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AMERICA 2.0: From Private Greed to Public Service;
From Complexity to Simplicity

By Jay Hanson, 10/6/2009 (major revisions on 7/18/2012).

This paper is hereby placed in the public domain and may be reprinted without further permission.
This file is archived at http://jayhanson.us/america.htm
A PDF version is at http://jayhanson.us/america.pdf

As the name implies, “process politics” emphasizes the adequacy and fairness of the rules governing the process of politics. If the process is fair, then, as in a trial conducted according to due process, the outcome is assumed to be just—or at least the best the system can achieve. By contrast, “systems politics” is concerned primarily with desired outcomes; means are subordinated to predetermined ends.
—William Ophuls, ECOLOGY AND THE POLITICS OF SCARCITY REVISITED, 1992

There is no way to vote against the interests of Goldman Sachs.
—Chris Hedges, 2011

Our political model has failed; structural adjustments are urgent! It occurred to me that the key difference between “process politics” and “systems politics” is the nature of the legislation which ultimately becomes law. America can easily move from process politics (competing individual interests) to systems politics (competing common interests) by enacting new legislation based on studies designed to improve the lives of all Americans.
—Jay Hanson, 2012

ABSTRACT: The Market is NOT Efficient

The “bad news” is that “peak oil” marks the beginning of the end of capitalism and market politics because many decades of declining “net energy” [1] will result in many decades of declining economic activity. And since capitalism can’t run backwards, a new method of distributing goods and services must be found. The “good news” is that our “market system” is not efficient! Americans could be wasting something like two billion tonnes (metric tons) of oil equivalent energy each year!!

In order to avoid anarchy, rebellion, civil war and global nuclear conflict, Americans must force a fundamental change in our political environment. We can keep the same social structures and people, but we must totally eliminate corporate-special interests from our political environment. A careful review of the progressive assault on laissez faire constitutionalism and neoclassical economics, from the 1880s through the 1930s, explains how this can be done legally and without violence. These early progressives showed how we can save our country. All that is lacking today is the political will.

The reason that the reforms listed on this page are so important and must be implemented as the first in a series of many political reforms is because they are “constitutional politics” (politics that changes politics). The modification that I am proposing would fundamentally alter the nature of politics in America.

To achieve America 2.0, we must first separate and isolate our political system from our economic system so that government can begin to address and solve societal problems directly rather than indirectly by throwing money at corporate special interests. The second step is to retire most working American citizens with an annuity sufficient for health and happiness, as government begins to eliminate the current enormous waste of vital resources by delivering goods, and services like police and fire services are delivered today. This would allow the vast majority of adults to stay at home with their families but still receive the what they need to enjoy life—while greatly reducing natural resource consumption.

These reforms are based on the biological principle that people respond to environmental cues; change the cues and one also will change the behavior. If the voting public and political decision-makers only receive cues designed to mitigate our crisis, then all choices they make will be aimed at mitigating that crisis. The choices made by elected officials will be, by best calculations, “good” for the public. Corporations will become the public utilities that they were before 1860.

PREFACE

To the free man, the country is a collection of individuals who compose it ... He recognizes no national goal except as it is the consensus of the goals that the citizens severally serve. He recognizes no national purpose except as it is the consensus of the purposes for which the citizens severally strive.
—Milton Friedman, CAPITALISM AND FREEDOM

We may well call it “the tragedy of the commons,” using the word “tragedy” as the philosopher Whitehead used it: “The essence of dramatic tragedy is not unhappiness. It resides in the solemnity of the remorseless working of things.”
—Garrett Hardin, THE TRAGEDY OF THE COMMONS

The criterion of “profit” has shaped our political decisions since the founding of our country, but now that we are facing peak oil, new “scientific systems” criteria must replace “profit” otherwise our civilization will “collapse” [2] like so many others have throughout history. This paper does not attempt to describe a complete system to replace state-sponsored capitalism and market politics. My modest goal here is to show a way forward which could avoid the worst.

In order for America to survive this crisis, a moderate, “doable” modification to our political environment is required. America must move from process politics (competing individual interests) to systems politics (competing common interests) by enacting new legislation based on studies designed to improve the lives of all Americans.

