The Economic Outlook: 2012 and Beyond

The worst is not; So long as we can say, ‘This is the worst.’

— William Shakespeare

It is said that today is pregnant with tomorrow. What and how we have done things in the past has shaped out today and what and how we do things today determine the shape of our future. To see into the future of our economies, with some small degree of certainty, we have to pay attention to what is happening around us and what we do.

But to get an idea of how the future will be, one has to have a real picture of the present. This is important since a false picture will present us with false alternatives, on which we act which in turn will result in unexpected outcomes (i.e., future that we are not prepared for).

It is not always easy to see through all the false pictures and data that we are constantly presented with. For example, in Norway on February 18th, the real-estate association came out with the statement that the housing crisis was almost over and the bottom was reached. This was plastered all over the place. Next day on February 19, the Norwegian Centre for Statistics came out with its own forecast; stating that house prices will continue to fall for the next year and that situation will deteriorate further.

It was clear to some of us that the real-estate association was putting out false information to drum-up business for its members. But if banks, industrialists, and even politicians also send out false and misleading information, then the average person will make decisions that may be contrary to his or her best interests.

Most of us do not have the time, energy, or even the necessary knowledge to gather and sift through large amount of data. We rely on news media, and the experts to make most of our decisions. Until last year, very few people were talking about the tremendous crisis that was well under way; even though as early as 2006, there were clear signs that the economy was under tremendous pressure.

In this article I will try to provide you with a picture of the present situation and then try to extrapolate based on the current policies adopted by various governments, what the near future will look like.

The current economic situation

Let me tell you in no uncertain terms that we are facing a synchronised global economic depression and I am not the only one that is saying this. In early February, the International Monetary Fund’s chief Dominique Strauss-Kahn said the world’s advanced economies — the U.S., Western Europe and Japan — are “already in depression.” Gordon Brown, the UK’s Prime Minister also used the word “depression” to describe the global economy, although his aides quickly said it was a slip of the tongue.

The politicians and others of course avoid using the term “depression” for fear of creating a panic; instead they use terms such as “severe recession” or “one of the most serious financial crises since the great depression,” etc. But they all are saying the same thing, we are in a depression and all the available data support this. An important fact to remember is that this depression is synchronised and this synchronicity has been made possible by the globalization and accompanying deregulation; the very things that were making workers poorer and the rich, richer.

Now the chickens have come home to roost. All economies are now suffering. Such promising economies as Iceland’s saw its GDP shrink by 10%, while the success show case of Europe, Ireland, had its GDP shrink by 6%. Germany, the euro zone’s biggest economy shrank by 2.1% in the three months to December, seconded by Italy, which suffered a 1.8% drop in GDP. The French economy also contracted by 1.2% while IMF put Spain on its vulnerable list. UK’s GDP has also suffered and is forecasted to contract by 3.5% in 2009.

The misery list includes most of the Eastern European countries as well with some such as Ukraine set to experience severe contraction. According to IMF Ukraine’s GDP will shrink by 8 to 10% in 2009. The Russian economic growth is also set to fall. According to the Russian Deputy Economic Development Minister Andrei Klepach the forecast for the Russian economy has worsened to a 2.2-percent contraction in GDP.

Japan’s economy, the second largest in the world, contracted by 12.7 per cent on a seasonally adjusted annualised basis in the fourth quarter and is set to contract further. According to the Taiwanese government, Taiwan’s GDP will shrink by 3% in 2009. Another big economy in Asia is Korea. According to S&P sovereign ratings, Asia’s fourth-largest economy will contract by about 3.5 percent this year. All other South East Asian economies are reporting severe slow down or outright contraction except China.

According to National Bureau of Statistics of China, by comparing the fourth quarter 2007 to that of the fourth quarter 2008, China had achieved a 6.8 percent growth in 2008. However, many believe that this figure is misleading and that the Chinese are hiding the extent of the economic contraction of its economy. They point out that energy consumption in China has substantially been reduced. This could not have happened without a marked slowing down of the economy.

According to the article published in The Epoch Times (17 Feb 09) “Economists at the Standard Chartered Bank estimate China’s growth rate to be around 1 percent. Morgan Stanley analysts estimate it to be at 1.5 percent. This is much lower than the CCP reported 15 percent for the first quarter of 2007. According to economists at Merrill Lynch, the sequential growth rate of fourth quarter of 2008 was zero percent.”

Middle Eastern countries have also been severely affected by the financial crisis. The revenue from their major source of income, oil, has fallen at an incredible rate. Oil prices that were around 120 to 140 dollars last year have come down to around 30 to 40 dollars this year. Every country has slashed its expenditure with the accompanying slowing growth. For example recently UAE was forced to halt construction projects worth $582 billion or fully 45% of all projects. A recent report in New York Times paints a grim picture of the situation in Dubai. The report states that “with Dubai’s economy in free fall, newspapers have reported that more than 3,000 cars sit abandoned in the parking lot at the Dubai Airport, left by fleeing, debt-ridden foreigners (who could in fact be imprisoned if they failed to pay their bills).” Iranians, Saudis, Iraqis, Kuwaitis and others have also been forced to slow down or freeze many projects. One must not forget that many of these countries’ petro-dollars are re-circulated back into the US and European economies. Those funds are drying-up fast.

Turkey sitting between the Europe and Middle East is also suffering. Turkey has the largest GDP in the Islamic world. Turkey’s GDP was 750 billion in 2008, the GDP of Saudi Arabia was 600 billion dollar for the same period. A once dynamic economy is now negotiating with IMF for help.

Having surveyed most of the economic landscape of Europe and Asia, we can now look at the world’s largest economy, the US. The US economy is in a terrible shape, with all sectors going through severe depression. Housing market has completely collapsed. The auto industry is going bankrupt. The banking sector is alive only by the grace of the government handouts. The entertainment industry (TV and film industry excluded) is facing severe problems and unemployment is increasing rapidly. The Federal Reserves’ forecast for 2009 shows a contraction of 0.5 to 1.3 percent of the GDP with official unemployment rising to 8.5 or 8.8 percent. Here one should note that this official unemployment rate does not present a true picture, since all those who give-up registering with the unemployment office or are barely working (part-time workers, etc) are not counted as unemployed.

The missing engine of growth

Before we look at the future development we have to remember that there are four factors that power an economy: consumers, investors, government, and a favourable trade balance. Some economies such as China rely on favourable trade balance and Foreign Direct Investment (FDI) for their growth. For example according to the Chinese Ministry of Commerce, from 1990 to 2007, China received $748.4 billion in FDI. At the same time, since its economic liberalization, China has recorded consistent trade surpluses with the world. For example China has registered trade surpluses of $102 billion for 2005, $177.47 billion for 2006, $262.2 billion for 2007, and $295.47 billion for 2008. China currently has accumulated nearly two trillion dollars in foreign exchange reserves.

In contrast to the China, the United States has relied on consumers and the government for its growth. According to Peter G. Gosselin citing Roach of Morgan Stanley Asia, U.S. consumers constitute only about 4.5% of the global population, yet they bought more than $10 trillion worth of goods and services last year. In contrast the Chinese and Indian consumers combined which account for 40% of the global population bought only $3 trillion worth. He goes on to point out that according to government statistics, from 2001 to 2007, U.S. consumer spending shot up from a little over 73% of the economy to nearly 77%.

If we just look at the differences in consumption levels between US and China-India, we’ll see that these countries are not in a position or have the financial resources to pick-up the slack left by the US consumers. Anyway, China’s growth is based on its exports and the FDI and not its consumers. When the international market shrinks, the Chinese will see (as they do now) a sharp drop in their actual growth. If they try hard they may be able to keep their people’s standard of living at its current level (highly unlikely); but they will be unable to increase consumption. Anyway, according to the Bloomberg (19 January 09), the Chinese unemployment rate has jumped to its 30-year high and will most likely increase further.

