This economic collapse is a 'crisis of bigness'

[CHIMO]

Living through a collapse is a curious experience. Perhaps the most curious part is that nobody wants to admit it's a collapse. The results of half a century of debt-fuelled "growth" are becoming impossible to convincingly deny, but even as economies and certainties crumble, our appointed leaders bravely hold the line. No one wants to be the first to say the dam is cracked beyond repair.

To listen to a political leader at this moment in history is like sitting through a sermon by a priest who has lost his faith but is desperately trying not to admit it, even to himself. Watch Nick Clegg, David Cameron or Ed Miliband mouthing tough-guy platitudes to the party faithful. Listen to Angela Merkel, Nicolas Sarkozy or George Papandreou pretending that all will be well in the eurozone. Study the expressions on the faces of Barack Obama or Ben Bernanke talking about "growth" as if it were a heathen god to be appeased by tipping another cauldron's worth of fictional money into the mouth of a volcano.

In times like these, people look elsewhere for answers. A time of crisis is also a time of opening-up, when thinking that was consigned to the fringes moves to centre stage. When things fall apart, the appetite for new ways of seeing is palpable, and there are always plenty of people willing to feed it by coming forward with their pet big ideas.

But here's a thought: what if big ideas are part of the problem? What if, in fact, the problem is bigness itself?

http://www.guardian.co.uk/commentisfree/2011/sep/25/crisis-bigness-leopold-kohr

[ixion]

1. Bigness isn't a contemporary issue. Bigness was part of what collapsed Rome.

Just sayin'...

[vets74]

17. Read "The Big Short." Michael Lewis at his best.

Capitalism has always worked just fine at moving investment money to useful projects.

Productive Capitalism, that is.

The non-productive organizations of capitalism are another matter. Financial Capitalism is always threatening to run off the rails -- misappraising risk and moving risk from the risk-takers to the marks who provide Other People's Money for the scams.

Financial Capitalism.

Lewis got this exactly right with "Liar's Poker" in 1989.

Selling the sell-side brokerages to the public as newly-minted common stock companies was a scam. Risk went from the betting/risk-taking partners over to Fools/investors who own stock.

It's been the same since Rome. That we know about.

Wouldn't bet a dime against Sumer having had a Big Bubble in bronze-and-turquoise ear rings, truth be known.

[dkf]

2. Interesting...

These in particular:

Published in 1957, The Breakdown of Nations laid out what at the time was a radical case: that small states, small nations and small economies are more peaceful, more prosperous and more creative than great powers or superstates.

Kohr's claim was that society's problems were not caused by particular forms of social or economic organisation, but by their size. Socialism, anarchism, capitalism, democracy, monarchy – all could work well on what he called "the human scale": a scale at which people could play a part in the systems that governed their lives. But once scaled up to the level of modern states, all systems became oppressors.

Growth would become cancerous and unstoppable, until there was only one possible endpoint: collapse.

[xchrom]

3. Recommend

[RKP5637]

4. Recommend!!! n/t

[cilla4progress]

5. Ok, here's what I thought - along similar lines

listening to The Christiane Amanpour Show (?) on Sirius today: all these bigheads completely befuddled by the GLOBAL economic crisis. Esp. Europe right now.So, I'm thinking, is there enough food in the world to feed everyone? Enough medicine? Enough water? Enough warm clothes? Enough energy (think wind,sun). Why don't we just get rid of the fake funny-money economic markets that are, after all, only a substitute for the true goods and resources that we all need, "currency," ignore / get rid of all debt and money-based systems, and just make sure everyone is fed, warm, housed, etc. You can't eat money.

Oy - this is a mess and way over-simplifed...someone help me here...but you get my drift? I mean, c'mon, George Will, Austan Goolsbee - they have no idea what's up and how to fix it, so how can my idea be any less legit? Just write off all debt (esp. student loans), and start over with true resources...distributed in an egalitarian fashion.

