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On the absurdity of recessions…

Worth reading as a reality check, after all as the expression goes – nobody has died. The real crisis is not in the headlines yet – global drought and food shortages as reported in earlier posts.  That is not to say we should not deal this financial crisis, especially as it, unlike climate change and fossil fuel scarcity,  is relatively easily done.


February 20th, 2009

The following may seem to be a brain teaser, but if it clicks in your mind, you will suddenly have a very different perspective on the world, and in particular, the current crisis. Enjoy.

There is one need in society that will always exist. No matter how much certain individuals believed that they couldn’t live without their Porsche, they will find that there is only one thing that really matters. That one thing is food.

Society is held together on the basis of one commonly held assumption – that when you walk into a certain designated buildings and hand over a piece of delicately printed paper, you will be given food in exchange.

This might seem a little like stating the obvious, but this highlights the absurdity of our current position.

When all is said and done, we know that the computers, cars, designer clothes, foreign holidays and other trappings of luxury mean very little in a near survival situation. Anyone who has spent any time in a near-death scenario will understand what little value you really place on such physical things. What really matters to us, in moments of clarity, is that our loved ones and ourselves are fed and safe from harm.

Now, we’ve come a long way over the last few hundred years. We know that we can, without a doubt, organise ourselves in such a way that everyone in our society is provided for, with at least a shelter and adequate food to stay alive.

In fact, we can do much better than that – we can provide everyone with food, clothing, heating, internet, telecommunications, mobile phones, public transport – the list goes on. We have made enough progress in technology and in the art of organising ourselves that we can ensure that everyone is provided for.

Except, that is, in a recession.

Take money out of the equation

Forget about money for a short while. Doing so will help you see the absurdity of the situation we are in.

A few hundred years ago, you would most likely spend your time working on the farm, producing the very food that you eat.

In modern times, you work away from the fields, producing various things that people want. In return, you are given tokens – gold coins, printed paper sheets, or more commonly now, numbers in a database. You take this coin, paper or numbers and exchange them for food.

You work, you contribute to society, and in return you are given tokens that you can redeem anywhere in society.

We can see that there is a voucher system in place. In the UK, the vouchers are called pounds. In the US, they are called dollars.

Now imagine, one day, somebody realises that we have all been using more vouchers than we have been earning. You get your vouchers in return for contributing to society (the genuine value you contribute is an issue for another debate, but let’s just look at the monetary value). If you are using more vouchers than you have been earning, then you are taking more than you give. Naturally, someone else, somewhere, must be giving more than they take. The real, physical economy can only be a zero-sum game.

Would it be possible that everyone was taking more than they give? Everyone was simultaneously eating more food than they produce?

Of course not – the food would run out within days.

The absurdity of the current situation…

So when we find ourselves in a situation where the vast majority of people are in debt, and the total of their debt far exceeds the value of everyone else’s savings, who exactly is under-consuming?

How is it possible that we are all taking more than we are giving?

It isn’t, neither mathematically nor logically.

If you understand this, the complete absurdity – and the complete illegitimacy – of the current monetary system should become apparent.

After all, how can we all simultaneously be ‘borrowing from the future’ when everything that we have borrowed to buy exists NOW, in the present?

What would happen if we were to cancel all our debts right now? Literally wipe the slate clean, forget about money completely. (This is not necessarily a proposal – just a mental riddle).

What are we left with?

If we removed money from the equation, what would we be left with?

We would be left with everything that we currently have.

We would be left with an ample supply of housing, machinery, office space, computers, food, and people with time on their hands.

In other words, we have everything we need to continue living the way we have been living for the last few years.

Everything we consumed in that period was created in that period – not in the future – so why do we need to ‘pay for it’ in the future? The idea of ‘living beyond our means’ works applies to some individuals, but can not apply to everyone collectively. It’s true that a 20 year old may have spent more on credit than they have earned in their lifetime, but how is it possible that we have all spent more than we have earned?

It’s all about the numbers

This current recession is all about a defective monetary system and a currency that is nothing more than numbers floating around in a computer system. It has no basis in reality.

Big decisions

It’s time for us to make some big decision about how we organise ourselves as a society. If we were starting from scratch, would we really design a system like this? Would we design a system whereby our decisions about what we produce and how much we work is determined by the numbers created in a computer system? Would we design a system which inevitably results in a shortage of those very numbers every 7-10 years? When we are sat here, looking for work; when businesses are sat there, looking for consumers; when banks are sat there, looking for customers; and no-one can make the first move simply for the lack of electronic numbers?

This is a crazy system. A recession is an absurd idea, and can only happen in a society that has become too wrapped up in the numbers and statistics to see the reality and common sense behind the situation.  It’s time we started again.

But the beauty of the solution is that we don’t even require a revolution – it’s very simple to get out of this depression. Find out just how simple it is by reading The Solution.

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