[Futurework] Nice while it lasted

[Keith Hudson]

On a holiday flight earlier this year I read the FT following article, wripped it out and stuffed it into my holdall. I only got around to emptying my bag today and rediscovering the article. It's interesting because it refers to the paradoxical situation in which we in the western world. (By "we" I mean fairly comfortable middle-class consumers.) Our days are so full that we have increasingly less and less time to enjoy new products or services. Yet we are trapped in a world economic machine that will still continue to grow at least for a generation longer because of consumer pressure from elsewhere (Asia, China, Central Europe, South America perhaps, etc), and thus is still going to require increasing amounts of fossil fuels which will peak within our grandchildren's lifetimes. There's something not sustainable in all this . . . .

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ECONOMIC PROGRESS WAS QUITE NICE WHILE IT LASTED

Richard Tomkins

Heavens, life must have been boring in prehistory. You can imagine the dally routine: get up, slay a mammoth, paint the cave, go to bed, repeat.

Compare that with our action-packed lives today. The mammoths have gone -- but home improvement continues to flourish. Plus there is so much to see, do and buy that we hardly have a moment to spare.

Yes, economic growth has been good for us. But at times like these, when the economic outlook is uncertain, it is sometimes tempting to wonder whether the growth could tail off for ever.Today, we mock those new paradigmists of the 1990s who said economic growth had permanently shifted into a higher gear. The soaring stock market indices were more than justified, they said. Next stop, Dow 20,000.

But are we just as misguided as they were? In the industrialised west, we assume that the "normal" rate of economic growth is 2-3 per cent a year because it is what we have experienced in our lifetimes. For most of human history, however, "normal" -- in terms of per capita growth -- has meant more or less zero.

That changed, of course, with the outbreak of the Industrial Revolution. In the era that followed, the machinery of industry set about fulfilling the material needs of people whose lives had changed little in centuries.

Theoretically, there could have come a time when everyone's needs had been satisfied, at which point economic growth would have reverted to zero. But as long as industry kept coming up with new products that people had never imagined they needed, the threat of saturation was averted.

By most people's reckoning, however, the Industrial Revolution reached full maturity in the second half of the 20th century. Since then, there have been few big inventions to compare with the marvels of the revolution's heyday, such as railways, domestic electricity and the motor car.

As with the big inventions, so with the small ones. Consumer goods companies that once made people's lives easier by inventing toilet paper, laundry detergent and tea bags find it increasingly difficult to come up with new ideas. More than 40 years have passed since the introduction of the last blockbuster product: disposable nappies, or diapers as they are known in the US.

In material terms, satiety is becoming the hallmark of the industrialised west -- but it is not always accompanied by the comfort it implies. Without genuinely innovative products to drive revenue growth, companies are engaging in an increasingly desperate struggle to keep profits moving ahead. The main options are entering a hyper-competitive battle for market share, cutting costs by continual restructurings or acquiring other companies -- all of which add to the feelings of anxiety and insecurity that have come to characterise life in our post-industrial society.

Conceivably, the growth is not over quite yet. As long as we want more than we have, and the means exist to supply it, economic growth should continue. Recently, too, the information revolution has filled some of the void left by the end of the industrial revolution, giving us the internet and other such innovations that we have persuaded ourselves we need.

But, surely, there must be a limit. It is a bit like road traffic: because it has been growing for as long as we can remember, we assume it will always be this way. In reality, there was no growth at all for most of human history. Today there is fairly rapid growth but it will end for ever when everyone has a car and is driving it 24 hours a day -- and probably long before then.

The analogy may have its shortcomings but consuming goods and services takes time, too, and many in the west feel they are doing as much of it as they can. As for the information revolution: a copy of the Financial Times already contains more information that someone in the 17th century would have been exposed to in their lifetime. How much more are we capable of absorbing?

Yes, economic growth has served us well. But nothing is for ever and a century from now, who knows? It could turn out to have been merely a blip.

Financial Times 24 January 2003
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Keith Hudson, 6 Upper Camden Place, Bath, England