Uncovering the Naked Truth about World Consumption
The world’s financial Big Picture is approaching melt down. This is, however, good news for the future.
After 200+ years of relative decorum, it appears the emperor of world economic order is wearing no clothes.
Japan, the world’s biggest banking system, has an estimated US$1.5 trillion of non-performing loans. America, the world’s biggest economy, has an estimated US$28.5 trillion in off-the-balance-sheet liabilities - so called derivatives.
Russia, one month ago, declared a default on all its foreign debt, which looks like a US$150 billion loss from derivatives alone,
Brazil, the biggest emerging market economy, having lost almost US$40 billion from its reserves in August and September, has asked the IMF for a US$50 billion loan. Brazil’s buying power is essential for America’s voracious growth-based economy.
The IMF appears insolvent. The World Bank appears inept. The UN’s WHO appears ineffective. The largest global private banks are doing backroom crisis prop-ups and the key stock exchanges of London, New York, Tokyo, and Hong Kong seem to be drowning not waving.
Scary stuff. But I am an optimistic futurist - this is ultimately good news. Why? Because things are so bad that no one, no matter how locked in to Jurassic world views, can ignore the mess and pretend we should carry on doing the same economic stuff on the same assumptions..
The annual United Nations Human Development Report looks for new ways to measure the lives of people. Aside from the boring but informative statistics like per capita GDP or import-export figures, the Report looks at who goes to school, how women share in the economy, who doesn’t get vaccinated against preventable diseases, whether there is clean water to drink, and so on.
This year, the Report looks at who has what and who consumes what. I shall discuss more of the Report’s data in my next column, but the general message is very clear - we are consuming ourselves to ideath. All of us - rich and poor.
The world’s consumption bill is US$24 trillion a year
The richest fifth of the world’s people consumes 86% of all goods and services while the poorest fifth consumes just 1.3%.
It is estimated that the additional cost of achieving and maintaining universal access to basic education for all, basic health care for all, reproductive health care for all women, adequate food for all, and clean water and safe sewers for all, is roughly $40 billion a year. Less than 4% of the combined wealth of the 225 richest people in the world.
I am not opposed to the accumulation of wealth. The Big Picture economic problem is not that there are haves and have-nots. Nor that the discrepancy is increasing. This may be a moral or ethics problem - it is not an economic one.
The real issue is that the economic system that has encouraged you and I to become haves is now on a treadmill of greed consumption so out of control that we are consuming ourselves out of existence.
The most basic assumptions of the 20th Century world, and the most basic values and attitudes inherent in those assumptions, are now being questioned for their validity and appropriateness to a healthy sustainable future.
As visiting American futurist Robert Theobold said recently in Perth when referring to powerful manipulators of our global economy: People are seeing that not only does the emperor wear no clothes, but he is now making obscene gestures.
And in spite of the big power brokers, ordinary people are beginning to change the way they see themselves, see each other, see our world, and see what we must do differently. They are quietly and peacefully making their little bit of the world better.
All the little bits of better are globally starting to add up to what just might be a healthy sustainable future.
Business News 15 October 1998
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