Debt and Civilization

"Brilliant plan, Pinky! Oh, no, wait.
What if we want to use a plan that works?"

You are probably aware of my persistent focus on debt-as-a-problem, and also of my view that civilization-is-in-danger. So it is worth pointing out that my Google Search for "debt and civilization" (in quotes like that) turned up just nine results or, as Google says, about 9 results:

Graph #1: Slide the ScrollBar Down to See More

Only nine occurrences of those three words in that particular order on the whole internet? That's hard to believe. So a few days later, I searched again. This time, Google reported 8 results.

Obadiah Mailafia

Obadiah Mailafia was a "Deputy Governor of the Central Bank of Nigeria", a separate search tells me.

The first of the nine results shown above ("Debt and civilization (1) – By Obadiah Mailafia") gives an error. Firefox says "We can’t connect to the server at www.thecolumnist.com.ng."

Note the "ng" there in the link. Are Nigerian links still "suspicious"? Caution is advised.

The second of nine ("Debt and civilization (2)") gives the same error. So now it might be important for me to note what the "Mailafia" search turned up: Mailafia is dead; he was murdered. The thought briefly crossed my mind that the murderers are now killing off access to Mailafia's writing.

You'd think there would be a collection of Mailafia's writings at the central bank of Nigeria. But I'm not gonna look right now.

Criton Zoakos

Criton Zoakos is "President of Leto Research, Inc., an economic research and consulting firm in Ft. Lee, NJ."  That's according to The Globalist. And now I have to caution myself that Zoakos might be a "globalist".

But that page is 20 years old. More current are the Leto Postscripts, offered as "Criton Zoakos' Explorations into the Roots of the Crisis in Western Civilization". This could be useful.

The author page at Leto Postscripts grabs my attention. Zoakos says he has been "investigating the relation between the crisis in fundamental science and the broader crisis in Western civilization" since 2008. I'm a little fuzzy on the meaning of "fundamental science" in that context, but at least Zoakos and I both still use the phrase "Western civilization". A lot of people don't.

Below the notes on the author page are three comments: a question from Ryan M, and two replies from Zoakos, who calls himself "Criton". Criton's two replies are each more interesting than the other. Also, there is about a year between the replies, suggesting that Zoakos thought about the question more than once. I like it when I see a blogger doing that.

The fourth of nine results for my "debt and civilization" search brings up four posts in the "Worldview and Social Behavior" category at Leto Postscripts. The first of these posts is "Taking the long view of geopolitical developments". In a paragraph that Criton thought important enough to display as bold red text (and one that I find important enough to repeat) he writes:

Contrary to the dominant views and practices of modern academia, what drives the longterm political and cultural behavior of a civilization is not the ideological narrative or the political philosophy behind it. Instead, the ultimate driver is that mental image of the physical world that the physical sciences of the civilization impart – by teaching and by osmosis – to that civilization’s general population.

What drives behavior in a civilization, Zoakos says, is not ideology or politics. The ultimate driver, he says, is the mental picture of the world that the physical sciences create. This, apparently, is the "fundamental science" noted above, that I was fuzzy on.

I am trying to imagine the "mental picture" Zoakos mentions, and how it may be important:

• If the "mental picture" changes over time time, we may find "red states" turning deep red while "blue states" turn purple.
   
• A historian like Rostovtzeff may describe the change:

  What happened was a slow and gradual change, a shifting of values in the consciousness of men. What seemed to be all-important to a Greek of the classical or Hellenistic period, or to an educated Roman of the time of the Republic and of the Early Empire, was no longer regarded as vital by the majority of men who lived in the late Roman Empire and the Early Middle Ages.

• And Hari Seldon may tell us:

  The feeling will pervade the Galaxy that only what a man can grasp for himself at that moment will be of any account. Ambitious men will not wait and unscrupulous men will not hang back. By their every action they will hasten the decay...

Our mental picture depends on the physical sciences, Zoakos says. I see what he's saying. But as I see it, our mental picture of the world depends primarily on the state of the economy. Long-term economic decline can turn a blue nation red and a red one blue. Continued, that decline can turn civilization into a stain on the pavement.

 

Again, my view is that it is the economy, not politics, that drives our behavior. These days, however, almost everyone does see politics as the driving force. And people have taken sides, the one side or the other. Each side disagrees with the other, and the two sides cannot agree on anything except that the other guys are wrong.

My take, as presented in "The Tides of Prosperity" (and related posts) a couple months back, is that the economy is not good and people know it in their bones, and that our bad economy is the source of our extreme political differences and our inability to resolve them. And yet, restoring economic health and vigor will reduce our political differences -- which shows that the problem is not political at all, but fundamentally economic.

