Looking at growth with soul rather than figures - battling transition and slide

India-Books/Economy 

By Madhusree Chatterjee 

New Delhi

Growth in the post Lehman Brothers World is aligning to a third curve that takes into account mind, body and concepts — and their possibility in the realm of contemporary reality. The three phases of growth — take off, boom and bust — that have carried the world through over the past two centuries since the industrial revolution be me measured in terms of quality rather than quantity in a resource-crunched world economy.

Growth, says technocrat-filmmaker and self-styled economist Mansoor Khan has been intricately to the way world has consumed oil. The peak-oil period is over and “oil reserves” across the world is showing a decline thus triggering a rethink in defining growth. India, as one of the developing Asian economic giants, is vital to broad oil canvas logging a sluggish economic growth in the last five years. Concern is palpable in the industrial segments as the new enterprise apparatus is veering to the softer tertiary sector — where the utilization of resources of resources is either minimal or optimal. 

Disposable resource to squander has run out of supply.

The third curve of growth plotted in tandem with global oil curve shows a downward trend for the future. The disaster management pill is a more introspective use of resource capacities to bring a qualitative change in the GDP rather than depending on the fallacy of plenty.

In a debut treatise on the global economic trends, “The Third Curve: The End of Growth as We Know It”, Mansoor Khan, suggests measures to bend the downside and strike a workable balance between concepts and reality to bridge the gap between money, resources and expectations in the inflationary money market which is scraping the bottom of the barrel to dredge funds to bring back the economy on the rails.

“The conventional model is collapsing and the reason for the downturn is the fact that we are in denial. Instead of accepting it, we are trying to perpetuate old models which are no longer applicable to the economy that has reached its maturity,” Mansoor Khan told this writer in the capital.

The options are “not that simple”, Khan says. “The move is towards a qualitative economy where the concepts about the value of money are different. Quality is the new value of money to sustain the process of growth,” the writer says. Khan’s new growth model- at the end of the progress curve— is based on a historical perspective. “Till the 1960s, beginning with the decades post-war— the world was witnessing paradise times where the sky was the limit,” Khan writes in his book.

“On July 20, 1969, man had landed on the moon. Breaking the boundaries of our little planet appeared to send ripples of boundless for the future. It assured us that we were entitled to break the limits of time, space, productivity and output,” Khan argues. Breaking the boundaries of the earth was perhaps the first retrograde motion to bear on the growth curve — with expectations surpassing resources. The future did not look as had been promised. “Starting with the disappearance of the whale, we woke to species extinction, forest depletion, population explosion, top soil erosion, ground water erosion, chemicals in our food — global warming,” Khan says. It led to ecological breakdown.

The root of the growth slide lies in the cycle of economy. The history of growth has followed a pattern boom, bust, revival and plateau — with a gradual shift to alternative possibilities of economic diversification. In the first 150 years of Industrial Revolution (in the 18^th century), a growth was exponential amount of start-ups, innovations and entrepreneurships. The great depression of the early 20^th century that coincided with the World Wars wiped the citadels of the industrial revolution.  New growth centres emerged across the globe — taking the action away from the traditional centres of growth like Britain, France and the allied block. While America (north) recouped, Germany in Europe revived from its wartime losses to follow a new industrial growth map. Russia, Japan and China (from 1950) in Asia became the new growth centres, followed by India.

The story of growth is linked to indiscriminate exploitation of natural resources as well— minerals, forests and water.    

Khan explains this process of growth in three phases — exponential growth, perceived growth with negative trending and failing growth. The writer believes that “the phase of failing growth” has been brought about by the ecological catastrophe.   

“As we raced down the highway of economic growth, we hoped that allotting huge funds through well-intentioned organizations to save the environment would help offset the ecological crisis. By then the financial structures were going awry,” Khan says. Suddenly, the future was not what it used to be.

Khan’s arguments about growth are linked to the mind — it is conceptual. The mind comes up with an idea — a concept that the body has to implement. The result is growth. “The body is like a runner and the coach is the concept. The coach initially pushes the body to run. The coach sets a speed limit of 10 km per hour, slightly faster than walking. The body runs with ease. After a week, the speed limit is 10.7 km per hour. Every week, the coach pushes the limit by 7 per cent pledging that in 18 months the body will break the speed of sound,” Khan says.  The sponsors are happy. But after 10 weeks, the body discovers that it has managed to touch 20 km per hour.

“The speed of the body doubles every 10 weeks like reaching for the sky. This is exponential growth,” Khan says.   

The “super coach” sells the “super concept” – of running faster every 10 weeks — to sponsors and claims that he will recover the money from the euphoric sponsors, who are impressed by early successes. This is Paradise Times.

But the bubble soon bursts. By the end of the first year, the body has can push itself by six per cent instead of the initial 7 per cent. The stressed body uses boosters to ramp up its speeds — but it is a piecemeal measure. Rigorous training fails to pull up performance. “The reality cannot be concealed any longer and sponsors hit the ceiling. They eventually withdraw,” Khan says.

This is a complex pitch, Khan says. On the one hand, the body is a wreck while on the other, huge amounts of money the sponsors have paid are a write-off. The body collapses from both outside and within. The road from this point is downhill.

“You must do two things at this time,” Khan says. The first is to kill the concept and second is to save the body. The concept is money and the body is the resource. “Saving the body requires a change of perception about the earth’s resources that the planet is not an inanimate chest of treasures but a breathing cosmic body that has life,” the writer says.

Khan connects the coach-runner concept to the discovery and the use of oil. The modern economic growth began with the discovery of oil. As the oil output grew, a third bell curve parallel to the oil curve shot up till the oil production and consumption peaked. It was the peak oil position. “I think we have reached the peak oil position, but very few people in India are aware of it. Most of the global economies are premised in oil. When oil prices touched 146 dollars a barrel, several oil-dominant economies collapsed,” Khan says.

The graph curved downhill.         

This slide downhill can be contained in two ways — denial or acceptance of peak oil. The path through acceptance is one of transition. Rebuilding the global economy in a post peak-oil scenario depends on “collective action”. “The shift to transition begins when a small group of people comes together with shared concern about shrinkage and downturn,” Khan says.

The idea that life post peak oil might be “more pleasant and fulfilling than today’s lifestyle is at the heart of the transition movement,” Khan says.

The phase embodies the quantitative reduction of energy and consumption and qualitative rebuilding of the aspects of the world that have been lost, Khan says.