by Geoffrey Chia
F**k the Neoliberal, Neoclassical Economists
“I’m tired of hillbillies bashing Socialism as if they knew what it was. But, damn it, they love being reamed by Capitalism because of the lies we’re –told every day. And yet, they love them some Communist Jesus!”
— Oblio’s Cap, comment on Europeans Appear Unimpressed With Our Beautiful American Health Care Choices
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Readers will recall that in Davos earlier this year, Steven Mnuchin, a pompous, overblown high voodoo priest of neoliberal economics, suggested that Greta Thunberg needed to study economics in college before lecturing the U.S. on fossil fuel investments. Greta’s response was, in my view, highly restrained. My response to Mnuchin is this: You, Sir, have shit for brains and need to go back to elementary school to learn basic arithmetic then to high school to learn basic physics then to college to learn basic climate science before lecturing Greta on fossil fuels. Failing that you need to shut the fuck up.
If I was asked to define neoliberal neoclassical economics in a nutshell, it would be this: privatisation of profits and socialisation of losses. Or perhaps we should adopt Al Capone’s definition of capitalism being the legitimate racket of the ruling class.
This article, part 2 of the Economic Oil Nexus, delineates exactly how insane and amoral the neoliberal, neoclassical, neocolonial, neoconartist economists N4Cons are. EONflowchart2 shows how the peaking of conventional oil led to the frenzied extraction of unconventional (UC) oils in a desperate attempt to keep businesses as usual, a dying animal, on terminal life support. The high energy (= high monetary) costs of UC oil extraction, transportation and processing ensured from the get go that UC projects could never be profitable, hence perverse incentives were employed to facilitate such madness.
There was no clear evidence of planned collusion between the UC oily fraudsters and their equally fraudulent financiers (unlike the invasion of Iraq where there was clear collusion between the corporations, especially Halliburton, the politicians – who were in fact revolving door corporatists – and the commercial media, to perpetrate that war crime). Nevertheless the fortuitous unholy convergence of economic “stimuli” such as quantitative easing, ZIRP and NIRP magically conjured up enormous liquidity, which was eagerly gobbled up by big business borrowers to be defecated down the black toilet of UC oil extraction. This has indeed forestalled the decline of global net oil availability (with horrific emissions and environmental consequences) but has also ensured that global economic collapse, when it does occur, will be much more abrupt and catastrophic than otherwise. Collapse has merely been postponed for now, but is certain to occur when the EROEI of conventional oil inevitably falls off a cliff (if not sooner due to the bursting of monumental financial bubbles).
Other socio-political issues aggravated by the N4Con agenda are also summarised on that chart. The rise of fascist, racist, right wing extremists is a predictable result of the resource constraints resulting from Peak Oil which manifest in the form of economic hardships, which the N4Cons have inflicted entirely on the poor and middle classes. However resource curtailment/destruction is also being exacerbated by worsening climate chaos which has caused the loss of houses and businesses, food and water disruptions, warfare and refugee outflows from the most vulnerable locations.
To understand our present precarity and worsening inequality we need to understand the dictums of Neoliberal Economics which have been imposed on the world by the USA (along with their partners-in-crime the AngloZionists) ever since WW2 by various mechanisms: the bribery of banana republic dictators or the imposition of regime change on targeted countries via CIA engineered assassinations or astroturf revolutions or US military bombings or invasions (in order to install US compliant puppets). John Perkins outlined those tactics in detail in his New Confessions of an Economic Hitman.
The prevailing establishment (viz the World Bank, IMF, WTO, all Western industrial economies and universities, the stooge media etc) have declared “TINA!” (There Is No Alternative!), thus shutting down any possible debate.
In part one I stated that the N4Cons are bonkers. Here are my justifications for that assertion:
N4Con artistry is predicated on these delusions, lies and deceptions:
Infinite growth is an indisputable, absolute, endless requirement and can never be argued against (those preposterous claims by radical Greenies that our planet is finite must be seen for the reckless, left wing, inner-city, latte sipping, raving lunacy that it is)
Externalities (pollution, ecosystem destruction, global warming, genocide of native peoples, etc.) are to be ignored. They do not affect me (the privileged rule-making 0.1%) here and now, hence they do not exist. If we are ultimately forced to acknowledge them, we must find some way to commoditise, monetise or financialise them e.g. cap and trade of carbon emissions, carbon offsetting, patenting the genomes of native plants and peoples etc.
