The God of the Machine - Tranche 41
Chapter XIX, Excerpt 2 of 3
Credit and Depressions
With a high production system, every part must be maintained by surplus production; the whole system came out of surplus production. Material is perishable in that it loses its usable form and quality with wear or neglect, in time. The kinetic energy of a production circuit may be dissipated without return in so many ways that it is tedious to enumerate them. It may be converted into static form which is useless for the circuit. They may be simple net loss, or carried dead load, at a continuing loss.
As long as financing came from private enterprise, the condition would be self-correcting. While more than 98 percent of the investment in railroads came from private capital, subject to the inescapable test of economic reality, 85 percent of recent increase in transportation plant came from tax funds, which are relieved of that ultimate test. The course of events reveals the true nature of capitalism, which cannot be brought into any system of collectivism. Capitalism is the economic system of individualism.
The quickest and most drastic liquidation of a credit collapse would be the most equitable. It would most rapidly reconnect the production system, but this is seldom allowed. Instead, the political machinery is called in to seize or depreciate money; the meter is falsified, and a general leakage along the line is caused. Under the Roman Empire, after the government intervened, there never was any recovery. That was the end of the empire; and Europe was sunk for centuries.
Credit and Depressions
With a high production system, every part must be maintained by surplus production; the whole system came out of surplus production. Material is perishable in that it loses its usable form and quality with wear or neglect, in time. The kinetic energy of a production circuit may be dissipated without return in so many ways that it is tedious to enumerate them. It may be converted into static form which is useless for the circuit. They may be simple net loss, or carried dead load, at a continuing loss.
As long as financing came from private enterprise, the condition would be self-correcting. While more than 98 percent of the investment in railroads came from private capital, subject to the inescapable test of economic reality, 85 percent of recent increase in transportation plant came from tax funds, which are relieved of that ultimate test. The course of events reveals the true nature of capitalism, which cannot be brought into any system of collectivism. Capitalism is the economic system of individualism.
The quickest and most drastic liquidation of a credit collapse would be the most equitable. It would most rapidly reconnect the production system, but this is seldom allowed. Instead, the political machinery is called in to seize or depreciate money; the meter is falsified, and a general leakage along the line is caused. Under the Roman Empire, after the government intervened, there never was any recovery. That was the end of the empire; and Europe was sunk for centuries.
"The true nature of capitalism cannot be brought into any system of capitalism." The welfare state is the mother of social justice.
"The political machinery is called in to seize or depreciate money; the meter is falsified." Counterfeiting is the mother of decivilization.
I realize this may come from the middle of one of her (typically very long) paragraphs. If you could give me the number of pages from the beginning of the chapter or some other hint (since our copies may not have the same page numbers) it would be appreciated.
In addition, I've limited each tranche to 3 paragraphs of about 75 words each. This is arbitrary, but it forces me to keep each paragraph relatively short and essentialize what I think are important ideas into something coherent. Sometimes, the flow is a little rough. Also, some of the sentences are shortened and combined with sentences in other paragraphs of the book.
You may have a different edition that I'm using, but for the section about which you ask, the first two sentences are drawn from the footnote on page 223 and the last two sentences are on page 227. This condensation would have been hard to find but thank you for asking!