[davep]

This is a pretty interesting article on the potential for capitalism to continue in a post-peak world: Truth Out

Here's a snippet: $this->bbcode_second_pass_quote('', '.')..The more radical activists in the anti-globalization movement also hope climate chaos, peak oil and economic contraction will become game changers. Many assume that economic growth is so essential that capitalism must fail without it. And, as it does, social movements will seize the opportunity to transform this collapsing system into a more equitable, sustainable one, free of capitalism's insatiable need to expand at all costs.

Both the optimistic reformers and the radical anti-globalization activists misunderstand the true nature of capitalism and underestimate its ability to withstand - and profit handsomely from - the great contraction ahead. Growth is not the primary driving force behind capitalism - profit is. When the overall economic pie is expanding, many firms find it easier to realize profits big enough to continually increase their share price. But periods of crisis and collapse can generate huge profits as well. In fact, during systemic contractions, the dog-eat-dog nature of capitalism creates lucrative opportunities for mergers, hostile takeovers and leveraged buyouts, allowing the most predatory firms to devour their competition.

One of capitalism's central attributes is opportunism. Capitalism is not loyal to any person, nation, corporation or ideology. It doesn't care about the planet or believe in justice, equality, fairness, liberty, human rights, democracy, world peace or even economic growth and the "free market." Its overriding obsession is maximizing the return on invested capital. Capitalism will pose as a loyal friend of other beliefs and values, or betray them in an instant, if it advances the drive for profit ... that's why it's called the bottom line! Growth is important because it tends to improve the bottom line. And ultimately, capitalism may not last without it. But those who profit from this economic system are not about to throw up their hands and walk off the stage of history just because boom has turned to bust. Crisis, conflict and collapse can be extremely profitable for the opportunists who know where and when to invest...

[peripato]

So, it's just catabolic collapse? I mean, that's what this article is describing, right? Capitalism without growth ends in collapse. Dog eat dog until there are no more dogs left to eat equals collapse.

[Corella]

Remarkable, all these utilizations of biological vocabulary! I think, it should be pretty much time not only to look to a naive "survival of fit", "variation and selection" but to all those regulation-mechanisms, included within the biological world.
For example: the germ lines are not possible to be influenced by somatic cell lines in order to keep the individual whole. There is no egoistic somatic cell line! Presented to competition is the whole, having much more possibilities for plurality, degrees of freedom, non biologists seem to imagine.
Biological examples compared to those extreme poor job descriptions (maximize profit and do it quick) of much too mighty CEOs is ridiculous!
Obviously biologists have failed to explain to the rest of the world, that the early Darwinism is overbeared long time ago. Or do rather economists dread to talk to biologists? Maybe both.

[Fishman]

Read the entire article. Still waiting for the unicorns he promises at the end of the article. Unfortunately his PHD is in political science and environmental law, not biology or ecology. Any human system, capitalism, socialism, etc still works on the basic laws of thermodynamics. Energy is lost, systems decline to the energy available. No system will change these facts. Nitrogen phosphorus and potash will still be needed to grow food. Transportation will still need to take place. If not, the population will decline. Sentiment still doesn't pay the bills.

[Pops]

Great article, Dave. The image of the Marx Bros cannibalizing the train to feed the boiler is perfect. The author describes the situation and even the politics well.

I like what Marx said:
$this->bbcode_second_pass_quote('', 'M')odern bourgeois society, ... conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells.

[Pops]

HaHA! It just dawned on me that after commenting on the Marx movie I quoted Marx - just so you know I realize Karl wasn't one of the Bros, I don't think.

[Outcast_Searcher]

$this->bbcode_second_pass_quote('Pops', 'G')reat article, Dave. The image of the Marx Bros cannibalizing the train to feed the boiler is perfect. ...
Creative destruction a la Marx was the need to periodically destroy wealth so it could be rebuilt, the idea that breaking windows increases GDP and so we have wars and depressions. One way of that destruction is economic crises like we're in now, definitely lots of wealth destructed. But the other and more modern take on that is creative destruction as "progress", i.e.: robot assemblers replacing assembly line workers, ATMs replacing tellers, etc. Tearing down for the more efficient new all in the name of profit.

