In the graph, the Industrial Evolution follows a 72 ±7 years generational cycle of evolution and overproduction of machines, the famous ‘Kondratieff’ cycle1,2 in which a nation discovers a new form of energy (white) applied to the creation of new forms of money, the informative software of the economy, and new machines/weapons (red), its hardware.
—Thus, we had an age of steam machines, the age of England, between 1780s and 1857, followed by a crisis of overproduction of steam machines and stock-money that brought the 1857±7 years crashes of the train-based economy, the Colonial age of war and the British Empire.
—From 1857 to 1929, we lived the age of electro-chemical energies, machines and chemistry, discovered by Germany, followed by the 1929 crisis of overproduction of cars and radios, 72 years latter, transformed into hate-radio and armored cars= tanks by the III Reich that brought II W.W.
—It came then from 1929-2001, the US age, the cycle of electronic machines, e-money, Digital weapons and audiovisual media, ended 72+7 years after 1929 with the overproduction crashes of chips and e-money in 2001-08 (dotcom, derivatives) followed by an age of drones & cyber wars.
A fundamental theme of this blog (left column) will be the study of those cycles, its overproduction crises, and the causal comparison of its main nodes, as we have done in the milieu of systems sciences, forecasting the present crisis of overproduction of chips, 20 years in advance2 with an accuracy and detail still unknown to my knowledge in books written today that go no further than the anecdote of the mortgage crisis. Forecasting is indeed the key element of a scientific true model, as all sciences predict the future observing the patterns of past cycles.
Accordingly as the 1st robots evolve as weapons and blue collar robots, during this overproduction crisis of chips, we can predict the last cycle of the Industrial Evolution:
– The Age of the Singularity, the IV Cycle of Evolution of machines, dominated by robots, solar Industries and China. Scientists call the arrival of Artificial Intelligence, the Singularity moment, when robots, which can use solar energy to become autonomous will complete the evolution of machines as organic forms, automating factories & expelling most human workers andsoldiers from labor and war fields, as previous revolutions did with obsolete III World non-technological humans, unless we forbid legally their evolution. Money will become then the digital informative, ‘genetic code’ that organizes their reproduction in those automated company-mothers.
In the graph, we can observe also that those 3 centennial cycles of evolution of machines are subdivided further in a first age (white cycle) in which a new energy is discovered (steam, oil/electricity, electronic and solar systems).
The new, more complex energy is then applied to power machines and used to manufacture new bombs (the reader should understand that machines and weapons are two sides of the same coin, or in parable terms ‘the bad and good fruits of the tree of science’, which always come together).
Then at the height of the cycle, the new energy is applied to transport machines and finally it reaches its ‘evolutionary zenith’, when it is applied to the ‘top predator’, most perfect metal species – weapons (red cycle).
In that regard, machines have 3 phases, parallel to the 3 ages of organisms: They are born as energy/bombs; then a new age of discovery and massive peaceful consumption follows and finally an age of war, as the most evolved machine is always a weapon, concludes the cycle.
So we had 3 ages of energy: the age of steam; the age of oil and electricity an the age of electronics – and then 3 ages of new machines=weapons; the age of trains-colonial wars; cars=tanks and robots=terminators – the final age of the industrial evolution that now starts in earnest.
Since after the end of the ‘Age of Germany’ and its Kondratieff wave of electro-mechanical engines used in weapons during World war II, the fascist age of cars=tanks and planes=bombers, the electro-mechanical wave was substituted by the Age of Digital minds (TVs, computers, mobiles, which act as the eyes, brains and ears of the future robotic species).
So we started a new dual wave of ‘electronic machines‘, which evolved and reproduced in increasing numbers till saturating the global market, provoking the final crashes of overproduction of 2001 and 2008. Then after those crashes the first robots are being evolved as weapons, with consequences for the ‘no-future’ of mankind we can deduce from the previous cycles.
It is also for that reason parallel to the crisis of overproduction of stock-money in the XIX century and ticker, electric money during the 20s and 30s and to the colonial crisis of overproduction of trains and stock-money of the XIX century.
The overproduction crisis at the end of each cycles: its 2 solutions, capitalist canons vs. democratic butter
Thus in each generational cycle of the industrial evolution, new forms of money, weapons and machines, ‘memes of metal’ become then the engine of the Economy till overproduction saturates consumption, increases inventory and crashes the market.
Thus the 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 engines that printed too much money (ticker speculation), automated production systems, halving factories’ workforce (Taylorism, moving assembly lines) and saturated markets for cars and radios.
So companies reconverted them into armored cars (tanks) and lobbied warmonger politicians, (Hitler), who used hate-radio speeches to embark the world into W.W.II.
