It's hilarious the way politicians and commentators are still talking about 'growth'. Do they think we are stupid? Don't answer that - or course they do.
But look at the graph above. Bank rates are at their lowest for 300 years! Surely even the most economically dyslexic can see that this is the one signal that even they can't ignore. What this chart means is that growth is finished. Not just for today or the next ten years, but probably for hundreds or even thousands of years. The reason? The end of cheap energy, booming population growth and the rising cost of many basic raw materials.
The industrial age is entering its final stage. Beyond that we are going to have to adjust to a sustainable energy society, lose possibly seven or eight billion people worldwide and completely alter the way we live.
Growth was fun. It meant that we could look forward to becoming more and more prosperous each year. It meant that we could genuinely expect our kids to have 'better' lives than we did. But most of it was financed on credit, or if you will by stealing from future generations. The downside is that we destroyed communities, damaged our climate, created ugliness everywhere and softened up intellectually.
Politics will change enormously over the next few decades. There will be a rush to the parties that promise to reduce growth. There will probably be far less democracy, more coercion. Our transport systems will change totally. Roads will vanish, railways and tramways will thrive. The canals will be used once more to move non-perishables. We'll all have to learn to create with our hands. Perhaps 80% of us will spend all or part of our time growing food. Small craftspeople, carpenters, blacksmiths, horse hauliers, teachers, nurses etc will flourish. Most of the non jobs that currently waste billions will go. The public sector will vanish, small (one person) capitalism will be the standard model for the economy.
Kids will learn how to grow plants, care for animals, look after the planet. Most lessons will be outdoors. They'll be able to play on the streets again, because there won't be any cars on them!
Adults will work harder but for less hours. We'll all hopefully have a little bit of land on which to grow all or some of our food. We'll take the tram to market to buy or sell, take the train to the seaside for our holidays, perhaps a couple of times in our life travel to continental Europe, a trip that will become an epic event!
Our lives are going to change enormously. The economic crisis, which is only just entering its most benign stage, will cause huge upheavals for us all. Most of us will have to change what we do to make a living. Many of us won't make it through. Even the climate will make it harder to do what we need to do. Expect huge horror stories from around the world. The economic crisis isn't causing this, it's just a simple message or signal of what is happening behind the scenes. The market is never wrong and learning to read it will be one of those essential life skills that we're all going to need to develop over the coming years.