The insane growth addiction of capitalism

[slaar]

Yes, our cheap cash has enabled us to buy more of their stuff - China has more money to invest which gave us more cheap cash - this further helped to inflate the bubble that has just burst

can you link to that graph please!

I'm afraid it's on a work presentation of mine. Will try and dig it up in the office next week.

I'm with butchers - half the world lives on $2 a day. They need health, education and basic incomes. They won't get that from subsistence farming.

 

[newbie]

How could it work without growth, and its counterpart, decline to eventual death?

As each new thing is invented and perfected, beit sanitation or window glass or the motor car or the internet or credit cards, it starts off available only to the richest but then spreads to those who want the benefits. Things we don't want don't grow worldwide. The whole world economy is based on delivering ever more goods and services to an ever greater number of people who demonstrate how much they want them by how hard they (we) strive to get them. As each individual prioritises their spending they do what's necessary- earn, scrimp, borrow- in order to have what's on offer and show how much they want what's already available to those richer than themselves. Scaled up to a few billion people, satisfying all those individual wants amounts to growth, how could it not?

 

[slaar]

How could it work without growth, and its counterpart, decline to eventual death?

As each new thing is invented and perfected, beit sanitation or window glass or the motor car or the internet or credit cards, it starts off available only to the richest but then spreads to those who want the benefits. Things we don't want don't grow worldwide. The whole world economy is based on delivering ever more goods and services to an ever greater number of people who demonstrate how much they want them by how hard they (we) strive to get them. As each individual prioritises their spending they do what's necessary- earn, scrimp, borrow- in order to have what's on offer and show how much they want what's already available to those richer than themselves. Scaled up to a few billion people, satisfying all those individual wants amounts to growth, how could it not?

Well, we're getting more efficient at recycling our waste. And population growth rates have been falling worldwide for decades. But since population won't peak until the middle of this century at best, and the greatest environmental stress is ahead of us we've got one hell of a hump to get over before our presence on the planet becomes more sustainable.

 

[newbie]

Building sustainability into the growth of what we have available to us to the teeming millions who don't yet have it is ridiculously hard. There's no social justice if we keep it to ourselves, there's little hope for the environment as it spreads.

 

[ViolentPanda]

Because your competitor who provides the same thing will grow, get economies of scale, more funds for R&D, marketing, etc. After a while they'll put Zero Growth Industries Ltd. out of business.

That depends on what sector a market you're providing goods or services for.

 

[kyser_soze]

Indeed - for example, washing powder is an example of a market which doesn't grow - when a company reports 'growth' it's growth in market share or margin. In fact, outside of 'natural' growth (i.e. as the population expands, a market will expand as there are more people to sell to), in matured markets 'growth' usually comes at the expense of competitors, or from developing markets...which themselves will eventually reach a similar maturation point.

 

[newbie]

washing powder has changed little in 50 or more years and remains affordable to most in this country. I imagine there are parts of the world where sales are growing as people become able to afford washing machines and relieve the drudgery of handwashing, just as it did here years ago. It's a mature product which can't grow much, but that's not the case with the PC and all that hangs off it, including the internet, which has driven economic growth across the world.

 

[kyser_soze]

PCs are different tho - despite the best efforts of their ad teams, washing powders haven't drastically altered as products, whereas with PCs there is a quantifiable improvement in new iterations...in most cases in hardware, if not in MS derived software!

Same applies to mobiles - apparently there is now 115% market penetration across Europe for mobiles (i.e. there are 15% more mobiles in use than the adult population...IIRC this measure of 'adult' also includes kids aged 10 and over)...

 

[newbie]

Quite so. 50 years ago growth was driven by people aspiring to a washing machine and the powder that goes with it. Now it's driven by computers and mobiles. Unless to freeze development there will always be something new the rich have got and the poor want.

