Headlong

A few days ago I posted about an approaching discontinuity I called the Cusp.

This is probably not the first discontinuity the world grapples with, but in previous cases, a convenient war helped the economy transition the discontinuity: spiralling-inflationed Germany breaking open WWII is the last example, and I wish I was more comfortable with key historical data to seek more confirmations.

When you think cynically about it, a war is the perfect way to get countries out of a tight economic situation: a war economy creates skyrocketing demand for high cost artifacts with a short shelf life (airplanes, ships, tanks, bombs…) delivering a sudden jolt to the manufacturing sector; it creates instant full employment, which costs bundles increasing national debt, but no political cost: Moody’s does not have a voice during a war and it eliminates the surplus workers perpetuating in a more sustainable way the full employment status.

And after the war is over, nations must rebuild themselves, creating another humongous source of growth and prosperity.

The current crisis has almost equalled in length WWII, and while I have compared it before to a true war, the lack of massacres and destruction is not providing any of the windfall a “real” war would provide, leaving us with a stagnating situation.

I have an unsupported suspicion that the transition from a carbon-based to an oil-based economy was the cause of the two World Wars (which in this sense are a double-dip single war): it was an irresistible transition brought about by the immense desirability of unlimited mobility of people and goods; it created industrial empires but relocated immense wealth from the manufacturing hearts of Europe and America to the Middle East and Russia, requiring a tectonic rebalance of power and redesign of the world force system.

Today it is perhaps the shift from an atom-based economy to a bit-based one that’s driving us headlong in another unbalanced state; the immense desirability of the world’ goods and services at our fingertips, the dematerialization of transactions and the potential for decoupling finance from economy are all pushing in the same direction, but without the cleansing fire of napalm (as Lt. Kilgore would call it), the foul smell of the old system decay’ may choke us far longer than in previous instances.

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