The Permanent Low Growth Disconnect

Pundits popped up on Radio 4 this morning to drop passing mentions of the UK’s permanent low growth outlook into their previews of the Autumn Statement.

Their hints bobbed across the breakfast airwaves as we digested the news that George Osborne will have to ‘extend austerity’ for another year to 2018.

I guess many people took away the thought that that means it will take even longer for things to turn round.

But that’s not what they said. When you cut the drug of hope with the talc of the truth lurking in that word ‘permanent’, the actual implication is that things won’t get better at all. Come 2018, we could find ourselves exchanging austerity for something more astringent.

We’re being softened up. The future won’t be the happy, shiny place we allowed ourselves to believe it would be. Or the one ‘they’ promised us if you took the politicians’ mantra of endless growth as a pledge they could somehow deliver.

Writing this at my PC in a warm room, central heating working and electricity flowing, streaming classical music over a 20MB web link, there’s no obvious connection between my blissful life and the bad news on the radio.

But the roll-over from increasing to decreasing net energy is not an abstraction. It’s real and it’s starting to trash the easy economic dogmas of the past 70 years.

UK industry hit by costs and ‘dying’ supply chain” reports today’s Telegraph business section. Yup. Not merely ‘inefficient’ or ‘under-invested’ but on the way to the knacker’s yard.

This is what happens to a highly technology-dependent society when its most important input – cheap fuel – goes away.

Life doesn’t suddenly change. Chaos doesn’t erupt. Hairline cracks appear. Then big ones. And even some of those – like the pensions breakdown – can be papered over for a long time.

But it gets clearer and clearer that we turned a corner five to 10 years ago. “Where’s the demand gone?” muttered one of Radio 4’s pundits this morning. That’s the connection. Welcome to the century of unaffordability.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s