Malthusian Catastrophe.

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As long as wealth is growing exponentially, it does not matter that some of the surplus labor is skimmed. If the production of the laborers is growing x% and their wealth grows y% – even if y% < x%, and the wealth of the capital grows faster, z%, with z% > x% – everybody is happy. The workers minimally increased their wealth, even if their productivity has increased tremendously. Nearly all increased labor production has been confiscated by the capital, exorbitant bonuses of bank managers are an example. (Managers, by the way, by definition, do not ’produce’ anything, but only help skim the production of others; it is ‘work’, but not ‘production’. As long as the skimming [money in] is larger than the cost of their work [money out], they will be hired by the capital. For instance, if they can move the workers into producing more for equal pay. If not, out they go).

If the economy is growing at a steady pace (x%), resulting in an exponential growth (1+x/100)n, effectively today’s life can be paid with (promises of) tomorrow’s earnings, ‘borrowing from the future’. (At a shrinking economy, the opposite occurs, paying tomorrow’s life with today’s earnings; having nothing to live on today).

Let’s put that in an equation. The economy of today Ei is defined in terms of growth of economy itself, the difference between today’s economy and tomorrow’s economy, Ei+1 − Ei,

Ei = α(Ei+1 − Ei) —– (1)

with α related to the growth rate, GR ≡ (Ei+1 − Ei)/Ei = 1/α. In a time-differential equation:

E(t) = αdE(t)/dt —– (2)

which has as solution

E(t) = E0e1/α —– (3)

exponential growth.

The problem is that eternal growth of x% is not possible. Our entire society depends on a

continuous growth; it is the fiber of our system. When it stops, everything collapses, if the derivative dE(t)/dt becomes negative, economy itself becomes negative and we start destroying things (E < 0) instead of producing things. If the growth gets relatively smaller, E itself gets smaller, assuming steady borrowing-from-tomorrow factor α (second equation above). But that is a contradiction; if E gets smaller, the derivative must be negative. The only consistent observation is that if E shrinks, E becomes immediately negative! This is what is called a Malthusian Catastrophe.

Now we seem to saturate with our production, we no longer have x% growth, but it is closer to 0. The capital, however, has inertia (viz. The continuing culture in the financial world of huge bonuses, often justified as “well, that is the market. What can we do?!”). The capital continues to increase their skimming of the surplus labor with the same z%. The laborers, therefore, now have a decrease of wealth close to z%. (Note that the capital cannot have a decline, a negative z%, because it would refuse to do something if that something does not make profit).

Many things that we took for granted before, free health care for all, early pension, free education, cheap or free transport (no road tolls, etc.) are more and more under discussion, with an argument that they are “becoming unaffordable”. This label is utter nonsense, when you think of it, since

1) Before, apparently, they were affordable.

2) We have increased productivity of our workers.

1 + 2 = 3) Things are becoming more and more affordable. Unless, they are becoming unaffordable for some (the workers) and not for others (the capitalists).

It might well be that soon we discover that living is unaffordable. The new money M’ in Marx’s equation is used as a starting point in new cycle M → M’. The eternal cycle causes condensation of wealth to the capital, away from the labor power. M keeps growing and growing. Anything that does not accumulate capital, M’ – M < 0, goes bankrupt. Anything that does not grow fast enough, M’ – M ≈ 0, is bought by something that does, reconfigured to have M’ – M large again. Note that these reconfigurations – optimizations of skimming (the laborers never profit form the reconfigurations, they are rather being sacked as a result of them) – are presented by the media as something good, where words as ‘increased synergy’ are used to defend mergers, etc. It alludes to the sponsors of the messages coming to us. Next time you read the word ‘synergy’ in these communications, just replace it with ‘fleecing’.

The capital actually ‘refuses’ to do something if it does not make profit. If M’ is not bigger than M in a step, the step would simply not be done, implying also no Labour Power used and no payment for Labour Power. Ignoring for the moment philanthropists, in capitalistic Utopia capital cannot but grow. If economy is not growing it is therefore always at the cost of labor! Humans, namely, do not have this option of not doing things, because “better to get 99 paise while living costs 1 rupee, i.e., ‘loss’, than get no paisa at all [while living still costs one rupee (haha, excuse me the folly of quixotic living!]”. Death by slow starvation is chosen before rapid death.

In an exponential growing system, everything is OK; Capital grows and reward on labor as well. When the economy stagnates only the labor power (humans) pays the price. It reaches a point of revolution, when the skimming of Labour Power is so big, that this Labour Power (humans) cannot keep itself alive. Famous is the situation of Marie-Antoinette (representing the capital), wife of King Louis XVI of France, who responded to the outcry of the public (Labour Power) who demanded bread (sic!) by saying “They do not have bread? Let them eat cake!” A revolution of the labor power is unavoidable in a capitalist system when it reaches saturation, because the unavoidable increment of the capital is paid by the reduction of wealth of the labor power. That is a mathematical certainty.

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2 thoughts on “Malthusian Catastrophe.

  1. While the Industrial Revolution vindicated critics of Malthus, and essentially eliminated him from economic/political thought (though he remained very important to biologists and ecologists) until population growth became exponential in less developed countries, more recently environmentalists and environmental economists have used Malthus to show the early philosophical criticism of ever expanding population growth. While this may be true at certain junctures, more than predicting a global catastrophe, most neo-Malthusians stress the local character of the relationship between population pressure, natural resource scarcity, and conflict as well as its dependency on the socio-political and economic context. This softened version of Malthusian thesis has received little empirical support in cross-country studies. And thats where the thesis fails springing up revolutions and causes for it as a trade off.

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