samix wrote:


Does this not shift the blame to the politicians from the central bankers, when they are the actual drug pushers who addicted the politicians to easy money ?



Not much to choose between them - politicians allowed central banks to establish - and were happy enough to take their 'campaign contributions' in return.

It's boiled rope and lamp-posts for all of them - although I might spare Alan Greenspan on the grounds that he knew exactly what he was doing when he deliberately set the system to annihilate itself. He really could have been Ayn Rand's 'man in Washington.'

No Screwloose, capitalism DOES require infinite growth - as you require infinite growth in order to FINANCE debt-based economies.

The problem for capitalist systems is that WITHOUT infinite growth you cannot service the interest on debt.

Show me a model of capitalism which does NOT talk about financing development with debt, and THEN we can start talking about a SUSTAINABLE capitalist system...

Any economy based on debt is by its very definition not one based on capital.

Screwloose wrote:
Any economy based on debt is by its very definition not one based on capital.

Sorry Screwloose but that is an incorrect understanding of capitalism as it exists in the real world.

In THEORY "capitalism" could be funded by SAVINGS rather than DEBT. This has NEVER happened in the history of Western capitalism (except for small business).

ALL corporate financing is done by borrowing money - the capitalists BORROW the money from those individuals with savings. It's not always 100% borrowed money, but even if a project was only financed with 10% debt (a very unusual occurrence) it requires GROWTH to repay the debt PLUS interest.

The fact that the term is used incorrectly to refer to modern debt-based funding is a matter for those who corrupted it thus. See the OED: Capital - wealth owned by a person or organization or invested, lent, or borrowed.

Credit/debt from thin air isn't capital - and, as you say, requires continuous mean growth, at or above the cost of interest, to sustain itself. This simple fact being ignored for the last 40 years is, in large part, the reason for what's to come.

Capitalism was practised successfully without banks, worldwide, for many thousands of years; if you consume less than you produce, then you produce a surplus - your capital - usually in the form of the most marketable good available. You can then deploy that capital in the best way that is in your own interest. If you lend it, you may well want interest to compensate for the risk of loss, but that doesn't require overall economic growth to accommodate in the way that multiplied fractional-reserve funds do.