One side says we need more government spending (and more government debt) to make things better. The other side says we have too much government debt (and too much government spending) already. My response is to offer a third view, a third "mental image of the physical world that is created" by science -- in this case, by the science of economics, my economics: There is too much debt other than federal. There is too much private sector debt. Private sector debt weighs down the private sector so that it cannot grow. The slow growth activates automatic stabilizers (and other responses) which add to the government spending and debt. But the private sector still cannot grow. I conclude that both the need for more government spending and the ineffectiveness of that spending are consequences of excessive private-sector debt, and that the solution is to reduce private-sector debt. This view that I offer is an alternative to the economics of both the Right and the Left, but no one seems to have noticed.

After Criton's bold red text, two sentences follow:

Populations understand their lives by situating themselves in a physical world, but they understand that physical world according to what physical science teaches about it. Their judgments and their actions are based on these understandings.

I think Criton is onto something. I think I might agree with him. I think what I was doing in those "prosperity" posts and in my alternative view was that I was trying to change people's understanding of the physical (or as I see it, the economic) world, based on what economic science should be saying about public and private debt. So it seems to me that I agree with Criton, more or less -- or with this part of what he says, anyway. 

It's early yet. I'll be reading more of the Leto Postscripts.

The Rum Soaked Fist

The fifth of the nine "debt and civilization" search results is a link to a page of discussion at The Rum Soaked Fist, a site that calls itself an "internal martial arts forum". Martial arts? They discuss economics with more intensity than I do on my econ blog!

• This, for example, by oldEurope: "... the bad news is: Money, debt and civilization are interlinked since the beginning ..."
• This, written by everything: "The other way to get revenue when income tax and payroll tax doesn't prove to be enough (remember that corporate tax is low) is to issue debt...."
• And, from Michael, this is especially good: "I agree that debt is a normal part of the economy, but I am concerned with how much of it that there is..."

Keep in mind that if they're talking about debt, they're talking about debt and civilization.

David Petraitis

The next two search results for "debt and civilization" lead to blog posts by David Petraitis. First, in his post (titled "Debt and civilization") he summarizes a Michael Hudson interview. Hudson is great! He always delves into the past and pulls out sweet, juicy peaches of economic history. Petraitis's post is a pleasure to read.

Second, Petraitis follows up with another post, "Debt: The First 5000 Years", where he reviews the David Graeber book of that name. Petraitis says it is "a very important book." Apparently, some 4000 reviewers said the same of Graeber's book. But it is hard to find one who can say what is important about it.

According to Petraitis:

It lays out a case ... that debt, as a human construction, is something which has been overlaid on our social relationships in such a way as to produce confused mixtures of morality and economics.

Not just debt, but all of economics is too often confused with morality. That's how you can tell econ is important: because people too often see economic problems as moral issues. But any book that dwells on this confusion has the wrong focus. And any review that dwells on the confusion has missed the primary importance of understanding the economy.

Morality is useful for establishing economic objectives. Morality is not useful for economic analysis. Morality diverts attention from the effort to understand and solve economic problems. It is noteworthy and probably significant that, despite all the attention Graeber's book received, only one Graeber-related result turned up in my search for "debt and civilization". 

 

Conclusion

This conclusion depends mostly on the thinking of Criton Zoakos, or I should say, on my interpretation (or misinterpretation) of his thinking. I plan to read more Zoakos, but not before I conclude this post.

There is a lack of trust these days, a lack of trust in internet links for example and in "globalists". But Zoakos seems to see the lack-of-trust as evidence of a larger problem that he calls a crisis in Western civilization. I find myself agreeing with him on this point.

A view of the world emerges from the science a civilization develops, he says, and this view of the world drives "cultural" behavior, the behavior of the civilization. This behavior, to me, is like macro-economic as opposed to micro-economic behavior; what Zoakos says makes sense to me.

The mental picture that emerges, according to Zoakos, arises from the "physical sciences". I'm still a little fuzzy on that but it seems to me that our everyday mental picture of the world emerges less from science than from living conditions, actual conditions like long-term economic improvement or long-term economic decline. I certainly agree with Zoakos when he says it is not politics or ideology that drives cultural behavior.

Again, taking the views of Criton Zoakos as a vague framework for my own (and promising to read more Zoakos, later) I conclude that the "mental image" which drives "cultural behavior" emerges from actual economic conditions and our understanding of the thinking that drives those conditions.

I should say also that we are not likely to be long deceived by actual economic conditions. The error, if there is an error in our mental picture, is far more likely to arise from flawed economic thinking. Despite what mainstream economists may want us to think, they do not yet know everything about policy, economics, and the economy.

Nor do the rest of us.

To make the economy do what we want, we have to understand what it wants. We have to understand how it works. If the economy is not giving us what we want, it is because we have failed to understand it. 

If the economy isn't doing what we want, something is wrong with policy. If something is wrong with policy, it is because something is wrong with the thinking that created the policy. If you want to get to the moon, you have to do the science. If you want to rule the world, you have to understand the economy.

I'm not offering here a solution to any economic problem. I'm talking about a way to find the good solutions. Probably, no one will notice.