The current worldwide slowdown in productivity gains may reflect a combination of decreasing energy returns on energy investments in fossil fuels, and limitations on productivity gains in the early stages of development of renewable energy replacements.
A review of the development process in terms of non equilibrium thermodynamics concepts is in order. The stresses of the upcoming major worldwide energy transitions, accompanied by climate change protections, are likely severely to test national and international coordination systems, and demand insight into the thermodynamic and economic processes involved on the part of those who participate in international diplomacy.
1.The Current Productivity Problem
Numerous publications have been reporting that rates of productivity gain have been declining in recent decades across much of ‘developed world’, and, from higher levels, in many ‘developing’ economies. A recent publication of the highly respected Brookings Institution probes this issue
The National Conference Board in the United States also reports almost imperceptible productivity gains, and some losses, in the most developed economies in the world. The Conference Board’s summation on this is as follows:
Zero or even negative total factor productivity growth suggests that improvements in the efficiency by which labor and capital are used have stalled . . . Ultimately declining TFP prevents companies from improving their competitiveness and profitability, and threatens the ability of countries to maintain or better people’s living standards.
As of this writing, the International Monetary Fund reports low growth prospects across a broad range of economies, and some difficulty in identifying why this should be so.
2. Current Related Financial Policy Actions
Institutions charged with coordinating national and global financial activities have undertaken attempts to encourage a resumption of ‘growth’ (typically measured within States as gross domestic product or gross national product). The conceptual basis for such measures seems to assume that growth rates should be those typical of the late 19th and the 20th centuries.
National governments have considered that they had two principal levers for trying to get economic activity back up to accustomed and/or targeted levels, termed ‘monetary’ and ‘fiscal’.
As to ‘fiscal’ action, the national government is assumed to be able to authorize economic activity directly, and to issue whatever monetary instruments, or forms, will be accepted in the markets supplying goods and services. This may create a current deficit, to be financed over time.
There seems to be more attention given to ‘monetary’ policy, typically managed by central banks, and institutions to coordinate the policies of national central banks.
National central banks have tended to try to stimulate economic activity by actions which make monetary units more amply available for national and international transactions. A part of this strategy is actions to lower the interest rates which generally apply in such transactions. This is thought likely to increase the levels of activity in investing in the production of goods and services (and in consumer purchases) by reducing the levels of yield needed over time from such activities to attract the ‘capital’ which will enable such activities.
At this time, most of the institutions with central bank functions, in the ‘developed’ economies, have been targeting very low interest rates for an extended period of time.
There have been at least two other, external but parallel discussions, with implications for economic activities. This article suggests that these inquiries are particularly significant at this time.
3. Current Awareness of A Need for An Energy Source Transition
It is generally understood that the enormous gains in human populations and activities have come from exploiting the ‘energy’ in fossil fuel, or earth-stockpiled, hydrocarbons. Discussions of productivity gains over time — generally the 19th and 20th centuries — seem to have assumed that the fossil fuel flows supporting such gains will be available at the same levels and costs as have been the case in these last two centuries. But looking ahead a century or two, this cannot continue to be taken as a given.
First, the prospective climate effects of combusting these hydrocarbons, to get the energy yield, has spurred a global search to replace these energy sources.
At the same time, the net energy yields from mining these hydrocarbons have tended to decrease. And, the limits of the most energy-rich hydrocarbon deposits seem visible, given current and prospective consumption rates.
The efforts to develop ‘renewable’ or ‘sustainable’ energy sources have led to a focus on a key measure — the energy returns on energy invested (EREOI) in such renewable technologies. Those tracking the development of renewables are keenly interested in when they will meet or exceed the EROEI of fossil fuels, and whether, and when, such energy yields will be sufficient to support a high energy industrial civilization in the future.
This author suggests that this should lead to shifting the conceptual center of discussion as to economic (and social) activity to the energy flow factors which enable such activity.
4. The Rise Of Academic Understandings of ‘Non Equilibrium Thermodynamics’
This dovetails into a stream of academic thought which has steadily expanded in recent decades, often termed ‘non equilibrium thermodynamics’.
The foundations of this thought go back at least as far as Heraclitus of Ephesus, born about 560 BC, who saw all things as process. However, in recent decades astronomers, physicists and others have expanded, elaborated, and measured these concepts in universally applicable ways.
Re-casting the productivity issues in thermodynamic terms may help answer a key question.
On the one hand, some suggest that the current slowdown in productivity growth in developed economies is just a pause in the realization of gains from innovations in process as to the economic potentials of current developed societies — e.g. ‘big data’ computations, self driving cars, the spread of ‘digitization’ of business and government operations.
An alternative suggestion might be that the combination of restrictions of fossil fuel use, the energy costs of such use, and the energy investment costs of creating and deploying renewable energy sources now imposes or will impose constraints on the rate of productivity gains, if any, which we can project for coming decades.
Given the recent ascent into widespread scholarly discussion of non equilibrium thermodynamics, I should to state at the outset what version of nonequilibrium thermodynamics frames the premises here used in approaching human productivity and ‘finance’.
