The anti-growthers are barking up the wrong tree. Whether or not a society has a sustainable economy based on renewable energy and recyclable materials depends entirely on regulations, not economic growth. The focus needs to be on convincing people to support green regulations and a green-energy economy.I'll get to the points about a "green-energy economy" later. However "anti-growthers" I will address now. I am not "anti-growth", rather I simply don't believe in it, have faith in it, and have never seen any convincing cases that it is possible into infinity. We are seeing limits to growth all around us everyday.
Fact is we will create GDP growth transforming to a green economy whether we want to or not. Some ways to go greener: build mass transit systems; subsidize broadband internet (wired and wireless) to reduce need for high-energy-consumption travel; build green-energy power systems; change from combustible engine cars to electric cars; develop driverless cars which will change the nature of transportation; etc. All these activities create economic growth.
Whether we want to or not? Not quite. Utilizing all types of energy available and skirting regulation while central banks have kept monetary policy in emergency response mode to supposedly entice borrowing and drive liquidity hasn't exactly been working too well. It's now 6 years since 2008 and we're still "recovering".
As for the initial suggestions: The major problem I see with most of them is that you believe we can both simultaneously grow from our already engorged state which will require even more energy and resource consumption from that which we currently consume (it's been 100% proven there is a direct correlation to energy consumption and GDP growth) while also changing from what is a very dense high return energy source to a more diffuse one. The other problem is that technological changes at the top do not alter the fact that our entire technological base is founded on oil. Don't get me wrong, I'm very much in favour of sustainability, but real sustainability, you know the kind that.. sustains. Forever.
So for instance you mention electric cars: first of all electricity is not a power source, it must be generated from another power source and I don't know if you've compared the costs and power generation capacity of wind farms, or solar panels, but they certainly will not be powering everything we have now and the addition of 800,000,000+ electric vehicles all running on the grid. Second you are not accounting for the materials and energy consumption that is going to be required to replace 800,000,000+ cars on the roads today. It takes 7 gallons of oil to create a tire, 3 times the car's body weight in oil to produce a whole car. We have to mine metals, pave roads and run regular maintenance on all of it. We can barely keep up with road deterioration as is.
You're correct however in that "all of those activities create economic growth", that does not mean however that the economic growth generated by those activities will be enough to actually grow the economy in aggregate.
So like evolution in electronics (smart phones and TVs, for example,) there is a process of creative destruction going on that puts an emphasis on energy efficiency. As long as it's done responsibly (recycling materials) it is not only positive, but necessary. We need technological advancement to go green. For example, if we build arrays of wind turbines across the country and find ways to make them more efficient, we need to rebuild or upgrade them. Same with solar power arrays. Same with cars, homes and buildings.
GDP (economic) growth means wealth creation. Wealth is created by people getting a return on their savings and investments (compound interest.) As long as all segments of society benefit from wealth creation, wealthier is always better. It provides the means by which a society can go greener. It provides the means by which people can realize their potential. Since health and education spending are measured as a percentage of GDP, GDP growth means we will have more money to invest in these and other areas.No, wealth is not created by people "getting a return on their investments" with compound interest. In fact compound interest, along with fiat currency (which represents debt or "wealth from the future"), and fractional reserve banking are all large parts of the problem which put society into a situation where infinite economic growth is required to service the status quo. Mike Maloney does a great series on how the modern monetary system actually works, I suggest you look at it. But for the purposes of this response I will say wealth is a return on energy invested. The more energy you get in return for the energy you expend the wealthier you are. We use currency to represent this stored energy.
The problem with compound interest and debt based currency is that because there is always more interest owing than there is currency in existence due to the fact that all currency is loaned into existence and has compound interest attached to it is that we make the assumption embodied in our monetary system that the future will always be larger than the past. We assume that we will always be able to increase production, exponentially, to pay off in real wealth the interest + principal of the outstanding loans and when that can't happen the whole system goes into a tailspin.
