Tag: economics

A Brave New World


 

How beauteous mankind is!

O brave new world,

That has such people in it!

 

                                                                                Shakespeare in The Tempest

 Climber enjoys the view from the top of the mountain

“….We must protect our borders from the ravages of other countries making our products, stealing our companies and destroying our jobs. Protection would lead to great prosperity and strength…. We will bring back our jobs. We will bring back our borders. We will bring back our wealth.”

Donald Trump in his Presidential inauguration speech, 20th Jan 2017

***

“But there is simply no need in the 21st century to be part of a federal government in Brussels……… It was a noble idea for its time but it is no longer right for this country. It is the essence of our case that young people in this country can look forward to a more secure and more prosperous future, if we take back the democratic control which is the foundation of our economic prosperity………. We can control our borders in a way that is not discriminatory but fair and balanced and take the wind out of those who would play politics with immigration.”

Boris Johmson, British politician & “Leave EU” BREXIT campaigner, 2016

***

“We launched the Make in India campaign to create employment and self-employment opportunities for our youth. We are working aggressively towards making India a Global Manufacturing Hub. We want the share of manufacturing in our GDP to go up to 25 per cent in the near future.”

Narendra Modi, Indian Prime Minister, 2016

***

The signs are everywhere. Of Globalisation, the beacon that was destined to shape this century, suddenly dimming. Of ‘Walls’ being built to prevent the ‘Others’ read immigrants to come in and usurp work that rightfully is ‘Ours’. Of bringing back off-shored jobs. Of ‘reclaiming back’ what belongs to us.

fair-economic-system

Which brings us to Technology. Now technology has always been  synonymous with productivity and economic progress. From those early days of industrial revolution of the eighteenth century to the mass manufacturing assembly lines of the twentieth century to the global networks of the twenty-first. Over all this period, it has been technology that has created jobs.

Faced with falling economic growth and stubborn unemployment (and under-employment) levels, politicians have been quick to chase symptoms. So the big bad wolf behind joblessness and immigrant inflows is seen as the ‘open doors’ of Globalisation. The Close Sesame formula seems quite straightforward. Close the doors, bring back all the off-shored work and leverage all the right technology. And ‘Hey presto!’ the pathway to economic growth and job creation shall be ours.

So Globalisation, the job destroyer is out……… and Technology, the growth and  job creator is in. Or is it?

Globalisation is all about free flow of technology, talent and capital. So as we turn our backs to Globalisation, can we keep technology, talent and eventually capital on our side?

There is also the other paradox. Of how nations and people get to apply different yardsticks to Globalisation as applicable to oneself versus others.  So Donald Trump sees nothing wrong in the spread of American entertainment and fast food brands globally but hates work getting off-shored. And Britain, the creator of the Commonwealth group of nations worldwide, now prefers to go it alone within Europe. Prime Minister Modi and India cry foul when changes in work Visa rules threaten the country’s IT industry but simultaneously focus on ‘Make in India’ to reduce imports.

And finally there is strong evidence that technology in its present avatar of automation, networks, robotics and artificial intelligence no longer creates jobs, in fact quite the contrary.  It has become the destroyer of jobs!

global_technology

Countries are witness to jobless economic recoveries. The world overall has seen productivity and economic growths far outpacing job creation. What this means is that companies and factories are able to produce more and more goods and services without the need to have more workers. What is it that is balancing the equation? Technology of course!

A major reason for the huge upsurge in start-ups is the widespread access to technology concurrent with the vanishing of  the traditional entry barriers relating to capital, workforce, infrastructure etc. One needs to merely read the stories of millennial entrepreneurs and their creations  like Jan Koum of WhatsApp and Mark Zuckerburg of Facebook to appreciate this.

What technology is also doing is shifting the wealth creation away from the workforce as they lose their indispensability and towards the entrepreneur controlling the technology. So the rich become richer and the Haves and Have Nots disparity continues to increase. In the US, we thus see 1% of the population holding 25% of the national wealth!

Finally, we are witness to the phenomenon of ‘tolerating people at work’. Not because they are intrinsically needed but because they work out cheaper in maintaining status quo compared to technology. So warehouses postpone introducing robotics owing to plentiful labour being available to do the work at low cost. Supermarket checkout counters continue to use clerks even though automation is available to do the job. What this of course implies is that there are growing numbers of people (immigrants, laid off workers, new entrants to the job market etc.) out there who are willing to work at abysmally low wages. Even the otherwise technology-mouthing Governments like it as this sustains socio-economic status quo against fears of disruptions which out- of- work populations might foster.