Briefly stated, this essay proceeds from the premise that all ordered structures in the Universe are manifestations of ordered energy flows. All ‘tangible’ structures are composed of relational systems — systems of correlated elements. Thus, the ‘order’ In the universe arises from correlations among the elements in the structures. In some, as in ‘solids’, the correlations are so stable as to stabilize both spatial dispersion, and radial degrees of freedom, over the periods of observation — or interaction with another ordered structure, or system.
Dynamic systems at the macro scale available to humans — processing energy flows and altering its internal conformation and/or relationships with external systems over time, or process — entail both energy intake and dissipation. Ilya Prigogine condensed this seminal insight long ago. A simple and visible astronomic example is the Red Spot on Jupiter.
Thus, ‘energy’ is in a fundamental sense the sovereign coin of the realm, so to speak, in the creation and maintenance of all ordered systems.
The leading explicant of the underlying dynamic nature of the Universe is Tufts/Harvard professor Eric Chaisson. In a series of exhaustively documented, elegant books and articles, he explains the energy densities, and related complexity levels, of galaxies, suns, ants, plants, humans and human societies. See for example “Cosmic Evolution”, Harvard, 2001, and for beautiful illustrations
A critical metric in Chaisson’s extensive documentation of energy flows is ‘free energy rate density’ (the amount of energy flow through a system per unit of mass and unit of time). Life units, for example, embody higher free energy rate densities than do galaxies or suns: animals higher free energy rate densities than plants, and humans, with their artifacts, like cities and particular elements in cities (e.. Jet planes and computers) much higher free energy rate densities than animals as a whole. In the energy scales of the Universe, human civilization is an extremely rare high free energy density phenomenon.
For a somewhat broader context, though condensed, overview for the interested general public, one can consult an article on ‘relational order theories’
As humans have organized the world around them, they have identified and constructed systems which have, to the humans, the characteristic of yielding more energy to the humans than the humans invest in them.
In agricultural societies, ‘land’ was often used as a conceptual catch-all for an energy yielding asset. (However, I understand the the word ‘capital’ was derived from the indo-european term for cattle, in an semi-nomadic phase of the indo europeans). A fishing resource, or the ocean as a whole, could also be so considered.
Let us focus on a world in which systems other than ‘land’ (or a fishery area) were made to yield energy returns on energy invested in them.
In the fossil fuel era, such a system could be a coal mine, an oil or gas well, etc. where we have accessed energy bound in hydrocarbons by previously living systems, and learned how to liberate and turn to our use that energy. In this world, more types of resource, and energy flows, are organized more flexibly, by entities including the holders of the symbols of ‘capital’.
As we seek to enter a larger scale ‘sustainable’ or ‘renewable’ energy era we consider artifactual photosynthetic systems, wind energy systems, nuclear energy systems, etc. As to all such systems specialized so as to yield to humans more energy than humans organize into them, we have come to seek to measure the ‘energy return on energy invested’.
5. Initial Application of Non Equilibrium Thermodynamics Concepts to Productivity and Energy Transition Issues.
Assuming that ‘productivity’, as to humans, corresponds roughly to the ‘energy’ which the human or the system in which the human functions brings to ‘goods and services’ — the fabrication, transport, communication, etc. which the human becomes involved in ‘producing’ — productivity, as measured by the output of units specified per person work unit, would be enhanced by more energy entrainment, and decreased by less.
Generalizing this, one might posit that in a world of high EROEI, per person ‘productivity’ gains can be high, and in a world of low EROEI, they will be low.
We have noted that some suggest that underlying gains in efficiency — compositional productivity, or multiple factor productivity — are in operation but not yet manifested in ways which register in the statistical identities and measures we now use.
Let us entertain an alternate hypothesis oriented to a nonequilibrium thermodynamics framework, and a simple model which might be used to attempt to test such an hypothesis, over time, with enough data accumulation and analysis.
A candidate hypothesis would be that the energy returns on energy investments in the interconnected global economic systems are now rewarding investment in energy production at lower than historic levels, and at levels which, given all the energy dissipation in cycling energy through the generation and consumption, re-generation cycles does not allow for much increase in the over all activity levels of the societies involved, over time and the continuing cycling process.
Let us consider a simple model in which the key variables are a ‘capital’ sector, the energy return on energy which is invested into the ‘capital’ apparatus, and a population. These elements are arranged in a simple linear cycle, and the result which matters most to humans is designated as per capita wealth, in energy terms, as follows.
Per capita (energy) wealth = ((K*EROEI)-ReinvE)/P
That is, the wealth per person, calibrated in energy units (which have correspondences to ‘goods’ and ‘services’), equals the energy flow into the capital apparatus times the energy return from that apparatus per unit of energy investment, minus the energy reinvested in the capital apparatus, divided by the total population.
The physical system is a cyclical, reiterative one, as follows. The population inputs energy into the capital apparatus, the apparatus returns (and distributes) the energy back into the population, the population ‘consumes’ the energy, building some of it into population and amenities, etc, and returns energy into the capital apparatus. And keep cranking.
Using a model such as this, one can imagine differing endowments in different polities — e.g. higher or lower current capital endowments, populations, EROEI results. Some interesting possible relationships are noted in the footnote.
