Thursday, October 5, 2017

Economic Transition, Reflection Upon Natural Progression / By: Bruce Wilds

In the Beginning, Everything Is New
The goal of this piece is to focus on the natural progression that takes place as an economy matures. When it comes to how we might view a developed country versus one that is in its early stages of economic development it might be helpful to think of a country in the early stages of development as a newly planned development on the edge of town. In the early stages of development, a great deal of money is spent on building the infrastructure necessary for the planned community, this includes roads, bridges, utility lines, and moving dirt. All this may go on for many years as homes and commercial buildings are constructed, all this creates jobs and new investment opportunities.

At Some Point, Focus Moves Towards Repair And Restore
At a certain stage of development, we reach a tipping point and a change takes place in the nature of how we spend our resources. As developments mature over time a larger percentage of outlays are spent on things like maintenance, updating, and upgrading existing buildings and infrastructure as needed, windows and roofs weathered by nature are replaced and parking lots repaved and sealed. Rather than pouring money into strictly new construction, we find as an economy matures its rhythm changes and the focus should become sustaining what has been created to maximize our prior investment and extend its use.

During the early 1900s just after the automobile became popular among the masses garages began to appear in cities. In the neighborhoods being built at the time garages were constructed for one car and fairly narrow to accommodate the cars of the time. When cars became larger and families started owning more than one automobile these garages were no longer was adequate and had to be enlarged. This example is used to highlight the fact that as lifestyles change neighborhoods change and evolve to better fit our needs and desires. Over time with each new invention, we alter our homes and the economy as well as a way of adapting to the new realities life fosters upon us.

In a perfect world, we would see developed areas not only continue to be maintained but steadily evolve and move forward. Because construction tends to reflect the lifestyles of those living during the planning and building phase, this means we should always be upgrading while preserving the best characters unique to the era in which buildings were conceived. When it comes to buildings this means adding insulation and replacing electrical panels when it comes to the economy it means finding new ways to manufacture and deliver goods. Unfortunately, the shift from a growth economy to one that is sustainable over time is very difficult to make and for many economies, it creates a slew of social as well as economic problems.

Much of mankind has adopted mantras such as "move forward or die" and "newer is better" these often prove to be short-sighted and discount what those before us have brought to the table. Failure to recognize this economic transition and reflect upon the natural progression of society ushers in conflicts and even war as politicians wrangle to produce the ever-growing growth demanded by a majority of voters. This shortsightedness could help explain why here in America we never hear politicians on the national scene call for conservation unless it is during an emergency. Consumers conserving, reducing waste, and any talk of government austerity usually conflicts with the goals of lobbyist hell-bent on creating growth at any cost.

War Is Wasteful And Disrupts The Natural Progression
The idea that the way to grow is to increase our population is flawed. Simply adding mouths to feed and efforts to merely add new workers to replace those retiring creates additional demand but is flawed and shortsighted because it ignores the problem of exploding population growth across the world. Just getting bigger is not always better and we must recognize even trees do not grow to the sky. At some point, we must face reality. War is often the byproduct of such growth and war has proven to be a poor answer to creating a better world. The bottom-line is we should focus on a transition towards a future that is sustainable over the long-term.

The world of tomorrow will create many new challenges as automation reduces the need for workers and we struggle with creating jobs that make people feel useful and allow us to live lives that have a purpose. When discussing such things it is easy to extend the conversation to things like income inequality and even a more interesting issues. What do people deserve from society merely because they are born? Do individuals have an obligation to give back to society and not simply take and make demands upon it? These are questions we will continue to grapple with going forward and most likely the correct answer is embedded in reflection and thought.


  1. This article dovetails with the idea we need immigrants for growth, the problem I have with this is that it is based on two myths. The first being economies are held captive to population growth, part of the quantity argument that more is good. More troubling is the second myth which is built around the idea the average immigrant is a plus to the community and country rather than a drain on social services. This is often based on claims they are needed in the work force and have skills that will allow them to rapidly be assimilated into the community. This can be spun into a "more people more demand' for goods and services scenario or bigger is better way of viewing the economy. I feel we should look deeper and be troubled when this growth is created by money flowing from the government in the way of entitlements. The article below delves into this subject.

  2. Our system is geared at getting politicians re-elected and fulfilling the most pressing needs of today. Things like profit, greed, and quenching our unrelenting desire for growth is placed in front of longer term issues and needs. Mapping out a logical and sustainable long-term plan requires delving into some rather hefty philosophical questions like what brings real happiness. More on this subject in the article below.