Non - House prices

@klaus_afcb I do kind of agree with you, but I don't think it's the real problem. It's education. We should be taught about these things in school. The path to build wealth is clear and well trodden, people just don't utilise the tools given to them such as S&S ISA's, probably because people don't have a clue how or why to use them. I'm 33 and most of my mates are on the ladder now, those that aren't probably could have sacrificed 20% of their beer/recdrug money spent over the last 10 years and it would have generated them a pot worth substantially more than a deposit.
 
@klaus_afcb I do kind of agree with you, but I don't think it's the real problem. It's education. We should be taught about these things in school. The path to build wealth is clear and well trodden, people just don't utilise the tools given to them such as S&S ISA's, probably because people don't have a clue how or why to use them. I'm 33 and most of my mates are on the ladder now, those that aren't probably could have sacrificed 20% of their beer/recdrug money spent over the last 10 years and it would have generated them a pot worth substantially more than a deposit.
If we all did it then it probably wouldn’t work.
 
swapping petrol cars for leccy cars is just keeping the current system going almost exactly as is - all very lovely, but unfortunately not an answer to the problems we face

You're right electric cars aren't a panacea just one part of wider whole. But there's other companies like a Swiss company that harvests carbon from the air and a Dutch company that generates electricity from plants.

Sure, green technologies are vital. But why do all sectors of the economy need to grow? Why do we need further expansion at the aggregate level? The majority of clean energy generation over recent decades has been eaten up by increased energy demand, much of which is not necessary.

I didn't say anything about aggregate expansion. Things can grow at the expense of others. If you sell 1000 cars a year but only 1 electric car. You can grow the electric share a thousand fold without aggregate growth. In doing so you make the planet a better place.

Economic growth basically requires something to be undervalued (either workers or the environment) in order to create value for a return on investment. There is also no evidence that growth can be absolutely decoupled from greenhouse gases or material resources more broadly. That means that addressing the environmental crisis through growth is basically an oxymoron.

I think you conflate growth with consumption which I don't think is strictly true, I could invent (or invest in) an algorithm that would improve traffic flow, make billions and save millions of tonnes of carbon emissions.

I'd go further than there being no evidence of being able decouple growth with environmental damage and say there's no evidence that it's possible to decouple human life with environmental damage. Where there are humans there is consumption.

The positive is that we know that further aggregate growth (particularly in rich countries) contributes nothing to increases in wellbeing - if anything, it's actually having a negative effect. This suggest that we can all live better in a post-growth society, where we value time and social participation over material resources. We therefore need to structure our economies around social participation and wellbeing and not around aggregate economic expansion, allowing those sectors of the economy which contribute to wellbeing to flourish and those which don't to shrink. This, of course, requires massive changes to the way we work, the investment economy, production etc. but we're working on it! ;)

The problem is that the comfort and wellness we experience in rich countries is largely at the cost of foreigners. Slave labour or close to is baked into food and goods production. Wellbeing isn't a currency that will allow you to buy food, medicines or other products from abroad. How do you overcome that?

I'm not pretending that investment in green companies will solve existential problems but it at a minimum buys the planet more time and removes my dependency on the government in later life and the need to have two tax payers to cover my pension. IMO a damn sight more help than a bunch of middle class hippies gluing themselves to a petrol station.

Also, regarding your other post about taxing inheritance. Playing devil's advocate, by taxing inheritance you would disincentivising saving and therefore encouraging spending and ultimately consumption.
 
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@klaus_afcb I do kind of agree with you, but I don't think it's the real problem. It's education. We should be taught about these things in school. The path to build wealth is clear and well trodden, people just don't utilise the tools given to them such as S&S ISA's, probably because people don't have a clue how or why to use them. I'm 33 and most of my mates are on the ladder now, those that aren't probably could have sacrificed 20% of their beer/recdrug money spent over the last 10 years and it would have generated them a pot worth substantially more than a deposit.

Indeed, surprised something like compound interest at least isn't explained at school. At least it wasn't when I was there.

I know not everyone does this, but in my experience people have different ideas what 'living' means. To some it means German car on lease, trendy clothes, eating/going out regularly, buying several coffees from Starbucks a day, not making their own lunch, latest premium smart phone, sky TV, regular holidays abroad etc and then complain its too tough to get on tge ladder.

Also, having high income doesn't necessarily mean they're wealthy. It's pretty common for people to upgrade in many areas as their wage increases, so you end up with people earning 6 figures with hardly anything saved or invested.
 
