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Seven predictions about our future. Most are unusual. All are certain to happen (I think)

13 May 2012

Summary:  What possible futures lie ahead for America and the world.  We can only guess, but good guesses will help us prepare.  Here are the seven big predictions of the FM website.  Our past record is quite good (see the Past Predictions page).  You might find these forecasts deserve your attention.

(1) Forecast: Death of the American Constitution, 4 July 2006

The the post-WWII global order collapses around us, but America seems unable to see this – let alone adapt to it.  This post discusses one of the most important consequences:  is the following still true?  It has been revised several times since its original publication in 2006.  Other chapters in this series appear at the end.

(2) The Fate of Israel, 28 July 2006

Part two in a series of articles about grand strategy in a 4GW Era.  This chapter shows (1) the difficulty of distinguishing strong from weak in 4GW, and (2) that choosing a wrong grand strategy can be terminal for a state.  It could easily prove fatal for Israel. 

(3) COIN – a perspective from 23rd century textbooks, 10 June 2008

Neither America or any other State will attempt large-scale attempts to directly fight insurgencies in foreign lands.  They may send cash, advisers, and trainers, but no combat troops.  The local government will retain the lead role.  If there is no functioning government, other major powers will either abandon it (e.g., Africa) or take over (intending to restore order and exit).  But the incredible cost in blood and money of America’s early 21st century adventures in Iraq and Afghanistan will act as definitive proof of the intolerably low cost-effectiveness of COIN in foreign lands.  Historians will find it incredible that such vast resources were wasted in the face of pressing and urgent needs elsewhere.

(4) A third American regime will arise from the ashes of the present one, 30 March 2010 — An optimistic vision.

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The dysfunctional nature of our political apparatus shows that the second American regime has begun its death throes.  History shows that the transitional period can take decades — and that America can emerge renewed and stronger. Or stronger but undemocratic. Or weaker and undemocratic. Our choices will determine the outcome.  Here’s another article with the same theme:  “The Coming of the Fourth American Republic” by James V. Delong.

Update: on other days my expectations for the next regime are less optimistic:

(5)  Important:  The coming big increase in structural unemployment, 7 August 2010 — First in a series about the next wave of automation, larger than we can imagine.

The future holds many new and strange challenges.  And some that we’ve grappled with successfully for generations, but most be confronted anew again.  Such as automation.  The next wave of automation will affect the service sector, by far the largest sector of employment.  It will affect America like nothing since the automation of agriculture, which reshaped America from a rural to urban nation.  We can only guess at the effects.

(6)  Important:  The good news:  America’s politics are neither polarized nor dysfunctional.  That’s also the bad news., 16 November 2011

How sad that we so underestimate our leaders, confusing their skillful political engineering with folly.  Of course their successful manipulation of us allows them to laugh at our scorn. No matter who wins in the 2012 elections, in 2013 our representatives will raise taxes, cut expenditures (including Social Security and Medicare), start rebuilding our infrastructure, and begin the long process of reforming health care.  America is well-governed.  But not governed in our interests, but rather those of its stakeholders.

Another explanation of this:   Fear not! America will not fall due to its citizens’ imprudence. We’ve found a sure solution.

(7)  Something different:  A look back at our time from the 2100 A.D. edition of the Encyclopedia Britannica, 24 June 2010 — Some wild speculation and inspired guessing.

Today we have an exercise in future history (see Wikipedia), a look at my forecast of medium-term geopolitical trends.  The most interesting predictions are at the end (starting with #4), our responses to the obvious trends.

Also see these FM reference pages

  1. Predictions – how do they look now?
  2. Smackdowns – corrections & rebuttals to FM posts
  3. History – economic, military and geopolitical
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22 Comments leave one →
  1. Thomas Moore permalink
    13 May 2012 5:21 am

