Theory and practice

I used to believe the bankruptcy of the Federal Deposit Insurance Corporation would have substantial implications. The FDIC officially ran out of money last Friday when they shuttered the usual handful of banks. When they close another handful this Friday — conveniently out of the media’s not-so-watchful eye — they’ll have exactly nothing with which to back up the deposits. Since backing up deposits in failed banks is the FDIC’s entire mission, this should cause the financial system to fail overnight. The FDIC claims to be working magic to solve this problem, but they’re simply trying to gloss over a monumental problem, as even the Wall Street Journal seems to notice.

Any decent math book has an explanation: In theory, there’s no difference between theory and practice. But in practice, there is.
In theory, the failure of the FDIC to shore up the otherwise-imploded accounts for John and June Sixpack means the industrial economy should seize up, at least in this country. In theory, by this time next week there should be no food at the grocery stores, no fuel at the filling stations, and no water coming out the taps. In theory, we shouldn’t even make it through the next few weeks to see another 150 banks fail. In theory, we should be foraging for food in picked-over dumpsters by Labor Day. In theory, it’s time to launch the lifeboats.
But, as we’ll see, practice will be somewhat different. In practice, commerce will keep lurching along, ensuring a steady supply of cheap, corn-based crap lining the aisles in the grocery stores. In practice, stock traders with insider knowledge will keep dumping stocks in anticipation of the market’s inevitable decline, planning for and helping create the classic “double dip” recession. In practice, the rich will keep rewarding themselves despite their performance, and the rest of us will keep getting jacked around. In practice, there will be no perceptible change in our imperial lives.
How can this be?
As usual, hyperinflation solves the apparent dilemma. All we have to do is print money to cover the expansive and ever-increasing losses. Money is merely a fetish, anyway, with no value of its own. As long as the Sixpack family keeps showing up to buy cheese doodles and soda pop, industrial humans will get to keep on killing every living thing on the planet in the name of progress.
As usual, the “field” of economics has no legitimate explanation for recent or ongoing events. Little wonder, that. Economics isn’t so much the dismal science as a non-science, or nonsense. On the other hand, The Guess Who had a pretty good idea where we were headed back in 1971 when they were singing about ecological collapse. We should’ve listened to them instead of the economists.

Comments 30

  • Seems to me we are in the midst of a severe Peak Doomer Metaphor crisis. Really, how many times can you accuse John and June Sixpack of eating cheese doodles?
    I know I’m preaching to the deaf here, but I’ll just make one small comment to illustrate my point. Following , I uncover this quote about one of the few topics I happen to know something about:
    “If a “free” economy of the sort depicted by Chris Anderson or Clay Shirky is really on its way, then books themselves are soon to be little more than loss leaders for high-priced corporate lecturing. In such a scheme how could professional writers and theorists possibly escape biasing their works towards the needs of the corporate lecture market? It’s as if the value of a theory or perspective rests solely in its applicability to the business sector.”
    You see, this is the kind of blanket hysterical generalizing and shamefully shoddy thinking that reduces credibility to nothingness. I’ve got my issues with the purported “Free” economy, but I would hardly dismiss it out of hand. Here, of course, is not the place for that discussion, but it’s just the sort of thing I see when I click upon most of your links.
    I’ve thought a lot about this actually. Why is it that so much web-writing is so hysterical, across the board? My conclusion: writing is a clumsy tool in the hands of the marginally skilled seeking web audiences. The easiest thing to reach for in a writer’s toolkit is the bright screaming hysterical metaphor. It’s what’s easiest to write, and what’s easiest to read. It’s what folks want. Posts containing subtle intricacies and shrewd, difficult-to-read analysis don’t get millions of page hits. Not that I’m saying your are trolling for hits, Guy, because I don’t think you are. But I do think you’re guilty of reaching for the low-hanging writing fruit, eschewing thoughtful analysis for the instant gratification of pulsating neon metaphors and similes and etc. You and about a billion other bloggers. We whip ourselves up into hysterical furies that signify nothing.
    You’re making your stand there in the desert, Guy, and I respect you for it, even if I don’t quite see things your way. Since, as you are fond of saying, there’s nothing you can do to forestall the seemingly inevitable trainwreck that we’re headed for, why not lapse into some thoughtful quietism (which I think could be your real bent anyway), and give us some thoughtful commentary, instead of a snarkastic running tally of daily events?

