When I took intro economics—which, in hindsight, was akin to a Hitler youth rally—they showed us supply and demand curves. If there was less of something, the prices would go up. This is one of the times the otherwise stopped clock of economics is right.
What we have today is global 'supply' of resources running out, and the corresponding increase in prices. Inflation is not a monetary phenomenon, nor is it momentary. It is the planetary bubble that has been inflating ever since colonialism, and which is now about to burst.
Eat The Poor
The political solution to this problem of late capitalism has been simply pricing out masses of poor people so the rich can keep the charade going a little longer. For example, in my country the IMF 'solved' a debt-crisis (they helped cause) by simply kicking nearly a million people off the electricity rolls, with hundreds of thousands increasingly unable to afford water. Our unelected comprador government put on a Christmas light show while an entire generation has neither energy in their house nor energy in their stomachs. Problem solved!
This whole approach, which is globally applied under the Imperial Monetary Fund, is akin to locking people in steerage on the Titanic as it goes down. The point is not even to get to the lifeboats, what lifeboats? The point is to enable the 'business class' passengers to have this last dinner and cigars without being disturbed by the poors. Oligarchies masquerading as 'liberal democracies' are doing this all over, increasingly doing away with the facade of elected governments entirely (Pakistan, Peru, the UK). The global rentier class of usurers (now called 'investors') must be continually bailed out while the working-class and poor must be waterboarded, over and over. This is how the Titanic goes down—with the lights on and the band playing—with nobody even thinking about lifeboats, and killing women and children first.
The punishment is inflicted not by ration cards, which would mean the government was actually trying, but by pricing, which means the market is just saying 'eat the poor'. This is why the famine horseman of the apocalypse carries scales. It's not that food is unavailable at the end. It's that it's unaffordable. Supply and demand motherfuckers!
The Limits Of Growth
If you scorn the gods (gods help you), the apocalypse has been predicted in more scientific terms (you heathens). In 1972, the Club of Rome published the Limits Of Growth, which ran what was then a giant computer program to model all the ways our goose was cooked. Only one model (what I call global climate communism) had humans civilization surviving in any recognizable form. And only if we started essentially totalitarian measures immediately, which we didn't, so it's simply too little too late now.
We have instead followed (generally) what R Club '72 called the 'standard model'. This is 'business as usual', full steam ahead, damn the icebergs. Even though they didn't specifically date their predictions (and advised against this), the predictions have been remarkably accurate. Here's their timeline with dates added, for a sense of 'where' we are:
As you can see, we are right at the point where resources are plummeting, food supply is dwindling, pollution is rising, and the massive deaths are about to start. Indeed, they have already started, but who's counting Palestinians or Africans, or the declining life expectancy of Americans? All imperial planners noticed was their stock portfolios going down, so they just gave the rich more money (that's all money printing is!) so they could pretend a little longer. But now we simply have more money changing even more scarce resource, ie the precise recipe for inflation. Which I assume you've noticed. I have.
Right now, Sri Lanka—which actually has a better debt situation than America—has to face the full force of the market. We're re-colonized and 'have to live within our means' because nobody gives a fuck about our money printer. What's good for the goose is of course not good for the goose farmer, because our overlords in America are just goosing their economy with more 'printed' money than ever to avoid the inevitable. But they're in the same fundamental situation, just with better drugs! All of its colonies—including previously favored Europe and the UK—are feeling the pain, and America can only numb it for so long. Deindustrializing and rising food prices are spreading across the rapidly undeveloping world, just as predicted by R Club '72. We are now at the crunch. I would say get your popcorn, were it not hideously expensive.
As a personal example, in Sri Lanka, my family (of three) have most of our meals at our in-laws, but our grocery bill is still easily LKR 100,000 a month, or $320. Now bear in mind that this was the average household income in Colombo (last I checked). We're just buying biscuits and cleaning products and not even enough for three meals a day. We have some investment (ie, free money) income, but working people are completely screwed.
Working-class people are eating proper protein maybe once a week, and rationing eggs to the smallest children. This is portrayed as some necessary (human) sacrifice to return to 'normal' but there is no normal to return to! This is just the famine horseman of the apocalypse, already upon us. As William Gibson said, the future is here, it's just not evenly distributed. Given the distribution pattern of Capitalism, it falls on the poor first, and on their children. Capital is really an artificial predator that is now thinning the herd.
This egg thing is a problem all over the world because global resources are collapsing, chief among them oil and fossil fuels. Never mind the pollution which kills us in a few decades, the drying up of economical fossil fuel reserves is killing us now. Note the 'economical' because—like the famine horseman holding scales—it's not that oil has to entirely 'run out', it's just that at some point it will cost more to get the oil out than it's worth. Indeed, in many situations we're at that point and just missing the point because of subsidies. Again, more fake money chasing real resources. This is akin to staying awake by doing more cocaine. It works… but at some point it really doesn't.
The Geography Behind The Graphs
Reduced resource supply—especially energy—is the 'invisible hand' that actually drives inflation. Independent central banker wankers, however, are some weird priesthood which likes to be isolated from both democracy and the environment in general. These Central Wankers are furiously masturbating monetary policy, trying to avoid the inevitable a little bit longer.
The physical fact is that economists scrupulously ignore is that all of their graphs and charts exist inside an ecosystem and that 'supply' is not inexhaustible (and landfills are not infinite). To illustrate this point, I give you an illustration that Herman Daly was working on before he left the accursed and apostate World Bank:
Daly's assistants brought him this diagram, showing the standard firms/households model of the economy. Resources go in, products come out, GDP goes up, forever (a perpetual motion machine!). As Dr. Tom Murphy tells the story [via my article]:
Dr. Daly said: “great, now draw a box around this and label it: The Environment.” The obvious point is that all economic activity takes place inside the environment. The next draft came back sporting a box drawn around the figure, but no label. Dr. Daly’s response: “It looks nice, but unless the box is labeled The Environment, it’s only a decorative frame.” The next draft eliminated the figure altogether.
