What comes next

For those on the Picketty train, a gloomy scenario is painted fairly clearly. We are entering an age of slow growth, one where little change in status is possible no matter how hard one works, or how brilliant one’s ideas might be. We are entering an age like the Belle Epoque, the 19th century Gilded Age where the top ten percent own virtually everything, and make their living by renting it to others. They rent their money to the government, the land to the proles, and live off the rental income, or interest, or whatever it is called in the various income streams they have fashioned for themselves. The rest of us, in the meantime, have only the sweat off our backs, or our brows, to sell.

Neofeudal city by Terra Politica

For those on the Picketty train, a gloomy scenario is painted fairly clearly.  We are entering an age of slow growth, one where little change in status is possible no matter how hard one works, or how brilliant one’s ideas might be.  We are entering an age like the Belle Epoque, the 19th century Gilded Age where the top ten percent own virtually everything, and make their  living by renting it to others.  They rent their money to the government, the land to the proles, and live off the rental income, or interest, or whatever it is called in the various income streams they have fashioned for themselves.  The rest of us, in the meantime, have only the sweat off our backs, or our brows, to sell.

Back in the Belle Epoque, only two crowds were independent from this have/have-not scenario.  The first crowd was the religious one, living in cloisters and rectories, participating little in the economic life of the city.  The second crowd was the scholarly one, living on campuses or in schoolhouses, participating even less.  What characterizes this time around is the change in status of these two extreme populations:  their fall from grace; their pedestals torn asunder by our grasping, destructive juggernaut.  Living in a state of grace, penniless but on the moral high ground, is one thing.  Associating oneself with profoundly hollow institutions, still penniless, looks more and more foolish every day.

Piketty painted a pretty bleak picture, but no one has yet sought the alternative viewpoint.  This peculiar condition characterizes all who participate in the economy; to overcome this condition one must stop participating, or at least change the game.  This would mean radically altering the space in which one conducts one’s affairs.  One would have to eschew any form of credit, whether mortgage, consumer credit cards, or car loans.  All of these are simply vehicles to siphon off a portion of your income up to the top ten percent.

One would also then have to carefully consider one’s work and whether it is parasitic, or whether one’s work is more purely production.  I’m adapting this distinction from Harvey, who said that parasitic production is that form of production which only increases profits without benefitting anybody, like parasites chomping away at a host.  The parasites – those top ten percent – keep chomping away at the middle class, bleeding off their income through various means.  By contrast, Harvey goes on to describe a generative process, or one that generates social surplus, a better society or a better world.

Harvey focuses on parasitic cities (Orlando is certainly one of these, having come into its present state by feeding off the great middle class’ need for escapism and stress relief by coming to theme parks).  However, everyone’s own economy has features of parasitism as well as generative efforts as well.

If one considers a CVS, for example, one could calculate the economy of an individual store, as well as the workers in it.  Let’s say that, of the pharmaceutical section, about 10% of the drugs do some real good.  Some drugs do a lot of good, even save lives; some drugs do no good at all, except to enrich the drug company.  Most drugs are a mixture of the two.  But the drugs are only a small portion of the offerings of a store.  The rest of the floor space is taken up with lipstick, toothpaste, candy, greeting cards, and other trappings of consumerism.  Again, about 10% of this stuff actually increases human society (that’s my own uneducated guess).  A greeting card might make someone feel connected to another; that is a good thing, but does it make them feel four dollars’ worth of connectedness?  The utility of a greeting card vs. its cost could be dissected in this way.  The utility of a bag of M&M’s could be dissected in a similar fashion; two dollars’ worth of feeling momentary oral pleasure is cheap; the chemicals and shipping cost and then the waste, both the empty bag and the portion of one’s excrement that goes into the sewage treatment plants, probably yield a net negative social surplus.  The CVS, in terms of its total economy, is much more parasitic than it is generative.

So a worker at a CVS who puts in 40 hours a week, and takes home $10 an hour, has an economy wherein $40 of his income is generative and $360 of his income is parasitic.  In other words, he spends about 4 hours of his time actually making the world a little better, and the rest of his time on the time clock is actually parasitic on the rest of us.

If you multiply this by the number of people in a city like Orlando, you get a staggering amount of money and what amounts to a  shocking waste of time.  And Orlando isn’t much different than any other city.  We seem to be helplessly sliding into this urban feudalism that Piketty describes.  While we are being preyed on by the top ten percent, who we pay back when we rent an apartment or make a car payment, we continue to live parasitically on each other, preying on our fellow proletariats, contributing little to a social surplus.

Before reading Piketty, I thought long and hard about this idea of being productive vs. being parasitic.  What truly constitutes a productive effort, and what is simply consumerist in nature?  The answer is not easy but it has to go back to the fundamental types of economy.  One type is indeed growth – making more stuff – which was the dominant mode for the last century or so.  As the population grew, we needed more stuff, and growth was the great measure of the economy.  Gross Domestic Product, or GDP, is compared year-over-year to establish a growth rate, which has been 1-2% for the past couple years but higher before that.

So if one is to sidestep this urban feudalism that seems to be descending upon us, one would have to avoid places like CVS (which means pretty much all of the globalist retail establishments).  One would instead have to carve out a lifestyle, conmingling with the urbanites around us, but trying to increase the “generative” portion of one’s activity up from 10% to a larger and higher proportion.  One would have to be a mole, to go underground.  Maybe a new name for this kind of person is a moletariat.

Harvey’s definition of “generative” is that it is a mode of production that increases social surplus, which is a way of saying that it increases quality of life.  Generative activity makes one healthier, and presumably ascend up the hierarchy of needs towards that of fulfilment and involvement.  Beyond Harvey, who writes as a social democrat, one could look at the ecological economists’ definition of human development as that which makes not just humanity better, but makes the world better as well.

If the world enters the equation, then one can see quickly where all the 90% of parasitic economy is going.  The cost to the earth in terms of chemicals extracted, energy consumed, and the systems to treat waste as a result of a $2 bag of M&Ms is much, much greater than the cost of the bag.  Generative activity would be, for example, production of nutritious food that has the same net utility as the M&M bag – oral pleasure – but that extracts less of the earth’s resources and injects less waste back into it.  Generative activity would be that kind of economic activity that increases human, and nonhuman, quality of life.

A focus on this kind of activity has not been discussed at present, and Piketty and most of the rest do not concern themselves with this distinction.  For them, the economy is one vast undifferentiated miasma of production and consumption, and he’s clearly shown us who the winners and losers are in that game.  But if a different form of economy is possible, one that is generative or developmental in nature, it might be possible to carve out a future that is independent from the urban feudalism of the coming times.

Piketty and all the other urban feudalists can have their CVS and M&Ms, for it is that kind of economy that they are considering in the new have-not and have class distinction.  A different type of economy is burbling around, however, one that does not involve these kinds of activities.

That is the only way I can see any positive future out of all of this.  Either we choose to be consigned to a proletariat future, forever paying off landlords and banks, or we choose not to be consigned to this future, and instead carve our own future.  The good news is that America has a fairly low tax rate (pity the poor European working stiffs, who are not only paying off credit cards and car loans and high rent payments, but are also paying half their salaries to the government).  We get to keep more of what we earn.  What we do with this money should be the next critical step to build a generative economy that can be handed to future generations.