[p2p-research] no oil crisis?

Paul D. Fernhout pdfernhout at kurtz-fernhout.com
Sat Aug 15 18:59:27 CEST 2009

Michel Bauwens wrote:
> I work more closely now with some people involved in the state of the world
> forum, which is a stellar collection of minds if I ever saw one,
> I can tell you that literally 'nobody' believes that oil and food markets
> work the way you suppose they do,
> there is very very high level debate, as there is indeed panic about both
> the havoc that the seesaw in oil and food prices is doing to the system as a
> whole,
> this 'market' is so dysfunction that it literally threatens the survival of
> the system itself, this is no wild leftist imaginings, but the thoughts of
> important members of the current establishment ...
> the pristine functions of the market you imagine are  nothing else than myth
> and ideology,

Personally, I want to transcend the market, especially because I feel (based 
on Alfie Kohn's work) that most competition is inherently destructive, and 
that a means of production built mainly around competition is in that sense 
a dumb idea. (Although, I can acknowledge a hybrid system of some 
competition and lots of cooperation may have some merits.)

The reason those prices are going crazy is in part the unchecked 
centralization of wealth.  There are many trillions of dollars sloshing 
around in global financial markets (no transaction tax) moving from 
speculation to speculation and doing some of the damage you outline. It is 
another systematic risk of markets, especially as the physical markets for 
food and manufacturing are now being dwarfed by other markets for services 
and finance.

That's one reason why, as long as we have markets, maybe we need *enormous* 
taxes? Seriously. Maybe we need to go back to the 94% marginal tax rates the 
USA had after WWII, and also lots of property taxes, as long as we have a 
market, with the money going mostly back to the people as a basic income. If 
people don't want taxes, then we need to reduce the role the market plays in 
human affairs. Note, this is completely opposite to the current dominant 
sentiment in the USA, but since the USA is going off a cliff economically, 
maybe that just shows the popular sentiment for low taxes promoting growth 
or societal happiness is a fallacy? Markets can't function well if wealth is 
too concentrated; I've seen others (economists) say that, and it is 
essentially what you are saying here.

So, what we are seeing is a reflection of how easy it is to solve resource 
problems because, essentially, they are so trivial that in one way, the 
market doesn't care about them or take them seriously anymore. :-) For a 
sign of how trivial these basic problem are, in the USA about 2% of the 
workforce is involved with agriculture, and about 12% (and dropping fast) 
with manufacturing (some imports happen too, granted). Anyway, clearly only 
a fairly trivial amount of the workforce is involved with primary productivity.

And even there, much of what is produced (beef, snowmobiles) is of dubious 
value. So, I'd guess we could support everyone in the USA with a good life 
(mostly vegetarian) with maybe 3% of the workforce (plus maybe some more 
(1%?) for core services like medicine, which could be more peer-ish given 
the interenet).

So, all the rest of the economy is "fluff" in that sense, mostly about 
guarding (like grocery store cashiers) or dealing with the negative 
consequences of the Western diet. But, it is fluffy enough to hide the real 
stuff. And that 94% of the economy we don't really need is the dog wagging 
the tail is the really essential part of the economy. So, yes, I'll agree 
that is a really dysfunctional situation. So, yes, I'll agree with those 
others in that sense.

Now, that is obviously a "market failure". So, the government needs to step 
in with enormous taxes and redistribute those trillions of dollars of wealth 
to make the market function again. Printing money is another way to have 
such a tax via inflation, though who exactly gets hurt there is a tricky 
subject. Or, if that is impossible politically, then I agree that people 
need to create non-market alternatives, like a gift economy, a shared 
commons of ideas and other resources, or local subsistence production, or 
some mix.

Smart countries, like Singapore, see this, and even without much taxes, 
ensure that core services like food production can continue to function for 
national security reasons, which means interfering with the market somehow 
(some interferences are worse than others, perhaps). Again, if so little of 
the economy is really needed these days with all our modern technology to 
supply food and other basics, it does not take much taxes to ensure the 
infrastructure is in place to produce them under any circumstances.

It is only extreme free market fundamentalist places like the USA that are 
at great risk of starvation and so on. It is both ironic, and 
understandable, that a place like the USA so at the mercy of the free market 
(grain supplies have been run down from years to days due to the Bush Admin 
   "Lowest Food Supplies in 50 or 100 Years: Global Food Crisis Emerging"
also spends the most on "national security". That is because rather than an 
*intrinsic* security of a well functioning infrastructure, the USA is 
relying on *extrinsic* security of soldiers to defend an indefensible 
infrastructure for oil and food. So, we have "Brittle Power".
Unfortunately, if the USA implodes, it has so many nuclear weapons and 
plagues and such that it could take the rest of the world with it. :-(

