The confusion between money and wealth, the theme of last week’s Archdruid Report post, has become almost impossible to avoid these days. Perhaps the most important reason is the extent to which money has metastasized so deeply into our economic life that it’s nearly impossible to do much of anything without it.
The economic textbooks you did your best not to read in school justify that ubiquity by a neat rhetorical trick. If you remember anything at all about the economics textbook you did your level best not to read back in your school days, it’s probably that bit of rhetoric; it can be found in the canned explanation for why we use money, somewhere around page 6. It runs something like this: there’s a plumber and a pig farmer who want to do business with one another, see, but the plumber’s Jewish and the pig farmer has nothing to trade but pork. Add money, and voila! The farmer sells his pork to other people and uses the proceeds to pay the plumber, who uses it to buy gefilte fish and matzoh meal. Everyone’s happy except, presumably, the pigs.
It all seems very logical until you think about it for ten seconds. Notice, to start with, how the explanation assumes that the plumber, the pig farmer, the purchasers of pork, the kosher deli, and everyone else are restricted to the specific kind of economic relationships that exist in, and only in, a money economy. The plumber doesn’t, as most people did as little as a hundred and fifty years ago, benefit from a household economy that provides a great deal of his food, including small livestock in the back garden. The pig farmer doesn’t, as most people did until as little as fifty years ago, do essentially all of his household repairs himself. Both of them are defined by a single function: the pig farmer can only produce pork, the plumber only plumbing.
Nor do the farmer, the plumber, or anyone else have access to any of the immense variety of nonmonetary systems of exchange human beings have used throughout history. !Kung hunter-gatherers sharing out a wildebeest among band members according to traditional rules, Haida chiefs distributing blankets and salmon to all comers at a potlatch, and medieval peasants working a baron’s demesne lands for a set number of days each year to maintain their feudal right to their own cottages and fields, all participated in flexible and effective systems of exchange that had nothing to do with money. Urban societies as complex as ancient Egypt got by entirely without money, and still managed to keep plumbers, pig farmers, and a great many other occupational specialties gainfully employed for millennia.
All that the textbook explanation proves, in other words, is that if you have a money economy, it does probably need some kind of money to make it work. This is not the conclusion the textbooks draw from the plumber and the pig farmer, of course; with very few exceptions, they leap from their canned example to the claim that money must be essential to any economy worth the name, and the rest of the textbook proceeds to focus on theories about the behavior of money under the false impression that those theories deal with the behavior of wealth.
The mistaken metaphysics discussed in last week’s post plays a large role in fostering this misunderstanding, but the sheer pervasiveness of money in today’s industrial economy has an even larger role. For most people in the modern industrial world, the only way to get access to any kind of wealth – that is, any good or service – is to get access to money first, and exchange the money for the wealth. This makes it all too easy to confuse money with wealth, and it also fosters the habit of thought that treats money as the driving force in economic life, and thinks of wealth as a product of money, rather than seeing money as an arbitrary measure of wealth.
The thought experiment of placing a hundred economists on a desert island with $1 million each but no food or water is a good corrective to this delusion. Unfortunately this same experiment is being tried on a much vaster scale by the world’s industrial economies right now. We have seven billion people on a planet with a finite and dwindling supply of the concentrated energy resources that are keeping most of them alive, and governments and businesses alike are acting as though the only possible difficulty in this situation is coming up with enough money to pay for investments in the energy industry.
It should be obvious that no amount of money can overcome the thermodynamic and statistical laws that have placed hard limits on the amount of highly concentrated energy resources that happen to exist on our planet. This is not obvious to most people nowadays, however, because the metastasis of money throughout the economy has trained nearly all of us to think that if you have enough money you can get whatever you want. The fact that the richest people in the world can put their entire fortunes into health care and still get old and die is one of the few persistent reminders that money cannot overcome the laws of nature, or provide access to goods and services that don’t exist.
So how did money get transformed from a convenient yardstick for real wealth to the be-all and end-all of contemporary economic life? At least three factors were involved, two of them common to complex urban societies throughout history, one unique to ours.
