Macro Mustachianomics & Environmental Effects

[CBnCO]

I was watching a business report this morning and it seems the financial media constantly fixates on growth (earnings, GDP, revenues, etc..). I'm beginning to see that with growth there are negative consequences (pollution, consumerism, species extinction, poverty, etc.).

At the same time, I reflect on the core MMM message which I think is to contemplate the benefit of quality of life over quantity of possessions; and I think the same lesson applies to the larger global economy. At what point, as a species, do we start focusing on quality of life instead of constant growth. Maybe its better if we stop growing human population, stop over-hunting & fishing, stop polluting, and stop bombing each other; but, instead we all go to bed hoping the S&P 500 goes to the moon.

Becoming more fiscally responsible is definitely making me more conscientious and I think all of our behaviors are intertwined with social and environmental outcomes. I wonder if others think about how much they hurt or help the environment based on lifestyle and purchasing decisions; because, it seems to me that we are quite insulated when we focus on MMM concepts solely at the micro level. 

I'd love to here your thoughts?

[Fishindude]

Good points.   
Many that claim to be low carbon footprint, green, peace loving, etc. likely have parts of their portfolio invested in, and are reaping the rewards from some of the practices they claim to abhor; oil, coal, mining, defense, etc, etc.

[Fudge102]

I like it I really do.  Growth at what cost is usually how I like to phrase it.  But as Fishindude said, many of us are cross pollinated.  I mean I invest in whole market ETFs.  They have a lot of companies that essentially go against the quality of life concept.  But to me, it's just an ETF.  I don't actually see the companies.  And that's how we do it here.  It's only a problem if you actually see it...  We all know that those people in China and SE Asia have much harsher working conditions, yet people don't care because their shiny new phone or clothing comes cheap.  Dan Carlin said it best in one of his Common Sense episodes.  Essentially people will outgrow the market they are in, i.e., Americans have become used to a certain quality/standard of life.  But in order to pay for that living, companies lose profits.  And when they lose enough, they look to other markets where the quality of life isn't good enough.  They can pay those people less and still make cheap goods for the people who demand them.  Essentially, the free market is a battle between profits and quality of life.  And as long as people don't see it, they don't care.  Applies to environment as well as living standards.

Hypocritical sure, I'm trying to divest myself of the consumerism lifestyle.  I think most mustachians are.  But that still leaves the investing part for us all to ponder...

[Mississippi Mudstache]

I'm with you. Perpetual economic growth is is undesirable and impossible, so long as we remain an earth-bound species. The laws of thermodynamics guarantee this (of course, we'll be hitting ecological limits long before we reach the physical limits of how much economic activity we can sustain).

Problematically, we live in a society that considers a failure to grow, even for the briefest periods of time, a disaster. We call it a "recession" and we panic and sell our stocks and companies fire people while the media stokes the flames. We run a Ponzi scheme (social security) to support our elderly, which explicitly depends upon an ever-growing economy (and population) to make good on the promises that were made to our parents and grandparents. Economists don't even take the idea of a steady-state economy seriously. We have Keynesian economists vs. classical economists, and more recently behavioral economists, but none of them have the capacity to look beyond their own noses to consider what a truly sustainable economy could look like. The only people sounding the alarm are climatologists, but half of our political class actively works to undermine and discredit them. No worries, though, because most of the population would rather plug their ears, rev their engines, and pretend there isn't a problem.

So what do you do? How do you change the rules to a game that you don't control? Frankly, aside from active advocacy, it's tough to see a more reasonable solution than what MMM proposes: drive less, live in a smaller home, have fewer children, and support sustainable energy. Most importantly, inspire others to do the same. Yeah, 100% of my net worth is tied up in index funds. I suppose it would be more befitting of my philosophy to invest only in businesses whose practices I support, but frankly it has far more of an impact on the bottom line when I buy from businesses I support and refuse to buy from those that I don't. And if my portfolio fails because society has decided to  transition to a sustainable economy, I'll consider that a win and gladly go back to working to support myself (spoiler alert: it's not gonna happen).