How about Japan? Japan also started its economic miracle by export-led growth. Japan saved hard, and worked hard to become one of the largest economies in the world. However, the bursting of the housing bubble in 1990-91 started a deflationary period that Japan has never really recovered from.

If we look at the Consumer Price Indexes (CPI) for Japan, the U.S., and the Euro Area from 1999 to 2006, with 1999 being the base (100), we’ll see that by 2006, the CPI index for US was 122.8, 118.5 for EU and 97.7 for Japan. This shows that until 2006 Japan was still in the grip of deflation.

Add to this the recent financial crisis and you’ll see that Japan is once again entering another deflationary period. In deflationary periods, consumers spend less and try to save more. The fear of losing one’s job, the psychology of ever decreasing prices, and general feeling of doom act against free spending by the consumers. One should also understand that Japanese consumers are reluctant to spend like their American counterparts. According to the available figures (2005), the Japanese consumption was only 55% of the GDP. Compare this to the American consumption of 77%. So the Japanese consumers cannot help either.

What about the EU? Euro zone consumers have a slightly better consumption rate than the Japanese. The consumption rate for Euro zone (2005) was 57% of the GDP. In addition the Euro zone is facing severe financial problems with many countries such as Spain, Ireland, Italy and others facing mounting debt and shrinking export market. Consumers already hit by the housing crisis, financial crisis and now the imminent unemployment crisis cannot be expected to start spending wildly.

So who is going to take the position left vacant by the US and act as the world’s economic locomotive and pull the world out of the depression? The answer is no-one and everyone. The US is clearly not able to do that much. As a matter of fact the US consumers have to get used to lower spending levels for at least a decade, if not for good.

According to Howard Davidowitz, chairman of Davidowitz & Associates, as quoted by Aaron Task in Yahoo Finance, American’s standard of living is undergoing a “permanent change” — and not for the better as a result of:

• An $8 trillion negative wealth effect from declining home values.

• A $10 trillion negative wealth effect from weakened capital markets.

• A $14 trillion consumer debt load amid “exploding unemployment,” leading to “exploding bankruptcies.”

“The average American used to be able to borrow to buy a home, send their kids to a good school [and] buy a car,” Davidowitz says. “A lot of that is gone.

Diminishing wealth

Last year when the depth of financial crisis became apparent the US Feds started to aggressively cut interest rates, in the hope of reducing the severity of the crisis. Other countries specially the Europeans soon followed the Americans in cutting their interest rates. As the crisis spread to Asia and the Middle East, they also began to cut their interest rates. But soon it became apparent that this crisis was not like any they had seen since the great depression and simply cutting interest rates was not going to solve the problem.

To start with the housing market had collapsed completely leaving many banks holding worthless pieces of paper. In addition, these papers were (partly) insured by many insurance and financial institutions that weren’t banks, but because of financial deregulations, had acted as banks. They were also hit by the bad mortgage problems. In short, all the financial institutions, banks, insurance companies and others were suddenly in trouble.

This hit the stock markets, with the shares of these institutions taking a nose dive. These institutions are extremely important for the economy. They provide the logistics for financial transactions. Any problem here affects all parts of the economy. So it was not a surprise to see that all normal financial transactions suddenly came to a halt, hitting other sectors of the economy. Share prices of all the affected sectors began to go down and with it the fortune of the share holders. To see the extent of the damage done one just has to look at how much various stock markets have fallen.

The following stock markets data was published by The Economist (21 Feb. 2009) which shows the extent of the fall since Dec 31st 2007:

US (NAScomp) – 44.7%, US (DJIA) -43%, US (S&P 500), Japan (Nikkei 225) -41.3%, China (SSEA) -55.1%, Hong Kong (Hang Seng) -52.9%, Canada (S&P TSX) -53%, Australia (All Ord.) -61%, Britain (FTSE 100) -55.8%, Euro area (FTSE 100) – 59.5%, Euro area (DJ STQxx 50) – 58.7%, France (CAC 40) -56.1%, Germany (DAX) -55.3%, Greece (Athex comp) -73.7%, Italy (S&P/MIB) -63.1%, Netherlands (AEX) -60.4%, Norway (OSEAX) -64%, Denmark (OMXCB) -55.2%, Sweden (Aff.Gen) -57.7%, Russia (RTS, $ terms) -77.1%, Turkey (ISE) -70.3%, India (BSE) -64.9%, South Korea (KOSPI) -62.6%, Taiwan (TWI) -50.5%, Brazil (BVSP) -53%, Argentina (MERV) -56%, Mexico (IPC) -52.9%, Venezuela (IBC) – 55.6%, Saudi Arabia (Tadawul) -56.8%, South Africa (JSE AS) – 54.1%…. WORLD all (MSCI) -51.2%.

For people in general, shares act both as saving and investment. The average person buys share in hope of getting a better return than from the banks. It is also easy to get in and out of the market. The advancements in information and communication technologies, the costs of buying and selling have fallen steadily in the last decade. So now anyone with a computer can buy and sell shares. This ease of entry enticed an ever increasing number of ordinary people to enter the stock markets.

Now the people have been hit by three disasters. First they lost a lot of money in the housing market. This was both real and illusory. First they were hit with the housing crisis. Many have lost their homes or have seen the value of their homes depreciate heavily. Then they were hit with the collapse of the stock markets. Trillions of Dollars, Yens, Euros and Yuans have been wiped-out in a relatively a short time. Then many have lost their jobs and many are uncertain about the future job security. All these have had a tremendous impact on the consumers, forcing many to heavily reduce their consumption, which in turn have begun to affect businesses which in-turn are shedding workers to compensate for the loss of sales and revenues. This is a classical deflationary circle that feed on itself.

The governments’ response to this threat has been to stimulate the economy by pumping large sums of money into the economy. A decade ago, a hundred billion dollar was an astronomical sum. Today we don’t even bother to look at it twice. Today we talk of Trillions. A few hundred billions here and a few hundred billions there soon add up to a few nice trillions; especially the trillions that we don’t have.

Now we face a classical problem: the increasing budget deficits. Exactly when the economy is contracting and tax receipts are falling, the government expenditure is rising rapidly. In addition, the governments are buying bad debts (US, UK, etc) and trying to spend more on whatever they can in order to arrest the increasing unemployment and stimulate the economy. These large sums have to come from somewhere. They can be borrowed or money can simply be printed. The problem is that some governments are opting for both.

The most important economy is of course the US economy. The US government under Bush spent close to one trillion dollars, and now the Obama administration is promising to spend trillions in the years to come to stimulate the economy. With official US debt now close to 11 trillion dollars and climbing fast, the situation is becoming untenable. According to, last year (2008) US government paid $451 billion dollars interest on its debt. Add to this the Medicare and social security obligations and suddenly things look a lot worse than they appear.

So how can the US continue its deficit spending? By issuing treasury bonds and other security certificates of course. Both public and foreign governments buy these securities which are guaranteed by the US government. According to Reuters (18 February 2009), foreign central banks alone held $1.76 trillion dollars in US treasuries. According to the same report: “The combined holdings of Treasuries and agency securities by foreign central banks at the Fed totalled $2.573 trillion, up $11.223 billion.”

The coming inflation

So far the foreign governments and businesses have been willing to buy US debt, but with the current economic downturn things are beginning to change. According to the New York Times, in the last 5 years China has spent as much as one-seventh of its entire economic output buying mostly American debt. However, with the sharp slowdown in its economy, China is finding it difficult to keep buying. China has also come up with its own $600 billion stimulus plan. This along with the falling trade surplus and the falling tax receipt will make it exceedingly unlikely that China can keep financing part of the US government’s deficit spending. The same applies to other countries as well.

