R.I.P. Will Steffen

Will Steffen’s crucial climate ideas on “Hothouse Earth”, tipping cascades and non-linearity. David Spratt, Climate Code Red. Feb. 1, 2023.

(go to Spratt's article at Climate Code Red for active links)


The eminent Australian climate scientist, and former Labor government advisor and head of climate at ANU, Will Steffen, who died early this week from complications following cancer surgery, will be remembered for some of the big, crucial ideas he and his collaborators contributed to the understanding of the Earth System, particularly planetary boundaries, climate tipping point vulnerabilities and cascades, risk and nonlinearity, and the “Hothouse Earth” scenario.

Particularly in the last few years, Steffen was very clear and forthright in communicating the threat and the dynamics of the climate system, and the trajectory towards collapse:

"Given the momentum in both the Earth and human systems, and the growing difference between the ‘reaction time’ needed to steer humanity towards a more sustainable future, and the ‘intervention time’ left to avert a range of catastrophes in both the physical climate system (e.g., melting of Arctic sea ice) and the biosphere (e.g., loss of the Great Barrier Reef), we are already deep into the trajectory towards collapse … That is, the intervention time we have left has, in many cases, shrunk to levels that are shorter than the time it would take to transition to a more sustainable system.”

More recently, Steffen and others asked:

“Could anthropogenic climate change result in worldwide societal collapse or even eventual human extinction? At present, this is a dangerously underexplored topic. Yet there are ample reasons to suspect that climate change could result in a global catastrophe.”

And in a recent book chapter, "The Earth System, the Great Acceleration and the Anthropocene", he recognised that climate change was already dangerous:

"It is clear from observations of climate change-related impacts in Australia alone – the massive bushfires of the 2019–2020 Black Summer; the third mass bleaching of the Great Barrier Reef in only 5 years; and long-term cool-season drying of the country’s southeast agricultural zone – that even a 1.1 °C temperature rise has put us into a dangerous level of climate change.”

Steffen was the key scientific climate advisor to the 2007-2013 Australian Labor government. In that role I often disagreed with his political advocacy, and told him so. Will’s advocacy stuck pretty rigidly to the 2°C, 450-ppm-CO2 goal that was de rigueur in global and national policy-making circles in those days, even as the science was already clear that it was a dangerous goal, and Jim Hansen had persuasively outlined the case for a goal of under 350 ppm, which had been adopted around the world by some more progressive parts of the climate movement.

But Steffen was far from alone amongst scientists around the world who become jammed between politics and science, in the struggle for balance between research knowledge and wanting, or sounding, to be politically relevant to governments either in denial or unwilling to grasp the size of the task.

At the same time, Steffen was keenly aware in 2008 that “the scientific community is underestimating the speed at which the climate is changing”, warning that the world's sea levels could rise by up to four metres by the end of the century.

And whilst Ross Garnaut’s 2008 report for Labor on climate change had contemplated the 450 ppm and 550 ppm goals (with short-term warming of around 2°C and 3°C respectively), Steffen in a 2009 report for the climate change department had recognised that 550 ppm (a doubling of the pre-industrial CO2 level) could lead to 6°C of warming:

“... when ice extent is treated not as a forcing but as a climate system response, so that both fast and slow feedbacks are included, the climate sensitivity approximately doubles (Hansen et al. 2008). Therefore, the eventual temperature rise in response to a doubling of CO2 is at least 3C and likely up to 6C, depending on the behaviour of the slow feedbacks.”

Many scientists and collaborators have already expressed their sorrow at the death of Will Steffen and paid tribute to his legacy, for example here and here and here.

Steffen’s passing is a great loss to climate understanding and advocacy in Australia, and to the research community at a global level. I will remember his work particularly for publications over the last fifteen years that dealt with system-level analysis of climate change, boundaries, risks and dynamics. In no particular order, some key papers and contributions in which he was either lead author or a co-author include the following:


1. “Climate tipping points — too risky to bet against” (2020)

Authored by Timothy Lenton, Johan Rockström, Owen Gaffney, Stefan Rahmstorf, Katherine Richardson, Will Steffen and Hans Joachim Schellnhuber, this paper was the first peer-reviewed paper (to my knowledge) to recognise the climate emergency as constituted by existential risks: “We are in a climate emergency… this is an existential threat to civilization” and “the evidence from tipping points alone suggests that we are in a state of planetary emergency: both the risk and urgency of the situation are acute”.

The paper pointed to “biosphere tipping points which can trigger abrupt carbon release back to the atmosphere.. Permafrost across the Arctic is beginning to irreversibly thaw and release carbon dioxide and methane… the boreal forest in the subarctic is increasingly vulnerable.”

The authors said that:

“the clearest emergency would be if we were approaching a global cascade of tipping points that led to a new, less habitable, ‘hothouse’ climate state. Interactions could happen through ocean and atmospheric circulation or through feedbacks that increase greenhouse-gas levels and global temperature. Alternatively, strong cloud feedbacks could cause a global tipping point. We argue that cascading effects might be common. Research last year analysed 30 types of regime shift spanning physical climate and ecological systems... This indicated that exceeding tipping points in one system can increase the risk of crossing them in others. Such links were found for 45% of possible interactions. In our view, examples are starting to be observed.”

The conclusion to be drawn from all of this is that the threat, the risks, are overwhelming. And it is a slap to conventional economic modelling of climate risks, when they write that:

“If damaging tipping cascades can occur and a global tipping point cannot be ruled out, then this is an existential threat to civilization. No amount of economic cost–benefit analysis is going to help us. We need to change our approach to the climate problem.”

2. “Trajectories of the Earth System in the Anthropocene” (2018)

With Steffen as lead author, this paper known colloquially as the “Hothouse Earth” paper, and one that captured the public imagination, was downloaded 270,000 times in just the first few days after publication.

