then shooting them down).........
In NZ's case, a reduction to zero, of immigration (we falsely accounted via GDP, that more is better; it isn't). Then an urging of a two-child limit, and a financial disincentive for more. We are at the point where we have to be cognitive enough to realise we are playing 'god' now, and have to be as responsible as the position requires.
Well, yes. In the past economists have been seen as the senior/elite/ultimate drivers of policy (in NZ that is, Treasury). I'd like to see that senior/elite position replaced by ecologists. That's not to say we don't need economists, only that their body of knowledge should not ultimately drive our decision-making - ecology should.
And I wouldn't by any means suggest a two-child limit is at all relevant for NZ. Such a number is junk science - "finger-in-the-wind" type stuff. The right/sustainable population of humans relates to the ecology of a place - as this basic explanation of the discipline points out;
Good call. Suppress immigration as we are allowed to do. if the Moriori had border controls things would be a bit different round here. Same goes for some of the later immigrants. Maori, British etc. But we do have border controls, so we can use them to our advantage. Not for the advantage of foreign owned businesses to import cheap foreign labour, but for the benefit of Kiwi owned businesses and taxpayers and union members in general. If we could keep the South Island population under a million that would be good as well.
I have also wondered about the biblical prophesies. There is plenty of evidence to suggest that we are not the first technological age of our species on this planet, the last one petering out around 10 - 14k years ago (although there are many 'experts' who will deny this). The Incas identified that we were in the 5th age of man. Are the biblical prophesies remnants of those previous ages? Telling us of the consequences of unrestrained consumption and greed without due consideration for the limitations of our environment?
Perhaps the government has already played that card, unwittingly undoubtedly but nevertheless with dire consequences. It is very strange that the first decree by the government was that the elderly & pre-existing vulnerables were to get out of and stay out of harms way. Yet the rest homes which are full of exactly those sort of people were left virtually wide open. We know that because we have a relative in that situation and ingress and egress carried on business as usual right up to level 4 being enforced. Our enquires were met with we haven’t been told to do otherwise. Survival of the fittest sure but that don’t mean forget about protecting the weakest when precautions could have been easily taken. So now we have the government explaining away why there are clusters in rest homes and why those clusters are producing deaths. Think we can figure that one out for ourselves.
I am disgusted by the comments here in response to PDK's statement about population.
These are extreme statements in comparison to what PDK said. If "Kill yourself" and "Extermination Camps" is the only solution you can see for the issue PDK illustrates then your thinking is deficient. And offensive.
Think it through. Already New Zealand has a stable population, it could even been declining slightly, if we took out the immigration factor. So not to hard to reach a better population level that is down.
Please, disagreement is fine, but think it through and don't just toss in the offensive. (and maybe apologise)
The 30's followed the excesses of the 20's. The easy monetary policies of the decade before led to the depression of the 30's. The share markets and this includes Germany, became gambling dens, people lost their minds.
Now we have a similar problem, the easy money and low interest environment of the last decade has led to overshoot. We need to somehow correct in a managed careful manner, limit damage while at the same time not protecting failed business models, yet keeping as many jobs as possible.
The gov't will eventually be faced with some very difficult decisions due to poor policies over the last decade.
“the easy money and low interest environment” therein lies a story. Basically the depression recovery new deal in the USA was public works, same here too with the working gangs. That put money in workers’ pockets, food on the table. Big difference between the worker of then and that of today, and that is debt, personal debt. Nobody in 1932 had a maxed out credit card to cope with.
The crazy thing was though, no matter how loud you made your voice or pushed your views that this is madness (the last 10 years as everyone was treating housing and sharemarkets like a casino - akin to the 1920's) that we need to slow this down because its going to end in disaster - you get labelled as a DGM, or having a bad attitude, to lighten up. Its madness dressed up as sanity or goodness that has got us into this position (i.e. John Key and many neoliberal capitalism leaders) who have been given knighthoods etc that encouraged the exact policies that have led to the present. Those same people are now leading the banking sector, which we are told are 'too big to fail' and have been making 'record profits' and pay executives salaries that make your eyes water - while telling you term deposits are risk free, but no guarantee, so here's a negative real return for your TD after you remove taxes and adjust for inflation - while we'll use your deposit to speculate on house prices via ever increasing debt.
