Wednesday, October 07, 2009

Okay, what's going to keep us up so high?


sobers said...

Ever since I visited China and India about 5 or 6 years ago I have had the same thought - what do we do here in the West that entitles us to such a featherbedded standard of living? What do we produce that is required by all the other nations of the world? Oil? Food? Minerals? Manufactures? We used to produce all of them, at various times. Now declining in each category.

I think that we have been living a fantasy, that the 'City' could be the golden goose that shuffled bits of paper around and by some alchemy produced the golden eggs to keep us all in the manner to which we have become accustomed over the last 50 or so years.

That fantasy has unravelled and reality awaits. We are in a between time, waiting for the axe to fall. We are buying a little time with our money printing exploits, that is all.

At best we face Japanese style lost decades. At worst total societal collapse. The former is more likely, but the latter cannot be totally discounted.

Weekend Yachtsman said...

Are you not asking the question the wrong way round?

What is to stop China and the others reaching our levels of prosperity?

(Apart from those countries who insist on central planning, socialism, etc - we KNOW what's keeping them from improving)

Sackerson said...

Levelling can be approached from both directions, but I think there are very likely resource and ecological limits to growth that preclude the whole world attaining Western levels of wealth - unless there is a crash in population fast enough to leave resources still there.

sobers said...

@weekend yachtsman: the point is not whether China et al will rise to our (current) level of prosperity (they very possibly may do), but whether we can sustain that level ourselves, by our own efforts, not borrowing money from them to do so.

We have forgotten that great riches require a great effort to attain, and do not just land in your lap for free.

Even a modest reduction in our standard of living (10-15% say) would have catastrophic consequences for a nation addicted to more and more of eveything good, and less and less prepared to do the hard work necessary to achieve it.

Paddington said...

Sackerson - the problem with a rapid population decline is that the extraction of resources becomes much harder in the chaos. Once left idle for a time, things like mines become unusable.

Sackerson said...

Yes, Padders, what a shame that while subduing the miners' insurrection Mrs Thatcher had no plan for preserving our access to coal for harder times.

Sackerson said...

... and it would be monstrous to wish a deadly pandemic merely as a way to get the ecology back into balance. We must hope that mankind is capable of the very long-term planning that is needed to reduce the population very gradually, so as not to tip us into a demographical imbalance leading to economic disaster. The Ecologist magazine's 1972 "Blueprint for Survival" is more relevant now than ever.

Anonymous said...

"Oil? Food? Minerals? Manufactures?"

The West produces a lot of both food and minerals. In fact one of the reasons why the West is so rich is it produces far more food than it consumes. This excess production of lifes key commodity allows it to import other products from elsewhere.

By the way, if measured by purchasing power parity, China has a GDP which is half that of the US and 4x that of the UK. Why? Because it both makes and consumes cheap products. Which is why the US is getting very irate at China's expansion of its own monetary base to keep its currency down. China isn't that competitive when you look in more detail. Chinese factory workers expect to have a stnadard of living that is comparable with factory workers in the West - so why does it seem to us that when measured in $ terms Chinese products are so cheap? Basically this is currency warfare - deliberately keeping the currency low to undermine the productive capacity of other nations. The whole world is catching on to their game - which hurts everyone of course.