By Tom Kando
If there is anything regarding the western world’s current economic problems about which there is almost total consensus, it’s that economies must grow. No politician, economist or opinion leader questions this. But I do.
First, a personal note: why should I have to make and spend more money every year? I don’t need new things all the time. I don’t need a new car, even though the average age of my 2 Hondas is 12.5 years. They both run superbly. My friends drive BMWs and Mercedes, so the only reason I would need to upgrade would be to please them.
I-phones? I-pads? Kindles? Androids? My cell phone works just fine (in Europe too, by the way, where the Verizon I-phone does not work). I have everything I need. A beautiful house, overseas travel, Friday night out to dinner and a movie with my wife. I don’t need to “grow economically.”
And what about national economies?
The consensus is that there is only one way for the (Western) world to get out of the Great Recession and out of the debt crisis, and that is to GROW out of it. However, there is a difference between the US and the rest of the Western world: In the US, it is axiomatic that the only action required is to cut government spending. Elsewhere, people agree that the solution consists of both spending cuts and increased taxes. Not only are Europe’s weak sisters (Greece, Portugal, etc.) required to do both of these things, but even an economically healthy country such as France is about to deal with its deficit problem in both of these ways, i.e. by cutting government spending and raising revenue. So has the Conservative Cameron government in Britain. There is only one country where any talk of increased taxation is anathema - the US. I don’t get it. Isn’t what’s good for the goose good for the gander?
Not to mention the fact that recessions require government stimulus spending. The Republicans’ insistence on cutting instead of stimulating the economy reminds me of the medieval medical practice of blood-letting: More likely to kill the patient than to cure him.
So in the US, the epicenter of Capitalism, it’s all about cutting public services, all about hurting the little guy. Nowhere else in the Western world is the emphasis so stark. And not surprisingly, nowhere else in the Western world is there as large a gap between the poor and the rich.
Meanwhile, the dollar continues to decline. This sure shows how strong the US economy is, and how confident the world is in our currency. Ha!
But reduced taxes (at least those of the rich and of the corporations) are supposed to create jobs and to grow the economy. No matter that the rich are more likely to spend their money at Tiffany’s, and that the corporations are more likely to out source jobs.
“Growth” is the universal mantra, however arrived at. Opinion leaders right and left bemoan that the US only grew by 1.5% over the past years. Everyone agrees that we must grow much more, including Obama, Democrats, not just Wall Street. Why?
Growth primarily means more consumption. That’s how GNP and GDP are measured - how much do the people of a given country spend and buy.
But we don’t need to grow. Growth is bad for the world and bad for our girth. We have grown enough. You can’t grow for ever. Once you have grown from childhood to adulthood, you must stop growing. Do you want to gain weight for ever? You want to weigh 400 pounds?
The modern capitalist world’s problem is over supply! We are forced to over consume. We are like the geese being stuffed to make goose liver paté. Advertising is the very essence of our culture: the masses being made to consume what they don’t need. The trinkets, the I-phones, the I-pads, the kindles, the I-pods, the androids, annual new fashions, the planned obsolescence, a country vastly overbuilt with strip malls and commercial properties. You go see a movie at a multiplex, and they show films to audiences of 6 people.
We don’t have a demand problem. There is no scarcity. Do you see lines in front of stores, like in the Soviet Union in the seventies? We consume too much, not too little. Capitalism has become a system for producers, not for consumers. It relentlessly maximizes production and enlists the consumer to buy, to consume and to go broke, ruining his pocket book, his health and the environment. leave comment here
19 comments:
The Republicans' plan to fight unemployment is to do away with government regulation of industry. Will letting factories pollute our air create new jobs?
Not only will the cancerous growth destroy capitalism, it will also affect our health, like second-hand smoke.
Bursting at the Seams
How much I agree with you Tom, is beyond description. Individuals, countries and companies don’t need to grow financially beyond a decent level of comfort and joy.
“A decent level of comfort and joy “ can be defined. Think about it: anyone who has enough surplus money to invest in the stock market is living in excess of “a decent level of comfort “.
Why?
Because any shareholder in a profit for growth company wants their company to grow so they can make more money and re-invest to make even more.
The shareholders are feeding the devil itself, the stock market growth monster.
But what about saving for my old age? I need a stash just in case I lose my job, can’t I invest that on the stock market?
