12 - CAPITALISM

CAPITALISM

Introduction

Capitalism is often described as the real source of inequality and environmental degradation. While capitalism has lifted many civilisations from poverty to prosperity through a personal incentive system, capitalism has an inherent flaw in that it increases inequalities, promotes wars for resources and power control, and damages the environment.

Capitalism is an economic system that transforms natural resources, labour and money into commodities for accumulation. Although capitalism is the least worst of all economic systems, it has some fatal flaws: the earth's resources (material and energy) are considered infinite and free. Waste and by-products are considered free (profits are privatised, but externalities are socialised), and short-term profit takes rule over long-term sustainability of the economy. The capitalist economic system, and especially the neoliberalism that has been in place since the 1980s, in which a group of banks and funds leaders within the financial complex decide where debt and capital is allocated, is a critical force that has led to greater social inequality, more environmental damage, but also a great society for most of us so far that has been the key driver behind falling fertility rates.

Let's first look at some basic notions of game theory, and then I'll offer some thoughts on how our current society works. The chapter 'Human Psychology and Behaviour' provides insight at an individual level. This chapter, in contrast, provides insight into social behaviour at a collective level.

Game theory

Formally, game theory is a branch of mathematics that studies how to make optimal strategic choices under uncertainty to win a game, starting with 2 players like chess or the Cold War. It was formalised in the Second World War era by John von Neumann and Oskar Morgenstern, and so much of how our economic system works is based on the same concepts. Game theory has been around forever, it wasn't called game theory, it was called strategy. We're basically talking about how to win a competitive risk game where you don't know what your opponent is doing and where, obviously, depending on what they're doing, some moves would be great moves and some other moves would be terrible moves. That is chess, that is any kind of game dynamic like that.

In game theory there's something called a coordination game, where you're not really competing against someone, you're coordinating with them when it's in your interest to coordinate, but then you reserve the right to defect to them when it's in your interest to do so, and not just in military situations, you see this in class dynamics: the upper class might all coordinate on tax policy for the benefit of the upper class only, while at the same time competing for positions of maximum power within that class. A whole industry, say the AI sector or the oil sector, might coordinate with each other to get the regulations they want for the sector, while at the same time competing to see who has the most market share, So in a game theoretic scenario there is no such thing as allies, there is no such thing as friends or loyalty, there are at best frenemies and a frenemy scenario is as long as we have common interests I can expect a certain amount of cooperation, as soon as we don't have common interests I can expect defections or constant planning for selfish defections and that also takes up a huge amount of bandwidth. That explains an enormous amount about how the world works, militarily, economically, politically, diplomatically, where we make an agreement while assuming the other guy is going to defect, while they assume we're going to defect, where we're trying to figure out how to spy on their defection while being able to confuse their spies, and those kinds of dynamics are a huge part of the coordination failures of the world.

The Moloch trap

The 'Moloch theory', or the 'Moloch trap', describes a situation in which individuals or groups acting in their own self-interest collectively make matters worse for everyone involved. This occurs when they are competing for the same limited resources or outcomes , trapped in a system, and the actions of one person encourage others to act in the same way, even if these actions have negative consequences for the group as a whole.

In other terms, a Moloch trap is a zero-sum or negative-sum game. It describes a situation in which participants compete for an object or outcome, but make something else worse in the process. Everyone competes for the same objective, but in doing so, everyone ends up worse off. It can be used to explain situations involving externalities or the preference for short-term gains at the expense of the long-term future. The problem is that it’s incredibly hard for any actor to escape the trap. If they do, they will lose out in the short term and may still be exposed to the downsides in the long term. Everyone is stuck in a 'game' or 'race' that they don't want to be in, but it's impossible to stop.

The original Moloch theory comes from a war god or tyrant who demanded child sacrifices to win wars. You might end up winning the war, but why did you fight at the first place if not to ensure the survival of your tribe for the next generation? Child sacrifice is a lose-lose proposition.

Some typical examples of the Moloch trap:

- Doping in sport. When Lance Armstrong doped his way to seven consecutive Tour de France cycling victories, his competitors had no choice but to dope too if they wanted to stand a chance of winning.

- The use of beauty filters on selfies and social media has become so popular that teenage girls are now becoming depressed because the real face they see in the mirror does not match the one with perfect skin and shape that the app creates. However, nobody dares to stop using filters suddenly because of the feared social backlash.

- AI could pose multiple risks and lead to doomsday scenarios, yet everyone is still rushing to further develop AI because no tech company wants to be left behind and go bust.

- Nuclear weapons: Country X may want to live in a world free of nuclear weapons, but because Countries Y and Z have them, Country X's self-defence interests mean it needs a deterrent too, so as not to leave itself exposed.

The Moloch theory essentially suggests that some systems are designed in such a way that they will inevitably produce negative outcomes, even if those within the system are acting rationally from their own perspective. By definition, Moloch traps are incredibly hard to break. If it were easy, we would already be free of them. Remember: players often recognise that they are in a race that won't end well. They just don’t know how to get out of it.

Moloch traps are everywhere in our human society: in our unsustainable level of debt to finance a social welfare system; in our usage of fossil fuels and overall consumption overshoot for our own comfort, letting machines do our work for us; in the destruction of ecosystems for our own consumption; and even in our low fertility rates, which allow us to enjoy a better lifestyle.

The prisoner's dilemma

There's a famous study in game theory that a lot of people have heard of called the prisoner's dilemma: the idea is that you and a mate are both sent to prison for an alleged crime, you're both being investigated, you're both given a kind of plea bargain type of option. If you both cooperate and don't rat each other out and don't throw your buddy under the bus, it's the best solution for both of you in terms of jail time. But if the other guy snitches on you and you don't, it's the worst outcome for you personally, and if you snitch on the other guy and he doesn't, it's less bad for you but the worst outcome for your buddy.

The prisoners' dilemma

What the study finds is that under uncertainty, where you don't know what the other guy is going to do, the tendency is to assume the worst and move into a position of kind of maximum selfishness and maximum rivalry, you want to assume the worst case scenario and try to plan so that you can win under the worst case scenario, and the other guys are doing the same thing, which means that you end up both confessing the other guy's crime and you both end up with a bad outcome.

The tragedy of the commons

One kind of game theoretic scenario is if you have a number of players, a number of actors, let's call them tribes or countries or corporations or whatever, and one of them does something that gives them a lot of short term advantage, it might be doing something particularly destructive like let's take an early kind of travel analogy, instead of just taking what they need from nature they start cutting down a lot more trees to be able to create a surplus of timber and you have a scenario where they can then use that surplus in different ways to be able to win the tribal war, build more boats, trade timber for other things, burn that timber for material processing, etc... So now you take the other tribes, if they don't do the same thing it doesn't protect the forest because the other guys are going to cut down the forest anyway and but and if they don't do the same thing they might not even be able to protect their people and get enough trees themselves, and so now even if they don't want to, they have to race to cut down the forest faster just for their own need to survive, you get the scenario where there's a kind of race to exploit the common resources, whether it's fishing or hunting or forest or fresh water or any kind of exploitation of environmental resources.

So you have a situation called the tragedy of the commons, which is a kind of social trap, is one where the net scenario of what everyone is racing to do makes the worst possible world for everyone, but nobody can stop it because everyone is making it so much worse for them in the short term, and they can't make sure that the other guy isn't doing it, and so the idea is that because the other guy is doing it, then we have to do it too. you end up with a world that nobody wants, but nobody feels they can choose otherwise.

This phenomenon is known as the tragedy of the commons.

The tragedy of the commons

The seas are a classic example. Most of the big fishers have now disappeared from the oceans because of what has effectively been a free for all economic activity. Although there are often international treaties, fishermen typically see themselves as good stewards of the resource, but assume that their competitors are plunderers and that foreign competitors are the worst. They feel compelled to increase their catches until an overcapitalised fleet is fighting over the last fish. And when the fishery is no longer viable, they blame the foreign fleets. But every fleet is somebody's foreign fleet. That is the tragedy.

It's such a profound thing to understand because if you take any of the big environmental issues like climate change, you could take oil depletion, you could take biodiversity and the extinction of life, you could take chemical pollution: literally nobody actually wants climate change or pollution or loss of biodiversity. There's nobody for whom climate change is their strategic objective. The whole world, the G20, the United Nations, all the major countries in the world have recognised that climate change is a major problem, we all want to stop it, there's a trillion dollars of climate related funding every year, there's the IPCC, which has huge supercomputers backed by NASA to produce reports, there are international agreements. And yet every year we use more fossil fuels. For all the renewables, all the solar, all the everything, we haven't even slowed the rate of increase of fossil fuel use. We obviously don't know how to stop climate change. Everybody thinks it's a particularly bad thing, the UN estimates that there will be about a billion refugees from extreme weather events and climate change in the next decade, the world has no way of taking in a billion refugees. We can't stop it and yet nobody wants it, but what we do want is energy for every other purpose and that's one of the side effects of it.

Nobody feels that they could price energy properly or be able to use less. Imagine we would price oil not as what it costs us to get it out of the ground plus a tiny margin, but what it took nature to make it or what it would take for us to clean up the environment. Obviously it is not the case and most of the costs are externalised to the environment. Now imagine if one country, our country, were to start trying to price it more properly so that you could produce it in a way that didn't have the negative environmental effects but another foreign country do not play this game and price it as per the cost of extraction plus tiny margin. This foreign country would have way more margins than our country and they would be more competitive, they would be able to flood the market with a much cheaper oil. And so consumers and industrials would end up buying only cheap foreign oil and that would run our national oil producers out of business, even if our national producers tried to take all externalities into account in their price. And that's the trap that's called the tragedy of the commons, and the same thing happens in food, in arms races, the advancement of military technology, in energy, in raw materials, or in any free international market. If they make AI drone weapons, the AI drone weapon is going to comprehensively outperform the weapons that are operated by humans, and we have to make AI weapons, and if we don't know exactly what kind of weapons they are making, we have to assume that they will spy on us ans so we also need to spy on them and we have to run counter-intelligence on their spies. But we also have to assume that they're making all the worst possible ones, plus defences, and trying to get comprehensive advantage, and allocate bigger and bigger military budgets, and you get a world where there's increasing destructive power with nuclear weapons, cyber weapons, hypersonic delivery of weapons, drone weapons etc and again literally nobody wants to live in the world of AI drone weapons but nobody feels they can stop it and so this multiplayer game theoretic dilemma where under uncertainty you assume the worst case scenario, you race ahead, the net result is this kind of self-fulfilling that the only reason you are doing it is because you think they are doing it too. The world you end up with is maximum environmental destruction, maximum extraction, maximum weapons.

The multipolar trap

What underlies and drives human behaviour is the design of civilisation and the multipolar trap: if we look at the extinction of species like whales or kiwis or the cutting down of mature forests, whether we killed them for direct commodification or for habitat, it was because nature was worth more dead than alive, so we had a perverse incentive situation. Today, war, addiction and sick people are great for GDP growth, so a lot of the problems in the world are due to perverse incentives, in economic, social and political drivers. There is an opportunity for some agents to get ahead at the expense of other agents, then everybody plays these kinds of games to get ahead at the expense of more externalities and unintended consequences.

Interestingly, what is best in the long run and what is best for others is not what is best for me now. What seems to be the best rational choice for an individual in the short term ends up damaging the commons of others and damaging my own possibility space in the long term, such as living on an ecologically devastated planet, or having an unserviceable debt, or I have generated so much animosity that even if I win a battle, I have not won the war. You end up in a situation where every agent making rational choices, focusing on them in the short term, creates the worst possibility space for the whole in the long term, and this is the source of most of the world's problems.

Example: I don't want to cut down all the trees, and I don't have to, but if I don't, someone else will, so if I don't, it won't save the forest, and the other one will use it to increase his power against me, to beat me in some other economic and political way, so we're actually both racing to cut down the forest as fast as possible, or racing to build an AI weapon before the other one does, etc....

Another example: It might be good for me to drive an electric car, and it might be good for my city or country to have more wind turbines and solar panels. However, at the other end of the world, more children in the Congo are working in artisanal mines, risking their lives. More damage is being done to tropical forests and water in Indonesia, and more soil and rivers are being polluted by toxic chemicals from processing raw materials in China. By striving for something that benefits me, I end up causing more damage elsewhere and to the planet.

Other example: If in 2023 or 2024 the US adds 7% to its debt (as a percentage of GDP) in a single year, and if part of this money is used to subsidise all sorts of local industries and to attract multinationals to build factories on US soil, such as semiconductors, cars, etc..., it will force other competitors such as China and Europe to compete and they must also go into debt and put money into subsidising local industries, subsidising energy prices, imposing trade tariffs, etc... The added debt of one nation forces other regions to go into more debt or risk losing competitiveness and running out of business altogether, closing factories and losing jobs. If you do not subsidise the car industry in Europe, very soon all cars will be made in China because China subsidises its car industry.

This is the multipolar trap: no one is maliciously doing the bad thing, and yet everyone is racing to do the destructive thing.

The multipolar trap

Imagine a new farmer in town who wants to produce milk the right way: no machines, every manual labour possible, care for animal life, responsible towards the environment, only organic raw materials, etc. The farmer will end up with a bottle of milk that costs $3. Meanwhile, the incumbent industrial farmer scales up with 50.000 cows, uses machines to milk the cows, provides processed food and growth hormones to boost milk production and reduce production time, and ends up with a bottle of milk that costs $1. The well-intentioned new farmer has no chance to survive in this competitive race, because unfortunatly, in a supermarket on a shelf, consumer will always pick up the 1.20$ bottle of milk placed next to the 3.30$ bottle of milk that looks similar and extremely similar content. The new farmer is faced with 2 options: Use modern technology (which consumes and pollutes) and scale up to survive, or go out of business. That's an example of a race to the bottom. Whenever there is competition, there is a race to the bottom, to be the cheapest, to get the most market share by getting bigger and using more resources and more energy to the detriment of human labor, and to release more waste into the environment.

Let's consider this scenario: If there were only 10 tribes on earth and they all respected nature and other tribes, did not engage in war or domination or conquest, did not consume natural resources below the natural rate of regeneration, these 10 tribes could live in harmony forever. From the moment that 1 tribe out of 10 suddenly tries to conquer more territory, colonise other tribes by sheer force, or over-exploit the common pool of natural resources, there are only 2 possible outcomes: Either the other 9 tribes will die out from oppression and subjugation or from lack of resources, or the other tribes will have to compete to survive, grow, over-exploit and catch up with the oppressive tribe.

The tragic reality is that we, white Caucasians Europeans, Americans and South Americans, are the descendants of those dominant colonising tribes. I am alive today because my ancestors were part of those tribes: they were dominated and survived. This is part of my socio-cultural heritage, whether I like it or not.

This is the multipolar trap: if one group of people wants to dominate and conquer, the other groups have to compete and consume more and grow their technologies as well in order to compete and survive.

If Microsoft develops AI, Meta and Alphabet must develop AI, otherwise their business model will be outdated and they will be out of business in a few years. If China is developing AI, the US must do so, otherwise the US risks falling behind in terms of technology, performance, productivity and military, as well as maintaining geopolitical and national security advantage.

The reality is that our society is a capitalist and power-oriented system that will always prioritise the benefit of us versus them over the benefit of humanity as a whole.

The free-rider problem

The ageing population benefits from the current system in which young active workers pay taxes for pensions and public health care while receiving little or no benefits. On the other hand, the over-60s population is growing rapidly and receives all the benefits while contributing little or nothing to the system. This is a typical case of the well-known "free rider" problem, as described below by Wikipedia:

<< In economics and politics, the free-rider problem is a type of market failure that occurs when those who benefit from resources, public goods and common pool resources do not pay for them or under-pay. Free riders may overuse common pool resources by not paying for them, neither directly through fees or tolls, nor indirectly through taxes. Consequently, the common pool resource may be under-produced, overused, or degraded. Additionally, despite evidence that people tend to be cooperative by nature (a prosocial behaviour), the presence of free-riders has been shown to cause cooperation to deteriorate, perpetuating the free-rider problem. >>

The free-rider problem

The median age in Europe is 45 and will be 50 in the next decade. As young people under 30 tend not to vote, currently about 60% of voters in Europe are over 50 and benefit from the pension and healthcare systems. Those over 50 are in the majority and want to maintain the comfortable status quo with a very generous pension system and an almost 'free' public health system, financed by the burden on young workers and by public debt. The free-riding problem of our welfare system and our low birth rate now benefits the majority to the detriment of young workers, taxpayers and future generations. Today's under 35 year olds feel scapegoated in this free-rider system, they feel the financial burden of having children, they feel the burden to not being able to rent or buy a house, and the bleak future of our societies, and most of them choose not to have children. That's why the majority of people under 35 vote for the far right or the far left wing: They know that the system is skewed against them, with a bleak outlook for the future, and they demand drastic changes, and they are absolutly right to do so.

