Tuesday, May 7, 2013

The Economy, Stupid.

A bullshit peddler.

     No economy can remain static. It’s either growing or shrinking.
     Our way of life is based upon constantly expanding markets. The notion that we can continue to improve standards of living while lowering production and consumption flies in the face of everything we believe about market capitalism. And in fact no one has had this notion. I think I’m the first!
     When you consider that I dropped out of school (upon request) about halfway through grade ten, then that’s really saying something about the intellectually sterile environment we’ve created in Canada.
     Every business person realizes that if revenues are capped at $100,000 then the only way to increase profits is to cut costs. But that is an assumption. You could sell fewer units, while still generating the same revenue—simply raise prices and lower production.
     But no one ever thinks of it that way—lower costs by creating efficiencies and driving up demand by reducing the number of available units.
     Yet this is all indicated by the currently-accepted theories of economics! And I’m not saying that all the theories are self-justifying bullshit. It’s just that one of the things a philosopher does is to invert things—and see what falls out of its pockets.
     And in this society at the present time, consumption drives production, which drives employment, which drives taxation. That is one reason why we now have half as many people living in homes that are twice as big as our parents lived in. In some ways we are a victim of our own efficiency. The housing industry is so competitive, that there is little profit in a 1,200 square-foot home, once the risk, liabilities, capitalization and time factors are put into the equation. Why would a builder waste six months to earn a profit of ten thousand dollars? He wouldn’t be able to live in the very houses which he builds for others. It is far better to build a 4,500 square-foot home, make fifty to a hundred thousand in profit, and at that rate, not only can you afford to do it again, it’s even worthwhile. It still takes six months of his precious time. The lot represents a fixed cost, so the bigger the building, the greater the profit.
    So the real problem is how to maintain standards of living without conspicuous consumption, without over-production and without stagnating wages and profits—because apparently the only path to prosperity for the greatest number of people is to constantly expand consumption and production.
     How is it possible, in a nation with a constitution and the rule of law, to compel the rich, the powerful, the corporations and institutions to make do with less? They don’t respect the law or any kind of morality—they never have.
     How can a CEO tell the shareholders, “We must lose money (or reduce our expectations of profit,) for the next five years in order to make these changes?”
     Stock prices will fall. The CEO has ‘damaged’ the company and the shareholders.
    According to shareholders, “Surely it is not our responsibility to save the world?”
     (I say it is, actually, but no one listens to my absolutely fantastic long-term investment strategies. But then they want ‘big profits right now.’)
     Only the poor can be compelled, for they don’t have the ability to resist. Price increases affect them first, and the most but they don’t have the resources to invest in newer, more efficient technologies.
     Hydrogen-powered cars have been announced as being just around the corner. Yet a different source says, ‘they’re just a myth.’
     In order to make hydrogen; ‘You have to burn methane,’ i.e. a fossil fuel. And electric vehicles are really only about 30 % more efficient than comparably-sized fossil fuel vehicles. In ten years your town will be spewing out just as much pollution as it ever did…we’re trying to sell more cars, after all, in order to employ more people to buy more cars, and homes, and electricity…we must expand to increase profits…it’s a vicious circle generated by conventional thinking and people and corporations who inevitably put their own interest first, ahead of all other considerations; including species-survival.
     (Not just our own species, but every species.)
     Battery-powered electric cars hold promise, but the required increase in generation capacity must almost inevitably come from nuclear technology, with all of its attendant problems.
     Ford and GM and Chrysler do not want to build small, efficient cars because there is no profit. It starts to look like a very expensive little car, in a very competitive market niche. To re-tool for hydrogen cars will take billions in new investment. And the car companies create unionized, middle-class factory jobs. This makes for a nice block of middle-class voters; all of them afraid as hell to rock the boat or upset the status-quo, which after all makes their own smug and comfy existence possible.
     It is a fact of human nature, “Those whose livelihood is involved, cannot see the problem.” And if you can’t see the problem then you can’t even conceive of a solution.
