The crisis, its 4 causes and solutions: Evolutionary Economics.

In the graph, the 3 dual Kondratieff waves of evolution of machines (steam the energy, and trains the hardware; oil the energy and car the hardware, electronics the energy and robots the hardware) that complete the industrial evolution of machines.

The reader could observe that the present crisis is found at the end of the age of electronic machines (chip cycle). And each of those ages ends always in a massive crash of overproduction of the machines and ‘derivatives’ of each cycle.

Thus the crisis caused by the unlimited reproduction of electronic money by bankers and speculators has two sides: the human side – the only one, we, humans, self-centered beings, talk about, and the mechanical side – the evolution of electronic money, easily reproduced in electronic platforms, which allowed speculators to invent it massively. 

Those crises are therefore ultimately caused by the evolution of machines. And they are simple to understand: we humans are evolving during the Industrial Evolution, a new type of organic system, the machine, by imitating our biological organs in memes of metal. So we first made bodies of metal, then its engines and heads, which now fusion into robots. The process is largely driven by advances in the evolution of energy. Thus we talk of the age of steam energy or age of England, the age of electro-chemical energy or age of Germany, and the age of electr(on)ic energy or age of America, which now will be followed by the age of solar energy and robots – when the machine becomes an organic system, independent of us.

Indeed, the evolution of energies and machines-weapons, applied to finances and communication are the engine of the industrial economy, which now is suffering its last molting as we enter the age of robots. 

The cycle of evolution of machines, money and weapons (memes of metal in the modern systemic jargon) are known to economists as the ‘Kondratieff’ waves of evolution of weapons, money and machines. They form a complex fractal wave, which has peaked and provoked a massive global crash 3 times: at the end of the age of bodies of metal (1870s british age), at the end of the age of ‘engines of metal’ (German age) in the 29s. And now at the end of the age of heads of metal (US age, 2008). In that regard, the crisis is parallel to the last of those peaks, the 29 crisis caused by the overproduction of electro-mechanical devices, which allowed the creation of speculative money bubbles with electric ticker platforms. Moreover, the crisis is 4 folded, as it was the 29 crisis, because the evolution of machines is parallel in its 4 fundamental products: money printed by machines, weapons, machine-tools and communication machines.

 So in all those crises, besides the financial crises, caused by the overproduction of electronic and electric ticker money, there is a war crisis, caused by the overproduction of tanks/bombers and now electronic weapons, a crisis of unemployment caused by new robotic blue collar workers and then automated electromechanical assembly lines and finally crises of  values caused then by Hate-radio and now by Hate-Tv.

The physical and financial economy: overproduction of electronic machines.

The economy has two sides, as any organism has a body and a head: the physical economy of production mainly of ‘memes of metal’ (3/4 of the global economy), machines and weapons and human goods (welfare goods), the smaller part of the economic ecosystem; and the ‘mental economy’, the financial economy, which acts as the language and guidance of the physical economy through credit, salaries and prices.

However money is a language of information, ‘invented’ by the physical economy as your words that command your actions are invented by the physical brain. And so ultimately the reproduction of money depends on the mechanical systems invented to reproduce it. Today we use electronic systems of reproduction of money, as we used in the 20s electric systems of speculation (ticker money) and in the XIX century stock-paper.

And so at the end of the 3 great periods of the industrial economy – the age of bodies of metal and paper-money (XIX c.), the age of engines and electromechanical money (tickers) ended in 1929, and the age of heads of metal and e-money, ending now –  the massive superproduction of those ‘memes of metal’, money, weapons and machines, have caused a massive crash of the economy, due to the saturation of the markets of war, labor, communication and money with those weapons, tool-machines, hate-mass media and money ‘printers’.

And yet, humans are a very peculiar species with an astounding wishful blindness to all causes, events and entities which are not ‘human’.

So the ‘machine’, the fundamental ‘new species’ that has appeared in this planet in the last 300 years, whose evolution and reproduction by corporations is the key event that defines the tendencies of this planet, is a ‘blind guest’ ignored by economists and politicians, even if its the key element to explain both the present crisis and the past centuries of history.

