Our Collective Religion

Ok ok, i've been pushed into writing more blog entries. Matt, at the blog The Hopeful Gardner, is right. You don't have to be a fantastic writer or have something completely original to write in order to post a blog entry. Just write, and let the chips fall where they may. And, i'm taking Matt up on his offer to write every week and to keep the blog entries short.

"You Gotta Have Faith, a Faith, a Faith"
Is it just me, or is the Dow Jones Industrial Average a complete fabrication? We've heard over the past few months some simple truths about the stock market: nobody knows what the numbers mean, what they equate, or even how the thing works. In theory, it is supposed to represent the value of the companies that are listed in its index. However, this value is based on popular perception, not on capital assets. So, we've based our entire modern world, all of our savings and retirement and future, into the perception that if we put our money into the stock market, it will increase in value. If, however, we perceive the market to be worth less than it is, then we stand to lose everything. The number is just that, a number. When we hear "Bill Gates lost 20 Billion dollars last year because of the recession", did he really lose that money? Did Bill Gates have 20 Billion dollars in a room somewhere that someone came and took from him during the recession? No. He never had that money becuase it doesn't exist. It is only a number on a computer screen. But what if he cashed in his stock? What if he did want his 20 Billion in cash? This would be the surest way to prove that the system is artificial: if everyone wanted their money in cash they would be met with a cold reality: it doesn't exist. That much money is not in circulation and is not in print and is simply not in a bank anywhere. It is perceived value.

So, we are told that the stock market and economics in general is all psychological and therefore we must be optimistic and spend our money for it to work. Modern economists are actually telling us that we should do what is right for the country: spend our money and not save it! The logic is that saving our money in a recession is bad for the economy, as it will contribute to a negative economic growth rate. For the economy to work we must have faith: continue to buy things, consume, consume, and spend money and it will return the favor. For the economy to work, we must have faith. Faith that we are not becoming empty shells of human beings by destroying all meaning of life in favor of commodification and consumption. Faith that the economy will not destory the Earth in extraction of our natural resources. Faith that we will find alternatives to forests and clean water, cheap fuel and clean air when we run out. Faith that a system, any system, can work that is based on continual and perpetual growth.

My question is this: What is the difference between our modern economic system of perpetual growth and a pyramid scheme? This is an honest question and I welcome serious answers. To me, they both appear to be based on the idea that it must grow in order to work. If there is not growth, then the system crashes, and those at the bottom of the pyramid lose their shirts. My question grows out of this concern: what happens when the economy has depleted its natural capital (oil, trees, fresh water, land, etc;)? What happens when we reach a limit that keeps the system from growing (no more cheap natural resources to fuel the growth)? Will it not crash just like a pyramid scheme?