Not long before being voted out, the Gillard government changed its mind on essentially what Julia called irresponsible growth and embraced Growth as the solution. Rudd of course was a Big Australia man. Recently, the Abbott government committed to and enlisted support for 2% growth. In the absence of productivity gains, this growth will have to come from population growth which ironically, further undermines anything that might contribute towards actual productivity - it also means we further embrace diseconomies of scale and continue to ensure no actual progress can be made in any meaningful improvements. Dont believe me? Go look at any other country with 3rd world population growth and by way of comparison, look at countries with roughly stable populations. Chris Martenson talks about the three major blockages to never ending growth, saying the floor is rising while the roof is falling. Over time, the vast majority of economic growth that has occurred over the past 7,000 years of civilisation has happened in the past 100 years but that system of human advancement is now under threat. Firstly, peak global oil production is upon us and scarcity of cheap energy will put a limit to growth. Secondly, The economy has already grappled with continuing, debt fueled growth and is reaching its limit. Finally, the environment is pushing back on growth. Human induce (or not) climate change, along with the negative externalities of growth are now resulting in three steps back for every two steps forward. Martenson also clarifies stuff we know to be true already, saying that there are three types of wealth. Primary wealth, being ownership of a productive resource such as a forest, a lake full of fish or a copper mine. Secondary wealth is making timber from your forest, catching fish to sell at the market or smelting copper for use in construction. Tertiary wealth is taking the funds generated from secondary activities and buying stocks, bonds and other financial instruments. Martenson makes a strong case for the complete destruction of tertiary wealth, leaving primary wealth as the only secure store of value. However, if the sort of economic system failure that he predicts is upon us, security of tenure of any assets must represent a huge risk.
Posted on: Tue, 23 Sep 2014 03:14:20 +0000
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