Musings Report 2022-49 12-3-22 It's a New Era
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It's a New Era
Eras may last decades, and only those who've lived long enough to recall previous eras have experienced the transition from one era to the next.
The era of financialization, globalization and low-cost, abundant oil/natural gas began over 40 years ago in 1981.
The era of digital / Internet technologies took off about 30 years ago. All of these dynamics accelerated in the early 2000s, roughly 20 years ago.
Only those 60 and older experienced working in a previous era (pre-1981).
All of these dynamics are decelerating and entering a phase of nonlinear turbulence as the changes are outpacing these highly streamlined / optimized systems' ability to self-correct.
This nonlinear instability is being increased by doing more of what worked in the previous era, in the mistaken belief that the 2020s are simply an extension of the eras that began 40 and 30 years ago.
The fixes that worked in the past won't resolve the nonlinear instability because all these dynamics have reached saturation: adding more debt no longer generates organic expansion of productivity, all it does is inflate an even larger and more unstable credit-asset bubble.
Globalization has been optimized to the point of saturation: the potential downsides to national security outweigh any remaining marginal gains in corporate profitability.
Financialization has so distorted the economy that gambling on useless speculations is now viewed as the best (or only) way to get ahead.
When a system has absorbed all it can absorb, adding more is just a waste of resources.
We've entered a new era, and so the fixes and incentives that worked in the past 40 years no longer work.
The idea that the past 30 years were not a permanent era but an anomaly that's come to an end doesn't compute for everyone who has only experienced the "glorious 30" years of cheap energy, soaring assets and falling prices due to hyper-globalization and hyper-financialization.
The idea that this new era may evolve unpredictably is also anathema to a technocratic culture and economy that prides itself on forecasting and controlling everything with credit and money.
The previous 40 years of material abundance has nurtured a belief that the solution to any scarcity is to create more money, as some of this new money will inevitably flow into eliminating the scarcity.
The idea that some scarcities cannot be fixed by creating more money doesn't compute.
It may turn out that all the lessons we learned in the past 40 years will not only be useless in this new era, they will be disastrously counter-productive.
Their unparalleled success for decades may blind us to the power of previous solutions to make our problems worse than they would have been had we recognized the new era for what it is rather than seeing the future as a seamless extension of the previous era.
This dynamic--making problems much worse by forcing more of whatever worked in the previous era into a saturated, increasing unstable new era--receives little attention or understanding.
This dynamic helps us understand why systems that seemed permanent and forever can destabilize and fall apart with astonishing speed.
We thought we were fixing it by doing more of what worked in the past, but we were actually accelerating the turbulence and destabilization.
We have a hard time letting go of the idea that the recent past is an accurate guide to the future. Most times, it is, but not when an era ends and a new one begins.
Highlights of the Blog
This Is of Course Insane 12/1/22
The "Oil Curse" and Splashy PR Announcements of Oil Production Cuts 11/29/22
The Uncertainty in China Is Kryptonite to Global Markets 11/27/22
Best Thing That Happened To Me This Week
The County of Hawaii opened a 4.5 mile stretch of old highway that was closed in 2013 for safer viewing of the Mauna Loa eruption.
From Left Field
NOTE TO NEW READERS: This list is not comprised of articles I agree with or that I judge to be correct or of the highest quality. It is representative of the content I find interesting as reflections of the current zeitgeist. The list is intended to be perused with an open, critical, occasionally amused mind.
Not Just Another Recession (Foreign Affairs)
FTX Crypto Bubble Really Is the Worst of Its Kind (Bloomberg)
Why Another Xi Jinping Term Might Be in U.S.'s Interest (WSJ.com)
China Is Starting to Really Regret Its Friendship With Russia
Alibaba founder Jack Ma hiding out in Tokyo, reports say
The tough calculus of emissions and the future of EVs: From materials and batteries to manufacturing, calculating the real carbon cost of EVs is just getting started
Manuscript treasure trove may offer fresh understanding of Hegel--hoping the student who took notes put whatever he heard into simple, comprehensible sentences....
China warns of 'crackdown' after weekend of widespread zero-Covid protests (France24)
The Devil’s Theatre -- longish....
Recycling Our Cities, One Building at a Time-- nice idea but the labor required is stupendous and thus so is the cost....
10 Japanese Idioms and Proverbs to Take to Heart
"Resentment is like drinking poison and waiting for the other person to die." Saint Augustine
Thanks for reading--
charles |
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