Summary:
Umair Haque we're not just addicted to oil, but to everything. We're not entering Peak Oil, but Peak Consumption. Current financial system is a house a cards that's in the process of collapsing. Consumption in developed world has been subsidised by developing countries: goods at low prices, and reinvestment of their revenues into our government and mortgage debt. Ignored costs like pollution, community fragmentation, and abusive labour standards. Our economy is built on firms whose very purpose is to sell, to relentlessly push people into endlessly consuming, without ever considering the long-run consequences. But we're entering a world where consumption must slow. Haque proposes that being able to break yesterday’s maladaptive consumption addiction is at the heart of next-generation advantage. Next global financial system will be powered by firms that can shift past nihilistic, meaningless industrial-era corporate purpose, beyond acting as mere pushers of an addiction. (Published: 29/07/08)
Notes:
- house of cards that is the global financial system
- emerging markets seek export-led growth
- they undervalue their currencies, so their exports are more competitive purely in terms of price
- amounts to essentially a subsidy to consumers on the other side of the table – those in the developed world
- emerging markets accumulate surpluses, and recycle them:
- lend them back to the US and UK in the form of government and mortgage debt, stabilizing their economies
- amplifies the existing consumption subsidy in developed countries through leverage
- artificial cheapness further amplified by simple fact the true costs of production haven't been factored in - until now
- very real costs like pollution, community fragmentation, and abusive labour standards
- we’ve been able to consume mercilessly and remorselessly – with no regard for the human, social, or environmental consequences, to us or to others
- not just cheap oil we’re addicted to: it’s cheap everything
- world we’re entering isn’t really of Peak Oil as it is one of Peak Consumption
- tentative economic history of the 21st century:
- Emerging markets – and the people that broke their backs in them – lent the developed world tremendous amounts. What did the developed world do with it? Instead of investing it in tomorrow, they spent it on McMansions, Hummers, and strip malls.
- could have chosen, instead, to invest
- anything would have been a more sensible choice than naïve consumption
- education, energy, healthcare, transportation, even a more sensible and rational kind of finance
- problem with strategy
- our economy is built on firms whose very purpose is to sell
- to relentlessly push people into endlessly consuming, without ever considering the long-run consequences
- tough choices for boardroom
- entering a world where consumption must slow
- Does it continue to hawk stuff that “satisfies” largely artificial needs?
- Or does it choose to do something authentic, meaningful, and purposive – something that makes us all radically better off than we were before?
- new strategy
- At the heart of next-generation advantage is, paradoxically, being able to break yesterday’s maladaptive consumption addiction – not fuel it
- It is firms who can shift past nihilistic, meaningless industrial-era corporate purpose – beyond acting as mere pushers of an addiction – who will power the next global financial system.
