Is the economic imperative sustainable?

Posted on 29 March, 2020 by alloporus

This post was written before the COVID-19 conundrum changed a few things… and yet it still applies.

The Australian economy is in a funk. We are told that annual growth in retail trade of 2.4% in trend terms is the lowest since December 2017.

Throughout 2019 households have not increased their volume of retail purchases at all.

In short, we are all strapped for cash and are not buying stuff.

Woh, hold on. Not quite.

Of course, we are consuming, we do it each and every week.

The problem for the economy is that we are not doing more of it than we did last year. Consumption is going on all the time, it is just not growing in percentage terms.

So it’s not consumption that economist’s are worried about, it is growth in consumption. Growth is considered essential for without it everything collapses in a heap. At least that is what we are told.

Let’s just look at that 2.4% again.

In 2019, retail trade — selling merchandise in the state that it is purchased, generally to a customer base of private individuals — will be double what it was in the year 2000.

When ABBA were in the charts in 1974 consumer spending by Australians was four times less than it is today. There are more people on Australia now than in the mullet and square shoulder days, but to quadruple spending in 40 odd years.

Come on, think about it.

Growth is not sustainable. It cannot go on forever. Not least because there will be nothing left for me to consume. I’d be consumed out.

Unless prices skyrocket there is a physical limit to the stuff that one person can consume even if I am littering, throw away, who gives a shit kind of consumer.

Sooner or later everyone has all the things they can think of and wish to possess. Does it mean that they just keep going round and round upgrading every time? Are we really that shallow — maybe!

Endless growth is just an extraordinary premise when you really examine it.

It is obvious why it is there.

Companies have to keep selling or they go out of business. Unless there are new people around to buy your widgets you will need your current customers to buy widget 2.0 or you diversify into insurance and the airline business.

A business can get away with it if prices rise. Their unit costs might go up but so does the retail prices and so growth is maintained. Indeed inflation is part of the growth deal, too little being as bad as too much.

So we teeter on the delicate balance of perpetual growth being imperative to our survival

Teetering a lot

Recently there was a step-change in the Australian continent.

An extended drought in the east created hot, dry conditions in spring when frontal systems create strong westerly winds. Dry air, hot temperatures, tinder-dry forests and strong winds produced devastating bushfire.

At the time of writing more than 11 million ha of bushland has burnt in NSW alone, an order of magnitude more than the whole of the previous fire season. Across Australia, an area the size of the Netherlands and Belgium has burnt in just a few hot, scary and brutal months.

Many of the forests that went up in flames, sometimes 70m tall, were supposed to be wet, they are even called rainforest and rarely burn, some of them not for hundreds of years.

This year they did. Several of the fires are 500,000 ha each.

It will take a while to assess the consequences but I suspect that these events have nullified decades worth of conservation effort and billions of dollars worth of natural resource management actions.

It should also be a wake up to the economists who are going OMG “annual growth in retail trade of 2.4% in trend terms is the lowest since December 2017″.

If the countryside burns like it has this summer the economy will struggle to achieve any growth at all for a long time.

And now the virus

So here we are in mid-March 2020 and COVID-19 is about to be declared a pandemic.

Australians have cleared the supermarket shelves of toilet rolls because they are absolutely bonkers — the toilet roll supply for the country comes from Adelaide, not Wuhan — and are about to freak out good and proper.

Already global markets have freaked out too and taken a massive plunge. This is actually a necessary correction from an over-inflated bull run that has gone on from the GFC, partly a response to the cash injections from jurisdictions. But ni matter, we can blame nature.

This new virus will not cease economic growth. The flu virus does something similar every year, this one is just more acute. People’s reactions to this unknown make a recession is a given.

Postscript

Even though there are confirmed cases of COVID-19 in the US, most people are more likely to catch and spread influenza.

In the 2019 flu season, there were nearly 30 million cases of flu and 17,000 deaths.

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Dust storm consequence that’s not so obvious

Posted on 22 March, 2020 by alloporus

Every now and again Sydney gets a dust storm.

