Archive for March, 2024

Water loss

March 29, 2024

It is frequently reported that human society, capitalism, developmentalism, the polluter elite, etc are destroying the planets capacity to regenerate the resources we are taking from it. At the moment, it is estimated we have used up everything by August 2. The rest of the year involves plunder and destruction and lowers the date for the consumption of regenerable resources, next year and so on.

This is a problem when we come to basic survival supplies, like water….

Ground water loss

the amounts of fresh water and their rate of adequacy, is hard to estimate, rains etc vary, but the UN has just reported the following. And I quote directly.

(Groundwater depletion).

Groundwater is an essential freshwater resource stored in underground reservoirs called “aquifers”. These aquifers supply drinking water to over 2 billion people, and around 70 per cent of withdrawals are used for agriculture. However, more than half of the world’s major aquifers are being depleted faster than they can be naturally replenished. As groundwater accumulates over thousands of years, it is essentially a non-renewable resource. The tipping point in this case is reached when the water table falls below a level that existing wells can access. Once crossed, farmers will no longer have access to groundwater to irrigate their crops. This not only puts farmers at risk of losing their livelihoods, but can also lead to food insecurity and put entire food production systems at risk of failure.

emphasis added

This is likely to generate a ‘risk tipping point’ which increases the likelihood of cascading failure involving other dangers, see below.

Losses of ground water have already affected some countries

In the mid-1990s, Saudi Arabia was the world’s sixth- largest wheat exporter, based on the large-scale extraction of groundwater for irrigation. But once the wells ran dry, Saudi Arabian wheat production dropped and they had to rely on wheat imported from elsewhere. Other countries, like India, are not far from approaching this risk tipping point, too.

Another source of problems for ground water includes mining operations, especially fracking which cracks rocks and mixes substances from different layers. While this can be protected against for some years, if all the cracks are sealed off, there will come a time when the sealants break, and pollutants start permeating aquifers. So that water that remains in the aquifers may no longer be drinkable. Carbon Capture and Storage also risks contaminating water supplies.

Other Water Loss

Loss of fresh water supply is also threatened by the decline in Mountain glaciers through increased heat. These glaciers source most of the world’s great rivers, and water shortages are expected to trigger wars. This diminishment of water supply, so it will never be as great as it was, can be called ‘peak water’.

Peak water has already passed or is expected to occur within the next 10 years for many of the small glaciers in Central Europe, western Canada or South America. In the Andes, where peak water has already passed for many glaciers, communities are now grappling with the impacts of unreliable water sources for drinking water and irrigation.

There are also issues of water storage in dams because of increased evaporation levels due to the increased heat.

In Australia we have been watching our rivers die for years, as irrigation appears to strip so much water from them, they can no longer function. This could lead to the collapse of inland agriculture and, of course, country towns.

Tipping points

The idea of a risk tipping point is fairly simple.

There are different kinds of tipping points. For example, “climate tipping points” are tipping points after after which unstoppable changes occur which influence global climate and stop it reverting back to what has been historically normal. Examples of such tipping points include the melting of the Greenland Ice Sheet, the release of methane from unfreezing tundra, the shifting of ocean currents, the rise in water vapour in the air. Some of these tipping points may have even occured even without rising temperatures, such as the human clearing of the Amazon and other large rainforests which will likely change rainfall patterns, as well as producing species extinction. Overfishing the oceans which could leave them dying.

A risk tipping point occurs when a “given socioecological system is no longer able to buffer risks and provide its expected functions” or when we have killed resilience, slack and redundancy in the social system and harmed its ability to bounce back to normal equilibria. If this happens “the risk of catastrophic impacts to these systems increases substantially”.

In an interconnected world the impacts of risk tipping points such as this are felt globally, as they cause ripple effects through food systems, the economy and the environment. They affect the very structure of our society and the well-being of future generations, and they also affect our ability to manage future risks. Groundwater, for instance, is relied upon to mitigate half of the agricultural losses caused by drought, a scenario we can expect to occur more often at many places in the future, due to climate change. If the groundwater has been depleted, this is an option we will no longer have.