 

[durruti02]

What do you propose then - less growth? Or properly managed growth? Growth in itself itself isn't bad, it's the social relations that it's currently embedded in that are the problem. You will never change anything on a no-growth basis.

why do we need growth?
when that growth gnerally means communities and environment trashed? is it not possible to have a society that is not based on creating a surplus from expoitation of resources and labour?

 

[free spirit]

I'm afraid it's on a work presentation of mine. Will try and dig it up in the office next week.

I'm with butchers - half the world lives on $2 a day. They need health, education and basic incomes. They won't get that from subsistence farming.

they need sustainable growth though, not just pure economic growth.

gdp based growth as the indicator of a nations development puts the development of an oil field as a hugely positive thing for the country, weather or not that oil field is developed in a socially and environmentally sustainable manor... if the development of that oil field and associated pipelines pollutes the local water courses, and land to such an extent that it's no longer capable of sustaining life, or causes increased cancer rates etc. then it's not of benefit to the local people even if it means the government can afford to build a new hospotal in the capital from the associated tax receipts.

just as an example of why GDP growth is a shit indicator of whether poor people's lives are being improved.

 

[elbows]

To maintain giddy growth for much longer, they need either major technological advances, or to start mining other planets.

Its tempting to say we've reached a tipping point on multiple fronts, but as it was also possible to think that in the 1970's, we could have more decades of sillyness to come before that happens. Sure smells like the god of growth is in peril and everyone started to notice this, their eyes increasingly open as the years of this century roll by. But to change course in a meaningful way requires the slaying of some very powerful ideas and beliefs that many people, powerful and not, dont seem ready to part with just yet.

Or perhaps they will just change what things they are monitoring for growth. Growth in leisure time for example, cos theres not quite so much pointless work around.

Or such is the addiction to economic growth, that we'll endure periods of horrific decline just so we can get a little bit of growth in there before another period of decline, ever lower, eventually hitting a point where things really fall apart on some very fundamental levels.

 

[butchersapron]

why do we need growth?
when that growth gnerally means communities and environment trashed? is it not possible to have a society that is not based on creating a surplus from expoitation of resources and labour?

Look at what i've said. This argument where moralists run into w/c communities and wag fingers is worse than useless. Just saying 'growth is bad' (and by growth we mean bad things) is politically worthless. Bad things are bad, tell us something new. Tell us about other models of development, don't just come in with this jesus shit, beause if you don't hitch w/c needs and desires to your politics you can already forget about it.

edit: fucking hell, that you need telling this

 

[slaar]

they need sustainable growth though, not just pure economic growth.

gdp based growth as the indicator of a nations development puts the development of an oil field as a hugely positive thing for the country, weather or not that oil field is developed in a socially and environmentally sustainable manor... if the development of that oil field and associated pipelines pollutes the local water courses, and land to such an extent that it's no longer capable of sustaining life, or causes increased cancer rates etc. then it's not of benefit to the local people even if it means the government can afford to build a new hospotal in the capital from the associated tax receipts.

just as an example of why GDP growth is a shit indicator of whether poor people's lives are being improved.

It's shit in some contexts, I quite agree, but perfectly good in others. But anyway that's why in the poorest countries we measure progress against the UN MDGs as much as economic growth (health, water, education, environmental sustainability etc).

 

[fredfelt]

why do we need growth?
when that growth gnerally means communities and environment trashed? is it not possible to have a society that is not based on creating a surplus from expoitation of resources and labour?

Isn't that another term for profit, of which is the basis for growth?

 

[nino_savatte]

washing powder has changed little in 50 or more years and remains affordable to most in this country. I imagine there are parts of the world where sales are growing as people become able to afford washing machines and relieve the drudgery of handwashing, just as it did here years ago. It's a mature product which can't grow much, but that's not the case with the PC and all that hangs off it, including the internet, which has driven economic growth across the world.

Ah, but the washing powder companies have diversified their product: we now have tablets, liquid and capsules to go with the powder... even though all of them do the same job.