Because deline of fertility rates started in the 1970s, the decline of working population started in the 2010s, and the over-60 population is growing every year, we are already the next generation paying for the previous ones not having children,and our societies are starting to feel the pain of a broken system favoring the olds to the detriments of the youngs. As demographics are extremely predictable for the future of a society, we will have more public deficits and loss of health services, less purchasing power, and degradation of labor-intensive services for pensioners, more poverty overall, more inflation, more social inequality with the top 5%, leading to civil wars and social unrest in the coming decades as the system slowly collapses.

Humans are conditional cooperators. They are willing to give or share if they see others around them doing the same. Most people are kind by nature and wish the best for others. However, if a significant proportion of the people around us cheat, abuse the system or remain unpunished for their malicious acts, most people will adapt and mimic what our peers do, simply to avoid being seen as fools for not taking advantage of the system. This is true of people claiming unemployment benefits when they have a firm job offer, Spaniards who don't pay their rent because the justice system is slow to react, any commonly known tax evasion trick, people who illegally connect a cable to the public grid to avoid paying for electricity, unpunished small crimes and the absence of justice for under-18s, and people who bring relatives and friends for health treatment in Europe at the public healthcare system just because it is free for them or the patient.

When the number of freeriders reaches a critical mass, people start to feel foolish for not cheating or abusing the system for personal benefit. The result is a society that cannot sustain itself: trust falls, the cost of living increases, there is too much public spending and not enough contributors, infrastructure fails, the budget deficit grows and the quality of public services degrades.

There are several other loopholes in our capitalist and burocratic societies. From tax evasion loopholes, where rich people and international corporations find legal ways of not paying taxes, essentially creating more wealth at the expense of regular taxpayers.

Rich and powerful people on boards of directors use the strategy of share buybacks, essentially taking the profits of the company generated by its workers to increase the value of the company's shares, which the shareholders can use as collateral to access credit and buy other assets and increase their wealth much faster than 95% of the people.

There is the ultra-financialised world, with banks and investment funds at the top, seeing the printed money first and deciding how to spend it. Banks used to be a store of value for citizens, then turned into investors for the benefit of society as a whole, but in the last few decades banks have become money making machines for the sole purpose of making more profit and money, not to serve people or businesses.

Another example of free riders are immigrants coming from outside Europe, when they first come to Europe and do not work immediately, they tend to go to France or Germany, because these 2 countries have a solid standard of living and generous social and financial public policies, so more people want to benefit from the social system for their own advantage, aggravating the financially unbalanced state budget and public spending.

The underlying incentive that creates the free-rider problem can be explained in terms of contributing to a public good. Suppose two people split a contribution to a public service like firefighters or police that benefits society as a whole. If both parties contribute, they both pay out of their own pockets and society benefits. If one party doesn't pay in the hope that the other will, they become a free rider and the other party has to pay the full cost. If the other party also decides to become a free rider and not pay either, then society receives no benefit. There is no fireman, and the next fire will burn down the whole neighbourhood.

The free-rider problem arises because individuals are willing to let others pay when they themselves can receive the benefit at no cost or at a low cost relative to their value. This is reinforced by the economic theory of rational choice, which states that people make choices that they believe will give them the greatest benefit. Therefore, if a service or resource is offered for free, a consumer will be happy to take it and not pay for it in full, creating a deficit somewhere.

Free riding is a problem of economic inefficiency when it leads to underproduction or overconsumption of a good, service or money. For example, when people are asked how much they value a particular public good, measured by how much money they would be willing to pay for it, they tend to undervalue it. Free-riding goods are usually characterised by the inability to exclude non-payers, the fact that consumption by one person does not affect availability for others, and the need to produce and/or maintain the resource in question. Indeed, if non-payers can be excluded by some mechanism, the good can be transformed into a club good (e.g. if an overused, congested public road is transformed into a toll road, or if a free public museum is transformed into a private museum that charges admission).

Free riding becomes a problem when non-excludable goods are also rivalrous. These goods, categorised as common pool resources, are characterised by over-consumption in the absence of common property regimes. Not only can consumers of common property goods benefit without paying, but consumption by some imposes increased costs on others. This is highlighted by the theory of the 'tragedy of the commons', in which each consumer acts to maximise his own utility, relying on others to reduce their own consumption. This leads to over-consumption and even possible depletion or destruction of the good. If too many people start free-riding, a system or service will eventually run out of resources to operate. Free-riding occurs when the production of goods and services does not take into account external costs, in particular the use of ecosystem services.

The tragedy of the commons

Ultimately, nothing is free and someone will have to pay. The results of free-riding in our societies are declining purchasing power for the under-40s, rising public deficits and national debt, high structural inflation, increasing climate change as companies and consumers do not pay for resources or externalities, and declining quality of overburdened elderly care, public pensions and health care systems.

Past societies and current social breakdown

Earlier types of societies and their characteristics are:

Tribalism: the extermination of other people

Colonialism: The appropriation of land

Communism: Everything belongs to the state and is redistributed to individuals.

Capitalism: The maximisation of resources for profit.

We are the descendants of all 4. Our ancestors made us what we are today. It's because tribalism overpowered and exterminated other tribes, because colonialism appropriated land and resources, and because capitalism triumphed over communism that we are the descendants of these 3 attributes of society.

If we are still here today, it means that we are the descendants of the winners of tribalism, colonialism and capitalism. White Americans are the descendants of Columbus' imperialism and the destruction of the Inca and Maya and native american cultures. Europeans are the descendants of the Greeks, the Romans and the Vikings. So this is part of our heritage, our culture of values, whether we like it or not.

We are the descendants of winners and conquerors, so our history book and our culture is about beating each other in competition. Our survival trait is that if you don't beat the competition, the competition will kill you, so you must first extract the resource, arm yourself with weapons, control the communications, media and digital world to maximise your output.

Our current society is a pyramid built on 3 levels:

At the bottom is the infrastructure, the physical world and technology.

It obeys the middle level, the social structure, which is the collective agreement field, government, laws and regulations.

This level obeys the upper level, the super structure, which are cultures and values, ethics, religion.

As long as the lower layer of technology is under the same umbrella of capitalism, technology will always serve the incentive of profit maximisation and increased growth, leading to more energy consumption, material extractivism and environmental waste and degradation. As long as the middle layer of laws is under the values of well-being, freedom, consumption, leisure and entertainment, we will continue to put no limits on our growth and not limit ourselves in consumption, thus not stopping environmental degradation

We have become an individualistic society. In the past there was no "I" in tribes, it was all about the tribe, the good of the village, not the individual. The oldest people were the wise ones who taught the youngest. In the past you would not exist without your tribe, without your community, without your natural environment and surroundings. Now at the touch of a finger you can get a cooked meal delivered to your door, a plumber to come and fix a leak, a job offer online, money can buy you almost anything, so practically we don't need a community, We just need people for fulfilment and psychological needs, but we don't need a collective group for survival. The focus has been on individual success rather than collective success. We value self-realisation more that the unsexy sacrifice to raise a child. Making a lot of money and becoming a top manager is valued, while bringing up 3 children and looking after the household for the family is seen as regression and submission. The sense of community has been replaced by the sense of personal fulfilment and personal success.

The ever-expanding human super organism

Capitalism maximises 2 goals: quality and customer satisfaction. It does not aim to minimise resource extraction nor waste. The earth's resources are considered unlimited and waste is free, in a political, legal and economic sense. And so the best companies that have flourished are those that maximise resource use and waste because there is no penalty for doing so. The only thing that matters is producing a cheap product that people like. If using a lot of resources and generating a lot of waste is the cheapest way to produce a product, then this process will prevail, outcompeting other processes and spreading worldwide.

When we consume goods and services, if we added to the price tag how many children worked to make the product, the average salary of the workers, the amount of fresh water consumed or chemicals released into the soil, and the raw amount of rock dug out of the mine, I think people would be much more reluctant to buy things.

We believe that the benefit of a good or service to us and our family is significant, while the cost or damage to the environment is very small, so we consume without thinking or without being aware and knowledgeable about the way things are produced. If I cut down a 100 year old tree to build a house for my family, i see a huge benefit for my family for years to come, and the forest will regenerate itself. The problem is that everyone does the same thing, and the forest is quickly depleted, and then nobody can build a house, so we have to import wood from far away or use another material.

Humans are universally driven by the two sides of the coin: seeking pleasure and avoiding pain. Both lead to consumption, and extra unnecessary consumption if we can. The more ability and means we have to dissipate energy, the happier we are. Humans tend to accumulate things and are naturally lazy over time, leading to overconsumption. Shopping, travelling, parties are the pleasure seeking and dopamine kick. Health care and painkillers, letting machines do the mechanical work for us to avoid sweating, are examples of pain avoidance.

The human predicament of constant growth has turned humanity into a super-organism that only knows how to consume more resources, in order to produce and consume more, but also to pollute more.

We live in overshoot: We consume more and more, never satisfied with what we have. We also consume faster than ecosystems can produce and emit waste faster than the planet can absorb. It is estimated that we currently consume resources and emmit waste 1,7 times more or faster than planet earth is able to regenerate or absorb. We are entertained to death by superficiality. We are bombarded with digital marketing that encourages us to consume things we don't need. Our consumerist society has made us shallow, individualistic and devoid of meaning.

El jardin de las delicias

The painting above is a famous painting by Jheronimus Bosch from 1505 called "El jardin de las delicias", literally "the garden of delights". On the left it shows the world at the beginning, when people lived peacefully in harmony with nature. In the middle you can see how mankind has overpopulated the earth and is enjoying life by abusing all the resources and good things that nature has to offer. On the right you see a dark and sad world with dead people from fighting for individual survival against other people and other spieces.

This painting is fascinating because the real intentions of the author are unknown, but it seems to be so accurate and ahead of time in describing the situation we are in today, and probably the near future to come.

Progress and innovation

Progress is a double-edged sword, something that has both good and bad consequences. Progress is a narrowly defined goal: Even if we achieve our goal by externalising the damage elsewhere, we still call it progress.nd those include That's a naive definition of progress, which is a propaganda for the winner-takes-all corporations and leaders of the world. If we define progress in terms of the betterment of people and the world, in most cases the totality of technological progress or GDP growth does not achieve that goal, neither for nature because of the externalities, nor for people because it is not evenly distributed across wealth classes.

The latest iPhone is more technologically advanced than the previous one, but is it better overall? How do we define good? Are smaller chips requiring more complex machines to produce better? Is the increase in processing power that leads to better photo and video quality, and thus more screen time and attention on social media, leading to more self-harm, suicidal thoughts, loneliness and depression among young people, a good thing? Is the world a better place with the latest smartphone on the market? This is more of a subjective and philosophical question.

Progress is universally beloved when looked in silo, but actually from a broad perspective, progress is often very questionable. There are very few moments of progress that are truly a good thing for all humans and all other species, and those include the discovery of man-made fire, the invention of the wheel, writing, and electricity.

See Figure 1 below for an overview of the major innovations of the past 250 years, since the Industrial Revolution.

Figure 1: Major innovation cycles

Technological innovations have brought many positive changes to human comfort and lifestyle, but they have also had negative side effects. Here are a few examples of moments of progress that are definitely double-edged swords, progress and regression at the same time:

The internet has given us all unlimited access to information and instant transactions, but it has turned jobs centered on face-to-face human relationships into jobs sitting at a desk in front of a screen for 8 hours a day doing electronic presentations and KPI reporting.

Social media has allowed us to stay in touch with people far away, but it has also reduced our physical interactions and drastically reduced our attention span.

A car can transport us faster and over longer distances than horses and donkeys, but it has released massive amounts of chemical waste and carbon emissions.

A simple plastic bottle allows us to easily carry water for consumption throughout the day, but the bottle ends up in landfill and as microplastics that pollute the oceans and enter our bodies, causing health problems.

Neil Armstrong setting foot on the moon is seen as a huge technological step forward, but in reality a lot of energy, resources and labour went into an achievement that did not benefit society.

We are a society obsessed with improvement and technology, but our children are losing the understanding of the value of simplicity, slowness and nature. They become more depressed and anxious. They don't learn the simple values and building blocks of a healthy life.

Progress and technology are moving humanity away from its biological reality. Screen time creates a virtual addiction to dopamine and instant gratification, shifting our focus towards social recognition from our peers and the search for validation, rather than listening to our own bodies, senses and feelings. Although progress and technology generate more physical comfort and convenience in our daily environment, moving us away from survival mode, they also disconnect us from our primary need to socialise, mate and pair in order to pass on our genes and secure our old age. Modern technologies encourage us to have as few children as possible.

Innovation comes from research, whether it is private R&D departments or public university research. The tragic reality is that only the research that benefits industry is funded. Nobody spends money to study that all the chemicals in the air and soil are causing our cancers and diseases, because no company has an interest in that, nobody has anything to sell about the air, and so you don't get comprehensive studies on subjects where the ultimate goal is not to sell something. That's why discoveries are made in the R&D arms of the market: IT technology, additive energy sources, weight loss drugs, etc... these innovations support the current capitalist system, they don't undermine it. You'll never find a study that concludes that we should consume less because it's better for the planet. When studies unequivocally show that burning fossil fuels releases harmful carbon emissions, all conclusions claim that we should replace those sources with cleaner ones. However, nobody claims that we should drastically reduce our consumption because this would go against the economy and the capitalist system.

Let us take this example: If the goal of the energy "transition" was to replace fossil fuels, it is undeniably, empirically, and measurably failing, because fossil fuel consumption and carbon emissions are still growing every year. So it is clear that the "energy transition" is another example of growing the pie instead of redistributing the pie differently, it is adding to the market to increase total returns. And still, nobody stops the energy transition due to failure because the reality is that it sells windmills, solar panels and batteries.

A cancer cell is very successful at imposing its state on the next cell, so more and more cells become cancer cells. They are so successful that they end up killing the entire metabolism, which ultimately kills the person and all the cancer cells at the same time. In summary, the cancer cells are so successful that they eventually destroy themselves. Men and Women in an industrialised society are a cancer cell on this planet, with no respect for other parts and the biosphere, and we call survival, comfort or competition the reason why we have to use our influence. We are simply killing our home in the long run.

Technology and innovation have solved many problems throughout history. But it has always found solutions that consume more energy and more materials. Technology makes everything more efficient, which puts downward pressure on prices, which tends to increase the overall availability of goods and services, but it also increases overall consumption through the rebound effect, including consumption of materials and energy. With better technologies, we tend to consume more over time, not less. Technologies will never solve the energy and material crises, on the contrary, technologies exacerbate per capita consumption.

Take AI and the AI data centres as the latest potent technology. In 2025, the AI data centres will have consumed more fresh water for cooling than the entire bottled water industry that year. The electricity consumption of all AI data centres in 2025 (and its associated carbon emissions) will equal the electricity consumption of New York City that same year. Technology is accelerating the use of fossil fuels and climate change. AI technology exacerbates and accelerates environmental degradation. As with any other technology before it, it generates more comfort and services for humans at the expense of increased material, fresh water and energy consumption, as well as more pollution and more climate change. The personal car, washing machine, internet and smartphone are similar examples of great technologies for humans conveniance that are detrimental to the planet.

Any innovation or technology, such as the internet or AI, that optimises efficiency or productivity would lead to greater human use, resulting in profit-maximising models that increase total consumption, extraction and environmental degradation. This would cause any perceived gain to backfire, as per the rebound effect. When technology improves, we simply issue more debt and extract more material, energy, and generate more ecosystem impact from the earth.

Technology is modernity's drug of choice, but the net effect isn't worth the rush. Each advance requires more energy, complexity and maintenance, while delivering less at scale. Wind, solar and electric cars aren't turning the tide on fossil fuel consumption, and climate change is still winning year after year. The more we build, the faster we use up resources. The push for endless technological expansion isn't saving the world, it's pushing it closer to collapse.

The double bind

Most of our societal problems are seen narrowly as an individual problem, a silo view, without considering the interactions with the ecosystem.

When you optimise things in society by creating groups of specialised people, the solution to one problem becomes a problem somewhere else. This is called the double bind. A double bind is a communication and decision-making dilemma in which an individual or group has two or more conflicting messages, making any action or decision a moral dilemma: Taking care of one side of the equation harms another side.

The double bind

Various examples of the double bind:

With the mass use of fertilisers and pesticides, we have solved the problem of mass production of cheap food, but as a result we have destroyed the ecosystems of agricultural soils.

