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Is continuation of the middle classes possible? - Moneyweek
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kenneal - lagger
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PostPosted: Thu Oct 29, 2015 5:50 pm    Post subject: Is continuation of the middle classes possible? - Moneyweek Reply with quote

Moneyweek have a newsletter called Capital & Conflict and earlier this week the editor asked "if democracy was compatible with the age of automation. That is, is the coming technological singularity going to put billions of people out of meaningful work and thus erode both the economic and social foundation of civilised society and if a middle class could continue to be supported?" I replied as follows, not expecting it to be read let alone published -

Quote:
Dear Daniel

What has supported the advent of an extensive middle class is cheap energy. While we have cheap energy a relatively small number of workers in the manufacturing and energy production, the capital-increasing sector can support a large number of people doing things that don't directly support the increase of capital goods. Cheap energy has enabled an increasingly small number of people to extract fossil energy and to manufacture and build the capital items that actually increase and underpin our wealth. The middle classes and the whole financial sector are parasites on the back of the capita-increasing, energy extraction and manufacturing sectors.

As cheap energy becomes scarcer, the ability to support a large number of non-productive people is reduced. As the Energy Return on Energy Invested, the EROEI, of fuels reduces there is less spare energy to support things other than the finding and extraction of our fuels, the growing, distribution and cooking of our food, the housing of people. Anything other than these things is, in reality, an added bonus in our lives which has only been enabled as we have developed the use of fossil fuels and the massive energy injection that we have gained from these.

Making money from money doesn't increase capital; it increases the size of a bubble as the extra money has nothing substantial to back it. What price bits of paper, be they cash or CDOs, without anything more substantial than frail confidence backing them? The financial markets and the people that they support will collapse with the end of cheap energy.

The collapse of these markets will collapse the value of all the paper that they support. The only things of real value are the ability to produce food energy using less energy than it takes to grow it, the ability to collect energy from the sun, a house to live in that can be kept comfortable using any form of solar energy that you are able to collect and, finally, the ability to protect all the previous items for marauders. The only thing that has lifted us above the basics of life just quoted is the availability of fossil energy and the ability to use it.

Yours sincerely

Ken Neal


It was published in today's newsletter with the comment
Quote:
A full reply to your note is beyond the scope of todays Capital and Conflict. But it was a ripper. Thanks Ken.


Some people in the financial world obviously get it. It will be interesting to see if they publish any further comments.

My thanks to Charles Hall and his book, "Energy and the Wealth of Nations: Understanding the Biophysical Economy" for the knowledge to concoct this letter.
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emordnilap



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PostPosted: Thu Oct 29, 2015 6:33 pm    Post subject: Reply with quote

Nicely put Ken.

The very basic fact that industry has had to resort to extracting more and more of the extreme forms of energy must - sorry, should - ring alarm bells in financial thinkers. After all, the capitalist world tends to go for the cheapest options!
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Little John



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PostPosted: Thu Oct 29, 2015 6:55 pm    Post subject: Reply with quote

The middle class, as has been historically understood since the end of WW2, is finished. If anyone wants to know what the remains of the middle class will look like and what extent of the population they will represent, taking a look back to late Victorian/early Edwardian times would be a good place to start.

I fully expect to see a return of workhouses before my life is through.
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biffvernon



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PostPosted: Thu Oct 29, 2015 11:51 pm    Post subject: Reply with quote

You really ought to read Paul Mason's Postcapitalism, Ken.
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kenneal - lagger
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PostPosted: Fri Oct 30, 2015 6:08 am    Post subject: Reply with quote

I'm just starting Nicholas Stern's book, Why Are We Waiting?, so it will be a while before I'm ready to take on another. I went to the launch at the Oxford Martin School a week ago and heard him talk. The Sheldonian Theatre was packed full, must have been over 200 people there. Unfortunately I didn't get the chance to ask him why we are going for 2 deg C when all the science says that it's not safe.
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biffvernon



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PostPosted: Fri Oct 30, 2015 9:37 am    Post subject: Reply with quote

A positive review of Nick Stern's book:

http://www.jonathonporritt.com/blog/nick-stern-why-are-we-waiting-why-indeed
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johnhemming2



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PostPosted: Fri Oct 30, 2015 9:44 am    Post subject: Reply with quote

The challenge of automation (one of the key challenges of the future) is mainly to jobs that are easier to automate.
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Little John



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PostPosted: Fri Oct 30, 2015 11:04 am    Post subject: Reply with quote

That's pretty much all jobs and it certainly is pretty much all jobs that are done by people whose educational attainment levels are secondary level and lower. That's a large percentage of the population.

