Index

2:   ECONOMICS' OWN DARK UNIVERSE

Frank Taylor

During the first half of the twentieth century physicists viewed the universe as consisting mainly of matter and energy; of stuff of one sort or another and which was all seeable or detectable by humans or their instruments. However in the past three decades cosmologists and astrophysicists have been increasingly preoccupied by the presence firstly of dark matter and latterly also of dark energy. Indeed it is now posited that most on the universe consists of, and is held together by, such dark matter and energy, and that the stuff we can either see or detect is little more than a surface phenomenon.

So more is the pity that the science of economics has not reached a similar state of advancement. For economics is also about stuff, albeit of a more immediate kind. Yet like the Universe most modern economic processes. consist of, and are, held together by, the economic equivalent of dark matter and energy. Whether the ignorance of orthodox economics is failing to detect the presence of this phenomenon, is wilful or accidental is for the reader to decide.

True enough the dark matter of the universe is, we are told, so difficult to detect that no one has so far actually succeeded in doing so. As it currently stands it is a concept born entirely of inference. Economists should not have anything like the difficulty; examples of dark economics are all around us for those who care to open their eyes even a modicum.

It has become something or a cliché to say that any increases in road accidents lead to increases in gross national product. After all a road accident brings a galaxy of services into play. The victims will be taken to hospitals and funeral parlours, recovery vehicles and police will be called to the scene, scrap merchants and garages will process the detritus; courts and lawyers will benefit from the inquisitions, insurance companies will pay for the repair of vehicles or the purchase of replacements. And what could add to our collective wealth more than an increase in road vehicle purchases? The crude sums of our bonkers economics tell us that all this adds to wealth creation.

Such wealth is created, we are told by our wise economists, because such things 'add value'. Road accidents might add value but if cheap, locally grown food is replaced by processed food gleaned from across the globe this also 'adds, value'. A spectrum of services;- transport, manufacturing, marketing et al is called into play. Similarly whereas fresh or dried flowers and naturally derived aromas from the garden were once used' td, sweeten our homes we now add value' with a plethora -of synthetic sprays and gadgets. Whereas the little local brewery might once have been content with a steady trade in beer to a few score pubs, value is now 'added' by the mass marketing of such products as alcopops sold in all night boozing barns. And when people fall ill through consuming too much booze or junk food, or suffer respiratory complaints from breathing synthetic cocktails then medical services will also be activated; 4 hat all this 'added value' is expanding our wealth.

At this point even the most blind might start to wonder. On the one hand the national accounts tell us that all this 'added value' is expanding our wealth. On the other our life experience tells us that we have growing stress and disease and rising taxes as the government grapples with the cost of providing all the extra transport and medical facilities and dealing with rowdy and anti-social behaviour.

Huge amounts of 'value' can be 'added' through planned obsolescence. Once upon a time a set of kitchen furnishings would last ... and be expected to last ... a lifetime. Now even the best quality fitted kitchen is old if it lasts twenty years before being chucked into the skip. Once upon a time our cast iron lawn mowers would last at least a generation. Now their powered successors, pop riveted together from bits of minimum-gauge plastic and tubular metal are unlikely to see out a decade. Our plastic kitchen kettles have nothing like the durability of the good old Swan. Electrical stores no longer even bother to stock replacement elements ... just throw the whole thing away and buy a new one.

Human toil can be categorised into that which is 'significant' and that which is, 'insignificant'. Even fifty years ago wash day, was certainly 'significant', requiring hard labour with tub and zinc board. The washing machine saved all that. Likewise the vacuum cleaner spared us much dirty and arduous handbrushing and carpet beating. These are certainly examples of where technology has liberated humanity, women especially, from 'significant toil' in the domestic arena.