    Some of these are not predictions, but rearview-mirror glimpses. The constitution died on 12 September 2001. Since then, Americans have kept up the pretense and the outward forms of our constitution (we still have elections, for example, and we still have jury trials) but in practice the actual procedures required by our constitution have been abandoned. The fourth amendment is gone (asset forfeiture gutted that in the 1980s), the fifth amendment requirement for due process vanished the instant we got a president ordering “extraordinary rendition” (interestingly enough, Bill Clinton was the American president who began the practice of extraordinary rendition — not George W. Bush!). The sixth amendment requirement for jury trials has been eliminated by the AUMF, and the subsequent passage of the NDAA by bipartisan consensus in congress. The eighth amendment prohibition on torture was eliminated when tasers were introduced and became accepted in ordinary civilian use on six-year-old children, and that occurred back during the 1990s. The fourteenth amendment requiring the government to respect citizens’ civil rights was finally and completely eliminated when a circuit court denied Anwar Al-Awlaki’s father’s lawsuit to prevent the extrajudicial murder of his son. When a federal court says that you don’t have the right to bring a lawsuit to prevent the president from murdering someone without even accusing him of a crime, it’s game over for the fourteenth amendment.

    In retrospect, Clinton’s ill-fated Somalia misadventure (actually initiated by George H. W. Bush, but carried over in the Clinton administration) looks like the death knell for large-scale first-world military incursions in third world states. Desert Storm looks at this distance of time like a peculiar atemporal anomaly, a throwback to an earlier period of military history made possible only by an exceptionally foolish and irrational leader (Saddam Hussein) and a unique combo of terrain and circumstances (the last large-scale tank battle to take place in history, probably). It seems as unrepresentative of the rest of its era as Teddy Roosevelt’s charge of the rough riders up San Juan Hill — similar escapades proved disastrous during WW I, just a few years later. Teddy got very very lucky, and the circumstances were unique. So that prediction about COIN I think also looks backward. Vietnam probably really put paid to COIN and Somalia sealed the deal.

    The “coming big increase in structural unemployment” is already here. Take a look at Ezra Klein’s recent post “The incredible shrinking labor force.” Tim Duy at Fedwatch has also been talking about this for years. Marshall Brain and Martin Ford have been talking about this for years now, along with less-well-known figures like Bruce Sterling who calls it “favela chic.” So this is another look in the earview mirror.

    It’s not clear whether a single new American regime will arise from the disruptions produced by massive automation & the consequent disappearance of the middle class + Peak Oil, etc., or whether America will break apart and become a failed state. We already boast many of the characteristics of a failed state: nonfunctional government that can’t get anything meaningful done, abandonment of the rule of law, rise of secret police who operate outside the law, universal spying on citizens, constantly dropping productivity, a Soviet-like militarization of everyday life and concomitant hypertrophy of the military sector along with the withering-away of everything not related to the domestic American stasi-type securität or military/paramilitary (which now includes all police, TSA, DHS, DEA, etc.). Washington state has now declared a whooping cough epidemic and is begging for federal help as the number of cases soar. Apparently the state doesn’t have the money in the current recession for the basic health measures that would prevent this kind of Victorian-era public health problem.

    Martin van Creveld has predicted (correctly) that technological and social forces now rapidly erode the viability of the nation-state. All nation-states find themselves increasingly unable to meet citizens’ basic needs (preventing a Dickensian illness like whooping cough from becoming epidemic is a good example), so citizens increasingly abandon their allegiance to the nation-state in favor of other more tribal associations (Facebook, if a nation, would be world’s fourth largest).

    So it’s not clear that America will hold together in the face of these technology & social pressures in the 21st century. Looking back, the USA enjoyed some big advantages from its sheer geographic size over the past 250 years, but its geographic size and population have now become distinct liabilities. In the era of Peak Oil, large geographic separation twixt resource-producing and resource-consuming parts of the America (the midwest vs. the 2 coasts) is going to be a big social and economic problem. A giant population is only beneficial if everyone works, and automation appears to be driving us toward a society in which most people find themselves unemployed by machines. A cowboy-style culture of rough-and-ready individualism had real virtues when America was mostly a frontier in need of taming, but this mindset has become intensely dysfunctional in a 21st century where cooperation and a globalized integrated economy is the engine of wealth.Consider this chart of the correlation twixt nationwide K-12 math scores and per capita GDP ofor 2009. While correlation is not necessarily causation, the changeover to a new global economic regime seems clear in charts like this.

