# Capitalism's intrinsic flaw



## basilio (7 August 2011)

Just came across the most recent  paper from Jeremy Grantham.  (Jeremy  is  founder and chairman of  GMO a global investment management firm with total assets >$100b).

The paper is called *"Resource Limitations 2 : Separating the dangerous from the merely serious"*  I thought there was some excellent research and analysis on where we are going as a world society and why capitalism (despite many benefits) has some intrinsic flaws which have to be tackled if we are to survive as an effective society.

Cheers

http://www.gmo.com/websitecontent/JGLetter_ResourceLimitations2_2Q11.pdf


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## Smurf1976 (7 August 2011)

1. The planet is finite. This is a fact.

2. The economic system we have today is based upon the notion of constant growth. This is also a fact.

It seems fairly obvious to me that the only possible outcomes are either (A) we rethink the economic system voluntarily or (B) depletion of natural resources forces us to do so.

It's a somewhat shocking thought to realise a few things (I'm focusing on oil and gas only because I know something about them - metals, fertilizers etc are an issue also):

If you are 42 years old and living in South Australia, then we've gone through 88% of the state's known reserves of natural gas - all of it in your lifetime.

If you are 42 and living in Victoria then the relevant figure is 44% of the gas and virtually all the oil - again all in your lifetime.

Globally, If you choose just about any resource then the vast majority of usage to date has been in the past 40 - 50 years. Looking specifically at oil, we've gone through somewhere in the order of 50 - 60% of the high quality stuff, two thirds of that since 1970.

You don't need to be the proverbial rocket scientist to realise that we can't keep using resources at this rate, and certainly not at an ever increasing rate. The only real questions are whether the change is voluntary or forced, and what other consequences (eg war) come with it.


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## Gringotts Bank (7 August 2011)

^^... which is why a carbon tax is absolutely essential, (even if man made emissions are only a small factor in global warming).

New technology, new job creation, cleaner air in the cities, less reliance on arab states for their oil.  It's all good.  And it will work out.  

Or you could live in fear.... if you want, that is.


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## So_Cynical (7 August 2011)

Gringotts Bank said:


> ^^... which is why a carbon tax is absolutely essential, (even if man made emissions are only a small factor in global warming).
> 
> New technology, new job creation, cleaner air in the cities, less reliance on arab states for their oil.  It's all good.  And it will work out.
> 
> Or you could live in fear.... if you want, that is.




Yep that's the message i got out of reading the linked paper, change needs to be massaged and managed...conservatives seem to struggle with long term, big picture issues.


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## Smurf1976 (7 August 2011)

A carbon tax fails to address the fundamental problem which is "growth" itself. It perpetuates the myth that there is some "silver bullet" that enables constant growth on a finite planet.

If GDP in 2020 or 2030 is higher than in 2010 then we're on the wrong track no matter what means of generating electricity or heating buildings we happen to be using. If GDP keeps going up then, ultimately, we'll consume everything we can get our hands on. Leaving a few barrels of oil in the ground isn't going to be much help in that context.

Ultimately, we can't keep this "growth" thing going forever no matter how we fuel it. If we fix energy, then we just run straight into some other constraint...


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## Wysiwyg (7 August 2011)

Sobering thoughts there Smurf. I have a longer time line. Peak about 100 years time or more.


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## basilio (7 August 2011)

Wysiwyg said:


> Sobering thoughts there Smurf. I have a longer time line. Peak about 100 years time or more.




Good to hear some constructive comments on the paper.  I thought it was very well written and not over technical. 

But I think Wysiwgy that crunch time is far closer than 100 years time and as Smurf has said the concept of exponential growth current capitalist style just...  can't... happen. It has to fall over.  That also is made clear. The current financial situation is a reflection of that  situation.


