[MrBill]

$this->bbcode_second_pass_quote('Chaparral', '')$this->bbcode_second_pass_quote('mattduke', 'T')his is a disturbing thread. How long until the grasshoppers who haven't accumulated any property will attack the ants who have been living under their means, diligently saving, and carefully investing for years?

[some_math_guy]

I think the idea that the original poster was getting at is

'Is upward mobility possible without economic growth?'

or 'Can a middle class exist without permanent economic growth?'

Consider how our economy works : it continually grows by converting more and more 'stuff' (capital) out there in the world into commodities that are either consumed or hoarded by people...trees, minerals, oil, etc. Money is just used to represent this 'stuff' - it's a convenient way to trade commodities.

Peak oil theory posits that in a future where there is less and less energy available to extract 'stuff' (capital) from the environment with each passing year, there will be less available capital and a generally less favorable economic/business environment. Banks will be more cautious with lending money because the stuff is represents will clearly be more limited in availability and take more energy to 'make'. All of the growth strategies used in the current economic system of investment/risk/diversification basically tell you not to put 'all of your eggs in one basket' - that way if you have a few 'bad eggs', the rest will probably grow enough to protect your investment. In the future however, virtually *all* investments will do poorly because growth will be curtailed in virtually all sectors. What we will see is a massive contraction in the amount of valuable 'things' out there, and when valuable things are in short supply, you generally see polarizing social systems emerging where this limited wealth gets concentrated in the hands of the few people who know how to 'work' the system properly, leaving the rest poor.

In the future, with a permanent shortage of capital, there will be a huge chasm between rich and poor. 'Upward mobility' is based on the idea that you can start off poor (maybe a starving student from a poor family, but bright with promise), then to lower-middle class (maybe you graduate and get a good job, start paying off your student loans, start to furnish your apartment with some consumer goods) then to middle class (get a raise, save some money, buy a house, a car, some better consumer goods) and on to upper middle class (get a management position, buy several properties, several cars, a boat, vacations every year, investments).

In a system with no middle class, the chasm is far too wide to jump from 'poor' to 'rich', and there are few mechanisms available to cross the chasm. 'Upward mobility' I think is a relatively new concept because in centuries past, economic output was basically limited to manpower and animal power...economic output grew only marginally each year with the increase in population, but the increasing population required more goods, so essentially we have a steady-state system. With cheap energy, we've gotten a temporary infusion of what amounts to basically limitless (albeit temporary) economic growth, flooding the world with an abundance of stuff that otherwise would not be available (several times increase in food out put, wood and building materials available cheaply from faraway lands, minerals easily extracted from deep in the earth, etc). Remember that 1 barrel of oil contains the energy equivalent of 25,000 hours of human labour. At 5$/hr minimum wage, a barrel should be worth about 125,000$, but today is only valued at 1/2000th of this. This equation alone should make people understand how fundamental energy is to the economy and how it props up all of the social systems that have arisen in the petroleum age.

I think that the link between 'capitalism' and 'slavery' is somewhat inexact, but what you have to remember is almost all capital goods available today (buildings, cars, airplanes, bridges, food, plastics, computers)are only made possible with virtually free energy. In a future with less net energy available there we be less 'stuff' available, and produced on a scale probably orders of magnitude less than today, at the height of the 'free energy' oil bonanza. Wealth will tend to polarize after peak and social systems somewhat similar to 'slavery' (maybe feudalism?) will probably come back.

[MaxDWolf]

$this->bbcode_second_pass_quote('gego', '
')Greed is part of freedom and it is a good part, because it drives one to take care of himself, creates the accumulation of wealth that can be invested in productive assets, and makes one then able to also be charitable. The idea that greed is bad is just a ploy used by politicians to make you give up your hard earned wealth to them since your are evil to keep the fruits of your own labor yourself.

[MrBill]

$this->bbcode_second_pass_quote('some_math_guy', 'I') think the idea that the original poster was getting at is

'Is upward mobility possible without economic growth?'

or 'Can a middle class exist without permanent economic growth?'