    As for the rest of your predictions, time will tell. We cannot lift ourselves enough out of our zeitgeist to see the transformations rushing toward us as technology changes and peak resource + population pressure change homo sapiens’ relationship to our planetary environment. Current predictions include a post-scarcity economy courtesy of asteroid mining and the dvance of robotics — not entirely science-fictional, as the asteroid Vesta has now been shown by recent space probes to have a metallic core and appears to be a protoplanet that never fully formed. Since rare elements like platinum and palladium are only rare on earth because they dissolved early in our planet’s history into the metallic core, they’re bound to be abundant in Vesta’s much smaller & now cold metallic core. If we could mine Vesta with robots, we’d have more gigatons of every kind of rare metal, along with hydrocarbons, than the wildest dreams of avarice could imagine. Other current predictions prove distinctly grimmer: the Olduvai Collapse, in which human civilization distintegrates back to the level of stone tools. As with most competing predictions about an uncertain future, the real future is likely to be “none of the above,” and something we currently can’t imagine.

    Like

    • 13 May 2012 5:31 am

      I don’t believe you are clear what is past and present.

      (1) How did you know that the Constitution died in 2001? Newspaper obits? On what basis do you so confidently predict that we cannot recover? As of today you’re just guessing.

      (2) I don’t read Ezra Klein, but he’s no economics guru. The evidence is overwhelming that we now have cyclically high unemployment, not structural unemployment (excluding retirement of boomers, so far a relatively small factor). For details see
      Do we have a shortage of workers, or just cheap employers? Part one and part two.

      (3) “Vietnam probably really put paid to COIN and Somalia sealed the deal.”

      How odd that Vietnam “put paid” to COIN, but three decades later we started decade-long COIN operations — now expanded to 6+ nations (depending how you count them).

      Like

    • themurr permalink
      13 May 2012 5:39 am

      Fabius, I should’ve saved my email for you to respond here, it fits at least halfway well. Thomas, we seem to have entered an early imperial Roman phase, with the forms intact, but the functions subverted, at least that was the crux of my thought.

      The other thought I have is of the book “Brokedown Palace” by Steven Brust (1986, see Wikipedia). It looks at the idea of whether a system is worth saving or if it would be better to demolish it. I don’t know what the answer is, but it is a question worth asking at this point. I have no answers, but I do agree with Churchill, we end up doing the right thing, after we’ve exhausted every other choice.

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    • 13 May 2012 12:54 pm

      Historical analogies are useful tools, but of course never exact. IMO the key similarities are those between USA today and late Republican Rome, which reflects my view that the Republic still lives, but steadily weakens. But there are similarities with early Imperial Rome. I’ve used both.

      “whether a system is worth saving or if it would be better to demolish it.”

      That’s a powerful question. My answer is simple: the Republic dies because of our weakness and disinterest. We no longer make the effort to work the political machinery. Nature abhors a vacuum — an ancient aphorism, going back to Rome (Natura abhorret a vacuo) or earlier. It’s the nature of life that powerful interests grow upon our weakness. The world has many predators.

      But our very weakness guarantees that anything that replaces the Republic will be worse. Destroying the Republic only eliminates our ability to recover — and will result in a system designed to contain and oppress us. Things can always get worse.

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    • 13 May 2012 6:16 am

      Desert storm was exactly what we are good at: You mess with us and we will blow through there like a whirlwind and your descendants will tell that story for a thousand years. Afghanistan started out that way too: guys on horseback with lasers calling in airstrikes. Epic. Inexpensive.

      But then we decided to stay.

      Like

  2. 13 May 2012 7:39 am

    My commentaries on the Fabian prophesies:

    (1) The Constitution is like a tree, its been dying for some time now. What you now observe is the tree falling and rotting.

    (2) {Israel} Agree, but I think the Arab countries around it have to bring it down; their success will usher a new age for them (they will hardly stop at Israel).

    (3) {COIN} Agree, but I believe big-scale war between states will make a comeback.

    (4) {Third Regime} Nature abhors a vacuum.

    (5) {Structural Employment} Agree, the US is experiencing, in my opinion, what Europe went through in the seventies the result will be: higher unemployment, lower fertility, less innovation, larger state, etc.

    (6) {change in 2013} Agree. US citizens are constantly surprised how well-organised the ruling-elite are.

    (7) Below are answers for the most interesting:

    (7.1) {Islamic reformation} You must be joking!

