Hegelian Dialectic and the Coming Economic Depression & the Transformation of Capitalism

“The life of a people ripens a certain fruit; its activity aims at the complete manifestation of the principle which it embodies. But this fruit does not fall back into the bosom of the people that produced and nurtured it; on the contrary, it becomes a poison-draught to it. That poison-draught it cannot let alone, for it has an insatiable thirst for it: the taste of the draught is its annihilation, though at the time the rise of a new principle” Hegel, 1804

In the mid-to-late 1980’s I was a very worried, bearish leaning observer of the financial and socioeconomic world. A bearishness based solely on my belief into the dialectical processes that were inevitably to unfold that would starkly reveal the intrinsic and totally insurmountable flaws of what I then called stock-market capitalism, what I shall now simply call finance capitalism. Which, to be more accurate, should be described as monopolistic finance crony capitalism, but this is just a tad too cumbersome.

Wall Street PigsBut then the world changed. It opened up with the fall of the Berlin Wall and the more rapid acceleration of capitalism in China and around the world that occurred with the virtual disappearance of the last Potemkin village that had become the only remaining “ism” in the world that could ideologically compete. In one bright flash of global capitalistic euphoria, a large portion of the world opened up to the expansion of a flawed model, American style finance capitalism. The global open architecture presenting itself would prove to be  more vibrant and dynamic. Driven by finance, transnational capitals voracious and insatiable need to expand, find new markets and destinations for an almost infinite and increasingly highly leveraged pool of excess capital. Backed by the coercive footprint, in some cases boot heels, of the American Empire, financial markets were off and running again.

Of course, so was the economic boom in nations that had fully opened up their economic, financial and business architecture to the invasion of finance capitalism. And in the old sclerotic, evolutionary more advanced nations, they were given a solid decades second wind, literally saved these increasingly tired founding nations embracing financial capitalism, despite the invasive and now ubiquitous spread of fascism and crony-capitalistic collusion between big business/finance and government, led the charge. Growth and economic well-being seemed endless, or so it seemed. But it was all a mirage built on the fictionalization of the world and the addicted need to continually expand the pool of leveraged capital to feed the self defeating Mobius Strip of elite wealth creation. The residue is proving to be deadly; excessive debt, credit and over-consumption and over-investment and a pool of relatively liquid financial paper whose notional “value” dwarfs world GDP by a large multiple and whose true intrinsic worth will likely prove close to zero. Of course, there is a rather savagely ravaged earth as well that will be dealt with for many more generations than those of us who live through the coming global systemic crisis of finance capitalism.

I digress. With the inevitable expansion and with massive new outlets for the growth of the American capitalist model I became radically bullish and remained so through the various financial market crisis that were the inevitable result of the rule finance capitalism, that is until early in 2007 when I reverted. Despite the enormous financial market rally since the bottom of 2009 and the paper wealth that has been created, I unfortunately remained so inclined, despite an awareness of the power of the central banks and the power, of even a  population as large as the worlds, to succumb to the self-delusions that the financial elites were willing to induce on a scale of manipulation never seen in the history of humankind.

The end of the Cold War coincided with another, perhaps even more significant event in the social and economic development of man ( generic “man”, I refuse to be overly PC), this was the same year in which the stock of liquid financial assets swirling about in the world exceeded world GDP for the first time in human history. At this point, and it is fascinating that it happened to be the same year in which Western, really American, capitalism and socioeconomic architecture was heralded as the knock-out winner of the great conflict of the 20th century, the conflict of the “isms”.

But, in reality none of this was coincidence. In the years 1989-1990, not only did the wall come down and open up for American capital the much needed final stage of globalization, the IV infusion for what, up until that point, was an economic system facing declining rates of productive growth, despite rising levels of debt/credit stimulus, it also was the year of the end of the nation-state, at least as it was so defined by the 20th century, following the long evolutionary process that began with the Peace of Westphalia. The rule of the affairs of economic man moved from the nation-state to the marketplace. With the United Kingdom’s attempt at monetary independence representing a defining moment in the shift in global economic power and of course the first billions for George Soros as well, a success that also announced the true reign of the “Masters of the Universe”, the sword of finance capitalism, the hedge fund manager.

snake-oilTo me, the rule of financial markets meant that the intrinsic flaws of American style finance/market capitalism would be papered over, literally and figuratively, but a boom in financial assets globally was at hand. It became apparent that to truly fail, to truly face the crisis that would result in the ultimate synthesis and birth of a new socioeconomic model, one still likely defined by the word capitalism, but with different characteristics and devoid of the absurdities and poisonous architecture of the current finance capitalism, the painful, chaotic turbulence of the cycle of death and birth must be global, world wide and totally complete. We are now at that point.

In 2007, looking back on my long period of secular bullishness that had then come to an end I wrote in my newsletter: “However, I have felt for the past 17 years of my optimism that the ultimate dialectical test of the worldwide implementation of American style finance capitalism would eventually arrive, with its internal flaws revealed. Built on excessive leverage and divorced from the fundamental laws of economics the new world of finance capitalism is one of grow or die, expand or perish, acquire or be acquired, create paper to sell to others who in turn create more paper, with endogenous liquidity created by the system only for its own perpetuation and the paper wealth of its masters. For the financial and socioeconomic events that lay bare the fault lines of our current form of capitalism they must occur on a global scale, they must be universally ubiquitous.”

