(07a) My Answers to Questions about what is the ideal economy (in the near future).
Question: How does the ideal economy looks like in a graph (according to me)?Answer: After a period of almost continuous growth that accelerated over the past decades, in 2007-2008 this growth came to an abrupt end when the economic and financial crisis started with in many (often rich countries) a contracting economy that continues up to these days in many countries (and there is evidence it may soon even worsen) although many mention the 0.1% growth every so often as proof of the end of the crisis.
This decline could have been expected because everything that goes up will one day stop increasing, often followed with a decline, certainly when the growth was too big in a too short period of time whereby often the largest decline can be expected in those countries that were doing best as one would expect poor countries can't fall much unless the falling rich countries cause even more poverty in the developing countries while trying to prevent their own decline (see Fig. 1a).
In addition, growth in higher developed countries (e.g. Western-Europe) will naturally be less than in developing countries (e.g. China) as developed countries are already close to their maximum because they can't sell their own expensive products to poor countries while their own citizens probably already have the products. This is something that many economists don't seem to understand as they continue to compare the growth of Europe and the USA with that of China and then think Western economies are a failure.
Finally, developing countries that grow much too fast may also fall very heavily (e.g. Spain) while highly developed countries that accept growths can't be forever may suffer less as they will try to avoid bubbles due to a too fast growing economy.
I think the ideal economy shows an almost flat line with only small fluctuations (like ripples on a lake caused by a gentle wind), thus without too much growth but also without much decline. When the initial growth wasn't too strong (i.e. controlled), a decline will be much easier to control. In summary, the ideal economy may be more or less in a steady-state or equilibrium (Fig. 1b). Certainly when all countries are equally developed, then continued growth in each country can no longer be expected.
|Fig. 1b: For me, the ideal economy is one that is in steady-state or equilibrium with only small but controllable fluctuations while large fluctuations are suspicious and need investigation to confirm they are real.|
Question: How to reach a steady-state or equilibrium economy?Answer: First and most important, we need to accept an economy doesn't necessarily need to grow to be healthy. Humans also stop growing, even when healthy, so why not economies?
Ones this is accepted, I think the steady-state economy can only happen when most (all) people have similar (not necessary the same) incomes (small differences stimulate some competition and thus progress) so everyone can buy similar things that are not too expensive and within the reach of most people. This does not mean everyone will buy the same things because people have different interests and tastes and thus also what people produce, sell and buy will be differently. In addition, as in the past, people will sometimes need to borrow, for instance to buy a house, but it will be within the reach of people so they don't have to rely on e.g. their parents to get a mortgage unless the parents agree to give money so their children don't need to borrow (it seems today some banks only give mortgages when parents re-mortgage part of their home; thus banks can claim both houses when things go wrong (literately getting two for the price of one)).
An equilibrium economy is an economy that is less volatile as people will mostly buy products to replace old and damaged products or because a better product is developed (e.g. people replace a broken fridge or buy one that uses much less energy while people do not buy fridges to stimulate the economy. Or they may buy a faster computer even before their old one is broken). An advantage of an economy that is less variable is that it will be easier to plan for the future while a decline is easier controlled.
A steady-state economy can also happen when the increase in the population is not too big, as today many accept that population growth should be controlled. During a relatively short period a growing population may result in a growing economy (if those people have a job and thus earn and can buy) but eventually, growth will flatten and even decline when everyone has what they desire, certainly now that people live much longer, resulting in unemployment for a larger number of people and thus a bigger decline. At this moment, some decision-makers in certain countries still think that the population should increase to stimulate the economy. But those born now will only consume within many years and thus are useless to solve the current crisis. In addition, in many countries unemployment is highest amongst the younger generation, demonstrating a large young population doesn't need to result in more growth while too many unemployed youth is dangerous as proven by revolutions in certain countries.
Question: What are some reasons economies grow?Answer: I list what I think are three important conditions why economies grow but you can think of others (most people are able to use their brain and thus can think about reasons, followed with possible solutions for problems):
- The most important reason for growth: poor people start earning more as happened during the past decades: wages of people all over the world increased, especially after WWII in the West while now also in less-developed countries and thus more people were able to consume and buy products. As a result, economies grew in developing countries (fast because people became able to buy things they didn't have before) as well as in developed ones (slower as people mainly replaced old things although they also bought new technologies, clothes or holidays). But indeed, some people (mainly in developed countries) lost because companies moved production to developing countries although this may change as people in those countries are starting to earn more and thus become more expensive. (By the way, it is remarkable that when the life of people improves (e.g. better access to healthcare), population growth slows down (and this will probably not reverse during a crisis).)
