Welcome to Helicopter drop Super Ben, savior of the indebted world.
hope Bernanke will walk its talk and monetize the US fed deficit. THe fed should already have started to crowd out private money creation. If Ben waits for the credit crunch to happen it will be to late to counter it.
There are 3 things to consider now
1 Debt can not increase much more
2 There's no asset bubbles left (housing is the bubble of last resort and the US lags the world housing boom, the housing bubble in the US is the bubble of last resort).
3 Greenspan allowed a boom in private money creation but he let federal money creation fall to a dismall percentage of the total amount of money created. It makes a HUGE different to print federal money or to allow bankers to create private money by lending more. The difference is simple : printing federal money does not need an increase in the debt level It's Ben Bernanke's job to manage this situation.
Printing money and 2 figures inflation is just what we need. We need this to erase 25 years of foolish build up of the debt level (not only federal officially reported debt of 8 trillions, also household debt (12 trillions), and unreported debt (promises of future payments for retirees and medicare recipients 50 trillions). We should never had let this debt build up happen. It happened mostly because tax were reduced for rich people while wages were kept artificially low (through anti labor policies and excessive opening of world trade). I don't think than anyone think that the average american will repay it's debt in present dollars. And it's not even an issue of americans screwing their international lenders. I don't think europeans can and will repay their debt either. I don't africans will repay their's either (they have had problems to repay them for years now). I'm not even sure that japanese can repay the debt they accumulated these last 20 years. In 90% of the countries public and household debt have soared recently. Whereever you look it makes no sense to have these debt burdens burrying us all into the ground. It's much wiser to erase them through inflation, erase much economic inequality in the process, and make our economies more productive and efficient by eliminating much of the energy spent in useless speculation (housing, asset markets).
The wheel of History turns. If some people did not want debt deflation to hit and subsequent high inflation to appear, they should not have let debt levels reach such foolish highs.
mardi, octobre 25, 2005
mardi, octobre 18, 2005
Debt : our new babel tower
You can find here the story of the Babel tower in the Bible.
As all stories in the Bible, this one has to be interpreted. The story is of course not a (failed) historical attempt at explaining how different languages came on earth. The story tells humans that if humans seek ultimate power, they will fail. Why they will fail is not explicitly said but can be infered, they will fail because of the cycle of optimism to pessimism, from attachment to suffering. This cycle is best explained in the buddhist or indhu texts, but the christian religion agrees with it. When humans care for material belongings, when they expect the future to be a certain way (better than the present especially, or at least the same as in the past), then they becomment attached to these expectations. 100% of the time, reality is bound to be unable to meet these expectations. And this causes suffering. This is why all religions ask for a detachment from the material world and from expectations on the future.
The babel tower is the highest expectations that humans can form. And it is an expectation possible only if it is shared collectively. Humans dreamed back then, and still dream at times, that if united, they could master the universe, they dreamed of ultimate power. unstable. It does not matter if there was any attempt in reality at building such a tower. It’s easy to figure how such a tower could be built, it would unite many people in a common project, they would come to speak the same language. It’s also easy to understand what would happen. When the tower reaches a certain height it becomes unstable, it falls. Better engineering help the project to restart and the new tower goes higher. But then fore whatever reason (insufficient technology, funding, energy, storm, termites ...) a limit is reached. The expectation of ultimate power is being disproven. Pessimism follow. Then each man for himself, chooses to take care of his own projects. End of the common project, of the common language, birth of thousands of new local projects and local languages.
What does this say about the present debt accumulation ?
A loan just as a debt is a bet on the ability to repay in the future with future revenues (or assets but assets themselves are worth the revenues they are expected to generate). So when the debt rise within a country or in a global economy, it means increased expectations on the level of future revenues, it means increased optimism on this future level. An infinite debt is probably the modern equivalent of the babel power. Infinite debt means infite spending power, someone with an infinite credit line would be the modern equivalent of a God. A country with an infinite credit line would be the absolute super power. Humanity getting an infinite credit line could fund all projects and allow all humans to get their desires. Of course, just as the babel tower was not possible to build, infinite debt accumulation is not possible.