By switching to EVs instead of ICE vehicles, you reduce direct carbon emmissions, but as a side effect you increase fresh water consumption and waste water popluation (to manufacture the battery among other things).

By subsidising people who lost their income during the Covid pandemic, we saved them from immediate poverty, but as a result, overall prices rose by 25% in 24 months, so everyone on earth lost some purchasing power.

By using AI, we will increase productivity and compensate for the declining labour force, but by introducing AI, you dramatically increase electricity and fresh water consumption (among other negative effects).

By outsourcing and externalising work to low-cost countries, it has brought massive deflation and huge gains in purchasing power in the industrialised world, but it has kept populations in Asia and Africa poor, de-industrialised Europe and not eliminated industrial pollution, but simply shifted it overseas.

If geographically possible, a country will decide to build a hydroelectric dam that will produce carbon-free electricity for the next 80 years, but this will create water scarcity and geopolitical tensions between countries that share the same river.

Two centuries ago, coal was seen as a great solution to deforestation and a way to save the forests. Now coal is our worst nightmare against CO2 emissions and solar panels and windmills and EVs are seen as a great solution. In the coming decades we will realise that these diffuse energy sources are the problem of rapidly diminishing access to fresh water and we will look for a new solution to tackle fresh water consumption. We always look at problems in silos, without connecting the dots and the interactions of very complex systems.

Let's take the cooling of data centres as another example. There are basically two options: air cooling, which uses electricity, or water cooling, which uses much less electricity but does consume and evaporate fresh water. If the operator wants to reduce the electricity bill, the fresh water consumption will increase; if they decide not to use fresh water, they will use more electricity. There are no perfect solutions, only trade-offs. One solution somewhere creates another problem somewhere else. Obviously, whichever solution the data centre operator chooses, they will only highlight the positive aspects, such as 'We have reduced our electricity consumption' or 'We have a water-free cooling unit', without mentioning the negative aspects.

I could go on with a million other examples, from GDP growth against a finite planet, by moving Europe from Russian dependency (gas, oil, metals) to Chinese dependency (solar, batteries, cheap manufacturing) and US dependency (LNG and military equipment). Every gain on one side is a loss on the other.

Out of sight, out of mind

As long as humans had only their hands and simple tools to hunt, cut and build shelter, the damage they caused to their environment was insignificant and sustainable: Nature was able to regenerate itself as fast as humans spoiled it.

But as soon as humans discovered the superpower of fossil fuels, starting with the Industrial Revolution about 250 years ago, we acquired a god-like superpower and began to irreversibly damage the natural ecosystem.

Consider a 50-year-old tree: if you have only your hands, you can cut off a small branch and use it for any tool or construction, and the tree will definitely survive and continue to grow. but if you are given a petrol-powered chainsaw, you can now cut off the 1-metre diameter trunk and definitely kill the 50-year-old tree within seconds. The use of petrol has absolutely given a massive advantage to humans, to the detriment of other species and ecosystems.

Before the industrial revolution and the use of fossil fuels, all human impacts on nature were located in the vicinity of urbanisation: Water was available from the river nearby or from a well or from the mountains a few kilometres away, wood was extracted from the surrounding forest, raw materials were mined within horse-riding distance of the town, etc... All damages and depletions to the environment were visible by the local population. Since the fossil fuel revolution, resources are now extracted much further from where we live, in most cases on other continents.

Some random examples: We mine in Chile, Congo or Australia, we get our oil from the Middle East, our gas from the US or Qatar, our cement from Turkey, our critical metals are refined in China, but most of Western civilisation has never set foot on the sites where we cause massive damage to our environment.

Another example: Every day, huge containers of fresh water are shipped from mainland China to Taiwan so that Taiwan can produce the semiconductors on which the whole world depends. Taiwan produces 40% of the world's semiconductors, but because the manufacturing process requires a lot of fresh water and Taiwan does not have enough fresh water reserves on land, it has to import fresh water from mainland China. No one knows this, or sees the ships full of water docking in Taiwan.

The same goes for the low birth rate: nobody sees the demographic development of a country in a normal day. When I was a child, I would walk down the street and see some people over 70, some adults and some children. Today it's the same, I see them all, but I don't know whether there are more or less people over 70 or under 20 than 30 years ago. I would have to look at the official statistics to get figures on the reality, but if I were to judge by my gut feeling and the assumptions of my everyday life, I would say that the population has not changed at all in the last 35 years. That would be completely wrong. The baby boomers are now retiring, and the under-20 generation is plummeting. I would be completely wrong if I did not do the research in detail. Unless you have the statistics in front of you for the whole nation, unless you see it yourself, you do not realise how bad it is.

So we don't feel that we're slowly destroying the planet, we don't feel that we're polluting the soil and the air because we're doing it far away from what our eyes can see. We don't see the population collapse happening.

When the unintended consequences of a good or service are beyond the human scale of time and space, we do not notice the negative impact and the direct negative consequences.

If you're making a smart phone, for example, and you're polluting the environment in Congo and Indonesia to extract resources, that's so far away from me in Europe that I don't care because I'll never go there in my life or meet anyone from that region. But if I poo in front of my house door instead of the toilet at home, I will see and smell the consequences every day. That's why I don't do it.

It is the same with climate change: if the consequence of our materialistic, affluent lifestyle is a very slow climate change that will be noticeable in 20 years' time, then I, as a human being, will not notice it and will not care about it. We only notice the things that are 5km around us or have an impact within 1 week. This is the human scale for understanding cause and effect. Everything beyond that seems harmless and inconsequential.

Believe me, if the nickel mining industry was not in Indonesia but right across the street from your house and you could see it from your bedroom window, you would be furious and you would protest strongly. If the metal refining industry was not in China but right in your back garden, spewing fumes and polluted liquids into the soil, you would not allow it and would probably move elsewhere. If the palm oil trees were planted in the nearest national park to your home, cutting down all the existing trees, you would be furious. If your neighbours had a cobalt mine where children were working with their own hands, you would go to the police and try to stop it immediately.

By increasing the distance of extractivist activities to the other side of the planet, either to uninhabited places or to places poor enough to accept the side effect of extractivism, our western style of hype-consumption has been artificially removed from all the damaging effects on nature, so that it feels innocent to consume high-tech products like processed food, laptops or cars. People are ignorant because they only believe what they see. If you don't see, you don't know, and you assume that what you are doing is neutral to the ecosystems, when in fact the opposite is true.

By increasing the distance of the waste we produce, and by postponing the self-created problems of debt, low fertility rates, climate change, access to fresh water and soil degradation into the long term future, we have given the unintended consequences of our activities a false impression of invisibility and harmlessness. People care about the 1000 metres around them and what is going to happen in the next 10 days because they can represent it in their heads, these are human scales to understand. But what happens in the middle of the Sahara desert in 20 years is so hard to fathom because it is so far away from human perception and judgement that any bad consequences seem harmless to us all, because happening either in the long run or in the long distance. And that's why our daily habits seem OK to us, we do not feel guilty of consuming, it seems not so harmful to society, when in fact they are an inaccurate perception of the devastating reality.

What do carbon dioxide in the air, microplastics, an ageing population, national debt and mining have in common for most of us?

All these big problems are invisible to our eyes. You don't see the carbon in the air. You do not see that you are eating toxic chemicals every day. Nobody sees the national debt, it is just a number that almost nobody cares about. Nobody sees that there are 50% fewer children than there were 30 years ago, or 30% more pensioners than there were 30 years ago, people still see some children and some elderly people on the street, but we don't see the ratio and we don't see the big picture.

If the rubbish in your kitchen smells, you notice it and take it out. If the floor of your living room is full of rubbish and liquids, you would quickly clean it up because you see it and it bothers you. But the world's greatest threats are all invisible, and so people don't care and don't realise the urgency of action.

Because we don't see these big problems, people don't care and don't act, and it feels harmless. That's the tragic part that has brought the world to the situation we are in, if all these problems were like a house on fire, a homeless person or a bleeding person, we would care and we would act. The hidden aspect is the tragedy that keeps it going and makes it worse.

Competitivity and race to the bottom

Globalisation, the free market and capitalism have opened up markets worldwide. If one place can produce goods more cheaply, then production from around the world ends up there via economies of scale. Globalisation has brought deflation and strong purchasing power to advanced economies, but it has also made business competition much tougher. In the past, our competitors were local or regional; now, they are worldwide. This means that there are only two ways to survive in this globalised free market: Either you outcompete the rest of the market with ultra-cheap labour, terrible working conditions (modern slavery) and low ecological standards, the approach favoured by underdeveloped economies. The other way is to focus on high-end products (microchips, aircraft, etc.) and luxury, and keep only services locally such as transport, education, healthcare, and care for children and the elderly. This is usually how advanced or industrialised economies end up.

This means that most mass production activities, such as steel, cement, plastic, glass and wood production, as well as the production of low-end products such as toys, furniture and clothing, are outsourced and cannot be produced competitively in advanced economies due to high salaries and workers' privileges, high environmental standards and high bureaucracy. Advanced economies end up importing literally everything, from food to shoes to bricks. This is problematic because it makes our ageing society dependent on countries with a young and cheap labour force, which is becoming scarce. It also forces us to remain at the forefront of high-end technology so that each country can export something the country is best at doing. If a country imports everything but does not export anything, its balance of trade would be extremely negative, its currency would devalue rapidly, and its citizens would no longer be able to afford all the imported products.

Having too many competitors or having no competitors (i.e. a monopoly) are both bad in the long term.

If a business has too many competitors, the price is driven down so much that plenty of companies go out of business. The only ones that survive are those with low environmental standards, poor working conditions, exploited staff and tiny margins, making those businesses unsustainable in an advanced economy. This is typically mass production of items such as glass, toys, plastic, basic tools and steel, and it is usually carried out in developing countries with fewer regulations, less bureaucracy and lower wages. If you specialise in high technology or luxury goods, you tend to have fewer competitors, which is better in the long term. This is the only area of production in advanced economies. If you have no competitors or too few due to geology, specific know-how or innovative ideas, this is great in the short term. However, in the long term, these businesses tend to become complacent in a challenging environment. This leads to stagnant evolution, employees getting benefits and becoming too comfortable, high product prices and, ultimately, a competitor showing up and the original company being unable to compete.

The best case for a business is to have two to four competitors in an area.

People naturally and instinctively want more goods and services, more comfort and a better standard of living. They want to imitate what looks good on other people. In order to maximise our return on spending, we tend to buy the cheapest good or service of similar quality. This triggers competition between producers to be competitive and lower their prices to gain more market share. This rush to lower prices brings with it all the negative consequences: child labour, underpaid labour, untreated waste and pollution, lower environmental standards in plant construction, use of the dense and cheap energy source that is fossil fuels, and companies forced into debt to scale up and reduce unit production costs to gain competitiveness.

If you're a chicken producer and you want to do it "the right way", you'll end up with a chicken that sells for 40€ a kilo in the supermarket. But there are other competitors selling similar chicken for 5 €/kilo that looks the same, and those producers will get 90% of the market share and put your ethical company out of business. And those 5€/kilo producers use mass factory production with disastrous living conditions, feed the chickens growth hormones and antibiotics, and maximise the use of machines and tractors to do most of the work. The producers who protect the environment and pay their workers well, with a huge human workforce, are simply driven out of the market by consumer choice, simply because consumers want all the comforts of life: Consumers want a car, holidays in the sun, meat every day, household appliances at home and a wardrobe full of new clothes. We want it all.

Modern food is engineered for durability, not taste or nutrition. Choices are made for what can survive pesticides and last longer in the store.

Even if apple trees grow in your neighbourhood and bees fly around, we import apples from New Zealand and honey from China because the biggest cost is the labour to pick the food. Beef and chicken are imported from Brazil because if local European farmers try to respect environmental rules, grass-fed commitments and no hormones on animals, local farmers cannot compete with other countries that do not have these rules.

Every product in the world ends up being produced where labour is cheap and workers are abused, where plants and animals have lost their nutrients and their dignity, where we use the most fossil fuels for fertilisers, pesticides and antibiotics, and where mega- large-scale producers are so big that only 2 or 3 producers with monopolies in the world can compete on their scale. All production ends up where it is cheapest, and there is no economically viable alternative for local, small or medium-sized producers. Only niche and luxury products can survive, but they all target the same 10% of wealthy and consumer aware customers. Monoculture and similar genetics increase productivity at the expense of resilience. Any producer who tries to do something good for the soil, for the plants, for the animals, for the quality of the food, for the diversity of nature, is simply uncompetitive and driven out of business.

Competitive survival is the simplest explanation for the race to the moral bottom that is driving the great crisis we find ourselves in: debt, climate change, fossil fuel consumption and, indirectly, the collapse of the birth rate. The most tragic thing about all this is that no one on earth has any real interest in polluting the world, or in climate change, or in going further into debt, or in increasing carbon emissions. These are unintended consequences. But you have to use these degrading processes with unintended consequences in order to survive in this competitive world.

Capitalism is now over later. You do not pay for the externalities like waste and pollution, nor for the resources extracted, you only pay for the final good or service you sell.

Our society is optimised for efficiency, not resilience. Supply chains, technology, international trade, just-in-time logistics, everything is highly efficient so that the consumer gets the best quality/price ratio of a product or service. But this has made the resilience of the system weaker and weaker over time: Any disruption in the supply chain, any depletion of a material or bankruptcy of a supplier, any geopolitical turmoil leading to trade barriers or export bans, makes a final good or service rare, late or simply unavailable.

If you allow the free market, the freedom of business to make a profit, and the freedom of people to choose their work to earn a living, you naturally encourage all activities that are designed to make money, not those that add value to society.

You end up with companies destroying their environment, polluting the soil and air, in order to make more profit. That's why all industrial jobs go to China. You also end up with engineers going into finance to do intraday trading or high frequency trading instead of designing new machines and new technologies, just to make a lot of money, without helping anyone in society. Engineers with a scientific background now pursue careers in finance for better pay. Those who might once have become scientists, dreaming of curing cancer or flying to Mars, now aspire to become hedge fund managers.

In industry, 95% of spending is on opportunities to increase revenue and profit, and only 5% is on risk mitigation. Money spent on risk mitigation is seen as lost money that doesn't generate additional profit. Risk mitigation is only useful in the future, when an event occurs, when the company's losses would be reduced. That's the benefit of risk mitigation, and that's why companies don't spend money on climate change adaptation, supply chain redundancy, alternative processes, etc... companies aim for efficiency, productivity, just-in-time and maximising current profit margin. If a company spent a lot of money on robustness, redundancy of its supply chain, being as environmentally neutral as possible and mitigating every conceivable risk, it would be uncompetitive with those who did not care about risk mitigation, and the risk-mitigating company would go out of business and die. That is the cruel world of capitalism. This is the reason why private companies and governments simply don't act on climate change: it would dramatically increase their costs, and because other companies and countries won't act, the other countries and companies would attract and suck up all the activity, and eventually climate change would continue to happen, while the companies and countries that do try to act would be driven out of business and into debt and poverty.

The last recent choices we had were the 2008 financial crisis and the COVID-19 pandemic. The 2008 financial crisis was basically solved by government and public institutions bailing out private banks and real estate companies by printing money through national debt and injecting liquidity into the broken system. 2008 is the beginning of the explosion of public debt, and now we go into any public debt to solve any kind of crisis or bankruptcy or difficulty. Since 2008 we would not let the private economy collapse, so public money saved the economy.

The next crisis will be when public money and public debt spiral out of control, then we have state bankruptcy and no one above to save society. Nothing can save governments and nations from bankruptcy next time. The whole of society will collapse.

The Covid-19 lockdown caused a 5% to 10% rapid downturn in the economy and in fossil fuel consumption and carbon emissions, and again the solution was massive public spending, free money to stay at home.

Yes, it solved the problem, but it generated 20% to 30% inflation and an additional 20% debt to GDP ratio. Again, the same solution to a crisis that will bring us closer to national bankruptcy and hyperinflation in the coming decades.

In times of stability and abundance of labour, energy and materials, which we have had for 80 years since the Second World War, companies that focus on performance strive. Who knows who will win tomorrow when we reach +3°C, when the working population declines sharply, and in the event that the internet goes down for 1 month, or fresh water becomes scarce, or everyone uses and depends on AI, but AI output is no longer reliable because the internet has become garbage content, or China and the US are the economic enemies of every other country and nobody does business with them anymore. By improving efficiency and performance, our economies have become less resilient, less robust to major events and more prone to risk.

The tragedy of our globalised, interconnected world is that money and activities always flow towards the most disgusting practices, such as child labour, unethical working conditions for humans, severe environmental pollution, the use of fossil fuels, and large government subsidies.