  • My link above doesn’t appear to work, and also the sentnece makes no sense. Here it is naked:

  • Sorry to be hogging all the comments here, but the link below is to an example of web writing that seems to me is of the thoughtful kind. Not coincidentally, it represents the opposite viewpoint from that usually espoused around here:

  • Prof Em Guy:
    Your Nepotistical Natering Nabob Nephew of Negativism (is it a sign of a character defect that I enjoy writing that? ) rides again.Hey,he’s of your blood not mine.
    Don’t we have fun?

  • Prof Em Guy:
    If Court gets out of hand at a family reunion,you can always hit him with his 5N nickname.Sure to get a howl from all.

  • Court, you inspired me to count. In the two-year history of this blog, I’ve mentioned the Sixpack family twice and cheese doodles twice. But never in the same post until the current one.
    Nonetheless, your point is well taken. Perhaps this autumn or winter, when I’m not working 12-14 hours each day in eager anticipation of grid failure, I’ll take the time to be more thoughtful. Could be, though, I’m just so excited about economic collapse that wishful thinking is clouding my judgment. Could be, in addition, that I’m just not cognitively capable of keeping up with you. I never claimed to be wise or worldly.
    In any event, I’ll keep putting my admittedly egotistical spin on the shit we’re in, complete with links to some of the posts I find worth reading. If you don’t want to read about economic collapse, ecological collapse, and the human predicament in light of both, you’ve come to the wrong place, in which case you might be interested in chattering about twit lit.

  • Guy, touche. Perhaps I confused you with your fellow doomers, who are also prone to mention of cheese doodles and Joe Sixpack. And I am, indeed, interested in twit lit, for the same reasons others might be interested in cave paintings or tribal oral histories: I think there is a possibility – mind you, only a possibility – that twit lit will serve as the progenitor to new forms of literature.
    But I digress. I am very much interested in the human predicament, from all its various angles. I just don’t happen to subscribe to the bumper-sticker leaves-blowing-in-the-breeze Doomer version of the human predicament, is all. Last week peak oil was going to do us in. This week it’s hyperinflation. Next week it will be melting glaciers. As I’ve said here before, it’s all speculation about an unknown and unknowable future. I highlighted the link to the opposite end of the spectrum (with which, I hasten to add, I am much in disagreement with as well) partly because there an erudite commentator sees the exact same trends as you do, and forecasts technological bliss, as near as I can tell. The difference in message delivery is both a matter of style and substance, and at no point (in this essay, at least), does he resort to demeaning and belittling his erstwhile intellectual opponents, or normal folks who are just carrying on with the lives their society has happened to build for them. Also note the lack of pronouncements of the absolute: as in “me right, everyone not same me wrong”. Especially, for chrissakes, where predictions are concerned. Better to never make predictions, especially about the future. (With apologies to Yogi Berra, and I think I’ve quoted him here before.)
    I guess we’ve been all over this ground before. Probably there’s no point in re-re-hashing it.
    December 31st draws nigh. I have your predication in 1s and 0s on my old blog that civilization will collapse at or before that date. Still sticking to your guns?

  • Court, like so many people you’ve confused my message. I simply must try harder to get my message across.
    Peak oil will not “do us in.” But it might save us. It’s our last hope to wiggle through the global-change bottleneck, species intact. And it’s the root cause of hyperinflation. Without peak oil and the associated economic collapse, there will be no habitat for humans, including you and your offspring, within a very few decades … probably 2030, if we keep the industrial machine of death running. For a well-reasoned plea to bring down the industrial economy before it kills us all, click here.
    If, on the other hand, we manage to prop up the empire for a few more years, those glaciers you mention will do us in … with a lot of help from high temperatures induced by the release of methane, among other side-effects of western civilization.
    And yes, I’m still sticking to my guns. Lights out on the empire by year’s end. Call me a dreamer. But I’m not only one.

