Too Much

Interesting story in the NY Times today about the latest buzzword in Chinese economics: involution. Involution, neijuan in Mandarin, is an old word for a sort of doom loop created by the failure of an economy or society to reform itself, with bad outputs serving as bad inputs for a system that therefore gets ever worse.

The problem? Too many companies making too much stuff:

Competition in China is often far more cutthroat than in the United States. America has a handful of carmakers; China has more than 100 electric vehicle makers struggling for market share. China has so many solar panel makers that they produce 50 percent more than global demand. About 100 Chinese lithium battery producers churn out 25 percent more batteries than anyone wants to buy. This forces Chinese manufacturers to innovate, but it also leads to price wars, losses and bad debt — and that’s becoming a problem.

I think about this all the time in the context of global trade competition. Economists like to talk about competitive advantage, but it seems to me that advanced economies all want to make the same stuff – cars, electronic gadgets, computers, airplanes – and we regularly run into problems because we could easily make more of any of them than anybody could buy. One constant theme in trade disputes is accusations of "dumping," that is, nations selling products for less than they cost to make so as to keep their own assembly lines humming. That this is not just a myth is proved by China's current crisis. Many manufacturers are selling at a loss, with the financial shortfall made up by bank loans and government subsidies to a degree that makes people worry about a collapse. 

There is so much clothing in the world that the number of times a garment is worn keeps falling, and Africa's textile industry has been wrecked by donated foreign clothes.

I recently read an interesting piece about global shipbuilding which argued that only three countries bother to build ships any more (Japan, Korea, China) because shipbuilding requires enormous capital investment but earns essentially no money.

George Orwell saw this coming, and he imagined that his future mega-states would fight unending but carefully controlled wars against each other to soak up the productive surplus.

And it isn't just goods; there also seems to be more money in the world than anybody knows what to do with. All the western states have enormous debts, but there is never any shortage of buyers for government bonds. Twenty-five years ago when the US flirted with running a surplus, there were people worrying that this might be economically harmful, given the vital role of US bonds in the world financial system. (Thank God for W and his plan to wage war, cut taxes and expand Medicare at the same time.) It baffles me that we just pased a Big, Beautiful budget that vastly expands our debt, and nothing happened. Compared to the titanic flows of money in the world, an extra trillion or two seems to make very little difference.

Yet, somehow, we feel poor. 

Yes, I know there are billions of poor people in the world. Some of the mountains of money generated by our global capitalist technocratic bureaucratic consumerist system has trickled down to them, leading to a great reduction in the number of truly immiserated people. And that's great. But those of us who were never in any danger of starving keep getting more and more and feeling no better for it. No matter how many times economists point out that we are far richer than our ancestors, now matter how many charts and graphs they produce showing that even people in the bottom 10% are getting richer, many people refuse to believe it. They insist that their generation has it harder than any before, that things used to be better in the 1970s or 1950s or 1890s.

This worries me, because I no longer believe that our dissatisfaction is about economics, or about constraints on our freedom. I say this, not because things are perfect now, but because we are unquestionably wealthier and more free than anybody ever was before, and yet seem to be no happier and may actually be worse off. The line ought to be pointing up, but it does not.

It seems to me that 1) we are fundamentally unsatisfied in a way that no amount of material wealth can touch, and 2) although the causes of this seem to me to be in ourselves, we insist on blaming outside forces, either economic or political, which leads to awful politics and a weird determination to throw away our amazing world because it just is not good enough.

And this might be on the verge of getting much worse, if AI lives up to its promise of both making our economies more productive and taking away much of our work.

There are strange spiritual longings in the air that manifest in peculiar ways: the Occupy movement, the explosion of wokeness, weird militias whose stated goal is to cause a chaotic civil war because even that seems better than our current situation. The Trump Prophecy.

This is not new; I would say it goes back at least to Roman Palestine. In the nineteenth-century some parts of America were referred to as the "burned over districts" because they had thrown themselves into wave after wave of religious revivalism. Some peopel sense another wave of religious enthusiasm mounting in America right now, but I can't see it going far enough to change our national mood.

I don't know what is coming, but it worries me more than ever before in my life.