" />
Building a world of
resilient communities.

MAIN LIST

 

Stop digging

Although we seem to be living in an era of forgetfulness when it comes to the insights of John Maynard Keynes, to my mind we should characterise the disastrous economic situation of the late-phrase capitalist economies in terms of a chronic failure of aggregate demand. In a famous passage in the General Theory Keynes describes how different cultures have dealt with the problem of insufficient demand:

‘Ancient Egypt was doubly fortunate, and doubtless owed to this its fabled wealth, in that it possessed two activities, namely, pyramid-building as well as the search for the precious metals, the fruits of which, since they could not serve the needs of man by being consumed, did not stale with abundance. The Middle Ages built cathedrals and sang dirges.’ (The General Theory, 1936: Bk 3, chap. 10, sect. 6)

Keynes is credited with solving the problem of the Great Depression through his theory of the multiplier effect of demand stimulation policies, although others have argued that in reality it was the switch to a wartime economy that put the capitalist economy back on an even keel. This was effectively a strategy of making enormously big holes across Europe and then spending around another decade gradually filling them in; this is obviously to make no comment on the loss of life and livelihood that was the price of this strategy.

Keynes’s argument was for injection of demand by public authorities, but the private sector had already begun its strategy of increasing demand before the stock-market crash and subsequent Depression. Although I should say at the outset that I do not believe that changing the sorts of light-bulb used can save us from ecological catastrophe, it may be that understanding the behaviour of the Phoebus cartel of light-bulb manufacturers just might.

The group was made up of all the leading manufacturers of the day including General Electric, Osram and Philips. At a meeting in Geneva in 1924 the Phoebus group decided to enforce a maximum life-time of the light-bulb at 1000 hours, eschewing the superior design already achieved by Edison around the turn of the century. A long-lasting life-bulb reduced their profits and so innovation was restricted. The oldest light-bulb in the world is still in place and casting light over the Livermore Fire Station in California: it is 110 years old.

The strategy of creating demand through the deliberate design of obsolescent or poorly made goods flourished in the years following the war. It was parodied in a contemporary film by Alexander Mackendrick called The Man in the White Suit. In the film Alex Guinness played Sidney Stratton, a research chemist working in the textile industry. Stratton’s expensive research to discover a miracle fibre that is not subject to the depredations of dirt or wear is successful and uses it to make a luminous white suit. His moment of glory is short-lived, however, since both managers and unions recognise the dangers posed by a suit that does not need to be replaced: Stratton is sacked and pursued both metaphorically and actually by both sides in the age-old capital-labour battle. Eventually he discovers that his suit is vulnerable to sunlight, but he remains undeterred and we leave him in the final scene striding purposefully off to another research laboratory where his attempts to create genuinely sustainable products will be doubtless be greeted with horror.

In the early days of the enthusiasm for creating demand its proponents were quite explicit about the various techniques that they used. King Camp Gillette, inventor of the disposable razor, argued that 'We have the paradox of idle men, only too anxious for work, and idle plants in perfect conditions for production, at the same time that people are starving and frozen. The reasons is overproduction. It seems a bit absurd that when we have overproduced we should go without. One would think that overproduction would warrant a furious holiday and a riot of feasting a display of the superfluous goods lying about. On the contrary, overproduction produces want.'*

We can be cynical about the profit motives of the industrialists, but there was a genuine desire to avoid unemployment and the suffering it caused, and to stimulate demand by any means to make sure there were enough jobs to go around. The strategy worked within its own terms, but it has left us in the disastrous position where efficiency in terms of energy and resources has no place in the modern economy. Now that we recognise the limits to growth we need to unpick this Keynsian solution and rethink the role of aggregate demand as the solution to our economic woes.

*quoted at Slade, G. (2006), Made to Break: Technology and Obsolescence in America (Cambridge, Mass.: Harvard UP),p. 10.

What do you think? Leave a comment below.

Sign up for regular Resilience bulletins direct to your email.

Take action!  

Find out more about Community Resilience. See our COMMUNITIES page
Start your own projects. See our RESOURCES page.
Help build resilience. DONATE NOW.

 

This is a community site and the discussion is moderated. The rules in brief: no personal abuse and no climate denial. Complete Guidelines.

Tags:  

The Case for a “Jazz Revolution” Against Corporate Capitalism

Should checkerboard revolutionaries let their preference for incremental, …

Buying The Farm: Dean Kuipers  

This week’s guest on Sea Change Radio, author Dean Kuipers, explores …

Local Currency — Money for Us, Not the Bankers     

The biggest challenge is changing our mindset from the scarcity built into …

Cooperative/Solidarity Economics and Advancing the Development of Worker Co-ops

Let's try to get both a firm grasp and a large perspective on "regional …

Fighting Over Democracy

Whatever failings Syriza has had in its “negotiations” with the …

Chinese stocks: When mispricing becomes more important than pricing

What's happening in the Chinese stock market may be the front edge of the …

A Revolutionary Pope Calls for Rethinking the Outdated Criteria That Rule the World

Pope Francis’ revolutionary encyclical addresses not just climate …