I dedicate this web site to the handful of individuals who desire to understand how the inexorable decline of net energy, combined with the use of the market system as a political system, will lead to global nuclear wars over the remaining natural resources—unless minor changes are made to the structure of our government to prevent them. As you shall see, we must move from a capitalistic form of government, which requires endless resource depletion, to a democratic form, which does not.

As you shall see, we must move from a corporate form of government, which requires endless resource depletion, to a human form, which does not.

 

THE BAD NEWS: The End of “Business-as-Usual”

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“Net Energy Cliff” Equals The End Of “Business-as-Usual”

Our present “business-as-usual” model, which requires endless economic growth and job creation, is no longer physically possible because “net energy” will decline for many decades! What is “net energy”?

One seldom thinks about the energy that is consumed in systems that supply energy—such as oil-fired power plants. Energy is consumed when exploring for fuel, building the machinery to mine the fuel, mining the fuel, building and operating the power plants, building power lines to transmit the energy, decommissioning the plants, and so on. The difference between the total energy recovered from the mining process, minus all the energy consumed, equals the “net energy” (in other words, the net amount of energy actually available to society to do useful work). For more on this, see netEnergy.pdf.

Prior to peak oil, producers could compensate for the falling net energy fraction (illustrated in the figure above) by simply pumping more conventional oil. However, conventional oil production "peaked" in 2005, so it is now physically impossible (thermodynamics) to increase net energy as we have in the past. In other words, producers are geologically constrained and can no longer compensate by pumping more conventional oil. This means that the energy available for economic development will decline for decades!  How will decades of falling “net energy” impact the global economy?

Historians will say that “peak oil” marked the end of the second free trade episode. If we don’t abandon business-as-usual now, we will be forced into another global war over resources:

By the fourth quarter of the nineteenth century, world commodity prices were the central reality in the lives of millions of Continental peasants; the repercussions of the London money market were daily noted by businessmen all over the world; and governments discussed plans for the future in light of the situation on the world capital markets. Only a madman would have doubted that the international economic system was the axis of the material existence of the race. Because this system needed peace in order to function, the balance of power was made to serve it. Take this economic system away and the peace interest would disappear from politics… By the end of the seventies the free trade episode (1846-79) was at an end… The origins of the cataclysm lay in the utopian endeavor of economic liberalism to set up a self-regulating market system.
—Karl Polanyi

THE GOOD NEWS: The Market is Not Efficient

Yes, that is correct: The “market system” is NOT efficient! [4] Our present method of distributing goods and services wastes enormous amounts of natural resources, but gigantic resource savings are possible. As an illustration, let’s make a rough estimate of per-capita food energy requirements and current waste:

This simple calculation suggests that Americans could be wasting something like 2 billion tonnes of oil equivalent per anum! [5] That’s FAR more oil wasted than all the oil produced in the Middle East! If we change a few of our founding assumptions—and adopt a new systems politics—more than enough energy remains to mitigate the worst.

FOUNDED ON KNOWN-FALSE ASSUMPTIONS

Economics is the publishing of political agendas that are hidden within known-false assumptions. If one accepts these assumptions, then one accepts the hidden agendas. This brilliant method for subliminal programming has been very effective in instilling libertarian ideals into university students for half a century.
—Jay Hanson, 2012

America was founded on several assumptions that modern science has since shown to be false. A key assumption, that led to the others, was that of “informed choice”:

The liberal order rests on the assumption of informed choice. People know what they want and act on their desires. More formally, they can rank their preferences consistently, they know all the options, and their choice is free from outside influence. In economic theory, that is what it means to be “rational.” —Avner Offer, 2011 [6]

In practical terms, this means:

Today, we know that our founders were fundamentally wrong about the ability of people to make economically rational decisions. This is well documented by hundreds of scientists, most-notably, Daniel Kahneman, who won the 2002 Nobel in economics:

Kahneman and Tversky proved in numerous experiments that the day-to-day reality of decision makers varies from the assumptions held by economists.—Goldberg and von Nitzsch, 2001

The assumption of informed choice has brought this civilization to the edge of collapse. Our future is hopeless if we continue to govern based on known-false assumptions. What must be done? Our present “market system” of distributing goods and services works something like this:

Why not simply have government pay someone to pick up that loaf of bread at the bakery and deliver it to the consumer? This is a form of distribution that would eliminate the banks, most of the other businesses, and all the stores. Most Americans would no longer need a car to commute to work or run to the store! However, some private businesses that provide critical services would still be operated but at our government’s direction.