There are however strong indications that going forward the above compromise may no longer work.

Let me explain myself. It is fairly well known that technology gets governed by Moore’s Law. What this law states is that for every dollar spent the computing power (and the corresponding productivity) doubles every two years. Doesn’t seem much, does it? But hang on a minute! Do you know what this does to productivity over a period of time? Over two decades, the productivity goes up a thousand times. Over four decades, it goes up a million times! And computers and computing power have been with us for more than four decades now. This is the power of the exponential law which all technologies tend to follow. Which leads to the technology cost curves coming down fast and over time tending to become zero!

Another change that is being wrought by raw computing power is the unleashing of Artificial intelligence and machine learning algorithms on a scale unimaginable even a decade back. As you might have guessed, this is leading to machines performing complex tasks which have been the exclusive preserve of professionals. Like medical diagnostics on patients better than the best doctors. Or scanning and interpreting past legal judgments, written contracts and assess risks to make a legal recommendation better and faster than a lawyer. Over the next decade or so, no jobs could be considered safe from being taken over by machines.

Do you see what the above two aspects together would do? Cost of using technology for not only low end jobs but even complex work would keep on spiralling down towards zero. We can’t compete with zero marginal cost can we? The writing is clear on the wall. More and more of us are going to be laid off……. with jobs harder and harder to find. We humans are well on our way to technological obsolescence!

So as I gaze into the crystal ball, what do I see?

I see the process of human work obsolescence accelerating and societal structure changing beyond our wildest imagination. Due to key exponential technologies like the internet of things, machine learning and robotics converging together, wide vistas of traditional human activity have no longer the need for humans. Several projections indicate that over the next two decades, available jobs would decline by 50%!

I also see technology continue to remove money out of the equation by making products and services cheaper and cheaper. This in fact had been happening for a while. Did you know for instance that a one teraflop processor which used to cost forty six million dollars in 2000 now costs below fifty! And the smartphone which we take so much for granted has in fact replaced a plethora of stuff in our lives which would have cost nearly a million dollars a couple of decades back!

 The downward movement of the technology cost curve would only accelerate. So a ‘Car as a Service’ future populated by Uber, Ola and the likes would ensure beggars would also be chauffeured around. The best surgeons would be robots working 24X7 with precision and the records of million past surgeries, at negligible charge. Cost of Housing too would fall dramatically as more and more folks work from anywhere in the world with avatar co-workers in virtual offices. Most people would enjoy energy independence through roof top solar panels and energy stored in vehicles. Rather than spending on energy, they would be earning through trading with the grid. And of course most education and entertainment would be available online for free.

So the future that I see hurtling towards us is of a world of people having little or no work, rather not needing to do any work, with an abundance of products and services available at low cost or free.

As Morpheus says to Neo in the Matrix:

 “……This is your last chance. After this, there is no turning back. You take the blue pill—the story ends, you…. believe whatever you want to believe. You take the red pill……. and I show you how deep the rabbit hole goes. Remember: all I’m offering is the truth. Nothing more….”

Our Brave New World too seems to be a story of the blue and red pills allowing us a choice of the path we could take.

brave-new-world-small-logo-623x261

One road leads us to a virtual utopia. Inhabited by people fully able to realise their creative and innovative potentials. A world where people are uniquely free to follow their passions and creative urges. Where innovations are exploding every other day and unimaginable wealth is getting created. Where products and services are plentiful and available to all. Where being wealthy or not no longer matters. A world that has finally come to realise the socialistic dreams of Karl Marx and Lenin, but in a warped way.

The other way is to the land of dystopia. Of people lacking meaningful work and condemned to exist on the lower rungs of Maslow’s hierarchy. With not a hope in hell of achieving the higher rungs of potential. Of folks condemned to live on a Universal basic income provided by the Governments of the day. Of large sections of society feeling increasingly dispossessed and spiralling down into drugs, gambling, terrorism and similar madness.

As the anti-globalisation clamour becomes more strident, I am left wondering about the pill that we as Mankind are about to take. What is the kind of leadership we need that would point us to the right pill? Is our current leadership upto that task?

