What Awaits Us.
CLIMATE CHANGE. This is the topic about which there is the least ignorance, and there is plenty of information elsewhere, so less space will be devoted here. Suffice it to say that it is happening now, is causing social disruption, fomenting political instability, and producing intense human misery. Right now. Much, much worse is coming. There are a number of things that can be done. A carbon tax is probably one of the most effective. What is standing in the way is the fact that our government is held hostage by greedy, short-sighted plutocrats.
THE SLOW MURDER OF DEMOCRACY. It is not a secret that our government, ostensibly serving at the will of the people, is utterly contemptuous of the desires, opinions, and needs of the mass of the people. But why? We don't ask. Instead, we heap scorn on our politicians, the politicians that we, the people, have elected. This, to put it in the most polite terms that the circumstances allow, is asinine. The system is broken, is not working as prescribed and as we still pretend it does. We need to first understand what went wrong and second to change it for the better.
The flaws in the system are many and complex. The most immediate and glaring is the fact that the political class serves the interests of the donor class and not the people. That overriding flaw is a compound of many others, such as our terrible voting system, the duopoly of our corrupt two-party system, and—we have to face it—the myopia and gullibility of King Demos. This is discussed at length elsewhere on this site.
THE FABLE OF GROWTH. Our unquestioning belief in growth is leading us to two different disasters. These are the least understood of the catastrophes that await us. This is where going to the roots is most important and most difficult. This is where false assumptions are most entrenched and potentially most threatening.
The Gospel of Growth insists that constant growth is necessary for prosperity. Without it jobs disappear, and then the middle-class disappears, resulting in a society of gross inequality in which the very few have everything, and the masses virtually nothing: a Banana Republic without bananas. Yet it can be easily shown that constant growth is unsustainable, a recipe for the destruction of our resources and the trashing of the planet.
The choice is artificial but real; it is imposed upon us by our blindness. It is an absolute article of economic faith that prosperity depends on perpetual economic growth. Anyone who dares to point out that the mathematics of geometric increase very quickly leads to an unsustainable use of resources and that we do, in fact, live on a finite planet, is denounced as an ignorant Malthusian.
There are reasons why growth is deemed necessary, but they are based on the assumptions of capitalist production and consumption. Those assumptions are considered sacred although they are leading us to disaster.
Here is how it works. In a capitalist society, the capitalist is the principal. From his point of view the worker is just a commodity. She is necessary to him to produce goods and services, but is expensive. He strives to increase his profit by increasing sales and reducing costs. For the past several decades he has reduced labor costs through outsourcing—finding cheaper workers—and “increased labor productivity” i.e., automation. Computers have accelerated the process of automation. This means more stuff and more services with less labor, and less money going to workers.
So if the level of production stays constant, the workers become increasingly poorer. But workers are also consumers, and that means they have less money to buy stuff. Demand goes down, and less needs to be produced. More workers are laid off and the economy spirals down the drain. That is the way to a society in which a few own nearly everything and the masses have little but misery: a Banana Republic without bananas.
THE RELIGION OF CONSUMERISM. To prevent this a capitalist society needs to constantly keep producing more and more stuff, way beyond reasonable need. Thus, the Gospel of Growth. We have been encouraged, nay, brainwashed, into extravagant wastefulness. It was quite deliberate.
Victor Lebow, an economist and retail analyst, wrote about modern consumerism in his 1955 paper, “Price Competition in 1955,” which was published in the Spring issue of the “Journal of Retailing.” He proposed a new religion of consumerism:
Our enormously productive economy demands that we make consumption our way of life, that we convert the buying and use of goods into rituals, that we seek our spiritual satisfactions, our ego satisfactions, in consumption. The measure of social status, of social acceptance, of prestige, is now to be found in our consumptive patterns. The very meaning and significance of our lives today expressed in consumptive terms. The greater the pressures upon the individual to conform to safe and accepted social standards, the more does he tend to express his aspirations and his individuality in terms of what he wears, drives, eats, his home, his car, his pattern of food serving, his hobbies.
