Regrettable Necessities

Goods and services which are needed for the subsistence of a large civic society. The entries on the Intermediate Economy and the Intensification Paradox discuss the principles behind this need. Here is an example.

The story starts in seventeenth century Europe, whose growing population had a fuel problem. A lot of energy was needed for domestic heating (this was the “Little Ice Age”, as discussed in Climate Change), for cooking, and for industrial uses: forges, lime-burning, salt-boiling, dyeing, brewing, soap, candles, bricks, gunpowder and the metal industries. Although wood was the obvious fuel, that option was closing, as forests were cut down for firewood, ships and building, and cleared for agriculture. The only alternative was to elaborate, to intensify—and the sequence of elaborations that had to take place required a large amount of extra work from labour and land alike:^R28

Stage 1. Firewood—the starting point—has decisive advantages. It is widely distributed, easy to obtain by gathering or felling, easy to transport and clean; it has tolerable fumes and it is renewable. It is also easy to use in industrial processes such as smelting and soap-making.

Stage 2. Failing the ideal option of wood, the next best choice is coal from shallow mines. This is accessible, and it had been in use for many centuries, but coal’s disadvantages are severe. It lies in concentrated deposits, usually far from where it is needed; it has to be formally bought, rather than informally gathered; it is heavy, and transport over roads in eighteenth century conditions was a nightmare of mud and ruts deep enough to drown in; its fumes are toxic and dirty; and its use for purposes such as smelting presents technical problems which were not to be solved for many years.

Stage 3. An even less attractive option, but—in due course—an unavoidable one, is coal from deep mines. Now the problems really start. Coal mines flood unless they are continually pumped, and this was for practical purposes impossible with the technology of the day: horse-whims (windlasses) could barely lift the long chains of buckets when they were full of water. The pressure to find a solution led on to the invention of steam power—which in turn required the invention of ways of making parts with an accuracy, durability and complexity that had never been imagined—and then onwards through a sequence of trial and (spectacular) error to metal-bashing, new processes, industrial chemistry, the shock of very-large-scale engineering, and rapidly-growing industrial populations (Energy Prospects > Coal).

Stage 4. Once deep mines became viable, it was necessary to establish a comprehensive system of transport. With a relentless step-by-step logic, the early Industrial Revolution, which had a non-negotiable need for coal, was drawn into building an immensely elaborate transport structure—twice over, with the canals promptly being made obsolete by the even more ambitious network of railways.^R29

And the result of all this was an extraordinary increase in the average person’s workload: so many intermediate tasks (regrettable necessities) had to be accomplished that many of the final goods and services that were desperately wanted by so many people were never produced at all. Certainly, there was economic and social inequality, too, but the more fundamental problem was that of how to achieve an adequate supply of final goods on any terms. This was a society with its back to the wall; a large and complicated productive system had to be invented, built and run in order to produce the massive quantities of intermediate goods and processes needed for the fuel, food, shelter and clothing that people actually wanted.

Far from being a matter of choice, all this was foisted onto society as a consequence of exhausting its preferred choice of energy. But there is a limit to an economy’s ability to do more and more work simply in order to fulfil its needs—that is, to keep going, to carry out the increasing workload required just to provide for its own subsistence. During the English Industrial Revolution that limit was tested: for many people, it was overstepped—as Richard Wilkinson explains,

The amount of work necessary to gain subsistence can—if all else fails—be allowed to increase until it begins to approach the maximum people are capable of doing. Beyond this the system is no longer viable. Undoubtedly this point was reached for a significant proportion of the English population during the Industrial Revolution: the workload rose to the limits of human endurance.^R30

From the standpoint of the people at the start of the process, this astonishing elaboration and total transformation of society in response to a simple shortage of firewood would have been unimaginable. But the logic led on relentlessly to. . .

. . . Stage 5. Even larger urban workforces, the break-up of small communities and face-to-face societies, the capture and concentration of populations and of specialist industries in particular places—and onwards to the mature transport-dependent market economy, whose energy problem has reached a climax which will turn out to be much more intense and dangerous than the firewood shortage which started the whole thing off in the first place.^R31

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This story highlights the paradox at the heart of development—the Intensification Paradox. Advancing technology and the specialisation of labour makes each worker more productive: he can produce more nails per hour of work. But when that increased productivity is channelled into developing (intensifying) the economy, the intermediate economy grows—there is a massive increase in the quantity of goods and services the economy needs in order to survive—and that requires a whole lot more nails. In that sense, development makes the economy less efficient—dramatically so—and its demand for energy and materials, for capital and labour, rises accordingly.

Now, all of these problems inherent in large-scale development are not what we might expect, given that the principle of “economies of scale” has extended well beyond being a key presumption in economics, and has become a household phrase. There is nothing wrong with economies of scale, of course: up to a point, they are completely obvious—this is the reason why we use shopping bags rather than carrying our apples back from the shop one-by-one. But it is equally well-recognised that those economies of scale become negative—becoming diseconomies, or inefficiencies—beyond a certain turning point: if you bought the whole crate of apples, you would have to get a taxi home, and install a chiller, or they would go off before you had time to eat them. Beyond that point, the needed infrastructures grow faster than the system they are there to support.^R32 The principles that govern this are explained in Scale.

In microeconomics, all that is fine: if the amount of stuff a factory is expected to produce increases beyond the turning point, then the obvious thing to do is to build another factory somewhere else, or to shift the turning point upwards by expanding the factory. But in the case of our industrial civilisation, we can’t do that. It has to carry on even though the turning point into inefficiency and grossly inflated infrastructures has been left far behind. Further growth increases those diseconomies yet further.

Yet the converse is also true, and that is the good news: if the size of the system should fall, those diseconomies can of course be expected to decline, producing an efficiency-dividend. This is the key to the feasibility of the Lean Economy, which has the vital property of elegance: it learns, by scale-management, to minimise the intermediate economy—the regrettable necessities.

This is a solution, but it is also a problem, for success in achieving the elegance required after the downsizing will mean a fall in the demand for labour. There is undoubted mid-term job-creating potential in the switch to a renewables-based economy, but the deep paradigm shift in prospect is towards the slack, output-poor, Lean Economy. Here spare labour (aka spare time) is not a “problem of unemployment”, but a property intrinsic to the life, culture and social capital of the place. And that is both good news and bad news, because it is hard—when the market economy is no longer functioning—to prevent no-job leading on to no-income and no-food. It can be done, but not by using only the instruments visible to economics.^R33

Related entries:

Culture, Leisure, Lean Economics, Hyperunemployment, Intentional Waste, Sorting, Unlean.