So as the economic downturn continues we can expect to see two things: the interest on US treasuries increase substantially to make it attractive and/or the increased printing of money. Printing money is not so farfetched as many would like to believe. Already countries that cannot find willing lenders are resorting to this. A good example of this is UK. With the current plans to nationalise a few more banks (Lloyds and Royal Bank of Scotland), the UK national debt is set to surpass the £2.2 trillion pound mark. This is 150% of UK’s GDP. It is not then surprising to see that the Bank of England voted unanimously earlier this month to seek consent from the government to start the process of quantitative easing by buying gilts and other securities. Quantitative easing means printing money. With interest rates at 1%, printing money is likely to increase inflation.

Already many governments find it difficult to cover their deficits. It is only a matter of time before they also begin to print money. It is especially appealing for the US government to do this since inflation means a real value reduction in debts. With mounting trade and budget deficit and decreasing tax receipts and the shrinking of the number of willing lenders, US government may not have any choice but to print money.

So far, all governments are reducing their interest rates to historic lows and at the same time spending a lot of money that they don’t have. It will take at least two more years for the economy to stabilise. By stabilise, I mean an arrest in decline rather than outright growth. Once that point is reached we will begin to see the effects of the loose monetary policy: a tremendous rise in inflation which can be accompanied by low economic growth or in other words stagflation.

The fear of stagflation arises from the fact that from all indications, growth will not strengthen anytime soon. It is quite clear now that the US and, to a large extent, the European consumers have been hit hard by the current crisis. There is also the possibility that another banking crisis may still ensue such as the commercial real-estate mortgage defaults and above all the repetition of currency crisis (1997 Asian Financial Crisis). Already we see that China, Japan, Korea and others are setting up a $120 billion currency defence fund to protect Asian currencies against speculative attacks.

The current economic crises have left many countries’ local banks with foreign currency loans that they find difficult to repay in that currency. This and the possibility of defaults have made these countries a good target for speculators. If such an attack starts, many countries will automatically have to devalue their currencies (even more than they already have) or try to defend their currencies. In either case this may trigger yet another crisis that may actually destroy a good portion of many economies around the world.

Even if we assume that no more nasty surprises will appear in the next two years and the economies stabilise, we are left with the reduced levels of consumption around the world, especially in major economies. As I have mentioned above, it is very clear that at least in US, the consumers are not going to recover anytime soon. I have also shown that the Chinese and Indian consumers cannot replace the US and European consumers. So there will be a dearth of market for the goods and services produced by others. In absence of the US, the question will be: which country or countries are able to increase demand to such a degree as to trigger a recovery; a recovery that most likely will be accompanied with high inflation.

In 2006, in the article “The Coming Financial Crises?,” I stated the following:

At the end of the WWII, 45 nations gathered at a United Nations Monetary and Financial Conference in Bretton Woods, New Hampshire, to address the problems of reconstruction, monetary stability and exchange rates.

The delegates agreed to establish an international monetary system of convertible currencies, fixed exchange rates and free trade. To facilitate these objectives the delegates agreed to create two international institutes: the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (the World Bank). An initial loan of $250 million to France in 1947 was the World Bank’s first act.

Since then there has already been considerable criticism of the roles of IMF and the World Bank. The above mentioned problems and the ongoing trade imbalance in the world have to be addressed by a similar gathering. Sooner or later, both the United States and the rest of the world have to address the existing problems. These problems are not the United States’ alone. We cannot ignore the largest economy on earth. It is said that if United States sneezes, the world catches cold. We have to either make sure that the United States doesn’t catch cold or vaccinate ourselves against it.

I restate my earlier arguments: we need a new Bretton Woods agreement where we can address the existing problems and restructure the world’s economic system. If we don’t do this, and soon, we will face protectionism, low economic growth, and even trade wars. We have ignored this problem for a long time and are now paying the price. What would the price be if we continue to ignore the existing systemic problems?

Dr. Abbas Bakhtiar lives in Norway. He is a management consultant and a contributing writer for many online journals. He's a former associate professor of Nordland University, Norway and can be contacted at: Read other articles by Abbas.

46 comments on this article so far ...

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  1. Ramsefall said on February 23rd, 2009 at 9:40am #

    Contradictive information works well at maintaining confusion in public circles, thereby creating indecision and a sense of helplessness. The confused rat in the maze no longer knows where to look for its next piece of cheese.

    Semantics typically functions to help create this sense of confusion even more. No, it’s not a depression, it’s just a really deep recession, everything will be okay while banks are bought up, account values lost in the shuffle, and foreclosures deemed more necessary. It’s a trickster approach that circumvents the truth while creating an illusory perception of reality. What skilled reality shapers they are.

    I enjoyed Dr. Abbas’ article until the last paragraph, which preposterously advocates a newly restructured Bretton Woods System. Considering that the original BWS has been a contributing factor to increased poverty in many underdeveloped nations, what sense would it make to restructure such a flawed system that merely benefits the fat cat bankers? None! Statistics have shown that the BWS has resulted in more than 70% failure in countries where it intervened.

    The capitalist house of cards is falling down in real time, no slow motion playback for this calamity. The world needs to move away from monetary-based, bank-centered economics and shift toward a resource-based economy where all the people of every nation have ownership in the resources produced by each country. Profit would no longer be the corrupting motive to neglect the environment along with well more than half of the world’s human population.

    Bankers have no sense of humanitarianism; it can’t be taught and therefore it won’t change — they are sub-human and motivated only by greed, not good deeds. A new system that addresses the needs of struggling people and a planet that’s increasingly in dire straights is the only solution. Any other proposal will simply widen the economic gap, concentrate whatever wealth is left in the hands of a few, privileged elites, and increase poverty. This, though, is likely the desired outcome for the world’s elite, and as such, pas plus avec de changement.

    Best to all.

  2. rg the lg said on February 23rd, 2009 at 9:52am #

    In a nation that has an extremely robust ‘disinformation’ system … from what is going on in other countries to our own internal operations … witha totally dysfunctional media/press … we are doomed!

    Maybe global warming will wipe us out … and then the planet can rebuild without us. (SEE? I do have an optimistic side … )


    RG the LG

  3. bozh said on February 23rd, 2009 at 10:20am #

    too, too bad, arms manufature did not contract by 90%. too bad, number of military bases haven’t shrank by 99% and number of soldiers by 70%.
    so, what’s shrunk? use of cosmetics, restaurant visits, car rides (which is good), hair cuts, pedicure, etc?

    how did we survive and enjoyed surviving for mns yrs w.o. modern gadgets?
    but we did and will again in spite of having lived for at least 10K in a master-serf societal structure.

    i have deliberately shrunk my economy by at least 50%. i pee in the garden as oft as i can. i wash my bum; hardly use any paper. i reuse, recicle my plastics.
    i blow my nose with fingers. all the garden cuttings i leave on the ground. i don’t watch movies or by papers. i boil my fish. i walk a lot.
    i wash my socks, shorts, shirts in a gallon of warm water but only after i wear them for month or two.
    dry my clothes on line. i don’t use deodors. i eat flower petals, dandelions, dill. thnx

  4. Ramsefall said on February 23rd, 2009 at 10:27am #

    rg the lg,

    either cynically or realistically, depending on one’s perspective, we are faced with two options as I see it; 1) get our shit together and start becoming planetary stewards (most unlikely), or 2) be shaken of the planet like dead fleas on a dirty hound (most likely). Either way, in good geologic time, the planet will recuperate from the abuse suffered by Homo sapiens particularly since the industrial revolution.

    Gotta love your optimism, best to you.

