Tag Archives: economy

Peak Paper

22 Feb
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Over at Crooked Timber John Quiggin has a post on peak paper:
In 2013, the world reached Peak Paper. World production and consumption of paper reached its maximum, flattened out, and is now falling. In fact, the peak in the traditional use of paper, for writing and printing, took place a few years earlier, but was offset for a while by continued growth in other uses, such as packaging and tissues.
China, by virtue of its size, rapid growth and middle-income status is the bellwether here; as China goes, so goes the world. Unsurprisingly in this light, China’s own peak year for paper use also occurred in 2013. Poorer countries, where universal literacy is only just arriving, are still increasing their use of paper, but even in these countries the peak is not far away.

Why does this matter? Because it means that we’re moving beyond the industrial mode of production and so must move beyond the ideas that go along with it, including the idea of perpetual growth:

Peak Paper points up the meaningless of measures of economic growth in an information economy. Consider first the ‘fixed proportions’ assumption that resource inputs, economic outputs and the value of those outputs grow, broadly speaking in parallel. Until the end of the 20th century, these assumptions worked reasonably well for paper, books and newspapers, and the information they transmitted. The volume of information grew somewhat more rapidly than the economy as a whole, but not so rapidly as to undermine the notion of an aggregate rate of economic growth. … In the 21st century, these relationships have broken down. On the one hand, as we have already seen, the production of consumption and paper has slowed and declined. On the other hand, there has been an explosion in the production and distribution of information of all kinds.
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The Self-Destruction of the 1 Percent – NYTimes.com

14 Oct

The 1% is destroying America, and their grandchildrens’ future.

The story of Venice’s rise and fall is told by the scholars Daron Acemoglu and James A. Robinson, in their book “Why Nations Fail: The Origins of Power, Prosperity, and Poverty,” as an illustration of their thesis that what separates successful states from failed ones is whether their governing institutions are inclusive or extractive. Extractive states are controlled by ruling elites whose objective is to extract as much wealth as they can from the rest of society. Inclusive states give everyone access to economic opportunity; often, greater inclusiveness creates more prosperity, which creates an incentive for ever greater inclusiveness.

The history of the United States can be read as one such virtuous circle. But as the story of Venice shows, virtuous circles can be broken. Elites that have prospered from inclusive systems can be tempted to pull up the ladder they climbed to the top. Eventually, their societies become extractive and their economies languish.

That was the future predicted by Karl Marx, who wrote that capitalism contained the seeds of its own destruction. And it is the danger America faces today, as the 1 percent pulls away from everyone else and pursues an economic, political and social agenda that will increase that gap even further — ultimately destroying the open system that made America rich and allowed its 1 percent to thrive in the first place.

via The Self-Destruction of the 1 Percent – NYTimes.com.

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Outsourcing isn’t the problem – Salon.com

19 Jul

What’s going on? Put simply, America isn’t educating enough of our people well enough to get American-based companies to do more of their high-value added work here.

Our K-12 school system isn’t nearly up to what it should be. American students continue to do poorly in math and science relative to students in other advanced countries. Japan, Germany, South Korea, Canada, Australia, Ireland, Sweden, and France all top us.

American universities continue to rank high but many are being starved of government funds and are having trouble keeping up. More and more young Americans and their families can’t afford a college education. China, by contrast, is investing like mad in world-class universities and research centers.

Here’s the nut:

The core problem isn’t outsourcing. It’s that the prosperity of America’s big businesses – which are really global networks that happen to be headquartered here – has become disconnected from the well-being of most Americans.

 

via Outsourcing isn’t the problem – Salon.com.

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Our Gardenbrain Economy – NYTimes.com

11 Jul

YES! The economy’s a garden, not a machine. It must be tended, not cranked. Right now the cranks are ruling the country and they’re making a mess of it!

What we require now is a new framework for thinking and talking about the economy, grounded in modern understandings of how things actually work. Economies, as social scientists now understand, aren’t simple, linear and predictable, but complex, nonlinear and ecosystemic. An economy isn’t a machine; it’s a garden. It can be fruitful if well tended, but will be overrun by noxious weeds if not.

In this new framework, which we call Gardenbrain, markets are not perfectly efficient but can be effective if well managed. Where Machinebrain posits that it’s every man for himself, Gardenbrain recognizes that we’re all better off when we’re all better off.

via Our Gardenbrain Economy – NYTimes.com.