Money can be created out of nothing by governments (by issuing bonds) and banks (the fractional reserve system of homoeopathic money) which can then be loaned out as debt.
Debt makes up the majority of money and money drives all incentives. No other human motivations exist: people are driven by money, money, money only and by nothing else.
Interest charged on debt forces indebted businesses (essentially all businesses) to grow, which therefore drives growth of the national GDP, which is the indisputable sole arbiter of success, the holy grail which must be pursued at all costs.
Natural disasters or war require rebuilding and repair of infrastructure which drive up GDP, a good thing. Funeral expenses also contribute to the GDP. Those ungrateful Iraqis should thus thank us for destroying their infrastructure and killing their people. The invasion in 2003 was certainly a good thing for Halliburton, Raytheon, Lockheed Martin &c. According to US law, corporations are people and you need to be aware that people have feelings, so please do not criticise Halliburton &c because that will hurt their feelings. As for the Iraqis, they are subhuman towel-heads, so fuck them.
Energy is merely a commodity which can be created out of nothing. Given the proper monetary incentives to stimulate innovation, anything and everything is possible!
Therefore energy considerations are subservient to and indeed are irrelevant to economic considerations
All economic participants operate on the basis of perfect information, perfect rational self interest and perfect competition. By definition they can never do anything to harm their own self interests.
A market entirely free of regulation therefore ensures optimality. We have proven this by using elegant mathematical formulae using assumed inputs from axiom number 9 above.
Asbestos does not cause cancer, people cause cancer.
Reducing taxes on the rich, who are the source of all wealth creation, encourages them to consume more and to create more jobs and hence increases national wealth. Hence everyone must repeat these religious mantras, “the poor must feed off the table scraps of the rich” and “a rising tide lifts all boats“.
The physical laws of Nature (such as the first and second laws of thermodynamics) do not apply to Economics. Economists know everything about everything (having fabricated really impressive theoretical mathematical models which are internally beautifully consistent) far better than any Scientists. Those pathetic Scientists depend on real world observations before devising their mathematical models1, which they capriciously abandon or modify should such models fail to predict real world outcomes. Scientists only accept paradigms which are both internally and externally consistent with Reality, which makes them weak. Strong Economists unburdened by Reality should therefore determine National and International policies, not pathetic weak Scientists.
It is easier to imagine the Extinction of Humanity than the end of Neoliberal, Neoclassical Economics, hence the former is preferable. (I actually paraphrased the popular quote which is: It is easier to imagine an end to the world than an end to capitalism which was attributed to both Fredric Jameson and Slavoj Zizek. Nevertheless we need to sharpen our focus and be absolutely clear: predatory industrial capitalism is relentlessly driving humanity towards extinction.)
If you are incredulous that such insane, amoral “axioms” could possibly form the belief system of the N4Cons, then you surely are a sensible person, however you do not fully realise how utterly crazed their ideology is. OK, I made up item number 11 myself, but it is not far from the truth. Unchecked, unregulated “free” market ideologies enable unbridled access of hazardous items, including military assault rifles, to the lowest common denominators of society in the name of “choice” and “freedom” (translation: choice and freedom for predatory capitalists to profit from the death and misery of ordinary people)
Please note that I do not advocate the abandonment of the discipline of Economics (which however needs to be more disciplined to be called a discipline). An understanding of real world Economics is vital to facilitate material well-being. But I do assert we need to abandon N4Con artistry which is quite simply institutionalised amoral fraud designed to funnel wealth from the poor to the rich and is also relentlessly driving us towards Extinction.
