End of abundance? But where did the abundance go?

Upon returning from vacation at the end of August, French President Emmanuel Macron had a public appearance before his cabinet ministers, warning them that the age of abundance in a care-free world was over: "Some could see our destiny as being to constantly manage crises or emergencies. I believe that we are living through a tipping point or great upheaval. Firstly, because we are living through... what could seem like the end of abundance..." Macron added that, "This overview that I'm giving - the end of abundance, the end of insouciance, the end of assumptions - it is ultimately a tipping point that we are going through that can lead to our citizens to feel a lot of anxiety." Last week, the CEO of Double Line funds, Jeffrey Gundlach reaffirmed Macron's warnings.

Well, if we've reached the end of abundance, where did the abundance go? Did we really exhaust it, and how can that even be possible in today's highly productive technological societies? I believe that both Macron and Gundlach are wrong. Abundance never went anywhere and we did not exhaust it. It is in fact all around us.

It’s land, labor and capital - economics 101

Let's get back to basics: what we call the "economy" forms the foundation of every society and it consists of land, labor and capital. The land, in a broad sense (so that it includes the sea and other waterways), provides absolutely everything we need to live. Labor,  that's us: we're surrounded by people who know how to build houses, fix cars, make clothes and apparel, grow crops, bake bread, and so on. With regards to capital, it is important not to confuse it with money or currency. Capital should be regarded as real savings (the surplus of resources produced in a society) and the production-enhancing infrastructure, machinery and tools. Capital deteriorates with time and use, but in normal conditions it is well within the productive capability of nearly every economy on earth to maintain and gradually upgrade it, be it basic or highly advanced.

Well, the land is still where it always was; labor is still available in great quantities and so is the bulk of capital, so why should the abundance be gone? The problem is that most people are rapidly losing access to it for one reason and one reason only: because our only ticket to that abundance is through "legal tender" currencies. To his credit, Jeffrey Gundlach recognizes this. "In the American economy," writes Gundlach, "the weak link are producers and retailers of discretionary goods because the people don't have the money to buy them."

If anything, we produce an overabundance…

The goods are being produced, and they're produced in absolutely vast quantities; if anything the society's problem is an overabundance created through hyperproduction of all kinds of everything. But if there's no money to buy everything we produce, stuff goes unsold and at times even goes straight into landfills and inventory lots where it may sit for months and years until it is destroyed. 

… so why are so few enjoying it?

Our next question should be, why is it that those who produce this overabundance can't enjoy it? The problem lies with the fraudulent monetary system which operates as a giant vacuum cleaner, siphoning great quantities of money away from those who should have rightfully earned it and towards those who conjure it out of thin air and lend it out at interest. Over time, those who control the levers of this system hoard vast amounts of money and control allocation of credit in the economy. Most people would prefer to live high quality lives in beautiful, safe neighbourhoods, in warm, comfortable homes and to eat quality foods. We might even choose to share our abundance with artists to paint beautiful things, sculpt marble statues, play music or dance for our delight. We might like such things, but those who control credit allocation might prefer to fund investments into surveillance systems, control grid, production of experimental vaccines and insect farms to produce fodder for the working population. It really is down to the way we allocate capital.

Fatima might have a passion for ballet, and her public might love to see her dance. But those who direct credit allocation can defund arts and prioritize “cyber first” instead. Fatima would then be unable to make a living as a ballerina but might find training and employment at a job flagging up her fellow citizens who exceeded their carbon quotas or made contributions to unauthorized political causes.

Money masters can also extinguish abundance through misallocation or even fund destruction of capital and disenfranchisement of labor. Sadly, today we are witnessing a gathering momentum in this direction: more and more resources are being allocated to build things most people don't want while less and less remains to spend on things we do want. At the same time, abundant funding continues to flow to think-tanks and the PR industry employing creative minds in order to convince us that this is all for the greater good while celebrities are increasingly earning their keep by pretending that they enjoy eating insects - so we should too. 

Abundance is our birthright - we should claim it back.

We took the wrong turn by complacently following the siren-song of those who, by hook or by crook usurped leadership positions in society. The abundance is all around us and it is fully our birthright, but it is being stolen from us. We are going to have to claim it back and this will define the march of history over the next few generations. It will not do to wax eloquent about how this system is the best one we ever had, how poor people are dispossessed due to their own shortcomings and how we should defer to experts who know what’s best for us. Quality solutions will have to emerge bottom-up because it is the only way such solutions will be conducive to a life we should all aspire to. And since this will define the world we’ll leave behind for our children and their children, we’ve no excuse but to don our thinking caps on and stiffen our spines. Our first objective should be monetary reform.