    (7.2) {next wave collapse of fertility} Pills won’t make a difference, its a social phenomenon; look at the fertility of the black man in the US: he fathers children, but has no family.

    (7.4) {peak oil} Oil prices will rise due to dollar printing, when peak oil hits no-one will take dollars for oil (or any other resource).

    (7.6) {crash research into energy} I wouldn’t hold my breath if I were you.

    (7.10) Two very funny items (thank you for the comic relief):

    (7.10.1) Forget about China, rats are leaving that sinking ship.

    (7.10.2) The “Saudi Republic” I had to laugh very loudly indeed when I read this! You are aware that “Saud” is the name of the ruling family? Either the whole Arabian peninsula (from Turkey to the sea) stands united or fall divided.

    (7.11) {geopol change}The wolf also shall dwell with the lamb, and the leopard shall lie down with the kid; and the calf and the young lion and the fatling together; and a little child shall lead them.
    And the cow and the bear shall feed; their young ones shall lie down together: and the lion shall eat straw like the ox.
    And the sucking child shall play on the hole of the asp, and the weaned child shall put his hand on the cockatrice’ den.

    Isaiah 11:6-8

    The sun is setting on the age of peace and commerce.

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    • 13 May 2012 1:51 pm

      We can only guess about the future. But several of your responses don’t match the past and present; others seem to deny that change happens.

      5: structural unemployment from automation — You don’t agree. Europe in the 1970s did not experience massive structural unemployment from automation.

      7.1: Islamic reformation — No, I’m not joking. Change happens. But this is just a guess.

      7.2: next wave collapse of fertility – “Pills won’t make a difference, its a social phenomenon.” That’s an odd forecast since the first pill made a massive difference. Technology has large effects on society.

      7.4 (peak oil) — A rise in oil prices in US dollars is not peak oil. Also, I love to read the religous-like confidence of inflationistas. Like cultists predicting The End on Tuesday, failure of past predictions does not affect them. First, the factors that supposedly will force US “dollar printing” are even stronger in Japan and Europe (ie, the dollar might be the strongest of the big 3 currencies). Second, unanticipated inflation is magic — but anticipated inflation is suicide. For details see Update on the inflation hysteria, the invisible monster about to devour us!

      7.5 (crash energy research) “I wouldn’t hold my breath if I were you.” This one is certaint as we approach peak oil (whenever that is). Do you really believe that rising oil prices will not spark a frantic search for alternatives?

      7.10.1 — “Forget about China, rats are leaving that sinking ship.” What are you referring to?

      7.10.2 — “You are aware that “Saud” is the name of the ruling family?” So you believe the Saudi Princes will rule for an eternity? Like peak oil, change is certain. Only the date is unknown.

      7.11 “The sun is setting on the age of peace and commerce.” We can only guess about the future, but I few signs of that. Most of the rising power are trade-based; the only major State obsessed with arms and foreign interventions is the USA.

      Like

    • 13 May 2012 6:13 pm

      Just one last remark: “So you believe the Saudi Princes will rule for an eternity?”

      No I don’t think they will rule for an eternity, but I very much doubt that any republic would be called after the current ruling family. Predictions require extensive knowledge about the subject, clearly you don’t know the history of Saudi Arabia, otherwise you would not have predict something as ridicules as the “Saudi Republic”!

      Like

    • 13 May 2012 6:38 pm

      Anonemiss,

      I didn’t mean that they will be called specifically the “Saudi republic”. Such a precise prediction are beyond anyone’s ability (these are broad guesses, not prophecy from God). Rather it was an easy way to describe a change of political regime in what is today the area ruled by the Saudi Princes.

      Also, your confident assertion as to the name of the next regime seems a bit much, IMO (ie, not the Saudi Republic). New regimes often continue the forms and titles of the past. An evolution of power from the Saudi Princes to a broader base might keep the name in some form.

      The extreme example is the Roman Emperors’ use of Senātus Populusque Rōmānus (“The Senate and People of Rome”, aka SPQR) as the official description of their rule — long after neither the people nor Senate had substantial power. More current is that the official form of government in some European nations is a form of monarchy (eg, the Kingdom of Sweden), without the monarch having much substantial power.

