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The Forum > Article Comments > Living standards in the era of declining marginal returns > Comments

Living standards in the era of declining marginal returns : Comments

By Cameron Leckie, published 1/4/2010

The biggest barrier to addressing the multitude of stressors on our global civilisation can be summed up in two words: living standards.

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How ironic that your arguments support the tree-change and sea-change phase of people who fantasise about a slower, less complex life.

The reasons for wanting this less complex life is the notion of 'lifestyle'. So they go and put up a McMansion in the country, freight in everything and still get found after they have died alone because 'lifestyle' doesn't include other people - except maybe as commodities.

As long as living standards are indexed by money and the capacity to acquire we are doomed to more of the same until the eventual slow implosion. By that time only the much maligned ageing hippies and greenies - the early adopters of sustainability - will actually have the skills to rebuild.

How ironic.
Posted by Baxter Sin, Thursday, 1 April 2010 10:09:26 AM
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All the author’s concerns boil down to no more than the fact that resources are scarce.

This is true, and it is a reason why resources need to be valued and prioritised. It is a reason why more urgent uses should have priority over less urgent uses. And it is a reason why we need a method by which different resource uses can be compared by reference to a lowest common denominator, i.e. economic calculation.

But it is completely fallacious to jump from the premise that resources are scarce, to the conclusions implied in the article that society is a decision-making entity, that its mode of decision-making is top-down, that the decision-making of society and the decision-making of the state can be effectively conflated, that the values in issue are objectively and centrally knowable, that the reason we have high living standards is because politicians adopt that as a policy goal, and that what is called for is for the patterns of consumption and production to be decided and enforced by governmental central planning. This is no more than a re-run of all the fallacies of socialism in the 20th century, which were disastrous for the environment no less than for human beings.

Socialism is not an alternative economic system: it is the abolition of the possibility of rational economising because it abolishes the possibility of economic calculation in whatever capital market is taken over by the state.

Each time the socialists’ schemes result in chaos and disaster, like the destruction to ecosystems done by government’s ham-fisted “management” of “wilderness, the socialists are taken completely by surprise. But there is no need for this commitment to ignorance. This is because we already know in advance, on the basis of sound theory, that the effect of abolishing economic calculation in a particular field will be planned chaos, precisely because it will abolish the ability to prioritise more urgent resource uses over less.
Posted by Peter Hume, Thursday, 1 April 2010 10:48:08 AM
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The simple rationale for a growth economy is that a vast portion of humanity lives and dies in poverty. There can be only two ways to alleviate their condition; either a redistribution of existing money, or creation of new money.
For many decades now we have trod the second path, and the gap between the haves and have nots has only increased; all the new money has -inevitably- been pocketed by the already rich.
Why inevitably? Artificial creation of new money (as we have just seen) without the parallel creation of new resources and material goods can only debase the currency, making everything more expensive -which must have the greatest impact on the most vulnerable.
I agree with the author that living standards need to be reviewed, but does anyone really need a $200,000 car, that is only legally able to do the same speed as a $2,000 car?
Do we really need Mcmansions? Or throw away perfectly servicable clothes simply because the very people who so proudly made the clothes now tell us we should, because they don't like them any more?
Should a rational measure of standard of living include keeping up with, and beating the Jones's?
“The rich must learn to live more simply, so the poor can simply live”.
Posted by Grim, Saturday, 3 April 2010 7:39:45 AM
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Continued:
This doesn't necessarily need to imply socialism. We have -for centuries- had a system of law designed to protect the (physically) weak from the strong. Why do we still allow bullying, and stand over tactics in the marketplace? We don't believe a large and strong man should have more rights than a child, so why do we allow strong corporations so much muscle?
Corporations have fought for years to be treated as if they were individuals. So why aren't they progressively taxed, like individuals?
We, as a society, don't need companies that “are too big, to be allowed to fail”. We need to pass laws preventing corporations from owning shares in other corporations. We need more competition, more players in the marketplace, not fewer.
The larger the institution, whether it be public or private, the greater the disparity between the ones at the top, and those at the bottom.
Posted by Grim, Saturday, 3 April 2010 7:42:14 AM
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> The simple rationale for a growth economy is that a vast portion of humanity lives and dies in poverty.

Poverty was the universal condition of everyone for many thousands of years, until people learnt to understand the benefits of the division of labour, and that by savings they could accumulate the means of production, and thus increase their output per unit of input.

The decision to have a growth economy is not made on behalf of the whole of humanity as a decision-making entity, by wise central planners taking a Gods-eye view, exercising powers of forced redistribution so as to ‘even things up a bit’ as between richer and poorer.

It is made by all individuals in striving for a better life for themselves and their families.

> Artificial creation of new money … must have the greatest impact on the most vulnerable.

Bravo Grim. A glimmer of economic understanding in a cave of collectivist fallacies. You correctly recognize that the artificial creation of new money disadvantages the poor most of all. It also adversely affects the poor in many other ways than simple price inflation, especially by skewing the structure of production toward the areas where the new money enters the economy. The resulting boom unequally favours those who are already capitalized and financially sophisticated, and the following inevitable bust unequally disadvantages the poor and financially unsophisticated. The root of the evil – fiat currency and fractional reserve banking – should be abolished.

> … does anyone really need a $200,000 car…? Do we really need Mcmansions? Or throw away perfectly servicable clothes simply because the very people who so proudly made the clothes now tell us we should, because they don't like them any more?

How could these questions ever be answered except arbitrarily? The Aborigines lived here for thousands of years with the simplest technology, so in that sense we don’t “need” doonas or beds, cappuccinos or internet bandwidth either.

But so what? Unless someone is to be empowered to use guns to stop this kind of behaviour, what do you propose to do about it?
Posted by Peter Hume, Sunday, 4 April 2010 3:56:46 AM
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> Should a rational measure of standard of living include keeping up with, and beating the Jones's?

People’s actions are always rational in the sense that by taking an action, they intend to cause an effect that will either satisfy a want, or remove a dissatisfaction. The underlying motivation is always subjective. There can never be an objective distinction between the value that a person sets on clothing as cladding, and clothing as satisfying their vanity or other subjective values; and the same with all other consumption.

There is no objective rational measure of standard of living.

“The rich must learn to live more simply, so the poor can simply live”.

Very pious, Grim. Perhaps you could start by giving up internet usage?

>This doesn't necessarily need to imply socialism.

If the income re-distribution you have in mind is not to be done by force, then how is it to be done?

> Why do we still allow bullying, and stand over tactics in the marketplace?

All consensual transaction that do not aggress against the person or property of others should be legal; otherwise it’s you who are advocating bullying. Why do we still allow bullying and standover tactics in government?

>We, as a society, don't need companies that “are too big, to be allowed to fail”.

Bravo, Grim. We’ll make a libertarian of you yet.

> We need to pass laws preventing corporations from owning shares in other corporations.

No we don’t. We only need to allow corporations to fail, and to deny them the legal privileges that are denied to everyone else.

>We need more competition, more players in the marketplace, not fewer.
The larger the institution, whether it be public or private, the greater the disparity between the ones at the top, and those at the bottom.

Governments are the biggest, most monopolistic corporations of all. Their capital consumption is by far the biggest single cause of poverty. Let’s start your reforms by reducing the size of government with a modest ten percent cut over five years.
Posted by Peter Hume, Sunday, 4 April 2010 4:00:05 AM
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