A pessimistic speculation on the future course of everything.



First a disclaimer (or three): 

  1.  As I said in my profile, I never promised that readers were going to like or agree with everything that I write.  If you don’t, feel free to post a comment to point out the error of my ways.
  2.  The economic theories described below are gross simplifications.
  3. This is a worst case scenario, but unfortunately, I don’t think it is impossible.

_____


The picture is of Kearney, in Co. Down (You might as well have something picturesque to look at)

How many Politicians can you think of that you actually believe are honest, hardworking and intelligent enough to be let out on their own?  We seem to have particular issues with this here in the North, yet we keep re-electing these sectarian plonkers.   Look at the state of this province.  The RHI enquiry continues showing up cronyism, incompetence and downright greed, Stormont still does not exist despite a backlog of huge and urgent issues that need dealt with (not least of which is Brexit).  The electorate in North Antrim can’t even be bothered holding ‘Junior’ to account for yet another cash for representation scam, and the main parties here seem congenitally incapable of moving on from the same entrenched positions that they have been pushing on us for the las 50 years.  They managed to fall out over an Irish language act that most normal people would put fairly low the priority list for government when compared to the normal issues that they should be managing like healthcare, the environment and the economy.  They are supposed to be looking to our future, yet seem permanently fixed in retrospective mode.  OK, that’s enough complaining for one day, below are one or two issues/ scenarios that I think all politicians should be taking into account.

All Western democracies are based on economic growth.  We have seen the effects of temporary failure in growth during the numerous depressions we have all lived through, from the 2007 banking failure, to (and here even I need a history book), the great depression of the 1930’s.  Every 10 years or so, no matter how the politicians rate their own competence, something has gone wrong.  While temporary economic failure can be pretty bad for all of us, what if the failure to capitalism as it now stands became permanent?

Economics at a national or international level have a very limited number of options for increasing wealth.  The choices are either to produce more goods and services to pull in more money from outside the economy in question, or to increase the speed at which money flows through the economy (this is probably the reason why saving is not being encouraged in modern economies).  Increasing the speed of money flow simply means making people spend, preferably ASAP.  A combination of these two is probably the ideal.

Problem 1: 


For the last couple of hundred years we have based the world’s economic prosperity on burning first coal and then oil.  This is really two problems rolled into one.  What happens when we run out of dead dinosaurs, and what if we burn enough of them to critically poison our entire world?  You may have already read an old book (1970’s) by a very clever man called James Lovelock (http://www.jameslovelock.org/), called The Ghia Hypothesis?  In the book he tells of being on holiday in Bantry Bay.  He was sitting looking out over the ocean watching the world go by when he joined up the dots on the interconnectedness of all of nature (a gross simplification – read the book).  His theory is still central to environmental science to this day.  Part of this theory deals with the carbon cycle, stating that for life as we would like to experience it the amount of carbon in our direct environment must be within narrow bounds.  While this was true when all that coal and oil was safely out of site within the bowels of the earth, we are causing more and more problems by releasing it hence the storms and other symptoms of environmental change than we are experiencing.  There are alternatives, including other sources of energy and heat, but given world population estimates, a per capita decrease in consumption of all the earth’s resources will be required.  This requirement and the need for growth through increasing consumption must at some point clash.

Problem 2: 

Automation:  There is a word used to describe the impact of new computer hardware and software.  That word is disruption.  The theory goes that the more disruption a new system causes, the better; then comes a generic justification of this that new work will be found for those that find themselves replaced by technology.  While this may have been true in the past, I have doubts about that this will continue to hold true.

We are told that we must adopt new technologies to stay competitive.  More technology means more production from less people.  Less employed people decreases the speed at which money flows through an economy.  So far this hasn’t been a particular problem, because the jobs that have been automated involve things like heavy lifting and basic assembly.  These are not skilled jobs and the people effected do not have a particularly influential voice in society. What happens when (note the use of the word when here rather than if!), higher grade, better paid jobs are automated?  A 2013 report by Oxford University (https://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf), gives a % estimate of which jobs they think will soon be automated, and which are safe.  Of course clerical jobs of all varieties rate as extremely unsafe, but some of the jobs with a listed 50 % or greater chance of being automated are interesting.  A few examples are listed below:-

Probability
Occupation
98%
Models
96%
Cooks, Restaurant
95%
Manicurists and Pedicurists
95%
Animal Breeders
95%
Landscaping and Groundskeeping Workers
94%
Accountants and Auditors
94%
Waiters and Waitresses
94%
Bicycle Repairers
93%
Butchers and Meat Cutters
93%
Refuse and Recyclable Material Collectors
90%
Reinforcing Iron and Rebar Workers
90%
Roofers
90%
Crane and Tower Operators
90%
Patternmakers, Metal and Plastic
89%
Bakers
89%
Bus Drivers, School or Special Client
89%
Taxi Drivers and Chauffeurs
88%
Construction Laborers
87%
Forest and Conservation Workers
84%
Lathe and Turning Machine Tool Setters, Operators, and Tenders, Metal and Plastic
84%
Security Guards
80%
Barbers
77%
Tree Trimmers and Pruners
77%
Bartenders
73%
Bus and Truck Mechanics and Diesel Engine Specialists
72%
Carpenters
71%
Aircraft Mechanics and Service Technicians
68%
Dental Hygienists
67%
Bus Drivers, Transit and Intercity
60%
Correctional Officers and Jailers
59%
Automotive Service Technicians and Mechanics
56%
Teacher Assistants
55%
Commercial Pilots

 

As you can see, there are a good range of jobs on this list from the leisure industry to drivers, but professions like accountants also feature on it.  With developments in artificial intelligence and neural networking over the next few years, more professions will soon appear on lists like this.





So, as ‘disruption’ effects increasing numbers of professions because of technological changes, there will also be pressure on all economies to reduce demand because of environmental change.  Disruption of professional level jobs may also have the effect of pressurising wages downwards, due to deskilling and the law of supply and demand.  It is a perfect storm; a person’s chances of earning money through work will be reduced, and the amount they earn if they are lucky enough to have a job will also reduce. 

Think too of the effect of a shrinking market on some of today’s largest companies.  Google, Facebook and a host of others survive on advertising revenue alone.  If markets shrink, they will be in trouble.  The alternative is to pay for access and searches, and this will surely exclude the growing underclass magnifying the gap between those that have and those that have not.

There would also be a knock on effect for government in that their tax income reduces.  Add to this a game that Ireland has been playing fairly successfully so far: the growing mobility of capital, where companies can move fairly easily from one geographic area to another.  As the need for skills decreases, the main attractors for global companies will be low taxation, and security.  In a race to the bottom of taxation levels, governments will be near bankrupt.  Services such as healthcare, education, utilities maintenance etc. will suffer.  The result of all this would be the emergence of a tiny and very wealthy elite, and the reduction of the rest of us to a level of poverty not seen for generations.  The old issue of land ownership in this Island may not have been consigned to history.

Disagree?  Please tell me I’m wrong and that the future still looks bright and shiny into the far and distant future.

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