global economics

Expansive Economies and Limited Economies: Industrial capitalism is characterized by population growth, economic growth, expansion and intensification. [1] Although there was a short-lived case of industrial capitalism between about 1585 and 1622 in the Netherlands, [2] industrial capitalism as we know it today really originated in England, based on the apparently limitless fossil reserves of coal and the presence of many landless people who had to live by their labour. [3] These vast reservoirs of fuel gave rise to technologies that permitted mass production and facilitated the conquest and settlement of lands all over the globe. In the 20th century petroleum oil replaced coal as the fuel of industrial expansion, particularly where wheeled transport was concerned, although coal remained a mainstay for electricity production. [This article is an extract from Sheila Newman, Demography Territory Law: The Rules of Animal and Human Populations, Countershock Press, 2013, which is part of a four-book series, of which the first two have so far been published.]
In contrast to Britain, America, Australia, Canada, with their larger landmasses, fuel reserves and well established trade links, small isolated islander societies had to learn to live within firmly fixed, immediate, territorial limits.

Any isolated island society which failed to do this must have perished quickly.

Two famous examples of reputed ‘failure’ to live within limits were Nauru and Easter Island (Rapanui). Nauru society had survived for many centuries, perhaps two or 3,000 years, but was quickly brought to its knees by capitalist ‘success’. Remarkable for its natural wealth and fertility, it did not survive the transformation of its phosphate and limestone coral-island base into a guano-mine for global-based agriculture, despite access to large but transient commercial wealth. [4]

From a well-watered densely vegetated, undulating Eden of native gardens, it was razed within about 62 years (between 1906 and it independence in 1968) by mining shovels to a flat, waterless desert, within a narrow fringe of marginal sandy coast. Rainfall ceased to gather on the island, but simply ran off the edges. The once self-sufficient nation now imports almost all food and water from Australia.

Nauru sought compensation in the 1990s through the ineffectual International Court of Justice but finally settled with Australia outside the court for a paltry $107 million.
Nauruans are now a spectacularly unhealthy and divided people, who have been obliged to rent out their devastated country as an international refugee camp to the colonial Australian government.

Although industrial economic exploitation for outside interests quite clearly destroyed Nauru, the wider industrialized world knows little of this. The press portrays the tragedy of Nauru as something the islanders brought on themselves.

Whereas the fate of Nauru is accessible to any who care to seek – although few do - the decline of prosperous Easter Island (Rapanui) has become shrouded in mystery and myth. It has become the subject of famous inconclusive investigations and explanations, including Thor Heyerdahl’s rafting experiment to test a theory that an earlier race of people built the famous giant statues on the island, and of Jared Diamond’s Collapse book among many others. Diamond popularized a theory with elements of biblical parable, not unlike Sodom and Gomorrah, but minus God.

Such theories leave the wider industrialized world with the idea that the Rapanuians were ironically the masters of their own destruction.

It seems, however, that Easter Island was, after all, like so many islands, including beautiful, rich Haiti, just another island victim of piracy and colonial forces in the European Trade Wars. The overwhelming evidence for this will be presented further on in Demography Territory Law: The Rules of Animal and Human Populations for Easter Island and in Book Three for Haiti.
Recognising the real causes of the destruction of Nauru, Easter Island, Haiti and similarly fated islands has far-reaching consequences.

For Jared Diamond, a North American, one reason to explore the failure to prosper of Easter Island and whole civilizations in the ‘developing world’ was to try to rationally dispel 20th century racist theories for persistent poverty and overpopulation among brown and black peoples. Another reason was because Diamond saw a parallel between the fate of Easter Island and the likely fate of capitalist growth economies, as doomed to collapse.

Diamond theorized that, like modern global citizens, the Easter Islanders failed to heed abundant signs that they were overpopulating and overexploiting their environment. For years this idea has been a popular subject of elaboration by ecologists like Tim Flannery in his book The Future Eaters [5] and bloggers and list-owners like Jay Hanson, who owned The Dieoff List [6] and pioneered EnergyResources among several famous resource depletion discussion lists. Just key Easter Island into an internet browser and you will find endless discussions about the mystery of the islanders eating themselves out of house and home as they continued to senselessly construct huge statues.