Consider how our economy works : it continually grows by converting more and more 'stuff' (capital) out there in the world into commodities that are either consumed or hoarded by people...trees, minerals, oil, etc. Money is just used to represent this 'stuff' - it's a convenient way to trade commodities.

Peak oil theory posits that in a future where there is less and less energy available to extract 'stuff' (capital) from the environment with each passing year, there will be less available capital and a generally less favorable economic/business environment. Banks will be more cautious with lending money because the stuff is represents will clearly be more limited in availability and take more energy to 'make'. All of the growth strategies used in the current economic system of investment/risk/diversification basically tell you not to put 'all of your eggs in one basket' - that way if you have a few 'bad eggs', the rest will probably grow enough to protect your investment. In the future however, virtually *all* investments will do poorly because growth will be curtailed in virtually all sectors. What we will see is a massive contraction in the amount of valuable 'things' out there, and when valuable things are in short supply, you generally see polarizing social systems emerging where this limited wealth gets concentrated in the hands of the few people who know how to 'work' the system properly, leaving the rest poor.

In the future, with a permanent shortage of capital, there will be a huge chasm between rich and poor. 'Upward mobility' is based on the idea that you can start off poor (maybe a starving student from a poor family, but bright with promise), then to lower-middle class (maybe you graduate and get a good job, start paying off your student loans, start to furnish your apartment with some consumer goods) then to middle class (get a raise, save some money, buy a house, a car, some better consumer goods) and on to upper middle class (get a management position, buy several properties, several cars, a boat, vacations every year, investments).

In a system with no middle class, the chasm is far too wide to jump from 'poor' to 'rich', and there are few mechanisms available to cross the chasm. 'Upward mobility' I think is a relatively new concept because in centuries past, economic output was basically limited to manpower and animal power...economic output grew only marginally each year with the increase in population, but the increasing population required more goods, so essentially we have a steady-state system. With cheap energy, we've gotten a temporary infusion of what amounts to basically limitless (albeit temporary) economic growth, flooding the world with an abundance of stuff that otherwise would not be available (several times increase in food out put, wood and building materials available cheaply from faraway lands, minerals easily extracted from deep in the earth, etc). Remember that 1 barrel of oil contains the energy equivalent of 25,000 hours of human labour. At 5$/hr minimum wage, a barrel should be worth about 125,000$, but today is only valued at 1/2000th of this. This equation alone should make people understand how fundamental energy is to the economy and how it props up all of the social systems that have arisen in the petroleum age.

I think that the link between 'capitalism' and 'slavery' is somewhat inexact, but what you have to remember is almost all capital goods available today (buildings, cars, airplanes, bridges, food, plastics, computers)are only made possible with virtually free energy. In a future with less net energy available there we be less 'stuff' available, and produced on a scale probably orders of magnitude less than today, at the height of the 'free energy' oil bonanza. Wealth will tend to polarize after peak and social systems somewhat similar to 'slavery' (maybe feudalism?) will probably come back.

[Falconoffury]

A lot of people think that capitalism is a system where everyone is free to produce goods of value, and everyone is free to choose to buy them. That is correct, and I'm not arguing against that idea. Just don't forget the resources that go into goods and services that people value. What happens to the system of money and freedom to produce and purchase when the resources to produce goods and services is slowly reducing? We have the freedom to choose any job that we can, but just what jobs will be available in a world with reducing goods and resources? Won't we have to compete with an ever growing population for jobs in an ever shrinking resource base?

My argument is that a percentage of those currently rich will figure out how to hold onto their wealth during this time of reducing resources, and have a huge pool of poverty ridden, desperate people to work for the rich to allow the rich to keep their wealth while the poor are getting just enough resources to survive. Thusly, we end up with a two class system. We have those who are able to hold their wealth and convince the poor to work towards their well-being, and we have the poor who simply have nothing and just need a way to survive. We won't have a middle class because we end up with those who can hoard the resources and those who work so that the rich and continue to hoard the resources.

Now, I hope this wasn't a waste of a post as I expect some good arguments for or against it!

