A broken model

I tweeted earlier (@powerdowngirl) about a Jim Puplava interview with Chris Martenson. While listening (about 20 minutes in) on the topic of money system debt, Chris describes the situation in such a way that I felt compelled to transcribe just that bit. I do understand time constraints and the whole interview is almost an hour long so below is just 2 minutes on why consumption and investment are NOT the same things. Given I’ve not finished listening myself, there may well be other gems of wisdom waiting for me as Chris is the author of the excellent Crash Course, which links energy, economy and environment and is well worth a look. It is split into small chapters, so can be dipped in and out of. I strongly recommend Chapter 17b on Energy Budgeting if you’re still a bit confused about net energy.

Anyway, despite record low interest rates and billions of dollars pumped into the global economy via quantative easing and other incentives to spend and consume, we’re not seeing the sustainable growth required by our financial systems. Chris asks, “If we really were going to spend that much money in deficit, what are we spending it on? Are we spending it on consumption or investment coz it’s a world of difference between those two and frankly almost all of that money has gone straight to consumption, not investment. And by investment (I mean) taking the natural gas that we think we have in relative abundance for the next 10 or 20 years, put the pipelines in, do things with that gasoline, figure out how we’re going to invest in the next round of energy technology, you know, these are things that would be investments and we’re not investing with this money we’re just trying to get back to consumption.

And so here’s the model. I think it’s a broken model  but that’s my opinion. But the model here is that consumers are supposed to consume and the way they do that is they take on debt and we need them to consume more than they are actually earning. We love that model. Remember you had your home and it was rising in value and you could (re-mortgage), spending it, that drives the economy and everybody’s happy. Maybe we have credit cards, we’ve got student loans, we’re borrowing for cars, that’s the model we had and the consumer, rightly and as predicted, just started to retract when the recession hit. That’s a good normal behaviour. What’s abnormal in this story is the Government stepping in saying ‘oh, I see you guys were overspending and now you can’t, let me take on the overspending role for you guys’. That’s a broken model.

Somebody lost the narrative in this story which says that in a time when consumers are undergoing normal consumption and they have to retrench from that, the Government can fill that tiny gap. When we’re overconsuming and the Government says ‘not only will I fill that but I’ll double you’, that’s where we lost the way. So yes people who look at these deficits and are concerned that they are unsustainable, as you mentioned, they’re absolutely right on. They are unsustainable but it’s worse than that. It’s how we are trying to sustain something that’s fundamentally, any grade school kid could tell you is unsustainable. We’re trying to sustain the idea that we can live beyond our means forever. The thinking caps have been taken off and we’re just reacting at this point and clearly when that story breaks, and it will, because things that are unsustainable have a way of building up until they stop, in that stopping moment we might find that it’s actually fairly unpleasant consequences and it’s something that I worry about and I know other people are worried about“.

Good, innit? So why do so few people get this? Anyone up on psychology? Because that’s what the next human breakthrough will be – psychological, not technological. Our next real breakthrough will be to understand (or should I say re-learn!) our place in this world, the importance of scale and rate of change, the abhorance of waste and, most importantly, the urgent need for cooperation to replace competition as a way to live. We need a new model and this time, could it please be one which works for all life, not just one elite sector of one rather smart primate?

Advertisements

About The Cheery Pessimist

Waiting for some sign that we will change our ways before it all comes tumbling down...still, you've got to laugh
This entry was posted in Growth. Bookmark the permalink.

6 Responses to A broken model

  1. Check out the Natural Change project. This was an initiative developed by WWF a few years ago: http://www.naturalchange.org.uk/

  2. Mystic Mox says:

    Some interesting points about consumption and psychology.