As all of you probably know, the global debt level has been rising faster than the global revenue for more than 40 years now. In all western countries consumer debt is sky rocketing, much faster than consumer revenues. In most countries of the world, government debt is growing much faster than tax revenues. Besides the public debt is highly understated because of the difference between private and public accounting standards. And the tax level of many european countries are already quite high. The debt level of financial institutions is sky rocketing world wide as they engage in ever complicated financial schemes. The debt level of companies is stable in most western countries but sky rocketing in asia. All in all the debt growth is unsustainable, humanity is presently building a new babel tower. And it is already very high and pretty unstable.
How this will finaly unwind is unclear.
If history is any guide, panic will finally hit the markets, asset prices will fall, battered consumers will save more, battered banks will lend less, thus battered companies will go bankrupt more often, bankrupcies will create unemployment ... A classic deflation by debt scheme, with a higher magnitude than in the 30’s because the debt level is now higher, and more countries took part in the game. To use the tower of babel metaphor : the tower will crash to the ground.
Governments may also proactively create tons of new central bank money, they may force hyperinflation to erase debts, hand out cash to consumers, create new programs to provide work. Hopefully they will act so, especially if the situation goes out of control.
To use the tower of babel metaphor, central bankers would raise the ground higher and burry the tower before it crashes.
Alas, they have many friends among the rich people and the general mood of central bankers presently is not at monetising debts.
Whatever the way, the global accumulation of debt will stop and this will mark the end of a 50 years era. The allegory of the bable tower tells us that the end of any common projects ends up in participants caring about their own business. This means in our situation probably the end of the dollar as the hegemonic currency, the end of the globalisation process as we know it.
NB :
Some people would like a third solution : debt accumulation sould gently slow worldwide, while revenue would keep on growing. To use the tower of babel metaphor, people would progressively stop to care about this tower and and slowly the construction rythm would fall, while the ground level would slowly rise.
This is not going to happen.
The story of the tower of babel does not say that slowly people got tired of building the tower, and slowly they started to quit the project.
And indeed things rarely work this way once a threshhold of speculation has been reached. Once there are people living on the 50th floor, and people hoping to go higher, the process is selfsustaining, until the crash. Too many people now get their revenues from the increase in debt. No action has been taken so far despite rising unbalances caused by the pro debt and assets policies of the 1980’s (reagan thatcher). The longer we wait, the harder the action will need to be, the most probable it becomes that any action will disrupt the financial markets in a significant way, push the tower to the ground.
If any of you has ever build castles with game cards, you know exactly what I mean. Construction often ends with a final crash.
As all stories in the Bible, this one has to be interpreted. The story is of course not a (failed) historical attempt at explaining how different languages came on earth. The story tells humans that if humans seek ultimate power, they will fail. Why they will fail is not explicitly said but can be infered, they will fail because of the cycle of optimism to pessimism, from attachment to suffering. This cycle is best explained in the buddhist or indhu texts, but the christian religion agrees with it. When humans care for material belongings, when they expect the future to be a certain way (better than the present especially, or at least the same as in the past), then they becomment attached to these expectations. 100% of the time, reality is bound to be unable to meet these expectations. And this causes suffering. This is why all religions ask for a detachment from the material world and from expectations on the future.
The babel tower is the highest expectations that humans can form. And it is an expectation possible only if it is shared collectively. Humans dreamed back then, and still dream at times, that if united, they could master the universe, they dreamed of ultimate power. unstable. It does not matter if there was any attempt in reality at building such a tower. It’s easy to figure how such a tower could be built, it would unite many people in a common project, they would come to speak the same language. It’s also easy to understand what would happen. When the tower reaches a certain height it becomes unstable, it falls. Better engineering help the project to restart and the new tower goes higher. But then fore whatever reason (insufficient technology, funding, energy, storm, termites ...) a limit is reached. The expectation of ultimate power is being disproven. Pessimism follow. Then each man for himself, chooses to take care of his own projects. End of the common project, of the common language, birth of thousands of new local projects and local languages.
What does this say about the present debt accumulation ?
