Since we fell apart in 2007

A 5% profit margin, or a 5% price difference between one maker’s product and another’s doesn’t sound great these days, but they’re equivalent to 10% fifty years ago or 20% a hundred years ago. In 10 years’ time they’ll be equivalent to 2%.

The average world tariff that countries impose on the products of one another — unless two countries have what is euphemistically called a ‘trade agreement’ — is now 5%. Because, these days, modern ‘trade agreements’ also ccontain heaps of jargon about necessary regulations, they’re equivalent to the 20%, 30%, 40% trade tariffs that were common in the Great Depression of the 1930s.

Whether the present world recession — that is, the tremendous slowing down of what is supposed to be ‘economic growth’ (as measured by GDP) — is due to the 2008 Crash or whether the Crash itself was an inevitable event that only brought about recession prematurely remains to be seen.

Economists generally still haven’t got it into their heads that every mechanical system ‘hunts’ towards a state of using minimum energy according to the basic law of the whole universe — that is, the Principle of Least Effort (or the Maximisation of Entropy).

And ‘mechanical systems’ includes world trade. If governments want to see world trade expanding into the undeveloped countries and their standards of living raised to those of the advanced countries then they’ll have to find out how to expand the use of total energy inputs — coal + oil + gas + solar cell + wind turbines + hydroelectricity + any other ‘renewable technology’ — two or three or four or five times higher than ir is now.

It can’t be done for all sorts of reasons. Whether we — mainly China — are now getting close to maximum world production of consumer goodies, or whether we’ve already overshot, remains to be seen. One thing is for certain, governments are as bemused by the present situation as they were in 2007 when the world’s monetary situation started falling apart.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s