The End Of Economic Growth

Via ZeroHedge:

global_economic_growth

I argue periodically that the current global slump/recession/depression is one consequence of the tidal wave of smoking bans that swept around the world over the past decade or two. The effect of these bans is to evict smokers from bars and restaurants and any number of other venues – theatres, cinemas, etc. And the effect of this eviction is that the smokers spend less money in these places, and also less money on transport to and from these places, and less money on the clothes and shoes to wear there, and less money on deodorants and aftershave (or lipstick and eyeliner). And since smokers comprise some 20% of the population of the Western world, and even more elsewhere, that’s a lot of lost customers, and not just for bars and cafes. And since smoking bans are always being extended to parks and beaches and the streets near schools and hospitals, the extent of eviction (and loss of custom) is always growing.

But no economist ever seems to put forward this argument. Most economists seem to think that if people have got money, they’ll automatically spend it on something. And if they can’t spend it on one thing, they’ll spend it on something else. So if you can’t buy roast beef and Yorkshire pudding in some restaurant, you’ll happily settle for Peking duck and noodles. They never seem to consider the customer who sits down at a table and studies the menu and decides that he doesn’t want to eat anything on it, and so just gets up and leaves. For when I go shopping, I usually have some list of things to buy. And if I can’t find them, I don’t usually buy something else instead. So if I go into a hardware store looking for a hammer, but can’t find one, I won’t buy a screwdriver or a drill or a bag of nails instead: I’ll just turn round and walk out.

It’s the same with smoking. As a smoker, I want to be able to sit down somewhere with a beer and a cigarette, and maybe read a newspaper or talk to somebody about how bad the weather is. It’s what I want, just like I wanted the hammer or the roast beef and Yorkshire pudding. And if I can’t get what I want, I won’t buy. The chair and table and beer and cigarette and newspaper and talkative acquaintance are a complete package, and if any of them are absent, I won’t buy. Just like I won’t buy roast beef if they’re out of Yorkshire pudding or roast potatoes or boiled carrots, or because there’s a potato and carrot ban. Or I won’t buy a house that’s got walls and roof and doors, but no windows. Windows are part of the package of things that come under the umbrella name of “house”. If it’s got no windows, I won’t buy it. I’ll go looking for a house that has got windows.

But the economists seem to think that when I check my wallet, all I see inside it is money to burn, and if I’ve got £50 in my wallet I’ll just head straight into town and blow the whole lot on anything I can lay my hands on. But it’s not like that. I spend my money very carefully. I’ll weigh up whether I really want to buy two expensive Dartington glass tumblers, or whether the money would be better spent elsewhere, or put back under the mattress.

Lots of people borrow money. They borrow money from banks, and pay it back later with interest added. These days interest rates have fallen to near zero. It’s very cheap to borrow money these days, and people ought to be borrowing lots of this cheap money, but they’re not. People aren’t spending money. And I suspect that the reason they’re not spending is because there isn’t much they want to buy. The shops may be full of all sorts of things, but there’s nothing that they actually want to buy. The banks can lower their interest rates to zero (or even set them negative, and pay people to borrow money), and people still won’t spend money on things they don’t want to buy. In my case I want to buy the table and chair and beer and cigarettes package, but they’re no longer on sale. Even if interest rates go negative, I still won’t start buying what I don’t want to own.

We have a situation right now, it seems to me, where on the one hand we’re being encouraged by low interest rates to borrow and spend money, but on the other hand we’re being dissuaded or prevented from buying what we actually want.

And it’s not just smokers who are being cajoled and bullied and banned from buying what they want. The global anti-smoking campaign is just one of countless anti-something campaigns. For there’s also anti-alcohol campaigns, anti-food campaigns, anti-sugar campaigns, anti-salt campaigns, anti-obesity campaigns, anti-car campaigns, anti-hunting campaigns, anti-gun campaigns, anti-coal campaigns, anti-nuclear campaigns, anti-war campaigns, anti-carbon dioxide campaigns, anti-whaling campaigns, anti-seal hunting campaigns. Name more or less anything, and there’ll be some organisation campaigning to ban it, usually with a government grant to do so. And a great many people now live in a chronic state of guilt about eating too much, smoking too much, drinking too much, travelling too far, owning too much.  They’re being told every day to stop spending on more or less everything. And if they’re made to feel guilty enough, they won’t actually need to be banned by law from doing things because they’ll ban themselves from doing it anyway.