A “Hothouse Earth” scenario is described, in which system feedbacks and their mutual interaction could drive the Earth System climate to a point of no return, whereby further warming would become self-sustaining (without further human perturbations). This “Hothouse Earth” planetary threshold could exist at a temperature rise as low as 2°C, possibly even in the 1.5°C-2°C range.

Steffen also said that: “even if the Paris Accord target of a 1.5°C to 2.0°C rise in temperature is met, we cannot exclude the risk that a cascade of feedbacks could push the Earth System irreversibly onto a ‘Hothouse Earth’ pathway.”

In other words, even 1.5°C of warming could be so dangerous that further warming would become self-sustaining; a warning seemingly ignored by policymakers and most advocates.


3. Climate Endgame: Exploring catastrophic climate change scenarios (2022)

This paper published last year by ten authors, including Steffen, cannot be underestimated in bringing together a high-level analysis of the need for climate research to focus on the worse-case high-end possibilities:

• “Prudent risk management requires consideration of bad-to-worst-case scenarios.” We know that temperature rise has “fat tails”: low-probability, high-impact extreme outcomes. Large uncertainties about dangerous surprises “are reasons to prioritize rather than neglect them.” Thus “a thorough risk assessment would need to consider how risks spread, interact, amplify, and are aggravated by human responses”.
• “Climate damages are likely to be nonlinear” and result in an even larger risk tail. There are feedbacks in the carbon cycle and potential tipping points that could generate high greenhouse concentrations that are often missing from models.” There are even more uncertain feedbacks, which, in a very worst case, might amplify to an irreversible transition into a “Hothouse Earth” state [including] “recent simulations suggest that stratocumulus cloud decks might abruptly be lost at CO2 concentrations that could be approached by the end of the century, causing an additional ∼8 °C global warming. Large uncertainties about dangerous surprises are reasons to prioritize rather than neglect them.”
• Feedbacks and future warming: Declining emissions does not rule out … extreme climate change [due to] feedbacks in the carbon cycle and potential tipping points that could generate high greenhouse concentrations that are often missing from models. Examples include Arctic permafrost thawing that releases methane and CO2 , carbon loss due to intense droughts and fires in the Amazon, and the apparent slowing of dampening feedbacks such as natural carbon sink capacity. These are likely to not be proportional to warming… instead, abrupt and/or irreversible changes may be triggered at a temperature threshold. Particularly worrying is a “tipping cascade” in which multiple tipping elements interact in such a way that tipping one threshold increases the likelihood of tipping another.

4. "A safe operating space for humanity" (2009)

Led by John Rockstrom and Will Steffen, with 27 others (including Hansen and Schellnhuber), this landmark paper proposed that a safe level of atmospheric carbon dioxide should not exceed 350 ppm:

"We propose that human changes to atmospheric CO2 concentrations should not exceed 350 parts per million by volume, and that radiative forcing should not exceed 1 watt per square metre above pre-industrial levels. Transgressing these boundaries will increase the risk of irreversible climate change, such as the loss of major ice sheets, accelerated sea-level rise and abrupt shifts in forest and agricultural systems. Current CO2 concentration stands at 387 p.p.m.v. and the change in radiative forcing is 1.5 watts per square metre. There are at least three reasons for our proposed climate boundary. First, current climate models may significantly underestimate the severity of long-term climate change for a given concentration of greenhouse gases. Most models suggest that a doubling in atmospheric CO2 concentration will lead to a global temperature rise of about 3°C (with a probable uncertainty range of 2–4.5°C) once the climate has regained equilibrium. But these models do not include long-term reinforcing feedback processes that further warm the climate, such as decreases in the surface area of ice cover or changes in the distribution of vegetation. If these slow feedbacks are included, doubling CO2 levels gives an eventual temperature increase of 6°C (with a probable uncertainty range of 4–8°C). This would threaten the ecological life-support systems that have developed in the late Quaternary environment, and would severely challenge the viability of contemporary human societies."

5. “Human impacts on planetary boundaries amplified by Earth system interactions” (2020)

In this paper, Lade, Steffen et al surveyed and provisionally quantified interactions between the Earth system processes represented by the planetary boundaries and investigated their consequences for sustainability governance and identified a dense network of interactions between the planetary boundaries. The resulting cascades and feedbacks predominantly amplify human impacts on the Earth system and thereby shrink the safe operating space for future human impacts on the Earth system. The three key findings for policymakers were:

• Interactions are crucial to understanding the planetary boundaries and humanity’s impacts upon them. For example, biophysically-mediated interactions have almost doubled direct human impacts on the planetary boundaries.
• Most interactions we found were amplifying, meaning that impacts on one planetary boundary lead to increased impacts on other planetary boundaries. Cascading of human actions through multiple components of the Earth system complicates governance of the Earth system. On the other hand, these interactions offer substantial scope for synergies: if impacts on one planetary boundary are decreased, impacts on other planetary boundaries may also lessen.
• Interactions between planetary boundaries lead to trade-offs between the boundaries. For example, interactions between agricultural activity and carbon emissions mean that high levels of both cannot be maintained. On the other hand, these trade-offs offer humanity some freedom in choosing how to navigate to a safe operating space.

6. Model limitations

Will Steffen was clear about the limitations of models and a quantification fetish when dealing with hard-to-project non-linear change and “Hothouse Earth” possibilities, for example in this Guardian article from 2018:

“I think the dominant linear, deterministic framework for assessing climate change is flawed, especially at higher levels of temperature rise. So, yes, model projections using models that don’t include these processes indeed become less useful at higher temperature levels. Or, as my co-author John Schellnhuber says, we are making a big mistake when we think we can ‘park’ the Earth System at any given temperature rise – say 2°C – and expect it to stay there”.