We could use the same efficient method of distribution for everything that Americans really “need.” Shoppers would order provisions online, similar to ordering goods from Amazon or Netflix works now, and then their orders would be delivered the next day. And a medical care caravan could regularly drive through neighborhoods, filling teeth, giving checkups, and so on. However, we must first separate and isolate our political system from our economic system so that government can begin to address and solve societal problems directly rather than merely catering to corporate interests.

My proposal could reduce natural resource consumption by something like 90% and greatly reduce, or possibly eliminate, civil violence caused by the inevitable post-peak-oil-economic collapse.

FIRST STEP: take corporate-special interests totally out of politics.

I hope we shall take warning ... and crush in its birth the aristocracy of our monied corporations, which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country.
—Thomas Jefferson, Letter to George Logan, Nov. 12, 1816

Thomas Jefferson, along with James Madison worked assiduously to have an 11th Amendment included into our nation’s original Bill of Rights. This proposed Amendment would have prohibited “monopolies in commerce.” The amendment would have made it illegal for corporations to own other corporations, or to give money to politicians, or to otherwise try to influence elections. Corporations would be chartered by the states for the primary purpose of “serving the public good.” Corporations would possess the legal status not of natural persons but rather of “artificial persons.” This means that they would have only those legal attributes which the state saw fit to grant to them. They would NOT; and indeed could NOT possess the same bundle of rights which actual flesh and blood persons enjoy. Under this proposed amendment neither the 14th Amendment of the US Constitution, nor any provision of that document would protect the artificial entities known of as corporations.
—Dr. Michael P. Byron [7]

Unless something is done now to prevent it, America will face anarchy, rebellion, and civil war on the downside of the net energy cliff. In order to maintain public order, the state must do one thing: take corporate-special interests totally out of politics. [8]

The urgency, necessity, and practicality of this proposal would be apparent to all sectors of society if they could be brought to understand how our social systems are depleting our physical systems. I am convinced that if Americans were given the honest science and engineering behind what needs to be done, the vast majority would willingly make a peaceful transition to a “sustainable retreat.”

ALL corporate-special interests—even universities, charities, and churches—depend on perpetual economic growth for their budgets, but the laws of thermodynamics tell us that perpetual economic growth is physically impossible. Therefore, ALL corporate-special interests must be removed from the political environment.

A careful review of the progressive assault on laissez faire constitutionalism and neoclassical economics, from the 1880s through the 1930s, explains how this first step can be done legally and without violence. [9] The first simple step is to remove the “personhood” Constitutional protections from corporations, which could probably be done by the President acting alone, via his “police powers.” Certainly, it could be done by the Supreme Court or Congress if they had the political will to do so. Once corporations are firmly under democratic control—in essence, “public utilities”—the federal government can begin correcting the abuses of capitalism as gracefully as possible. We want to preserve and include the great achievements of capitalism while removing its pathologies.

What follows are six political steps, listed in order of priority, that are designed to mitigate the societal disruptions of the net energy cliff:

  1. Pass the following Amendment to the US Constitution:

    Section 1 [Corporations are not people and can be regulated]

      The rights protected by the Constitution of the United States are the rights of natural persons only.

      Artificial entities, such as corporations, limited liability companies, and other entities, established by the laws of any State, the United States, or any foreign state shall have no rights under this Constitution and are subject to regulation by the People, through Federal, State, or local law.

      The privileges of artificial entities shall be determined by the People, through Federal, State, or local law, and shall not be construed to be inherent or inalienable.

    Section 2 [Money is not speech and can be regulated]

      Federal, State and local government shall regulate, limit, or prohibit contributions and expenditures, including a candidate's own contributions and expenditures, for the purpose of influencing in any way the election of any candidate for public office or any ballot measure.

      Federal, State and local government shall require that any permissible contributions and expenditures be publicly disclosed.

      The judiciary shall not construe the spending of money to influence elections to be speech under the First Amendment.

    Section 3 Nothing contained in this amendment shall be construed to abridge the freedom of the press.

