Chernobyl and Our World-Casino Economy: Their Shared Mathematics of Destruction
In November both the American and Canadian election campaigns were run on the assertion that an unprecedented level of prosperity and budgetary surpluses had been achieved. Only when the American balloting was finally disposed of, did the disturbing truth burst into the media: the boasted New Economy was in tatters. Its glories had been based on an unprecedented burden of debt that has begun backing up like neglected plumbing.
Almost at the same time, 14 years after the nuclear meltdown of the Chernobyl reactors in the Ukraine, the final reactor was finally shut down. And the world press carried a resume of its staggering costs: a fifth of the entire territory of the Ukraine was so heavily poisoned with radiation that it will be unsuited for human life or agriculture for countless centuries. The radiation released was 500 times that of Hiroshima. The wretched hospital system of the Ukraine is clogged with the resulting cancer patients and the deformed children. The lethal clouds covered a good part of Europe. For years the reactors known to be deadly were kept working because the mouse-poor country needed their power output, no matter at what human price. The grieving over the shutdown of the final reactor was as much for the irreplaceable jobs as for the loss of life.
Such catastrophe in the heart of Europe can only be compared with the condition of sub-Saharan Africa. There is the same spread of disease from AIDS to the revival of tuberculosis Average life-spans are dropping precipitously and child mortality is rising. Population is declining. Two areas that historically provided the slaves (as in Slays) for much of Europe and the Americas are now threatened with the being left un-peopled.
Cities have been abandoned to moulder and fall apart. Africa, the Ukraine and Belarus are the ultimate indictment of enthroned greed.
There is a reason for the similarity of results in the two areas. The Chernobyl reactor and New Economy of which Africa is the principal victim are based on the same exponential mathematics, the significance of which still has to be grasped by economists. Forget about models where the compounding takes place at fixed interest rates. In exponential development the rate of growth must increase to match the value already attained by the function itself. By extension the rate of growth of the rate of growth, and all derivatives to infinity do likewise. (The common mathematics of our New Economy and nuclear physics is attested by the use of the spreading importance of he term derivatives borrowed from mathematics and physics by high finance little more than a decade ago.)
All this is by-product of a society where the enhancement of shareholder equity is the priority to which, as wheat to the scythe, everything else bows, Not even the rules of accountancy are exempted. The future is cut up and appropriated as were the commons in early sixteenth century England to serve as deer-parks. The 16th centurythe Age of Plundermoved from the enclosure of the commons, to the privatizing of the pillage of the monasteries, to the piracy on the seas by which much of Spaniards loot from their conquests ended up in England. In the process no stock can fall short of the exponential curve built into such a model without paying a ruinous penalty. But do stock-market jocks command the freshman maths to dig all this? They dont have to. It is all incorporated in the graphs that usually accompany analyses in our financial press. When you see these graphs standing up vertically like a Viagra ad, you known that their alleged record has been exponential, and exponential it must continue. And if you have overlooked the exponential pattern on the way up, you now have plenty of opportunity to catch it on the way down. These days it is not unusual for outstanding high-tech shares to lose more than half their market evaluation in a matter of weeks. And each time this happens money which today is exclusively credit is destroyed throughout the economy.
The consequences are beyond the concerns that have suddenly taken over orthodox commentary about whether the cyclical landing of the economy will be soft or
hard. The fact is that the globalized, deregulated economy is without landing gear. And it has little to do with the traditional cycle. The financial institutions of most of the world are immobilised with capital losses reaching as far back as the seventies. Those cycles are flatter than a Firestone tire. To borrow from political lingo there has been no closure. The load of bad debt inherited from the financial crises has not been made good. It has merely been translated into ever more crushing debt taken over by governments, and the general public. The fractured societies of East Europe and Africa will not revert to where they were ten or twenty years ago on their own.
There is moreover an important sense in which the economics of the Western world are in worse shape than the Soviets were at the time when those Chernobyl reactors went berserk. The clean-up workers sent into what had become atomic furnaces were without protection and were clueless about the danger. But in the same Soviet Union there was a profession of physicists who could stand comparison with that of the West. It knew exactly what Chernobyl was about. That contrasts with the cluelessness of the officially recognised economics profession in the West. Most economists get their doctoral degree without a knowledge of Keynes or the relevance of the laws of freshman high-school algebra to the economy. That is why we are headed into what can be the greatest bout of deflation with central bankers who have taken vows never to mention deflation, with countries whose laws prevent them from incurring a deficit even in times of depression. The toll in human lives of that can easily outstrip that from the Chernobyl disaster.
from Economic Reform, January 2001