Then there are only 2 alternatives in a world obsessed by economical growth: switch overproduction to weapons, the ‘evil twins’ of consumption machines that consume us; or switch overproduction to welfare goods, the good fruits of the tree of life that save us.
‘Cannons or butter’ was the expression used by Goring during the 30s, when mankind faced the same choice. And he chose Cannons because they ‘made us strong and butter make us fat’.
Today, we suffer the overproduction crash of chips, which will be followed by the robotic cycle that completes the Industrial Evolution.
And as it happened in the major overproduction crises of the ‘colonial, train era’ and the ‘fascist tank=armored car’ era, we seem to have chosen instead of butter, again cannons.
Indeed, there are always 2 solutions to those overproduction crises:
– The humanist solution of a sustainable world based in the overproduction of ‘life-based’ welfare goods, whose production would be promoted by a Global New Deal with permanent, massive deficit investments and subventions to the sectors of the economy that reproduce those goods (health, food, textiles, public transport, infrastructures, education, etc). This solution could be easily reached if the right to issue money today monopolized by financial and industrial corporations were returned to the people and its elected governments with the creation, as keynes suggested, of a global currency – ‘Ye$’ money (Yen-Euro-Dollar at fixed 100=1 parity, latter expanded to all other global currencies). Such international currency would then have rights to issue debt-free money (the so-called deficit) as the socialist and keynesian schools asked for in the previous crisis, invested on those goods and create a permanent, global, sustainable economy that could design a perfect world made to the image and likeness of man.
– The mechanical, runaway solution of corporative monopoly on finances invested after the crisis of peaceful consumption in ‘cannons’ – in this cycle in the new weapons of the chip age, terminator robots, vigilante cameras, security states that is bringing as in the previous ‘fascist ages’ of the crisis, a permanent low intensity, high-tech war against 3rd world ‘terrorist nations’ – which have become the perfect excuse to overspend in weapons and develop a neo-colonial world of wars for profits similar to the XIX c. wars against ‘primitive africans’ that we have to ‘civilize’, soon expanded into a vigilante state against our own citizens that are stripped off their rights, freedoms and social goods, plummeting back to the XIX century capitalist ‘class structure’ with bankers on top, corrupted politicos below and a starving mass on the bottom (now isolated in ghettos and 3rd world countries of the globalized world).
In the graphs, machines are systems of metal that humans construct by imitating their biological organs and functions of energy and information, proper of animal life. For that reason machines have evolved as life organisms do, in 3 generational cycles, as humans have recreated carbon-life based organisms with metal in increasing degrees of complexity:
Finally, in the XXI century, as nature does with simple organisms, such as viruses in cells, where the 3 ‘parts’ of the virus – its DNA information, body and legs are constructed – and then assembled together, we put together all those organic components into autonomous robots, completing the industrial r=evolution of ‘metalife’ – a new organic species, made of a stronger substance than carbon-life…
And so we can expect an increasing competition between robotic and human workers and soldiers in the economic ecosystem, that will last the rest of the century, as those robots compete with human beings in labor and war fields.
Thus the Industrial Evolution of machines can be studied with the laws of evolution and modeled with organic systems.
Corporations are then defined as ‘Company-mothers’, organisms that re=produce machines, causing positive, symbiotic and negative, predatory, competitive events with rival humans (labor, soldiers).
Thus we define machines as systems of metal that ‘company-mothers’ evolve by imitating human energetic, body organs (XIX C.) & informative heads (XX C.) now put together into robots (XXI C.), which fusion the bodies, hearts and heads of machines of previous cycles into a new organism ‘metalife’ – as Nature does with simple organisms, such as viruses that first create its 3 inert ‘parts’– its DNA information, body and legs.
But then it assemblies them together into life beings that kill their host cells. So when humans put together all those organic components into autonomous robots, completing the industrial r=evolution, a new organic species, made of a stronger substance than carbon-life, potentially independent of the humankind will kill us.
Thus an organic model of machines and its company-mothers describes their nature, predicts their evolution, re=production and extinction of rival species (simpler machines and men), as in each cycle the eco(nomic)system selects the best energy & information machines through consumption testing and the best top predator machines (weapons) and cultures attached to them through war.
Since a Free Market is an ‘Economic ecosystem’, regulated by a language of information called money and ruled by company-mothers, whose aim is to re=produce and evolve machines, organisms of metal that imitate & enhance human body/mind information & energy organs, making our ego addict to them but also compete, atrophy and substitute them.
And this competition for resources is the true cause of economic crises, which are crises of overproduction that happen at the ned of each age of the industrial r=evolution. We live the 3rd of those crises, the crises of overproduction of chips, e-money, robotic weapons and pc-white collar and blue collar robots that displace us from labor and war fields. But this crisis is worst than the others because as the robot ends the industrial revolution there will not be a new age of machines whose discovery and reproduction can take off the industrial economy and create new jobs.