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Can Citigroup Shareholders Launch a Revolt on Banks? – Business – The Atlantic Wire

19 Apr

The shareholders of Citigroup voted to reject the generous pay package of the CEO Vikram Pandit this week, setting up a potential showdown that could ripple throughout the corporate world. The “advisory” vote — which is required by the Dodd-Frank Act, but is not binding — now puts the company’s directors in awkward position. They can go along with it and ask Pandit to “give back” some of the $34 million it paid him last year, or they can ignore it and defy the people they theoretically work for. Neither option is attractive, but how it plays out could change the very nature of the shareholder-corporation relationship. It’s the first time a major Wall Street firm has had to face such a vote and it probably won’t be the last one to lose it.

… However, it’s now clear from this shareholder move that it isn’t just Occupy Wall Streeters who are annoyed with the outrageous sums that top executives take home. Now they’re actively trying to do something about it.

via Can Citigroup Shareholders Launch a Revolt on Banks? – Business – The Atlantic Wire.

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Say Hello to the Highest Poverty Rate in 17 Years | The Nation

14 Sep

The Census Bureau has released its poverty numbers for 2010, and the picture isn’t pretty: 46.2 million people were living in poverty last year, according to the bureau’s latest report, the largest number for the fifty-two years that the data have been published. This marks the fourth consecutive year in which poverty rose, with an overall poverty rate of 15.1 percent, up from 14.3 percent in 2009, and the highest rate since 1993. Indeed, with real median household income at $49,445—a drop of 2.3 prcent from 2009—incomes are lower now than they were more than a decade ago.

via Say Hello to the Highest Poverty Rate in 17 Years | The Nation.

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A Cooperative Economy: The Time Is Now | Common Dreams

26 Aug

This is a perfect time for a cooperative economy. Considering the disproportionate struggles faced by women and people of color during a recession, the cooperative economy presents an opportunity for all people, to leverage more power by making themselves the bosses, sharing ownership, and taking a collective approach to good management. Many people have already been let down by a top-down corporate or non-profit model in a recession-ridden society. Now is the time to rebuild the system, and build a society founded on justice, dignity, and respect for people and the planet.

via A Cooperative Economy: The Time Is Now | Common Dreams.

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The American Economy is Grinding to a Halt

7 Feb

Richard Heinberg is posting drafts from his new book in progress, The End of Growth (New Society Publishers). “The Sound of Air Escaping” explains why the American economy is grinding to a halt, with little chance of continuing forward on its present path. He observes:

During the 1930s, industrialized countries were in the early stages of their shift from an agrarian coal-based rural economy to an electrified, oil-based, urban economy—a shift that required enormous infrastructure investments (in new highways, airports, dams, and power lines) that would ultimately pay off handsomely for a nation on the verge of realizing a consumer utopia. All that was needed to initiate the building of that infrastructure was credit—grease for the wheels of commerce. Government got those wheels rolling by taking on debt, with private companies increasingly taking up the lead after World War II. The expansion that occurred from the 1950s through 2000, as that infrastructure was built out and put to use, easily justified the government pump-priming that initiated the process. Interest payments on the government debt could be paid through growth of the tax base.

Now is different. … both the U.S. and the world as a whole have passed a fundamental crossroads characterized by increasing scarcity of energy and crucial minerals. Because of this, strategies of growth that worked spectacularly well in the mid-to-late 20th century—via various forms of business and technological development—have reached a point of diminishing returns.

He concludes:

If the Keynesian remedy doesn’t cure the ailment but merely extends the suffering (while increasing government debt to truly toxic levels), the medicine of austerity may have such severe side effects that it could kill the patient outright. Both sides—left and right, the socialists and free-marketers—assume and hope to the point of desperation that their prescription will result in a rapid return to continuous economic growth and low unemployment. … that hope is futile.

There is no “silver bullet,” no magic solution that will turn back the clock to an era of abundant resources and easy growth. For now, all that governments can do is buy time through further deficit spending—ideally, using that time to build infrastructure that will continue to function in the coming era of reduced flows of energy and resources. Meanwhile, we must all find ways to come out from under a burden of debt that will otherwise crush us. The inherent contradiction within this prescription is obvious but unavoidable.

The entire chapter is online as MuseLetter #224; you can also download a PDF (214 KB).

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Peak Oil and Financial Decline

1 Feb

The Nation has posted a video by James Howard Kunstler on Peak Oil and Our Financial Decline:

From the description of the video:

Kunstler suggests that “cheap abundant energy” has facilitated ever-increasing industrialization for centuries. But now that society is in a period of self-destructive capital accumulation, he expects debt to increase as abundance in energy drops. The tremendous amount of accumulated debt, “a by-product of cheap abundant energy,” will mean that in the future governments will be less able to make investments in socially-beneficial programs.

He also criticizes the US environmental movement for shying away from the problem of energy. The movement is unable to talk about walkable neighborhoods, smaller cities or investing in rail or water transit,  an “intellectual failure of the culture to have a coherent conversation from people who ought to be leading” such a conversation.

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