What precipitated the 2008 financial collapse? Oil at $147 / barrel and gas prices on the frontpage of every newspaper. The cost of everything skyrocketed, people had to use credit to afford their gas bills, and eventually when the credit ran out the missed payments began and the whole house of cards came down. Was the issue the banks? Yes, but it could have gone on longer had oil prices not dampened consumption and created a deflationary situation. Though had the banks acted proper "economic growth" would be nowhere near what we claim it is today, the overblown housing market created wealth out of thin air -- for awhile. As it is today too with the central banks and their ultra low interest rates, expensive energy, limited credit. Our inability to really get economic growth going is a direct result of an energy crisis, not a shortage but a crisis in the sense that we have it but it is becoming very expensive to produce and very expensive to consume due to the shrinking energy return on energy ratio we are getting for production.
So while we may be "swimming in oil" as the latest buzzword says, we're drowning in costs, and the central banks are trying to offset this by "creating wealth" through loans and returns to investors but currency itself is not wealth, its just paper, and printing more paper or creating more digital signals does not put food on tables - cheap energy does. We can print all the currency we like but the reality is it does not change our actual balance of excess energy which we utilize for economic production. The more energy we spend producing energy the less energy is available for "growth". It's simple math that if growth requires production of more energy than we had before, and our excess energy (that energy we do not spend extracting more energy) is shrinking, then growth is going to likewise shrink too. Contraction.
The real problem is free-market social Darwinism that allows a small minority of oligarchs (whether "democratic" or fascist) to hog up most of the wealth.
The anti-growthers don't realize their alternative to economic growth is some form of communism (full government control over the economy.) Historically, the cause tends to get lost in the revolution and a totalitarian dictatorship is created.I don't know if you've realized this or not, but we're pretty much already there. All of the "democratic nations" have fully armed militarized riot police trained to put down the coming protests and riots as the economic situation around the world worsens. We saw them at the G20 in Toronto, we saw them in Ferguson recently. The oligarchs you speak of know that a major economic contraction is already in the works and are simply kicking the can down the road long enough until they're prepared to handle the result. It's not like it's going to be a voluntary thing either though, I am not against growth - I've simply accepted the reality that it is a mathematical impossibility. It's not going to be optional, but the further pursuit of it is only going to lead us into more dangerous territory. The more expensive the world becomes due to diminishing energy supplies, the more shortcuts were going to start taking, the more activities like fracking, and oilsands become appealing.
Another positive about GDP growth is that it created wealthy developed countries which have negative population growth. They only way to stop runaway population growth is to raise living standards across the globe and increase immigration to developed countries.At this point I have to question if you really understand the concepts I'm talking about. It created wealthy countries during the cheapest energy era the world had ever seen. It's very easy to grow and raise living standards with lots of plentiful cheap energy, but its a much different ball game going from cheap energy to expensive energy. Yes, wind-farms and solar panels - relative to conventional oil - are very expensive and provide poor returns. They are also not nearly as mobile, depend on an oil based supply chain and advanced oil based technologies like micro-computers. They are not truly "alternative energy" but rather "derivative energy" as their production and operation depends entirely on an oil based supply chain.
In order to accomplish this we need to use the centrist mixed-market economy — which created modern living standards in the post-war era — on a global scale (it's a balance between free-market capitalism and communism.) Communism is not an option. Free-market ideology creates a balkanized globe and regulatory race to the bottom which is the cause of all our problems, economic and environmental.In the post-war era energy was cheap, currency was sound and based on real money, and Ronald Reagan hadn't happened yet. The world economies today are a much different beast and also rely much more heavily on financial magic and market fraud to "balance the books". The system as a whole is much more unstable, much more dependent, and much less resilient. In the post-war era "farming" was still a viable career, today most people get their food from the grocery store. Comparing the two is like apples and oranges and the thing about economic growth is, if you don't grow then you're contracting. We can't go back in time and "do it right", we have a huge economy now and much of it is based on fraud and junk bonds and it must grow. The emergency financial measures, currency wars, trade wars, and resource wars that have broken out over the last 20 years are growing evidence that those with a vested interest in the world's resources are getting antsy. We'll likely blow ourselves up into instability long before the economic impacts take their logical course.
"How exactly do you produce more without utilizing more resources to do it? It's pretty simple, you don't."Physical goods can be produced without using more resources if they are created using renewable energy and recyclable materials.Of course, many of the goods and services being created are information based, which use very few (potentially renewable) resources in their creation, reproduction and transportation.