If we could just admit to ourselves that our way of living and being as a society has been broken, probably for the last 20-30 years, then we can move forward. But many I talk to, most of who have skin in the game and were making $$ at the expense of others, simply want to go back to how it was. So our society is probably going to be ripped apart if we try to change the system. Those who were benefiting vs those that were not.
The answer/s aren't easy. It could become a very delicate process politically - civil unrest could be the outcome. I know many in their 20's and 30's have given up. They take no ownership or care for the way that those in their 50's, 60's and 70's see the world (and vice versa). Change is coming in my opinion, its how the older generations manage that change will be critical - for they are in many management/executive positions and have the power to influence/make change within the current form of society as we know it. However I find that many in that generation still appear to have a 'victim identity' that they need to get past (we've had it so tough millennials...listen to how hard we've hard it, we deserve expensive assets because its been so tough - ok the story has been heard, lets start doing the right thing now), before they can see the need to do things that will make NZ better in the future, as opposed to maximising profits/asset values for themselves, right now. Doing the right things from a utilitarian view will be critical - so we need to move beyond the me/now/FOMO paradigm that to me has been the (negative) psychology at the heart of all this.
Agreed about the 'victim identity' of the older generation. What I find interesting is when you listen to people in that age group (especially the older ones) describe how 'tough' they had it, what they are describing as hardships - being out in the workforce at a young age, having to work overtime, having to pay a mortgage on one salary while Mum stayed home to look after the kids - are things millennials regard as luxuries. Being able to walk into a job that pays well enough to afford a mortgage straight from school is almost unheard of now, as are things like 'overtime' and being able to afford to have one person stay home and look after the kids.
The share markets and this includes Germany, became gambling dens, people lost their minds.
Brings to mind:
I'm hesitant to draw parallels between The Great Depression and current events. During The Great Depression you had not only a liquidity crisis (crops spoiled in fields while the urban poor went hungry because there was no liquidity) exacerbated by bank failures but then compounded by the subsequent a productivity and ecological catastrophe in the Dust Bowl.
We only face a virus that will likely kill circa 0.2% of our working age population.
smithfield is closing plants expecting meat shortages, beef plants down too.
https://www.argusleader.com/story/news/2020/04/12/smithfield-foods-clos…
I think you missed the weakness that was developing in our economic system prior to the virus. It was just going to take a trigger to expose it. Causing weeks of shutdown in the economy is just making it plainly obvious how unsustainable the direction our economy was heading was.
out of curiosity IO, what economy could sustain weeks of no economic activity on a global scale? I do not mean that everything was honky dory and the viurs turned a heaven into hell. But something that causes weeks of shutdown will bring any economic system down. I have to say that my assumption is that there is a level of specialisation and we are not talking about a society without any trade.
Did you see how much cash Buffett was sitting on prior to this? Have you heard the saying 'well see who is naked when the tide goes out'.
Our model has businesses and house holds swimming naked....but in an oddly narcissist manner proud of how expensive their share price or house valuation is. Do we laugh at them now when the tide goes out? Or do we hold their hand while they put some togs on in public?
When the times are good we must be saving....but we weren't. If we had, we could have survived four weeks in lock down.
Instead of the average house being worth $600,000 it should be $300,000 and giving space for people to save. Interest rates should be 5% for savings - to encourage it. Instead we've created a culture of speculation and not saving. That is where our problem is - our greed and FOMO - our need to be better than others.
How could we have a 'rockstar economy' but no capcity to save (both businesses and private) so that we could survive 4 weeks of lost income. Clearly it wasn't a rockstar..clearly if people can't save.
Lets say you are 100% right with all you say. Houses must be $200k even. I did not defend the system as it was, I am just asking a simple question: what economic system can sustain for weeks of global shutdown? many people would have lost their jobs in the exact same way. How much saving people needed to have to survive a prolonged depression? 2 years worth of their annual income saved? three years saved? if you are in significant debt, you will be bankrupted and your assets (which are not yours if you have significant debt against them) returned. You end up in the same place as others who had no debt and no income very quickly.
For our society The problem is NO income from NO economic activity. Debt is the problem of the rich (who were actually able to save money as you have pointed out and who will lose their saving). I do not see how any other economy would have survived this.
