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We are in the biggest global/sovereign debt crisis of the last 100 year, maybe more. The things that will cause an explosive collapse in this scenario is shrin

by anm89 4y ago

We are in the biggest global/sovereign debt crisis of the last 100 year, maybe more. The things that will cause an explosive collapse in this scenario is shrinking population and a global shrinking economy. Debt needs growth. It's like a mortgage on a house. It's a good deal if the house is increasing in value. It can quickly turn bad if the house is losing value. Personally, I'd prefer to see that collapse happen but understand it would be incredibly nasty. I think most people drastically underestimate how fucked up the world would be if GDP and population fell by 1% annually for the next 10 years.

xnx 4y ago
An economy that is dependent on continuously increasing population is the mother of all pyramid schemes.
- imtringued 4y ago
  When you read the comments in this article, everyone is basically arguing that abandoning the pyramid scheme and eliminating growth dependence is somehow going to make us poorer despite the fact that the vast majority of people in this thread only need growth to keep their jobs, not because they are unhappy with their massive salaries.
eCa 4y ago
Can you dive a bit deeper into why you would like to see our global civilization collapse? (I mean, if it doesn’t it’s not for lack of us trying. I just don’t see it as something to look forward to.)
- anm89 4y ago
  Our current system is wrecking the environment. That seems like a good enough reason for me.
dredmorbius 4y ago
Debt is a social construct and ultimately a notional and notational reality, not a real one. Real wealth is not financial but physical --- "the annual produce and labour of the nation" in Adam Smith's formulation (and hence a flow rather than a stock as many commentators have noted). Debt and credit reflect claims on that wealth, but not the wealth itself. Disrupting the claim-making system does have profund effects upon distribution, but does not fundamentally affect the actual production function itself. That is, by reallocating debt, one may influence who has claims on wealth produced, but even an infinite expansion of those claims still runs into upper limits of production, that being the classic definition of runaway-printing-press monetary inflation. There are several post-WWII articles on prisoner-of-war camp economics, often based on tokenised (though not barter) transactions based on cigarettes and other standardised items, interacting with both relief packages (generally provided by the International Red Cross) and some amount of indigenous POW-camp services (barbering, laundry, and entertainment, for example). The characteristics, benefits, and limitations of strict monetary manipulation were made clear.
- anm89 4y ago
  >debt is a social construct As opposed to what? A carbon based life form? A monster truck? Yes literally every thing that humans interact with that isn't constructed of atoms is a social construct. Contracts, agreements, trades, transactions. Every single concept in finance and economics. This isn't a profound statement
  - dredmorbius 4y ago
    Contrast with, say, physical or natural phenomena: the size of the Earth, solar insolation, the prevalence of various chemical elements within the Earth's crust, their organisation (or lack) into ores, their cycling through the biosphere, net primary productivity, and the like. A debt, by contrast, is a socially-recognised and generally legally sanctioned claim on another's wealth or productivity. That is, debt is fundamentally informational, and records a relationship, but that relationship is not fundamentally grounded in any underlying physical reality. As is noted, "debts that cannot be repaid won't", and when the notional fiction runs up against such a reality, the debt is retired. That is, the information is changed. There are numerous cultural, legal, and financial reasons to believe and behave otherwise, but ultimately, debts are a social, not a natural or intrinsic construct. Their behaviour is ultimately more a symptom than a cause of a larger growth or collapse. Debt wants growth, but need not have it. The principle challenge is that the modern monetary system based on central banks and fiat currencies was developed in a world of rapid economic growth. It need not be limited to such a world. Currency sovereigns can both retire debts and introduce new liquidity to maintain a flow which supports commercial transactions. A major problem to date has been that new liquidity introductions tend to be to the wealth-holding classes rather than those requiring currency to pay for current and essential demand and consumption. Again, there are historical reasons for this, but they are still cultural and notional, not some underlying Law of the Universe.

by anm89 4y ago

xnx 4y ago

An economy that is dependent on continuously increasing population is the mother of all pyramid schemes.

imtringued 4y ago
When you read the comments in this article, everyone is basically arguing that abandoning the pyramid scheme and eliminating growth dependence is somehow going to make us poorer despite the fact that the vast majority of people in this thread only need growth to keep their jobs, not because they are unhappy with their massive salaries.

eCa 4y ago

Can you dive a bit deeper into why you would like to see our global civilization collapse? (I mean, if it doesn’t it’s not for lack of us trying. I just don’t see it as something to look forward to.)

anm89 4y ago
Our current system is wrecking the environment. That seems like a good enough reason for me.

dredmorbius 4y ago

Debt is a social construct and ultimately a notional and notational reality, not a real one. Real wealth is not financial but physical --- "the annual produce and labour of the nation" in Adam Smith's formulation (and hence a flow rather than a stock as many commentators have noted). Debt and credit reflect claims on that wealth, but not the wealth itself. Disrupting the claim-making system does have profund effects upon distribution, but does not fundamentally affect the actual production function itself. That is, by reallocating debt, one may influence who has claims on wealth produced, but even an infinite expansion of those claims still runs into upper limits of production, that being the classic definition of runaway-printing-press monetary inflation. There are several post-WWII articles on prisoner-of-war camp economics, often based on tokenised (though not barter) transactions based on cigarettes and other standardised items, interacting with both relief packages (generally provided by the International Red Cross) and some amount of indigenous POW-camp services (barbering, laundry, and entertainment, for example). The characteristics, benefits, and limitations of strict monetary manipulation were made clear.

anm89 4y ago
>debt is a social construct As opposed to what? A carbon based life form? A monster truck? Yes literally every thing that humans interact with that isn't constructed of atoms is a social construct. Contracts, agreements, trades, transactions. Every single concept in finance and economics. This isn't a profound statement
- dredmorbius 4y ago
  Contrast with, say, physical or natural phenomena: the size of the Earth, solar insolation, the prevalence of various chemical elements within the Earth's crust, their organisation (or lack) into ores, their cycling through the biosphere, net primary productivity, and the like. A debt, by contrast, is a socially-recognised and generally legally sanctioned claim on another's wealth or productivity. That is, debt is fundamentally informational, and records a relationship, but that relationship is not fundamentally grounded in any underlying physical reality. As is noted, "debts that cannot be repaid won't", and when the notional fiction runs up against such a reality, the debt is retired. That is, the information is changed. There are numerous cultural, legal, and financial reasons to believe and behave otherwise, but ultimately, debts are a social, not a natural or intrinsic construct. Their behaviour is ultimately more a symptom than a cause of a larger growth or collapse. Debt wants growth, but need not have it. The principle challenge is that the modern monetary system based on central banks and fiat currencies was developed in a world of rapid economic growth. It need not be limited to such a world. Currency sovereigns can both retire debts and introduce new liquidity to maintain a flow which supports commercial transactions. A major problem to date has been that new liquidity introductions tend to be to the wealth-holding classes rather than those requiring currency to pay for current and essential demand and consumption. Again, there are historical reasons for this, but they are still cultural and notional, not some underlying Law of the Universe.