We’ve now seen a belated dawning of awareness that – outside mining – the Australian economy is pretty stuffed. Or sluggish, if you prefer. But the commentariat have finally caught up with LP bloggers.

Anyway, it’s interesting to consider the significance of a blog in The Economist of all places floating the possibility that:

people may just be sick of buying new stuff. Or at least of buying the kinds of new stuff that the consumer economy of recent decades has been based on producing.

The post references an interesting piece in the New York Times, arguing that there may have been a structural shift in the US economy, driven by debt aversion. “The old consumer economy is gone, and it’s not coming back.”

The obvious counter argument to the proposition that there has been a secular shift in consumption habits is that, as the Economist blogger says, “more useful data would have to come from behavioural economists who work on consumer motivation”. Or sociologists!

Yet, if we think back to the generation that grew up during the Great Depression, it’s clear that shifts in behaviour and attitudes driven by economic adversity persist after that adversity passes.

There’s also a confluence with – at least among some parts of the populace – a return to ideas of making and repairing stuff, a resistance to the culture of planned obscelence, coming together with technological improvements in the quality of goods. Cultures of slower living, of household production: both are emerging.

David Leonhart in the NYT thinks this all implies the need for a different sort of economy, one where consumer spending isn’t the engine of growth. The issue I see with the sort of Schumpeterian predictions of new vistas for capitalism to conquer emerging out of economic crisis is that these vistas simply aren’t on the horizon. In a sense, both mass and niche production and financialised mayhem have been tried, and failed.

Interesting times.

NB: Thanks to Mark for drawing the Economist link to my attention.

The idea is that there’d be no need for handouts or compensation to rent seekers, and that households and businesses could be compensated according to their needs. The article notes that a full range of market based solutions was never really contemplated, because the international momentum had previously been towards a production based ETS.

Despite the near absence of any reporting in Australian media, and its dissonance with the ‘narrative’, Copenhagen was not without result, and there will still be advantage in, and pressure for, Australia to establish a carbon price.

I’m no expert on the design or implications of these sorts of mechanisms, and I’d welcome input from commenters who can elucidate the nature of a consumption based ETS.

Politically, I’ve been commenting for some time that it’s highly likely that the Rudd government will seek to put something substantive in place on climate change before the election. The challenge will be to explain away the backflip on the CPRS in a more convincing manner, and why a replacement model wasn’t proposed earlier (and here The Greens’ support for an interim Garnaut Carbon Tax should have been leveraged).

Kevin Rudd is said to be disillusioned with the purported strategic geniuses from the NSW Right (Mark Arbib, Karl Bitar, Bruce Hawker, Graham Richardson, et al) whose bright idea it was to dump the CPRS in the first place. This mob never met a focus group they didn’t run in fear from, and their sole solution, aside from policy cave-ins, is leadership change. Worked well for the NSW government, didn’t it?

A substantive ETS which avoids some of the political and policy problems of the CPRS would be just the tonic the government needs, and would usefully focus attention back on Tony Abbott’s ‘Direct Action’ tokenism and denialism. But the challenge will still be to fix the mess already made with the CPRS, which has been exemplary of the government’s tendency to shoot itself in the foot.

Elsewhere: Richard Green at Troppo.

Predictably, this disclosure has added fuel to the fire of complaints from the right about its evils.

In the circles Tony Abbott moves in, redistribution is a dirty word.

That, of course, ignores the fact that everything governments do in tax, benefits, and allowances of whatever kind is redistributive. That includes all the Howard era tax/welfare transfers. It’s not as though Labor has some sort of evil socialist agenda and Kevin Rudd and Julia Gillard are socialist wolves in sheep’s clothing, much as some might like to entertain such fantasies.

It’s no doubt right to say, as Andrew Norton does, that Abbott’s shift in the Coalition’s position to opposition to the CPRS (matched with vague promises of costless emissions savings) exposes the detail of the ETS to more debate. That may not be a bad thing, though it would also be a good thing if its ineffectiveness in achieving its ostensible aims were the focus of the debate. That’s not likely to be the case in the headline election year debate, as Abbott’s move switches attention to hip pockets.

However, anyone who followed the design of the CPRS from the start would be well aware that the government had already anticipated this line of attack. As the modelling Peter Garrett released shows, Kevin Rudd deliberately ensured that compensation for low income earners was much more generous, and ongoing, than similar Howard era packages; the GST, for instance.

Secondly, unlike income tax (though somewhat similarly to the GST), the effects on household finances are variable, depending on consumption patterns. This, after all (again leaving aside the failure of the CPRS to materially affect corporate emissions, at least in the short term), is the point – a price signal on emissions across the economy, including to the household sector.

