(This is the first in a series that is growing out of a short talk I gave at the Central Texas World Future Society on May 21, 2013)
Our social, economic and political systems are built with the assumption that not only will growth continue forever but that it MUST continue forever.
- If the economy fails to grow for 2 consecutive quarters (6 months) we are said to be in a recession.
- Wall Street punishes companies that fail to show year-over-year growth in revenues and profits.
- Moore’s Law has powered the computer revolution by promising that the power of digital circuitry will DOUBLE every 18 months.
Thinkers have warned us that this cannot go on forever but their voices are generally drowned out or shouted down. Financial Analysts call refer to this as “all trees grow to the sky”. So far, technological advances and cheap energy have kept the myth alive.
This Myth has Many Faces
Consumerism. One of the ways this myth is applied is by way of demand creation. Consumers are enticed with the latest and greatest gadgets, constantly changing fashion, “keeping up with the Jones”, planned obsolescence and other tactics. Every one of those tactics have a goal of getting end users to consume more stuff so that the producers can increase the top and bottom lines, resource consumption, actual need and disposal issues be damned.
Debt and easy credit The satisfaction of this ever-increasing demand is sped up with the use of debt. Debt is borrowing from the future to pay for something in the present. The subtle tactic of getting consumers to think in terms of monthly payments instead of total cost – then increasing the payoff time as a way to hide price increases.
The only practical uses of debt are wealth creation and for emergencies. Consumer debt for things expected to outlast the terms of the debt are bad. Debt that remains after the good or service purchased with it is horrible and wrong beyond words.
Side bars about debt:
- Debt, death, mortgage, mortality and mortuary have common roots
- There was a time when people paid cash for houses. I remember when 20-year mortgages were the longest available terms and when 30-year mortgages came into existence. For a time, 100-year mortgages were offered in Japan (then prices collapsed so they were no longer needed).
- This discussion includes student loans. Most knowledge today has an expiration date. Students should go into debt only to acquire marketable skills. They should then pay off that debt while those skills are marketable.
The computer revolution. The massive technological improvements are best described with Moore’s Law which has been working since 1958 (Gordon Moore discovered it in the mid-1960s). It will continue for a few years but it cannot go on forever. At some point, transistor density will be limited by size of their atomic structure.
Obviously, this can’t go on forever.
Unlimited growth ignores the fact that the Earth is a mostly closed system. It will fill up. This multi-generational Ponzi scheme will end, just like every other one that has ever been run on unsuspecting marks.
In the next post, I will discuss
For now, please share what makes you happy NOW!