Now on with it...
There has been quite a bit of debate, well, just about everywhere on the resolution of the global financial crisis and subsequent recession. In the U.S. there has been debate at least as early as the 2008 presidential campaign about how to deal with the recession, and get back on track towards growth.
Now sitting from my perch of stable employment, it was easy for this question to come to me, although it might not be altogether fair of me to do so:
Why is everybody so eager to rush back into growth?The big financial bubble had just collapsed. Why were we in such a hurry to charge that imaginary capital back up and create a new one? The only debate that was going on was how to get back on a track towards growth, but nobody I saw was really debating why getting back on track was desirable in the first place.
Is it just assumed that growth is what we want to be doing? Need to be doing?
So I did what any self-respecting concerned citizen would do. I went to my local library and Googled it. Turns out that if you Google anything with the word "rush" in it, all you get is a lot of news and blog pages about Rush Limbaugh with not a single sponsored link.
So I went back home and ripped a page out of my old market-capitalism 101 book. Here's what I found out...
It turns out that the whole point of capitalism is to use capital (like cash, factories, raw materials, etc.) and make more capital out of it. We do this by making and selling stuff for profit, and then turning the profit into capital. Simple. Turn capital into more capital. Turn stuff into more stuff. More and more and more stuff (Here's a little story about stuff).
But the simplest and most versatile type of capital is still cash. Capital is cash, and capitalism is about stacking up cash and using it to make more cash.
Cash. It's a financial asset.
Wait a tick. Didn't we just have a financial bubble? Like...a cash bubble?
Okay, let me catch you up on what happened in two sentences for those who aren't tracking the financial bubble yet. Bankers (and pseudo-bankers, and not-bankers) used good capitalist goals to create more cash (just capital) out of cash...but it was imaginary cash. But then somebody told everybody else that the cash was imaginary, and everybody started freaking out.
But it was just good capitalism right? Right???
Here's the thing about capitalism. It's awesome. There is not an economist around who can tell you about a faster way to create a whole ton of goods and wealth to go around. Capitalism works so good.
Market-capitalism is awesome too. Any economist will tell you that a market is the most efficient way to trade and allocate goods among people. Costs are low (sometimes lower than they ought to be but...not now) and anybody can participate in a free market. Being able to participate in a free market makes everybody more free. Because if they couldn't participate in a free market freely, that would be the definition of being less free. See how definitions are rad like that?
But if there is one thing I learned at the library on all those Rush sites is that bubbles suck, and imaginary capital sucks. I'm also smart enough to know that all you can do with imaginary capital is make more imaginary capital or imaginary stuff. And America can't feed the kids with imaginary stuff. And we have to feed the kids.
So now we want to get back to growth, right? We want to get back on track and make more stuff, right? Do we want more imaginary stuff? It is theorized that this has happened before. Turn a tech bubble in 2001 into a housing bubble in the middle bush years and a housing bubble into a financial bubble in 2008.
So we want to make real stuff, not imaginary stuff.
I suppose we could do that, but a thought just crept into my head (no it didn't, this question hit me at the library).
Why do we want to to begin making more real stuff? Haven't we got enough stuff?I'm going to work on this question another time. This has gotten a touch lengthier than I wanted it to be. But you can anticipate I'll be back with "bubble back II" soon.