End of Consumption Cycle?

With the high rate of unemployment today, we hear this complaint often that we are not growing (in GDP) because we are not spending and unless we spend more, there is not gonna be enough work (to produce), i.e., less jobs. Wait, but isn't that's the reason for less spending in the first place? So looks like we are in a downwards spiral, which is technically nothing new, the pundits say every recession we see this phenomenon.

If we care to ask why this phenom, well we just said because of recession then the real question is why recessions? Oh, don't even go there, that's an age old question. Since (economics) times immemorial experts have tried to answer that, some even tried to co-relate these downwards cycles with the position of stars, I wonder if they were closer than where we are today.

Well, for whatever its worth, here is a thought - if we reverse the cycle mentioned above, meaning consumer spending > production (jobs) > wages > growth > higher living standards (more desires) > more spending > more production > more growth .... is this really sustainable? Could this cycle, growing out of bounds, causing humongous waste and environmental destruction, not become a cause in itself to produce the recession which is nothing but a correctional force that Nature puts forth to set right the deviated behaviors.

If so then,

1. We must realize that in a growing economy the lines between needs and wants gets blurred, our desires take over us and enslave us, causing an ever growing living standards, cutting off our connection from simple and natural living. So these unchecked desires at individual level are the real cause of bubbles or excesses, those are bound to get bust
2. We must learn the right lessons from the recessions so that we don't fall into these cycles again and again, ad nauseam.

What is that lesson? When I have $100 in my pocket and I suddenly get an urge to buy that new gadget, at that moment, having the courage to ask oneself - do I really need that, will I use that FULLY or do I want that just so I look cool etc.; and then choosing to be wise to let go that urge and free oneself from the bondage of desires. Sounds very much like spirituality isn't it .... perhaps there is not much difference between economics, democracy and spirituality, after all situated at the center of all these is - I.

P.S: Written while having been unemployed for 2 weeks

Time for People 2.0?

The underlying driving force behind Democracy and Markets (Capitalism), the two great forces of modern times is really - People. The underlying assumption here being - "whatever people demand must be good, hence the system must allow that to happen". Nothing wrong so far in the logic, all seems pretty natural and isn't that the real strength of these systems that it resembles nature when it follows laws like the survival of the fittest etc. However, there is something comfortably disguised in the above assumption and it is in the word "demand". In terms of natural laws, this demand would really translate to need, which would really translate to vacuum. For example, why air, water or electricity flow from higher pressure to lower pressure etc..

Now comes the real question - is there something wrong with people's demand today? Well one need not ask anyone else but oneself, do I always take buying decisions based upon what I really need, do I demand from my politicians what is really needed for us or am I getting influenced by those million dollar ads, am I getting influenced by fear, greed or any other external agent, like in this picture can we say the next decision these traders will take will be free of any emotions.

Actually there is a even bigger question if one might have the courage to ask - do I even know clearly what are my real needs and what comes in the zone of superfluity.

If I find that many times my actions are affected then a well running Democracy or Market will only amplify it to a magnitude proportional to the sheer number of people multiplied by degree of affectedness. So if this is the case then what is the point in blaming the Hill or the Street, they are a mere reflection of what we are, a mechanism to channel our own individual tiny forces. If we agree with any of this above, it should make it clear where should my efforts go if at all I am really interested in bringing forth a correction.

To nip perverted thinking that by raising these questions I am suggesting to go back to the world of feudal lords or dictators, I must say that this is really for the present and young generations who MUST question the state of Democracy, Capitalism and the driving force behind these, i.e., ourselves, and they must inquire and investigate what is missing, what is not right with courage to accept where needed, so that we can evolve to systems which are better in all respects.

Our problems, a great leveler

"If we dig deep enough into the major problems we are facing today as humans, we find one common element towards the root of these problems, and that is - the human being. More specifically the individual deviation from what one ought to be.."

One day while walking down to work, my thoughts wandered into the three recent major problems we face as human beings - global economic crisis, global terrorism and global warming, ... notice every thing is going global these days. Thinking about the root cause of the recent global economic crisis, I jumped backwards from bail outs ... to credit crunch ... to foreclosures ... to housing market ... to sub-prime lending & financial innovations of derivatives ... to too easy credit .. and finally to individual home buyers who bought houses overlooking the basic principles of need and affordability. Of course they were able to do this because it was made possible for them by the profit mongers of the modern financial system.