[The Practician]

$this->bbcode_second_pass_quote('Outcast_Searcher', 'I')n short, capitalism tends to be successful at building wealth. ... And,FWIW, I am also a capitalist who at least makes a solid attempt at minimizing my footprint on the planet AND treating those who I do any sort of business with, with fairness and respect, even though it costs me far more in dollars than I "could get away with").

[Pops]

The "problem" people see with capitalism isn't necessarily capitalism I don't think, it is corporatism, they just don't make the distinction. "It wasn't me, the corporation did it!" is the refrain heard from the board room. No real human must take responsibility for the corporations' actions, not surprisingly, is the main reason for corps. The other basic reason for corps is to have great amounts of capital to wield, add that to legal immunity then give that entity the vote and remove all regulation and what could be a better recipe for disaster?

But the whole capitalism equals growth bit doesn't wash. The economy can be shrinking and still a better idea can equal profit at the expense of lesser idea, a Prius outcompetes an F-150 say, the better idea bets out The Better Idea - LOL. That is what happens in any mature market, competition rewards with market share at the expense of competitors instead of increased market size. The economy as a whole shrinks but competition continues - increases in fact as business fight for survival, not just increased profit.

I think the ability to innovate will be even more important in a deindustrializing economy as we try to wring out as much efficiency as we can from the fossil energy we have left and transition to something else. Innovation is what capitalism does best because profit is the best motivator; the baker bakes out of greed, not altruism, he'll need to find ever more efficient ways to bake.

[SeaGypsy]

IMO the OP just states the obvious. The only comment I would add is to chime in that there's nothing else going on and stuff all we can do to stop it. Popcorn time.

[evilgenius]

There is also the role of both our inherent intentions and the actions or marketers to consider. For example take the ascendance of the SUV over the course of recent decades. I've mentioned this somewhere else on this site, but the SUV's popularity arose mostly out of people's fears rather than out of some marketing campaign. Suddenly the meme was that everyone needed a hulking vessel to protect them and their progeny from all of the other drivers on the road. This could have been a short lived meme, but the marketers saw a gift.

So far there is no system that adequately meets people's needs. Capitalism is the closest. It does it by throwing out offers of goods and services, seeing which ones will stick. Sometimes capitalism creates perceived need, but usually it meets need by approximate satisfaction, not by attending to exact needs. We would all like better, but capitalism can't do what it costs more to do than the amount of money that goes into a venture. Guess what, that is the role of public policy. That's why you can't run government like a business. Nobody else exists to meet those legitimate needs of the people that cost more to fulfill than what they bring in. Oh, you can shufty those over to this or that charitable organization, but in reality there are more needs than there are charities. Besides most charities are not secular. At least business maintains a kind of secular nature when taken at face value. Of course, the secular nature of business is not so secular once you peer behind the veneer. Behind there you see how political it all is and how much those who have power in corporations can turn the power of those corporations loose in ways to further their interests. At least in dealing with government we all have the ability to gain redress of grievances. To get the same ability within a corporation you have to own a certain percentage of stock or have more complicated measures working for you.

As for capitalism, the thing to watch for is how much ownership it takes to control a corporation as well as how many diverse sets of opinion one corporation can manage to facilitate. In a deflationary crash those with cash can buy up control more cheaply per share. They need to purchase more because the threat of other interest sets taking over becomes magnified in such a situation. In an inflationary crash it takes less ownership to achieve control. That's when you see the kinds of games perpetrated against shareholder interests which have been prevalent over the last few decades: management asserts itself as a kind of pseudo ownership class, dividend return becomes subsumed to capital appreciation seemingly as a persistent meme, people lose sight of what rates of return actually mean to them in favor or sexiness and hype.