Are you assuming that they could buy properties with no debt? if they "chose" not to buy, they would have been renting. Once they lost their job, they would have lost the ability to pay rent sooner or later. So they would have needed to empty the place sooner or later. They would have been broke without being bankrupt. The mortgagees in the same situation will go both bankrupt and broke. Being bankrupt or broke in depression do not make a huge difference.
Without a secured (or at least probable) source of income, you have no ability to borrow either. Really does not matter if you already have a lot of debt or no debt at all. So without the income coming in, you would end up in the same place, unless off course you are Warren Buffet or other wealthy individuals who have tons of money.
What have we learned from those events though? Those situations exist now and were evident before the virus pandemic.
We have ecological issues, some of which appear to be slightly softened by the reduction of industry. We have productivity issues according to economic measurements, maybe those measurements and our concept of productivity is flawed. We had bank liquidity issues already so we obviously learned nothing there. Obviously something is flawed if food in the fields can't get to the hungry in need. Why should a lack of debt prevent this from happening?
We've learned nothing from the Great Depression, nothing from the Dust Bowl, nothing from banking crisis after banking crisis, nothing from our wars, literally nothing from history, because we keep ending up in the same situation time after time.
Yet we seem to be chomping at the bit to go back to "normal".
Minds won't be focused until we come out of lockdown currently everything is frozen consequences wont be visible until lockdown finishes . Lesson from this article I see is if you keep doing the same thing and expecting a different result it really is the definition of stupidity as quoted
This is something, people rarely/won't like to discuss in NZ;
https://www.scoop.co.nz/stories/HL1507/S00101/the-fire-economy-new-zeal…
https://www.youtube.com/watch?v=MGrBCtOt4Qs
I agree with Mr. Trotter to a point. Doing the same thing that got you into a mess won't actually help. However, what actually got us into this hole and what should we do to get out? The answer is rather obvious; the government shut-down the economy. This is the Great Suppression. So the answer is for the lockdown to end and allow business and individuals to get back to work. How do we kick start the economy since the government suppressed it? I suggest it is not more government intervention but less. Cut taxes and regulations - that puts real money into people's pockets straight away and will allow people to take a chance and start new businesses.
Step backwards, more likely. You should re-jig your monniter.
Try doing some homework; there's an extensive reading-list attached to my most recent piece here:
https://www.interest.co.nz/opinion/104187/murray-grimwood-says-its-time…
By the time you've finished (I'm talking hypothetically, you won't go anywhere near any of them, is my bet) you'll realise that even if every rule was removed from social restriction, completely, the last doubling-time still beats you. Every time. So your Trump-like complaint is doomed to early failure, leaving us a bigger mess than that we are already in.
One thing I know, it that we are starting to understand what dinosaurs sound like :)
No, I understand your view quite well but I disagree with it. In theory the Earth has finite resources but I don't think we are anywhere near it. The problem with your view is that there is never an explanation how the most successful companies recently - Google, FB, Microsoft etc, - use very little resources. Ideas, which is the bases of our economy is infinite; ideas will never run out.
Also the history of economies over the last 250 years is that we are doing far more with less. I believe that this will continue and we will use less resources to achieve even more.
Bollocks. The companies you list all use energy (what do you think all those server-farms run on? those computers got made using?)
I don't mind if you trade in ideas indefinitely - but the moment you expect to trade them in for a pound of butter, a cake of soap or a BMW, you are back to the finite world.
And we are not, indeed, doing more with less. You may recall the bewilderment with which economists (trained to fly blind) cannot fathom the plateauing of 'productivity'. The reason is that work efficiency comes up against thermodynamic limits. Unlike economic 'rules', they are real ones.
Productivity improvement in last 30 years, for those actually doing the hands-on productive work in manufacturing, agriculture and building has been tremendous. What has destroyed all the gains is the rising tide of regulatory overheads - unproductive work to appease parasitic bureaucrats intent on growing their empires, helped along by politicians who service them for their own electoral ends, and media who give oxygen to their endless calls for more regulation as they scrounge around for content. And as ever PDK you are just plain wrong on limits to growth, betting against Malthusians is easy money.