Ecological die-off writers’ theorise that the major difference between Easter Island and nations in the global economy is one of scale. The apparent inability of Easter Islanders to take stock in time contained a dramatic irony due to the tininess of their territory, which meant that the warning signs should have been inescapable to all but the willfully blind. In these days of sophisticated modern communications and widespread education, similarities can easily be drawn.

Why, ecologists ask, do modern humans also sit like proverbial experimental frogs in slowly heating water, and fail to jump out of the saucepan or turn off the gas? How is it that humans seem not to understand the incremental nature of systems failure, despite a myriad of gauges and dashboards, statistics and publications?

“Are we all doomed, like the Easter Islanders?” the cry goes out.

What if our fundamental assumptions are wrong and the Easter Islanders actually didn’t befoul and destroy their own nest after all? I will argue a need to abandon the parable that the Easter Islanders brought about their own doom because it probably is no more true than that the Nauruans brought about theirs. (More about this later.)

The untrumpeted and inarguable truth is that Easter Island, like many, many successful Pacific Island societies, managed to survive for thousands of years. The durability of Pacific Island settlements is born out by DNA records which show that the Lapita people and their societies have been around for between 40 and 60,000 years, notably in New Guinea.
Major exploration and European colonization of Pacific Islands occurred a century or two later than in many other areas, like South America and Africa. The transition in the Pacific from self-sufficiency and order to overshoot and disorganisation over the 19th and 20th centuries was therefore in many cases carefully and scientifically documented by anthropologists whose excellent work now lies in dusty tomes. Not all of it caught the limelight of controversy like Margaret Mead’s study of Samoa. [7]

If what emerges is that colonisation and capitalism destroyed these island cultures, does that mean that the same forces are now destroying the rest of the world as scientists like Jared Diamond and Tim Flannery seem to think?

Well, yes and no.

This book argues that there are two major systems in the industrial world. One of these systems is beyond the control of its citizens, but the other is not.

The work of Diamond, Flannery and others does not take significantly into account that the remorseless conditions of uncontrollable population growth and economic growth which are driving some major first world countries into overshoot do not really exist in the Western Continental European system.

Yes, Europe’s population is too big to maintain without fossil fuel despite nuclear supplements already in place and it is causing unsustainable environmental destruction beyond and within its own borders, but the Europeans know this and they are preparing to ‘downsize’ thorough natural attrition. In fact population growth in Europe slowed dramatically from the first oil shock in 1972-73.[8] The problem is that the populations of North America, Britain, Australia, Canada, etc – the Anglophone states – failed to slow their growth after the first oil shock, even though this was apparently desired by some of their leaders. [9]

Not only did they fail to slow down, they have actually increased their population growth rate on bases which have more than doubled since the 1970s, in the face of increasingly serious threats to democracy, international politics and environment.

Since the oil price-rises and global financial shocks at the beginning of the 21st century, the Anglophone states have hugely ramped up aggressive exploitation of their own, as well as other countries’ natural resources, with horrendous consequences to environment, democracy and international politics. (War with Iraq, Afghanistan, fracking for gas, blowing the tops off mountains for coal that had been considered uneconomic half a century prior, mining arctic national parks, etc.) These consequences have shocked and alarmed their own informed citizenry and the rest of the world. Yet the Anglophone states do not seem able to exert any more control over their fates than did the Easter Islanders, the Nauruans and the Haitians.

The problem of inertia in dealing with ‘overshoot’ in the Anglophone states is worsened by their institutional and commercial investment in continued population growth.
Europe’s Roman law system seems to contain a solution in its retention of some features of traditional local societies. Starting with France, the system has been adopted by nearly every country in Europe since the 19th century, making the Anglophone system a minority one.

The principle difference between the systems is that Anglophone state citizens have very little democratic power to organize to defend themselves against a Market and destructive corporate interests to which they and their governments have become captive. In continental Europe, however, citizens and the state have quite effective power against corporate interests, largely because the state still controls most of the land-use. In the Anglophone states, private and corporate ownership of land, resources and utilities rivals that of the state.

