Economic Evolution, and the Coming Adjustment

ECONOMIC EVOLUTION, AND THE COMING ADJUSTMENT

By Roland Watson

To close this section, I want to consider the later stages of economic - and social - evolution, and the concerns that would arise in a world with a stable or declining population.

Humanity has now had a lengthy period of experience with a modern economy, and this is a great resource for understanding. What we have seen is that in the normal evolutionary process, an economy's initial foundation is in agriculture and the exploitation of natural resources. This, in turn, is followed by an industrial period, including the development of a consumer products industry and easily transferable high-technology, both of which are ultimately subcontracted out and shifted to other nations, actually, from nation to nation, in search of lower labor costs, of people willing to work for less. However, industries with technologies which represent great value-added, and which for whatever reasons are considered to be non-transferable (e.g., because they have a role in defense), are retained in the nations of their invention, regardless of the labor costs.

But, it is now evident that in their advanced stages economies, and societies, require only so many new industrial, and consumer, products. The industrial sector as a whole is subject to a decline, which reduces the demand for employees, which is itself exacerbated by the increasing use of automation. In many cases, though, this decline is offset, somewhat, by a growing service sector, to satisfy and absorb the greater wealth that such societies have usually created up to this point.

However, service jobs regularly have low skill requirements, and pay, and hence are viewed as demeaning. And such societies, while wealthy, are not so wealthy, so prosperous, that this extends to everyone. What this is leading to is a polarization of society, into haves and have-nots, into service consumers and service providers. The question is: where will such a society, and economy, go? How will it develop next? Here, we are in uncharted territory.

But, as such a polarization may persist and increase, it will undermine the gains in fairness and equality that such societies have achieved, and set the stage for new civil disruption. It is worth considering that throughout history all great accumulations of wealth ultimately have been "redistributed," in one way or another, to the more numerous, and hence more powerful, have-nots (or at least to their leaders).

The other factor, or unknown, is the effect that future population trends will have on economic and social conditions. Development and progress, as they have been presented to us, are predicated on continual growth, both in population and consumption, but we now understand that in a world of finite resources this is impossible. If we do not reverse these trends, particularly the trend of overpopulation, we will breach the planet's limits, with catastrophic consequences, including widespread conflict over water and food, massive famines, and even greater, irreparable harm to the earth's ecology. Indeed, by our present and prior actions such consequences may already be programmed, even irreversibly programmed, into the future. The future is a function of probabilities, but already they do not look good.

The only positive offset to this is that knowledge of these actions and their outcomes is becoming widespread (except in the world of business!). Due to this and other reasons, foremost among them greater education and equality for young women, vast numbers of people are postponing childbearing, or avoiding it altogether. In developed nations, birth rates are falling such that overall populations may soon begin to decline. In developing nations, while birth rates are still high enough to cause population increases, the rates in many cases have fallen such that actual population growth is now much less than formerly was expected.

What this means, demographically, is that over time we will see significant increases in the average age of national populations and, economically, major structural changes to reflect this. Indeed, such an eventuality is causing much fear in some circles, from the administrators of empty schools, to the representatives for the elderly, who wonder how in the future such individuals will obtain the support that they need. Some of the more extreme of these observers even go so far as to suggest that birth rates must be increased, by whatever means necessary, to reverse this trend. What this demonstrates, though, is that these observers care only for themselves; because of their selfishness they are ignoring inevitable consequences. Their recommendations therefore must be avoided completely.

Humanity is now faced with a required - a forced - adaptation. It must undergo an adjustment which is long overdue, and of its own making. We will have to suffer through the consequences of an aging population, until we establish, and regulate, voluntarily, our numbers at levels easily supportable through the sustainable usage of the earth's resources. Along the way, we will have to practice thrift, and simplify our lives, to reduce our demands. We will also have to cooperate and help each other, rather than continue our mindless competition. Most likely, though, the adjustment will be nowhere near as difficult as some expect.

Indeed, it is worth remembering that these observers are using volatility: they are selling fear. And why are they doing that: to satisfy their own interests. For example, we are told to fear deflation, or falling prices. But for consumers, falling prices are greatly to be desired. They should only be feared by companies which have based their plans, and their borrowing, on ever-increasing prices: on programmed inflation.

As to the world on the other side of the adjustment, it may well be wonderful, far more in equilibrium with the constraints of the planet, far less destructive to it, and hence with less stresses of the kind that have led to or accelerated selfishness, greed, competition, corruption and war.

You might think of it this way: if one person lived in the entire United States, he or she would have the whole nation's resources at his or her disposal. For one hundred thousand people, they could share, or apportion, the nation into this many lots, but each would still enjoy great abundance. (And the other life sharing the lots would have only a minimal threat.) At one hundred million, as was the population some eighty years ago, there would still be enough resources to go around. Of course, there were not enough resources back then, it seems, for some people (the European settlers), although actually the resources were sufficient, but they were not used without causing great environmental destruction, because of this greed, and also ecological ignorance. And this set of values brought the settlers into conflict with the Native Americans, who favored a different form of existence, one more a part of nature and hence with less exploitation of it. Finally, at five hundred million people, it would be far too many, even for a country the size of America, except for a few wealthy and powerful individuals, who could cordon off greater than average shares for themselves.

So, what is the right number, what is our planet's carrying capacity? Well, to calculate this we will (1) have to allow for a wide range of personal tastes, from wilderness enthusiasts to slaves to technology and materialism; (2) operate under the constraints imposed by the need for a truly sustainable resource utilization; and (3) satisfy the higher principle of respecting nature for its diversity and valuing it in and of itself, not only in relation to the needs of humans.

It is a complicated equation, to be sure, but one to which we will inevitably arrive, indeed, to which we already have arrived, and which we must learn to solve. For example, research has shown that sustainable resource utilization, such as sustainable logging, does not always equate to the preservation of biodiversity. But, we should only utilize resources to the extent, and in a way, such that we do not degrade, further, the planet's biodiversity. Also, as different nations have different amounts of land and resources, the equation, the "balanced" human population to be achieved, will be unique for each.

This, then, is also our goal, what might be called our final social, and economic, objective. Now all we have to do is find ways to cooperate and work together, so we can get there as quickly as possible.