My lifelong ambition has been to invent a suitcase-size box containing some fusionlike machine that would produce enough energy to run a house or car for 10 years. I imagined the world would be a better place if there was abundant cheap energy. But now I hear cheap energy is messing up the international order of things. The currencies of Russia, Brazil, Venezuela and others are crashing and about to drag more with them, all because the price of crude has dropped dramatically.
How can this be?
It seems the answer to this mystery is a term we have heard before — leverage. You know, that condition you find yourself in when you buy a new car based on your next pay raise. When it doesn’t happen, you have to scramble to cut expenses. If the worst happens and your pay falls, you’re forced to sell things at a loss.
Success in our global capitalistic economic system is based on growth and efficiency. To keep it afloat we must pump it up 2 percent to 3 percent every year. As the whole grows, so does the compounding annual addition until we run up against the outer limits of resource availability. To alleviate this problem we employ efficiencies in the form of computers, robots and elaborate machines. But this creates another problem — the devaluation of human labor, which is the average consumer’s income source. Without income to spend on the goods, the product price must fall or they will sit idle in warehouses, and the cost of their creation will become a loss. Without viable consumers the whole system grinds down in a deflationary spiral until a new value system can be developed, most often via violent revolution.
We can see signs of this around the world today.
Ron Pulliam
Ridgefield