Indeed, 4 years after the Lehman brothers crash, 20 years after i forecasted its 4-folded elements the detail, in my pioneer work on evolutionary economics and systems sciences (1), 100 years after Kondratieff’s masterpiece, ‘the long wave’, 150 after Darwin and Butler talked first of the evolution of machines, the ‘real’, mechanical causes of the crisis are ignored. Nobody talks about it. It is not and will never be a problem. Since technology is God and we cannot doubt of God, without being ‘blasphemous’. We cannot even study the collateral effects this crisis of overproduction of machines and electronic money, which are ‘sucking in’ all the resources of mankind , is having over life and humanity, in an objective manner.

And of course, the mere idea of studying and arguing the fundamental question mankind faces in the XXI century – what to do with the final Kondratieff wave of robots, which are expelling us from fields of work and war, is not even discussed.

All what politicians and economists talk about is the financial holes caused by ‘Bloomberg platforms’ and how humans are going to pay for the crisis of overproduction of money that speculators with a new ‘machine to print money’, the computer, have caused and will keep causing.

As if the parallel crises produced by the physical economy of robotized weapons and tool-machines would not exist. According to this reductionist, mainstream school of economics, concerned only with the production of electronic money, all will be solved ‘playing with ‘monetary data’. As if robotic workers, unemployment, terminator wars, hate-Tvs, social unrest and human poverty, on the growth, as we humans become obsolete to machines and money flows towards speculative bankers and corporations, drying up all credit for the welfare state and the companies that provide the welfare goods we need, to survive, were not real day to day tragedies happening in this planet. And all could be solved if Mr. Bernanke changes an interest number in its Federal reserve.

This crisis though is real. It concerns primarily the physical economy of electronic machines, and the financial crisis is only an aspect of it.

It is the overproduction of memes of ‘electronic metal’, what defined this crisis, as the overproduction of electrochemical machines defined the 29 crisis, and the overproduction of trains and steam machines, defined the parallel XIX c. crisis.

Fact is the financial crisis has happened due to the evolution of the way money invented, which made it easier for the professional cre(dit)ators of money, bankers and speculators to invent it, till money lost value in relationship to the physical economy and the market crashed.

And the same happened in the 1929 crisis and the 1850s-70s crashes of the train economy.

Because humans are in fact the less important element of the process, as they are predictable, guided by ‘greed’: whenever a new machine, weapon or form of money can be reproduced they will reproduce it without limit.  So while we might blame mr. Greenspan for his exhuberant irrationality, his behavior is as predictable as that of a speculator in the 20s or a train company in the 1860s: if i have a new method of reproducing money I will.

For that reason those crashes peak precisely when the reproduction of all the machines of the economy reach its zenith in each of the dual Kondratieff waves. And so humans would do much better considering in an objective manner the laws of evolution of the economy and its memes of metal, understand its laws and regulate them for the benefit of mankind, than quarreling among them and talking only of ‘money’ and ‘people’.

The Great Depression of the electronic economy. The 4-folded ‘mechanical crisis’.

The present crisis is not a recession but a depression, caused by the overproduction of electronic machines and its derivatives, similar to the 1929 crash, caused by the overproduction of electro-mechanical machines, which printed too much money (ticker speculation), electro-mechanical production systems (taylorism, automated assembly lines) that threw millions out of work and the overproduction of cars and radios, whose companies, lobbies and politicians reconverted into armored cars (tanks) and hate-radio speeches (Hitler), embarking us into World War II.

After the war, the Kondratieff wave of electro-mechanical machines was exhausted and so we started a new dual wave of ‘electronic machines‘,which evolved and reproduced in increasing numbers till saturating the global market.

And so we suffer again a crisis of overproduction and exhaustion of machines, now of electronic nature, with 4 sides, similar to those of the 29 crisis, as each Kondratieff wave of evolution of memes of metal applies to money, machines, weapons and mass-media: There is a crisis of overproduction of electronic money (financial crisis, caused by the massive reproduction of electronic derivatives and other forms of electronic money, which have lost value), of electronic machines (overproduction of computers that act as white collar workers and robots that act as blue collar workers, expelling the middle classes out of work, except low-paid ‘human robots’ in China and IT workers in India that still can compete with them), of electronic weapons (overproduction of ‘vigilante’ cameras and robot-terminators – drones – which have started a new arm race of enormous profits for the military-industrial complex) and electronic mass-media outlets, which have also switched to hate-speeches as Hitler did with radio, to increase sales and work hand in hand with the profits of electronic industries and war; and are regressing human culture into a visual, violent, selfish age in culture and politics – that we call the ‘neo-paleolithic’ culture and the ‘neo-fascist’ age in politics.