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By contrast since about 2018 I've been investing in an ethical (take note XR types!) fund that's had annualised returns of something like 15% including fees.
Hi Kudos, would you be happy to say which fund? I have a number of renewable (wind, solar and Hydrogen) ITs in my S&S ISA. I prefer the seeming transparency of ITs over funds. Happy to exchange tips off public. :)
Back on topic, I have strongly believed UK house prices are well overdue a correction since the late 80's but it never seems to happen they just keep going up and up. If it is purely supply and demand we simply cannot keep building more and more, there's not enough planet left as it is and we all (except the deniers) know how fragile the long term future of our planet is. The only way is to limit the human population which is clearly not an easy thing to do with any degree of humanity.
 
Indeed, surprised something like compound interest at least isn't explained at school. At least it wasn't when I was there.

I know not everyone does this, but in my experience people have different ideas what 'living' means. To some it means German car on lease, trendy clothes, eating/going out regularly, buying several coffees from Starbucks a day, not making their own lunch, latest premium smart phone, sky TV, regular holidays abroad etc and then complain its too tough to get on tge ladder.

Yeah of course. Living in Dubai you see both ends of the spectrum.
 
Love this. Clearly I am no economist but surely common sense dictates that endless growth has a finite point - i.e. too many of us and nothing left to exploit.

Sure, green technologies are vital. But why do all sectors of the economy need to grow? Why do we need further expansion at the aggregate level? The majority of clean energy generation over recent decades has been eaten up by increased energy demand, much of which is not necessary.

Economic growth basically requires something to be undervalued (either workers or the environment) in order to create value for a return on investment. There is also no evidence that growth can be absolutely decoupled from greenhouse gases or material resources more broadly. That means that addressing the environmental crisis through growth is basically an oxymoron.

The positive is that we know that further aggregate growth (particularly in rich countries) contributes nothing to increases in wellbeing - if anything, it's actually having a negative effect. This suggest that we can all live better in a post-growth society, where we value time and social participation over material resources. We therefore need to structure our economies around social participation and wellbeing and not around aggregate economic expansion, allowing those sectors of the economy which contribute to wellbeing to flourish and those which don't to shrink. This, of course, requires massive changes to the way we work, the investment economy, production etc. but we're working on it! ;)
 
Hahaha. God don't get me started. I have a friend who I increasingly see as rather dim. He's about 100k USD up on an NFT he bought a few months ago and he thinks the whole thing is a magical money tree that's going to make everyone rich rich RICH!!! I mean, he's dim for thinking that, not for making all this air money obviously.


There are no end to Crypto Currencies. Discuss.
No don't, really.
 
Hahaha. God don't get me started. I have a friend who I increasingly see as rather dim. He's about 100k USD up on an NFT he bought a few months ago and he thinks the whole thing is a magical money tree that's going to make everyone rich rich RICH!!! I mean, he's dim for thinking that, not for making all this air money obviously.

Yeah the NFT thing is insane. People recently making 100k to 1 million selling what look like avatars of apes.
 
Good topic to debate!

I didn't say anything about aggregate expansion. Things can grow at the expense of others. If you sell 1000 cars a year but only 1 electric car. You can grow the electric share a thousand fold without aggregate growth. In doing so you make the planet a better place.

Completely agree. But growth-based capitalist economies require growth at the aggregate level. What you're talking about there, i.e. a situation where those sectors of the economy serving a social or environmental benefit are encouraged and grow (up to a required point - we don't need the growth in electric cars to continue indefinitely) and other sectors degrow, is a post-growth economy.

However, we need to focus the economy around human needs - i.e. we have a need for mobility. We could satisfy this need through everyone having their own electric car. Or we could improve public transport services, putting less pressure on the environment. An economy requiring aggregate growth will always choose the first option, and keep encouraging us to "upgrade" our cars indefinitely.

I think you conflate growth with consumption which I don't think is strictly true, I could invent (or invest in) an algorithm that would improve traffic flow, make billions and save millions of tonnes of carbon emissions.

You could, but under an economic system which requires aggregate growth (as capitalism does - it would require books to go into the details of why, but it centres around the need to generate ever increasing returns on capital) these savings would result in increased number of cars, roads etc. It's a concept called rebound.

I'd go further than there being no evidence of being able decouple growth with environmental damage and say there's no evidence that it's possible to decouple human life with environmental damage. Where there are humans there is consumption.

This I don't agree with. Humans have existed for thousands of years without causing the kind of environmental damage of the last 150 years. There are also plenty of examples of communities around the world meeting their needs while living within environmental limits. It's only with the development of modern capitalism that the crises have reached the levels they have.