Here is a summary of the 5 biggest lies of global capitalism: https://www.weforum.org/agenda/2016/12/lies-of-global-capitalism-guy-standing/
Here is proof that the N4Con ideologies violate scientific realities and hence are, not to put too fine a point on it, off-the-wall, loony tunes garbage: https://www.scientificamerican.com/article/does-economics-violate-th/
For those N4Cons who scream “TINA!” I suggest they take off their blinders and look at the Scandinavian high taxing yet highly competitive socialist / regulated capitalist systems which have delivered the highest standards of living and highest levels of happiness to their populations: https://en.wikipedia.org/wiki/World_Happiness_Report#2019_report
Yes Virginia, successful mixtures of socialism and regulated capitalism do exist, not only in Scandinavia but also in France, Germany, Canada, Australia and NZ which provide universal health care irrespective of any citizen’s ability to pay. And here is the biggest mammoth in the room, a highly regulated ginormous system which has lifted hundreds of millions of people out of poverty and single handedly propped up the world economy after the GFC of 2009, a system that the N4Cons have no idea what to make of and therefore choose to denigrate at every turn: https://www.truthdig.com/articles/neoliberalism-has-met-its-match-in-china/
Some rightwingnut Troll looking to find fault with this article will probably bring up the irrelevant issue of COVID19, a big problem no doubt, but one which will inevitably be overcome in time. Are there any other countries out there that can build a brand new, fully functioning 800 bed hospital within 10 days? Meanwhile Trump continues to undermine the funding of the CDC, of scientists and of clinical research. https://www.theguardian.com/world/2020/jan/31/us-coronavirus-budget-cuts-trump-underprepared
The prostitute talking heads of the establishment condemn Bernie Sanders because they say he will bankrupt America from his reforms such as healthcare for all. All I can say about those useful idiots is that their pants on fire and they have no regard for facts, reality or rigorous analysis:
https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(19)33019-3/fulltext
https://www.mintpressnews.com/91-percent-scientific-papers-medicare-for-all-save-money/264189/
So wake up you shit-for-brains N4Con jackasses! You Chicago and Austrian school dickheads! There ARE alternatives which DO EXIST in the REAL WORLD and WORK far far better than your corrupt, duplicitous, parasitic, genocidal, exploitative and self serving conartistry.
Of all the sins of the N4Cons, quite apart from the war they are waging against Life itself on this planet http://triplecrisis.com/neoliberalism-and-climate-change/ , there is one sin which is, right here, right now, undermining their own Capitalist foundation. The N4Cons in their syphilitic Trumpian mindsets, dazzled by their own self proclaimed brilliance as stable geniuses, have failed or refused to acknowledge the very source of their wealth: namely the working class producers who are in fact also the most important consumers. The N4Con strategy of funnelling wealth to the parasitic rich from the hard working producers (who are simultaneously being crushed by harsh austerity, thus destroying their ability to consume), bears the seeds of the system’s own destruction. What is the point of generating products and services if nobody can afford to buy those products and services? The Cambridge economist, Ha-Joon Chang (not a N4Con) wrote that austerity has never worked: https://www.theguardian.com/commentisfree/2012/jun/04/austerity-policy-eurozone-crisis
Henry Ford understood way back in the days of the Model T that to stimulate the sales of his cars he needed to ensure there were customers who could afford to buy it. That was why he paid his workers salaries well above the population average, so they could buy those Model Ts while still enabling Ford to make a profit. Ford became a multimillionaire by caring for and nurturing his golden goose2, his workers.
Modern day Robber Barons not only lack any empathy for their workers, they are actively killing their golden goose by destroying collective bargaining, destroying employment benefits such as health insurance, destroying job security (the new “gig” economy) and by keeping pay packets below a living wage, forcing the working poor to take on multiple jobs to the detriment of their family lives, thus producing a new generation of neglected, angry, resentful, impoverished, malnourished offspring with no options, who are often forced to resort to crime. All justified by the dictums of the N4Cons. Never was there a more perfect example of a parasite actively working to kill its host.
This article is not a polemic against all economists, only the N4Cons. We need economics as a discipline but it needs to be properly grounded in Reality to be considered even a “soft” science. Hard scientific principles of Physics, Chemistry, Biology and yes, even the “soft” sciences of Sociology and Psychology, not hypothetical mathematical assumptions, must form the bedrock foundation of any economic theory if it has any hope at all of being relevant to the real world. The profit motive, competition and monetary rewards for innovation and creativity all have their place in an economy. However taken to extremes and hijacked by unproductive, self-serving parasites, the system becomes toxic and needs to be regulated by ethical, social and environmental concerns.
Thankfully, the world is finally waking up to the fraud of the N4Cons:
https://www.truthdig.com/articles/mexico-is-showing-the-world-how-to-defeat-neoliberalism/
There are many economists I do respect, to name a few: Richard Wolff, Michael Hudson, Jeffrey Sachs, Joseph Stiglitz, Steve Keen, Yanis Varoufakis, Richard Deniss and of course Herman Daly. They are all advocates for environmental protection and the fairer distribution of wealth in societies. Unfortunately apart perhaps from Daly, most do not adequately take into account energy considerations and resource and waste constraints when working out economic theory. That is why, although I have great admiration for Varoufakis who is a masterful orator (and I do believe his policies, if implemented, would help mitigate much of the horrific suffering that millions of ordinary people will face on this downslope of the Hubbert curve), his green new deal is doomed to failure if it is predicated entirely on large scale centrally controlled so-called renewable energy production and distribution, and if it ignores the depletion of high EROEI energy sources.