- New products are introduced and promoted: the economy will grow (temporarily) because people want new and better things (e.g. a new and much better car model will stimulate people to buy it, even before their current car needs replacement). Thus, investments in research and development result in growth as we have seen during the past decades when sciences flourished (similarly, throughout history those societies that stimulated intellectuals prospered although intellectuals should mix with everyone to understand the needs of people in order to find solutions for their problems). It creates jobs for scientists and engineers while at a later moment more people are involved, building or selling the new products. However, even this will not last, because after buying the latest development, people will one day get bored with it and spend again at a normal rate, i.e. replace old with new and no longer new with newer. Also scientists can't develop ever newer things but one day improve what was invented and thus less scientists may be needed. And the day we know all answers, even scientists will loose their function in society.
- People feel they have a future and thus spent money on things they like, including children (although planned, e.g. two children). However, in a healthy economy people will first save before buying something (unless it is an expensive long-term investment such as a house or to start a business when one needs to borrow unless one inherits) and not as happened in the recent past when people borrowed to satisfy their immediate needs without questioning whether they really needed the items, resulting in large debts and increasing prices as too many people wanted products in a short period. During this crisis, some people start saving (more) to be sure that when they loose their job or when pensions may go down, they have enough money to continue buying food or paying bills. And although saving more at this moment slows down the economy, people may use their savings later so it may stimulate the economy in the future. Thus it is very important for the economy that people save so they can spend it later (maybe much later) or invest in something expensive. But, it is not good when some people earn so much they can't even spend it all or they spend it on things that don't stimulate the economy because then, too much money goes out of circulation while they don't understand how difficult it can be for ordinary people to save a little.
Question: What are the possible dangers of (too fast) growing economies?Answer: Continuing on the above:
- It is not always good that wages go up too quickly and become too high because when people earn too quickly too much they often do not spend their wealth wisely as they no longer want to remember the time when they couldn't afford the things they can buy when earning (much) more. As a result, they often buy useless things simply because other people have them, wasting money while depleting faster the resources of our planet what can result in the collapse of societies as those resources are limited. Also, often people who became rich very quickly try to forget their own (poor) background and often show contempt to poorer people they regard as losers who are unable to do anything useful in life in contrast to themselves who work hard and gain much. But they forget most people work hard without reaching the same high level of income or they are happy with the job they are doing, even when they are paid less. In addition, when people earn too much, the percentage of what they spend of their income is too small and their money becomes silent in a bank, or they spend money on things that don't really stimulate the economy (e.g. buy a painting painted in the past). People should save to be able to spent in future but earning too much means people have too much savings and this money is then lost for society unless the money is invested to create work for others. (By the way, stimulate the economy does not necessary mean more profits but can also mean profits are used to employ more people). Finally, when a certain section of society starts earning more while other sections stay behind, prices of products will rise because those earning more can pay more, including prices of essential goods (i.e. food, houses) and of products that make people jealous (e.g. cars, holidays); as a result products become more difficult to buy for most people and thus anger in society may rise (can be dangerous).
- Introducing new products often means the disappearance of something else and often this decline counteracts the increase in sale of the new product (see Fig. 2). I discuss this using the example of a newly-developed product: tablets. When more tablets are sold than probably less PCs will be sold (although I don't think PCs will disappear completely but become smaller with a large screen as e.g. I find PCs are better for editing photos). But certainly sales of paper (news)magazines and books will decrease because people now read magazines and books on their tablet and phone (although some specialist bookshops may remain). Thus, while the number of jobs can increase in one sector of society, jobs may disappear in other sectors. And thus while many people are excited about the new things, others face uncertainty as they fear loosing their job. And thus society needs to adjust. In my example, writers need to publish differently than they did in the past (e.g. write blogs or publish via electronic newspapers) while publishers of paper copies will only be able to survive when they find new ways for offering their services. Newspapers publish articles via Internet, not only written articles but also videos and sound and links while book publishers sell eBooks and start websites where people can publish their own stories and earn something. Maybe bookshops can install machines where books can be downloaded after people asked information and then drink a coffee. People even start making their own movies to show via the Internet, changing the film industry. It will become more democratic while professionals may have to accept lower prices to continue selling better products because of more competition (will be possible as no expensive paper or DVDs needed to publish). But the moment most people have the new thing and it no longer improves much, here too the number of jobs will decline as people will start to replace old with new and thus fewer products will be sold in a certain period, resulting in a equilibrium (Fig 2).