But in the last two decades the name of the game has been to 'add value' by commodifying 'insignificant toil'. GPS saves us the trouble of carrying a road map. But the 'added value' is clear; a road map might cost a fiver whereas a GPS system is likely to cost £300 or more. Does a dish washer save that much time and effort over hand washing? Does the effort of loading and unloading a tumble drier save any real time over hanging clothes on a clothes horse or line? Do we gain very much from automatic transmissions, mobile phones, electric carving knives and tin openers, electrically operated windows and seats, remote controllers, or domestic jet washers? Coming onto the market we have all manner of voice actuated products from bathroom taps and self-closing curtains to telephones which save us the dreadful effort of having to dial a number.

So there are many ways of 'adding' value. What conventional economics cannot, or more likely will not, grasp is that these are also ways of simultaneously adding cost. Junk food causes illness; excess alcohol causes both illness and social disorder, Planned obsolescence will increase-the quantity of goods consumed as will the commodification of insighificant toil. But both will vastly increase the transport resources necessary-to shift all this stuff around and the facilities necessary to dispose of it all. Both will disproportionately increase energy and material resources consumed, yet because of the insignificance of the functions being supplanted, add virtually nothing to the sum total of utility or usefulness available to people across society as a whole. Indeed if the sum total of effort and resources needed to develop, manufacture, market, distribute, service and dispose of such merchandise actually exceeds the toil that is allegedly being saved, then the sum total of social utility will actually decline. We run ever faster on a treadmill to stay on the same spot.

This consideration leads us to one of the most basic of arithmetical rules; if something is being added in one place then it is a pretty fair bet that something is being subtracted elsewhere. So from what is the added 'value' actually being subtracted? Does the value 'added' exceed this 'other' value which is being subtracted or visa versa? At this stage we must also directly consider cost externalisation; the dumping of extra resource-demands for health, law and order, transport, waste disposal, pollution, resource and energy depletion et al, which arise as a consequence of 'added value', onto the taxpayer, the environment or the third world.

Now as in most things a law of diminishing returns applies. Whereas the saving of 'significant toil' might indicated a big leap in social productivity there will be progressive increments to the point where the toil being saved is no longer significant. At that stage we reach a tipping point where further development will cost more resources; than human toil, being saved and when the .provision of further products or-merchandise will increase the sum- total of toil thus reducing social productivity.

This we might call 'pseudo growth' or 'dark growth'. On the one hand personal incomes and GDP continue to rise. Economic orthodoxy will automatically applaud any such increases. Never mind the quality, feel the width. Yet on the other hand hidden and externalised costs of the apparent 'growth' exceed,$ any benefit that increase might confer. The point is reached where the 'value added' by the growth becomes firstly proportional to, and then progressively less than the externalised cost of the growth. In such a situation the mirage of expanding prosperity can only be maintained by such factors as the technoholic obsession with innovation for its own sake which so obsesses our age, by ever expanding credit, and by an ideology which turns the concept of 'growth' into a secular religion.

The word 'growth' itself has become a semantic mirage. It has become inextricably linked to concepts of bounty. But the true concept is more neutral; all it means is an increase in size. Increases in size can be malign as well and benign. Gold, corn, summer nights, feather beds and good red wine can become more: abundant, but then so can plagues; cancers, bars and hurricanes.

The world in which; we live shows every symptom of high and growing stress across virtually every front. Most of our ills are iatrogenic; self inflicted and self replicating. We listen to people whinging on radio phone-ins about all the plastic packaging they end up with every week and hear of politicians agonising over what to do with all this waste, when the answers are so clear and simple. Yet this situation is the product of 'growth', and, we are told, our malaise can only be cured by even more 'growth". The spiral of iatrogenic malaise can only step further up its staircase..

Could it be that rather like the universe has become filled with dark matter and dark energy, that the modern economy has become filled to the brim with dark growth to which our prevalent ideology so blinds us that is has become invisible? But there is a difference. The darkness of the physical universe cannot be altered by human action, but our economic darkness can.

Frank Taylor

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