For example: When Indonesia mines nickel with low environmental standards and harsh working conditions, subsidised by the Chinese government, the output price of nickel is so low that no other country or company outside Indonesia can compete if they enforce better working conditions or environmental standards. This pushes ethical companies and sites elsewhere to closure because they become uncompetitive compared to Indonesian nickel mining companies, which dominate the entire nickel production market. The same is true of child labour in the cobalt mines of the DRC, which are controlled by local mafia groups, making any attempt to mine cobalt elsewhere unprofitable. The steel industry is closing in Europe and moving to China because European environmental and emission standards are tough, while China uses coal, has lower environmental and regulatory constraints, and offers lower salaries and tougher working conditions. European steel is simply priced out of the market, meaning most of the world's steel is produced in China. Textiles are mostly produced in Vietnam because workers are paid 50 cents per hour in terrible conditions. If you want your textiles to be produced in Germany, a regular T-shirt would cost $80, whereas one made in Vietnam would cost $10. Nobody would buy an $80 T-shirt, so the German textile producer would shut down. Eventually, all T-shirts are made in Vietnam and most of our clothes are manufactured in unethical working environments in Asia. If Vietnam were to start paying its workers $10 per hour for a maximum of 40 hours per week, factories in Vietnam would close and new ones would open in Laos or Cambodia with the same terrible initial working conditions. In a globalised economy, you simply cannot avoid the forces of the race to the bottom.

The irony is that by introducing environmentally friendly regulations in Europe, which is ethically sound and makes sense at first glance, Europe is actually encouraging the relocation of production to Asia and Africa, which ultimately worsens the overall environmental impact. This is the race to the bottom. The same is true of subsidising an industry in a country such as China's EV and battery sector, which forces other countries to either heavily subsidise their own EV and battery production companies or watch their battery and EV industries shut down one after the other due to lack of competitiveness. This is the multipolar trap. When Microsoft spends billions on AI development, Google, Amazon and Meta are forced to do the same; otherwise, their technology could be left behind, causing them to miss the next technological step, lose the competition and lose market share and potentially die like Nokia or Kodak in the past. When one company or country invests heavily in a new technology, all the other competitors are forced to do the same; otherwise, they risk losing ground, falling behind, and becoming irrelevant. The multipolar trap applies to any international goods or services, such as software, cars, steel, chemicals and textiles. The exceptions are luxury products, where price does not matter, and local goods and services, such as a cup of tea in a coffee shop or a haircut at a hairdresser's. Even if the price of a cup of tea or a hairdresser's service was three times cheaper across the globe, you wouldn't import hot water from Vietnam, nor fly to Moldova for a haircut.

The solution to the race to the bottom due to the multipolar trap is for the governments and leaders of countries engaging in these harmful practices to stop. However, these countries and leaders often benefit greatly from their competitive advantage and dubious business practices, so they have no incentive to stop. Another solution is international sanctions, tariffs or boycotts, but this simply risks retaliation and alienating the allies of the country you want to sanction. Complex geopolitical situations can backfire, making products more expensive to import and making it more difficult to find international lenders for government debt. Ultimately, when you buy an electric vehicle (EV), you don't know, ask or care whether the cobalt in the battery was mined in the Democratic Republic of the Congo by children. As a consumer, you care about the price, performance, functionality and aesthetics of the car. Even if you wanted to, it would be impossible to find out where the nickel was mined, who mined it and under what conditions, because the supply chain is opaque and not directly traceable. The phenomena of the race to the bottom and the multipolar trap are unavoidable in the globalised economy in which we have been living for more than a century.

Ordinary people and small communities or indigenous societies do not inherently exhibit the traits associated with an arms race, the tragedy of the commons, the Moloch trap, the multipolar trap or the race to the bottom. Regular people naturally communicate and collaborate, and they do not want to destroy the planet, deplete its resources, nor see others suffer. Game theory does not originate with ordinary people, but with institutions, states and private companies whose leaders do not share the human traits of the vast majority of us. States, institutions, and big corporations are led by people with dark triad traits: psychopathy, narcissism, hyper-competitiveness, dominance, and the pursuit of power. In the capitalist model, private companies must be competitive by definition and by design. They tend to be more extractive of resources and people, and seek more profits by law, to the detriment of the planet, its resources, and competitors' well-being. Governments must act and respond to other governments that threaten their well-being, peace, sovereignty or interests, which leads to an arms race and a concentration of power. All game theories are led by a few leaders in the top 1%, most of whom have dark triad traits. The vast majority of humans would not participate in this arms race if they had the choice. However, we are all part of the system, society and capitalist model. We all belong to this game and have no power to change the rules.

Ultra leveraged financial world

Another thing to take into account is that the world is extremely leveraged with debt at all levels. Businesses, banks and investors have far more debt than assets, which is why their wealth is growing exponentially. Private individuals are also in debt through mortgages, student loans and "buy now, pay later" schemes. Businesses are extremely in debt, especially new ones, start-ups and small businesses that can only kick off their growth based on external capital investment, which is mostly debt. Public debt at a national level is also a factor, with each government making new debt every year to compensate for the deficit between tax revenue and public spending.

Figure 2A below shows the evolution of total world debt since 2000. While total debt increased fourfold from 80 trillion US dollars to 320 trillion US dollars in 25 years, the world GDP increased only threefold from 34 trillion US dollars in 2000 to 108 trillion US dollars in 2024. The level of debt is growing very fast and is reaching unsustainable levels. In order to generate a given level of growth, we require more and more debt due to an ageing population and the servicing of past debt.

Figure 2A: World total debt since 2000

Figure 2B below shows total debt (blue line) and the broad money supply (M2, red line) in the US, both in nominal terms. In the 1960s and 1970s, the debt-to-broad money supply ratio averaged around 2.5 for a considerable period of time, meaning that for every 10 dollars in circulation, there was a total debt claim of 25 dollars on it. Fast forward to today, and the ratio is 7.5-to-1. For every 10 dollars in circulation, various financial actors such as banks, investors, hedge funds and the central bank hold 75 dollars of debt claims on them. This means that the economy must continue to grow drastically in the future in order to pay the interest and some of the principal.

Figure 2B: Debt and money supply in USA since 1960

In the USA, government debt is around 120% of GDP, while business and household debt is around 170%. This brings the total to around 300%. There are also off-balance sheet entitlements: Public employees and military veterans are promised future benefits and pensions, accounting for roughly the same amount as the current GDP. This brings the total to around 400%. Overall, there are 10 times more financial assets in the world than the global world GDP. For every one unit of added value, there are ten units of debt, insurance, intermediaries, etc. The world is highly leveraged and financialised at several levels before one unit of productive output is generated. This multiplies growth and money-making at the top and in financial services, but makes any downturn or sustained recession a nightmare and a major financial crisis waiting to happen. With the industrialised world's workforce having been in decline since the 2010s, we will have to find ingenious and creative ways to manipulate the figures and make it look like we are still growing, and that's called printing money and inflation, because the system cannot afford any slight degrowth.

The issue is that, from 1970 until 2010, the system held because there was an increase in the working population, but productivity per capita has been linear at around +1% per year, not exponential. Therefore, I expect productivity to remain at this pace. Since the 2010s, the working population has stabilised or started to decline slowly. Growth at all levels has been achieved through new debt. However, since the 2020s, the working population has really started to shrink, which means the real economy will shrink, and this is a major issue in a highly leveraged world.

If I start a business with $80,000 of debt and $20,000 of personal capital, and the business grows in value by 20%, from $100,000 to $120,000, I have actually doubled my original private investment. However, if the business's value decreases by just 10%, from $100k to $90k, I lose 50% of my original investment.

That's why any prolonged slowdown in the economy is fatal at all levels: private, business and public. The system is over-leveraged at all levels. We will not let that bankrupt happen because it would lead to a catastrophic economic collapse at all levels, far worse than the 2008 financial crisis. The way out will be to print money, devalue the currency, and create high inflation. The government will claim that inflation is 5%, but it will feel like 10% in real life. This will allow businesses and national debt to claim growth, but it is fake growth based on a devalued currency. Purchasing power and standards of living will decrease while public services will be drastically reduced, triggering social unrest, massive protests, civil war and the rise of extremist political parties, causing a lot of turmoil through loss of prosperity.

If an economy has 10 people, each making 1 toy sold for $10, the size of the economy is $100. Now, if your population reduces to 8 people instead of 10, you still have the same debt and still need to grow to survive. Through more debt, money printing and currency debasement, inflation will rise and so, each person will sell a toy for $13, giving a total economy of $104. Has the economy grown? In nominal terms, yes, this economy has grown by 4% and is able to service its debt. However, in terms of real economic output and purchasing power, this economy has actually shrunk by 20% because only 8 toys are being produced instead of 10. The trick is that there has been 30% inflation in the price of a toy, from $10 to $13. You might argue that 10 toys for 10 people is the same as 8 toys for 8 people, so there is no loss of output per person. Not exactly. In this example, we are only counting the working population, whereas in the real world, a worker goes off to ritirement and the total population remains or increases in the future due to an ageing population, so there will be more people for fewer toys. Retirees will have to stop playing with toys, I suppose.

More seriously, this exact phenomenon will happen in the coming decades: rising durable inflation to compensate for the constant shrinking of the working population. This will ensure that the over-leveraged economy does not go bankrupt, and can sustain nominal growth and fulfil its nominal debt obligations. However, the majority of people's standards of living will decline due to loss of purchasing power and poorer quality public services. There will be a rising demand for healthcare and pension support, with fewer active healthcare workers and fewer taxpayers, which will lead to a drastic decline in the quality of public services. Unfortunately, there is no other positive outcome.

Modern slavery

Europe and the western world has been able to achieve tremendous growth and wealth through colonialism and exploitation of other countries rich in resources like Africa and cheap in labour like Asia. With one hour of average wage labour, an American can afford goods that would take 10 to 50 hours of labour for a worker in an outsourced developping country like Asia or Africa to afford.

The high standard of living in the western world has been made possible by the use of fossil fuels, but also by the outsourcing of human labour to other countries where workers are paid peanuts and work in very harsh conditions. Europeans and Americans are only rich because some people in Asia and Africa are poor. It is not possible for all countries in the world to be wealthy and industrialised. Rich countries rely on poor countries to be rich, and so rich countries cannot exist without poor countries providing for them. This tragic reality is something that those of us in the Western world tend to ignore. The idea that all countries can be developed to a decent level of prosperity is misinformed and ignores how economics and capitalism work. If we want to bring Africa up to the standard of living of the USA in the coming decades, where will Africa find its "Africa"? It will not happen because there will be no countries left for modern slavery, an abuse of human beings that is somehow tolerated because it benefits us, rich people from the western world. You need poor countries to make some other countries rich.

Don't hate the player. Hate the game.

Modern slavery, somewhere in Asia

It is too comfortable for society and the majority of us to blame a minority of scapegoats for the climate crisis: Point the finger at big oil, and point the finger at China's polluting industries, so we can feel good about ourselves and other companies. It's a ridiculous distortion to avoid the harsh reality that every producing company and every consumer is part of the problem.

Let's take an example: Europe, as a consumer, wants to electrify a lot of things to be "clean" and needs a lot of copper to make electrical wires. China, as the most competitive producer, refines most of the world's copper, causing soil pollution and CO2 emissions in China, but making a good business out of it, creating local jobs and tax revenues for Chinese society. Would you rather blame China for the terrible environmental impact of this copper business, or would you rather blame Europe for demanding the material at a cheap price so that people can benefit from its use? My answer is neither. I fully understand and support the Europeans who want electrical appliances for their comfort, and I fully understand and support China who benefit from the local business. It just happens to be a side effect that this business is polluting and destroying the planet in the long term.

And please do not suggest that China should implement tougher environmental policies like those in Europe. If they did, their products would be more expensive, and another country such as Vietnam or Indonesia would undercut them by not implementing those policies and producing cheaper goods. In the long run, China would lose all its business, and neither the environment nor China would benefit from this.

Take another example: Russia, Saudi Arabia and the USA have been gifted with large oil reserves in their soil and therefore these 3 countries are big oil producers. Every advanced civilisation consumes oil, so everyone in the industrialised world is an oil consumer. Would you blame Exxon Mobile, Chevron, Total Energies, BP or Shell, the big oil companies, for the carbon emissions? Or would you blame an ordinary European who drives a petrol car, buys plastic items and buys goods from all over the world dispatched using diesel engines? The answer is neither. It is only natural to want more goods and services to enjoy and make life more comfortable. Somewhere on the planet, there must be companies producing those goods and services.

As a corporate employee, I am a modern-day slave to my company's big shareholders. They make their fortunes from my hard work. On the contrary, the Vietnamese who makes my $10 T-shirt I can buy in my store with the equivalent of 30 minutes of my work, or the Congolese teenager who mines the cobalt I consume in my electronic devices, both working 12 hours a day for 50 cents an hour in harsh conditions, are my modern slaves. I am the modern slave of others who would never be rich without me, and some others are my modern slaves without whom I would never be able to buy so many cheap things in my life. This is modern slavery. You are somewhere in the economic power chain. However, several levels and a hierarchy are needed for some to enjoy a prosperous, abundant and wealthy life. You cannot have a world of only billionaire shareholders nor have a world of only average American workers and consumers.

Take a look at the two photos below of the illegal Shabara artisanal copper-cobalt mine in the Democratic Republic of the Congo (DRC).

The artisanal cobalt mine in Shabara, DRC

Copper and cobalt ore is dug out by hand using basic pickaxes and shovels, while workers wear no protective equipment and risk their lives at any time. 20,000 Congolese people work there in four shifts of 5,000 people at a time. Some of these workers are children under the age of 18. The mining site is protected by the military and mafia members who have been politically bribed. These mines are either co-owned by Chinese public mining companies or local officials work together with Chinese public officials who buy at least 90% of the mined output. Workers are paid between one and two dollars a day for working in hazardous conditions. The DRC produces 75% of the world's cobalt. Cobalt is mostly used in electric batteries, while copper is used in wires and electrical devices, most of which are consumed by industrialised countries.

This is the closest thing we have to slavery. It is absolutely indirect modern-day slavery. People in Europe and the USA do not 'own' those "slaves", did not ask or wish for modern slavery and have never seen them in person, and everyone is against it, but it still happens in real life. This work is not official and does not appear in any data, but modern-slavery absolutely exists in the world in 2025. The only two reasons it is happening are that a free capitalist market will always go where the cost of a product is cheapest and because the Congolese people working there have virtually no other income sources.

Blame the game, not the players.

Social inequalities and loss of purchasing power

Central banks can print new money at any time by creating new debt and pump it into government budgets, economies, stimulus programmes, big banks, servicing the old debt, direct cheques to households, etc... This new influx of money, created out of thin air, devalues the existing currency, making things more expensive (rising inflation) and reducing our purchasing power. You can imagine that if everyone's salary doubled overnight, a few months later the prices of goods and services would also double because there would be more money in the economy to buy those goods and services, pushing up the prices.

Money supply, or the total amount of money in circulation in an economy, is the key driver of price stability and inflation. If the economy grows by 2% in a given year, the money supply should theoretically grow by 2% to accompany and support this physical growth in goods and services. If the money supply grows by 5% in that year, it will theoretically increase inflation by 3%, the difference being that more money is added to the economy than the sum of the goods and services available for purchase. Inflation first manifests itself in the form of more profits for big banks and big companies, rising asset prices such as gold, housing or stocks, but eventually it's the cost of everyday life that goes up: food prices, rents, energy bills, the cost of services, the cost of goods, and so on.

Average salaries tend to barely keep up with the rate of inflation, which means that an average worker with an average salary can barely keep up with the inflation of everyday prices. The lower salaries definitely do not keep up with the prices of food and rent, among other things, and are loosing purchasing power over the years. But if you look at the total money supply that goes into stocks, property prices, gold, etc, then salaries are definitely losing something like 3% to 5% a year compared to the total money supply. Average incomes are not keeping up with house prices, for example.

The top 5% wealthiest do not become wealthy through paid work or salaries. They make money through passive income by owning assets and reaping the profits or increases in their value. The wealthiest top 5% get loans from private banks by putting their assets as a collateral for the loan, then use this credit money to buy more assets and repeat the process. As a consequence, assets value is growing much faster at around 10% than the growth of the economy or GDP (2% to 3%), average salary growth (2%) and even the money supply (6%). This means that the richest 5% at the top who own these assets are increasing their net worth and wealth by the total money supply, because the extra money has to go into someone's pocket somewhere, and it's usually CEOs, shareholders, asset managers, hedge funds managers and banks who get all this new money supply, not the workers.