So starvation, death, rampant inflation of food prices, food riots and so on can be expected to result from loss of water.

Given the world’s largely neoliberal regimes and their belief in markets, we can expect that the rich, and corporations, will try to purchase the water they need and take it away from others.

Privatization can be a problem

People will have heard of the UKs water problems. Given the country’s fame for rain, this is almost unbelievable, but water cleanliness is being destroyed by privatisation and the urge for profit.

UK rivers are full of sewage. the number of people admitted to hospital with waterborne diseases has risen by 60% since 2010. Data suggests that raw sewage was discharged into rivers and hence into the Seas, for 3.6m hours in 2023, doubling over the previous year.

The government has given water companies until 2035 to reduce the amount of sewage flowing into bathing water and ecologically important areas, but other discharges could continue until until 2050.

Perhaps not surprisingly Water companies increased profits from this bad performance. In 2022-23, they made £1.7bn in pre-tax profits, up 82% since 2018-19, when they made £955m. They also plan to increase water bills by up to 40%, to pay for cleaning up and debt payments. Over the last 30 or so years Thames Water has paid £7.2bn in dividends, and taken out £14.7bn in debt – some of which is likely to have gone on dividends. Between 1990 and 2023, English water companies have paid out a total of £53bn in dividends, meaning that they have given almost the same amount to shareholders as they currently have in debt.

Guardian 28 Feb 2024

In the US testing by the Environmental Protection agency has found that about 70 million people are exposed to toxic “forever chemicals” in their drinking water. However, the testing only covers one-third of the USA’s public water systems, so the total figures could be much higher. Independent estimates put the total at around 200 million people having tainted water. Likewise, parts of the water supply in the USA are heavily contaminated with cattle waste from huge feedlots. According to the Minnesota pollution control agency, nearly 70% of the state’s water pollution comes from crop and livestock production, and the pollution also affects groundwater wells.

Both shortage of fresh water and unpolluted fresh water will increase the problems of population increase. To feed the extra 2 billion or so people being, we may need to double the water supplies for irrigation.

Conclusion

As many as 4 billion people are already exposed to water stress conditions for at least one month a year. The natural ecosystems that provide clean water and alleviate floods and other risks — such as forests, mangroves and wetlands — are degrading and disappearing at alarming rates. Demand for water is projected to increase by up to 30% by 2050, while water-related conflicts and political instability are on the rise. And climate change is worsening the problem, intensifying floods and droughts, shifting precipitation patterns and fueling sea level rise.

World Resources Institute Securing Freshwater for All

This essentially human-based weakening of survival systems, is the real mark of the Anthropocene.

The more parts of the global system become precarious the more likely a system cascade will eventuate, in which a failure of one system generates failures in other systems which then reinforce the original failure and so on.

Increased rain, in some places, may be captured rather than simply flood and destroy towns, but that would require vast engineering works. A large building program for filtration and desalination plants may be necessary, although it seems improbable nowadays.

We have to stop destroying natural systems, and possibly risk building new kludge systems to deal with the destruction we have generated.

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Marxist Fantasy

March 23, 2024

Probably everyone is familiar with a few points of Marxist imagining of the Revolution.

Marx says

after the enslaving subordination of the individual to the division of labor, and therewith also the antithesis between mental and physical labor, has vanished; after labor has become not only a means of life but life’s prime want; after the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly – only then can the narrow horizon of bourgeois right be crossed in its entirety and society inscribe on its banners: From each according to his ability, to each according to his needs!