Malthus’s famous views come to mind. If we were to adapt a Malthusian point of view, the K, or capital, factor was largely seen as land. The yield — the EROEI — of land had not shown great increases in centuries prior to Malthus, and nothing like ‘geometric’, or exponential, or repetitive doubling, would seem plausible at his time. So if one assumed that the total population would increase faster than did energy production from land, using historic forms of agricultural technology, people would live more poorly, or some of them would, or some would have to go — to be subtracted from the equation.
Let us now put in this formula the Industrial (or fossil fuel) Revolution. Suddenly (in historical terms) EROEI skyrockets — let us say up to 50 times the energy input. The population can expand (improving food supply in various energy-fed ways), the energy using apparati generally (goods and services) can expand, and the capital factor can increase. The cycle becomes wonderfully virtuous, and humanity bestrides the Earth beyond its agricultural dreams.
But now let us suppose there are limits to the extent the capital factor can increase, or the EROEI begins to decrease, or both. Depending on how one varies the critical factors of population size, capital stock, and EROEI, many scenarios can be produced, as noted before. But with capital limited or fixed, and no appreciable gains in EROEI, we could be headed back to the Malthus type of calculation.
Let us sketch a more optimistic scenario for a few centuries ahead.
Let us continue to assume that the EROEI on fossil fuels decreases, and/or fossil fuel capacity is capped in order to avoid overheating the whole human complex, with major losses of system function and human welfare.
But our specialists advise us that life on earth taps only a very small fraction of the solar energy impinging on earth, we also tap a small fraction of the wind energy available, and if we are clever, farsighted, and disciplined enough we might replace the fossil fuels, at levels comparable to or above current civilization energy levels, at EROEI ratios sufficient to maintain our population levels and our per capita welfare, and also feed back into the capacity machinery enough energy to keep that machinery, and the whole system, stable and growing.
If humanity is not to go on a severe diet at some point, this is clearly the situation which will have to be managed. We humans have a very big and tricky energy supply transition coming up, and there are many uncertainties involved in it.
We may not know just how rapidly the energy supply transition can occur.
Vaclav Smil counsels that we think in terms of a century or so, and has historical evidence to support his view. Vaclav Smil (2011), Global Energy: The Latest Infatuations, American Scientist.
Others suggest that the coming transition could be managed more rapidly. The current Administration in the United States is pursuing an aggressive program to facilitate adaptation of the electricity system to increased proportions of wind and solar electricity generation.
As of this writing, a 2016 projection of the Bloomberg New Energy Finance group projects that by 2027 renewable electrical energy sources will cost less than operation of fossil fuel plants, and by 2040 renewable technologies will improve their cost levels 40-60% and fossil fuel production will have shrunk to less than 50% of total electrical energy production worldwide. In the advanced economies of Europe and America, the fossil fuel shares will have shrunk to a third or less of total electrical energy supplies. And, as to transportation, electric vehicles would constitute about 35% of new vehicles sold.
We also may not know exactly what system wide EROEI levels are required to maintain the high levels of free energy densities prevalent in highly industrialized civilization. A currently circulating guess is 10/1.
We do not know how well the public in the industrialized areas will understand their situation, and have the patience and foresight to soldier through the required transitions.
Given these uncertainties, we still must attempt to project a path forward.
Let us trace out a scenario reflecting the possibility that we are at or near a difficult point in our energy base transition.
This scenario might be called a ‘valley of disappointment’ scenario. (That is the pessimistic part. The optimism is reflected in the projection that only a valley, not a cliff, looms before us.)
If and as we are now entering a situation in which the fossil fuel energy recovery rates are declining, and the renewable energy yields are increasing, but are currently only a bit above the base rate needed for advanced civilization , account only a small part of energy supply at this moment and need extensive energy-consuming complements to fill out the entire range of energy uses, we might predict that our societies could encounter the following situation.
●A slowdown in global, composite EROEI levels relative to historic fossil fuel boom era EROEI levels,
- and thus widespread, aggregate slowdowns in GDP, or GDP growth
- and related slowdowns in per person productivity gains,
- and thus slowdowns in consequent ‘standard of living’ gains.
●Even if the renewable energy sources were eventually to produce high and reliably increasing levels of energy flows in human societies, efficiently spread throughout our societies, we could see
- lags between investment in the renewable energy sources, and the related complexes which are required to make them broadly and efficiently usable, and their full effectiveness, and thus
- human societies enduring some decades of transiti
●All this leading to
- A lull in standard of living gains, if not a period of decline, and
- slow progress in improving them again. And, consequently,
● as these slowdowns occur, and a resumption of something like historic welfare gains seems remote, considerable dissatisfaction arising in populations which are accustomed to rapid gains in ‘welfare’, or standard of living.
Does this picture resemble what we now may be seeing in the ‘highly developed’, extremely entitled populations of America and Europe?
Were this overview accepted, the 2016 Bloomberg new energy investment scenario seems to suggest that by 2040 renewable EROEI would have increased by 40-60% and even transportation would be moving toward energy efficiency sufficient to service high energy human civilization. Such a rate of progress could make less onerous the ‘valley of disappointment’. We could at least better see our way to a more abundant future, perhaps even more abundant than our fossil fed recent past.
6. Implications For Financial Policy
In this sort of scenario would the roles of ‘finance’ differ from those now prescribed?