Red dirt descends on the harbour city leaving a stain on all exposed surfaces and forces asthma suffers indoors. The cloud usually passes within a few hours on the strong westerlies that brought the problem with them.

The typical conditions that bring this occasional event are simple enough: drought in the centre of the continent and a deep low tracking through the Tasman sea. Winds whip up topsoil and keep it aloft long enough for it to travel far and wide, sometimes even to New Zealand.

Dust storms like this are not common in Sydney. There is a major one every few years that creates a temporary nuisance. After a day it is forgotten and the next rain shower removes the evidence.

Severe thunderstorms, floods and bushfires along with their smoke are the more familiar of nature’s challenges.

However, suppose that the dust storm deposits 0.1 mm of dust across Sydney. Just a thin film of silty redness; nothing that the rain cannot wash away.

Suppose further that this happens at least once every 4 years.

In the lifetime of the current crop of university students, some 0.5 mm has landed and washed away. Not much to write home about — although most university students live at home these days so could just shout to their mums in the kitchen

Since the time past when shiploads of convicts founded Sydney and began to spread out into the hinterlands, these irregular storms have deposited 5.75 mm of dust or a little under a quarter of an inch.

Again not much, but you could scrape it together into piles and make enough soil to sprout some bamboo shoots.

Now assuming the same rates and amounts occurred since the first humans reached Australia, say a minimum of 60,000 years ago by most genetic estimates, then we are looking at around 150 cm of deposited dust, roughly 4 feet 11 inches of the stuff, more than enough to grow things in.

In fact, 4 feet 11 inches is the average height of a modern 12-year-old kid.

What this should tell you is that wind erosion is serious business.

Wind can move soil from a source area and deposit it somewhere else. It can do this very quickly, well within the time bounds of human societies. Give it a bit longer and it can shape landscapes.

If the paddocks in the west of NSW are bare when the pressure discrepancy hits then the wind does its thing even faster. Soil and nutrient exit stage left.

If this is alarming to you it should be.

At a time when we need every gram of nutrient to stay on the paddocks to nurture the plants that we want to eat, it is continuing to blow away on the wind.

Also, know that wind erosion is a perfectly natural process. It has contributed to the flattening of mountain ranges on earth for millions of years. It is not something humans can stop as, despite our biblical edicts of dominion, we can’t stop drought and we can’t prevent air pressure systems from moving around the planet.

We can be smart though and reduce the effects of wind through management. This is a very simple principle — keep groundcover.

That is, don’t leave bare soil anywhere.

Easy to say, not so easy to do. If your livestock are starving under drought conditions and need to eat whatever is left on the paddock there is a strong temptation to let them. Keeping plant cover on the ground requires advanced planning for the dry times so that the livestock are elsewhere or fed from other sources.

Again, really easy to say — especially by a blogger from the city — really hard to do on the farm.

A kicker

In old, already heavily eroded soils like those over much of the Australian inland, the last thing you need to happen is topsoil loss.

Old soils tend to have fewer primary minerals especially k-feldspars (orthoclase, sanidine, and microcline) and micas (muscovite, glauconite and illite). These minerals are called active because they have a high capacity to hold onto and exchange nutrients with plant roots.

Primary minerals act as an important reservoir for potassium (K), with over 90% of K in soils existing in the structure of these minerals. Significant amounts of calcium (Ca), sodium (Na), and silica (Si) and smaller amounts of copper (Cu) and manganese (Mn) are also present in the feldspars. Micas and illite are the most important source of K in many soils, and they also contain magnesium (Mg), iron (Fe), Ca, Na, Si, and a number of micronutrients

This makes growing plants in older soils a challenge as the nutrients exchange is far less than it is in younger soils.

Another kicker

I am writing this update in late January 2020.

It has been an apocalyptic summer on the east coast of Australia. More than 11 million hectares of bushland has burnt, temperature records have been smashed — where I live the daily maximum recorded temperature for December was exceeded by over half a degree Celcius and then in January by a full degree, it was 16.5 degrees above the long term average that day.

