Sunday, June 14, 2009

Power comes from ownership of the means of production!

A timely post from John Robb at Global Guerrillas. We in Australia are (as usual) a couple of years behind the US but the problem of the end of the current financial system is ours too. What do the middle-class do with their money if the consumer society is dead, and when the shonkieness which is destroying our current wealth generating strategy (investment-at-a-distance through complex and difficult-to-understand means) runs its course? The economy will collapse at some stage during the next couple of years and then rebuild. But it won't come back to what we had before.

In the end, wealth depends on control of the means of production — Karl Marx's key insight. In any society this is ultimately the case. What we need to do is look ahead to the new economy which will emerge over the next few years to replace the current one and invest wisely in it. Those who do will form the next dominant class — this is simply the way society works.

Our current system where we have only the vaguest notion of where our savings and superannuation funds are being deployed, by people we don't know who whatever their personal virtues may be, are governed by very short time lines and an outmoded economic model, is finished. That doesn't mean it will disappear overnight because institutional inertia and cultural inertia is huge. It will take down with it the present moneyed classes as well as the retirement funds of several generations. But the generations coming to maturity in the newly emergent economy in the second decade of the twenty-first century will have no loyalty to it.

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