Saturday, January 29, 2011

The Paradox of Modern Life and Economy

Off you go into the countryside
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 human population began to move towards cities to engage themselves in industrial production and other pursuits related to an urban life.  Consumption of energy and industrial production began to increase and with advent of things like antibiotics,  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 may run out of cheap 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 but that pushes up the cost of dwindling resources like fossil fuels and the economy tends to push back into recession all over again causing repeated dips.

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, governments and  economists would prefer that this does not happen because if consumption reduces, GDP growth reduces. The national budgets are a percentage of  GDP, therefore an economy in recession implies that governments 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).But then a day comes when the debt becomes too large to service, some of it is defaulted and cheap debt is no longer available as has happened in Greece.

Incase a government reduces expenditure then it is unpopular with the population as is Greece, Ireland or UK currently. An unpopular democratic government then gets thrown out in a democratic election. In case 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.The sad truth in some countries though is that they are the grandchildren of past excesses. The future is here.

In the meantime, 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 up 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.Backed by the government a planned move back to the land can create a huge number of quality jobs and there is a separate post on that called AM farms in this blog. Just search for it using the search tool on the top left corner of this blog.

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, eventually forced into suicide) but in other cases and that is still 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 (a North African thing) 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 milk 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. No wonder more of poor rural persons laugh more often than rich urban ones who are found to be irritable and sulking frequently instead.

When I told a modern economist of an economic model based on reduced growth (that included proportionately reduced government expenditure) for a change, the urban economist laughed heartily. The laughter was a pleasant change. He remarked that a diet based on wheat is not a low carb diet, that he is currently on. None of the farmers I met had ever heard of a low carb diet. When told about it they laughed heartily.  Similar laughter on all sorts of sundry things is common with this lot of unsophisticated ruffians :)


John Myste said...

Very interesting article, sir. If I were to summarize it in one sentence, it would be this: “Recession is sustainable.”

Curtis White published a very good analysis of sustainability “A Good without Light,” where he argued that one should not seek sustainability at all. Anything we are having trouble sustaining should be a target of reduced consumption, he said. If we are running out of oil, then stop relying on the processes that need oil instead of looking for alternative energy. After reading the first few pages, I was prepared to debate, but by the time I got to the end, I was almost convinced: almost, but not, as the theory is impractical.

Your article reminded me of that a little bit. Very good, and very thought-provoking, but in America not completely practical. To compete globally, we must not live in a recessed state. Thus, we must have ways to not fall into recession and at once sustain ourselves, which means alternative resources. Of course that is a religious argument on my part, because we could simply say that to the degree competing means racing toward an environmental dead end, it is not true sustainable competition, but either a selfish goal designed to financially enrich us and pass the true cost to our descendents, or an illusion entirely. Even as I disagree with you, I find myself starting to agree with your position more than I do mine.

“It is better for such persons to return to the land and make a simple living out of it.” In American, a homeless person cannot do this, as he has no place to exist. He cannot put up a tent on a plot of land. All land is spoken for, either by the government or a private citizen, and the person who owns no property must pay for the air he breathes. His existence in America is criminal, loitering, unless he is paying someone.

All of that said, I find the article very intelligent and one of those pieces that will probably cause me to change my impromptu opinion of it every time I return.

Well done, sir.

ashok said...

Thanks John for your encouraging comments. Yes these questions need to be thought about much more deeply. At one time communists had brain washed entire populations. When that model failed people began to question it and overcame the brainwashing. Perhaps we too are to an extent brainwashed by other systems, at least partially.

ashok said...

John, for the homeless getting charged for criminal loitering repeatedly and ending up in prison may not be such a bad deal. I hear the conditions in American prisons are great with free board, lodging and entertainment for which the rest of the population pays.

Vincent said...

I wrote a long response, and it was lost. Oh well. Good piece, good discussion.

Vincent said...

As for your idyllic portrait of country life, Ashok, another blogger also from India, is as worried as you about the effect of the world economic situation. But he points out the number of suicides by Indian farmers: more than 2 million since 1997. See this post.

ashok said...

Yes Vincent I know about that. I follow all the national news regularly. I have mentioned it in my post - as those who took debt. These were indebted farmers in certain regions where climate failed them, their debt grew and they committed suicide. It is a very sad situation even though limited to certain specific areas in the country.

However, my reference was to the majority. It is also not that there were not an equally large number of suicides in the city, some for other reasons, some more distressing.

ashok said...

As always there is a dark side and a bright side to life Vincent wether it is a rural life or an urban one. The advantages and problems of each are different.

Vincent said...

You mention that begging is despicable, which sounds harsh to me. It may be one of the most harmless forms of distribution there is, to the one who gives and the one who receives. Compared with prostitution and drug-dealing, for example, it is positively honourable. Not to mention many ways those higher up in society earn their living, ways which give no benefit at all to the world and may cause great suffering.

Vincent said...

Distribution of wealth, I meant.

ashok said...

There I agree with you Vincent. begging is far less harmful compared to many other insidious ways in which supposedly some respectable persons make money in the world. When such money is made by a leader of the coutry, say for example Egypt, it causes immense misery to millions of persons that includes young children, infants the old and the helpless. Compared to all that begging is perhaps no more than a case of bad manners or poor practice. I should have used a less harsh word for it.

ashok said...

Vincent, I am considering replacing the word 'despicable' by unfortunate in the post. Would that be OK ?

ashok said...

or perhaps "sad". It is very sad if a person is palced in a position to beg.