  • By “do us in”, I meant civilization as we know it. A quibble, I know.
    As for your third link, well, you see, this is just the sort of hyperbole that I’m referring to. Some of what she says is true, particularly about the raising of the “socialism” bogey man, and the (attempted) domination of money, money, money into every aspect of our lives. Unfortunately, she, like so many writers of her stripe, buries her own decent points in endless mounds of hysteria and generalization and hyperbole and wishful thinking. Every American is bereft of reason, and the only hope for the globe lies in recent Latin American socialism (to cite just two overblown generalizations) …? Puh-lease. It’s just an echo chamber, where empty slogans are tossed around to the approval of a pre-approved crowd. You can’t tell me it’s any better than Fox.
    As for the first link, you’re right. Far more reasoned. (Never thought I’d see the day when Monbiot refers to himself as having “professional optimism”.) A little repititive, maybe, but interesting nonetheless. Still it reads a little like 2 talking heads on Fox arguing about whether we should waterboard terrorists, or just go ahead and hook up the electrodes to the nuts.
    It is not at all clear to me that civilization truly teeters on the brink. It’s certainly possible, in light of the trends you highlight here, but by no means certain. I seek to preserve some independence of thought, and as a card-carrying Humean empirical skeptic, I am instantly suspicious of all claims to absolute certainty. Particularly about the future.
    There, I read yours. Now you go read mine. I suspect you’ll disagree with every word, and as I said there’s plenty there I don’t buy, but do do me the courtesy of actually reading the thing. Who knows. Maybe you actually won’t want to vomit by the end of it.

  • Prof Em Guy:
    It’s impossible to put a time line on any of this.Better to concede 5N’s point,and if it doesn’t happen before year’s end,and he gets sassy about it, you can always remind him of his new nickname.

  • Often contrarian views are not particular welcome here,
    I dont ‘troll’ as they say, just for the sake of it.
    I dont know everything clearly, no of us do,
    however in defence of this site I see the discussion
    as a conversation, where we can collectively moan
    bond, ‘take the piss’ (mock), and question everything.
    I am weary/wary of certainty and prediction.
    None the less ecological limits are a
    given. When it comes to doomerism/collaspe there is
    a belief that given the complexity and inter connectedness
    of the global economy; resource limits and population pressure
    that there will at some stage be a catastrophic economic/environmental ‘collapse’ aka olduvai theory.
    Systems theory suggests that the more complex a system is
    the more vulnerable it is to a complete collapse. I believe
    contrary to popular opinion as expressed here and elsewhere
    that profound complexity can express resilience. There
    are just too many variables in any system to predict any
    There was a belief that when the US economy ‘sneezes’,
    Australia catches a cold, clearly in this case the Aus
    economy has shown amazing amount of resilience.
    Often I feel that here on this site I am merely ‘pissing into the
    wind’, not only in terms of my expression in understanding world events, but also in presenting a different view from the other contributors comments. My views change and I often challenge my own understanding of things. There is a link between ones intellectual inflexibility and intelligence, apparently have a fixed view is compatible with the highly intelligent. Clearly this does not
    describe yours truly.:)
    Kunstler also likes to mention ‘salad shooters’ – euphemism
    for all that is wasteful/excessive in todays modern consumer culture.
    The point of having a comments section is to challenge/question
    and perhaps on the odd occasion agree with the commentary of Guys post.
    Everyone one can chime in, agree to disagree, obviously
    Guy welcomes the comments. It is difficult to make fresh
    and intelligent comments and therefore make a positive (constructive) contribution all of the time.
    Intuitively (sp) I feel ‘profound’ doomerism is a pyschological state. Clearly eco limits/pop pressures are real, but when you
    individually make whole sale change to your life because
    of perceived collapse you perhaps
    need to occassionaly question you motivations.