A loan just as a debt is a bet on the ability to repay in the future with future revenues (or assets but assets themselves are worth the revenues they are expected to generate). So when the debt rise within a country or in a global economy, it means increased expectations on the level of future revenues, it means increased optimism on this future level. An infinite debt is probably the modern equivalent of the babel power. Infinite debt means infite spending power, someone with an infinite credit line would be the modern equivalent of a God. A country with an infinite credit line would be the absolute super power. Humanity getting an infinite credit line could fund all projects and allow all humans to get their desires. Of course, just as the babel tower was not possible to build, infinite debt accumulation is not possible.
As all of you probably know, the global debt level has been rising faster than the global revenue for more than 40 years now. In all western countries consumer debt is sky rocketing, much faster than consumer revenues. In most countries of the world, government debt is growing much faster than tax revenues. Besides the public debt is highly understated because of the difference between private and public accounting standards. And the tax level of many european countries are already quite high. The debt level of financial institutions is sky rocketing world wide as they engage in ever complicated financial schemes. The debt level of companies is stable in most western countries but sky rocketing in asia. All in all the debt growth is unsustainable, humanity is presently building a new babel tower. And it is already very high and pretty unstable.
How this will finaly unwind is unclear.
If history is any guide, panic will finally hit the markets, asset prices will fall, battered consumers will save more, battered banks will lend less, thus battered companies will go bankrupt more often, bankrupcies will create unemployment ... A classic deflation by debt scheme, with a higher magnitude than in the 30’s because the debt level is now higher, and more countries took part in the game. To use the tower of babel metaphor : the tower will crash to the ground.
Governments may also proactively create tons of new central bank money, they may force hyperinflation to erase debts, hand out cash to consumers, create new programs to provide work. Hopefully they will act so, especially if the situation goes out of control.
To use the tower of babel metaphor, central bankers would raise the ground higher and burry the tower before it crashes.
Alas, they have many friends among the rich people and the general mood of central bankers presently is not at monetising debts.
Whatever the way, the global accumulation of debt will stop and this will mark the end of a 50 years era. The allegory of the bable tower tells us that the end of any common projects ends up in participants caring about their own business. This means in our situation probably the end of the dollar as the hegemonic currency, the end of the globalisation process as we know it.
NB :
Some people would like a third solution : debt accumulation sould gently slow worldwide, while revenue would keep on growing. To use the tower of babel metaphor, people would progressively stop to care about this tower and and slowly the construction rythm would fall, while the ground level would slowly rise.
This is not going to happen.
The story of the tower of babel does not say that slowly people got tired of building the tower, and slowly they started to quit the project.
And indeed things rarely work this way once a threshhold of speculation has been reached. Once there are people living on the 50th floor, and people hoping to go higher, the process is selfsustaining, until the crash. Too many people now get their revenues from the increase in debt. No action has been taken so far despite rising unbalances caused by the pro debt and assets policies of the 1980’s (reagan thatcher). The longer we wait, the harder the action will need to be, the most probable it becomes that any action will disrupt the financial markets in a significant way, push the tower to the ground.
If any of you has ever build castles with game cards, you know exactly what I mean. Construction often ends with a final crash.
La dette : notre nouvelle tour de babel
L’épisode de la tour de Babel dans l’ancien testament est souvent présenté comme étant une tentative dérisoire des religieux d’expliquer a posteriori la diversité linguistique parmi les humains. Les hommes auraient voulu dresser une grande tour qui atteigne les cieux. Dieu, excédé de tant d’outrecuidance aurait alors introduit la diversité des langues parmi les hommes. Ceux-ci, soudainement divisés, incapables de se comprendre auraient du renoncer à leur projet grandiose.
Bien entendu il y a beaucoup plus que cette interprétation littérale à l’évidence historiquement fausse. Mais quoi ?