In learning……

Shakti Ghosal

 

Acknowledgements:

 

 

 

 

 

The Turn of the Screw


“Change is hard because people overestimate the value of what they have—and underestimate the value of what they may gain by giving that up.”

by James Belasco and Ralph Stayer in Flight of the Buffalo,1994

Turn of the screw

China seems to be more and more in the news of late. Well I suppose with its clout as the second largest economic powerhouse in the world, that is hardly unusual. A couple of months back, the country unilaterally devalued its currency Yuan by about five percent to combat declining exports and economic slowdown. More recently the Chinese communist party at its annual conclave announced the end of the controversial ‘One child’ policy, allowing couples to have two children for the first time in thirty-five years. In an environment of economic slowdown, this underlines a heightened fear of loss of competitiveness to countries with better demography.

China degrowth

The Turn of the Screw…….

As Oil prices drop from above one hundred dollars to around forty dollars per barrel, the oil producing nation states in the Middle East led by Saudi Arabia seem to be stumbling, with fiscal deficit rapidly rising to unsustainable 20% of GDP levels. As these countries frantically dip into their reserves to balance the deficit, they fervently hope for oil prices to start climbing up again.

Oil and Gas

The Turn of the Screw……..

I suppose majority of the world believes, just as China and the Middle East hope for, that the economic and oil prices downturn are temporary and the ‘screw would turn back’. China would continue its rise, oil prices would climb back and all would be well with the world again.

My thoughts go back to that prescient article “Marketing Myopia” written by Professor Theodore Levitt of Harvard Business School more than half a century back. The central argument in that was “the history of every dead and dying ‘growth’ shows a self-deceiving cycle of bountiful expansion and undetected decay.” Professor Levitt goes on to say that with the ‘turn of the screw’ in terms of the environment, market and technology, there is always a small timeframe ‘window’ allowing an optimal match between these and an entity’s intrinsic competences. As the screw turns, that fit between such competences and the environment, market and technology starts getting lost. What is needed then is to rediscover and reinvent oneself in terms of ‘What business we are in?’ While Professor Levitt essentially wrote the article from an organisational and industry perspective, I see his concept much more universal and having relevance to nations and Global trends.

myopia

So how do I see the future trending?

For decades, manufacturing from the developed world has been migrating to China, attracted by low costs and productivity. But rising costs in China and development of sophisticated automation are tipping the scales back. Realizing the need to automate to remain competitive, China is implementing advanced robotics. It is constructing the first “Zero human labour” factory in Guangdong which would use a thousand robots to do the work of two thousand humans! But does this not run contrary to the effort to increase the Chinese work force by allowing a two child policy? And what happens to the Chinese manufacturing competitiveness as and when the US and Europe also employ similar robotics to manufacture? Allowing same costs but less the shipping time and transportation costs. Clearly, manufacturing is headed back to the consuming countries themselves. Once again a manifestation of the turn of the screw.

And what about the Middle East and its oil lifeline? For decades now, this region has been enjoying windfall profits from Oil and Gas and resorting to heavy subsidization of its citizenry. Says Meghan L. O’Sullivan, director of the Geopolitics of Energy project at Harvard Business school, “The expensive social contract existing between the Rulers and citizens in the gulf states will get more difficult, and eventually impossible to sustain if oil prices don’t recover”. (A few years back, during the days of the Arab Spring, I had deliberated on this ‘Social Contract’ aspect in my post, “Childhood’s End?”). The question that brooks an answer is when will the oil prices recover? More and more experts in the Energy sector are of the view that with improved energy efficiencies brought in by new technologies and the fracking industry waiting on the sidelines, there is no way oil prices can go up to earlier levels. This coupled with clean energy technologies like the Solar and Wind advancing exponentially means that the fossil fuel industry is headed the way of the dinosaurs. Yet another manifestation of the turn of the screw!

One might wonder that with such inevitable turn of the screw, what is the kind of leadership that would succeed in the world. As I think of this, I realise that such leadership needs to have the ability to envision and embrace a future unencumbered by the present- be it the technology, the geopolitics or the economics. A future which addresses core concerns rather than transitory symptoms. And a leadership which comes to live into such a future as it empowers others to deal with the socio-economic and other changes needed to realise that envisioned future. A future that was not going to happen anyways……….

In learning………….. Shakti Ghosal

Reference: Marketing Myopia by Theodore Levitt, HBR July-Aug 1960.

Where do we go from here?


