3D1317BB482B5C7D61E4C4E53B9F984F

An Economy On “Life Support”

Walt Fryers 1997 Published in: Technocracy Digest 1st quarter 1997, No. 323

The North American Price System has run its course. It is no longer viable in its traditional form. It is now on “life support” in a desperate attempt to extend its vital functions a while longer.

The pyramid of debt has grown to such proportions that it dominates the economy. No longer is debt creation the measure and means of new growth. The accumulated debt must now be sustained at whatever cost and by any necessary expediency, lest it precipitate a total economic collapse.

As a consequence, and in the name of “monetary expediency”, governments divest themselves of due responsibility, of leadership, and control, and of expressing the national will and welfare. With venal resort to lotteries and casinos, they seek to service and validate their debts.

Beggars abound, more than in any society in history. Not just the street people, and homeless, increasing as they are in number. Not just the Food Bank supplicants, in their legions. But also the thousands of charities and non-profit organizations that solicit money by mail and telephone and door-to-door, trying to cover the derelictions of a failing society. It is failing the poor, the sick, the environment, the arts, education, and even the applications and advancement of science. The “touch” is made in the name of charity, morality, humanity, progress, the future, children, welfare mothers, whatever. The “touch” is made especially to the middle class “volunteer taxpayer” who has been persuaded it is the only possible way to go. The government is thereby cutting back on its role of responsibility to provide a decent economy, education, roads, sewers, health, for all its citizens.

And then there is inflation. Inflation has been institutionalized! It is now built-in. In less sophisticated societies, the debt “train” is ridden to the point of collapse, at which point catastrophic inflation destroys the debt structure and the currency. A new cycle of debt creation with a new currency can then begin. Not so here. Managed-inflation of 2% or 3% achieves the same objective, without the sudden collapse. Old debt is reduced in value, and retired. Money is devalued slowly but inexorably. In its train are the usual consequences of a failing economy: casualties of lost income, burgeoning bankruptcies, family breakdown, emergence of a predatory class of opportunists preying on a larger class of vulnerable citizenry, while politicians fiddle with palliatives and promises.

When a domestic economy falters, as ours has been doing over the last couple of decades, investment money looks desperately for new places to invest. If trade barriers permit, this money can begin flowing off-shore. This is part of the foreign trade operation, and is nothing new. The British Empire grew mightily on this process….. for a time. Now, under the flag of “globalism” and liberalized trade rules, the modern industrial nations are having a vigorous revival of investment opportunities….for a time! But domestic problems persist. The expanded trade benefits investors, and traders, and some others by the “trickle down” process. But intractable problems of unemployment, poverty and all their consequences remain. At the same time, the capacities of competitive economies are fostered and enhanced. And more domestic enterprises wither or move off-shore.

Even more “hyped” than “globalism” are the concepts of “private enterprise” and the “market economy”. These have long been regarded as the enduring principles for sustaining a successful economy. These, indeed, are the vaunted “freedoms” of the past, the days of “laissez faire” economics. But the continuing crisis of debt has drastically changed the application of these concepts.

No longer can the banking system be allowed to struggle in a totally free market economy, where surplus investment funds would collapse interest rates (as in the Great Depression of the 1930s.) Instead, manipulated interest rates, “fabricated” inflation, write-offs for bad debts, new service charges, guarantees, and other such measures, now preserve the profitability of the banking system. That is what Central Banks must do — as instruments of government policy.

Unregulated and uninhibited freedom of private enterprise is reserved for smaller initiatives, where it often becomes the freedom to go bankrupt in increasing numbers.

There are many “fixes” for a failing economy, palliatives to ease the pain and pacify the casualties. Such are the food banks, the charities, make-work projects, subsidized training programs, welfare support, and so on. These serve to stabilize the status quo. But perhaps the most stultifying force against any fundamental change is due to the influence of the media: TV, radio, newspapers, magazines, etc. As described by linguist Noam Chomsky, this is a case of “Manufacturing Consent” (the title of his book). As a result, there is no effective dissent that would cause a fundamental change of course. In our common economic environment, the absence of significant dissent is interpreted as consent.

So there are many and devious ways in which a faltering economy can be sustained and social stability maintained. No revolutionary change of direction is even possible in an economy as massive and complex as the North American Price System, short of an epochal collapse. This may not be imminent, but neither is it remote. It is inevitable.

When it does happen, the construction of a Technocracy in North America can begin.

Tags: ,