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Life-style, Climate Change and the American Economy

January 3, 2012

Recently, I read a short opinion piece in the Bangkok Post by Naomi Wolf noticing a trend by some, young adults for the most part, to choose to live a lower impact lifestyle. This is not the quasi-religious back to nature life styles movement favored by the Hippies in the 1960s, nor was it the life of hopeless desperation that gripped much of the Nation in the 1930s. Rather, it seems a number of the modern descendants of those prior movements are deciding on a simpler way of life because the alternative, even if accessible, is no longer as desirable. The ideal life based almost exclusively upon greed and accumulation is being found wanting.

The impact of this change in goals, as she pointed out, could be momentous. It does not take that many people to decide, for example, they do not need a second car, for its reverberations for good or ill to be felt throughout society. The failure of the automotive industry to grow at a rate equivalent to population growth, replacement and a little more, would have severe consequences to the economy that cannot be remedied by lower prices or financing. In a recent article appearing in Business Insider, pointed out that modern youth seem to be forgoing the obsession with automobiles of prior generations.

Add to her observations, the often commented upon disappearance from the un-employment rolls those who have given up and presumably accepted a less goods rich life style as well as those apparently large number of Americans who have accepted underemployment as their status in life. It is not too difficult to foresee an economic and social future different from that of the past and incompatible with many of the projections suggested by the charts and graphs of the economic and political pundits that rule the media today.

Also, Ms Wolf did not mention, that a lot of those entering their most economically productive years today are the members of the social network, mobile entertainment and information generation. Their life style choices could exacerbate the economic and social impacts of the trends she writes about.

For example, our transportation, fashion, entertainment, social and a host of other choices often require, or encourage our traveling somewhere, frequently with the hope to impress those we meet along the way with our abilities, success or whatever else is important to our sense of self-worth. For the new electronically connected generation, mobility and physical appearance becomes less essential as they text rather than travel. Conspicuous consumption of even some of the wealthiest among us may become less a function of acquisition of physical things then it is now. (Why two Ferraris when you do not need to alter your location for most of your social or business needs?) Some of us for instance may decide that public transportation, although longer in duration and sometimes lacking in the comfort of isolation is more acceptable because its downsides are mitigated by the fact that ones mobile, work, entertainment and social needs do not need to be as curtailed on public transportation as they would be should you choose to drive an automobile to your destination.

It would not require more than a few of us to make these choices for it to rock the economy in ways that standard financial theory is unable to manage, based as it is on production and finance, causing the economy to contract and perhaps collapse or at least to change substantially. The current American economy is for the most part founded on habitation and transportation. What happens when the demand for both ceases to grow at historical rates should enough people make these lifestyle choices?

Strange as it may seem, it may be that this social change more than technological invention or energy conservation that delay’s the impact of the hydrocarbon threat.

Several investigators into the world’s energy and climate change crises have argued that neither crisis can be resolved absent an economic contraction or collapse (See, Timothy Garrett and Do the Math website). Certainly, given the scale of the economic interests at stake and the resistance of the political sector to grapple with the problems, a massive economic contraction is probably the most likely result. Perhaps the conjunction of the underemployed and the social network generation will be the catalyst, in the developed countries, to slow the rate of growth of energy consumption while the people of the world adjust to the new, climate and economic realities.

It would be ironic, that the potential economic collapse of the worlds industrial nations may prove to be the most significant event in dealing with the energy and climate emergency facing us. It is doubly ironic that, if that is the case, those that were the most responsible for getting us into this mess, those who have urged the rest of us to do nothing, can now argue that they were right all along.

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