Marx Critique of the Gotha Programme section 1

And Engels

As soon as there is no longer any social class to be held in subjection; as soon as class rule, and the individual struggle for existence based upon our present anarchy in production, with the collisions and excesses arising from these, are removed, nothing more remains to be repressed, and a special repressive force, a state, is no longer necessary. The first act by virtue of which the state really constitutes itself the representative of the whole of society — the taking possession of the means of production in the name of society — this is, at the same time, its last independent act as a state. State interference in social relations becomes, in one domain after another, superfluous, and then dies out of itself; the government of persons is replaced by the administration of things, and by the conduct of processes of production. The state is not “abolished”. It dies out.

Anti-Duhring

The society which organizes production anew on the basis of free and equal association of the producers will put the whole state machinery where it will then belong–into the museum of antiquities, next to the spinning wheel and the bronze axe.

Origins of the Family

Will labour stop after the Revolution, or people become parasites? This seems to be a standard capitalist response – stop workers collaborating for fear they might end up supporting others as they do now….

To be a bit simplistic, Marx believed that all value and human life itself depended on human labor, so people would always have to work. The issue was that they would not have to work and have the value of their labor taken away from them. They would work freely without compulsion, for the pleasure of it.

In capitalism a person works for a capitalist or a boss, who pays them less than their labor is worth in order to profit. On the whole capitalists conspire to make this gap as big as possible, and they also try to make sure that people cannot be self-supporting (even in small business if possible) – so most people have to have a job and compete with others for that job to keep wages down.

In feudalism, the Lord take a conventional and usually religiously sanctioned percentage of what you grow on the land, so you labor for him some of your days. Technically, the Lord cannot stop you from supporting your family, or throw you off the land, without you having committed a crime.

In a slave society, slaves work under the threat of death and violence – this can be considered to be true in capitalism, hence the idea of ‘wage slavery’: most people have to work in a job or starve.

In ‘primitive societies’ you labor for yourself, your ‘extended family’ and other people and gift what you have in excess to others, or do whatever else you like – as nobody is taking anything away from you that threatens your ability to survive, and it is recognized that ‘economics’ and profit are not the only good things in life..

Part of the reason the State exists, according to Marx, is to separate you from your labor, so that it goes to your boss your lord, or your owner, and to protect the property and power of the dominant group from popular uprising. Adam Smith and David Hume said something similar. Capitalists will always want a State to protect them.

Without the State and enforced inequality, then Marx thought that people would again labor as they did in primitive societies; “each according to his ability, to each according to his needs.” In more modern terms we would say that this would probably be a status economy. If you produced for others you would gain status and respect, but it would not be an accumulative economy in which inheritance preserves inequality and status, so that the untalented children of the talented would be able to rule, but those ‘useless children’ would not starve, any more than anyone else. Everyone has to actively prevent class and power groups from arising.

It would be a real free enterprise economy that would not oppress others, destroy the earth and continually undermine its own functioning in other ways.

Marx chose to let the societies to come, find their own way forward as he had no idea what post-capitalist societies would be like, or what conditions they would face.

Yep rather than spend your days laboring for someone else and having no time for your self or your family, after the Revolution and the withering away of the State, it would be up to you. You could also work to improve things that others valued.

Personally I doubt this is possible, but it serves to remind people there are better ways of living than we have now.

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Polanyi on the rise of Fascism

March 17, 2024

Some degree of planning is probably useful when facing challenges, even granted the limited predictability of complex systems. Businesses need to plan all the time. However, as argued in the previous post, free market advocates attack government planning, especially planning for general welfare and protection from the market, as “a denial of freedom.” The only essentials of freedom are said to be “free enterprise and private ownership” (265). This could be said to be ‘Class War’ because it guarantees

the fullness of freedom for those whose income, leisure, and security need no enhancing, and [gives] a mere pittance of liberty for the people, who may in vain attempt to make use of their democratic rights to gain shelter from the power of the owners of property.

265

These objections to action means that the State becomes useless in facing challenges, particularly those challenges generated by the economic system. It may even privatise some of its operations, making itself and its people more vulnerable to the illth of the market. Polanyi argues that the “victory of fascism was made practically unavoidable by the [free marketeer’s] obstruction of any reform involving planning, regulation, or control” (265).

