Please understand I’m not an economist.
It seems to me that capitalism, The Way It Is Now, depends too much on folks spending money and not enough on saving money. Not enough emphasis on self sufficiency, like gardening or raising a few chickens, or sewing your own clothes.
It depends too much on having the latest and most expensive of everything.
Which seems to me a very unstable system.
Some years back, the US government was trying to stabilize the economy and one of their strategies was to encourage us to go out and spend money.
As if it’s my patriotic duty or even an obligation to take the family to the restaurant and pump more money into the economy.
I call bull-oney on the type of thinking.
It ain’t capitalism that’s the problem, it’s corporate cronyism. Address that and one might get somewhere.
Capitalism is nothing more than the private ownership of capital and free exchange of capital between people. It is basically just a word for human interaction in economic terms.
So when someone says that “capitalism must end” or some such, what they are truly saying is they want some variation of the abolition of private property, curtailing of free association and enterprise, a confiscation of accumulated wealth, and regulation of commodities and prices.
The “problem” with capitalism, as Zzyzx_Road said, is crony capitalism where the state props up bad actors, creates barriers to entry through crony regulation, and other such things. Though the French finance guy may be surprised, but more regulations will not fix a problem created by regulations. Though crony capitalism is basically state policy in France and the EU (airbus I’m looking at you).
Capitalism refers to process by which profits earned from the business are used to invest elsewhere or to expand business operations. The decision to do so is made based on what is written in the business by-laws, which is usually maximization of earnings for the business owners, or capitalists. There are exceptions, such as non-profit businesses, and businesses do not necessarily involve private ownership, as in the case of state corporations and mixed economies, and do not necessarily involve free exchange of capital or trade, as seen in various regulations.
Those operations ultimately involve more oil, minerals, etc., needed for supporting mining, manufacturing, mechanized agriculture, shipping, and other processes needed as a base for financing and services. And as more people become part of the middle class (which is what capitalists want because that leads to more sales of their goods and services), even more material resources are needed. Just think of the U.S. as an example, which has less than 6 pct of the world’s population but must consume up to a quarter of world oil production to support lifestyles that, if followed by the rest of the world population (and which capitalists and workers want because that’s how they get higher income and returns on investment), then more than one earth will be required.
Meanwhile, the effects of extraction and use of resources on ecosystems are significant.
Thus, the claim raised in the title thread, and which are partly related to what the Church has been saying from St. Pope John Paul II to the present, is logical. And it’s a claim that does not even require religious belief but physics and common sense: capitalism by its very nature requires continuous growth, but a biosphere with physical limitations won’t allow it. Even solutions that some imagine to solve this won’t work with capitalism because the latter is ultimately based on competition.
Periods of self-destruction, followed by regeneration, followed by self-destruction . . . aren’t aspects of capitalism, they are capitalism.
Meanwhile, getting capitalists to finance what many (most) might see as their responsibilities to the societies that generate and source their profits is an old and endless struggle.
He wants to overhaul taxation and govt regulation, not capitalism.
Spending versus saving by and large is a product of interest rates. So to some extent you are correct that most capitalist free market countries these days, through low interest rates, have encouraged spending over saving. Mind you, when I was a kid, when interest rates were in the double digits, sure savers made pretty good money even on a savings account, anyone wanting to buy a house was in for a pretty hard ride.
The problem in the last decade or so is that no one really believes we’re out of the woods from the 2008-2009 credit market meltdown. The general view, whether openly expressed or otherwise, is that the global economy sits atop a bubble that could burst at any time. Interest rates are raised very tentatively, and the Fed clearly wants them higher, but there’s also a significant concern that too many hikes could destabilize the system.
There is a good reason why the U.S. consumes about 1/4 of the world’s energy used, and that is that the U.S. produces about an equal fraction of the world’s production of goods and services. It takes energy to produce, and until somehow productivity beyond uncertain subsistence can be produced by muscle power alone, that will remain the case.
Since productivity of energy used in the U.S. is on the increase, there is no particular reason to believe the world’s energy needs will require more than one planet. After all, many countries don’t need heat in the winter, do they? And lots of them are desert and don’t have the Great Plains to farm.
Cronyism is the bottom of the Swamp - political hangers-on.
Corporate cronyism is a huge problem in the US. Just look at our healthcare industry for instance. How enormously resistant it is to any idea of price discovery that forms the basis for normal capitalism. The law is there (Sherman Antitrust, Robinson-Patman Act) for federal and state attorney generals to take on the industry but not one single one will do so.