      Like

    • Bluestocking permalink
      13 May 2012 8:17 pm

      7.5 (crash energy research) “I wouldn’t hold my breath if I were you.” This one is certaint as we approach peak oil (whenever that is). Do you really believe that rising oil prices will not spark a frantic search for alternatives? — Fabius Maximus

      As far as I’m aware, there’s never really been any doubt that rising oil prices and Peak Oil would trigger a frantic search for alternatives. The biggest source of concern has always been how long it will take us to come up with effective alternatives and what will happen to ordinary people in the time between the point at which oil prices rise beyond their own personal means and the point at which the alternative fuel(s) can truly replace or become a viable substitute for petroleum. I think this may be what Anonemiss was trying to get at. This is a particularly worrisome problem for our culture because of suburban sprawl and the (increasing) emphasis on personal independence rather than interdependent community spirit — as well as the critical fact that our entire agricultural industry from start to finish, all the way from preparing the soil for planting to carrying food home from the grocery store, is massively dependent on petroleum.

      It is only natural to anticipate that as prices for petroleum rise, so will food prices — indeed, we saw this to at least some degree during the last oil price spike in the year or two before the recession (at which point oil prices began to lower again because people were cutting back on travel and in general spending less). What happens when rising oil prices and the resulting rise in food prices make it even more difficult for poorer people to afford food…in a country where an estimated one in six people are already suffering from “very low food security”, a growing number of Americans are on food stamps as a result of the recession, and food pantries are finding it difficult to meet the demand? (One possible solution is encouraging a transition to a mostly or entirely vegetarian diet, since a sizable amount of the grain grown in this country is used for livestock feed — but that still wouldn’t fix the problems of growing and transporting it.) What happens when rising oil prices force smaller transportation companies to go out of business or else agree to be absorbed by larger companies, reducing competition and leaving people vulnerable to the caprices of those who have the whip hand? The one saving grace in this equation may be that rising oil prices might also slow the rate of technological advancement and therefore structural unemployment, since petroleum is also heavily used in industry — i.e., an significant ingredient in plastics manufacturing.

      As Michael C. Ruppert has pointed out, the fact is that we’ve actually already been given two visible examples on a much smaller scale of how the latency period might play out after Peak Oil and before the firm establishment of an alternative-fuel society — these being Cuba and North Korea, both of which experienced a serious fuel crisis in the aftermath of the collapse of the Soviet Union. Cuba is the positive model, North Korea is the negative one. The Cuban government instructed the people to begin planting food wherever there was ground available for cultivation, with the result that food production became more localized and there was enough to be had. The North Korean government stubbornly insisted on maintaining their centralized model, with the result that their country suffered widespread famine.

      Like

    • 13 May 2012 9:37 pm

      Bluestocking,

      (1) How will peak oil play out? For two perspectives see:

      (2) Debunking the oil-food price doomster theory:

      (3) About Michael Rupert, wingnut doomster with an astonishingly long history of failed predictions.

      21 September 2005 (Link):

      While I had serious doubts about America’s ability to recover from Katrina, I am certain that – barring divine intervention – the United States is finished; not only as a superpower, but possibly even as a single, unified nation with the arrival of Hurricane Rita.

      9 January 2009 (Link):

      • I can pretty much bet that as many as 50-75 new Executive Orders will be announced within 72 hours of the inauguration.
      • I wouldn’t be at all surprised to see a couple of days with 700+ point losses in the Dow over the next ten days to two weeks.
      • Reports have suggested that China may dump half of its $1.4 trillion dollar holdings within the next two months.
      • As I correspond with a number of key friends and researchers around the world we have all concluded that it may be just a matter of weeks (yikes!) before we start seeing major disruptions in everyday life.
      • Soon it will be necessary for me to look at topics which we’ve mentioned in passing. These include civil unrest, camps, emergency communications and preparedness as the threat of societal breakdown becomes imminent. It’s time to start doing that.

      25 November 2008 (Link):

      • “The end” of the U.S. economy by March or April.
      • Gold $2000 an oz. by March
      • People starving and screaming for food by August
      • Conditions 10x worse than The Great Depression by August
      • Oil above $100, gas above $3.00 by Summer.

      13 September 2005 (Link):

      “I predict we will soon see a national draft, and Canada will not harbor U.S. deserters as it did during Vietnam, as it is now a virtual U.S. colony.”