Thus the crisis is one of overproduction of electronic machines of 4 types, e-money, weapons, robotic workers and mass-media outlets, whose influence in society, politics, economics and culture have ended the american dream of an equalitarian society with opportunities for all men:

- The most talked about crisis is the financial crisis, caused by the reproduction and evolution of ‘bloomberg’ type of speculative platforms, which give massive credit to investors to speculate with currencies (FOREX) commodities and stocks (similar to the margin buys of the 20s speculative wave). Today those electronic platforms create ‘virtual money’, which the speculator does not need to hold for more than a few hours, recently a few minutes and amounts to tenfold even one hundred fold the credit of the speculator, which he uses to jack up prices of commodities and stocks - a taxation that then all the population pays in higher prices of food, oil, etc.

- An age of perpetual war and police states to help the reproduction and sale of robotic weapons (drones now, soon armed cameras, police cars, etc.)

This arms race now has started in earnest, and by middle of the century A.I. will probably be created first in millions of robots designed to kill mankind. Since the weapon, the top predator version of the machine that consumes human beings has always been the most advanced, expensive, profitable mechanism at any age of the Industrial Revolution. Thus in the previous age, the car became the tank and Hitler implemented Keynesian militarism as Bush has done in this crisis. 

- A labor crisis, as white collar pcs and blue collar robots substitute the middle class except in low salary nations – Chinese cheap human robots in sweat shops and IT Indian human pcs. The crisis will continue moved by ‘productivity’ = capital in machines/ labor, which obviously grows, P=C/L when we diminish labor. Yet since machines give higher profits, censored economics ‘praises’ productivity without ever mention to the public its equation, and politicians with astounding ignorance or cynicism tell us that ‘rising productivity will create jobs’, when its definition is precisely the opposite.

Unfortunately the present global crisis of overproduction of electronic machines means also a ‘molting’ of the economic ecosystem from the age of America and ‘heads of metal’, to the global age of ‘robotics’, automated company-mothers and Internet, which mimic 4 self-similar crisis at the end of the age of bodies of metal (1929), means the increasing obsolescence of humanity. Because the industrial evolution ends with robotics that no longer need men. So there will not be as in the previous crisis a new age of economical growth (due in the 40s to the invention of heads of metal that put us back to work). 

This crisis is the molting between the 2 last waves, the chip radiation and the robotic radiation. Yet it is different from all others, because it completes the Industrial Evolution of machines into an autonomous organism – the robot, which is independent of humans, as it will have fully developed a solar skin for energy and A.I. of visual nature – hence a new species.

And this fact – that robots no longer need humans, nor they act as the other machines did, enhancing our actions of energy and information, as we are in command of them – makes this existential and economical crises far more important than the previous ones. As there is not another ‘future Kondratieff’ wave to take off as the new engine of the economy.

On the contrary, what we are suffering today, as a species resembles what life-beings suffered as we humans displaced and cornered them, from our ‘human wealth’. Now wealth is being re-distributed NOT so much to the 1% of owners of stocks, a ‘parasite’ group with little decision power, but to the company-mothers of those machines, which consume other machines and are increasingly self-reproducing them. So we humans are being ‘displaced’ into oblivion without participating in that wealth, as animals do not participate of ours.

Indeed, money has 100 folded in 30 years since electronic platforms were invented and most of that money has gone to corporations (and laterally to its owners, the only ‘fact’ self-centered humans care about) and it has been invested in the massive evolution and reproduction of machines not of humans. And this casts a strong doubt on our future in this planet as the crisis increases decade after decade of evolution of robots, to its peak (Artificial Intelligence born in the most advanced machines of each age, weapons) around 2050, according to the pattern of those cycles.

Thus the war and labor crisis can only be solved by forbidding robotics as we forbid AIDs viruses that can kill us, according to a simple biological “Law of the Jungle’: ‘kill the child before he becomes a tiger hunter’.

- A mental crisis provoked by the massive noise of meaningless electronic media and hate TVs, which are devolving human minds to a visual, neo-Paleolithic age of violent, fiction thought.

