In the current Mode of Production, the solution to every social and economic ill is to "grow our way out of it."

The solution to unemployment: jump-start growth by expanding consumption, spending and borrowing.

The solution to stagnant wages: jump-start growth.

The solution to declining profits: jump-start growth.

The solution to government deficit spending: jump-start growth.

And so on.

So what happens when most people have not just the basics of life, but a surplus of stuff? Where is the growth going to come from if people already have everything?

The answer is three-fold:

1. Replace a perfectly good product with a new product and dump the old one in the landfill.

2. Buy duplicates and put the surplus products in the closet or storage facility.

3. Buy gimmicks (Pet Rocks, etc.) that are tossed in the dump shortly after the holiday gift-giving season ends.

But does this Landfill Economy make sense? The cheap oil is about gone, and so does it make any rational sense to burn the last of the cheap fossil fuels on assembling stuff nobody needs in China, shipping it thousands of miles to retailers or Amazon warehouses, adding it to the immense piles of stuff most households already own, and then shipping the old but still functional products to the landfill, just to keep the economy humming?

This is of course insane. Decisions aren't being made as if scarcity matters; the goals and incentives are set to encourage perverse and destructive overconsumption and overspending: not only are we squandering resources in the sacrifice to the false gods of "growth," we're indebting households to do so, stripping income that could have been saved and invested in productive uses.

In the lunatic asylum of the current economic model, media anchors sport grins of delirious joy when reporting increases in holiday spending, as if a bump higher from $680 billion to $700 billion is a gargantuan win for the flailing economy.

Wasting resources, capital and income on stuff nobody really needs is a monumental disaster on multiple fronts. Rather than establish incentives to conserve and invest wisely, our system glorifies waste and the destruction of income and capital, as if burning time, capital, resources and wealth on stuff nobody needs is strengthening the economy.

Isn't it obvious that this system is a one-way path to collapse? Isn't it obvious that burning resources and capital to haul stuff to the landfill at an ever-increasing rate is madness, folly, recklessness and stupidity combined?

Isn't it obvious that if we set out to design the most perverse, toxic and doomed system possible, we'd end up with the Keynesian Cargo Cult's insane permanent growth/Landfill Economy?

It doesn't have to be this way. I've sketched out a sustainable, human-scale Mode of Production/way of living in my two books, Money and Work Unchained and A Radically Beneficial World.

A new arrangement is inevitable. Our choice boils down to changing our understanding and Mode of Production now, before the whole perverse structure falls apart, or waiting for scarcities and self-serving systems to collapse the current arrangement, leaving the ill-prepared and shell-shocked populace to sift through the wreckage.

Common sense suggests the first option is the wiser choice, but common sense is scarce in a world trapped in a bizarre Keynesian madness.  I'm offering my new book Money and Work Unchained at a 10% discount ($8.95 for the Kindle ebook and $18 for the print edition) through December, after which the price goes up to retail ($9.95 and $20).

Read the first section for free in PDF format.  If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

I can't summarize all the ideas presented in the book in one brief blog entry, but some basic principles will serve us well when bubbles abound.

1. Risk cannot be disappeared, it can only be masked or transferred to others.When anyone claims an investment is low-risk, they're actually claiming either A) the risk has been obscured by fancy footwork or false claims, or B) the risk has been transferred to some mark, chump or bagholder--nowadays, that usually means the taxpayer, as profits are private and losses are socialized.

2. Value flows to what's scarce. As economist Michael Spence and his colleagues have noted, conventional capital--the kind issued by central banks and private banks--is not scarce and therefore has little value. Ditto for conventional labor. This is why the returns on conventional capital and labor are so low.

Spence et al. suggest that what's scarce in today's global economy are ideas that create new business models, new productivity tools and new goods/services: Labor, Capital, and Ideas in the Power Law Economy.

This suggests an investment strategy of identifying what's scarce, or what will soon be scarce, before everyone else.

3. Many things that are scarce and thus valuable cannot be bought on the global marketplace. The number one example of this is of course health, which is priceless because even having millions won't buy your health back when it's been lost.

Yes, you can get patched up with stents or costly meds or maybe score a black-market organ harvested from some unfortunate prisoner somewhere, but all this sort of thing merely keeps you alive; it doesn't actually restore health.

So any investment in health will pay extremely high dividends. It doesn't take a ton of cash to invest in one's health; most of the investment is behavioral.

Other examples of what can't be bought in the same way stocks, bonds and housing can be purchased: meaningful work, communities with a collective memory of how to get things done in the real world, a functioning community economy, etc.

Investing in work you find fulfilling and meaningful pays dividends that can't be bought on the marketplace. Once again, investing in one's skills and social/intellectual capital doesn't require much cash; thanks to YouTube University and many other free or low-cost sources, anyone can start acquiring the eight essential skills I lay out in my book Get a Job, Build a Real Career and Defy a Bewildering Economy. The basic idea is to learn how to build your own career and job.

4. Comparing the relative value of various assets helps identify what's relatively overvalued and undervalued. The key word here is relative: to say something is absolutely undervalued is trickier than concluding something is undervalued compared to other asset classes.

For example, compare housing in the U.S. and global commodities. Based on the national Case-Shiller Index, house prices have reached new bubblicious levels. Thanks, Federal Reserve!

It's not much of a stretch to reckon that, hmm, valuations are looking a bit more likely to be overvalued here rather than undervalued.