For such people, it is pointless to exhort them to become better educated. They are not and will never be capable of that. Instead, they simply represent a part of the normal distribution of human intellectual ability. If we accept that, then not only is it morally unsustainable to condemn a large proportion of the population to have to live like shit simply because they are in the "wrong" half of that distribution, it is also politically unsustainable because, whilst their limited intellectual abilities (and lack of time and energy as a consequence of having to work all the hours of the day just to meet the daily costs of life) cause them to be credulous enough to suck up various lines of bullshit that lead them to blame single mothers, the old, the young, the sick and whichever other scapegoat our dear leaders can convince them is the cause of their hard lives, not to mention spill theirs and other's guts on foreign fields in the name of some fictitious crusade against a manufactured bogeyman, there comes a point where they rebel and we are steadily approaching that point.

And, finally, what makes all of the above even more incendiary is the fact that the less well educated ranks of the downtrodden working class are being rapidly swelled by the addition of the disappointed, disillusioned, well-educated, thwarted middle-class. It may be relatively easy to bullshit the former with scapegoats and bogeymen. Far less so with the latter. Revolutions are never fomented by the proletariat. They have neither the time nor the intellectual resources. Instead, they are always fomented by a frustrated bourgeoisie.


Last edited by Little John on Fri Oct 30, 2015 11:43 am; edited 3 times in total
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Little John



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PostPosted: Fri Oct 30, 2015 11:34 am    Post subject: Reply with quote

It would appear that my earlier prediction of a return to workhouses before my life is through is coming true rather sooner than even I expected:

http://voxpoliticalonline.com/2015/10/28/workhouse-deal-is-signed-between-council-and-charity/
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emordnilap



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PostPosted: Fri Oct 30, 2015 12:48 pm    Post subject: Reply with quote

Little John wrote:
That's pretty much all jobs and it certainly is pretty much all jobs that are done by people whose educational attainment levels are secondary level and lower. That's a large percentage of the population.

For such people, it is pointless to exhort them to become better educated. They are not and will never be capable of that. Instead, they simply represent a part of the normal distribution of human intellectual ability. If we accept that, then not only is it morally unsustainable to condemn a large proportion of the population to have to live like shit simply because they are in the "wrong" half of that distribution, it is also politically unsustainable because, whilst their limited intellectual abilities (and lack of time and energy as a consequence of having to work all the hours of the day just to meet the daily costs of life) cause them to be credulous enough to suck up various lines of bullshit that lead them to blame single mothers, the old, the young, the sick and whichever other scapegoat our dear leaders can convince them is the cause of their hard lives, not to mention spill theirs and other's guts on foreign fields in the name of some fictitious crusade against a manufactured bogeyman, there comes a point where they rebel and we are steadily approaching that point.

And, finally, what makes all of the above even more incendiary is the fact that the less well educated ranks of the downtrodden working class are being rapidly swelled by the addition of the disappointed, disillusioned, well-educated, thwarted middle-class. It may be relatively easy to bullshit the former with scapegoats and bogeymen. Far less so with the latter. Revolutions are never fomented by the proletariat. They have neither the time nor the intellectual resources. Instead, they are always fomented by a frustrated bourgeoisie.


Spot on, Steve.
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kenneal - lagger
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PostPosted: Fri Oct 30, 2015 4:09 pm    Post subject: Reply with quote

Little John wrote:
It would appear that my earlier prediction of a return to workhouses before my life is through is coming true rather sooner than even I expected:

http://voxpoliticalonline.com/2015/10/28/workhouse-deal-is-signed-between-council-and-charity/


That article is pure speculation. The writer has no evidence that this is what it's going to be and he freely admits that point.

Otherwise I agree with your previous post, LJ. Automation relies on fossil energy at the moment and is therefore unsustainable. Until a company can confirm a sustainable source of energy they should be banned from using this new equipment or they should, at the very least, be charged a carbon tax on the fossil energy used. As energy becomes more expensive automation will gradually be phased out anyway.

It could be said that sacking people so that a machine can be used instead is outsourcing the cost of the redundancy and should be paid for by the employer doing the outsourcing either directly or through taxation and welfare payments. We have removed the ability of nearly all people to source their food and water and made the provision of housing almost unaffordable so this provision should then fall on the state. The state has a moral obligation to provide basic human rights. What could be more basic than the provision of the basics of life?
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PostPosted: Fri Oct 30, 2015 4:20 pm    Post subject: Reply with quote

kenneal - lagger wrote:
The state has a moral obligation to provide basic human rights. What could be more basic than the provision of the basics of life?


Remembering that Blair's preferred wording is that people should have the right to buy food, not the right to food itself.
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PostPosted: Fri Oct 30, 2015 4:34 pm    Post subject: Reply with quote

Starvation is almost certainly a violation of Article 2. However, UK laws on destitution mean that there are default protections.
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kenneal - lagger
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PostPosted: Fri Oct 30, 2015 4:44 pm    Post subject: Reply with quote

If they have the right to buy food they must be allowed the money to do this or the right has no meaning.
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PostPosted: Fri Oct 30, 2015 4:46 pm    Post subject: Reply with quote

kenneal - lagger wrote:
If they have the right to buy food they must be allowed the money to do this or the right has no meaning.


I assumed he also allowed people the right to earn money. Laughing
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