There’s now an ubiquitous, global, anti-consumerist movement of which the antismoking movement is just one very small cog. Its devotees are anti-everything. They’re anti-industry, anti-trade, anti-growth, and above all anti-human. If they have any discernible goal, it seems to be a wish to return the whole Earth to being a green planet inhabited only by plants and animals, completely devoid of human life. Human life is now seen as a plague, economic growth as a disease. Guardian columnist George Monbiot, writing in October 2007 (shortly after the UK smoking ban was introduced), Bring on the Recession:

Is it not time to recognise that we have reached the promised land, and should seek to stay there? Why would we want to leave this place in order to explore the blackened wastes of consumer frenzy followed by ecological collapse? Surely the rational policy for the governments of the rich world is now to keep growth rates as close to zero as possible?

The governments of the rich world would seem to have been taking Monbiot’s advice to the letter for the past 9 years.

I imagine that Save The Whales is probably now just another taxpayer-funded, environmentalist political organisation like Friends of the Earth or Greenpeace. But here’s some people in a small boat actually saving a whale.

About Frank Davis

smoker
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20 Responses to The End Of Economic Growth

  1. Spot on as always Frank.

  2. Richard Joyce says:

    Yes – good post. I do wonder if anyone can explain the advantages of the 2007 smoking ban?

  3. Clicky says:

  4. Some other Tom says:

    Exactly – and it applies to smoking bans directly; supply and demand is the crux of any economy. Where there is a demand and a supply, there is a price point. Social engineering (fascism, socialism, et al) seeks to change demand by limiting, altering, or changing supply or the terms of some desired service, or the price via taxes or laws limiting the terms of it. It presupposes that what people – individuals – decide is completely superfluous and mutable, which it isn’t the case at all. It is why I think Trump is so popular, as was Brexit; many people are beginning to realize they don’t have to eat shit sandwiches while being told it is caviar. They are waking up to basic human nature to be revolted over being controlled and defined and told what to enjoy…

  5. waltc says:

    OT sort of: Here’s one way Ezekiel Emanuel , a prime author of Obamacare, would plan to fix it in the next administration–

    “…there are important public-health measures that should be implemented to improve America’s wellbeing. While smoking has dramatically declined in the last 50 years, 18 percent of adult Americans still smoke. A 50-cent per cigarette package tobacco tax would lower smoking rates among teenagers and young adults by 4-5 percent. This would have enduring benefits, because if someone does not start to smoke by age 21, they are unlikely ever to smoke. This modest tax would also have substantial, long-term health savings resulting from lower rates of COPD, lung cancer, heart disease, and other outcomes associated with smoking. These savings could then be used to support the Nurse-Family Partnership for Medicaid mothers, as mentioned above.” iOW, tax existing adult American smokers to benefit the indigent pregnant.

    http://www.realclearpolicy.com/articles/2016/10/24/our_next_administrations_health-care_agenda.html

    • //This would have enduring benefits, because if someone does not start to smoke by age 21, they are unlikely ever to smoke. //

      There’s a catch here. This number is an outlier.

      It totally depends on personal choice and socio-economic factor.

      And, people turn smokers, especially the males, when they cross age of 30, as that’s the age when men start to get to see the real word, they are grown up adults now, so cannot even take help from others, cannot even talk about their plights? So how to spend time with such stress.

      I think everyone knows the answer.

  6. Lepercolonist says:

    The economists tell us that we are in a post industrial/manufacturing economy. We must adapt to the new service economy. A major area of the service economy is the hospitality sector. This is where the smoking ban is a big drain on their projected revenues. We have lost 6 million manufacturing jobs in the US for last 15 years. Those revenues will never be actualized with this draconian smoking ban.

  7. garyk30 says:

    Consumer spending is only about 7% of the USA GDP.

    There are far more serious problems than less consumer spending!