‘Policy makers’ may be unclear whether they may just assume that ‘fiscal’ stimuli will draw on an underused and available well of production and productivity-increasing opportunities on which to spend money tokens, or whether their justification rests solely on a judgment that they, better than the market, can discriminate between higher EROEI possibilities and less productive ones. However, they may be inclined to choose to funnel resources to long term thermodynamic gain as well as or better than an unguided or unassisted market. We have done well in the past by encouraging canals and railroads, for two examples.
As to monetary tools, on the face of it, a regime in which low interest rates prevailed would seem to accord with a relative scarcity of thermodynamically fruitful (in customary language highly productive) investment opportunities. That is, low interest rates would appropriately reflect generally low returns to investments.
If one expected that ‘natural forces’ — e.g. ‘innovations’ — would soon replenish the inventory of potentially rewarding opportunities, one might just hold steady and wait — perhaps a few years.
If on the other hand the ‘valley of disappointment’ construct more accurately depicts our situation, the ‘wait’ — the period of low returns on ‘capital’ generally — might go on for some decades. A great deal of adjustments in matters such as annuities, pensions, bond integrity — indeed, public and private finance generally — would be compelled.
Thus, there would seem to be a strong case for monetary policy functionaries and advisors to focus clearly on non equilibrium thermodynamics, EROEI oriented, analyses of economic phenomena. If this work is done thoroughly and well, the ‘valley of disappointment’ hypothesis may be confirmed in whole or substantial part, or disconfirmed. We may learn enough to get a better picture of workable paths through the transition before us.
If the more advanced economies are facing thermodynamic/economic constraints in the upcoming Great Energy Transition, whereas on the other hand less developed venues feel entitled to a great deal of economic catch-up, regardless of atmosphere heating results, we have a continuing difficulty in managing world climate protection and acceptable rates of welfare improvement in some large and ambitious countries.
The oil-laden Persian Gulf area is a continuing management problem. The deepest and most easily accessible pools of liquid hydrocarbons are in the hands of archaic political systems, some of whom — like Iran — have felt badly treated by the industrialized ‘West’. But USA Investment in an order-maintaining military presence in the Persian Gulf area most directly benefits India and China –the US only indirectly. This has not escaped the attention of one of the presidential contenders in the United States.
Diplomacy will be involved in finding ways to reconcile nativist-nationalist impulses in several European countries, and in the United States, with the economic and social advantages of global integration. The recent ‘Brexit’ act highlights the significance of this phenomenon.
Notwithstanding all the above, the hierarchy building imperative evident the hierarchical construction of order in the Universe explains at the most basic level currently available the tendency to global human integration evident in the last few centuries. This integration dynamic is fundamental.
But the equally underlying stochastic nature of the Universe counsels that nothing is guaranteed to we weird, extreme, socialized apes who seek to live like high technology, high energy, densely clustered ants, in a dynamic, promising, but perilous journey through life’s accumulated energy bounty into a new era of energy entrapment on Earth.
Thus the civilized effort to make light out of international heat, and workable coherence out of urgent parochialisms, has fundamental tasks before it in this era of change in the energy fundamentals. An understanding of the currents moving the ships of state, as well as steady hands on the helms, are needed.
How War lead to the advent of Market Economy
Evident throughout history is the belief that the bipolar divide of social reality has been between government and markets especially governments that wage war. Social reality is termed here in a sense to give an idea that how people place themselves in this context to either of the poles. That is to say that their political choice dictates their economic choices. Interestingly enough, the bipolar divide in its popular sense appears to be questionable. In fact, markets have appeared as a consequence of military adventurism led my governments.
David Graeber, an economic anthropologist at the London of School of Economics and Political Science aptly explores this historical anecdote in his book Debt: The First 5000 Years.In his account where he refers to the Axial age(600 to 800 B.C), a term coined by a German philosopher Karl Jaspers is a time period in which apparently all the major philosophical/religious movements came to the fore. What is most interesting is that it was the same period in which coinage was born. To keep things simple coinage was characterized by a set pattern of coins/currency being developed by local citizens and subsequently taken over by the government. This pattern followed in all the major regions such as Greece, China, and India. However, one thing of particular significance to this inquiry is that the first ever coins to be produced were in the Kingdom of Lydia which is the present-day Turkey.
Graeber argues that the Gold, Silver, and Bronze from which coins were made was initially only limited to the Kings and the nobility. That however started to change in an intriguing manner. Such precious valuables started circulating among the common masses which was how these coins were made. Here Graeber refers to David Schapsa professor of Classics: according to him, it was a period which he calls the ‘’generalized warfare’’. It is then of common sense to understand that in the aftermath and in the duration of war, loot and plunder is a consequential hazard. In such a circumstance it became inevitable that people were left with large amounts of precious metals. It is in this sense that Schaps argues:
‘’It may well have been the protracted wars among the states of these areas that first produced a large population of people with precious metal in their possession and a need for everyday necessities.’’
