February 27. 2016

The Growth Myth

There is a great gnashing of teeth and wringing of hands these days among practitioners of the dismal science, the economists, analysts, fiscal experts and, yes, politicians who spend a large portion of their time worrying about the economy.  The cause of all this angst is the disappearance of this community’s champion: economic growth.  For decades, economic growth has been held out as the end-all, be-all of government policy, not only in the Western, mostly capitalistic world, but also in such places as Russia and China.  There is palpable anguish at the loss of this favorite son.  Doom is said to be upon us.

The only thing that is doomed by current circumstances, however, is the status quo.  Surely, our world is in for some significant changes over the coming decades, although the end result is not likely to be famine, war or pestilence.  To the contrary, the ground is being laid for a shift to more equitable and sustainable economies, economies where speculative wealth is replaced by tangible wealth in the form of things that people really need: durable goods, infrastructure, food, water, shelter, recreation and entertainment options.

Several factors are driving this shift.  Perhaps the most important is the global aging of the population.  This phenomenon is explained convincingly by Morgan Stanley analyst Ruchir Sharma in the March/April 2016 issue of Foreign Affairs.  Sharma points out that most of the industrialized nations of the world are below or near negative population growth, with the result that retirees and pensioners are rapidly outpacing young, productive workers.  For all their efforts at wooing the 18-34 age group, salesmen and advertisers around the world are looking at a diminishing market.  Certainly for the next couple of decades, it is the AARP crowd that will have an inordinate amount of influence on domestic markets here and abroad.

And seniors have considerable purchasing power in most industrialized and post-industrial societies.  What is it they want to buy?  Not Hollywood blockbusters nor the latest i-Thing version 19.5.  Until 2050, the global market will want basics.  The industries that will undergird our economy for the foreseeable future are agriculture, health care, energy, construction and, yes, hospitality.  Equity market fluctuations, national debt limits and currency fluctuations will have limited impact on demand in these areas.  Worries about global competition disappear before the realization that all these things can be provided in a cost-efficient way at home.

It is time to debunk the growth myth.  Historically, economic growth has tracked population growth, with spurts spurred by advances in technology.  But growth is not an asset in and of itself.  There would be nothing detrimental about a zero-growth economy in a society where all basic societal needs are met in an equitable and sustainable manner.  Indeed, static population levels would also do wonders for many of the environmental issues we currently face.

Does this mean we have to give up the dream of constant improvement in our lives?  The American Dream?  Not at all.  New technologies, improvements in health care, healthy cycles of repair and replacement, when distributed equitably, will continue to give citizens better, brighter lives. 

It will be of great interest to see what happens in China over the next couple of decades.  Having artificially buttressed a booming economy, created a modest middle class as well as a passel of billionaires, and having awakened the material expectations of a billion people, the party leadership has an unenviable dilemma on its hands.  Perhaps they have already realized that meteoric economic growth is not only unsustainable, but also inimical to the social fabric.  Hopefully they will find a path to an economy that provides what people really need.


 May 17, 2012

Tidbits of Viking History

One hesitates, in this age of “my daddy can whoop your daddy,” to speak too highly of one’s Viking forbears.  They were undoubtedly a brutish lot whose penchant for mayhem won them little respect from neighbors.  That they plundered and pillaged across most of Europe is without question.  And by all accounts they were a bloodthirsty lot with no respect for the rights, goods or families of others.  Their concept of justice was decidedly vindictive.  Transgressors paid mercilessly for their sins.

But history hasn’t always been fair to the Vikings, either.  For centuries, accounts of the Viking Era were written primarily by their enemies.  The cruelty of Viking raids were commonly depicted by those who suffered the indignities, and the historical accounts that prevailed in Europe during the late Middle Ages and into the Renaissance emanated from cultures and states that thought of themselves as victors over and superior to the pagan Vikings.  Foremost among these were of course English writers and historians. Yet any close scrutiny of English behavior in the centuries that closely followed the Viking Age reveals a tendency toward greed, brutality and vengeance that seems quite equal to that of the “Norsemen.” Indeed, these were brutal times, and savage conquest was the norm. In most ways the Vikings were no better and no worse than their peers.  But in some ways, they excelled.

