Economic Collapse: The end of Man
A mass extinction is NOT the result of extraterrestrial agents, volcanism, nuclear war or disease. A mass extinction occurs when the ecological pyramid overturns.
The unemployment that you read about in the news today is not a short term, predictable phase of the business cycle. It is an inevitable, structural component of a long term trend dating to the origin of Man. Our global economy is soon to collapse and there is nothing we can do about it. Neither Intelligence nor Technology can solve the problem because Intelligence and Technology are the causes. It is Intelligence and Technology which have brought us to this point. Intelligence and Technology lead to efficiency and efficiency to extinction. Corporations produce and distribute food for a profit. After the global economy breaks down, these companies will no longer have any incentive to do so.
The long term History of Economics
If the paleontologists, anthropologists and biologists have it correct, our species has been around for around 200,000 years. For most of that time we were just like any other wild predator, killing an animal in order to live another day. But our hunter/gatherer days came to an end about 10,000 years ago when we invented or discovered Agriculture. More and more people around the world abandoned the uncertain life of savages and switched to the more predictable activities of farming and husbandry.
However, we did not stay forever in Agriculture either. About 200 years ago, Man began a geologically swift process of urbanization, an exponential concentration of individuals into high density areas. Cities sprang up overnight and the planet has become like a polka dot balloon: one ant hole here, another one there. Tokyo, Mexico City, New York, London are ant holes boasting several million people. Humans made Agriculture efficient and shifted their numbers to Manufacturing, part of the reason being that the factories produced the equipment that made farming more efficient. The urbanization process is still in full swing in major underdeveloped regions such as China, India, Africa and South America.
About 30 years ago, the United States became the first country to make the transition to Services. In 1978, for the first time, a country had more people working in the Service Sector than in either Manufacturing or Agriculture. For comparison, the United States had only 10% of its work force dedicated to Services at the start of World War II. Today, every country in the world is emulating the United States and attempting to become a modern Service Economy. Every country in the world is working to become more efficient in Agriculture and Manufacturing and pushing its work force towards Services (Fig. 1).
Just to show how swift this process is, last year China finally became a Service Economy. More Chinese now work in the Service Sector than in Agriculture or Manufacturing. The planet as a whole has shifted from producing nouns to providing verbs. Efficiency has led us to exchange wealth for richness, form over substance, abstract financial transactions rather than bartering of tangible goods.
To summarize, 100,000 years ago all of mankind had a single activity: hunting and gathering. 10,000 years ago people moved to the more efficient activity of farming. 200 years ago they shifted again to Manufacturing, and 30 years ago to Services. The million dollar question is: Where will billions of workers work next? What will be the next major activity to which humans will dedicate their time once the Service Sector runs its course?
Fig. 1 Jobs through the ages
The final economic category: Unemployment
There is only one activity left that anyone can imagine and that is no activity whatsoever. The next major category is Unemployment (Fig. 2). When Agriculture became efficient we moved to Manufacturing. As Manufacturing became automated we shifted to Services. And as Services become more efficient, we will not be moving the masses back to Manufacturing any more than we went from Manufacturing back to Agriculture or from Agriculture back to Hunter/Gathering. We will be moving 'forward' towards Unemployment. The unemployment of developed regions such as the United States and Western Europe is NOT a periodic downward phase of the short term business cycle. It is an inevitable, structural component of Man's long term economic history. Our economic system has no solution to efficiency, no provision for mending the social problems it creates other than to have those who work support those who don't.
Fig. 2 The next category: Unemployment
Unfortunately, ever rising Unemployment is unsustainable. We cannot even imagine taxing ever fewer workers in order to support an ever growing army of unemployed. (And within the 'unemployed', it behooves us to include those who are retired and those who are on welfare and not limit our definition to just those who can't find work.) Our ever more efficient economic system, fueled by Technology and Innovation, leads to a dead end. The system WILL collapse at some point.
The skeptic is unconvinced. He argues that unlike other species, Man is an intelligent animal. There is no problem humans cannot solve. We've run into trouble in the past and always got out of them through inventiveness and ingenuity. The problem today is corrupt politicians and greedy bankers. The problem is that we are not allocating our resources equitably. In worst case, we can always try Communism or bring Hitler back.