It is important to note here that at this point of time financial markets had virtually no relevance. It was only taken as war bounty initially but what’s fascinating to note is that it is in this very sense of material fulfillment that gave people both the want to diversify their economic life and as well the need to fullfil their basic necessities. Furthermore, in the context in which is discussed; war led to plunder and plunder led to the market trade based on exchange of valuable metals. Before dwelling deep into it, one should bear in mind that these metals and stones were not wholly looted for the fact of being simply precious but it had an added factor of being portable as well. As armies would mobilize according to situational needs, so their plunder would include such items which they can carry with them as well. Coming back to the central argument, Schaps further argues that:
The constant warfare of the archaic age of Greece, of the Janapadas of India, of the Warring States of China, was a powerful impetus for the development of market trade, and in particular for market trade based on the exchange of precious metal, usually in small amounts. If plunder brought precious metal into the hands of the soldiers, the market will have spread it through population.’’(Pg 226)
As mentioned earlier the term ‘’generalized warfare’’ which engulfed the major empires did something which had no historical precedent; that is to say, it laid the foundations of a market economy. This might not be as straight forward as it may sound. The very fact that governments, the kings had the monopoly over national wealth and also the fact that the war was not a new phenomenon known to humankind and so the subsequent loot that would take place, the essential dissimilarity of the Axial age from the past was that during the times when coinage was born, the Greeks were improvising their war mechanics and sophisticating it.
This led to the demand of their troops world-wide and as obvious as it is, essentially a service of such sort demanded reward as well. Therefore, it is necessary to understand that these mercenaries were paid in diminutive value of what consisted as large-scale valuables. This leads to another factor explained above which is ‘’portability’’ of these items or to use an appropriate word, ‘’renumeration.’’ Any other form of exchange or barter would made it plausibly impossible for these mercenaries to carry them.
Governments had vested interests to monopolize this changing reality. On the one hand, due to the capacity it had, governments were responsible for distributing the newly formed currency/coins to the masses and on the other hand, due to this very fact it could regulate the flow of this currency internally by giving it an official value. This provided an eminent premise to create markets with the authorization of government subsiding all the other currencies which might have existed in one form of the other. Usage of coins as renumeration is believed to be a practice which started in the Kingdom of Lydia. Exploring the politically important regions of that time, Graeber concludes that as a practice of the day it was largely coinage which proved to be a solution to the prevailing debt crisis which happened to exist way before the coinage. Athens in this regard is an example of it where a crisis of such sort prevailed in 594 B.C. Any solution to curb the crisis would entail either being in servitude to landed elites or being a part of free- peasantry which would liberate the populace of debt servicing so that so their children would spend time training for the army. All the major economic activity of the time was centered around the distribution of looted goods in war and conflicts which has been repeatedly mentioned to be precious metals and stones. In Athens, it was not only limited to the distribution among the army but also the common masses.
A catalyst to this chain reaction was the phenomenon of slavery as well. With reference to Alexander’s army, Graeber describes that he had a long-standing army of more than 120,000 men which needed to be paid and since his attack on Persia resulted in large number war captive slaves. He directed them to mining fields in order to mine more gold and silver. Resultantly causing to formulate the ‘’military-coinage-slavery complex. ’’However, slavery is not of particular relevance to this inquiry but it did play a vital role in shaping the politico-economic landscape of that time. Exploring further, Graeber discovers the pattern to be similar in India as well. Divided in different forms of governments in terms of regions, the kingdoms here too held huge armies which were on the payroll of governing authorities. Simply put, those having control of the mines were able to sustain armies of large magnitude which would result in a more powerful assault on the enemy in case of war and the resultant cycle of subsequent war bounty. Eventually, the concept of the economic thought evolved. What is understood in modern terms as the public and the private sector find its ancestral roots in Axial Age. Governments reinstated officials on a fixed salary. The institutionalization took place in terms of establishing its monopoly of power and control. What started off as a consequence of war was extended to the entire governance system to establish economic monetization. The cycle of economic activity was established by having trading houses, warehouses etc. The aim was to put back into the treasuries the metals, stones and silver. This was the basis of economic commercialization.
Pandemic Recovery: Follow the trail of silence
When common sense becomes the enemy of state; deep silence slowly slips and slides, covering high and low competence in order to survive; gagging new ideas and killing change. Discover hidden peaks of such fears, lack of skills and incompetency and follow the trail of silence and here to achieve a faster pandemic recovery engage in open discussions eliminating fears of change and encourage upskilling. Wake up the sleepy isolated Rip Van Winkle from the dreams as the world has already changed.
Now is post pandemic recovery time. Follow the silence and engage in constructive dialogue.
Trapped in post-pandemic paralysis of local economy facing restless citizenry; today, some 200 nations mostly in critical lack of digital transformation, without speed and efficiency to uplift the nation, all delayed for fears of change and lingering incompetency, already leaving some 100 high potential nation critically behind.
Digitization of Public and Private Bureaucracies of the world became critical necessity decade ago, almost free many years ago, but the deep silence never allowed any open bold debates on transformation for fear exposure of mismanagement risking job securities.
Today, stripped naked in public are broken economies of the world, buried under mountains of crumpled twisted paper, trying to figure out backlogs and deep losses. Nations without digitization will remain crumbled economies, businesses without digitization will not survive and individual office workers without advanced understanding on such topics may have no future. Any business model irrespective size, type, location to go forward must base on solid digitization to bounce of global stage.
