Guest Post by Jim Kunstler
The debate over Thomas Piketty’s new book Capital in the Twenty-First Century is as dumb as every other issue-set in the public arena these days — a product of failed mental models, historical blindness, hubris, and wishful thinking. Piketty’s central idea is that wealth will continue to accumulate and concentrate among individual rich families at ever-greater rates and therefore that nation-states should take a number of steps to prevent that from happening or at least attempt to correct it.
The first mistake of Piketty fans such as New York Times op-ed ass Paul Krugman is the assumption that the dynamic labeled “capitalism” is an ism, a belief system that you can subscribe to or drop out of, depending on your political correctitude. That’s just not true. So-called capitalism is more like gravity, a set of laws that apply to and describe the behavior of surplus wealth, in particular wealth generated by industrial societies, which is to say unprecedented massive wealth. The human race never saw anything quite like it before. It became both a moral embarrassment and a political inconvenience. So among the intellectual grandiosities of modern times is the idea that this massive wealth can be politically managed to produce an ideal equitable society — with no side effects.
Hence, the bold but hapless 20th century experiment with statist communism, which pretended to abolish wealth but succeeded mainly in converting wealth into industrial waste and pollution, while directing the remainder to a lawless gangster government elite that ruled an expendable mass peasantry with maximum cruelty and injustice.
In the other industrial nations, loosely called “the west,” the pretense to abolish wealth altogether never completely took, but a great deal of wealth was “socialized” for the purpose of delivering public goods. That seemed to work fairly well in post-war Europe and a bit less-well in the USA after the anomalous Eisenhower decade when industrial labor enjoyed a power moment of wage arbitrage. Now that system is unraveling, and for the reason that Piketty & Company largely miss: industrial economies are winding down with the decline of cheap fossil fuels.
Piketty and his fans assume that the industrial orgy will continue one way or another, in other words that some mysterious “they” will “come up with innovative new technologies” to obviate the need for fossil fuels and that the volume of wealth generated will more or less continue to increase. This notion is childish, idiotic, and wrong. Energy and technology are not substitutable with each other. If you run out of the former, you can’t replace it with the latter (and by “run out” I mean get it at a return of energy investment that makes sense). The techno-narcissist Jeremy Rifkins and Ray Kurzweils among us propound magical something-for-nothing workarounds for our predicament, but they are just blowing smoke up the collective fundament of a credulous ruling plutocracy. In fact, we’re faced with an unprecedented contraction of wealth, and a shocking loss of ability to produce new wealth. That‘s the real “game-changer,” not the delusions about shale oil and the robotic “industrial renaissance” and all the related fantasies circulating among a leadership that checked its brains at the Microsoft window.
Of course, even in a general contraction wealth will still exist, and Piketty is certainly right that it will tend to remain concentrated (where it isn’t washed away in the deluge of broken promises to pay this and that obligation). But he is quite incorrect that the general conditions we enjoy at this moment in history will continue a whole lot longer — for instance the organization of giant nation-states and their ability to control populations. I suppose it’s counter-intuitive in this moment of the “Deep State” with all its Orwellian overtones of electronic surveillance and omnipotence, but I’d take the less popular view that the Deep State will choke to death on the diminishing returns of technology and that nation-states in general will first degenerate into impotence and then break up into smaller units. What’s more, I’d propose that the whole world is apt to be going medieval, so to speak, as we contend with our energy predicament and its effects on wealth generation, banking, and all the other operations of modern capital. That is, they’ll become a lot less modern.
As all this occurs, some families and individuals will hang onto wealth, and that wealth is apt to increase, though not at the scales and volumes afforded by industrial activities. Political theorizing a la Marx or Thomas Piketty is not liable to deprive them of it, but other forces will. The most plausible framework for understanding that is the circulation of elites. This refers to the tendency in history for one ruling elite to be overturned and replaced by another group, often by violence, and then become the new ruling elite. It always happens one way or another, and even the case of the Bolsheviks in Russia during the industrial 20th century can be seen this way.
In any case, just because human affairs follow certain patterns these days, don’t assume that all these patterns will persist. I doubt that the Warren Buffets and Jamie Dimons of the world will see their wealth confiscated via some new policy of the Internal Revenue Service — e.g. the proposed “tax on wealth.” Rather, its more likely that they’ll be strung up on lampposts or dragged over three miles of pavement behind their own limousines. After all, the second leading delusion in our culture these days, after the wish for a something-for-nothing magic energy rescue remedy, is the idea that we can politically organize our way out of the epochal predicament of civilization that we face. Piketty just feeds that secondary delusion.
“So-called capitalism is more like gravity, a set of laws that apply to and describe the behavior of surplus wealth, in particular wealth generated by industrial societies, which is to say unprecedented massive wealth.” ————- from the article
Kunstler’s mistake is that his idea of capitalism, if it ever existed, has been dead for several decades. Corporatism is not capitalism.
Going medieval or reverse enginering will happen, whether it is sudden and violent I don’t know. Cheap energy is now a thing of the past. My city is big on local food production, as we have a big farming base. I think JK is right about most things coming our way, since he is a gold bug and gardener, he gets my attention.