Actually, the resources required to run "the internet" are massive. Multitudes of servers, wires, and electronics which are produced, and reproduced at an alarming rate - giant server farms on the electricity grids. The internet is the single largest energy and resource consumer mankind has ever created.
What we really need to focus on is uniting activists around the globe to demand action that representational governments are unwilling to take (because they represent oligarchs, not people.)
Whether one believes in economic growth or not, the people need to unite to demand that: a) we put the right regulations in place to create a sustainable economy; b) we tax the rich (income taxes, wealth surtaxes, estate taxes, financial transaction taxes, etc.) so we can make the necessary investments to create a sustainable economy.
I think its better to focus on what kind of regulations and investments are needed, because any which way you slice it, they are sorely needed.I agree. The problem is that under the current economic model there is simply not enough capital to make the transition - the cheapest, biggest return will always win. Due to the dependence of advanced energy sources on older energy sources and an oil based supply chain it is incredibly unlikely derivative energy sources can become cheaper in terms of energy invested and energy returned than the energy and materials upon which the technology is based on and which have a much better rate of return. The fact that we're even willing to pursue projects like oilsands whose returns are dubious at best shows where we are in this energy story and how desperate we might get. We're not going to be making smart decision, we're going to be making what appear to be the cheapest solutions and that is reinforced by a GDP economy which demands growth. When a company needs to enact cost savings for growth they are usually cutting corners, or over working people, reducing quality, etc. This is not an avenue towards a better future, but rather a worse one.
Absolutely we need to go after the oligarchs. They are the bankers putting compound interest on the currency we borrow into existence and which we must pay back with our hard earned labour. I'm not exactly sure where you got the idea compound interest is providing returns for anyone but the oligarchs, for compound interest is one of the ways they rob us. I'm all for a sustainable economy, but sustainable and growth are not going to go hand in hand. Nothing sustainable grows forever, nothing.
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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for CenturyLink
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The reason the 2008 economic meltdown occurred was because a bubble economy formed on top of complex "financial innovation" products (derivatives.) Instead of banks putting mortgages on their balance sheets, they sliced and diced them up and sold them off as Collateralized Debt Obligations (mortgage backed securities.) Investment banks and bond rating agencies used flaky math to give them AAA ratings. But since banks weren't on the hook for the mortgages, they gave mortgages out to anyone with a pulse. (Moral hazard.) So investors got suckered into buying toxic assets they thought were safe investments.
ReplyDeleteThis problem was entirely regulatory: deregulation and a failure to regulate derivatives. These meltdowns didn't happen in Canada and Australia because we kept post-war banking regulations in place.
(On top of the junk-mortgage-backed securities was a "synthetic asset" casino that bet on the value of real assets, and whether banks would fail. This not only was a risky allocation of capital, it took capital out of the real world economy separating profit from social value. The entire scheme was a market manipulation fraud. Similar to a boiler room pump-and-dump penny-stock fraud but on a much grander scale. Masters of the Universe played musical chairs with the global economy.)
The reason interest rates are at the zero bound is because the 2008 economic shock was greater than the 1929 stock market meltdown and we are in an economic slump we haven't seen since the Great Depression. The Keynesian solution used to end the Great Depression — and create modern living standards — was spending on infrastructure to boost demand and create jobs, as well as creating the social safety net.
Today, free-market ideologues who caused the meltdown claim Keynesian measures don't work. This is the reason we are still stuck in the slump. (And will be for years to come, like Japan, which has been stuck in a similar slump for 20 years after its own housing bubble collapse.)
So pointing to this as evidence we have come to the limits of economic growth is not factual.
Second, access to credit is something that benefits all. People want to save money for retirement and get a return. People want to borrow money to buy things like homes and cars. Businesses need to raise money to create jobs and create new technologies.
ReplyDeleteYour assumption that this puts people further in debt in a downward spiral is not factual. Whether debt is beneficial to society is related to inequality. Piketty in "Capital in the Twenty-First Century" points out when the return on investments is greater than economic growth, wealth is concentrated in the hands of a tiny minority of oligarchs and levels of inequality are very high. He concludes measures like progressive taxation and redistribution of wealth are the only solution to put things back in balance.