[RKP5637]

6. Good ideas, but this suggests no greed, and those holding the cash and

power don't want to relinquish anything. So, they'll ride the system down to the bottom. Also, the system rewards sociopathic like behavior, so I don't have a lot of good expectations. The sociopathic greedy will ride the system out to the end taking many down with them. I don't think there is a whole lot of altruism in that crowd.

[cilla4progress]

8. God - do I "really" have to accept this?

That everyone on the other side is evil? I really don't want to..but it does seem inevitable.

(And by "the other side," do I mean ALL Republicans? All of the wealthy...the corporate masters on Wall St.? I don't know!)

[RKP5637]

10. Certainly not all of them, but a trend line is certainly there IMO, otherwise,

we wouldn't be in this mess.

[tama]

16. Thank you

for speaking from your heart - and seeing things as they are. Yes we have enough to satisfy our needs, we can live in abundunce, provided by Mother Nature.

The logic of consumerism is dictated by the logic of capitalistic profit making, and that logic leads to incredible waste and destruction. Stealing land from the people who are part of the land, mining resources to produce in sweatshops consumables that are not made to last but to break so that there would more and more "demand" for consumables. Creation of new "needs" by the psy-ops industry of hypnotizing people into mindless consumers. Half of food is wasted from fields and waters to the dinner table, while natural fertility of the land is being destroyed by unsustainable agricultural practices. This is collective insanity and we can live better.

[Citizen Worker]

7. A good friend is predicting that the US will fragment into as many as six distinct nation states.

Interesting prediction.

[cilla4progress]

9. Actually, I've been thinking...

why do we all accept that Lincoln's saving of the Union was an unequivocal plus?

[RKP5637]

11. There seem to be soooo many differences anymore, they just seem unresolvable. It could

be a peaceful division, but I doubt it ... I've never experienced this country in such unsettled times with soooo much polarization and hatred by so many numbers.

[cilla4progress]

12. Yes - the Balkanization of the U.S.

Civil wars are always the bloodiest. Just like, you are more likely to be murdered by someone you know, than by a stranger; cops are always most concerned responding to a DV incident.

Blood thicker than water, indeed!

(Yikes, so apocalyptic!)

[applegrove]

13. A guy on CNN "Your Money" this afternoon said that banks are just

not in the business of regular banking anymore. They are into the sexy banking where they can make money. Which is apparently not lending to small business or refinancing mortgages. I think that is so true.

[vets74]

18. Banks get below-inflation money from The Fed. They then buy assets...

one way or another. Banks are not doing banking ??? Yes, indeed.

-- Inflation is running 3.8% or so.

-- T-Bills are going auction at less than 1%.

-- Banks are getting free Fed money at about 1%.

Nobody is making business loans to small- and mid-range businesses at anything like competitive rates and terms. It's crazy.

Of course, a 30-year old Chinaman with a high school education is working in Shanghai for $1.50-an-hour. It's not clear how this difference in price levels is going to hold up versus American equivalent getting $17.00 an hour, or even the American getting $10 an hour. The business situation is insane at best.

(We're screwed like Greeks -- who are inflated to wage rates and real estate prices at 30% or 40% above Northern Europe.)

Good luck with that.

Btw: banks are doing housing "overhangs" with 1,000,000+ residences in their foreclosure inventories. Until that gets auctioned off to the highest bidders, nothing much is going to change.

-- Clearing out the "overhang" would jack down prices, then increase home building to normal a year later and lower unemployment by 2% to 3%.

-- Nobody is going to build houses on spec -- i.e., normally -- with 1,000,000+ plots on the "overhang." They'd have to be crazy.

[CJCRANE]

19. Because it takes time to make a profit from a small business loan.

But create some funny money then bankrupt a country and you can get the taxpayer to pay in full.

A billion here and a trillion there and it soon adds up.

[Demeter]

14. The Bigness of the Frauds, Maybe

Take out the fraud, and the "bigness" isn't a problem.

[bemildred]

15. A sound point.

The requirements for any system to scale up both arbitrarily and well are quite stringent, and there is nothing automatic about "economies of scale" even when they are in some part feasible.