 

[fredfelt]

Ah, but the washing powder companies have diversified their product: we now have tablets, liquid and capsules to go with the powder... even though all of them do the same job.

And there is also the market for 'green' washing powder. An example of where 'growth' does not need to cause more environmental destruction - although I do accept that most growth ends up using more resources.

Even growth based on efficiency savings generally means cheaper products, leading to higher demand, resulting in even more demands on limited resources / environmental destruction.

Moving on - while interest is charged on loans, economic growth is essential.

 

[slaar]

Moving on - while interest is charged on loans, economic growth is essential.

Assuming the debt isn't periodically wiped out (the original meaning of jubilee), this is true (well, either growth or appropriation of part of a fixed set of resources: growth is probably easier).

 

[nino_savatte]

Moving on - while interest is charged on loans, economic growth is essential.

Just as long as we all understand that there is more than one economy.

 

[newbie]

Ah, but the washing powder companies have diversified their product: we now have tablets, liquid and capsules to go with the powder... even though all of them do the same job.

that's a local battle for share of a saturated market (as is greenwash); globally the growth potential is the spread of washing machines, and the electricity to power them, to people who previously didn't have them. For every machine sold to someone who's never had one before there's a whole raft of manufacturing industry, power generation, chemicals and distribution infrastructure necessary, all of which counts as growth in both economic output and environmental pressure.

e2a

quick google reveals

n 2007, the washing machine market in China maintained a steady growth and sales of high-end laundry appliances grew rapidly. Data from the Chinese National Bureau of Statistics show that the total output of washing machines was 25.57 million units from January to September 2007, about 19% more than 2006.

growth rates like that here are around digital technology not stuff we've had for 50 years.

 

[elbows]

Also bear in mind that overall economic activity is where the growth needs to be to keep things ticking along. It doesnt matter if greenowash 4000 does staggering growth, if everything else is declining rapidly then at best it dampens the decline a little, doesnt save this flavour of capitalism.

I presume many of the lessons from history are about where growth ran out due to saturated demand, with remedies including bombing the shit out of everything. We dont have too much contemporary data about what happens if growth dies due to lack of supply of resources, or population decline, which are the sorts of things that may keep the great shrinkage going and threaten the survival of the god of growth on which our systems currently depend. Or Im possibly wrong about this and lots of juicy examples can be provided by people. I suppose countries that have been crippled by external sanctions might have a few characteristics in common with a world crippled by resource constraints?

Question: can they increase growth by bringing activities from the black and grey economy into the official economy?The current interface between the different shades of economy interests me, I wonder how things like illegal drugs affect the numbers. There are people earning, spending, saving and investing in that stuff, and I ponder whether the scale of it is sufficient that it has an impact on the official economy, does it take more money out than its puts in, or the opposite, or neither.

 

[elbows]

Following up on my speculation about the effect of drug prohibition on the economy:

http://www.guardian.co.uk/society/2009/apr/07/drugs-policy-legalisation-report

The regulated legalisation of drugs would have major benefits for taxpayers, victims of crime, local communities and the criminal justice system, according to the first comprehensive comparison between the cost-effectiveness of legalisation and prohibition. The authors of the report, which is due to be published today, suggest that a legalised, regulated market could save the country around £14bn.

For many years the government has been under pressure to conduct an objective cost-benefit analysis of the current drugs policy, but has failed to do so despite calls from MPs. Now the drugs reform charity, Transform, has commissioned its own report, examining all aspects of prohibition from the costs of policing and investigating drugs users and dealers to processing them through the courts and their eventual incarceration.

Taxing drugs would also provide big revenue gains, says the survey. An Independent Drug Monitoring Unit estimate, quoted in the report, suggests up to £1.3bn could be generated by a £1 per gram tax on cannabis resin and £2 per gram on skunk.

The report follows calls for legalisation or a full debate on reform. Last month, the Economist concluded: "Prohibition has failed; legalisation is the least bad solution."