De-Growth

 Georgios Kallis ( Autonomous Uni of Barcelona )

 

Thomas Roulet ( Cambridge University )

 

Maitreesh Ghatak ( London School of Economics )

 

 

 

Context ( Articles / Interview ):

 

 

Ø  Degrowth means we live a simpler life, so that others can simply live

 

Ø  Degrowth will accelerate as consumers change-companies should adapt now

 

Ø  Relentless pursuing growth can uproot the tree that bears us fruit

 

(  source :  Economic Times – 23 Dec 2020 )

 

 

Dear Friends,

 

 

What you advocate , makes great sense

 

 

In JAINISM, there is a VOW , called “ Asteya “

 

 

A follower who takes this vow, is expected to lead a simple life by consuming only that much quantity which is essential to sustain life – no more

 

Developed countries who, through over-exploitation of resources, have so far managed to lead a “High Standard of Living “ , will gradually need to reduce it to a sustainable level

 

 

Thomas,

 

You wrote :

 

“ The thought process for companies needs to start around their product itself – is it durable ?

 

  What features an be integrated into the design of the product so that it will consume LESS RESOURCES and provide the same utility to the consumer ? “

 

 

My take (  https://myblogepage.blogspot.com/2019/11/low-manpower-cost-low-cost-economy.html  )  :

 

Ø  In any given product, 99 % of the resource ( value addition ) is HUMAN resource, as explained below :

 

Product Cost                =   Cost of   “ Assemblies “                       +  Manpower Cost

 

 

Ø  Assembly Cost        =   Cost of  “ Sub Assemblies “                  +  Manpower Cost

 

 

Ø  Sub Assembly Cost  =   Cost of    “ Components “                    +  Manpower Cost

 

 

Ø  Component Cost      =    Cost of    “ Semis “                            +  Manpower Cost

 

 

Ø  Semis Cost              =   Cost of    “ Minerals “                          +  Manpower Cost

 

 

Ø  Minerals Cost           =   Cost of    “ Beneficiation “                    +  Manpower Cost

 

 

Ø  Beneficiation Cost     =   FREE digging out from Earth                +  Manpower Cost

 

 

 

Every product that we see around us has its origin in Earth

 

 

 

At every stage , from digging out the minerals from the Earth ( which Mother Earth provides for FREE ) , to assembling the final product,  we need to employ people and pay them salaries / wages , which is “ Manpower Cost “ [ This also applies to generation of electric power – a crucial input ]

 

 

 

Hence,  fundamentally , every cost addition at every stage of manufacture, is  MANPOWER  COST  !

 

 

 

So , the industry which manages to keep its Manpower Cost low ( as compared to competitors ), manages to sell its products cheaper and corner a large market share within a country

 

 

 

This also holds true at international level

 

 

 

A country which manages to keep its Manpower Costs low , manages to out-price other countries and can export more

 

 

“ Manpower costs “ depend upon salary levels which keep rising, year after year , as employees demand neutralization of rising “ Consumer Prices “

 

In most countries, a component of salary ( known as DEARNESS ALLOWANCE , in India ) , is linked to CPI ( Consumer price Index )

 

This sets in motion a circle of Rising CPI > Rising Salaries > Rising product costs > Rising CPI

 

In past , I have suggested that Annual Salary Increement should not attempt to neutralize COST of LIVING , by 100 %

 

It should be restricted to ( say ) 75 % max

 

When people have  less salary ( consumer surplus ), they will buy / consume less !

 

 

With regards,

 

Hemen Parekh

 

Mumbai – India / hcp@RecruitGuru.com  /  www.hemenparekh.in