Combine the heat with the smoke and even the healthy are calling it. Then the dust storm, a big one. When it passed through Orange in the centre of the NSW it turned day into night and was the worst anyone could remember.

Then the rain came, briefly and yet with such ferocity the lightning strikes took your eardrums out.

This is climate change, my dear readers. All of these severe weather stories are the consequence of more energy in the atmosphere, even the deep chill last winter in the US that the POTUS joked about.

Again we can’t ‘fix’ climate change but we sure as hell should be doing everything we can to mitigate against it.

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What’s with all this individual enrichment?

Posted on 15 March, 2020 by alloporus

Capitalism is a powerful force.

Simplistically, it mobilises funds — capital — to secure peoples time and effort — labour — that converts or generates goods and services, often from a natural resource or two, that when sold becomes more capital.

The basic idea is the conversion of one thing to another for monetary gain.

The deal with capitalism is that for this process to work, the enriching part, some capital is needed to begin the process. There is an investment required in the extraction or conversion or creation of a resource that can be rented or sold.

How to start becomes the problem if you have no access to capital.

Hence for centuries workers felt exploited as they lacked access to the monies to get themselves off the treadmill. In modern times more westerners feel they have access to capital, sufficient at least for a house, a car, and the luxuries of life.

That they are indentured to the banks for this cash seems to pass them by as they trudge along to the workplace as enslaved as the poor buggers who used to do it for peanuts. Quite literally in the slave systems of the 1800s.

Then there is the inbuilt reality to capitalism that is starting to bite very hard.

When capital is used to create more capital, the original owners of the capital stand to gain the most from the process — the rich get richer.

The argument that wealth creation raises all boats, the more money made, the more money there is to pay workers and their lives improve is also true to a degree. The average wage in mature economies tends to rise over time and the standards of living along with them.

The problem is that individual enrichment is still at the core of the process. The owners of the capital gain the most, the get bigger boats as all the little rowboats slosh about on the tide.

A report published by Oxfam in January 2020 ‘Time to care’ found that the world’s 2,153 billionaires have more wealth than 4.6 billion people.

In other words, a little over 2,000 people hold more wealth than over 60% of the world’s population.

These numbers show what has and continues to happen. Fewer and fewer people have a greater and greater proportion of the wealth.

A riddle
Suppose the board of a large company has seen some good numbers from the CFO and decides to redistribute some of the profit to the workforce as a bonus.
Rather than do this on some arbitrary merit score they decide to give everyone at the company a one-off bonus that is 10% of their gross salary.
Is this fair?

Check out one answer at the end of the post.

A moral conundrum

Should this aspect capitalism be allowed to continue, this appropriation that is an inevitable consequence of the paradigm?

Well, obviously there are plenty of people busting everything to be one of the 2,000 with more money than any one person could realistically spend.

Then there is just about everyone else who would like more money than they have. They might not need billions, even millions, but most people would like even a little bit more to help with the school fees, the rent and maybe even a holiday sometime.

The 4 billion people living on less than $10 per day certainly would. For them over half the money they earn is likely to go on food.

The 800 million of these people that the United Nations says live in extreme poverty are desperate for more cash simply to not go to sleep hungry and maybe a leg up to get themselves out of their poverty.

Unless there is a better way to redistribute, it would seem that we need an alternative to creating wealth for these people.

Are there alternatives to capitalism?

A question asked many times by folk far more erudite in these matters than Alloporus will ever be.

The answer is, of course, several alternatives. Here are a few of the common ones.

Communism

Communism was tried and failed the pub test. People hate being told what to do, especially when it comes to money.

Variants on the tried communist model have been proposed including a few based on anarchism

Anarchist communism, that advocates decision making by consensus democracy, the abolition of the state, and the abolition of private ownership of the means of production.
Post-scarcity anarchism, an economic system based on social ecology, libertarian municipalism and an abundance of fundamental resources.
Anarcho-syndicalism, an ideology centred on self-management of labour, socialism and direct democracy.

