As a teenager, I watched with bedazzled wonderment as Alan Greenspan ushered America, head-first and eyes wide open, into an age of market egalitarianism and can-do profitability. The telecom industry and an increasingly powerful information technology sector were rapidly becoming the sinews of what financial pundits were hailing as the New Economy.
Things were to be fundamentally different than they had been, went the mantra; individuals, with their discount stockbrokers, could seize the reins of their own household economies, and American corporations were beginning to do business with Paris, France with the same speed as Paris, Ohio. \Market order,"" ""price-to-earnings ratio"" and ""IPO"" entered the public vernacular.
But for all the deafening brouhaha, far more stayed the same than actually changed.
For all the technological sorcery and for all the teenagers buying small-cap technology stocks from their dorm rooms, America, and the rest of the world with it, remains caught in a dangerous cycle of diminishing marginal returns with respect to resource capture.
What do I mean by this? Perhaps the best explanation would be via the example of the Roman Empire, which faced a similar quandary to our own. In the case of the Romans, expansion became less and less worthwhile until disintegration ultimately became a better option than maintaining a complex society, which is not to say that they did not fight it. As Joseph Tainter explained in his seminal work, The Collapse of Complex Societies, the Romans made the critical mistake that many expansive empires throughout human history have made: They put themselves in the difficult position of paying an increasingly high cost simply to maintain the status quo. After the First Century CE, Rome continued to increase the area under its influence, although the increasingly meager benefits of expansion did not justify the swelling in size.
Though Tainter's theory operated largely within the sphere of physical expansion, it can be profitably applied to the modern American nation, within limits. It is true that the United States is not physically expanding'it has not for years. But the expansion of developed land within our borders, along with the type of economic expansion capitalism seems to demand of us as the status quo, leave us in a similar predicament. In the face of dwindling natural resources, we have been opting, as Tainter said of the Romans, to ""tax the future to pay for the present.""
There is a point where growth becomes a liability.
We are certainly seeing this within the context of world population. Though moving from small, isolated communities to a larger, more connected network of communities stimulates the creation of complex culture, the benefits of complex society which originally necessitated a considerable population begin to wane under an oppressively large one. The high level of culture enjoyed by China, for example, is now threatened by that country's inability to supply enough fresh water to its exploding numbers. Every new attempt at resource capture delivers a decreased return, until drastic measures are required'such as diverting one of the world's largest rivers, the Yangtze, to feed the water-hungry cities of China's north. The environmental costs of such an act for both the present and future of China will likely be both substantial and irreversible.
The point is, I am still waiting for the New Economy. The one we got out of the late '90s carried with it the desperation of putting a pound of Folgers Crystals in a nice bag and calling it Taster's Choice. If post-modern economists want a truly New Economy, it will, in itself, need to be the vehicle of a fresh value system, not just a new way of doing the wrong thing better. It will need to make the distinction between a deliverable supply and a sustainable one, with a clear preference for the latter. And it will need to help us see ourselves as citizens with a limited power to consume, not as consumers with the limited power to vote.
As it stands, the implications of our current resource-capture dilemma seem to go so far over the heads of the economically minded technocrats in Washington that they might as well move to Jamaica and be limbo dancers, as Rowan Atkinson would say.
Because at this stage, a few new technological toys are not gonna cut it. After all, as the saying goes, he who dies with the most toys'still dies.
