By: Gunabalan VGBS

with the price of Oil becoming cheaper in global trade by the day, combined with the effect of the Ringgit losing value against other currencies, there is a fear of high inflationary effects affecting normal household budget for most goods sourced from overseas as consumers labor under increased duress of low discretionary income.

For the longest time, the world was worrying about peak oil. This resulted in the price of a barrel of crude oil hitting USD 110/- a barrel in late 2013. However, new fracking technology from the US of A changed these fears overnight. The US of A was at one point in time the largest importer of oil and coal in the world.

Today though, we now hear talk of an overabundance of OIL supplies worldwide with the US becoming the leading exporter of oil, due to these FRACKING ability!

When we talk about peak oil, I say, in developed countries they have probably hit peak stuff. 

I’d say we’ve hit peak red meat, peak sugar, peak stuff… peak home furnishings."The average western consumers'’ home is bulging with all the materials and goods it needs, in my contention.

Hence, global furniture producers like Ikea needs a cleverer marketing ploy to whet its western consumers appetite– helping them recycle what they have, for instance. (The Belgians have made 2nd hand goods and recycling the most fashionable "in thing" to do amongst the fashion and trendy gen Y age groups).

These days in Europe, whether more is always the answer is being questioned, not by environmental think tanks only, but by the consumer market itself.

Only in developing African and Asian countries have consumers the capacity to want more, but as most economists have accepted, for that to happen, these countries need higher buying power, which in turn rests on the global distribution of income and wealth being fairer.
There is also the question of how much longer unfair rewards and low pay systems can be tolerated. 

The best capitalists have always known that unequal societies are not good for business – this was one of the reasons Henry Ford wanted to pay his workers well. It’s a lesson many should heed today. 

Hence also, the need for the Trans Pacific Partnership Trade Agreements foisted on us.

Heavens to Murgertroid!

The mouse’s have turned and are now demanding equitable living systems from their governments. Which in turn, means that the Central Banks and Economists will be corralled to find an answer. 

Unfortunately, Economists are ill equipped to address such phenomena. 

Faltering growth in consumer demand in all countries is understood wholly in traditional economic terms: The story is that consumers are indebted and uncertain; they lack confidence and want to rebuild their savings. 

Most rightwing, anti-state economists would peddle tax cuts as the universal panacea. Like Pavlov’s dog, they think consumers will flock back to the shops once they are emboldened by a tax cut.

Historically, it’s been proven that there would be some increase in consumer spending in following these previously successful financial modules, but as the recent Q.E. exercise in the US has shown, far less than there used to be.

More fundamental forces are holding back spending. 

There is a quest for meaning, aided and abetted by the knowledge and information revolutions, that is not answered by traditionally scale-produced goods and services. 

Economist Tomas Sedlacek, who has won an international following for his book Economics of Good and Evil, insists that contemporary societies have become slaves to a defunct econometric view of the world.

When early modern societies were poorer, it was reasonable for Keynesian economics to focus on how to produce more stuff – that was what societies wanted. 

Now, the question before us is more Aristotelian: how to live a happy life – or “humanomics”, as Sedlacek calls it. 

Aristotle was clear: happiness results from deploying our human intelligence to act creatively on nature. To inquire and successfully to quest for understanding is the root of happiness.

Yet most people today, says Sedlacek, work in jobs they do not much like, to buy goods they do not much value – the opposite of any idea of the good life, Aristotelian or otherwise. 

What we want is purpose and a sense of continual self-betterment, which is not served by buying another iPhone, wardrobe or a kitchen.

Yet purpose and betterment need a social context :   purpose is a shared endeavor and self-betterment is to act on the world better with others. An individualistic society such as our own makes it much harder to find others with whom to make common cause.

I am beginning to wonder if one of the factors that drive the ever-upward movement of house prices is that owning your home might be that rare material possession that begins to answer the question of who you are, or at least offers a platform to begin the happiness quest. (In a manner of speaking, having the respect of your peers -in part due to Home Ownership gives you the confidence to move on to bigger & better social endeavors).

Furthermore, it is a good financial investment to boot.

In these circumstances, if servicing the mortgage takes more than half of your disposable income, so what?

We just buy less stuff until our financial situation improves. 
I believe the word here is : delayed gratification.

Interestingly, home ownership and housing conditions don’t figure much in the varying academic and think tank attempts to understand and measure happiness and satisfaction.

The New Economics Foundation has developed a matrix of five key performance measures to get beyond indicators of “stuff” such as GDP: job quality, well being, health, environment and fairness. 

You can quibble with what is in the categories (housing only figures marginally in the well being category, for example) but not with the attempt to address the hunger for meaning.

Living in an unfair society is psychologically hurtful; air quality does matter; a workplace where you are respected counts; acting pre-emptively to stay healthy makes sense; life satisfaction is what it is all about. These are the categories we should measure and track.

They also reflect changes in the market. Big Governments and GLC’s that employ thousands of workers are not alone in facing these predicaments.

The dynamic areas of the economy are in customized micro-production; caring/mentoring/teaching to enhance well being and capability; health; sustainability in its widest sense – all enabled by digitization.

This is not a world in which goods and services are produced at scale as conventionally measured, but a honeycomb economy of niches and information networks whose new dynamics we barely understand, even if we have a better grasp of its values.

They are deeply human. Kampung based,even.

A better world is struggling to emerge; if we understood it better it would emerge even faster.

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