Perpetual Growth, or PG, is a wonderful theory, a sweet dream come true, the chosen baby of modern capitalism. It posits that it is capitalism that controls the inner dynamic of pushing production of everything beyond limits imposed by Nature and human endurance. “Capital” is central to PG theory. Karl Marx defined capital as the string of “Commodity-Money-Commodity,” whereas commodity is any material thing that can be produced for use by the consumer. Money is the means of allowing the exchange of “things” for profit (profit being the great bogeyman in the eyes of socialists and communists.)
Capitalism has both its ardent proponents and fierce enemies. Marx explained how capitalism leads to impoverishment of the masses in the hands of a top-tier minority class of capitalists (owners of ‘the means of production’ and ‘usurers’ i.e. those profiting from lending money) who’s sole mission in life is amassing profits by exploiting the labor of the “workers of the world.” We all know what happened next (hint: Russia, 1917.)
Much has changed since the Bolshevist coup d’état (dubbed ‘a people’s revolution) and we now find ourselves in the Age of Debt with almost all major economies burdened with runaway sovereign debts. The US is now the global queen of this suicidal liability: as of January 29, 2021, the Current Outstanding Debt of the United States stood at almost $27.8 trillion, with every man, woman, and child owning $84,099 for their share of this enormous mountain of obligation.
Yet, American politicians seem oblivious to the terrifying prospect of a sovereign bankruptcy. The 2008 stock market crash, despite its horrendous impact on tens of millions of Americans via massive job losses and mortgage defaults, has not apparently taught a lesson to politicians, who continue their happy-go-lucky journey of deficit spending (apparently, they have also forgotten the October 1929 market crash that sent the entire industrialized world into a tailspin that lasted until 1939 and, among others, catapulted Adolf Hitler to power.)
Today, with the pandemic upending the world economy yet again, the US has the printing presses working overtime to provide “stimulus” to the economy to the tune of trillions; a nearly $1 trillion relief bill has been passed by Congress and Joe Biden is clamoring for another $2 trillion in spending. And, again, all the money is on “Perpetual Growth” to restore America’s global capitalist leadership.
Those who still adhere to this insane theory have now latched onto the supposed invincibility of the US high tech industries and the global “on-line” economy, not to mention the ubiquitous “financial services” and “instant investment banking” (both of them the perpetrators of the 2008 crash.) Manufacturing, the backbone of economies for centuries, has been quietly pushed to the back seat although it is real material “things” that humanity still needs in order to meet life’s daily demands. The economists who advocate “Perpetual Growth” work exclusively with balance sheet data and turn a blind eye to the glaring limits imposed by Nature on all of us—rich and poor. But reality is unforgiving; as one report has put it:
Economists are master illusionists who rely on a set of fictions, fantasies and forecasts that emanate from a core magical mantra of Perpetual Growth that goes untested year after year. And yet it’s used to manipulate the public into a set of policies and decisions that are leading the American and the world economy down a path of unsustainable globalization and GDP growth assumptions that will self-destruct the planet.
Today, America is entangled in this “magical mantra” in ways that are almost impossible to break. Yet, the signs are worrying, to say the least. As Wolfgang Streeck has eloquently put it in his How Will Capitalism End? advanced capitalism has accepted “the highly unequal distribution of wealth” as the order of the day and it has thus created the conditions of the perpetual decline of incomes for the vast majority of the population. The “American Dream” is increasingly an unattainable objective for the vast majority despite what politicians still parrot—and the hard facts of reality are frightful; among others (1) 44.6 million people are now living below the poverty threshold (2) 52 million people are without medical insurance and (3) Cumulative private debt stands at $159 trillion (not to mention the coming wave of foreclosures as the pandemic destroys jobs and family income for tens of millions.) The prediction against this backdrop is dire:
We have been living high on a whole herd of borrowed hogs, well beyond our means for a long, long time, and as always happens when a body abuses debt, the rate of growth of that debt is escalating, compounding and we are borrowing to pay the interest on debt already spent, transferring interest to principle. (Which anyone who has ever borrowed from one credit card to make a payment on another knows, only hastens the end, especially if the rate of income available to pay the debt declines instead of increases.) It is clear the American dream has become the American myth, empty rhetoric in electoral propaganda. Still, you hear the promises every day.
For all the maniacal hoopla, fed by “experts” and vote-hungry politicians, the “miracle” of the online economy, the imperium of behemoths like Google, Amazon, Facebook, and their myriad offshoots, is the real bubble: it generates enormous money profits for those who control them but it offers next to zero trickle-down effect for the vast majority of the population: you cannot eat Facebook posts, you cannot fill your gas tank with Google searches, and you cannot buy medical insurance because Amazon delivers your groceries at your doorstep (precious little secret: services and ‘social media’ alone cannot sustain an economy in the longer term— although there are of course those who still believe that social media ‘influencers’ and ‘global reach’ can keep the economy afloat almost by themselves.)
Still, the myth of “Perpetual Growth” persists. And the “new age” economists stubbornly refuse to contemplate the problems that keep expanding—such as unsustainable global population growth and exhaustion of natural resources which should, at least, generate some skepticism among this day dreaming crowd of “experts.”
Remember? Americans are simply not alone in this world.
In the end, the “Perpetual Growth” mantra is based on five obvious myths:
Myth #1 – Wealth can be generated
Myth #2 -- Technology will find a way
Myth #3 -- Population growth is beneficial
Myth #4 – Fossil fuel (oil) is constantly being made by the planet, therefore the supply is endless
Myth #5 -- Everything will be fine if only we get the government to do the right thing.
Time to put on our thinking caps…. or else…