Productivity gains have largely come at the expense of peoples jobs, and those people are pushed further down the food chain. This has perpetuated itself in increased poverty, and the social unrest that goes with it. Most of these gains have been achieved through technological advances, anit would be a lie it has created the equivalent numberof jobs elsewhere.
Some these productivity gains have strickly been financial gains for the select few, and social economic losses for the masses.
As for increased regulations, I agree some of this is created by bureaucrats to maintain their status, however for the most part its been put in place to increase the price of doing business. This cost pay little regard to the size of the business and is in essence a barrier to starting a small business; which snt have to scale to employ staff to do this and have to outsource at a relative big expense. Established big business have to scale to employ someone to take care of these regulations, which is a relatively small cost to their operations.
While these bureaucrats may have no understanding of the costs they impose on small business, dont kid yourself Big Business (through the big four accounting/advisory firms) are behind most of it to shut down competition.
Regulation such as hiring people and the minimum wage for example but there will be others that people know in their own industry. The plan the government is that we will spend 10s of billions of dollars so think that large of a tax cut. I would half income tax and abolish corporate tax - at least for a year. We could off-set to some degree with a land tax which every economist states is the less intrusive tax around.
Let's have practical problem solving policy rather than grand ideological visions. On a very small level, witness the Government's reaction to the very reasonable plea by golf clubs to allow staff to work in an isolated bubble to save greens. It took about 10 days and a media campaign to get a grudging yes, you can do it after Easter. If it can work, make it work. There are easy ways to restart international education, some limited tourism, get many small enterprises up and running. But we are being led by statists, people with no skin in the game whose salaries and pensions will largely be unaffected by this draconian response they've drafted. I do concede it may have been needed as a short term measure, but the real cost is the enormous sacrifice young people have had forced on them. They will be paying for a very time time unless some smart, real world decisions are taken very quickly. Greta who?
I am not sure why the so called collapse of capitalist world is something to look forward to.
The way I understand it, capitalism was and is a mean to counter the power of the political entity (the state). Without capitalism, there is no controlling the state. Before the rise of capitalist, everything and everyone was under the sole and unchecked authority of the king and his agents who could remove any ones rights at his whim. This model is very much like the soviet and the Chinese social models today.
So I really hope that while it does look inevitable that we are moving towards significant increase in state owned enterprises, this does not completely wipes out capitalism. These two evils (capitalism and state) do counter each other and I hope that the new balance is a better one that we had to date.
Slavery has just a new face under capitalism that is all - with a different set of 'lords' for the serfs.
When the serfs revolt and say they aren't paying rent to the lords - which appears to be happening, the system breaks. Similarities to the end of feudalism - perhaps? It become dangerous when the serfs realise they have the power of the lords/capitalists.
A) You are using the world slave very lightly. At least in developed countries (and to a very large scale in most developing countries except the very poor ones and the ones with massive populations) that comparison is pointless. I think North Koreans and Chinese and Cubans are much closer to slaves than any citizens of developed countries. It is a huge mistake to assume that capitalism is only about physical assets, it is as much about owning your thoughts and choices. When all resources are owned by the state, thoughts and hearts will also be owned by them.
B) Revolt they may, but if the outcome of such revolution is a ruthless and unchecked state (Soviet, China, Cuba, Venezuela, Zimbabwe, North Korea, Iran etc) what is to come will definitely be a lot worse than what was there before.
You could add as C the counter situation of Japan. Before WW2 still virtually feudal hence the unbridled savagery of the military. The soldiers thought and acted no differently to those of Wellington’s time because that was what the Emperor expected. Post WW2 MacArthur kept the Emperor on but the power was broken. Japan has surged ahead as a democracy, the people are educated and liberated from the previous regime.
No. Simple fact: a degree of capitalism (private ownership) is a prerequisite of a democracy and there will be no democracy without capitalism (i.e. private ownership). You will need a mixed system of socialism and capitalism for democracy. Pure socialism (all assets owned by the state or other organisations representing collective ownership) will never be democratic.
No. China is a classic example of capitalism without democracy. The problem is that you need a mechanism for 'eternal vigilance' to nobble megalomaniacs, and voting is the best we've come up with.
The bigger problem is that every system trashes the planet, just for the benefit of a slightly different cohort. Which makes them all equally stupid, in perspective.
