© Fernando Caracena 2022, by Fernando Caracena
The Crisis of Capitalism
Jeremy Rifkin's recently published book, The Zero Marginal Cost Society, discusses the direction capitalism is heading as a result of our increasing efficiency in the use of energy in manufacturing, telecommunication, and many other aspects of life. He notes that a characteristic of capitalism is that the selling price of items and services that it offers tends to fall to its marginal costs that is, the cost of producing one more item. Scarcity is what drives up the prices of goods and services. Very scarce items will sell for very high prices. As manufacturers are able to produce more at cheaper prices, then the market prices of manufactured goods tend to fall. According to Rifkin's predictions, the cost of living will tend to drop toward zero with time as more goods become available at near zero cost.
This easier living for everyone would be a natural way for capitalism and the free market system to yield dividends to the working class. The contributions of the previous generations of workers is a form of capital (their own time and energy) that they have invested, which would pay dividends in the future to their descendants in the form of more leisure and more purchasing power. This possibility has crossed the mind of other authors. Consider Timothy Ferriss's, "The 4-Hour Workweek".
The result of the above cited, future developments would be deflationary, and destabilizing. In our debt-based, fiat-currency system they would cause central bankers to lose control of the economy. Further, because power "elites" of the present use central banking as a means of controlling the activities of the global population, the future developments for capitalism described above would tend to declaw the global power structure.
Were Rifkin's predicitons true, central bankers and power "elites" would be facing a very disconcerting future, which could motivate their behind the scenes struggle to maintain their grip. For those of us who think beyond the current crises and news flashes, this struggle would explain what we see as massive, systemic incompetence and mismanagement that looks as if it could be improved if The Three Stooges were in charge.
Discussion of Rifkin's Analysis
In the above cited book, Rifkin analysed the developments that are causing the prices of nearly everything to drop. I think that he made very weak case for the importance of the Internet of Things (IoT), but in other areas, I agree with some of his analysis. The IoT may yield big savings in manufacture, just in time delivery, and inventory control that would affect business, but at present it does not directly affect the lives of individuals, except in a negative way as a potential loss of privacy. The more stuff in your house is connected to the Internet, the more opportunity a variety of potentials eavesdroppers will have to spy on you.
In the area of energy, costs may fall rapidly through the developments of higher efficiency photovoltaics, that are being researched and developed to achieve higher efficiencies. For example, quantum dots offer a promise of much higher solar energy-conversion efficiencies. Rifkin foresees that at some point in the near future, solar panels will become so cheap that they will replace coal fired plants and will be able to generate electricity at diminishing prices per kilowatt, the marginal cost tending toward zero. This means nearly zero cost energy.
But does Rifkin's analysis hold up to reality? I looked at the energy return on energy investment (EROI) motivated by Cliff High's online discussion of it. Here is High's analysis of EROI for various energy sources:
Crude Oil: 185/1
Wind Mills: 7/1 when running continuously, actually 0.62../1 in actual running time.
Note that the energy costs themselves reflect the present, global economy' s cost in efficiency, manufacture, and delivery of alternative energy converting systems. Today, windmills may offer a negative rate of return, but when the chief source of energy was from animals and humans, wind power did offer a positive EROI of several times greater than one.
Missing from Cliff High's discussion is the EROI of photovoltaics, which is a key consideration of Rifkin's analysis. Here one has to be careful because there are various government subsidies involved that mask their real EROI. The question remains, given the present economy, what is the EROI of photovoltaics? One scientific analysis of it arrives of a figure of it as about 9–10/1 for sunny areas.
OK, so Cliff High is correct: at present the best EROIs are in the fossil fuel areas and hydro power; the green sources give very low returns, which makes them a bad investment of human effort. Of course, we can look to future developments.
Photovoltaics are like integrated circuits and computers and some people in the power structure expect their doubling capabilities to follow something like Moore's Law. But alas, scientists shoot down this hope with counter arguments like this.
The dream is to have a replicator in ever home that is like the one in the science fiction series of Star Trek. That particular instrument, which is everywhere on a star ship, produces everything from energy and the shape and molecular forms are shaped by a huge computer that has access to a large part of humanity's database and programming.
Rifkin's book (cited above) has high hopes for 3-D printers for reshaping our access to goods rapidly and locally. Many small consumer products could be manufactured in the home using a 3-D printer. A lot of software for manufacturing many items from 3-D printers is available from the open source movement
Here are some examples of where 3-D printing is being very useful:
Here is an article that discusses current industrial problems and challenges of adopting 3-D printing technology.
