The poppy has been a part of human civilization for a long time -- the Sumerians in 3400 BC called it hul gil, or "joy plant", and tablets found at Nippur describe the collection of poppy juice and production of opium from it. The Assyrians collected poppy juice the same way that it is still collected today -- by scoring the seed pods and then collecting the dried sap. It was cultivated by the Egyptians, traded by the Phoenicians, and spread across Europe by the Romans. It was re-introduced to Western society by Paracelsus in the 1600s after he found it in Arabia, although in these early European years it was more traditionally used as a tincture called laudanum.
In the days before the advent of surgical anesthetics, it was a godsend for the injured and the ill -- the Union army in the American Civil War used 170,000 pounds of opium tincture and 500,000 opium pills during the conflict. But opium also had a dark side -- when used for depressed patients, for example, it was found that the depression was worse once the euphoric effects of the opium wore off. And as its use spread throughout Western society, physicians began to prescribe it for minor illnesses, and the number of addicts rose.
Morphine is one of 50 alkaloids present in poppy sap, and the primary active ingredient in opium and laudanum. It was isolated in 1804 in Germany by a chemist who almost killed the first 4 people (including himself) that he administered it to. Shortly thereafter it was marketed as a pain medication and, somewhat amusingly, as a "treatment" for opium addiction -- kind of like "treating" an alcoholic with whisky to cure his addiction to beer.
Heroin, synthesized in the late 1800s, was marketed by the Bayer pharmaceutical company as a non-addictive morphine substitute and cough suppressant (this is the cyclical history of pharmaceuticals -- introduce a more potent and more addictive substance to "treat" the problems created by their previous invention.) Heroin was of course almost twice as potent as morphine and even more addictive, and within a few years Bayer had to stop mass production and marketing due to dependence and abuse. Thus began a long and fruitless search for a medication capable of producing effects by stimulating the human opioid system without producing dependence -- oxycodone, invented in the early 1900s and given frequently to Hitler by his physicians, being the most recent in endless serial waves of suburban opiate addictions.
The error the drug companies have made is their presumption that their inability to find a drug that provided good stimulation of the opioid system without producing addiction was because they just hadn't yet found the right chemical. It never occurred to them that the design of the opioid system is such that you cannot stimulate it without producing tolerance and therefore addiction.
Opioid receptors are basically present throughout the entire body. Their roles include maintaining the proper balance between ions in the body, regulating cell proliferation, they are most likely intimately involved in the hibernation cycle seen in many mammals, are involved in pain sensation and emotional responses, are an integral part of the process of emotional attachment, they modulate the immune system and the feeding response, and modulate the cardiovascular and respiratory systems. Essentially, they affect everything.
The body produces its own opioids, which scientists began to isolate in the 1960s, and the current list includes the enkephalin, dynorphin, endomorphin, nociceptin, and endorphin classes of signaling molecules. Endorphin was a contraction of the term "endogenous morphine." There is a fluctuating but steady supply of chemicals that stimulate the opioid system in the human body -- the body makes what it needs in order to respond to external events.
Chemicals like morphine exert their effects through over-stimulation of the opioid system -- but the opioid system is a system designed to help maintain balance. Thus when the system is over-stimulated, it responds by attempting to regain balance. It does this through the process of down-regulation, which involves reducing the number of opioid receptors in the cell membrane as well as reducing the effectiveness of the opioid receptors -- essentially, when you blast opioid "music" at the human body, it responds by putting on earplugs. Thus any effect that you get through over-stimulation of the opioid system is temporary -- the body quickly adjusts, which is why heroin abusers are always chasing that first high.
But now what happens to this self-regulating system when the over-stimulation is removed? The body continues to make its own chemicals to stimulate the opioid system, but the opioid system is now wearing earplugs. It's like walking out of the concert with your earplugs still in -- you can't really hear what people are saying when they talk normally -- it sounds abnormally quiet and like they are whispering. The body senses this as an opioid deficit, and just like there were symptoms that accompanied the over-stimulation of the system on the front end, there are now symptoms that accompany the under-stimulation on the back end. The opioid system adjusts, but the whole body gets affected during this adjustment process, and people perceive this adjustment process as the misery of withdrawal.