  2. Make it a federal crime for corporations to advocate anything (including, but not limited to, advertising) in the mass media.
  3. Make it a federal crime for anyone employed by a corporation to lobby elected or appointed officials directly or indirectly.
  4. Mandate public financing for elections.
  5. Assemble teams of the country’s best and brightest medical doctors, scientists, engineers and other thinkers—but no representatives of religious groups, economists, or other corporate-special interests—to recommend public policy. (We do not need a Manhattan Project for economics—on how to save the corporations and their outrageous profits; we need a Manhattan Project on how the country can survive the net energy cliff!)
  6. Encourage public debate on proposed changes.

(Number 5 above is the key difference that I am advocating. Public policy recommendations would come from medical doctors, engineers and scientists who are looking at the entire system instead of from a room full of fat-assed salesman trying to sell worthless shit to an unsuspecting public. It’s based on the recognition that if one changes the environment in which political decisions are made, one changes the decisions.)

Corporations will become the public utilities (public servants) that they were prior to 1860!

SECOND STEP

The second step is to retire most (not all) working American citizens with an annuity sufficient for health and happiness, [10] as government begins to eliminate the current enormous waste of vital resources by delivering goods and services directly. This would allow most adults to stay at home with their families but still receive the goods and services that they need to enjoy life.

Any number of alternative cultural, ethnic or religious communities could be established by the popular vote. Communities could vote to have prayers in their schools, prohibit booze, allow no television to corrupt their kids, wear uniforms, whatever. Hippies could establish communes where free sex was the norm. Writers and painters could make bad taste would be against the law. Ethnic communities could decide that preserving language and customs was the highest priority. If residents didn’t like the rules in a particular community, they could move to another of their choosing.

NATIONAL GOAL: Healthy and Happy

The “goal” of our society should be to make our citizens healthy and happy while using as few natural resources as possible (especially energy). The methods needed to attain this goal can be determined by teams of medical doctors, scientists and engineers. Capitalism should be dismantled as gracefully as possible and any natural resources that are not required for health and happiness, should be left to nature.

My guess is that with modern technology, probably less than 5% of the population could produce all the goods that we really “need.” A certain number of qualified “producers” could be selected by a peer group to produce for five years. The rest can stay home and sleep, sing, dance, paint, read, write, pray, play, do minor repairs, work in the garden, and practice birth control.

What is the "Gross National Happiness"? (click to open)

WHAT CHANGES? ECONOMICS

It occurred to me that the key difference between “process politics” and “systems politics” is the nature of the legislation which ultimately becomes law. Our present political system can exhibit systems politics by basing new legislation on studies designed to improve the lives of all Americans. AMERICA 2.0 is the first step in moving from process politics (competing individual interests) to systems politics (competing common interests).
—Jay Hanson, 2011

What changes is that we move from a “profit” criterion public policy, which cannot mitigate absolute energy scarcity, to a “systems-analytic” criteria public policy, which can mitigate energy scarcity. We move from a special-interest form of government, which cannot mitigate our common misery, to a common interest form of government, which can mitigate our misery. In short, we move from economic decisions to political decisions.

America 2.0 is based on the biological principle that people respond to environmental cues (information). If one changes one’s cues, then one also changes one’s behavior. On the first Earth Day in 1970, a spectacular change in environmental cues occurred in our country! Americans sent a powerful message to our Federal Government that corporations were out of control. Here is how our legislators responded as explained by Jeffrey D. Clements:

After a century of industrialization, Americans had by 1970 had enough of corporations using our rivers, air, oceans, and land as sewers and dumps, leaving most people and communities with the costs and giving the profits to shareholders. One day in April 1970, twenty million Americans of every age and political party came out into the streets and the parks to celebrate the first Earth Day. They demanded a better balance between corporations and people and better stewardship of our land, water, and air. Look at the photos from this first Earth Day and you will see families with children, men in suits and ties and neatly dressed women, working- and middle-class Americans, people of all ages and races.

