Tag Archives: Economics

Our To-do List (A work in progress)

I realize that there are so many websites & blogs out there, all saying much the same as this – that we need to vision a new future etc etc – but no clear idea on what that looks like. I’m hearing speeches and reading opinion pieces every day with terse reminders along the lines of – ‘If we don’t do something soon, we’re all screwed’, yet offering nothing concrete by way of action plans. There is a massive disconnect between the perceived need and the actions on the ground that will achieve them.I’m starting here.

-1- Often in South Africa, there is money allocated to tackle the problem, lots of money, but it gets returned to treasury unspent every year, as the money was not tapped. Reasons for this include unnavigable Red Tape and a procurement process which is (inadvertently) designed to destroy initiative and quality service delivery. The systems were designed that way to try to stop tender corruption – a laudable effort, which seems by all accounts to have failed, if one considers the slew of corruption exposes that come to light every month. The system was designed with the best intentions in mind, but doesn’t work. It’s time to redesign it from the ground up. Government has the money available to make many of the interventions needed, but they are not being made. That is insane. Starting with a ‘Two-envelope’ system is a good starting point – in the first envelope is your methodology, team and track record. Only if you make it through that first cut can your second envelope be opened, which presents your tender bid. That eliminates all the fly-by-nights and ‘crazies’ who are currently destroying the market. A second idea wold be to use the French system of choosing the tender price closest to the average price of all submissions. We have the money – we aren’t spending it – we can afford to pay to have the job done properly, rather than the current ‘race for the bottom’ where by the time you have slashed your prices to get the work, you can’t afford to do the job properly. As it stands, the system is myopic and counter productive

Action Plan No. 1 – Scrap the State Procurement Policy, and start again.

To do: Write letters to the paper, contact your local Councilor, work your networks. Devise a better system, then start publicizing it.

-2- The private sector is hoping the sun will come out tomorrow. I am one of the growing number of people who seem to think it won’t. Well, not like that, anyway. The 2003-2008 boom was no boom, it was a bubble. The party’s over. We were spending money we simply didn’t have. Now our collective credit card is ‘maxed’ and we have to stay home, watch telly and live off beans on toast. Welcome to the Post-Peak Credit World.

I hang out with property developers, a couple of whom have become close friends. One in particular was earning an astonishing amount of money every month during the boom. Its all gone. He has nothing to show for it. He’s just as happy now- but he wasn’t at the time he was losing it all. I have met obscenely wealthy people – obscene is the correct word – seldom any happier than you or I. I won’t labour the point, its all been said before – ‘Money can’t buy happiness’.

Which is fine and well if you still have an income. Every week, we are hearing of companies laying off staff or closing entirely. For those affected, it is a very scary experience. Fear of losing their home, how to feed the family – all very real concerns. The market cannot soak up the casualties, and with a smaller economy, there will be higher unemployment rates, notably amongst a sector of the labour market which is unused to the idea. I was chatting to a guy this week who is scared rigid – he’s just been laid off. He is going to try his hand at jobbing – a bit of this – a bit of that – have 2 or 3 jobs, rather than one full-time job. Maybe that is the way we are heading. The labour market is set to become more fluid and less structured, with more people working as freelancers and jobbers, and the idea of a rigid structured job working 8-5 becoming less commonplace. That may be an important paradigm shift to get our heads around:

Action Plan 2 – change the way you think about your employment.

To do: Diversify & skill up into new marketable niches.

-3- We are trying to imagine what the new economy will look like. We know it is based on a low-growth or zero-growth economy – maybe the term ‘replacement economy’ is appropriate – that we will have to stop hankering after the mindless accumulation of ‘stuff’ and rather live more simply: buy a new kitchen when the old one collapses, buy a new car when the old one is no longer economical to repair – or trade it for a bike – you get the drift. This is always held up as a horrific doomsday scenario, but is it? I’m not an economist, so I will tread lightly here, but from what I am reading from economist’s work, it is not necessarily the end of the world. Read Richard Heinberg’s The End Of Growth for a Post-Peak Credit scenario. He concludes with an optimistic note:

The transition to a no-growth economy (or one in which growth is defined in a fundamentally different way) is inevitable, but it will go much better if we plan for it rather than simply watching in dismay as institutions we have come to rely upon fail, and then try to improvise a survival strategy in their absence.