When people stepped out of caves or from darkness into light, a time came when without electricity a business could not function. Digital transformations of world economies during the last decade were at a snail pace. Now Covid-19 simply stepped on that snail. Calling nations to digitize or linger on bankruptcies. Institutions lagging behind, like Chambers and Trade Associations in old models and Public Private Sectors of the world all now openly challenged.
Pandemic recovery needs massive real value creation, calls for revitalized national SME base, digitized on global standards, capable and upskilled citizenry to produce quality, performance and profitability. Ability to dance on global digital platforms and showcase talents creating collaborative synthesizim. Today, any absence of national mobilization of entrepreneurialism and upskilling of national SME on digital platforms for exportability is becoming number one national economic and political issue.
Trade wars mostly become issues when nations lack skilled citizenry with speed to earn exportability and create foreign exchange to boost economy and create grassroots prosperity….hence, chaos on the streets, towers of debts, broken economies. Today, the global masses are not waiting for The Fourth Industrial Revolution as what they need is ‘mental-industrialization’ a serious process of self-discovery gymnastics to liberate them from blockades of old mental-divides and enter into new digital-divides.
Daily Briefing 365 Days: Cold Facts and Harsh Realties
The world learned quickly, how national leadership could shine with daily LIVE briefings, regimented execution and presence with all hands on deck to tackle issues of national importance. The populace of the world is thrilled. Following are the current critical issues of national economy, craving for the national leadership to go LIVE daily and hold open and bold discussions with questions answers and shine. Make daily briefing a yearlong agenda to fast economic recovery.
The tectonic shifts, affecting nation by nation
Hastily, societies all over the world are losing addiction to endless consumption like repulsion; such shifts on buying behaviors will alter consumption based economic models and create new narratives. This may shrink Retail 50% in developed economies. Offices may shrink by 50% due to remote-work acceptance. Downtowns may shrink 50% in selected countries. The ‘cement-structure based retail’ as predicted decade ago will eventually give-in to ‘cyber-structured-retail’ now fully dressed up in cyber-windows with AI+AR+VR 24x7x365 a new thinking emerging.
What are the new game plans; how to bring all such calamities to calm and authoritative regional and global debates and Round-table discussions to achieve sustainable systematic solutions?
The global educational delivery system crashed decades ago; the value of education lost years ago, with heavy burden on society in times of crisis must try to save itself under new models, pricing and thinking. Now speed and execution skills with complex problem solving with entrepreneurial leadership flares are the top skill needed for future, national leaderships must create daily briefing on such special areas to uplift the smartness of working citizenry.
Where is the national umbrella to park all these conflicting ideas but open discussions with new discoveries?
The small and medium size business will play the most significant role on coming years. The national trade groups like vertical trade associations and Chambers of commerce of the world will all need new adjustments to deal with new and digitally advanced entrepreneurial centric world. Some 100,000-trade associations and 11,000 Chambers must come together on digital platforms to lead in the future.
How mobilization of all such institutions and trade bodies land on digital platforms with amazing results?
Metamorphosis of Coronavirus; hidden in the damage is a bright future, the isolation and break down of economies have shifted the cause and action; The global populace has now advanced, metamorphism has new craving; as if a caterpillar pretending asleep but in reality learning fast to fly; now leaves chrysalis, spread colorful wings and fly…
Firstly, speak, boldly explore and claim your path to victory and change; create big and small discussions, internal or companywide podcasts, local, national or global webcasts, but always bold and open discussions. After all, any lingering incompetency is only a proof of new grounds in big need of fertilization to uplift and upgrade knowledge. Lack of skills only represents that the discovery and exploration process of new skills never occurred. The world’s greatest people were all lifelong learners. They openly explored their own levels of competency, changed and advanced. The more you realize how little you know the more new doors you open to new ideas with amazing new information uplifting skills to advance your future, try it, share it. Follow the trail of silence and help achieve fastest economic recovery for all…
The rest is easy
The COVID-19 Pandemic and the “Phoenix” of the Globalized Technological Capitalist System?
In the midst of the COVID-19 pandemic, it is important to acknowledge that three prominent intellectual figures spanning the 19th and 20th centuries forecasted the cataclysm of modernity. Thomas Carlyle, René Guénon, and Jacques Ellul provided reasoned accounts to justify their views that modernity is engulfed in a state of crisis on the basis that the not-mutually-exclusive hegemonies of technology, capitalism, and globalization are not invulnerable.
While each offered a slightly different viewpoint and a slightly different description of what they took to be the crisis, their views all coalesce around the general thesis that the continuous expansion of the material and technological built landscapes will eventually prove to be catastrophic. This is for two reasons. The first, because an ever-more complex system becomes ripe for error, an error which could cause the whole system to go haywire. Essentially, “the bigger it is the harder it falls.” The second reason is that in constructing an external environment as its hegemonic priority, humanity is neglecting giving attention to spirituality, philosophy, and developing the human inward nature. The external and material becomes the fog that humanity becomes ensconced in to such an extent that pursuing such things as the ascertainment of spiritual reality through intuition, the project Plato inaugurated academia with and inspired Christianity and Islam’s later development with, becomes wrested away wholesale from the consciousness of humanity. The two factors work in a type of synergy in that they mutually reinforce one another and precipitate cataclysm. The renunciation of the pursuit of constructing an ever vaster and more complex material system, which ostensibly implies a turn toward the spiritual as a premise, is the only means to stave off ever-greater cataclysms as the material system continuously grows more complex and more globalized.