Freedom cannot flourish in a complex society without support for everyone to be free, or without enabling people to use their freedom. This requires law, regulation, and spending – without spending to help the ‘lower classes’, only the richest are free. It is not freedom to be at the beck and call and whims of a boss, to be the victim of plutocratic corporate planning, or to have no future.

Polanyi points out, that despite the free market ideology, no society is possible in which power and compulsion are completely absent, nor is it possible to have a world in which force has no function. What the free market people appear to want is not a world without power, but a world in which only corporate force can exist, democracy is pointless and the powerful can avoid responsibility for the consequences of their actions. For them the market is absolute good, and the democratic State is bad. The authoritarian state which protects the market is far better. Hence their sympathy to the idea of fascism, which might otherwise be hard to explain.

This [reluctance to plan for freedom] leaves no alternative but either to remain faithful to an illusionary idea of freedom and deny the reality of society, or to accept that reality and reject the idea of freedom. The first is the liberal’s [free marketeer’s] conclusion; the latter the fascist’s. No other seems possible.

(266)

In keeping with the implicit arguments of free market people, fascists protect the market economy and society from collapse, through the “extirpation of all democratic institutions, both in the industrial and the political realm” (245).

Essentially, the defense of free markets, and the diminution of democracy and government planning for general welfare, provides the situation for the rise of fascism.

While people may want to explain fascism by factors such as cultural history “there was no type of background — of religious, cultural, or national tradition — that made a country immune to fascism, once the conditions for its emergence were given” (246).

While fascism aimed at getting a mass following, it is not remotely a democratic or popular movement. Its strength

was reckoned not by the numbers of its adherents but by the influence of the persons in high position whose good will the fascist leaders possessed, and whose influence in the community could be counted upon to shelter them from the consequences of an abortive revolt, thus taking the risks out of revolution

(246)

This means that “fascist tactics were invariably those of a sham rebellion arranged with the tacit approval of the authorities who pretended to have been overwhelmed by force” (238). Fascists were invited in, to save the anti-worker forces and boost the conservative and pro-corporate, counter revolution (248). The elites pretended they had yielded to the people, to give the changes legitimacy.

In the fascist rebellion, the anti-democratic anti-egalitarian authorities preserved and “the bulwarks of democracy and constitutional liberties were stormed and their defenses found wanting in… spectacular fashion” (247), through being weakened by ‘free market’ politicians.

In Prussia, in July 1932, the legal government of the Social Democrats, entrenched in the seat of legitimate power, capitulated to the mere threat of unconstitutional violence on the part of Herr von Papen. Some six months later Hitler possessed himself peacefully of the highest positions of power, whence he at once launched a revolutionary attack of wholesale destruction against the institutions of the Weimar Republic and the constitutional parties. To imagine that it was the strength of the movement which created situations such as these, and not to see that it was the situation that gave birth in this case to the movement, is to miss the outstanding lesson of the past decades.

(247)

Summary

Polanyi argues that the fascist takeover comes about because free market supporters depower the State, de-democratise the State, imperiling freedom and organisation for most people, and destroying the capacity of the State to face challenges. This produces insolvable problems, as no planning or discussion can be allowed. Fascists with the support of the desperate elites (conservatives and free marketeers), resolve these challenges by asserting their power over the State and destroying non-corporate freedom completely. We can also suspect that fascism gave a morality of heroism, co-operation and self-sacrifice to the Nation, which people found more satisfactory than the self-interest of free markets.

I think that Polanyi ignores the importance of scapegoats and hatred to fascists. They were struggling against evil leftists, evil academics, artists, Jews, immigrants and so on. Those creatures were responsible for the troubles ordinary people faced, and so there was no need to challenge the real power elites, who could relax, knowing anger was being displaced elsewhere.

Relevance

This is relevant today because the dominant neoliberals on both sides of politics inhibit government action to help preserve freedom and general welfare, or to act on climate change and ecological destruction, because this might impinge on the ‘freedom’ of the market, to pay low wages, siphon off profits to the elites, or pollute.