It's simple enough to point to some abuse in the credit system and then claim the entire system is corrupt. But this ignores all the benefits. We wouldn't be arguing about this now over the internet if there was no economic growth. Wealth creation is not the problem. How we create wealth is the problem. We need strong regulations to produce a sustainable economy founded on renewable energy and recyclable materials. And we need the market place and government to work together to make the transformation possible.
The only alternative is living like hippies in a commune in a totalitarian state. But with that kind of system comes political corruption and human rights abuses and limits on personal freedom and expression. The solution to our problems is more democracy, not less. Over the past 30 years of free-market reforms, not only has the economy deteriorated, so has the state of our democracy. We need a global direct democracy movement to counter the corruption of our representational government.
Third there is no real value of money. The function of money is to represent the value of goods, services and assets. It shouldn't have a value of its own. (Which makes currency markets just as absurd as the gold standard — a barbarous relic.)
ReplyDeleteThe only thing we need to be concerned about with fiat money is price stability. If inflation is too low, bond-holders get an advantage at the expense borrowers. Workers suffer because economic growth is anemic. If inflation is too high, borrowers get an unfair advantage (their debts are melted away.) Economic growth will also suffer from stagflation.
Banks don't create money out of thin air. The purpose of a bank is to take on illiquid assets (like mortgages) in exchange for cash (so people can buy houses.) That means they are on the hook for the money they lend out. The central bank controls the overall all growth of the money supply by raising interest rates when the economy is inflationary and overheating (cutting back on overall lending.) They cut interest rates to boost borrowing and economic activity when the economy is in recession.
Of course, in the post-war era, democratic government was in control of the economy. Then we used fiscal (spending), monetary and regulatory means as a counterweight to the economic cycle. And we did it much more effectively. Using all three measures is better than a heavy-handed use of monetary policy alone — especially in the hands of pseudo technocrats who represent vested interests and are not accountable to the people.
The harsh anti-inflation measures of the central banks from 1979 to 1995 are the reason real median incomes have been in decline while the incomes of the rich have grown to Gilded Age levels. These measures facilitated corporate downsizing. These measures are also responsible for high government debt.
The reason we created modern living standards in the post-war era — using demand-side economics — is because it put more wealth in the hands of the people, lowering inequality. When people have more money they can spend and save more.
It's a fallacy to suggest cheap dirty energy was the source of all the growth. Today we have the technology to do a lot more with a lot less energy. It just requires the right regulations. If we spend vast sums of public money on green infrastructure, it creates jobs, increases tax revenues and helps pay down debt. (In the post-war era, Western governments paid down most of their debts — debt burden is measured in debt/GDP.)
If anyone is interested in finding out what went wrong with the economy and how to fix it, they should read Joseph Stigltiz's "Freefall." I think people who attack the market-based economy are lacking in understanding of how the economy really works.
The fact is we need some form of economic system to tackle the problems we face. The real problem is the anti-democratic right-wing economics that have plagued us over the past 3 decades. The centrist mixed-market economic system provides a dependable alternative with a proven track record.
The anti-growthers don't have a system to replace corrupt free-market capitalism. Their attacks on economic growth are based on big assumptions and generalizations. They are only helping the free-market plutocrats who stand in the way of creating a responsible, sustainable economy founded on renewable energy and recyclable materials. In order to defeat the plutocrats, and save civilization from certain destruction, we must destroy the free-market ideologues on the economic battlefield. The arguments the anti-growthers put forward are largely uninformed and not credible. In short, they lose -- we all lose -- by not showing up for battle.
I dont have time tonight to respond to all of thos, though i will. However in the meantime perhaps give this article a read as it address the majority of your points and provides some good data sources to back the claims. The real reason the economy is broken and will stay that way: http://www.peakprosperity.com/insider/80883/real-reason-economy-broken-and-will-stay-way
ReplyDeleteThis guy's theory, IMO, is a conspiracy theory that doesn't stand up to the facts. There is no correlation between GDP growth and the price of oil. In fact, there can be an inverse relationship.