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## Gringotts Bank (7 August 2011)

Smurf1976 said:


> A carbon tax fails to address the fundamental problem which is "growth" itself. It perpetuates the myth that there is some "silver bullet" that enables constant growth on a finite planet.
> 
> Ultimately, we can't keep this "growth" thing going forever no matter how we fuel it. If we fix energy, then we just run straight into some other constraint...




I know but a carbon tax allows us to 'buy' time. 
The World might be finite but it has a way of balancing itself.  Natural disasters, terrorism, war and plagues could easily halve the population in a short space of time.  Have a look at the numbers who died in WW2 and the Bubonic plague.

edit: WW2 - 60 million people
Bubonic Plague - 1/4 of population of Europe


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## Wysiwyg (7 August 2011)

basilio said:


> But I think Wysiwgy that crunch time is far closer than 100 years time and as Smurf has said the concept of exponential growth current capitalist style just...  can't... happen. It has to fall over.  That also is made clear. The current financial situation is a reflection of that  situation.



I went to Maccas today for a cheese burger and chips and the line up was as usual. Big. Being a contemplative type, I thought how things don't change much and a credit rating downgrade in the USA along with debt repayment problems isn't enough to shake up the average consumer.

The last barrel seems awhile away.


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## wayneL (7 August 2011)

Gringotts Bank said:


> I know but a carbon tax allows us to 'buy' time.




Really? How?


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## Starcraftmazter (7 August 2011)

Link in my sig is fully relevant to thread


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## prawn_86 (7 August 2011)

Gringotts Bank said:


> edit: WW2 - 60 million people
> Bubonic Plague - 1/4 of population of Europe




Excluding a meteorite, it is hard to see something aside from a disease that can significantly wipe out enough of manking to make a difference.

Realistically we need to get rid of about half the worlds population (3 - 4 *billion* people) for eveyone left to be able to live comfortably and then sustain, not grow, that population. What Smurf has said is correct, we cannot grow and innovate forever.


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## Gringotts Bank (7 August 2011)

wayneL said:


> Really? How?




As natural resources dwindle, whole economies could fail.  While resources are finite, the development of new technologies is theoretically limitless.  Technologies for food and energy production can become ever more sophisticated, efficient and cheap.

If that was the path we take (I assume it is), then the only problem left is physical space.


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## Wysiwyg (7 August 2011)

Smurf1976 said:


> A carbon tax fails to address the fundamental problem which is "growth" itself. It perpetuates the myth that there is some "silver bullet" that enables constant growth on a finite planet.



 Could the psyche of the human race be pervaded with the thought that birth rate should not out strip death rate. It is that simple yet we want to keep people alive longer and birth more people.

The trivia of now absorbs everyone.


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## prawn_86 (7 August 2011)

Wysiwyg said:


> Could the psyche of the human race be pervaded with the thought that birth rate should not out strip death rate. It is that simple yet we want to keep people alive longer and birth more people.




The problem is it is biologically inbuilt in most of us (especially women) to want to have children. Until we can change this biological urge its pretty much impossible to change the birth rate with out government controls worldwide.


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## Wysiwyg (7 August 2011)

Gringotts Bank said:


> As natural resources dwindle, whole economies could fail.  While resources are finite, the development of new technologies is theoretically limitless.  Technologies for food and energy production can become ever more sophisticated, efficient and cheap.
> 
> If that was the path we take (I assume it is), then the only problem left is physical space.



Sustainable is the word. Pending no overpopulation, humans could live with nature as long as conditions allowed.


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## So_Cynical (7 August 2011)

Smurf1976 said:


> A carbon tax fails to address the fundamental problem which is "growth" itself. It perpetuates the myth that there is some "silver bullet" that enables constant growth on a finite *planet*.




We have 50 to 100 years to make the move to Mars and beyond if we want to keep the growth thing happening...politically hard to sell to the extremes of the political spectrum considering the political problems in this country we have had with Boat people, Climate change and broadband.


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## Wysiwyg (7 August 2011)

prawn_86 said:


> The problem is it is biologically inbuilt in most of us (especially women) to want to have children. Until we can change this biological urge its pretty much impossible to change the birth rate with out government controls worldwide.