  5. Max Shields said on February 23rd, 2009 at 11:04am #

    Abbas, good analysis from a capitalist perspective. From that point, no new Bretton Woods; instead let it go.

    We need to transition. The last Bretton Woods brought us THIS.

    First, we need to begin to de-industrialize to move us away from fossil; and concurrently de-militarize the MIC and eliminate all offense weapons, most assuredly, the nuclear arsenals.

    We need to re-think the entire economics of uneconomic growth. Whether this requires a global initiative is questionable. It needs a local dynamic; not a top-down “expert” master planning session. Those days are over.

  6. Don Hawkins said on February 23rd, 2009 at 11:54am #

    Abbas for some reason many seem to be hardwired to do the wrong thing. To do the wrong thing now this story doesn’t have a happy ending. A new way of thinking is needed and needed now.

  7. Suthiano said on February 23rd, 2009 at 12:16pm #


    I agree, but we will continue to see top-down master plan initiatives being attempted, and likely hood of isolated local work succeeding in preventing this is minimal to nil.

    People must organize locally, but money (ppl) is organized top down. It’s value is determined by elite few.

    If money becomes worthless, then you have opportunity, but also lots of opportunity for social unrest and riot control/potential martial law, all of which make organizing extremely difficult.

    Currency must be resource based… economic values would then reflect other traditional values like respect for Creation, spirit, and moderation, hard work, for sight etc., and these changes would quickly overflow into our social and political values.

    We must establish community banks that print own currencies based on these reserves: grains, water, forests etc… but these banks would be targeted/hard to get going… so some level of inter-community cooperation would be necessary imho.

    curious as to your thoughts.

  8. Don Hawkins said on February 23rd, 2009 at 12:58pm #

    Oh what a tangled web we weave,
    When first we practise to deceive!

    Sir Walter Scott

    To deceive is very clear now in the twenty first century. The good the bad and the ugly is right there for all to see. In there attempt to continue to deceive and a good dose of arrogance they still think nobody see’s, wrong. By 2012 climate change will be right in our face and clear what it means. The time to start is now and the time to face the problems is now and the time to stop deceiving is now. Has anybody seen the stock market today, oops and how did this happen?

    Oh what a tangled web we weave,
    When first we practise to deceive!

    A new way of thinking is needed and needed now.

  9. Michael Kenny said on February 23rd, 2009 at 1:58pm #

    Very good analysis. It’s worth bearing in mind that the famous “crash” occurred in October 1929, but the worst year of the depression was 1931. The spending programmes of the New Deal did a lot of good, but what really got the US out of depression was the vast WWII public spending programme, not just in the sense of the huge government contracts but also because a big chunk of the population became government employees by being drafted into the military. In addition, America’s infrastructure wasn’t destroyed in the war, whether by fighting on its territory or ariel bombardment. The secret seems therefore to be to spend money as if the world was at war but not actually to go to war!

  10. Max Shields said on February 23rd, 2009 at 4:26pm #


    I’m in complete agreement that a thorough re-do on our economics is essential. There exists an undercurrent of what is fundamentally needed, one that makes currency meaningful and much more.

    What we need is something called a Transition Cultural movement. Such a movement would transition us, NOW, from the global preditory system that is operating the world economy to a community of practice. I think a holistic systems approach like permaculture is central. The principles and thinking behind it are human-scale and require us to be much more attentive as we create the new world.

    I agree that top down Bretton Woods are the kind of thinking that comes natural in today’s dominate narrative (that needs changing if the species is to continue). That said, there is an important place for national and global collaboration on these problems because they are just too integrated to solve entirely at the local level.

    But local is the true north; and without it, it is all plutocrats, oligarchies and your general command-and-control elites. So, the global intergation must continue but it must be built on bioregions and solidarity between city and city regions within those bioregions. We’re at the end of the road with oil and, as I’ve said time and again, there is no replacement for oil which does what oil does – it made industrialization and mass-production of everything we see, that is not natural, possible. Oil was like winning the lotter in the mid-19th century. But like the lottery its a one-shot go for broke and the plutocrats got a taste of the crude and couldn’t let it go, massive highways, cities of endless industrial complexity were built and expended the world over; and the level of dependency allowed the population to grow from under 2 billion (remember it tool tens of thousands of years to reach that number) to nearly 7 billion in a century! Oil allowed that to happen – even our sophisticated medicene requires immense industrial investment – that’s oil.

    As climate change, economic meltdown, peak oil collide, Obama and company will have stark choices. This is imminent and is driving what we see. The piece above simply speaks to the symptoms. We need to understand the causes, without flinching, and what can actually work.

    What will work is a reduction in everything we do. It will be hard, very hard and that includes significant population reduction (to the levels of a century ago). That is what the earth can sustain when humans no longer have the amplification of oil as an energy source.

    This is not simply about capitalism vs socialism. Both terms have been coopted by the preditory plutocrats (Michael Hudson speaks to this in the lead Counterpunch today (

    But, again, I agree with your assessment Suthiano, in general. We have not begun to feel the pain; and the coin is in the air as far as how this will turn out; but I think the movement for transition is there. I see it real time with real people. I suggest we put our energies there to build a new build; a better world; one we can live in.

    This is not pessimism (I see the glass and is both half full and half empty – realism); I see a future that works!


  11. Tree said on February 23rd, 2009 at 5:13pm #

    “Housing market has completely collapsed.” Not true. While the housing market is obviously in bad shape, the fact is there has been an uptick in purchases as well as a large swell in refinances.

    “The banking sector is alive only by the grace of the government handouts.” Another misleading comment. Many banks are in trouble, others are not and some are still doing very well without handouts. Obviously, we are in extraordinary times but the government regularly steps in and shuts down banks; it’s only now we are hearing more about it. There are thousands of banks in the US as well as credit unions. A lot of these banks are midsize banks focused on their communities and they did not participate in the subprime lending fiasco. No one hears about these banks in the news because that’s too boring.

    I’m not arguing the fact that the US economy is in very deep trouble and it seems it will get worse, in fact I think it’s a very serious issue, so it bothers me to find some of the information here to be misleading and hyperbolic. To claim that the housing market has “completely” collapsed is irresponsible.

  12. MrCynic3 said on February 23rd, 2009 at 5:46pm #

    Nobody is saying anything about birth-control. Good economy or
    bad economy or what have you, the world cann’t sustain all those
    people in basic decent life no matter how frugal everyone lives and
    limits consumption.

  13. Jeff said on February 23rd, 2009 at 5:49pm #

    Max, world population depletion is the thought of the everlasting elite. The world population had a tough time time accelerating as wars of mortal combat led to population control. No doubt the two WW tried to accomplish this, and for the most part had an effect, but with the realization of total obliteration with the nuke prospect the elite have to rethink the agenda. They of course could obliterate themselves in the process. I wonder what the plan B actually is. Maybe 1930’s Germany is not that far off. What did they call the work camps of the 30’s in the USA?

  14. Barry said on February 23rd, 2009 at 6:46pm #

    A future that works? I think all bets are off – the ecological crisis has gone too far. While all should be working for a better society – (just in case the icecaps don’t quite melt) likely some sort of mixed economy similar to that of the Swedes, capitalism has in the meantime drained the pond. Marx was right about that, though he got the precise mechanism wrong.

  15. Max Shields said on February 23rd, 2009 at 7:15pm #


    Seeing a future that works may require some clarification.

    First, I think we can all imagine a future that works, in spite of the journey that seems to be headed toward the wall of a non-negotiable wall of reality (long overdue).

    How we achieve that vision depends…it depends on what we know and what we do with what we know, and working through the constraints.

    I think the planet will go on, and I think the human species will continue but in smaller numbers. The latter will happen either because we find a way to reduce the population or because natural forces will simply impose the basic laws of thermodynamics.