And then a warning if we don’t make the shift:

In effect, we have to create a desirable “new normal” that fits the constraints imposed by depleting natural resources. Maintaining the “old normal” is not an option; if we do not find new goals for ourselves and plan our transition from a growth-based economy to a healthy equilibrium economy, we will by default create a much less desirable “new normal” whose emergence we are already beginning to see in the forms of persistent high unemployment, a widening gap between rich and poor, and ever more frequent and worsening financial and environmental crises—all of which translate to profound distress for individuals, families, and communities.

Action Plan 3 – change the way you think about our economy and your expectations of consumption.

-4- As a Built Environment professional, we are facing this very reality at the moment – there is precious-little private sector work, and the public sector work is in such short supply that by the time you have won the ‘race to the bottom’ to slash your fees enough to win the tender, you can’t afford to do a decent job.

So what will the future hold for the likes of us? – There will still be buildings built and areas developed to house the ever-growing population, but what will it look like, and how will we afford it? Property Development has always been a high-risk – high-reward industry. Take away the reward, and the only way it will be done is if someone else shoulders the risk. That would be the government, and let’s be honest – their track record for creating inspirational places to live is nothing to crow about. Nope – we need a third way. Desperately.

We are currently engaged with a new breed of property developer, the likes of whom I have never encountered before, but wish I met every day. we are working on a large development which will make an enormous change to the way our city functions and approaches inherent shortfalls and problems. The success lies in cross-subsidization, and that is an incredible part of the plan. It does not look at lifting the cream off small high-profit components and trying to scrape off the loss-leaders, he takes a holistic approach and views the entire system as a whole, which functions as a healthy whole, or not at all. It speaks directly to Alan Savory’s work. This guy truly is an inspiration. 400,000 homes are to be built using this approach – (which would mop up the social housing backlog of our city if it were to happen tomorrow), and despite the chorus of derision from the Doubting Thomas’s, the project is looking less and less like a pipe dream and much more like a sure thing. It will mean living in mixed social and economic neighbourhoods, and will change the ways we think about our communities. Rather than living in niches, in which we surround ourselves with people of similar status and standing, we will be exposed to a far greater cross section of our society.

Keith Writes about the Tools Of Disconnection in his book ‘A Matter Of Scale‘, listing them as the means by which Industrialized Machinery has cleaved us from our world, community and reality. When one begins to understand the importance of community to our psychological well-being, we see how essential it is to reintegrate ourselves as a community, and function within that realm.

Action Plan 4 – change the way you think about your community – how it is comprised and your place in it.

-5- Food Production. My next post will be on food production and the planet’s carrying capacity. Reading Jared Diamond’s ‘Guns, Germs & Steel’ has sent me in paroxysms of despair, as it becomes very clear that the earth has a carrying capacity of between 1 and 2 billion people, depending upon whom you listen to. That means 5-6 billion people will be left without a chair when the music stops, and that is a truly terrifying concept for all of us, regardless of which side of the divide you think you will end up on (and be honest, you hope and believe that you and your family will make it – we all do) I hope we all do too. It is a long argument which I shall paraphrase in the next posting, but the bottom line is – learn to grow your own food. Practice now while you can afford to fail, because in a few years time, you will eat or starve by your efforts. Before the industrial revolution, and indeed for the past 9000 years or so, it has been thus, and so shall it be again. You will need secure land, water, food and time. Start reading up on it, join classes or web groups, and start scanning your neighbourhood for suitable allotments. The City of Cape Town has already made it policy that each neighbourhood will have 1 good park, and the other Public Open Spaces within the area will be made available for other uses, particularly for Urban Agriculture.