Do you think it is more in defiance of being told what to do rather than a thinking minds uncontrollable urge to reproduce? I am convinced women birth for reasons other than biological urge. Birthing in poor countries to keep their race existing, birthing in rich countries to take advantage of encouraging/generous government handouts for example.


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## Julia (7 August 2011)

Gringotts Bank said:


> I know but a carbon tax allows us to 'buy' time.
> The World might be finite but it has a way of balancing itself.  Natural disasters, terrorism, war and plagues could easily halve the population in a short space of time.



 How is a carbon tax here in Australia going to allow us "to buy time"?  It has clearly been asserted by the greatest advocates of the tax, e.g. Garnaut, Flannery, et al, that any such tax in Australia - in the absence of ALL of the rest of the world doing likewise - will make no discernible difference to climate.

So what do you mean?

And aren't you rather contradicting yourself in advocating a carbon tax when in the next breath you say the world has a way of balancing itself.
Totally agree with this latter statement, btw.


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## Smurf1976 (7 August 2011)

There is a limit to resources on Earth. This is a fact. There is much debate about the extent of resources, particularly fossil fuels, but ultimately they are limited.

There is a limit to efficiency. Basic thermodynamics limits energy efficiency and it is the same with other resources. At best, man may eventually work out a means of using resources at the maximum theoretical efficiency but that is it. Efficiency can not continue to increase forever.

I think the only real way to comprehend this properly is to do some maths for yourself using real resources and see what happens. Energy is the easiest example but any resource will do. Do that exercise and pretty soon one of two things happen - either you run out of resources or it becomes physically impractical to maintain the pace of expansion due to constraints on some other resource.

This phenomenon has already been experienced with various resources in various locations but it has yet to happen globally... yet

As for a carbon tax, the problem with that is it fixes the wrong problem and has too many escapes that preclude any real solution to broader environmental problems. If we continue with growth then we'll burn the lot - all the carbon tax changes is who burns it and where.


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## Gringotts Bank (7 August 2011)

Julia, the carbon taxes forces innovation.  It forces a movement from the finite (resources) to the potentially limitless (new energy technologies).

It's conceivable that someone will come up with a technology that is totally out of this world - cheap and self-renewing.  We're already close to that with solar thermal, but I mean something that even exceeds that.


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## Smurf1976 (7 August 2011)

Gringotts Bank said:


> As natural resources dwindle, whole economies could fail.  While resources are finite, the development of new technologies is theoretically limitless.  Technologies for food and energy production can become ever more sophisticated, efficient and cheap.
> 
> If that was the path we take (I assume it is), then the only problem left is physical space.



There's been a simmering debate about this sort of stuff on a public forum in Tasmania for quite some time now. There's quite a few involved and you could divide them into these basic groups:

1. There is no problem. Climate change is a myth and there's plenty of oil.

2. Climate change is real, oil is limited but the world is going to use the lot anyway so we may as well enjoy it and stop worrying.

3. We should have dammed the Franklin back in 1983 and we wouldn't have to worry about power now if we had. 

4. Advocates for various small scale options like solar water heaters, better insulation etc that can't really solve the issue but which do create awareness.

5. One individual who is particularly keen on beaming energy down from space and/or colonising other planets.

6. Those who see that any fix to the question of energy only prolongs the inevitable, that growth is unsustainable no matter how it is fuelled.

With the exception of point 3 which is an eternal debate unique to Tasmania and which will probably never really die, I'd say that practically everyone fits into one of those categories. 

I'm clearly in category 6, although I'd rather a dam and some solar panels over coal or nuclear any day (but I acknowledge the futility of building either if there is to be constant growth since we'll still end up using all the coal in the end).