“Even at the current level of warming of about 1°C above pre-industrial, we may have already crossed a tipping point for one of the feedback processes (Arctic summer sea ice), and we see instabilities in others – permafrost melting, Amazon forest dieback, boreal forest dieback and weakening of land and ocean physiological carbon sinks. And we emphasise that these processes are not linear and often have built-in feedback processes that generate tipping point behaviour. For example, for melting permafrost, the chemical process that decomposes the peat generates heat itself, which leads to further melting and so on.”

This is important because so much policymaking has been based on a goal of climate getting towards 2°C and then assuming that could become stable, when in fact the paleoclimate history suggest that 2°C is not a point of system stability, but a signpost on the road to a much hotter 3–4°C outcome.

And with William Knorr in The Conversation, Steffen warned that due to model limitations, we will not know exactly how the climate crisis will unfold until it’s too late.

Finally, Steffen’s capacity to communicate clearly and succinctly is well encapsulated in an interview with The Intercept when he said getting greenhouse gas emissions down fast has to be “the primary target of policy and economics” with something “like wartime footing”.

That sounded to me like a very short, effective description of the climate emergency.

Fabio Vighi on Senile Economics

please see his site for more of his writing, but this piece was too good not to re-post in its entirety: 

Fabio Vighi: Senile Economics: Bubble Ontology and the Pull of Gravity

What are the drivers of senile capitalism? I will list five of them in no particular order, and then proceed to discuss their interconnections:

1. Debt. The only road into the capitalist future continues to be signposted by liquidity creation programmes. Creating cash “out of nothing”, and setting it in motion as credit, is the elementary monetary strategy that keeps our societies from staring into the abyss – like the cartoon character who, having run off the edge of a cliff, floats in mid-air before acknowledging gravity. However, the pull of gravity is now irresistible, and the descent has begun with a violent bout of currency devaluation.
2. Bubbles. Financial bubbles, inflated by cheap credit feeding a delusional mechanism of perpetual motion, are the only meaningful measure of wealth-production left. Nothing but keeping the bubbles from popping matters to the minions of the “beautiful machine”. While the financialised economy balloons away from its social bond, human existence turns into collateral for the speculative algorithm.
3. Controlled demolition. Wage dumping and downward competition for fewer and fewer jobs is the necessary other side of the bubble paradigm. For the speculative markets to persist, the “work society” must be gradually downsized, since today’s artificially inflated financial assets and real demand are mutually exclusive. Simply put: Main Street is a liability for Wall Street, which is why consumer capitalism is now morphing into the management of collective immiseration.
4. Emergencies. Our existential condition during the terminal phase of bubble-to-bubble capitalism is an intrinsically terroristic meta-emergency ideology, a permacrisis that must accompany us from cradle to grave. In this respect, the pseudo-pandemic of 2020 was only the icebreaker. Let us not delude ourselves: a world that is set on defending so fanatically its own implosion has many more shockers in store for us.
5. Manipulation. Media propaganda in the age of digital hyper-connectivity comes naturally, so it is only natural that senile capitalism, sensing its collapse, makes the most of it. A stubborn confluence of blind stupidity and cynical calculation is at work here. As George Orwell predicted well before the internet, it comes down to telling lies while believing them: ‘The process [of mass-media deception] has to be conscious, or it would not be carried out with sufficient precision, but it also has to be unconscious, or it would bring with it a feeling of falsity and hence of guilt.’[i] Jean Baudrillard called the result of this process ‘hyper-reality’.

Capital’s perpetual-motion machine

Having run out of monetary tricks, the financial elites have painted themselves into a corner. The debt-based speculative system they have pumped for decades through money printing and artificial suppression of interest rates can no longer be sustained without significant “collateral damage”. Bourgeois economic theory’s illusion that money can move autonomously, as if through a perpetual motion machine, is finally being exposed. The current inflationary spike is the first obvious symptom of a cancerous disease rapidly spreading through the social body, forcing a large share of the population – including the increasingly insolvent middle classes – to choose between putting food on the table and paying the bills. By now it should be sufficiently clear that any money-creation programme – which are desperately needed to prop up the financial sector – will cause further erosion of purchasing power, therefore requiring new creative methods to control the impoverished masses. The alternative to this scenario is for Central Banks to keep on raising rates until the market bubbles pop – which would get us straight to the hard-landing scenario.

The illusion of financial perpetual motion works as follows: the expansion of credit pulls money into risk assets whose valuation grows as demand increases; soaring financial assets then serve as collateral for more borrowing, setting in motion a feedback loop where credit feeds asset valuation feeding collateral feeding credit. Under the illusion of eternal liquidity expansion, leveraging capital to buy assets to use as collateral for more credit is all that matters. And as long as the self-fulfilling loop holds, debt-service obligations can be rolled over. But if interest rates rise and collateral drops in value, suddenly the borrower begins to sweat and starts selling assets, which soon turns into herd behaviour. With the deterioration of collateral, assets are at risk of dropping below the outstanding debt, which causes liquidity to dry up and, eventually, bubbles to pop. This is the stage we are approaching, where the fake wealth-creation loop reverts into a death spiral: asset valuations fall, collateral shrinks, credit collapses. The paradox of our time is that the speculative money inflating the bubbles has no real value substance; but if the bubbles burst, all hell breaks loose.