Wonder if we look, inside our hearts, exactly what
We’d find
Or Maybe we could take a lot of pain away
Yeah
Or maybe we could heal the world today
Yeah
Or maybe, you know, something, I don’t, if you do then

Tell me    
Where do we go from here
Where do we go from here
Where do we go from here

                                                   Chris Rene, American Singer

A few weeks back I had watched the limited coverage of the national convention of the Chinese Communist Party. Rows and rows of party leaders listening and taking notes as a new leader Mr. Xi Jinping took over China’s leadership. With China’s flagging growth, Mr. Jinping is widely expected to provide his vision of the Chinese economic and living standards growth going forward.

The current UPA Government in India seems to be on its last legs and is frantically trying to reverse the ominous dip in GDP growth rates through desperate reform measures. While the jury is still out on the short-term impact of these “big ticket” reforms, it is obvious that no coalition or party can come back to power without a proven record of economic and consumption growth.

This story repeats in country after country in the developing world. Per capita growth, higher standards of living, endless availability of goods and services seems to be the universal mantra. The flickering images on the LCD panels, the endless sitcoms on myriad channels instigate us to go for that I phone 5. Or a fine dining experience. Or hanker for that newly launched car or luxury home. Our ability to consume, to pander to whims and fancies is seen as our success and growth.

But what happens when the two and a half billion folks from China and India come onto the field and want to play ball? What happens when the Chinese and Indians turn around to ask, “Hey you guys in the west, you followed your own American dream for more than a century. Now it’s our turn.”

Thomas Friedman did allude to this in his best seller ‘The World is Flat” but  said it in the context of Globalisation and a world view of a level playing field allowing everyone  an equal opportunity. Methinks however that the far more critical issue is the emerging stress on sustainability. The strain on our planet to continue to produce in pace with the exponentially rising consumption. To put it bluntly, mankind is well on course to strip this planet dry. Do see my earlier post “We need a second planet by 2030” in which consequences of mindless growth and consumption have been discussed.

So where do we go from here?

We need a shift in perspective and mindset. The twentieth century dream of conspicuous consumption cannot remain a role model any longer. This needs to be revisited, reviewed, redefined. We need to be able to answer the following.

“What really is personal prosperity, what constitutes our success?”

“Does success necessarily have to come from ownership and self-aggrandizement?”

“Could our hunger for access to better products and services be satiated, not necessarily by owning, but by sharing?”

This of course is easier said than done. We remain conditioned to acquire and own for our psychological security and comfort. This harks back to days of yore when scarcity and competing for scarce resources was the norm. This mindset continues even though access and availability is on a different plane. In our mind, Owning signifies upward mobility and prestige, of having arrived in a brave new world of capitalism. While Sharing is looked down upon as the vestige of a failed experiment called socialism.

Clearly a tectonic shift in perspective is called for. In a different context in “Age of Discontinuity and the Chinese Shi”, I had brought up the aspect of the Shi mindset which eschews the heaviness of resource ownership. Could this be a perspective that may be needed today?

I think of this and wonder who could play a catalysing role. Political leaders? Opinion makers? Media? What could be the trigger for them to buy-in and play such a role?

The good news is that technology and engineering acumen exists to achieve the above shift. Through better public transportation, better residential spaces with higher density, superior services delivery and energy efficiency, better use of public spaces, better reuse of stuff which we tend to throw away etc.The other great opportunity is of more and more “have not” folks gaining access to products and services which till now have been out of their reach.

Could this be the moment when the best tenets of Capitalism and Socialism coalesce and synergise to open up the path to sustainability?

In Learning………                                        Shakti Ghosal

 Acknowledgement: The World is flat A brief history of the twenty-first century: Thomas Friedman, 2005.

The Oxymoron of our times


From the heart of all matter
Comes the anguished cry
Wake, wake, great Siva,
Our body grows weary
Of its law-fixed path,
Give us new form
Sing our destruction,
That we gain new life…

                                                                                             Rabindranath Tagore

               (Translated from the Bengali original)

The media remains flush with dire tidings. About persisitent US unemployment. About the Euro zone crisis. About faltering growths in the BRIC economies. On screen debates and coffee table discussions waft around how to get back to the old ways of Capitalism fuelled growth.

We remain witness to cycles. The boom and bust. The shortening of product and business cycles. The rapid changes of technology and society. As I muse, I visualise the ebb and flow of human endeavour. Of our  knowledge and  creativity. Of our  follies and emotions. I see the movement, at once intuitive and playful, of the flowing curves and trends. I see economic and social aspirations as energy, unfolding and folding within itself. I see oscillations between  active and dormant states. I start to see Creation and Destruction….

