APRIL 5 2019 | FORBES/STEVEN CHU: The world economy is based on ever-increasing population, said Nobel laureate Steven Chu, a scheme that economists don’t talk about and that governments won’t face, a scheme that makes sustainability impossible and that is likely to eventually fail.
If you have read the EC blog yesterday, it is easy to grasp as why the majority won’t speak about it as 200 people heading some of the most powerful hedge funds control $50tn worth of assets. And the scheme is failing right in front of our very eyes, every day furthermore. Chu is safe for now. As long as he does not start to name names.
“The world needs a new model of how to generate a rising standard of living that’s not dependent on a pyramid scheme,” Chu said at the University of Chicago.
What is just said here is paradoxical because the subjectivity of value fueled by speculation is the glue of the Pyramid Scheme. So until he does not say that there is something deeply wrong with monetarism itself, he will remain a controlled opposition.
“Increased economic prosperity and all economic models supported by governments and global competitors are based on having more young people, workers, than older people,” Chu said.
Governments have always loved their citizens to have plenty of children. Kids… or debts, both come down to same, fuel consumerism and thus so-called growth.
As standards of living increase, population growth declines. So if the economy succeeds in raising standards of living, it undermines itself.
It is not the standards of living per se. The debt ratio per household tells a different story. In the West, people who take on more debts have less kids on the other hand. But the opposite is also true: poverty and more kids by household have always been linked. Of course there are exceptions to the rules, but that generally is how it plays out. Chu is referring to the middle and upper classes of course, so yes most live beyond their means and have less kids to take over their appetite for consumerism.
“The economists know this, but they don’t really talk about it in the open, and there’s no real discussion in government,” Chu said. “Every government says you have to have an increase in population, whether you do it through immigrants or the home population. So, this is a problem.”
Definitely seems like the immigration is a big issue in the West, and the media are working seriously to change people’s opinions and perceptions about it.
China has replaced its one-child policy with incentives for parents to have two children, Chu noted as an example, and France offers a prize, the Médaille de la Famille Française, to mothers of large families. Incentives like these will not help the world achieve sustainability, he said.
It is too late for that anyway.
The system is doomed due to its own pervasive greed. As much as the top protects itself, the crowds try to live as richly as possible. Two different kinds of greed. Both destructive.
“Education of women and wealth creation. Across all cultures. You go negative. You go negative birth.
Unless it is the plan to create social havoc, trying to control population growth is a recipe for disaster. The birth rate is determined by the education and spiritual beliefs after all. In a money-free society, leisure and creativity will very likely remain the engines of society. People will take the time to live for themselves first.
That will help the environment, he said, but it will also require a new kind of economy.
As long as the economy is speculation driven, there will not be anything new under the sun… and monetarism without speculation just falls apart.
This interview clearly demonstrates that one does not need to be a Nobel laureate to interpret what is happening to the world economy, but we are going to see more and more mainstream figures like him coming out.