Heritage Check System

Then there is the retention of the market economy but with banks stripped of their lending power and with constraints on governments printing money and when they do the money is only used to “buy materials to back the currency, pay for government programs in lieu of taxes, with the remainder to be split evenly among all citizens to stimulate the economy”. This is termed a “heritage check”.

No doubt the originator Robert Heinlein, the American science-fiction author, knew what he meant.

Economic democracy

Economic democracy is where the workers control the companies in some sort of democratic system and social investment is carried out by a network of public banks.

Sounds good until we all suffer death by democracy for the crowd is not always operating in its own best interest let alone the interest of the individual.

Knowledge economy

In a book Post-Capitalist Society published in 1993, Peter Drucker described a possible evolution of capitalistic society where knowledge, rather than capital, land, or labour, is the new basis of wealth.

The thing about this option is not everyone, including an orange-haired president and his supporters, respect knowledge enough. People are quite good at rejecting evidence they don’t like.

Individual enrichment

We could go on for there are dozens of others and maybe one day there will be one that has a chance.

That system will have to allow people the chance for betterment no matter where they currently sit within the system. This is the essence of capitalisms success — even the lowly janitor has a chance of making it.

It’s a slim chance but it is not zero.

This is how people are at the core. They want, desire, need the opportunity to get better, to be better and to live better.

This great urge for betterment is understandable for those whose life is a struggle. However, it does not stop when you get the Porsche and the air-conditioned mansion with heated indoor pool

Maybe not even when your incense burns and your chakras are in blessed harmony, for your ego will still be lurking somewhere deep in your psyche just waiting for you to slip out of nirvana.

Whatever the system it has to allow for individual enrichment.

Answer to the riddle
Is a 10% pay rise across the company fair?
Well, it sounds fair enough. But 10% for the office junior might buy a weekly trip to the fast-food court. The CEO, on the other hand, gets a new car.
Not so fair after all.

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What ever happened to the stupidity filter?

Posted on 8 March, 2020 by alloporus

When I was a kid I avoided being seen as stupid.

It was my number one priority, the imperative. I hated the embarrassment of getting anything wrong so I tried not to with every fibre of my being.

Who wants to admit they don’t know who scored Tottenham’s second goal at the Lane on the weekend or wasn’t allowed to stay up late enough to watch the screamer from Glen Hoddle.

Who could not know the latest track by the Sex Pistols, even if it was banned by the BBC and there was no way for the average closeted Joe to hear it?

Who wants to admit they hadn’t heard who the class bicycle was supposed to be shagging. Yes, it was all horribly misogynistic in those bygone years.

I developed a few handy tactics to avoid putting my foot in it.

I thought before I spoke.

I listened and made sure I was in the know about everything there was to know.

I acted like everyone else as best I could.

The last thing I did was blurt out errors of fact or judgement for all to hear. Nobody, least of all me, wanted to be a dumbass.

What changed?

It seems that today there is no embarrassment at being wrong at all.

Any sports, social or knowledge item is a click away on Google. Any visuals missed are on Youtube. If I don’t know the track its cool to Shazam it.

This suggests I can be in the business of getting it right all the time with a little help from my handheld device. Only that is not how it goes down.

These days I am just as likely to be suckered by fake news and errors of knowledge and feel no problem at all in blurting them out to whoever is nearby.

I can be stupid with impunity and absolutely nothing at all happens to me.

What happened to make stupidity a skill worthy of the highest prizes?

Here are three possibilities:

Theory #1

the bubble

We all live in our own bubbles and nothing gets in. The view is opaque and soundproof. Others can see our posts but not us, hence we can never be stupid because we are invisible and safe in the bubble. It offers extraordinary protection and zero kickback.

Theory #2

The hyper ego

Similar to the bubble, but where everyone can see and hear you. It doesn’t matter though because your ego is so powerful that you are always right even when you are not. The ego is all-powerful and can’t ever let you feel pain or let down in any way.