These millions continued a longstanding American principle of guarding against concentrated corporate power that might overwhelm the larger interests of the nation. This nonpartisan tradition goes back not only to Franklin Roosevelt’s New Deal, not only to Theodore Roosevelt’s Square Deal, but to the founding of America. James Madison, a chief architect of the Constitution, wrote in the early 1800s that “incorporated Companies with proper limitations and guards, may in particular cases, be useful; but they are at best a necessary evil only.” Always willing to be more colorful, Thomas Jefferson said that he hoped to “crush in its birth the aristocracy of our monied corporations, which dare already to challenge our government to a trial of strength and bid defiance to the laws of our country.”
 
In the 1830s, President Andrew Jackson and his allies battled against the partisan activity of the Second Bank of the United States, a corporation. Jackson pressed the urgent question of “whether the people of the United States are to govern through representatives chosen by their unbiased suffrages or whether the money and power of a great corporation are to be secretly exerted to influence their judgment and control their decisions: Even President Martin Van Buren, hardly a radical, warned of “the already overgrown influence of corporate authorities:8

That first Earth Day in 1970 again awakened our government to the necessity of restoring the balance of corporate power and public interest, of those who control powerful corporations and the rest of Americans. With a Republican president in the White House and bipartisan support in Congress, the extent of reform that quickly followed in the months and a few short years after the first Earth Day remains astonishing:

* First Environmental Protection Agency
* Clean Water Act
* Federal Water Pollution Control Amendments
* Clean Air Act Extension
* Toxic Substances Control Act
* Safe Drinking Water Act
* Wilderness Act
* Surface Mining Control and Reclamation Act
* Endangered Species Act
* Marine Mammal Protection Act
* Resource Recovery Act
* First fuel economy standards for motor vehicles

These 1970s reforms were long overdue. For a time, they worked extraordinarily well and made a profound difference in the quality of life of the vast majority of Americans. No longer could dumping untreated sewage and toxic waste in our waters be considered a standard business practice; no longer could corporations walk away from hazardous waste and chemical sites; more wilderness areas preserved more of our birthright and that of future Americans; new laws rejected the industry view that we just had to live with the discharge of brain- and organ-damaging lead from millions of cars and the spread of lead paint in every building in the land; access to clean, safe water was assured for far more Americans; and so much more.

The market did not do this. We did this by acting as citizens in a republic. [11]

The key here is to enact new legislation based on studies designed to improve the lives of all Americans—not just special interests. If we can change the environmental cues on the National level, we will change the behavior of all Americans. If the voting public and political decision-makers only receive cues designed to mitigate our crisis, then all choices they make will be aimed at mitigating (not solving) that crisis.

 

How does changing cues change behavior? A simple example (click to open)

The following scenario illustrates how “environmental cues” (information) control decisions.

Suppose you are out driving in the country, and you are running low on gas. You come to a fork in the road. You see a sign announcing a gas station down the right fork. You turn to the right expecting to encounter a gas station.

Now suppose that the sign would have indicated that the gas station was down the left fork? This time, you turn to the left instead of the right.

What changed? The cues! If we change the cues, we change the behavior of people.

 

How does changing cues change behavior? A more-realistic example (click to open)

The following scenarios illustrate how “environmental cues” (information) control decisions.

It is almost impossible for Americans to imagine how their government makes decisions, unless they have actually attended a “commission” (or “board”) hearing. Commission members are ordinary citizens who were appointed to act as watchdogs on government (the “planning department” discussed below). Try to imagine the following scenario:

Assume you live in a small town with terrible traffic problems. You are a realtor who was appointed to your city’s “planning commission.” Every day, your friends and neighbors complain about the traffic! Your spouse spends two hours, every day, stuck in traffic! Every day, you read an editorial in the local paper bitching about traffic!

Your town’s “planning department” (city employees) has been studying the problem for years and has finally submitted an ordinance to install a new traffic light. Today, your commission is taking testimony, and then you are scheduled to vote on it.

You have personally read the executive summary written by the employees in your planning department, and they are claiming that the new light will solve your town’s traffic problems. You do not have the education or the time to analyze the study yourself and must assume the study was done correctly and hope if there is an error somewhere, it will be identified in discussion or testimony.

The Chair opens the meeting for testimony.

No one offers testimony.

The Chair calls for discussion.

No one wants to discuss the ordinance.

The Chair calls for a vote.

Your name is called first. How will you vote?

“YES”means you do build the light.

“NO”means you do not build the light.

How will you vote? You will vote YES because you are convinced the new light will solve your town’s traffic problems.