Without going into who should get more blame, one who got drunk or the bartender who did not warn about the aftereffects; it is suffice to say that both had a role in it and both factors at least be scrutinized seriously when we look for lessons to learn. We hear the bankers and the banks getting hammered quite a bit about financial derivatives, culture of unscrupulous lending and what not but what about the millions of people living a culture of borrowing and spending beyond one's means going after more comfort and wealth, do we hear that as much? If no then why not? Perhaps because we all have a share in that and by the logic of Banderlog of The Jungle Book (R Kipling), "we must be right because we ALL say so (or do so)".

Then there is another factor worth pondering and questioning - in capitalism customer (or consumer) is near God, i.e., all perfect, cannot have any defects or all defects are excused, much the same way as in democracy people are (or at least pretended to be). Don't you think after 2-300 yrs it's time we need Capitalism 2.0 and Democracy 2.0, anyways that is a topic of another post. For the case in hand, a.k.a. The recent global financial crisis out of which we are slowly recovering (economically speaking), if we have to ascribe the root cause (or near root cause) to one common factor I would say - individual deviation from what one ought to be.

Now jumping to other crisis - global terrorism. I am not an expert in anything, but IMHO the word terrorist itself fuels the fire of terrorism. Isn't it essentially caused and/or fueled by a war of perceptions? They call others infidels and of course others know they are not and in reverse others call them terrorists and of course they know they are not because they are doing God's work as martyrs. Unless we see each other, understand each other and accept each other, is there any solution in sight via diplomacy, political stability, economics or use of force? Haven't we been trying these means for some times? May be the right combination of these means haven't been applied sincerely and for long enough. The big question is who would do it, when every one (nation) is mired by problems of their own. The root cause of global terrorism is way too deep to be fixed by patchy efforts applied at the surface. While I am not suggesting any solution, because I don't know any, what I am attempting to suggest are some potential contributing factors. Questions like why we see the same world so differently, why we are not able to understand each other and accept each other and the biblical one - Why do you look at the speck that is in your brother's eye, but do not notice the log that is in your own eye? These questions have nothing to do with terrorism, they have been with us since time immemorial, they probably lie at the base of every human conflict. Suffice to say that it is human deviation from what it ought to be, again at the bottom of this mess.

Lastly coming to global warming, the easiest one to see how individual deviation is at the root of it. So much plastic goes to waste, why? Because we don't change our habits e.g., to take a reusable bag to store. So much energy gets wasted, why? Because we don't change our selves to do simple things such as to not use hot water to wash our hands in summer, to take stairs instead of elevator to go a level or 2 up or down, to use reusable ceramic cup for coffee in office instead of those Styrofoam cups; let alone harder things such as reduce our consumption or car pool. If we, each one of us take a moment and think about what at all, if anything, I have done or I am doing to change my behavior to mitigate the effects of global warming, I am afraid the responses would be way down in the negative territory .... and why .... because we think or perhaps we are subconsciously benumbed to believe that problem is outside us. So again, these millions or billions of micro deviations (individual) when added together creates a macro one, which we call as global warming.

So why are we talking about this, what if let us say we assume that the root is indeed the individual deviation? Well, the point is what are we doing about it .. anything? The systems prevalent today capitalism and democracy do not facilitate very well in pointing out the individual deviation because of an inherent conflict of interest (between businesses & consumers or political leaders & people ), do they? Then how can the cherished dream of the founding fathers of this country - meaning, intention or the essence of freedom, the pursuit of happiness where the keyword is pursuit, a constant journey towards ones own perfection of a being, be fulfilled?

First thing that may help is that we rise above our perceived differences. And if our skills, our talents and our humanness with all the differences is not helping us to unite or to see each other at par then perhaps our problems will, after all we all share the same root cause. Who knows, it might be much easier to come together when stomachs are little less filled and wallets lighter, like the observation made by the British mystic James Allen about how sparrows share the small piece of bread in winter scarcity where as fight over the same thing in spring's abundance. How different are we from. ... umm sparrows ....... are we?

Until next time.