Individual profit before system efficiency

One of the most disappointing things about our current systems is that they have evolved in such a way that incredible resource inefficiency can become extremely profitable for a selected few. The analogy I always use for this kind of situation is paying one company to demolish your house and then paying another company to build it up again. Sure, this will create jobs in the short term and, if many people do this, a lot of people in the demolition and house construction business will get very rich. But how about society as a whole? Well, after all of this breaking down and building back up again, society would have gained absolutely nothing for all of the precious planetary resources and energy consumed in the process. And since the net wealth of society stayed constant, the fact that people in the demolition and construction businesses got rich implicitly implies that other people (the homeowners) became poor, thereby increasing social inequality.

Sure, no-one is crazy enough to continuously break down and rebuild his house, but in reality, as will be illustrated in the next few examples, this is essentially what most of us are doing each and every day.

Health

The first and most important example of this is health in the developed world. In this case, the house in the example given above is equivalent to our bodies. Certain industries (fast food, soft drinks, tobacco, television etc.) make massive profits from ruining our bodies through woeful nutrition, slow poisons and sedentary living. This has created a true degenerative disease epidemic in the developed world which, in turn, has allowed the medical industrial complex to make truckloads of money out of trying to treat the symptoms of these degenerative diseases.

As a graphic illustration of what a terrible waste this actually is, we can bring back the graph from the previous page. As shown below, countries such as the USA spend five times more on healthcare than some other countries which actually achieve a longer life expectancy. Just spend a few seconds to let this sink in. In effect, rich countries are using more and more resources to break down their bodies and try to repair the damage later on, all while actually losing a number of years of precious life. This really is just as stupid as breaking down your house and building it back up again, only to have the newly reconstructed house be of lower quality than it was before. And yes, one would really think that sane people would value their health over their houses.

The USA is the prime example of this madness. Under intelligent healthcare policies, they could slash their healthcare spending by over $2 trillion per year and gain at least 5 years in life expectancy. Just for some perspective: $2 trillion is enough to buy two thirds of the entire global population a new iPad.

Military

The second example is war. War, or any kind of conflict for that matter, gets one group of people to use their own resources to try and destroy as much of the resources of their opponents as at all possible. From a global societal point of view, this is about as low as anyone can possibly sink. And yes, after the war is over, there are of course the select few who profit from once again building up destroyed infrastructure. This, in essence, is exactly the same as our example of breaking down and rebuilding the house.

Once again, the USA is the primary culprit. America is responsible for almost half of global military spending and has a military presence in almost every country around the world. American politicians say that they do this to preserve peace and spread democracy. However, a strong opposition argument is rapidly growing which says that such continued American aggression results in something called blowback which is nothing other than a very understandable retaliation from the victims of American aggression (watch the video below for some much needed perspective). Therefore, it is possible that all of this massive waste of lives and resources is actually the cause of further conflict and further loss of life and resources.

In any case, if you look at the numbers, you will find that cigarettes are about 2500 times more dangerous than terrorists. Also, since cigarettes kill 1 non-smoker for every 10 smokers they kill (through second hand smoke) smokers are a 250 times greater threat to the general population than terrorists. If the danger from smokers were to be represented by the length of a cigarette, the danger from terorrists would be represented by the thickness of a human hair. But hey, we make a lot of money from selling cigarettes and pumping all the victims of lung cancer full of chemotherapy, just as we make a lot of money from fighting the terrorists. So, who cares?

Bureaucracy

This third example is a little bit different. While the players in the previous two examples profited from breaking the house down and building it back up again, the players in this example profit from setting up and enforcing a long list of rules and regulations as to how the house is supposed to be broken down and built back up.

In the real world, this bureaucratic burden (often referred to as red tape) can be roughly linked to the size of the public sector. Nowadays, the public sector accounts for roughly half of the GDP of the 20 largest world economies – a percentage that really is unsustainably large. In general, there are two problems with the public sector: Their performance is very loosely linked to their income and they get to manage and spend a lot of other people’s money. Naturally, this leads to poor performance and wasteful spending – both of which severely hamper economic efficiency.

The reason for great public sector growth is that the government can pay these workers with money stolen from future generations (by selling the labor of future generations in the form of government bonds). Thus, if a president wants to look good, he just racks up another few billion in government debt, pays a few thousand people to do something completely unnecessary in the public sector and tells the electorate that he has created thousands of jobs. Unfortunately, as Europe is finding out at the moment, this scam can only be pushed so far until investors get fed up with your woeful performance and refuse to lend you any more money. Then you suddenly have to start scrapping many of these pointless public services and face riots in the streets.

Planned obsolescence

Finally, we come to the case where the home builders in our example decide that they want to secure further business even without the help of the home demolition people. To do this, they simply deliberately build homes with severe structural inefficiencies so that it requires regular repair and reconstruction, thereby ensuring lots of future business for themselves.

One of the first examples of planned obsolescence was in the case of nylon stockings. When nylon was discovered and made into stockings, it really was quite a breakthrough. The stuff simply would not break or tear. Women absolutely loved it, but the companies making the stockings soon found their sales going down because these new super-stockings almost never needed replacement.

Naturally, they solved this predicament by instructing their scientists to make the super-efficient nylon fibers a lot weaker so that the stocking would tear after a certain time and consumers would be forced to buy a new pair. And yes, it was not long before the rest of the world jumped on the planned obsolescence bandwagon and started making stuff so that it would break sooner rather than later.

The perceived obsolescence mentioned in the “story of stuff” video above is also a big factor when it comes to things like fashion and electronics. It has become normal to get a new cellphone every year and the short time in which fashion trends now go full circle is so ridiculous that one has to doubt the sanity of consumers. We truly have become a throwaway culture.

But the incredible inefficiency of our current system does not end there. Please move on to the next page.

4 thoughts on “Individual profit before system efficiency”

  1. Your mentioning the subject of health and nutrition reminds me of a question I have yet to answer: Here in the UK, we are repeatedly told that people are living longer and that the numbers of people reaching 100 and getting a telegram from the Queen every year is rising steadily. However, we are also told that the proportion of children under five that are considered obese is also rising steadily… Similar story with regard to liver disease in progressively more and more younger and younger people as a result of abuse of alcohol…

    These trends are not mutually sustainable; at some point, average life expectancy is going to nose-dive? One thing is certain; it cannot increase indefinitely!

    1. Yeah, this is a very sad topic. Put “first generation living shorter than parents” into Google to see how much has already been written about this issue (primarily in the USA, but I’m sure that the UK and the rest of the Western world is not far behind).

      But this is just another problem with our Ponzi scheme economy: not only is the number of retirees to taxpayers constantly increasing (set for a big jump as the baby-boomers retire), but the taxpayers are getting more and more unhealthy (and thereby less efficient and a bigger burden on the state) every year. These trends certainly are very worrying.

      1. I did that. Yikes!… Also, talking of being a burden on the State, I must go and earn my Job Seekers Allowance…

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A DIY guide to saving our world while building a happy, healthy and wealthy life

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