The policy of unlimited growth is the ideology of the cancer cell. ~Edward Abbey
Returning to Bill McKibben's book, Deep Economy, we find McKibben questioning a fundamental given amongst many - if not most - if not all - economists today: Growth as Unquestionable God.
As the new millennium began, growth had become the organizing ideology for corporations and individuals, for American capitalists and Chinese communists, for Democrats and Republicans. For everyone. “Harnessing the ‘base’ motive of material self-interest to promote the common good is perhaps the most important social invention mankind has achieved,” said Charles Schultze, a former chair of the president’s Council of Economic Advisers.
George Gilder, the fervent apostle of tech-driven high-growth economics, went further: entrepreneurs, he said, “embody and fulfill the sweet and mysterious consolations of the Sermon on the Mount.” [shudder! -Dan] The so-called Washington consensus dominated far more of the world than the Union Jack ever had; it was an empire of the mind.
And it is easy to understand why. For one thing, under present arrangements any faltering of growth leads quickly to misery: to recession and all its hardships. For another, endless growth allows
us to avoid hard choices, to reconcile, in Collins’s words, the American “love of liberty with its egalitarian pretensions.”
The administration of George W. Bush assures us that we can have tax cuts and still protect Social Security because the tax cuts will stimulate economic growth so much that we’ll have more than enough cash on hand to take care of our old. No need to choose. Having found what has been truly a magic wand, the strong temptation is to keep waving it.
But, as readers of fairy tales know, magic can run out…
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Is there any reason to think that the magic might NOT run out? Or - heaven forbid! - that there's no such thing as magic or a free lunch in the first place?
4 comments:
Hey Dan,
This is probably a basic argument that you can shoot down pretty quickly, but doesn't a market take into account quantity? That is, as quantity approaches 0, price approaches infinity? What's the difference between say, a high gas tax designed to encourage conservation, vs. higher gas prices that come about due to lower quantity, and in turn, encourage conservation.
I think the tax cuts have stimulated the economy, the only thing is that Bush spends so dang much.
The economy provides only limited job opportunities for the entry into the work place, A_The military, B_The Federal, State or Municipal Government or C_Private Eneterprise. The lower the tax base the greater the justification for Capital formation in the form of small business.
More Jobs are created by small business than by large multinational public corporations.
Higher taxes require more hiring by Government to manage the increased income. In a small business, this is referred to as increased Sales or Revenue requiring more hiring.
Where should the new job opportunities be created? In government or in private enterprise?
I'd vote for private enterprise. Thanks for stopping by, lucky.
Chance, you're correct, of course, that as cheap supplies dwindle (likely over the next ten to 50 years) and demand increases, prices will increase.
The problem is that our system is predicated upon and addicted to this cheap supply of oil and energy. When prices skyrocket, there's nothing to replace it with, so we're faced with paying more and more (doubling our food budget? Tripling?) IF we continue to try to consume at the ever-increasing rates we consume.
Now, at some point, the higher prices will cut down on consumption, I believe economists will tell us.
But what of Mexico (where the energy crises are already increasing the price of corn) and other poorer nations around the world? We may be able to afford a hit to our wallet like a doubling of our food budget, but can they?
And what happens to all these starving masses? Will they say, "Well at least the US is weathering this okay, even if it's a struggle for them. Good night, starving one..."? Will they gladly say that for long?
I'm no economist. I don't know what the effects of ever-increasing costs of everything will be, of limited supplies of energy and water will be. I'm just saying it doesn't sound like a moral, logical or secure way to manage our economy or ecology.
I had the opportunity to watch this play out in the microcosm. For several years I worked for a private school. Each year for more than 25 years the enrollment of the school increased each year and because parents were competing for space in the school, they sent in their tuition earlier and earlier and so, needless to say, tuition increased every year.
The board noticed this fell into the habit of spending the advance on the tuition in the year in which it was received. That is, they only reckoned that the assets in hand needed to last them until March of the current school year with their being plenty of cash to be had in March received against the next year's tuition.
Since each year there were more and more students and tuition was higher and higher, you could safely spend more during any current school year than you took in during that year.
Now, at board meetings back then, a few of us who knew how to do arithmetic pointed out that the current level of spending at the school depended on a 15% increase in enrollment each year and at least a 10% increase in tuition. At an enrollment of 325 and a tuition of $1800 that would mean in fifteen years (this was more than fifteen years ago) the school would need nearly 3000 students each paying nearly $15K in tuition.
What was the comeback to this? "Rubbish, we'll come up with something between now and then!"
Then the next year (1987), the enrollment leveled off. That's all, just failed to increase. Without the competition for space, the tuition also froze.
The school became insolvent that year. Later it reorganized to a fraction of its former size and "glory" and moved out of a elegant century old college building into those portable trailer classrooms.
ALL growth based economies (which means all modern major economies) will eventually face the same thing.
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