First, despite the drastic oversimplifications of the textbook example cited earlier, it reflects a reality: a complex society can gain significant advantages from a medium of exchange that can be traded for any form of wealth. Even in societies where most goods and services are distributed by way of social networks, a social consensus tends to establish certain trade goods – wampum shell strings among the First Nations of eastern North America, for instance – as a common measure for those goods and services that are exchanged in other ways. As a society becomes more complex and the division of labor among different crafts expands, some standard measure of wealth becomes more useful. While money itself was invented around 700 BCE by the ancient Greeks, other ways of measuring wealth for the sake of easy exchange had been in use in Old World urban societies for millennia before then, and it’s not inaccurate to include money or some equivalent system as part of the basic toolkit that makes complex urban societies possible.
Second, whenever common measures of wealth are controlled by institutions, those who manage those institutions become powerful, and can be counted on to maintain and expand their power whenever possible. In ancient Egypt, for example, grain in temple warehouses provided the basic measure of wealth; as a result the priests who controlled the stockpiled grain became a potent political force. In medieval Europe, when land was the basic measure of wealth – there’s a reason we still call it “real estate,” as though all other wealth is unreal – the power of the feudal nobility derived directly from their control of land. Today the governments that claim exclusive power to print and regulate money, and the banks and financial corporations that manage most of society’s money, derive much of their effective power from their control over the medium of economic exchange, and can be counted on to encourage the rest of society to rely ever more completely on the thing that gives them power.
These two factors can be traced in the history of most of the complex urban societies of the past. What makes our civilization something of an extreme case is a third factor – the extreme complexity of an economic system that has temporarily replaced the limited energy resources of other human societies with a torrent of cheap and abundant energy from fossil fuels.
Ilya Prigogine, one of the most innovative physicists of recent years, showed via a series of dizzyingly complex equations that the flow of energy through a system increases the complexity of the system. If there was ever any doubt of the accuracy of his claim, it was settled by the economic history of the western world from 1700 to the present. The societies over which the tsunami of the Industrial Revolution broke in the early 18th century were not unusually complex by the standards of past civilizations; their own contemporaries in the Chinese and Ottoman Empires considered western Europeans, and not without reason, to be grunting, smelly barbarians with few of the arts and graces of civilization.
Fossil fuels may not have done anything about the gracelessness and the smell, but it certainly made up for any shortage in complexity. Until the dawn of the industrial age, as a general rule of thumb, some 90% of the inhabitants of any complex society worked in agriculture, providing the food and raw materials that supported themselves as well as the 10% who could be spared for all other economic roles. By 1900, at the zenith of the age of coal, many nations in the industrial world had dropped the percentage of their work force in agriculture below 50%, and shifted the workers thus freed up into a broad assortment of new economic roles. By 2000, buoyed by the much higher concentration and efficiency of petroleum, many industrial nations had dropped the percentage of their work force in agriculture below 5%, with the other 95% filling newly invented roles in the most complex economies in the history of the planet.
One consequence of this swift and unprecedented surge in complexity was the triumph of money over all other systems of exchange. When the vast majority of workers at every income level labored at tasks so specialized that their efforts only produced value when combined with those of hundreds or thousands of other workers, money provided the only way they could receive a return on their labor. When most of the customers for any given product had money and nothing else to exchange for it, buying products for money became standard. Social networks of exchange – household economies, customary local exchanges, church and fraternal networks– shattered under the strain, and were replaced by purely economic relationships – wage labor, shopping, public assistance – that could be denominated entirely in cash. The last three centuries of social and economic history are largely a chronicle of the results.
If economists took a wider view of the history of their discipline than they generally do, they might have noticed that what most of them consider a fundamental feature of all economies worth studying – the centrality of money – is actually a unique feature of an economic era defined by cheap abundant energy. Since the fossil fuels that made that era possible are being extracted at a pace many times the rate at which new supplies are being discovered, current assumptions about the role of money in society may be in for a series of unexpected revisions.
