Amid the intense debate about global warming, one of the claims by those claiming dropping fossil fuels will mean a much lower standard of living for ordinary people is definitely false. The evidence is overwhelming that the industrial-era systems, including the methods of energy provision, are running out of steam.
This is hardly a new idea: the management thinker Peter Drucker was writing about the transformation in his book The Post-capitalist Society in 1993. But the stagnation is now becoming critical. Most of the world, including Australia, has reached a point of debt-saturation, even China. This is why interest rates are close to zero in most of the developed world. Once debt reaches a certain point, no-one wants to borrow any more and the whole system grinds to a halt (as Japan has demonstrated for the last 29 years).
What is needed — and this is why those arguing for the status quo are part of the problem — is new types of goods and services. Ask yourself the question: what new products have emerged in the last 30 years? There have been great gains in computer power, but that is an enabler, it is not really a new product. There may be a few new types of services connected with the internet. But for the most part the new demand is simply an updated version of something that already existed.
Mobile phones are just telephones that can be moved around. A refrigerator may be connected to the Internet-of-Things, but it is still just a refrigerator. Cars may run on electric power, but they are still just automobiles. Computer tablets may allow you to watch videos online, but it is still basically television.
Creating new products, especially sustainable ones such as solar power, is a way to catalyse the 'creative destruction' — a phrase coined by the Austrian economist Joseph Schumpeter (a friend of Drucker's father) — that is so loved by the political right, largely because it is a useful pretext to drive down workers' wages. That should only be the start. Unless radically new products are created, things perhaps not even envisaged now, then the industrial system will get slower and more stressed.
It is unavoidable for another reason: plummeting fertility rates around the world. Industrial systems rely on demand remaining robust, especially as the methods of supply become more and more efficient. But as Darrel Bricker and John Ibbitson describe in Empty