David Willets is a commentator on this blog. He posted this in response to my post on advertising:
I am not asking facetiously, as I'd also like to see an end to marketing and advertising. My question is about what happens as consumption falls. For instance, if everyone, on average, reduced their spending by 50%, each business would have 50% less income, which would mean, with the current economic model, mass unemployment. I don't imagine people would be willing to pay twice as much to keep said businesses running, and neither would said businesses be likely to keep the same number of people employed to do half the work. My question is, how do we avoid the abject poverty that would ensue for many because there were no longer jobs making, transporting or selling all the stuff we need to stop buying?
I posted this in response:
This has never happened, and it won't again.
We eliminated coal in the U.K., rail as a means of goods transport, the typing pool, and so much else. And then? Those people (not all, but most) found other work.
The world did not end. We simply found other things to do.
What will we do? Care more. Educate more. Entertain more. And yes, have more leisure.
Is that economically possible? Of course it is. Once needs are met - and if we act now they can be still - then what we do beyond need is our choice.
Consumer society has taken that away.
We can have it back.
But we have to believe that owning what is good is not necessary. Sharing it might be.
Greening the planet is not that hard. It can still be done. Persuading people that our need is to co-habit with each other rather than to fight each other to prove our status - that is the hard bit of this process.
But if we do that there is only one limit to the amount of good we can do - and that is the collective hours in the week.
In summary, it's not that we will give up living. It's not that need will not be met. But we will give up consuming as much, and at the same time we will do more for each other, and pay each other for it.
How will we pay? As now, we will use money.
Where will the money come from? It's just a promise to pay. Its value is wholly unrelated to what we promise to pay for.
Where does value come from? From the quality of what is provided.
Will there be markets in this? Of course, just as there are now for entertainment, for example. But let's also be honest, there will be more done by the government, I suspect. More, but also I am quite sure, not all.
How does the government fund this? By creating the necessary money, of course.
How does it control the money supply to prevent inflation? Through tax, as ever. Much of that will need to be progressive. But what is excess wealth for in a world where the apparent ability to consume has been shown to be the most anti-social action possible?
What's the constraint on this? Only our willingness to innovate.
And I believe we will innovate.
I am certain the world will not look as it does now.
And that's the key message to David: the assumption implicit in the question is that the way we live now is the answer to the question as to how to meet need. It isn't. It does not work. We are killing people alive now if we carry on as we are.
What we need is the faith to realise that we humans can innovate our way out of this. Not by working to keep things as they are. But to make them as they should be.
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Money is a very useful tool… but should always remain the slave, not the master.
I have spent my adult life trading and thinking about money and find it fascinating (sad but true). But on the important issues it is often helpful to exclude all thoughts of money when trying to work out what sort of society we want.
Do we want more doctors and carers? Could we live with fewer advertising execs and bankers? Of course! Who could disagree. Why not just do it?
This is where money obscures things…. “we need the bankers to pay taxes to pay for the doctors” it is said. This really is a sorry state where we reward people doing a job with negative impact and leave those doing something useful to beg for scraps.
Burglary is profitable for burglars but we make it illegal because it is damaging to society as a whole. Why not do the same for (some) advertising and banking?
“But you can’t buck the market” or “competition delivers results” I hear…… what nonsense. From the dawn of civilisation is is human cooperation that has delivered results. Once upon a time this was at family/tribal level but technology means that this must happen at national and global level. Surely the climate crisis (amongst other things) demands it.
If the system is delivering perverse results then we must change the system.
Agreed
Circular economy. Build for on site maintenance: for example: all white goods designed so that everything can be repaired. Employment shift from: build it/sell it/use it/scrap it/repeat to build it/fix it locally/repeat. Could then extend this by having specific interface standards for all white goods (& plenty of other “stuff”). Goods eventually would look more or less the same (and?) . Would this mean development (more efficiency) would stop? Not necessarily. Recycling/scrapping of goods is a response to a symptom – not a response to a cause. The above could extend to personal transport & a host of other things. Employment would shift to local. Above could apply to energy systems in rural areas, villages and small towns. Innovation (in terms of goods, systems and how things are done) would be an inherent element of all of the above.
Which is a round about way, via examples, of saying that I agree.
I agree with your examples
For 200,000 years humans have lived as if labour was the only constraint on our standard of living. Therefore we have an economic and tax system, based solely on the cost of labour (while materials are taken out of the ground for free and pollution and waste cost nothing – apart from the labour needed to extract or throw them away). We therefore learned how to maximise labour productivity in factories that give us cheap goods, and a throwaway society.
But today labour is in surplus in most parts of the World, while we already consume the resources of 2.5 planets even before developing countries raise their standard of living to ours. This is simply unsustainable. We need to shift costs away from labour (which should be subsidised with Basic Income) and onto materials, waste, and pollution instead. It will then be economically viable to recycle, minimise pollution, and maximise material productivity (using lean thinking) even at the expense of labour productivity. Ie. Far more jobs in restoration, recycling, repair, and sharing assets like cars, which reduces labour productivity, but ensures that we consume and throw away only what is absolutely necessary. This is the basis of the circular econony, and it is the only way in which 10 billion people can achieve a good standard of living without exhausting the resources of our planet.
I think you are correct.
I agree that we can, as a species, and an emergent culture that nurtures the world within which it lives, resolve the problems caused by Consumption and Wealth Extraction.