    All along we have choices. The world is not moving together like lemmings with the Western industrial oil drenched mantra. Alternatives are in process, have been built, are thriving, will challenge the Western industrial world order. It is a world that works.

    Humans are a wasteful species and need to constaintly work to stay within the margins of sustainability. Western economics is the most wasteful of all economies in the history of economies. It is in fact uneconomically.

    I agree that the ecological balance has shifted, that the oil peak is non-stoppable, but that does not mean the end. It does not mean we will not have a world that works. It will need to be a ‘world’ very different than that of the last century and a half.

  16. Barry said on February 23rd, 2009 at 7:44pm #

    Indeed Max – the planet will go on – there’s no real threat to the planet itself. As I see it, ecological destruction and reduced human numbers thru warfare, famine, and epidemics are all of one process. But I don’t see reduced population coming out of any organized process. I think drastically reduced population will result in total havoc, not so much anarchy as chaos.

    We shouldn’t underestimate the dynamism of capitalism. As has been common in Latin America (and elsewhere) a warrior class can be created and paid off to keep the worker class in line. When given spiffy uniforms and steady paychecks, this warrior class acts as a bulwark against the peons (from which this class emerged). They will be brutal – as always.

    Indeed, Western economics is maximally wasteful. And it will consume itself. I don’t have high hopes for what comes out the other side. In the past, people have had to turn to the left or right. In Chile and Nicaragua they turned to the left and then Capital strangled them. In pre-WWII Germany, the people turned to the right under the guidance of Big Business. Even the Soviet Union, if it ever was meant to be on the left, soon found its right-wing leader in Stalin.
    Certainly, if populations are so small that isolated groups can experiment with a better way of delivering goods and services that would be a good thing. I’n not hopeful though.

  17. AaronG said on February 23rd, 2009 at 8:32pm #

    I agree with Ramsefall’s very first comment. Dr Abbas’ article was an excellent ANALYSIS of the current situation, but the last paragraph’s attempt at offering a SOLUTION based on Bretton Woods was feeble and was a contradiction of the first paragraph “What and how we have done things in the past has shaped out todayand what and how we do things today determine the shape of our future”. Dr Abbas is advocating more of the same – ie patching up the current economic system. Therefore, the results will be the same.

    If you were visiting from outer space and read the article (until the last paragraph) you would quickly come to the conclusion “the system’s broken!”. Assuming you had some intelligence, you wouldn’t advocate a Bretton Woods II as your solution like some world leaders are doing. You might put the current system in the bin and start again.

    What kind of system analyses a people’s worth by reducing their efforts down to “GDP”? We are not (or should not) be economic drones producing “goods” for “sale” in a “market”. I can plant a seed with hard work……then wait for the natural systems of the water cycle, the nitrogen cycle, osmosis, photosynthesis etc to turn that seed into a fruit-bearing tree, from which I can feed myself. The man-made market and money systems have nothing to do with the process described in the previous sentence. So why do we need them?

    The bad news is the immediate future is full of band-aid solutions, “stimulus packages” or “bailouts” or whatever they’re called. The good news is intervention will bring an end to the entire economic system as we know it.

  18. Monkismo said on February 23rd, 2009 at 9:35pm #

    Jeff–if “the elite” achieve their goal of eugenics and depopulation as you suggest, who will do the work? Who will be the serfs? Who will be the engine of the economies that create their wealth? With all due respect, it simply makes no sense. And referring back to the Nazis doesn’t support your case; true, they selected out certain groups for elimination, but they also rewarded breeding by their own. It wasn’t about depopulation.

    In the same sense that we dehumanize by painting with too broad a brush sometimes, I think some of us “overhumanize” by seeing every discussion of population control as some kind of attack on our own little Bobby and Suzie. We live in a finite world and depend on finite resources. If we’re too blinded by our own egos or religious dogma to consider the consequences of unfettered population growth, we share the responsibility for the outcome as much as those whom we refer to as the elite.

  19. Deadbeat said on February 24th, 2009 at 12:14am #

    Monkismo writes…

    Jeff–if “the elite” achieve their goal of eugenics and depopulation as you suggest, who will do the work? Who will be the serfs? Who will be the engine of the economies that create their wealth? With all due respect, it simply makes no sense

    There is an aspect of reactionaryism in the topic of “overpopulation”. It is clear that much of the current crisis is the result of the huge productivity gains over the past 30 years with real wages held in check. The huge productivity that has been co-opted by the elites means that they need FEWER workers. What we are seeing is a huge army of redundant workers and therefore the need for “workers” by the elites is much less than in times past.

    Desperation especially the lack of power among woman around the world as well as the yoke of religiosity has lead to an over-population among the poor in the world. In fact the “first world” nations has been witnessing an ageing of their population. Therefore there is very much a “racist” underpinning with the “overpopulation” issue. The real issue is the misallocation of resources.

    People of color has been victimized by Eugenics promoted by white supremacy. Before “environmentalist” can convince people of color that there intention and advocacy is not racist environmentalist need to focus first on the redistribution of wealth and resources in order to lift living standards.

  20. Deadbeat said on February 24th, 2009 at 12:25am #

    Max Shields writes …

    This is not simply about capitalism vs socialism. Both terms have been coopted by the preditory plutocrats (Michael Hudson speaks to this in the lead Counterpunch today (

    Socialism is not a “term”. It represents the idea of economic democracy and it should be fought for. Unfortunately there is a strain on the “Left” that would rather concede the language to the elites. Michael Hudson, who wrote and excellent article, would rather EDUCATE his reader by recapturing the language rather than abandon it to the elites who distorts and perverts everything. The elites distorts ALL facets of the language: war, peace, democracy, radical, anarchy, radical, class, racism, etc. Are we to abandon those words too?

    IMO it is time to recapture the language and like Hudson EXPOSE the elites for who they are and how they operate and in order to do that it start with RECAPTURING the language and not abandoning it.

  21. Don Hawkins said on February 24th, 2009 at 4:09am #

    I got this e-mail today.


    We’ve got just one week to go!

    The largest mass civil disobedience for the climate is happening
    March 2 in Washington, DC. Here is some important information as
    we all get ready to make history together:


    This Wednesday, February 25, you can join Dr. James Hansen and
    several key action organizers on a national conference call
    discussing plans for the action.

    The call will be Wednesday at 9pm EST, 6pm PST and will last for
    one hour.

    The call will include several brief presentations about
    different aspects of the action and Dr. Hansen will discuss why
    he’s so excited to participate. If you need a toll-free number,
    you can also call 866-478-7986. If you can’t get through, we
    have also set up secondary numbers: 641-594-7500 and
    866-486-5174 (toll free).


    We will meet at Spirit of Justice Park, C St. and Capitol St SE
    in Washington, DC at 1pm and march to the Capitol Power Plant.

    We’re asking everyone to look their best for the action — but
    it doesn’t need to be a business suit. Folks from different
    cultures have different ways of “dressing up” — feel free to do
    what feels right and don’t forget you’ll need to stay warm as
    temperatures are likely to be in the 40s. Read more:


    We’ve set up a text loop for the Capitol Climate Action. That
    means you can get up to date text messages on your cell phone

    This provides a quick and easy way for us to communicate to you.

    It’s really easy to set up, just send a text message to 40404
    with the message “follow capitolclimate” (no quotations) and you
    will be following our text messaging.

    Once you are in the loop, you’ll get regular messages about the


    Also, don’t forget to sign up for Powershift 09. From February
    27th to March 2nd, young people from across the country will
    converge on Washington D.C. to take a message of bold,
    comprehensive and immediate federal climate action to Capitol
    Hill. More than 10,000 people are expected to participate. You
    can register at . When they ask how
    you found out about Powershift, you can write “Capitol Climate


    Anyone can actively participate in the action and choose not to
    risk arrest. While nothing is ever guaranteed in an action
    scenario, we have a very high degree of confidence that this
    will be a controlled, intentional, safe environment and people
    will be able to chose their own involvement levels.

