Today’s Contemplation: Collapse Cometh CLXIX
Fiat Currency Devaluation: A Ruling Elite ‘Solution’ to Growth Limits
Today’s post is my comment on the latest Honest Sorcerer’s piece regarding the misuse of the term ‘inflation’ and how currency devaluation and the coming energy squeeze overlap.
Another well-articulated summary of yet a further aspect of our species’ predicament brought about by a society’s attempts to pursue infinite growth on a finite planet and how our ruling class attempts to keep the party going for a tad longer (mostly for them and their ilk) as we bump up against and try to ignore the planet’s biogeophysical limits to growth.
Debauching a currency as a society continues to expand but encounters diminishing returns on its investments in complexity has a long and storied history. In fact, the ‘strategy’ of economic machinations of this type to kick-the-can-down-the-road as it were has been around for about as long as complex societies and their currencies have been. The most famous (at least for those schooled in Western cultures) is that of the multi-generational devaluation of the Roman denarius[1].
I penned a rather lengthy Contemplation on the economic manipulation we will experience increasingly as part of a series on our energy future. In this fourth and final installment (that aligns with your piece) I begin with this:
“In Part 1, I argue that energy underpins everything, including human complex societies. In Part 2, I suggest that the increasing need for diminishing resources, especially finite or limited ‘renewable’ ones, invariably leads to geopolitical tension between competing polities. Part 3 further posits that this geopolitical competition creates internal societal stresses that are met with rising authoritarianism and attempts at sociobehavioural control of domestic populations by the ruling elite.
Economic manipulation — mostly through the financial/monetary systems of a society, that the ruling caste controls — is part and parcel of addressing the societal stresses that arise as things become more complex (as a result of the problem-solving aspects of a society), competition with other polities increases, resources become more dear, and control of the population takes on greater urgency.”
Pre/history has witnessed this story play out countless times in a rather predictable fashion. First, a society addresses its various problems using the least expensive and easiest-to-achieve ‘solutions’. The surpluses that result from this approach allow for a society to continue expanding (hydrocarbons having strapped powerful rockets to this recurrent tendency). Eventually, however, diminishing returns on these ‘solutions’ are encountered. More expensive and harder-to-achieve ‘solutions’ are then pursued.
Surpluses can stave off having to abandon growth for a while but eventually a point is reached where the masses begin to bear the brunt of the economic contraction that accompanies expansion or even just to maintain the status quo — the elite finding ways to insulate themselves for as long as possible. In a society with a complex economic/monetary system, manipulation via currency devaluation is one of the go-to ‘solutions’ since it can disguise responsibility for the inevitable decline in living standards that are experienced from it while benefitting a few at the top of the power and wealth structures that exist in large, complex societies.
On the surface this approach can appear to be effective, and certainly the narrative managers that work on behalf of the ruling class to steer beliefs amongst the masses stress this to be the case. In reality, however, this currency devaluation is like eating one’s seed corn: it always ends badly, for everyone since it is stealing from the future…
I provide some further thoughts on this phenomena in these posts:
Collapse Cometh IV; Collapse Cometh XI; Collapse Cometh XXXII; Collapse Cometh CXII.
If you’ve made it to the end of this contemplation and have got something out of my writing, please consider ordering the trilogy of my ‘fictional’ novel series, Olduvai (PDF files; only $9.99 Canadian), via my website or the link below — the ‘profits’ of which help me to keep my internet presence alive and first book available in print (and is available via various online retailers).
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You can also find a variety of resources, particularly my summary notes for a handful of texts, especially Catton’s Overshoot and Tainter’s Collapse: see here.
Recently released:
It Bears Repeating: Best Of…Volume 1
A compilation of writers focused on the nexus of limits to growth, energy, and ecological overshoot.
With a Foreword and Afterword by Michael Dowd, authors include: Max Wilbert; Tim Watkins; Mike Stasse; Dr. Bill Rees; Dr. Tim Morgan; Rob Mielcarski; Dr. Simon Michaux; Erik Michaels; Just Collapse’s Tristan Sykes & Dr. Kate Booth; Kevin Hester; Alice Friedemann; David Casey; and, Steve Bull.
The document is not a guided narrative towards a singular or overarching message; except, perhaps, that we are in a predicament of our own making with a far more chaotic future ahead of us than most imagine–and most certainly than what mainstream media/politics would have us believe.
Click here to access the document as a PDF file, free to download.