Download Enough - Part 1

Enough is enough
Klaus Nürnberger
Oct 2013
!
Enough is enough
!
Enough is enough?
The world economy is run on the dogged
insistence that ‘enough’ cannot and should
not ever be enough.
Dominant economic wisdom says:
The free-market system will grow or
collapse.
And there is no other viable system!
Scientific insight must grow.
Technological innovation must grow.
Capital investment must grow.
Economic output must grow.
Energy supply must grow.
The population must grow.
Income must grow.
Consumption must grow.
Human life time must grow.
Session 1 deals with the fact that we are embedded
in, and determined by, the free-market system.
The modern economy leads to growing
discrepancies in life chances and escalating
ecological destruction.
Session 3 deals with motivations underlying the
modern economy and a Christian response.
The modern economy is driven by desire which
is deemed natural and profitable.
Our aim is to find a valid and realistic Christian
response.
Session 1
Basic
economic
realities
Outline
1. Economic power in a free market
2. Growing discrepancies in life chances
3. The effects of globalisation
4. Stimulation of consumption with easy credit
5. Increasing money supply
6. The ecological fall-out of economic growth
First assumption:
“The free market balances out the economy”
‘Any bureacratic interference distorts the market,
reduces output and therefore impairs human well-being’.
Price
The Market mechanism
Quantity
Yes – but …
The reality:
The market balances out supply and
demand. But it does not lead to a balanced
economy!
Because of unequal endowments of
economic power, free competition leads to
growing economic imbalances.
PROFIT
MOTIVE
PRODUCTIVE
POWER
BARGAINING
POWER
SUPPLY
DEMAND
NEEDS
DESIRES
PURCHASING
POWER
MARKET
Feeding on itself, competitive power in the market
grows exponentially, thus leading to widening income
discrepancies.
World income distribution
Second assumption:
Free competition enhances the wealth of the
society as a whole.
Yes – but …
The reality:
1. The wealth of a small elite is enhanced
beyond all proportions while a growing section
of the population is being marginalised.
6
5
Number of billionaires
Combined wealth in trillion US$
Average wealth
3 800 million US$
Wealth in trillions US$
Thousands of billionaires
4
3
2
1
0
2000
2005
2010
NET WORTH OF
BILL GATES
US$ 72 000 000 000
(2013)
Which is more than the Gross Domestic Product of 128
of the 192 countries (67%) in the world today.
1. Billionaires and the great corporations have
exorbitant power to influence society.
This power t can be used for beneficial purposes
(Bloomberg, Gates, Buffet)
Or abused (transforming the US democracy into a
plutocracy; Berlusconi in Italy).
2. The same is true for the lobbying power of large
corporations and whole sectors (oil, agriculture).
(Many analysts allege that there is massive collusion and
abuse of power in the American system.)
2. Superabundance and deprivation are
consequences of one and the same process.
There is an economic centre where the
economy grows while the population
remains constant,
And an economic periphery where the
population grows and the economy
stagnates.
CENTRE AND
PERIPHERY
AFFLUENCE GAP
POVERTY GAP
PERIPHERY
CENTRE
PERIPHERY
IN GEOGRAPHICAL
TERMS
IN TERMS OF LIFE CHANCES
Trinity Yacht
Lady Sura
The price is not provided –
is it irrelevant for the
monied?
Probably US$ 40 000 000
= R 400 000 000
Porsche Spyder € 781,155
= R 10 000 000
3. An increasing number of people are pushed
to the margins of the economic system,
and may become redundant in economic
terms altogether.
4. A seriously skewed economy cannot
accommodate the total population.
MARGINALISATION
THE FORMAL
ECONOMY
CANNOT
ACCOMMODATE
THE TOTAL
POPULATION
INSIDERS ARE
ECONOMICALLY
RELEVANT
OUTSIDERS ARE
ECONOMICALLY
REDUNDANT
Marginalisation is reflected by poverty levels:
PROVINCE
NUMBER OF POOR
in millions
% OF POPULATION
GAUTENG
LIMPOPO
3.7
4.1
42%
77%
WESTERN CAPE
EASTERN CAPE
1.4
4.6
32%
72%
KWA-ZULU-NATAL
5.7
61%
SOUTH AFRICA
25.7
57%
The Gini-factor is growing 1991 0.68, 2001 0.77
Third assumption:
Globalisation (a free market across the globe)
leads to rationalisation
thus greater efficiency
thus greater productivity
thus lower prices
Which is good for the consumer.
