Posted by: Mark | December 19, 2008

My Thoughts on the Economy: To (In)finity and Beyond!

As a teacher I have been frantically trying to understand the economic situation of the last several months, because my kids are constantly asking for explanations. I’ve been going to the expected media outlets for information and I can say with a degree of confidence that I am reasonably informed.

As a history teacher I cannot help but to make references to past economic crises, and I do it constantly throughout my day. I, along with my students, find distinct parallels between the mortgage crisis and, to give you some examples, the stock market collapse of 1929, the demise of the silver-based Spanish empire of the 1600s, and the catastrophic Great Leap Forward in China.

On the surface, my high school students are quick to identify institutionalized greed as the unifying trend between these different downturns, and it is easy to agree. The New York Times in particular has had some scathing op/ed’s in the last few days (see Krugman’s from 12/19) that attack the perceived core values of Wall Street, with banks giving huge bonuses to its employees for making extremely risky loans with no long-term stability. And like I said, to a large part I agree. I think we are seeing the inescapable curse of Roman-Greco hubris taking its toll on our country.


However, I also think there’s more to it. Now that the auto industry in America is going defunct, despite the bailout they are getting, greed needs to be looked at a bit more critically. I have boiled it down that at its core, the “modern world” has a fundamentally flawed view of our planet and its resources, and that is what has driven the economic downturns throughout the last 500 years.

I caught onto this line of thinking when I first saw the Story of Stuff last year. It’s an online movie made by Annie Leonard that talks about the production cycle, and it starts off by pointing out the single largest flaw in it: In producing goods, us humans have relied upon the idea that our planet was going to produce an infinite amount of resources. However, since we live on a finite planet, such an assumption is fundamentally wrong, and I think at the center of what we are witnessing today.

(I’m going to insert a shameless plug here before I continue. In an elective I teach called “global issues,” my students made a video response to The Story of Stuff and posted it on youtube, which you can see here. She responded to our video, and agreed to sit down with my class and have a recorded conversation to be posted on our class podcast, which you can check out here. This whole thing was written about on a PBS Learning site, which you can read here. Yeah Web 2.0!!!)

Let’s get back to the issue. The American car making mentality was pretty clearly “bigger is better.” In order to be making cars bigger and bigger, the assumption seems to be that the resources that make the cars are infinite, the fuel that can feeds them s infinite, and the demand for the cars are infinite. Of course, none of this is true. I can’t imagine that the extremely intelligent people at these car companies didn’t realize this mistake in the face of countless science urging them to reconsider their production practices. It seems instead to just be a really reckless case of deliberate, wishful thinking. When gas prices started soaring, all of the sudden the car companies realized that the fuel supply is very much a finite thing. And when credit dried up, the demand also showed itself to be uncompromisingly finite. And now these companies, who deceived themselves away from embracing reality, have put the livelihoods of hundreds of thousands of Americans at risk due to these flawed assumptions.


The credit crisis is the same. There was an absurd belief that the real estate market would never stop growing, that the roof was non-existent and profits were infinite, so any and all risky loans were totally acceptable because the houses they were buying would never stop increasing in value.

The Spaniards, when they ruthlessly pillaged the “New World” in the 1500s, set up a slave labor system in the mountains of Bolivia that extracted silver at a breakneck pace, mostly to feed the Chinese demand for it after the Ming Dynasty decided to abandon its paper currency. The Spaniards used the backs of Africans and indigenous Americans to pull more and more silver out of the ground, assuming the supply to be infinite ,and that the Chinese would always want more and more of it. Then, in a Marxian crisis of oversupply, the value of silver plummeted, silver production came to a screeching halt, and the once grand Spanish Empire, which had put all of its livelihood into silver, whimpered its way to the back of the line in global influence.

Mao had the distorted belief that the rice fields of China were not growing enough rice because greedy capitalists were deliberately not growing rice in order to keep the cost of rice high. Assuming an infinite capability for the ground to nourish rice, he instituted over-production and crop clustering that created the largest man-made famine in human history, ironically and tragically disappointing the name given to it: The Great Leap Forward.

What we’re seeing is not new, and we’re not just dealing with greed, although of course that is part of it. We’re dealing with a dangerous view that our planet can infinitely supply us with materials, and that people will infinitely want them. That has brought acute pains to localized economies throughout history, but it also has wreaked havoc our own environment in the long-term. It is now the case that in the 21st century, with a tightly globalized economy, what should be a localized economic hiccup has instead spiraled to suck everyone in.

In order to get back on track, we need to correct this view of our planet, and it is not going to be pretty. It’s going to be hard to take a species of almost 7 billion who are incorrectly sustaining themselves off a finite planet with the assumption that it is infinite, and to get them to view our planet in the right, limited way. For that reason, I’m not overly sympathetic to the auto industry right now and don’t support the bailout. We don’t need better gas-guzzling cars, we need a re-tooling of the way that we live and transport ourselves that reflects that this planet will not sustain us forever. What I am talking about is a pretty profound change, one that needs to be species-wide and a change of behavior and beliefs. People don’t do that willingly unless they need to because of an unavoidable threat. In some ways, that to me may be the only good thing to come out of this situation. The threat is real. People are losing their jobs. Temperatures and water levels are rising. The time for the wishful thinking of the Big Three is over.

This is probably the least optimistic I’ve been in a while, but human behavior takes longer to change than economic and environmental forces. I hope that this mandatory shift in mentality can happen with as few damages as we can manage, but we’ll have to sit back and see if everyone’s ready to get on board or not.



  1. The amount of pressure we’ve put on our planet is unacceptable and unsustainable. The biggest problem, though, is our diets. Beginning a vegetarian or vegan is the best thing you can do for the environment. It’s even better than giving up your car.

    As for the bail out, I support it mostly because of the jobs it provides. Obviously I’m unhappy with the pressures put on unions to accept massive pay cuts. As usual, it was the businessmen who ran the companies into the ground, but it will be the little guys who take the biggest hit.

    There ought to be demands on the industry to produce electric cars and the like (although you’re right, it’s not just what we are using to get around, but our entire lifestyles).

  2. By “it” I mean the auto industry, obviously.

  3. I also teach social studies and I am always looking for new ways to engage students in the classroom and I think my students will love The Story of Stuff. I read the article at PBS and I could not agree with you more that our students have grown up in this technology age, so why not use it more to impact them positively! There is video on YouTube that explains the possibilities for more technology in the classroom called “Pay Attention,” it is one of TeacherTube’s top 100 most viewed videos. Great Work!

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