- Many people (even certain wealthy) spend too much and therefore have debts because they think they will be able to repay later. But as we now know, the main reason why we have this financial crisis is because society built up too much debts while a few have too much wealth (the sum probably equals zero). Personally, I liked using credit cards but only as a way to control my spending as everything is nicely written on a statement while I always tried to repay my debt the next month. As a result, I hardly ever had debts except on a few occasions when I had an unexpected cost or went on holiday. Some people start to realise this and thus try to reduce their debts (as also many countries are now doing) so they do no longer spend as much and thus the economy suffers now but will benefit in the future. One may also expect decrease in prices if fewer people buy. When people fear for their job, certainly when they notice that even governments reduce their workforce, then they save more and spend less to be sure they have money when they may become unemployed and may need their savings to continue paying the bills. The stupidity in some countries is that people hardly get benefits when they loose their job if they have some savings; thus people in those countries save much less than expected unless their income is big enough to save large amounts because incomes from interest will be higher than benefits. There should be a balance between spending and saving; if one is too extreme compared with the other there is something wrong. But governments should accept that when people loose jobs, costs for governments increase as they have to look after more unemployed although their income can increase by having fair taxes (i.e. even wealthy people have to pay the same (or slightly higher) percentage of taxes as everyone else and not less).
Question: Why should the economy be controlled by laws and punishments if necessary?Answer: The economy should take place in a controlled way as happened in the past. This means governments check whether everyone obeys the same rules (preventing unfair competition) and not as recently happened when some (large) players are hardly controlled while some even started to play by their own rules (e.g. they were fixing rates or hardly pay taxes) and the results are more problems for everyone else (such as higher taxes and more difficult competition for everyone else (although most people think they benefit when they are able to reduce their own taxes a very little and thus agree with the current system)). Even when it became obvious some larger players probably cheated, they still were able to pay themselves large sums of money instead of being judged and sentenced.
But control doesn't mean an excess of rules. On the contrary, rules should be simple, easy but clear so they can be used in many occasions without argument as long as they are logically used. (E.g. everyone should pay taxes and thus avoiding them results in punishment for those who avoid paying them, not for the rest of society by paying higher taxes. It is also easier to control everyone pays taxes when they are as low as possible for everyone than to introduce tax reductions for all sorts of reasons that mainly benefit people with money while the poor can't use them (e.g. they can't afford a house and thus reduce their taxes) although that doesn't mean differences in tax can't exist (e.g. increased taxes on polluting cars)).
I believe that, in contrast to what some economists claim, people and companies should moderate their consumption in order to be able to continue spending (e.g. buy new things when the old ones are broken and not only to follow the latest fashion), thus preventing too much debts, one of the reasons for the financial collapse. Moderation will also prevent exhausting our resources although there are exceptions: i.e. renewable products such as clothes made from e.g. wool can be produced and sold as long as we don't kill the sheep for a one-off meal while the sheep can multiply so supply will continue after its death; but to have good materials we need to treat the animal well (and the sheep will be happy the wool is gone in summer). Moderation will also result in moderation of prices as fewer people will buy the product at a certain moment. Thus, governments should introduce laws to prevent companies advertise too much debts while they should also enforce recycling of products and if possible the use of renewable products.