It is worth reminding ourselves that in the globalised West we have already pawned everything we own. That is to say, we (states, businesses, families) own nothing but our debt, which is falling underwater. And, as the global casino threatens to go bankrupt, our puppet masters understand all too well that they must act swiftly if they are to retain power and privileges. Crucially, they know that their only chance to continue to flood the markets with the necessary amounts of artificial liquidity requires controlling (through authoritarian measures legitimised by emergencies) the freefall of the real economy as it shrinks into stagflation. Inaugurated in style by the pseudo-pandemic, today this process continues to take place under the coordinated watch of Central Banks, whose rate hikes only tickle inflation but further depress real demand.

In this respect, the recent rise in the cost of energy must also be viewed contextually as part of the wider attempt to decompress a highly flammable system – the equivalent of carefully defusing a bomb. The sanctions to Russia have been a farce and, for Europe, a masochistic exercise from the start, for the simple reason that Russia sells its oil and gas to China at a discount, and China then exports them to Europe at a premium. Similarly, the aim of the corporate-led “fight against climate change” is to impose lower living standards upon those working and middle classes who, until only a couple of years ago, were still lured into embracing the utopia of endless growth and mindless consumption. Ukraine can be seen as today’s tragic symbol of such controlled economic downsizing: thanks to a cynically prolonged proxy war, the country is facing the obliteration of its industrial infrastructure. Significantly, on December 28, 2022 Larry Fink (BlackRock’s CEO) and the deified Volodymir Zelensky agreed to coordinate investment to rebuild Ukraine, confirming the familiar pattern whereby the devastation of an entire society is an opportunity for financial expansion. Here is a reason why the West is sending hundreds of billions of dollars to the Ukraine, rather than peace negotiators.

A controlled demolition of demand in the real economy is now essential if the financial aristocracy is to prevent and postpone the deflagration of the speculative bubbles. This means that capital can only self-reproduce by widening the gap between a handful of super-rich owners (the “key financial players”) and the impoverished plebs, who are expected to 1. Own nothing and also be happy; 2. Sacrifice their personal freedoms (including the freedom of speech, increasingly stifled by a grotesquely hyper-regulated cultural discourse); 3. Surrender their right to exist to the State, whose biopolitical role is to administer such right on behalf of transnational capital. Unfortunately, this dark phase of “crisis capitalism” has been vastly underestimated – to use a euphemism – by our “radical” left-wing intelligentsia (from Noam Chomsky to Slavoj Žižek) who, like Pavlov’s dogs, have greeted the “return of the State” as a sign of emancipation. Their reluctance to grasp the elementary nexus between a global economy hooked on growing mountains of credit without substance, and State authoritarianism, suggests they are now embracing a very sinister form of conservatism.

The depressing short-sightedness of the left was particularly painful to observe as the recent global health emergency unfolded. COVID-19 was not the Bubonic plague of the new millennium, but a financial coup enabled by the largest and most spectacular brainwashing operation ever experienced by humanity. It served to hide the fact that the system was infected by terminal sickness, not the global population. Ironically, or predictably, what the left seems unable to accept is that capitalism itself, with all its familiar categories, is fading into obsolescence, and can only fake a life it does not have by mobilising fear to beat the immiserated masses into obedience. COVID-19 was most of all a pandemic of fear, whose damaging consequences on the human mind and body remain unknown. With “vaccines” mandated as a magic bullet (95% efficacy we were told!) against a disease with a 99.8% survival rate, how could anyone fail to smell a rat? By the same token, none of our anti-capitalist gurus felt perturbed when Pfizer admitted they did not have a clue whether their serums actually stopped transmission – when stopping transmission was sold to the public as the indisputable scientific truth behind the discriminatory mandates. Similarly, no outrage when the “Twitter Files” where released (on December 26, 2022), revealing the pressure exerted by US government agencies to manipulate the scientific debate on COVID-19 and silence critical journalism. How far right has the radical left moved if it fails to recognise the criminal sleight of hand of emergency capitalism? By supporting global discrimination and destruction under false ethical pretences, most of today’s left does the job of the right more efficiently than the right itself.

While the awareness of mass deception is now slowly emerging, most people prefer the head-in-the-sand solution: better not to know than question their levels of gullibility. And yet, there is little point recriminating. What instead remains crucial is to remind ourselves that Virus was the invisible shield utilized to avoid a banking & financial crisis that would have put 2008 to shame, while simultaneously ushering in a pan-emergency strategy for the coordinated management of mass impoverishment – not only in the peripheries of the capitalist world, but also in its centre. It is especially revealing that we are now being persuaded to accept the economic freefall as fate: a somewhat mythical stagflation originating in external and largely uncontrollable triggers (the pandemic, war in Ukraine, climate change) rather than in the rotting away of our economic model. In retrospect, one could even appreciate the evil genius of a system that conceals its massive social, economic, and cultural implosion behind a tiny, invisible scapegoat.


Wobbling bubbles

Many critical issues have threatened the global financial casino during 2022. In total, equities and bonds lost more than $30 trillion. The Nasdaq index closed the year at – 33%, its worst performance since 2008. The global volume of negative-yielding debt shrunk from $18.4 trillion in December 2020 to $686 billion in December 2022 (which, despite misleading media reaction, is bad news for the global debt bubble, as it means that bonds are tanking). Naturally, rate hikes are being held responsible for the loss of market value. The latter, however, took place against the backdrop of record-breaking corporate buybacks (which artificially increase share prices while also boosting corporate profits). Ergo, while taking a hit, today’s markets continue to behave like casinos on the Vegas strip, with Central Banks happily playing the House (who always wins). With the Quantitative Tightening regime currently in place, the system is stalling. Yet, the central bankers’ cavalry will return with more sustained monetary injections as soon as deemed necessary – most likely, under the protective shield of the next emergency.

