A serious joke
Let's calculate, just for fun,
what would happen if a capital of 100 euro
was invested in 1800 with a yield of 10%.
This capital would, by continual growth,
have arrived today somewhere
in the order of billions.
If we want to make a chart for this growth,
we must use such a large scale that
at the beginning of the chart it is not
possible, to distinguish the curve of
the capital from the zero line.
The result can be found in Figure 3, where
the course of the curve after 1900 is shown.
In 1900 our capital would have been 1. 378. 000,
but the size is indistinguishable on the scale of
the chart from zero. Therefore only the last 100
years are designed on the chart.
Is the shape of this curve somehow familiar to
you?
Do you recognize the law that is hidden in such
a development?
Even values in the order of millions are too small
on this scale to be detected at the beginning of
the diagram. Only after 1950 can we recognize
the explosion inherent in the system, which by
the year 2000 would have made 19 billion from
the initial 100 euro.
If you found this development to be excessive,
as it is indeed, do not attribute it to an overstated
assumption of a growth of 10%.
This assumption is a very "moderate"
one.
Investments which yield less than 15% annually
are considered to be absolutely uneconomic.
They are abandoned and their shares are sold.
Our example is purely hypothetical.
But we can ask ourselves how far
from the truth this lies.
Could we not, just to
have
a sense of what is going on,
assume that at some time,
say in 1800, this process of
accumulation of capital began?
Mustn't we imagine that this accumulation of capital
has led to the existence today around the world
of more goods and more money?
You would tell me that there is nothing more
pleasant than this.
We are becoming constantly richer.
What else do we want?
It's true.
Today in the world a lot of wealth
(houses, factories, ships, airports)
has accumulated.
Of course, how this wealth is distributed,
is another story, and it is very interesting
and characteristic of the law which
developed in parallel, that fewer and
fewer people have more and more capital.
This fact of the ever greater concentration
of capital has not only its moral and social
dimension. It shows something very important
about the development of the system that
will soon help us to better understand the
phenomenon.
For now, what we need to consider is:
Where can such a development lead the system?
We are dealing here
with an explosion,
the capitalist explosion.
Where
will it lead us?
There of course, where
all
the explosions lead:
To
disaster.
There is no system that can accelerate forever.
Isn't it clear that on a limited planet no
unlimited growth is possible?
If this trend continues for another 20 years,
the initial 100 € will increase to 128 billion.
You would tell me:
And so what, where is the problem?
The problem is this:
Where can we invest the
billions "born" new
every day in order to yield the
"normal" 10% for us?
And if we just manage it today,
what will happen tomorrow,
when even more billions must
be invested profitably?
In 1800 10 new euros were "produced"
within one year, from our original 100 €.
During the year 2000 two new billion
should be added, should be "born".
If this trend continues, in 2020 our capital
should "produce" 13 billion within one year,
i.e. almost as much as accumulated
during the first 200 years!