As I look at how 3-D printing is being used today and who uses it, I feel disappointed. What has happened to the spirit of garage entrepreneurship that produced the PC revolution? A lot of the spirit of early development of personal computers appears to have evaporated. Computers have become a consumer product. The aspirations of the earlier cyber world have fallen into a pit of neo-TV-ism. Unfortunately, the new boob tube has become a smart spy machine, the benefits of which go to government and big industry. The dreams of a great race of human beings that walk among the stars, colonize the moon and other planets, and live a rich an exciting life of exploring reality ends in an opium den of wasted life.
Money as a Surrogate For Information and Energy
Energy is really one of the two bases for money. The modern view of physics is that the universe is built of the flow of energy and information. It is a thermodynamic world. The global economy is based on the flow of energy and information as well. The past energy supply was first human muscle power, then fossil fuel; and information was conveyed by a number of successive vehicles, such as: word of mouth, writing, stage coach, pony express, railroads, telegraphs, radio, and now, the Internet. Matter according to Einstein cannot travel faster than the speed of light and the energy cost of sending material at nearly the speed of light is enormous. In modern times, the flow of information has been decoupled from the flow of matter so that we communicate at the speed of light. That speed up in the flow of information leads in two directions: toward fantastic personal freedom, or into deep slavery.
The Computer as a Mental Enhancer
The Computer can be a personal mental enhancer. We are also now able to process a lot of information from the world through the Internet locally. Using distributed computer systems and computers have become cheap enough that they have become personal appliances. Further, the development of modern graphics cards, which have thousands of graphic processing units (GPUs) has allowed people who have the know-how to have personal access to a personal supercomputer. Add the Internet and you have a world, in which a genius can very inexpensively enter and become a very important player in word events.
What we see is what could develop into a new mode of civilization that leads to a complete break from the previous ways of living. This development threatens the importance of the old-guard leadership. The network of secret society leaders meeting in smoke filled rooms making global decisions for humanity could be on the way out. Or perhaps, the masses will fall into an opium den of self gratification that atomizes the population of humanity leading to the destruction of human civilization. Will the advance of technology lead to the regress in evolution, a de-evolution, into a caged monkey existence for humans. Or perhaps, human development will bifurcate.
A growing group of people is appearing that is able to see through the past smoke of propaganda, deception and scare tactics by using new information sources over the Internet. Many smart people are analyzing the subtle signals that escape censorship though state-approved information outlets. Because of this the economics of information gathering, analysis, and distribution has changed. I would say that the mainstream media (MSM) can no longer operate in a free market system, but must somehow be subsidized.
Martin Armstrong is a source of information and insight that governments and big industries pay a lot of money to get. He has developed an artificial intelligence program, called Socrates, which using a feed of the vast information source of the internet is able to analyze and predict the directions that large-scale movements are taking humanity. Here is an example of a recent interview of Martin Armstrong that appeared on an alternative web-base news site. This kind of private development represents a big threat to the old guard who had inside knowledge about what was about to happen in the world. The insiders acted on that information to gather huge fortunes and acquire princely powers. But now, someone can develop personal information gathering and analysis equipment and software that makes his product sought out by the very powers that be who were the caretakers of inside information. You can bet that those people are running scared at this point.
Today we see a group of old power "elites" scrambling desperately to find ways of keeping their power and money base. We see a bunch of scared rabbits out there playing the role of Hitler and superannuated politicians reanimated to mouth the edicts of unseen power groups. So how are they trying to regain control, when humanity is growing to the point where their historical methods of control are beginning to fail among a growing intelligent minority? They are now openly using lies and dirty tricks to survive. In the process, they still maintain their hold of the majority, but they reveal themselves to a progressively larger group that is no longer fooled. They have set the genie lose from the bottle and now, their opposition is using it in way that they interpret as being against them.
One way to put the genie back in the bottle is to starve it. If energy is becoming cheaper, then the powers that be (PTB) want to make it more expensive. There are still ways to do this. Fossil fuels still provide for enough of the economy and constitute the primary energy source that a crunch in their supply can seriously damage the world economy of what is small and local. Also a crunch in goods and services can distract the global populations by requiring each individual to use more of their wits just to get by. We see also many other stumbling blocks thrown in the path of local, small-scale economies, which I will not mention here because they are obvious.