Therefore, real (and not subsidised or exploited) prices should be paid because then people and companies will value the natural resources more and use them in an as economically-sensible way as possible without wasting them too much as that will be too expensive. E.g. only use the car when necessary and not simply because oil prices are low although that is hard to sell as a politician unless politicians introduce such policies that stimulate research into reliable and affordable cars on e.g. electricity or sun energy so people will be more willing to buy them (e.g. give a timetable after which taxes on production of cars that use fuel go up so car companies have time to develop electric cars but get their punishment if not while the companies developing energy-efficient cars will benefit). Also, the countries harvesting the natural resources will benefit as they receive higher prices and thus even when they sell fewer products, this will still result in higher profits that can be used to pay employees fair wages. Paying the correct prices will thus result in better use of our resources because people will not buy unnecessary products as they are more expensive. And recycling products as much as possible results in less need to overuse our resources while local re-use will keep prices down. In addition, immigration will slowdown as people in those countries are fairly paid and this will satisfy many people. Governments can even benefit from those who don't recycle when they have to pay more for rubbish collection and/or when people don't get a refund as already done in many countries. But there should also be fair competition to keep prices low (although lower than a certain minimum will never be possible unless companies sell below the production price and that is not healthy for their survival nor for the producers). But when governments don't want subsidised products, they need to ensure people have a decent income so they can buy the products while talk about it to convince people and set acceptable time frames to implement them (although there will always be enough people to say governments only do this to raise taxes and thus will not vote for those parties).
Still, governments can decide to help certain sections of the economy (e.g. in certain circumstances governments may subsidise the production of food so everyone can buy affordable food (an essential necessity to live) while farmers have a good income. Today, this is consider as a waste of money while paying for banks seems to have become a good investment. Governments can also subsidise investments in a cleaner economy and in health and education so it becomes affordable for everyone.
Thus, I think governments should:
- Stimulate people not to consume without thinking but should instead promote a sustainable economy, i.e. mainly replace what is really needed, not simply to have another of the same latest gadget (such as another more recent tablet that is one tenth of a second faster than the one bought one year earlier (although they still evolve quickly and thus newer can still mean much better)) and when a new product is bought, then the old one should be recycled. Still, e.g. people can buy lots of clothes because this is made of an almost unlimited source, i.e. wool or cotton. An example why a sustainable economy is important: can we still eat fish after we emptied all oceans or do we need to fish wisely so fishing can continue?;
- Assure everyone has a fair income so people can afford essential goods (food, clothes, buying or renting living space) as well as non-essential ones. When the numbers of rich people who can buy whatever they like become too large, prices of products increase as they can always pay more to get the products compared with someone else and at a certain moment ordinary people with normal incomes are no longer able to buy products, even together, something that is not in favour of the economy. Therefore, governments should introduce mechanisms preventing the wages of the highest earners become too big (the exception may be people who are self-employed and after they repaid their loan can pay themselves whatever as it is their own company unless they misbehave and cost society money when they go bankrupt), certainly after they became civil servants during the takeover of banks by governments (by the way, CEOs of most big companies are employees and not employers because they are employed by companies and thus they should be paid (but not in excess) for doing their job without being allowed to pay themselves extras (if they claim they need bonuses or they leave, they can leave without golden handshake) as they would tell other employees)). The money saved (when no huge bonuses are paid) can be used to save other employees' jobs (and then employees may even be more willing to reduce their own earnings to save the company). On the other hand, developing countries need to continue to grow so poor people in those countries become better paid and thus they can buy and stimulate the economy while governments should prevent some of them use corruption to enrich themselves. Then people will stay in their own country except those who prefer to live somewhere else, resulting in less problems with immigration. Still, people in developing countries should not be forced to want ever more if they are happy with what they have (e.g. (an example I ones heard) if a society prefers living in a hut in a hot country, why force them to live in a house under a metal roof?);
- Stimulate research into new products and materials that allow sustainability and better health. Research into renewable energy is expensive but can result in lower energy bills in the mid and longer term and a slowdown in climate change while energy companies that develop energy-efficient products will earn money selling the equipment without the need to waste money finding oil and gas. In addition, (future) cars on solar energy can in theory continue driving without the need for refuelling, a big advantage. Research in healthcare and new ways of treating illnesses will reduce poor health and thus more people can work or less people will be in need of expensive healthcare while it may be possible special working schedules are used for those in need so they can be independent if they prefer. And as more people work, workload will go down for everyone. Thus, research will save money in the longer run and make people happier. Although the more people are doing research now, the more likely less research is needed in future and thus we may one day become a society where people no longer need to work.