Yes – but …
The reality:
Globalisation means that local centres are
integrated in the global centres, enhancing their
reach and power,
Local peripheries are exposed to global competition
and pushed out further than before.
Examples: SA shoe and clothing industries;
agricultural dumping (e.g. poultry from the EU)
GLOBALISATION
ENHANCED COMPETITION,
ENHANCED GAINS
ENHANCED MARGINALISATION
PERIPHERIES ARE
PUSHED FURTHER OUT
I
CENTRES BECOME MORE INTEGRATED
Again the third assumption:
Competition leads to rationalisation
Rationalisation = enhanced productivity, lower
costs, and lower prices,
which is good for the consumer.
Yes – but …
Which consumer?
Rationalisation = reduction of costs
= retrenchments,
greater gain for shareholders,
greater packages for CEOs,
greater purchasing power for the employed
Total loss of income for the retrenched.
No chance for the unemployed.
The modern
economy ne
a diminishin
number of
highly traine
workers.
As a factor of production, labour can no longer
compete with technology and energy gained from
fossil fuels.
LABOUR
TECHNOLOGY / ENERGY
Redundant labour is shifted into non-productive
sectors, or it drops out of the system.
120
SERVICES
US jobs
100
2000-2010
COMPUTER
TAKE OVER
80
Series1
Series2
60
CONSTRUCTION AND
MANUFACTURING
40
20
AGRICULTURE
0
1
2
3
“Increasingly sophisticated scheduling software has
eliminated the need for many office assistants and
secretaries; Labor Department statistics show a loss of 1.1
million such jobs in the decade between 2000 and 2010 (in
the US).
The number of bookkeepers fell 26%, word processors and
typists, 63%; travel agents, 46%; and telephone operators,
64%. Online services like banking have wiped out many teller
jobs; self-service checkout lanes have whittled away at
cashier jobs.”
This is a bakery – do
where are the bakers?
How many people
are working here?
NO WORKERS NEEDED!
In highly developed countries the productive
sectors provide the wealth needed to support
growing unproductive sectors.
In poorer countries the productive sectors
cannot sustain bloated public sector and
service sector employment.
Social grants to pick up the unemployed,
though necessary, bleed an already struggling
economy.
Fourth assumption:
A recession must be avoided at all costs,
therefore a sluggish economy must be stimulated
with easy credit.
Yes – but …
The reality:
1. Easy credit leads to escalating
indebtedness.
2. Consumer credit transfers purchasing
power from consumers to lenders
(credit institutions and sellers).
Cash price
60 m credit
Loss
R 110 000
R 158 356
R 39 000
10.5%
33%
Corporate and private debts in South Africa
(at present about 75% of disposable income)
Household
debt to
income
Fifth assumption:
“Boosting the money supply” will stimulate
the economy.
(First step: lowering interest rates close to zero to induce
borrowers to take out more loans. When interest rates are
already close to zero, the central bank buys mortgage
bonds from commercial banks to provide them with more
money – called quantitative easing. It takes over the debt
risk from the banks so that the banks are encouraged to
give out more loans.)
Yes – but …
The reality:
‘Quantive easing’ leads to massive state
indebtedness.
Such state debts have to be shouldered by the
average population for generations to come.
US STATE DEBT CEILINGS
Yes – but ..,
The reality:
1. The ‘financial economy’ grows,
even when the real economy does not.
2. The speculators are gaining from the
financial economy, rather than the
consumers.
The surplus money must go somewhere –
and it is invested in stocks.
The Johannesburg stock exchange just hit a series of
all time highs,
while consumers are struggling to service their debts
and pay their bills.
3. The real winners are the captains of the
financial sector:
Total packages of banking CEOs in 2012 / 13
Gupta (DBS)
Jain / Fitschen (Deutsche Bank)
7.5 million US$
6.2 million US$
Ramos (ABSA)
Jordaan (FNB)
Nxasana (First Rand)
R 16.7 million
R 17 million
R 22.5 million
R 75 million
R 62 million
THE ECOLOGICAL FALLOUT
Sixth assumption:
Techological efficiency and economic productivity
have led humanity to
a level of prosperity that previous generations could
never have dreamt of.