Take a look at Figure 3A below, which shows the annual change in the money supply M2 (often referred to as "money printing") in the US compared to the rate of inflation. Firstly, you can see that the blue curve of money supply is almost always above the green curve of inflation, which means that the difference is money going into assets such as houses, gold, stocks and the net worth of the richest 1% in the world, which is essentially the primary reason why the rich get richer and the poor get poorer over time. You can also see that when the money supply rises sharply, usually after 1 to 3 years, inflation catches up and rises as well. This is especially visible in the 1970s. When too much money is created, faster than the economy is growing, it gets into businesses and some rich people at the top. Some of this added money is retained by the richest top 3%, and then over time, some of the added money goes into the real economy and the prices of goods and services go up, and that's how you get inflation. The Covid-19 pandemic is a good example: In 2020 and 2021, people were confined to their homes, some businesses shut down, but people kept their full income and received some government benefits. There was a huge increase in government spending and new money supply, up to 27% increase in new money supply. Then in 2022 the inflation rate followed and reached up to 12%. Money printing is the solution to every problem, but when overdone it creates inflation.

Figure 3A: Money supply compared to inflation in USA

When governments print money that is not backed by economic growth, the money supply flows into assets, all kinds of assets like stocks, vintage items, art, real estate, gold, etc. Only the wealthy in the top 5% benefit from owning some assets. But for most people, especially the middle class, the lower income class and the younger workers, not only do they not benefit, but they also see house prices (also stocks, gold, etc...) rise to unaffordable levels, which has exacerbated the wealth gap of the last 40 years between people over 50 and those under 30, as well as the wealth gap between the top 10% and the middle 60%, as shown on figures 3B and 3C below.

Figure 3B: Evolution of personal wealth in the USA

Figure 3C: US wealth distribution

Not only has the wealth of the top 10% (in blue and yellow on figure 3C above) increased enormously over the last 30 years, even after adjusting for inflation, but the share of total wealth held by the middle class (the 50-90% income bracket) has fallen from 35% to 30%, while the top 1% has increased its share from 23% to 31%. Most of the GDP growth announced in the US actually goes directly to the richest 1%, while the other 99% stagnate. The US is the best example of exacerbating the well-known saying "the rich get richer and the poor get poorer", but the trend is virtually the same in all developed countries.

When you think about it: 1% of Americans own 31% of US wealth, while 90% of Americans own 33% of US wealth. Or to put it another way, if you take 100 random Americans, the richest of them owns as much as 90 people in the group! What a shame! What a filthy society! What a disaster! How did we get to this point? How could we develop a political and financial system where all the growth and benefits go to the lucky 1% and nothing to the rest, including the well-educated, hard-working middle class? Where is the American Dream? Or is this the American Dream, where the winner takes all and everyone else struggles? How is this even possible in a modern society full of advanced technologies and progress? We are able to master the chemistry of rocks and air, able to modify our own DNA, able to influence our global climate, but we are unable to regulate ourselves! What kind of stupid ego do we have? How come we can send spacecraft into space and recover the rocket, build microchips the size of a nanometer, create artificial intelligence, transplant a heart or a kidney, but somehow we are unable to redistribute the wealth in a society so that everyone has a decent standard of living. Today, eight men own the same wealth as half of the world's population. The top 8 wealthiest individuals own as much as the bottom 4 billion people, an astonishing statistic that speaks volumes about how billionaires amass their wealth and how many people in the world are still in relative poverty. The human species is ultra-smart in one way and so selfishly arrogant and meaningless in another. Our inability to care for everyone and leave no one behind is, in my opinion, the most disgusting and infuriating characteristic of humanity as a species.

Another simple way to measure inequality is to look at consumer spending on things like cars, groceries, home appliances, leisure activities, services, etc... These are everyday regular expenditures that reflect your lifestyle and comfort because they exclude savings, ownership and assets. The richest 10% of Americans now account for half of total consumer spending in the USA, while the poorest 60% of Americans account for only 20%. Take 80% of the americans and they account for only 40% of total consumer spending while the richest 20% account for almost 60% of all consumer spending. These trends in inequality have been growing steadily since 1995, as shown in Figure 3D below.

Figure 3D: Share of US consumer spending by the top 10% and bottom 60%

Another key element of spending and inequalities is housing. Figures 3E and 3F below show the evolution of the house to income ratio, i.e. the number of years of average salary needed to buy an average house. Note that Japan and Italy, countries where house prices are relatively stagnant, are two of the countries with the worst demographics and the fastest depopulation of the consuming working age group. Between 2012 and 2024, the average hourly wage in the US has increased by 57%, but over the same period the average price of a single-family home will increased by 150%, making first-time homeownership nearly impossible for the majority of young American adults.

Figure 3E: House to income ratio in the USA

Figure 3F: House to income ratio in the world

The USA is one of the richest countries in terms of GDP per capita, yet this does not translate into the living standards of many Americans.

25% cannot afford healthcare and live in substandard accommodation in the suburbs. Many people can no longer afford to eat properly or need to work 2 jobs to make ends meet. We're talking about the basic needs of food, shelter and healthcare. If American parents want to send their two kids to university, it will cost about half a million dollars in total expenditure. That is a huge amount. The reality is that the capitalist system only benefits the top 5%, while social inequalities grow, leaving many in the bottom 50% struggling. Official statistics look great on paper because they tell the story of the average person, not the median person.

Although we live in a democratic political system, the economy is led by an oligarchy of banks, funds, big tech and big businesses that allocate capital to the most profitable businesses rather than to what people actually need.

It can be tempting to blame liberalism and capitalism for all the world's problems, such as social disparity and wealth inequality. However, it is important to remember that, of all the political systems, capitalism is the least bad.

Over the last 200 years, capitalism has reduced child mortality from 50% to 3%, increased life expectancy from 60 to 85 years, and boosted GDP and living standards more than 50-fold. It has also greatly improved women's education, access to clean water, and basic sanitation.

Figure 4A: Life expectancy across the world

As shown in Figure 4B below, liberalism and globalisation have lifted the vast majority of people on Earth out of poverty. Incomes have grown tremendously around the world via innovation, technologies, the massive use of fossil fuels, liberalism and globalisation. My life is much better than that of my grandparents, who had a much better life than their own grandparents (war time excluded). We should never forget this when capitalism is blamed for all our current issues.

Figure 4B: Evolution of income distribution in the world

In the Western world in 1950, 20% of disposable income was spent on food. This figure is now 13% in the EU and 10% in the US. Like any other commodity, food has become much more affordable compared to the median income, which has boosted the consumption of other goods and services. This added benefit is associated with fossil fuels, technology, capitalism and globalisation.

The downsides of capitalism are its impact on the environment and growing inequality. While the average person has more purchasing power than 50 years ago, if you have been earning minimum wage since 2010, your purchasing power has actually diminished. More and more people are earning below the average income due to the disparity and enormous growth of the top 5% of earners. The vast majority of low-wage earners have struggled to make ends meet over the last 2 decades.

Even the poorest 10% in the Western world, who earn the minimum salary, have a better standard of living than kings and royal families did centuries ago. They have mobile phones, access to public transport, an abundance of food and entertainment such as TV series and music on the internet. They can order any item for home delivery, and have running hot water, a heating system and electricity 24/7. They also have access to basic medicine and education until they turn 18. All of this would have been unimaginable only 500 years ago, and this is absolutly due to the positive effects of the free market, capitalism, technology and innovation, intensive usage of fossile fuels.

Because the human desire for a better life is innate and knows no limits, there will always be people looking for more wealth, more power, better standards of livings. There will always be poor people because there will always be rich people. Even when everyone is much richer than they were 200 years ago, there are still poor people today.

Poverty is unavoidable in a large society, but poverty is relative.

Wealth and poverty follow a power law distribution, also known as a Pareto distribution, whereby the top 10% of the population owns 90% of the total wealth. It was true with royal family and emperors centuries ago and is still true today with the billionaire entrepreneurs of our current world. This Pareto distribution differs from the normal distribution, or Gaussian distribution, or bell curve, in which most people are centred around an average value. See below on figure 4C. Examples of normal Gaussian distributions are weight and height. Examples of Pareto distributions include wealth, income, home location (cities), stars in galaxies, musicians and athletes.

Figure 4C: Normal distribution and Power law distribution

When a system involves interactions such as production, trade and destruction, it follows a power law distribution. Without interactions, systems follow a normal distribution. Regardless of the political system or rules (e.g. liberal capitalism or egalitarian communism, totalitarism, monarchy or democracy), and regardless of how much production and value we create (e.g. technologies) or destroy (e.g. war), the result of wealth distribution is always a power law distribution, whereby 10% of people own 90% of the wealth. This is a universal law of nature. Any political or technological attempt to alleviate poverty through degrowth, communism, AI robots or nuclear fusion is futile and will unfortunately never succeed.

Throughout history, every civilisation has experienced widespread inequality. Monarchy, dictatorship, emperor, communism, socialism, capitalism... People with power will always abuse the law and system to gain more privileges and resources, so inequalities grow over time in any political system. Those at the top increase their wealth and lead over others.

What matters in any system is how the bottom 50% fare. Do they have good, improving living standards, and do they have access to food, shelter, and healthcare? Do they benefit from better public infrastructure, such as roads, sanitation, and access to water? This is where systems differ, and liberal capitalist democracies might actually be the best political system for the bottom 50% of people. On the one hand, living on minimum wage has become extremely difficult, bordering on poverty. On the other hand, everyone has a smartphone, a washing machine, access to fresh water and electricity, public education and healthcare, good roads and transport, and plenty of low-wage job offers. Since the Industrial Revolution in the late 18th century, capitalism has raised living standards by a factor of 100.

The reality is that inequalities are necessary to guide the allocation of capital in a free market, spurring individual initiative and innovation, rewarding personal effort, and encouraging calculated risk-taking.

When people think about the unfair system whereby the top 1% of the wealthiest people get richer, there is one misconception: The alternatives to an increasing wealth gap are probably worse overall. The grass isn't always greener elsewhere.

Money is created when the size of the economy grows, when the government runs a budget deficit and closes the gap via debt, or when asset owners leverage their assets by getting a loan secured against them. Historically, between 4% and 8% of new money has been created every year for the last 40 years; consider 7% to be the average.

People are right to complain about growing inequalities. Of the 7% new money supply created each year, 5% goes into asset value, which is owned by the richest 5% of people in the world. Only 2% flows into the real economy in the form of 2% inflation or consumer prices. Therefore, most of the additional money in circulation ends up enriching the world's wealthy elite.

The tragic reality is that if the wealth gap did not grow and the wealth of the richest people stopped growing, the entire 7% would flow into the real economy and generate a constant inflation rate of 7%. This is roughly the peak inflation rate during the 2021–2022 period of the COVID pandemic, and those who remember it will recall the widespread dislike and public complain of the overall price increase. Imagine if 7% inflation were the permanent rate: people would protest heavily, demand higher salaries and inflation would rapidly rise to 10%, 20% or more. So, to all the utopian leftists of the world who wish that billionaires could stop making more money, the sad reality is that the alternative is high inflation and a drastic loss of purchasing power for everyone — a worse outcome. I would rather have Elon Musk and Mark Zuckerberg become 20% richer every year while maintaining stable prices in the economy with a 2% inflation rate. People want a fairer distribution of wealth and reduced inequality, but this alternative world would have much higher inflation, which people would hate much more than today's world of the rich getting richer.

Social inequalities have always been present in our society, going back to the transition from hunter-gatherers to agriculture, which required regulation, administration, landowners and land workers. The shaman and village leaders have always had the authority and rights to distribute wealth. The kings and queens have always had all the power and wealth. The aristocracy and families close to the ruling leaders have always had more wealth and privileges. The problem is not the inequalities, but the worsening of the relative gap between the richest and the poorest in a given society. The more homogeneous a society is in terms of inequality, as measured by the Gini index on Figure 5A below, the more stable and secure it is.

Figure 5A: Gini index showing inequalities among a population

From 1945 until 1980, blue-collar workers and engineers were the dominant force in the economy; these were the jobs to pursue if you wanted a career. If you could build a house, manufacture cars or home appliances, or design and develop anything, you would receive decent pay and be in high demand. From 1950 until the early 1980s, the global economy was growing rapidly, with real wages increasing at the same rate. In essence, until the 1980s, when the economy of an industrialised country grew by 4%, the average real wage also increased by 4% per year, giving people an extra 4% purchasing power each year. Productivity gains and total economic growth were distributed fairly through wages. Technical skills, engineering expertise and hard work used to pay off.

However, since the early 1980s, the financial sector has taken over, with many entities, companies, banks and administrations emerging with the sole purpose of making money rather than improving the goods and services available to society. Around 1980, the hyper-financial world began, with derivatives, traders and institutions such as banks and hedge funds making money solely for the purpose of making money, without offering any goods or services to society. Even governments started to make more public debt to solve any problem by injecting money and please people. Finance became the dominant force in the economy. The 1980s marked the beginning of large-scale financial products, hedge funds and traders, and an overall financial system that benefits only the top 5% or 1% of people in the world. As shown in Figure 5B below, real GDP growth and real average wage growth decoupled in the early 1980s. Now, the global economy benefits only the top 3% of the world's population, who achieve net worth growth of 15–30% per year. Meanwhile, median income earners, especially low-wage earners, can barely cope with real inflation with a 2% salary increase per year.

Figure 5B: US real GDP growth compared to real median wage growth

In the 1970s and 1980s, the rich were getting richer and the poor were getting less poorer, we had an economic boom with 5% growth per year, the baby boomers were young adults in their prime working years, oil was plentiful (apart from the two oil embargoes of 1973-1974 and 1979-1980), and everyone could really see their standard of living improving year on year, which maintained social stability and cohesion.

The next era began following the 2008 financial crisis when governments backed up banks and seized control of the economy. Unserviceable private debt became the growing public debt, and since 2008 governments have played a more active role in the economy, hands on the economy, deciding on subsidies and policies, tariffs, high level of taxation and high redistribution into the economy, more debt and money printing to inject into te economy. At the same time, smartphones, social media and cloud software spread widely across the globe, and digital technology became the dominant force in the economy. As of today, with AI being the next big thing and public debt reaching unsustainable levels, we are still in the era of technological and governmental dominance.

All bets are open for the next era. Is it cryptocurrency? Or the BRICS Alliance and the fall of the US dollar? Or will the risks of AI cause the destruction of the internet and the end of the tech era? Will energy, mining and commodities make a comeback? Will demographic collapse lead to authoritarian regimes and the end of democracies? From the blue-collar and engineering era of 1945–1980, to the private financial era of 1980–2008, to the government era of 2008 to the present day, the next era is open for debate. The next era of capitalism and economic dominance is wide open.

Since the financial crisis of 2008, social inequalities have increased dramatically, the richest 1% have multiplied their wealth many times over, and the bottom 30% of incomes have become poorer over time in terms of purchasing power, as shown on Figure 5C and 5D below.

Figure 5C: Income growth by bracket in USA since 1980

Figure 5D: Share of the income owned by the top 1% earners since 1975

Figure 5C and 5D above show that the income gap between the top 1% and the rest of the population is widening. But if we look at net worth, the sum of savings and assets held, as a measure of wealth, the picture is even worse.

In the US, the top 1% had a net worth of $4 trillion in 1990, while the middle 60% were worth $8 trillion. To put it another way, 60% of the population, centred around the average wealthy person, owned twice as much wealth as the richest 1% in the US in 1990. Fast forward to 2024 and the richest 1% are now worth slightly more than the middle 60%. Yes, 1 person at the top is now wealthier than 60 people IN THE MIDDLE CLASS (not the bottom 60%). The gap is widening to insane levels and the wealth generated by our society is clearly not being redistributed fairly, at least in the US, certainly with similar trends in all other industrialized countries.

Using carbon emissions as a proxy for wealth and consumption, it is estimated that the top 1% of the world's population emits twice as much CO2 as the bottom 50%. This means that the top 1% emit as much as if everyone on the planet were in the bottom 50%. This puts into perspective all the "net zero" and electrification strategy, all our trillions of dollars of investment and all the media hype about climate change: If the top 1% of the world's richest people behaved and lived like the median person on earth, we would probably cut our total CO2 emissions in half, without changing anything else about technology or the way the 99% of the rest of us live.

If you look at house prices in the US, the picture is the same: While median household income has risen by 20% from 1970 to 2022, adjusted for inflation, average house prices have risen by 120% over the same period. This means that it has become increasingly difficult, if not impossible, to buy your first home on your salary alone. While baby boomers needed 3 years of average salary to buy an average home in the 1970s, it now takes 7 years of average salary to buy an average home in the US. As a result, young adults are staying in their parents' homes longer. The proportion of young adults aged 25-34 in the US living at home with their parents will rise from 10% in 2000 to 18% in 2022. Owning or renting a home is a growing part of the budget.

