The Paradox of Modern Life and Economy

There was a time when a very substantial portion of the human population lived off the land in rural areas scattered across the planet. Since the industrial revolution, large portions of the human population began to move towards the city to engage themselves in industrial production and other pursuits related to an urban life. The consumption of energy and industrial production began to increase and with the advent of things like antibiotics the human population too began to increase rapidly. Nations that could produce and consume at increasingly large rates or provide for increasing consumption to other parts of the world grew rapidly. It is here that an inherent paradox and contradiction began to be built into modern economies.

Many realize that the current rates of consumption in the most developed economies such as the US are not sustainable. As resources like energy and materials diminish, the planet will run out of such resources. On the other hand if humans begin to reduce consumption and return to simpler lifestyles, the economies will stop growing and sink into recession. It is a case of die if you do and die if you don’t. That is why economists in the US jump with glee when retail sales and consumption increases as it did over the last quarter.

Of the two scenarios, one of increasing consumption and the other of reduced consumption, common sense appears to suggest that reducing consumption, at least excesses and wastages, is the more enlightened way to go. It should be welcomed. However, government economists would prefer that this does not happen because if the consumption reduces, GDP growth reduces. The national budgets are a percentage of the GDP, therefore an economy in recession implies that government would be compelled to either reduce expenditure or go into debt; or go into deficit and monetize the deficit (print more paper money in excess of GDP).

Incase a government reduces expenditure then it is unpopular with the population as is happening in Greece, Ireland or UK currently. An unpopular democratic government then gets thrown out in a democratic election. Incase the government goes into debt, it can postpone its problems for a future government or future date. If deficits are monetized then inflation takes place and that is like an additional tax on all citizens, an invisible tax, that is not shown in the tax returns but hurts much more since it hurts the poor as well as the rich. Since the democratic countries are the dominant ones in the world today hence an economic philosophy that is favored by governments that are elected for short terms prevails. Hail consumption, who cares for grandchildren.

In the meanwhile, while governments struggle with these problems some people loose their jobs and end up on the street. In a recent post, John was commenting in his blog that persons ending on the street and begging are despised. To my mind stepping out of the economy and its stress is not such a bad idea for a person who is willing to enjoy not much more than sunshine and fresh air. However, if a person gets into begging that is despicable since it involves bumming on someone else. It is better for such persons to return to the land and make a simple living out of it.

I presently live in India and have witnessed the rural way of living that is still not very different in some parts to the way of living prior to the industrial revolution. In some cases the life is hard especially if the weather gods have been unkind (The worst off were those that went into debt from time to time encouraged by modern or traditional bankers)but in other cases and that is the majority, rural farmers have a little surplus to tide them over the bad years. They do not have the luxuries of modern societies but they are stress free and happier as a result of it, most times. If they have some surplus they build a cement and concrete house. If they do not have a surplus they build a mud and thatch house that comes for free. It requires labor but the labor is often spread across several years so that it is not a pain. They have no money for medical treatment and medical drugs. Hence they die peacefully without having to suffer debilitating side effects and conditions like cancer. Most are able to grow enough wheat for their own consumption and if you think carefully this is a versatile food grain, a variety of grass that can sustain a human diet. Think of the many forms wheat can be turned into. First there is a range of leavened and unleavened breads. Then we have cookies, biscuits and cake, with a bit of processing one may have noodles, pasta, pizza, Khus Khus and a croissant. When one grows wheat then that produces fodder for the cows. Farmers who keep up to four cows end up with at least one that is in the milking stage and that provides butter and more protein or cheese. Once in a while two or three cows begin to produce milk simultaneously and that is the time to sell some and get a new wardrobe for the family. When a farmer gets too old to farm either his son does the farming or he sells/rents his land and lives off that.


When I told a modern economist of an economic model based on reduced growth (that included proportionately reduced government expenditure) the economist laughed heartily. A diet based on wheat is not a low carb diet but none of the farmers I met in an undeveloped economy had ever heard of a low carb diet. When told about it they laughed heartily.