The party's over, so let's stop our obsession with economic growth; the pensioner.
The only famous economist I ever met was JK Galbraith, the Keynesian who coined the phrase "the Affluent Society". When I met him he was jet-lagged, just off the plane from America, and I interviewed him for Radio Times about a BBC series he'd written. I prepared for it by reading not only his economic books but also the one novel he ever wrote. Perhaps he found that last bit disarming because he said (I kid you not) it was the best interview he'd ever engaged in. His ideas made sense. But alas he's dead, and today's problems are on a different scale.
The immediate cause of this crisis was the mother of all scams, the belief in a housing "ladder".
That phrase makes me wince. A house is a building, not a financial escalator. There's no God-given rule that its value must increase faster than inflation. That was a myth promoted by the usurers to make a killing out of - and boy, did they succeed!
Unfortunately, the puncturing of that bubble coincided with other happenings in the real world, like the fossil fuel crisis. In 150 years we've consumed stored-up energy accumulated over millions of years in coal seams, oil-fields and pockets of gas. That bonanza has already peaked.
There's plenty left but from here on it gets less accessible, more expensive, and ultimately ends. We can survive on renewables but we can't binge on them. The party's over.
People also assumed that First World nations would always be richer than the lesser breeds whose cheap raw materials and cheap labour fuelled our prosperity. That was no truer of Europe and North America than it had been of Nineveh and the Aztecs and Caesar's Rome. We must learn to adjust to that. Instead we're busting a gut pretending we're still the nuclear terror of the world. That party's over too.
Finally, there's the gospel of Growth: that this year we must consume more goods and services than last year, or face disaster. No matter how unnecessary or rubbishy, more stuff must travel from factory to supermarket to consumer to landfill site, ever more and ever faster until the end of time. That gospel, still being preached, is boloney.
To improve the lot of the poorest, the remedy is not to produce more wealth but to concentrate on the way it is distributed. The cost of helping them now should not fall on their children and grandchildren but on those who can best afford to pay today.
Not for 60 years has public opinion been so ready to welcome increases in taxation levied on the most opulent sectors of the population. But where is the party with the courage to put that policy into practice?
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|Publication:||Western Mail (Cardiff, Wales)|
|Date:||Nov 21, 2008|
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