René Girard
René Girard est le développeur génial de son unique idée : les humains n’ont pas de désir propre, ils désirent en fonction des autres. L’idée en soi n’est pas radicalement nouvelle on trouve un concept de sympathie assez proche chez Hume, Smith, et Spinoza explique très bien qu’on aime ce qu’aiment les gens qu’on aime et hait ce que les gens qu’on hait aiment. La spécificité de René Girard réside dans l’idée que selon lui, le désir mimétique conduit nécessairement à la violence, une violence qui se répand de proche en proche. Pour mettre fin à cette violence, ou la conjurer, la société fait converger tous ces désirs de violence vers une unique victime, le bouc émissaire. Avec le bouc émissaire surgit une dimmension sacrée, une valeur qui vaut pour tous. La mise à mort, réelle ou symbolique du bouc émissaire permet de fonder la loi, l’interdiction du meurtre. Voilà pour un rapide résumé d’une pensée riche et éclairante. Les personnes curieuses peuvent en savoir plus ici.
Quel lien entre René Girard et la tour de Babel ?
Nous voulons ici raconter une autre histoire. Fut une époque, les humains voulurent atteindre au pouvoir absolu, au pouvoir divin. C’est une époque qui se poursuit en fait encore maintenant, une époque qui n’a jamais cessé de toute l’histoire de l’humanité. Les humains avaient décidé de batir une grande tour pour atteindre le ciel, de contrôler l’écosystème de leur planète, de s’endetter à l’infini … Peu importe le projet, l’idée est la même, accéder au pouvoir infini. Ce projet commun les unissaient tous dans leur diversité, ils adoraient le même objet, le même bouc, la même tour, le même système financier. Ils étaient optimistes, ils priaient, ils chantaient, ils attendaient le succès. Ils étaient attachés à la réussite de leur projet.
Malheureusement, le pouvoir absolu n’est pas de ce monde pour les humains. Alors un jour la tour s’est écroulée, l’écosystème s’est déréglé, il y a eu un krach financier. Peu importe l’échec. L’optimisme excessif de la période préalable avait fait naître des attentes considérables. Celles-ci n’étant pas rempliées, ils ont connu la souffrance, ils ont été déçu, ils sont devenus pessimistes. Chacun alors a quitté l’espoir dans le projet collectif du pouvoir absolu, pour la quête d’objectifs plus particuliers. Chacun a quitté la langue commune pour sa langue particulière.
En résumé, lire l’allégorie de la tour de Babel, c’est avant tout comprendre que, tout projet commun crée bien sur une langue commune, mais que lorsqu’il est déraisonnable, il ne peut mener qu’à l’échec. Or avec l’échec, reviennent les langues particulières. Ce n’est pas la diversité des langues qui a fait l’échec de la tour de Babel, mais l’échec ce projet délirant qui a conduit à la diversité des langues.
L’Allégorie de la tour de Babel éclaire le passage régulier d’un marché d’échange à un marché spéculatif à un marché d’échange, elle infirme la thèse simpliste de René Girard. Il y a toujours une période durant laquelle chacun parle sa langue particulière a ses propres désirs et se moque des autres qui demeurent de toute façon incompréhensibles. Durant cette période, un marché permet par exemple des échanges. Puis vient toujours une période durant laquelle, les langues se fondent, tous les désirs se dirigent vers un même objet d’élection, dans l’imitation des autres. Il y a alors un désir d’enrichissement commun dans une monnaie de plus en plus virtuelle, ou d’accroissement de pouvoir de plus en plus virtuel. Le projet commun crée des attentes délirantes qui naturellement ne peuvent qu’être insatisfaites. Chacun revient alors à ses désirs, sa langue, sa morale, ses forces, ses liens particuliers et propres.
Quel lien entre la tour de Babel et la dette ?
A ce stade le raisonnement est probablement évident pour tous.
Un prêt-une dette c’est toujours un pari sur l’avenir, pari sur la capacité à rembourser ce prêt dans le futur. L’augmentation de l’encours des prêts d’un pays est donc une mesure implicite de son degré d’optimisme sur l’avenir. Si la société augmente son endettement, c’est qu’elle pense pouvoir à l’avenir accroître ses revenus pour rembourser ces dettes. De fait très souvent l’endettement permet l’acquisition et la fabrication de biens productifs (machines, usines, maisons). Accumuler des dettes à l’infini, est l’équivalent moderne de construire une tour de Babel. Pouvoir s’endetter à l’infini, sans se préoccuper de sa capacité à rembourser, c’est accéder à un pouvoir d’achat infini.
