The emerging sense here is that there is a demand crunch in the Chinese economy. This is likely being caused by a number of factors driving layoffs and reduced hours, which means workers have less money to spend on conspicuous consumption items. In a short-term sense, I think the big factor would be layoffs from Trump's so-called trade war. But the bigger factor is that the global economy simply hasn't been performing, since 2008. We are way too invested in financial markets, and firms like Apple are sitting on way too much cash. In the past, a decline in Chinese domestic demand wouldn't have effected western firms like Apple so much. But it speaks volumes to where we are now, with the impact of globalization on economies.
The big tech firms, like Apple, need a new "big thing." Thing is, it likely won't be a big consumeristic "thing" like the iPhone. Possibly, if government were to lead the way on it, the next big thing would be an industrial revolution in environmental technologies. Apple and other companies might have a lot to contribute, on this front...
Hear me out: So far, we’ve only attempted market-based solutions (cap and trade, consumption taxes, etc) to global warming. We’ve focused on the idea of adding taxes on human activity, with the view that ‘doing less’ human activity is the solution. Of course it won’t work. Human demand for human activity is quite understandably inelastic! No wonder ppl reject it. As the gilets jaunes in France represent, people see that the market-based solutions hit the poor the hardest. The narrative we’ve been afraid to try is: MORE human activity. And that’s the basis of the so-called green new deal. A stimulus-based approach, which has the added virtue of kick-starting a new era of productive jobs in the global economy. Right now, global demand is still weak from 2008. Because we haven’t learned the lessons of 2008, the real money is still in finance. Large corporations are sitting on piles of non-productively invested cash, for lack of demand. Salaries are very low, in real terms, compared to what they were in the 30 years after WWII. The gap between rich and poor has not been as wide as this, since the gilded age — except it’s worse for us. These are the facts. Meanwhile, the effects of global warming are also disproportionately effecting the poor. And so the situation cannot endure. We need a green new deal, which starts with the proposition a whole generation people shouldn’t be abandoned to live paycheck to paycheck, but which furnishes the solution to our globally weak economy with a massive GREEN jobs program.
A green new deal. Like FDR’s new deal, except focused on converting our energy generation and transmission, our transportation, and our waste management, to a carbon neutral basis. Secondly, to begin a serious effort to re-sink atmospheric carbon into the earth; in Iceland they have a system which, if scaled, can use sea water to turn atmospheric carbon into limestone blocks. To do this on a widespread scale however, is the trick. None of this will be achievable without a massive public investment plan, however. Which means it will be costly, and corporations won’t want to do it. What we’ll need to remind ourselves however is that taxes used to be much, much higher, in the new deal era. And much of the global prosperity of the 50s and 60s came from this. From the USA to there UK to Norway to India, demand stimulation came from public-led programs. These reduced inequality, extended lifespans, increased happiness, and also set the basis for the success of future generations. All of this has been unraveling slowly since the 1970s, because of neoliberal technocratic dithering. We’ve lost faith in the idea of collective action. We do everything thru market-based solutions now. Which means, of course, that today we solve only the problems from which short-term profits can be made. I think so long as this short-termism prevails, we are doomed.
The current likely collapsing bubble in tech stocks is symptomatic. We need government to lead the way, with a new deal, if tech jobs are to survive. We need a new, green revolution in demand-side economics.
