[p2p-research] An End to Economic Growth

Michel Bauwens michelsub2004 at gmail.com
Tue Aug 25 05:34:21 CEST 2009

Hi Kevin,

great article,

could I exceptionally ask you to post it yourself, as I'm taken until next

ideally it should be post-dated the 28th or after,

James burke can help with access if need be,

many thanks,

copy now at http://p2pfoundation.net/Test


On Tue, Aug 25, 2009 at 3:24 AM, Kevin Carson <
free.market.anticapitalist at gmail.com> wrote:

> An article by Richard Heinberg at The Oil Drum, "Temporary Recession
> or the End of Growth?", http://www.theoildrum.com/node/5638 suggests
> <blockquote> that the economic crisis is not simply a cyclical
> downturn, but a permanent structural change:  we've reached a limit to
> growth.  In so doing, he not only treats energy as "enabler of growth"
> but equates growth itself to the increased consumption of resources.
> </blockquote>
>  On the P2P Foundation email list, Michel Bauwens pointed out:
>  <blockquote> But it is only a particular kind of growth that has
> become impossible, the kind that neoliberalism and friedmanism
> promoted that refused to take into account any externalities. A steady
> state economy, that recognizes that any input has to recycled back
> into the system to the degree that it depletes physically limited
> resources, has tremendous 'alternative growth' potential.
> </blockquote>
>  Compare this to Jeff Vail's excellent post on improved technics as
> the way to maintain or improve material standard of living in the face
> of reduced energy inputs.
> http://www.jeffvail.net/2007/04/design-imperative.html
>  The question of whether "growth" can continue is meaningless until
> the neoclassical conception of what "growth" itself means is pinned to
> the board for a thorough dissection.
>  Since conventional measures of economic output and GDP reflect
> primarily the economic value of inputs consumed, they are largely
> irrelevant.  The GDP consists largely of the cost of Bastiat's "broken
> windows" and of the cost of waste.  The more superfluous steps are
> added to the Rube Goldberg mechanism of material production, and the
> more tribute we have to pay for proprietary design and content, the
> higher the GDP--even if we're just working longer hours to pay for the
> same stuff.
> By way of analogy, in the cost-plus culture that prevails under the
> standard GAAP accounting rules for inventory absorption that prevail
> in Sloanist mass-production industry, all the inputs wastefully
> consumed are incorporated into the “value” of the goods that are
> “sold” to inventory.  So all consumption of inputs is the creation of
> value, just like under a Soviet-era Five Year Plan.
> A drastic reduction in inputs required per unit of output, and the
> disappearance of the price mechanism altogether for much of what we
> consume, would register in conventional econometric statistics as a
> catastrophic economic collapse.  But it would be entirely compatible
> with a radical increase in actual material standard of living.
> The growing irrelevance of conventional measures of economic output to
> our actual material conditions of living has been a recurring theme in
> recent years.
> A good example is Michel Bauwens' work on the untenability of
> capturing value from the cognitive realm, and the failure of cognitive
> capitalism
> http://blog.p2pfoundation.net/can-the-experience-economy-be-capitalist/2007/09/27
> (the cognitive capitalist model is essentially what Tom Peters is
> celebrating, by the way, when he gushes that "intellect" and
> "ephemera" rather than parts and labor are some 90% of the price of
> his Minolta camera).
> More recently, there has been speculation that the current “jobless
> recovery,”
> http://www.progressive-economics.ca/2009/08/07/recession-far-from-over/
> with its combination of stagnant total employment levels with rapidly
> rising levels of self-employment, represents a major shift toward
> value creation outside the cash nexus.
> http://crookedtimber.org/2009/03/05/the-end-of-the-cash-nexus
> Obviously, this reinforces the growing inability of the old corporate
> framework to capture value.  As Rushkoff pointed out, when the
> prerequisites of production in the information realm become easily
> affordable to the individual, and even the tools of physical
> production are imploding in cost, venture capitalists find that nobody
> has any need for about ninety percent of the available investment