Ce n’est un secret pour personne que le monde entier est actuellement dans une spirale d’endettement croissant. La dette des gouvernements, des consommateurs, des banques croit de façon beaucoup plus rapide que les revenus des gouvernements, des consommateurs et des banques. Seules les entreprises ont un comportement d’endettement à peu près raisonnable.
L’allégorie de la tour de Babel nous dit exactement ce à quoi il faut s’attendre. A l’évidence le processus d’accumulation d’endettement ne peut se poursuivre à l’infini. Il devrait s’interrompre très prochainement, soit via une réduction forte de l’activité financière, une déflation sévère, des faillites, une dépression, soit via une création de monnaie centrale très très forte, l’organisation concertée d’une hyper inflation annulant les dettes antérieures. Quel que soit le mode d’arrêt de cet optimisme mondial sur les revenus futurs, de cette spéculation à la hausse, l’allégorie de la tour de Babel nous dit que la division en résultera.
Bien entendu il y a beaucoup plus que cette interprétation littérale à l’évidence historiquement fausse. Mais quoi ?
René Girard
René Girard est le développeur génial de son unique idée : les humains n’ont pas de désir propre, ils désirent en fonction des autres. L’idée en soi n’est pas radicalement nouvelle on trouve un concept de sympathie assez proche chez Hume, Smith, et Spinoza explique très bien qu’on aime ce qu’aiment les gens qu’on aime et hait ce que les gens qu’on hait aiment. La spécificité de René Girard réside dans l’idée que selon lui, le désir mimétique conduit nécessairement à la violence, une violence qui se répand de proche en proche. Pour mettre fin à cette violence, ou la conjurer, la société fait converger tous ces désirs de violence vers une unique victime, le bouc émissaire. Avec le bouc émissaire surgit une dimmension sacrée, une valeur qui vaut pour tous. La mise à mort, réelle ou symbolique du bouc émissaire permet de fonder la loi, l’interdiction du meurtre. Voilà pour un rapide résumé d’une pensée riche et éclairante. Les personnes curieuses peuvent en savoir plus ici.
Quel lien entre René Girard et la tour de Babel ?
Nous voulons ici raconter une autre histoire. Fut une époque, les humains voulurent atteindre au pouvoir absolu, au pouvoir divin. C’est une époque qui se poursuit en fait encore maintenant, une époque qui n’a jamais cessé de toute l’histoire de l’humanité. Les humains avaient décidé de batir une grande tour pour atteindre le ciel, de contrôler l’écosystème de leur planète, de s’endetter à l’infini … Peu importe le projet, l’idée est la même, accéder au pouvoir infini. Ce projet commun les unissaient tous dans leur diversité, ils adoraient le même objet, le même bouc, la même tour, le même système financier. Ils étaient optimistes, ils priaient, ils chantaient, ils attendaient le succès. Ils étaient attachés à la réussite de leur projet.
Malheureusement, le pouvoir absolu n’est pas de ce monde pour les humains. Alors un jour la tour s’est écroulée, l’écosystème s’est déréglé, il y a eu un krach financier. Peu importe l’échec. L’optimisme excessif de la période préalable avait fait naître des attentes considérables. Celles-ci n’étant pas rempliées, ils ont connu la souffrance, ils ont été déçu, ils sont devenus pessimistes. Chacun alors a quitté l’espoir dans le projet collectif du pouvoir absolu, pour la quête d’objectifs plus particuliers. Chacun a quitté la langue commune pour sa langue particulière.
En résumé, lire l’allégorie de la tour de Babel, c’est avant tout comprendre que, tout projet commun crée bien sur une langue commune, mais que lorsqu’il est déraisonnable, il ne peut mener qu’à l’échec. Or avec l’échec, reviennent les langues particulières. Ce n’est pas la diversité des langues qui a fait l’échec de la tour de Babel, mais l’échec ce projet délirant qui a conduit à la diversité des langues.
