Given only historic and economic factors, the Great Depression of the 1930s, followed by the wastrel behavior of World War II, should have led to the disappearance of the United States as a cultural powerhouse by the 1950s. Obviously, this did not happen. And there are two reasons and only two reasons why this did not come to pass.

Power generation

The first was the introduction and rapid expansion of our ability to generate and distribute electrical power really beginning in the early 1930s. The positive impact of this on human productivity cannot be overstated. However, even this 2nd industrial revolution would have only provided the United States approximately a 40-year respite from the economic collapse that is inevitable from our present monetary policies. As such, if this revolution was the only one in the 20th Century, the United States' major world influence would have all but dissipated by the beginning of the 21st Century.

Automation

Again, it is clear that this did not take place and it is due to one factor as identified in the last segment, another technological revolution also took place in the 20th Century. This massive technological leap forward that led to the third industrial revolution was the automation of our productive capacities based on digital computers. This revolution had its beginning in the late 1960s and got into high gear with the introduction of the microprocessor. This second major revolution bought another 30 years of viability for the United States.

But now all of the benefits that the present culture of the United States can derive from modern science and technology have played themselves out.

We are moving into another Great Depression, or from the perspective of economics, we are actually moving into the second phase of the great depression of the 1930s. The only question is: How bad is this phase going to be?

What are the differences?

Some have compared the depths of what we are about to face to that experience from the 1930s. However, before such predictions can be made we must recognize that there are fundamental differences in our culture between now and then. All of it due to the two industrial revolutions as we have already mentioned.

So the question becomes what are the big differences between now and then?

Demographics

The most obvious difference has been the shift in demographics since the 1930s. Then, the urban and rural populations were about equal with approximately 25% of the total population supporting their local communities on the family farms. Farmers may not have had a lot of money during the depression but life on the farm went on as before, with long hard days spent tending to crops and animals.

Since then, our way of life has shifted dramatically. It is estimated that 80% of the United States population now lives an urban lifestyle with 20% living in the country. Only 2% of the total employed population now grow food for the nation. While it is true that modern farming methods produce much higher yields per acre per man hour, this concentration of our food production means that farming is no longer a local industry.

Food preservation and distribution systems

This shift was made possible by the use of modern energy sources to ship and preserve the food that is grown in the country and transported to the city. The result of all of this is that the distance between the average individual and his food source has been greatly increased. In the 1930s it was measured in tens or hundreds of feet...now it is measured in hundreds if not thousands of miles.

Centralization

The second major development is a product of both the shift in demographics and our country's monetary and financial policies. The consequences of these two have been the centralization of both our productive systems and the infrastructure of our civilization. One classic example of this is that as recent as 1973 80% of the oil wells in the country were owned by individuals that owned less than 50 wells. Now, well over 95% of oil wells in the United States are owned by a handful of corporations (principally the remaining four big sisters).

This is but one example of what has happened in all major industries from food to clothing production to transportation to entertainment and the like.

In simplest terms these centralized production mechanisms are built upon centralized currency and debt. Should the centralized currency fail, so shall these organizations. What consequences will the average individual suffer if the large scale production mechanisms that bring his food and other necessities from several hundred miles away stop working? And, What happens when millions located in high population densities suddenly begin to run short on food, power and transportation due to failure of the centralized production mechanisms?

By way of note, that is what is meant by "depression:" When a number of large scale production mechanisms and the economies on which they are depending stop working properly. With this we can now begin to imagine the consequences of a great depression developing in our civilization as it now exists if no steps are taken to prevent it.

Technology

What is even more profound is to consider the speed at which this could happen. While the wonders of our present technologies have brought ease and comfort to our lives, another side is that they have the potential to increase the severity of the consequences by accelerating the decline with swiftness never before thought possible. Communication technology now gives investors around the globe minute by minute access to market data which enables them to sell or buy in real time with the touch of a button. This swiftness could bring the collapse about measured not in years but ultimately in months.

Time to build rafts

You know the story of the Titanic...the band plays and the passengers continue to dance oblivious to the fact that the ship is sinking and they are about to perish. If they had only known what was about to happen they would have had the time to create makeshift rafts out of doors or other materials. They didn't have to die. That is a great metaphor for what we are facing. The subterfuge from the so-called experts is holding at bay any real fear or panic for the time being, but when the realization finally hits that we are "sunk," it will be too late.

So the question now is...WHAT DO WE DO? How do we build those rafts?

 

Part 4:  Common Solutions and Why They Won't Work