In the USA, it is estimated that of all the money created by bank loans and central bank money printing for treasury bonds, only 15% of this invested money eventually goes into the production of new goods and services, while 85% remains in the financial system or is invested in already existing assets such as stocks or real estate. For every $20 generated, only $3 goes into new value creation, leaving $17 for banks, hedge funds, investors, interest fees, short-term trading and asset owners. No wonder the economy as a whole only benefits the richest 5% of the people.

Figure 5E below shows that the global value of assets is at around $1,000 trillion, with the richest 3% of people owning most of it. Meanwhile, the world's GDP, which is the total amount of wealth created in a year, is at around $111 trillion. In other words: It would take 10 years of work by everyone on the planet to produce the wealth owned by the richest 3% of people in the world.

Figure 5E: Total global asset value

Until around 1980, the creation of value through increased productivity was reflected in workers' incomes. However, since around 1980, wages have stagnated in real terms while productivity has continued to increase, as illustrated in Figure 5F below. This can be explained by several factors, including globalisation and the abundance of cheap labour, the concentration of power at the top through market manipulation to maintain monopolies and influence against anti-trust laws, economies of scale that are even more powerful in the digital age than in the manufacturing sector, and the rise of corporate and public debt in an ultra-financialised world that has exacerbated wealth inequalities, effectively concentrating wage increases at the very top of the income pyramid.

Figure 5F: Evolution of wages and productivity in the US

Adjusted for inflation or purchasing power, average wages have stagnated for four decades. However, if we consider those earning below the median income or in the bottom 30% of earners, real wages have actually been declining. Look at the two graphs below in Figure 5G, which show the evolution of the purchasing power of an average French citizen and of a minimum wage earner in France. You can see that the lowest earners have been struggling to survive and pay their bills since 2005, which is the best explanation for all the recurrent protests, riots and social unrest in France over the last 20 years.

Figure 5G: Evolution of French wages in terms of purchasing power

While a modest french salary has lost purchasing power and quality of life since 2010, Nasdaq100 index shareholders have increased their wealth by 10 times between 2010 and 2025! Yes, the owners of technology companies are 10 times richer today than they were 15 years ago. This fact adds fuel to the fire and makes most people naive and disgusted, rightly complaining about a system that only benefits a privileged minority of us.

As a result, low-income earners have to move to the suburbs, tend to be frustrated by all the luxury on display on social media, and more and more people vote for far-right or far-left political parties. This trend is likely to accelerate in the coming decades due to the looming economic crisis associated with the ageing population.

The GenZ generation (born 1995-2010) feels the inequality gap much more now after 2020 than before 2020, due to post-COVID inflation. Buying a house at 30 years old is almost impossible now compared to 20 or 30 years ago.

The majority of people are not benefiting from economic growth, the richest 1% are now richer than the middle 60%. All the official statistics on growth, GDP per capita, stock market growth, only benefit the top 5%. wealthiest people.

Inequalities have grown rapidly since the 1980s, particularly since 2009. The ultra-financialisation of our societies, declining interest rates and growing money supply are one factor. However, one of the main reasons of growing inequalities is the concentration of power and the monopolies of certain companies that are able to dictate their terms. The top companies and shareholders in the food, tech, banking, hedge fund, defence, military, health and pharmaceutical industries are in a leading position and can almost monopolise the market. They can scare away competitors by setting prices, avoiding taxes, buying out newcomers, imposing their own distribution channels and supply chains, including middlemen and producers, bypassing some laws and anti-trust regulations, and influencing lawmakers via lobbies and the general public via the media. When platforms like Walmart, Google, Spotify, Amazon, Airbnb or Uber have such dominance in the market, they can impose a commission of between 30% and 50% on third parties or producers for using their platform. As these platforms dominate their respective markets, producers, sellers and third parties cannot do business without them and have no other option but to pay the fee.

The middle class will lose its social benefits over time through loss of purchasing power: Most of the GDP growth since the 2008 financial crisis has gone to the top 5% of earners and asset owners. While GDP or GDP per capita is growing on paper, the middle class, the median earner in a nation, is actually drifting closer to the low income group. Here is an example: Let's take a group of 10 people, each earning $40,000 a year. 5 years later, there is 1 very successful person who now earns $550,000 a year and the other 9 individuals earning just a little more at $50,000 a year. The average income for the group of 10 looks strong and wealthy at $100,000 (1 time 550,000 plus 9 times 50,000 then divided by 10), but the median income, the middle man, the 5th most earning person, earns only $50,000, so on average the GDP and GDP per capita for the group (a country) looks good on paper, but the median person in that group, or the 5 people ranked 3rd to 7th in earning, have not really become wealthier over time, but rather has lost purchasing power and access to a solid standard of living.

The middle class will also be most affected by declining fertility rates, as it is the class most affected by the decline in purchasing power, the rising cost of living, the preference for a childless adult lifestyle, individual goals and unrealistic visions for oneself, and the comparative pressures of social media. Low-income people will continue to have relatively high numbers of children because they have lower aspirations and expectations of themselves, are less influenced by social media and the goal of self-fulfilment, and these women are more likely to accept traditional gender roles while having several children as part of their family and social generational model.

Here's an example of why official statistics like GDP, GDP per capita, CPI inflation, average salary, stock market growth, etc... don't tell the real truth. Imagine you have a country or a company or a population of 10 people. Let's say that overnight 9 people earn $100 more and 1 person earns $9,100 more. If you take the average, you can claim that the total of 10 people earned $10,000 more, which is an average of $1,000 more per person, it looks fantastic, enormous growth, the whole population is richer, all the KPI's look great! The reality is that most people only got a $100 bonus, which doesn't buy anything of value, and only one fat cat walked away with all the money. In this example, the better statistic would be the median, the middle man, the 5th person out of 10 who only earns $100 more, rather than the average of $1000, which is really not representative of the situation. GDP and GDP per capita, as well as CPI inflation, are flawed data, manipulated to deceive the market and the financial system to pretend a healthy financial status of nations. The reality is that inflation is higher for people on modest incomes than officially announced, and economic growth only benefits the top 5% of the world, while the majority of us see no economic growth in our real lives. Always use the median instead of the average if you want to include inequalities in a statistic.

The government can manipulate statistics by hiring public employees to increase GDP growth on paper. They can also adjust the content and weight of the CPI basket to manipulate inflation. Furthermore, they can provide different statistics on unemployment depending on whether those not actively searching for work, those in part-time 'mini-jobs', and those studying are included, so the unemployment rate can be tailored. Any data on unemployment, GDP growth or inflation can be adjusted slightly, depending on the government's intentions, and should be viewed with a pinch of salt as an estimation rather than a universal truth.

Why millionaires grow wealth faster than the average Joe

Let me give you an analogy to help you understand why the world's richest 1% are getting richer faster than anyone else, increasing their wealth by 20% to 30% every year, while 80% of the population is struggling to keep up with inflation and loss of purchasing power. In this analogy, I will compare in my example a big tech company like Google or Apple to a simple bakery selling croissants, and I will compare the powerful billionaires like Elon Musk, Mark Zuckerberg and Jeff Bezos of this world or the big shareholders or hedge funds of this world to the 2 owners of the bakery. I will of course simplify many details to make it easier to read.

Imagine you have a bakery in a small town, owned by an old couple, Grandma and Grandpa. Grandma and Grandpa's only interest is to make money for their pension, they don't really care about bread or croissants, for them the bakery is just a money making business. The bakery has 1 employee, the baker, who makes and sells the only speciality it makes: Croissants. The bakery is known for making the best croissants in town. The baker sells 100 croissants a day, and he sells out every day because everyone loves these delicious croissants. The croissant costs 90 cents to make, including the baker's salary, the raw ingredients, the rent and the depreciation of the oven. The bakery sells the croissant for $1, making a profit of 10 cents per croissant, or a total profit of $10 per day.

Grandma and Grandpa, the owners of the bakery, would like to have more wealth when they retire, so they decide to go public and become a publicly traded company on the New York Stock Exchange. They decide to value their business first, so they use the classic 10-year business valuation, which is 10 years of 300 working days at $10 earnings per day, and that means the bakery is valued at $30,000. What Grandma and Grandpa do is to issue 100 coupons or 100 property titles called "shares" or "stocks". If you have one share, you own 1% of the bakery. Grandma and Grandpa decide to keep 30 shares each, decide to give the baker 10 shares for his integral part in the bakery's success. The remaining 30 shares are put on the market (30% is the free float, the percentage of the company that can be publicly traded). Each share is worth 1% of the original price of $30,000, or $300 per share. Grandma owns $9000 worth of the bakery through her 30 shares, so does Grandpa, and the baker owns $3000 worth of the company through his 10 shares. 30 private investors now own the remaining 30 public shares.

The baker reports to Grandma and Grandpa that he sells out all of his 100 croissants every day due to high demand, and some customers come in late in the day and are saddened by the news that all the croissants are already sold out. Grandma and Grandpa sit down and decide on a strategy for the future:

<< What should we do now, should we sell 150 croissants instead of 100 because the demand is high, or should we raise the selling price of a croissant to 1.10$ each, because even if a minority of customers would no longer buy at this price, some other customers would definitely pay any price to get the best croissant in town? >>

Remember that Grandma and Grandpa no longer work as bakers, they just own the bakery and their only interest now is to make enough money to fund their retirement. Grandma and Grandpa do a quick calculation: << If we sell 150 croissants a day instead of 100, we will go from earning $10 a day to earning $15 a day. But if we keep the supply at 100 and increase the price from $1 to $1.10, we will now earn 20 cents per croissant instead of 10 cents, or $20 per day instead of $10 per day. Let's do this second option, and if the demand is still high at 1.10$, we can always increase the quantity of croissants later>>.

And here we go, overnight the croissant sells for 1.10$, and because it is the best in town, the baker still sells 100 of them every day.

Now the bakery earns $6000 a year ($20 times 300 working days) instead of $3000. Grandma and Grandpa could keep the $6000 for themselves, or use the $6000 to raise the baker's salary, or hire a second baker, or invest in a second oven. That would be the socially fair decision. But remember, all they care about is getting as much money as possible to pay their pension. So instead, Grandma and Grandpa decide to use that extra money to do what is called a "stock buyback": they use that $6000 to buy 10 shares on the open market at $600 each, more than the previous value of $300, to make sure they find a seller, and they decide to literally destroy those 10 shares. There are now only 20 public shares in the "free float" public market instead of 30, and a total of 90 shares instead of 100. The baker still owns 10 shares, and grandma and grandpa still own 60 shares, for a total of 90 shares instead of 100.

Because the bakery is a publicly listed company, it has to publish an annual financial report, and it claims that the bakery has gone from earning $3000 last year (100 croissants at 10 cents earned over 300 working days) to $6000 this year (100 croissants at 20 cents earned over 300 working days). When the public is informed, the new valuation of the bakery (called "market cap") rises to 60,000$, or 10 years of the new annual income of 6000$. Public investors are rushing to buy shares in this thriving and prosperous bakery business, investors are willing to trade the remaining 20 public shares at up to 666 EUR each. The bakery is now valued at $60,000, 10 years of earnings of $6000 per year.

But because there are now only a total of 90 shares of the company, each share is no longer worth 1%, but 1.10% of the company. Grandma, like Grandpa, now owns 33% of the bakery instead of 30%, and because the share is now worth $666 ($60,000 divided by 90), Grandma owns 30 of them, or $20,000 worth of the bakery. Remember that a year ago her net worth was $9000. Grandma, like Grandpa, has more than doubled her net worth! Just by increasing the price of a croissant from $1 to $1.10, all within 1 year. Life is good for shareholders.

The key messages I want to share here, related to this bakery analogy, is that:

- A business is not there to please society (sell 150 croissants instead of 100). The sole purpose of a business is to increase profits and shareholder value. Not to provide jobs for citizens, not even to sell goods and services, not to care about the climate and the environment. The sole purpose of a private company is to make money for its shareholders.

- If you sit on the boards of governments that own part of a company, you have the power to make decisions that increase your net worth, like raising the selling price of a croissant, starting a share buyback, etc. When a business grows by 10% in revenues or profits, shareholder wealth grows by 12% if they do share buybacks, for exemple.

- In a fair and just world, a company's profits would be used to reinvest in the business (a new oven, more staff, etc.), but in the real world, the profits generated by the baker's hard work are used to make the shareholders (grandma and grandpa) richer, not to increase the salaries of the employees and not to make cheaper goods for the customers.

- For high margin companies like the big tech companies (Amazon, Google, Microsoft, Meta, etc...) which have great pricing power, these companies regularly buy back shares, which is perfectly legal and increases shareholder wealth in 2 ways: it increases the share price by having more buyers than sellers by injecting money into the public trading market, and it reduces the total number of shares, thus increasing the % of the company owned per share. This has a double effect on the big shareholders.

- The world's richest 1% live off passive income, not from work. They spend their time networking and managing their wealth, but they do not work to create a good or service for the benefit of society. They own assets that generate a passive income (a rent, a dividend, etc...) and they can live off that passive income. As their asset value increases by 10% to 20% per year, their passive income also increases by 10% to 20% per year. While ordinary people do not get a 15% pay rise every year, but rather something like 3%, the top 1% do because of their asset value, which explains the widening inequality gap over the last 40 years. As their sum of assets (net worth) increases in value, they are able to get a loan from banks, using those assets as collateral. The loan is used to buy more assets, and the loan carries an interest rate of like 4%, while the newly acquired asset is increasing in value by 10% a year, making a profit of 6% a year, and all in all accumulating more assets and more net worth.

Why the top 1% own the world and capture all money creation

If you've ever wondered how billionaires can grow their wealth so fast, at 30% to 50% a year, while the lower in come person increase its revenue by only 2% salary increase a year average person saves money or invests in stocks or property at just 5% to 10% a year, here's a big difference: The top earners leverage their earnings with debt, mortgaging their businesses to get access to even more businesses. In this case, debt is good for them because it multiplies their income. This is known as the "buy, borrow, die" strategy that allows the wealthiest people to avoid tax.that allows the wealthiest people to avoid tax and grow their wealth extremely fast.

Let's take an example to understand how it works:

Imagine a millionaire who buys a business or part of a business for $100,000 paid in cash. If the business runs well, 1 year later the business is worth $110,000, so the owner has $10,000 of additional wealth, or 10% more net worth. This is what ordinary people would think and do. But big asset owners are not satisfied with 10% organic growth. So what most do is go to the bank and ask for an $80,000 loan in exchange for an $80,000 mortgage on their acquired business. Essentially, the bank now owns $80,000 of the business and the millionaire owns the rest, the remaining $20,000. Now this person uses that $80,000 to buy a second business worth $80,000. Then the asset owner goes to another bank and gives the bank $60,000 of the second business as collateral in exchange for a $60,000 loan, which the asset owner uses to buy a third business worth $60,000. The asset owner now owns 3 businesses with the same initial capital of $100,000. One year later, assuming for simplicity that all the businesses have grown by 10%, the first business is now worth $110,000, $80,000 owned by the bank and $30,000 owned by the millionaire; the second business is worth $88,000, $60,000 owned by the bank and $28,000 owned by the millionaire; and the third business is worth $66,000, all owned by the millionaire. The added net worth of the millionaire over the years is now 10k+8k+6k=$24k instead of the original 10k the millionaire would have made if he/she had decided to own only one business and not to mortgage his/her assets for loans. The millionaire's wealth grows by 24% in a year when the business grows by 10%. That's the power of leverage, which is only possible with bank loans, and only available to very rich people who own a lot of assets, businesses, shares and property. This trick is not possible by simply saving money at the end of the month and investing it, which is what 95% of average people do. That's why Warren Buffett, Elon Musk, Jeff Bezos and the Mark Zuckerbergs of the world grow their net worth at a rate far greater than the value of their original business or the share price of their company.

In practice, this loophole is infinite, and that's how banks create money: Not only do banks create money for ordinary people when you buy a house, but banks also create money when top asset owners mortgage their assets by putting up those assets as collateral to get a loan and use it to buy more assets. The more money you have, the more access you have to foreign capital to invest. Each time they multiply the initial capital by a factor of 2 or 3 or 4, depending on how much risk they are willing to take, and so their total profits are also multiplied by that factor.

The downside is the risk: if a business does not perform well in a year and loses, say, 20% of its value because the bank owns 80% of the original $100,000 of the first business, which is now worth $80,000, the bank will either demand a "margin call", asking the owner of the asset to put up more cash, or the bank would sell its share of the business to recover its original $80,000 without risking a loss on the business. Banks make their money from interest rates and transaction fees, not from business growth. That's why financial crisis happen extremely quickly, like a chain reaction of events where all the banks trigger margin calls at the same time and everyone tries to sell at the same time, driving all asset prices down, leading to financial collapse and the bankruptcy of millionaires and billionaires extremely quickly. But the risk is worth it if you diversify with several businesses so that there is always one performing to bail out the depreciating others.