Moreover, if the global liquidity index is now deteriorating fast (after more than a decade of artificial growth) the last day of 2022 registered an all-time high in reverse repo deposits at the New York Fed: $2.5 trillion by 113 counterparties. This means that, as we ordinary people try to figure out how to pay mortgages and bills, investors park inordinate amounts of cash at the Fed as the reverse repo facility guarantees higher returns than market investment (the current repo rate stands at 4.3%). While it would only take a small increase in counterparty risk for this repo business to backfire, it still means that large volumes of insubstantial liquidity, carrying a massive inflationary potential, are trapped in the financial markets, thereby not appearing directly as real demand – precisely the strategy that, since the 1990s, was employed to keep inflation suppressed. However, this stopgap has now passed its use-by date, for the heap of fictitious capital has swollen to a magnitude that can no longer be contained. In fact, it has long started cannibalising the real economy.

For quite some time, global capital has been dancing to a “bubble-to-bubble” tune. Since the start of the millennium our world is captive to the cloning of financial bubbles, from tech to housing to sovereign bonds, each of which depends on frantic liquidity creation and bond rate suppression, courtesy of Central Banks. More importantly, the above is what keeps real capitalist production (i.e., our societies) going. The original logic is therefore inverted: speculative bubbles are now systemic drivers, while in the past they were isolated phenomena both in time and space. Their current ontological character makes them incomparable with, for instance, the Dutch tulip bubble of the 1630s, or the South Sea Ponzi-scheme of 1720 (built on profits from the slave trade), for when those bubbles burst, they gave way to new cycles of real accumulation – i.e., new mass exploitation of labour-force – while today a popping bubble can only morph into another bubble. The main implication is that an enormous share of real production is already part of the speculative process. At the same time, the financial conveyor belt has reached near-total disconnection from the work society. We have been kidnapped by an invisible self-perpetuating mechanism, whose abstraction is so great that its comprehension eludes us.

Let us recap the key point. Bubble inflation requires “hot air” in the form of borrowed liquidity. The lung capacity of the system is its bond market, the place where debt securities are traded. If capital needs to be raised for asset investment, or to finance State expenditure (including wars), bonds are issued, which obliges the issuer to repay their cost at a negotiable maturity date and interest rate. Corporations issue bonds, and so do governments. Our system is now existentially dependent on skyrocketing piles of bonds, through which investors secure the credit they need to speculate in financial markets. Borrowing aggressively in order to invest is the risky strategy known as leverage that makes up the DNA of contemporary ultra-financialised capitalism. In 2019, the bubble economy was, again, on the verge of a nervous breakdown due to toxic derivatives behaving hysterically and interest rates rising steeply in the repo market. COVID-19 was the answer to this cataclysmic risk: a cynical response to a looming financial Armageddon. A recent data dump by the New York Federal Reserve revealed that a total of $48 trillion in term-adjusted cheap loans were given to distressed mega-banks during 2019-2020 – well beyond what the looniest of tinfoil hatters could have possibly imagined. This would not have been achieved without lockdowns and other restrictions helping to ‘insulate the real economy from deterioration in financial conditions’ – to borrow from the BIS paper published in June 2019.

We are now approaching what for bubble-capitalism is an existential moment of truth. The fuse to the next bomb deflagration is the debt market, and it has already been lit. Bonds are no longer “fairly priced” in line with a by-now mythological law of supply and demand. According to this law, when a bond is in high demand, its price rises, while its yield (and therefore its repayment rate) falls; conversely, when bond demand drops, its price also falls, and its yield (and repayment rate) rises. Higher bond rates should provide a release of “hot air” in any asset bubble, for less affordable bonds lead to a liquidity drain. That is to say: the bond market is supposed to blow off steam when bonds carry high rates, thus preventing the economy from overheating. However, the entire financial metaverse is now systematically distorted by Central Banks, who, through the massive liquidity injections of the past decades, have created a Frankenstein monster they can no longer control. The current heavy turbulence in bond markets across the world, with yields showing signs of structural instability, suggests that Central Banks are running out of glue to cover the cracks in the credit-doped system. If in principle there is no end to credit creation, the consequences of uninterrupted artificial asset inflation are no longer manageable through economic policy alone. As COVID-19 should have taught us – including those pseudo leftist academics and intellectuals who have long retreated into the safe haven of “culture wars” – the elites are preparing for total social warfare.

The destructive potential of the debt avalanche is immense, to the point that it can no longer be hidden. Or rather: it is so threatening that it has to be hidden. Last December, the BIS issued a warning relative to a staggering $80 trillion-plus off-balance sheet debt held by financial institutions and funds – an amount greater than the total stocks of dollar-denominated Treasury bills, repo and commercial paper in circulation combined. This is derivative debt that is not being captured through regular statistics: mostly complex speculative instruments like foreign exchange swaps and forwards. The BIS claims that this invisible debt has grown from $55 trillion to $80 trillion in a decade, with daily foreign exchange (FX) swap deals totalling a whopping $5 trillion a day. US financial institutions and pension funds have twice as much FX swap dollar obligations as the amount of dollar debt listed on their balance sheets. Foreign banks have $39 trillion in derivative debts that also are not showing, which amounts to ‘more than 10 times their capital’. This debt burden is a ticking time bomb at the heart of the global economy.

While in the wake of the 2008 global financial crisis the Fed claimed it started running stringent stress tests for the Global Systemically Important Banks, the BIS disclosure of undeclared derivative debt brings us back to Alan Greenspan and his Fed Chairmanship from 1987 to 2006, when Wall Street was allowed to build the pile of toxic derivatives which blew up in 2008. That nothing has changed is an open secret, for credit bingeing has been the system’s modus operandi of the last four decades. In an interlocked environment, however, contagion is always lurking. At a time when dollar-denominated debt is more expensive due to rising interest rates, the default of a globally interconnected bank, or a fire sale of financial assets, are concrete possibilities, and so is the ensuing meltdown. For this reason, the system must find reasons to keep itself liquid at all costs, while also managing the consequences, including currency devaluation and recession.

