First, I think few people understand how rapidly government revenue capability is going to slump, how hard it’s going to be to cope with that, and how angry a lot of people are going to be about the necessary responses.
At constant 2020 values, revenue is likely to be about £810bn this year. On a trend basis, using consensus numbers, this would rise to just under £1,000bn by 2030. SEEDS puts the out-turn for 2030 at £812bn. That includes taxing a lot of things that are untaxed or low-taxed at the moment. Trend expenditures (excluding debt interest) are about £1,050 in 2030. That implies the need to cut spending by at least 20%.
Then there’s discretionary consumption. This is going to collapse, even on the assumption that annual investment is trimmed to the bone (and what does that do to RE investment?)
Third, the UK is important-dependent, not least for energy, components and a sizeable part of food supplies, and also has substantial financial commitments in other currencies. Britain cannot afford a currency crash. This implies rates far higher than anything yet being discussed. The UK economy has been driven by credit expansion, and by over-inflated (and rising) property prices. Neither of these motors can survive sharp rises in rates or, for that matter, enormous compression of affordability.
If we stood up in Hyde Park and outlined even some of the necessary response measures, we’d probably be lynched.
In short, the situation is turning so bad so quickly that nobody really has any idea of what lies ahead.
I would add that, whilst I’m no fan of Mr Johnson – or for that matter of Mr Starmer – I wouldn’t want to be in the position that the PM and his ministers face in the next few years, in which I include 2022.
A report, Soil health: a national security profile, launched today by the Food & Global Security Network, calls on ministers to formally recognise healthy soil as a strategic asset, critical for maintaining food and societal security. It says that defence departments globally should work with departments for agriculture and the environment to jointly oversee delivery of increased food sovereignty within nations and the regeneration of soil function. In the UK, the Ministry of Defence should work with Defra.
Ffinlo Costain, chief executive of Farmwel and founder of the Food & Global Security Network, said, ‘The right to affordable nutrition underpins peace and civil stability, but the impacts of climate disruption and biodiversity loss are already affecting food production. If we see a 2C rise in global temperatures, which now seems increasingly likely, we could experience extreme disruption in global food supplies. When food is scarce, prices rise, inequality increases and simmering resentments can turn rapidly into conflict and even war. Healthy soil and a balanced ecosystem are critical for food sovereignty and a peaceful society.’
Soil health: a national security profile was published by the Food & Global Security Network, a project of Farmwel, supported by FAI Farms. The report profiles the critical importance of soil health through the independent writings of 22 experts – military minds, NGO leaders, scientists and practical farmers. Writers include Rear Admiral Neil Morisetti (the UK’s former Climate and Energy Security Envoy), Patrick Holden, Øistein Thorsen, Sue Pritchard, Martin Lines, Walter Jehne, Reginaldo Haslett-Marroquin and George Young.
Global security is maintained by taking steps to mitigate future threats. Now, in addition to traditional state-on-state or intra-state threats, we face non-traditional threats, the most important of which can be characterised as ‘ecological breakdown’. The extreme weather events associated with global warming, coupled with the loss of biodiversity and soil structure, could have devastating impacts on harvests around the world. While food scarcity is a recognised accelerant of instability, it is soil biodiversity in particular that is critical in minimising and mitigating this risk.
Ffinlo Costain said, ‘We urge governments and food businesses to take the security risks associated with soil degradation and ecological breakdown extremely seriously. We see agroecology as a low risk and low cost solution that can mitigate the security threats connected with poor soil health. With COP26 in sight, agroecology and regenerative farming can produce great food locally and at scale, while greatly accelerating carbon drawdown, regenerating biodiversity, and managing precipitation to provide greater drought resilience and better flood protection.’
“All forms of economic output – literally all of the goods and services which comprise the ‘real’ economy – are products of energy.
Nothing of any economic value or utility can be supplied without using energy. Energy can be defined as ‘a capacity for work’ and, historically, everything that we wanted or needed was produced using the labour (work) of humans and animals, plus some early application of the power of wind and water. That changed from the late 1700s when we learned how to deploy the vast reserves of energy contained in fossil fuel (FF) deposits of coal, oil and natural gas”.
The real economy is the foundation on which all kinds of social constructs are built. Constructs that may or may not accord with the real economy.
A future of “Business as usual” is totally out of kilter with the real economy. As is everything that is said about a future based on the growth paradigm.
The real economy is evolving in ways hardly affected by any kind of construct. Constructs created out of the imaginations of politicians, social scientists, bureaucrats, and other dreamers.
Yet those who create these constructs deny that they are peddling a virtual world. And there is no way to convince them of this.
Which is not surprising when you understand how things are.
The reality is that we are now in an era of degrowth to a smaller economy and declining prosperity.
It is too late to stop global warming.
It makes sense to prepare ourselves as individuals, families, and organisations for what is to come.
The real economy of de-growth is heading in the following direction:
Spending on essentials is becoming more expensive, and less affordable. Spending seen now by some to be essential will become discretionary. Such as whole-house heating. What future for heat pumps?
Discretionary spending and related markets will continue to decline. Don’t be a chef.
The economy will shrink. City centre big business will be replaced by The eventual end of supermarkets. No need for HGVs or HS2.
The consumer-based economy will disappear. Economic growth will be replaced by familial and social development. As I remember the 1950s.
Top-down public sector-funded services, such as the NHS, will be replaced by indigenous ways of doing things. This is already happening. People are becoming fed up with what little the GPs have to offer.
The economy will be smaller. A fundamental change.
The easiest to understand in today’s mindset is that the economy will be smaller. Not just smaller than now, but getting smaller for the foreseeable future.