L’Allégorie de la tour de Babel éclaire le passage régulier d’un marché d’échange à un marché spéculatif à un marché d’échange, elle infirme la thèse simpliste de René Girard. Il y a toujours une période durant laquelle chacun parle sa langue particulière a ses propres désirs et se moque des autres qui demeurent de toute façon incompréhensibles. Durant cette période, un marché permet par exemple des échanges. Puis vient toujours une période durant laquelle, les langues se fondent, tous les désirs se dirigent vers un même objet d’élection, dans l’imitation des autres. Il y a alors un désir d’enrichissement commun dans une monnaie de plus en plus virtuelle, ou d’accroissement de pouvoir de plus en plus virtuel. Le projet commun crée des attentes délirantes qui naturellement ne peuvent qu’être insatisfaites. Chacun revient alors à ses désirs, sa langue, sa morale, ses forces, ses liens particuliers et propres.
Quel lien entre la tour de Babel et la dette ?
A ce stade le raisonnement est probablement évident pour tous.
Un prêt-une dette c’est toujours un pari sur l’avenir, pari sur la capacité à rembourser ce prêt dans le futur. L’augmentation de l’encours des prêts d’un pays est donc une mesure implicite de son degré d’optimisme sur l’avenir. Si la société augmente son endettement, c’est qu’elle pense pouvoir à l’avenir accroître ses revenus pour rembourser ces dettes. De fait très souvent l’endettement permet l’acquisition et la fabrication de biens productifs (machines, usines, maisons). Accumuler des dettes à l’infini, est l’équivalent moderne de construire une tour de Babel. Pouvoir s’endetter à l’infini, sans se préoccuper de sa capacité à rembourser, c’est accéder à un pouvoir d’achat infini.
Ce n’est un secret pour personne que le monde entier est actuellement dans une spirale d’endettement croissant. La dette des gouvernements, des consommateurs, des banques croit de façon beaucoup plus rapide que les revenus des gouvernements, des consommateurs et des banques. Seules les entreprises ont un comportement d’endettement à peu près raisonnable.
L’allégorie de la tour de Babel nous dit exactement ce à quoi il faut s’attendre. A l’évidence le processus d’accumulation d’endettement ne peut se poursuivre à l’infini. Il devrait s’interrompre très prochainement, soit via une réduction forte de l’activité financière, une déflation sévère, des faillites, une dépression, soit via une création de monnaie centrale très très forte, l’organisation concertée d’une hyper inflation annulant les dettes antérieures. Quel que soit le mode d’arrêt de cet optimisme mondial sur les revenus futurs, de cette spéculation à la hausse, l’allégorie de la tour de Babel nous dit que la division en résultera.
mardi, octobre 04, 2005
Concentration, efficacity and long term security
Choose about any subject you may think of :
medicine, food safety, architecture, finance ...
Whatever the subject you pick you find some very interesting relations between concentration, efficacity and long term security.
Hospitals provide better tratments than your local doctor, selected crops or animal species have high yelds, large scale food processing units allow for better food safety procedures than your local peasant killing the duck in the courtyard, high buildings can provide shelter too many people on a small area of land, they withstand earthquakes better than small houses, concentration in the finance industry allow entrepreneurs to raise large amounts of cash quickly ...
At the very same time, concentration makes any single accident more visible.
If your local doctor makes an error of practice it will very often go unnoticed. If a major drug treatment has defects, people will be affected simultaneously by the thousands. If an infection is declared in an hospital, many get ill at the same time. If a food processing unit gets infected, thousands of products must be called back.
Etc.
This process often drives call fore more safety measures. Very often safety measures can be made economically viable only through more concentration. Your local doctor can't respect all the safety rules and learn all the protocals. Your local peasant can't invest the equipment necessary to pasteurise milk or food etc.
The process can go on for a while in a loop. It provides more efficiency and objective safety. Its costs are loss of diversity and increased fear. Indeed even though there are less and less risks of dying, eating unealthy food, seeing a building crash etc. Such events are more visible and therefore create more stress.
Of course, my point is that this process can not go on forever. There is always a risk that the concentration creates risks of its own.