I think of Creative Destruction, a concept by Joseph Schumpeter that has often resonated with me. Schumpeter saw human advance as a “perennial gale of creative destruction”. He likened it to the Darwinian natural selection to secure the “survival of the fittest”. What Schumpeter envisioned was the economy and society constantly regenerating from within by shedding old and failing businesses and social structures as it reallocates resources to newer, more productive ones.

I do see the path that Creative Destruction has taken in times gone by. As steam powered factories and looms closed down to give way to those with electric power. As did the horse drawn carriage give way to the automobile on the roads. And more recently, how the digital revolution squeezed out the traditional photography and music industries.

A machine perennially ON, creating that which is ‘new’ as it destroys what is ‘old.’ Like Lord Siva’s Rudra Tandava ( Dance of destruction) in Hindu mythology. Like the proverbial phoenix, rising from the ashes of that which no longer serves. And as it rises, it creates new Capital, new Thought, new Man. I see unstoppable movement. To stop would mean stopping change, evolution, progress. To stop would mean the inevitable decline.

But as I muse, I start seeing how Creative Destruction is failing today, just as it succeeded in centuries gone past.

As the old “debris” is destroyed, the ground needs to be cleared for the new to arise in a sweeping upward motion. This of course presupposes that both creation and destruction take place within the same society, winners and losers standing close and people gaining in other ways as they lose in some.

The grandeur of those great American auto towns in Detroit and the tens of thousands who worked in and around have surely gone with the wind, not to return. But as these jobs got destroyed in that area, many other value added and differentiated opportunities did arise, if not within the state, at least within the US itself. So Creative Destruction did work…….but this was last century.

Cut forward to our era of Globalisation and we see the Information and Technology outsourcing leading to near elimination of that industry in many parts of the world. Jobs destroyed in fact get created somewhere half way round the world, never to return. And with this we have been witness to the near destruction of the very communities from which they emanated

Whole countries and regions are becoming long term losers through destruction versus others becoming winners through creation. In this globalised age, the integrity of the oxymoron ‘Creative Destruction’ is being torn apart, way beyond what Schumpeter could have visualised.

And so I come back to the aspect of how the current global crisis looks through the lens of Creative Destruction. Are governments the world over in fact doing all the wrong things through politics? As they bail out top-heavy banks. As they subsidise inefficient businesses. As they prevent natural job losses. By doing these, has the world willy nilly shortchanged creation itself? And sowed the seeds of Capitalism’s own destruction?

In learning…..

Acknowledgement: Prophet of Innovation: Joseph Schumpeter and Creative Destruction    by Thomas K. McCraw, 2007.

Coming of the Second Wave


So you speak to me of sadness and the coming of the winter,
The fear that is within you now that seems to never end,
and the dreams that have escaped you and the hope that you’ve forgotten,
and you tell me that you need me now and you want to be my friend,
and you wonder where we’re going, where’s the rhyme and where’s the reason?

                                                                   John Denver, Rhymes and Reasons, 1969.

  

Is it not ironic that at times when we stand close to a momentous event, seeing it unfolding in all its HD brilliance, we tend to miss the wood for the trees in terms of its future impact? So it was when the Berlin wall came down; most folks saw it as the factual German reunification rather than the tectonic ideological change about Communism it portended. So it is with the Occupy Wall Street protests, mostly being seen as anger against job losses and lack of economic opportunities rather than something more structural.

As I look around, I see a march of seemingly unrelated trends and events.

  • Declining social and political trust arising out of a growing global inequality and a deepening fiscal crisis. This has lead to a crisis for pension, healthcare schemes etc. dependent on debt burdened states.
  • A heightened perceived insecurity in the developed world. For the first time in generations, people no longer believe their children will grow up to have a better standard of living.
  • More criminality. Be it cyber crimes, drug trafficking or acts of urban terrorism. Symptoms of rising youth unemployment and disenchantment.

During this year’s Davos meet of the World Economic forum, failures of the globalised market economy and an ‘uncertain future’ of Capitalism became the main issues. Ironic when you consider that over the years, Davos has become a byword for Globalisation.

I notice that Capitalism and Globalisation, those two economic pillars of the last few decades, appear to be losing flavour. So, is the world at some kind of an inflexion point?

