Peace with the Earth: economic maturity
not growth, nor degrowth will fulfil basic needs
Economic growth sound great! But as with all growth you have to ask yourself what it will look like when it's fully grown. So too with the "economy". I'm not talking about the monetary system that produces tokens and circulates these tokens around between citizens, companies, governments and back. I'm talking about the arrangement for keeping a roof over your head, food on your table and a load of other essential services.
Economic maturity is very much, but not exclusively, Built Capital maturity
I'd like to suggest that economic maturity has much to do with infrastructure maturity. That is to say, the technology used and utilised by producing organisations. As the economy grows, then, more infrastructure is built and the capacity to serve the population increases.
Mature - that's the answer to the question: "What will it look like when it's fully working?"
Maturity of real capital - in this case built capital - is about both capacity (function) and performance.
EXAMPLE: BUS
Capacity (function): to traverse route with space for 60 passengers.
Performance: reliability set at available for 98% of scheduled runs.
We have to ask ourselves "what will it look like when it is fully grown?" This is a political thing, and people will not agree, but the discussion will likely throw up something that most can agree on, like the example of the bus, above. The diagram below gives an example. Let's say that for a town to be a good place to live in there should be a certain amount of amenities: libraries, parks, swimming pool, sports halls as well as healthcare, local transport etc. What there should be as a minimum can be derived from opinion polls, surveys and investigations. This list is put at 100%. Now, it may be that not all of the amenities are accessible to residents (for example, shortfalls in local transport) So this can be investigated too.
Remember: when growth is achieved, all energy goes to function
Another aspect of economic maturity is that a mature system - in this case built infrastructure - requires energy for maintenance and operation but not for growth. All that energy needed to build it- and it can represent at least the energy that the infrastructure will use over a lifetime - once expended, will continue to bring benefit. This is the red line that is represented in the supply chain diagram of earlier posts.
Testing the idea in a thought experiment
In a thought experiment below, we see that most of the amenities are in place, but there is a shortfall in their accessibility.
To explore this line further, let us do a thought experiment around accommodation and add a third criteria, one of meeting expectations. Expectations don't have to be the same for everyone. It could for example be something like:
Maturity of housing will be reached when everyone is accommodated and in types of accommodation meeting their preferences to at least 60%
A mental model of real capital maturity to test
Now, lets do an experiment and test a mental model.
Our mental model is that real capital maturity, of infrastructure capability and performance, could be a useful policy tool for local government.
By useful, we would mean that the measure of maturity would clarify the situation and give a decision basis upon which to base policy. To test this mental model we could begin with a thought experiment. Put yourself in the shows of local government needing to make policy decisions. Given is the political will for 100% housed, so you will need to work from that.
Three criteria of maturity
Let's say that we identify three maturity criteria for housing :
There are enough houses built to accommodate everyone
That everyone IS accommodated (i.e. there are some people with second homes and some without but there is room for everyone)
That the accommodation fulfils their demands by over 60% - that is that they have their ideal home at 100% but their home fulfils 60% or more of their criteria. This figure could be arrived at in many ways, for brevity, let's assume the method is accepted by voters.
Measurement of maturity presented in a table
To present this to decision-makers (you) we might produce a table:
Out aim is to improve policy-making. So let's see if this kind of presentation would inform policy-making. But we'll explain it first.
The real capital we are looking at it housing, and housing has two performance criteria, the number of people housed and the subjective level of acceptance. Policy around real capital is an asset. This is because it is arrived at democratically and an agreed ambition, something to build on. Liability is shortfall on policy - this is that society is failing and equity is the actual performance.
Have we tested our mental model?
In this thought experiment, the policy is for everyone to be housed, but only 85% are. However, there is accommodation for 95% so the distribution problem is higher than the actual physical pool problem.
We see that the population satisfied to 30% with their accommodation, so there is a shortfall of 30%.
Can you craft policy using this approach?
So have we passed the policy test? Is is clear from the rundown above the status of the housing situation, and is it clear where policy needs to intervene? Does this policy require economic growth for it to happen? Will it MEAN economic growth? Does economic growth have any relevance in this case. I'll leave you to answer this in the comments.