Industrialization looks increasingly like a short-lived phenomenon. Unlike the successful Pacific Islander societies, industrial society has no experience of economies or polities lasting thousands of years. Despite this, business as usual in industrial societies, depends on a widespread assumption that industrial capitalist society will go on forever. Moreover, it is believed that the future holds material utopias which will gradually fuse into some kind of total knowledge. A popular book by Ray Kurzweil, The Singularity, is an excellent example of this new religion. Central to Kurzweil’s thesis is an extrapolation of “Moore’s Law” where trends based on past rate and production of technological improvement go on exponentially forever. [10] This works fine as an isolated theory, but the author gives little consideration to practical problems. The major practical problem is the concomitant trends in material, social and environmental costs [11] that underlie those past trends and which extrapolation of those trends would also increase.

NOTES

[1] Burnham, Peter, 2003. Capitalism: The Concise Oxford Dictionary of Politics. Oxford University Press, p.64"Karl Polanyi concludes that capitalism did not emerge until the Poor Law Reform Act of 1834. Capital existed in many forms - commercial capital and money-dealing capital - long before industrialization. For this reason the period between the sixteenth and eighteenth centuries is often referred to as the merchant capital phase of capitalism. Industrial capitalism, which Marx dates from the last third of the eighteenth century, finally establishes the domination of the capitalist mode of production. In contrast to liberals, writers in the Marxist tradition understand twentieth-century developments in terms of the movement from the laissez-faire phase of capitalism to the monopoly stage of capitalism. On the basis of Lenin's famous pamphlet, Imperialism: The Highest Stage of Capitalism, the monopoly stage is said to exist when: the export of capital alongside the export of commodities becomes of prime importance; banking and industrial capital merge to form finance capital; production and distribution are centralized in huge trusts and cartels; international monopoly combines of capitalists divide up the world into spheres of interest; and national states seek to defend capitalist interests thus perpetuating the likelihood of war (see also imperialism).

[2] The Netherlands case is explored in detail in Book 2 of the Demography, Territory and Law2: Land-tenure and the Origins of Capitalism in Britain, series in the chapters related to the Trade Wars from the 14th century to the 19th century.

[3] This phenomenon of dispossessed labourers in Britain is a core subject of the second volume of Demography, Territory and Law.

[4] Mary Nazzal, April 2005. An Environment Destroyed and International Law, p.3. http://www.lawanddevelopment.org/docs/nauru.pdf. "By 1906, the Pacific Islands Company reached an agreement which granted them mining rights in Nauru at which point the company was renamed the Pacific Phosphate Company. It is interesting to note that at this time the Nauruans could already foresee the demise of their island. A traditional song created in 1910 illustrates this point:
By chance they discovered the heart of my home
And gave it the name phosphate
If they were to ship all phosphate from my home
There will be no place for me to go
Should this be the plan of the British Commission
I shall never see my home on the hill.'"

"[...]The Jaluit-Gesselschaft mining rights were transferred to the Pacific Phosphate Company for a cash payment of £2000, £12,500 worth of shares in the Pacific Phosphate Company and a royalty payment for every ton exported. While the Nauruans were not part of any formal agreement, the Germans paid the native landowners a very modest amount per ton of rock removed from their land."

After Germany was defeated, Nauru became part of a new political agenda designed at the 1919 Versailles and Australia occupied and administered the island.

See also, TED (Trade Environment Database) Case Studies: Case Number: 412, Case Mnemonic: Nauru, Case Name: Phosphate Mining in Nauru, Case Author: Michael E. Pukrop, May, 1997. http://www1.american.edu/ted/NAURU.htm.

[5] The passage you are reading is from Sheila Newman, Demography Territory Law: The Rules of Animal and Human Populations, Countershock Press, 2013. The second book in the series is, Sheila Newman, Demography Territory Law2: Land-tenure and the Origins of Capitalism in Britain, Countershock Press, 2014. The volume in the series that includes remarks on Haiti is still being edited. It will be published by Countershock Press as Sheila Newman ,Demography Territory Law2: Land-tenure and the Origins of Democracy in France, probably in 2018.

