The Collapsonomics Practice
by Vinay Gupta • February 19, 2009 • Personal • 7 Comments
Usually I don’t get out of bed for anything less than 1% mortality rates. Harsh as that might sound, there are enough 1% problems to be working on that I do not usually focus on less lethal stuff.
However, over the past month or so in London I’ve come to the conclusion that there is a valid case to be made for working on economic collapse scenarios as part of the global humanitarian platform. It is not as serious as the national security stuff or the ever-more-vital global poverty work, but it’s pressing and threatening enough that I now need to start doing a little thinking on how to mitigate the consequences of the cash economy imploding.
The general mantle for this work is “collapsonomics” – the economics of collapse and avoiding collapse.
Interesting – I’ve also been thinking about this. I’ve been to meetings recently about the financial future – like BarcampBank – and found there is a scenario that everyone in the financial world kind of agrees on. But they haven’t really thought about how bad it could get. Rather they’ve thought about how bad could it get and still be solved within existing structures.
“Solving Tough Problems” by Adam Kahane is very good on dealing with major stuff – like Apartheid – using Scenarios.
Scenarios are also good because they let people talk about possibilities without anyone having to prove that yes This Will Happen.
If people live to 100 and population numbers are stable, then life is 1% lethal.
As it is, present numbers are 55,664,164 deaths per year, for a population of 6,761,634,050. So we could say life is less than 1% lethal. Of course, “ymmv” applies globally.
http://www.census.gov/cgi-bin/ipc/pcwe
http://www.census.gov/ipc/www/idb/worldpopinfo.html
#Collapsonomics is now a twitter hashtag (e.g. you can search at
http://search.twitter.com/search?q=%23Collapsonomics
Collapsonomics may be an unnecessarily negative term. How about contractonomics?
My point is that the root of the “growth model” in economics is the idea that income can only be distributed via employment.
As a result the need for “full employment” is perceived as unavoidable. Hence we have to create economic activity to generate enough jobs to channel purchasing power into the pockets of consumers so that they are able to buy everything that the economy is producing.
With the institution of an unconditional basic income a “floor” of effective demand would always exist without the need for full employment. Economies would safely deflate to a normal size from their current unnecessary obesity.
If you get Collapsonomics wrong, you get a collapse. If you get it right, things stay sane. That’s my take on it anyway 🙂
How do we get collapsonomics right?
Instead of giving the banks billions of taxpayers’ money, give it to the people. After all, the essence of all recessions is that businesses cannot sell everything they have produced to sell.
It is a problem of distribution not of production. So why pressurize the unemployed to pile in onto the “labour market” at depressed wages and produce even more stuff people can not buy.
It is a loss that this kind of exchange fizzles out.
I did not actually mean to criticize, just offered the view that there is a better term to describe a natural and self-adjusting contraction of the economy.
When production and purchasing power comes into balance an economy is no longer burdened with the task of producing employment for employment’s sake.