For instance higher buildings allow plane terrorist attacks, concentration of the sickests and the weakest in hospitals is a major driver in the apparition of resistant bacterias and viruses to all known treatments, concentration in the number of species grown in agriculture facilitates the spread of epidemias like the avian flu, philoxera ...
This statement seems contradictory to the precedent. However it is not. As usual, it is very important to differenciate between speed and acceleration.
Indeed Higher buildings are often safer than lower ones, however your engineering science limits the height you can reach.
You may believe that high buildings are better, but the truth is what is better is having a better engineering science. Countries with a better engineering science build higher and safer buildings.
However with a given engineering technique, higher buildings pose more of a risk.
Big banks are safer than small ones, large and liquid financial markets allow more safety and flexibility than small markets. However your finance regulations allow you to manage only a given size of debt. There's a limit to the amount of debt that you can pile on.
With given finance regulations, a higher debt level creates a greater risk.
Ian Illich asked 40 years ago if concentration had not gone too far. At the time huge projects were planned by the governments. Some of those failed. Now concentration is driven by the market forces. However it does not seem on a firmer ground.
Indeed even if we let aside the subjective growing fear and unhappiness with the loss in diversity, it becomes more and more self evident that concentration is reaching its limits in many areas :
for ever growing debt piles, for ever concentrated populations, forever reduced numbers of species grown in agriculture are creating huge risks.
medicine, food safety, architecture, finance ...
Whatever the subject you pick you find some very interesting relations between concentration, efficacity and long term security.
Hospitals provide better tratments than your local doctor, selected crops or animal species have high yelds, large scale food processing units allow for better food safety procedures than your local peasant killing the duck in the courtyard, high buildings can provide shelter too many people on a small area of land, they withstand earthquakes better than small houses, concentration in the finance industry allow entrepreneurs to raise large amounts of cash quickly ...
At the very same time, concentration makes any single accident more visible.
If your local doctor makes an error of practice it will very often go unnoticed. If a major drug treatment has defects, people will be affected simultaneously by the thousands. If an infection is declared in an hospital, many get ill at the same time. If a food processing unit gets infected, thousands of products must be called back.
Etc.
This process often drives call fore more safety measures. Very often safety measures can be made economically viable only through more concentration. Your local doctor can't respect all the safety rules and learn all the protocals. Your local peasant can't invest the equipment necessary to pasteurise milk or food etc.
The process can go on for a while in a loop. It provides more efficiency and objective safety. Its costs are loss of diversity and increased fear. Indeed even though there are less and less risks of dying, eating unealthy food, seeing a building crash etc. Such events are more visible and therefore create more stress.
Of course, my point is that this process can not go on forever. There is always a risk that the concentration creates risks of its own.
For instance higher buildings allow plane terrorist attacks, concentration of the sickests and the weakest in hospitals is a major driver in the apparition of resistant bacterias and viruses to all known treatments, concentration in the number of species grown in agriculture facilitates the spread of epidemias like the avian flu, philoxera ...
This statement seems contradictory to the precedent. However it is not. As usual, it is very important to differenciate between speed and acceleration.
Indeed Higher buildings are often safer than lower ones, however your engineering science limits the height you can reach.
You may believe that high buildings are better, but the truth is what is better is having a better engineering science. Countries with a better engineering science build higher and safer buildings.
However with a given engineering technique, higher buildings pose more of a risk.
Big banks are safer than small ones, large and liquid financial markets allow more safety and flexibility than small markets. However your finance regulations allow you to manage only a given size of debt. There's a limit to the amount of debt that you can pile on.
With given finance regulations, a higher debt level creates a greater risk.
Ian Illich asked 40 years ago if concentration had not gone too far. At the time huge projects were planned by the governments. Some of those failed. Now concentration is driven by the market forces. However it does not seem on a firmer ground.
Indeed even if we let aside the subjective growing fear and unhappiness with the loss in diversity, it becomes more and more self evident that concentration is reaching its limits in many areas :
for ever growing debt piles, for ever concentrated populations, forever reduced numbers of species grown in agriculture are creating huge risks.
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