Comment: US Mercantilism Ain’t The Problem
Authored by GoldFix ZH Edit
Contents:
- The Stag and the Lion
- Intro
- Mercantilism is Dangerous
- What Should Come After Unipolar Global Capitalism?
- Things Can Get Worse Before They Get Better
- Globalism’s diminished returns
- The Rotting Corpse of Unipolar Globalism
- Mercantile Stop-Gap
- It Can Get Much Worse
Aesop's Fable 102 - The Stag and the Lion
A stag, oppressed by thirst, came to a spring to drink. After having a drink, he saw himself in the water.
He much admired his fine antlers, their grandeur and extent. But he was discontented with his legs, which he thought looked thin and feeble.
He remained there deep in reverie when suddenly a lion sprang out at him and chased him. The stag fled rapidly and ran a great distance, for the stag’s advantage is his legs, whereas a lion’s is his heart. As long as they were in open ground, the stag easily outdistanced the lion.
But they entered a wooded area and the stag’s antlers became entangled in the branches, bringing him to a halt so that he was caught by the lion.
As he was on the point of death, the stag said:
‘How unfortunate I am! My feet, which I had denigrated, could have saved me, whereas my antlers, on which I prided myself,
have caused my death!
To which the Lion replied:
"We often make much of the ornamental and despise the useful" as he began eating the stag.
Intro
Michael Every’s Daily entitled A Great Variety Of Moron Symptoms Appear is very good we think. We suggest reading it. He points out many ways things can (are?) go wrong from here. The pushback (if you want to call it that) comes from believing US Mercantilism (or any Mercantilism) to be the problem. Mercantilism is a symptom of Globalism's current shortcomings. Ultimately, Mercantilism is the best way forward given present circumstances.
First, we should get the truth out of the way about Mercantilism. It ain't pretty
Mercantilism is Dangerous
True Mercantile thought is sum-zero thought. It believes all value is created at the point of goods-exchange, as opposed to at the production or inspiration point. It is fascinated with the bottom-line and the present tense.
It makes no room for future growth. It is cash-and-carry personified. It does not believe a bigger pie can be created. It holds that our loss is their gain. It is also the earliest form of Capitalism. It is at its core, trading.
Mercantile thought, more than almost any other economic thought is shaped by environment, not by ideals. It was a response to environmental pressures when Feudalism broke down then. It is a response to globalism breaking down now. As risky as it is, Mercantilism's rise is a good sign that at least the world wants to trade with each other, even if a sum-zero mindset is now the new zeitgeist.
What Should Come After Unipolar Global Capitalism?
If Michael is using Marx as his guide, Socialism is “better” than Global Capitalism. We don’t think he believes that in the extreme sense. So, absent the new improved Global Capitalism we all want, Mercantilism is the best thing for everyone until trust is earned again.
Michael warns of the risks of Mercantilism. He’s not wrong. Here is our biased response:
Mercantilism is what keeps us from killing each other until the new “good” thing happens. Globalism is dead and there ain’t nothing better on the horizon just yet. Until then, hoping for a resurgence of globalism in a self-interested world is unlikely to happen for a generation. Self-sufficiency is king until it returns.
Regarding Micheal’s title: “A great variety of moron symptoms appear”. He is, we believe, referring to the stupidity inherent in thinking this new US Mercantilist model will work without a hitch in a global world. He is again right in a big way. Mercantilism is a fallback position that must hold now or we are in a lot of trouble.
Mercantilism rising isn't a bad thing necessarily auguring for a worse thing just yet. No, it is a constructive thing given the calamitous and accelerated collapse of Global trust these past two years. Mercantilism is the spindly ugly legs that keep the Aesop Fable stag alive.
But Mercantilism *is* the replacement for Globalism as determined by environmental forces converging on people who wish to not kill each other just yet. Decentralized Capitalism, aka Monetary Multipolarity is the front runner for the future if we make it that far.
[Edit- Production scale and Unipolar centralization are dead, Multipolar demand networks and decentralized multipolarity are key now- VBL]
Things Can Get Worse Before They Get Better
"Everybody has a plan until they get punched in the face."
-Mike Tyson on Marxist dialectical materialism
Nobody said Globalism’s replacement had to be better or even *new*.