Stucky, go fuck yourself.
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Also from the article: “After all, the second leading delusion in our culture these days……. is the idea that we can politically organize our way out of the epochal predicament of civilization that we face.”
My cousin is part owner of a large business on the East Coast and also just bought a struggling company in Texas saving 120 or so jobs there. He also believes that voters will wake up and vote in a new political leader that will save the nation.
I like optimism but that is never going to happen. It’s as if we need to educate people that the solution to our economic problems is not another politician.
Sad.
Oligarchs, Billionaires, Uber Wealthy are Killing Capitalism– They Are Dangerous
Capitalism has many faces. That’s the message of Thomas Piketty, whose book, Capitalism in the Twenty-First Century, is making right wingers crazy, and clearing the inventory shelves of Amazon. The big message people are taking from his book is that capitalism as it now exists will produce income inequality.
Piketty has put a scientific face on what we’ve pretty much known already.
The detour capitalism has take that has led to the development of ultra-wealthy individuals could be a dead end– a dangerous detour that could disrupt capitalism as the world has known it.
This may be a message we, the ninety-nine percent can use against the billionaires, ultra-wealthy and the transnational corporations mutating capitalism to something that threatens the planet.
Reading Naomi Klein’s book Disaster Capitalism opened my eyes to the idea that there are different kinds of capitalism, and that some of them can be malignantly evil and toxic. I asked Naomi to describe the basic concept of Disaster Capitalism. She replied, in an interview on my radio show,
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“the thesis of the book is that if we want to understand how this radical “market fundamentalism” has swept the globe, the system that has imploded before our eyes, the de-regulated system that has been so profitable for the people at the top but something of a disaster for everyone else.
If we want to understand how this system has swept the globe from Latin America to Russia to this country, we need to understand the incredible “utility of crisis” to this project, because the great leaps forward for this project have taken place in the midst, during the immediate aftermath of some kind of a shock.
The extreme cases that I discuss in the book are wars, terrorist attacks, natural disasters, but overwhelmingly, the most common shocks that have created the context for pushing through these very unpopular policies in a way that economists often call “economic shock therapy,” the first shock is the economic crisis, the second shock is the economic shock therapy; overwhelmingly the shocks have been economic crises, whether it’s the Asian financial crisis in 1987 or the economic crisis in the former Soviet Union that created this sort of panic atmosphere where they could impose economic shock therapy, so we are in one of those moments of shock.
In the book, I quote a Polish human rights activist in 1989 describing what it was like in that country when they were living through a very profound economic crisis. They became the first Eastern Bloc country to be prescribed shock therapy, and as she said, “We’re living in ‘dog years’ (laughs) not human years, which is to say it’s this fast forward intense period where you can barely keep up and I think we are living in dog years at the moment.”
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A conversation I had with Thomas Frank a few years after Klein’s Disaster Capitalism came out got me thinking further about how there are different kinds of capitalism– some that really helped the middle class. Frank had just written a book, Pity the Billionaire, and he described how, after the crash of the 1930’s people got together and demanded economic cleanups. Capitalism, for the next forty years started to serve the middle class.
Yes capitalism is not some sacrosanct, one version, monolithic economic model.
The question is, who steers the ship of capitalism? Who decides what model of capitalism dominates?
What we know today is that capitalism is not working for more than 99% of the people on this planet. When capitalism is not working it increases the problems that make a more dangerous, less stable world– hunger, poverty, inequality, police states, corrupt judicial systems with different laws for elites.
When capitalism is warped and abused by a small group, it ruins capitalism for the rest of us.
It’s not just about the oligarchs and billionaires and the politicians they buy being greedy. These people are endangering the planet and ruining capitalism. Ruin of capitalism will also mean ruination for big corporations too.
Ruining capitalism? Yes, Capitalism the way Roosevelt sculpted it, capitalism with 92% top earner tax rates under Dwight Eisenhower– those were capitalist models that worked to raise the middle class and strengthen industry. Capitalism in the 1960s included publicly owned utilities, water companies, public transportation– it was a hybrid of capitalism with socialism– as we now have with medicare and road construction and public schools.
And let’s be clear some of the most dangerous billionaires are investing a fortune in eroding public education (Koch brothers,) in fighting efforts to deal with global warming (Koch brothers, Mellon Scaife,) are fighting to end regulation of corporations. These billionaires are allying with the biggest corporations to eliminate essential industry regulations– regulations that keep capitalism on a healthy path.
Is it possible to reframe and channel the explosion of interest in Piketty’s take on capitalism so the billionaires and oligarchs are identified as the bad guys, the ones literally creating a threat to the future of capitalism– that they are, because of their mutations and disruptions of capitalism, literally putting the viability of capitalism at risk
Naomi Klein spelled out the answer in our 2008 interview, saying, ” it’s not about who you vote for or who you trust. It’s about being a political adult and realizing that political change isn’t handed down from above; it’s demanded from below.”