  8. Rose says:

    You know, I think that all these behavioural change campaigns are beginning to work on me.
    I just gave some fresh faced, door to door, young cancer charity collectors, who wanted to sign me up for a monthly donation, a quick lecture on the Nicotine Content of Common Vegetables, charity call centres and “denormalisation” using BHF as an example.
    http://web.archive.org/web/20130301044414/http://www.bhf.org.uk/media/news-from-the-bhf/no-smoking-day1.aspx

    I could have just said no.

  9. slugbop007 says:

    It might be a good idea to no longer respond to any TC sponsored polls. We the people should create our own polls with our own questions.

    slugbop007

  10. smokingscot says:

    Trouble with the UK is we had an Empire, so we could supply all these far flung places with British cars, motorcycles, trains, rolling stock, ships and – later – aircraft. We used to have an industrial base that was way out of proportion to our own needs.

    As that withered we never got our act together to compete, so bye-bye ship building and Jowett and Armstrong Siddeley and so on. Same with our motorcycles.

    Then came the oil shock at the end of 1973 and that’s when the developed world started pouring vast amounts into the coffers of the oil producers. Funnily enough it was in 1973 that we signed up to join the EEC – and of course we became a net contributor to that lot as well, so we helped build the roads and infrastructure in Southern Europe, Spain in particular.

    As others have pointed out, we’re mad keen to be seeing to do our bit with contributions to the UN, WHO, Nato and so forth, as well as the £12.2 billion we gave away in overseas aid last year.

    theweek.co.uk/63394/where-exactly-does-britains-122bn-foreign-aid-go

    Now the focus has shifted to the Far East. Japan did real well with an under valued currency for many years. They got nailed years back and now China’s doing the same thing.

    What I like about China is they’re investing heavily while they can. They’re huge in Africa with absolutely no interest in politics, nor human rights. Just trade and money. Jolly nice tram they built in Addis Ababa.

    theguardian.com/public-leaders-network/2015/sep/22/new-tram-chinese-addis-ababa-ethiopia-uk-councils

    Arguably far better than the slow, ponderous thing we have in Edinburgh.

    And hey, what about a railway from Addis to Djibouti? Done.

    bbc.com/news/world-africa-37562177

    660 kms is 412 miles. (Edinburgh to London is 414 miles).

    But best of all is their belt and road project. That is truly impressive already.

    “more than 70 countries and international organisations are participating in the construction of the Belt and Road.”

    Something the EU – and us – could learn from. Don’t change them, bribe them!

    china.org.cn/china/Off_the_Wire/2016-06/24/content_38741620.htm

    Hope this one comes up. It shows very clearly the effect of the Scottish smoking ban, but the English one is obscured by the financial crisis. After each shock we recover, but always at a lower level.

    Donald T, quite rightly, has made an issue of the drag these supranational organisations have on the American economy, as well as crap trade deals. Tess will be aware of this too and really needs to get shot of much of the baggage we’ve acquired, frequently via unaccountable bureaucrats.

  11. Pingback: Kitty Syncs A Fishy… – Library of Libraries

  12. Reinhold says:

    Translated this (for the most part) into German in https://www.facebook.com/groups/NetzwerkRauchen/
    and eventually it will also appear on http://www.netzwerk-rauchen.de/frank-davis-auf-deutsch.html

  13. If calculated properly, food costs more than tobacco. But no one calls the banishment for food. Even in India, we have to eat what we get in stores and streets, which is labelled as food.

    • Frank Davis says:

      Wonderful to have someone from India commenting. I get British, Americans, Europeans, Australians, Canadians, Kiwis, Russians, Brazilians. Now I can add Indians. (So far no Chinese).

      • /Most economists seem to think that if people have got money, they’ll automatically spend it on something//

        This was the part of conspiracy. To make sure that certain corporations gain profits. If we see, only handful of corporations are rich.

        I can’t understand the ban on smoking. I believe, that it is the most in-expensive thing which one can do. Culinary items are so costly, mcdonalds and other malls don’t care, but people spend and waste more money on food, which, I think are causing more harm to everyone. Unfortunately, in this era, things have been designed in this manner.

        People spend mindlessly, actually.

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