[6] Tim Flannery, 1994. The Future Eaters, 1994, Reed Books, Melbourne.

[7] This was a yahoo list about energy resources that was popular in the late 1990s and which was one of the first run by Jay Hanson in a series of yahoo lists with an international membership. There is an associated Dieoff website at http://www.dieoff.com. Jay Hanson has a facebook page at http://www.facebook.com/JayInHawaii [Since these old addresses don't have SSL certificates, I have not activated links to them.]

[8] Sykes, Brian, 2002. The Seven Daughters of Eve: The Science That Reveals Our Genetic Ancestry, Corgi Press, UK.

[9] This slowing was a precautionary response to the prospect of oil depletion, which threatens the survival of the unprecedentedly large post-war populations. See Chapter 7 of Newman, S.M., 2002. The Growth Lobby and its Absence in Australia and France. Environmental Sociology Research thesis, Swinburne University, 2002. https://researchbank.swinburne.edu.au/file/a3115a39-c50a-4504-8d1f-4aca21be26fd/1/Sheila%20Newman%20Thesis.pdf, Chapters 6 and 7. [Note that the virtual location of this thesis at the universitiy changes from time to time, so if you cannot find it there, I suggest you use a search engine to find its new address or other copies that exist on the internet. ]

[10] Stephen D. Mumford, 1996. The Life and Death of NSSM 200: How the Destruction of Political Will Doomed a U.S. Population Policy, Centre for Research on Population and Security, Research Triangle Park, North Carolina, pp.179-352. This study also contains an appendix recommending population growth reduction as a method of combatting fossil fuel depletion.. (Appendix 2.) NSSM 200 stood for National Security Study Memorandum. This was an interagency study of world population growth, US population growth, and the potential impacts on national security. In this work evidence was given to support an argument that population policy initiatives failed largely due to interference from a lobby group of Catholic bishops in the United States. See pp.179-352).

Aristide R. Zolberg, 1993. Are the Industrial Countries under siege. In G. Luciani, (Ed), Migration Policies in Europe and the United States. Kluwer Academic Publishers, Netherlands, pp.53-82, p. 61 : "In the 1970s, mounting objections by conservative segments of the citizenry to the presence of culturally and often somatically distinct minorities, as well as the oil crisis and ensuing economic crisis, prompted the governments of the industrial countries to undertake a drastic reevaluation of ongoing immigration, but the difficulty of reducing the flows to the desired level, as well as to restoring the status quo, precipitated renewed fear of 'invasion'. In the United States, in the 'stagflation' 1970s, estimates of illegal immigrants escalated to as high as twenty million, on the basis of which it was argued that the nation had 'lost control of its borders'. The major solution proposed was to impose sanctions on employers of unauthorized labour, but this failed of enactment because of resistance by organized business interests, so that in 1979 the Congress established a commission to overhaul the entire immigration system."

[11] Ray Kurzweil, 2005. The Singularity, Penguin Group, USA. Review by Robert D. Steele. www.amazon.com/Singularity-Near-Humans-Transcend-Biology/product-reviews/0670033847/ref=pr_all_summary_cm_cr_acr_txt?ie=UTF8&showViewpoints=1.

[12] Energy costs in fuel and materials, plus the social costs of the politics of wealth distribution (piracy, slavery, environmental impoverishment, third world inequality, destruction of whole peoples through colonization, loss of biodiversity, rise in pollution, social engineering etcetera.)

#D1E6A8;line-height:120%;">"Why is Philippine labour cheaper than Australian labour, when supposedly they are of equal value? If there is no fundamental reason for the disparity, why does it persist? If the lower price represents an increased economic efficiency, then one would expect that the nations that jobs are off-shored to would be able to produce desired outputs at a greater rate and efficiency. Yet they are poorer and the people seek to move to countries with less efficient labour rates. Here we have two contradictory market forces. The first, movement of people, suggests that despite the increased cost, first world nations are a more desirable economic proposition. The second, movement of capital and jobs, suggests that the increased cost in the first world nations is not worth it, and third world nations present a more desirable economic proposition. They both can't be right, yet our economic world-view is that both are."