Now, consider a slightly different scenario: What would have happened if the following testimony were submitted?

A representative of the National Society of Professional Engineers rises and introduces himself. He is sworn in and then states that the idiots in your town’s planning department made a fundamental error when they did their calculations! Moreover, a team of his professional experts has calculated that the new light will actually make your traffic problems much WORSE. He even has the proof with him and offers it into evidence.

This nationally-recognized expert is saying that your planning department made a mistake. Your job is insuring they do not make a mistake. How will you vote? Because of the new information, you will vote NO to allow yourself more time to study the allegations made by the independent planning expert.

The above scenarios illustrate how environmental cues (information) control decisions. If we change the cues, we change the vote.

 

 

 

TACTICS

Mob in America

“Mob In The Square in Romania” Which Led To The End Of Communism

The changes I am proposing can be accomplished without rewriting our Constitution or violence. The progressive assault on laissez faire constitutionalism and neoclassical economics, from the 1880s through the 1930s, explains how this can be done legally and without violence. These early progressives showed how we can save our country. All that is lacking today is the political will.

The two quotes at the end suggest tactics that worked for the anti-Vietnam War and civil rights movements. Sign-carrying activists should fill the streets of D.C., “like the mob in the square in Romania,” [12] until the city is grid locked. Activists should just stay there until the powers-that-be conceded.

I expect that organizing this movement will take a few years. It’s asking a lot. It can’t happen overnight. We know that with “cliffing” net energy, our society is just going to keep getting worse until something big changes.

Let’s hope the “big change” is something “progressive” instead of a new “President For Life,” who has a “prayer breakfast” every morning where he makes up lists of “evildoers” that are to be rounded up and shot. (That’s still my most-likely scenario. We came close with “W.”)

No progress is possible until we can GET THE CORPORATE-SPECIAL INTERESTS—ALL OF THEM—OUT OF OUR POLITICS AND OUT OF THE MASS MEDIA!

Jay—http://jayhanson.us  http://www.dieoff.com 


You don’t communicate with anyone purely on the rational facts or ethics of an issue... It is only when the other party is concerned or feels threatened that he will listen—in the arena of action, a threat or a crisis becomes almost a precondition to communication... No one can negotiate without the power to compel negotiation... To attempt to operate on a good-will basis rather than on a power basis would be to attempt something that the world has not yet experienced.
—Saul Alinsky, RULES FOR RADICALS

The big corporations, our clients, are scared shitless of the environmental movement. They sense that there’s a majority out there and that the emotions are all on the other side—if they can be heard. They think the politicians are going to yield to the emotions. I think the corporations are wrong about that. I think the companies will have to give in only at insignificant levels. Because the companies are too strong, they’re the establishment. The environmentalists are going to have to be like the mob in the square in Romania before they prevail.
—William Greider, WHO WILL TELL THE PEOPLE

“Capitalism” is a money-based political system which creates dissatisfaction, while converting natural resources into garbage, in exchange for IOUs, which will be worthless when the oil production plummets, and the country goes up in flames.
—Jay Hanson

The above quote about capitalism explained (click to open)

First is a key definition: “Politics” is social relations involving authority or power.

You must understand “politics" to understand the world around you. If you aren’t clear on the subject, here is a short slide show which explains “politics": http://www.jayhanson.us/p3.html

I said: Capitalism is a money-based political system.
This means that social power derives from “money.” In America, everything is for sale.

I said: Capitalism creates dissatisfaction.
People purchase products because they are “dissatisfied” with their present state. “Dissatisfaction” is the engine of capitalism. The goal of advertising is to make people “dissatisfied” with their present state and seek “satisfaction” in the marketplace.

I said: Capitalism converts natural resources into garbage.
In the United States; all economic activity depletes nonrenewable natural resources (at a minimum, fossil fuel from the grid). Moreover, manufactured products have built-in obsolesce – are designed to fail. Ninety-nine percent of everything manufactured is in the dump six months later.

I said: Capitalism exchanges natural resources for IOUs. Our money is created ex nihilo when a consumer borrows money and promises to repay it. http://www.jayhanson.us/m1.html Thus, our money is literally consumer IOUs. In other words, the planet is converted to garbage in exchange for consumer IOUs.