In an ironic way, this process of revision may be fostered by the antics of the world’s industrial nations as they try to forestall the Great Recession by spending money they don’t have. The economic crisis that gripped the world in 2008 was primarily driven by a drastic mismatch between money and wealth. When the price of a rundown suburban house zoomed from $75,000 to $575,000, for example, the change marked a distortion in the yardstick rather than any actual increase in the wealth being measured. That distortion caused every economic decision based on it – for example, a buyer’s willingness to go over his head into debt to buy the house, or a bank’s willingness to lend money on the basis of imaginary equity – to suffer similar distortions. Now that the yardsticks have snapped back to something like their proper length, the results of the distortion have to be cleared out of the economy if the amount of money in the system is once again to reflect the actual amount of wealth.
Yet this is exactly what governments and businesses are doing their level best to forestall. Governments are scrambling to prop up economic activity at a pace the real wealth of their societies can no longer support; banks and businesses are doing everything in their power to divert attention from the fact that a great many of the financial assets propping up their balance sheets were never worth anything in the first place and now, if possible, are worth even less. Both are doing so by the simple expedient of spending money they don’t have. As government deficits worldwide spin out of control and the total notional value of the world’s derivatives market climbs steadily above one quadrillion dollars, the decoupling of money from wealth is even more extreme than it was at the height of the real estate bubble.
This is another context in which a wider view of history than economists usually allow themselves to take could offer a useful warning. The dominance of money in complex societies has a distinctive trajectory over time, and next week’s post will discuss some of the ways in which that trajectory might unfold in the decades immediately before us.
41 comments:
Wealth is so much more than money. Wealth is the sum total of real assets: having skills that add to society; engaging in mutually supportive personal and business relationships with others; the ability to enjoy life; and having a few useful possessions, and some money. Money is a part of life, but making its acquisition one's primary life goal actually leaves one in a precarious position - as money can't substitute for the other real assets. And also because - as you've noted in your post - money is more tied to the availability and supply of natural resources than most of us care to think about.
10/7/09, 8:32 PM
Patz said...
One of the effects of the fossil fuel (FF) age we are just beginning to exit is that the population explosion tracks FF use almost exactly. As we are at 7 billion souls with a dead aim on 9 + billion we have already overshoot that connection. That is because the population growth mechanics play out over a much longer time than FF depletion.
Another poster last week mentioned that China would achieve sustainability with its one child policy. That policy was implemented in 1979. However, from 1969 until 2005 China's population almost doubled up from 800,000 + to 1.3 almost 1.4 billion. As the population continues to grow it will reach a doubling within no more than 10 years. Moreover their ecological footprint is even outstripping that as they race into the industrial/technological age.
In the past few decades entertainment has been one of the few profitable exports of the United State's. No place in the world has been unaffected by the vision of the good life as portrayed by Hollywood dreams. It is a sad irony that we are concurrently running out of the means to provide the material progress people worldwide have learned to yearn for.
10/7/09, 8:40 PM
Dave Wahler said...
10/7/09, 10:18 PM
RDatta said...
10/7/09, 11:22 PM
Jason said...
If there is a 'source of money' other than government fiat, it is claimed implicitly in our cult of money that the source is actually desire, which literally produces money -- whether it is desire for goods or desire for health or shelter or food or whatever it is. If you wish money, your first job is to find desire.
(Hence, perhaps, the distorted New Age idea that if you only wish for something hard enough, in a spiritual kind of way, it will appear, in a physical kind of way.)
Desire is then automatically good, since its fulfillment can only increase wealth, and even the desire for human meaning itself can now be satisfied with the correct purchases, it is so often suggested.
Perhaps that is the reason so many think there will be 'more meaning' in a different economic system -- having found they can't obtain it with their Visa card, they assume it is simply not available!
10/8/09, 5:48 AM
Spirit Flower said...
10/8/09, 5:48 AM
xhmko said...
Put this into percentages as you have shown here and you can see the transition from people who find their food, to people throw away food without any idea where it came from.
I guess if you put the last 8000 years or so into a beaker, a small portion of crude oil would lazily rise to sit on the meniscus of many millennia of sweat.
Or something like that.
Another insightful analysis. Thanks JMG
10/8/09, 6:48 AM
Mark said...