The problems are accumulating. Hence neoliberals are shifting to support authoritarian leaders who will (in turn) support corporate action, freedom to pollute, freedom to discard staff, and freedom from having any responsibility for the damage they have caused.

Republicans have basically handed their party over to Trump and authoritarianism. People in the UK seem to be trying for a less leader-focused lack of responsibility in the elites. In Australia the media has promoted the more corporate friendly parts of One Nation, and the Coalition. Everywhere it seems like people are fed up with ineffectiveness, but having their anger displaced onto vulnerable scapegoats and voting for authorities.

The binary options seem to be restore democratic, active and responsible government that can face challenges, or get in the authoritarians who will purge people, protect business, and generate new challenges.

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Comments on Polanyi’s assertions about the failure of the 19th Century economy

March 17, 2024

Quotes from The Great Transformation

The economist and political theorist Karl Polanyi argued that 19th century society failed because of “the measures which [it] adopted in order not to be… annihilated by the action of the self-regulating market.” This ‘free market’ conflicted with “the elementary requirements of an organized social life” and produced the “strains and stresses which ultimately destroyed that society” (257). Capitalist markets are destructive of life and freedom even if they are constructive in other ways.

The problem arose from organising the economy on the principles of self-interest. As Polanyi points out “Such an organization of economic life is entirely unnatural, in the strictly empirical sense of exceptional.” It tried to naturalise its oddness, by claiming that all contrary behavior was “the result of outside interference” (257).

However, while self-interest exists, it is not the only principle of human action. There are also factors going beyond the calculating little self, like co-operation, compassion, charity, generosity and so on, all of which are needed for a satisfying life. Perhaps reduction to this simplicity comes from a market which expects it and destroys satisfaction in order to persuade people to consume what is unneeded.

More to the point, these so called “free markets” are also engineered by force:

Economic history reveals that the emergence of national markets was in no way the result of the gradual and spontaneous emancipation of the economic sphere from governmental control. On the contrary, the market has been the outcome of a conscious and often violent intervention on the part of government [or business] which imposed the market organization on society for noneconomic ends. (258)

Moreover, the supposed separation of politics and economic, which has never happened, served political purposes, to produce freedom foe some “at the cost of justice and security” and liberty for most other people who were condemned by riches, and kept in powerlessness. It was not a political decision to keep them dependent on ‘their betters’ for survival and to pay them low wages, it was what the impersonal economy demanded. Yet it may be worth preserving the ideas of “moral freedom and independence of mind” for all, not just the dominant class. It is that freedom, when used from the point of view of those suppressed by the economy, that suggests the economy does not deliver what it promises. As we see today, markets do not always deliver liberty and prosperity for all, they may even deliver authoritarianism (as discussed in the next part of this blog).

The shifting of industrial civilization onto a new nonmarketing basis seems to many a task too desperate to contemplate. “They fear an institutional vacuum or, even worse, the loss of freedom. Need these perils prevail?” (258).

As Polanyi points out, this current market is already permeated by loss of freedom for most people, employment with unlivable wages, economic crashes, profiteering, inability to act because of lack of money or leisure etc. The market was curtailed for a while after WWII, but came back in the 1970s to 80s. Now we have the additions of climate change, ecological destruction and plutocracy. Not doing something may be a greater danger.

The removal of corporately controlled ‘free markets’ will not be the end of markets, trade and exchange flourished long before capitalism and wage labour, but it could be the end of treating people and land as commodities controlled by the market, able to be dismissed cheaply or destroyed for profit.

With a new economy, freedom might not be as constrained by market forces.

The current corporate free market market not only seems unnatural and suppressive of humanity, but is kept going by force. It is becoming less easy to keep going by force the more that ecologies ‘fight back’ against their destruction and produce conditions under which those markets, and market societies, likely cannot exist in a vaguely satisfactory way.