This leverage is the reason why most money creation goes to the world's richest 1%, why all GDP growth goes to the top, and why most wealth ends up in the hands of a few billionaires, or why small businesses are bought up by multinational super-corporations.

It's a cruel world we live in. That's why a billionaire's net worth grows by 20% to 30% a year, while an ordinary person who invests in stocks and shares or property only grows by 7% to 10% a year, and while the average person who doesn't invest actually gets poorer over time.

Another point I have not mentioned here is the power that these billionaires have over legislation through lobbying. Billionaires absolutely influence politicians and lawmakers to pass laws and regulations that favour their business and turn the market in their favour.

Jeff Bezos, founder of Amazon and the space tourism company Blue Origin, does not donate millions to climate activists because he cares about the climate. Not at all. It's all about business. Donating to a climate charity gives him and his two companies a positive green image and reputation, and it also prevents climate activist NGOs from investigating and suing his two companies for the harm they cause to the environment. Donation is a pure marketing and business strategy that pays off in business terms.

The top 1% of the population are getting much richer very quickly thanks to their access to massive debt and investments. The richest 5% are getting richer through owning assets. Meanwhile, the bottom 60% are losing purchasing power and essentially getting poorer over time. The remaining 35% of the high middle class mostly keeps up with inflation, retaining or slightly growing their wealth. That's the harsh reality. While capitalism raises the floor of the world and everyone's standard of living, social inequalities are simply growing year on year between the bottom 50% and the top 3%.

Let's get one appealing proposal out of the way: Taxing the ultra-rich (top 1%). Taxing the top 1% does not work at all. In fact, it makes the overall population poorer.

Taxing the richest 1% of people at a rate of 2%, for instance, can only work if all 200 countries in the world apply the same tax rule. If this ultra-high income tax were introduced in only one country, or even a group of countries, it would simply push those multi-millionaires elsewhere. They would move their businesses, bank accounts, tax declarations, holding companies and assets simply to a more tax-friendly place. The top 1% of the wealthiest people have the best financial advisors and know all the tricks to pay less tax, so a high tax on the wealthy would only scare them away. Bear in mind that the top 1% of wealthy people contribute 20% to 30% of a country's total tax revenue. A country absolutely needs very wealthy people. The entire social system needs wealthy people; multi-millionaires are the foundation and key financial source of the social system. Rather than scaring them away, promote a culture of success and encourage people to become rich, have a great life with high spending, and let them pay some decent amount of tax to be redistributed to poorer people. In fact, a smart country would tax the ultra-rich slightly less than its neighbours, attracting them and increasing its total government tax revenue. Not to mention the economic boost created by their lavish spending. Don't scare away extreme wealthy people, otherwise there would be no more public benefits for the poor people in need.

Artificial Intelligence

AI is part of capitalism, it is the new shiny tool that we call progress and new technology. Like any progress or new technology, it is about more material consumption and more resource consumption for the benefit of humans, so that we have more machines doing the work for us. Machines were doing the physical and machanical work for us, now they will also do the intellectual and digital work for us. Nothing revolutionary in the grand scheme of things.

Over the past 200 years, energy-intensive tractors have increased the output of each farmer, while energy-intensive manufacturing machines have increased the output of each manufacturing worker. Just as machines have done physical work for us, energy- and computationally-intensive AI will now increase the output of white-collar workers, impacting the productivity of every job dealing with data, content and information, including accountants, programmers, designers, engineers, scientists, lawyers, doctors and analysts.

We absolutely need AI and robots to replace all jobs that can be done by machines. With an ageing population retiring and a rapidly shrinking workforce, just to maintain our current economy and production output, we need AI and robots for every job that can be replaced: Accounting, home delivery that becomes fully self-driving, truck drivers, any repetitive manual task on an industrial assembly line, any repetitive manual task in the food supply chain, in agriculture, in infrastructure and maintenance, in logistics inventory and preparation, customer service responses, etc... Of course, not all jobs will be replaced by machines, far from it, but the more replacement the better to maintain our economies and living standards.

As shown in figure 6A below, the USA's GDP per capita, which measures average purchasing power and standard of living, has grown at a constant rate for 150 years. AI could generate unlimited output and abundance, putting an end to scarcity. Alternatively, it could lead to human extinction, with uncontrolled AI robots destroying the planet. Or it could simply boost productivity slightly, becoming just another technology used to empower humans. All three scenarios are completely plausible. This illustrates just how potent and unpredictable the potential and impact of AI is.

Figure 6A: The potential impact of AI on GDP per capita

AI will definitely increase productivity, which is total output per human worker. It will also increase profit margins for companies and make businesses more efficient. AI will help to solve the coming labor shortage. But AI and robots are not consumers and do not pay taxes, so they will not solve the demographic collapse and national debt problems, will not solve the public deficit, will not solve the climate crisis, but will probably agravate or accelerate the climate crisis. AI is huge computing power based on a huge amount of digital data, and both consumes tonnes of materials, fresh water and electricity, exacerbating the environmental crisis and accelerating the depletion of fossil fuels.

As shown in figures 6B and 6C below, productivity around the world has steadily decreased since 1970, from around 4% growth per year in the 1970s to around 0.5% per year over the last decade. With an ageing population, more retirees to support and a declining workforce, the world absolutely needs all AI productivity gains to maintain decent living standards over the coming few decades.

Figure 6B: Productivity growth of the G7 countries since 1950

Figure 6C: Productivity growth rate over the last 10 years

AI will also exacerbate loneliness, especially for men. If machines take over the physical tasks and now the intellectual tasks of humans, then what will be the remain to do for us? What will be our purpose, motivation and pride in life? If only social and caring activities remain, most of men will feel lost, useless or worthless. More and more young men will tend to isolate themselves physically, avoid social contact and relationships, and spend most of their time online in front of a screen. Imagine if you could have a personal assistant, a virtual girlfriend who knows you best, knows how to talk to you to cheer you up and give you good advice, understands your every move, is available 24/7, is not moody and is always there to support you without being needy or demanding... Sounds like the dream girlfriend, right? You will start to build an emotional relationship with this AI bot and completely turn off regular living women. Why bother with a demanding and needy partner who has moods, limited availability, his/her own problems, when you can have a 24/7 available and lovable chat partner who understands you best and is completely dedicated to you? AI virtual relationships are not science fiction, they are here now. AI friends and AI bots on social media are also coming. The younger generation will have emotional relationships with AI bots, whether it is a personal assistant, best friend, personal psychologist, friendship or love relationship, virtual girlfriend/boyfriend. We will not distinguish between chatting with a real person on social media and chatting with an AI bot.

People have only two choices: coexist with the machines or reject them altogether.

Those who reject them will be left out, like people living off the grid, people without smartphones, people without bank accounts, etc. We as a species will have to accept and embrace AI bots and physical robots everywhere, all the time.

People with knowledge won't be as valuable when machines are a thousand times smarter than the average human. What will be valuable is our adaptability or ability to use and embrace new technologies, our social skills to understand, relate and communicate with people. We will have to use and master AI to survive in any job. Some jobs may be completely replaced by AI and robots, as shown in Figure 6D below, but most of our jobs will remain and co-exist with AI, which will make those jobs more productive per capita. Some jobs, such as care for the elderly or childcare with a social and relational component, will remain forever. Jobs that require agility and dexterity, and that involve new situations every day, such as plumbing, electrical work, and any other type of home repair, or changing a newborn baby's diapers, will be deemed impossible to replace with AI robots. However, in industry and logistics centres, any relatively repetitive task will be carried out by an AI robot in the long term.

Figure 6D: Jobs most at risk to be replaced by the deployment of AI

Since Open AI ChatGPT 3.5 was released in 2022, there has been a sharp decline in junior white-collar job openings, as AI technology can now replace entry-level graduates. Figure 6E below shows that graduate job listings, or job openings for candidates without prior work experience, have declined by around 50% in the USA and the UK in the last 3 years alone. In the near future, we expect AI software and robots to lead to more layoffs by replacing more advanced intellectual roles, as well as jobs requiring agility, dexterity, and ultimately, replacing almost any kind of job.

Figure 6E: Job vacancies for graduates are disappearing fast

The AI revolution is having a greater impact on young men than on young women. As of 2025, AI technology has replaced jobs in coding and digital content generation, IT, data analyst and consultant jobs, logistics, finance and trading, and any task involving repetitive non-complex physical activity. These jobs are predominantly taken by young men, whereas young women still hold most of the jobs that have not been replaced in the fields of childcare and elderly care, health care, administration, journalism, marketing and education. As shown in Figure 6F below, the result is that since 2023, there are much more unemployed young male graduates than young female graduates.

Figure 6F: Unemployment rate among young US college graduates

Not all jobs will be replaced by AI; perhaps only a very small number will be. As with computer technologies in the 1980s, the aim of AI is to enhance human productivity, not replace humans entirely. This is because jobs rarely involve repetitive and defined tasks. White-collar work thrived in earlier digital eras because computers rarely replaced entire jobs all at once; rather, they automated routine and repetitive tasks — those that could be codified into explicit rules and executed by machines. When a job consisted entirely of routine and repetition, it could disappear (as happened with typists). However, most professional roles comprise a variety of tasks, only some of which can be automated. The result was not replacement, but upgrading: computers increased productivity, allowing human effort to be directed towards higher-value activities such as analysis and judgement. Air traffic controllers illustrate this pattern: software helped to process flight data, but humans retained authority over high-stakes decisions and wages rose. E-commerce has generated new roles in logistics, supply-chain planning, and digital payments. Smartphones created the need for app designers. Social media has given rise to digital marketers and influencers. The result has been sustained growth in white-collar employment. Blue-collar jobs such as plumbing or electrical work often involve customised, individual tasks that require dexterity, agility and the ability to adapt to unique situations. Being good at 95% of a task is not enough when the remaining 5% involves edge cases and discretion. Even before an AI robot can assess water pipe damage and implement a repair, change a baby's nappy or clean the body of an elderly person, there will still be jobs and tasks for humans in the foreseeable future.

Take a look at figure 6G below, which shows how prices have changed over the last 25 years. Physical goods have become cheaper over time, and AI will make them even cheaper in the future. However, if the internet, digitalisation, cloud software and smartphones were unable to reduce the cost of healthcare, medical services, childcare or education, it is unlikely that AI will be able to reduce the cost of labour-intensive services and those related to soft skills.

Figure 6G: Price changes in USA since 2000

AI will definitly change how people learn things and the public education system, which system has been stagnant, outdated and conservative for decades. Our education system has not changed for a century: One teacher stands at the front of the class and delivers knowledge content to an audience of 30 children, each of whom understands and learns at a different speed, while sitting quietly. This system is completely outdated and not adapted to modern society. A modern education system should emphasise communication, critical thinking, creativity and collaboration, rather than pure knowledge, which AI is much better at teaching. Instead of classes of students of the same age but different skill and talent levels, we should have classes of students of different ages but similar levels. There should be more voluntary selection of topics and courses based on students' interests and more flexible course options. Personal interest is key to curiosity, and curiosity is key to learning. Failure should be embraced as a learning opportunity rather than being mocked.

We can speculate about both the benefits and the issues associated with AI. On the positive side: productivity gains, a great way to compensate for the coming labour shortage, possible new discoveries in medicine and science. Possible negative effects of widespread AI: skyrocketing unemployment of low-skilled office workers, cybercrime, crime under fake IDs, fake news and people manipulation, algorithms taking control of critical infrastructure such as hospitals, power plants or internet servers. In the long term, the internet could become a vast mix of lies and misinterpreted data. It could become a source of unreliable, messy, bot-created content, to the extent that it would no longer be possible to distinguish between human-made and machine-made content. This would render the entire internet unusable, with massive socio-economic consequences.

Although AI technology could cure any cancer, it could also engineer a virus or biological weapon. As any other technology, As positive as AI is, it could be equally disastrous. You cannot have AI doing amazing things in medicine and science without it also being used to cause harm through disease and biological weapons. You can't have good-intentioned technology without bad-intentioned technology. Every tool is ambivalent and brings as much negativity as positivity. If a technology adds a great deal of value and comfort to humanity, it has an equally negative impact in other areas.

AI learns from the pool of data available on the internet, and what people put on the internet is not always the best of humanity, especially on social media, it's not always displaying the best of humanity's traits like love, care, awareness. Social media, by design, amplifies extremes and polarises opinions because this provokes human reactions, resulting in content being viewed, liked, disliked, re-posted or forwarded. This means that social media ends up containing only polarising and extreme content. If this is the source of information for AI, how will it be able to find a middle ground and behave like a balanced human? Can AI help humanity with love, caring and awareness when it is almost absent from its training programme? Can AI help minimise its own impact on the environment when we have no historical data on the impact of AI data centres? I doubt it, as the pool of information available online for AI training is limited or almost non-existent.

AI is the latest evolution of the digital technology revolution that began around 1995 with the advent of the internet. From the outset, the USA has dominated digital technologies, including websites, search engines, the dot-com bubble, softwares, chip design and manufacturing, cloud infrastructure, social media, and now AI technology and data centres. As shown in Figure 6H below, the US is well ahead in tech innovation, maintaining its competitive edge against the rest of the world.

Figure 6H: Number of tech-related innovation patents

In 2024, there were 7000 data centres worldwide, half of which were in the US. This number is expected to grow exponentially over the next decade due to the adoption of AI and an increasingly digital world, and this will require an increase in electricity demand, putting pressure on the grid and utilities. Figure 6J below shows the expected growth of US data centres.

Figure 6J: US data centers growth projection

A ChatGPT query uses about 3Wh of electricity, that's 10 times more than a Google search, or the equivalent of a modern 6W light bulb switched on for 30 minutes. It also needs about half a liter water to cool down the GPUs of the data center per query. US electricity generation is expected to grow from about 4TWh in 2024 to 5TWh in 2050. A big reason for the growth in electricity demand is the deployment of AI and the data centres that support it. The US is home to half of the world's data centres. US data centre electricity consumption is expected to grow from 150 TWh in 2023 to 600 TWh in 2030, a fourfold increase in just seven years. Data centres' share of total electricity consumption is expected to rise from around 3.5% in 2024 to between 9% and 12% in 2030, a huge increase that will put pressure on utilities to scale up quickly to meet demand.

Data centers

Renewables aren't part of the AI data centre plan. Data centres and AI require uninterrupted, reliable power 24/7, which renewables can't provide. Downtime is unacceptable, and the intermittency of wind and solar makes them impractical. Meanwhile, natural gas and nuclear can provide the reliable power needed without the massive additional costs required to stabilise renewable grids. Natural gas, for its flexibility, and nuclear, for its steady, carbon-free baseload power, are the preferred options.

The rise of AI is a harsh wake-up call that the energy transition is more illusion than reality. The real world demands reliability, scale and infrastructure that wind and solar cannot provide.

The idea that AI and superintelligence will enable us to produce anything at an extremely low cost, that we will live in a world of abundance with minimal human labour, and that AI will generate so much wealth in the future that people won't need to work, only spending one or two days per week on work-related tasks if they wish, is a popular one. This idea suggests that we will all live happily, receiving a Universal Basic Income (UBI) from the abundance of value created by AI and robots, and spending our time on entertainment and socialising. However, this idea is very optimistic, utopian and unrealistic in the real world.

Public benefits such as public pensions, unemployment benefits and potential UBI are public funds distributed by the government to individuals. This money comes from taxation, mostly from individual salary tax, corporate tax on company profit margins and consumption tax via VAT (value added tax) on any goods and services we consume. When AI is deployed on a massive scale and robots are everywhere, doing the intellectual and physical work that humans used to do, most of the value creation will be captured by a handful of tech companies that own the AI models, cloud infrastructure and computing power to run the AI and robots. Most of the value created by AI will end up in the hands of shareholders in a few AI and Big Tech companies. Value creation and wealth will be captured by private companies.

In order to have the public funds to finance a UBI system, we would need to transfer this enormous wealth via corporate tax from private corporations to public taxation. This makes the UBI scenario due to AI a pipe dream. As shown on figure 6K below, in 2023 on average across the 38 OECD countries, about 24% of total state tax revenue came from individual income tax, around 25% came from social security contributions shared between corporate and individual contributions, only 12% came from corporate tax, 20% came from VAT, and around 18% came from other taxes, such as property tax. The key point here is that 35–40% of all tax revenue comes from the individual taxes of human workers, but only 12% comes from corporate taxes. This 3:1 ratio is due to the fact that when a human worker is taxed, their entire cost or salary is taxed, whereas when a company is taxed, only its profits are taxed, not its total costs.