This sums up the economic response to even the idea that it's contained within an ecosystem. “Um, no.” This is why I call economics a pseudoscience. Physics has to connect to math and chemistry to physics, but economics is just like 'fuck it, we're special.' What vulgar economics cannot understand is anything outside of economics. Economics cannot understand us running out of oil or air or 'supplies' in general because it has no connection to other sciences (re: physics, math) or to reality in general.
As Daly said, “Prices measure relative scarcity and guide us in keeping everything in the right proportion relative to everything else — but there is no recognition of any absolute scarcity limiting the scale of the macroeconomy.” Economists are lost in the model, and losing the world. What does this profit a man? A lot, apparently, until it doesn't. The great golden bull of 'the economy' is always imagined as a closed system, and inflation as a monetary phenomenon with no connection to the greater world. There is only artificial scarcity in economics, not natural scarcity because economics has no concept of the natural world. And so we lose it all.
Oh, The Humanity
Believing that the entire world revolves around human needs is like believing that the sun goes around the Earth. Like the heliocentric model, this thinking weirdly works, for a bit. A simplistic but wrong model is actually fine for 'doing stuff'… until it isn't. We could actually act like there were no natural 'supply' limits, until we ran into them. Now we're still acting, but it's a painful pantomime.
Like playing any resource-based video game (re: Sim City 3000), we were able to max out on everything for a while and 'do well', but this inevitably crashes once the resource limits are reached. In the short-term, however, you outperform anybody behaving conservatively, because you're not thinking of the long-term at all. If you're a corporation algorithmically encoded to think in terms of quarters and limited liability, why wouldn't you? What's lost? Corporations don't have a concept of the world (as we know it) at all.
It's like the computer program which was commanded to move, and discovered that it was faster to build tall blocks and have them just crash, over and over. This is a pretty good description of capitalism, with its constant booms and busts. Keeps moving forward, doesn't it? Thus we get to the end of Sim City 3000, having blown all our resources on dumb shit with no plan for the future besides 'figure it out'. This is what the algorithms we call incorporations have done with the real world, and there's no do-overs.
While early colonial corporations ravaged parts of the world (there's no pearls left in Sri Lanka, for example) the idea of ravaging the entire world seemed impossible (it's so big). But this fundamentally misunderstands exponential growth, which can overflow a chessboard with 12,000 worlds of rice, starting from just one on the first square. By the first row there's only a handful so you don't notice it creeping up on you, but—before you know it—it's there. As Daly said, “As long as the human economy was infinitesimal relative to the natural world, then sources and sinks could be considered infinite, and therefore not scarce.”
But we're not there any longer, are we? Now, 400 years into the video game called 'progress', we are actually running out of resources (and running into pollution) and that is driving prices up. And prices will continue going up, driving more and more people out of not just the 'middle-class' but out of the class of living beings entirely. This will kill us, in the millions, if not billions. People will die in great numbers and the only 'economic' response to this seems to be 'women, children and the poor first'. Not to the lifeboats, but to the hearse. Inflation is just a symptom of the fatal cancer that is infinite growth.
What we call 'inflation' is just the inflation of a giant bubble that actually popped with the South Sea Bubble in 1710, but which has been reinflated to climate-popping proportions. Prices will continue going up and up in this system because supply will keep going down. Plants are not making more fossil fuels (at anywhere near the rate we need), which means we cannot keep goosing our zombie soil with nitrogen (which we need to feed), and of course none of the resources exists to satisfy our greed incarnate in corporate form, which must double every generation or explode in rage.
Raising The Dead Via Interest Rates
These ghouls will continue 'raising interest rates' (ie, give the rich rentier class more money) as if this can raise the dead. All they're doing is looting a little bit more and building their bunkers before the inevitable end. That's all inflation is, a sign of end times, a phenomenon which is not actually transient, but which has been baked in from the beginning. A 'good' amount of inflation is considered to 2-3%, which is doubling every generation! This is what an average of 3.24% inflation looks like in the United States over just 100 years.
Via Inflation Data
The fact is that more money has been chasing more scarce resources for centuries, not just since COVID-19 or whatever the latest shock is. This is simply the mathematical nature of infinite growth on a finite planet. It's not physically to double everything we measure every generation. This inevitably degenerates the planet, as we are physically seeing today. Supply is limited by the actual supply of things in the world, not the imagination of human beings. WTF were we thinking. I think, therefore the economy am? What a sham. Economics is just the mass psychological delusion in perpetual motion. As Earl Cook said in 1982, when I was born:
Abandonment of belief in perpetual motion was a major step toward recognition of the true human condition. It is significant that “mainstream” economists never abandoned that belief and do not accept the relevance to the economic process of the Second Law of Thermodynamics; their position as high priests of the market economy would become untenable did they do so.
The position of economists to this day is that all reality can be contained within the Cartesian plane, and endlessly manipulated using monetary spells (ie, witchcraft). Well, that plane is crashing, and you might have noticed because dinner service is only available in the literal Business Class, while children are screaming of starvation in the back. That is the phenomenon of inflation, the old horseman with scales. It's too late for averting this collapse for billions of people (women and children first!), but one can at least remove the scales from one's eyes for what it's worth. It's worth nothing by the way. It's like waking up inside a hearse. Perhaps it's better to sleep, perchance to dream. Even if you understand what inflation is, the bubble has already burst.
Author
My name is Indrajit Samarajiva and I'm a writer. People also call me Indi or Jit. I was born in Canada, raised in America, and live in Nugegoda, Sri Lanka.