The bad news is that’s just one industry in the US. Many more than I can shake a stick at.
In the U.S., most of oil consumed is used for transportation and residences. Only a fourth is used for industrial purposes:
In many countries, it’s the other way round.
The reason is obvious: countries with sizable middle classes and that outsource manufacturing to other countries to avail of cheap resources and labor will use more energy and material resources for personal conveniences, and the levels will obviously be high, which explains why ecological footprints per capita are higher among the middle class:
Meanwhile, most of the world is catching up:
which means the global economy will need at least one more earth in order to meet that demand. The same economy, which is capitalist, will also want that demand for reasons I explained earlier.
Unfortunately, the earth is a limited biosphere, which means that this growth is obviously not sustainable.
Crony capitalism may have started even earlier, with robber barons colluding with the state during the late nineteenth century to monopolize exploitation of natural resources. By 1913, private banks had managed to form a quasi-central bank to take control of money supply. This was followed by Eisenhower’s warning of a “military industrial complex,” with the arrangement maintained all the to the present, where a few years back Wall Street bankers received large amounts of bailouts.
LOL, we are a big country. That oil used in transportion is also going significantly towards economic needs, not Sunday drives.
Capitalism doesn’t exist.
I agree that growth in oil consumption is not sustainable. But nobody knows when it will run out or get so expensive nobody can afford it. That point has been wrongly predicted for decades.
Transportation and healthy residence is also part of productivity. I suspect relatively few miles are put on for purely pleasure purposes. I think you misread the percentage dedicated to residential use. But it is true that the percentage of U.S. oil consumption to worldwide consumption is essentially equal to the U.S. percentage of total production.
China has a larger industrial output and population compared to the U.S. but consumes less oil.
Note that these are not predictions: they already happened. What’s keeping us afloat is higher water cuts in Saudi Arabia and unconventional production in North America, as many other oil-producing economies have peaked in production. But the costs are increasing due to diminishing returns, leading to oil industry debts doubling in less than a decade.
To cover those debts, oil prices have to rise to around $100 a barrel. To cover more debts to increase oil production further, prices have to go up even more (e.g., “heavier” oil from places like Manifa may cost us around $150). Because of physics, the same problems are taking place for copper, uranium, phosphorus, etc.
One can argue that this is all a matter of dollars (as if creating more money will reverse physical laws), but even that can’t be used to measure the toll on ecosystems, something which the Church has also been warning about for decades. If any, the effects of that may make a resource crunch (coupled with soaring debt) look like a walk in the park.
Meanwhile, organizations ranging from the U.S. military to HSBC to Lloyds of London have been issuing reports to their personnel and clients warning of the effects of peak oil, global warming, etc.
That doesn’t dispute/refute the point I made.
“Peak oil” is relative to the ability to get it. In 1850, they had already reached “peak oil” because the only way we knew to get it was to skim it off the surface of the rare creek on which surface oil floated.
Later on, we learned to drill for the “easy” oil; the oil that will rise to the surface if pierced by a well. Later, we learned how to pump it out. Later we learned how to inject detergeants into the wells to get more out. Later we learned how to side drill. Then we learned to frack.
It’s not all a matter of debt. Debt is relative. If I owe $20,000 on an income of that same amount, I’m in a world of hurt. If I owe that same amount and make $100,000 a year and own an apartment building subject to that debt, I’m in “tall cotton”, so to speak. Debt may be higher, but so is production and income.
All resources are finite. Even sunlight is, because there’s only so much earth surface to catch it on. But resources uses change. I can point out mines near here that could produce mineral, but produce nothing. Why? Because their ore is lead, zinc and silver. The demand for lead and zinc has plummeted because their use has. The silver is too little to go after for its own sake. Now, only the very richest veins are tapped for the limited amount of lead and zinc the economy now uses.
Just as an aside, phosphorous is like alumina in that it’s pervasive in the planet. Extraction is the thing. Even the “easy” phosphorous supply is about 300 years, but it’s in almost every rock and bit of earth. But regardless, it doesn’t disappear from the planet. Most is used in agriculture, some of which returns to the soil, particularly in beef production. Its disappearance is due to its being “suspended” above ground in products that consume meat, hides, bones and plants. But it isn’t gone. Maybe there will never be a method of recapturing it. But people did that with nitrate during various wars.