In fact, the only option left for a debt-soaked bubble regime would seem to be currency debasement. As some financial analysts have been forecasting for a while, the prospect we are facing is that the greatest bond heap in history will be washed away by a tsunami of mouse-clicked liquidity. Despite the central bankers’ current hawkish posture, they might soon be forced to destroy their fiat currencies in an attempt to protect the bond markets. Then, a debt bubble morphing into a monetary bubble could pave the way to the widely announced CBDC-based system. In fact, more inflationary money printing is already with us, as evidenced not only by the slowing pace of rate hikes but also by the Fed’s injections of repo liquidity, which already dwarfs Powell’s timid Quantitative Tightening (-2.4% in 2022, compared to +76.7% in 2020 and +18.9% in 2021). The bottom line is that our social bond remains hostage to the astronomical expansion of speculative liquidity. In this respect, the crucial problem faced by transnational entities like the BIS, the WEF, the IMF and the World Bank, is how to save the wobbling bubbles while selling us the story that the contraction of the real economy (which in truth is a slow-motion collapse) is the consequence of an unfortunate series of events.


A sense of perspective

The real paradigm shift within capitalism occurred a few decades ago, when a new type of financial capital emerged, one that is qualitatively different from its precursor.[ii] Since the 1980s, financial abstraction (i.e., speculations on asset prices) is no longer an appendage to a thriving and expanding “real economic abstraction” – the sociohistorical discourse based on the correspondence between a given amount a labour time and a given amount of monetary compensation (wages). Rather, the financial “industry” is now both the driver and the escape route of the social narrative that around five centuries ago founded capitalism – when labour-power first appeared as a commodity exchanged on the market. As discussed above, there is now a growing cleavage between the massively stretched credit chain and the total mass of value originating from labour, which means that keeping up appearances is increasingly problematic. Since 2001 we have seen a huge transfer of liquidity into the bond and real estate markets, generating unprecedented bubbles not only in the US and UK but also in China and Europe. This created a qualitatively new mix between speculative growth and the economy based on the real production and consumption of goods.

For a period of incubation, the escape into the future of insubstantial credit did not generate inflation. Today, however, it is absurd to continue to believe that the mass of fictitious and speculative capital remains trapped in the financial sector. Rather, it has colonized the real world, eroding both our purchasing power and the model of capitalism we still believe we live in. The internal limit to real accumulation acts as an external propeller, pushing capitals toward the virtual space of transnational circulation of financial assets, which is powered by growing stacks of self-cannibalising debt. This is not a pathological corruption of the original capitalist model, but the logical consequence of its structural crisis: the overall fall in the mass of surplus-value is larger than the increase in the relative surplus-value of individual capitals competing with each other through reductions in the cost of labour-power.

This means that the capitalist discourse is now broken, having irreversibly damaged the pillars of its socio-historical narrative. Starting with the Third Industrial Revolution in the 1970s, the productive use of cost-cutting technology has made productive wage labour increasingly redundant, thus inhibiting the creation of new surplus-value and triggering an implosive spiral. Since then, the financial supplement to the work society has turned into its basis and raison d’être. Financialising the economy was the historical answer to the demise of Fordism. Today, our lives remain hostage to the grand illusion that, while making its original formula obsolete, financial capital is capable of turning into a perpetual motion machine. Yet, because global unproductive labour has crossed a critical threshold, currency devaluation is inevitable – an economic shock that is bound to turn into a violent shock for social consciousness in general.

A bubble-system of the current magnitude cannot coexist with real growth, i.e. flourishing mass consumption and mass production. If today’s volume of fictitious capital were to circulate freely in our societies, it would spark hyperinflation – which so far has been exported to the neglected peripheries of the globalised world.[iii] The endgame scenario we are in is the result of the extraordinary growth of credit-dependence during the 20th century, which means that money could not preserve its previous form, i.e. its convertibility into a hard asset. Already WWI showed it was no longer possible to finance a war with gold-backed currency. The increase of debt that came with WWII and the following Fordist boom eventually lead to the decision, in 1971, to abandon the gold standard. At this stage, money lost its substance, something which bourgeois economic theory (or neo-classical economics) could never quite comprehend in its radical implications. In this respect, even Keynesianism was merely an attempt to save capitalism from itself, specifically through deficit spending: more State debt supposed to reignite the labour economy. At the same time, Marxist labour movements never fully assimilated Marx’s critique of value. Instead, they focussed on struggles for redistribution, but always within the ontological horizon of capital. After 1971, money as a “store of value” became a mere convention without objective foundations in the social bond. The logical and inevitable consequence of this loss of value-substance – which under neoliberalism led to the ideology of “jobless growth” – is structural devaluation: either inflation, or a violent deflationary wave triggered by a market crash.

This trend is irreversible. No sector of the economy can reignite real growth and bring us back to something even vaguely similar to the Fordist period, itself already powered by extraordinary injections of State credit. When the Fordist accumulation cycle hit the buffers, no new mass reabsorption of labour could be mobilised, which is why fictitious capital today has achieved ontological status: it compensates for the permanent loss of surplus-value creation. The dream of constant growth sustained by mass consumption is turning into a nightmare, with most of today’s consumers already tapped out. The dystopian capitalist phase we have entered is characterised by productivity without productive labour, which means that the work society as a whole is dying. Many businesses, of course, will continue to compete by making use of increasingly sophisticated technologies, while exploiting the immiserated workforce; but the social bond organised around wage labour can only continue to disintegrate.