Capitalism is owning private assets and the ability to exercise that right against the state. China is the exact opposite of that. The state owns everything and the State agents are trusted with its assets. The state can take back everything any time they want. So no, China is far far away from a capitalist state. They are much closer to old school monarchies where the wishes of the political leaders run supreme to everyone else and everything is owned by the king, and the king trusts its subjects with using them but that can be revoked anytime the king wishes.
Tribal society can be socialism and democracy. Checkout some of the 800 different cultures in PNG. Capitalism depends on trust. Trust is not the default mode for humans (yet again checkout some of the tribes in PNG) but trust is essential for capitalism to work (when banks crash it is a sad betrayal of trust). A society with humans trusting one another beyond family ties is a less violent and happier and more productive society and more suitable for the rule of law and democracy to thrive. [ideas stolen from Steven Pinker].
Capitalism was merely an evolution of feudalism with underlying constructs in place that haven't really changed. Trading companies represented the "the state" when colonizing other countries. The US had the idea of separating state and church which is different from separating state and corporations. Modern day slavery is prettier than historical slavery and therefore easier to accept so even the masses are blind to it. Democracy is a pretty picture painted to give you the illusion that your voice counts. In reality it's mob rule and a popularity contest and only if the mob toes the line given to them.
Excellent book, Bloodlands - highly recommended. Between them, Hitler and Stalin managed to do away with 14-16 million souls in that disputed piece of territory that lay West of Russia and East of Germany.
GeneralPlan Ost (from the German side) contemplated the annihilation of the populations to the East of them, in the name of Lebensraum (literally, room to live). Uncanny echoes in some of the comments on this very thread.......
In glass-half full mode, a better way to contemplate the future is with the sort of Rational Optimism characterised by Matt Ridley. The rise (from Stone Age on) of exchange, specialization and the innovation that the (as he puts it) meeting, mixing, mating and mutating of ideas gives rise to, is the real foundation of prosperity. And the beautiful thing about Ideas is that they can be copied and modified indefinitely. As Jefferson put it, “He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me.”. This rather blows a hole through the 'finite world' meme: ideas are in theory infinite, and in practice, numerous. And to the extent to which the pursuit of Ideas into Practice adds efficiency, we get More from the same or Less.....
No it doesn't.
He fails to mention energy, without which nothing happens. And sequentially, he fails to mention that it was our tapping into the one-off, low-entropy store of fossil energy which 100% underpinned all the growth for the last 200 years.
You go to your vehicle, Waymad, and fill that there tank with ideas. See how far down the road you get. It's a nonsense, is the Julian Simon 'the copper is in our heads' stuff. And efficiencies run into the Laws of Thermodynamics - with a HT to Carnot. Just like you cannot get an energy return on scooping up the scattered thorium in seawater, enough to outflank the energy it took to do the scooping - which is why it will never happen.
We will retain much of our knowledge, even in collapse. But we would have to have been a lot more sapient that we have been, to have avoided it.
And the living-space for the common folk reference, was real. It has been sidelined by the resource-scrap-winning victors (who no doubt didn't want to think on it too hard) but all we did was magnify the problem globally. We learnt nothing - absolutely nothing (well, apart from China's one-child policy) from it. Read Catton's Overshoot, Waymad. Read it dispassionately. Just as I read stuff I tend to disagree with (like this: https://andrewmcafee.org/more-from-less/overivew - see if you can pick the flaws). I just don't understand why, with your attitude, you installed solar panels. Surely all you needed was the idea?
How many times do you need to be told that there is no limit on energy - we have more than enough energy at below current prices to see us through the next few billion years. Fission (uranium from seawater costs <1% of it's energy value), PV + battery and pumped storage, likely fusion in a few decades. Repeatedly asserting things that are demonstrably wrong just marks you out as a religious fanatic.
At this point you are just lying to yourself pretending cheap energy will ever be scarce. Uranium from seawater is about $1000/kg, and can make about $100000/kg electricity at current wholesale prices. New PV in sunniest countries makes electricity for USD$0.025/kWh (NZD$0.04). That can make hydrogen for plastics at $0.06/kWh, about double the super low wholesale cost of natural gas, or liquid hydrogen to be shipped anywhere in the world for about $0.08/kWh - about what we pay for residential natural gas now. Equivalent to about $120/barrel oil in straight energy terms, though being able to use it in fuel cells means more like $80/barrel oil equivalent. A tiny corner of Northern Australia can power the world. We don't use either of these options yet because we still have slightly cheaper and more convenient fossil fuels, and EV's will soon take over land transport anyway, but it will be easy to change when economics become attractive.