Those old enough to remember living in the 1950s and 60s, when the economy was much smaller may rather like the idea. It was before mindless consumer-led growth got going. When today’s discretionary markets and spending hardly existed, Government-funded so-called “National Restaurants” were the only places to eat out – if you could bear tasteless mince of dubious origin. You could get to almost anywhere by train.
The big difference I now realise was how slow daily life was. Slow busyness.
We are on a journey. No need to plan it. We will get taken by the evolving real economy. But we don’t yet know how fast the economy will shrink. It will probably depend on how the Government reacts when it realises what is happening.
Since writing this I have been made aware of the Seneca cliff which, if it turns out to be the shape of the shrinkage, will be more of a problem on our journey into the future.
This is from the long-established Institute for the Future
Welcome to IFTF’s inaugural
Equitable Enterprise Initiative newsletter!
Join us today to continue to receive updates.
We are witnessing a historic transformation in the nature of work and organization of labor worldwide. Some compare this transformation to anthropogenic climate change but with less visibility. Put simply, work is no longer the means to distribute prosperity and ensure dignity and economic security for millions of people in the United States and around the world.
Many believe that inequalities are growing because of automation and the rise of platforms that power on-demand work. Technologies can and do re-shape work in multiple ways—change the content of work, how we access work, how we get paid, who controls our work, etc. But technologies are not the full story. Many factors—including power dynamics, cultural norms, government policies, and capital flows—influence how technologies are being deployed, who owns them, and how they impact society. This means that we have agency to harness new technologies and platforms to achieve more equitable outcomes.
In other words, this is a perfect futures moment for work, labor, and organizations. It is a moment for us to take stock of what is happening and to take action towards ensuring that the future of work is equitable.
This is why, with the support of the Conrad Hilton Foundation, the W.K. Kellogg Foundation, The James Irvine Foundation, and the Robert Wood Johnson Foundation, IFTF has launched the Equitable Enterprise Initiative. We envision the Initiative to serve as a hub for research, scenario building, public engagement, and policy innovations aimed at shaping the new curve of work. By equitable enterprise we mean forms of organizing business activities and value creation in ways that distribute the social and economic benefits of such activities broadly, not just to investors but to those who contribute to them and the larger communities in which they operate.
In short, we want to retire Milton Friedman’s pronouncement that the only social responsibility of business is to create value for shareholders and instead shape the new curve of work based on the belief that the only social responsibility of business is to maximize community wellbeing and the equitable distribution of economic returns from its activities.
Rewilding Britain believes that a new and thriving ecosystem of employment can be built around the restoration and rewilding of nature. We propose the creation of localised Nature-Based Economies across 30% of Britain by 2030. We would like to see each Nature-Based Economy supporting a diversified, resilient and just economic transition alongside the large-scale restoration and rewilding of nature.
OUR REPORT DEMONSTRATES:
The people-led approach we propose can help rewild and restore nature while invigorating a much-needed economic transformation of rural and coastal communities.
Across a number of economic sectors we provide examples from real businesses to show how investing in nature and nature-based businesses can help us transition to a low carbon future while delivering real social and economic benefits today.
Rewilding Britain is calling for the UK and devolved governments to invest in new thinking and joined-up action to unleash the extraordinary potential of Nature-Based Economies.
WE ARE ASKING THEM TO:
Incentivise the creation of Nature-Based Economies across at least 30% of Britain’s land and seas, including core rewilding and regenerative areas, as part of a green recovery.
Integrate Nature-Based Economies within the upcoming Nature Green Paper, outlining how we plan to meet our target to protect 30% of Britain’s land and sea for nature’s recovery by 2030.
Mandate all National Park Authorities, Protected Area and Marine Management Organisations to create locally-led Nature-Based Economies, leading the way with at least 10% core rewilding areas.
Support the creation of integrated local land and marine use plans linked to the development of Nature-Based Economies that are shaped by local communities and led by trusted anchor institutions.
Mandate relevant authorities – e.g. local councils, NPAs, Local Nature and Land Use Partnerships, forestry agencies – to back the development of locally-led Nature-Based Economies.
Enhance localised decision-making by diversifying public, private and community ownership models within Nature-Based Economies, for example through extending Scotland’s Community Right to Buy to England and Wales.
Re-orientate a significant amount of public funding towards the establishment of Nature-Based Economies, especially for core rewilding areas.
Encourage equivalent increases in private capital investment focused on integrated business models which deliver nature’s recovery alongside thriving local communities.
Develop locally-driven public investment vehicles which provide concessionary finance to small and medium nature-based enterprises and reinvest the returns in new projects.
Empower local anchor institutions to attract and coordinate significant inward investment and ensure that benefits accrue to the local economy.
Establish integrated regulatory processes and practices that support the development and implementation of Nature-Based Economies in alignment with local land and marine use plans.
Re-orientate public innovation funding towards the establishment of Nature-Based Economies to support nature’s restoration and place rural and coastal communities at the forefront of a just economic transition.
Establish ‘nature-based enterprise zones’ with associated packages of support for nature-based businesses aligned to locally determine land/marine use plans.
Integrate other innovation support mechanisms within Nature-Based Economies such as ensuring adequate investment in internet connectivity and local infrastructure.
A foreboding sense of climate chaos, societal breakdown, and economic and ecological “doom” is now widespread. Acknowledging our predicament and working through the stages of grief takes one only to the midpoint: acceptance. What lies beyond? Michael Dowd (with occasional co-hosts) invites 75 guests to share their personal journeys along this trajectory and especially the gifts they have found on the other side of the postdoom doorway. (List of questions below.)