DeleteOil is a commodity, like gold. And the reason commodity prices spiked in the early 1980s and after the 2008 meltdown was because of economic uncertainty. Since investors can't make money investing in an economy in recession, they park their money in bonds and commodities, which causes their prices to spike (with bonds higher prices result in lower interest rates.)
In the 1980s, central banks jacked up interest rates as high as 22% to break the back of 1970s inflation. When they were done, the economy took off like a rocket. And conversely, commodity prices tanked.
The same thing is happening now. Relatively good job creation news in the US has caused the price of gold to drop. The price of oil is also dropping. If the Fed jacks up interest rates too soon and kills off the recovery, oil and gold (and bonds) will shoot back up.
It's also a fallacy that the Fed is printing a lot of money. The "state money" it has printed only makes up 15% of the total money supply. The US money supply has been growing below trend. (Like the economy, the money supply grows at an exponential rate. One needs to use a logarithmic scale to convert to linear to gauge growth.)
The actual reason the economy is in a slump is because of a lack of aggregate demand. Same problem that occurred during the Great Depression. I read somewhere Keynes referred to monetary stimulus in a slump as "trying to push a string." Like then, we need fiscal stimulus to get the economy functioning again. Monetary stimulus is tickle-down economics. Fiscal stimulus puts more money in the pockets of average people which has a multiplier effect.
This guy is using the 2008 meltdown to peddle his conspiracy theory book. But the financial meltdown created the economic uncertainty that drove up the prices of commodities and bonds. It wasn't the other way around.
The price of oil? No. The consumption of oil. I don't think you're actually reading what I'm writing. I will be responding to the rest of your points later.
DeleteBTW, you should probably go look up the meaning of conspiracy theory. Just because you don't agree with someone's position doesn't mean automatically their position is a conspiracy. Conspiracies are very specific things, not any theory can be a conspiracy theory. *sigh*
Your usage of general derogatory lanaguge with labels such as "anti-growthers", along with baseless accusations of "conspiracy theorist" shows me you rely on trying to degrade other's points not by addressing them, or even fully investigating sources and reading clearly what's being said, but by insulting and then peddling your own theory on what one could only deem to be your version of a utopia. You talk as though all of this has been proven, and done before, it hasn't. It's a theory, one for which you've provided no data to back up your claims.
There is a direct correlation to the consumption of oil and GDP, it was witnessed clearly during the 2008 collapse: http://www.canadiantrendsblog.ca/2014/02/spin-how-your-desires-are-used-against.html
In his "conspiracy theorist book" Chris Martenson actually shows you how much stimulus the Federal Reserve has pumped into the global economy. If stimulus worked, you'd think the largest stimulus in the history of mankind and a 6 year period would have something to show for it.
Didn't realize "anti-growther" was derogatory. I was just putting a simple label on the philosophy.
DeleteThe guy says "there has never been a recovery when the price of oil is over $100". His point appears to be that consumption is related to price.
In any case, I relate it to a conspiracy theory because, in my opinion, the guy is exploiting the global economic meltdown to peddle his theory and sell books. (Like conspiracy theorists exploited the 9/11 tragedy and other events.)
I've read a number of books and blogs from Keynesian economists: Paul Krugman, Joseph Stiglitz, Robert Reich, etc. And they have said since the crash that the Fed's monetary stimulus was not going to be enough to revive the economy. (See "liquidity trap.") Krugman has been writing about this since 2003 before the meltdown ("A Return to Depression Economics.")
John Maynard Keynes said the same thing during the Great Depression in the 1930s. Our present economic quagmire "The Great Recession" is similar in magnitude: a seemingly never-ending slump.
There's certainly a relationship between GDP growth and oil consumption. More economic activity will be associated with more energy consumption (than when in a recession.) This is worse in countries like the US and China because they have done little to curb carbon emissions. This doesn't mean dirty energy is required for growth.
Germany, for example, has one of the most competitive economies on the planet. And is also one of the greenest economies.
I'm not talking about utopia. I'm talking about practical solutions. And yes there is a mountain of evidence. We used the Keynesian mixed-market system from 1945-1980. When governments spend a lot of money, whether blowing things up in a war, or investing in infrastructure, it gets a slumping economy firing on all cylinders.
