Courtesy of The Automatic Earth.
Russell Lee Levee at Bird’s Point, MO during the height of the flood January 1937
Mostly, it feels like a useless waste of time to wonder why everyone, and certainly economists of all flavors, no matter what gross incompetences they may accuse each other of, so blindly and slavishly talk only of different ways towards the one and same overarching goal: growth. There is a lot of talk about Keynes and stimulus and QE, as well as the pros and cons of each, but only when it comes to discussing the best and worst ways to achieve growth, not to discuss the notion itself. As if we cannot even imagine anything else than something that plainly can’t be.
But from time to time I must return to the theme, because I think it underpins everything that goes wrong with us today and that will leave us gasping for dear life – if we’re lucky enough to be alive – in our futures. Not only does nothing grow forever, our economies haven’t actually grown for decades, and present attempts to resurrect growth are leading us into a deadly quagmire of nigh unlimited lying, data manipulation and Edward Bernays-based spin that can only lead to depths of misery which might perhaps quite easily have been avoided (not that we know, the question is never asked).
And I keep on asking myself: why do we do it? What Do We Want To Grow Into? Why do we refuse to take a breath and a step back so we can ask ourselves why it is that we’re chasing growth? Why is the growth meme and mantra idea so ubiquitous that it’s so hard to find anything anyone has suggested as an alternative? There’s steady state economics, of course, John Stuart Mill, Georgescu-Roegen, Herman Daly, but that field is, for my taste, too strongly linked to Mill’s “The end of growth leads to a stationary state”, while in my view a stationary state is as incompatible with physics, let alone the human brain, as perpetual growth is. Still, at least these guys have scrutinized the issue, which puts them light years ahead of most “experts” who seem to discard it as unworthy of their lofty brainpower .
I was thinking about it all again after finishing yesterday’s Japan Is A Step Or Two Ahead Of Us . If you look at Japan today, you see a government that is going to very desperate Abenomics lengths to “return to growth”; they’re issuing bonds to such an abandon nobody wants them anymore, so the central bank is the only buyer; they’re pumping “money” (what’s in a name) into their economy with equal abandon even if their national debt is beyond belief; they’ve managed to kill people’s savings because people have nothing else left to live on; and there are still no results on the horizon, only “hope”.
But what are Japan’s realistic prospects? The generation of Japanese that made Japan rich in the 1970s and 1980s are now older, and the next generation after them is much smaller in numbers, so the country has a fast ageing population. It also has close to no domestic sources of fossil energy, it needs to import almost all oil and gas, and its nuclear power has turned into a nightmare after Fukushima. There may be some promise in tidal, solar and wind, but the overall picture is clear: relative to total population, there are far fewer productive age Japanese, and they will have to produce with almost certainly far less, and assuredly far more expensive, fossil fuels and – as a result – total energy resources. So why does Tokyo insist on hammering in the growth idea? Where is it supposed to come from?
If our politicians and economists et al were honest with us, in Japan and elsewhere, they would acknowledge that if we look at the rise in debt numbers since about 1980 (pick a date), there’s no escaping the notion that debt has risen faster than economic growth. That means we have borrowed our way into alleged growth for decades now. And the only forward we see, when looking at that, is to borrow more, get deeper into debt, because we feel we need the growth we haven’t actually seen other than in PR driven reports, so much we’re willing to risk our own future well being to achieve it? How does that make you feel smart? What is it about it that makes you feel better?
Whether you look at Japan or the US or Europe or even China today, how can you not at least ponder the idea that it’s precisely the incessant focus on growth that is making us poorer? And that there is a logical end to the delusion that we will return to growth just because we want to if only we incur enough debt on top of what we already have? We doesn’t Japan get ready for a future in which it will have much less in the way of luxury, cars, petrol and plasma TVs, but can still have a reasonable standard of living if only it plays its cards right? Growth is the wrong card to play for the rising sun right now, the stars are not aligned well enough. And it’s not the sole choice for Japan, just the only one its leaders will consider, because that keeps them in their cushy seats as long as it takes, while a not-all-growth approach might threaten those seats. And who can blame them; like our own “leaders”, they’ve never learned, or thought about, anything else.
And so we go down, incapable of applying our frontal lobes to something as simple as the perpetual growth question, which has long since been answered in physics, to the economics that guide our daily lives. If we can’t do that, what do we deserve? If we refuse to use the very part of our brain that allows us to distinguish between myth and reality, between amoeba and rocket science, between (growth) religion and common sense, then who are we? And what can we expect the future to bring us if we choose to be led by our older, primitive, instead of our younger, more advanced brain? We can do this, but we don’t. We don’t even ask the most elementary questions. If anyone can tell me why, I’m open to suggestions.