However, the danger is that people may attempt to resolve (not solve) these challenges by a resurgence of authoritarianism, which suppresses people and awareness of the real issues, while favouring the Party and the rich elites. In short, we are threatened by a fascism which will make the situation worse.

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Neoliberalism: its knowledge and free markets are weak

March 15, 2024

Neoliberalism is not just an economic theory but a cosmology, and a political/ethical way of understanding humans and the universe. As such, it is extremely limited, and hence surprisingly weak in some ways.

Neoliberalism attempts to govern complexity and emergence by only attending to markets. It possibly rightly warns of the dangers of government planning and of concentrated government power, as (due to complexity) no government planning can be based on a total understanding of the world system (or ‘Gaia’), and governmental power can interrupt and disrupt beneficial processes. It tends to see all government action on behalf of ‘the majority of the people’ (such as livable minimum wages, social security etc) as leading to totalitarianism. Neoliberalism supports its position by suggesting that the market acts as both an information system and as a responsive system generating spontaneous and beneficial order. As such it tends to argue that markets can solve all problems, and that governments are necessarily sources of disruption, corruption and inefficiency, and should do little beyond supporting the market, enforcing contracts and providing military defence.

In order to make these claims neoliberalism ignores some important factors. It ignores the effects of corporate power and planning and riches, by assuming that rich people and organisations will not ally and plan together, organise to structure markets in their favour, or have enough power to affect the system. It denies that the power of riches could be as disruptive and ignorant as the power of government. It also does not appear to consider that attending to price systems as information systems emphasises price signals, profit and the power of others to disrupt profit, while suppressing or distracting people from other vital information. It lives within self-produced disinformation. It also downplays the possibility neoliberal corporately bought governments may be encouraged by market participants to support established markets and market players and throttle emergent or necessary change or correction.

In other words neoliberalism may well cut itself off from information vital to its sustainability, and interfere with systemic processes to disrupt its survival. It also seems to ignore the idea that Gaia is relevant to economies, and propose that markets have no limits which they should refrain from disrupting. Neoliberalism encourages a politics of unboundedness, which is not currently founded on fact. Neoliberals largely ignore climate change and ecological destruction, although they would acknowledge them as price signals. Limits are only known as far as they affect profits, and that might encourage (or not hinder) destructive practices to maintain profits.

Discussing neoliberalism’s success as a cosmology and method of preserving corporate power from challenges may give the impression that it is a system of total control. Neoliberalism may be a system which encourages a type of total control that reduces every possibility to some form of profit or capitalist organisation and evaluation. There is also the possibility of its followers using some kind of corporate fascism (as capitalists did in the 1920s and 30s) to maintain stability, but complexity means that control cannot be total, or feel total – it is distributed. Neoliberals my try so hard because they always fail to make everything capitalist.

Neoliberalism is vulnerable to its own success in removing visible opposition, the lack of perception it encourages, the interstitial gaps it produces and cannot recognise, and the resistance it generates. If many of the rich elites are concerned with escaping from the world crisis as suggested by Bourdieu and Rushkoff, then that is an indication they have no solutions they have any faith in, and hence that their weakness is growing.

There is also the possibility that some of the harmful effects of neoliberalism such as growing inequalities, massive ecological destruction and climate change are unintended consequences of its practices, rather than the product of deliberate evil (Keen #)[j1] . This possibility might also change the way we approach it.

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What economic theory needs to realise?

March 6, 2024

A kind of sequel to the previous post about free markets and politics.

A realistic economic theory needs to recognize that:

Politics

  • ‘The Market’ is never separate from politics. Riches gives power so, to survive as a free and open market, the economy needs power relations to be equalized (especially across generations) and equitable access to power available to all.
  • It is standard for the rich to team up to protect and increase their riches. The rich want power and buying it is easy in a society that values ‘The Market’ beyond anything else, as everything is up for sale. It would be seem to be immoral not to make a profit when its offered. Standard market theory recognizes that poorer people can team up against the rich, and does everything it can to stop it, but does nothing to stop the rich teaming up against the poorer – or even hails it as good business practice.
  • The rich tend to pollute more, and often attempt to make sure that pollution gets dumped on poorer and less powerful people. This is the real meaning of the trickle down economy.