These commodities and services must be offered to the consumer with a special urgency. We require not only “forced draft” consumption, but “expensive” consumption as well. We need things consumed, burned up, worn out, replaced and discarded at an ever increasing pace. We need to have people eat, drink, dress, ride, live, with ever more complicated and, therefore, constantly more expensive consumption. The home power tools and the whole “do-it-yourself” movement are excellent examples of “expensive” consumption.
So what is wrong with that? Is anyone who objects just a puritan spoilsport? Don't we love all that cool stuff, especially all that new cool stuff? Perhaps, but our addiction to materialism is as unhealthy for our civilization as an addiction to drugs is for our bodies.
RULE OF 72. We mentioned earlier “the mathematics of geometric increase.” It is most simply explained as the “rule of 72.” One usually encounters this rule in finance, as a simple way of calculating how long it would take for an investment to double in size at a given rate of fixed interest, but it applies to any case of incremental increase. Let us apply it to the notion of economic growth.
You apply the rule simply by dividing 72 by the rate of increase expressed as a percentage. Suppose the economy were to grow by 3.5% a year. It doesn’t sound like much, and in fact is about what America and much of Europe achieved in the decades right after World War II. Some economists today regard it as ideal. 72 divided by 3.5 is 20.57. In a little more than 20 years, the economy would have doubled. In a century it would have grown to almost thirty-two times its initial size! And in two centuries it would be more that one thousand times its starting size! One thousand times as much stuff in a world already drowning in junk! Even a more reasonable figure of 2% annually would mean a doubled economy in thirty-six years and an economy eight times as large in 108 years.
This is clearly not sustainable. A sustainable world is possible, and you can learn more about how in Tim Jackson's Prosperity Without Growth. Other books along the same line are Douthwaite's The Growth Illusion and Daly's Beyond Growth.
But given the absolute necessity to achieve prosperity without growth, why do economists and policy makers refuse to see it?
CAPITALIST ASSUMPTIONS. Because of unexamined assumptions about how the economy has to work. Our laws and customs all assume that workers are, and must necessarily be, utterly dependent on the need for them by the property owners, the capitalists. For their part, the capitalists see workers merely as an expense and seek, any way they can, to reduce that expense. They want to employ as few as possible and pay them (both in wages and benefits) as little as possible.
Production requires both labor and assets. If the worker owns the assets (tools, machinery, shop, raw materials) there will still be inequality because of differences in both skills and the quality of the assets. Those inequalities tend to multiply because the more successful worker (by virtue of either her skills or assets) will make more money to purchase more and better assets. So left unattended, an society that starts out relatively equal can end with wealth in few hands and workers who have nothing to work with and nothing to sell but their labor.
And by law and custom, the product of that labor belongs to the capitalist. They do not share. In some cases even the unrealized ideas of an employee are deemed the property of the capitalist. Religious terms are used to describe the special place in our society of the capitalist; we reverently speak of the “sacred right of private property.”
And we invent new rights. A doctrine called “takings” is based on the assumption that property owners have a guaranteed right to a profit. This doctrine holds that if a government passes a law, say protecting the environment or worker safety, that might reduce the property owner's profit, the government is illicitly “taking” from the owner. No one comments on the utter absurdity of this idea. In fact, the possible profits from any form of property are contingent on any number of things: perhaps a better competitor, a change in the market, or the emergence of a new technology. What this absurd and obscene theory holds is that if a government prevents someone from profiting at the expense of the common good, that government has injured the capitalist and owes compensation. It is as if the police were to foil a bank robber and then be required to compensate the thief for the forgone loot. And consider this: if government does something that increases profits, like opening lands for mining or drilling, should that be deemed a “giving,” requiring the company to return those profits to the government? What do you think?
LABOR RIGHTS? So we create the assumption that capitalists have a right to profit. Does anyone suggest a corresponding guarantee of a living wage for productive labor? No, the supply of jobs is assumed to be contingent entirely on the needs of the capitalist.
Or that was the case at least until recently.