Predicting the Economy: 2010-2020
From now until 2020, expect intermittent depression and only sporadic flashes of semi-prosperity.
If history repeats itself once again, the next decade will be devoted to extinguishing the consumer society and economy (socio-economy) of the 20th century and replacing it with a socio-economy correcting the multiple ills of over-consumption—abuse of the environment and infrastructure; excessive debts, deficits, climate change, water and air pollution, housing boom and bust, defective infrastructure, medical and educational inadequacies, etc.
Unlike recession, depression is the struggle to replace a failing socio-economy with a viable, very different successor.
The time of the Great Depression of the 1930s was an era much like the one we find ourselves in today. Then, however, a socio-economy minimizing consumer spending (1845-1960) was transformed screaming and kicking into a socio-economy maximizing consumer spending (1900-2020).
In the 2lst century, we are in the midst of a new struggle—to end our irresponsible fascination with consumer spending and create a socio-economy devoted to repairing decades of that irresponsibility.
Socio-economic predictions rely on very long periods of observation. The new socio-economy can best be understood by observations beginning in the 1840s.
The socio-economy minimizing consumption spending, 1845-1960
An 1840’s map of the United States shows no railroads, industrial cities or industry in the vast interior. Manifest Destiny beckoned and America would tame that vast expanse into a manufacturing powerhouse.
How could a desperately poor and uneducated people make that happen? Men would work long and hard for low pay. (Not many were obese.) They’d scrimp, save and invest.
In only 60 years, they filled that huge interior with railroads, mines, farms and industrial cities. A tiny river village called Chicago became the hub of a Colossal Industrial socio-economy. From 1840 to 1900 Chicago grew from 4,470 to 1.7 million!
The next socio-economy: maximizing consumer spending, 1900-2020
After decades of building and connecting new cities, those lean and mean Americans were precisely miscast as customers creating a reliable market. So began a great transformation. While Europeans colonized, Americans became spenders and consumers.
Rising on silent cat feet, the consumer socio-economy made its inauspicious appearance around 1900. Capitalistic progress would soon be measured by ever-increasing consumption spending.
Eventually, we accelerated consumer spending by easy credit, credit cards, radio, TV, other consumer-oriented innovations, annual style changes, ‘no money down, no payments until…,’ and endless advertisements via every channel of communication. We created the new consumer city—suburbia—with its endless “palaces” for little kings.
Not so fast. The transition from minimum to maximum consumption spending would not come easy. That transition would bring a Great Depression.
Explaining Great Depression I
To transform the socio-economy, the economy slowed down.
Unyielding Yankee savers had to be rewired. Everything had to change—family life, ambitions, child-rearing, education, political attitudes. To increase incomes, the Democrats had to become more successful and unions more powerful.
Suburban homes and automobiles—twins joined at the hip—would become mainstays of the rising socio-economy.
A difficult accomplishment: (For people living in city tenements, cars were superfluous. Street- cars were just fine.) But living in suburbia was impossible without cars.
Suburbia (and the spike in consumption that accompanied it) exploded after 1945. Not in the 1930s.
• Roads were built for horses-and-buggies, not cars.
• Down-payments on new homes were too high.
• Suburban jobs and shopping were scarce.
• TV advertising and credit cards weren’t available.
The Great Depression lasted only a decade? It seemed much longer to those living in it, just as will likely be the case from 2010 to 2020.
The socio-economy ending excessive consumption spending, 1960-2020:
Since 1960, repairing the damages of excessive consumption spending has given rise to environmentalists, health-food fanciers, climate change warriors and people dedicated to simple living.
Welcome what we term “Responsible Capitalism,” the rising socio-economy opposing maximum consumption spending and the excesses of the 20th century. Universal health-care signals one approaching victory.
Great Depression II?
Seriously torn by deficits, debts, climate change, infrastructure obsolescence, environmental damages and more, we are slowly but surely abandoning the consumption spending socio-economy.
A new society is creating a brand new economy. But chucking the old and embracing the new will require many years. Historically, it has always taken over two decades for Americans to convince each other that another society—another kind of life—is more rewarding and worthy. Eventually, industries and advertising devoted to the old way of life will be jettisoned, and new attitudes, industries, skills, education and satisfactions will repair damages inflicted by excessive consumption spending.
The favorite policy tool of 20th century economics is now defunct along with much of conventional economics. Reducing taxes to increase consumption spending will no longer work. Policy-makers must recognize that depression is always a total game changer. More than the economy alone, familiar old social rules and attitudes will be largely replaced.
-Jack Lessinger and Ranger Kidwell-Ross
Jack Lessinger is the author of numerous books on socio-economics including his latest, with Ranger Kidwell-Ross, ‘The Great Prosperity of 2020; Fall of What’s in it for Me?; Rise of What’s in it for Us? The book is available at www.socio-economics.com and at www.amazon.com.