> funds they're sitting on.
> http://www.fastcompany.com/article/how-tech-boom-terminated-californias-economy?page=0%2C1
>  So corporate capitalism's crisis of value realization reinforces the
> tendency toward overaccumulation and the shortage of profitable
> outlets for investment capital.  The only way to circumvent these
> tendencies is through “intellectual property” and other forms of
> monopoly that artificially inflate the amount of capital that must be
> invested for a given unit of output, and protect high-cost and
> high-overhead producers from market competition.  That is, it depends
> on protecting the large appliance manufacturers from small shops and
> open-source manufacturing networks mass-customizing modular
> accessories and generic replacement parts for their platforms, and
> from outsourced supplier networks deciding to produce the platforms
> themselves without the brand-name markup.  As soon as enough small
> producers decide to ignore the “intellectual property” laws and become
> so dispersed as to be below the state's enforcement radar, the
> corporate dinosaurs will sink beneath the tarpits.
>  Charles Hugh Smith, likewise, has associated the collapse of wage
> labor and the collapsing profitability of investment capital with the
> collapse of taxable value.
> http://www.oftwominds.com/blogjuly09/what-if07-09.html
>  This was also a major theme of the first part of Cory Doctorow's
> *Makers*, serialized as *Themepunks* at Salon.Com (now being
> serialized again in anticipation of the novel's release).
> http://www.tor.com/index.php?option=com_content&view=blog&id=38507
> The exploding productivity of desktop manufacturing technology and the
> collapse of the proprietary information and technology business model
> meant that the Fortune 500 were bleeding red ink and headed for
> bankruptcy about as fast as, say, the Soviet Empire in 1990.  A
> precipitous decline in average hours of employment at wage labor was
> accompanied by a massive shift of production to the basement and
> garage workshop.
>  In the past, cyclical downturns in employment and industrial output
> led (as Michael Piore and Charles Sabel argued in The Second
> Industrial Divide) to the enlargement of the craft periphery at the
> expense of the old mass-production core.
> But starting with the stagnation of the 1970s and 1980s, it has become
> a permanent, structural trend.  The growth of local networked
> production in Emilia-Romagna arose in that environment.  So did the
> networked lean production model of Toyota (in which increasing shares
> of production are undertaken by networked suppliers in small shops
> using general purpose machinery to switch between production runs) and
> the cruder Nike model (retaining control of finance and marketing and
> the brand name, and outsourcing everything else to a global
> archipelago of sweatshops).  In both cases, actual production is
> increasingly carried out by a distributed network, and the corporate
> headquarters is just a redundant node to be bypassed.  See Pollard.
>  Likewise, economic downturns of the past have always seen a partial
> shift of production from wage employment to the informal and household
> sectors, and a turn to barter organizations and cooperative
> arrangements for exchanging labor.  That was reflected in the
> Owenites' organization of production for barter by unemployed
> craftsmen in the depression of the 1830s, the many local currencies
> and barter networks (some of them, in California, hundreds of
> thousands strong) in the Great Depression, and the “hoarding of
> labor-power” and use of the household  as income-pooling unit
> described by James O'Connor in the '80s in Accumulation Crisis. But
> with the increasing tendency to "jobless recoveries" over the past
> twenty years, the cyclical tendency has tended toward a structural
> change.  And with what we're experiencing likely to be the mother of
> all jobless recoveries, we can expect the total level of employment as
> a percentage of the population to remain at record lows indefinitely.
> --
> Kevin Carson
> Center for a Stateless Society http://c4ss.org
> Mutualist Blog:  Free Market Anti-Capitalism
> http://mutualist.blogspot.com
> Studies in Mutualist Political Economy
> http://www.mutualist.org/id47.html
> Organization Theory:  A Libertarian Perspective
> http://mutualist.blogspot.com/2005/12/studies-in-anarchist-theory-of.html
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