Tiptoe on the tightrope

David Seaton's News Links
A couple of days ago I uploaded a post about the idea that the "productivity revolution" was the starting point for today's economic fright. Among several interesting comments, I got these questions from News Links reader, Steve Crawley:

I would like to hear the rest of the story from you about the post-collapse era. Here are a few prompting questions to hopefully get you started. Assuming technology and advanced communications continue be with us, will they contribute to improving our national economic or is something else needed? Do you agree social instability has not yet arrived, but is just around the corner? Or is there another path that is necessary for some sort of economic and possibly social stability to return?

To begin to answer Steve's questions, I would have to start with Yogi Berra's famous caveat, that it is difficult to make predictions... especially about the future. Yuck, yuck.

Talking to people that are supposed to know about this stuff, they seem to agree that the most orthodox way out this mess is to devalue ones currency, up productivity and cut wages...

If my idea is correct that upping productivity has already cut jobs and stagnated or lowered the salaries of many if not most remaining jobs and made it necessary to lend money to people with little hope of paying it back just to keep the whole mishagoss in motion, then you can see that the last two items on the list -- upping productivity and lowering wages -- would eventually only lead to more unhappiness.

This assumes of course that I am right and that the absolutely amazing gains made in productivity since the personal computer and the Internet were wedded to industry are what is behind all of this mess.

As to what the contributions technology and advanced communications might make to improving our national economy. I've just read Fareed Zakaria's recent and quickly outdated book, "The Post American World", where Zakaria writes about advances in nanotechnology:

At some point in the future, or so I'm told, households will construct products out of raw materials, and businesses will simply create the formulas that turn atoms into goods.

The idea is that you put some powder you order on the Internet into a washtub, add water and out walks a TV set, thus putting millions of Chinese people out of work.

Whether this ever happens or not, the fact that somebody might think it was a good idea and that a lot of money was being invested in making it happen would have to put you on your guard a bit: it's the thought that counts.

So as to "social instability" being just around the corner, that all depends where the corner is. Is this crisis the turning of that corner?

I think the real "corner turner" will be the crisis that comes from the remedies that are being applied in this present crisis.

This particular crisis is about a vacuum in credibility. It isn't exactly America's "fall of the wall" moment... yet, but it is moving in that direction. Think what it means when a whole ideology crashes.

When I was a young fellow many people truly believed, and had made huge personal sacrifices all their long lives in the belief that history's inevitable march was toward socialism and that the Soviet Union was the genuine vanguard in that march. Many were still believing it right up till the moment when Gorbachev pulled down the Red Flag on the Kremlin.

It is impossible to exaggerate what an intellectual and political hole that left... a hole big enough for people like Alan Greenspan and George W. Bush to walk through.

The Madoff scandal is the quintessential caricature of the whole moment. The idea that people had around the world had was that American Jewish people were the only people intelligent enough to really understand advanced financial products and it turns out that America's richest, therefore smartest, Jewish people were as stupid as it was possible to be, even Madoff himself to ever think he could get away with it, all this destroying centuries of malignant stereotypes of preternatural craftiness at the worst possible and inopportune moment.

The bottom line is: If America's richest Jews are just as stupid as the rest of the world's goyim, then... who is minding the store?

Substitute "American" for "Jewish" and you've got the whole idea of this crisis's implications.

So, with the deflation of Real-Existing Socialism and now Pensée Unique we are now going to have to fake it.

Digging through the ruins of Marxism, we can probably find some useful and recyclable refuse. One idea that people are going to be rolling around again is that capitalism is a historical "phase" like feudalism with a beginning, middle and end.

I don't think it is ending now or anything like it, but people are now going to take seriously the idea that it will end at some point and if nothing else table talk is going to be more interesting. DS