The paradoxes of the modern economy:

1: An economy can be defined as the process by which inputs are turned into desired outputs.

That is, the process by which materials, energy, labour, time and knowledge are converted into desired goods and services.

Economic efficiency is therefore simply maximising the quantity of desired goods and services produced from the
inputs available. The more efficient an economy, the less inputs that are needed to obtain a desired output. A
basic axiom that is understood by all manufacturing sites and put into practise using lean manufacturing techniques,
six sigma and so forth.

The cost involved with the purchase of a good or service on the marketplace is related to the resources involved in
creating or realising it. Greater economic efficiency results in lower prices, as is usually observed when new mass
produced products enter the marketplace.

Yet our economists and politicians often celebrate the opposite by considering, in some cases where beneficial for
those who have a vested interest and a voice, increasing inefficiency as "a good thing". Increasing housing prices,
which results in individuals expending greater resources to achieve the same outcome is lauded as an economic
positive. It may be to those who sell (and supply and demand plays a factor in allowing prices to be driven up, as
does controlling availability of credit through the central banking system), but fundamentally, despite individual
profit, this is an economic inefficiency and individual cases of profit making are used to divert attention away from the larger overall national economic regression.

Asset bubbles and increasing asset prices impede the economy and make it less efficient and ultimately, cost more
than the benefits they supposedly bring. Increasing house prices, for example, tie up capital which could be used
to realise new products or ideas and absorb money that could be used to fuel other economic sectors.

Cartels and oligopolies increase prices through market manipulation and government, media and academic Compliance and promote economic inefficiencies which drag down the national economy for private benefit.

2: Wealth is obtained by creating goods, services or ideas which are of value to society.

A person's individual wealth is commensurate with the wealth they've created which is of value to others. This basic economic principle is the foundation of the success of market economies over other economic systems, where individuals are compelled to be productive and creative to reap the gains of such work. This also goes by the name of the 'profit motive', though modern understanding of human psychology and evolution has produced a model of human behaviour where desire to work and create is more complex than the simple 'profit motive'. People will, for example, work to have children, despite this economically being a loss, or engage in charity work or fight in defence of their nation for the benefit of their own nation.

The success of market economies over centrally planned economies, such as those in Marxist countries is from the
motivation and freedom for people to build their own wealth by creating wealth for others. Though the motivation is
often misunderstood (it isn't always just about getting rich), this is an observable reality.

Yet any time you hear of a "wealth creation" seminar, it is ALWAYS about making money without creating anything of
value to others. "Wealth creator" is often synonymous with being a parasite, and "wealth creation" seminars, or
other books on building wealth simply teach using the system to enable one to be a more efficient parasite.

The paradox here is that market economies are wealthier than non market economies due to people being motivated to produce what people want or need. But if the path to wealth shifts from productive activity to unproductive activity through moral and structural changes in the economic systems, then wealth creation is diminished. The more this happens, the more those who push this talk about "wealth creation" and "job creation".

Those choosing to obtain wealth through gaming the stock market, rent seeking, through capital gains in property
investments through tax concessions and tax payer funded population engineering, are not contributing anything in
return for their profit. Again, this impedes progress by tying up capital in unproductive endeavours and encouraging the growth of economic activity which does nothing, wasting labour, knowledge and time.

As a result, productive output in terms of GDP per capita is diminished and productive output is exchanged for non
productive activity. Standard of living and overall wealth is also diminished, or at the very least, future opportunity is lost.

Our keepers of the economy avoid distinguishing between productive wealth generation and non productive wealth
generation, as our economy is now controlled and run by those who prefer and sell the easier, non productive path.

Wealth is being transferred away from productive people to "wealth creators" and overall, out of these nations and
to those nations who still produce goods.

The term "free market economy" has been corrupted to represent rent seeking, market manipulation by plutocrats and state condoned parasitism. It is promoted by Libertarians and Conservatives who imagine themselves to be capable predators in such a system.

