Cursed to live in interesting times
In this article I connect the fall in the growth rate, with its roots in the rising costs of energy extraction and generation, to declining resilience in the economic system. These are in turn related to a more conflict ridden geo-politics. There is an increased vulnerability to shocks which will be catastrophic unless and until there is a new conventional wisdom in society about what is wrong and what has to be done about it. Things would still be hard if we had a better understanding of what is wrong but society would be in a better position to do something about the predicaments that face us all. Unfortunately those with a vested interest in current arrangements are not likely to change their world view any time soon. With their control over an extraordinarily servile mass media there is a grave obstacle to society understanding its predicament and responding appropriately. The global system is entering an extremely dangerous phase for life on the planet.
Growth and stability go together – like balance and momentum on a bike
Let me start by using the metaphor of riding a bicycle. With forward momentum it is possible to balance on a bicycle – as soon as the bike and passenger stops it becomes almost impossible. There is an analogy here for the capitalist economy. If it is growing a capitalist economy will stay economically stable. If it is not growing then, after a time, it automatically becomes unstable. Account books can be balanced, bills paid and debts serviced when individuals, households, companies and government are in surplus because incomes are rising. However a surplus requires growth. In general terms in a contracting system the incomes are more likely to be inadequate to cover outgoings. Some of the costs cannot be paid when revenues do not cover those costs.
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