[MrBill]

$this->bbcode_second_pass_quote('Falconoffury', 'A') lot of people think that capitalism is a system where everyone is free to produce goods of value, and everyone is free to choose to buy them. That is correct, and I'm not arguing against that idea. Just don't forget the resources that go into goods and services that people value. What happens to the system of money and freedom to produce and purchase when the resources to produce goods and services is slowly reducing? We have the freedom to choose any job that we can, but just what jobs will be available in a world with reducing goods and resources? Won't we have to compete with an ever growing population for jobs in an ever shrinking resource base?

My argument is that a percentage of those currently rich will figure out how to hold onto their wealth during this time of reducing resources, and have a huge pool of poverty ridden, desperate people to work for the rich to allow the rich to keep their wealth while the poor are getting just enough resources to survive. Thusly, we end up with a two class system. We have those who are able to hold their wealth and convince the poor to work towards their well-being, and we have the poor who simply have nothing and just need a way to survive. We won't have a middle class because we end up with those who can hoard the resources and those who work so that the rich and continue to hoard the resources.

Now, I hope this wasn't a waste of a post as I expect some good arguments for or against it!

[CrudeAwakening]

I tend to see society stratifying as well. Those that have lived the consumer dream and ended up indebted up to their eyeballs will suffer the most, along with those who experience prolonged unemployment as a result of the economic recession I perceive to be ahead.

I think the ultimate outcome depends on how significant the social dislocation is, and to what extent the upper classes can maintain some kind of hegemony over the disenfranchised lower classes. If the middle class does largely disappear, this will remove its role as a social buffer between upper and lower classes, and would not bode well for continued social harmony (such as we have, anyway).

Added to this are the problems of an aging population, and of course global conflict over resources. I worry about the hundreds of millions of people who believe it is their birthright to consume at current levels, when it becomes clear that this is no longer an option. Who will they blame? I suspect they will see the people who ride out the wave most successfully as being responsible for their predicament.

[americandream]

Take a look around you the next time you exhort the wonders of the free market.....the infrastructure you function within is 70% common funded (roads, hospitals, bridges, parks, libraries, city halls, armies, police, revenue service etc...with a 30% grafted on predatory organism solely dedicated to the use of further other common resources for the generation of private capital accumulation...one wonders what advances we might have made had the best of our brains not been dedicated to the development of PS2 and X Box.

Incidentally....I'm extremely well of financially....I know a rotten system when I smell one..but that does not necessarily mean that I'm not going to participate in it out of some mental deficiency....lol.....you people are so simple in here...you so quickly jump to conclusions...has it never occirred to you that someone you may well term upper middle class...using your infernal tendency to label may well be a marxist....for reasons other than limited intellect.

[gigacannon]

Capitalism is a means of representing useful work in the form of numbers which may or may not be printed on hard currency.

[abelardlindsay]

$this->bbcode_second_pass_quote('Kaare_Mai', 'I')t is funny to see how americans who never set a foot outside their country can dismiss other types of systems...

I live in Denmark, and as most of europe, Denmark is a socialistic country.

We have no poor people. - Not a single person in Denmark has to live on the street.

Not a single person has to pay a dime to go to the doctor or hospital.

We have very little crime and 99% of the population has never seen a gun with their own eyes.

Denmark is the home for several danish companies that are known world wide.

We pay 6.2$ / gallon at the pump and 40% income tax, and not a single soul are complaining. Why? Because we're wealthy. We have nice houses, plasma TV's, cars, internet, 7 weeks of vacation without the special holidays and weekends calculated in.

So don't come here and tell me that socialism doesnt work... Im glad not to live in the arogant, self centered, gun-loving america where their own people are forced to suffer when a storm hits their shores...

[Concerned]

$this->bbcode_second_pass_quote('abelardlindsay', '')$this->bbcode_second_pass_quote('Kaare_Mai', 'I')t is funny to see how americans who never set a foot outside their country can dismiss other types of systems...

I live in Denmark, and as most of europe, Denmark is a socialistic country.