Question: What is being done at this moment?Answer: At this moment, governments often do the opposite of the above. Some even speak of returning "to strong and sustainable growth"; I think this is unbelievable. I think we should not stimulate further growth, including making everything more expensive as then we can fall even deeper (see Fig. 1a). I believe we should work on a soft landing, i.e. sharing work so more people can do the job, resulting in a reduced work pressure (at this moment many people are loosing their job and thus those who remain have to work harder, often for less money). Further, the highest wages and certainly bonuses should be reduced to be able to use that money to keep other people employed while it is not good to reduce the income of ordinary people because then they will have it even more difficult. For instance, people should be convinced house prices should not continue to increase as higher prices is not in their own interests.
I also think that using people's savings to save banks as was recently decided during a European summit is not the best solution: what will people do if they loose their job while their savings are used to pay the bonuses of the big earners in the banks (I mean, to save banks from bankruptcy), even when it may save countries? Because we can expect prices of products will increase due to the way the current economy works: when numbers of customers fall (due to the crisis), people often increase prices to compensate and thus even fewer people will come until the company (e.g. restaurant) goes bankrupt or introduce lower prices what only can if the suppliers also agree to lower their prices what only can when (high) earners accept to reduce their wages what can when prices go down (a circle that is difficult to break).
Here you may argue that what I say it in contradiction to the above, i.e. we should consume less. That is correct, but we need to eat and drink, thus that can be done at restaurants and bars (although sustainable) instead of at home while e.g. less cars should be sold unless newer models are better for the environment. But I agree, it is a complex matter.
To prevent some/many only want more, more, more for themselves and thus nothing for everyone, regulations need to be strict so that those working at the top of big companies behave and we don't need to save the companies they are leading. I simply can't understand how those people can be proud of their failure (although I think many enjoy the game of how to bankrupt people, businesses and countries and get their money to pay their own bonuses, showing they are the most powerful people; I however argue that those who manage to save society from its downfall are the real leaders while those who block necessary changes are not). Still, at the same European summit as mentioned above, PM Cameron claimed not only should the EU's budget be reduced (as Europe approved), but there should be less regulation to create jobs. It is correct companies don't need unnecessary bureaucracy but that doesn't mean one can do what one likes. Because in the UK companies can't in general. And let's be fair, there are any laws to counteract bad legislation.
Thus, I think governments should
- not try to convince people to borrow more (make debts) and continue spending. Although they may believe this will stimulate economical growth while at the same time governments themselves try to reduce debts and thus investments in the economy, even firing their own employees (i.e. civil servants) so those people will no longer be able to buy although some claim that less people will result in a faster government. Of course, governments should not be bigger than necessary but also not smaller as then it will take longer e.g. to approve licenses or collect taxes which is the income of governments;
- not promote excessive wealth for some who claim to work (a little) harder in certain parts of economy that are assumed to generate wealth such as the financial industry (even when all evidence points to a financial crisis caused by incapable people working in the financial sector) while other parts of the economy (e.g. health sector) are considered too costly compared with their benefits (in financial terms) and thus it is assumed those people should earn (much) less. Nevertheless, because of the failures in the greedy sectors, most if not all other segments of the economy suffer and because the greedy sector points to what they consider as "useless" and "costly" sectors of the economy, politicians feel obliged to make savings in the "expensive" parts of economy (healthcare, research, benefits, ...) to please the greedy sector. As a result of the cuts in the other parts of the economy, the middle and lower classes start to suffer, becoming poorer and thus growth will continue to slowdown while in addition e.g. the quality of help ill people are receiving starts to decline;
- not reduce investments in research and healthcare and thus prevent new technologies dealing with e.g. climate change or finding cures for certain illnesses as this results in an immediately high cost for society when e.g. many people finishing university no longer receive grants to do research (and thus can't produce or spend) and in the longer term the development of technologies that allow us to deal with climate change or prevent the depletion of resources or cure diseases of our ageing population are slower or not at all (did you notice that age increases with the quality of the healthcare?). Although, at present in some countries, more money is invested in new research for the old and damaging industries (e.g. oil industry).
