Black Monday

[Panda-NZ-]

Don’t think so mate. Your comrades in the Greens and those radicals in the Maori party are desperately trying to redistribute wealth.

They have never been in power for 200 years either

It's mostly irrelevant what they think.

[moka]

Compound growth is now the problem.

David Harvey - The Anti-Capitalist Chronicles. The basic premise of his book is that global capitalism is facing a number of existential crises, many of which are products of capital’s own internal contradictions.

Capital is always about growth: it has to be because it is animated by the pursuit of profit. A healthy capitalist economy is one where everybody has positive profits, which means that there is more value at the end of the day than there was at the beginning. The surplus value at the end of the day is then used, under the force of the “coercive laws” of competition, to create more value. Capitalist growth is compound growth. Compound growth is now the problem. The size of the economy doubles almost every 25 years.

The $4 trillion economy that existed in 1950 grew to $40 trillion economy as of 2000, and to $80 trillion in 2020 (in constant 1990 dollars)

If this continues, as the laws of motion of capital suggest it must, then we have to face a $160 trillion economy by 2050, $320 trillion by 2075, and $640 trillion economy by the end of the century. This is what compound growth does. It challenges all barriers and limits even as it seems to postulate an impossibility of achieving its endless spiral of growth.
The exponential growth of the global money supply and of global credit moneys since 1970 testify to the underlying compounding growth trajectory and the critical problems posed for production, distribution, consumption and the realization of value within global market under the rule of capital.

Capital is having real difficulty finding profitable investment opportunities for $80 trillion.
Where and how money capital can be profitably invested is a critical problem, particularly since there is only one type pf capital that can accumulate without limit, and that is money capital.

When world money was constrained by gold, it couldn’t accumulate infinitely. But the gold standard was abandoned in 1971 and the money supply of the world was liberated from its gold base. Thereafter we get this tremendous growth in the money supply. When we get into economic difficulties, the Federal Reserve simply prints more money, which adds to the compounding of the quantity of money in circulation. But then the question is what is that money going to do, and how is it going to be profitably invested?

While the failure of the dominant political-economic model is clearly visible and political protests are proliferating, there is at this time little consideration given to how the underlying problems might be addressed within or outside of the existing frameworks of economic management of the global capitalist economy. Capital cannot survive in its current form on its current growth trajectory. On the one hand, we can’t do without it, on the other hand, it is on a suicidal path. This is the central dilemma.

[blackcap]

Compound growth is now the problem.

David Harvey - The Anti-Capitalist Chronicles. The basic premise of his book is that global capitalism is facing a number of existential crises, many of which are products of capital’s own internal contradictions.

Capital is always about growth: it has to be because it is animated by the pursuit of profit. A healthy capitalist economy is one where everybody has positive profits, which means that there is more value at the end of the day than there was at the beginning. The surplus value at the end of the day is then used, under the force of the “coercive laws” of competition, to create more value. Capitalist growth is compound growth. Compound growth is now the problem. The size of the economy doubles almost every 25 years.

The $4 trillion economy that existed in 1950 grew to $40 trillion economy as of 2000, and to $80 trillion in 2020 (in constant 1990 dollars)

If this continues, as the laws of motion of capital suggest it must, then we have to face a $160 trillion economy by 2050, $320 trillion by 2075, and $640 trillion economy by the end of the century. This is what compound growth does. It challenges all barriers and limits even as it seems to postulate an impossibility of achieving its endless spiral of growth.
The exponential growth of the global money supply and of global credit moneys since 1970 testify to the underlying compounding growth trajectory and the critical problems posed for production, distribution, consumption and the realization of value within global market under the rule of capital.

Capital is having real difficulty finding profitable investment opportunities for $80 trillion.
Where and how money capital can be profitably invested is a critical problem, particularly since there is only one type pf capital that can accumulate without limit, and that is money capital.

When world money was constrained by gold, it couldn’t accumulate infinitely. But the gold standard was abandoned in 1971 and the money supply of the world was liberated from its gold base. Thereafter we get this tremendous growth in the money supply. When we get into economic difficulties, the Federal Reserve simply prints more money, which adds to the compounding of the quantity of money in circulation. But then the question is what is that money going to do, and how is it going to be profitably invested?

While the failure of the dominant political-economic model is clearly visible and political protests are proliferating, there is at this time little consideration given to how the underlying problems might be addressed within or outside of the existing frameworks of economic management of the global capitalist economy. Capital cannot survive in its current form on its current growth trajectory. On the one hand, we can’t do without it, on the other hand, it is on a suicidal path. This is the central dilemma.

So many contradictions in that article Moka. Initially it mentions (in constant $), then later all it talks about is expanding money supply etc. So which one is it?

[maclir]

Don’t think so mate. Your comrades in the Greens and those radicals in the Maori party are desperately trying to redistribute wealth.

Everyone tries to redistribute wealth, you only make it sound bad when the residtribution is not to your liking.

[causecelebre]

Everyone tries to redistribute wealth, you only make it sound bad when the residtribution is not to your liking.

No. I love it when the open market redistributes wealth. I don't love it when politicians take away from those that have earned it and give it to those that haven't. Communism is utopic and monetary equality requires extreme imbalance of power, even Marx understood the "dictatorship of the proletarian"

[maclir]

No. I love it when the open market redistributes wealth. I don't love it when politicians take away from those that have earned it and give it to those that haven't. Communism is utopic and monetary equality requires extreme imbalance of power, even Marx understood the "dictatorship of the proletarian"

There is no "open market", those in power determine the rules, including redistribution. They then in our democratic system get others to pay for enforcement of those rules. That's how capitalism works, it's how feudalism worked.