The one thing that does surprise me in that debate, is just how many environmentalists seem willing to cross the floor and support things they strongly oppose (specifically dams) on the condition that they are an actual replacment for fossil fuels. But, like me, they see no point if it ends up being a dam AND coal due to constant growth, with the dam simply prolonging the inevitable. 

I would personally say the same about nuclear - I'm strongly opposed to it whilst it remains in addition to other energy sources and simply prolongs the inevitable. But if it were an actual replacement, if we were to go nuclear and end growth, well then I'm more willing to consider that it may have some benefits. But as it stands today, we'll use all the coal and oil with or without also using uranium, so we might as well leave the uranium in the ground and avoid the hazards it brings.


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## prawn_86 (7 August 2011)

Wysiwyg said:


> Do you think it is more in defiance of being told what to do rather than a thinking minds uncontrollable urge to reproduce? I am convinced women birth for reasons other than biological urge. Birthing in poor countries to keep their race existing, birthing in rich countries to take advantage of encouraging/generous government handouts for example.




No, i think most women have a very deep biological urge to reproduce, which was intially based on keeping the race existing.

Back in the day before oil when energy input had to equal energy output, breeding was a way of ensuring the human race. Because oil has changed things so rapidly many of our biological urges have not yet changed/evolved (hence why so many obese people now also).

My partner for instance has known since she was about 16 that she want children and she has been both rich and poor in that time, its just a deep desire that can defy logic.

FWIW, the gov handouts dont help, but definitely not the reason why (most) people have kids imo


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## Wysiwyg (7 August 2011)

prawn_86 said:


> My partner for instance has known since she was about 16 that she *want* children and she has been both rich and poor in that time, its just a deep desire that can defy logic.



Right there is a want, not need nor biological urge. It is for humans a want or desire as much as it is a natural act.


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## xyzedarteerf (8 August 2011)

Gringotts Bank said:


> Julia, the carbon taxes forces innovation.  It forces a movement from the finite (resources) to the potentially limitless (new energy technologies).
> 
> It's conceivable that someone will come up with a technology that is totally out of this world - cheap and self-renewing.  We're already close to that with solar thermal, but I mean something that even exceeds that.




Bring on the hover cars its about time...might explian the increase in UFO sightings in the UK.


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## Starcraftmazter (8 August 2011)

prawn_86 said:


> The problem is it is biologically inbuilt in most of us (especially women) to want to have children. Until we can change this biological urge its pretty much impossible to change the birth rate with out government controls worldwide.




Tell that to Japan. No government controls, yet declining population for quite a while now!


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## notting (8 August 2011)

It's natural.  We can conceptualise and think cognitively,plan, follow logic or follow desire, act out of social comscience or out of short term self interest. 
Women tend to gravitate/desire toward family,babies and sence of safety from a man. Men gravitate toward women out of desire even though the last thing they want is to be bound by babies etc. Even though they love their children once they have them.
We follow desire and compromise everything for it. Of course there are exceptions, but over all we do not rise above the animal kingdom governed by desire. Any species that becomes too dominant ends up destroying it's own environment.
Their still having babies in lands of starvation. Animals are stupid. Desire is stupid. Desire rules. Stupid rules.


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## moXJO (8 August 2011)

So_Cynical said:


> ...conservatives seem to struggle with long term, big picture issues.




While socialists waste our money on the next dumb$hit feel-good idea that achieves nothing.

 Capitalism is a big part of the reason new technologies are developed. America has brought about some of the greatest technology to date due to capitalism.


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## Julia (8 August 2011)

notting said:


> Women tend to gravitate/desire toward family,babies and sence of safety from a man.



What do you mean "sense of safety from a man"?


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## moXJO (8 August 2011)

Julia said:


> What do you mean "sense of safety from a man"?




MAN STRONG, with big wallet


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## notting (8 August 2011)

Quote from Seinfeld 
George "What does she look like?"
Elaine "What does he do?"


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## wayneL (8 August 2011)

There is no flaw in pure Capitalism as there is no pretense for the greater good of all. Pure Capitalism will do it's job, even if population reduction is the ultimate result. 