Invest in a good cause or keep your money under the mattress. Banks gamble with your money too. We don’t want our money gambled with.
Your political points, Tom, show that America has some catching up to do on basic home economics. But even if all countries raise taxes for the rich and economise on vital services , nothing much will change until it is understood that growth for excessive profits kills the geese that lay the eggs.
The consumer is dying of cancer and exploding at the seams. Enough is enough already.
On the Upside...
Now that we know that the mistake of present capitalism is the stock market and the stock market only, we can begin to realise that we, the people have the power.
Oh yea? Howzat then? Governments and multinationals have the power.
Not at all, if we, the consumer stop investing in and buying shit produced by gambling scrooges, where will they go those multinational companies?
They will blow up like a pink cloud into thin air, that’s what’s going to happen - if we play our cards right.
Only two cards you need: your wallet and your credit card, use them wisely and not in excess of a decent level of comfort and joy.
Since the fall of the wall, we don't hear much about Marxism. Sadly, we have lost much due to the intentional and systematic confounding of Marx's socio-economic theory that predicted the path of Capitalism going forward and his very flawed utopian vision of worker revolution and "the end of history".
Marx said:
"The capitalist system carries within itself the seeds of its own destruction."
Possibly of interest along these lines...
In 1999, Economist John Gray, (London School of Economics, of course!), wrote a book entitled, "False Dawn: The Delusions of Global Capitalism". It will come as no surprise that at the time, his book was roundly trounced as anti-Capitalist tripe. Today, the picture he painted no longer looks quite so marginal.
On Sept 3rd, 2011, he wrote in the BBC News Magazine of the cancerous nature of Capitalism:
"As a side-effect of the financial crisis, more and more people are starting to think Karl Marx was right. The great 19th Century German philosopher, economist and revolutionary believed that capitalism was radically unstable. "
http://www.bbc.co.uk/news/magazine-14764357
I seem to have awakened Marxist impulses among some readers.
Like so many other things, this whole topic becomes readily complicated.
Marxism is a cuss word to many, a flawed ideology to others, an important contribution to economics and politics to some, very much discredited in the decades following the collapse of the Soviet Union, but perhaps poised for a resurgence in the future, who knows?
I am not a Marxist. Perhaps a Socialist, or better yet, a Social Democrat, like Presidents Roosevelt and Obama, John Maynard Keynes and many other reasonable people.
So it's good to criticise Capitalism, which is in great need of criticism, especially as it is evolving now. There are many important sources which can inform our criticism, and Marxism is one of them.
Hi Tom,
What you say about the impossibility of infinitely continued compulsory growth is perfectly true.
You say, in the US "we've got everything we need". Are you sure this is true for the masses of Americans who live close to poverty, judged by international standards? Should not these people be able to spend more money on healthy food, health care, the education of their quasi illiterate children,etc.? That would boost economy the "good way". Obviously, a fairer redistribution of the national wealth would be necessary to do this, ie.taxes. But in the States that is called "socialism" isn't it?
Csaba:
I agree with you, but I didn't say that "in the US we've got everything we need." I said that I (and my wife) have everything we need - even though, by the way, we are right smack in the exact middle of the American income distribution.
Be that as it may, I am fully cognizant of the enormous and growing pockets of poverty in this country, and the need for the millions of people who live in poverty to "grow their income."
It's at the OVERALL level that this country no longer needs to grow: OVERALL, U.S. annual per capita income is almost $50,000. That's PER CAPITA, not per household! For a household of 2 (say a couple) that's almost $100,000 per year. For a household of 4 (say, 2 parents and 2 children), that's almost $200,000 per year!
Of course, AVERAGE (= Mean) income is very skewed. Median is a better measure.
And that's the whole problem: If it weren't for the obscene maldistribution, there would be no need for an OVERALL further growth of America's GNP. I believe that you and I agree
There is a cancerous growth alright, but calling it capitalism it too vague. It is corruption of the laws that fail to properly govern the use of capital. The problem is legislation ostensibily for public good that is nothing other than back room deals that destroy the economy. It is collusion of Wall Street and Washington. Here is a recent example: http://blog.ganderson.us/2011/10/fda-gives-patent-on-public-domain-gout-drug/
I am laughing at this commentary. You are true. I have a Sanyo T.V that I purchased in 1999 it still works great. I still have my old C.D/DVD. I gont even buy electronic appliances. And, I have a toyota corrolla which will probably run great for another 10 years. Thus, I think that we could shape the evils of capitalism by curbing down its growth. All of this stuff and no where to put it.
