R.E.A.P. Club

Our everyday talk is about ‘growth’. But to what purpose?

Does it mean more than just a few percentages compounded annually indefinitely aside of the odd rude interruption as again experienced so very recently?

The ultimate purpose of all production is consumption, and sustaining, and where needed expanding, the means of production.

In my lifetime so far the global population increased from some 2.3bn to 7bn and will probably top out near 10bn within my remaining lifespan, assuming slightly stretched actuarial tables (but then who knows?).

Some 90% of that beginning post-WW2 global population existed on $100 income a year. It was basically rural and agricultural in nature, still very superstitious of mind, traditional in social values, uneducated, politically subservient (still only just), its existence having changed but little since its forbears exchanged the hunter/gatherer stage for rural agriculture some 10 000 years ago.

Not only will the global numbers have risen fourfold in my lifetime (1950-2050 showing the biggest absolute increase ever by far), but the living base will have become over 90% urbanized, will have enjoyed increasing years of education, will have transited the industrial stage in record time and will already be overwhelmingly in the post-industrial and even post-services (professional-creative, entrepreneurial and leisure-preferred) condition. And hopefully mostly democratically governed (though very large exceptions in some parts of the world may by then still exist in practical terms).

Also, large pockets of basic industrialization will still exist by mid-century (mainly a majority of 1.5bn by then still low-cost Africans) and parts of South Asia (a majority of 2bn low-cost Pakistanis, Bangladeshians and Indonesians and a minority of Indians and Chinese) and otherwise occupied in basic services.

Global income should have risen to over $300trill by 2050 and global per capita should top $30 000 annually.

Pockets of global population will enjoy over $100 000 income per capita (in the US, Europe, the global-ranking cities everywhere else in terms of quality), holding some 3bn people (or a third of the global total).

This global elite will probably absorb well over three-quarters of global income and will mostly already be comfortably post-middle class by today’s standards.

The remaining 7bn people will probably by then share some $40trill for a per capita income of some $6 000 annually – South Africa’s today – with a large majority thereof still working class but with a growing minority already middle class by today’s social standards.

Not all income by then will be going into equivalent consumption compared to today. By then there will presumably already be a climatic price to pay, the environmental equivalence of war or urban sprawl waste known today.

But it will be a world transformed compared to today, just as we are a world transformed compared to 1950, 1900, 1800 or 1600 when it (compounded per capita global growth) started very gradually even as the first stock market (Amsterdam) got its charter.

Also by mid-century we won’t be living in a world shortly ceasing to transform (unless the next generation herself or Mother Nature on her behalf decides to end it all, abrupt or otherwise).

For while world population will peak this century, it will thereafter start to descent, probably approaching (much) lower stable levels within centuries, reversing many of the global expansion dynamics of the past millennia in a matter of centuries.

Yet scientific progress will allow even more stupendous levels of per capita income to materialize. As part of this change global society will become yet more differently organized, socially driven and technically assisted, courtesy of that ultimate human quality, flexible adaptation to change.

Besides, genetic manipulation by then will probably make Homo Sapiens rather unrecognizable, intellectually and emotionally, but probably also physically (all being so very, very young and attractive while tranquil though many in fact very ancient, with restlessness by then having become so very, very blasé).

But that part of Mankind’s growth curve stretches so unimaginatively far into space, not unlike the opening sequence of the original Star Wars movie, we shouldn’t go there this time.

It taxes the imagination enough to simply grasp how this particular mid-century will differ from today, socially, politically, technologically. And, yes, goodies-wise.

Imagine. China today has a passenger car ownership of 45m. It will be over 500m then. India 20m now, over 800m then. Worldwide a factor of 20 bigger than today.

Clearly not mainly petrol-engine based, but that is only one technicality.

Still, the next 40 years will probably see the biggest global accumulation of middle class goodies as we know them today (and still to be invented) the world has ever seen to date. The reason? Well, rising income, but also human aspirations, with basic greed and insecurity still doing the driving.

In other words our Stone Age emotional inheritance will still be in the driving seat doing most of the decision-making (trophy cars, houses, boats, communication capabilities, art, wives, kids, education, pets – you get the picture – BRAND will remain for now EVERYTHING).

For global society by then will still be largely pre-genetic transformation, with only that watershed probably eventually seeing startling changes coming about in physical appearance and social conditions we can only aspire to today, but few having the endowment to make it come true on any scale today. Never mind the will to do so, the general endowment is simply not there yet.

So our already ancient middle class ambitions as we know them today will remain for now the driving global focus, though this is unlikely to survive the collision with science as time overtakes all.

The sheer urban numbers will force changes, courtesy of ongoing organizational and technical innovation, need driven. So the global cities should still expand hugely AND become more liveable, though the real breakthrough there awaits the subsequent descent in numbers.

Exciting stuff, yes, while we and the next generation take the last middle class hurdle remaining, still as the ratpack we increasingly resemble.

So many goodies still to accumulate, so little time. A typical male preoccupation.

Thereafter waits the feminine age. So much time, so few real good men.

Ahh, life!  


By Cees Bruggemans, Chief Economist of First National Bank, 09 December 2009

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