Gaining a sense of critical perspective on the implosion of senile capitalism requires, as a fundamental precondition, resisting the onslaught of deception and distraction relentlessly churned out by the info-sphere. Mainstream media will never inform us about the causes of a structurally insolvent economy, for the simple reason that they are a branch of that bankrupt system. On the contrary, they will try to persuade us to look elsewhere: pandemics, wars, cultural prejudices, political scandals, natural catastrophes, and so on. While the reactive media can no longer hide the downfall, they have learnt to blame it on exogenous events. In truth, our economic predicament is the second instalment of the 2008 crisis, part of a systemic collapse so acute that its cause is now systematically displaced on ideologically manipulated, or fittingly manufactured, global emergencies.

Arguably, understanding our condition requires the effort of thinking against ourselves, since, as a rule, a subject who ‘organically belongs to a civilization cannot identify the nature of the disease which undermines it.’[iv] Conformity and wilful ignorance are infinitely more contagious than the strength needed to overcome the biases of our time. Most of us are determined to remain asleep, preferring to believe that what we are experiencing is only a temporary glitch. Yet, we must gather the courage to see through the smokescreen that hides the decaying substance of our world. Defensive reasoning crushes the vitality of thought. It colonizes not only consciousness, but especially our unconscious attachments to the obsolete categories of a collapsing civilisation.

Every civilisation immunises itself by drawing a line between its own constituent order and a malevolent other. Evil-doing must be projected outside the dominant social body if the latter is to retain the illusion of its consistency. Yet, a global civilisation on the verge of defaulting on its own value (the self-valorising value called capital) can no longer rely solely on fighting localised enemies – it must unleash global and ubiquitous villains. This is why, having replaced the pandemic, the Ukrainian war was from the start portrayed as a kind of synecdoche for global conflict: we must constantly be reminded that a “Dr Strangelove moment” is always behind the corner. The fear of Virus has been replaced by the Doomsday Clock. This way, the war really turns into the ideal continuation of Covid: an ideological screen dissimulating the painful everyday reality around us, from recession to structural inflation and mass corporation layoffs. Furthermore, the war allows both monetary expansion by financing the military-industrial complex, as well as systemic self-immunization via re-drawing the line between us (morally and culturally superior) and them (the barbarians). In this respect, the geopolitical tension between the US-led globalized Western model and the multipolar world in the making (BRICS+) is, strictly speaking, an effect of the ongoing economic collapse. The “new Cold War” in the making has already been factored-in, as none other than Morgan Stanley claim that rewiring for a multipolar order is now a priority.

Regardless of where you are on the geopolitical chessboard, the common problem faced by every capitalist state and its overseeing transnational aristocracy is, and will continue to be, how to control the waves of mass discontent stemming from increased immiseration. We only need to browse the recent G20 Bali declaration, or the latest WEF programme at Davos, to see that the elites’ main concern is to make sure the growing levels of global poverty are met with “global solutions” ranging from digital IDs linked to vaccination programmes, to the releasing of Central Bank Digital Currencies. Global cooperation is the ideological catchphrase of the jet-setting ultra-rich who seek to regiment the increasingly stagnant world population. In this regard, the neo-feudal spirit of our time is best captured by the “lockdown model”: on the one hand, we tend to forget that millions of socially excluded humans were already living under “lockdown conditions” before the pandemic, confined to suburban slums and rural peripheries of the world, without access to work and basic goods; on the other hand, iterations of the lockdown model will be extended to most of us in the near future, allegedly to protect us from global threats.

It is crucial, then, to realise that we are facing total socioeconomic breakdown. Those who drive the financial gravy train will continue to promote conflicts and divisions of all kind to hide systemic collapse. Every conflict, geopolitical or otherwise, begins and ends within “crisis capitalism”. The demise of Socialism in the 1980s lifted the veil of Maya. Since then, as a Buddhist would say, “duality is a delusion”: there is only One socioeconomic dogma, and it is no longer working. Keeping consumer capitalism alive while also expanding debt toward infinity is now impossible. The pile of IOUs is reaching beyond what we own as collateral (essentially, our assets, labour power, and lives) while fiat currencies have long started their journey to the land of rubbish. The entire banking system is closing in on folding, which is why it so desperately needs new inflationary liquidity to keep afloat. The Great Reset is our owners’ authoritarian attempt to respond to this systemic threat by taking control of the collateral (our lives) and remain in the driving seat. All the rest is perception management.

Radagast: A fata morgana in the desert of the real

Radagast: A fata morgana in the desert of the real

The nice thing about 9/11 is that it taught a lot of people never to trust anything their government is involved in ever again. The reward for that lifelong distrust you were immunized with came in 2021. Am I saying it’s an inside job? Before psychedelics I would say yes. Now I would say: 9/11 happened in your head. There’s no objective reality, it’s all in the eye of the beholder and you’re (un)lucky enough to have ended up in synch with mine.

And you might say I should watch some 2 hour documentary that proves who did it. But here’s the thing: They caught FSB agents in Russia with explosives in an apartment complex, yet you can’t PROVE that the FSB caused the Russian apartment complex bombings. And in a world where you can’t prove the FSB committed a terrorist attack, after the FSB agents were caught planting explosives in an apartment complex, what chance do you have to prove that Cheney and the PNAC gang had those planes fly into those buildings?? It’s a fool’s errand.

The point is: Physical matter doesn’t determine what happened. Rather, these are the constraints within which we, the conscious observers, have to maneuver. And from your angle it’s obvious what happened, but that can only ever tell us something about you. It’s a Rorschach test: It’s not designed to have a single correct answer.

It’s like the wave-particle duality. Is it a wave, is it a particle? It’s both as long as we don’t force the function to collapse through sufficiently careful observation. And events like 9/11 or the Russian apartment bombings are forever in that grey zone, where it looks like a particle, but it might just be a wave.