Psychology and information

  • People are co-operative as well as competitive. Market theory needs to recognize that actually functioning markets involve co-operation, collaboration and competition, and that models based on entirely ‘selfish’ individual actions are unreal. Social psychologies are complex.
  • Price systems are not perfect information processors, because market practice includes distorting information, PR, advertising, faking prices, collusion, internal trading, wiping out small competitors by price cutting, becoming monopolies or oligopolies, profit gouging, overriding local information, and so on – all of which distort the price system, until it is too late and a crash of some kind occurs. Markets operate in unreal and fantasy spaces as much as in real spaces.
  • Markets are reflexive. What people believe about the market and how the market works, may change their behaviour and therefore change the market. Economists are much more likely to be driven by ‘selfishness’ than non-economists who have a more complicated view of human nature. The same is likely to be true of business people, who believe this idea. Hence control over information is important to market activity.
  • Maximal profit seeking does not conserve traditions, stability or anything else (it is anti-conservative), and does not encourage ‘virtue’. It even invents religions who proclaim that God allocates wealth to good people, and that if you are not rich, you are not virtuous. The market is likely to continually undermine its moral legitimacy. More importantly, encouraging only the one value, motivation and form of organisation, can lead to lack of variety in response and hence lack of resilience.
  • In current riches-structured markets, corporate power can ignore information about say climate change, with the apparent exception of insurance corps who recognize the growing problem that past data on disasters is no longer of use to calculate their risks. In this market bent by power and propaganda, it seems really good strategy for fossil fuel companies to continue to sell their products and massively profit, while they still can, despite the harms it will bring for others or for the market in general. They hope that riches will protect them as other people die. And its profitable for politicians to go along with this, and to fear what the corporations will do to them, if they act. Ideologues can even dismiss business concerns about survival as being woke capitalism.

Complexity

  • Economies are complex systems that interact with complex social, psychological, ecological, energy, and technological systems, amongst other systems. As such, markets are inherently unstable subject to unpredictable changes – equilibrium may be rare. Markets crashes occur even if all actors are perfectly selfish and rational because markets require actors to make predictions in an unpredictable situation with bad information.
  • Complex systems have patterns which arise despite the intentions or workings of the participants. Thus market workings cannot be completely derived from ‘economic man’ even if it was an accurate idea. ‘Economic man’ is as likely to arise from the system as vice versa.

Ecology

  • A functional market requires a functional ecology. Markets operate within ecologies. Ecologies are not completely submissive to market demands. Ecologies can change because markets alter or destroy them.
  • Markets and manufacture involve waste, pollution and extraction. These necessary processes to particular forms of market organisation, can be harmful to the market as they can destroy the ecology the market depends upon. Markets are systems of destruction as much as they are systems of production.
  • Markets cannot expand forever on a finite planet. We are already over consuming our resources faster than they regenerate, which will lead to a crash, because of lack of water or other essential supplies. We cannot assume useful innovation will certainly happen.

Innovation

  • Markets like other complex systems have emergent properties and they can be considered creative.
  • Innovations and product substitutions may not be possible, no matter how useful, or how much the price system signals that it would be a good idea.
  • Innovations may not arrive in time, in a form which is useable, at a price which makes them useable, in a form which is acceptable to both the dominant elites or the economic system, and they may have destructive effects which undermine their use.
  • Markets cannot solve every problem or challenge that can arise, because some problems may be wholly or partly generated by markets, such as climate change.
  • Emergence does not have to harmonise with what the market would like. Emergent processes can destroy essential properties of the market.

