The State of Our World

I feel compelled to write this post because we are at an unprecedented time in human history, and, though it has been said before, capitalism is on the brink.  The capitulation of Syriza was unfortunate, but the distance that it went and the resolve of the people to say "we will take a lesser life if we are independent" is just the beginning of the new age of revolution.  I want to talk about what has us on the brink, which in my view are two interrelated but very specific things.

Debt
Most of the world's economy operates under conditions of debt.  In the U.S., the Federal Reserve Board, a quasi-private institution, buys debt from the U.S. Treasury and lends new money based on this debt to private banks.  The Fed, as it is known, has been lending this money to banks for virtually free since the recession of 2008.  This has encouraged banks to lend, putting more money into the economy.  If the Fed did not do this, which is to essentially print money backed by debt as an asset, the global economy would spin into deflation (a situation of low prices and scarcity of money), caused by the refusal of banks to lend.  It must also be noted that banks lend on the basis of fractionary reserve lending, which essentially means that they can lend more than they hold on account.  If a bank has ten dollars, it can lend as much as $100.  More money created as debt.

This system spins like a top until those who are indebted (non-core countries or cities, individuals) quit paying their bills.  This is what happened in the 2008 crisis - all the value that had been artificially created through derivative trading based largely on the housing market was destroyed when folks stopped paying their mortgages.  However, nothing has essentially changed in the derivative market, which is valued at almost $600 trillion dollars.  To put that in perspective, the GLOBAL GDP is approximately $74 trillion dollars.   That means that the derivative market, based almost exclusively on debt, is valued at 9 times the global economic output!

Enter Syriza.  Syriza, faced with mountains of debt that it did not create, was on the brink of telling the European banks "screw you, we will build our own economy."  This significance of this was that Greece, Syriza, and especially the people of Greece were read to essentially say that they don't care about foreign direct investment, the banks, or the credit rating of their country.  They would have to go it alone.  Greek banks would have to print money to keep the economy going which would lead to rampant inflation, think Zimbabwe.  What it means is that the Greek people were ready to say no to tutelage to international banks and to build their own economy.  If this had happened, and other indebted, non-core countries had followed suit (and there are many) the $600+ trillion in debt, which folks had stopped repaying, would have to be written down.  Banks would stop lending and there would be a worldwide depression that would probably make the Great Depression look like a walk in the park.  (In case you think this doesn't connect to Birmingham, global banks walked away with $5 billion dollars in the sewer deal and now Jefferson County basically has water austerity.)

With no real writing down of global debt, the Fed's measures over the last 7 years have basically just slo-mo'd the meltdown.  Nothing has changed and capitalism's contradictions are as dangerous as ever.  It is not a matter of if this debt must be written down; it is a matter of when.

Life
The other major looming crisis at this stage of capitalism is the complete undermining of life on Earth.  Part of the turn to debt-based money from commodity-based money is that capitalism is growing past the ability to legitimately value natural resources.  Global capitalism as so destroyed the natural resource base that there is literally a crisis in every sector of nature: agriculture, water, timber, precious metals, fossil fuels, and so on.  We are literally running out of shit.  This is not primarily because there is not enough stuff on the planet; it is primarily due to lifestyles of core countries, which are fundamentally unsustainable.  Make no mistake - what humans have done technologically is nothing short of amazing.  It has not be available to all, but shooting someone to the moon is an impressive feat.

Combined with the impending collapse of the global financial system and the increasing scarcity of resources, the planet is in for a very significant lifestyle change, especially in the Global North.  We have to create a new economy and a new style of life that is adapted to the precarious situation that we find ourselves in.  That work must be done now, not tomorrow, not next week, not next year.  Now.

I will end with this.  Value in the capitalist system, at this point in history, is based on keeping countries, cities, and individuals indebted, which will wed them to the global capitalist economy.  This indebtedness in turns leads to the over-exploitation of natural resources to pay those debts.  The banks profit and everyone else is their peon.  We have to start being independent and do for ourselves.