The Economy

After our last column about a Steady State Economy, I heard from David Dawson who lives at La Broquerie. David agreed with the column, but thought the language got a little too complex at places.

Here is how he put it: I am just an ordinary guy – certainly not an economist. Here are just common sense thoughts from an amateur. Mind you, I believe the economy as a whole is so complex that no one really understands it completely. Experts build computer ‘models’ but how accurate are they.

David thinks it must be obvious to any thinking person that perpetual growth of anything, anything at all, including population and economy is unsustainable. Eventually something will have to give – probably with dramatic effect.  Nevertheless, if our economy isn’t expanding we are told something is wrong. We call it a recession or even depression.  Unemployment soars and company revenues fall, leading to a drop in government revenue. We fear another depression similar to the 1930s.

Obviously, if we can’t go on growing the economy for ever, David says, there has to be a point where growth stops and we end up in a state of permanent recession/depression or at best stagnation.  Currently our lifestyle is based on continual growth, so we are, without doubt, eventually destined for a major shake-up with huge social adjustments.  Are we possibly seeing the very beginnings of this process at the present time? The USA is having great difficulty creating jobs and getting out of the last recessionary period. There are obscenely high pay levels in the financial sector which are creating a totally unbalanced sharing of the wealth of the nation with poverty rife everywhere. Is this partly responsible for the present situation?  The demonstrators all over the world seem to think so.

According to David, when we are in a period of recession our government borrows money to boost the economy to keep employment artificially high.  By borrowing, government creates or maintains a standard of living unsupportable by the economy.  The government hopes it will be able to pay back the loans when the economy returns to growth, but as you can see growth must eventually stop.  We may end up in a situation where we can never pay back the loans, with a crippled economy paying interest only on the money it has borrowed. These payments take much needed resources out of our economy. I wonder if we are in a time of human existence when we are close to, or are actually in, a period of permanent recession/depression.  If that is the case, what are we going to do about the money we have borrowed, whether it is private, individual borrowing, or government borrowing? If this is the time we are in, now is the time to change the way we do things. 

David’s solution is to learn how to cook instead of buying pre-packaged, pre-cooked, boxed meals.  Dig up that useless lawn and plant vegetables.  Learn how to make jam, preserve and freeze your produce.  Compost the waste.

You might also join us Thursday for a presentation on the Steady State Economy. October 27, 7:00PM at the Eastman Education Centre on Loewen Bld. More information at southeasttransition.com.

Eric Rempel