At the Feet of Mammon…

Toby, Vex:

I was revewing the recent paper by Keen, Ayer, et al – not this very afternoon. Which is biophysical economics by the way. Briefest synopsis: modern macroeconomics runs as a perpetual motion Cobb-Douglass equation – as a function of only capital (K) and labour (L). This is termed ‘cost/share’ analysis. If you add a third variable – energy (E) – you get a three factor cost/share analysis called LINEX.

Problem 1: Kummel-Ayres-Voudouris have been pushing this fruitlessly on mainstream for years – to no avail.

Problem 2: it doesn’t work. You can set E = 0 and still get production via the Cobb-Douglass function

So theirs is a sophistication of LINEX – thermodynamically and exergy compliant. Then they started doing maths and my brain started to bleed. So then I looked at another one called HARMONEY – following a very similar development outline.

Problem 3: they are production biased – assuming we can carry on production. Which at least HARMONEY takes on board – as it is Limits To Growth and WORLD 3 compliant.

Here is the real sobering analysis in regard to money.

Due to some rather nasty feedback the other day – for saying cities are centres of collapse – which is nothing exceptional for the ecological literature (it’s not often said explicitly, mind). I’ve spent this week looking at the literature – including on consumption. Here is the nub.

Unseen to us we have a collapsing overfinancialisation debt and derivative bubble collapsing at this very moment. Probably north of $350 tn. Dr Tim Morgan estimates $320 – four times the size of GFC 1.0. No one can predict whether it will be a partial or full collapse. No one.

What few will be aware of is this. GDP is strongly correlated to energy, material throughput, as well as production (using capital and labour). There was a relative decoupling of resources and GDP in the late 90s. Then came the DotCom bubble and that decoupling became a re-coupling – a re-materialisation of the global economy. Then came GFC 1.0. The re-materialisation increased. Of all the materials extracted from 1900-2015 – a third were mobilised between 2002 and 2015. A third!

We know from David Harvey: between 2011 and 2013 China consumed 50 percent more cement than the United States had in the entire twentieth century. The correlation is clear. We – China – built our way out of back to back recessions …using as much as a centuries worth of some commodities in a few short years.

Open question: can we do it again? Not in China – and the Russian economy is too small. Canada; Australia, South Korea, China never deleveraged and are carrying all their debt forward. We have conservatively four times the magnitude of debt and derivative bubble. Central Bank rates are universally around zero. There is a limited amount of negative yielding junk bonds you can create. We already have around $15tn – underpinning the euro and yen. And there is the ongoing collapse of the repo market – where rates (nominally 1.9% – spiked past 10%) – which is a tell that junk ‘wealth management products’ are being used as collateral …just like 2007.

Given this context: does money have a future? If money has a future: do we have a future? Since 2010 – with the advent of QE1 – finance started to decouple from labour and materials again. Can we re-materialise – that is recouple – ‘free’ energy (solar and stored solar – at the point of extraction), materials, exergy (productive energy – at the point of use), capital (energy embodied in machines), labour (energy embodied in humanity – which is only partially ‘exergy’ (<50%)) …and have a productive 'real' economy that carries that debt burden forward …and pays it down (destroying value)?

I can pretty much tell you: I very much doubt if anyone – apart from me – has even framed the questions we should be asking. Academics – despite what they may think privately – cannot say "full and rapid collapse".

Keen and Ayres are assembling a team to get the economists shutdown and retasked "teaching remedial maths". But is his own solution – debt jubilee and peoples QE ($10K to paydown debt or buy stocks – to democratise equities) – any better? Are we then going to restart industrialised production for a Marxist dialectical value Capitalist hybrid economy?

I think the answers are staring us in the face. Only we are averting our gaze. The largest liquid asset on the planet – the Ghawar oilfield – is currently partially out of action due to the *cough- psyop* "Iranian" missile attack. Aramco revealed that production has been overestimated by 1.8bn bpd for decades. They are now post-peak with a lot less reserves than was previously thought. Julian Assange made this known – that there reserves were 40% overestimated. This is the largest 'clean and light' field known. The Permian – Americas shale wonder – has taken over as the the worlds top producing field. But they are selectively 'sweetspot' drilling – which is a flash in the pan.

Anyone who points out the deficiencies in the capitalist psychology – and it is more than a mindset – it is an epochal way of being …or not being – hits a cognitive wall. There has to be a massive reality check and correction of unrealistic expectation and value production. Free energy and land will be the only value production assets we have. And they are being degraded fast.

Values are what we make them. They are who we are. [See McMurtry's "onto-axiology" – life-blind and life-coherent value creation]. But above all: we have to put humanity at the heart of our experience. That is by overcoming the – internal/external; subject/object/ self/other – false dichotomies of experience. We have hollowed out nature by exteriorising it and replacing it with a scientifism of dead deterministic fighting; fucking; and fitness competitive hierarchies – isolated in a mechanistic causal absolute spacetime …WHICH DOES NOT EXIST!

That is our only problem: we have taken our representations to be a reality and built a gazillion dollar bubble reality to insulate ourselves from non-existent representations. And I really mean 'non-existent'. We live in projected ontological structures we agree are real. It's the fucking Matrix as a documentary!

It is neither solipsism or nihilism to say so. The solipsism and nihilism are inside the Matrix. Outside: there is only life and the reciprocal live experience …of life experiencing life through the fluid processes of bodily movement.

"At the still point of the turning world. Neither flesh nor fleshless;
Neither from nor towards; at the still point, there the dance is,
But neither arrest nor movement. And do not call it fixity,
Where past and future are gathered. Neither movement from nor towards,
Neither ascent nor decline. Except for the point, the still point,
There would be no dance, and there is only the dance"

That is your value production equation. Given by a poet. No money required because no commodity of objectivity or subjectivity is being exchanged. No spurious pseudo-exhange of services and commodities for the eternal valorisation and glorification of the Mammon of Money …at whose feet we sit: waiting for the collapse.

If not this time: the probability rises that it will be the next. After that: the odds are really short of being dumped on.

Surely other people are working this out? If we can restart this with real exhange – of the co-instantiation of each other as neither subjects or objects – and rebuild communities of trust and harmony …where the interior landscape of human nature has no inside or outside that is not co-extensive with the real nature – the one we have yet to encounter en masse. Then we must NEVER, NEVER, EVER let this happen again.

First, we have to deal with the collective mess we have made. If it can be dealt with. There may well be no after. Don't blame me. Blame the collective co-constitution of Mammon. Not one that ever captured me: the pseudo-values of money.