This same distorted perception of money as wealth has also taken a many number of forms in the past 50 years as well; replacing one's aptitude of learning with a grade which measures how well the programming is working, uselessness as leisure, and destruction as recreation, (etc.)... As we all know, cancer spreads and destroys its host.
10/8/09, 7:10 AM
Jb said...
10/8/09, 7:55 AM
John Michael Greer said...
Patz, if you can come up with a million economists, I'll come up with the island.
Dave, I can all too easily imagine the handlettered cardboard sign: "will lecture for cookies."
RDatta, Chuang Tsu pointed out a long time ago that the best way to avoid getting into trouble in a crazy age is to make people think you're a harmless eccentric. I do my best...
Jason, bingo. Current New Age ideology is precisely the mindset of the modern shopper, applied to the world of the spirit.
Flower, thank you!
xhmko, my guess is that the total amount of energy extracted from fossil fuels in our age is equal to all the muscular energy exerted by human beings in all the ages leading up to ours. Remember that when a planeload of tourists fly from Los Angeles to Egypt to see the Great Pyramid, they use as much energy as it took to build the Great Pyramid in the first place.
Mark, no argument there. The near-total replacement of the liberal arts with the servile arts (i.e., making a living) in education is one of the least promising trends I can think of.
JB, thank you!
10/8/09, 8:16 AM
PanIdaho said...
10/8/09, 8:38 AM
J Gav said...
In the 'money situation' you so convincingly outline in this week's post, I guess it was predictable that flooding the world with virtual money would eventually lead to legions of virtual consumers. An absorbable shock, perhaps, when it's a question of dwindling numbers of widgets; an extremely perilous proposition, however, should it extend to key commodities like fossil fuels ... or food, and there are worrisome signs this may be happening.
In any case, leaving pyromaniacs in charge of the fire department hardly looks like the best way forward from here, does it?
10/8/09, 8:45 AM
Jason said...
10/8/09, 8:58 AM
xhmko said...
Imagine now for a second the combined work hours during a single day of every single organism on this patch of over excited stardust as it cleans up after us, provides breathable air for us and serves as food or at the very least a part of the service industry behind it.
I don't know if they have a theoretical number high enough to calculate the unknown perpendicular of this triangle of human labour x fossil fuel x said coordinated effort.
We claim to be flying high in the aircraft of evolution, but some plane crashes somewhere every year.
10/8/09, 9:27 AM
tristan said...
Must hang on 'till next week!
10/8/09, 12:11 PM
LynnHarding said...
I hope that the music and literature and all of the cultural things that we love are not destined to disappear as we get less energy, less complexity, less specialization. It is hard to be a farmer and a scholar!
10/8/09, 5:02 PM
John Michael Greer said...
Gav, societies that develop complex monetary systems always do seem to leave their fire departments in the hands of arsonists; more on the consequences next week.
Jason, thanks for the info.
xhmko, the only attempt I know of to quantify the economic value of natural systems came up with the very rough midrange estimate that of every dollar's worth of value used by human beings, 75 cents were provided free of charge by nature. My guess is that this is a serious underestimate.
Tristan, yep -- no escaping it.
Lynn, specialization is only one aspect of complexity, though it's an important part. The amount of energy flowing through a system doesn't determine how additional complexity will develop or what it will be used for, but it does determine that there will be additional complexity. The blanket rejection of determinism is just as unproductive as the blanket acceptance of it.
10/8/09, 9:33 PM
Vic said...
10/8/09, 11:02 PM
ajmacey said...
I work for a regional government in Australia and have some marginal involvement in public policy development. Since becoming aware of peak oil I have tried to have the issue considered by policymakers but to no avail.
While I am not familiar with Ilya Prigogine referenced in this post, the centrality of energy to the economy and the consequences that shortages lead to, seems compellingly made by yourself and others such as Tainter/Hirsch/Diamond etc. Given you need energy to make stuff a decline in energy must lead long term to economic decline. And this issue cant be taken in isolation, energy scarcity interacts with a range of other problems, for us most notably arable land and water, making those problems even worse.
