13 June 2012

A Stitch In Time

... saves nine. Now, that aphorism, dating from at least the 18th century, means about the same thing as "an ounce of prevention is worth a pound of cure". To wit: if one takes pains to do the small things early on, one is saved from the trouble of major problems later. Or, just being smart. On the other hand, taking just the first phrase, "a stitch in time", alone, one could ponder a meaning in the context of the fabric of space-time. It could mean that one finds time, events from one point, merging with events from another point. Guess which way this essay will go?

My regular reader knows that I am among those who view The Great Recession as largely a replay of The Great Depression.

So, we have Eccles observation: "As mass production has to be accompanied by mass consumption; mass consumption, in turn, implies a distribution of wealth -- not of existing wealth, but of wealth as it is currently produced -- to provide men with buying power equal to the amount of goods and services offered by the nation's economic machinery."

Then, we have my continuing fascination with Bermuda as a real life Social Darwinist Experiment, as described in the pages of The Royal Gazette. Today's episode echoes much of what I've been spewing in this endeavor, and in letters and comments (pseudonymously). Here's the piece, and here's the relevant quote: "It must be noted that Bermuda is different from most countries in the sense that it has a tiny domestic economy, with a small agricultural sector and virtually no manufacturing. It is instead a service economy which depends solely on two foreign exchange earners international business and tourism -- to enable it to import almost everything else." I've argued, since I returned from my visit a few years ago, that Bermuda's problem (not making any *things*) is also the USofA's problem; it's just that the USofA is so large and controls to a significant extent the international money system, that our chickens have not yet roosted. They will.

And then, we have the obit of a Nobel winning economist (who actually wasn't), Elinor Ostrom. Read the obit, and you find that she re-introduced the "political" in political economics, using real data from real life. That, and the fact that her training was poli-sci didn't endear her to many (most?) mainstream economists. What she discovered, although not explicitly stated in the obit, is that rational people are Socialists, if left alone.

Finally, the spectacle of Germany making war on its trading partners in Europe. Capital hasn't more demand on income than labour, it's that simple. Without consumer demand, capital is worthless. The Dark Ages proved that.

In other words: long term survival of the species requires that we all recognize that we're all in this together. Not the 99.9% indentured to the .1%.

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