Dean,
As you point out, we develop habits which might offer short term gratification, but long term trouble and even when we realize this, cannot easily change course. As is said of drunks, sometimes they just have to hit bottom before they can see the light of day. It seem humanity as a whole is headed toward that situation and so the question then becomes, how do we then change our ways?
As I see it, there are a number of conceptual issues which we naturally take for granted, without fully examining their nature and so if we were to reach a point of serious soul searching, it might well be a matter of more than just promising ourselves to do better next time. I think there are fallacies built into some of our central beliefs, but they are not factors which can be changed prior to some significant punctuation of the equilibrium, So I'm just putting them out for consideration.
We look at time backward. Since we exist as individual points of perception, we experience change as a sequence of events and so think of the present as moving along a vector from past to future events. Physics then distills this narrative effect to measures of duration to use in its equations. The underlaying reality is that the changing configuration of what exists, turns future into past. There is no dimension along which these events exist, they simply form and dissolve. While this results in a present oriented reality, it also means we need to navigate the many obstacles, or we too rapidly recede into the past.
In a sense then, time is much more like temperature, than space. Time is to temperature what frequency is to amplitude. With temperature we think in terms of the overall effect, even though it is created by lots of individual velocities/amplitudes. With time we think in terms of the particular actions/rates of change, yet can't seem to find that universal clock which keeps everything synchronized. That is because, like temperature, universal change is the cumulative effect of those many rates.
So the future is not determined, since probability precedes actuality and the input into any event only happens with its occurrence. Nor does the past remain probable and branch out into many worlds. We are a factor in the equations and affect our reality as it affects us.
Another fallacy built into our current thinking is that we treat money as a commodity, when in fact it is a contract. It is backed by public debt and debt is a promise, a contract. Given everyone, rich and poor alike, want to accumulate as much as possible, there is overwhelming pressure to create as much notational value as possible. The problem is the basis of this currency is the health, wealth and productivity of the country issuing it. Since the only way to store this wealth is either to remove it from circulation, or to invest it in some way that will at least produce a return commensurate with the risk, this creates two unhealthy processes. If it is removed from circulation, then more must be issued in order to keep the system functioning. Also investing eventually creates bubbles and pyramid schemes, as the amount of productive forms of investment are limited by physical circumstance, so the 'greater fool' method of speculation takes over.
We have alleviated some of this by having the government borrow up enormous amounts of this capital, but that is creating an ever larger bubble which will potentially destroy the currency on which all these other forms of financialization are based.
Consider that when Paul Volcker 'cured' inflation, he did so by restricting the flow of fresh money into the system, with higher interest rates and selling debt used to create the money in the first place. The problem is that higher interest rates reward supply and punish demand and since the problem is oversupply of capital, this is counterproductive. It only seemed to work by 1982, by which time the Federal government was borrowing upwards of 200 billion a year and that was real money in those days. It was this extra borrowing that provided the demand for capital that finally dried up the surplus and brought inflation under control.
Remember that when the Fed sells debt to draw in excess capital, it is selling to those with a surplus in the first place, so by this logic, excess capital is in the hands of those with an excess, not what is being used to lubricate the economy. Obviously those with an excess would prefer not to think of it this way and so having the government borrow it up for any number of uses, such as extraneous wars and large militaries, works just fine. The problem is that these are not productive investments that will produce a return on the money, yet the public still has to pay them off, which serves to siphon value out of the economy in general and thus weaken the basis for the currency.
Now if we were to truly treat money as the contract between a community and its constituents, that it is, we need to understand how it all functions. It is an economic medium, like a road system, or blood in the body, or water in a convection cycle. As such it is most productive and effective when it is most evenly distributed and large reservoirs do not overwhelm the system, such as hundreds of trillions in derivatives etc, on a world economy valued in the tens of trillions. Now one of the primary reasons most people save money is for time when they need extra, so other systems have to incorporate these needs as a form of shock absorber. For one thing, we often view social relations and environmental resources as sources of value to be mined. Yet if we understood the monetary medium as a form of public utility and do not actually own these notational units, anymore than we own the section of road we might be using, there would be far greater reluctance to sacrifice tangible, near term relations and resources to convert into currency. So such things as education and care for the young and old become much more of a social function that doesn't need nearly as much monetary input, or possibly forms of local currencies would grow up to serve these local needs. Conversely, those caught hoarding or otherwise abusing the system would have their store of notes penalized and this would further encourage alternate stores of value.
Then banking would be much more of a local and civil function and as it developed foundational strength, then broader regional cooperatives could develop, with the understanding the structures can only be as big as the foundations can support and blowing up enormous functionally illusionary bubbles, even if they seem all sweet and inviting to begin with, are to be viewed with concern regarding structural weakness they might be hiding.
This might all seem far fetched at the moment, but even bubbles as big as the one we are currently experiencing, do eventually pop and then we will have to start over again, without nearly as much raw materials as last time.
Regards,
John Merryman