Sounds defeatist but try as I might there is nothing I can do within the confines of the current system/structures of power to get any traction, a looming catastrophe will unfold, which, while it could not be prevented, could have been ameliorated. Anything 'controversial' like contingency planning just doesn't enter the discourse. Even from a risk management point of view, you would think the issue warrants serious consideration. The IEA, the very agency we as a government pay to advise on these issues sends out as clear a message as possible things need to change. Nothing, doing. They're still planning for economic growth, developing idiotic plans with no chance of success and no doubt when I flag the centrality of energy to the success of any strategy they look at me as a madman. Diamond discussed this in detail in Collapse where elites refuse to make changes to adapt to changing circumstances. Being witness to this ultimately self-defeating behaviour I don't understand the wilful arrogance. The economist mentality oft discussed on this blog reigns supreme.
The only issue I could raise on this post here from my perspective is yes, the government is trying to keep things going (but not in a way which will work) but they are only giving the people what they want. I can forsee endless bailouts of no longer viable industries and even greater government spending on health and education, which in a shrinking pie has to come at the expense of government spending which doesn't generate votes ie on maintainence of our basic infrastucture eg rail and water. Through business as usual it seems likely we will kick away the ladder we need for long term viability. Nobody is willing to make any sacrifice whatsoever. And when the current government change because they cant deliver on undeliverable promises of job creation,nothing will change as the new lot will make all the same promises. All leading to an erosion in the legitimacy of the state.
10/9/09, 5:55 AM
Jane said...
Several years ago, finding myself unemployable (age!) and with a small amount of money, I found a house that came with an acre of land in a regional town, and bought it. The house was old enough that it had been functional before electricity and oil... another plus, from my point of view.
I paid $85,000 for the house (all the money that I had.) The first reaction from a number of people was that I should subdivide it, build several houses on it and "make my fortune."
The house has been "revalued" at about 250,000, and of course I have had advice from all over the place that I should take the money and run.
It has taken my about five years to improve the soil to the point where I don't have much of a food bill (or any other bills for that matter)... I have been able to improve my asset even while in recent times, the "value" is going down!
My cousin still can't understand the difference between the value and the worth of my poor little house!
I think I'll give him your post to read. Thankyou.
10/9/09, 7:30 AM
Rimu said...
Unless the buyer is me...
10/9/09, 9:31 PM
LynnHarding said...
Thanks for listening to a bit of a rave. It is fun to find people thinking about things like this. You have a way of distilling things and getting at the foundations of concepts.
10/10/09, 11:28 AM
Patz said...
Alan should definitely be allowed to get off the island and keep his money!!!
10/10/09, 2:14 PM
secondera said...
I have two comments. First is that you can still have manias without fossil fuel input (ie. the tulip mania), but having an input as powerful as essentially free energy certainly helps. Second is that you omitted the economic trend after industrialization. Post industrial societies trade their manufacturing base for a service sector and certainly the most lucrative service sector is finance. Finance is best served by resources, people, markets and environments that can be exploited which is why it was so successful under colonialism. Once it begins to prey on these things within its own domain however, it begins to rot the very environment in which it operates. This is what is happening in the US at this time.
10/10/09, 8:10 PM
John Michael Greer said...
Ajmacey, this matches what I've heard from people elsewhere in local governments; even those that are willing to dabble in planning for the end of cheap energy aren't willing to put the plans into action -- one of the reasons I have my doubts about the Transition Town movement. One point you make that I think a lot of people miss is that local governments do this because their constituencies demand it; if they tried to do anything else, they'd be chucked out of office the way Jimmy Carter was.
Jane, right now you're wealthier than most millionaires. Don't let anybody talk you into trading away that wealth for a bunch of soon to be worthless paper.
Rimu, my thoughts exactly.
Lynn, my point is simply that deterministic explanations aren't always wrong. White's Law, for example, points out that economic development is directly correlated with energy per capita, so if you know the energy use per capita in a society, you also know within a fairly narrow window what their maximum level of economic development will be. It's thus entirely reasonable to say that the per capita energy use determines the level of development. It doesn't determine the form of development -- that's a much more complex thing, negotiated between people and the environment -- but it does rule out those forms of development that require a higher level of energy per capita than the culture has available.