    The Capitol Power Plant powers Congress with dirty energy and
    symbolizes a past that cannot be our future. With a new
    administration and a new Congress, this is our window of
    opportunity. But we have to open it together. On March 2, you’re
    going to help make history. Get all the latest at

    Can’t wait to see you in D.C.!

    The Capitol Climate Action Team

  22. Ramsefall said on February 24th, 2009 at 4:21am #


    thanks for acknowledging what appeared to me to be the most obvious weak-link in an otherwise informative and thoughtful article.

    While the Dr. does analyze this contemporary calamity with great scrutiny, his advocacy for a restructuring of the failed BWS which correlated seamlessly with Friedman’s failed free-market economic vision, will continue to be disastrous for the majority of underdeveloped nations.

    None of us may be able to pinpoint with certainty just what the solution is, but we can say without any doubt what the solution isn’t. More of the same ain’t it.

    Humanity is not in need of a “New” economic system. What we are in dire need of is a new, sustainable way of living that addresses the most basic needs of people and the planet. While our actions undoubtedly and temporarily damage the planet, her reparations will commence once our welcome has been worn out.

    Best to you.

  23. Mike Hunt said on February 24th, 2009 at 4:39am #

    Man made climate change is a scam created to include those who would normally be protesting against governments heavy hand. Give the people something to fear, Red Scare for instance, and they tend to ignore the larger more obvious issues. Like a doomed economic forecast.
    Capitalism and elitism are fighting for their lives. No fair playing field for them, just for us.
    The real problem is there is far too much information for any government to control. Sure via party politics there is a failing attempt to guide partisans. Overall it will never work because of the at present access to unfiltered information.
    Unless there is a complete crash, say the DOS attack on Kyrgyzstan, or limited access to unaffiliated political sites, the Genpop will continue to become informed and that information will percolate their anger into action.
    We see that now in parts of Europe and Iceland. We see it in protests outside CEO’s homes and spray painting of political figures homes and cars. These are the beginnings of outright rebellion.
    Next year will be far worse than this one, and the next an even greater decline. The US could become Balkanized, Google up JESUSLAND for some real fun.
    Right now we walk a fine line between politics for the masses and the return of business as usual. Bones will be throne and wars will be created to distract us from an ever worsening world crisis.

  24. Max Shields said on February 24th, 2009 at 5:45am #

    Humans are like all other species that colonize, and expand in numbers until they over-reach the capacity for an area on the planet to sustain them. Humans can, if they choose, reduce their numbers (as we’ve seen attempted) or wait for fathmon, drought, and disease to reduce the numbers. Humans have migrated to parts all over the globe. To do that they needed excessive energy sources. Those sources, in those quanitities and forms are non-renewable.

    Thinking human beings can actually contemplate these things Deadbeat without being politically “reactionary”.

  25. Max Shields said on February 24th, 2009 at 5:57am #

    Jeff, (and Deadbeat will chime in and agree with you because he disagrees with nearly everything Max posts, it’s a little game with him…)

    Like all in the world, population can be thought of as a political maneuver for some elite. Some right-wingers think global warming is a political maneuver on the part of the left “elite” who want to end their freedom to do as they please.

    Trust me on this, if nothing else, I”M NO ELITE. Excessive population is determined by carrying capacity of a species. Humans produce waste. Most of what they produce, and consume does not find it’s way back into the ecosytem to be re-used – that’s primarily true of Westerners and the Western economy which has been exported. But the truth beknown, many indigenous peoples have deforested and popluted large swaths of land as well.

    As population increases “waste” is compounded until the population suffers the consquences of depletion – energy sources like food, wood, coal, oil dry up.

    This is NOT a political phenomenon. It is something we, as humans, know, have extensive evidence on all species including human civilizations. Since our global dependencies are what they are, this crashing of the economy and the depletion of key energy sources will like (and is) have a global tidal wave effect. Population is simply part of the entire picture. Fewer people require less from the environment. People who make efforts to stay within the cycle of nature (reducing and possibly eliminating waste) will lead sustainable lives.

    Now if there is a political elite waiting to coopt this (and there always is) then DO SOMETHING about rather than acting helpless. Begin NOW.

  26. Don Hawkins said on February 24th, 2009 at 6:17am #

    Here’s part of an e-mail I got today.

    The call will include several brief presentations about
    different aspects of the action and Dr. Hansen will discuss why
    he’s so excited to participate. If you need a toll-free number,
    you can also call 866-478-7986. If you can’t get through, we
    have also set up secondary numbers: 641-594-7500 and
    866-486-5174 (toll free).

    The Capitol Power Plant powers Congress with dirty energy and
    symbolizes a past that cannot be our future. With a new
    administration and a new Congress, this is our window of
    opportunity. But we have to open it together. On March 2, you’re
    going to help make history.

    Can’t wait to see you in D.C.!

    The Capitol Climate Action Team

    Begin NOW.

  27. Max Shields said on February 24th, 2009 at 6:55am #

    DB, on the Hudson article, not sure if you get it. Michael Hudson is providing sound insights into classical economics and how the language has been distorted over the last century. He is not “pushing” socialism (or capitalism). He is talking about the loss of the tenents of classical economics.

    That corruption of classical economics began in the late 19 to early 20th centuries and continued at ever excellerator rates during Reagan to the present. This hijack is called neo-classical economics which serves neoliberal trade agreements and the kind of monopolistic faux free trade Hudson discuss in the article.

    Hudson and his discussion of monopolies being owned by the public is pure Henry George. The idea is not simply that land is a common which should not be privatized but that in a classical sense any business or industry which can monopolize human needs should be publicly owned.

    George, to some folks chagrin, is neither a dogmatic capitalist or socialist, he is both without trying to be either. Hudson’s writings have a similar mission.

  28. Max Shields said on February 24th, 2009 at 6:58am #

    Clarification: by “publically owned” I meant to saythose businesses and industries which fulfill human needs must be in the public (owned by the public at large) domain (as opposed to private owned;i.e., whether traded or non-traded.)

  29. Ramsefall said on February 24th, 2009 at 7:56am #


    something that I discovered about Henry George, thanks to your recommendation, while reading Progress and Poverty was his apparent simplistic insight and dissection of an otherwise complex social phenomena. Regardless of what other readers on DV perceive of his writings, I found it to be a brilliant reaction to reality.

    One of the things he stated which makes the most sense, “If the forces opposed to truth were weak, why would error so long prevail?” He managed to shed light on what is otherwise an obvious fact.

    Monopolistic land ownership, along with Friedman’s free-market economic theory riding on the back of the elite created and elite benefited Bretton Woods System, are some of the most exemplary examples of long prevailing error contributing greatly to the societal problems being faced today.

    Thanks, and best to you.

  30. bozh said on February 24th, 2009 at 8:55am #

    as long as we have a master-serf society and to such a degree of severity as in many arab and other lands, talk on reduction in population and who might be reducing it, shld be delayed.

    once we obtain a more or much more egalitarian society, people wld think, Who needs children when better people than my children wld look after me in my old age!

    we do not know apriori that we need to reduce world pop by any number or even stop its increase. we do not know how many people and animals Earth can sustain.

    in a worldwide socialist-egalitarian society, people might choose to have no children or just one or two. thnx

  31. Max Shields said on February 24th, 2009 at 9:14am #


    First, the environment knows what level of human population can be sustained. We have thousands of cases of collapsed societies whereby population, after careful study, was a major contributor (it is integral and not exclusive). It’s true of all living things, not just humans. Detailed comparative and in depth society studies have given us this knowledge.

