The Future of the World Economy is Perma-Crisis


These Aren’t Shortages —

They’re the Beginning of the Longest, Hardest Economic Collapse in History
by umair haque


Sshh, don’t tell anyone. In my other life, I’m a musician. I’m lucky enough to be working with a vocalist who many of you’ve probably heard of. Her voice is magic. It’ll give you goosebumps and chills when she sings. After a few songs together, I scratched my head. Nothing I could do in the computer, in the studio, could improve that magical voice. So we thought: what we should do was buy a really good microphone and amplifiers that suited this set of songs especially. Off I went — and little did I know.
I looked, and looked, and looked. Sold out — everywhere. Not one to be found. They hadn’t made any for three months, six months. ETA? Nobody could say. I scratched my head again. Now what? Meanwhile, outside her house, in London, people were “brawling” — that’s polite British-speak for “rioting” — over gas.
That’s a tiny slice of life right about now. What’s it made of? Shortages. Here are just a few of the things — simple things — I’ve tried to buy. Sorry, no luck. A desk — lumber’s in short supply. Electronics — chips are famously in shortage. A car — good luck with that. Some basic studio stuff — an amplifier. Who knows when they’re even going to resume production?
It’s not just me, because it can’t be. Shortages are so widespread now that, like I said, they’re “brawling” in London over gas. Meanwhile, they can’t get milk, vials for blood tests. There’s talk of energy shortages this winter. In America, it’s cars and gadgets and computers.
Suddenly, things have changed. It’s not the same anymore. Welcome to the End of the Age of Cheap Stuff.
It’s a theme I’ve discussed before. And when I brought it up before, I think there was a little skepticism. But by now, it should be painfully clear. Things aren’t getting better. They’re getting worse. More goods are going into severe shortage now — and those shortages don’t seem to have any solution on the horizon. Why is that?
Because this really is the end of an era. We’re used to lives of cheap, thoughtless abundance — at least those of us in the rich world. If we want something, we just…go to the store and buy it. But now it’s not like that. You’re beginning to be lucky to be able to get stuff, even if you need it. That is how it’s going to be, at an accelerating rate, more or less forever.
We are now transitioning to a new economy. Usually, when people like me say that, it’s for the sake of an overblown portrait of a utopia. Let me assure you, I don’t mean it that way. We’re transitioning to a new economy of shortage, inflation, and stagnation — for the stuff we’re accustomed to having plenty of, and buying thoughtlessly. It’s going to be a deeply painful transition.
What’s behind it? And what does it really mean?
The superficial explanation goes like this. Covid wrecked the global economy. It caused a huge drop in demand, so manufacturers made less stuff, and retailers ordered less stuff. Meanwhile, huge distribution bottlenecks emerged, as the world went into lockdown. Bang. What do you get? A solid few years of pain, via shortages of basics.
All that’s true, but it’s only part of the story — the introduction. What’s really going on here is something much deeper.
Our civilisation’s systems are beginning to fail, and as they fail, the things we once took for granted are going to go into shortage, ever more severe, and prices for them will skyrocket.
Covid cause what’s known as a long term shock. Two, in fact. One on the supply side, and one on the demand side. Suddenly, milliions were laid off. And factories went idle. None of that’s easy to undo.
The effects of Covid alone are going to linger for the rest of this decade. How do I know that? Well, because Covid’s not over. We can pretend like it is, like Britain and America are doing, sure. But in both of those countries, the effects of Covid are still catastrophic. America’s having a 9/11 every two days.
The poor world is the global economy’s factory floor. And because we haven’t vaccinated the planet, the effects of Covid are very simple: there are labour shortages. China can’t make nearly enough stuff to satisfy the West’s hungry maw anymore in an age where pandemic precautions have to be taken. The correct thing to do, for the sake of the global economy, not to mention human life, but who cares about that, would have been to vaccinate the planet, fast — instead of give Big Pharma patents for vaccines it didn’t create. This combination of mismanagement, greed, and indifference is now backfiring on the West: shortages are squarely an effect of labour and production and distribution shortages in the rest of the globe.
Now fast forward a decade. It’s not Covid anymore — it’s climate change that’s the apocalypse du jour. What effect does that have? Take what Covid’s done, and multiply it by an order of magnitude. What goes into shortage as a result of climate catastrophe? The better question is: what doesn’t? Food does, as harvests fail. Staples like milk do, as farms are abandoned to the heat. Fresh air does, as smoke fills the sky. Go ahead and take a hard look at how you need a battalion of air purifiers to live in Northern California. Then there’s water — all the droughts to come from the intensifying heat. The American West is already in drought — what happens when the water runs out, as it will in the next decade or so?
It’s hard to think of all that though — basics going short. So let’s stick with more familiar basics. Now there are mega-typhoons and mega-fires and mega-floods as grim realities. Half the planet is either a Flood Belt or a Fire Belt. That’s what trucks and vans and planes have to cross to distribute goods. Good luck getting stuff. It’s not going to be easy.
And that’s when stuff gets made at all. Just like Covid caused a massive labour shock, so too will climate change. All those millions of climate refugees? They’re going to be a labour force that’s not working at a factory anymore. Maybe that factory’s under a meter of water, anyways. Maybe it caught fire. Maybe the whole complex was wrecked by a mega-typhoon — and it’s going to take a decade to rebuild it.
Exacerbating that problem is the fact that production for much of the stuff we’ve come to rely on, to have in abundance, is centralized. Almost all iPhones and iPads are made in one factory. Cars, in a few. Medical devices? A handful. The list goes on. These factories are massive, massive capital investment. If one goes down — the entire world suffers. The current chip shortage is due to a fire at one factory, a drought in another, and a storm at another— and it’s caused the world’s electronics to suffer a long term undersupply. In short, the chip shortage is one of the first major effects of climate change, aka global warming.