We have no poor people. - Not a single person in Denmark has to live on the street.

Not a single person has to pay a dime to go to the doctor or hospital.

We have very little crime and 99% of the population has never seen a gun with their own eyes.

Denmark is the home for several danish companies that are known world wide.

We pay 6.2$ / gallon at the pump and 40% income tax, and not a single soul are complaining. Why? Because we're wealthy. We have nice houses, plasma TV's, cars, internet, 7 weeks of vacation without the special holidays and weekends calculated in.

So don't come here and tell me that socialism doesnt work... Im glad not to live in the arogant, self centered, gun-loving america where their own people are forced to suffer when a storm hits their shores...

[gego]

$this->bbcode_second_pass_quote('MaxDWolf', '
')My one disagreement with you is just one regarding choice of wording. Self-interest, putting oneself first, is good. I would differentiate between this and greed. Greed is (by definition) inordinate desire and/or acquisitiveness. To want to enjoy the fruits of your labors and even fair conquests is reasonable self interest. To refuse to acknowledge any right of society to ask you to contribute to the common good is greedy.

[gego]

$this->bbcode_second_pass_quote('MrBill', '
')
Oh, I think many are saying that capitalism and the market economy are to blame for all our problems like peak oil? Nevermind that it is a geological fact. But there you go.

Well, I think Cuba is an example of a fabulously well-run country with a socialist government and centrally planned economy, so long as a Russia, or China or Venezuela is always at hand to pay the bills and provide cheap energy imports.

Speaking on Venezuela. Another great example of an economy running on all cylinders and creating wealth.

$this->bbcode_second_pass_quote('', ' ')




CARACAS, Venezuela (Reuters) - Taxi driver Jaime Tinoco works the streets of Caracas in a 1976 Chevy Nova that guzzles 19 gallons (72 liters) of gas a day. But he doesn't worry about fuel efficiency -- filling his tank costs just

$2.30.

While U.S. consumers struggle with soaring energy prices, Venezuela's gas is now the world's cheapest at 12 cents a gallon and Washington's regional foe, President Hugo Chavez, vows to maintain subsidies that keep fuel dirt-cheap.

"Those gringos have everything -- so why does their gas cost so much?" asked Tinoco between chuckles as he navigated a midday traffic jam. "Don't they have oil reserves?"

Chavez, a self-proclaimed socialist and critic of President Bush, has even begun subsidizing fuel for poor U.S. neighborhoods as U.S. consumers brace for average summer gas prices of $2.71 a gallon -- 34 cents higher than last summer.

In Venezuela, the world's No. 5 oil exporter, drivers fill their tanks for less than the price of a cheap breakfast, and love to point out that gasoline costs less than mineral water.

The nation's gasoline is now the world's cheapest, according to an International Monetary Fund report released in April that shows Venezuelan gas prices as about a third of those in oil-producing giant Saudi Arabia.

Shiny SUVs and rusty 1970s-era sedans share the streets of Venezuelan cities as drivers shrug off fuel costs.

Low-priced fuel is considered a birthright in Venezuela, which sells 1.2 million barrels per day of oil to the United States -- the world's biggest gas guzzler.

"Gasoline should stay cheap the way it is, that's why we have oil in Venezuela," said Maria Rosa Pinero, 55, a housewife, filling up a Volkswagen Gol at a gas station in eastern Caracas.

Chavez has extended Venezuela's fuel subsidy to poor Americans through a well-publicized jab at the U.S. government that offers 40 percent discounts on heating oil distributed by Venezuelan-owned refiner Citgo.

Flush with cash from high oil revenues, Chavez has also shored up regional alliances by providing low-priced fuel to Central American and Caribbean nations he says have been snubbed by the United States.

'HOOD ROBIN' SUBSIDY

Venezuela's gas subsidy is the subject of endless grumbling by economists who say it promotes consumer waste and costs the state billions of dollars in lost revenue.

Critics say the subsidy largely benefits middle and upper-class vehicle owners at the expense of government income that could be spent on the poor.

