A front-page story in the Washington Post on Feb. 16 was entitled "Economy Strains Under Weight of Unsold Items." It led, "The unsold cars and trucks piling up at dealerships and assembly lines as consumers cut back and auto companies scramble for federal aid are just one sign of a major problem hurting the economy and only likely to get worse. The world is suddenly awash in almost everything: flat-panel televisions, bulldozers, Barbie dolls, strip malls, Burberry stores. Japan yesterday said its economy shrank at an 12.7 percent annual pace in the last three months of 2008 as global demand evaporated for Japanese cars and electronics."
In a front-page story in the Post on Feb. 18 entitled "Swift, Steep Downturn Crosses Globe," a London-based economist is quoted: "Manufacturing, construction, financial services, non-financial, retail—wherever you look, you see a complete collapse in demand."
The past three decades have seen an orgy of consumption in the developed world and an understandable desire in the developing world to emulate us. Last year, the collapse of the subprime mortgage market was no more than a distant rumble of thunder for most of us in the U.S. and hardly even that for consumers in the rest of the world. As that calamity cascaded through the financial markets, however, an economic storm of unimagined scale broke over consumers the world over. And everyone, late last year, seemed to have woken up from a dream and asked themselves, "Do I really need any more stuff?" For many, the answer was simply, "No." And here we are.
The defining theme of the 20th century was not the triumph of democracy over other competing political systems, as some commentators claim. It was the triumph of capitalism over competing economic systems. As China and Russia have amply demonstrated, capitalism is as compatible with authoritarian political systems as it is with democratic ones.
The question before us now, I think, is whether capitalism itself is a viable organizing principle for society in the 21st century and beyond. I am not an economist, but capitalism seems to require endless growth—in demand, in consumption, in population—and despite the claims of capitalism's defenders, endless growth is, by definition, a physical impossibility. Planet Earth is groaning under the weight of the humans already here.
An ACS colleague said to me yesterday, "Recessions always end," and he's right, of course. Although we certainly have not reached, or perhaps even glimpsed, the bottom of this recession, it will end. I hope we emerge from it, as my parents emerged from the Great Depression, chastened and willing to embrace something new, not a lesser quality of life but a new definition of what constitutes quality—a definition that somehow provides for human needs within the limits of a healthy and vibrant planet Earth.
Thanks for reading.
How much stuff do you need? That is the fundamental question at the heart of the current global economic meltdown that is crushing economies around the world. The chemistry enterprise is by no means immune to this economic chaos, as the pages of C&EN attest week in and week out.
I am not a shopper. I honestly cannot tell you the last time I was in a mall. Except for the few suits I own, almost all of my clothes are mail order. The only stores I actually enjoy going to regularly are grocery stores, because I like to cook and I like to eat good food.
My wife, Jan, is not much of a shopper either, but she does, on occasion, venture out to the mall for this or that. Invariably, when she returns home, she will comment on the vast quantity of goods arrayed in the aisles of the department stores and chain stores and wonder aloud where it all winds up because, surely, it cannot all get bought.
It definitely is not being bought today. Neither are cars or appliances or tools or furniture or home improvement items or McMansions. Demand for stuff has collapsed worldwide.