I believe we have begun grappling with a massive socio-economic change. A change ushered in by programmable machines, networks and the World Wide Web. I had spoken of this in some detail in an earlier post. I say again that technology implementation is resulting in massive shifts at the work place as also how the very concept of work itself needs to be viewed. For the first time in history, technology, without human intervention, is adding economic value and wealth. So those getting in ahead of the game in terms of controlling technology are the new millionaires, displacing the aristocrats and industrialists of the last century. And these millions are being created thick and fast with hardly the need for additional employment generation. Not only is this fuelling a widening wealth gap and disparity, it is leaving more and more of the population behind, unemployed and dispossessed.

Small wonder therefore that a recently published global Wealth Report indicates that most of world’s richest people became richer through the recent economic downturn and into 2011. When in fact the average middle class family actually saw its income fall in real terms. According to Economist Paul Krugman. the current disparity gap in the USis the biggest since the 1920s. Clearly we have entered a landmark period of inequality where the gap is widening to unprecedented levels.

But do you know where the core irony of this whole situation lies? Well it happens to be our much vaunted economic models that not only failed to predict but also to come up with solutions to handle the inequality problem. Worse, if we were to go by economic theory, it is possible to show overall economic growth while significant part of the population is facing a recession or mired in poverty!

So if the predictive reliability of modern economics cannot be relied on, what do we as a society fall back upon? I sense fear as political leaderships all over brace themselves against increased social and political backlash of a growing global inequality. In the Occupy Wall Street protests. In the Arab Spring uprisings. In the resurgence of Marxism in the Indian tribal belts. In the eschewing of the rugged Thatcherism by the British Conservative party as it swing towards leftist policies.

There remain vestiges in our societal psyche of what happened a century back. The chasm between rich and poor opened up by the industrial revolution had been one of the main factors that led to the massive unrest in the first half of the twentieth century. Reaction to this had culminated in adoption of the Communism model in large parts of the world.

I believe we have once again reached that inflexion point where conditions are ripe for the coming of Socialism’s ‘Second Wave.’ I see this as a reaction to the perceived failure of the Capitalistic model and the kind of Globalisation and growth it has spawned. This Second Wave would need to show us ways of re-distributing the wealth created by that part of technology working without human intervention.

Would this be the way Inequality would give us our rhyme and our reason for the future?

In Learning…………..                                                                                        Shakti Ghosal

QE1, QE2, QE3……………..QEn.


” There’s no disaster that can’t become a blessing, and no blessing that can’t become a disaster.”  Richard Bach, author of Jonathan Livingston Seagull.

I have never failed to notice one common thread in most Hollywood disaster movies. Of a precursor to the main event whose significance is lost to all except the protagonist. And how, when the latter tries to convince the authorities about the impending cataclysm, he is ridiculed. Till it is too late.

So in Independence Day, when David Levinson discovers a signal within a signal which is counting down to the Doomsday attack of the aliens, most of Mankind prefers to think of the event as the path to Deliverance. And in Day after Tomorrow, when the paleoclimatologist Jack Hall presents clinching evidence on global warming at a United Nations conference, diplomats are unconvinced. Interestingly the audience, sitting on the seat edge comprehends the emerging situation with the main guy and one tends to leave the theatre wondering at the woodenness and ‘stuck in the groove’ mindset of the powers that be in the movie.

As I sat reading a piece on the global economic situation the other day, one aspect caught my attention.  Of how more and more Governments are raising funds against bonds. Enter the central bank ( Fed in the US, RBI in India) which buys back these bonds and credits the commercial banks through a single entry and hey presto! money has been created out of thin air. The much touted QE1 and QE2 in the US were such “money printing” initiatives. The banks sit on piles of cash which they would like to lend out. And the more such money sloshes about in the economy, the more it chases physical assets like real estate, gold etc. And before we know it, we are inside a bubble, a dangerous territory to be in.

I remain amazed at how nonchalantly the world has passed over the above real life disaster in the making. How Governments, like opium addicts, continue to indulge in QE3, QE4………. up to QEn, by which time we are sure to be overwhelmed by hyperinflation. And how the interest payments on the borrowings are becoming unbearable and sending whole economies into a vicious tailspin. What a huge problem China, with its three trillion dollar reserve in US treasury, is facing due to a looming bond crisis. Or how an aging population in developed economies are finding their pension systems increasingly under threat. As people watch in horror their life savings getting eroded to near nothing.

Keynes in his 1919 essay on Inflation quoted Lenin, the Communism ideologue, as saying, “The best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens……………………………. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.” 