In the montage, we can see, separated by 72 years generations, the 3 cycles of overproduction of peaceful machines and money that saturate markets, causing stock-crashes: 1857+7 crashes of train stocks; 1929+7 year crashes of cars and ticker money and 2001-08 crashes of e-money derivatives and chips/robots. Then companies switch overproduction to armored machines (weapons) and informative hate-media, provoking wars for profits.
Thus we study the 2 phases of machines and weapons overproduction separated by crashes:
– Overproduction of working machines & corporate money: In the 1st cycle, trains eliminated most transport job & horses while its stocks soared. In the 20-30s mobile assembly lines threw ½ of the work force, while tickers jacked-up stocks. In the 2000s blue-collar robots automate those assembly lines, while e-money stocks and derivatives multiply the wealth of corporations.
– Yet, since the ultimate goal of corporations is NOT human, they do not reproduce the ‘welfare goods’ humans need to survive.
Thus at the end of each of those Kondratieff cycles, as industrial and financial corporations overproduce fiat money and the machines and weapons of each cycle, in a world of limited resources, they absorb all the wealth of the economy, provoking scarcity on the human side of the Economy, of jobs, wealth and welfare goods humans need to survive, from food to housing, to health-care, to education. So in the 30s, the overproduction of cars and radios and the application of electromechanical engines to assembly lines, meant the loss of millions of jobs and the poverty of humans, while the world was filled with cars, its armed version, tanks used in II W.W. and stock-market speculators became immensely wealthy.
Then as social unrest grows, there is overproduction of hate-media printed with the same informative machines that print money (yellow press in the XIX c.; radio-hate in the 1930s and TV-hate in the 2010s), parallel to the overproduction of weapons, (armored transports) that ends in global wars: Colonial wars fought with trains (XIX c.), fascism fought with tanks=armored cars & robotic wars in the 2010s. Poverty grows, as humans loose their jobs to new tool-machines and their wealth to corporations.
Thus this crisis is similar to the overproduction crises of electromechanical machines during the 30s, as each Kondratieff wave of ‘memes of metal’ applies the new energies to overproduce money, machines, weapons and mass-media, the 4 key machines of the Financial-Media Military-Industrial system, provoking endemic poverty, social crisis, fascism, war & the end of democracies. Now we live a crisis of overproduction of Chips and its derivatives: e-money, hate TV, blue-collar robots and white collar Pcs, which are the real, non-human, objective causes of the crisis:
-1. There is a crisis of overproduction of electronic money – a new form of money made by computers, and hence related to the evolution of information machines and its technology. Today there are 100 times more money in the world than in 1973, when bankers started to invent e-money for free; changing it for real assets, absorbing all the wealth of the economy and leaving no money for the middle class, human governments and small companies that produce welfare goods. 95% of e-money is today in the hands of corporations. They started to invent e-money in the 80s and brought 2 crises: the dotcom crash of 2001 and the e-money derivative crash of 2008. Both crises invented so much electronic derivatives and speculative ‘prices’ that fiat e-money lost all value, crashing the economy. Those crises are similar to the train’s stock-paper crashes of the XIX c. and the ticker money crashes of 1929-37.
– 2. There is an overproduction crisis of electronic tool machines, which evolve so fast that now are able to manufacture all type of goods, displacing human workers (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 compete with them). In the first cycle it was the train that ended most transport jobs, the bulk of labor in the XIX c.; then it was the electro-mechanical assembly lines of the 1920s; now we have white-collar pcs and blue-collar robots in the 2000s, which throw from those assembly lines the human workers.
– 3. Transport machines are overproduced, provoking crashes of the physical economy as they remain unsold (train stock crashes after 1857; luxury car crash of 29; cheap cars’ crash of 1971; 1991 & 2001 overproduction crashes of Pcs and all kind of chipped electronic machines.
– 4. There is an overproduction crisis of electronic weapons – vigilante cameras and armed robots, drones that watch, control and increasingly kill human beings. They have started a new arm race of enormous profits for the military-industrial complex), as companies shift from making transport/communication devices to making its ‘evil twins’ weapons (shift to war railroads and hate yellow press in the second half of the XIX c. to hate radio and armored cars=tanks after 29 and to hate-TV and robot terminators after the 2008 crash).
– 5. There is an overproduction crisis of electronic mass-media outlets, which have also switched to hate-speeches as Hitler did with radio, to increase sales and synergies with the profits of war. They are regressing human culture into a visual, violent, selfish age – that we call the ‘neo-Paleolithic’ culture and the ‘neo-fascist’ age in politics. They also report positively about the people who run the political and financial system, as media uses the same machines that print money and the same conglomerates own its corporations.
