Just listened to Douglas Rushkoffs second radio show over on the Media Squad. If you are interested in the crisis, especially the latter half is interesting. They quoted some numbers that I have so far not verified, but that may well prove correct. For example there are forecasts that by the end of 2010 retail spending in the US will be cut by half. 50 percent of spending will go away in a country whose GDP is made up of consumer activity by 70 percent!
Now, I am not sure whether consumer activity is equal to retail spending, but if it is that could potentially mean that 35 percent of american GDP could go away by the end of 2010. Think about that for a second. The economy would contract by 35 percent. Think about the loss in taxes, think about the amount of people losing their jobs, people that are one or two salary cheques away from total financial meltdown.
Should this happen, there will be some changes – on a massive scale. Basically you have two choices: You can put maybe 30 percent of the workforce on the street and have them start rioting or you can get into socialism. If choice one weren’t scary enough by itself, think about the enormous amount of young men coming back from the wars overseas, coming back to nothing, no perspective and then think about their primary skill set: making war. I leave the rest to you.
Both of these innovations—corporate charters and centralized currency—tend towards resource exploitation rather than innovation. They are extractive in nature, not productive. And, more importantly, these particular innovations cause wealth to end up being generated through speculation rather than creation. They cause scarcity, not abundance. Over time, it becomes easier to make money by having money than by doing anything. And this was the pure, stated intent of centralized currency and banking in the early Renaissance: to keep the wealthy wealthy, in the face of a rising merchant class.
This isn’t some extremist perspective. It’s just historical fact, though largely forgotten and seemingly refuted by our collective false memory of the Renaissance’s greatness. If you’re interested in finding out more about this, or seeing the evidence on which my research is based, take a look at the best historians writing about the era: Fernand Braudel (The Wheels of Commerce: Civilization and Capitalism: 15th-18th Century, Volume 2, Univ. of California Press, 1992), Carlo M. Cipolla (Before the Industrial Revolution: European Society and Economy, 1000-1700, WW Norton, 1994) or Bernard A. Lietaer, whose book On Human Wealth used to be available for free download off his site, but doesn’t seem to be anymore. In these books, you can find out about the sustainable local economic systems of the Late Middle Ages, learn that the Black Plague actually began after mandated centralized currency had impoverished Europe, and find support of my contention that cathedrals were built with local money before the Renaissance, not Vatican money during the Renaissance.