Coppola Comment

A version of this post appeared on Pieria in December 2013.  In my post “ The desert of plenty ”, I described a world in which goods and services are so cheap to produce that less and less capital is required for investment , and so easy to produce that less and less labour is required to produce them. Prices therefore go into freefall and there is a glut of both capital and labour. This is deflation. There are two kinds of deflation. There is the “bad” kind, where asset prices go into a tailspin and banks and businesses fail in droves, bankrupting households and governments and resulting in massive unemployment, poverty and social collapse. America experienced this in the Great Depression and narrowly avoided it in the Great Recession. More recently, at least one European country has felt the effects of this catastrophe. But there is also another kind. This is where falling costs and increasing efficiency of production create a glut of consumer goods and services.

This post first appeared on Pieria in November 2013.  Throughout history, humans have dreamed of plenty. They have longed for there to be abundant supplies not only of essentials, but of luxuries. The promise made to the Israelites wandering in the desert was that they would eventually come to a land “ flowing with milk and honey ”. And the vision of the New Jerusalem in Revelation is of riches beyond imagination . Recent forecasts of forthcoming abundance, too, have focused on the benefits. Imagine a world in which everything was so plentiful that not only the essentials of life but the luxuries, too, were free. There would be no need for money, because nothing could be bought or sold; and there would be no need to work, because there would be no need for income. And if everyone believed that such “superabundance” would last forever, then there would be no need to worry about the future – no need to save or prepare in anyway. There would be no point in deferring cons

I have been going to the gym. Seriously. For about a couple of months now. I'm doing weight training for the first time in my life, and cardio exercises, including - wonder of wonders - short bursts of running. I'm even paying for a personal trainer. It's a shocking extravagance, but I'm likely to find any excuse under the sun not to do my workouts unless I have someone telling me what to do and shouting at me if I don't do it. As one of my school reports said, "Frances does not enjoy physical exertion". Truer words were never spoken. Sporty, I am not. So why am I doing this? It is all because of my family. Specifically, my father. He has serious heart problems, vascular deterioration in his brain and Type II diabetes. And I am a lot like him.  Ok, so he is 83. But he was a lot more active in his 50s than I have become. Since I reduced my singing teaching and took up writing, I have become largely sedentary. Even gardening has gone, killed by a

While visiting Germany in the summer, I was struck by the prevalence of adverts saying something on the lines of "Sie sparen können". I've never seen a society so obsessed with saving, not in the sense of putting money away (though they do that too) but in the sense of reducing costs. Never mind the quality, look  at the price. "You can save". Always. Penny-pinching is by no means limited to German households. Ever since we collectively decided, on September 16th 2008, that the money had run out, we have all - households and businesses - been scrimping and saving like mad, reluctant to spend money in case we too run out. We look for bargains, delay purchases until end-of-season sales, and avoid paying for things unless we absolutely have to. We have become a "something for nothing" society. At an individual level, this seems sensible. Most people have limited incomes, and wages have stagnated for a long time now. Businesses, too, have felt the

My latest post at Pieria delves back into the history of the Long Depression in the 19th Century to find lessons for today's "secular stagnation". Persistent excess of supply over demand is anything but benign and surprisingly difficult to deal with. "In my post “ The desert of plenty ”, I describe a world in which goods and services are so cheap to produce that less and less capital is required for investment , and so easy to produce that less and less labour is required to produce them. Prices therefore go into freefall and there is a glut of both capital and labour. This is deflation. There are two kinds of deflation. There is the “bad” kind, where asset prices go into a tailspin and banks and businesses fail in droves, bankrupting households and governments and resulting in massive unemployment, poverty and social collapse. We have seen this in the past, in the Great Depression; we narrowly avoided it in the Great Recession; and there are currently places

My latest post at Pieria is my belated contribution to the secular stagnation debate. I think it's caused by the growing trend to abundance. But do we really want abundance? Throughout history, humans have dreamed of plenty. They have longed for there to be abundant supplies not only of essentials, but of luxuries. The promise made to the Israelites wandering in the desert was that they would eventually come to a land “ flowing with milk and honey ”. And the vision of the New Jerusalem in Revelation is of  riches beyond imagination . Recent forecasts of forthcoming abundance, too, have focused on the benefits. Imagine a world in which everything was so plentiful that not only the essentials of life but the luxuries, too, were free. There would be no need for money, because nothing could be bought or sold; and there would be no need to work, because there would be no need for income. And if everyone believed that such “superabundance” would last forever, then there would be no n