      25 April 2009 (Link):

      “Now, with the swine flu outbreak just developing, it is clear that the dieoff has begun…”

      Like

  3. 13 May 2012 7:59 am

    Strange Post, FM.

    The Constitution has been stretched and revised and ignored for many, many years

    Israel has had a demographic problem for many years.

    COIN will never be deployed again….and the Defense Budget will be reduced!

    Another American Regime will arise form the “Ashes”…what fire? Is this like Lodgepoles after a forest fire, the great storehouse of American pine-coned values will save the Bright Shining House on the Hill?

    The coming big increase in Structural Unemployment but it is really cyclical unemployment?!…duh.

    American Politics is neither dysfunctional nor polarized….the Elites laugh in scorn at us because they are so adept at fooling us polarized, dysfunctional sheep.

    Taxes will increase…REALLY?,… as in like some Cuts may expire!

    Med and SS will be reduced….no kidding?…like how much, FM? Sorta like maybe the 17% across the Board cuts will cause some Primary Docs to sit this one out or that Medicaid reimbursements do not cover costs of goods sold in most Urban Clinics—-and yes, that will bring reform to a market based System? Yes!

    “Infrastructure”? Do you know even the basic useful life of an asphalt street or a concrete bridge (and who really pays for the bridges across the rivers in your town?) Ever seen a modern highway system that is not alligatored with sub-soil decay? Do you even know where you might find such a system? Who is the prime supplier on the SF/CA BAY BRIDGE?

    Suggestion only: Stick to telling the sheep how their dreams are dust and how it is their own fault. That’s easy. That ends conversations and keeps it light. T’is your own darn fault sucker, you didn’t vote or the Media is just a business and you won’t buy the Truth so they stopped printing it!

    Breton

    Like

    • 13 May 2012 1:54 pm

      Breton,

      My guess is that you didn’t read the post very closely, as you appear to have missed the key elements. Few of your jibes make much sense. I’ll give just one example:

      “The coming big increase in Structural Unemployment but it is really cyclical unemployment?!…duh.”

      What are you attempting to say?

      Like

  4. Ole C G Olesen permalink
    13 May 2012 11:42 am

    Fabius Maximus ! To end our ongoing discussions.. around on Your various postings here 2 things i reccomend and I say this .. because I appreciate Your basic attitudes and principles which should gouvern a country

    First a ” Funny” One… which isnt funny ..by the way : describes the ” Situation” in the US quite clearly .. and should direct the VOTE of any patriotic american in another direction

    Secondly .. a LINK to a man who has been MY mentor for the last 14 years with regards to everything financial in a Geopolitical sense : He is precise , enourmously knowledgable , describes most things short and with biting Wit can see connections and explain even complicated economic matters in a way .. everybody can understand.. without loosing quality … and has proven himself right .. for all the time i have read his publication : The collecttive team of Fabius Maximus and all its readers would do wise .. reading this Australians publication THAT will enable YOU and your readers to see the financials of your country and the World as they occur .. ..more clearly. http://www.the-privateer.com

    I would URGE You to prenumerate on this news publication .. you will not regrett the money spent ( I havent for 14 years ) He was the ONLY ONE and absolutely FIRST to predict ..in a logical well-founded way ..all what has occurred since 2007 .. many years prior to the events took place .. which I can prove.. as i have saved all what this man has written for most of the last 14 years

    Let me end with this small excerpt from the publication : Sorry Bill .. but You can say things better than anyone I know so : from The Privateer:

    “In an article in New York Times , May 8 … the dilemma of Greece now and the rest of the world very soon was put in succinct detail by a US fund manager : “ It is easy to abandon austerity measures because they are painfull things to do . It is much tougher to figure out how to grow an economy “ Figuring out how to grow an economy is exceedingly easy thing to do. It merely requires living within one’s means , saving the surplus and investing in new and/or more efficient means of wealth creation. That process has been known and followed for thousands of years . Prehistoric herders did not grow rich by depleting their herds and prehistoric farmers did not “increase” their “ economic growth” by eating their seed corn . They would have laughed to scorn anyone who tried to convince them that this is possible. The problem today is that purveyors of these nostrums are not laughed to scorn , they are elected to office , appointed to run central banks or given Nobel prizes in economics . “ Growing “ an economy is difficult if most of the means to do so have been cut of … It becomes impossible when the realization has dawned that the seed corn has gone . “

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    • 13 May 2012 2:07 pm

      The excerpt from the Privateer makes little sense as a description of “the rest of the world”. It contains a classic statement of stupidity pretending to be smart:

      “Figuring out how to grow an economy is exceedingly easy thing to do. It merely requires living within one’s means , saving the surplus and investing in new and/or more efficient means of wealth creation.”