Capitalism contaminated with Socialism, therefore a cognitively dissonant frankenconomy, is full of flaws, because it contradicts itself.

Capitalism is Darwinian, which is natural. Socialism feeds and promotes weakness which is the antithesis of natural.


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## moXJO (8 August 2011)

wayneL said:


> There is no flaw in pure Capitalism as there is no pretense for the greater good of all. Pure Capitalism will do it's job, even if population reduction is the ultimate result.
> 
> Capitalism contaminated with Socialism, therefore a cognitively dissonant frankenconomy, is full of flaws, because it contradicts itself.
> 
> Capitalism is Darwinian, which is natural. Socialism feeds and promotes weakness which is the antithesis of natural.





Agree, I think an economy can run sufficiently with some socialist policy. But once the scales tip to far to the left business confidence ends up in the trash. Good luck with running the country when productivity is destroyed.


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## Garpal Gumnut (8 August 2011)

prawn_86 said:


> The problem is it is biologically inbuilt in most of us (especially women) to want to have children. Until we can change this biological urge its pretty much impossible to change the birth rate with out government controls worldwide.




Communism, Socialism and Green ideology have had a good go at achieving this but failed. 

gg


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## prawn_86 (8 August 2011)

wayneL said:


> There is no flaw in pure Capitalism as there is no pretense for the greater good of all. Pure Capitalism will do it's job, even if population reduction is the ultimate result.
> 
> Capitalism contaminated with Socialism, therefore a cognitively dissonant frankenconomy, is full of flaws, because it contradicts itself.
> 
> Capitalism is Darwinian, which is natural. Socialism feeds and promotes weakness which is the antithesis of natural.




Agree with this. The problem we have now however is if we were to switch to pure Capitalism (never happen, but lets theorise) then everything would need to be reset, otherwise those already with money/land/gold etc would be better placed.

This reset would then cause new wars, murders etc. Perhaps it is what we need...


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## Gringotts Bank (8 August 2011)

Socialism can promote horrible apathy and weakness, and capitalism can promote greed and corruption, but then there's the Tao.


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## wayneL (8 August 2011)

prawn_86 said:


> Agree with this. The problem we have now however is if we were to switch to pure Capitalism (never happen, but lets theorise) then everything would need to be reset, otherwise those already with money/land/gold etc would be better placed.
> 
> This reset would then cause new wars, murders etc. Perhaps it is what we need...




Yes we seem to be stuck with the current frankenconomy. At some stage however a "reset" will inevitably occur. The only question is when. The current model which is predicated on perpetual growth cannot continue ad infinitum, this is irrespective of capitalism, socialism, or mongrel hybrids thereof.

One can only despair that at that point, given the world's leaders record of prudent economic decisions this far, the wrong decision will be made.


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## wayneL (8 August 2011)

Gringotts Bank said:


> Socialism can promote horrible apathy and weakness, and capitalism can promote greed and corruption, but then there's the Tao.




Capitalism need not be lawless, the common law must always prevail in civilized society. Capitalism need not imply the law of the jungle as the United States 'fairly' successfully navigated a a good balance for quite some decades.

But in case you didn't notice, corruption and greed exists on either side of the ideological divide.

And yes, then there is the Tao.


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## notting (8 August 2011)

I like the fact that the two reining kings of capitalism have chosen to become nice socialistic 'weak' supporting charatyists, giving their stock piles of money to the most needy and encouraging all their princly counterparts to do the same.
The bigger the devide, the less secure is the king.
Darwin might find that a little confusing when it comes to homosapiens.
At what point does capitalist man realise that he is happier as a social appreciating/contributing creature than a ruthless competitor?
I guess when he is very rich!
There yet?


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## craft (8 August 2011)

> The current model which is predicated on perpetual growth




What exactly is it in the current model that requires perpetual growth?


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## notting (8 August 2011)

Perpetual growth is - "Jobs Jobs Jobs" to get me to win the next election.


