You should read Bill Mitchell MMT blog. It is for anyone from 12 to 99 years old. Ok, for even older.
His post here went unnoticed in a real sense , Witchdoctor is not certain that even Bill Mitchell caught the implications in full.
The facts are there, in numbers, and they are a proof how Europe has ended- destroyed- the capital and thus ended the capitalism in the EU. Cheers.
Side remark,0
What is Capitalism, basically?
Capitalism is a system of capital accumulation for maximizing the profit. WD.Capital accumulation can be private or public.
Slowly, the profit rate falls. The economy of scale , with a small per item profit makes a one big profit, and that is the ultimate concentration of capital, before AI and robotics make a 0.001 cent per item profit in trillions of cents of trillions of items pr day. This is also the end of work.
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Bill Mitchell post shows us something even more terrible, or, if you want it may be good news for the anticapitalists, and it seems that the European union Masters and Producers are right there, in the anticapitalist agenda, they have just not figured it out, yet! HHHeeeeheheeh.
There are Two parameters in his analysis, but Witchdoctor will add a Third one- the Debt.
Since Bill Mitchell was kind enough to mention even a EU mouse dropping, Slovenia, Witchdoctor will use Slovenia example for two reasons to prove the end of capitalism in a wast majority of EU countries. First is a sentimental stupid sod one, and the second is an almost complete lack of financial suprastructure worth mentioning in Slobenia and so the picture of the end of capitalism gets crisp clear.
The three macro parameters are, in the last 13 years;
Almost all Eu countries have a huge rising debt. And they are not a currency issuer of their own debt..
Almost all Eu countries have a dismal, free fall drop of Public Investments
Almost all EU countries have a deep drop in Capital Formation.
We can conclude that Eu countries are heavily net loosing (saving) in public investments and heavily net loosing (saving ) in private capital formation, WHILE the Debt is steeply rising!
This is happening already for 13 years! 13 years is enough to conclude what WD is concluding and proving. This is a default and it is the end of capitalism in The EU. Cheers! The EU anticapitalist Commission has won!
Not even the steep rising public debt is helping the Eu countries to prevent the depletion and destruction of the private capital and the free fall in public spending, or to at least achieve some public spending. This can not be called a depression, it is a final crackdown.
Side remark1
Witchdoctors blog is also about the end of the debt driven economy because of its mathematical impossibility.. The three laws of DDE- Debt Driven Economy.. From the beginning. It is about projections, and the probability amplitude of a crash. The Oracle is doing fine. The boundary conditions for a probability amplitude are proven, and this data are the last nail in the coffin.
Now, apart from Maastricht criteria, European Stability mechanism, The role of the ECB and all other bollocks which provoked this, it was a third actor who made it happen- China. China is making all this real economy capital depletion in Europe to come faster. Nobody can do goods cheaper , nobody can have such a economy of scale when , in trillions of items produced there is enough 1 cent of profit for item to win.Not to mention the real Chinese Money tree machine, doing Fiat money and investing it, directly or through the banks at a whim.What is Capital in China in 21 century? It is like water, you turn the tap on. The whim win.
Bill Mitchell- free fall in Capital formation in last 13 years:
Greece 64 per cent lower (shocking policy abuse), Spain 24.4 per cent, Italy 25.4 per cent, Cyprus 15.7 per cent, Latvia 30.2 per cent, Lithuania 16.1 per cent, Netherlands 12.2 per cent, Portugal 15.2 per cent, Slovenia 33.2 per cent.
Side remark2
This data of free fall of the GFC in 13 years have to be corrected by what would have been the average, even sluggish normal growth of GFC in this 13 years. So one has to add , lets say a really dismal number of 40% of GFC in 13 years. Which is less than India. We have a current gap of 70% for Slovenia to the peak level of 2007..
Or lets look Italy, Greece has terrible situation which is a catastrophe, but Italy has in last 13 years:
public investments drop-26.81 per cent in Italy.
GFC fall-Italy 25.4 per cent,
Just double it , adding the missing growth of both factors. Instead of minus 25, think of plus 25%, Doubling it is a dismally low number, but the gap is catastrophic.
Add all together, it is a 100% catastrophe, and your capital expenditure is 0.No, it is worse, there is no Capital,it is gone. The thing you see and where they manufacture is Walking Dead Zombie economy.
So, if we add on this figures a projection of what will the Covid19 situation bring, we can conclude that the capital in 21 century in big parts of Europe will be non existent, and that is the end of capitalism.
They have never painted the doors, the roof is leaking,the machinery is kept together by wires, they never changed oil in a car, they never invested in light bulbs, they are ready to disconnect the phones, the optic cable did not arrive, they have no money in the bank….
The difference between Capital and Portfolio
WD will explain why Slovenia is a good example in this proof of the end of capital and the consequent end of Real Capitalism.There is no financial market in Slovenia worth mentioning and so the part of financial capitalism is missing.This means that we can clearly see, that the real economy capital destruction is different from the financial “capital “ destruction. This is the case of Slovenia.
