Well, the capitalist economy did very well in terms of organizing things,
just using the biomass up until around 16 or 1700.
After that point, it starts to get difficult
because of the competing claims of agriculture for food and energy.
Energy is siphoned off.
And so capital accumulation during the industrial era can take off
as if it has no constraints of energy production, of energy consumption.
So fine, you’ve solved the problem, but that then becomes a precursor
of the
greenhouse gas emissions.
This is, if you like, an analogy I want to use in relationship
to fictitious capital.
Capital did fine about claims on future
labor and claims on the future of general output.
All the time the credit system could work in the way that it did.
But in so doing it increased the amount of fictitious capital within the system.
In other words, this is a bit like the greenhouse gas emissions.
So what eventually happens is that we
get capital,which is doing
absolutely great during the 1990s, is doing fine.
I mean, China's coming on board.
Huge amount of increase in everything that's going on.
Total output in the global economy is surging hugely, hugely.
Profit rates are reasonably good and so on.
But then we start to say, well, but more and more
are we running into the greenhouse gas problem.
But also we're running into the fact that there's
increasing amount of fictitious capital information
because we're having longer and longer term investments.
We're getting much more, you know, fixed capital and consumption
fund information.
The dynamics of the system are such
that the credit system becomes more and more significant,
that the credit system becomes more and more a situation in which the gap
between what is imagined and what is really possible
starts to expand to the point where when you start to look at indebtedness
on the global scale, we see exponential growth since 1980.
Huge increase in indebtedness, a huge increase in fictitious capital formation
to the point where now fictitious capital formation is the problem.
You can actually go out now and instead of investing in production,
you can start to trade, you know, stocks and shares
against government debt, against, you know, carbon futures, against
financial currency futures, against.
So all of these different markets exist in which
fictitious capital start to circulate in search of fictitious capital.
So in a sense, in the sense fictitious capital,
in the same way that it produces
an ambient gas, CO2 in increasing amounts,
which then create a series of serious problems that need to be resolved,
so actually, you create an ambient form of capital
that is a form of capital which is fictitious capital
which is circulating, circulating in fictitious capital markets.
So more and more capital is fictitious capital chasing fictitious capital.
And the result of that is that you've got a situation
where the likelihood of a major crisis,
fictitious capital formation, is clearly there in exactly the same way
that we’ve got a crisis of greenhouse gas emissions, which is clear,
and it gets to the point where capital, like I said,
can simply invest in capital,
which is the definition of a Ponzi scheme:
where you
actually borrow more money to pay the interest on the money
you just borrow and you just Ponzi it up like that.
Right.
Right now, I think to myself, actually fictitious capital
is the global Ponzi scheme, in which an ambient form of capital
is available worldwide for anybody to invest in at any time.
And people are making their money simply out of speculating
on the different qualities and quantities
of financial capital in are in circulation.
And there is a huge gap between the fictitious capital
which exists and the real capital which exists.
And this is, I think, one of the reasons why I would speculate myself
on there likely to be a very serious crash
in the financial system, particularly
because the fictitious capital is actually built now into a global
Ponzi scheme and a Ponzi scheme invariably becomes undone.
Except in this case, the Ponzi scheme is so big that you can't afford to undo it.