Energy

  • Markets require energy and energy sources. With declining energy, then in general, but not always, less can be done. Systems will likely collapse without a change in organisation or organisers. With more energy more can be done and more can be disrupted or destroyed.
  • Energy availability is usually structured by riches. The rich use more energy not only in their work lives but in their personal lives.
  • The basic form of energy for markets is human labour, or labour power. However, this can eventually become far less important than other sources of energy, and these other sources can become directed by machines. The economy can destroy the need for much human labour. A question is whether labour providers then starve or not.
  • The main sources of effectively unlimited energy are the Sun, nuclear forces, earth processes (such as wind, tidal power, and thermal gradients).
  • The presence of entropy (energy dispersion) and physical entropy (pollution and costs of maintenance and repair), cannot be ignored in a real economic model..

All of this may be difficult, but having easy but fundamentally inaccurate theories, which leave out vital parts of economic dynamics, will not give useful results, and may hinder necessary transformation.

Finally

Non-revolutionary approaches to the free market, are basically plans to reinforce power and wealth inequalities and stop most people from improving their lives. Forty plus years of neoliberal talk and legislation for ‘free markets’, should show the truth of this.

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Free market theory

March 5, 2024

Ok I keep writing similar things 🙂 but the variations might be useful.

The obvious first point is that capitalism does not allow a ‘free market.’ Free markets will always be prevented by the entrenched power and the patterns of behavior of those who benefit from the current market arrangement including: the corporate class, the hyper-rich, their networks of think tanks and their bought, or hopeful to be bought, political supporters.

Markets are always about politics. Even markets of ‘gift exchange’ tend to be about establishing alliances, relationships, obligation, dominance etc. which involves and manifests politics. Gift exchange economies have the advantage that the tend not to build up class systems, they are more ‘immediate’ and status cannot be inherited, and most people can participate in them if they want.

If a free market could exist, it would undermine itself politically. Such markets inevitably lead to plutocracy and to constant demands for ‘the people’ to subjugate themselves to bosses. The more talk of free markets, the more plutocracy, and the more markets are structured to favour those who are already a success and their children.

If a person really wanted free markets then there seem, in general, to be two ways of getting them. One is the Revolutionary way and one we might call the Neoliberal way

The revolutionary way to get a free market is to abolish and overthrow the currently existing market completely, as it is a market established, designed and built for the rich and their networks of exclusion – and it does not work to deliver general liberty, openness, equal opportunity, efficiency or prosperity.

This revolutionary approach would first get rid of huge accumulations of ‘private property’ and its power, as property is often stolen from original inhabitants and ordinary people. That property should be made common. Perhaps people could be allocated roughly equivalent housing and other essential property and start again more equally with a more level playing field with open access. This would help get rid of the wealth inequalities which would then get rid of the rich’s ability to buy markets, politicians and information. People would need to make it so the wealthy cannot structure the market to suit them and to stop a massively unequal accumulation of riches from ever happening again and destroying free and open markets through modes of inheritance and accumulation. People would need to remove all state subsidies for wealth and corporate pollution, although allowing equitable social insurance so everyone has some levels of protection against misfortune, fraud, and the capitalist boom and bust syndrome. You would also need to try and destroy the rich’s networks for ‘self-help’ and mutual backscratching, so people can operate according to their abilities rather than to who they know. And so on.

Libertarians will never take a revolutionary approach, because libertarianism is about protecting the liberty of the wealthy, protecting rich people from other people and from the State. Nothing more than that.

The Neoliberal (conservative political party) way is to protect all the inequalities, and roll back the State from helping anyone who is not rich. It aims to stop the State from protecting people though environmental or anti-pollution regulation, eliminating fraud, legislating minimum wages, minimum protections at work, social security and welfare and so on. They officially say this will increase liberty but it clearly won’t – it will just free the corporate sector to do what it likes to you, and make you more desperate to sell your life to a job.

Libertarians generally support this Republican approach, which increases the power of the rich.

The next post looks at some of what a realistic theory of economics needs to consider

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