Politically, as Garrett’s rhetoric today indicates, it’s designed to allow higher income earners who may have some cost increases to feel either warm and fuzzy about ‘doing their bit for the planet’, or to modify their consumption patterns. Those who will see it as a nasty impost in this demographic are probably already Coalition voters, and my suspicion is that the responses to polling questions about making a financial sacrifice are more likely to be genuine among upper middle to high income earners.

Many of Abbott’s ‘battlers’ will actually make a buck.

In short, I wouldn’t be jumping to any conclusions that flicking the switch to an argument over the affects of the CPRS on individual and household balance sheets necessarily gives the Coalition the advantage most commentators seem to have been assuming it does.

Australia is in the midst of a flat-screen TV crisis, says Clive Hamilton. Driven by an insatiable desire for “stuff”, we spend more time chasing money and less doing the kinds of things that would really make us happier and more fulfilled — spending time with friends and family, getting involved in the local community, and developing our skills and creativity. Greed and materialism are making us miserable.

But there’s no evidence that people in affluent countries like Australia are greedier or more materialistic than in the past. The major reason we buy more stuff is because stuff has become cheaper. The increase in working hours is not being driven by an increasing desire for stuff but by increases in the cost of things like housing and services.

Hamilton, to put it mildly, has some questions to answer around the basis for his “Affluenza” claims. It would also be interesting, also, to trace exactly why such claims seem to strike a chord.

I’ve long thought this sort of mindset is particularly politically pernicious, and so I’d completely endorse the conclusion to the post as well:

The affluenza myth is both self indulgent and dangerous. It’s self indulgent because it allows affluent, educated people to blame the world’s problems on the consumption habits and psychological weaknesses of less educated, households. And it’s dangerous because it distracts attention away from serious social problems such as the lack of affordable housing for low income earners and the problem of raising taxes to fund redistributive policies in the future.

To cut a long story short, there is a real sense in which the concept of the ‘prosumer’ gestures towards a hypostasised economic (and social) relation as well as a blurring of borders between consumption and production of content and knowledge.

Elsewhere: SocProf at The Global Sociology Blog.

This sort of thing only compounds the fog of economic war at a time of crisis. It is true that economic predictions are a dime a dozen and at best indicative the further they’re projected forward in time. Media savvy ex-Treasury boffins in Access Economics were warning of runaway inflation this time last year. This year, they’re worried that we’re “buggered”. (And they’ve always got some neato right wing policy prescription to go with the diagnosis.)

But at a time when the tectonic plates of the economy are shifting rapidly, it is essential to have access to good data. Nobody seems willing to credit Treasury modelling anymore, so with Rudd’s pre-Christmas stimulus package, we were treated to prediction by anecdote. And, all of a sudden, Gerry Norman, retailer Harvey Norman’s boss, was some sort of folk wisdom personified.

Apparently, he still is. In his column today, Peter Martin explains why deflation is a *bad thing*. He traces a scenario where consumer expectations of price discounting lead to the deferral of discretionary purchases, which then creates a vicious cycle.

Rather than keep cutting prices, retailer Gerry Harvey has begun shutting stores. Others will follow if deflation takes hold, and the resulting unemployment will make even the majority of us who keep our jobs still more wary about buying, pushing prices down further and pushing more of us out of work.

I was actually in one of Gerry’s emporia yesterday – because my dvd player died on the long weekend. (I don’t know whether a dvd player is a “non-essential purchase”, and maybe there’s more precision needed in defining exactly what that means.) I’m not flush with cash at the moment, but I did consider purchasing an all in one LCD tv, and had my eye on a Grundig with a 22c screen which had been knocked down to $749. But I decided to defer the said purchase, figuring such items would later come down in price, and my search for a cheapo dvd player actually took me to David Jones, of all places, where they were less expensive than at Harvey Norman.

So perhaps I am creating unemployment. Or something.

I’m actually highly sceptical about the value of using Harvey Norman’s supposed travails and competitive strategy as a parable for the economy as a whole, or even for consumer behaviour. How important are computers and tvs and gadgets as a component of the retail sector and of retail spending as a whole? How usual was it in the past for people to defer purchases of big things like tvs and computers on the assumption that the price would come down – because often it has? What contribution does discretionary spending actually make to the economy and how is it defined?

In thinking about the economy’s plight, it doesn’t seem to me that anecdote, possibly self-serving pronouncements by retailers and argument by theoretical prediction go all that far. I’m certainly not to be read as suggesting that we should wait endlessly for perfect data before acting, but it might be nice if we were a little less unquestioning of the data we think we have, and how it was derived.