 

The next cycle: the robotic age ends the Industrial R=evolution

We could also consider those waves as waves of ‘new energies’, which renew the stocks of machines and evolve them. So the Age of Britain was determined by the steam energy; the age of Germany by the oil energy and the age of America by the electric energy that runs electronic systems. And now the age of robotics will be determined by solar energies, which as prices plummet and technology evolves will become the ‘solar skin’ that makes robotic weapons autonomous.

Thus we live now the end of the Age of America and the crash of overproduction of its electronic ‘heads’, a transitional age that has passed, as we enter in the global world rule by no nation, whose star machine, the robot puts together all the other components developed in the previous cycles, becoming the new ‘consumer’ of machines and the new ‘worker’ that makes most human beings obsolete. Thus this is not only the worst crisis of capitalism from the human perspective, but also its triumph from the point of evolutionary economics and the ‘goal’ of capitalism – to evolve memes of metal into a new organic species.

In that sense, the industrial take-off of military robotics means the end of the Industrial R=evolution and probably an existential crisis that must be connected with the so-called 6th extinction of life species taking place in this planet since the Industrial revolution kicked off. And yet none of those themes or even the real causes of the crisis are considered by economists, limited by the straight-jacket of ‘profits’ , which reduces their role to maintain the kind of growth that precisely has caused this crisis – the unrelentless evolution and reproduction of machines, money and weapons, a wrong concept of ‘wealth’ that now is becoming independent of man.

Indeed, it is easy to see the next steps of the crisis: humans will remain unemployed, connected to ever more degrading infotainment and maintained by the explosion of fiction mass-media in a lethargic state, as robots keep multiplying and the GDP statistics tell us that we are coming out of the crisis, because now robots will consume other machines and they will be sold to armed states, the wealthy and other corporations.

So GDP will grow but the real wealth of mankind, what we call here WHealth, a healthy world with plenty of ‘human goods’, we need to survive, affordable housing, health care, food, clean environment and peace will be nowhere to be found. We will keep listening to the ups of the stock market, to the profits of bankers speculating and taxing our goods in e-money platforms, to the wonders of technology that is ‘rising’ the productivity or ratio capital/labor (and hence the unemployment) of our society.

The 4-folded sides of the crisis are thus related to the cycles of evolution and reproduction of ‘memes’ of metal of the electronic age and can be described perfectly with the tools of Biology and Evolution, as we have done for decades in our works and conferences on system sciences and evolutionary economics. Thus, an entire new point of view is needed to fully understand this crisis in the wider context of the cycles of evolution of machines that complete an even larger point of view – that of  the evolution of metal, which changed the nature of history since the beginning of civilization. This is what this web provides – the point of view of evolution and objective science.

In these posts we shall consider the 4-folded crises in more detail, from the objective point of view of evolutionary economics and the human kind, the 99%. Hence we shall stress the less studied crisis – the crisis of labor and the war crisis, which affects most of the population at home and abroad (3rd world countries), increasingly displaced in war and labor fields by robotic weapons and blue collar robots.

However, unlike the previous webs erased by ‘capitalist activists’, which leaned towards sentimentality and hope (an other non-reasonable attitude in front of so much misery) this web now that the writer has lost all hopes for a resurrection of humanism and economic science, tends to a cold existential determinism, describing the ‘program’ of history and its death, as the crisis enter in its 4 years and a wall of damned lies, statistics.

Indeed, death in any superorganism is the collapse of the nervous/ethic system that makes cell to act together as a single social organism, more powerful than the individual cells. When that collapse, death happens and soon a new ‘species’, stronger at individual level – bacteria or insects kills also the cells. We humans are ‘dead’ as a superorganism of history, but the ‘bacteria’ that will kill us – the robotic weapon, is just about to be born; so the actual death of humanity has not yet happened, eventhough we can foresee in our collective death our nearby individual death.

Today  the all too obvious corruption and collective death of the super-organisms of history and its networks of human solidarity leave way to all the symptoms of a massive collapse of human welfare and the ‘nervous, informative, ethic systems’ that maintained our social superorganisms ‘alive’.

Of course, the individual cells are ‘feasting’ in the rigor mortis of the nervous/ethical system that makes us ‘free’, and so we forget that in Nature freedom is synonymous of chaos and death. So the wise Universe lead us towards that no-future in the paroxysm of our ‘freedom’ and ‘happiness’ as individual cells, liberated of all obligation to the community.