"They call it the 'Hood Robin' subsidy," said Jose Luis Cordeiro, a petroleum engineer who writes about energy issues. "Instead of stealing from the rich to give to the poor, it's the opposite."

He estimates Venezuela would have taken in at least an additional $8 billion last year -- almost 8 percent of the nation's GDP -- if Venezuelans had paid market rates for fuel.

The subsidy also encourages rampant fuel smuggling to neighboring Colombia and leads to huge lines of Brazilian drivers waiting to fill up along the southern border.

But past efforts to raise gas prices have not gone well. Authorities in 1989 raised fuel prices at the height of a recession, leading to three days of rioting during which at least 300 people were killed. Human rights groups say troops may have killed several thousand people.

The event marked a turning point in Venezuelan history, and served as inspiration for Chavez -- at the time a young army officer -- to lead a coup attempt three years later. The coup failed but helped propel Chavez into the presidency in 1998.

Chavez has maintained popularity by channeling oil revenues toward social programs for the poor, and has often criticized U.S. dependence on cheap gasoline. Washington says he is using his oil wealth to threaten regional democracy.

At Venezuelan gas stations, however, there are few complaints about low-cost fuel or fuel efficiency.

"People buy a car because it's comfortable or because it's big," said Isidro Rodriguez, 30, an accountant, as he filled up a new 4-wheel-drive Ford in southern Caracas. "It's not for the price of fuel, because that's never been a problem."

[gego]

$this->bbcode_second_pass_quote('Kaare_Mai', 'I')t is funny to see how americans who never set a foot outside their country can dismiss other types of systems...

I live in Denmark, and as most of europe, Denmark is a socialistic country.

We have no poor people. - Not a single person in Denmark has to live on the street.

Not a single person has to pay a dime to go to the doctor or hospital.

We have very little crime and 99% of the population has never seen a gun with their own eyes.

Denmark is the home for several danish companies that are known world wide.

We pay 6.2$ / gallon at the pump and 40% income tax, and not a single soul are complaining. Why? Because we're wealthy. We have nice houses, plasma TV's, cars, internet, 7 weeks of vacation without the special holidays and weekends calculated in.

So don't come here and tell me that socialism doesnt work... Im glad not to live in the arogant, self centered, gun-loving america where their own people are forced to suffer when a storm hits their shores...

[MrBill]

$this->bbcode_second_pass_quote('', 'I') generally do not like Mr. Bill, because of his involvement and defense of the fiat money creating and ripoff system, but I will agree that his post here is eloquent and dead center.

[deconstructionist]

Capitalism as it is currently practiced in America is State-Capitalism and as such, is basically an elaborate system of social control. We are wage-slaves. We do not have a free market. Nor are we socialist. It is a state-socialist system, also known as state-capitalism. It is a doubly bastardized form of capitalism and socialism all mish-mashed into one. State-capitalism is capitalism without freedom, socialism without eqaulity, and can only grow into a totalitarian police-state, which is where we are headed.

[directinfo]

The Wall Street Journal – All the disinfo that’s fit to print about Peak Oil.
$this->bbcode_second_pass_quote('', '[')url=http://www.post-gazette.com/pg/06165/698172-28.stm]Power shifts to countries with oil reserves[/url] Wednesday, June 14, 200 By Bhushan Bahree and Chip Cummins, The Wall Street Journal
There is more to today's oil crunch than temporary jolts to supply and demand. What is also roiling the energy world is an enduring shift in the balance of power between the fuel-guzzling West and oil-rich developing countries. Since World War II, the industrialized world has relied on stable and affordable supplies of crude to fuel economic growth. The U.S., Europe and Japan together needed more oil than they could produce. The developing world had plenty of oil, but little use for it and few alternative markets. So industrialized countries tapped the cheap resources of poor ones.

[eXpat]

Amen

[Gridlock]

Brilliant!

[Doly]

Somebody tell these guys that peak oil isn't running out of oil, it's running out of cheap oil. They already got that we're running out of cheap oil. All they need to learn now is the proper name for it.