    You’re certainly right that most people don’t consider how their consumption affects and depends on the natural world. I always scares me on the rare (but occassional necessary) trips I make to shopping centres like Livingston how many people seem to make wondering around buying stuff a major part of their social life. This is what advertising and the media tell them is normal and what they should do. They’re sold the belief that they are only “normal” people if they act in the normal way and buy the same stuff as everyone else and that the only way to move up the pecking order is to buy more and more stuff. This reflects a real lack of self-worth and confidence which would allow more people to take pride in doing doing, wearing or owning something more individual, durable or possibly even old! Obviously commercial interests are only to keen to push the line that you can’t be normal if you don’t conform.

    I guess originally the need to acquire new and better stuff evolved when people first started using tools and gave an evolutionary advantage. Trouble is that this has now gone into instinct is now jammed on and coupled with the constant bombardment of advertising has gone into overdrive. How to cure the problem? Well it’s simple to say cut the advertising and encourage people to develop the confidence to assess status against non-material criteria. Doing this is not so simple given the vested interests, and lack of awareness. Even the lay-out of the mega-malls discourages any contact with the natural world – enclosed in weather-proof bubble, artificially lit and with no sign of any plants, soil or non-human life is it surprising that care for the environment is not at the top of people’s minds.

    There’s also the whole media spin on why the “success” of the economy is portrayed as being so essential to people’s wellbeing. I guess most people find the economic commentaries about as intelligible as the shipping forecast and if they listen to them at all its as a generally babble in the background, but through this they pick up some general moods: the doom-ridden feeling when the economy isn’t growing backed up by threats that bad things will happen to themselves and their children unless it is put back on track and the euphoric reports at the end of “a good days trading” linked to the carrot that this might be reflected in slight better pay or work-life balance as a reward. The case that the economies of developed countries are already big enough if the money was distributed more fairly just isn’t being made in a way which is getting through.

    • mandy meikle says:

      Yes, it’s easy to block out the doomy stuff – even I do it, believe it or not! The media is a weird one. For instance, why is there so little coverage of the protests on Wall Street? If everyone who was a victim of the system took to the streets, it’d be an impressive turnout but what would the slogan be? I think one of the biggest problems we face is geting people to understand that our cultural story (you know, the one which says that humans are supposed to dominate all other species because we’re so smart and anything that isn’t food is either a pest to be wiped out or it doesn’t matter so we’ll only wipe it out if it’s in the way of our stupendous progreess) is bollox. Sadly, no time for a rant just now, which is probably a good thing!

  3. Haven’t heard from any mystics for a while. I think the last one was Meg… !
    But yes I concur with the comments made. I recently watched the film ‘The Corporation’, which took the status of the Corporation as a legal person to its logical conclusion. It put ‘Mr’ Corporation on the psychiatrists couch, did a personality and mental health profile on ‘him’ and concluded that Mr Corporation was a psychopath.
    Another endearing scene in the film was how big companies did research on parent nagging and used that research to target children, particularly via TV. In other words we are all systematically brainwashed and integrated into the consumer society from infant-hood. Little wonder then that consumerism has become synonymous with religion.
    Does that cover your rant Mandy!
    If you haven’t seen the film yet I would suggest that it’s mandatory viewing.

    • mandy meikle says:

      Yes, that’s a good stab at it Barry – but way too short! I’ve seen The Corporation but don’t think I have the DVD (otherwise I’m sure I’d have watched it again!) I posted on Derrick Jensen some time back but am now wading through his book Endgame (vol 1 of 2!) A lot to think about & I’ll no doubt post about it in due course. I’m sure there are others like Jensen out there (smash the system type thing) but he’s just so thought provoking. If industrialised civilisation is destroying the planet which sustains us, shouldn’t we do all we can to dismantle it? Now that doesn’t neccessarily mean blowing up dams to restore salmon stocks – it can equally be living without money & alternative economies (like LETS – http://www.letslinkuk.net/). I just joined Freeconomy (http://justfortheloveofit.org/) today – now I have to remember to look at the site again! Aaargh – so much information, so little knowledge and very little wisdom!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s