Sunday, 1 April 2012

Money does not make the world go round

I read a letter from Nicko Williams, founder and Chief Executive of Climate Cars (a taxi service using only Hybrid cars) to The Economist, reprinted in The Week magazine (31/3/2012). I think it is nonsense, reflecting a view that can see past money as the beginning and end of everything.

He writes "my question is whether it is reasonable to expect living standards to keep improving" and his answer appears to be 'no', because he adds "For our generation [he is 28] to work harder and longer than the last seems to me to be an inevitability". This is because, he says, "History tells us that we live in cycles" and "We live in a far more competitive world than our parents, therefore our generation will have to fight harder, with the prospect of lower comparable rewards than our parents."

What brings us an improved standard of living, Nicko, is science and technology. Are you seriously suggesting that there hasn't been phenomenal progress in this? In fact progress in science and technology has been exponential.

Much of this technology has brilliant potential for labour saving, so why are we, or must we, work longer and harder? We were told that technology would liberate us from work, but this seems to quietly have been dropped. The problem is that by saving labour, technology reduces employment, and in our system employment is the main way to get money and money is pretty much the only way to get access to the resources we need to live and thrive. Break this link between work and survival, and you allow techonology free rein to improve our lives.

"History tells us that we live in cycles". No, history tells us that we have lived in cycles. The cycles referred to are, I assume, the so-called economic cycles, which are in fact just monetary cycles. These are entirely man -made and unrelated to the real resources available to us. There is no cycle in technological and scientific development and there is no inevitability that the monetary cycle will repeat.

"We live in a far more competitive world than our parents, therefore our generation will have to fight harder". Fighting harder is virtually the same as competing more, therefore, generalised, this statement becomes X therefore X. Logical flaws aside, do we live in a more competitive world than our parents, and - more imnportantly, is this inevitable?

I don't know how overall competitiveness might be measured or aggregated, but I do know that co-operation rather than competition, is encroaching on the old scarcity mentality of fighting for resources. would be a good place to start some research ino this, but as boss of a taxi firm, Nicko is already working to an access or service model, rather than an ownership model in the field of personalised transport.

Nicko's 'monetary blind spot' is most clearly identified in his reference to the "unprecedented property boom" his parents' generation experienced. 'Property boom' is slang/jargon for house prices going up. Apart from the fact that house prices rising faster than incomes makes it harder for people to afford to buy one ('get on the housing ladder' in the jargon) - a downside that is usually ignored - it is obvious that the true value of a house is independent of how much it can be sold for, and given that left unmaintained a house will eventually fall down, its value (as distinct from its price) tends to fall over time.

Money may indicate true value, albeit rather crudely, but it is not true value itself. If we do not take our eyes off money, and look at human need and the planet as a finite resource, we are doomed as a species.

No comments:

Post a Comment