Consumption Growth 101 The Basics

CONSUMPTION GROWTH 101

INTRODUCTION

Imagine being sent on a mission to the remotest parts of the world. For much of the time you will have no idea whatsoever what lies ahead. Your task is in fact precisely to go to those areas where there are no maps. This was the assignment given to Captain James Cook as he departed England in 1768.

Not only did Cook not have maps of the areas he was to explore, it was his job to make the maps as he went along. How did he successfully get himself and his crew safely around the world and home again? Navigation. It was through navigation that Cook didn't get lost. It was navigation that determined which way to point the ship at any given time.

As the world sails into climate change, looming water scarcity, the end of oil and a host of other challenges, are we not in the same situation as Cook, setting off into a dangerous unknown. Unlike the Endeavour our ship has many captains and navigators who claim to know the best path of action. How do we know who to believe? How can one make an assessment of the navigating skill of those calling loudly for one course of action or another? Whose advice do we follow?

In order for Cook to work out where he was and which way to go he needed to have an accurate understanding of certain facts about the world and the solar system for example. Seemingly good ideas would just not do. Surmising that the sun went around the earth, or that the earth was flat would be worse than useless. Lives depended on having an accurate understanding of reality, and being able to apply some mathematics to it to boot.

Think about global environmental issues. What are the primary causes: depletion of resources; pollution? What drives these factors? In a word: consumption. If consumption is the main culprit then an accurate understanding of the basics of consumption must surely be a pre-requisite for being able to navigate our way through these uncharted waters. Some essential principles must be firmly grasped.

Let's say that a certain seaman on Cook's ship believed that the further west they travelled they would only ever get further and further from home. With an erroneous understanding of the shape of the earth it would come as a surprise to discover that by continuing west they would actually eventually end up back where they started.

Observe the words of world leaders and policy makers. How many times is the word growth mentioned: frequently, rarely or never? And in what way. Is growth regarded as good or bad? Is the pursuit of growth only a temporary necessity, or is it a noble objective to strive for forever? Does some future time of unending zero or near-zero growth feature as part of the long term strategy? What is the growth being referred to: is it tangible or intangible? Is it growth of goodwill and learning, or is it growth of production of goods and services?

These are the captains of our spaceship earth.

Now note the action plans of key global environmental advocates. Think about what it is we are all supposed to be doing. Where does growth feature in the action plans? Do the strategies seek to address growth: minimise or halt it? Or is growth taken as an immutable given: something which must be accepted and worked around; a secondary factor that will take care of itself perhaps. If growth is a problem, what are the strategies for dealing with it? Improve efficiencies? Reduce per-capita consumption? Meet it with renewable energy?

These are the navigators of the global environment.

In order for Cook to work out how far west he was he needed to know what time it was back home, for which he had an accurate clock, and measure the relative position of some heavenly body. By consulting pre-prepared tables and performing calculations he would arrive at a position of longitude. If he got the mathematics wrong his position would be wrong: simple as that. If he thought he was somewhere he was not then his chances of getting home safely were diminished.

The growth referred to by leaders and policy makers is always expressed as an annual percentage rate. These are numbers that are being used for navigating: working out where we are and where we are going. What is an acceptable rate of growth? One or two percent per year perhaps; three or four percent when things are good? Here's the crunch: can a tangible growth rate of one, two, three or maybe four percent per year be sustained indefinitely? If not indefinitely, for how long? A thousand years? Five hundred? Or is it shorter than might be expected. Is a strategy of unending growth in the production of goods and services realistic, or is this akin to a ship's captain believing the sun goes around the earth?

If, as we seem to be reminded every day, it is our consumption that is the cause of all the trouble, what about the strategies for dealing with it. Will improving efficiencies, reducing per capita consumption and switching to renewable energy solve the problem?

This is where Consumption Growth 101 comes into the picture. Just as Cook made use of some reliable navigation methods, we too can perform some basic navigation based on well-understood mathematical realities. We can soon figure out what is possible and what is not; what is a viable strategy and what is doomed to failure. Consumptiongrowth101.com provides the tools.

Cook mapped the whole of New Zealand and a significant part of the east coast of Australia. In 1771 he returned home with those maps which were of tremendous strategic value. Cook succeeded in large part through meticulous navigation. The foundations of that navigational skill were a sober and accurate understanding of reality. Our successful future relies upon an accurate assessment of the same reality.