Indebtedness & the Industrial RevolutionPosted: February 13, 2008
Despite the fact that anyone with any sense knows that deficit spending and continual indebtedness are excellent tools with which to destroy one’s own finances, they are indispensable parts of a government’s economic toolkit. Why, I don’t know. Maybe because groups of people are stupider than individuals, and most individuals aren’t that smart – so a really big group is bound to be really dumb.
But any time a “developing” country decides to undertake a program of industrialization and “being like America,” they begin by borrowing incredible amounts of money that they are then incapable of paying back, because the programs never quite succeed. And here in America, we have such a massive amount of national debt that every person – not every taxpayer, or every adult, but everyone – owes $30,000 of it. (Current figures available here.) And, of course, most people have their own debts as well – because our economy runs on consumption, and perpetual consumption requires that lots of people buy lots of things they neither need nor really want, and which they have to borrow money to buy.
I don’t know where or when this all started, but I have a feeling that the world’s current debt-binge is a result of the Industrial Revolution and the creation of a large class of people with disposable income. And I also think that, certainly in the West, we’ve been running things on the same line of credit since the beginning, not having learned the lesson of the Great Depression; that is, part of the history of the last two hundred or so years is one long bender of borrowing and consuming and borrowing some more.
And it’s not just economic: we’ve been using up natural resources and filling our environments (or other people’s environments) with the waste like the world was about to end. Even recent advances in “green” technologies and products are still based on a cradle-to-grave model. A CFL is far more efficient than an incandescent, but it still gets thrown away when it burns out. Ditto for rechargeable batteries and hybrid cars. I’m not saying that we shouldn’t use them; we should. But they’re only temporary solutions – our industries and economies need to be rebuilt on a cradle-to-cradle model.
But getting out of debt requires not only serious discipline and lots of hard work, it requires that you stop borrowing. Because i tend towards cynical pessimism, I think we’ll continue to borrow against the future (both financially and ecologically) with our eyes tightly shut, until our credit runs out and payment in full is demanded. That doesn’t mean that I’ve given in to despair; on the contrary, I’m going to do my damnedest to turn things around. If all I can do is carve out a chunk of land where my children and grandchildren can live self-sufficiently, then, well, at least they’ll be able to weather the Fall of the West and the next Dark Age.