The End of GrowthBook - 2012
In an urgent follow-up to his best-selling Why Your World Is About To Get A Whole Lot Smaller, Jeff Rubin argues that the end of cheap oil means the end of growth. What it will be like to live in a world where growth is over?
Economist and resource analyst Jeff Rubin is certain that the world's governments are getting it wrong. Instead of moving us toward economic recovery, measures being taken around the globe right now are digging us into a deeper hole. Both politicians and economists are missing the fact that the real engine of economic growth has always been cheap, abundant fuel and resources. But that era is over. The end of cheap oil, Rubin argues, signals the end of growth--and the end of easy answers to renewing prosperity.
Rubin's own equation is clear: with China and India sucking up the lion's share of the world's ever more limited resources, the rest of us will have to make do with less. But is this all bad? Can less actually be more? Rubin points out that there is no research to show that people living in countries with hard-charging economies are happier, and plenty of research to show that some of the most contented people on the planet live in places with no-growth or slow-growth GDPs. But it doesn't matter whether it's bad or good, it's the new reality: our world is not only about to get smaller, our day-to-day lives are about to be a whole lot different.
From the critics
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We'll buy fewer things, but we'll also have more time to enjoy our lives. Does anybody really like the rat race? (Pg. 258).
If the objective of climate change policy is to reduce carbon emissions, then that's exactly what's achieved by higher energy prices (Pg. 240)
Neither China nor the United States currently puts a price on carbon, and neither appears likely to make a policy change anytime soon (Pg. 235).
The pace at which our economies grow is far more important to the level of future emissions that any government-mandated carbon reduction schemes (Pg. 233).
Even brutal dictatorial regimes could soon recognize that explosive population growth and food scarcity is an untenable combination (Pg. 226).
Food didn't go to the highest bidder, but to the citizens of the countries in which it was produced (Pg. 218).
Dictators throughout the Arab world have seen how hunger can quickly turn into revolution (Pg. 215).
A crackdown on immigration goes hand in hand with slower economic growth. (Pg. 177)
But those plans don't account for a new world of higher energy costs that will prevent the economy from growing at the pace achieved in the last decade, when it pumped out a steady stream of new jobs every month. (Pg. 176).
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In his second book, Jeff Rubin again makes a strong case that "triple-digit oil prices, record budget deficits and potentially catastrophic levels of carbon in the atmosphere are telling us the same thing: endless economic growth is unsustainable" (Pg. 254). His unconventional approach of explaining the world's economic situation, neither supports the Keynesian school of thought such as those of renowned economists by the likes Paul Krugman nor Laissez-faire ones such as Milton Friedman. Jeff Rubin further states that, "no matter what stimulus measures are put in place, we can't make our economies grow at the rates they used to, because the energy that drives them now costs fives times as much as it did only a decade ago." Despite the relatively low Brent crude oil prices compared to the summer of 2008 prior to Lehman Brothers collapse, it is a strong argument that oil prices are "only a messenger; the real issue is the underlying scarcity they signal" (Pg. 255). As the former Chief Economist of a major Canadian Bank, the author has the right long-term vision of how economies must be reformed. However, in the current unstable state of the world economy, I am more convinced that government stimulus is the proper measure which nations and central banks must implement now as advised by Paul Krugman (End this Depression Now). True, in the long-term spending must be reduced and citizens all over the globe will have to use less energy and rely more on public transportation. The immediate threat to the stability of the world economy can not be underestimated, however. Politicians and central bankers must act immediately as one major central bank finally acknowledged this day on July 5, 2012, by lowering the interest rates. I conclude by referring to a quote from John M. Keynes which Dr. Krugman frequently refers to in the New York Times: "The long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is past the ocean is flat again."
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