I said: which will be worthless when the oil production plummets and the country goes up in flames. This means that when not enough energy remains to operate our economy, unemployed consumers will not be able to repay their debt, and their IOUs (our money) will be worthless. http://www.jayhanson.us/l3.html

#OccupyKona


FOOTNOTES

[1] Life on Earth conforms to universal thermodynamic laws. We mine our minerals and fossil fuels from the Earth’s crust. The deeper we dig, the greater the minimum energy requirements. The most concentrated and most accessible fuels and minerals are mined first; thereafter, more and more energy is required to mine and refine poorer and poorer quality resources. New technologies can, on a short-term basis, decrease energy costs, but neither technology nor “prices” can repeal the laws of thermodynamics:

Decreasing net energy sets up a positive feedback loop: since oil is used directly or indirectly in everything, as the energy costs of oil increase, the energy costs of everything else increase too—including other forms of energy. For example, oil provides about 50% of the fuel used in coal extraction. Every day, about 85 million barrels of oil are burnt. [ http://www.nationmaster.com/graph/ene_oil_con-energy-oil-consumption ] Every day, less oil exists on planet Earth than the day before. The handwriting is on the wall: “capitalism” is running out of energy! Here is a small, silent animation which will illustrate the “net energy” principle: http://jayhanson.us/oil.html

 

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Imagine having a motor scooter with a five-gallon tank, but the nearest gas station is six gallons away. You cannot fill your tank with trips to the gas station because you burn more than you can bring back—it’s impossible for you to cover your overhead (the size of your bankroll, and the price of the gas are irrelevant). You might as well put your scooter up on blocks because you are “out of gas”—forever. It’s the same with the American economy: if we must spend more-than-one unit of energy to produce enough goods and services to buy one unit of energy, it will be impossible for us to cover our overhead. At that point, America’s economic machine is “out of gas”—forever. More on energy basics at http://dieoff.org/page175.htm

[2] http://dieoff.org/page134.htm

[3] This net energy graph is an “educated guess” to illustrate the fall in net energy. Precision here is impossible because the data is not available. Several oil drum pieces on net energy can be found at: http://netenergy.theoildrum.com/

[4] Although economists claim the market is “efficient,” they actually mean “efficient distribution” of benefits—NOT the “efficient use” of materials. “Economic efficiency” is completely different than “materials efficiency.”

[5] Here is an oversimplified example to give us an idea of how incredibly inefficient the “market system” really is. Suppose that the only thing Americans had to do was to eat. How much energy would be required to feed them?

In 2006, Americans consumed about 334,600,000 BTU per capita, per anum. [ http://www.eia.doe.gov/pub/international/iealf/tablee1c.xls ] This converts to about 84,317,785 nutritional calories equivalent each person, each year [ http://www.onlineconversion.com/energy.htm ] or 84,317,785 / 365 = 231,008 calories per day. However, adults only require something like 3,000 calories of food energy per day to survive, so it seems we, very roughly, waste something like 231,008 - 3,000 = 228,008 calories per day, per capita.

Studies show that food grains produced with modern, high-yield methods (including packaging and delivery) now contain between four and ten calories of fossil fuel for every calorie of solar energy. So we will allow ten calories of energy to grow and process each calorie of food delivered, so 3,000 * 10 = 30,000 calories per day is required to keep an adult alive. Thus, 228,008 - 30,000 = approximately 198,008 calories are still being wasted each and every day, by every American.

Let’s allow the equivalent of 3,000 nutritional calories (about 1/10 gallon of gas) per day, per capita to collect and deliver food and water to each and every household in the country, so 198,008 - 3,000 = 195,008 calorie equivalent wasted per day, per capita in the US.

The estimated population of America on Sept. 22 2009 was 307,511,668, [ http://www.census.gov/main/www/popclock.html ] so 195,008 *307,511,668 * 365 = 21,887,999,529,837,200 nutritional calories wasted every year in the US, or 2,188,799,953 tonnes—over two billion tonnes—of oil equivalent are wasted each year in the US feeding people! (In 2006, oil production in the Middle East was only 1,221,900,000 tonnes! [ http://tinyurl.com/mfwndm ])

Every year, the “market system” in the United States, wastes almost a billion tonnes more oil than is produced in the Middle East! Obviously, there is more to life than eating, but equally-obviously, the market system is the most inefficient organization in human history!!