Thus economists who propose a humane solution to the crisis (butter instead of canons) have no exposure. Instead corporative economists and neocon politicians rule the system, praise overproduction and ask for the destruction of the human welfare economy and the building of a security, repressive, weapons-based state. They defend ‘splendid little wars9’ to get out of the crisis with profits. The yellow press in the XIX c. also sponsored the colonial age of wars fought with the surplus trains and steamers that killed 30 million non-technological people; while Hitler’s Hate-radio sponsored tank wars in the 30s.
The equations of overproduction: Capitalism maximizes war and minimizes welfare.
Money is a language of digital information that gives orders to workers, consumers, products (with prices) and politicos (lobbies). In systems sciences, we describe all what exists as complementary systems of energy and information: languages stored in heads, particles and informative social castes, politicians and bankers, guide ‘blind’ fields, bodies and masses of human citizens workers. Thus, a real science of Financial Economics must be based in the description of money as a language that reproduces the goods of the economy, as blood systems do in organisms. As such it runs parallel to the informative system of verbal laws that regulate the actions of the physical body of human cells, citizens of History. But in all complex organisms the nervous system controls the blood system. So, the legal system must control the economy and regulate credit to create a sustainable world that overproduces the welfare goods that all humans need to survive instead of overproducing only metal-memes as corporations do, in search of maximal profits.
So in an efficient, democratic, social system both languages must be controlled by politicians (nationalization of finances) and citizens must receive enough energy – a ‘universal salary’ – to give ‘economic orders’ of production of welfare goods and absorb enough ‘blood products’ to survive.
Indeed, democracies are about people and if people with universal salaries and their governments with deficit had the rights to print money they would spend it on themselves and their survival and needs, creating a paradise on Earth, a world made to the image and likeness of human beings.
But we do NOT live in a real democracy or an efficient economic system. We live in a ‘capitalist system’ in which governments don’t print money (Deficit zero laws). Instead financial and industrial corporations invent it and use it to over reproduce & sell ‘memes of metal’ – money, weapons and machines – to increase profits, regardless of the harm they might cause to humans. So the most over reproduced goods are the most profitable: money (pure profit); tool-machines that increase and lower the costs of reproduction of memes of metal; weapons that are the most expensive machines despite killing human bodies and audiovisual media because they are the cheapest to reproduce, despite atrophying our minds. So those 4 products increase profits and put together in an equation explain the 4 over production crises of capitalism at the end of each Kondratieff cycle:
1.1 Max. Production (tools) x Max.Price (weapons) – Min. cost (audiovisuals)=Max. profits (Money)
Thus profits will always be higher in weapons, financial industries, tool machines and media industries, which are the less ‘healthy’ industries & goods for mankind since weapons kill us; financial companies that overproduce fiat money, ruin us when we exchange real wealth for worthless digital media; tools take our jobs; and mass-media that has the minimal cost of production, as it reproduces simultaneously through electromagnetic waves devolves and programs the human mind with messages. Finally tool-machines that need no salary will also be overproduced causing a crisis of unemployment.
On the other hand a capitalist system based in profits under produce less profitable, welfare goods:
1.2 Min. Profits=Min. Price (perishable life goods) – Max. Cost (Max. human job x max. labor hours)
Most goods of min. price in monetary values are goods of the human, welfare sector that have higher costs because they use costly human workers. For example, food is perishable and cheap but costly, as it requires time and human labor. Thus it is systematically under produced, reason why 1 billion humans are hungry. So it is basic health-care & education that require many human job hours to cure the sick or educate a human; while machines replicate very fast, so production is high and use other machines always cheaper to maintain than human labor. These equations prove several facts: That capitalism systematically fails to reproduce the goods we need to survive (welfare goods). That it increases unemployment displacing workers with tools. That it overproduces top predator weapons that consume humans in wars. That it degrades human minds with audiovisual trash and only profits the 1% of owners of corporations, for whom the system caters. While the cheapest goods of lesser sale profits that use more costly human labor, the goods of the welfare state that make us survive will be systematically under produced. So a healthy, wealthy, demand-based, sustainable economic system mustnationalize the financial industry. Since capitalism is from the perspective of ‘Human WHealth’ the worst possible system.
So today paradoxically as electronic machines and corporative profits multiply the ‘rival’ human wealth in life goods, human jobs, peace, freedom and true information disappear. And the result of the crisis is the same than the previous ages of overproduction: the dominance of corporations over all the political, economical and cultural elements of society, which ends in this cycle the American dream of an egalitarian, humane society, based in the welfare, human goods we need to survive, be happy and evolve, within a just society with jobs and opportunities for all men.