And Thomas Frank observed, “Ultimately the lesson from the 30s is that you have to organize outside of political parties– that takes a lot of movement building.” Frank, two years ago, in February 2012, focused on the need for strong unions, just as Adolph Reed has emphasized this year.
The top has declared all out war on the bottom ninety-nine percent. The politicians in congress are bought and paid for, except for a small handful. The enemies of democracy, of the middle class are also the enemies of capitalism. That’s the message we need to get out there. Getting too big, too rich is bad for the economic system. It’s bad for national security. It’s bad for the future.
The ultra-wealthy try to put out a message that we, the 99% are jealous of their wealth. They turn true American values upside-down. Thomas Frank pointed out how conservatives were reframing the idea of work:
“workers are parasites. Guys like Mitt Romney are the real job creators. Workers should count themselves lucky to get a job from someone like Mitt Romney.”
We need to put out the meme– the wealth inequality situation is endangering capitalism, has created a dangerous form of capitalism that is un-natural, unprecedented and that will destroy the world economy as we’ve known it, replacing it with an experiment that is so disruptive that even if it succeeds, it will create chaos and violence that the world can’t afford.
I’ve been talking about how the world is going through a bottom-up connection revolution. Well, if there’s a revolution, it usually happens within the context of an existing power-order. The good news is there IS a bottom-up revolution going on. There are a lot of positive forces, positive trends under way .The bad news is the old, top-down order is at its pinnacle– incredibly powerful and using all its powerful resources to fight to hold on to what it has grabbed. The billionaires are funding this resistance to the bottom-up revolution, this attempt to consolidate their power.
We can beat them. We can help the waves of bottom-up connection energy that are swirling throughout the world, to gradually erode the top-down powers. When the erosion and the direct assaults on the top-down powers are further along, there will be no billionaires. The world will repudiate them as flickering momentary freakish abominations that existed in a handful of cultures for a few thousand years. We will live in a future not that far away, where a hybrid socialist capitalist culture shares justice for all, including the environment, where the most successful people are noted for doing the most good, not grabbing the most. This can happen, but only if we talk about it, only if we envision it and decide we want to make it happen. We must move towards positive world visions while at the same time villifying those who work to create and maintain toxic worlds.
http://www.opednews.com/articles/Oligarchs-Billionaires-U-by-Rob-Kall-Capitalism_Disaster-Capitalism_Oligarchy_Wealthy-140426-389.html
Any “ism” with a central bank is doomed to fail. A central bank is a main tenet of communism.
All are bankrupt now, socialism (Europe), communism (China), fascism (USA)…
Get rid of the central bank, have a money system that’s based on a finite substance like gold & silver, & U can have a legit economy. But the elites are like the poor welfare recipients, they don’t want to work for an honest day’s pay!
How many people even know the Constitution says US money is supposed to be gold/silver coinage, not paper money? Paper money backed by nothing may be the ultimate evil in its sneakiness.
Nixon fucked the US in a way that allows the current dumbass to pull his tricks.
If the US had sound money, Obama wouldn’t be able to do shit – no wars, no giant military, no sending jobs overseas, no inflation, no unaffordable higher ed. or healthcare…
Without changing the money system (no 1 should be able to create $ out of thin air backed by nothing), it don’t matter, the problems ain’t gonna be fixed!
Wait, I hear bb, Stucky, & AWD flying in from the future in their ReTardis time machine…Gotta go!
Econman ,you an idiot.How can we get rid of the central bank when there’s a 100 million people on the government dole ?People like Stucky have got to eat and he is never going back to work.There’s not enough tax payers like me to feed his fat ass so the government must get money from somewhere.Then you got all those negeeos that’s been on welfare for 50 years.Where’s the money coming from ?The central bank ,Dumbass.
Econman ,you must not work either or you wouldn’t been so willing to make excuses for all these worthless parasites in society.I starting to think you’re one of these worthless welfare motherfuckers will no job and no desire to get one.Nigger does as Nigger is.Right?
To bb,
#1, Dickweed, I own my own business & am an economics teacher.
# 2, I suspect U are an illegal immigrant with your horrible English. I’d like to see your green card.
# 3, if U are employed, whoever hired U should be fired.
# 4, repeat #s 1 through 3.
# 5, when U make fun of Stucky, U are hilarious. I agree with you on Stucky.
# 6, your economic comments are almost as stupid as Krugman’s. Are you related?
# 7, Is your ReTardis time machine a British police box, a cereal box, or a jail cell?
Econman
Exactly what is your fucking problem??
I have, so far, ignored your slams and negative UNPROVOKED comments against me.
I’ll do so for a little while longer …. giving you a chance to have the last word.
It won’t last forever. Don’t get into a prolonged shitfest with me. First, it will detract from this site. Second, you will come out the loser. Third, I will be in your head night and day … even when your ass-fucking your dog.
Econman is a flaming asshole…..
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Econman , I have worked every since I was 18 And now I am 52.*Going on 35 years .Paid taxes every step of the way.I have been hearing this poor minority shit all my life .Getting a little sick of it .
You 3 should get on line early to fill out forms for your snap & ebt cards. They may give u all a package deal.
U guys are hilarious.