Since the Industrial Revolution of the 19th century, technology, capitalism, and globalization have exerted their unquestioned domination only increasingly—until COVID-19. Technology, capitalism, and globalization have been unquestioned to such an extent that in hindsight it is obvious, in the midst of the COVID-19 pandemic, that a global emergency of major proportions was necessary to even entertain the question that they were bound all along to eventually lead to a breakdown and inflict unprecedented harm to global health and the global economy. World War II was a destructive moment, but in no way did it impede the post-war expansions of technology, capitalism, and globalization in the latter-half of the 20th century and the first two decades of the 21st. The COVID-19 pandemic is dissimilar even to the catastrophe of World War II because of the magnitude and the nearly-universal geographic scope of the economic toll it has taken in such a short time. Moreover, while there was room for technology, globalization, and capitalism to both re-emerge and expand following World War II, their room for expansion from their forms immediately prior to the economic contraction COVID-19 exacted is likely to be minimal and is more likely to be non-existent or even negative. The contraction of the technological globalized capitalist system would inherently imply the beginning of a new post-globalization era.
What makes Carlyle, Guénon, and Ellul interesting to entertain in the midst of the COVID-19 pandemic is the grand, global, and “esoteric” natures of their philosophies of modern history. It should be noted that the dominance of scientific rationality, mechanization, and materialist economy in the modern era itself was the lens through which enabled their philosophies to bereceived as radical and “esoteric,” or not based on empirical, positivist, scientific evidence. If their views had found a way to usurp the hegemonic position in the popular collective consciousness, they would not have been seen as radical or off-base.
Thomas Carlyle’s Sartor Resartus is an 1836 fiction book that essentially inaugurated and epitomized modern social criticism toward the blind commitment to the Enlightenment and the resulting emergence of the non-spiritual materialistic basis of 19th century European politics, economy, and society. It was a chief inspiration for Ralph Waldo Emerson and Henry David Thoreau and a foundational book for American Transcendentalism as an intellectual movement in general. In Sartor Resartus, Carlyle offers a cryptic diagnosis of the ailment of modernity during the midst of its advent, the Victorian industrial age.
Speaking through the voice of the book’s protagonist, Professor Diogenes Teufelsdröckh, Carlyle theorizes of a “phoenix” that can be forecasted to take place roughly sometime in the 21st century. Carlyle writes, “we are at this hour in a most critical condition; beleaguered by that boundless ‘Armament of Mechanisers’ and Unbelievers, threatening to strip us bare! ‘The World,’ says [Teufelsdröckh], ‘as it needs must, is under a process of devastation and waste, which, whether by silent assiduous corrosion, or open quicker combustion, as the case chances, will effectually enough annihilate the past Forms of Society; replace them with what it may.’” This is flowery language that communicates Carlyle’s view that the world is destined to be consumed and destroyed as a function of the domination of those who uninterruptedly pursue the “boundless” construction of the material economy single-mindedly as their highest/only priority in conjunction with those who are non-spiritual, the “Unbelievers.” The “Armament of Mechanisers” and “Unbelievers” are synergistic and largely synonymous in that they are those who acknowledge only that which is material and perceptible by their senses.
To Carlyle, the “Armament of Mechanisers” and “Unbelievers,” by promoting the material economy, are inherently ignoring the spiritual realm, a realm that would be a moderator and reign in all-consuming materialism by embodying the virtue of renunciation (a virtue in nearly every theological and spiritual tradition). Humanity loses consciousness of the spiritual because modernity inherently divests the world of its spirit. Such a process is unsustainable because the finite nature of the world and its finite resources cannot sustain the pursuit of infinite material consumption and the increasing chaos that inherently manifests with a system that grows ever more complex. Thus, the materialist economy is bound to come into its full being, just like the mythic phoenix, before returning to ash and emerging in a different form. Carlyle reflects, “what time the Phoenix Death-Birth itself will require depends on unseen contingencies” and that it is a “handsome bargain would she engage to have [it] done ‘within two centuries.’”
René Guénon, a 20th century intellectual and metaphysician, offered what is perhaps the most sweeping and all-encompassing critique of the historical trajectory of Western civilization. He is also noteworthy in the contemporary sense as an inspiration for Steve Bannon, a chief political and policy adviser to President Donald Trump and a prominent promoter of traditionalist conservatism through such channels as Breitbart News Network. For Guénon, the West is in precipitous decline and he forecasted that it will reach a breaking point since the world is progressively displacing the realization of the quality of what he called the “Essence” of the transcendental realm (i.e. what lies beyond time and space and is perceived through the use of Platonic/spiritual intuition) with the realization of ever-greater quantity of the substance of what is material on Earth. Essentially, the progressive development of civilization corresponds to a cheapening of it and what he refers to as a “reign of quantity” rather than a reign of the quality of what can be nominally cast as the timeless Platonic Forms. Rather than conceiving of an ideal (i.e. a Platonic Form) through the use of intuition and then pursuing its realization in the Earthly material realm, everything modern defaults to gravitating around what Guénon takes to be the lowest-common-denominator, which is the measurement of everything by its quantitative rather than qualitative value. In other words, we are losing our ability to grasp and realize by intuition the ideal incarnation of all objects, concepts, and phenomena that are timeless and unchanging in the transcendent realm yet ephemeral in the material Earthly realm.