Action Plan 5 – learn to grow your own food, and find ways to secure space to do so.

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Abandon Hope – You’ll Feel So Much Better

Hope holds us back from moving forward. When we hope things will improve, it allows us to stay in a place where we are apathetic. Paralyzed, even. “The Sun’ll come out tomorrow”… sang Little Annie. She’s right of course. It will – their headline screaming another new obscenity from the lampposts. There is such noise on the wires discussing the superficiality of whether we use Compact Flourescent Bulbs or recycle our ink cartridges – like it matters. Its like lining up all the passengers on the deck of the Titanic and asking them to all blow hard at the iceberg. Will it help? – Technically, yes. Really? – we’re just trying to make ourselves feel better by fooling ourselves we are making a difference. Because the level of change required is so fundamental, that we are simply not prepared to countenance it.

Take a look at Elizabeth Kübler Ross’ ‘Stages of Grieving’, here carefully cut & pasted from Changing Minds.org:

So now let’s try that on for size with the looming crisis we see coming: I’d put most of the world at Stage 1, with a rapidly growing number of people at Stage 2. All hell hit the streets of Europe this week as about half a million people collectively reached Stage 3. Expect a whole lot more of that. Stage 4 is the mad rotation of bald tyres we see happening all around the world at the moment, where the belief that using a block of salt under your arms instead of deodorant or having your sugar served up in non-bleached sachets will save us all. For the most part, it is little more than cynical green-washing by companies who are onto the next big thing. Until we stop consuming, nothing is going to change.

Depression. Stage 5. That sucks. That’s the bit where you stop wriggling. You realize that no matter how many economic bail-out plans are floated, no matter how much the market gurus try to talk up the market, the party is over, and now we have to clean up the mess. And wash the dishes, to pay for the bill, because it turns out the guys we were partying hard with – the coke-head wide boys we admired and thought were (or we wanted to be) our friends – they just stiffed us with the bill and ran off with the girl we fancied.

And that brings us to the point of this missive – ‘Abandon Hope’

Its only when we get to the stage of letting go of the idea that we can continue the ridiculous consumption we have been pursuing and the hamster wheel that we have been on, that we have any chance of turning this boat around. The show is over. We need to accept that.

Zen Master Thich Nhat Hanh, in a recent interview with the Guardian, offers the following words of comfort:

“Without collective awakening the catastrophe will come,” he warns. “Civilisations have been destroyed many times and this civilisation is no different. It can be destroyed. We can think of time in terms of millions of years and life will resume little by little. The cosmos operates for us very urgently, but geological time is different.”

“It’s like the person who is struck with cancer or Aids and they learn they have been given one year or six months to live. They suffer very much and fight. But if they come to accept that they will die and they prepare to live every day peacefully and they enjoy every moment, the situation may change and the illness may go away. That has happened to many people.”

When we give up and stop wriggling, we can open to the space where we realize that it is all a story in our heads, anyway. It doesn’t exist. All of our civilization is a mental construct – a function of our intellect. We love being clever. This came through this evening from my guru, Ram Das

“Freedom allows you to be wise, but you cannot know wisdom. You must be wisdom.

When my guru wanted to put me down, he called me ‘clever.’ When he wanted to reward me, he would call me ‘simple.’

The intellect is a beautiful servant, but a terrible master.

Intellect is the power tool of our separateness. The intuitive, compassionate heart is the doorway to our unity. “

We need to embrace simplicity, and live more frugally. Build self sufficiency. Start now while you can afford to invest in capital items like solar panels and rain water tanks. The prices are only going to go up. Learn how to grow your own food. Learn to live with less. Swallow the red pill and wake up to the puppet you have become, slave to the whims of the advertising industry. This is all old hat – there is nothing I can add here that you haven’t already read before, so I’ll stop.