    We know there are limits to growth. We know that what enables the growth is energy, and in human terms the single most potent contributor to growth is fossil. It ampliphies human existence. If, as more and more evidence is providing, the energy that allowed us to reach this huge increase in a relatively short period of time, greatly diminishes, peaks, than it is natural to conclude that a population number somewhere in the vacinity of where it was prior to the energy source that got us here is where we probably need to be (just under 2 billion, it’s not exact, but a reaonable approximation).

    We have choices. As we make them, each determines an outcome. It is not some kind of pure voodoo.

  32. Barry said on February 24th, 2009 at 9:33am #

    For capital to survive and accumulate profit, it needs a working class to make things and a middle class to purchase them. China provides both, soo too does India. If we view the planet as a profit surface then we see why firms are relocating to these countries (actually largely China at this point). [Capital has always wanted China open for business – the last bastion of closed economies. Now they have it and so we have a glimpse of the future.]
    So a large pool of workers are needed – and unemployment should be high so that workers submit to discipline or be replaced – and a large consuming class is required (the contradiction here is to keep them consuming while also paying them less – hence debt servitude is useful and profitable). Beyond this, workers are expendable. Production gains are made by squeezing more work out of fewer workers – or automating the processes.
    While a eugenics movement is unlikely to be overt, entire regions and peoples can be written off through a less bombastic approach. Sub-Saharan Africa is largely written off. Its people are pretty much deemed to be incapable of participating in global capital except at the lowest possible rung. They are allowed to kill each other en masse, allowed to suffer from fatal contagious diseases, forbidden from challenging the global system of trade and investment, forbidden from immigrating in large numbers. Capitalist firms could relocate to Africa as it is the world’s largest and cheapest pool of labor. But they don’t except to mine the continent for its raw products for the price of what amounts to slave labor. So eugenically speaking, Africa is where the action is.
    Climate change is real and there is little doubt that it is human-generated. The atmosphere-warming qualities of carbon dioxide, methane and other gases are known from laboratory work. If you dump enough of these gasses into the air it WILL have an effect. The precise changes are difficult to measure because of global atmospheric and oceanic complexity. But the measurements still show that all of the warmest years since accurate record keeping have occurred since 1990. And CO2 levels in the atmosphere continue to rise well above historic and pre-historic levels. And that’s without counting CFCs and related compounds that have many times the heat-inducing characteristics of CO2.
    This IS political. Capital is about the accumulation of short-term profits, not about long-term interests of humanity (never mind the ecology of the planet). But capital is also dynamic. It creates its own need for innovation and invention in the pursuit of profit. So capital is also able to stave off its demise by staying one step ahead of its ecological downfall. However, the clock is ticking and returns on each innovation are likely to be less and less. Eventually, and we may already be there, collapse of the system overtakes growth – as we see in the response to Katrina or the Tsunami or what is allowed to happen in Darfur, Sri Lanka, Palestine, or uncontrolled forest fires in various places, the throat-singeing pollution of Beijing, etc. The problems on the periphery strike closer and closer to home. And now we are in a deep global recession/depression that already has ramifications for work and food supply in many countries. Riots can be expected to erupt and spread – crackdowns can be expected.
    [I don’t think we can blame indigenous people so much – (certainly not the few remaining band societies) as indigenous people are operating under the aegis of global capital as we all are.]
    Ecological and political crises are NOT separate entities – attention to one is not a distraction from the other. The redistribution of wealth, the change to a more equitable economic system – are not separate from a new paradigm regarding our planet’s resources. It is an oxymoron to think we can have one without the other.

  33. bozh said on February 24th, 2009 at 10:10am #

    as you say, societies collapse. and, as you say, there are limits to growth.
    i wld put the word collapse under single quotes as the term is overgeneralized.
    a folk indeed ‘disapears’. khazars, scythians, avars, phonecians, sumerians, akkadians, pequots, et al have ‘disappeared’ or ‘collapsed’.

    but, respectfully max, there were causes for them. and one of the causes may or may not have been the numbers of a disappeared folk.
    but extremely iniquitous structures of society and which almost always cause warfare; which, to me, is a cause for a folk to go dwn to bite the dust.

    and no folk may have utterly disappeared but is still with us today as slavs of bulgaria and moravia [today’s hungary] prove.
    descendants of assyrians are still in ME. samaritans are still around. canaanitic folks likewise.
    copts of egypt are with us as well. and may be cyrcasians, akkadians, wends and sorbs (in germany).
    gauls/celts, picts, tuscans, latins also either absorbed people or been absorbed like Bulgars (an asiatic people), moravians by hungarians or magyars, etc.

    envy, lust, hatred, fears, stupidity, false knowledge, shamanism, cults may be also causes for one might to rise and another to fall.
    in some instances, historian say, people were invited by an empire to settle in its land.

    desire to migrate may be another cause for melting pots. in the balkans we’ve had tatars, avars, gauls, thracians, et al. all of them left for greener pastures.
    but gauls are still in scotland, portugal, spain, france but mixed up vith visigoths, vandals, franks, burgoundians, et al.

  34. MrCynic3 said on February 24th, 2009 at 10:23am #

    I am baffled and perplexed by those who attack any call for birth-control as eliticism and shifting the blame .
    Yes, there is exploitation and unfair distribution of resources and the
    fruits of labour which causes widespread poverty and want, however
    the resources of the planet is finite specially food crops.
    I know from personal experience from where I grew up.
    Just a simple question, Do an average family with six kids can has
    the same living standard like a family with two kids? and what if
    the income of the first family is smaller than the income of the second
    family to start with?!!

  35. Max Shields said on February 24th, 2009 at 10:31am #


    Let me be clear, I am making the case for the important role population growth plays in collapse. HOWEVER, I am not suggesting that it alone creates collapse. A society or civilization could (and do) collapse with relatively stable populations (i.e., no discernable growth). But what is important and cannot be denied is that a collapse can only happen when there is a population of some sort. What allows that population to continue on, avoid collapse, are a number of factors to be sure.

    Human choices are key. If a locality depends on a trading partner and the trading partner becomes a threat or collapses then that can have a ripple affect on the survival of the locality’s survival. The locality has choices even then. When the last tree during the process of deforrestation is cut down, how come that choice was made (and the many before it)?

    We need to look at the overall issue of population as we do any other threat to the continuation of a civilization. Today, with globalization the situation is larger than ever before in human history. The connections are enormous, with one region effecting regions thousands of miles away.

  36. Kim Petersen said on February 24th, 2009 at 10:36am #

    “and no folk may have utterly disappeared”


    Just one example: In 1829, with the passing away of Shanawdithit, the Beothuk of “Newfoundland” became extinct as a people.

  37. Max Shields said on February 24th, 2009 at 10:42am #


    While I agree with your assessment and the need to control birth rates, I am not perplexed. Why? Because all issues once politicized taken on a life of their own. There is an issue of power – who controls who gets born? Will there be a racist attempt to reduce the population of one tribe over another.

    Take our recent history with Palestians. One of the few areas Palestinians can control – one that provides a semblance of power – is their population vis a vis that of the Israeli/Jewish population. The Palestinians seem to be taking some advantage of that – their birth rates continue to significantly rise.

    It does not off-set the military and economic might of Israel, but does provide some leverage in sheer numbers. So, population control of Palestinians would (and I would agree) be seen as a racist move if say Western states made some kind of over-reaching demand – land for population or some such bargain.

    But, in terms of life and the forces of nature, which are outside the human game of politics, you are right (from my perspective) that we need to look at the problem as a problem and not as one which will start with the poor and be classed based. All things can be turned against the “weak”, but that doesn’t mean we should not face the problem head on…again it’s about choices. If our concerns keep us from making the “right” choices than we will suffer the consequences. I think we should be mindful of the moral and humanistic aspects of any solution in order to temper it with the right approach to the problem.