Gail
I believe the expression is "sauce for the goose is sauce for the gander." It is what they are cooked in, not something good for them
Ken,
Your message proves 2 things:
1. You took note of my blog, which is gratifying.
2. As a (former) foreigner, I still get some idioms wrong: Here are a few other distortions I have been known to make:
“easy as cake,”
“piece of pie,”
"a gorilla in the closet,”
“skeletons in a China shop,”
“the 800-pound elephant in the room,”
“the mice are abandoning the sinking ship,”
“the 8th inning stretch,”
Yep. Buy buy buy, use use use, consume consume consume. On borrowed money. Although the U.S. certainly could benefit from legitimate public works investments (to heck with the ten-dollar word "infrastructure"), shotgunning money to be spent on consumables . . . well . . . problematic. That builds nothing of lasting value. We are suffering the results of decades of living (at individual and government level) beyond our means. And yet the solution offered is a giant serving of hair of the dog.
thanks, Gail, Gordon (and Ken again):
There seems to be some agreement about the evil of over-consumption. The label? Capitalism, government collusion, consumerism?
Tom,
One important point you miss is if the population is growing, as it is in the United States, gross domestic product needs to grow at same rate as population to just maintain existing standards of consumption and employment. A solution would be to use GDP per capita as the measuring rod in your argument. I agree it is fine if this stays constant. But if population is rising, GDP needs to rise to keep GDP/POP constant.
Rob,
thanks.
I am absolutely aware of and in agreement with what you say. Of course. Since the US population is still growing by about 1% a year, our total GDP should indeed match this.
The ultimate scenario, hopefully, is a flattening of both the economic and demographic curves, as is already happening in places like Switzerland, Denmark and some other places.
I realize that there are other complications when population stagnates or even declines. Eastern Europe and Russia are having all sorts of problems. Japan, too. Germany, whose population is also stagnant, still wants to grow economically. There are all sorts of labor shortage issues, retirement funding, etc.
But in general, less growth, both in industry and in babies, is the planet's inevitable long-term future.
Dont misunderstand: I am not lecturing an eminent scholar such as you. I am just stating the obvious.
And you are right, as long as there are additional mouths to feed, even the US economy should continue to grow modestly to accomodate this.
Tom and Rob, The demographic growth issue is definitely contentious, both in the US and Europe, because it often leads to immigration. Especially if immigrants are coming from a country with a lower standard of living. Thus, even if domestic growth decreases, overall population may continue to increase without strict immigration laws. I don't know if you consent to open immigration, but it seems your theory might demand opposing it.
Good stuff, as usual, Tom. Instead of growing consumerism, we could turn to growing our badly deteriorated infrastructure. And we could stop having so damn many babies. And, we could stop fighting useless wars for the rest of the world (at the same time keeping the costs off the books.)
Gordon and aldnwd:
Right, migration and other demographic issues are all intertwined with economic issues. Both in Europe and in the US.
I am not clear as to how our position requires opposing open immigration.
For now, both sides seem to benefit from the push-pull process: poor Third World countries get rid of some excess population (as did Europe in the 19th century) and this remedies some of the labor shortage in rich First World countries like Germany.
In the long run, the Third World must go through the same demographic transition as the Western World has already done - reach low birthrate and low deathrate. Third World people will then stop emigrating, as Europeans did once their standard of living rose.
Tom, Thanks. I agree with you,both on your opposition to conspicuous consumption capitalism as well as the GOP idea that we must cut taxes (and put teachers and other public servants out of work).
I lived in Japan in the mid 1950s, a time of shared frugality. Everyone had health care, good education, public universities were $15 yearly, no one was hungry, good cheap public transportation, full employment, etc. People seemed happier and more interested in culture then than now.
Thanks for including me in your thoughtful blog.
Tom Swift
Thanks, Tom,
I, too, remember the 50s (in Europe, in my case) as an era of greater general happiness, while most people were way, way less affluent.
And this is more than just anecdotal, or nostalgia on the part of old fuddy-duddies like you and me:
I have heard and read on several recent occasions that there was a relatively high level of happiness in the 50s. No doubt there was a sense that things were getting better, after World War Two, etc.
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