     They are simply unable to perceive the evil that they are doing, by their persistence and insistence on continued conspicuous consumption, for surely a Hummer or a Ford F-150 are nothing else. Most of those vehicles still have one occupant and never carry a serious load in the entire life-span of the product. It is so much about status and so little about utility that it is a kind of indictment of middle-class ethics and morality.
     Oh yeah, the middle class wants change, just don’t ask them to contribute, or don’t put it in their neighbourhood, or both. One lady objected to a solar farm due to ‘transformer noise,’ yet one wonders if that farmland wasn’t noisier with the trucks, tractors, mini-bikes, flocks of blackbirds…worms digging in the soil. She was simply an idiot. Her kitchen clock makes more noise! A middle-class Canadian idiot, and we have many of them.
     Where are you going to put the next nuclear reactor? I have a couple of concerns as well. These include the ‘not in my backyard’ syndrome, and the usual cost overruns associated with any project organized around government patronage. Here in Sarnia-Lambton, a petrochemical company was assembling a piece of land for a refinery. No one had any real environmental objections, and people were disappointed when it failed to go ahead. One wonders how they would have felt about nuclear power.
     We already have nuclear waste trucked down local highways, and ending up in provincial landfills. We try real hard not to think about it too much.
     Local food production would reduce the carbon footprint of our diet. For every ten units of food energy, a hundred units of carbon are released by the transportation and processing of food. Local food production might employ a lot of people, and that sounds good in the middle of a depression. The problem is that historically, we haven’t paid folks like that enough to afford $400,000 homes. And it begs the question of how can we compete with a sixty-five cent New Zealand apple, shipped and trucked twenty thousand
     For some reason it’s called ‘global warming,’ but the problem is really about our selfish lifestyles. Talking about waste isn’t sexy. It’s pretty square. We have such great expectations for ourselves, but the changes our world is undergoing carry a strong risk of the mass migrations of peoples, war, revolution, famine and endemic disease. All of our standards of living are going to fall. That is the big secret that no politician has the courage to talk about, in fact they will tell you, “There’s nothing wrong with our lifestyles.”
     Middle class wages have been stagnant for about fifteen years, the working poor have seen incomes fall over the same period. Only the rich are doing well. So if our lifestyles are not going to fall, why are they in fact falling? How do you explain it?
     “Oh, I can assure you it’s not a conspiracy, Mr. Shalako,” you might say.
     I never asked about a conspiracy. You brought that up all on your own.
     If our lifestyles are killing the planet, then they are simply immoral. That’s pretty tough to accept. To call for a ‘carbon tax’ is politically unpopular, but no one thought to call it a ‘pollution tax.’ (I would call it an ‘ignorance tax.’) The biggest shortage in this country is leadership, with any kind of firm resolve, or clarity of vision. And the truth is that a lifestyle based on greed, consumption and conspicuous waste, has become kind of immoral, and some people are becoming quite alienated, like a kind of subculture.
     The government is in no position to provide moral guidance, and guys like me are in no position to run for election. I guess we’re pooched.
       Now, in the perfect economy of the future, an artificial and theoretical construct; all (or most) products and services will be intangibles, such as financial planning, wellness consultation, motivational speaking and literature, news-casting, e-publishing, etc.
     What this means is that Canadians will be able to enjoy a high standard of living without the need or benefit of unions, as everyone will be self-employed. They will make good livings, based on the provincial $10.25 an hour minimum wages, and they never have to cut a tree down, skin a beaver, dig up coal, put out a fishing net, or do any of the traditional resource-export-based things we did in the past.
    Once you get your head around this notion, then you will quickly see that the perfect economy of the future is perfectly designed for constant expansion of productivity—all products are useless and therefore luxuries and therefore desirable, like a thousand ‘apps’ for your text service provider’s ‘free phone.’
     I’ll be selling essays, or better yet, bartering them for aromatherapy or feng-shui classes, getting my colours done and using my cell-phone app’s to keep track of my pedicure appointments, or my reservations at ‘Grille 23.’ The pemmican is great, you should try it sometime.
    In a world where ignorance is popular and superstition sells, a bullshit-peddler like me or that nice Mister Kevin O’Leary on CBC should make out all right.
     Mr O’Leary and I agree on one thing for certain: people are basically pretty stupid.  
     I guess the only solution would be a long-term program of mass education by a disinterested and highly-honourable consortium of mass media.  


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