  • I read “The Technium.” There’s so much here to disagree with, I hardly know where to begin.
    First, he assumes an infinite supply of cheap energy. Then he assumes that we’ll use it to improve the human condition, contrary to history. He assumes we’ll conquer space (see my view on the lunacy of that endeavor here). And he assumes we’ll not realize our full human potential until we’re programmed by machines.
    Okay, he doesn’t quite use those words. But that’s the gist, as I read it. Never mind the complete extinction of every species on Earth, including ours. He certainly doesn’t mind. Indeed, he doesn’t even think about the consequences of technology.
    The further we go down the path of technology, the further we depart from our humanity, not the other way around (he has it exactly backwards). I made this point >a few posts ago.
    This is the stuff of nightmares. It’s exactly this kind of love for technology that we do not need, not now and not in the years ahead. And don’t even get me started on his disdain for hunter-gatherers and his love for agriculture.
    Technology is an extinction trap for our species. Agriculture is the lever we tripped several thousand years ago.
    Finally, Matt from Oz makes an excellent point: I value contrary voices here, as I did in the classroom. As Gerry Spence says, “Please argue with me.”

  • yes Court, in reality all popular media is hysterical.
    Perhaps the same reason why sport is more popular than
    the arts. Sport is reductive, it is immediately
    measurable, there are winners and losers, it is black and white.
    Popular media’s modus operandi is tabloidism. Unchecked/unfettered most of the media content on the internet is conspiratorial, shrill and paranoid. The infinite complexity of world events cant compete
    with the limitations or the need for concision. Chomsky often
    describes concision as the main obstacle to presenting the true
    complexity of ideas/world events in any media form/forum.
    Perhaps the media has shaped and consequently trained us to
    think in particularly way when comes to understanding complex ideas.
    We can only ‘tune’ into the concise, the black or the white.
    Perhaps time constraints force us to hang our hats on particularly
    ideas, we all cant be wandering logicians from ancient Greece!
    (ie Plato’s ‘Republic’)
    The technium link is a very long post, as a consequence I have only
    skimmed it, I have the ‘gist’ of it, this ‘confession’ is a case in point and the point that perhaps you are making.

  • Alright, Guy, so I’d like your professional scientific opinion on one of the pieces salient points: do you think it’s possible and / or true that man could have seriously altered the environment and possibly climate before the advent of agriculture? As in causing large mammal species to go extinct, burning vast swathes of grassland, etc?
    Matt, time constraints, yes. Concision is good, but some ideas, no matter how concisely expressed, still take lots of words. These are the ideas largely lost in the public discourse. Now, make no mistake, this is hardly a new development, and the net is hardly responsible for it, but the net sure does propagate it.

  • It’s certainly possible, and probably even probable, that humans altered the environment before the advent of agriculture. Although the evidence is sketchy, pre-agricultural humans almost certainly burned large areas, although these same areas probably burned in the absence of humans, too. And pre-agricultural humans likely caused a few extinctions (possibly including large mammals). But let’s not lose sight of the larger issue, namely that the impact was stunningly small. To a very great extent, pre-agricultural humans lived short, relatively carefree lives and had little impact on other species or cultures. That lifestyle persisted for about 2 million years.
    Along comes agriculture, and quite suddenly the climate begins to change, vast areas of habitat formerly used by non-human species are transformed to an unlivable state, and we have a crisis as grave as the Cretaceous–Tertiary extinction event. George Monbiot, along with nearly everybody else in the industrialized world, thinks we should keep doing the same things we’ve been doing … except with a couple solar panels to light the way.
    I think this is insane. We’re killing the living planet and our own species. And don’t give me that crap about all species going extinct, so it’s no big deal — we’ve accelerated the demise to a huge extent, and we depend on these species for our own existence.
    The longer we spend in denial, the more we overshoot, and the more humans die miserable deaths. It’s time to terminate the industrial age. It nearly happened five times within the last year (that I know about). Is the sixth time a charm? I truly hope so.

  • Well, if it is the case that pre-agricutural humans were altering their environment, then it seems that some of what Kelly was saying in that article holds true: perhaps what we are doing now is simply a working out of the trajectory we have been on since emerging from the primordial muck or, more properly, from our simian ancestors. Perhaps this imbues us with a tragic destiny, if the collapse you are so certain of comes to pass; but then this would seem only appropriate, would it not, given our effect on other species worldwide? More practically speaking, if this is our trajectory, and I tend to think it is, it is highly unlikely we will turn from it willingly. This is at least partly why I tend to the techno-optimist side these days – if our species has a decent hope of maintaining workable civilization, it will probably take some techno-form. (Espcially if you define “technology” as broadly as Kelly does.) If you are right, then nothing matters anyhow, given that we are not willingly going to depart from our profligate ways. So, pragmatically speaking, why not get on board with where we’re going anyway? If we’re doomed, we’re doomed. But, unless some wishful immortality dream comes true, we’re all doomed anyway.

