Wheels within wheels.

[pbrower2a]

(12-15-2018, 07:32 AM)David Horn Wrote:

(12-13-2018, 03:24 PM)Mikebert Wrote: I think my post was misunderstood. What I said was I am increasingly of the opinion that the S&H generational theory is wrong. This is NOT to say that we are doomed to have a "failed crisis".  S&H is not the only cycle theory that deals with crisis issues...

My interest has never been academic.  It's more entertainment than anything serious.  That said, I've read-through some of the information on other cycle theories, Turchin in particular, and find them a bit pedantic.  That's not to say that they are wrong, just dense and turgid … and overly complex to address the material they describe.  Complex cycle theories are important in the academy, and indirectly elsewhere, but they have no application in the world we live in.  History is evolving at tremendous speed and accelerating.  We need the Cliff Notes version for hoi polloi, and that could have been T4T.  It's looking more and more like it's not.

Many of us are would-be academics; we would be such if we had the opportunity, and we would not give up the quest for knowledge for lucrative but comparatively soulless and mindless (but socially-desirable and necessary) activities such as the installation and repair of HVAC units). There are activities such as astronomy in which amateurs supply data and images for the love of the activity, people who know a tiny portion of  the constellation Corona Borealis very well and watch it closely. Can amateurs contribute to the study of history? Maybe so long as we are not unduly cranky or excessively partisan.

I have my idea of what makes history operate: the development and refinement of the memory of knowledge that serves as a guide to policy (and in a democracy such shapes voting practices) followed by rediscovery of such knowledge, often at much grief, after people who got such knowledge leave the scene due to death and debility. I look at the long a time was necessary for an economic bubble as destructive as that of the 1920s to appear again: roughly eighty years. The last people around to have any coherent memory of the cause and consequence were GIs old enough to remember the heady times going into the 1929 Crash. They got to see that the New Era of prosperity founded upon a weak foundation of speculation would disintegrate and become a time of hardship for innocent people, as they got to experience in the Great Depression. That generation put the lid on such things and kept the lid on tight as long as they were around to sway no and mean it. The temptation was around at all times from the 1940s to the 1990s, and they knew better. Around 2000 many had died off or become irrelevant.

Sure, I am a Boomer, and I listened to stories of the 1929 Crash and Great Depression. I would have concurred with the GI wisdom about the destructiveness of speculative bubbles. Had I been in politics around 2003 I would have been giving warnings about the speculative bubble -- and I would have been voted out of office because the shysters who made fortunes off rip-offs in finance and real estate would have supplied the funds to defeat me in the next election.   

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Mike then Wrote:...  One direct prediction that can be made based on this model output is that Democrats will not cooperate with Trump like they did with Bush in the event of another financial crisis. That financial markets are in a bubble is revealed by the fact that asset value relative to GDP is higher than ever before, even higher than in 2000 and 2006. We have had 8 such bubbles, four of which ended with financial crises., suggested a 50% probability that this bubble will end as a financial crisis. The most recent two bubbles (2000 and 2006), show the same 50% probability, so this rule apparently still works. 

Most likely, either THIS asset bubble (or the one that associated with the next business cycle, which would peak in the late 2020's) will end with a crisis. PSI is high now, and will be even higher a decade from now. That means this cycle's 1929 event is either in the near future or a decade away, strongly implying a 4T-like crisis in the 2020's or 2030's, that will NOT be do to a generational mechanism along the lines of what S&H proposed.

This is real meat!  I agree on the time frame and focus, yet again, on finance.  The question lingering in the background: is this the first death knell of capitalism?  Is THAT model still viable?  Will AI finally eliminate the need for labor (it's already on the downward spiral), and trigger a real response?  I can't see a purely capitalistic response that doesn't make inequality much worse, and the opposing forces are about as organized as a kindergarten picnic.  

For argument's sake, let's agree that the terminal transition phase is still a long way off.  The history of elites shows no reason to suspect that they will relinquish their favored position willingly, so this next crisis will only indicate the path that will be followed later.  Add-in AGW and the emerging East, and be happy we aren't responsible for fixing that.  Leap forward a century, and the world will be radically different.  Let's hope, in a good way.

Much as people with economic power who live exceedingly well would love to kill all memory of Marx, the old arch-nemesis of capitalism does not quite die. It's like Satan with the churches; he offers some undeniable realities that unsettle the true believers in capitalist plutocracy. The proletariat is always the majority, and even if employment moves steadily from manufacturing to services, much of the service business is damned to live under proletarian conditions. After all, the proletariat always has nothing to sell  but its toil, and toilers nearly always get the shaft. Maybe at some stage the capitalists decided that the industrial proletariat needed a consumer society to have cause to not rebel against the capitalist class, at least in America. In Germany the industrialists, financiers, and agrarian magnates decided that the masses could be paid the lowest wages in Europe so that the elites could live exceedingly well -- and when people started challenging hose elites those elites turned to Adolf Hitler, who would turn industrial workers into literal serfs (while doing far greater crimes for which he is better known).

It may be that as miracles of productivity, including miracles of robot-based manufacturing, require fewer people in the making of the industrial cornucopia, the only necessary proletariat is that in agricultural business that becomes increasingly dependent upon big farms and factory-like dairies and meat-packing places. But remember -- as Marx told us the proletariat has nothing to sell but its labor, and it is easy to see how successors of Donald Trump can transform the worker into a serf. Maybe those successors do so without racist genocide and apocalyptic war, but it is easy to see this time as the end of a good era and the beginning of a bad one.

Marx may have oversimplified history as a progression of slavery to peonage to capitalism to socialism to communism, with communism as the consequence of productivity that would free people from toil. He missed an era in which capitalists decided that a consumer society was better for all than was a Socialist revolution. What happens when the economic elites, not all of them industrialists and their heirs, take away the consumer society and create a world of peonage?

Maybe the world becomes a nightmare out of 1930s serials such as Flash Gordon complete with a nobility and in which the seamy side of life was hidden and power struggles within the elite are of utmost importance -- something successful in the 1930s because people feared such. Or perhaps we go from capitalism to Marx' prophesy of Communism with all that such entails. (This is heretical by Marxist standards, but historical reality fosters heresy).