The stock market’s fall may also have had something to do with evidence of a growing deflation in consumer prices in America, or so opinionators opined. Well, I guess we don’t have the “inflation dragon” to kick around anymore.

And we’ve had another outpouring of deficit aversion, bipartisanship at last (!), in response to Glenn Steven’s expression of the belief that the government had a responsibility to “borrow to invest”.

And, yet, we’ve had a piece of prime silliness – to put alongside all these other signs of the times – in Crikey‘s editorial:

There’s not a lot politicians can do. The Government handing money to low income earners who’ll have virtually no choice but to spend it makes sense, but there’s only a limited number of times a $10b heart-starter can be administered to the economy. Even the Opposition has been doing its bit lately, prefacing virtually every statement on the economy with the mantra that Australia is best-placed to weather these difficulties.

And there’s not much businesses can do without demand. It’s actually up to us consumers to realise Australia’s economic fate is in our hands, and act accordingly.

Righteo. Hopefully there’ll be another Herringbone sale again soon and I’ll try to do my duty. The rent went up $200 a month – does that help?

But Crikey’s leader writer might like to think about household debt being at 160% of earnings at a time when – even if unemployment is yet to really hit home – the evidence is in that hours and overtime are being cut back all over the shop. And while the mortgage rate may be down, there’s been very little or no discernible movement in credit card rates – something Kevin Rudd acknowledged some time ago, and vaguely promised to look into now that consumer credit is to be regulated by the Commonwealth. If citizens – also known as consumers – are trying to do their own “deleveraging” and get their balance sheets back to something a little more realistic, I hardly think that’s a matter for the loud condemn. Or for that matter, people choosing not to buy more, well, stuff. Do you like stuff? You can never have enough stuff – apparently.

I’d much rather go with Glenn Stevens’ view and look to the government as investor and consumer of last resort.

Complaints regarding gallstones are often highlighted to demonstrate what’s wrong with waiting lists for public operations. Gallstones can be incredibly painful – it is very difficult to write about pain, because as a number of writers have noted, it literally defies expression. But suffice it to say that very severe pain for about two hours, often at an ungodly hour of the night, which almost nothing short of morpheine or similar painkillers can relieve, is very far from being pleasant, and though the pain is intermittent, it can be very difficult to work because of the loss of sleep and the general feeling of enervation when you have severe gallstones. Gallstones, left untreated, as I’m well aware to my cost, can also lead to some very nasty complications, and in some instances can also lead to things like pancreatitis and worse. Even if that’s not the case, waiting for an op can be quite awful, though the operation itself, if done by a good surgeon, is pretty straightforward in the absence of complications, and can be done by keyhole surgery, requiring only an overnight hospital stay.

Incidentally, if the articles are correct that Rein has had a recurring problem, based on the advice I received, she might have done better to have her gallbladder removed – unless much has changed in the last four or so years, I was told that dissolving the stones surgically doesn’t stop them recurring. But that’s neither here nor there. At the time I had the operation, the wait in Queensland was nine months, and I was able to have the surgery done basically to fit my own convenience in terms of work within a couple of months of the diagnosis. As it turned out, I ought to have had it done earlier (which would have been possible) because between the first ultrasound and the actual surgery, a lot more had gone wrong.

I took out private health insurance when I was 30 because of the inducements offered by the federal government (lifetime rating, and lower Medicare rebate), and I envisaged getting most benefit out of it through rebates on dentistry. But I was fortunate to have taken out hospital cover. However, the whole business of being ill was still expensive – while the hospital’s $500 a night bill was covered, the gap between the Medicare schedule and the fees of the surgeon and the anaesthetist were not, and then there were the gaps in GP bills and radiography costs. I think I worked out at the time it cost 8 grand all up, only about 5 grand of which was covered by either insurance or Medicare. It also sorted out the wolves from the sheep in terms of my employers as a sessional academic – some were happy to keep paying me even though I wasn’t well enough to teach, one reacted so unsympathetically and refused to offer me further employment despite having worked there for four years that I considered taking legal action against them. Certainly it was a much bigger strain on my budget both through the upfront costs and income foregone than it would be for Therese Rein.

Despite the money the Rudd government is pouring into the public hospital system to clear waiting lists, I can’t help thinking the continued support for the private system and private insurers will continue to drive and reproduce inequality. The claim from Howard that private hospitals would take pressure off public ones has to be one of the biggest ideologically motivated con jobs ever. There will continue to be incentives for those who can afford to do so to effectively opt out, and the existence of a two tier system will continue to make it less politically palatable to spend on public hospitals if a significant section of middle class voters believe that they’re some sort of residual safety net for the poor – this is the whole point of universal public provision. Although it’s hardly perfect, that’s why the British NHS is well worth defending, and I was very struck by the argument made by Neal Lawson in The New Statesman:

The purpose of any centre-left government is to use the state to ensure that accidents of birth do not blight people’s lives. The brute luck of not being born rich, bright or healthy demands social action to ensure that all have the resources and opportunity to make the most of their lives.