[moka]

So many contradictions in that article Moka. Initially it mentions (in constant $), then later all it talks about is expanding money supply etc. So which one is it?

It is both. It talks about the economy and the money supply, which are related but distinct concepts.
Money supply focuses specifically on monetary assets, while the global economy includes a much broader range of economic factors like production, trade, and investment.

Constant 1990 dollars is the economy – “The $4 trillion economy that existed in 1950 grew to $40 trillion economy as of 2000, and to $80 trillion in 2020 (in constant 1990 dollars.)”
The expanding money is money supply. (“The exponential growth of the global money supply,” “this tremendous growth in the money supply.”)

The money supply refers to the total amount of monetary assets available in an economy at a specific time M1 and M2.
Money Supply
Narrow Money (M1)
The narrow money supply, typically referred to as M1, includes physical currency in circulation and easily accessible bank deposits. Globally, this figure is estimated to be around $36.8 trillion.

Broad Money (M2)
When considering a broader definition of money that includes M1 plus short-term time deposits and money market funds, the global money supply expands to approximately $90.4 trillion.

Broader Interpretations
Including other financial instruments and assets, the global money supply becomes much larger:

• Stock Markets: The total value of global stock markets is estimated at $73 trillion.
• Derivatives: The funds invested in derivatives range from $544 trillion to $1.2 quadrillion, significantly dwarfing other forms of money.
• Commercial Real Estate: Global investment in commercial real estate totals around $29 trillion

Cryptocurrencies
While growing rapidly, cryptocurrencies still represent a relatively small portion of the global money supply. For example, the total market capitalization of Bitcoin was estimated at $100 billion in the referenced data, though it has since grown significantly.

Global Debt The total global debt, which includes money owed by individuals, corporations, and governments worldwide, is estimated at $215 trillion.
The global GDP is projected to be $105 trillion by the end of 2023, representing a $5 trillion increase from the previous year

Disclosure: Thanks to Perplexity AI for the explanation as I am not an economist.

[moka]

So many contradictions in that article Moka.

So many contradictions in capitalism too, so much so that David Harvey wrote a book called "Seventeen Contradictions and the End of Capitalism." Here are some key points about Harvey's analysis of capitalism's contradictions:

Core Contradictions
Harvey identifies 17 key contradictions inherent to capitalism, which he argues contain the seeds of systemic crisis and potential collapse. Some of the major contradictions he highlights include:

• The tension between use value and exchange value
• The necessity for endless compound growth
• The exploitation of nature and natural resources
• The tendency toward universal alienation

Fatal Flaws
While Harvey sees many of capitalism's contradictions as manageable, he argues that some are potentially fatal to the system in the long run. The three most dangerous contradictions he identifies are:

1. The stress on endless compound growth
2. The necessity to exploit nature to its limits
3. The tendency toward universal alienation

Spatial Fixes and Limits
Harvey contends that capitalism has historically managed to extend its limits through "spatial fixes" - expanding geographically to incorporate new markets, resources and labor. However, he argues that capitalism is approaching the limits of this strategy, as there are few remaining frontiers for expansion.

Crisis and Transformation
For Harvey, crises stemming from these contradictions are both destructive and potentially transformative moments for capitalism.
He sees crises as catalysts that force capitalism to evolve and take on new forms. The 2007-2008 financial crisis, for example, revealed underlying contradictions and instabilities in the system.

[Panda-NZ-]

What is to be done when there is AI?

The federal reserve has been covering for the flaws in captalism (not enough jobs without printing trillions). I imagine it could be even more urgent when there's a risk of widespread deflation.

Would be nice if it went direct to the people rather than on property loans.

[moka]

So many contradictions in capitalism too, so much so that David Harvey wrote a book called "Seventeen Contradictions and the End of Capitalism." Here are some key points about Harvey's analysis of capitalism's contradictions:

Core Contradictions
Harvey identifies 17 key contradictions inherent to capitalism, which he argues contain the seeds of systemic crisis and potential collapse. Some of the major contradictions he highlights include:

• The tension between use value and exchange value

The tension between use value and exchange value shows up in the housing crisis.

Use value refers to the utility or usefulness of a commodity - what it can be used for. Specifically:
It represents the actual usefulness or benefit derived from consuming or using a product.
For example, the use value of a house includes providing shelter, privacy, and a space for personal relationships.

Exchange Value
Exchange value is the monetary worth of a commodity in the market. Key points about exchange value include:

• It represents how much a commodity can be sold or exchanged for.
• For example, the exchange value of a house is its market price or how much someone would pay to buy it.

All commodities have both a use value and an exchange value.
There can be tension between use value and exchange value, especially for essential goods like housing.
The dominance of exchange value in capitalism can lead to negative social consequences, like housing segregation as people try to protect property values.

Harvey argues that eliminating the "exchange value dynamic" could allow for reorganizing economic systems in fundamentally different ways.

Importance in Capitalist Systems
Harvey views the contradiction between use and exchange value as fundamental to understanding capitalism:

• It shapes how goods are produced, distributed, and consumed.
• The pursuit of exchange value (profit) often overrides considerations of use value in capitalist production.
• This contradiction contributes to crises and inequalities within capitalist economies.

By analyzing these concepts, Harvey aims to critique capitalism and explore potential alternatives that prioritize use value over exchange value.