In The Crisis of the Modern World, published in 1927 shortly after World War I’s explicit embodiment of the rejection of the narrative of continual progress in modernity, Guénon reflects: “the belief in a never-ending ‘progress’, which until recently was held as a sort of inviolable and indisputable dogma, is no longer so widespread; there are those who perceive, though in a vague and confused manner , that the civilization of the West may not always go on developing in the same direction, but may some day reach a point where it will stop, or even be plunged in its entirety into some cataclysm.”
Guénon parallels Carlyle in Sartor Resartus in that he acknowledges the deeply problematic nature of cutting material existence on Earth off from any transcendent/spiritual/divine reality, a phenomenon which is only increasingly taking place in the context of modernity and not in previous ages. Devoid of any collective consciousness of transcendent reality that may prove effectual to moderating the continuous expansion of materialism and the “reign of quantity,” Guénon thinks modernity takes on a dimension antithetical to the transcendent and thus can be deemed “satanic” in the simplest nominal and non-theological use of the term. This narrative, Guénon maintains, explains the eventual dissolution of the modern world, as “the reign of quantity” will maximize the realization of quantity to its farthest limits, before triggering a cataclysmic contraction. According to Guénon in The Reign of Quantity and the Signs of the Times, the “rectification” of modernity “presupposes arrival at the point at which the ‘descent’ is completely accomplished, where ‘the wheel stops turning.’” Guénon concludes that until such a breaking point is attained, “it is impossible that these things should be understood by men in general…”
Jacques Ellul, who was perhaps the foremost philosopher-critic of technology in the 20th century (and a chief inspiration for the Unabomber), largely reincarnated without citation Carlyle’s original criticisms of modernity. Ellul felt that modernity was synonymous with one vast global technical civilization that was autonomous and not subject to human control since its overall historical development as a system and long-term consequences are not subject to human control.Ellul defines what he takes to be technical civilization in his magnum opus The Technological Society, published in 1954: “technical civilization means that our civilization is constructed by technique (makes a part of civilization only what belongs to technique), for technique (in that everything in this civilization must serve a technical end), and is exclusively technique (in that it excludes whatever is not technique or reduces it to technical form).”
Ellul made known his theory that the technical civilization will have to perfect itself and sustain its perfection, as the only other alternative to perfection is the commission of an error, either small or large, that has the ability to cause the vast and interconnected system to go haywire. Ellul declares, “the technical society must perfect the ‘man-machine’ complex or risk total collapse.” For Ellul, technical civilization is a “Behemoth” and it can “rest easy” as nothing “will prevent him from consuming mankind.” Such an elucidation of the stakes involved in creating an ever-more complex and gigantic globalized and technological system are deeply relevant to the narrative of how COVID-19 wreaked havoc on global health and the global economy so quickly and so easily. Air travel and other forms of transportation infrastructure were technological developments that had reached a zenith at the time of the onset of the pandemic as a function of globalized capitalism also being at a zenith. The totality of the network of global transportation infrastructure manifested by technical civilization’s progressive global development since the Industrial Revolution was compounded by the growth in the levels of global travel on the part of the largest global population in history at the time of COVID-19’s onset.
Ellul denounces liberal political economy for providing the favorable climate necessary for the unquestioned manifestation of technical civilization and refutes prospective critics who would maintain that liberal economy and technical civilization are compatible for the long-term:
“It will doubtless be pointed out, by way of refutation, that production techniques were developed during the ascendancy of liberalism, which furnished a favorable climate for their development and understood perfectly how to use them. But this is no counterargument. The simple fact is that liberalism permitted the development of its executioner, exactly as in a healthy tissue a constituent cell may proliferate and give rise to a fatal cancer. The healthy body represented the necessary condition for the cancer. But there was no contradiction between the two. The same relation holds between technique and economic liberalism.”
Just as Carlyle documented what he took to be the crisis of modernity at its advent during the initial industrialism of 19th century Victorian England, Guénon documented in the context of retrospectively accounting for the catastrophes of both World Wars I and II, and Ellul documented in the context of the post-World War II exponential growth of technology, the COVID-19 pandemic provides another milestone with which to, at a minimum, revisit their mutually compatible theses with respect to the cataclysm of modernity. Whether COVID-19 proves to be the “big one” and arrests the hegemonic triumvirate of technology, capitalism, and globalization remains to be seen. At a minimum, what can be gleaned from Carlyle, Guénon, and Ellul is that modernity’s improvement of the material standard of living for so many globally needs to be balanced with a view toward moderation and long-term sustainability. Liberal political economy, science, and technological innovation have until now been single-minded seekers of continuous growth without acknowledging the need to at some point ossify or plateau the technical civilization they have each been instrumental in constructing so that it does not become a phoenix and burn to ash.
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