…

If Brown wants to use the gap before the next election to put the NHS on a sound footing he must start by understanding it as a political entity. It is a social democratic bubble in a capitalist society, a place where we feel free from commercial pressures but that can’t avoid being contaminated by market forces and values surrounding it. It is perhaps the key battleground in the ongoing struggle between society and the market.

…

Through our collective voice, we demonstrate the common ownership of the NHS as a site of social citizenship, which we value not just because it makes us well, but because it makes us more equal and puts us in control of our world. Democracy is the means and ends of the good society.

…

If Labour cannot popularise the National Health Service as an institution that embodies the values of the left, the notion of solidarity will come under threat of extinction in an increasingly individualised and consumerised world. After all, we should all be equal in our pyjamas.

The emotive responses in the blog associated with the latter story, and the reaction of some commenters when I posted on this issue on John Quiggin’s blog a couple of years ago, indicate an element of resistance from people who seem to have become dependent on plastic bags and thus claim that all manner of misfortunes will befall them if plastic bags are phased out.

As someone who has been saying “no” to plastic shopping bags for over twenty years, I must admit to being unable to see what their defenders are on about. It isn’t hard for me to just pick up a shoulder bag, a sports bag or a backpack (depending on the size of the shopping run) from my floordrobe and take it along to the shop to pack full of whatever I have purchased. And supermarkets will still home deliver large orders for those of us who don’t drive.

Indeed, as a child and adolescent growing up in a working class suburb of Melbourne in the 1960s and 1970s, I can hardly recall plastic shopping bags ever being used by my family or being issued by local retailers we shopped from. For small purchases of milk or bread I would be sent to the local milk bar or 4-Square with my mother’s string bag or sister’s old school bag. For larger expeditions mum (with or without me, depending on the time of year) might walk or drive to the main streets of Reservoir and either fill a wheeled shopping jeep with her purchases, load up some cardboard boxes which would then go in the car boot, or arrange for home delivery – all without plastic bags, and without any of us ever thinking we were hard done by without such things. It is a testimony to the insidiousness of a certain kind of cultural change that there is now a section of the population which protests that they cannot imagine how they are going to get by without being furnished with (on average) 500 plastic bags per person per year.

The existence of such opposition is relevant to the government’s eventual choice of policy instruments for phasing out plastic bags. Whilst a part of me has a philosophical preference for a simple ban, for pragmatic reasons I think a levy (of 20 cents per bag, roughly similar to Ireland) should be preferred. If plastic bags really are the boon that their defenders claim, one would expect them to be willing to pay such a levy for their freedom to choose a plastic bag. What is far more likely is that we would see a similar process to what has occurred in other jurisdictions, where creating a price signal to partially internalise the environmental externalities has led to reductions of over 90 per cent in plastic bag use as consumers painlessly adopt other options for conveying their purchases.

Indeed, I’m sure that in time even Miranda Devine will become accustomed to using a reusable cloth bag instead of a plastic one to carry around the white feathers she gives out to opponents of the Iraq war!

There has been more and more mainstream media coverage lately about issues of ethics in fashion, which is giving consumers this kind of knowledge. Sue Thomas’s opinion piece lays out most of the main things that consumers should consider, and there was a recent Sunday lifestyle story (which I can’t seem to find online) directly comparing the environmental footprint of various fabrics (taking into account the water and energy needed to grow and/or process them into fabrics, the energy to transport them to factories and retail outlets, their durability (hence how often they’d need to be replaced) and the energy, water and detergents needed to launder them. I remember taking from this article that organic cotton used extravagant amounts of water and that polyester was surprisingly environmentally friendly because of its durability and the fact that old garments can be broken down and recycled into new synthetic fabric.

It’s an interesting post that argues that the ethics of fashion are not straightforward.

Adding to this complexity, in addition to couture, ready-to-wear, knockoffs and vintage we need now consider the ethics of online fashion.

While there are certainly still environmental problems involved in letting a virtual you glam it up, it certainly helps to solve problems like water wastage, animal rights and landfill to have original fashions that can be worn without leaving the drawing board.

It also removes problems such as practicality from the equation; if you wanna wear a cupcake, wear a cupcake.

Iris Ophelia takes a tour of Second Life style here.

Even fashion protesters are getting in on the act.

*am I the only one who thinks that Footpath Zeitgeist is not updated often enough?