Click here to access article from Washington's Blog.
This blogger assembles a lot of documentation to show that energy extraction is now requiring increasing levels of debt, and compares this to a Ponzi scheme. While there are similarities with a Ponzi scheme, this analogy serves to hide a much bigger dilemma that is faced by global capitalist elites as they come up against resource, particularly energy, limits of the planet.
It is much more revealing to see the capitalism system itself as a Ponzi scheme. This is so because capitalism is a system serving individual or, more importantly in our era, collective owners (corporations) of economic property that are seeking a profit from their operations (income over and above costs). Because energy extraction is growing far more expensive as older, cheaper fields have become exhausted, energy corporations have had to invest in far costlier operations to keep up with the energy demands of a capitalist economy that requires growth.
The new, much vaunted shale-fracking operations to derive energy are proving to be expensive due to rapid depletion rates of such sites. The privately owned financial system inherent in the system of capitalism also seeks a profit through loans to corporations. Corporations must produce a profit to include sufficient income to pay off the loans plus interest charges to banks. Thus, they must always continue to grow or die, or merge with other corporation as we see today in mega-corporations that are global in scale. And, course along with growth comes power to force governments to serve their interests.
What has enabled the rapid rise of economic activity in the last one hundred years has been the abundance of cheap energy in the form of fossil fuels. However, cheap energy is no longer available and there appears to be
no viable alternatives in sight to feed the voracious appetite demanded by a system that requires constant growth. What has been keeping the capitalist system going is increasing debts, that is, cheap money supplied by large financial institutions such as privately owned central banks which create money from debt that future generations of entire countries will be required to pay back. Thus, we can only expect more economic crises and more wars in our future under capitalism. This new reality is best explained by a 11:46 minute video presentation by Roger Boyd.
I think that this reality is what has been the driving force behind austerity policies domestically and the aggressive actions abroad by the dominant capitalist entity, the US-led Empire, that we have been witnessing since the end of the Cold War when everyone expected peace to reign.
