In the money economy, some $45 trillion in measured assets and pensions has been “lost”, compared with a $70 trillion global aggregate of GDP.
Chinese leaders question the wisdom and security of buying dollars, likely fearing a Madoff-style Ponzi scheme by the over-leveraged, currency-printing Western treasuries.
Trillions of casino dollars of bonus-geared credit derivatives continue to spill out, landing on hapless Icelandic, Irish, Scottish and American financial institutions.
Meanwhile, in the product consumption economy, retailers struggle, inventories are bulging, manufacturing has slumped (China reporting a 25 per cent export drop in February), a third of the world’s shipping fleet is laid up, and resources which peaked last summer now languish at 20 to 30 per cent off those lofty, inflated peaks (e.g. our nickel metal buying is now around $12k a tonne vs $52k at peak).
If the recent decades of growth were based on an illusion, it is clear that new ideas and directions are required to get us out of this mess.
This means encouraging innovations, new ideas, industries that have a future.
Our continued use of fossil fuels is a fine example of where we are going wrong. Look at the oil price hike last year – that was a dress rehearsal for the inevitable reality that will be ‘peak oil’. It’s a concept popularised by Jeremy Leggett, chairman of renewable energy concern Solar Century (named entrepreneur of the year at the Rosenblatt New Energy Awards last month), which simply predicts soaring prices when cheap oil ends. As each year passes, the case for clean energy gets stronger and, as far as climate change is concerned, ever more urgent.
In Europe, Germany is leading the way in showing what a proper green strategy can achieve. Between 2001 and 2006, the government invested over Euro3.5 billion in retrofitting apartments with energy efficient technologies. This investment also utilised more than Euro15 billion of private money and created 140,000 jobs. The sooner other countries see the sense in this kind of approach, the better.
What we are seeing is the collapse of old industry models and economic structures. We are undergoing a transition from capitalism to “carbonism” – the recognition that neither the industrialised labour that underpinned the 19th century, or the global movement of capital that defined the 20th century, are suitable going forward.
It is the control and efficient use of carbon that will define true wealth in the 21st century, creating opportunities for growth not just in how we work or how we consume, but in how – and if – we are to live.
In other words, it will be a green new deal or no deal at all for businesses seeking survival or growth.