Or as I said here:
   What am I up to with that PU education myself? Besides being a part-time 
stay-at-home Dad, I'm busy these days in my "free" time (along with many in 
the world, such as these people: http://www.reprap.org/ :-) attempting to 
help take down the intellectual scaffolding of global capitalism one myth at 
a time in a controlled safe manner where no one gets hurt, same as these 
people do when demolishing physical structures past their usefulness:
     "And behind each successful project stands the CDI team - a talented 
group of professionals with decades of experience dedicated to absolute 
perfection on each new project."
   See, there are people whose whole careers are devoted to the safe 
demolition of historic structures. And this essay is not intended in any way 
to defend anyone who intentionally destroys structures in a way intended to 
hurt people. ...
   At some point, after you are done building a new building (or a new 
post-scarcity society) the scaffolding comes down. :-) But unlike the easier 
time CDI has with demolishing vacant structures, it's much harder if people 
(including PU alumni) still mistake that competitive capitalist scaffolding 
for the post-scarcity building full of abundance the scaffolding surrounds 
(and likely always did. :-) And I'm definitely hoping for that intellectual 
scaffolding's removal in a controlled way, not a big crash like these where 
often people get hurt: :-(
     "Images of catastrophically collapsed scaffolds"

There are no doubt other reasons for the problems the USA is causing.  As 
one person wrote to me (given I had referenced Bush's Lyme disease that 
might have come from an accidentally released weaponized version): "I 
sometimes wonder with what (mentally and physically) the neocons are also 
infected. Historically, most if not all rulers have been infected with 
insecurity, a compelling need to dominate from a basis of power & greed, a 
"need" or compulsion to "get even" or to show those under them something - 
  or to at least impress someone some how. The many STDs with which many 
world leaders have been documented or reputed to carry (and transfer) may 
explain some of their anger, and wishes to create suffering upon their own 
sycophant subjects first, and then the world."

An interesting idea about STDs and centralized leadership. Maybe that is 
another reason a peer economy makes sense -- it does not centralize STDs in 
a small number of active politicians who are contracting them and then 
making political decisions?

Still, let's be very clear. Pricing is part of a rationing and control 
system. Just because a control system fails (say, a computer in a car) does 
not mean the rest of the system has any physical problems. Even if the car 
won't start, it is still there, and could be repaired by replacing one tiny 
component (an ideology of free market fundamentalism in this case).

I wrote more on alternative approaches here:
   Here is a sample meta-theoretical framework PU economists no doubt could 
vastly improve on if they turned their minds to it. Consider three levels of 
nested perspectives on the same economic reality -- physical items, decision 
makers, and emergent properties of decision maker interactions. (Three 
levels of being or consciousness is a common theme in philosophical 
writings, usually rock, plant, and animal, or plant, animal, and human.)
   At a first level of perspective, the world we live in at any point in 
time can be considered to have physical content like land or tools or fusion 
reactors like the sun, energy flows like photons from the sun or electrons 
from lightning or in circuits, informational patterns like web page content 
or distributed language knowledge, and active regulating processes 
(including triggers, amplifiers, and feedback loops) built on the previous 
three types of things (physicality, energy flow, and informational patterns) 
embodied in living creatures, bi-metallic strip thermostats, or computer 
programs running on computer hardware.
   One can think of a second perspective on the first comprehensive one by 
picking out only the decision makers like bi-metallic strips in thermostats, 
computer programs running on computers, and personalities embodied in people 
and maybe someday robots or supercomputers, and looking at their 
characteristics as individual decision makers.
   One can then think of a third level of perspective on the second where 
decision makers may invent theories about how to control each other using 
various approaches like internet communication standards, ration unit tokens 
like fiat dollars, physical kanban tokens, narratives in emails, and so on. 
What the most useful theories are for controlling groups of decision makers 
is an interesting question, but I will not explore it in depth. But I will 
pointing out that complex system dynamics at this third level of perspective 
can emerge whether control involves fiat dollars, "kanban" tokens, 
centralized or distributed optimization based on perceived or predicted 
demand patterns, human-to-human discussions, something else entirely, or a 
diverse collection of all these things. And I will also point out that one 
should never confuse the reality of the physical system being controlled for 
the control signals (money, spoken words, kanban cards, internet packet 
contents, etc.) being passed around in the control system.
   The above is somewhat inspired by "cybernetics".

So, the market and fiat dollars is just one possible control system among 
many. It has its good points and bad points in different contexts. You are 
validly pointing to a fundamental weakness -- the fluff in our society is in 
charge of the critical part. So, we either need to spread the wealth around, 
highly regulate that part of the market (the US has tried, but done it 
badly) or we need to take our infrastructure out of the market (some 
government planning like Singapore, or peer alternatives and local 
production, or some other way). Or some mix of all those things.

So, what is fair to say is, in a theoretical market, with wealth roughly 
evenly shared, the market responds to resource problems faced by everyone. 
In a real market we have right now, with wealth heavily concentrated, the 
market only responds to the needs of a few key individuals, and they spend 
most of their money on fluff. :-) So, everyone else may starve amidst 
plenty. Or, in other words, "Let them eat virtual cake." :-(

I'll have to look more at the rest of what you posted, which will take some 
time. :-)

I've posted a tangentially related note I wrote elsewhere about die-offs and 
carrying capacity and my disagreement with that premise.

--Paul Fernhout

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