What? Utility doesn't make you happy? How Scot is that?
:>))REH From: [email protected] [mailto:[email protected]] On Behalf Of Keith Hudson Sent: Sunday, July 17, 2011 3:32 AM To: RE-DESIGNING WORK, INCOME DISTRIBUTION, , EDUCATION Subject: [Futurework] We're all Urukians now The great fallacy of most economists today is that they believe that economic growth as presently figured is the natural state of affairs. It is assumed that, somehow, somewhere, there is a great swathe of consumer goods lying ahead of us that will cause masses of people to save hard for them. For the savings to be invested in the production equipment to make the goods. For the goods to be finally available in the shops (or, these days, via the Internet). But that pretty well ceased at around 1980. By then, most people in the advanced countries had bought all the 'big ticket' consumer goods that had come into existence -- television, cars, central heating, for example. Hitherto only affordable by the rich, even the poor could afford these goods by 1980/90. There are still many big ticket consumer goods that the rich can afford which the masses may only fondly wish to have. For example, second homes in beautiful locations, personal planes or helicopters, sea-going luxury yachts. But, as the economist Fred Hirsch pointed out 40 years ago, the necessary space is limited. The goods themselves may, in theory, be mass-producible, but the space they need -- beautiful locations, (commutable) airspace and (berthable) sea coast space -- is already taken up by the super rich. By 1980, the real steam had gone out of the economic machine that had spluttered into life at around 1680 (for the rich), had got going by 1780 (for the middle-classes) and was going full-pelt (for the masses) by about 1880. By 1980, what is now known as the 'financial sector' was unconsciously aware of this and, starting with personal credit cards, had to invent all sorts of wonderful and weird financial scehemes by which hard saving was not necessary any longer. Live now, pay later. By now, the total of private and governmental debt is so huge that, to be realistic, it will never be paid off in the usual way, whatever the politicians may pretend. Instead, by one means or another (inflation or deflation), all conventional assets will have to be down-priced in the coming years and most debts written-off. So what is the solution for the West today (and perhaps China, India and Brazil in 30/40 years' time)? Since about 1980 the masses, too, have been having their say in the economic scheme of things. Because the cost of raising children has been going up like a rocket, they have been reducing the size of their families steeply in order to afford both the big ticket items that they're accustomed to and also the plethora of low-priced gadgets which entertain them today. Of course, it's possible that they may change their minds in future years and have more than the two children per female that is necessary to replenish their country's population. But it's hardly likely that the present parental trade-off between goods and children will change much. The rich, and their retinue of professionals and scientifics which is necessary to understand and administer the increasingly complex economic machine will survive, of course. Steadily and gradually, mass production and mass sales will no longer be necessary in the coming decades. More automation and more flexible (and customizable) production methods will require less and less muscular and mental attention by the masses. And then, as populations of advanced countries decline, the huge volume of circular personal services that go on within them will diminish. We are not moving into a new post-industrial, 'services' economy as many economists proclaim. As regards the mix between food, consumer goods and personal services we have much the same sort of economy today as occurred within the high clay walls of Uruk in Mesopotamia 5,500 years ago. The only objection to this modern scenario -- and it is a big one -- is that substantial immigration into the advanced countries will be allowed to continue by governments and thus maintain high populations, or even grow them for the sake of maintaining their taxable base. At the present time and for the foreseeable future, fierce resistance to immigration is swelling and it is difficult to say whether the masses or governments (mainly impelled by their civil servant departments) will win. But even if governments win in the coming years (which is doubtful given the likely powerful social repercussions) then second and third generations of immigrants inevitably adopt the culture of the indigenous populations. They, too, will have less-than-replacement sized families in order to stock up with the standard range of consumer goods. It only means that the whole procedure of population reduction in the West will take place over a longer period. Of course, I've ignored the fact that world population is already decelerating and that it's likely to start declining anyway by 2050 at the latest. The scenario described above is only a more sophisticated addendum to the main trend. However, it still means that today's and tomorrow's economists had better come up with a more realistic notion of what is actually happening in the advanced countries already. Economic growth in terms of GDP figures no longer makes any sense at all. By all means -- given our amazing innovative abilities -- there is no reason why man should not make 'progress' but this doesn't necessarily mean the increasing production of consumer goods. Keith Keith Hudson, Saltford, England http://allisstatus.wordpress.com/2011/07/
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