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Current Crisis Predicted Over 30 Years Ago

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The current crisis was predicted 30 years ago

MOSCOW. (RIA Novosti economic commentator Vlad Grinkevich) - The current economic crisis came as a bolt from the blue for most. In the meantime, experts warned in the early 1970s that the world economy was heading for a crisis in the first decades of the 21st century.

In the 1960s, Western countries concluded that oil-stained beaches, smoggy megalopolises, and heavy pollution of major European rivers were too high a price for the benefits of mass production. In 1968, a group of industrialists, politicians, and scientists set up the Club of Rome in the Italian capital. They had enough money to conduct a series of studies with the participation of prominent scientists, and the use of tested methods.

Computer-predicted disaster

The Club's first report, which had the tell-tale title "Limits to Growth," caused a shock. It was compiled by a group of scientists headed by Dennis L. Medows, who decided to create a cybernetic model of global development. Having focused on five global processes: fast industrialization, population growth, increasing shortage of food, depletion of non-renewable resources, and degradation of the environment, they modeled the future on a computer.

The emotionless machine produced an answer that sounded like a verdict: the human race is in for a disaster. Considering that the population was growing at a rate of over two percent annually at that time, while industry was growing at up to five to seven percent, modern civilization was bound to reach the limits of growth in the first decades of the 21st century. Mineral resources will have been depleted; environmental pollution will have become irreversible; a sudden uncontrolled drop in the population and decline in production will have become inevitable. Millions of people will have died as a result of man-made catastrophes, spontaneous economically motivated social conflicts and unknown pandemics.

To prevent the cataclysm, the authors of the report offered a concept they called "zero growth," under which new purchases should only replace used up items. For example, a new car should be purchased only when the old one has stopped running; there should be universal birth control - no more than two children per family, and they suggested restricting consumption.

The report was a bombshell. It called into doubt the foundations of the Western economies. The zero growth concept contradicted the very logic of industrialized society which rested on the principle of supply-and-demand. The concept did not offer a future for the poor people of the non-capitalist world: a resident of a Soviet communal apartment was bound to live in it until he died, while a Chinese peasant was doomed to heat his hut with manure and dead-wood.

Does the truth begin as heresy?

Needless to say, the report was subjected to severe criticism, primarily because its authors did not offer any solutions. They admitted that their model was far from ideal, but the conclusions of their opponents were no less fallacious. Optimistic scenarios were not limited to only good wishes. The concept of a post-industrial society, for one thing, promised a miraculous salvation. It was very similar to the bright future predicted by communist ideologists.

Unprecedented technical breakthrough was the sine qua non both for building communism in the U.S.S.R. and for post-industrialized society in the West. It was supposed to produce technology which would resolve a number of environmental and socio-economic problems (for instance, let machines do arduous, dirty work).

As a result, the elites of the industrially advanced countries preferred to live with a due account of restrictions, and grow until they reach the natural limits in the hope of a technological leap which would allow them to go beyond the limits.

Global self-deception

The talk of the looming global crisis quickly ground to a halt in the latter half of the 1980s. Optimists were bragging about the resolution of global problems, and many analysts were confident that the bright post-industrial future had already arrived.

They seemed to be right but only at first glance. The majority of the European and U.S. middle class were white collar workers, involved in finances, marketing, and research. But in reality, driven by the market's logic, the leaders of the industrialized countries simply followed the path of least resistance. They switched the dirtiest and most labor-consuming industries to the developing countries, and let guest workers from the same countries take the worst jobs at home because they were cheaper than machines.

However, practice has shown that even a very advanced country cannot resolve global problems alone. Indeed, the once lifeless Czech Vltava or the German Rhine now abound with dozens of fish species, but the environmental crisis which the West has overcome is now looming elsewhere. It became clear that it would go beyond the limits of assembly lines several years ago when the Amur River was covered by a huge benzol spill. Resource restrictions are even more obvious - regardless of where a plant or factory oriented to the world market is located, a certain amount of resources is required to produce a commodity.

Finally, to control the production scattered all over the world, a sophisticated financial system had to be construed. With time, it started taking on a life of its own, produced by a fictitious economy with the profits of financial institutions depending not on real production but on intricate financial transactions.

This resulted in a big number of disproportions in the world economy. Investment in the financial market surpassed corporate capital, while the funds accumulated in the financial bubble exceeded the money in the real economy by many times.

As a result, an attempt to mothball the problem ended in failure. Having reached the limits of growth, the financial system collapsed and triggered the current economic turmoil.

The opinions expressed in this article are the author's and do not necessarily represent those of RIA Novosti.

From: http://en.rian.ru/analysis/20090108/119294610.html

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Economic growth will end eventually, likely shortly after global population growth ends.

