Item: In certain places, bar and bat mitzvah celebrations had become intensely competitive, with parents generally responding to kids’ needs to up the ante by spending ever-more money on more lavish and far-out parties. According to a recent report on the public radio program, Marketplace, that included having the celebrant jump through a hoop of fire or be escorted thorough a Polynesian -themed entrance by scantily clad dancing girls. In this competition for attention, the rising sensationalism meant on average no kid would get more attention than before, but the arms race was hard to stop.
And all that spending, mostly on locally provided services, was stimulative to the American (money) economy. Now, however, just when more stimulation is apparently needed, it has become more attention-getting to desist from the arms race and offer an obviously less lavish and expensive and altogether more sober sort of event, one that seems to fit the down-sized times. It just does not do to be too ostentatious in spending in the current recession (or depression). From the point of view of the capitalist economy, this is too bad. Now is when a stimulus is certainly most needed, and people who can spend, it could be argued, have a good citizen’s responsibility to do so.
Item:As the shenanigans in Washington over the stimulus package reveal, plenty of people still can’t get their minds around the idea that spending is needed to revive the economy — assuming it can be revived. President Obama, in my estimation, is himself only partially convinced of this necessity, and therefore has yet not done an effective job of convincing the wider public. He keeps appointing people who also are more culpable than corrective in changing the tide. The dual (if absurd) messages that people on Wall Street deserve high pay for their hard work —much higher of course than many other hard workers — and that saving is better than spending, that in fact too much spending seems to be what got us into this mess, collide and produce cognitive dissonance that leads to fear and inaction.
Item: workers of all kinds in China will work for much less than their US counterparts. Why shouldn’t the banks set up all their operations in China, and why shouldn’t President Obama hire Chinese economic advisors? I’m sure the latter can give just as mediocre advice as he’s getting at higher prices now.
Item: as I just said, workers of all kinds, including high qualifications are available in China and can do anything American workers can do. It’s great for the Chinese if they are employed even at their low wages, but it would be horrible and impossible for Americans to try to get by on such small wages. This is the folly of globalization. It wouldn’t be folly if there were an unlimited need for workers, but rising productivity means that is not so.
One of the things that makes the typical American economist so mediocre is the assumption that we can “get back” to steady growth for all infinity, if we only correct for ecological problems (that part’s ok). This hope ignores that we cannot sensibly consume infinitely much, so that rising productivity eventually has to cause problems. Even in a world in which everyone has a good income, in which institutions and cultural preferences and technical limitations do not limit consumption, the scarcity of attention eventually would do so. But in the real world, where incomes are already decidedly unequal, where most of the world has in fact lost ground as a result of the breakdown of ordinary agriculture as more productive western agriculture has replaced it, and where factories , etc,. get more highly productive all the time, the limiting consumption point has quite possibly already been reached. The average Chinese probably would not want to consume at the American level, or even imagine doing so, and all sorts of barriers anyway prevent that. For the world’s devalued peasants, the idea of huge consumption is still further off scale.
Actually, the turning point was some time ago, I suspect. What kept us from noticing was precisely the overheated financial sector here in the US. The Internet and the like have greatly speeded the rise of the attention economy (in my sense) but it has also made possible a vastly overheated financial sector in which large volumes of money running through could be slightly diverted in order to set up apparently substantial profits that were little more than gimmicks, even if unintentional ones, but these gimmicks for awhile were also justified in issuing mountains of loans that allowed the average person to buy much more than the average declining income would have made possible. That fed, for instance, the credit card binge and the mortgage binge that led to ever higher home prices, leading to ever more toxic mortgage deals, etc. But the collapse of that house of cards just reveals the deeper underlying problems of a bereft capitalist economy. As US consumption was what kept the entire world economy afloat at the level it was, our fall now cascades into others’ economies as well. Pulling the whole world out of it is going to take much more than has ever been seen before, and I don’t see how that more can be more capitalism as usual.
As stock prices sink and profits plunge, the firms that survive will be the ones that continue to increase productivity the fastest, which means shedding even more jobs.
Item: The bailed-out banks have been loathe to lend money to ordinary consumers, because most of them are maxed out on their credit anyway. But the same banks were willing to form a consortium to lend bailout money to Pfizer to buy Wyeth, which will lead to 14,000 layoffs, and that fact might be just waht gave the banks the confidence to lend. So much for the bailout helping keep jobs.
Many economists cheerfully believe that the US can recover its former more advantaged position by developing a more educated workforce which will more design rather than produce goods. However if the idea is that these designers will be able to command a premium for their services on the world market, that can only come about if their designs all get attention from a large part of the rest of the world. In other words, to have what passes for a high material income in an attention economy you have to rreceive a good deal of attention, in this case thorugh your designs or for your share of whatever project you are involved in designing. And there may not be (or, rather, isn’t) enough attention to go around, doing that). Actually, of course these high attention-receiving workers need not be designers; they can be novelists, movie directors, singers, sports stars, and so forth, just as well. But still, comparatively very few of these will get the bestseller kind of attention that is needed.
And other countries’ citizens will be good at starring in these ways too.
The more the old economy sinks under the weight of too high productivity and thus tremendous overcapacity, the faster will be the move towards the attention economy, as more and more people make use of the Internet to vie for attention in new ways. The vast majority of people will find themselves, in effect, to be fans, if they are not chiefly that already. But they will sink in to despair even as fans unless they feel the stars will somehow take care of them. So it is incumbent upon stars who want any kind of a stable world to worry about a pattern of goods distribution that continually improves life for those at the bottom, and does so in more or less sustainable ways. This is what we must try to flesh out, I think, if there is going to be any sort of desirable human future.