Tag Archives: Capitalism

Today, capitalism came to space

Today at 9:44  the private company SpaceX launched the first commercial rocket that will carry goods up to the International Space Station. This opens a new chapter in our relationship to space.

I am not sure if I like this or not. On the one hand I think that if we want our exploration of space, and not least, our use of space to grow, we need more actors than the public agencies such as NASA, ESA and JAXA. On the other hand, for the foreseeable future it will be the tax payers who will pay the private companies for what they do (except for what happens on the satellite side, but that’s another story). Should we really use tax money to create private profit? NASA is paying SpaceX 1,6 billion USD for 12 trips to the Space Station.

Here is NASA’s video from the launch

I believe our future lies in constantly exploring new horizons.

“Go West, young man, go West. There is health in the country, and room away from our crowds of idlers and imbeciles.” “That,” I said, “is very frank advice, but it is medicine easier given than taken. It is a wide country, but I do not know just where to go.” “It is all room away from the pavements.”  Horace Greely said once (there is disagreement about who is the origin of the term Go West, young man, go West, some claim it comes from John Soule)

Greely’s advice was given in conjunction with drive to occupy the American West. This movement brought great suffering to the original people there, but let us look away from it for a moment and reflect upon where we now can go to build a better society for people.

I believe that at least some of the answer lies in space.

Is it a real crisis?

I must admit that I have seen this financial crisis unfold. I have had mixed feelings. On one hand, I have not lost any sleep over giant banks and rich financiers loosing some of their clout and some of their money. Also it is good for the poor that oil prices are falling. On the other hand. Rapidly rising interest payments, lack of credit for ordinary people and the collapse of the Icelandic economy has had me worried.

The moneycrisis. Thanks to scriptingnews for sharing under Creative commons
The moneycrisis. Thanks to scriptingnews for sharing under Creative commons

Now, it seems that the lack of credit is transforming the crisis from a finacial crisis to a real economy crisis. Solid businesses lack liquidity to keep in business, and shops lack the credit to take in new goods. Now reports are coming in that this hits food as well. The BarentsObserver.com writes:

Now the chain has ruptured with banks now longer willing to offer the credits. Subsequently, the wholesalers are no longer able to buy the foodstuff from the producers and then sell it on to the supermarkets, newspaper Komsomolskaya Pravda reports. Consequently, the shops are emptying.The situation has now made Russians line up in the shops and secure their necessary products. The result is an even more rapid decrease of good in the stores.

Russia certainly has the money to shore up its banking sector and get credit moving again. I’m less certain about Iceland, even though they are trying to loan a couple of billions from Russia. Reuters had a wire the other day stating that:

Iceland has food stocks for about 3 to 5 weeks, but needs quickly to restore a proper foreign exchange market so importers can get back to normal business and avoid shortages, importers said on Wednesday […]The problem for importers was uncertainty about whether they would get foreign exchange, which they now have to apply for under a rationing system begun by the central bank.

I don’t actually believe that we will see food riots or starving in either Iceland or Russia. Neither country i Zimbabwe. But this is an instructive lesson into how modern capitalism works. And it works through credit. Get Rich Slick puts it this way:

There WILL be plenty of food around but it would be a matter of the truck driver having the credit to buy the fuel for his truck to get the food from the farm to your grocer. It will be a matter of the grocer to have credit to pay the trucker for his services. It will be a matter of the fuel station to have the credit to buy fuel from big oil and so on…..

When access to mony stops, everything stops. Still the worlds production capacity is the same. When it comes to food, oil, steel, transport, fertilizer. Nothing has changes. This gives us one very clear signal. The market must not govern us. We must have democratic elected governments that regulates, oversees, produces and makes sure that a crisis in the market place do not ever spill over into a crisis that affect food, health or security. I believe, naively maybe, that the Nordic welfare state has come close to finding an equilibrium where entrepreneurship and safety coexists in a way that maximizes productivity, welfare and security. Recent crises in Norway stems from deregulation not overegulation. If we take Iceland as an example, the crisis stems from a total deregulation of the banking sector.

This crisis shows, yet again, that we need to govern the market, not be governed by it.