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Life After Growth: How the global economy really works - and why 200 years of growth are over

Book Description

Why, years after the banking crisis, is the global economy still mired in recession and burdened by enormous debts? Why have the tried-and-tested economic policies of the past failed us this time? In Life After Growth, leading City analyst Tim Morgan sets out a ground-breaking analysis of how the economy really works. Economists are mistaken, he argues, when they limit their interpretation of the economy to matters of money. Ultimately, the economy is an energy system, not a monetary one. From this, it follows that we need to think in terms of two economies, not one - a 'real' economy of work, energy, resources, goods and services, and a parallel, 'financial' economy of money and debt. These two economies have parted company, allowing the financial economy to pile up promises that the real economy cannot meet. Starting with the discovery of agriculture, Tim Morgan traces the rise of the economy in terms of work, energy and resources. The driving factor, he explains, has been cheap and abundant energy. As energy has become increasingly costly to obtain, the potential for prosperity has diminished, to the point where growth in the real economy has ceased. An immediate problem is that our commitments - including debt, investments and welfare promises - cannot be honoured, which means that we can expect the financial system to be wracked by value destruction. At the same time, we need to adapt to a future in which prosperity can no longer be taken for granted. #lifeaftergrowth

Table of Contents

  1. Table of Contents
  2. Publishing details
  3. Foreword by Terry Smith
    1. Chapter 1: An Economy That Has Run Out of Road
      1. The corner that is never turned
      2. In search of the real economy
      3. The end of cheap energy and the death of wealth
    2. Chapter 2: How the Economy Really Works
      1. Two economies, not one
      2. The real economy – an energy system
      3. The subservience of money
      4. Recklessness – the creation of excess monetary claims
      5. The madness of crowds
      6. The globalisation disaster
      7. Dodgy data – an exercise in self-delusion
      8. Where do we go from here?
    1. Chapter 3: The Energy Economy
      1. What is the real economy?
      2. The commonality of energy
    2. Chapter 4: The Great Breakthroughs
      1. The first great breakthrough – agriculture
      2. The second great breakthrough – the heat-engine
    3. Chapter 5: Growth and Risk
      1. Energy, population and exponential risk
      2. Towards peak oil?
      3. Right answer – wrong question
    4. Chapter 6: The Real Threat
      1. Energy returns – the killer equation
      2. Where are we now?
      3. The road from wealth to poverty
      4. Removing the foundations?
      5. Knowing the score
    1. Chapter 7: The Servant, Not the Master
      1. The subservient role of money
      2. The creation of money
    2. Chapter 8: The Madness of Crowds
      1. When it didn’t pay to go Dutch
      2. “An undertaking of great advantage, but nobody to know what it is”
      3. An eastern bubble
      4. The biggest bust
      5. Something old, something new
    3. Chapter 9: The madness of globalisation
      1. Dangerously simple, simply dangerous
      2. Credit market distortion
      3. ‘Taking in each others’ washing’
      4. Deep in the hole
      5. Gravity reasserts itself – the debt crash
      6. Compounding errors
      7. Energy takes away the punch bowl
    4. Chapter 10: The Madness of Statistics
      1. The high price of understated inflation
      2. Grossly Distorted Prosperity
      3. What growth, what jobs?
      4. Government finances – smoke and mirrors
      5. The understatement of government commitments
    1. Chapter 11: Welcome to Life After Growth
      1. The end of an era
    2. Chapter 12: Value Reduction – the Real Economy
      1. Energy – from abundance to scarcity
      2. Options for the future
      3. Costs – the energy sprawl phenomenon
      4. Real incomes under pressure
      5. Business – the model nears obsolescence
    3. Chapter 13: Value Destruction – the Financial Economy
      1. Unfit for purpose
      2. Thinking the unconventional
      3. Are we printing inflation?
      4. When inflation is not enough
    4. Chapter 14: An End or a Beginning?
      1. How do we think?
      2. Action this day?
      3. The dangers of stasis
    5. Afterword: “What Does This Mean to Me?”