Yes – but …
The reality:
1. Wealth = economic throughput.
2. Economic throughput is the transformation
of natural resources into waste.
3. Technology accelerates throughput,
thus the depletion of resources and
the accumulation of waste.
ECONOMIC
THROUGHPUT
RESOURCE
BASE
EXTRACTION
PROCESSING
Money
flow
Goods and
services flow
DISTRIBUTION
CONSUMPTION
WASTE
4. Wherever wealth is ‘created’, it goes at the
expense of other humans or the natural
world. (The law of entropy).
5. Human self-interests are blinkered.
They concentrate on human consumption
irrespective of the costs for the natural
world and future generations.
CONCERNS OF
NATURE (GOD)
RESOURCE
BASE
EXTRACTION
MANUFACTURE
Money
flow
Goods and
services flow
DISTRIBUTION
CONSUMPTION
HUMAN
CONCERNS
WASTE
Modern humans began to colonise the earth some 100 000 years
ago. Wherever they went their arrival had devastating effects on
other creatures.
“Homo sapiens became the first species to stop living inside local
ecosystems. All other species, including our ancestral hominid
ancestors, exist as semi-isolated populations playing specific roles
in local ecosystems. All other native plant species are now classified
as “weeds” — and all but a few domesticated species of animals are
now considered as ‘pests’.”
Economic growth,
population growth,
growth of economic discrepancies and
growth of ecological impact
are all part of the same process.
ECONOMIC
GROWTH
ECONOMIC POWER
GROWS IN THE CENTRE
INCOME
DISCREPANCIES
GROW
POPULATION GROWS
IN THE PERIPHERY
THE ECOLOGICAL
IMPACT GROWS
Population growth
is a consequence of the modern economy and
began in Europe!
Between 1700 and 1900 Europe’s population
grew from 100 million to 400 million.
United Kingdom
1700
1800
1900
2000
5 000 000
7 750 000
30 000 000
49 000 000
Germany
1700
1800
1900
2000
19 600 000
21 700 000
56 400 000
82 000 000
United States
1700
1800
1900
2010
250 000 (Whites only)
5 300 000
76 200 000
310 000 000
The world population grew
exponentially since the onset
of the modern economy.
1 billion in 1804
2 billion in 1927 (123 years later)
3 billion in 1960 (33 years later)
4 billion in 1974 (14 years later)
5 billion in 1987 (13 years later)
6 billion in 1999 (12 years later)
7 billion in 2013 (14 years later)
Seen in the long term, humans posed no
threat to nature until the tilling of the soil
and the formation of the great empires led
to power concentrations and technological
advance.
Today there are 35 times as
many people on earth as
when the Bible was written
7 000 million
Today 2013
600 million
Luther 1550
200 million
Jesus 30
60
South African population growth
1900 - 2000
50
40
30
Series1
20
10
0
1
1900
2
3
4
5
6
1950
7
8
9
10
11
2000
12
Simultaneous with the population explosion there
was an explosion of material expectations
(here represented by energy consumption).
The dynamics of the modern economy have
gripped the imagination of poorer populations
across the world,
Leading them to aspire to the life styles, the status
and comforts of the rich.
Growth of material
expectations
GDP US$ / capita
USA
47 000
Brazil / RSA
11 000
China
7 500
Congo
320
150 x
Now multiply
the growing population
with growing expectations!
This is a
tsunami
not of seawater but of humanity
flooding the planet and
destroying everything in its wake
For over four decades the warnings of
ecologists were dismissed and refuted
with ‘scientific’ arguments.
Neo-classical economists have legitimated the
interests of large corporations (especially
those dealing with fossil fuels).
Powerful lobbies in the corridors of power ( =
a form of corruption) have made policy
changes illusory.
Further neo-classical assumptions:
7. The benefits of economic growth are selfevident. Growth is indispensable.
8. Population growth enhances economic growth.
9. Consumers must be motivated to consume
more because vibrant market demand
enhances production and therefore economic
growth.
10. Resource constraints are not an issue
because resources are unlimited and the
market will sort out deficiencies.
Yes, but – NO, not at all!