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## wayneL (8 August 2011)

craft said:


> What exactly is it in the current model that requires perpetual growth?




Fiat


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## craft (8 August 2011)

wayneL said:


> Fiat




That was succinct. What is it about Fiat currency that requires perpetual growth? I can see how it accomodates growth but how does it require perpetual growth?


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## tech/a (8 August 2011)

craft said:


> That was succinct. What is it about Fiat currency that requires perpetual growth? I can see how it accomodates growth but how does it *require perpetual growth*?




To service the debt of printing money---to create more debt---and handing out IOU's (Bonds).


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## RandR (8 August 2011)

moXJO said:


> While socialists waste our money on the next dumb$hit feel-good idea that achieves nothing.
> 
> Capitalism is a big part of the reason new technologies are developed. America has brought about some of the greatest technology to date due to capitalism.




bahaha ...

so i guess its capitalism that funds NASA ? 

capitalism that funds the CSIRO ?

capitalism that funds CERN ?

did you think apple or microsoft invented the computer ? 

All these things came about due to government/public spending. Not corporate capitalism.


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## craft (8 August 2011)

tech/a said:


> To service the debt of printing money---to create more debt---and handing out IOU's (Bonds).



 Debt creates the original capital but not the funds for the interest payment – they come from new debt issues and set in motion the need perpetual growth. All true with a positive interest rate. But the growth requirement disappears on a physical level with a negative ‘real’ interest rate (which a lot of the world has now) and disappears on a financial level with a zero (Japan) or negative nominal interest rate.  Nil growth is not incompatible with Fiat currencies but it is incompatible with positive interest rates.

If growth exists at the financial level but not the physical level you will eventually get inflation.  If you get neither physical growth nor inflation then nominal valuations need to adjust accordingly.

I don’t see so much see a intrinsic flaws in Capitalism as just adaption and revaluation process to recognise physical growth and inflation expectations.


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## basilio (8 August 2011)

> I don’t see so much see a intrinsic flaws in Capitalism as just adaption and revaluation process to recognise physical growth and inflation expectations.    craft




You have to go back to the original story to see what Jeremy Grantham describes as the critical flaw. Essentially it involves the (profitable) destruction of resources in the pursuit of profit until the resource base itself collapses. 

It's worth the read. IMO


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## IFocus (8 August 2011)

wayneL said:


> The only question is when. The current model which is predicated on perpetual growth cannot continue ad infinitum,





Closet Greeny?


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## wayneL (8 August 2011)

IFocus said:


> Closet Greeny?




I have always been 'out' as a greeny, but I have never been a Greeny and never will be. But I am primarily speaking here of the monetary system, not the environment, even if the same principle applies to the the environment.


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## craft (8 August 2011)

basilio said:


> You have to go back to the original story to see what Jeremy Grantham describes as the critical flaw. Essentially it involves the (profitable) destruction of resources in the pursuit of profit until the resource base itself collapses.
> 
> It's worth the read. IMO




Hi basilo

No argument that Gratham is a good read.

No issue that there is a limit to the carrying capacity of the human population – I suspect we have already passed it.  

Just thinking about where the capitalist system fits in.  Remove the positive interest rates and you also substantially reduce the discount rate in deciding whether you consume resource now or in the future.  You remove the incentive to profitably plunder because resource available in the future is just as valuable as resource available now.  In fact if there is no unnatural storage of wealth (ie money with positive interest) then there would be an incentive to preserve resources and moderate current consumption. 

Fiat currency is not the problem positive interest rates may be and that doesn’t seem on the surface to be to inadaptable to a no/low growth world


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## IFocus (8 August 2011)

wayneL said:


> But I am primarily speaking here of the monetary system, not the environment, even if the same principle applies to the the environment.




..........+1


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## pixel (8 August 2011)

wayneL said:


> But I am primarily speaking here of the monetary system, not the environment, even if the same principle applies to the the environment.



