netkingcol

thinking outside the tank

Exciting times ahead – defining the new economy

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Do you remember how Sarah in the film Labyrinth has to cross the Bog of Eternal Stench by leaping from one stepping stone to the next, and each stone starts to sink as she lands on it? 

It’s the same with the UK economy. Industrialised Britain petered out during previous recessions and the noises from Jaguar and Land Rover are the last few sucking sounds as manufacturing sinks, almost, without trace.

At the last moment we were able to jump to the new service-based consumer-led economy. We discovered we needed services we had never dreamt of: personal trainers, personal financial managers, and dog-walkers. We needed 120 TV channels and 5 megabits per second Internet access. Most of all we needed clothes and gadgets. Fashion to wear a few times and throw away; music players that had to be replaced when the battery packed up; an endless stream of mobile phones, games consoles, and computer peripherals. We wanted travel, and digital cameras to photograph it, and food – lots of cheap, fatty, sweet food – and lots of alcohol to wash it down.

All this needed money and the financial services industry became one of the largest sectors of the economy. Easy money meant we could run up massive debt and speculate on property. But the money wasn’t real, was it? It wasn’t backed by anything real. Now, like Kaiser Soze, puff: it’s gone. We can’t trust money any more.

There was a time when we thought we could not survive without a shipbuilding industry. Not so – although there is a real need for ships, here is not the place to build them. We thought that steel and car manufacture were the essential foundations of our economic house. Not so, and we learned to live without the DeLorean.

The banking system has nearly collapsed, and the retail frenzy is calming. I think we are more shocked in this recession because the businesses going into receivership are much closer to our daily lives. The places we have shopped mean more to us than a shipyard or car-plant at the other end of the country. This time it’s the service economy that’s receding rather than the manufacturing one. On that score, I’m not yet convinced this recession is any different – but it does feel like it.

I believe we live in exciting times because we have the opportunity to define the kind of economy – and society – that emerges from the recession. I am unemployed and we two million in the UK expect to be joined by another million over the coming year. As a freelance IT consultant, my career has tracked the economy quite closely, but this time I’m 57 not 37 and I’m growing doubtful there will be demand for my current skillset when the recession ends. The good side is I should meet my personal carbon dioxide emission target for the year.

If we don’t make things and we don’t shop for things and we don’t think a world centred on making money for its own sake can be trusted, what should we do and how should we live? That’s the exciting part – we can decide it for ourselves. The problems we face are the reasons we should change:

  • There is almost no doubt that the legacy of industrialisation and rampant consumerism is a climate-changing level of carbon dioxide in the atmosphere. We need to live more simply: fewer possessions, things that are built to last, goods that can be recycled, activities that have less impact.
  • Feeding the population will be a huge problem. The forecast is for 9 billion people by 2050 – let’s call it 10 billion. Suppose each of those people needed only 1000 calories of food per day, a low value, then the planet will need to provide 10 trillion calories of food per day. There is enough sunshine to do this, but the question is how we grow the food. Agrochemicals may not be available or will be prohibitively expensive as the oil runs out. The same applies to the diesel to run the tractors. In any case, the chemicals destroy biodiversity, wiping out whole swathes of useful life-forms at the same time as killing the ‘pests’ and ‘weeds’. No, the only way to grow food is sustainably. Here’s a thought: those 10 billion stomachs will be closely related to 10 billion pairs of hands, hands that could be used to hoe and plant and weed and harvest. Maybe there is life after oil.
  • Energy – what form, how much, how secure, what impact? The problems of all current, large-scale energy sources are well known, be they based on fossil fuels or nuclear reactions. Even if we get the carbon dioxide under control, I seem to remember some law of thermodynamics that says a proportion of work done has to be expended as heat. So we may simply replace the greenhouse effect with direct atmospheric heating. Could the economic activity of 10 billion people do this?

Fundamentally, society is about people, and economy is about organising people to meet society’s needs. Notably, the economy is not about making money; it’s about expending human effort to achieve some ends. It’s the ingenuity and the muscle of people that represent the core resources of the economy, and when combined with the share of planetary resources that the human species can take sustainably, together they define an economic envelope outside of which we should not push.

People do things. It used to be shipbuilding, mining coal, and rolling steel. Lately, it was making pottery and leather sofas, and investment banking. It wasn’t the activity that was important, it was the fact that people did it. Flexible as we are, we will learn to do whatever the economy requires us to do. We simply need money to lubricate the wheels. What then should be the new range of activities in which people engage?

My view is that, since people will be doing the work, we should aim to meet the needs of people; all of the people; everywhere. Think of Maslow’s hierarchy of human needs. Then think how many people are at each level in the hierarchy. Clearly there are huge numbers who don’t have enought to eat, don’t have clean water to drink, and have unhygienic excretion arrangements. The first target for human endeavour then is:

  • Satisfy the basic human needs of every living person

Equality should precede luxury. Let’s not make another ‘must-have’ gadget until every mouth is fed and watered. Many more people will return to the agrarian lifestyle to achieve sustainable food production, as discussed above.

On the next level, everyone needs to feel safe. We need a place to live, secure employment, a health service, a police force to maintain order. There’s a wide range of activities and occupations here, some of them addressing the most pressing problems:

  • Research scientists to discover novel physical and chemical properties of the Earth’s resources. We need to know how to get more from each kilogram of rock we quarry, with less impact.
  • Engineers and other technologists to design new materials and to work on more efficient electricity generation. Nanotechnology will have a large part to play here.
  • Architects to design the next generation of ecohome, ecohospital, and ecoschool.
  • An army of construction workers to: raise the insulation standards of existing buildings, and build the new homes, wind-farms, electricity distribution and transport infrastructure.
  • An army of conservation workers to preserve and enhance the environment. We need new forests, restoration of damaged habitats, and some places simply left to be wild.

Security of employment means knowing that society is organised in such a way that there will always be something useful to do in the neighbourhood. It’s right that, in the competitive environment of a capitalist system, businesses should be able easily to reorganise and resize themselves; that’s the way it works. For the unemployed, when they lose their jobs, they are knocked right back to the bottom level of the hierarchy, wherever they were before. There must be a better way.

If  the far side of the Bog of Eternal Stench is in sight, perhaps we should start limbering up for the one giant leap that will get us there. The thing called money, which ultimately represents human effort, should be directed towards the new economy rather than trying to fix the old one.

Copyright © C.Hazlehurst 2009

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Written by netkingcol

January 15, 2009 at 8:39 pm

One Response

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  1. Great article … thanks a lot …

    Gilmour Poincaree

    January 15, 2009 at 9:14 pm


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