Interesting article, and even more interesting commentary stream. FDR's comment "...demands bold persistent experimentation" highlights an issue. With economic success largely defined the US did not stop 'experimenting' when they introduced Friedman's 'free market' theories. The problem was that it wasn't for economic recovery any more. It was to make the rich, richer, America uber alles, if you will. The ability of the world's single largest economy, to be able to dictate to the rest.
A part of that picture was the problem of the banks, and I see a parallel today. The banks must be better regulated.
I also feel that too many of the world's leaders are only too willing to forget that the consequences of their actions falls firmly on the shoulders of 'living, breathing human beings'. They've already proven this in the last 40 years.
Powerdown's living in an alternative reality which is unfortunate as;
We are living in an age of energy abundance like no other time in history. Oil for gods sake is $20 a barrel and at no time in history has there been as many known and proved oil and gas reserves then now.
High quality refined Petrol is $1 a liter at the pump (before tax). People happily pay $4 for 500ml water. The sun last time I looked wasn't running low on Hydrogen, we are continually and almost exponentially learning how to use Energy from all kinds of undepletable sources.
We have enough Coal in just one deposit in the South Island which can easily be liquefied into enough Diesel to last NZ for the next 5000 years at current usage.
There is a minority group trying to convince us that a one in ten thousandth part change in atmospheric gas composition will end the world as we know it, however in practice nobody actually cares for this theory and most understand its political agenda.
I was on the Greenpeace boat in Whangarei last year to ask them why their engines had been running continually dockside for 7 days and why the ship had a giant oil stain up the side from the exhaust - now I could not make this up but they told me the ship was 'hot' by design and the generators could not be shut down as the ships services required them. What services I ask. Hot water for sanitation in galley and Air conditioning for crew comfort were the two top reasons, again I couldn't make this up. They then asked me what area would be good to deploy their plastic Kayaks. I'm getting off topic...
We are continually developing small safe Nuclear reactors however we have no need for them as we live in an era of such energy abundance they are not necessary.
We have abundant resources for every person on Earth and plenty more, starvation is a thing of the past for every human on Earth bar political/war issues. The population will top out at around 11 billion and we wont even know the difference from now till then.
Our future has never been brighter. Energy is more plentiful than ever before and so it will continue to be. Anybody with any common sense and a pair or even just one eye this will be completely obvious too. I live a very happy life with power supplied from just two 300 w solar panels that cost me under $500 and around 27kg of LPG per year. Hell I could get a wind generator and I'd be exporting power.
With One barrel of oil that costs around 1 hour work at just over minimum wage I can do as mush work as 8 years of human labor.
We haven't even begun to discover oil and once we get over our little climate agenda we can get on with it. The oil age is still in its infancy, but we don't even need it as we're very clever critters and can easily find other sources of energy given the time and inclination.
Powerdown my friend, the first law of thermodynamics is that energy cannot be created nor destroyed. Where is it all gone?!
Friends of interest.co.nz our future is going to be great and we will one day look back at 2020 and wonder how we ever lived like this. That much is obvious. Don't let anyone tell you otherwise, it's usually a sign that life has not quite gone as one planned and need something to blame it on. Things are not perfect but they are better than any time in history for the collective population of the World and each day forward will be better.
Entropy. :)
But a lot of that is just plain wrong. It's a commonly-held narrative, but just plain wrong. It requires you to deny that our low-grade emissions like carbon, and ultimately heat (https://dothemath.ucsd.edu/tag/heat-pumps/) are not having any effect. Then you have to claim that something which peaked in 1964
https://www.researchgate.net/figure/Worldwide-oil-discovery-and-consump… has yet to even get into gear.
And your last sentence makes the fatal mistake of back-casting to project forward. As I often point out, you'd be about 100 feet tall pased on your Plunket-book height graphs. There is a limit to the size of body a habitat can support, and that habitat needs to support two, minimum, or the species doesn't reproduce. That requires the habitat to be capable of supporting tier offspring too, plus a little for diversity. That's why things stop growing in nature. We did our growing based on resource draw-down (of finite resources, of renewable resources and of sinks. We did it exponentially. The only thing it was going to do, was stop.