These economics can be used to transform economies to green energy. In fact, they have been used in Europe towards this end since the oil crises of the 1970s (especially investments in mass transit.)
Alright, now we're back on track. I'll address your points presented here tomorrow too.
DeleteThe reason those you are saying "exploited" the 9/11 tragedy are called conspiracy theorists is because they believe in a conspiracy that 9/11 was an inside job. Peak oil and limits to growth is not a conspiracy theory, it is a scientific theory. It does not involve any sort of secret agenda amongst people.
By continuing to use the word "anti-growthers" to label those who believe in limits to growth even after I expressly stated that it is very inaccurate regarding the actual position myself, and even Chris Martenson are taking now makes it derogatory.
I wasn't continuing to use the word. I merely referenced the word in quotes to explain my original use. Actually I never heard anyone use the term before. I was writing a lot of stuff and just threw it in as a short form.
DeleteI am definitely a pro-growther, although I certainly wouldn't use the concept of "infinite growth." Like I mentioned before, GDP per capita has increased about 18 times in the last 150 years, from around $2500 to $45000. Technically it would take an infinite amount of time to reach an infinite amount of GDP per capita no matter what the rate of growth.
Economics is not only about GDP growth (wealth creation). It's also about productivity growth (machines doing more of the work.) Under the free-market system, the economy is doomed to collapse as automation creates depression-levels of unemployment (say 20%.) Under the Keynesian system, which ensures all segments of society benefit from GDP and productivity growth, people will work shorter and shorter work weeks.
Keynes predicted we would have a 14 hour work week by now. What happened? 35 years of right-wing economics happened. People ended up working more for less pay and benefits while the rich hogged up all the benefits from GDP and productivity growth.
Perhaps our present economic slump could be the result of automation killing too many jobs. Perhaps it could be that economic resources are poorly allocated concentrated in the hands of a tiny minority instead of being better put to use in the hands of the people. Perhaps it could be that capital is poorly invested as bankers seek high returns betting the money in the synthetic asset casino instead of investing in real world assets -- expecting taxpayers to eventually socialize the losses.
Keynes' vision could be called utopian, although it takes a while to get there. But the free-market ideologues don't oppose him because he was wrong or his theory disproven. They oppose him because of greed and power. They are opposed to the idea of society. They are opposed to democratic government leveling the economic playing field with progressive taxation and moderate redistribution of wealth.
I equate GDP and productivity growth with the evolution of civilization. The evolution of civilization is a growth process that could potentially continue on forever. (Civilizations could possibly outlive their host universes by developing the technology to create new universes. Who knows?)
"So for instance you mention electric cars: first of all electricity is not a power source, it must be generated from another power source and I don't know if you've compared the costs and power generation capacity of wind farms, or solar panels, but they certainly will not be powering everything we have now and the addition of 800,000,000+ electric vehicles all running on the grid. Second you are not accounting for the materials and energy consumption that is going to be required to replace 800,000,000+ cars on the roads today. It takes 7 gallons of oil to create a tire, 3 times the car's body weight in oil to produce a whole car. We have to mine metals, pave roads and run regular maintenance on all of it. We can barely keep up with road deterioration as is."
ReplyDeleteRoads, bridges and other infrastructure are crumbling because of 30-years of neo-conservative cheaponomics. We've been doling out big tax cuts to the rich instead of paying our bills and making wise investments in infrastructure that pay social and economic dividends.
A country's entire fleet of cars is replaced about every 12 years. So upgrading to electric cars would simply mean phasing out combustion engine cars.
Electric cars are 85% efficient. Combustion engines under 20%. Our transportation sector emits 25% of GHGs. If we eliminated combustion engines, replaced them with electric, then built oil-fuel Heat Recovery Steam Generators power plants (60% efficient) we would cut emissions by over half. Of course, there are better ways to make the grid greener.
In terms of economics, we need to be smart about making the grid greener. The pay-as-you-go conservative way is to make ratepayers subsidize green energy projects — as well as business use. This will only make people vote against going green.
The smart way is the Keynesian way: subsidize green energy infrastructure through general revenues and raise taxes on the rich to pay for them. To use an example, Republican president Dwight Eisenhower became president in 1952, raised the highest tax bracket to 91% and built the US interstate highway system.