The problem is that the comfort and wellness we experience in rich countries is largely at the cost of foreigners. Slave labour or close to is baked into food and goods production. Wellbeing isn't a currency that will allow you to buy food, medicines or other products from abroad. How do you overcome that?

I'm not fully sure I understand your point here. But yes, large amounts of production for the rich is done at the cost of the poor. That's exactly how the current system is designed to work (not in some kind of conspiracy way, just how it grew in and through colonialism). Exploitation has to occur at one level to create a surplus elsewhere.

I'm not pretending that investment in green companies will solve existential problems but it at a minimum buys the planet more time and removes my dependency on the government in later life and the need to have two tax payers to cover my pension.

This I kind of accept, but think its a low bar to set. We can "green" capitalism up to a point, which will potentially buy more time. But a system reliant on infinite growth will explode in the end. As I said, there's no evidence of absolute decoupling currently or likely in the future. We are actually rematerializing the economy overall.

Also, regarding your other post about taxing inheritance. Playing devil's advocate, by taxing inheritance you would disincentivising saving and therefore encouraging spending and ultimately consumption.

Saving doesn't prevent increases in spending and consumption across the economy. The monetary system is obviously more complicated than this, but basically one person's saving funds another person's loan, which then needs to be serviced through increases in production and consumption. Inheritance tax could be a source of funding for a UBI for example. This would obviously have redistributive benefits, but it would also allow governments to spend money into the economy rather than rely on commercial banks loaning it in (and so remove the environmental consequences of needing to service the debt)
 
swapping petrol cars for leccy cars is just keeping the current system going almost exactly as is - all very lovely, but unfortunately not an answer to the problems we face

Its the answer to A problem. There are many issues in the world and exhaust fumes in town are one of them. Besides, EVs are taking over as they are simply better cars than petrol.
 
Sure, green technologies are vital. But why do all sectors of the economy need to grow? Why do we need further expansion at the aggregate level? The majority of clean energy generation over recent decades has been eaten up by increased energy demand, much of which is not necessary.

National grid demand has decreased for decades for many different reasons. Thats why green energy is a greater % of production than ever.
 
Good topic to debate!

Agree and grateful for your time to engage with me.

Completely agree. But growth-based capitalist economies require growth at the aggregate level. What you're talking about there, i.e. a situation where those sectors of the economy serving a social or environmental benefit are encouraged and grow (up to a required point - we don't need the growth in electric cars to continue indefinitely) and other sectors degrow, is a post-growth economy.

However, we need to focus the economy around human needs - i.e. we have a need for mobility. We could satisfy this need through everyone having their own electric car. Or we could improve public transport services, putting less pressure on the environment. An economy requiring aggregate growth will always choose the first option, and keep encouraging us to "upgrade" our cars indefinitely.

I don't want to go down a rabbithole with a hypothetical but I would think the solution that cheapest (consumes least) combined with convenient (wellbeing based) would win out by being the best overall.

You could, but under an economic system which requires aggregate growth (as capitalism does - it would require books to go into the details of why, but it centres around the need to generate ever increasing returns on capital) these savings would result in increased number of cars, roads etc. It's a concept called rebound.

I don't get this and it's probably going to need a book recommendation. So in a similar vein, if remote working takes off and tonnes of cubicle farms disappear along with the morning commuters what would replace them?

This I don't agree with. Humans have existed for thousands of years without causing the kind of environmental damage of the last 150 years. There are also plenty of examples of communities around the world meeting their needs while living within environmental limits. It's only with the development of modern capitalism that the crises have reached the levels they have.

My point is that humans like all animals impact their environment. Cavemen burnt ferns in forests just to make hunting deer easier for example. Modern capitalism has provided us with all the things that have made us safer, more comfortable and healthier means we live longer.

50 million people living like we live today would easily be sustainable. It's the rest of the 9(?) billion that makes it a problem.

I'm not fully sure I understand your point here. But yes, large amounts of production for the rich is done at the cost of the poor. That's exactly how the current system is designed to work (not in some kind of conspiracy way, just how it grew in and through colonialism). Exploitation has to occur at one level to create a surplus elsewhere.

I think I'm confusing a national economy based on wellness with an international one. I think you're saying exploitation of foreign workers would still be part of the economy.

As mentioned above I think theres a distinction between mindless consumption and growth when it comes to improving lives and the environment.