The sufficiently paranoid conspiracy theorist will point out that the attacks were FORESHADOWED! Look at Neo’s passport in the Matrix! It expires on 9/11!

Or look at that Lone Gunman episode, where the government flies a plane into the WTC to increase defense spending!

Or look at how the Simpsons predicted 9/11!

So what happens is you find yourself expanding your conspiratorial vision of the world. Apparently these people insist on giving you hints. As part of their Satanic religion, they must foreshadow what they’re going to do. And they are dedicated enough that a Lone gunman Episode is insufficient, the SImpsons have to be made complicit too.

But what I would argue, rather than calling you crazy, is that you haven’t expanded your paranoid view of the world enough yet. You’re looking for an agent here within this world. That’s the mistake. It’s something that designs this reality you experience, that’s toying with you. It’s pulling your legs, never quite giving you concrete proof of what’s going on, forever keeping you guessing, forever keeping you deeply suspicious, but unable to prove that something is not adding up. And when it decides to troll you through the Matrix out of all possible movies, it’s just laughing in your face.

You’re stuck with a society that expects you to believe a completely ridiculous story, about the mightiest nation in the world that has two of its skycrapers brought down by a guy in a cave in Afghanistan who decides a bunch of dudes have to hijack some airplanes and fly them into the buildings. Buildings that were bought by a guy a few weeks before, who then went on to sue his insurer to insist the two buildings being hit by airplanes constitute two separate terrorist attacks and thus entitle him to double the money. What actually happened on 9/11 appears more like a parody of a conspiracy, than as an actual conspiracy.

The Pentagon somehow announces the day before a couple of trillion dollars are unaccounted for. The people involved in the accounting are blown up the next day by an airplane strike into a section of the building that was recently reinforced.

The top dogs in government write a creepy document where they explain how they wish to build an American empire, for which they will need a “new pearl harbor” to pull the whole thing off. And they even go around, giving speeches where they warn about such a surprise event:

And simultaneously, at the end of the day you’re just unable to poke a sufficiently strong hole in this whole thing to deflate it, the kind of big hole that allows you to move on with your life. Your choice is: Either ignore it like all the normies do, or turn yourself into a social pariah by digging and digging and digging in an attempt to find that one silver bullet that allows you to finally put the whole thing to rest. But you won’t find it. It’s a rabbit hole, filled with quicksand at the bottom.

And the mistake you make, is that you play along in the game. You signed up to go on the fool’s journey. Like a young farmhand who has his colleagues ask him to get the strawberry ladder, they’re going to keep the game going as long as you’ll play along with it: “Where’s the strawberry ladder?” “Oh haha it was out there somewhere in the attic, see if you can get Joe to get it for you, ask him about it.”

Because the real game here, is metaphysical. You’re looking for something concrete, here in this world. Something you can grab and hold and show to someone else: “Look, this type of metal doesn’t create this kind of crystalic structures until 1200 degrees Fahrenheit, which JET FUEL CAN’T REACH!” And so you’re like the young farmhand looking for the strawberry ladder. As long as you play the game, your coworkers will help you out in search of the strawberry ladder.

The joke is that you won’t find it here in this world. I’ll never find that video again that proves Timothy McVeigh was still in the army months after he had supposedly quit, it was on Youtube, it was deleted and nobody bothered to back it up. You’ll never find that video that proves the controlled demolition beyond a doubt. And http://archive.org won’t have that news article you seek. But if you’re naive enough to play along, this world will happily keep you forever searching, searching for your very own strawberry ladder.

It’s a supernatural event. 9/11 happened in your brain and what really happened is in the sight of the beholder. There is no objective answer, because there is no objective reality. It’s all subjective. From time to time events happen, events where us mere mortals can’t agree on what took place.

What 9/11 is, is the desert of the real. When Slavoj Zizek wrote Welcome to the Desert of the Real, he was quoting Morpheus in the Matrix. And Morpheus, was referencing Jean Baudrillard’s Simulacra and Simulation. A Simulacra, according to Baudrillard, is never that which conceals the truth—it is the truth which conceals that there is none.

To Baudrillard, we live in a world of symbols, symbols which serve to obscure the fact that reality, insofar as it may even exist, is irrelevant to our lived day to day experience. So it is with 9/11. What actually happened on 9/11 is irrelevant, what matters for our lived experience is what it became as a symbol. And when you try to find out what really happened, when you try to replace their symbol with that of your own, first you will encounter a conspiracy, but as you dig deeper, you will merely encounter a void.

These events are like forks on the road. And as our boats split off into different directions on the river, we try to hold hands, we try to pull each other back towards our direction: “Look at this obscure Youtube video I found! This proves it beyond a doubt! Your fact-checkers have nothing to say about it!”

But again, it’s a fool’s errand: The boats will be pulled apart. The forks on the road exist for a reason. Maybe a consensus reality with 8 billion people is just hard to run, maybe it takes a lot of processing power.

You’re stuck in a ride in an amusement park. And what runs this amusement park is entirely indifferent to your suffering and confusion. It seems to find it hilarious that you continue to believe any of this is even real.

You could call this a metaphor if you want, about the nature of reality. But I would say: Just smoke it. Smoke the Salvia plant. The metaphor will manifest itself before your very own eyes. The clowns will appear and they will joke with you, they will mock you, you will see their whole circus, along with the device within which they put you through all of this insanity.

And when you do, when you return from the circus, you can forget for a moment about trying to prove what happened on 9/11. Two skyscrapers where 3000 people were immolated by their own government becomes among the least of your worries. You felt as if there is a joke that’s being played on you, but it’s much bigger than you held possible.