The first five principles underlying the transition to renewable energy must be:
Reduce consumption and increase efficiency
Reduce consumption and increase efficiency
Reduce consumption and increase efficiency
Reduce consumption and increase efficiency
Reduce consumption and increase efficiency
The best way to achieve that is by decentralised, locally generated renewable energy with the shortest possible transmission distance eg from solar panels on a roof to the electrical sockets of that very same house (via battery), which will also render you immune to grid interruptions caused by climate chaos. Equally important is the local production of food. Above all however, we need to pare down this bloated monstrosity called the Economy and pursue degrowth: http://www.feasta.org/2019/10/03/the-school-of-economics-as-a-suicide-academy/ to try to live within the limits of Nature.
Taking a step back from those specific recommendations however, what principles should we base real world Economics on, which all scientists can agree about and which would confer at least a modicum of credibility to Economics?
Using the definition of Material Wealth as having easy access to a wide variety of high quality goods and services, I assert, based on actual world realities, that:
The production of all material goods and the delivery of all real services require the input of energy
Energy sources and flows follow the physical laws of thermodynamics which are absolutely indisputable and inviolable
Material goods are all derived from natural resources which are all derived from the environment.
If we fuck up our environment we will fuck up ourselves
Therefore preservation of the environment (which includes having a stable climate, which was the basis of the Holocene and enabled humans to pursue agriculture) MUST be a keystone principle of Economics
Endless growth on a finite planet is impossible, hence steady state Economics (eg transition from fossil fuels to renewable energy, transition from mining to 100% recycling, in general the adoption of closed loop systems) should have been employed well before overshoot in order to avoid disaster. Key principles would in particular have been to limit population and limit consumption and waste production to well within the carrying capacity of our finite planet.
There is nothing new about the above and principle number 6 was clearly expounded to us way back in 1972 with the publication of “The Limits to Growth“, which was viciously pilloried by the mainstream economists3. As we are now far past overshoot by all parameters worth measuring, disaster is absolutely inevitable. Hence those smug N4Cons can pat themselves on the back that they have won a conclusive victory and their prize is the guaranteed die-off of billions of people this century and possible near term human extinction.
CONCLUSION: Yet again I can only exhort the reader, if you are able, to set up or join a remote off-grid community in a climate resilient location and to grow as much food for yourselves as you can. Trying will not guarantee success but not trying will guarantee failure.
G. Chia, Feb 2020
Footnotes:
Scientific models do require certain underlying assumptions to be made, however unlike economic models, scientific axioms must be based on the physical realities of the real world. For example, the Limits to Growth scientists made the assumption that it is impossible to have infinite growth in a finite system (our planet), an axiom shown to be inviolable in reality whether considering bacteria in a petri dish, yeast in a vat, reindeer on St Matthew Island or cancer in a human body. Neoliberal economists however saw fit to dispute this reality, based on the fact that the N4Cons have shit for brains. Other indisputable scientific axioms are the laws of thermodynamics, which cannot be violated*. All real world economic activities require energy inputs and when total net energy availability plateaus, further real economic growth becomes IMPOSSIBLE. Oil is the keystone energy commodity, required to manufacture and produce all other types of energy generation (whether nuclear power stations, hydroelectric dams, wind farms, solar panels, mining of coal, extraction of gas and indeed the pursuit of more oil itself). UC oils provide a pittance of energy compared with conventional oil, at huge energy cost. This is why we will NEVER see a return to growth and why economic contraction and eventual collapse are guaranteed as the EROEI of conventional oil declines. This is a fact the N4Cons refuse to acknowledge or accept because they have shit for brains.
*Disingenuous nitpickers may argue that some physical principles can theoretically be violated in the quantum realm or at relativistic extremes eg near light speed or near black hole gravitation. Such theoretical exceptions are completely irrelevant to the non-quantum, non-relativistic scale we live in.
More precisely, golden goose refers to the goose which lays the golden eggs, not a goose made of gold, but you know what I mean.
Did I mention that the N4Cons have shit for brains?
References for EON Part 1:
Debunking Steven Pinker:
Exposing Jordan Peterson:
Published by the Doomstead Diner 07 March 2020.
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