positivenegative

lost and safe

The Story of the People

“As the economic meltdown proceeds to its next phase, we begin to see the unreality of much that we thought real. The verities of two generations become uncertain, and despite a lingering hope that a return to normalcy is just around the corner — in “the third quarter of 2009” or “by the middle of 2010” — the realization is dawning that normal isn’t coming back…

When faced with an abrupt shift in personal reality, whether the death of a loved one, or the Gestapo coming into town, human beings usually react first with denial…I was not surprised, then, that our nation’s political and corporate leaders spent a long time denying that a crisis was underway. Consider some quotes from 2007: “The country’s economic fundamentals are sound,” said George W. Bush. “I don’t see subprime mortgage market troubles imposing a serious problem. I think it’s going to be largely contained,” said Treasury Secretary Paulson. “A recession is unlikely.” “We are experiencing a correction in the housing sector.” “America is not in recession.” “It is likely that housing prices won’t recover until early 2009.”

Of course, many of these pronouncements were insincere, efforts at perception management. The authorities hoped that by controlling the public perception of reality, they could control reality itself; that by the manipulation of symbols they could manipulate the reality they represent. This, in essence, is what anthropologists call “magico-religious thinking.” It is not without reason that our financial elites have been called a priesthood. Donning ceremonial garb, speaking an arcane language, wielding mysterious inscriptions, they can with a mere word, or a mere stroke of a pen, cause fortunes and nations to rise and fall.

You see, magico-religious thinking normally works. Whether it is a shamanic rite, the signing of an appropriations bill, or the posting of an account balance, when a ritual is embedded in a story that people believe, they act accordingly, playing out the roles the story assigns to them, and responding to the reality the story establishes. In former times, when a shamanic rite was seen to have failed, everyone knew this was a momentous event, signaling the End of the World, a shift in what was real and what was not, the end of the old Story of the People and the beginning, perhaps, of a new one. What, from this perspective, is the significance of the accelerating failure of the rites of finance?

[…]

When money evaporates as it is doing in the current cycle of debt deflation, little changes right away in the physical world. Stacks of currency do not go up in flames (but even if they did, that is not too momentous a physical event). Factories do not blow up, engines do not grind to a halt, oil wells do not dry up, people’s economic skills do not disappear. All of the materials and skills that are exchanged in human economy, upon which we rely for food, shelter, transportation, entertainment, and so on, still exist as before. What has disappeared is our capacity to coordinate our activities and focus our common efforts. We can still envision a new airport, but we can no longer build it. The magic talisman by which the pronouncement, “An airport shall be built here” crystallizes into material reality has lost its power. Human hands, minds, and machinery retain all their capacities, yet we can no longer do what we once could do. The only thing that has changed is our perceptions.

[…]

As it dawns on our leaders that we are not experiencing a mere “retrenchment,” “correction,” or “recession,” but are at the brink of a full-fledged deflationary depression, they are now beginning to act accordingly. When debts become unpayable, one can either reduce or eliminate the debt entirely, or one can try to increase the income of the debtor so that he can continue to make payments. The holders of wealth, whose interests determine government policy, would obviously prefer the latter, since a reduction in your debt is a reduction in their wealth. Consequently, the first response of the Obama administration to the deflationary crisis is economic stimulus. It will be more reluctant to adopt the second option, although we are beginning to hear calls for bank nationalizations, debt writedowns, and debt forgiveness now as well.

Both responses have as their ultimate goal the reigniting of economic growth, something nearly everyone agrees on. Here we enter into a second, deeper, story of money. I believe that even the most radical measures proposed today can have at best only a temporary effect: if they instigate economic growth it will be anemic and short-lived. That is because economic growth as we define it today, and money as we define it today, is part of a Story of the People that too is becoming obsolete. Reflecting this obsolescence, the true nature of the crisis will become apparent as each progressively more radical solution fails to restore the status quo. What we are facing today is not merely a Minskian bubble collapse, nor merely, even a deflationary unwinding of credit: it is nothing less than a Marxian “historical crisis of capital,” resurging now at a time when all the measures that have kept it at bay for two centuries have finally been exhausted.

The Marxian crisis is deeply related to the depletion of social, cultural, natural, and spiritual capital…”

[Money and the Turning of the Age]


Yet another well written piece by Charles Eisenstein over at Reality Sandwich delineating the current disintegration of human capital and true wealth under the current worldwide Operating System.

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