That, we contend, is the ultimate conceit of post-enlightenment humanity: Specifically that we are *always* progressing and improving teleologically.
- That is what got us into this mess in the first place.
- That is why the BRICS are doing what they are doing.
- That is why Gold is resurging as money again. Some things cannot be improved upon.1
Thinking Globalism will return or that something better is coming tomorrow is ideal but premature.We want to believe that. We truly do. We believe the arrow of humanity is pointing upward. But that arrow does not point in a straight line. Thus, to ignore the cyclicality of things is to ignore history itself.
Globalism, an artifice of complexity, does not solve all problems. It exacerbates some while solving many. Neither is Globalism immune to the laws of diminishing returns.
Globalism’s Diminished Returns
Tainter's Collapse of Complex Societies is a seminal work on this diminished return problem the world is undergoing:
“In the evolution of a society, continued investment in complexity as a problem-solving strategy yields a declining marginal return.”
[Edit- Unironically, a major contribution to this declining marginal return is energy expended maintaining and growing complex bureaucracies.- VBL]
Humanity we hope, truly has a teleological drift upward just as the enlightenment project taught us. Nevertheless, it also *always* regresses to the mean within that drift. Therefore, Globalism --economic complexity personified-- must retreat once in a while. Just as all markets return to their moving averages, all societies return to their mean. Sometimes they even go below them.
Tainter’s Collapse….
Put differently: Globalism represents the world at its most complex to date. When a Global economy recedes because of lost trust as it is now, it also shrinks physical manifestations of Global Complexity (e.g. supply chains) as a function of lost trust along with it.
When economic complexity shrinks, the world reorganizes into simpler, more regional economic relationships to survive. Business stays local. Trust extends only to those you can see from your window literally or at least ideologically.2
The Rotting Corpse of Unipolar Globalism
Ultimately, Complexity Collapse ends when complex societies decompose into their smallest self-sustaining functioning version that society accepts without killing each other. Whether that smallest functioning version be a region (East/West now), nation-state (e.g post Austro-Hungarian empire), smaller ethnic enclaves (e.g. Yugoslavia breakup) or tiny tribes (e.g. Hutu/Tutsi) remains to be seen. But, balance must be restored before progress can resume. Paraphrasing Tainter:
- Societal Complexity: Tribal >> Ethnostate >> Nation-State >> Regional Block >> International >> Global
Right now we have collapsed into Regional but still (barely) International functionality. Nation-state would be next if it continued. Frankly, it could continue if supply chains are not rebuilt along regional lines properly. That would be very bad.
What do you think happens in the East if the BRICS do not work out? We need the BRICS tradeblock to make it now. if it does not, then that whole region could go up in flames. Globalism is not a choice for them anymore. Mercantilism *must* work.
Mercantile Stop-Gap
"History shows again and again how nature points out the folly of men".- BOC
Mercantilism is providing a Stop-Gap against that right now. Without mercantilism-- and the only truly trustworthy monetary arbiter Gold-- complexity will collapse faster and further into warring nations, warlords, and tribal conflict.
In fact, Mercantilism saved Europe from itself once upon a time. Read: How Mercantilism Brought Europe’s Fragmented Economy Together for more on that.
Mercantilism is not the problem. It is a constructive (but wildly imperfect) fallback in an environment where complexity is shrinking. It is a sign that we still want to work things out. It’s the logical straw to grasp at given the world’s deteriorating situation. But it’s not the last straw. And it is not the shortest straw. It is the best straw right now.
The bottom line is: We hope Mercantilism works until something better comes along. Because Globalism is dead and there ain’t nothing better on the horizon just yet. If Michael’s fears are realized, it can get much worse.
It Can Get Much Worse
Here’s the kicker. If we do not find some comfort in Mercantilism until something better does come along and if economic complexity continues to collapse, Feudalism is next, as Marx understood.
Marx said: Early Societies » Feudalism » (Mercantilism) » Capitalism
Right now that timeline is moving in reverse.
Right now it simply looks like a healthy retracement (given the import of what happened in Ukraine and the ME) even though it feels horrible for the WEST. But it might not feel so bad in the EAST yet. Nevertheless, it can turn ugly quickly and must be worked at constantly. Ultimately, World War 1 was a byproduct of failed Mercantile practices.
See you on the other side of this mess.
Continues here
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