by John Young
Though I have restructured it a bit, I originally wrote this as a reply to a friend’s post on Facebook, but thought it was worth sharing with a wider audience.
The hesitation of our political system to stem the flood of immigration (both legal and illegal) is primarily driven by three factors:
1. Horizontal rather than vertical economic expansion.
2. Social welfare systems based on the current working population paying from current income rather than based in savings.
3. Our banking system based on issuing money as debt so that each new injection of money requires a subsequent injection (also borrowed) in order to be able to pay back the interest on the funds previously borrowed.
The problem with this arrangement is that it eventually reaches physical limits of various sorts.
Explaining the difference between horizontal and vertical economic expansion requires a bit of explanation. Imagine a building contractor. He creates wealth by converting raw materials (wood, rock, etc.) into something more valuable — a house. He can make more money and add to the nation’s wealth by consuming more land, more wood and more rock to build more houses (horizontal expansion) or by making a house that he builds more valuable through insulating it better, using better roofing materials or even making it into a smart home.(vertical expansion).
If you make buggy whips, you can make more money by making sure everyone owns a buggy, and when you run out of customers you can send the army to foreign nations to turn everyone in the whole world into a buggy driver. This is horizontal. Or, you can ascertain that using the same raw materials, you can make something that is more valuable, such as a much-improved buggy whip or even shoes.
The need for profit (otherwise why have a business?) is usually more easily met in the near-term by horizontal expansion. Coke can just expand its market to cover Iraq and Japan without having to invent anything new. It can also be addressed by cheaper labor, such as the use of actual human slaves in Florida for raising tomatoes. (Yes, REAL LIVE HUMAN SLAVES, not just cheaply paid illegal immigrants — read the book Tomatoland.) Our housing market drove contractor jobs by horizontal expansion through artificially increased demand by giving interest-only no-money-down mortgages, etc.
Obviously, horizontal expansion favors global markets and drives the need for supplies of the cheapest available labor (i.e. immigration). Manufacturers would love to sell all the billions of people in the world a computer, a car, a washing machine and a cell phone. But this won’t work — that is, the drive to make the whole world into a mirror image of the United States can only fail — because horizontal economic expansion runs up against three hard limits.
The first hard limit is pollution. Because we offshore most manufacturing, we forget that one reason why off-shoring is so popular is that it allows manufacturers to disregard the broader costs that would be built into their products if they were made in a place that regulated their pollution. In other words, they privatize profits while forcing the public to either accept or pay to clean up their messes.
Hence, the World Bank has reported that 75% of China’s rivers and lakes suffer from severe pollution and 1 in 5 are so bad the water can’t even be used to grow plants. China is now filled with “cancer villages” — with 459 of them spread across 29 of China’s 31 provinces. That’s just one example. Looking even in the United States, one reason testosterone levels have fallen is likely due to pervasive contamination of ground water with agricultural hormones, etc.
The earth will do just fine. It has another 5 billion years. But humans, like fish in an aquarium, are quickly approaching the point of killing themselves with their own waste. You can’t blame a corporation (whose only standard of value is profit) for the profitability that globalism affords by offshoring pollution, but these effects are not strictly local to the “brown people.” According to the Pentagon (who are not exactly environmentalist whackos) global warming has reached the point of no return and within 10 years it will have global destabilizing effects caused by droughts etc.
The second is resources. Again, the Pentagon predicts we will start seeing the effects of Peak Oil by 2015 in the form of skyrocketing energy costs in an economy that is very energy-based. But that is not the only area — do a bit of research into global strategies regarding rare-earth minerals and you’ll soon see they could start a war. Some countries are even trying to stake out territory on the sea floor where these rare earth minerals are found.
There simply is not enough cheap energy or critical materials to horizontally expand the economy indefinitely. We are already seeing price spikes in many critical commodities and some nations are hording materials.
The third limit is cultural. Many countries and cultures have no desire to participate in a homogenized global culture in which you can go anywhere in the world and order the exact same McDonald’s hamburger. Many countries do not want to import GMO seeds from Monsanto. Many countries want to maintain their own social mores which are completely antithetical to globalized trade. Hence, we reach a point where, even given indefinite resources, to turn the whole world into America we’d have to bomb them to make them “free.” This whole disaster in Iraq is part of just such a strategy to “democratize” the Middle East to turn it into a ready consumer market.
SO by concentrating on horizontal rather than vertical economic expansion, we are running up against some physical limits but ALSO necessitating immigration. Our internal dependency on horizontal expansion requires a continuously increasing population.
Our social welfare schemes likewise necessitate immigration.
Obviously, if you give welfare to immigrants you will drive immigration, but what I mean is why won’t our government put the breaks on immigration?
The reason is because the social welfare system is funded from current taxes rather than through capitalization. This necessitates taxes that have held down birth rates. The social welfare system is a pyramid that requires an ever-growing base of taxpayers at the bottom so it doesn’t collapse, while the taxes it necessitates hold down the birth rates it requires. This is the hard limit. Hence, the necessity of immigration in order to bypass that limit. But that problem could just as easily be solved by restructuring how key entitlements (such as social security) are funded. If we did it based on capitalization, most people would retire multi-millionaires and would be self-funding without being a burden that restricted birth rates.
The above proposal would fix social security, but it wouldn’t do anything about welfare programs. The primary driver of our welfare programs is that we are creating an ever-more-efficient economy domestically so that jobs that would allow someone with an IQ under 100 (which is half the population) to feed themselves with dignity simply do not exist in sufficient numbers. Such jobs are either sent off-shore or given to migrant labor. The thing that drives that is our banking system.
And, of course, our banking system requires constant expansion to stave off collapse because it is based on issuing new money as debt requiring future borrowing to pay the interest on prior issued money. Thus there is continuous inflation. Inflation is caused by the supply of money increasing faster than the value of goods produced, thus making each unit of currency worth less when compared to a given good or service. We’ve been doing this for nearly 100 years and at this point our currency has literally lost 95% of its value.
Because labor costs increase at the rate of official inflation, manufacturers moved manufacturing offshore so that they could produce goods at the same price as they did domestically before the inflation. In sectors that can’t be sent offshore such as harvesting lettuce, mowing lawns or carpentry, immigrants are brought in at lower pay rates so that they can hold prices down. This is because even though the cost of labor increases at the rate of official inflation, the actual price of goods increases pretty consistently at about double that rate (see Shadow Stats for details), so with people’s buying power declining, there is serious incentive to do everything possible to keep costs down.
So our banking system, social welfare systems (especially old age pensions) and a mindset favoring horizontal economic expansion (for quick profits) rather than vertical expansion (for long term sustainability) are the three legs supporting the status quo’s take on immigration.
But we could easily reform or fix all of these things, and the reason we don’t is because a handful of people with vested interests benefit from the way things are now, and really couldn’t care less that they are wrecking our country and maybe even the world through their greed.
The bottom line is I spent 2 hours in traffic jams getting to work this morning. Our infrastructure doesn’t need any more population. We are still tearing down farms to build subdivisions. We have serious pollution problems even in this country much less abroad and we need even more population like we need a hole in the head.
Those people we have here are falling into competing ethnic blocks competing for resources by using the government as an arbiter of force. We need multiculturalism like we need a hole in the head.
What we ACTUALLY need is some serious political thought and courage — so we can reform our banking and social service systems so they can work with vertical economic expansion and to give the long-range implication of horizontal as opposed to vertical economics some thought.