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Excess capacity in almost all economic sectors is causing havoc to the current unsustainable global economic system. This greed based archaic regime, which unfortunately is adopted by all and sundry, doesn’t know when enough is enough. To start with, pressing needs for most essential items/services in the world are already met (OECD +) or are being met gradually (LDC +) hence production/services should have been adjusted accordingly. But since the system is driven by pure unadulterated greed, it just doesn’t know when to stop. Cranking out unwanted junk as well as superfluous and highly alienating services that are neither organic nor liberating has become synonymous with economic wellbeing. The irrational system is set up only to grow indefinitely, in a finite planet; how idiotic! We admit, if the global economy stops growing there will be wide spread distress, if not serious implosion. What is even worse, the system keeps on utilizing precious non-renewable resources to produce unwanted surpluses, while destroying life support systems across the world. The time is now ripe to rebel against this crude and life destroying system in unison!
The irrational global system is now in a phase where things look absolutely ridiculous. Consider the merit of building additional houses, (rather blindly) when there are over 20 million of them sitting idle/empty in the US. Or the craze of constructing more flats when there are around 70 million empty ones in China, to say nothing about ghost cities that were built for millions that have yet to secure residents! One would have rationalized such projects if they were fine-tuned. For instance, if constructions were taking place in specific areas where there is chronic shortage of affordable housing, or the market is incentivizing more housing supply in a given locality, then the effort might have been somewhat understandable. On top of that, since the market is rigged, there is no way of knowing the actual cost of goods/services in the wider global economy. Price discovery for goods and services has been lost to crony capitalism. Crony capitalism has effectively destroyed, probably the most valuable mechanism of the market economy, namely, the (efficient) allocation of resource via price signal! Easy credit has obliterated the price discovery mechanism of the market and has led to massive mal-investments and waste across the world. The connected can access plenty of financial resources to waste on projects that are remotely viable. That is why we see excess supplies in almost all sectors of the global system, while the global mass becomes marginalized and disfranchised!
Let us take Dr. Copper, the bellwether of global industrial economy. Because of copper’s multifarious use in the modern world system, it is regarded as a good indicator of global economic health. Today copper is being sold below production cost! Its current price is the same as it was thirty years ago! When price of copper collapses so will economies like Zambia. As a consequence of this, the Zambian economy is now in trouble and if the situation doesn’t improve, it will have a hard time keeping up with loan payments and the country will go back to the old stern adjustment/austerity program. These programs are bad enough in the OECD, (rich countries), in Africa they will be disastrous, to say the least! Because of commodity price collapse, Brazil is experiencing its worst depression since the 1930s. Perceptive individuals have been warning all along, but African governments don’t heed. They always get infatuated with their temporal good fortunes and extrapolate unrealistic scenarios going forward. Our fate seems to hang on cycles of commodity boom and bust.
Let us look at the global steel sector. China alone produces close to a billion tons of steel a year. By comparison the US produces somewhere between 80 and 90 million tons annually, while UK’s output is about 13 million. Less than half of China’s excess steel production can keep Africa going for over two years. Cement production is also about a billion tons per annum. What the US produced in a whole century, China produces every three years! The same goes for glass, ceramics, aluminum, etc.! As a consequence of shrinking global demand, many of the largest iron ore miners in Australia are in deep trouble. Some major mines are closing down, globally speaking. Let us look at transport. Cars are produced like a plague of locusts. This troubling contraption of modernity continues to pollute the planet as well as atomize physical social mobility. The global excess capacity of vehicles is more than sixty million units (per annum)! Because of oversupply of freight vessels and collapsing demand, one can ship a container from the Far East to Western Europe for only 298 USD! Of course, all the above operations are not profitable at all, but not to worry, the big global companies will not fold, thanks to crony capitalism. They will be bailed out or in the lingua of the system; they are too big to fail (TBTF.) Capitalism’s ruthless clearing mechanism is now effectively suspended in favor of crony-parasitism that globally pushes useless productions/services, thereby cluttering the world!
Global retail is also shrinking, mostly due to stagnant income and excessive debt that is currently afflicting the sheeple in the OECD. (Note; sheeple = sheep + people = human mass) Moreover, the industrialized and other ‘emerging’ countries also seem to have already developed their essential physical infrastructure, hence seem to have a tempered appetite for material input. Besides, the northern sheeple’s increased awareness/sensitivity towards nature and the natural has started to inform its views/opinions, particularly in regards to the logic of the reigning global profit system, where the only thing that really matters is profit, even more than life itself! For example there are many cases where the people in the North have started to out rightly reject the massive concretization of their landscape. The buildings of new airports, highways, stadiums, shopping malls, conference centers, hotels, etc., are being resisted by the new nature sensitive generation. Unlike us, here in Africa, where the mutilation of nature is celebrated as a sign of development, there seems to be a glimmer of hope within the Northern sheeple!
The sociopath/psychopaths (less than 5% of the global population) led modern world system is not capable of discerning the temporal from the eternal, the good from the bad, the frivolous from the sublime, etc. And thanks to these sickos the world is now at the precipice and the possibility of major war/s breaking out in the near future cannot be ruled out! Here is our two cents worth: “Beware, collective humanity might not have the smarts to survive its own follies! “Good Day!