Douglas Rushkoff on the economy: Let it die

Douglas Rushkoff, author of many fine books that I have enjoyed, has an article available through Arthur Magazine. In this piece, Rushkoff argues that the current economic troubles should be allowed to run their course because our economy is nothing but a ponzi scheme that has been going on for 500 years:

"So what went wrong? Nothing. The system worked exactly as it was supposed to. The problem was that after America’s post WWII expansion, there was really no longer any real growth area in the economy from which to extract wealth. We were producing and consuming about as much as we could. Almost no commercial activity was occurring outside the corporate system. There was no room left to grow. Sure, outsourcing, lay-offs, and technology created some efficiencies, but wars, rising costs of health care, and exchange rates essentially offset any gains. [...] The boom seemed to offer the promise of a new market, but it fizzled almost as quickly as it rose. So speculators turned instead to real assets, like corn, oil, even real estate. They started investing speculatively on the things that real people need to stay alive. What real people didn’t understand was that there is no way to compete against speculators. Speculators aren’t buying homes in which to live—they are buying houses to flip. Speculators aren’t buying corn to eat or oil to burn, but bushels to hoard and tankers to park off shore until prices rise. The fact that the speculative economy for cash and commodities accounts for over 95% of economic transactions, while people actually using money and consuming commodities constitute less than 5% tells us something important. Real supply and demand have almost nothing to do with prices. We do not live in an economy, we live in a Ponzi scheme."

I recommend reading the entire article. It is thought provoking. I’ve already pre-ordered Rushkoff’s next book, Life Inc.: How the World Became a Corporation and How to Take It Back. I’m looking forward to reading this book, which has consumed Rushkoff for the last few years and which current events would seem to make very relevant.