Patz, thanks for the link!
Secondera, granted, you can have manias without fossil fuels, although you'll notice that they didn't get started in Europe until colonial ventures flooded European capitals with huge amounts of essentially free money. (Holland was a major colonial power at the time of the great tulip mania, for example.)
As for "post-industrial" economics, though, those don't exist yet. Ours is still an industrial economy, it's just one that has moved its company towns a little further away from the main population centers than they used to be. Finance was just as big a part of the economy, and just as dishonest, in the late 19th century when the US ran its factories at home. Look up the history of late 19th century financial panics and swindles in the US sometime; with the absence of computer trading and other silicon-based trickery, every bit of current fiscal chicanery had its exact equivalent back then.
10/10/09, 8:52 PM
J Gav said...
From the Bankers' Manifest of 1892:
"Capital must protect itself in every possible way, both by combination and legislation ... Debts must be collected, mortgages foreclosed as rapidly as possible.... When, through the process of law, the common people lose their homes, they will be more tractable and more easily governed ...
By dividing the people through the political party system, we can get them to expend their energies in fighting for questions of no importance to us, except as teachers of the common herd."
Or this from businessman Edward Kellogg's 1875 book, A New Monetary System: "The money power is the most unjust and deceitful of all earthly powers. It entails upon millions excessive toil, poverty and want while it keeps them ignorant of the cause of their sufferings; for, with their tacit consent, it silently transfers a large portion of their earnings into the hands of others, who have never lifted a finger to perform any productive labor."
10/11/09, 4:20 AM
gigglingwizard said...
This led me to meditate on how most of these people acquire money, and the interpersonal power dynamics involved. If a person can't (or believes he can't) get the things he needs without money, and he can't get money (or believes he can't) without a job, then that person's survival depends on his ability to convince someone else to employ him. Of course, there are all sorts of opportunities for people to be self-employed, but our schools don't train young people to be entrepreneurs or venture capitalists. They teach them to be employees. Our money-industrial economy, then, has created an artificial ecology where "survival of the fittest" means "survival of the most compliant." Based on this, it could be rationalized that discriminatory hiring practices are a form of genocide, cutting off the means of survival to a segment of the population by shutting them out of jobs.
I wrote a journal entry about it here: http://gigglingwizard.livejournal.com/569687.html
You rightly point out that people fairly recently used to produce much of their own food and did their own household repairs. One of the greatest challenges I see in helping people break free of the money=wealth mentality is helping them overcome their learned helplessness. 4-H, gardening clubs, canning parties, and all sorts of DIY activities exist for those who are already interested, but too many people just don't look into such things in the first place because they assume they would be hopelessly inept. Have you any ideas on how to give the general population the confidence they need to pursue development of home economies?
10/11/09, 11:22 AM
M.C.P. said...
mahalo for the post
10/11/09, 2:14 PM
John Michael Greer said...
GW, I don't think it's any lack of confidence that leads the general populace to ignore opportunities to do things for themselves. I think it's lack of incentive, and there's nothing I or you or anybody else can do to give them an incentive -- until, that is, hard times and changing conditions impose their own harsh incentives on the situation.
MCP, I've chosen to participate in the abstract money games that structure life in late industrial society, as there are certain things I want to do and certain resources I value that would be out of reach if I was a hermit, or otherwise living outside the money economy. I don't take those games seriously; I use them because for certain things, they're the only game in town just now. Their raw absurdity is simply another detail.
10/11/09, 3:26 PM
Simon said...
- The monetization of the economy started around 1400 at the latest. From then on institutions are converting customary rents paid in kind into coin, whenever they have the opportunity.
- A leaseholder in the low countries around 1600 AD could expect to pay half of the fruits of his labour in taxes and rents. Even assuming that elsewhere the agricultural bounty was much less, it wouldn't be unreasonable to go with a quarter of the population that was available for non-agricultural tasks.
Also consider that mere advances in machinery and transportation are not sufficient to reduce the part of the population working on the land; it's fertilizer that has a real impact there.