What we see developing now is a movement among the PTB, similar to that of the Luddites, the old English textile workers that fought against loss in livelihood under technological advance in weaving technology by destroying and sabotaging the satanic mills. The following is taken from the above Luddite reference:
The Luddites were not, as has often been portrayed, against the concept of progress and industrialisation as such, but instead the idea that mechanisation would threaten their livelihood and the skills they had spent years acquiring. The group went about destroying weaving machines and other tools as a form of protest against what they believed to be a deceitful method of circumventing the labour practices of the day. The replacement of people’s skilled craft with machines would gradually substitute their established roles in the textile industry, something they were keen to prevent, rather than simply halting the advent of technology.
My opinion is that another way that the PTB have tried to stuff the genie back into the bottle is by sabotaging education. Consider the question, what are the goals of education? I would say that the main goal for a child would be to develop as an effective and productive human being and to become a good citizen of a peaceful world. That goal is served by two intermediate ones: to learn self discipline, and to learn how to use that discipline continue to learn and apply new ideas to benefit his own life in the service of the highest goals he can discern for himself and humanity. This must be done with a careful respect for the freedom of the developing human being. It would be counter productive to try to teach the children those lessons through intimidation or through appeals to the personal authority of the teacher or the system. That is contrary to the future development of the human race unless the power "elite" manage to reset us back to the stone age. There are plenty of ways to teach children and make if fun to learn: grow gardens; study the weather; go for hikes in nature; take the kid on tour of a power plant; how about going to a working farm or ranch; really, how is the world at work and how dose it fit together?
I learned a lot about education when our own grandson was unschooled. My daughter and I discussed this. I asked her, "but how is he going to learn to read and do math." She gave me a book by John Holt (see this link). No unschooled child failed to learn how to read. That sort of makes sense for a literate family. We read all kinds of books. I have a huge library of physics books. The kid saw us all reading all the time, and of course, he wanted to read as well. So we let him select books that he was interested in.
We took our grandson to the Tattered Cover Book Store in Denver, Colorado. That was after we visited the Museum of Natural history. The bookstore was several stories tall next to a parking building of the same height. The layout of the store was between that of a library and a set of living rooms complete with easy chairs, reading lamps, and tables. Our grandchild found the children's section and many books he wanted us to buy, from Astronauts to dinosaurs. Grandma limited him to three. He laid out a bunch of books on the carpeted floor and rearranged them in various priorities until he was able to decide on the tree he really wanted. Of course he kept pleading for more at every turn. So our grandson learned to read almost entirely on his own. Of course he had asked us to read to him and that was part of his learning.
There was the issue of the Internet in his education. Our grandson had two friends who attended a Waldorf School in Boulder. Their father is a lawyer. Their school emphasized not using computers or calculators, but only paper and pencil. We had discussions with their father over the fact that we allowed our grandson not only to use these devices, but also allowed him access to the Internet. And of course, there was the issue of unschooling. I had set up several computers in our basement, old recycled MS machines and "Apples". Those were the days when access to the internet was through dial-up modems. By then, the dial-up feature was automatic and we had an ISP service. Our kindergarten-aged grandson learned how to use an old Apple computer that I let him use. I had loaded it up with kids' games, which he played. He soon moved beyond kid games and learned how to get online. He found his favorite set of stories on a dedicated online site, which now is exampled at this site, Thomas The Tank Engine.
My feeling at the time was that the cyber-world was going to be our grandchild's future world, so that if his interests took him in that direction, that was good. Today, our grandson is a successful young man quite at home in the cyber-world, and a world traveler. He uses modern tools such as digital cameras, volgs, drones, and the Internet to advance his career.
What I found out is that unschooling preserves the child's natural curiosity and enthusiasm for learning. We as teachers do not try to stuff information down the child's throat. The desire to learn is already there. What we need to do is facilitate the child's learning experience. It is fascinating to watch the child's mind develop: how a child grows up and develops into a very competent young man. The future is there in freedom, learning, self discipline, and access to vast stores of information and knowledge online.
The PTB are afraid of the emergent new human being that will advance humanity by the use of a free mind that enthusiastically learns to use the accumulated knowledge of humanity to not only advance the standard of living , but who also creates better conditions for human happiness. In fear they use their residual power over governments, means of production, and news media to try to wreck humanity's course of evolution into new heights to darg humanity back into past modes of existence in misery and poverty just as the Luddites sabotaged developing textile technology.