 ..... +2

An even bigger problem lies in the "democratic" principle that everybody can make demands, ensure - by lobbying, threats, and manipulation of the almighty "public opinion" - that these demands are met, without regard of justification, costs,and consequences.

And the puppets voted into Parliament can assign themselves special rights, perks, and privileges, but will never be held accountable other than - possibly - voted out at the next election.

If all those, who make demands for special Rights, had to foot the tab and share Responsibility as well, none of this "fiat" and "lost business confidence" would be a problem. It simply wouldn't be there.


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## moXJO (8 August 2011)

RandR said:


> bahaha ...
> 
> so i guess its capitalism that funds NASA ?
> 
> ...







> Birth of the First Computer
> In the year 1837, Charles Babbage was the first to think about something that would function like a computer and ended up designing a programmable mechanical computer that he called "The Analytical Engine" but because of limited finance, and an the inability to stop himself from trying to upgrade it and find some innovation with the design, Babbage could never actually built his Analytical Engine.
> 
> Then Konrad Zuse came in the whole arena in the year 1941. He also wanted to make something that would be like a computer hence was created electromechanical "Z machines," the Z3, which was the first working machine, which featured binary arithmetic, including floating point arithmetic and a measure of programmability. Zuse also started the first Computer start up company, which was established in 1946.




Capitalism fosters an environment that develops the tech, and then makes it cheap and accessible to the masses. 

Hasn't Virgin developed flights that take us into suborbital space a whole lot cheaper?

And um capitalism does fund all those things, through taxes:

Social market economy is still capitalism I thought, I just don't like leaning too far into the red.


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## Smurf1976 (8 August 2011)

craft said:


> What exactly is it in the current model that requires perpetual growth?



Fiat money is the first problem. Tomorrow's growth is collateral for today's debt...

The second problem is the notion that it makes more sense to replace something every 10 years than to spend a little more and build it to last centuries. It's ridiculous in the extreme when you realise that even something as basic as a kitchen bench now has a typical lifespan measured not in decades, but is just a few years. Statistically, if you put in a new kitchen when the Sydney Olympics were on then you've already replaced it since then and you're due for yet another one right now. That's a ridiculous waste of natural resources and human effort.

There is something seriously wrong with a system that views making things so that they rapidly fail as desirable. It is not creating real wealth, it is destroying it, and it isn't doing the environment much good either. Fair enough where there is genuine innovation perhaps, but there's not a lot of innovation to be done in cupboard doors, sinks and ovens.

I'm no Green according to traditional measures of such, but I absolutely refuse to have anything to do with this nonsense of throwing out perfectly good items (like a kitchen sink) just because someone's decided that it is fashionable to have one that's a different shape or brand. No thanks...


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## DB008 (8 August 2011)

No Chance of Default, US Can Print Money: Greenspan

http://www.cnbc.com/id/44051683


Scary stuff 'eh......


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## notting (8 August 2011)

Capatalism seems to be the best of an imperfect hand for a blind race of individuals unable to act with enough courage to act beyond their own wallets for the whole.
There is no politcial solution or economic model that works in a world full of beasts like that.
So nature takes it's course, could be a plague, a volcanic eruption, a meteorite, a warming, warming less dimming = boiling = carbon ok for the short term = boiling medium term = ice age for grandkids grandkids. Hopefully we have grown out of world wars.

Whatever reboots the growth switch will help keep the model.

Certainly won't be a political or economic model, unless we havea spiritual renaissance and all become selfless saints devoted to the higher good in all that we do.
Then marxist socialism and Platos repuplic  become feasable.


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## Starcraftmazter (9 August 2011)

craft said:


> What exactly is it in the current model that requires perpetual growth?