All that is what “climate risk” really means — something that pundits and economists are finally beginning to recognize, way too late. Let’s delve still further, though.
What happens as things go into shortage? Well, prices rise. What happens as prices rise? Incomes fall. What happens as incomes fall? Unemployment rises. Economies go into depression, via the vicious spiral of stagflation.
All that isn’t new — it’s just that it’s been ignored. The global economy has been stagnating for twenty years at this point. American incomes haven’t risen in the last half century. All that is because of the way that the economy was globalized. The poor world was turned into the factory floor, exploited to the bone, to give Westerners endless cheap stuff — even if the price was those Westerners’ own jobs. Now the folly of all that is beginning to become triply clear. One, globalising the economy like this caused an explosion in carbon emissions, overheating the planet spectacularly. Two, it created huge instabilities, because Westerners now had fewer jobs and stuck incomes. Three, it led to fascism in the East and West.
The only real winners of all this over the last few decades have been billionaires — figures like Zuck and Bezos who are now so rich they could each vaccinate the planet ten times over alone, but won’t.
Those toxic dynamics are now poised to grow much, much worse. Let me spell it out for you now in formal, unsparing terms.
What is happening to us is that our living standards are beginning to fall dramatically. What’s it called when you can’t get the same stuff you’re accustomed to, when you have to pay more for it, when you can’t afford it? You’re getting poorer. We might not know it, or understand it, but we are now becoming rapidly poorer as a civilization.
That is what the End of the Age of Cheap Stuff really means.
Why? Because we have lived beyond our means. Globalisation meant that we ended up massively indebted to billionaires, to afford all the cheap stuff we became addicted to. But just making and distributing all that cheap stuff wrecked the planet. We overconsumed our way across the only set of resources we have. Now those very resources are going into sudden, severe shortage. Timber. Air. Water. Energy.
We poisoned the planet to make cheap stuff, and went into debt to billionaires to have it. It was a completely toxic and fatally foolish economic model, one promoted by America’s pundits and intellectuals and politicians, at the expense of a future.
Now we are going to have to price for living beyond our means. Living beyond our means financially, which means being in massive debt. Living beyond our means ecologically, which means we have little left to take from the planet. And living beyond our means socially, which means that the consequences of all this have ended up in nationalism and isolationism and fascism, anyways.
The result of all that is the average person is getting dramatically poorer. What does it mean that Americans can’t get cars? That Brits are rioting over gas? People are already getting poorer. That’s as a result of what you might call the entry level catastrophe — Covid. Which is just a warmup for the main event, climate change, global warming, and ecological collapse. As those bite, Covid will look like a fond memory. We’ll look back nostalgically on how good life was now.
Because in a decade or so, we really will be struggling to get the basics. You can include me on that list, if you like. Today, I’m irritated I can’t get the microphone I need for my vocalist to shine. How spoiled is that? A decade from now, I’ll be wondering: will the kids get milk today? Are there going to be brownouts and blackouts again? What if the food spoils — the food I waited in line for hours for, anyways? And what about some wood and metal to patch up the house? That’s been in short supply for months now — maybe I can find some, today, if I’m really lucky. Electronics? A new car? Forget it — I’m just trying to eke out another month of survival now.
What is life like that called? Poverty. It’s been a long time since better minds predicted all this. Long ago now, in the 70s — that’s half a century — the seminal “Limits to Growth” report painted a portrait of the world that’s emerging now. We’ve lived beyond our means, it said, and this economy is a house of cards that’s going to collapse.
This is the collapse.
Welcome to it.
Enjoy your life today. Don’t take all that stuff for granted. Treasure it. You’re not going to be able to get it tomorrow, in a world ripped apart by natural disaster, fascism, a planet where country turns on country and brother on brother, just to have what they need to live another day. It’s only going to get harder from here. A lot harder, a lot faster. This is what it means to be poor, my friend.
We’re a poor civilization — we always have been, our per capita income never rising above $10,000. We imagined — some of us, anyways — that we were rich, mostly Westerners living in blissful ignorance, their institutions letting them pretend they were “rich”, never teaching them that we were a poor civilization, underinvesting, and overconsuming, not saving enough, not nurturing enough. And so as a civilisation, we lived beyond our means, financially, ecologically, politically, socially. Now the bill comes due — and it all comes back down to earth. A scorched, parched, bleeding earth.
This is the end of an era, my friend. The End of the Age Cheap Stuff, or the Beginning of the Age of Expensive Stuff. You get poorer from here — unless, like Zuck and Bezos, you can be the kind of person who could vaccinate the globe, but doesn’t, and what’s that kind of person, comfortable with mass death, called? To be sane in this age is to be afraid, worried, anxious. Face it, hide from it, fear it. It is what it is. The question, first, is if you see it.
This is the age where our living standards fall, dramatically. For the rich West, they plummet down to the level of “third world” countries — just ask Britain, where people now riot for gas. And for the poor world? Sadly, they go below that. We could have stopped all this, long ago, when the warnings were issued. But you know the story. Now it’s essentially too late.

Buckle up, my friend. It’s a long, bumpy ride down from here, and the abyss?

Well, it goes back to the Dark Age before it climbs back up to the light.

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