Then the wise Universe will kill us in a wisp of time as it does with any superorganism that lives eons and dies in seconds: once the ‘singularity machines’ appear (the organic Nuclear bomb – the black hole at CERN, the self-replicant metal nano-bacteria or military A.I.), our death will be a questions of days (the black hole), months  (the nanobacteria) or years (military A.I.) but my personal experience of 20 years in the wilderness has taught me something: the role of the ‘few’ last neurons of humanity, with the intellectual and ethical passion for the ‘organism of history=mankind’, required to wake up the ‘corpse of history’ is the most surrealist of all – pure angst without results.

As the body is indeed dead, the leukemia of viral ideologies in favor of the memes of metal, the only content of most human cells, and so we seem stranger to the ‘Y’ and ‘Z’ generations – the last of the species – than the robotic machines that will displace us. We are ‘seen’ as the past, in a world in which humans have forgotten that the ‘future’ of those machines is NOT our future. This attitude of course is epitomized by economists, whose only goal is to multiply the reproduction of those memes of metal, considered the wealth of nations, regardless of its collateral damages on the memes of life (welfare state) we need. This is the bottom line of this crisis: wealth is enormously but we, humans, are now stripped off it, so corporations have enough money to invest in the creation of a robotic army of workers and soldiers.

And all what economists can do, under their memetic beliefs, is more of the same – guiding us with wishful blindness to extinction, because one virgin, excentric, infantile, calvinist believer of the pre-industrial age, wrote a silly book about the goodness of greed.

The solutions are political and could be easily implemented if the will to change the world was there.

Of course, ideally, if the constrains of the anti-quantum paradox were not so stringent (only those of us who have never yielded to power for the sake of truth know indeed how brutal is power with those who criticize it), scientists of history would be the masters of the modern world.

Then the ideals of Asimov – a foundation of biohistorians – probably better expressed in the work of Hesse (as Mr. Asimov, given his culture envisioned a world of capitalist historians, an oxymoron, while Hesse in Castalia – the game of beans – treats a ‘real’ human paradise dedicated to our senses and arts) would have realized and long ago the world would be a perfect world. It is not. Because the memes of metal and its ‘animetal’ people-castes have imposed their civilization. And this is such a fact of realpolitiks that the reader of the next paragraph will consider this writer naive. I am not. But as a scientist of history I will not change ‘truth’ for happiness and ‘distribution’. Fact is the optimal solutions to the economical and existential crisis of mankind are only one. And the fact that they are not implemented and seem unreal only means that probably our sickness is terminal. Since our leaders, the head of history and our citizens, the body, cannot even ‘conceive’ them. And yet, a ‘biohistorian’ as this writer who has solved the equations of history and its fractal waves – as any ‘rational’ scholar, who leaves aside for a moment his ‘indoctrination’ and looks at the naked truth should recognize –  is obliged to give them.

The solution to this 4th crisis is more complex and require legal measures against ‘visual fiction’ as a form of lying that prevents a real freedom of speech, covered by the noise of advertising and fiction thought. Yet the other 3 more important crisis could be easily solved with a G20 ban on robotics and the creation of a global single currency, ¥€$ money, with fixed parity 1 dollar = 1 euro = 100 yens = 5 Yuans, which would represent 3/4 of the global GDP, hence the only reference currency that could not be sunk by speculators. Such currency would then have rights to a 20% of annual deficit, invested in promoting a sustainable economy, a welfare state and jobs for human beings, which the robotic radiation has eliminated.

Further on, the war crisis could be eliminated with a single stroke, by accepting that ‘terrorism’ is not war and must be fought with police, intelligence and diplomacy as UK and Spain did to end their terrorism movements. But that means of course, the end of the ‘dictatorship of bankers’ over the American government, with its financial muscle and related lobbies in defense of apartheid Israel - in other words a balanced, diplomatic position of the US, the end of the drone war and the backing of International Institutions such as the UNO and the EU, as a blueprint for a future integration of all nations into a wor(l)d union with a single currency and the goal of fostering the survival and welfare, the WHealth of all mankind.