At this stage Carr is dead right - we need to be looking ahead, and the future won't be what the past was. This is probably the most prescient of the offering to date: https://www.routledge.com/Creating-Regenerative-Cities-1st-Edition/Gira…
You're talking rubbish. Technology and economics don't stand still. Energy is cheap, and will get cheaper - ultimately to as little as 10% of current costs. Technology is efficient and will get more efficient, using less energy and cheaper bill of materials to get the desired results. People are rich and will get richer, making energy and resources relatively cheaper (economics of ore beneficiation is largely driven by energy costs)
Oh that will be why people can barely afford to pay their power bills, heat their homes etc. It will explain the advent of the penny in the slot forms of power distribution in a country where it was unheard of in the past. It is you grow, grow, grow merchants that are wrong, as you seem to have no consideration whatsoever for the natural world around us, and how our continuing to expand leaves less and less space for it. There is more than just the human race with a claim to this planet!!!
On FDR and his new deal...roosevelt is as bigger mass murderer as the other two as his spidery international politics steadily backed japan into a corner from which the nips predictably lashed out and started the pacific inferno. The new deal had long since stalled and as the 30's drew to an end was in need of much greater enhancement to move the economy forward but it was beyond conventional wisdom at the time to acheive this. Instead FDR chose to follow Hitler and revitalise the US military production capacity as a way of growing the american economy. Initially it was used to supply britain via lend lease but soon enough was feeding the mighty american war machine itself once war with the japanese broke out and USA declared war on the axis countries. With armaments flowing out of factories across the country like rivers in flood and happy workers everywhere FDR simply cancelled the new deal and focussed on building the new american economic empire we know today...
Not entirely 4E. The Japanese had revealed the nature of their aggression with the march into China. Horrendous atrocities, well documented.The Americans aided and fought alongside the Chinese, the famous Flying Tigers for example.The Japanese were only delayed from moving south into the Far East and towards the oil fields of the Dutch East Indies, because they over extended themselves in North West China and got thrashed well and truly by the Russians under Zhukov. Based on that, it is certain that FDR and his advisors thought war with Japan was inevitable so no use feeding them energy and raw material only to have it fired back. And that makes the attack on Pearl Harbour being a surprise, truly unfathomable.
"Both totalitarian empires turned human beings into statistics, and their deaths into a necessary step towards a better future"
Modern economics/capitalism is no different. It also reduces everything to monetary economic values and statistics. Humans are reduced to labels - consumers, taxpayers, workers, disposable and expendable, all as necessary steps towards a better future. We don't even have a vision of a better future. There is no sacredness attached to ecological life, of which we as humans are one part of, under today's ideology....
The title of this piece starts with, "Chris Trotter looks to the 1930s for lessons..." yet actually goes right up to 1945 to make an argument. It would seem to me that the comparisons between the US, USSR and Germany should be made for the 1930-39 period. In the 1940s everything changed as Germany and the USSR engaged in a ferocious existential war while the US mainland was peaceful and had its economy significantly boosted.
What works? usually a hardcore medication pill to swallow. BUT in all boys NeoLiberal club? only one way to re-ignite F.I.RE based economy - follow the rest of herd actions 'What was supposed to work'.. QEs, loan, borrow, subsidy, printing money - socialised the loss to all populations. Clever uh? .. or self preservation mode of greedy mentality.
Production and Trade have declined so drastically that the only spending can be done by the Governments. Jacinda is thinking like Roosevelt, but with a smaller economy it may be easier here than elsewhere. Debt forgiving across the globe can be an option ?
https://www.youtube.com/watch?v=LlQX4fmRrpI&feature=youtu.be&fbclid=IwA…
Before commenting , I intend to read this piece by Trotter .............. again , slowly, so I get a fuller understanding of what he is saying .
At first read , he is making sense , but as a well known left-wing common - potato , I am not sure he sees Roosevelt's NEW DEAL through the same eyes as many of us would .
That said , maybe we will get the roads and infrastructure we need , such as schools , hospitals , etc , as well as social housing for those who will never own a home
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.