3: Only governments can interfere with free markets.

This is not so much a paradox, as it is a mis-truth. Free Market Libertarians and Conservatives usually point to
government regulation or interference as the source of economic problems (and there is truth to this), but they
overlook other forms of market manipulation and interference which come from other sources.

This comes down to a simplistic notion, possibly derived from anti-Socialist writings written to specifically counter Marxism, that "government" is the sole agent by which people interfere with markets. It is based upon a world-view that markets and government represent some sort of duality, being independent bodies, rather than being two components of a singular national enterprise. Ayn Rand's free market philosophy seems to be little more than an
inversion of Marxism and it also denounces any form of collectivism, both Socialism and Nationalism. In doing so,
the recognition of the encompassing social force which includes both the economy and government is denied.

Therefore the possibility that corporations, big business, media, business lobby groups or wealthy individuals can
also interfere with markets is denied. Any power can manipulate the market, regulate it or otherwise interfere with
its workings, and government is just one of many entities which distort the market. A market cannot be free if it
can be manipulated at will by ANY entity, interest group or institution.

The other paradox, is that if the government is truly democratic, then any market interference or regulation is done
BY the market and therefore not external interference, but part of the market acting on itself. The market is therefore still working according to the wishes of those who comprise it.

Real Estate industry lies, conditioning and information hiding, mainstream media propaganda, "paid for" economists
and think tanks, marketing professionals. These are all entities which interfere with and create opaqueness in markets. They exist to push out the actual views of the market by interfering with democratic processes and
promoting a flawed understanding.

Regulation agreed upon by truly democratic means is therefore required to ensure a functional free market. A
completely free market is a paradox, and regulation is required for free economic activity, in much the same way
that freedom requires laws and force to prevent the exercise of freedom taking away other peoples freedom.

4: Unemployment is a problem.

The idea of work as a virtue goes back to Calvinism and the Protestant work ethic, and prior to that, slavery and
indentured servitude. Our society considers work a virtue and idleness a sin (lifters and leaners), though in the
history of the Western world, there are many philosophers and members of nobility who have expressed the opposite, that it is leisure, not work, that we should value and consider noble.

As a result of this ethic, our economic and social structure is geared upon the expectation that all should work,
whether it is required or not. Politicians are elected upon the promise of making people do something they want to
avoid doing, that is, work. The economy required people to make things which must be sold by pressure, to earn
money to buy things they are pressured to buy.

Paradoxically, as technology has greatly improved our economic efficiency, by greatly reducing costly labour
required as an input to produce a good or service, it has resulted in impoverishment by placing people out of work.

Even more perplexing is the idea that if machines did ALL our work, we would all be impoverished.

Again, like the first paradox, our economic structure, to benefit a few who own the rights to the products of those
machines, requires and promotes economic inefficiency, and all the waste of resources and environmental degradation that results from it.

A progressive economy, capable of dealing with change, which ours currently isn't, would be able to adapt to this and welcome it rather than see it as an issue. The economy needs to transition to allow people to make a living
without necessarily having to input work effort according to current standards or resort to unproductive 'wealth
generation' through speculation.

The incentive for people to engage in speculation and in financialising a post-industrial economy would be great,
thereby increasing the urgency and necessity to dissuade the proliferation of this behaviour.

5: Some desired outputs are 'outside' the economy.

If the economy is the means by which productive activity and resources are used to generate a desired output, then
why are some desired outputs cast out of the economic sphere? These include social cohesion, ample and clean living space, leisure time, natural environment, stability, continuity and individual empowerment.

There are pushed aside as 'externalities' and taken out of the equation. Yet the gap is there, glaring.

For example, a company can more efficiently operate a call centre, or manufacture goods by moving the jobs to a
poorer nation. This results in what appears to be an increased efficiency in producing that service, but in modern
times, the analysis stops there and the equation is viewed in an incomplete state.

Other costs involved, such as the loss of employment in the home nation are not factored, nor is the comparatively
lower value of the standard of living in the poorer nation. Here again, short sighted analysis sees a benefit (greater profits for shareholders), but the greater loss, that is, lower quality of life is disregarded. High standards of living (a desired output) comes at a cost, which is higher prices for labour.

