What’s Your Consumption Factor?

  By ruud | November 2, 2010 - 15:23 | ,

Talking about consumption…

Below a link to an article from the New York Times (January 2, 2008).
I think the article is still very actual.
Maybe the numbers in the article are not an exact representation of (nowadays) reality, but i assume there is a lot of thruth in them (the numbers).

http://www.thelavinagency.com/images/uploads/1215820671_nytimes-jan08.pdf

Text I like to highlite:
The average rates at which people consume resources like oil and metals, and
produce wastes like plastics and greenhouse gases, are about 32 times higher in North America, Western Europe, Japan and Australia than they are in the developing world. That factor of 32 has big consequences.

If India as well as China were to catch up, world consumption rates would triple. If the whole developing world were suddenly to catch up, world rates would increase elevenfold. It would be as if the world population ballooned to 72 billion people (retaining present consumption rates).

Some optimists claim that we could support a world with nine billion people. But I haven’t met anyone crazy enough to claim that we could support 72 billion. Yet we often promise developing countries that if they will only adopt good policies — for example, institute honest government and a free-market economy — they, too, will be able to enjoy a first-world lifestyle. THIS PROMISE IS IMPOSSIBLE, A CRUEL HOAX: we are having difficulty supporting a first-world lifestyle even now for only one billion people.

Written by: ruud on November 2, 2010.
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  • James

    There is a rebalancing force going on. Emerging and frontier markets are catching up. They have a growth model which tolerates a modest amount of inflation. The developed world, soon to be junior partners, can only comply.

    • Stevo

      It’s goes a bit deeper than that. Work has moved east because capital relocates to the most productive environment it can find. Whether that is China or Mexico or New Jersey is largely irrelevant. If a fully automated car factory can be built in Cleveland relying upon 1 maintenance engineer to run it then capital moves back to that location. i.e. where production is the cheapest and the most secure. Since most production is still provided by human labour then the lower wage economies have the upper hand. This might change if automation takes another great leap forward. If it does then the production costs will be determined largely by energy costs (and security). Thrown into that equation are also things like tax and investment incentives. Almost all western countries now offer some financial incentive to locate a factory on their doorsep.

      Every politican and business leader prattles on about productivity these days. Productivity essentially means doing more for less, driving out as many inefficiences as possible. The problem is that it is the inefficiences that provide the profit margin. The more of these inefficiences that are squeezed out by competition then the less opportunity there is to make a profit and a return on the capital investment. To retain the profit requires products that have a lead on the competition and the use of marketing and politics to protect a monopoly. But protecting these factors cost money in R&D, advertising and bribery. So the cost of maintaining these errodes the final return on capital.

      In a way, capitalism is slowly choking itself. The very concept behind it “to produce a return” is actually eliminating the return it seeks because many of the barriers to competition have been eroded. I suppose it’s just the law of diminishing returns at work.

      • James

        Add to the mix the debt saturation, and capital productivity is indeed diminishing in the West vs the East. The cancerous debt must be discarded, one way or the other.

  • SSanford_1

    If we keep doing the same things, we will keep getting the same results. Of course, the entire human population cannot be supported well doing things the way we have been doing them. We are entirely mismanaging our resources. Yes, I do think that the entire human population can live comfortably and well. However, that will require us to stop squandering both our resources and our knowledge.

    We have the means. If we decided to, we could make the deserts bloom and light the darkest night. We do not have the will to use the scientific break throughs and knowledge that we already possess to improve the lot of humanity. We constantly prove that we prefer war, meaningless labor and degradation to peace, leisure and prosperity. If it were not so, we would change our ways.

    So long as we squander our resources both human and natural on wars and unnecessary busy work that produces nothing, suffering and squalor is the lot of vast parts of our human population. We could be living lives of plenty and leisure.

    It will certainly require an honest government but a free market economy simply will not provide for the needs of humankind. It only provides for the greed of the few at the expense of the many. We have already proven that.

    • http://paradoxnl.wordpress.com/ ruud

      “It will certainly require an honest government but a free market economy simply will not provide for the needs of humankind. It only provides for the greed of the few at the expense of the many. We have already proven that.”

      In general I agree with that.

  • Jantje

    Maybe it would be wise to not want all those kind of stuff.
    Do I really need a new television every 5 years. Do i need an Ipad?
    I try not wanting that anymore. It helps not to watch TV much thus avoiding advertisements by this media. However i am bombarded with advertisements via email and flashing advertisements on internet. I realize that without all that stuff, I have more time to do other things. And also boredom arises in times, what people nowadays seem to be hating. They think they have to be entertained endlessly, and they more or less hate people that do not entertain constantly. They want constantly new gadgets, like I also used to. It needs turning of a switch, and keep away the hands that want to switch that on again. “Boredom leads to Richdom” might be the credo, because one will focus on more important things like eating healthy food, doing some sports, walking in the park. That kind of behaviors will certainly put less pressure on environment.
    The problem might be that if people do not keep on consuming the products, then maybe there could be a worse economy, the money is not moving anymore. But I do not see it as my job to keep the economy running. And when you buy less stuff, the economy is worse, and thus people get less money which they did not need in the first place because they do not need the money to buy the stuff they do not need.