Question: What do I think will certainly not work?Answer: At this moment, companies but also governments are firing people. This is to a certain extend understandable because if companies and governments suffer to survive, then costs have to be reduced and one of the largest costs is paying employees. Thus, companies sack people to reduce costs. But if you read that bonuses paid at financial companies (that needed to be saved by governments) exceeded three times the wages, then one starts questioning the sanity of those people. Or people have to start working for their benefits, reducing their time to search for a job and go to interviews and as a result may not be able to escape their descent into poverty (although of course it is difficult to accept some people only profit but that is a minority as most people want to work so they can afford whatever everyone else can afford).
Still, at the same moment companies increase prices of products to raise income for shareholders and thus while income for many people decreases, prices are rising. The most dangerous price increases are of course those that effects all of us: food, water and house rent or mortgages. And price increases are happening at this moment.
Thus, the highest earners should accept less while they want even more because they can claim the stress of their job becomes even bigger as more people start to resist them. But as more people are loosing jobs, it also means more work and thus stress for the normal people who have a job, and thus as they may now feel blessed they have a job, in the longer end, many may face burnouts and this they may feel for many years to come. Thus, if high earners accept to earn less so that money can be used to keep people employed, they may receive praise (although some people always complain) while as more people have a job, stress will reduce for those in jobs (but as long as they didn't experience the stress, they may not be grateful for this).
Question: Does that mean there can be no growth?Answer: No, growth (and decline) will always occur as long as economies exist but in a controlled economy it is more based upon fairness and needs and no longer on greed: companies that are better than other companies (e.g. superior products or better services) will grow faster than other companies offering similar products. (Un)Fortunately, when companies grow and as a result their competitors may become smaller or even disappear, the bigger companies often become arrogant and forget why they grew and then their services may go down (not always) or people may want something different. However, this causes opportunities for smaller companies when they provide better products and/or services. Therefore, governments need to make sure all companies are treated in a similar way to prevent bigger companies misuse their powers to force smaller companies out of the market (e.g. it should not be possible for big companies to force small producers to sell below market prices so the large companies can sell cheaper than smaller companies that can't force producers to sell their products too cheap). And thus, although politicians and civil servants should be independent, they (and managers) should also live in the real world to know what goes on (e.g. go shopping so they know the prices) and prevent unfair competition. In addition, competition will keep companies awake to prevent them from having bad products and thus it is in their own advantage.
Question: Why can no growth be pleasant?Answer: No growth seems unusual but it is not for most people on this planet. Indeed, in general people working for someone earn a certain amount of money each month although sometimes this increases or decreases (e.g. indexation or promotion or change in work). Thus, ordinary people are used to more or less no growth.
But also self-employed people often understand the meaning of "no growth". Indeed, e.g. someone opens a restaurant and in the beginning it can grow because people discover the place with its good food so during the first years the business becomes bigger, until maximum capacity and then the same amount of money comes in month after month if always equally successful. Of course, the owner can increase the prices in the hope he/she will earn more. But then he/she will have to provide very good services in order people continue to come back. The owner can also open more restaurants but then he/she may loose customers because he/she can no longer serve them personally. Of course, when the reputation of the restaurant is very big, people will continue coming. But opening restaurants means temporarily a reduction in income and in general more work. And thus, a business can grow. But most owners are happy with their smaller business because they can live the life they want while they are still able to see their family and friends.
Recently, many people became very greedy as there was so much work certain employees could almost ask whatever they wanted or move to another company, changing workplace whenever they saw an opportunity to earn more, even when the new job was less rewarding. Of course, people can live the life they choose but it is not longer acceptable when certain employees, calling themselves employers because they are hired by the company to run the business (being hired equals being an employee) pay themselves and their friends many ten of thousands, even millions while other employees are only paid a few ten of thousands (or less). Is it any longer acceptable that in the same company, one person earns €900,000 while another person has to work 30 years as he/she only earns €30,000? And €900,000 is not even that much for some companies while many people earn much less than €30,000.
Thus, no growth can give satisfaction to people. They know that when they work they get their payment while when they don't do their job properly, they may get fired or the business may go bankrupt. Indeed, we still need to work for our money but there is also another life: that of friends and not of competitions with "friends" to earn more than them. And when money is re-invested in employing more people, this means more people can find a job they like and thus may be happy doing it for less money, certainly because when prices of products are lower when everyone earns less, they will still be able to continue discovering the world by going on holiday and meeting friends in bars and restaurants. Just as the post-war generation was able to do before people became greedy and prices started to rise.
