So we bid goodbye to 2011, a difficult year for many people, ermines included. A certain degree of mayhem on the stock market, but also a degree of mayhem for the lives of many Britons. Unemployment is rising and inflation is taking a toll on many people’s household incomes. Often already precarious in the good times, lubricated with the torrent of cheap debt, the going has been tough for a lot of people as the friction of everyday financial existence increases. Hopefully not too many gorged on the Christmas sales and our guardianistas and impecunious Daily Mail journalists learned to say no to their materialistic children from last year.
What did we learn in 2011 – well, the drumbeat of bad news continued, we learned the Euro was pretty much shot to bits and heading in the wrong directions. We learned we are poorer than we thought we were, we learned in August that shares could go down as well as go up, as if we’d forgotten from 2008… We observed some creative solutions to the problems of inflation in the summer, unfortunately somewhat at odds with the law.
We learned an awful lot of people in Arab states were mightily pissed off with their lot, we learned that we could bump off dictators like Gaddafi but as usual we weren’t so good at putting something better in its place (cf Afghanistan, Iraq). The trouble is the West is too economically and imperially weak to invade and hold and transform a situation, some of us (well, the US of A to be honest) can project force, but we hate the messy part that comes afterwards. Iran seems to be the next place for an oil war, and those North Korean dudes seem to be genuinely barmy despite no doubt being useful to their northern sponsors, but at least they haven’t discovered the elixir of eternal youth yet.
So what of next year? We seem to be coming up against a bifurcation. Established economics would have it that 2012 will be a pretty rough year but that it should be a turning point. On the other hand it could also be a different kind of turning point, where we discover that capitalism is beginning to eat itself as Karl Marx foretold all those years ago, as it continues to destroy the jobs and livelihoods of the people that it needs as consumers. Like so many things, some is good, more is not always better. Or it could be time to consider surrendering to the forces of peak oil and perhaps engineer an economic system that doesn’t demand we consume more and more consumer tat and make up for the empty feeling inside with Prozac, there has to be a better way.
This is becoming apparent as the shocking youth unemployment and rising joblessness. It is hard to say where that is going, it is a bad combination with an education system that has been debased and which seems to take as its most important job bolstering its customers’ self esteem. Sometimes it is better to know that you are stuffed than to just feel good about yourself, as knowledge leads to effective action. We have been here before, it was pretty rotten to look for a job in Thatcher’s first recession, and the 1990s one was no fun for jobseekers either.
For me, 2012 is the year that, after three years of frugality wins me the second goal of financial independence, assuming, of course, that there is still a financial system to be independent in 🙂 The first was reached nine months ago, when I could survive on the stored capital. This New year feels like the last leg of the journey started in February 2008, when I listened to a twerp of a line manager try to pressure me, and I decided that I needed options in future, in particular the option to call punks like that out and tell him that while he may be desperate for the money, not all of us buy our middle class lifestyle on a tower of debt, and I think my own way and dream my own dreams.
So now I am on the final approach, and it does feel like I am gradually surrendering the potential energy of a dynamically unstable job for the lower energy but more stable position of my final aim, to be independent of working for a living.
My hopes for 2012 are personally, to be able to stay the course until the third quarter of the year. Two and a half years ago I took a chance, to carry on and risk crashing and burning, and so far it has worked out, and a lot of luck has favoured my journey. The road is getting harder all round, however. One of the pieces of luck was to get on a London 2012 project, which will be a great swansong for my engineering career.
More generally it is that we find out whether this financial crisis is a financial crisis or something more serious, in that the assumptions behind an industrial economy are starting to break down.
Finally, what we desperately need is for enlightened leadership to rise to the surface. Not ‘strong l’eaders, but a political leadership that can see the wider picture and is not so craven as to endlessly tell the people what they want to hear. There are some serious challenges coming in the years and decades to come. We would all like things to carry on as they were, but sometimes we need to recognise that isn’t possible, and then to take decisive and effective action to adapt and select one of the better alternatives.
I did this in 2008, realising that working for another 12 years until retirement would come at a significant cost to my well-being. I had the advantage of being just one person. As nations, there are a lot of areas where effective leadership is needed, In Europe, the people of the Eurozone need to decide whether they have sufficient common cause politically to make a political union that reflects the economic union. It would be good if the politicians, particularly Merkel and Sarkozy, were slapped around the face with a wet fish often enough that they got to understand that it would be really good if they asked people first, before implementing it. I am not sure that this process was done in the creation of the Euro, and repeating the undemocratic exercise makes me uneasy.
If the people aren’t up for it, then it is time to back away and unravel the Euro, carefully. Because it seems pretty clear that without political union monetary union with always fail Europe in times of financial stress.
Closer to home, we need to decide how we want to earn our living in the UK. We can probably rebuild the banking edifice, though we could do well to diversify. I am not sure that the time is right for us to go down the line of making things again – time and time again it disturbs me how many of the principles of logical thought and basic engineering seem to have been lost from professional life in the UK.
If there is one things I’d like us to achieve in the year ahead, it is to find a way for our economy to give decent jobs for most people to do as Obama called out in his state of the Union speech earlier this year. At the moment we are racing headlong into a winner-takes-all world of work, where most people will end up unemployed and a few will reap most of the rewards. Though chaotic and unstructured, there are sounds of dissent as the ‘99%’ feel this without understanding. We need to apply understanding. It may be possible that having most people unemployed is the only way an efficient modern economy can work. It’s not necessarily a bad thing – the 1970’s dream of a life of leisure I was sold at school and that Keynes foresaw doesn’t sound that bad, and heck, this is what I have been striving for this last three years. Work just isn’t all that. However, we must then change a lot of the incentives and designs of society – Martin Ford has given this a lot of thought, n particular how we deal with a world where most people are not capable of being employed usefully in his scenario where the majority of jobs have been automated away.
It takes brilliance to see the possibilities when all around seems lost, just as JM Keynes, standing at the depths of the Great Depression when all semed lost in 1930, wrote Economic Possibilities for our Grandchildren.
But beware! The time for all this is not yet. For at least another hundred years we must pretend to ourselves and to every one that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight.
I look forward, therefore, in days not so very remote, to the greatest change which has ever occurred in the material environment of life for human beings in the aggregate. But, of course, it will all happen gradually, not as a catastrophe. Indeed, it has already begun. The course of affairs will simply be that there will be ever larger and larger classes and groups of people from whom problems of economic necessity have been practically removed. The critical difference will be realised when this condition has become so general that the nature of one’s duty to one’s neighbour is changed. For it will remain reasonable to be economically purposive for others after it has ceased to be reasonable for oneself.
The pace at which we can reach our destination of economic bliss will be governed by four things-our power to control population, our determination to avoid wars and civil dissensions, our willingness to entrust to science the direction of those matters which are properly the concern of science, and the rate of accumulation as fixed by the margin between our production and our consumption; of which the last will easily look after itself, given the first three.
It’s hard to see how this could transpire, looking back over 8 decades, and decades in which we have very definitely failed to control the human population, or eschew wars. I hope his vison was clearer than mine, and he simply called his solution to the economic problem in a bit early 🙂
Happy New Year, and may 2012 be good to you!