The Viking era lasted from approximately 793 AD to 1066 AD, that is, from the raid on the Anglo-Saxon church at Lindfarnes to the Norman Conquest. At various times during this era, Vikings ruled over large portions of Northern and Eastern Europe, and they competed both commercially and militarily with everyone in the “known” world.  In 845, the Danish warrior, Ragnar Lodbrok, broke through a Frankish defense force and with 120 Viking ships, sailed up the Seine and laid siege to Paris. Forty years later, a Danish army led by Sigfrid, took more than 500 ships up the Seine and besieged the city. Plaques commemorating the event still hang in the beautiful old church in Saint-Germain-des-Prés. In the 850s, Ragnar's son, Bjørn Jærnside, and his adjutant, Hastein, led 62 ships on a 4-year Mediterranean cruise. Their voyage included stops at Valencia, Algeciras, Pisa, and possibly Alexandria.  Like any modern day traveler, they brought home souvenirs: silver, tapestries, silks, gold, and a few "blue men," or African slaves. Of course, the contemporary Mediterranean cruise wouldn’t allow slaving, but keep in mind that this was nearly a millennium before slavery was abolished in the United States.  Other reports have Viking explorers sailing around the horn of Africa and trading with peoples in Asia.

By 920, descendants of Rurik and his Scandinavian relative, Oleg of Novgorod, held sway over a trade empire that stretched from the Baltic to the Black Sea and would persist until the 13th century. According to legend, Olav Haraldsson, later to be beatified as Saint Olaf, led an abortive raid on London around 1010, during which his men used grappling hooks to pull down a bridge over the Thames River, thus giving rise to the nursery rhyme, "London Bridge is falling down." The British Isles fell under Viking rule a generation later, as the Dane, Knutr Sveinsson, also known as Cnut the Great, solidified his hold over the North Sea.

Then we come to 1066 and all that. A generation after Cnut, his Norwegian rival, Harald Hardråde and more than 10,000 Scandinavian and oppositional English soldiers, were defeated at the battle of Stamford Bridge, thus ending control of Britain by Scandinavian and  Anglo-Saxon families, and opening the way for the Norman Conquest. 

There are three things that are often lost, or at least understated, in many accounts of this era.  For one, the Vikings rarely get historical credit for their contributions to democracy.  Being a peripatetic and largely self-sufficient lot, they discovered early on a need for consultation and decision-making.  The Viking concept of the “ting” or “thing,” while similar to many tribal councils throughout the world, expanded the authority of the common council to include judgments over property, retribution and even the delegation of authority.  As such, it was an early forerunner to the British parliament.

Also, even though it took centuries of research and analysis to confirm it, the Vikings began the process of exploration that would ultimately upend world order.  Whether the Vikings, given power and authority at the time, would have engaged in the kind of colonial fervor that tore the world’s political fabric apart, remains unknown.  However, it seems clear that the Norsemen understood what lay ahead.  Viking knowledge of global geography was astounding.  As the opening lines of Heimskringla recounts: "the orb of the world which mankind inhabits is riven by many fjords so that great seas run into the land from the outer ocean." Centuries before European astronomers made their heretical discoveries, and even longer before the Vatican allowed such knowledge to be disseminated, Viking navigators knew about our globe’s roundness, measured their progress on the high seas with magnetic lodestones, and knew that our orb contained "innumerable treasures." 

When Erik the Red went looking for families to settle on a new island he had found in the Atlantic, he called it Greenland because he knew folks would be more likely to consider the venture if the place had a pleasant name.  But this was pretty much the extent of Viking PR efforts. Even today, bragging and self-importance are frowned upon in Scandinavian culture. Among those who followed Erik were his son, Leif, and fellow explorer Bjarne Herjolfsson, both of whom, on separate voyages, established temporary camps on Labrador and, around 1000 AD, at L'Anse aux Meadows in Newfoundland.

Perhaps only Scandinavians rue the fact that Norse colonization of the Western Hemisphere was unsuccessful.  Nonetheless, the adventuresome spirit that Vikings passed on to their progeny – which sometimes seems like wanderlust to others – made them an integral part of the creation of a global trading system.  Only a few generations later, the commercial activities of the Hanseatic League, based primarily in those lands and seaports frequented by Norse wanderers, cemented global trade as a principle element in the power of states and the power struggle among states.  Ironically, the Vikings, in spite of their own pride in self-sufficiency, were among the first to open the globe to its full and varied commercial potential. 

There is a line in Henrik Ibsen’s play Peer Gynt, which is often cited as a brilliant encapsulation of the Scandinavian psyche.  To paraphrase the line: “We are ourselves enough.”  Despite this “enoughness,” the Vikings obeyed a strong need to go abroad and search for more, and they changed their world in doing so. 



© Dag Ryen 2016