So the skeptic did not understand a word! I'll repeat the message because it went over his fanatic head. Even the economies of North Korea and Cuba are divided into Agriculture, Manufacturing and Services, and there is no category beyond Services! The Bureau of Labor Statistics in the United States has been listing the different categories of Industry and Services since 1884. The department has not come up with any new Manufacturing or Service categories for the last 50 years. There is no new major economic line item that anyone in Cuba, in China, in Germany, or in the United States can even imagine!
From now on, global Unemployment WILL continue to rise until the entire system finally disintegrates. WHEN that happens, the companies that produce and distribute food to the masses will have no further incentive to do so. What we have done in these last 200,000 years in pursuit of efficiency is isolate the individual from the only thing that keeps him alive: food. Hunter gatherers and subsistence farmers have direct contact with their livelihood. 'Civilized' man incongruously creates the middleman. Every individual out there, rich or poor, depends on someone else to produce his food and deliver it to him.
Collapse of Demand
To make matters worse, businesses require demand to increase year after year. The ideal situation for corporations is to sell more and more goods, at ever lower costs and, hopefully, at ever increasing prices. Our global population projections show a contrary trend. The global population growth rate has been steadily declining since 1963 when it peaked at 2.3%. Today it stands at 1.2 and by mid-century it will drop to zero, an ominous milestone known as Zero Population Growth (Fig. 3). This is good news for environmentalists, but the worst possible news for businesses. Demand is ultimately a function of population. No population, no demand. It's just that simple! As the demographic trend continues to level off and more and more people of the world satisfy their basic 'necessities' -- table, chairs, bed, oven, fridge, TV, phone, computer -- demand will undoubtedly suffer. Competitors will fight for a decreasing market and either merge or be driven into bankruptcy.
Fig. 3 Global Population Growth Rate
Let's face the obvious. The ideal cost situation for any corporation is to replace every worker with a robot where possible. The ideal revenue situation is for population to increase exponentially. We are certainly taking care of the cost side of this equation. It is the consumer side which is seriously lacking (Fig. 4). Therefore, the demographic trends can only exacerbate the current unemployment problems.
Fig. 4 Business vs. Population
Many ask, "You pointed out the problem. What is the solution? What can we do about it?"
And I reply that there isn't anything we can do about extinction. If Intelligence and Technology could solve the extinction dilemma, Man would never become extinct. We would live in this blue heaven for centuries, millennia and -- why not? -- millions of years. If diseases, nuclear weapons, asteroids, climate or any other agent threatens us, we simply neutralize it with prescient foresight and superior inventiveness. The only reason skeptics, especially those who regard themselves as intelligent atheists or agnostics, cannot get around to accept imminent extinction is that they actually convinced themselves that Man is God's chosen creature.
How much time do we have, doc?
Most people will agree that Man is not eternal. This is not because they reasoned it out in any detail. It's an intuitive issue. The average person has this 'feeling' that humans will die some day. Maybe it will be an asteroid or climate change or a disease run amuck. More than likely it will be our arsenal of nuclear weapons. But whatever it is, the event won't happen within MY lifetime!
Let me spell it out for those who still didn't get it. The mechanism of a mass extinction is economic collapse. The ecological pyramid overturns on a broad family of species, in the instant case, the mammals. A mass extinction finds the many chasing after the few. We are moments away from such a catastrophe. We are on the last stretch, the last leg. If the long term exponential trend just illustrated serves as an indicator, we have but a few months to go. We spent over 100,000 years as hunter/gatherers, 10,000 years as farmers, 200 years as manufacturers and 30 years as service providers. What can we expect next? 5 or 10 years as Un-employees?
Paper presented at the
International Conference on Biology, Environment and Chemistry
(ICBEC 2010, Hong Kong, China):
Paper presented at the
Apocalypse Conference, Oxford University
May 8, 2016, Prague, Czech Republic
The Extinction Series...
Economic Collapse: the end of Man!