Why We Abandoned the Stable Economy for the Continuous Growth Bubble Economy

God is dead. God remains dead. And we have killed him. How shall we comfort ourselves, the murderers of all murderers? What was holiest and mightiest of all that the world has yet owned has bled to death under our knives: who will wipe this blood off us? What water is there for us to clean ourselves? What festivals of atonement, what sacred games shall we have to invent? Is not the greatness of this deed too great for us?
Must we ourselves not become gods simply to appear worthy of it?

Friedrich Nietzsche

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We do not need a continuous growth, Bubble Economy; I explained the Stable Economy simply and concisely in a previous article. Given that we don’t need continuous growth, why on earth do we have a growth economy?

Capitalist theory requires that businesses grow and grow and grow forever. The reasons are to prevent takeover and to take advantage of economies of scale. However, the first of these is really a subset of the second, which is itself not necessarily true.

The theory is that a small store or manufacturer will be put out of business by a larger one, because the latter can take advantage of economies of scale to offer lower cost products and services. Economies of scale simply means that when you make or do more of something it costs less to make or do. This ‘rule’ fails in many cases, and here are three simple examples:

• Micro steel mills are more efficient than mega mills
• Manufacturers close to customers pay less for shipping, something that will become increasingly important as oil prices increase
• Megacorporations have mega-overhead that small businesses do not have

In reality, the megacorps have gained much of their dominance through ‘influencing’ governments at various levels – with the result that they have been able to externalize many costs. They pollute and taxpayers shoulder the clean-up costs, for example, or they insist on tax breaks that must be made up by the rest of the taxpayers. They demand subsidies and bailouts and protection from competition. In the worst cases, they abuse workers, which practice resulted in the rise of unions, or cause harm to people who live nearby, resulting in sickness, death, and lawsuits. (Where again the large corporation has the muscle to break unions, pay skilled and unscrupulous lawyers, and push governments to make the immoral legal.) Nowadays they outsource to developing countries where government officials are more easily ‘persuaded’ to turn a blind eye to abuse and pollution.

Technically, any business from corner store to megacorporation could remain a certain size forever, providing employment and paying dividends to investors – if governments maintained a level playing field by preventing pollution, insisting upon the same taxes for all, and so forth. Capitalist theory serves more as a cover for growth than a valid justification for it.

Greed is Good

So who or what is driving this continuous, cancerous, bubble-causing growth? Quite simply: greed. The people who have clawed their way to the tops of massive corporations want ever bigger salaries and ever larger corporate empires. They want bigger yachts, grander offices, larger mansions, more private jets, more servants, their own islands. They want more control over everything that could affect their personal security, including government.

We all want security: Financial, physical, and emotional. We all want to live long and happy lives, and not worry about the fears that have plagued humanity from the beginning of time. We don’t want to worry about a sabre tooth tiger eating us, or an enemy taking all we have, or where the next meal is coming from, or sickness and sadness and death. These are normal and natural human fears, and they are biologically ingrained.

The problem is that there is never ‘enough’ for those afflicted with greed. They go far past normal self-interest and always want more money and control (power). It is an insatiable addiction. They are predators.

Our forebears knew this well and attempted to warn us. The seven deadly sins – wrath, greed, sloth, pride, lust, envy, and gluttony – are destructive individually and also socially if allowed to run out of control. The foundation of modern capitalism is greed: Greed is Good is the credo. It is no surprise that an economic system founded on the love of money would be corrupting.

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“For at least another hundred years we must pretend to ourselves and to everyone else that fair is foul and foul is fair…. Avarice and usury and precaution must be our gods for a little longer still.
For only they can lead us out of the tunnel of economic necessity into daylight.”

Sir John Maynard Keynes, 1930

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At the rate we’re going, we may not make it to 2030.

God is Dead

The reasons we abandoned a stable economy for one based on greed are somewhat complex, including a greatly reduced fear of God – and therefore established religions, which had provided morality for the masses – and the rise of corporations, which are institutionalised greed. Greed has certainly existed throughout human history, but as science discredited traditional ideas of God and the various religions failed to evolve, there was a vacuum in morality. That hole was filled by a new god, the Almighty Dollar, and this allowed a new class of money and power-worshippers to rise to power, the Chief Executive Officer (CEO).

In addition, with God dead, the rest of us soon embraced greed, albeit to a much lesser extent than the upper crust. In this we were strongly encouraged by those who stood to make the most from our abandonment of conservative principles: the CEOs. Most advertising is simply the encouragement of one or more vices, sometimes accompanied by the mocking of our former principles.

As time has gone by, the CEOs have wangled many laws enabling and encouraging greed, including the most recent easy credit era and deregulation of banking. They have also poured literally billions of dollars into ‘think tanks’ like the American Heritage Institute and Cato for the purpose of justifying the goodness of greed.

And, just as greedy religious leaders and kings had in the past encouraged heavy breeding by the masses in order to increase the size of their followers and armies, today’s CEOs insist on continuous population growth as the simplest and crudest way to keep the economy – and their markets and salaries – growing. Even though it is obvious that someday the population growth must stop, the answer is always: Not now. That is the response of an addict.

The result is a corrupted society, and an economy and environment teetering on the brink of collapse.

Because so many of us have bought into the idea that Greed is Good, returning to conservative principles of thrift, of living within one’s means, of common sense, will be difficult. Sooner or later, however God/Nature/Reality, whether  you believe in it or not, will force it upon us. The cost will be greater the longer we remain disconnected from reality.

Further reading

What a Stable Economy Looks Like, and How It Works

Combining the Stable Economy with Waste Not, Want Not for the Sustainable Economy.

Developing Countries need a Growth Economy; Developed Countries need a Stable and Sustainable Economy.