      These god-like statements are of little use to most people, because the devil lies in the details. In fact, as most developmental economists admit, we don’t know how to structure an economy so that it grows. Also, one element of successful nations (from 19th century America to China today) that contradicts this trite formula: prudent use of debt.

      Like

  5. Ole C G Olesen permalink
    13 May 2012 3:59 pm

    Really ..Fabius ? I certainly hope for Your private economy ..that You follow the advice . As should a country do … and all would be well … and I have seen plenty of such endevours applied successfully … as well as the opposite .

    But ofc ,, i do understand that from an American perspective .. the statements by the Author must be percieved as .. well shall we say outlandish .. NOT having to depend on Borrowing from abroad … recieved … voluntarily .. or forced.? Have You ever read the fairy tale : The Emerors New Clothes ? You see .. thats the problem.. the Financial World..especially in the USA and in the UK but also many other places are like the Emperor parading down the road…. NAKED. The have NO CLOTHES = NO CASH

    To stray from simple calculus has never brought anyone economic success. Fabius .. You do … and thereby demonstrate that You dont understand economic reality !

    Like

    • 13 May 2012 4:17 pm

      I stated that a common element in successful national development was wise use of debt, and cited the examples of America, Japan, the Tigers of East Asia, and China. Supporting my point that there was no one formula for national success, each used different kinds of debt, differently funded.

      Look at America. The Revolution was to a large extent funded by France. The expansion into the West was largely funded with European loans (esp from the UK).

      And in rebuttal Olec cites a fairy tale.

      Enough said. This is a waste of time, both my time writing and of the FM website’s readers. Olec, either cite data or please stop. No more rants. Further comments will be moderated.

      Like

  6. Zemtar permalink
    14 May 2012 12:49 am

    I can’t shake the gut feeling that the root of the “problem” lies in some formulation of too many people without meaningful roles to play in the future to come, with a continued trend towards greater stratification of wealth distribution. It seems like that is a root cause of many of the other problems, and it is a worldwide problem.

    While resource scarcity is surely going to be an issue, new technologies and new areas of resource extraction (i.e. asteroids, etc.) will (hopefully) eventually come online as things get scarce, what are we going to do about all the people who don’t have anything to do because of increasing automation? How can you have a meaningful democracy when most people don’t have meaningful roles? If the masses aren’t necessary partners, why should the ruling class do anything other than “keep them in line” with bread and circuses (sp?)?

    I feel like a cranky old man saying this, but what are the pilots going to do when the skies are filled with computer controlled drones? What are the machinists going to do when their computer controlled lathes no longer require their assistance? What is the factory worker going to do when the fully automated factories come on line (with their fully automated repair and maintenance subroutines)? Its not as if they will “share in the wealth,” as the vast majority of people do not hold any significant share of stocks or capital.

    Look at the great gains in productivity over the last 30 years or so. Due to automated assistance, American workers are far more productive, but they don’t get paid any extra money and, in fact, are in a more precarious position.

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  7. Thomas Moore permalink
    14 May 2012 2:09 am

    FM remarks: “I don’t believe you are clear what is past and present.”

    Absolutely correct. The future tends to bleed into the past, and the past tends to diffuse into the future. It’s often hard to separate the two. As, for example, southern states’ re-enactment of Jefferson Davis’ secession speech on the anniversary of the Civil War last year.

    FM asks: “How did you know that the Constitution died in 2001? Newspaper obits?”

    Correctamundo! Here’s the exact newspaper obit for the U.S. constitution, written on 12 September 2001 and published a day later: “World War Three.”