This I kind of accept, but think its a low bar to set. We can "green" capitalism up to a point, which will potentially buy more time. But a system reliant on infinite growth will explode in the end. As I said, there's no evidence of absolute decoupling currently or likely in the future. We are actually rematerializing the economy overall.

Infinite is a strong word because nothing finite can produce something infinite.

Really has the purchasing power per head actually increased in the UK in the last 100 years? Look at GDP per capita in USD against the purchasing power of the dollar over that same period.

Growth is seemingly only achieved by more workers and only needed because we need 5 workers to pay 4 pensions.

Saving doesn't prevent increases in spending and consumption across the economy. The monetary system is obviously more complicated than this, but basically one person's saving funds another person's loan, which then needs to be serviced through increases in production and consumption. Inheritance tax could be a source of funding for a UBI for example. This would obviously have redistributive benefits, but it would also allow governments to spend money into the economy rather than rely on commercial banks loaning it in (and so remove the environmental consequences of needing to service the debt)

Classic economic theory is that you tax behaviour you want to discourage and don't tax the behaviour you want to encourage. If you tax savings, you encourage consumption because you might as well buy your kids fancy tatt when you're alive because they won't get anything when you die.

At a macro level wouldn't redistribution of wealth just result in redistribution of consumption? 1 Ferrari replaced by 100 BMWs.

On a micro level, if I borrowed money from a bank to start a business turning abandoned offices into nature reserves people would pay to visit how has that led to more consumption?
 
@Kudos

I won’t respond to each point otherwise this is gonna become too long and bore the pants of everyone else. Plus, I’m not gonna pretend I have the answer to each specific point you raise. To be honest, this conversation is best done over a pint rather than on an internet forum!

But, in short, the issue is at the macro level. A capitalist economic system requires growth due to the need to create surplus value (I’d really recommend reading some David Harvey to go into this in detail). However, growth is not / cannot be decoupled from environmental pressures (a solid analysis of the literature on this can be found here). And so, to address the environmental crisis, we need to transition to a post-growth, and therefore likely post-capitalist, economy (However, there’s a really good paper, here, on why this would actually increase wellbeing for almost everyone).

Some of the examples you give are good. However, looking at the micro-level hides what’s happening at the macro. Take your nature reserve example. On the micro level, you’re right, this a great idea for a business with ecological benefits. However, in order to service the loan you borrowed from a bank, you need to make a profit. That requires the creation of surplus value somewhere else in the economy which then makes its way to you through fee-paying visitors (there’s a good paper analysing whether there is a role for for-profit business in a sustainable economy here)

If you’re interested in this kind of stuff, there are a few good and accessible books I can recommend. Happy to DM you if you’d like but obviously don’t want to push anything on you!

I thought I’d also just respond to one of your points directly as I think it’s an important one:

At a macro level wouldn't redistribution of wealth just result in redistribution of consumption? 1 Ferrari replaced by 100 BMWs.

So, this is one of the issues that is being grappled with at the moment – the concept of the “marginal propensity to consume”, that is, the resource intensity of consumption at different points on the economic spectrum. More basic needs are generally more resource intensive – food, housing, heating etc. So, there is one school of thought that suggests redistribution will increase consumption-based emissions.

However, there are obviously moral objections to keeping people poor just to keep down emissions. In addition, carbon and material footprints are significantly higher amongst the rich, with research suggesting that much of this excess consumption contributes little to furthering their wellbeing.

So, through the redistribution of wealth, and the downscaling of unnecessary material consumption amongst the rich, we can create “ecological space” for the poor to increase their consumption to meet their basic needs. However, we also need to create systems which lower the material requirements of meeting basic needs for all – for example, choosing public transport over car ownership, swapping higher wages for more free time etc., reducing private land ownership and increasing access to commons etc. Economies with a growth imperative aren’t capable of delivering this given their mandate to maximise profit, rather than maximise social value.

And just quickly on the concept of rebound: A good thought experiment to illustrate the concept comes from the invention of the chain saw. Say, in the past, people felled one tree a day using a manual saw. Then someone invented the chainsaw. Rather than fall one tree in an hour and take the rest of the day off, a growth economy, with the need to generate surplus and maximise profit, will instead use the increased efficiency to fell 10 trees a day. So, in short, efficiency savings are always reinvested into increasing profits.

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This is all a fast-moving area of research, and no-one claims to have all the answers (least of all me). But more and more economists are now accepting that growth is, at least part of, the problem and how we transition to post-capitalism is an area of much interest at the moment.

Sorry everyone, I'll stop clogging up the forum with this now.
 

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