I see no reason why we should not have an economy that is both growth
and no growth. In fact, this is precisely what has been happening in
the past 30 years. Even while national GDP figures have been rising
in the advanced countries (mainly calculated on cost-of-living
indices concocted by governments), per capita use of resources
(energy particularly), incomes (in real, not inflated, money terms)
and family size (now less than replenishment) has been going down.
What's been happening -- almost imperceptibly -- in Japan, Northern
Europe and, most recently, in America is that the consumer goods
proportion of economic growth has been declining and that the
proportions due to production goods and government has been rising.
Most recently, however, the last item is also reaching its
limits. This applies whether governments (such as Germany, the UK,
the Nordic countries) are intent on austerity in order to reduce
their national debts or whether they are still spendthrift (such as
Greece, France, America) in the hope of stimulating consumer growth
with consequential taxation increases.
It's not dramatic, but that's the trend. If there are no more
uniquely new consumer goods in the pipeline that can re-set the sort
of economic growth of the last 300 years, what else would be required
in order to produce the profit margins that are absolutely necessary
for investment purposes? Obviously, it's in the production of those
items which even-state consumers will want to retain -- the family
car (or some equivalent), a basic house or apartment, a basic set of
comfortable furniture, a microwave (the trend to ready-made meals
seems unstoppable), a tele-amalgam (my word for a personal
phone+TV+PC) and portable goods (ornaments and clothes) which
precisely reflect one's social status (even though the possessor may
not always be fully aware of the real reason).
And what do we discover in that category? Smaller number of larger
and larger national and transnational production units with
ever-fiercer competition between them and ever-declining profit
margins. Even with only the tiniest marginal improvements between one
marque of a consumer product and another, massive corporations can
arise (and disappear) in a trice. But what happens when, for example,
the three or four major manufacturers of cars or mobile phones in the
world attain products that are well-nigh perfect (such as the garden
spade or the frying pan)?
They will only be able to compete (obtain profits and future
investment) by making improvements in energy efficiency. Production
units will do this by becoming steadily more automated and by
deriving their necessary component goods and services more
efficiently. And this, in turn, depends on location (the costs of
trans-oceanic delivery of goods being relatively trivial). And this,
in turn, depends on dense city locations as prescient thinkers such
as Fred Hirsch, Neil Peirce, Kenichi Ohmae and Edward Glaeser have
been pointing us to in the last 40 years. And here, of course, there
is vast scope. There are huge energy savings to be made here.
There are already strong indications that the economy of the world is
becoming increasingly concentrated in about 15 to 20 major
metropolises. Each of them tends to specialize in one industrial or
service sector or another and each of them subsidize the costs of the
nation-state in which they are situated. A country without one or two
such super-cities will not be able to grow its GDP. It's already the
case in the last 30 or 40 years that the standard of living in almost
all countries not in the advanced country fold (and excluding no more
than a dozen such as China which might make the grade) has
declined. Maybe we'll have 30 or 40 major cities in due course, but
bearing in mind what our present stock are already doing between them
the world doesn't seem to require many more.
Keith Hudson, Saltford, England http://allisstatus.wordpress.com
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