The enclosed editorial ( at the bottom of this post) in The Times of London from Gerard Baker, published on January 19, 2007 is a worthy read, for it reeks of the hubris of man, for his thoughts were only reflective of the general consensus at the time. The Great Moderation was the wonder of human genius, the lasting edifice of a new, brilliant future, a virtually cornucopia of wonderment!  They could have not been more prophetic as a red carpet for the coming global economic destruction which has not remotely been played out eight years later, nor, of course could they have been so wrong.

 I have no idea on timing, but I will fall prey to my own hubris, only because it has been tempered by the success of the mirage hoisted on the global population by the financial engineers and masters of economic deception from Wall and Fleet Streets to the halls of the seats of temporal power in Washington and London, whose sustaining power I totally underestimated. What is coming is nothing short of epochal–the painful, but necessary transformation of the worlds reigning socioeconomic system into something different. Dynamic shifts of the magnitude I am expecting have occurred very rarely, but with regularity over civilizations history. They never occur without a corresponding impact on the geopolitical landscape through war.

Financialization, which helped to boost these economies for decades, is now arrested by its own contradictions, with the result that the root problems of production, which financial bubbles served to cover up for a time, are now surfacing.

This is manifesting itself not only in diminishing growth rates, but also rising levels of excess capacity and unemployment. In an era of globalization, financialization, and neoliberal economic policy, the state is unable effectively to move in to correct the problem, and is increasingly geared simply to bailing out capital at the expense of the rest of society.

Thus IMF Managing Director Christine Lagarde declared in a speech in China on November 9, 2011, in which she called for the rebalancing of the Chinese economy: The global economy has entered a dangerous and uncertain phase. Adverse feedback loops between the real economy and the financial sector have become prominent. And unemployment in the advanced economies remains unacceptably high. If we do not act, and act together, we could enter a downward spiral of uncertainty, financial instability, and a collapse in global demand. Ultimately, we could face a lost decade of low growth and high unemployment.

In today’s globalized world “the endless crisis” of monopoly-finance capital is endless both in time and space. Just as there is no way of historically transcending the growing contradictions of capitalist maturity within the context of the system, so there is no spatial fix that will free us from the fault lines that now encircle the entire globe. This leaves us with only one final choice: “the revolutionary reconstitution of society at large, or… the common ruin of the contending classes.”

==The Endless Crisis: How Monopoly-Finance Capital Produces Stagnation and Upheaval from the USA to China (John Bellamy Foster and Robert W. W. McChesney)

Freedom cannot survive government management. The U.S. Constitution designed a government managed by the people; Progressives have disregarded the Constitution and fundamentally transformed government – to manage the people.

Since the post-war peak of American productivity in the 1950s, the U.S. Constitution, and consequently, individual freedom, have been consistently, and deliberately eroded by the Progressive influence in society, and especially in government. The tidal wave of Progressivism that washed over Washington in 2008 drowned the nation in debt, in its search for “social equity” and “environmental safety.”

It should now be abundantly clear that without the U.S. Constitution, and the freedom from government management it guarantees, the American experiment in self-government stands at the edge of a cliff, about to fall into the abyss of history.

America at the abyss, Henry Lamb

Of course, the life of every system eventually comes to its material end. The skin begins to sag and lose color, the bones become fragile, the blood flow meets increasing resistance and mental processes start to fade. The “immune system” of our global civilization is not nearly as effective as it used to be, and even the slightest infection could bypass its defenses and spell society’s demise. Efficient systems will always and forever become fragile and burn themselves out, given enough time. It may take millions of years to occur in large biological or ecological systems, but it only takes a few human generations in socioeconomic ones. The evolved systems of global civilization are absolutely necessary for its survival, and they are all quickly deteriorating now. Given the surety of this impending death, the only thing left to fear is the possibility that our society dies in bitter and painful agony, rather than a state of composed dignity.

==Simple Planet.

What do we need to do in order to prepare for the coming economic collapse?  Are there practical steps that we can take right now that will help us and our families survive the economic depression that is approaching?  As the publisher of The Economic Collapse Blog, I get asked these kinds of questions a lot.  Once people become convinced that an economic collapse is coming, they want to know what they should do.  And so in this article I am going to share some key pieces of advice from some of the top experts in the entire country.  If you are not convinced that economic disaster is on the way, this article might not be for you.  Instead, I would encourage you to go to my website where you will find more than 1,200 articles that set out the case for the coming economic collapse in excruciating detail.  For those of you that are interested in getting prepared, I apologize in advance for the outline format of this article.  To examine each of these points in detail would take an entire book.  In fact, I am the co-author of a book that will soon be published that discusses many of these things in great depth.  But you don’t have to wait for a book to get prepared.  Mostly, it comes down to common sense.  In this article, I share 89 common sense tips that will help you get prepared for the coming economic depression.  Hopefully a lot of people will find these to be very helpful.

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via 89 Tips That Will Help You Prepare For The Coming Economic Depression.

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