Back on Sunday, March 7, 2010 5:07 AM, in the exchange on "[politics456] the death of Iceland?," you sent the following:
I think the answer may be that times have changed because of technological advancement and increased productivity. Back in the old days of even 60 years ago life was tougher. A much greater fraction of human productive output was spent just creating the necessities of life, food, shelter, clothing, etc. If anything happened that disrupted production even a little bit, like a financial crisis, then there would be genuine shortages of stuff and people would necessarily suffer. But over the past century, productivity has risen so much that a much smaller percentage of society's output is necessary to sustain life. Automated factories turn out clothes to efficiently that these things are cheap. Highly mechanized farms grow food so efficiently that its very cheap. Automated fishing ships can catch untold amounts of fish. It used to be that something 70% of the American labor force was engaged in agriculture, and now it's something like 3%. Most of human effort these days in the developed world goes to luxury items and services. We're all web site designers now. --WillHopefully, it's only a matter of time before this trend makes work-as-we-know-it obsolete world-wide. In fact, the way out of the current mess -- or maybe the path to the next stage of evolution (maybe both) -- will likely be automation of nearly everything. Most likely, as the necessities become so cheap they can be given nearly free to everyone, exchange tokens will become a minor consideration, and wealth disparity will only be a topic for gossip. But, because of the situation reflected in the Gini coefficient (and other factors, some of which we've been debating) we're still pretty far from that currently -- although there's this from July 10, 2013: Three trends that will create demand for an Unconditional Basic Income | Simulacrum .
So, it's between now and then we have to worry. Here's my main worry, you might want to consider it too: Collapsing fiat empires tend to repressive police-states. This, along with the other bad things connected with paper money, are also history. Rome, for example - - -
The episodes of extreme inflation took a standard form. First the government started building up the army and undertaking public works projects. These projects increased expenditures drastically and the government raised tax rates. But the higher tax rates encouraged tax evasion and discouraged economic activity. The tax base diminished and soon the tax needs exceeded the tax capacity of the government. The government ...resorted to debasing the coins of the realm. This took the form of replacing the gold and silver in coins with copper and other cheaper metals. Over the period 218 to 268 A.D. the silver content of Roman coins dropped to one five thousandth of its original level. Sometimes the size and weight of coins were reduced. It also meant vastly increasing the amount of coins in circulation. There was a corresponding increase in prices. ...Maybe this reminds you of the Fiat Money Inflation in France after the French Revolution. It should.
In 301 AD Diocletian issued an edict declaring fixed prices; i.e., price controls. His edict provided for the death penalty for anyone selling above the control prices. There was also penalties (less severe) for anyone paying more than the control price.
In the short-run these draconian measures may have curbed inflation but in the long-run the results were disaster. Merchants stopped selling goods but this led to penalties against hoarding. People went out of business but Diocletian countered with laws saying that every man had to pursue the occupation of their father. The penalty for not doing so was death. This was justified on the basis that leaving the occupation of ones father was like a soldier deserting in time of war. The effect of this was to turn free men into serfs. --EPISODES OF HYPERINFLATION, Thayer Watkins, ECONOMICS DEPARTMENT, SAN JOSE STATE UNIVERSITY
It [the French ruling body, the National Convention] decreed that any person selling gold or silver coin, or making any difference in any transaction between paper and specie [gold and silver coin], should be imprisoned in irons for six years; that anyone who refused to accept a payment in assignats, [paper money not denominated in a fixed amount of gold or silver] or accepted assignats at a discount, should pay a fine of three thousand francs; ...Later, on September 8, 1793, the penalty for such offenses was made death ...To reach the climax of ferocity, the Convention decreed, in May 1794, that the death penalty should be inflicted on any person convicted of "having asked, before a bargain was concluded, in what money payment was to be made." --Andrew Dickson White, Fiat Money Inflation In France, -pp. 78 & 79Here and now, we have Bernard von NotHaus - - -