  38. Max Shields said on February 24th, 2009 at 10:49am #

    I’m sure there will be a response to the issue of birth rates and Palestinians. This is a paradoxical and tragic approach to attempting to gain leverage or local power. Gaza is a tiny strip of land. The more human strain put on the land and the needs of the people compounds what is already a case of genocide on the part of Israel.

    Still it is an understandable reaction by Palestinians.

  39. bozh said on February 24th, 2009 at 10:50am #

    kim, thnx,
    i was careful to say that “may be no people utterly disappeared”
    thnx for the important info

  40. Ramsefall said on February 24th, 2009 at 12:22pm #

    bozh, Max,

    the issue at hand of collapse and/or disappearance of peoples is most relevant to the dilemmas which we as a species are facing today. Aside from that though is the topic of language disappearance, and with that its cultural facets and identities — a diminishing of our species’ cultural diversity, dwindling in accordance with the rate of crumbling environmental diversity…falling more or less hand in hand.

    With the loss of languages; e.g. Inuit, other American tribes, African tribes, etcetera, we as a species are losing our own sense of collective history, and the qualities that make our species unique.

    In short, it’s not only the destruction of the environment or cultural groups, but also of the languages that allow one to identify a particular group. Either way, diversity on all levels is suffering at the hands of what could be considered to be inconsequential perspectives and attitudes so ever-present in our sick and dysfunctional capitalist system that sets out to put the desires of you and me over our neighbors.

    Best to you both.

  41. bozh said on February 24th, 2009 at 1:37pm #

    i’m loath to make predictions. i’d rather first of all dwell on what has happened and what is happening now.
    to see what is happening, one just needs to know how to read. one needs also to look, of course.
    to do this, one needs almost no special skills or almost no education.
    and in evaluating what is desirable or desirably true, one shld study or look at all of our doings.

    and having done that (hopefully all of us) we decide what is desirable
    and what isn’t.
    what is desirable to me? belief in a god but not speaking for it/him/her is obvioulsy OK.
    the fact that we swim in one genetic pool and thus have no say what one gets when one is born, shld finally and for all time be recognized.
    or to say, I yam what i yam. nature made me and i’m not gonna argue with it.
    that we live/swim in many pools, that’s the pits. this causes an endless number of injustices.
    so, for me, i fervently hope global warming destroys humanity.
    and barring any absoluteness, including innocence, we all bear responsibility [tho in various degrees] for institunalization of such enormous psychosis.

    there may be only one way out: get rid of the pshicotic behavior. but are we incurable? well, i make no prediction. thnx

  42. Ramsefall said on February 24th, 2009 at 3:10pm #

    Yes, bozh, prediction making is speculation, and that really has no intrinsic value until the hypothesis has been proven through experimentation…something that the Change Gang (I like the sound of that) won’t likely make possible during its tenure.

    As you know, speculation/prediction/prophecy is based on factors such as history, media influence, personal experience, belief systems among others. Regardless, that which we focus on is also that which receives our energy. Provided a prediction correlates with gloom and doom, I believe it’s advantageous for one to maintain reservation. If, however, we desire to experience the inherently positive reality of an intelligent being’s unlimited potential, maybe someday or even sooner than we think, that may be worth adhering to.

    Mankind has appeared to be governed by psychotic behavior for at least the past 12 millennia, especially recently as industrial petro man which I believe you already have countless examples of in your knowledgeable head. But there are exceptions, and exceptions can progress into standards by which to exist. Eating herbs, not using deodorant, washing your clothes in a bucket after wearing them for a month, are all exceptional examples and personally evolutionary from an environmental/philosophical perspective, not de-evolutionary as our society has intentionally created us.

    While we can’t choose or change the societal setting into which we are born, as far as we know, my gut tells me that as we (Little Brother according to the Kogi — Elder Brothers of Santa Marta Sierra Nevada) continue our ascent on this exponential slope of life, we will soon be reaching a breaking point that may provide humanity (whatever’s left of it) with the opportunity to relearn the art of living a sustainable and peaceful existence that most would call Utopian. Call it what one wants, but the truth remains that life is a complete mystery and none of us can say what will come tomorrow…perhaps the chance to get things right by implementing what we’ve learned.

    Who knows? I may have completely missed the mark by saying that.

    Best to you.

  43. Barry said on February 24th, 2009 at 3:59pm #

    Kim and Bozh – I saw you (Bozh) had hedged on utterly eliminating a people so I didn’t respond. But as long as Kim has then I ‘ll also add that the Tasmanian people have also been disappeared. I’m sure there are others – I would think.

  44. Barry said on February 24th, 2009 at 5:09pm #

    I’m not sure I agree on Palestinian birthrates. While it may be a conscious attempt by some to increase numbers, I think the major reason for high birthrates is that as a Captive Nation, Palestinian society is not free to undergo the demographic transitions extant elsewhere. The Psychological mindset of Palestinians is a frayed one – the super high rates of death, injury and incarceration at the hands of their occupiers renders life both precarious and precious. Palestinians adults, especially men, are emasculated daily and reminded of their inferior status. The only major outlet for many Palestinians is in reproduction. The response to a stunted civil life is ironically, a rich inner life. Short of martyrdom, this is the only way many Palestinians can prove they are men.

  45. Max Shields said on February 24th, 2009 at 5:31pm #

    I’m not sure how much of this has to do with masculinity or a sense of personal control over ones body and life in spite of the horrid conditions. One can also imagine just the opposite happening.

    In any case, there has been a good deal written about Palestinian populations vs Israeli. Population size in areas has been a means of strenthening ones presence in an area. Population has been a factor in domination of lands and resources for milleniums.

    But again, the role of population globally is an environmental issue. It should not be, in my opinion, dismissed as an elitist means of control if we are to deal with the problem as a problem.

    The reasons why collapse happens is because of the ways a group or society perceives the problem vis a vis their political view, their economic view, etc. While these may serve a parochial, short-term purpose, it has been known to collapse and end the entire civilization because the reaction impeded survival.

  46. sastry.m said on February 25th, 2009 at 9:00am #

    Global economy is closely related to individual human economy. Human economy relates to mind-body management in a rational and righteous manner true to the saying ‘healthy mind in a healthy body’. While a healthy body can be maintained by proper internal and rational user upkeep a healthy mind upkeep is subject to various constraints placed by religion, spirituality as well as factors of upbringing relating to social,cultural and ethnic soul programs. Thus the individual human economy is maintained by a judicious parity between various factors relating to health while the global economy is maintained by a harmonious cooperation among managing individuals addressing a multitude of human problems. One should also realize that transcendental & subtle Mind- Soul programs are down loaded and embedded in rationally working human body systems according to individual ‘karma’ recordings. Although human minds are amenable to logic and rationality their subjective use in association with ‘soul’ programs tend to be highly idiosyncratic to individual personalities. For example the most famous poet and novelist Oliver Goldsmith was a drunkard with no sense of responsibility for family and yet entertained great concern for welfare of humanity in his writings for guarding against greed and vanities of human nature. Any unbridled activity becomes abusive whether relating to subtle mind resulting in insanity or gross cellular body resulting in malignancy. The present ills of global economy are indicative of such activities with a total disregard to principles of natural creation and indulgence in vagaries of vain gloried riches with no compassionate concern for fellow human beings. To conclude my personal opinion I would like to add a couple of my own poetic lines having drawn good old Goldsmith into discussion.
    God has made Man and Man has made Money
    God’s Money is Goodwill and Man’s Money is a Promisary Note
    Goodwill given to others is extended and Money given to others
    is expended.