When you understand how the opioid system works, you see the futility of trying to find a chemical that will over-stimulate the system without the system adjusting to it -- it is impossible, because the over-stimulation is the very thing that causes the adjustment. They are flip sides to the same coin. You cannot have one without the other.
So how does this relate to economic cycles?
Society builds itself by feeding on energy that flows through it -- if the energy flow is very low, then the society will be very simple -- few layers and not a lot of available energy to use to build more complex solutions to problems. Hunting/gathering lifestyle. But as the energy flow through it increases, for example as you add the energy of coal or oil, then society can get more complex as that increased energy floods through it.
The economy is the system that helps distribute this energy throughout society, and it does so in a self-regulating way, using a universal energy translator we call money. Money tells us something about how much energy it took to make a particular thing. This energy translation operates through a feedback system, and we call this feedback signal price. The "price" of something simultaneously takes into account how much energy it took to make that thing as well as how many people want that thing. Price also allows us to make comparisons between one thing and other things that would otherwise be difficult -- we can immediately tell how many apples are equivalent to a bag of oranges, for example, by comparing the price.
The feedback provided by price is how the system adjusts. If the price of something goes up because a lot of people want it, then the higher price encourages the system to send more energy into that product, more product is built, and the price comes down. If the price drops below the energy cost to make an item, then businesses either raise the price or eventually stop making the item, and the price comes back up to a sustainable level.
Society and the economy are thus self adjusting systems. Like the opioid system, the economy regulates and therefore impacts everything in society. It is possible to over-stimulate the economy, and this over-stimulation feels "good" to everyone because they think they are getting richer, and thus it creates euphoria. This over-stimulation can be accomplished by introducing the impression of extra energy into the system, and this impression of extra energy is accomplished by spoofing the energy translation function of money. Thus introducing money units into the system that are not actually accompanied by any extra energy will make the system react as if extra energy has been added, because the system initially cannot tell the difference between fake money and real money.
In reaction to being over-stimulated by fake money, the economy starts to make decisions as if that extra energy is actually there -- projects are started that require energy, purchases are made based on anticipated future energy flows, and wages are increased as the fake excess money works its way though the system. And it produces a temporary euphoria. But the economy quickly adjusts to this new level of money, and the euphoria fades. And after that euphoria is gone, the system now needs to adjust back to a level of activity that the actual energy flow through the system is capable of maintaining. But to the system, that now feels like regression, feels like deflation -- feels like withdrawal. That sensation for society is necessary, because it is the process of matching expectations to reality. But it is painful.
And so society usually chooses to shoot up again. Inject more fake money. Which produces more euphoria -- but never quite as much as the first time. And eventually the one time injections are no longer capable of producing much response, and so the fake money injectors switch over to a steady drip of money increase, a steady drip of economic heroin, but the system then adjusts to this steady rate of inflation as well, such that eventually what is required is an increase in the rate of increase -- which is by definition a parabolic or exponential increase.
But meanwhile, the coordinating function, the energy translation function of price has become completely perverted. It no longer tells us anything useful about energy supply or demand -- but the system needed this information in order to stay balanced and linked to reality. Thus the system becomes increasingly dis-coordinated, dysfunctional, dystopian. And eventually the system collapses because the continual prodding of the system has destroyed its stability.
When looked at this way, we can see that over-stimulation of the economy through manipulation of the money supply, which includes manipulation of the money supply through control over interest rates, is only capable of stimulating non-productive and temporary economic activity, just like over-stimulation of the opioid system with heroin is only capable of producing temporary fake analgesia and happiness.
Over-stimulation of the opioid system for temporary effect has a cost, which is imbalance across many body systems as well as the eventual need to go through some kind of withdrawal in order to reach balance again. There is no way to over-stimulate the opioid system without having these negative consequences.
Similarly, over-stimulation of the economic system for temporary effect has a cost, which is imbalance across many facets of the economy as well as the eventual need to go through some sort of economic withdrawal in order to re-align and re-equilibrate with the true energy supply available to the system. There is no way to over-stimulate the economic system without having these negative consequences.
Interesting that the concept of inflation has been around for just about the same amount of time as opium has been. We have had ample time to understand how both work, and to see that they both work the same way. But no one wants to hear that there is no magic bullet.