We're not there yet.

How can you say this? Economic growth depends on more than just population, it depends on natural resources too. All I can see happening is a big collapse happening everywhere.

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How can you say this? Economic growth depends on more than just population, it depends on natural resources too. All I can see happening is a big collapse happening everywhere.

Natural resources have not yet been fully depleted. The planet still has a couple of good boom/bust cycles left, at least.

But I agree that eventually there will be a point of no further growth, and possibly/probably significant decline.

We're just not there yet.

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Natural resources have not yet been fully depleted. The planet still has a couple of good boom/bust cycles left, at least.

But I agree that eventually there will be a point of no further growth, and possibly/probably significant decline.

We're just not there yet.

You don't have to fully deplete a resource to experience supply problems. Once the easily accessible oil, or palladium or anything else is gone, monetary and energy costs of extraction increase, and production tends to decline, which is a tad awkward for an economy based on never-ending growth.

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There's a good interview with Meadows on FSN (Jim Puplava), talking about the updated version of that book.

Is there another update? I bought the thirty year update a few years back.

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Natural resources have not yet been fully depleted. The planet still has a couple of good boom/bust cycles left, at least.

But I agree that eventually there will be a point of no further growth, and possibly/probably significant decline.

We're just not there yet.

from just a few of your posts hamish, i seem to paint you as someone who is fairly well off who could be severly effected should the current crisis become catasthrophic (sp.) you seem to have a 'so long as it doesn't happen in the next 50 years, i'm alright jack' attitude and care not one jot for the future or what problems our actions now are going to cause for the future.

anyway, personals aside, it will only take some more serious decline to destroy economic growth. any anarchy that ensues could see many capital projects vandalised and destroyed regardless of resources or population growth. the western world may not like the change in living standards and culture that the powers that will attempt to coerce (sp) them into over the next few decades.

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When I've got enough money, I'm going to buy some rubbish dumps and just watch their value rise exponentially.

Ironically, in that statement, you are far closer to the actual nature of the problem, than the article writer

It's not that resources are running out, it's rather that one of them cannot be made or moved or functionally replaced and is necessary to all production and so its possession can be used to destructively hold the productive economy to ransom.

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You don't have to fully deplete a resource to experience supply problems. Once the easily accessible oil, or palladium or anything else is gone, monetary and energy costs of extraction increase, and production tends to decline, which is a tad awkward for an economy based on never-ending growth.

theres an umlimited source of suppies in the universe,just need to be more motivated for space expansion.

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When I've got enough money, I'm going to buy some rubbish dumps and just watch their value rise exponentially.

"hotairmail of the dump" hasn't quite got the same ring to it though has it? :P

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from just a few of your posts hamish, i seem to paint you as someone who is fairly well off who could be severly effected should the current crisis become catasthrophic (sp.) you seem to have a 'so long as it doesn't happen in the next 50 years, i'm alright jack' attitude and care not one jot for the future or what problems our actions now are going to cause for the future.

anyway, personals aside, it will only take some more serious decline to destroy economic growth. any anarchy that ensues could see many capital projects vandalised and destroyed regardless of resources or population growth. the western world may not like the change in living standards and culture that the powers that will attempt to coerce (sp) them into over the next few decades.

Yes, he will likely lose his parliamentary seat. :lol:

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from just a few of your posts hamish, i seem to paint you as someone who is fairly well off who could be severly effected should the current crisis become catasthrophic (sp.) you seem to have a 'so long as it doesn't happen in the next 50 years, i'm alright jack' attitude and care not one jot for the future or what problems our actions now are going to cause for the future.

anyway, personals aside, it will only take some more serious decline to destroy economic growth. any anarchy that ensues could see many capital projects vandalised and destroyed regardless of resources or population growth. the western world may not like the change in living standards and culture that the powers that will attempt to coerce (sp) them into over the next few decades.

Cant disagree with that. To me he sounds like a pompous fool. He will call this name calling, but I have read enough of his posts to not give a flying.

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Ironically, in that statement, you are far closer to the actual nature of the problem, than the article writer

It's not that resources are running out, it's rather that one of them cannot be made or moved or functionally replaced and is necessary to all production and so its possession can be used to destructively hold the productive economy to ransom.

It's not just oil. Oil may pose the biggest problem of them all but there are plenty of other resources which are now on the verge of critical depletion, not least of which is fossil groundwater in places like Australia and the US. The actual nature of this problem is only partly to do with our wastefulness. The bottom line is that there are simply too many human beings on the planet. No behavioural changes can compensate for this; nothing will solve this problem unless it includes a significant reduction in the population.

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  • 285 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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