6: Globalism and markets.

Economic theory dictates that market forces will find the right price, yet the doctrine of Globalism is pushed with
the assumption that wages and costs worldwide will equalise. Whether this is believed by them, or a lie pushed to
allow capital to cross borders freely is up for debate.

Many nations maintain a lower standard of living with comparatively lower wages. We are supposed to believe that
the valuation of labour and of the currency is both correct and incorrect, rational and irrational.

It is rational because we are to accept that free market valuation of currencies and labour is reflective of the true value of rational markets. But we must believe that it is irrational, because prices will equalise and there is no fundamental reason for the disparity.

This poses a paradox. Why is, for instance, Philippine labour cheaper than Australian labour, when supposedly they
are of equal value? If there is no fundamental reason for the disparity, why does it persist?

If the lower price represents an increased economic efficiency, then one would expect that the nations that jobs are
off-shored to would be able to produce desired outputs at a greater rate and efficiency. Yet they are poorer and
the people seek to move to countries with less efficient labour rates.

Here we have two contradictory market forces. The first, movement of people, suggests that despite the increased
cost, first world nations are a more desirable economic proposition. The second, movement of capital and jobs,
suggests that the increased cost in the first world nations is not worth it, and third world nations present a more
desirable economic proposition.

They both can't be right, yet our economic world-view is that both are.

It seems that the latter disregards an externality, one that the masses of migrating peoples of the world value. It
is an externality which explains why the global market prices labour differently, and why as first world nations
accept incoming third world workers, the wages drop in the host country, irreversibly. It would seem therefore,
that off-shoring work and globalism is about selling this unstated externality for private profit.

Role of debt in a fool's paradise

The world graph shows Australian private debt to be proportionately higher than that in the US, Financial sector debt to be significant and Govt debt to be relatively small. Why then is so-called excessive Government debt ALL we ever hear about from the media and the growls emanating from the political bear-pit? Are they just stupid or are they trying to hide or completely deny something?

Also of morbid interest is that the UK is an economic meltdown waiting to happen. Financial debt is running at 1000% of GDP. How can that astronomical amount possibly be bailed out when it implodes? Greece and Spain are flecks of dust compared to that one.

These give a snapshot of the extremity of the national and global debt situation. Very evidently it is the biggest elephant in the global lounge-room at the moment and will only get stinkier and more broadly destructive the longer that its overwhelming presence is ignored.

Australian debt related to housing

Australian debt related to housing represents a huge part of the costs of doing business and of living. The opposition has a lot to say about the cost of a carbon tax, but that cost would be imperceptible if governments and the growth lobby stopped pushing up land and housing costs by importing whole towns worth of people into this country.

We are looking at long-term loss of spending capacity

There is a pressing need for governance to recognise the game-changing transition that is now irreversibly underway so that the best outcomes can be drawn within the very unfamiliar and difficult economic rules of this new game. We have now moved from a long build-up period of enormous credit spending and debt accumulation into a long period of debt de-leveraging and consequent loss of spending capacity. The loss will hit Individuals and thus the retail economy, and hit all levels of government and thus the entire public spending program. Public debt and Government financial capacity will be hit even harder if governments continue to bail-out wealthy financial institutions for their speculative losses.

Unfortunately a number of reasons make such bail-outs likely to occur, and particularly so if the ordinary person remains unaware of the nature of this big structural change that is underway. Its impacts will reach deeply across our entire socio-economic framework. It effectively destroys the growth model that has been employed since World War Two.

Local councillors need to educate themselves beyond State ideological feed

Local Councillors need to become aware of this so that they can pull back from a futile reliance upon property development and associated tourism to drive Shire economy. I know most do not have the mental faculty or will to do so, however some might if the material is presented in the right way. This need is especially urgent in the context of the impending construction a new Strategic Town Plan.

Greg Wood is a leader in the fight to stop inappropriate development at Rainbow Beach Queensland in a World Heritage area.http://www.inskip.org/index.html