    “…I couldn’t help but wonder: Does my country really understand that this is World War III?”
    — Tom Friedman

    When you’re in the midst of World War Three, you don’t both about the fifth amendment or the sixth amendment or any other civil rights guaranteed by the constitution. As soon as America starting spewing newspaper headlines like AMERICA UNDER ATTACK and WORLD WAR THREE, the constitution was dead. because on a battlefield that includes the entire world and every state inside your own country, you don’t worry about the constitution. On a battlefield, who worries about whether an enemy soldier had his fifth amendment rights violated? So on 12 September 2001, the U.S. constitution died.

    FM goes on to aver: “On what basis do you so confidently predict that we cannot recover? As of today you’re just guessing.”

    I don’t predict that we “cannot recover.” I only observe that the American constitution has no more force today in actual practice than the Soviet constitution (which was truly admirable, and full of wonderful guarantees) had under Stalin.

    The constitution is dead — but since we’re speculatin’ about the future, that’s the realm of science fiction. And as we all know, the third Star Trek film showed us that the dead can return to life. So maybe the constitution will come back to life. Who knows? Anything is possible.

    As for the statement that “You’re just guessing,” sure — just like you. Any speculation about the future is, by definition, a guess. If it makes you feel any better, I’ll volunteer that I’m probably wrong. Most guesses about the future are!

    FM went on to remark “..the evidence is now overwhelmingly clear that we have cyclically high unemployment…” Yes, poor choice of words on my part. When I used the term “structural” for unemployment, I forgot that economists use “structural” to mean a specific and special condition of skills mismatch. What I meant was that long-term unemployment has been creeping up and the number of people required in factories has been dropping over the last few decades as a result of automation. That’s an overall change in the proportion of the workforce that’s employed due to technology, but it’s not “structural” in the strict economic sense. (In case you reply with the standard economist’s “lump of labor fallacy” rejoinder, Marshall Brain and Martin Ford have dealt with the “lump of labor fallacy” in detail. Briefly, we are running out of jobs to switch to. As evidence of which, consider this latest news item — there are now computer programs that will take raw data and write acceptable news stories from them. This is a job that used to require a human and no longer does. As this tech advance continues, the number of human jobs will continue to shrink. That puts us in a new economic regime that truly is “different this time” than in previous eras when automating factory or farm jobs simply pushed people into service jobs.)

    Finally, FM notes “How odd that Vietnam “put paid” to COIN, but three decades later we started decade-long COIN operations — now expanded to 6+ nations (depending how you count them).”

    Not really. Societies typically continue doing things that once made sense but no longer do for long after the behaviors have become counterproductive. For historical examples, see the Southern effort to continue slavery long after steam power had made it economically obsolete, or the Aztec practice of responding to droughts by sacrificing infants to Tlaloc.

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  8. david jones permalink
    15 May 2012 1:07 am

    $.02: Peak oil (and eventually peak fossil fuels): yes. peak energy: no

    wouldn’t be too surprised to see peak per-capita energy consumption, or much lower population growth. structural unemployment in the US (and Europe too): yes, but because of standard-of-living imbalance vs rest of the world.

    Ok that about blows the budget :-) peace

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    • 15 May 2012 2:54 am

      Jones,

      I don’t believe any of that is likely.

      Peak oil is peak energy for some period of time thereafter. Probably a generation or more, depending on the nature of peaking (length of the plateau and the rate of the following decline). As the Hersh report shows, building the infrastructure to replace oil (let alone fossil fuel) will take decades.

      The rate of population growth has been slowing for many years. Rapid growers like Iran are now slow growers. Much of the developed world has below-replacement fertility. Very severe economic decline might accelerate that.

      There is near-zero evidence that “standard-of-living imbalances” creates structural unemployment in the developed world. It has not for the past several ten generations in which the standard of living gap has widened. It has not in Germany (generational low unemployment) or the US (which has cyclically high unemployment).

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    • david jones permalink
      16 May 2012 1:10 am

      Regarding peak oil (and fossil fuels) – the nature of the peaking is key, for sure. A rapid decline would have the effect you say. I was envisioning a decline over 50+ years. Until alternatives are availible, oil demand will be inelastic so prices should go up fast even with small production declines, and also because the remaining oil (+gas etc) would be increasingly “unconventional”. In any case, having an extended period of moderate production decline but very high oil prices would prevent catastrophe. Might be wishful thinking, but it’s actually in the interest of both the producers and the world in general.

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