Bernard von NotHaus is the creator of the Liberty Dollar and co-founder of the Royal Hawaiian Mint Company. [also NORFED] ... The FBI claimed that NORFED's purpose was to mix Liberty Dollars into the current money of the United States and that NORFED intended for the Liberty Dollar to be used as current money in order to limit reliance on, and to compete with, United States currency. ...Von NotHaus was labeled as a domestic terrorist by the United States Federal Bureau of Investigation in 2011. --Bernard von NotHaus - WikipediaHere's a modern U.S. take of the trajectory from Prof. & ex-CIA assett Chalmers Johnson:
This time his [Prof. Chalmers Johnson] tone was more alarmist, while his focus was on the way an American version of military Keynesianism was failing the country. He feared that the U.S. would be simultaneously overwhelmed by related tides of militarism and bankruptcy. ...he pulled together many of his thoughts about the fate of empires-particularly the Roman and British ones-and predicted that, in the reasonably near future, the U.S. would have to choose between remaining a democratic society or becoming a military dictatorship. --Chalmers Johnson vs. the Empire by Tom Engelhardt -- Antiwar.comJulian Assange of Wikileaks suggests just how far things have gone in one of those directions. And he should know. He quotes someone else who should know - - -
William Binney, the former chief of research, the National Security Agency's signals intelligence [sigint] division, describes this situation that we are in now as "turnkey totalitarianism," that the whole system of totalitarianism has been built -- the car, the engine has been built -- and it's just a matter of turning the key. And actually, when we look to see some of the crackdowns on WikiLeaks and the grand jury process and targeted assassinations and so on, actually it's arguable that key has already been partly turned. --EXCLUSIVE: Julian Assange on WikiLeaks, Bradley Manning, Cypherpunks, Surveillance State- - - and now we continue with this trend in Europe:
Criminalizing public meetings, expanding police powers and weaponry, and applying anti-terrorist measures to street protests: it sounds like Spain in the Franco years, but all of these measures have been proposed in Spain in just the last couple of weeks. Far from being a throwback to the years of dictatorship, these repressive developments go hand in hand with the current economic crisis. ...between the brutal austerity measures implemented already a year or two ago by the government in Madrid and the increasing signs of shakiness from more stable EU countries such as France, Spain is, if anything, ahead of the curve.... In Barcelona, Austerity With an Iron FistAnd here are some insights into how and why that happens - - -
The abuse of buying and selling votes crept in and money began to play an important part in determining elections. Later on, this process of corruption spread to the law courts. And then to the army, and finally the Republic was subjected to the rule of emperors. --Plutarch (46 A.D.-127 A.D.) Historian of the Roman Republic 109_clip15
Most police states, surprisingly, come about through the democratic process with majority support. During a crisis, the rights of individuals and the minority are more easily trampled, which is more likely to condition a nation to become a police state than a military coup. Is America a Police State?, Congressman Ron Paul, U.S. House of Representatives, June 27, 2002
Lucas' own geopolitics can sound pretty bleak: "All democracies turn into dictatorships -- but not by coup. The people give their democracy to a dictator, whether it's Julius Caesar or Napoleon or Adolf Hitler. Ultimately, the general population goes along with the idea ... " --filmmaker George Lucas, Dark Victory from time.comSo, Will, this is my real concern with today's economic upheavals and the fiat/paper currencies and debt that underlies them.
A very large part of this battle is fought in the media, especially the new media, and I know you're doing your part there. I'm afraid it may be too late, but all that's necessary for evil to triumph is for good men to do nothing. Besides, otherwise, how would I spend my free time?
Health, happy new year, and stable currencies,
L., Tuesday, January 1, 2013 8:16 PM
P.S. Assuming the human race ducks the dictatorship bullet, there's a real existential question laying in wait up ahead too. There are now sensors that make it possible for "picking machines" to replace even itenerant farm workers for example. "Lights out" manufacturing -- plants that operate without human personell (except to fix the machines when necessary) -- are up and running. And the numbers of those are increasing faster every year. They even do warehousing now. Google has those cars that drive themselves, now licensed in Nevada and California.
The question will rapidly become, "What can humans do better than machines?" Paradoxically, the easiest thing for the machines to replace is IT, Information Technology -- loosely "thinking." The computer (Watson) now beats us even at Jeapordy. And not just us, the best we have to offer.
Ray Kurzweil suggests we will combine with machines and calls it "The Singularity." Yes? I don't know, but the dude is hard to dismiss.