10/11/09, 5:30 PM
Raven said...
http://sites.google.com/site/livingwithoutmoney/Home/all-faq-s-together-in-printable-format
and realized that my thoughts and ideas were still distorted by money.
Unlikely that I am going to go out and live the way this guy does, though it seems appealing to live just as all other animals do, without the human constructs of time and money.
Thanks for sharing your good work with me!
10/12/09, 5:22 PM
secondera said...
I understand that while manufacturing at home has declined, manufacturing abroad has increased. Economies are still largely national affairs and so beginning with the UK, then Europe, the US and Canada and most recently Japan, these economies have all undergone this transition, but available data also indicates this trend towards the service sector is happening world wide.
I believe that dwindling resources, with fossil fuels leading the way, will reverse this trend. I actually think that the agricultural sector will begin to grow first with the manufacturing sector following because, among other reasons, while you can site manufacturing centers to improve efficiencies, you can’t do that with agriculture. You can call this return to reality the post-service economy.
10/12/09, 11:06 PM
Part said...
“Our thesis is that the idea of a self-adjusting market implied a stark utopia. Such an institution could not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surroundings into a wilderness.”
Indeed, he correctly foresaw the impacts of market that we are experiencing today:
"the vigor and stamina of the population, the abundance of food supplies, the amount and character of defense materials, even the climate of the country which might suffer from the denudation of forests, from erosions and dust bowls, all of which, ultimately, depend upon the factor land, yet none of which respond to the supply-and-demand mechanism of the market."
10/13/09, 12:20 AM
Lance Michael Foster said...
http://www.cnn.com/SPECIALS/2009/americana.in.focus/index.html
10/13/09, 6:13 AM
tony said...
"First is that you can still have manias without fossil fuel input (ie. the tulip mania), but having an input as powerful as essentially free energy certainly helps."
Concerning the tulip mania, there definitely was fossil fuel input: peat (much more than wind power for example). Peat and the Dutch Golden Age (http://www.peatandculture.nl/documenten/Zeeuw.pdf) is an extremely interesting paper about it, it explains why the Dutch could use their peat and others couldn't (accessibility by water). This was definitely an eye-opener to me (I live in Belgium btw).
10/13/09, 10:33 AM
John Michael Greer said...
Raven, you're welcome! It's not necessary to stop using money to get out from under the spell that makes people think it's the same thing as wealth; just treat it as a tool, and remember that its only value is the willingness of other people to take it in exchange.
Secondera, I don't doubt that there are a lot of services in the global economy these days; to some extent, it's what had to happen to provide jobs to workers surplused by automation. Even so, the manufacture of goods remains the core of the real economy; as you suggest, and I think you're quite right, most of the services are disposable in a pinch, much more so than goods.
Part, I'll certainly check him out.
Lance, one can only hope.
Tony, now that's interesting. I hadn't encountered that -- and in fact Lewis Mumford, whose work on the origins of industrialism has influenced me quite a bit, seems to have missed the role of peat entirely. Hmm!
10/13/09, 5:31 PM
Part said...
10/14/09, 1:59 AM
Simon said...
It still shows, however, that monetization and increasing complexity predate the surge of fossil fuel. At least 90% of the workforce in agriculture until 1900 is a an exaggeration. There certainly were counterexamples, although that doesn't change the main point that society was predominantly agricultural until fossil energy of course.
10/14/09, 4:40 AM
John Michael Greer said...
Simon, if you'll glance back at my post you'll see that I estimated 90% of the population involved in agriculture until the dawn of the industrial age -- which was a long time before 1900! (I'd put it around 1700.) Of course monetization and increased economic complexity precede that date; they're standard features of agrarian civilizations, after all (Rome managed a great deal of both). It's just that in societies without fossil fuels, you can't take either one as far -- another point I believe I made in my post.
10/14/09, 6:48 AM
mxyzptlk said...
10/14/09, 8:23 AM
Jb said...
Thank you for this terrific synopsis; it's my favorite in your series thus far.
Jb
10/20/09, 1:07 PM