So like David Levinson and Jack Hall of our movies, did Lenin have the prescience of what would happen a hundred years later? Was he the one man who foresaw the self destruct capability of Capitalism nurtured economic forces gone wild?

In Learning…….                                                               Shakti Ghosal

Acknowledgement:  Keynes on Inflation. Excerpts from ‘The Economic Consequences of the Peace’ by John Maynard Keynes, 1919. http://www.pbs.org/wgbh/commandingheights/shared/minitext/ess_inflation.html

We need a second planet by 2030!


A Vedic Hymn to the Goddess Earth

                                                                                                                                                                             Atharva-Veda, XII,I

 Truth, greatness, universal order (rita), strength, consecration,creative fervour (tapas), spiritual exaltation (Brahman),the sacrifice, support the earth. May this earth, the mistress of that which was and shall be, prepare for us a broad domain!

 The earth that has heights, and slopes, and great plains, that supports the plants of manifold virtue, free from the pressure that comes from the midst of men, she shall spread out for us, and fit herself for us!

 The earth upon which the sea, and the rivers and the waters, upon which food and the tribes of men have arisen, upon which this breathing, moving life exists, shall afford us precedence ……….

                                                                               

The independent think tank,Global Footprint Network (GFN), insists that humanity is operating on an overdraft, having surpassed nature’s budget. According to its calculations,mankind would need a second planet to satisfy its hunger and dispose of the waste, as early as 2030.

I time travel back fifteen years to that weekend show of “Independence Day”, of that opening panorama of the low flying alien ship blotting the sun out, a technologically empowered species waiting to unleash, invade and take over our world and its resources. Are we also destined to venture out of our earth cradle on a similar mission?

As we welcome the seven billionth newborn into our midst this week, as our planet strains to host this level of humanity,many of us are left wondering whether doomsday predictions may yet come to haunt us. When Thomas Malthus forecast in the eighteenth century that our propensity to reproduce would outstrip our ability to sustain food and other resources,could it be that he was right after all and simply a few centuries ahead of the curve? While we might be able to stabilise the world population sometime in the  future, would the strain not become unbearable in the poverty stricken regions of Asia and Africa which face the fastest population growth?

Some of the red flags are already up. As Mathias Wackernagel of GFN says, “From food prices to the crippling effects of climate change, our economies are now confronting the reality of years of spending beyond our means”. Many may see this to be uncalled for scare-mongering and would repose faith in technology and Man’s creativity to provide the necessary scallop. Similar to the way Industrial and Green revolutions proved the Malthusian doomsayers wrong in the last two centuries.

But as I reflect on all of this,I wonder whether we are not missing the woods for the trees. Is this devouring of the planet’s bounty, from forests, fisheries, fresh water to minerals and oil,due to the population getting added?  Or is it more due to the ravenous greed of the existing one?

Is the “flattening of the world” as Thomas Friedman aptly puts it, bringing those additional billions of the developing world onto that level playing field? And what happens when these billions start aspiring for the materialism of the west, for that “great American dream”? Kamla Chowdhury, Professor, IIM Ahmedabad, in her Earth Charter theme provides an answer, “We live in a world which has an obsessive preoccupation with growth and unlimited confidence in new developments. We have pursued the philosophy of cancer which grows and expands on its host, eventually killing it. We are behaving like the cancer cell, killing earth by using it ruthlessly and unsustainably.”

So what is the way forward? To heal the earth, I believe we need to heal the individual. The post industrial era ushered in a societal belief of the supremacy of Science and Technology and these became the only approach to knowledge and power. In the process we have become rewired towards greed, aggrandizement and become spiritually contaminated.Methinks we need to regain the moral and ethical values to take a holistic view.

  • Perspective shift towards technologies and innovation with a human face.
  • Societal values and Economics that would cooperate with our world and its ecology rather than exploiting it.
  • Spiritual positivity and sustainability in our thinking and actions.

Can we empower ourselves to adopt a new paradigm for development based on the above values? That surely would be the biggest turning point in human history.

“The world has enough to fulfill all our needs but not our greed.”

Mahatma Gandhi

In Learning………………                                                                                                                                                  Shakti Ghosal

Acknowledgements:

  1. Global footprint Network : http://www.footprintnetwork.org/
  2. The World is flat A brief history of the  twenty-first century : Thomas L. Friedman
  3. The Earth Charter: Kamla Chowdhry.