And further, "big guys" who claim they should earn much more than others should also get a tougher punishment when behaving badly (e.g. fixing rates) while now they often even get a reward (golden parachute) when they are fired (i.e. change job). Only when they know punishment can be severe they will control themselves from misbehaving. Indeed, one should be rewarded (get a wage) when doing the job one needs to do but get punishment (e.g. study or even loose the job) when a job is done badly (although people should be able to learn from mistakes but even that is not the case as many continue as if nothing went wrong).
Thus, no growth does not mean that one does not have to work or improve but it means that growth will be reinvested to continue work. E.g. if the workload becomes too heavy, instead of paying employees more for working longer hours (possibly resulting in mistakes, burn-outs and less family life that also cost society money while good employees may leave), extra employees can be employed (reducing unemployment and thus cost for society while employees can continue seeing their family and friends and thus they will be healthier employees).
At this moment, many things are changing in the world:
- new economies are emerging (a good thing as people in poorer countries will be able to escape poverty (although sometimes it increases their poverty when prices of consumables increase more than wages) while they will be able to also discover new worlds);
- political power in the world is shifting (a good thing as no longer a few countries can dictate their will to others although this probably needs changes in the way the world is governed as I explained in another blog (new way international organisations works but also how countries (if they still need to exist) work together));
- socially societies are changing with more and more mixed couples (colour but also religions) and as a result more mixed-race children (e.g. the American president) so we will speak less about black, white or Asians (although it would be a pity if only mixed-races are left because then the choices are fewer) and even same-sex couples. (A thought: climate change may even force white people to mix with darker people to prevent us looking like lobsters that were boiled.)
Question: What are the consequence of the above described controlled way?Answer: Of course, the above "Thus" are no wonder cure but if people moderate their demands they can have a fulfilling life. Moderation will result in less forced growth but a longer lasting and sustainable economy. Indeed, when people no longer consume simply to consume in order to show off (e.g. at present, many want to buy the latest technology because they are in competition with friends to show they are able to buy products as they fear loosing friends while these technologies should bring them closer), they can earn less (does not mean little) and can trust again to have real friends and not friends for what they can buy. And by moderating their income, more people can be employed and this will result in a reduced workload. But first, those earning most should accept to reduce their income first and not demand others earn less so their own income can continue to increase. Indeed, at this moment the rich are getting even richer while most other people are becoming poorer, even when they don't realise it when they get a smaller than inflation increase in income.
In conclusion, it may be fine that economies grow but it is useless when they grow too fast if the result is a collapse. Ones that principle is accepted, one can start building a society that is more levelled but will last longer than one that grows too fast but collapses. In addition, if that society results in happier people, then one was successful while a short-lived growth is a defeat.
I think societies should accept we can't be too greedy although we need some ambition in order for society to continue making progress towards a better world and not a world to fill the pockets of a few on the expense of the majority.
Finally, when each society has what the best of societies has, than that one society can no longer be better than the rest and thus needs to accept it is equal to the others or the others became equal to the best. Then we will not for instance send children at an earlier age to school so we stay ahead of the others as that may result in too much stress and thus failure.
Thus, I think future competition can only be between individuals, cities and companies and no longer between countries as that may exhaust societies because everyone is then forced to join the competition to lift the country (less bright ones or nicer people will stay behind and may become depressed) and bring them down. These individuals and cities can work together on a voluntarily base and not because capitals dictate them to do so while international organisations can help when tensions arise and overlook that rules are followed. This will result in places with their own local rules but whenever certain places or companies behave badly, they will feel the consequences (e.g. if certain places accept less than the minimal international rules (e.g. they do not enforce protection for workers against exploitation as today in certain countries concerning the production of cheap clothing) than people may move to better place while those other places may not buy the products while punish internationals who use the place to produce cheaply and thus abusing people will no longer reward).
And by accepting that by moderating our demands and wishes and by sharing work so our workload reduces, our lives may become more enjoyable. It may be a path to planet Utopia where there may no longer be the need for competition, but that is for a future publication.