The financial crisis we are facing today arises from the fact that there is almost no more social, cultural, natural, and spiritual capital left to convert into money. Centuries of near-continuous money creation have left us so destitute that we have nothing left to sell. Our forests are damaged beyond repair, our soil depleted and washed into the sea, our fisheries fished out, and the rejuvenating capacity of the earth to recycle our waste saturated. Our cultural treasury of songs and stories, of images and icons, has been looted and copyrighted. Any clever phrase you can think of is already a trademarked slogan. Our very human relationships and abilities have been taken away from us and sold back, so that we are now dependent on strangers, and therefore on money, for things few humans ever paid for until recently: food, shelter, clothing, entertainment, child care, cooking. Life itself has become a consumer item.
Today we sell away the last vestiges of our divine endowment: our health, the biosphere and genome, even our own minds. Pythagoras's dictum, "All things are number," has nearly come true: the world has been converted into money. This is the process that is culminating in our age. It is almost complete, especially in America and the "developed" world. In the "developing" world (notice how these terms assume our own economic system as the destination of other societies) there still remain people who live substantially in gift cultures, where natural and social wealth is not yet the subject of property. Globalization is the process of stripping away these assets, to feed the money machine's insatiable, existential need to grow. Yet this strip-mining of other lands is running up against its limits too, both because there is almost nothing left to take and because of growing pockets of effective resistance.
The result is that the supply of money -- and the corresponding volume of debt -- has for several decades outstripped the production of goods and services that it promises. It is deeply related to the problem of overcapacity in classical economics. To defer the Marxian crisis of capital -- a vicious circle of falling profits, falling wages, depressed consumption, and overproduction in mature industries -- into the future, we must constantly develop new, high-profit industries and markets. The continuation of capitalism as we know it depends on an infinite supply of these new industries, which essentially must convert infinite new realms of social, natural, cultural, and spiritual capital into money. The problem is that these resources are finite, and the closer they come to exhaustion, the more painful their extraction becomes. Therefore, contemporaneous with the financial crisis we have an ecological crisis and a health crisis. They are intimately interlinked. We cannot convert much more of the earth into money, or much more of our health into money, before the basis of life itself is threatened.
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Eventually, debtors run out of disposable income and seizable assets. The crash underway today should have actually happened many years ago, except that various phony and inflated assets were created to keep it going a little longer as the financial tao tie cannibalized itself, covering debt with more debt. The efforts to shore up this edifice cannot work, because it must keep growing -- all those debts bear interest. Yet the authorities keep trying. When you hear the phrase "rescue the financial system," translate it in your mind into "keep the debts on the books." They are trying to find a way for you (and debtor nations too) to keep paying and for the debt to keep growing. A debt pyramid cannot grow forever, because eventually, after all the debtors' assets are gone, and all their disposable income devoted to debt payments, creditors have no choice but to lend debtors the money to make their payments. Soon the outstanding balance is so high that they have to borrow money even to pay interest, which means that money is no longer flowing, and can no longer flow, from debtor to creditor. This is the final stage, usually short, though prolonged in our day by Wall Street's financial "wizardry." The loans and any derivatives built on them begin to lose their value, and debt deflation ensues.
http://www.realitysandwich.com/sacred_economics_chapter_7_crisis_civilization
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