  • Yes 5N nailed it.
    matt: It’s not “Court” anymore.That’s his archaic nomenclature.He is now identified as 5N.See my previous posts on this subject.We can’t have any progress on this site if we don’t keep up to date.

  • We’re tragically flawed by our lack of free will, as I’ve been saying for years (echoing Nietzsche). Can we do better? In the spirit of the Overman, of course. We can save a few remaining species, and perhaps even our own, if we bring a stop to industrial civilization. The idea is not so tough to grasp — it’s so mainstream it appeared in the Guardian! Will we do better? You may call me a dreamer, but I’m not ready to give up yet.
    To be fair, pre-agricultural humans could not have known they were disrupting habitat sufficiently to cause extinction (if that occurred). They had neither the power nor the knowledge. We did not know our own actions threatened other species until we entered the agricultural age. We didn’t know with certainty that our own actions threatened our own species with extinction until a couple decades ago. By that time, we’d already made the conscience effort to cause the extinction of at least one species, a small fish known as the snail darter. In 1979, we decided the convenience of electrical power was more important than the continued existence of another vertebrate species.
    How many of us will it take to stop the machine of death known as western civilization? That remains to be seen. Perhaps some day you’ll join us ….

  • Deep Truths / High Intellect / Low Culture
    I have to say right aloud that I really dig this red-neck intellect Joe Bageant. Read his analysis of the healthcare “debate” at:
    But there are deeper truths in that discussion that deal with the failures and frailties of our society and culture and why we continue to shoot ourselves in the foot and demand the destruction of our own best interests. This is pervasive throughout our society and culture, including within academia…
    Stan Moore

  • court raises several points.
    There is nothing like forecasting
    to teach one humilty. So yes it is easy
    to question the validity of predictions
    made by Guy. The second objection to the
    blog is the notion of repetition, I would
    disagree. Visit Kunstlers website for
    repetition. You could encapsulate his priamry
    message in 500 words, and yet for the most
    part he says the same thing week after eek.
    Somewhat ironically he has quite a following. This
    factor says more about his ‘followers’ than
    it does about the intellectual rigour of
    his commentary. The uber doomers need there
    weekly dose of the impending apocalypse one
    week at a time – spoon fed.
    (In contrast NBL does have a diversity of posts, but of
    course there is an overall theme) – environmental/resource limits and an overriding concern for the biosphere.
    Now suggesting that the modern growth economy
    is bad for the environment is a no brainer.
    I dont beleive anybody in all seriousness could
    debate this point. The strength of NBL lies in the
    opportunity to make comments. Perhaps on a occassion
    the intellectual poverty (include myself here)
    of some of the counter arguments strengthen the
    content of Guys commentary. Perhaps Technium is a
    case in point. At the end of the day ‘mere’ opinions are
    expressed here. Furthermore the medium is not a perfect
    platform for deep discussion.
    On concision – all we have is a sound bite to get our message/
    viewpoint across. Pop media the internet included is perhaps
    not the place for the complexity of ideas expressed in literature
    and in philosophy, and most importantly the viewers appreciation of the medium conscious or otherwise simply wont allow this kind of thoughtful articulation.
    excuse the typos/ramble – in a rush!

  • 5N is a voice of reason and proportionality.We need an arbiter like him.I realize that when he has criticized me in the past he was correct and accurate.
    The 5N designation is so he doesn’t get too uppity about it.
    Truth and reality are the two most important aspects of life.
    Our Stan and matt are quite helpful also in this regard.