[ralfy]

$this->bbcode_second_pass_quote('Pops', 'T')he "problem" people see with capitalism isn't necessarily capitalism I don't think, it is corporatism, they just don't make the distinction. "It wasn't me, the corporation did it!" is the refrain heard from the board room. No real human must take responsibility for the corporations' actions, not surprisingly, is the main reason for corps. The other basic reason for corps is to have great amounts of capital to wield, add that to legal immunity then give that entity the vote and remove all regulation and what could be a better recipe for disaster?

[Outcast_Searcher]

First, thanks very much everybody for a very productive, positive thread -- on a subject that often stirs a bunch of adverse emotions. No name calling etc, just productive, thoughtful, interesting ideas and information.
$this->bbcode_second_pass_quote('ralfy', '
')Unfortunately, innovation "is what capitalism does best [exactly] because profit is the best motivator." With a shrinking economy, there will be less profit, and with that less innovation.

[Pops]

Capitalism doesn't obviously equal growth.

Definition of CAPITALISM from Wiki:
$this->bbcode_second_pass_quote('', 'C')apitalism is an economic system that is based on private ownership of the means of production and the creation of goods or services for profit.

[SeaGypsy]

I had a related debate with Ralphy on another thread recently. He has a blind spot regarding the complexity and diversity of scales; along the lines of 'Global growth is required to maintain economic growth per se.'

It is a complex thing to grasp I guess, but to my mind it seems totally obvious that some kind of capitalism can continue all the way down. The best, most efficient scavengers being the last man standing at the OK Coral. Big, even dominant players falling over into death spirals while lesser, more efficient (perhaps ruthless?) players rising to the 'new top'; which may be well below the standard of the original dominator. It's still capitalism and it's still growth; just not global, not overall and not for the ex-dominant/ trading blocks, corporations, countries, regions, families or individuals.

[ralfy]

$this->bbcode_second_pass_quote('Outcast_Searcher', '
')
Ralfy, one thing I don't understand, and I'm just responding to your quote because your point about a shrinking economy reminded me -- there seems to be an understanding (sometimes explicit, very often implicit) that capitalism REQUIRES growth.

Does it really? I understand that if we have a shrinking pie there will be less resources to devote to innovation (which in capitalism will be seen in less profit motive as you mention). Completely valid point.

However if we live in a world (and I think all but the cornies on the site will agree we do), where we can't count on endless expansion of wealth and resources (despite how clever a monkey man has become) -- then won't there be less innovation WHATEVER economic system we use?

If we are declining in available resources per person at X% a year and use, for example, communism and there's zero reward for innovation, won't that result in even less innovation than with capitalism -- even if the capitalistic profit rewards might be 90% or even half of what they would be in a healthy economy? There will STILL be a competition for better ideas under (true) capitalism.

....

Now, if the main point is that only an idiot will assume that capitalism can conquer anything and will magically save us -- then I'm with you 100%.

[ralfy]

$this->bbcode_second_pass_quote('Pops', 'C')apitalism doesn't obviously equal growth.

Definition of CAPITALISM from Wiki:
$this->bbcode_second_pass_quote('', 'C')apitalism is an economic system that is based on private ownership of the means of production and the creation of goods or services for profit.

[ralfy]

$this->bbcode_second_pass_quote('SeaGypsy', 'I') had a related debate with Ralphy on another thread recently. He has a blind spot regarding the complexity and diversity of scales; along the lines of 'Global growth is required to maintain economic growth per se.'

[SeaGypsy]

What they did before technology. Bits of burning stuff to make fire with, wives, Warmth, food, water, shelter.

[dsula]

$this->bbcode_second_pass_quote('ralfy', 'I')n short, the end result is always increased productivity, which boils down to more sales in return for more profits. That is essentially what "profit" involves in the definition that you gave.