Figure 6K: Share of various taxes in the total tax revenue of OECD countries

Essentially, this means that if a human worker is replaced by an AI robot, the state will receive three times less tax revenue. Every job cut due to the penetration of AI and robots is a clear net loss for state taxation and exacerbates the financial crisis of governments already in deficit. Replacing human workers with AI, computers and robots will not only increase unemployment, it will also drastically lower tax revenue, putting governments under severe financial pressure to find public funding for all the spending required by an overwhelmed social welfare state, let alone generating new public money for a UBI.

If an AI robot replaces a human worker, the tax contribution of 35% is replaced by a contribution of 12%, which is 3 times less revenue for public spending. Major shareholders in big tech companies will benefit from most of the AI added value, while people, states and governments will be poorer and won't be able to spend on pensions, healthcare, public infrastructure and servicing debt. The added value of a human worker benefits the people and the state. However, the added value of AI and robots will end up in the hands of a small group of tech billionaire shareholders of tech companies. Selling AI and robots as a huge productivity boost that will make everyone rich is a lie. It will make a few billionaires richer, but it will ruin the states fiscal situation and endanger social stability.

The rapid deployment of AI and job replacement will accelerate the public debt crisis. All the wealth and profits created by AI will be captured by a small group of elites at the top of big tech and AI companies. This is why every company is racing to invest in order to be the first to develop AGI (Artificial General Intelligence) and ASI (Artificial Super Intelligence). Make no mistake: AI is another technological tool that will exacerbate the wealth inequality, aggravate the environmental crisis, and will not solve the government debt issue, nor will it increase the birth rate and repopulate the planet with babies and children.

Sacrificing the future for a better present

We live in a world where the maximisation of GDP is both desired and an imperative, not because more is better or because it is driven by companies aspiring to make more profits, but primarily because GDP is essentially a proxy for taxation and government spending. If a government wants to increase spending on education, healthcare, defence and the military, it needs more tax revenue, so it needs more GDP growth. This is the main reason for the universal push for GDP growth. People obviously want to consume more, and companies want to grow their market share, but the real driver of economic growth is the desire and need for increased public spending.

However, in a world where GDP is maximised, people would spend all their time producing and consuming, leaving no time for family or raising children. This started in the 1960s and 1970s when we experienced tremendous growth and a rise in living standards. There was a sharp increase in female participation in the labour force and a large cohort of baby boomers in their prime working years. This push for more production and consumption came at the cost of fewer babies being born. Nowadays, there is a shortage of workers aged 18–40 and even fewer children aged 1–18. Because of the shortage of young workers, our social and economic stability is crumbling.

We have been sacrificing the future for more than 40 years now, by not having enough babies, who will become the next generation of producers and consumers. Now, the future is catching up with the present, the future of the past. It's as if we've been eating corn and corn seeds for 40 years and are now starting to run out of food.

Because fertility rates have plummeted further over the last 20 years, we will certainly be in a far worse socio-economic situation in the next 2 decades, whatever we do now, because babies not born in the last 20 years cannot be created out of thin air. We have been living beyond our means for 40 years, and now the time for repayment has come: fewer workers, more retirees, a shrinking working population, a shrinking physical economy, and rising debt that we can no longer service. Societal collapse is unavoidable because we have taken capitalism, liberalism and hedonism to extremes over the last 40 years.

We have been mortgaging and damaging the future for decades in search of immediate and present gain. The future is now catching up with us. In the 2020s, we have entered the sacrificed future of the past decades:

Since 2008 the national debt has exploded, money has been printed like bread in a bakery, with short term intentions to help financially and maintain a social system, year after year, leaving future generations unable to afford to service the debt. We are now in a debt spiral with no way out other than high inflation and loss of purchasing power.

We have been extracting resources like crazy for the last 70 years, depleting rich mineral areas, abundant and easily accessible oil fields, for the present comfort of mankind, polluting the soil and air for short term gains. But after 2040, there will be no abundant oil reserves and very few ore-rich mines, and climate change will cause massive destruction of cities and ecosystems. We are now beginning to pay the price for this extractivism and over-consumption of the last 70 years.

We have stopped making babies for 50 years in order to enjoy a better life and be more productive, to the detriment of future generations. Future generations are now being asked to support an ageing population with a massive baby-boomer generation either already retired or retiring in the next 10 years, combined with a reduced young generation entering the workforce, unable to sustain a country's economy and unable to support the elderly. We are now starting to pay the price for not having made enough children for the last 50 years.

There is nowhere to hide: All the "future" sacrificed in the past is now catching up with us. By prioritising the present over the future, our societies have created the false impression of eternity, the illusion that we can continue our behaviour and privileges forever without facing drastic consequences. From 1980 until 2020, we accumulated more resources, freedom, privileges and rights, seemingly at an invisible cost and ignoring the implications for future generations. This has resulted in more debt, increased consumption and resource depletion, and fewer children and young adults. We are now entering the "future", and the payback starts now in the 2020s. This is Karmageddon: The karma for all the free pleasures and all the bad things we have done in the past is starting to wreak havoc in the present and will lead us to the Armageddon of our modern civilisation. If you accumulate too much rubbish for too long, when the time comes to clean it up, you are overwhelmed and simply forced to live in a reduced space surrounded by rubbish that you have no pleasure or courage to clean up. That's where we'll be for decades to come. Most of the terrible consequences on our civilization are linked to our demographics and the lack of children over the past 50 years. There is no solution, because even if the birth rate were to return to 2.5 overnight, we would still struggle and suffer tremendously for the next 60 years until the ratio of workers to retired people returned to a reasonable and affordable level. The next 60 years are therefore bound to be miserable and see a serious decline in welfare, whatever we do now.

Internal conflict of interest

We all carry 3 hats with us.

The first hat is: I need a pay check, I need a job, I need to follow my boss's instructions, I need my business to succeed.

The second hat is: I have a short time to live so I want to enjoy it, I want to spend time with my friends and family, I want to go on holiday, I want to watch TV and have all the good experiences I can.

The third hat is: I want to be a good ancestor, I want to do the right things, I want to contribute to a better future for humanity and the planet, I want to make a positive impact on future generations.

We cannot wear all 3 hats at the same time. Each hat we wear is incompatible with the other 2. We wear the first hat primarily, running on the treadmill of capitalism. We want to wear the other 2 as much as possible, but the first one is so exhausting and time consuming and such an imperative that we hardly have time or energy to wear the other 2.

Unless you are born into a family of millionaires, or marry one, you have to work first and most of the time to enjoy the pleasures and leisure of life, you can only wear the second hat for a short time before you have to wear the first hat again to earn money and spend it on the things you enjoy. If you wear the second hat and enjoy the pleasures of life such as travelling, going to the cinema, going to the spa, buying clothes and cars, consuming the non-survival goods and services that make our lifestyle sweet, then you contribute enormously to the overshoot in consumption and planetary environmental degradation and feel as if you never wear the third hat. If you live your life unspectacularly, with a regular office job, cleaning the house, raising your children, then you're not achieving anything memorable or spectacular, and you feel you won't be remembered as a good ancestor or leave a mark in your community. If you really care about the planet and want to do no harm to it, you have to force yourself to live in poverty, not buy anything you don't need, eat organic, local and seasonal food, travel only by foot or bike, give up all your hobbies, but no one does this to any great extent. Most people wear the third hat when they raise their children, some with involvment in NGOs or local communities. To save the planet with our third hat, the whole of society would have to live in poverty and deprivation, and our second hat will not allow that. The 3 hats are simply incompatible.

We would need a society that allowed us to wear all 3 at the same time. AI and robotics are the only hope to get to that point, especially in an ageing population with a shrinking workforce, with all the AI risks, with potentially not enough energy available, with looming supply chain disruptions, with a shrinking working population with diminishing purchasing power, with all the need for social and manual labour to support the massive elderly population, how can this society be materialised?

I think the future will be the other way round: We will have to work harder and longer to maintain our purchasing power. Industrial goods made by robots will always remain cheap. But services that make our lives easier will be hard to come by. The declining quality of public services such as health care will have to be replaced by private services for which we now have to work extra to pay the fair price. Public pension will be inexistant or half of what it is today, no longer reliable to make a living out of it. Fun times will become a luxury, as life was 200 years ago.

It may sound pessimistic, but I am a realist, not a doomer. The population aged 20–60 in the industrialised world is set to shrink considerably over the next 50 years, which will have a negative impact on the global economy, tax revenue, total consumption and the working population. The retired population will grow or remain unchanged, placing an additional burden on healthcare and pension costs, as well as on labor-intensive services. Public debt, which is directly linked to the ratio of people over 60 to people aged 20–60, will continue to increase significantly until too much money is printed, leading to sustained high inflation. People who have become accustomed to public services and social privileges, and who have relied on public money for the last 50 years, are not going to accept access restrictions and constraints without massive protest and civil unrest. The age of digital media and greater freedom of choice has led to more single people, more anxiety and depression, and definitely fewer children each year. Toxic pollution and climate change are getting worse every year, and none of the technology, announcements or awareness campaigns are having an impact.

Just because the sun shone yesterday and is shining today does not mean it will shine tomorrow. The weather forecast says a storm is on the horizon.

Conclusion

Capitalism is far from a perfect system, but it is the least bad of all the systems for administering human societies. Communism, dictatorship and the pursuit of perfect social equality are bound to mass poverty, as demonstrated by past civilisations.

If everyone received a universal income, many people in low-paid and uninteresting jobs would quit and live off the income. This would create supply chain disruption, inflation and fewer goods and services produced in society, hence poverty.

A system in which every job is paid the same, regardless of the worker's performance or required skills, would result in many job vacancies and lower output per worker. If you are paid the same whether you lay 100 or 500 bricks a day, why would you work hard and lay 500? The total output of goods and services would decrease drastically, resulting in widespread poverty.

Social inequalities and personal interest in individual performance are needed to provide incentives, to promote hard work, to attain overall prosperity, to rise living standards and to set ambitions to achieve a better life. Social inequalities are required in a population, and this is also true of other species, such as monkeys and lions, as of remote indigenous communities. Social inequalities have always existed and will always exist. If the disparity between the two extremes of social inequalities is not too wide, this is a good and healthy thing. Even in medieval times, kings and their families owned everything, and 99.9% of people were poor slaves working for the king. The same is true today, with the top 1% of the population being extremely wealthy, while the bottom 80% are underpaid and do not get much richer over their lifetime. The issue is not the inequalities but the growing inequalities and the decline in the living standards of the lower classes. Social inequalities are not a problem themselves.

Free market and capitalism can solve many technological problems, lift people out of poverty, increase welfare and the amount of goods and services available and affordable. But it cannot solve the problem of resource depletion because, by definition in economics, natural resources are unlimited and free. Nor can the free market solve the environmental crisis because, by definition in economics and capitalism, environmental waste is also a free externality. Consumers pay for the product or service they buy, not for the damage done to the environment in the production of that product or service.

In addition, by pushing the financial system to extremes of debt and leverage, especially since the global financial crisis of 2008, it has also increased inequalities, with the world's richest 1% getting a bigger and bigger slice of the pie, in terms of wealth, power, political influence and manipulation of rules and laws, so that the average announced GDP growth in a given Western country is actually growth for the top 5% of people, those invested in businesses, stocks and property, but stagnation for the remaining 95% of people. The top 1% of the world owns about 40% of the world's wealth and the top 10% owns about 80%. Only the top 10% really benefit from the current capitalist system, the other 90% watch in disgust or envy. Hard work used to be rewarded in the 1950s to 1970s, but hard work no longer pays off. Being born to wealthy parents, smart choices, good networking and communication do much more than your degree or scientific knowledge.

The world is in a meta-crisis. This means that many crises are occurring at the same time and are interacting with each other: Rising public debt, falling birth rates, our dependence on fossil fuels, climate change and environmental degradation, widening social inequalities, and so on. This calls for a rethink of how problems are solved. Causes should be identified rather than just treating their symptoms. Traditionally, problems have been tackled in isolation. This approach has led to the meta-crisis.

Climate change is only one part of the larger environmental and ecological crisis. Focusing primarily or exclusively on carbon emissions misses the broader context, which includes energy, economics, society and human behaviour.

The world's population was 2.5 billion in 1950. It has more than tripled to over 8 billion by 2024. The total energy consumption has increased more than 60-fold over the same period, and 20-fold per capita. Half of all historical oil consumption has taken place since 2000.

Growth is the problem. Carbon emissions are one consequence of the growth in energy consumption that has enabled the growth in human population and economic activity.

Our impulse to seek solutions to existential threats is a psychological human trait. It's a form of denial that allows us to avoid the full depth and systemic nature of our predicament, and our role in driving it.

We like to think of ourselves as uniquely curious problem solvers, but that's just arrogance and oversized ego. All species solve problems. What sets us apart is that we have to solve problems of our own making, a far more complicated challenge.

Modern society is driven by the myth of endless progress, the belief that every problem has a solution. This fuels relentless action and blind optimism, even when realism is needed. We hold tight to solutions as a way of maintaining control in an uncertain world, unwilling to accept that some problems have no easy solution or require painful sacrifice.

The drive for solutions is a defence mechanism against discomfort. Facing limits and loss is painful, so we distract ourselves with solutions rather than reckoning with reality. Politicians, CEOs and activists push simplistic solutions that sound good to the public but simply don't work.

Storytelling helps us make sense of modernity, question growth and the progress narrative, and imagine better ways to live. It offers a way to face crisis with resilience and meaning. The rise of social media since 2010 has accelerated the meaning crisis: People feel lost. Religion and family once provided purpose, but secularization and self-deception have taken over. Instead of real connection, wisdom, or transformation, people chase fulfillment through “stuff” and shallow experiences. The result? Emptiness.

Humanity has come up with virtual ideas of its own imagination, concepts that sound good on paper, and agreed with a community and put it on paper and said this is the law, this is how our society will work. That's actually science fiction! The only valid law is nature: Mother Earth and Father Sun, life, the biosphere, the interconnected parts.

Unfortunately, no man or society can stop the human predicament, our natural path of resource extraction, growth, waste and pollution.

The only thing that will stop us from infinite growth is nature. If the conditions on the planet are really bad, like soil pollution, access to water, etc... the human population will drop from 8 billion to 2 billion.

When oil and gas fields are depleted, we will reduce our consumption from 100 million barrels to 20 million barrels a day.

We are in a double bind: we need growth for finance, for the economy, for government budgets, for all developing countries, for our ageing population, etc... But growth will lead us to biodiversity Armageddon, terrible climate change, depletion of fossil fuels, scarce access to fresh water, soil pollution and more frequent and severe natural disasters, massive destruction of ecosystems, unsustainable debt and hyperinflation.

What if some problems don’t have solutions? Maybe the real challenge isn’t fixing everything, but learning how to live with what we can’t change, by fixing ourselves from the addiction to overshoot and adapting to the degading environment, adapting our consumerism behaviour to the level of debt and the demography.

Past civilisations that collapsed, such as the Roman Empire, did so because expansion and growth led to a lack of resources and to growing social inequality, bribery and corruption among the elite, and ultimately, workers' protests, money printing, inflation, mass poverty and civil war. The Romans faced a shortage of resources and workers' protests, so the leaders decided to give the workers more money by 'printing' money, by making coins containing less and less silver, from 90% originally to almost 1% content, worth nothing in precious metal. This devalued the currency, creating inflation, shortages, mass poverty, criminality and civil war, and that's how the Roman Empire collapsed. History has repeated itself many times, and it will do so again in our current industrial, globalised, fossil-fuel-based civilisation.

All past civilisations that achieved longevity did so with wisdom, restraint and a greater sense of collective togetherness. Those civilisations had a lot of restraint at the individual level and lived closer to harmony with their natural environment. This is what our societies lack: We have been given many freedoms and rights, but almost no obligations and no constraints. Everything is as much as possible: consumption, sex, power, salary, income, size of house, cars, etc. We live in an "all you can eat" world, and the more we eat, the more recognition we get from our peers, so we are encouraged to eat more. There are no restrictions imposed on us by society. This has created a society of individuals who seek to maximise their own status and possessions to the detriment of others, the planet and the future.

In the next chapter, we'll see what a degrowth world would look like and whether it is possible.

Next chapter: 13 – DEGROWTH

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- THE LAST DECADE -
December 2025

Why we are all doomed and there is nothing we can do about it.

Why do we have so few kids, and what are the consequences for society.

The uncomfortable and inconvenient truth about the soon coming end of prosperity in our industrial civilisation.

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THE LAST DECADE

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