Today he would be considered a socialist (absurdly enough.) But he was a centrist. And we need actual centrist economics to tackle our current problem. (Today's Liberals are pretend centrists having adopted the neoliberal economic policies of Brian Mulroney. Dalton McGuinty was a pay-as-you-go conservative premier who foisted his poorly planned green energy projects on ratepayers.)
Also driverless electric cars will change the way we drive. People could lease car services instead of buying or leasing cars. If a person lived in Hamilton and worked in Toronto, they could call a car service to drop them off at the train station. Then have another service pick them up in Toronto. So with technology an ingenuity we can take a lot of cars off the road.
It all boils down to sacrifices. We have to make smart ones. If we make the wrong ones, the free-market nihilists will incite a dirty-energy revolution bent on destroying progress setting us back years or decades.
Also, the neoliberal way of going green means making energy so expensive poor people have to do without. The centrist way of going green (or left-leaning) is to make electricity affordable with subsidies and make dirty-energy more expensive. Fake liberals believe jacking up electricity is the way to go green. But the fact is our electric grid is our greenest form of energy. We need to make dirty energy scarce, not energy itself. To make households greener, have programs that help people make energy efficient upgrades. (Of course, electronics are becoming more and more energy efficient because of the desire for portability and longer battery life.)
Sorry I haven't had time to get to this response yet - it's still on my to do. There is a lot here to respond to and I want to ensure my response is as accurate and clear as possible.
ReplyDeleteI've been doing some number crunching with Excel. Pretty simple growth-related stuff.
DeleteIf we had the same level of growth we had in the Keynesian era (1950-1980: as far back as my data goes) that we had over the latest free-market era (1980-2013) the size of our economy would be $2.66T instead of $1.53T ($USD PPP.)
We had 4.6% annualized growth during the Keynesian era; 2.47% in the free-market redux (both free-market eras culminated in global economic meltdowns: 1929 & 2008.) So given our tax revenue rate at 30.4% GDP, if Keynesian growth continued we'd have a $300-billion+ surplus (federal + provincial.) Just imagine the kind of green infrastructure that could be built with that kind of money…
The reason why growth was moderated was due to labor-busting inflation-fighting policies of central banks that caused massive recessions in 1982 and 1991. (Just take a look at interest rate history.) They helped facilitate corporate downsizing. Over this period real income for most people fell while income for the rich grew by leaps and bounds. (During the Keynesian era, real income grew along with real GDP-per-capita.) We went from historic low levels of inequality back to Gilded Age inequality.
The importance of growth is that all our indicators of well-being are measured against GDP: healthcare, education & infrastructure spending, plus debt burden (which is paid down with strong GDP growth: debt/GDP.)
So economic and productivity growth can be used for good or they can be used for evil. The plutocrats actually want low levels of growth (higher debt burden) to bankrupt democratic government so they can rule the world without regulations and accountability raping and plundering the globe.
The way I view growth is that it's related to development. When people cooperate in a free society (with rules and laws to prevent abuses) the end result is a positive-sum game. This development is measured in wealth creation and machines doing more of the menial labor (productivity growth.)
A steady-state economy would mean we would be stuck with a huge debt burden forever. People in Africa with less than $3000 GDP per capita (ours is $45,000) would be poor forever. In short, growth is not the problem. Growth (development) is the solution.
The problem is free-market plutocracy. The plutocrats are barbarians in suits. They don't care if they drive their companies into the ground. They don't care if they destroy the world. Just as long as they have wealth and power in the here and now.
Therefore the solution is global democracy: that is, the people taking responsibility for the economy so that development is done in a stable and sustainable fashion for the benefit of the vast majority of people on the planet, not a tiny minority of sociopaths.
In short, the struggle is between plutocracy and democracy; between the free-market system (economic anarchy) and the Keynesian mixed-market system (with strong regulations that protect the people and the environment.)
The world needs more people understanding how economic systems work (and fail). I implore you to read Joseph Stiglitz's books "Freefall" and "Inequality" before passing judgment on the market-based system. You may find we don't need to reinvent the wheel to solve all our problems.