In fact the real economy capital has a different intrinsic nature from the financial capital. Imagine your facevook page with your chums and pals, or a telephone directory. That is a Portfolio. A collection of assets. This Portfolio is completely different from a manufacture company capital in the real economy. The financial portfolio is a collection of assets, some from real economy, and it constitutes a capital only for financial means and ways. It is not and can not be a real economy capital of some hardware production. In fact, it is not an accumulation of capital for producing items which make profit. It is a suprastructured capital of various chums and chunks which has a different goal from the real factory capital. In fact,financial is opposed to a real capital and we see this when the stock market cheers the sacking of tens of thousands people working in some real economy firm as a sign of higher profit for their portfolio.. Amazon is classic Portfolio Capital, where the sellers-manufacturers sell at their own risk of failure, forced to keep their profit low, while the big chunk of profit and the profit of economy of scale- the Amazon platform, goes to this Portfolio Capital Holder. Facevook sells people who are there for free and this is another Portfolio Capital. Google sells telephone directories as a core Portfolio capital…
Side remark3
The depletion of capital is seen in Slovenia as the survival of work intensive manufacture with low capitalization. To compete, the Slo manufacturers import low to low medium skilled workers from the Balcans area, with less social rights. As the result of the Green deal, the SLo govt is promoting and financing in a simil Keynes style the same low paid , imported workforce for building new constructions,adding motorway lanes, new motorways on the best farm land as this is cheaper doing it on flat land (they will eat cake after, anyway), burn plastic junk in the coal thermal electric powerhouses because recycling 400 types of plastic is difficult, plans to build a new nuke electric power plant, new trash incinerators, as a green new deal….
In Italy and Spain, the agrobusiness is thriving on illegal migrants workforce in the low intensity capital farming, which have no rights whatever, abused by anyone, and so keeps the competitive edge…
And the other low intensive capital is tourism which employs part time workforce, badly paid, the booking platforms get more,for a part of the year and the South Europe is getting nervous as this is a social bomb in the times of Virus, so, they have forgot about the Virus and pretend all is fine, just come to visit us.
With the help of the EU architecture, with the help of China, the capital of the real economy and the real economy capitalism has disappeared from the EU.
What will all this people in Europe do? From what they will live?
They can not eat the financial portfolio or be all employed there.
Do you want that Witchdoctor adds Artificial Intelligence and Robotics on top of this destruction of capitalism of the real economy on top, a cherry on the grave? The Ai and Robotics on the real economy of scale, with cost per unit of output decreasing with increasing scale.This, which is not happening in the EU but somewhere elsewhere.?
You have heard of this new recovery funds and similar the EU AI android president looks of Von Ursula is talking about. Look at her videos, does it seems real, she is there to win an oscar performance for acting, look the face and mimicks, it is fun.
This so called funds are less than peanuts.They are less than zero for this magnitude of destruction of capital.
It is the end of capital in the EU.The end of public hand, the end of the hidden hand, it is the empty hand you are getting, in next 6 months.
The last cherry on the grave in the EU is the free fall of the only game in town, The car industry.Apart that China is providing all, even toothpicks, there is only the car (and tourist industry Disneyland of the medieval EU) industry left. The green new deal of new cars.That is the plan for new growth in the EU, The only one recovery left.But the batteries are missing, they are made in China.
The next question is, who will pay this double price, compared to the thermo engine car today, for a “green” car? On what purchase power of the people pocket green new deal?New private loans. And who will change a car every 4 years, as EU idiots like to do for a better meaning of life? So, keep the car for at least 15 years, buy expensive replacement batteries after 7 years, made in China, and the factories will produce maybe a third of the cars they do now, since, who is buying this green new deal? What the EU people will do for a living in this new normal?
They will eat cake.
You think that other nations are better off? Like, for example, the US Empire which, as WD wrote way back, has proved to be a third world country in all civilization parameters,as covid19 has shown.
And do not forget, the elephant in the room, Covid 19. He is going to get you.Stay young and you will survive, sack them, do not ask them.
Side remark4
Well, this is how to construct the real conspiracy. Hard to prove but if you look and have looked, it goes like this: the Covid 19 has put millions out of work and they do not have even 50 dollars to keep living. They need to work, regardless of health, virus or not virus.Instead of promoting welfare, giving basic income, a job guarantee, to all this mass of people, it is cheaper to spread the rumor.The rumor they are spreading is that the Covid 19 is a hoax, a scam, to take from the people their living and “freedom”. The virus is a conspiracy, and then they imply the name of the conspirators, they are always in the opposite political side.And conspirators are very very very rich.
Theconspirators want to ruin the people lives with this tale of the deadly virus. They want to control the people, as if they do not do it already.So, people go and protest against the quarantine, the lockdown and they do not wear any protection, it is all a hoax.
This is the cheapest way to run the country.And the cheapest way to not change anything.The cheapest way to not change the basics of welfare and health and god forbid to pour some real helicopter money in the people pockets. You do not need to pour money for this scum, the people, all you need is a conspiracy story and they are mostly willing and forced to work in any condition. Of risk. But, anyway, it is all a hoax.
Side remark5
With the end of capital in the EU, the mafias are coming in. Italian, East, Far East, Ruski , Chechen, any, ….. buying all this loads and loads of foreclosed shops, small business, craft workshops,small hotels,restaurants,investing on the EU stock market.They are building a Portfolio.
Witchdoctor