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[6] http://www.jayhanson.us/_Economics/Self-ControlAndTheFutureOfCapitalism.pdf

[7] http://tinyurl.com/c28c87

GANGS OF AMERICA: The Rise of Corporate Power and the Disabling of America,
Ted Nace, 2003,2005, http://www.amazon.com/Gangs-America-Corporate-Disabling-Democracy/dp/1576753190


Differences Between the Classic Corporation (Before 1860) and the Modern Corporation (After 1900)
ATTRIBUTE
CLASSIC CORPORATION
MODERN CORPORATION
Birth Difficult: requires a custom charter issued by a state legislature Easy: general incorporation charter allows automatic chartering
Life span Limited terms No limits
“Shape-shifting” Corporations not allowed to own stock in other companies; restricted to activities specified in charter Corporations free to pursue acquisitions and spin-offs;
Mobility Usually restricted to home state No restrictions
Adaptability Restricted to activities specified in charter Allowed to pursue multiple specified lines of business and initiate or acquire new ones at company’s discretion
“Conscience” Actions constrained by shareholder liability and by threat of charter revocation Fewer constraints due to limited liability, disuse of charter revocation, and tort reforms
“Will” Managerial action hampered by legal status of minority shareholders and of corporate agents Legal revisions enable consolidation of management’s power
Size Limited by charter restrictions Asset limits removed; antitrust laws generally not effective
Constitutional rights Functional only Steady acquisition of constitutional rights


http://jayhanson.us/gangsOfAmerica.pdf
http://jayhanson.us/Gangs_2.pdf

Here are some organizations, books, and web resources that share the same goal -- ending corporate governance: http://www.ratical.org/corporations/ReadingLinks.html

This time line of corporate personhood (the gain and loss of rights and powers) is particularly interesting: http://www.ratical.org/corporations/ToPRaP.html

[8] In order to understand why people act as they do, at a minimum, one must understand “politics” among social animals. See http://jayhanson.us/p1.html

[9] The“Progressives” are still making constitutional changes. THE SECOND BILL OF RIGHTS: FD’s Unfinished Revolution—And Why We Need It More Than Ever, Cass Sunstein, 2006;
http://www.amazon.com/Second-Bill-Rights-Unfinished-Revolution/dp/0465083331

THE PROGRESSIVE ASSAULT ON LAISSEZ FAIRE: Robert Hale and the First Law and Economics Movement, Barbra H. Fried, Harvard University Press, 1998;
http://www.amazon.com/Progressive-Assault-Laissez-Faire-Economics/dp/0674775279

THURMAN ARNOLD, SOCIAL CRITIC: The Satirical Challenge to Orthodoxy, by Edward N. Kearny; http://jayhanson.us/thurmanArnoldSocialCritic.pdf

THE FOLKLORE OF CAPITALISM, Thurman W. Arnold, Yale University Press 1937, CHAPTER VIII: The Personification of Corporation http://jayhanson.us/thePersonificationOfCorporation.pdf

REACHING FOR HEAVEN ON EARTH: The Theological Meaning of Economics, Robert H. Nelson, 1991; http://www.amazon.com/Reaching-Heaven-Earth-Theological-Economics/dp/0847676641
http://jayhanson.us/_Economics/gospelOfEfficiency.pdf
http://jayhanson.us/haleAll.pdf

[10] Human health and happiness are the products of our biology and environment.

[11] CORPORATIONS ARE NOT PEOPLE: Why They Have More Rights Than You Do and What You Can Do About It, Jeffrey D. Clements, Bill Moyers, http://www.amazon.com/Corporations-Are-Not-People-Rights/dp/1609941055   http://www.jayhanson.us/_Politics/EarthDayToCitizensUnited.pdf

[12] http://en.wikipedia.org/wiki/Romanian_Revolution_of_1989

This paper is hereby placed in the public domain and may be reprinted without further permission.

This paper is the culmination of almost 20 years of study—working almost full time—to understand why our civilization is self-destructing. My brevity here is not due to my lack of understanding or scholarship.

This file is archived at http://jayhanson.us/america.htm
Jay Hanson, October 6, 2009