The reality:
Resources that cannot regenerate themselves
(such as fossil fuels) are depleted,
Resources that can regenerate themselves (such
as forests) are overexploited or destroyed.
Natural sinks (such as air and water) that process
the waste are overtaxed.
While global warming may still be disputed,
what cannot be disputed is:
Maritime resources are being decimated,
Forests are being destroyed,
Agricultural land is eroded and poisoned,
Fresh water resources are running out,
Species are being eradicated in their thousands.
We are living through the sixth mass extinction in the
earth’s history –
the first caused exclusively by humans!
Normal extinctions vary between 1 and 10 species
per decade.
During the last century the rate was between
100 and 10 000 per year.
Responsible Policy Priorities
1. The preservation of the resource base of the planet.
2. A modest but healthy livelihood for all.
3. Equity in the distribution of efforts and rewards.
4. Concern for the weak and vulnerable.
5. Balanced (material, social, spiritual) need satisfaction.
Actual policy priorities
The economy must grow.
Capital investment must grow.
Economic output must grow.
Energy supply must grow.
The population must grow.
Income must grow.
Consumption must grow.
Preliminary conclusion:
Should enough be deemed enough?
Quite definitely!
Frugality has become imperative!
1. Growing discrepancies between extravagance
and misery are undermining any prospect of
material adequacy for all and social peace.
2. Our avarice is destroying the planet, thus the
future of our progeny and countless other
organisms.
3. Our economic system is vastly out of kilter. Neoclassical economics reinforces the fatal trend
rather than counter-acting it.
What are the alternatives?
African traditionalism is not an option because it stifles
free initiatives and thus the development of the poorest
of the poor.
The Marxist alternative failed, because
(a) it misinterpreted human motivations,
(b) it was based on the same quest for
human mastery, ownership and entitlement,
(c) it was an oppressive system.
In the free market system there is no political will to
change. Change is only possible when human
motivations change.
Session 2 Group discussions
Can Christians make a difference?
“Nur den Betern kann es noch gelingen,
das Schwert ob unsern Häuptern aufzuhalten…”
Inner constraints:
Since Pietism and the Enlightenment, Christians have
focused on:
Our eternal destiny at the expense of God’s mission,
the spirit at the expense of the body,
the individual at the expense of the community,
the church at the expense of the society,
humanity at the expense of the rest of nature.
Our faith has become as self-centred as the
motivations of the modern society at large.
Outward constraints:
1. Does the church wield economic or political power?
2. Which groups are represented in our congregations –
the youth, the men in their prime, the workers, the
industrialists, the professionals, the politicians?
3. Are those who sit in our pews interested?
4. Do our sermons, liturgies and hymns reflect such
concerns?
5. Are preachers trained to address such issues?
6. Are the motivations of believers different from those of
the general public?
7. Are conference resolutions ever translated into actions?
8. Are we taken seriously by anybody in public arenas?
What if our enemy were not impotence,
but fatalism and despondency?
Once we feel we cannot do much,
we swim with the crowd.
Then we remain part of the problem
rather than part of the solution.
Faith in God is a trust, a conviction, a mission and a
determination that can ‘move mountains’.
If we were to make a difference,
what would have to change?
Where could we begin?
Which developments could we support?
1. What motivates us as Christians?
Our clean conscience and peace of mind?
Our eternal destiny?
Our standing in society and earthly prosperity?
Or God’s vision for his world?
2. Can our concept of salvation include the well-being
of God’s creation as a whole?
3. Can our Christian worldview be transformed to
match current scientific insight?
4. Does it matter whether individuals or households
change their way of life?
5. How can the Word of God reach the decisionmakers and role models of our times?
6. Can our theological training equip our pastors to
work with secular experts and role players?
7. Should pastors include economic-ecological topics
in their sermons and classes on a regular basis?
8. Can our church issue sporadic, concise and clear
guidelines about economic and ecological issues?
9. Should our church leadership cooperate with other
churches with similar concerns to play a public
role?
10. Can our lay membership be motivated to think and
act responsibly in their secular contexts?
11. Should we re-establish the Christian Academy,
where such issues can be discussed between role
players, stake holders and experts on an
interdisciplinary basis?
12. Can you think of NGOs, Government Agencies,
lobbies and advocacy initiatives that we would join?