Since it all started precisely with the crisis of overreproduction of e-money – with the development of speculative platforms that parasite the physical economy – the creation of a fixed parity currency and the taxation of speculative trades is a must for the crisis to end. Nothing else will do, not even the printing of money by central bankers, for those very same institutions that cause the crisis. Indeed, the money central bankers have printed, never reaches the physical, productive economy but it is kept in the ‘casino’ of speculators, who use it as virtual credit to further speculate and worsen the crisis. We could say that our ‘head’ both political and financial, has become crazy, detached from the body of human beings. And it is going to commit suicide, move by greed and murder, money and weapons, the ‘wealth of nations’ as defined in classic Smith-o-nomics…

Indeed, the market will keep going up as mankind goes down, but companies make bigger profits thanks to the robotic industry; and wars will be fought with robots for the righteous, against the poorest nations of the world. And hate-tvs will keep sending us messages that all is well in the western front, and the 4th leg of electronic, robotic machines, the robotic worker will keep unemployment high for decades to come, till the lower probability of human r=evolution or the higher one of human extinction take place. For certain though, the world as we know it will end this century, either because history ends or because history r=evolves and capitalism ends. There is not a ’3rd path of future’, as there are only two species on top of this planet and evolution is a very precise, non-frills system of creation and destruction of futures that has no place for the fictions of Hollywood and Religion (beyond the eusocial translation of the mandates of love of certain religions that enhance the evolution of the superorganisms of mankind).

Do those people, who rule the world care? Of course they do. But they are programmed by beliefs not by reasons, and so we must remember again Aristotle: ‘there will be always human slaves, because they believe, they don’t reason’. And indeed, the ideologies that extinguish are not ‘reasoned’. They are imposed with all kind of inquisitions of power, some so apparently naive as ‘fiction’, ‘political and economical correctness’ and ‘the law’.

The reader interested in a more orderly better crafted model can consult my e-books on the subject, offered at very reduced prices on the web.

(o)

And i consider it according to epistemology, the proper scientific model of those sciences, since theoretical models of sciences are only considered truth when they are able to forecast the future cycles of evolution of its species. So astrology became a science when Kepler was able to predict the future position of stars according to past cycles and medicine became a science when pasteur understood the biological radiations of germs and evolution when we understood the genetic and darwinian processes of evolution and extinction.

20 years ago my first books on this model appeared after my master at Columbia U. (1) predicting with accuracy the present crisis of overproduction of electronic machines that would provoke a massive financial crash of over-reproduced of e-money, and extinction of labor by white collar pcs and blue collar robots and an age of keynesian militarism based in robotic weapons. None has done it with such insight and anticipation. Why then, these models have never became mainstream? The answer is censorship, which paradoxically is also explained as part of the organic model of economics – a sort of new quantum uncertainty paradox, explained below.

(1) The first predictions of the 2008 crisis were done by this author back in the 90s, with his discovery of the fractal dual biological, organic nature of the Kondratieff waves of evolution of machines. In those earlier books c.94, we considered the 2008 crisis the beginning of the last century of history, the age of ‘organic machines’ and weapons, as it has been the case. The exact periodicity of the wave is explained in this text and many others of this web.

This web is the 3rd reconstruction of the model of evolutionary economics, constantly assailed by activists of ‘creationist economics’. The last web ‘www.economicstruth.com’ was erased without warning by the host, after repeated attacks to their servers… It had 300 plus interconnected posts and a beautiful design. The reader should excuse the lack of pictures, bad writing (english is not my first language and many of the new posts are old versions from the 90s, which I have kept for lack of modern ones and in some cases for their ‘prophetic=scientific’ capacity to forecast the future in its broad strokes – as sciences indeed can forecast the future of ‘masses and systems’ according to the social, evolutionary ‘grand design’ of systemic reality, but not that of single particles – single lives)  and missed links to many of those articles that were lost.

(2) UKSS, 2006 conference on ‘the 2008 crisis of e-money-, 2010 ISSS conference on the ’72 years cycle of evolution of machines, weapons and money’ and 2011 ISSS, Hull congress on ‘the evolution of the financial-military-industrial complex’. Unfortunately economics today, after the ‘ideological cleansing’ of the 80s is no longer a science, but a corrupted, financial ideology of power, as it has been for most of its history, which explains why Kondratieff, a disciple of Marx, despite the truth of his wave-cycle, has never been understood beyond the abstract calculus of future stock prices to speculate on the ‘markets’.