Theory #3

Who gives a f__k?

It doesn’t matter if you are stupid or not because there is no personal responsibility for anything. If I am wrong so what, it’s my life. I don’t care what others think. If I believe I’m right then I am, sod them.

What happens next?

The reasons for getting things right back in the day were the wrong ones.

I was wanting to be accepted, in with the in-crowd, to be liked. Naturally, this is the ego talking, the kind of thing that besets youth whatever the generation.

What it did though, this protection by the ego, was to instil a useful caution. I was more thoughtful than I would otherwise be, perhaps even learnt to be a little streetwise. This was very important when later in life you find yourself on your own in the wrong neighbourhood of Johannesburg or confronted by the military man at the roadblock, his AK47 pointed into your truck.

What happens to the modern youth who can’t be arsed whether he is right or wrong on anything. So long as the chicks think he is cool, who cares?

Presumably, his streetwise instincts must come from somewhere else. Not learned from smarts.

Presumably the truth, the facts and knowledge lose whatever currency they once had. All the work needed to gather and store them is time wasted. Should the unlikely happen and a fact is needed, it is there in your palm.

In other words, there is no stupidity filter anymore.

It is quite ok to be dumb. Nobody seems to mind anymore. They even expect it.

There is no embarrassment, no loss of face.

This will create problems later on. When we actually need that filter to function it will not be there. We will not know how to tell the nonsense from the truth.

And we get Trump and Boris and Scomo all over again.

Who has the right to impinge on my personal development?

Posted on 1 March, 2020 by alloporus

I have been doing what I do for a very long time. Some of my colleagues even think I’m quite good at it.

I managed teams, run businesses, write and, in the day job, provide scientific advice.

Not everyone understands science.

Alloporus has talked about this before, that many people don’t even think numerically even though they might be as trained in the technical aspects of the work that they do. Thinking numerically is an art. Thinking logically is an art. Few people are comfortable with so much ‘nude on a chair’ and not everybody does the whole art criticism thing that well either.

So my skillset of numerical logic and deep understanding of the scientific method should be really useful and, for the most part, it has been. However, it is not the easiest of career choices as people find it very hard to accept what is being said when they don’t understand where it comes from.

I meet with resistance, uncertainty, insecurity, and all the usual patterns of behaviour that flow with those negative vibes. This happens every day in one form or another.

I need to be resilient to the negative emotions shunted in my direction. It is rarely personal but it does happen often enough for it to drain my energy at an alarming rate.

So I need plenty of coping mechanisms. Here are a few of them

I play golf
I just bought myself an electronic drum kit
I enjoy a beer and a drama on Netflix
I meditate
I have read any number of books on Self Development and the spiritual self
I love the Toltec four agreements and try to implement them
I even lie on a Shakti mat pretty much every day

Currently, my day job involves working for a large organisation that has taken upon itself the task of educating its management staff in pretty much all of the above — well actually the kindergarten version of the above.

What should I do?

I already do all of what they’re suggesting and then some. Ironically it’s really annoying to be told how to do it all over again from the beginning.

Should I just smile — also a key tactic for resilience — or switch off.

Should the workplace impose itself on my personal life?

This is actually a much bigger question. And at this time in our history when our leaders are useless and morally bankrupt and we are faced with real crises of the material and monetary kind, it is a vital one to answer.

I don’t believe it should.

I don’t think the workplace and the organisation behind it have the moral right to my spirituality even if they claim it will enhance their bottom line.

In fact, I think this leakage across people’s lives makes it very hard for them to understand boundaries.

And most of the time it is the breakdown of the boundaries that causes stress for individuals and inefficiency for the organisations. If people kept their uncertainties and insecurities in check, I would be less stressed when I’m trying to explain to them the intricacies of science.

So my contention is that the workplace should just butt out. Keep the spiritual personal development stuff personal.

Just a thought.

Post comments to the contrary or in support, curious to know if it’s just a me thing.

Alloporus

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