The Price of Growth
In my quest to understand and practice the discipline of simplicity, I face no greater challenge than the prevailing mindset of my American culture. Its god is progress; its prophets, television and the Internet; its hymns, commercial jingles; its temples, stores. Its proverbs include “growth is always good,” “more is better,” “enough is just a word,” and “do what moves you.”
What I have been reading and seeing lately reveals the utter arrogance and self-centeredness of such a mindset. Whether any of the predictions about the sustainability of our lifestyle come true, life as we have known it will probably change a great deal. We will probably never see gas for less than two dollars again. Food prices will probably continue to rise as well. And the demand of those and other goods from ascendant countries around the world will increase, too.
I am not, by nature, a pessimist, but the perfect storm generated by these and other factors will almost certainly have the economic strength of a Hurricane Katrina, which is to say catastrophic strength. Former Comptroller General David Walker seems to add fuel to the fire as he identifies the “sustainability challenges” facing the US.
The “growth as savior” crowd, as Walker notes at the end of the segment, say that America can grow its way out of these challenges–perhaps any challenge. Ever optimistic, these people see an endless supply of, well, virtually everything America needs to grow at record rates. The reality is probably much different. The American experiment seems to walk a knife’s edge: any unexpected event might prove devastating. And growth of any kind, much less the kind of growth necessary to sustain our way of life, may be a pipe dream.
Rising prices might prove just the sort of event, gradual enough to be ignored until it’s upon us, that could tip the balance. And the funny thing is, the news is gaining traction. Mr. Walker resigned in March to become CEO of the newly formed Peterson* Foundation, whose stated mission is “to enhance public understanding of the nature and urgency of selected key sustainability challenges that threaten America’s future, to propose sensible and workable solutions to address these challenges and to build public will to do something about them.” What I used to read in more “radical” publications, I’m now reading in mainstream ones. This from the Wall Street Journal last week:
[T]he most recent government data shows food inflation for the average American household is now running at 4.5% a year.
And some prices are rising even more quickly. The latest data show cereal prices rising by more than 8% a year. Both flour and rice are up more than 13%. Milk, cheese, bananas and even peanut butter: They’re all up by more than 10%. Eggs have rocketed up 30% in a year. Ground beef prices are up 4.8% and chicken by 5.4%.
These are trends that have been in place for some time.
And if you are hoping they will pass, here’s the bad news: They may actually accelerate.
The reason? The prices of many underlying raw materials have risen much more quickly still. Wheat prices, for example, have roughly tripled in the past three years.
Sooner or later, the food companies are going to have to pass those costs on. Kraft saw its raw material costs soar by about $1.25 billion last year, squeezing profit margins. The company recently warned that higher prices are here to stay. Last month the chief executive of General Mills, Kendall Powell, made a similar point.
The main reason for rising prices, of course, is the surge in demand from China and India. Hundreds of millions of people are joining the middle class each year, and that means they want to eat more and better food.(emphasis mine)
That last statement is significant, since it represents the fruit of the most successful US export: the American dream and the worship of progress. The growth of the middle class in China and India is resulting not only in the desire for more and better food, but also in the desire to own a car.
J.D. Power and Associates calculates that four-fifths of all new cars sold in China are bought by people who have never bought a car - not even a used car. The number has remained at that level for each of the past four years.
By contrast, less than a tenth of new cars in the United States are purchased by people who have never bought a new car before, and less than 1 percent of all new cars are sold to people who have never bought a new or used car.
What will those brand-new cars require? Fuel. And since the biggest growth sector of car sales is SUVs and luxury cars, they’re going to need a lot of it. And since the Chinese government controls the price of gasoline, new car owners will be able to afford their fuel bills.
I don’t know what all this will mean, but I know what it means for us. People who know me have heard me say, “God gave us brains.” By that, I mean that God gives us the reason to make decisions in the light of his grace and his Word. And for our family, we will continue to pay down our debt and simplify our life. I believe we can trust the Lord to care for his people. I also believe that his dealings with his people reveal that when they said, “We can handle this,” God often responded by saying, “Okay.” In trusting themselves and their idols more than they trusted him, they invited, shall we say, undesirable results. Sadly, we (and I say we advisedly) seem to walk the same road: more and more unable to ignore our impulses–impulses to spend, to acquire, to believe that unrestrained growth is always good. We don’t realize it, but we are really agreeing with Gordon Gecko’s legendary pronouncement in Wall Street: “Greed is good.”