Wealth Extraction is a political utility – great wealth affords even greater power, the difference between Bill Gates philanthropy and Gina Rinehart/Charles Koch approaches on how they utilise their vast wealth is instructive. Gates avoids politics, Koch and Rinehart wade right in, gloves off.
The Consumer was ‘designed’ in order to expedite the extraction of Wealth for political hegemonic purposes. ‘Those who own the gold makes the rules.’
The video ‘The Story of Stuff’ lays this out in clear detail.
Externalised Costs are the costs incurred during the extraction of raw materials, the production of products, the consumption of those products and the lack of end of life recycling of materials.
Damage to the environment, toxic pollutants released in the environment, low paid work (poverty), extraction of Wealth from economies to be hoarded and used as a political weapon (poverty and the corruption of democratic legislatures) to maintain the extraction of Wealth are all forms of externalised costs.
Poverty induced by below poverty levels of state benefits : “The reduction in the real value of benefits for those of working age would increase incentives to work and increase the attraction of low paid work.” 1982 Long term planning discussion memorandum, September 6 – another externalised cost.
The workers and the poor pay the price, bear the cost in ill health, depression, petty crime, lower levels of educational achievement. Covid has shown this to be the case.
All of this is choice. None of it is inevitable.
Thanks for your reply, that’s why I didn’t want to be seen to be asking facetiously, since, as you say, the answer cannot come from within the current economic arrangements, but only via a different way of doing things, which recognises the role the state can play (and must play if it continues to exist) in creating the money to bring about the changes needed – particularly summarised in your last two paragraphs. I share your view that we can’t simply tinker with the system as it is, since it cannot achieve what needs to be done. I also agree with other comments here about: circularity, sharing, co-operation in place of competition, many more health professionals, educators, restores, repairers, recyclers, carers – what a world that would be! We need to break the false beliefs that money is in short supply, and that its existence depends upon the private sector somehow “making money” that can be taxed to provide the good stuff. This view is killing the earth and destroying so many lives. From what you’re saying, the difficult part, really, is getting the state into the hands of those who will direct money to those places where they will do social/ecological good (no mean feat!). The rest will be the activity of people working together with the support from the state that they need (also provided by people working together).
Thanks
You could also add a basic income scheme to ensure no one falls into abject poverty, a shorter working week 2/3 days and much more flexible working so casual/seasonal. workers won’t be put off by the enormous bureaucracy entailed at present coming on and off the current Unversal Credit system. We need to realise to survive, consumption must be reduced drastically. Bring utilities under public control so there are no massive increases in bills, ensure there are fair rents, and get rid of housing racketeering.
Hi Richard.
Be interested on your thoughts regarding the points made in this article below. Some very interesting stuff on energy that I have only just been made aware of.
https://surplusenergyeconomics.wordpress.com/
From a quick read it seems sound
The increasing energy costs of energy extraction is a really interesting point.
Traditionally it has been less than 2% but is now 10% and soon to hit 19% and getting higher all the time.
A developed economy with anything above 6% ECoE has real problems with de-growth.
Renewables at best, will have a ECoE at 10%.
In a renewable future, the economy will be much smaller than it is now and with no growth. The implications of this are huge!!!!!!!
But you assume no more services and no change in the size of government
But any services or the size of government ultimately depends on the availability of surplus energy after extraction/creation.
What is achievable is directly related the energy inputs.
The renewables we create now will need to be replaced in 40 years time using renewable energy. This is going to impact on how much “spare” energy there is going to be to run everything else.
Tell me how much carbon care uses?
I guess it depends on what kind of care?
Care in an ICU bed has higher energy inputs than, say, making a cuppa for my Gran. But all human needs have energy inputs.
The availability of that energy (whether renewable of fossil fuel) dictates to what level those needs are met.
The level of relative comfort we enjoy today is totally down to the abundance of fossil fuels.
These levels of available energy are going to be much reduce going forward. Renewables just can’t replace fossil fuels at the same level.
I am talking care
Not NHS provision
I guess it depends on what you mean by care?
To help people, who struggle to acquire the means for a comfortable existence?
Most, if not all of those means require energy inputs.
Services use energy.
The infrastructure to just keep us from sitting in the dark at night has huge energy inputs.
And no one is suggesting that they are going to be threatened by climate change
Shall we get real here?
The best “real” assessment I have read on climate change is a link at the top of the linked article below.
Energy and Human Ambition on a Finite Planet.
It’s a free pdf book and well worth the time to read. Explains how all the possible fossil fuel replacements work, their pros and cons and the real state of play which is rarely discussed regarding a transition away from fossil fuels.
https://dothemath.ucsd.edu/2011/10/the-energy-trap/
The problem with automation and productivity growth can be rephrased into a simpler problem.
A man can do the work of 5 and society consists of 5 people.
There are two solutions:
1. One person is doing all the work but also gives away 80% of it.
2. Every person is doing 1/5 of the work and working 80% less.
There are also false solutions:
Every person is producing at their full output. (forced endless economic growth)
Apply the problem recursively on a societal scale where one society is doing the work of 5 societies but also gives away 80% of it. (trade surpluses invested into worthless debt or speculative bubbles)
The first scenario is what humans are prone to because the “hard working” person gets to be in power and gets to belittle the ones whose work is not needed. When that person denies access to the productive output to others you get misery. So, that “hard working” person will tell the others to do the same and “work hard” as well, which results in one of the false solutions.
How do we do solution 2? Start on a global scale. Get rid of permanent trade imbalances between nations. Then do the same within nations.