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For something like the last twenty-five years, huge numbers of the world’s citizens – we talk of them as consumers – have lived in an economic environment of low interest rates. Their governments have kept interest rates low to encourage consumers to borrow and then to spend, because in economies that have moved strongly towards services, consumer spending is important.
With China rising as a low-cost manufacturing centre at the same time, those same consumers were encouraged to lose their sense of value and buy more of everything, use it promptly and then replace it. Easy borrowing, thoughtless purchasing and careless disposal became the norm. Add in a few pills for anxiety, as deep down we knew this formula could not last.
Despite the underlying unreality of this impossible way of life, which study after study tells us is terminally damaging to biodiversity, nature, climate, humanity and the planet we inhabit, it seems set to continue for a while yet. All the major signs suggest a rise in interest rates is due, but consumer and investor behaviour remains stuck in the belief that there will be no change for a further few years.
Similarly, we continue to be reminded of the dot-com boom as companies with no prospect of being profitable get valued at billions of dollars. Uber is the latest. “We expect our operating expenses to increase significantly in the foreseeable future, and we may not achieve profitability.” Its prospective hides these unsatisfactory finances behind a long-term view of the transport industry. Meanwhile, it uses its cash flow to subsidise predatory pricing, and in so doing drives the historic system out of business. The traditional taxi business in most of the world badly needed disrupting, as the passenger came last, and the Uber service has been a revelation; but is this a proper way for business to evolve?
While what Uber thinks about the future of transport is actually useful, given its understanding of both the digital and the urban development impacting us all, that does not make using huge amounts of borrowed cash to bully the marketplace to create a monopoly position right. Nor is overconsumption and waste a justifiable lifestyle, one made worse by the rush to excessive use and careless disposal of plastic containing material in recent years, like so many of the fakes that misuse the term leather to deceive the consumer.
All these things will inevitably change. It is a matter of time. At the end of the day our societies around the world will realise that life is better, the levels of anxiety and depression less, if you save in order to spend, buy fewer things and spend your money on better quality. And better to buy bio-based materials that are durable, as well as beautiful, like leather. Especially if they are designed into articles worth caring for; articles worth having repaired – then we might be in time to stop the damage to the world that everyone is talking about.
Dr Mike Redwood
May 8, 2019
Follow Dr Mike Redwood on twitter: @michaelredwood
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