  • double D
    you will make a half decent moderator one day,:)
    my last post (content) was out of sync, I sent
    it approx 24 hrs ago – apologies
    they believe (firm proof in some intances)
    there were pre ag mega fauna
    extinctions in australasia –
    as said before, philosophy is there to help
    us transcend our baser human qualities,
    perhaps this is overly optimistic,
    the biggest issue we face is human greed

  • Since life is a string of semi-random moments, with failure almost as likely as success with each breath, I can’t worry about it.
    What happens tomorrow? I continue to muddle through, or I don’t–that’s what. One way or the other I still die, and things ramble on the way they will. I see very little that is productive in worrying about any of it.
    I’ve said it before, and will say again: I don’t care about the macro trends which I have no influence over. I do care about the possibilities present in all the positive interactions I can have on my own, insignificant scale.
    Folks can go on being Doomers or Cornucopians or Pollyannas or whatever the like to call themselves or call each other. In the meantime… I am…and that’s all.

  • As expected, a handful of banks failed today (Friday), including the third largest bank failure of the year. As expected, the stock market continues to soar … as does the price of oil, which now sits at the same price airlines began to fail in large numbers last year.

  • Yes, but it was bought by a Spanish bank and will re-open on Monday. The three other banks have also been purchased and will remain in business. Yet another wasted pushing of the panic button.
    As for the price of oil, hey, I never said I disagree with you about peak oil. I’m just skeptical that its TEOTWAWKI.

  • Technical note: your link isn’t working, Guy.

  • The issue isn’t who bails out the failed banks — although it gives me pause when it’s either taxpayers or foreign banks — it’s that the number of bank failures is yet another economic symptom of energy decline. Banks require cheap energy to make a profit. Without cheap energy and therefore economic growth, banks fail (as do other institutions). Eventually, all the banks fail.
    And that is TEOTWAWKI.
    Thanks for the note about the link, which I repaired with an updated and permalinked version of the original story.

  • Thanks matt,
    Double D

  • Dear Professor Guy —
    I have not been keeping up with the discussion here, but taking a brief look at some of the comments reminds me that humankind survived and prospered over vast periods of evolutionary time through tenacity. For thousands of years, despoilation of the natural environment was part of survival itself, and there was plenty of room to grow and find new land and new resources to continue the process. Our species seems to have become evolutionarily adapted to anti-speciation and eventually detrivorous (Age of Fossil Fuels).
    That tenacity has never left. I would call the Reagan Revolution the beginning of the end. I just watched the CD biography of Ralph Nader, called “An Unreasonable Man” and it reminded me of how Reagan effectivly negated so much of the early consumer advocacy of Nader, and Reagan did even worse — he popularized greed and effectively neutralized conscience and social and ecological consciousness in favor of greed. And every time Reagan was caught lying and violating law and conscience, he lied tenaciously. George W. Bush excelled at tenacious lying, and now Barack Obama is doing the same.
    But we have little additional wiggle room in the ecology or the economy of our planet and of our society. We are in a fantasy land now, just like Joe Bageant spoke of in his latest posting. People are seeing recovery and prospects of growth in the printing of money in a society which produces nothing of real value. The major media is currently hailing Ben Bernanke as a savior of the economy and reveling in his profession that prospects for near-future growth look good.
    Investors who have been fed their wealth by government largess continue to speculate with their non-earned wealth. Why not! The books are completely cooked on the economy and the market and so if you have some wealthy from the cooking process, why not eat the dinner while you can!
    While societies and civilizations take time to collapse, we have seen Easter Island and we have seen Babylon and we have seen Mesa Verde and Greenland and we can see our fate if we open our eyes.
    The bigger they are, the harder they fall, and our fall will be spectacular.
    But there is still a wee bit of wiggle room for the optimists to play with, even though their optimisism is more closely aligned with astigmatism than realism.
    Our house is built on a foundation of sand, with walls eaten by termits and a leaky roof. The wind is starting to blow. The mud hut looks inviting…
    Stan Moore

  • court,
    ‘In an effort to challenge those assumptions, systems ecologist and energy researcher Charlie Hall has long championed a biophysical approach to economics as an alternative to neoclassical economics which he likens to a Ponzi scheme. Why a Ponzi scheme? Each new wave of lending is made based on the faith that future flows of energy will increase sufficiently to create enough economic growth to pay off the new loans.’