Friday, 8 July 2011

Economic decadence

"Bloggers Aretae and Foseti are debating moral decline. Foseti takes the classic reactionary position. He states that we are in a period of moral decline and warns of the dangers. Aretae mocks him, saying, "every single generation in the last three thousand years has complained about moral decay, and look we are doing great!"
Paradoxically, it's possible that both Aretae and Foseti are completely correct.


consider the following three assertions
  • 99% of the people ever born in the history of the world were more morally decadent than their parents.
  • reactionaries are absolutely right about the dangers of moral decay and decadence, and absolutely correct that a hard-core, disciplined morality is crucial for building civilization
  • we are more prosperous and live in a more developed civilization than any previous time in history.
It is entirely possible that all three statements are true statements. How can that be you might ask?


Discipline is required to build civilization.

Once built, civilization causes increases in wealth. Wealth leads to moral decadence. Therefore each generation is more decadent and simultaneously, more prosperous.

It takes a long time and lots of decadence to destroy civilization, hence all three positions are possible. For a while, at least."

"Let's use the reactionary definition of moral decline, which basically means decadence. By this definition, moral decline is when people stop valuing the traits that reactionaries believe make civilization grow and prosper. Indicators of moral decline include: sacrificing future investment for indulging today; ... spending time at dilettante political book clubs rather than building a business; importing foreign castes to do hard labor; importing foreign castes to fight your war; unwillingness to use violence in the cause of justice and self defense..."

I am interested in economic decline, economic decadence, not moral decline or moral decadence.

"Let's zoom forward to 2016. This is the year that the chancellor and the Office for Budget Responsibility predicts we will have closed the gap between national spending and income.

Well done us. For the first time since 2002 - fourteen years - we will be living within our means.

The Labour Party look forward to this moment with not a little glee. The Tories will have done the hard bit and they'll be able to slip the cheque book out of your pocket and starting spending again.

More frightening is the fact that many on my own side believe the same thing. They are all wrong. 2016 is merely the end of the beginning. The real slog will have only just begun.

In five years time our national debt will be somewhere north of 80% of GDP. On current projections that'll be roughly level with France and quite a bit worse than Germany. Of the big economies, only the USA will be more indebted and they, of course, have the mighty dollar to discount what they owe.

At the same time, China, India and Brazil - with projected gross debt to GDP ratios of 10%, 62% and 59% respectively - will be paying significantly less in interest payments just at the point when they move up to meet us on the value chain. Millions of graduates will pour forth from their universities, able to set up businesses that - in China's case - will make use of infrastructure well ahead of anything we will possess. Maybe the first sod will have been turned on the High Speed 2 but that is equivalent to an extension to the Docklands Light Railway in Chinese terms.

It's not only that we'll be paying more interest as a proportion of our economic output and investing less in growth. We're also going to be carrying with us the costs of a welfare state that none of our new competitors will share. And this is for certain: as they start to develop a proper system of guaranteed pensions, healthcare, sickness and unemployment support, it will be along the marketised lines that we are so wary of adopting ourselves.

In short, we will be asking the productive part of the economy, business, to compete in what will be the most competitive global environment this country has ever seen, with one arm tied behind its back. And if we expect to be able to tax employment and profit as we currently do, we will have to kiss goodbye to the businesses who generate our nation's wealth.

Where do Tory truths come into this? Well, it's really what we are not saying that is the nub of it. Here's a topical example: we now have just over four working people to support each state pensioner, the slimmest ratio the UK has ever seen. Even with the government's accelerated timetable for the increase of the state pension age, that figure falls to under three within forty years time. If the state pension is unaffordable now, what then? Have we explained that to everyone my age, who on current plans will be retiring at just that point?

Before too long we on the right are going to have to own up to the fact that we must live quite differently, and receive far less from the state, that our parents have come to expect. That is not a statement of political intent: it is the reality of the world as it will soon be."

1 comment:

  1. "Economic decadence" is a phrased that should be used more often.

    I am proud to be bourgeois: I take it to mean that I save obsessively.