This explains it pretty well:
http://video.google.com/videoplay?docid=-2550156453790090544


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## moXJO (9 August 2011)

Smurf1976 said:


> The second problem is the notion that it makes more sense to replace something every 10 years than to spend a little more and build it to last centuries. It's ridiculous in the extreme when you realise that even something as basic as a kitchen bench now has a typical lifespan measured not in decades, but is just a few years. Statistically, if you put in a new kitchen when the Sydney Olympics were on then you've already replaced it since then and you're due for yet another one right now. That's a ridiculous waste of natural resources and human effort.
> 
> There is something seriously wrong with a system that views making things so that they rapidly fail as desirable. It is not creating real wealth, it is destroying it, and it isn't doing the environment much good either. Fair enough where there is genuine innovation perhaps, but there's not a lot of innovation to be done in cupboard doors, sinks and ovens.
> 
> I'm no Green according to traditional measures of such, but I absolutely refuse to have anything to do with this nonsense of throwing out perfectly good items (like a kitchen sink) just because someone's decided that it is fashionable to have one that's a different shape or brand. No thanks...





The emerging economies are doing things differently. More due to necessity at the moment, but the world is changing.
http://edition.cnn.com/2011/BUSINESS/08/02/dayo.olopade.africa.innovation/index.html




> In a fat economy, a bicycle is just a bicycle, or a cell phone is just a cell phone; in a lean economy, I've seen men in Kenya making phone chargers using their bicycles, where it's double use. Where electricity goes out and you have a cell phone that's out of juice, you can then plug your cell phone into a bike and peddle away and also charge your phone.
> So it's about recombination, recycling, innovative use of existing objects. I actually just heard about something here in South Africa which is a woman who created a washing machine using the vuvuzela, where she poked holes in it and it was something that could be used as a washing machine.
> CNN: What is somebody reading this book when it is published, sitting in London, going to take from a vuvuzela washing machine? They're not going to take the practicality of that -- what's going to make them say 'wow, I didn't know that?'
> DO: Well I think what it is, is a sense of individual responsibility and a sense of entrepreneurship ...




I know people that ship our used tyres overseas for re-use at a profit. And kitchens do get recycled at auctions. Same goes for most building materials, mattress, and computers/ ewaste. If you dig a little deeper you can always find someone that recycles most goods. People don't often look, or are unaware though. I had an artist come and take some rusted sheets for artwork that would have otherwise been given to the local scrap metal guy to make his bit, there are recycling websites where people will come and take a jar of rusted nails. And there is also money to be made with a little effort from it.

I know your problem is with the throwaway society and durability of goods but imo the mindset has already shifted towards longer lasting product and reuse of goods. Quality will come back online at a cheaper price as well (already happened on the net) imo.

There is no chance of starving in this country so innovation will remain low amongst the population of un-driven. I have been working with a lot of refugees lately and their drive/ work ethic and hunger to get ahead leaves westerners looking fat and spoilt in comparison. 

As to fiat there are a couple of choices that will stop the growth. None very palatable for general pop though.


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## basilio (9 August 2011)

Starcraftmazter said:


> This explains it pretty well:
> http://video.google.com/videoplay?docid=-2550156453790090544




Heard about this previously but took the opportunity to see it this morning.

Excellent, excellent explanation of how the banking system works.  The program is called Money as Debt.  There have been 2 subsequent  releases - Money as Debt 2 and Money as Debt 3.  Also a website that provides references for the quotes and discusses criticism and comments on the information.

Key question it asks is "How can we have so much personal, national and international debt ? Where did it all come from  and how will/can we ever pay it back ?" (Seems pretty topical at the moment..) Under the current banking system  we will be collared for these debts either individually or nationally.  And it is these debts that theoretically underpin the nominal value of our deposits in banks. 


References

http://paulgrignon.netfirms.com/MoneyasDebt/references.htm
http://video.google.com/videoplay?docid=5352106773770802849  (Money as debt)
http://www.youtube.com/watch?v=rCu3fpg83TY  (Money as Debt 2)
http://paulgrignon.netfirms.com/MoneyasDebt/MAD3.htm


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