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It Starts With an Excuse

Through the first decade of Barataria, one theme becomes clear.  There is always hope, there is always a better way if we just figure out how to talk honestly about what’s wrong and how we have to work together.  The exceptions to this theme are the most illuminating.  This post is from January 2010, the low point in the recent Depression.  The distinct lack of hope is a bit chilling.

What would make a recovery sustainable?  If you ask an economist, they’d tell you that what makes any economy grow and prosper is, ultimately, what they call “productivity gains”.  That’s the ability to make more with less that allows a people to propser.  During the 1990s this was given as the reason why interest rates could remain low and we could have one Hell of a party – a sloppy, hazy bender.  We live in the hangover that resulted, but have we really learned how intoxicating this one, simple idea is?

The basic idea is serious fun.

Like a first drink, the initial effects are simple and hard to argue against.  Changes in technology, either physical or through more efficient organization, allow companies to either make more stuff or do what they are doing with fewer people.  The gain in efficiency, measured in dollar output per employee or capital required, means that the economy as a whole is producing value.

In the 1990s, cocktail of choice became information technology, aka computers and internet.  During this period of time “technology” came to mean nothing more than this narrow area of tech, but the principle has been the same no matter what kind of “skill” is reduced to practice in a way that increases people’s ability to put out more stuff per person.

Going back in time to the 1970s, however, we had a more fundamentalist view of this intoxicating stuff.  Back then, we relied more heavily on manufacturing as an economy and tended to focus on manufacturing systems.  Technological developments then were in the form of assembly robots and other mechanization, and they were not as well received.  The United Auto Workers warned everyone that jobs lost to machines were a threat to not just their jobs but the entire economy.

Make what you want, when you need it – and get it right to your door cheaply.

The reasoning of the time went like this:  if you make more things, there have to be people who are willing to buy them, and if you let people go while you make the same amount those people have to find new jobs.  Technology might be great for the company, but it’s hard on the economy as a whole.  This view was common right through the 1980s but was eventually drowned out by one simple fact – consumption, or money spent on things that don’t last, rose dramatically in this period from 62% of GDP to 70% of GDP.

By the time the information technology came along, the warnings of the grumbly Union Guys and their weak beer started to seem very old fashioned.  Popular culture started to assume that what might be true for one class of people wasn’t necessarily true for all.  Improvements in “productivity” brought by the information technology were somehow different, as if a Cosmopolitan was different from PBR.  Nevermind that we didn’t need as many people storing, maintaining, and recalling data written on paper to make things work.  Forget about how banks once managed risk by getting to know their customers and the intimate details of their lives.

The drinks just kept on comin’, and they were good.  Technology was a driving force that increased “productivity” and made it possible for us to all be rich because we’d be even more efficient.

Who doesn’t enjoy a lovely tea party?

It’s important to look back over the blur of the whole party because there’s no one point where we went over the edge.  It only worked because we were able to consume the excess that was produced through the bubble economy of the 1990s. We were able to change the popular mythology of what technology does for us because we had an amazing party.

There is little question that the downturn we are in started around 2001 because from that year forward the net growth in GDP minus Federal deficits is negative – every other part of our economy, from manufacturing to mining and from retail to services, has added up to a decline every quarter since then.  Once we were able to use these new systems to cash-out home equity, using our homes as a kind of ATM, the overall economy actually fell harder outside of these operations that generated quick, unsustainable cash.  The crash of 2008 gradually became inevitable.

Where did it all start?  It wasn’t simply the first drink of “productivity gains”, although these clearly resulted in a need for fewer workers or goods and services that we couldn’t consume fast enough.  It started with an excuse.  Just like the commercials against drunk driving tell us, impaired reasoning and a feeling of invulnerability created the excuse that allow us to justify stupid, destructive behavior.  We need to understand that it is just an excuse and there is still no substitute for a hard dose of reality.

Technology and the “productivity gains” that it can create are not always a positive, wonderful thing.  They create side effects that ripple through the whole system.  If we want our new understanding to serve us we have to not make excuses for it because it’s left us feeling giddy and powerful.  That’s when the technology, like any addictive substance, starts to take over your life.

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16 thoughts on “It Starts With an Excuse

  1. It’s clear enough that a global economy based on production and consumption of “stuff” is unsustainable (to use a very overused word). Structural unemployment is perhaps the least of the reasons.

  2. I keep coming back to the root problem -for me – Our form of capitalism depends upon 3% growth, every year, at least, with no limits/no ceiling, JUST to maintain stability – if Tech ain’t shovin’ out continuous new snazzy things, the recent decades have shown that Financial instruments And/Or false over-valuing of various non-essential commodities will step up to meet the need – – – Until we DO, as a nation, understand, fully, some base realities and fashion our daily lives/choices on what to purchase, invest in, etc., not much will change until we are forced to change during crisis – but hey, what do I know? I think local food producers and composting toilets are the greatest things to invest in – – LOL 🙂

  3. There was a book written in 1972 called Limits to Growth. The authors were Donella H. Meadows, Dennis L. Meadows, Jørgen Randers, and William W. Behrens III. Some of the thinking was to explore how exponential growth interacts with finite resources. Both Alan Muller and TamrahJo have the same take as I do. An economy based upon growth is unsustainable and far too inefficient and destructive. We are literally drowning in our garbage and contaminating our world. Yet we have incredible levels of poverty and starvation with needs that could easily be met it our thinking and approach was different.
    Leslie

    • Yes, exactly. “It” may have seemed to work when only North America, Western Europe, and small-minority-elites elsewhere aspired to mega levels of consumption. But now the entire planetary population is aspiring to “consume” (while millions still starve) and there is no way the earth can stand it. What would observing aliens in their saucers think of the election of Trump?

    • Absolutely. Equity is the real issue. Of course, that is a good source of growth, at least in the short term. But it won’t be satisfied until we put growth aside.

    • There is a genuinely positive spin on this, which is to look at how a world based on abundance, not shortage, would operate. Star Trek operated in that world, so it’s not too terribly hard to imagine.

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