Monday, December 1, 2014

A grim future?

In my last two posts I looked at the way changes in technology interacted with employment and at how green energy technology might create new jobs. That's part of a wider process of economic change. I want to round off this discussion with some more high kevel thinking, before I get back to my more usual focus of   looking at what the technological options are. 

Technology is not autonomous- its development and deployment is driven by larger economic and political forces. As I described in the first post, it has enabled capitalism to avoid profit squeeze and productivity expansion crises. And some hope that with luck it may also help avoid terminal exploitation of the planet and its natural resources and ecological processing.  Maybe, for a while. But whether it can allow economic growth to continue unabated for ever is less clear.

The usual argument is that capitalism needs growth to survive- given  potentially terminal competition between rival chunks of capital. It can only continue if markets and demand continually expand. But this can’t continue for ever on a planet with finite resources and bio-carrying capacity, even with clever eco-technologies.

In a recent book, Capital in the Twenty-First Century. Thomas Piketty, a professor at the Paris School of Economics, doesn’t looks much at resources or the environment, but he does look at growth and capital. While he argues that the process of accumulation of capital is central and so is growth, he says they may not always coincide. He says that, globally, the rate of return on capital, which historically has been around 4.5%, rose during the industrial revolution to around 5% , but after around 1913 collapsed, falling to 1% , only recovering after about 1950. It is still rising, and will eventually, after 2050 or so, head back to nearly 4.5%. In parallel, economic growth (global economic output), which had historically been rising, accelerated even more in the 1950s and reached a peak of nearly 4%, but has recently begun to fall, and may never recover, falling to 1.5% after 2050. There was thus a golden (mid last century) era when both were rising with everyone doing well relatively, but now they are heading in opposite directions- capital up, growth down, a squeeze for the majority. He sees this as explaining the rise of the very wealthy- the so called ‘1%’, who own most of the wealth on the planet and will get more. He says its not just earning power (very high salaries) but the ownership and control of capital and crucially the ability to pass it on to offspring. 

Be that as it may, it’s not too clear from his analysis why growth has fallen off  (are the rich just skimming more off?) and, perhaps more crucially, how the capital accumulation process can continue without growth, with its consequent major environmental and resource implications. Some of this wealth is created by manipulating and exploiting intangible or at least non- material assets such as ideas, information and money, and by speculation. It’s almost a virtual world, a big game- with presumably little direct environmental/energy impact, at least from the ‘gaming’ activities themselves. A bit like IT.  But there still has to be a real economy, with real trade in real good and services, if only to support the lifestyles of very rich elite.  And to maintain (albeit very unequal) social stability, some affluence has to spread more widely. That does have material impacts. And they are growing.  

Could it be that, to avoid dealing with that, and the small trickle down share getting out of control, and given ever reducing planetary resources, the elite will seek to limit this trickle down process to the minimum? That certainly is the assumption in may dys-utopian sci-fi films of recent years. A protected elite (in the extreme, off planet) and a vast suppressed underclass.  If so, then we are back to Marx, relentless immiseration, and, as a result, world revolution! And/or, optimistically, a shift to an egalitarian, stable state global economy, with less emphasis on materialism, using low impact technologies to meet genuine needs. 

Some of the necessary energy technologies are already emerging and are being adopted. The system is starting to run on a new fuel mix. But is that enough?  Unless social structures and social expectations change, probably not.

Some optimists see the rise of a new technocracy of middle ranking technical experts coming to the rescue. Certainly the new world of ICT does have some independence from the old capital owning classes, but not much, and it is reliant on a mass of addicted cyber consumers and poorly paid IT kit producers. Not much change there. See Lanchester’s upgrade of Marx:

We could be in for a rough ride. While the planet prepares to teach us the error of our ways.  A new NASA-linked report seems to come to similar conclusions:
I would like to be hopeful, but that's hard given, for example, the spectacle of Australia being hit by an unimaginably dire series of major weather episode (droughts, fires, floods), but then going on to elect a government that all but abandoned  its climate policies. The situation elsewhere may be a bit better (even, now, in the USA), but overall, apart from some good but patchy efforts at local transitions and the continuing development of decent technologies, I’m not too hopeful for the future. A revolt by the global underclass is possible, mass defection from consumerism maybe less so. But either way that could lead to a global economic collapse- not something that many would benefit from in the short term, the poor would just get poorer. We need a more gradual transition. But is that likely, and even if it is, would slow be fast enough?  As far as I can see, the best those of us with technical skills can do is to ensure that the technology is ready. Showing that alternatives are possible does change the situation slightly…and may helps create a new basis for wider changes. 

 Is that possible?  I took some heart from Gary Alexander’s very positive, if utopian, new eGaia book: . And from this World Futures Council report:

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