Frank Taylor

Once I saw, in a nearby garden, a  contraption for hoovering up  leaves. It was almost the size of a  Shetland pony. The effort involved in  lugging it from its shed, wiring it up,  and dragging its bulk around would  actually be greater than the time  honoured method of rake and wheel- barrow. Any additional usefulness  provided by this machine would be  negligible, even negative.

Technical developments are prone to a  law of diminishing returns. Whilst  washing machines are a great leap  forward in domestic utility, what of  tumble driers? After all the actions  involved using such a device is hardly  less than that involved in pegging  clothes on a line. Yet a tumble drier  will double or treble the energy used  on washday, quite apart from the  productive resources absorbed by the  machine itself. Does a dish washer,  using three times more energy and  water, really save much effort? What is  the advantage of a shoddy plastic  electric mower, with a life expectancy  of perhaps six years and which  consumes energy in use, against a  hand mower which uses no power and  which can last twenty?

We must consider the balance of  domestic productivity against the  whole life resource cost of appliances,  their development, design, production,  marketing, distribution, servicing and  ultimate disposal. In that scenario the  law of diminishing returns eventually  yields a negative.

Our world picture is one of ever more  frenetic activity to produce ever less  of enduring worth. There is much  wringing of hands as to why life  becomes ever busier, more complex  and costly. We can at least partly  explain this phenomenon by utilising  Adam Smith’s notion that a society  contains a ‘stock’ of goods, - that is  the sum total of its usable assets - and  that this ‘stock’ can be ‘improved’. If  we equate the concept of  ‘improvement’ to ‘utility’ then a given  totality of goods will yield a given sum  of utility.

Today we have a situation in which  growth in the ‘stock’ of goods does  not further ’improve’ the total utility  available. Indeed, the more goods  accumulated the greater the gap  between potential use as against actual  and resource input against output.  ‘Economic growth’ is not about  ‘improving’ the ‘stock’ of society but  accumulating ever burgeoning mountains of surplus utility.

Conventional economics is principally  concerned with production and the  efficiency of production and only very  marginally with what happens to a  product after it has been ‘consumed’.  By and large a product, once purchased, drops into an economic black  hole and out of the picture altogether.  Yet if economists focus their attention  on the efficiency with which goods are  produced, why should they not take a  more holistic view by focusing  attention also on the efficiency with  which they are consumed?

What constitutes efficient consumption? Examples abound. Take a  launderette which serves two hundred  houses. Instead of two hundred  washing machines in two hundred  houses operating four hours a week,  we might have eight machines in a  launderette each operating ninety  hours a week. A family car will be  used perhaps five hundred hours per  year, the bus will receive ten times  that utilisation.

The relative resource inputs required  to manufacture, service and operate,  for example, eight large machines as  against two hundred smaller ones are  abundantly clear. On the one hand we  have small numbers of highly utilised  resources but which are shared. On  the other we have modular consumption where large quantities of merchandise are held in conditions of low  (usually very low) utilisation.

A consumer society relies, using the  pretext of ‘convenience’, on modular  consumption. Since a person can, at  any given time, only ‘consume’ so  much this pattern of consumption is  reliant on merchandise spending much  of its time idle. A car might be used  ten hours per week, a washing ma- chine four, a lawn mower one hour in  two weeks, a book may be read once  and then spend thirty years unopened  on a shelf. Consumerism requires the  creation of ever greater mountains of  redundant utility.

We are told that ever more appliances  are needed because we work so hard  and have little time or energy left for  domestic matters. But where is the  convenience or the logic in having  millions of people working forty hours  per week, engaged m the unsustainable guzzling of finite resources, in  order to churn out labour saving  devices? The productive dog ends up  chasing its own tail ever faster.

This indicates an inverse relation  between improvements in the efficiency with which goods are produced  and the efficiency with which they are  consumed. To promote economic  ‘growth’ there must, for every advance  in productivity, be a countervailing  reduction in the efficiency of consumption.

Thus there are two components to  surplus utility. First we have merchandise which does eliminate

drudgery but whose utilisation is low.  Secondly we have merchandise where  not only is the utilisation low but that  any further improvement in utility  offered is negligible or non existent  and whose main purpose is to com- modify undemanding activities such as  raking the lawn or hanging out the  washing. The tipping point of diminishing returns is passed and we get  into a situation of utility glut where  further production and consumption  can only add to the total ‘stock’ of  surplus utility.

All that is ‘growing’, then, is surplus  and redundant utility, in short waste.  A whole life calculation of the re- source inputs required by many  modern appliances as against both  actual and potential output yields a  picture, not of ‘growth’ but of decline.  Thus we can account, at least in part,  both for the mirage-like appearance of  ‘economic growth’ and for the spiral- ling externalised costs which derive  from the social and environmental  stress required to produce, service and  dispose of all this gadgetry.

Human stress is sometimes defined as  the non-specific reaction of the  organism to its environment. We see a  pandemic of compulsive-addictive  disorders running hand in hand with a  relentless growth in crime and stress- related health disorders both physical  and mental. Over time the growth in  such malaise runs in approximate  parallel to ‘economic growth’. The  stress created by the productive  processes needed to create this glut of  redundant utility has become unendurable both to the environment and to  many people. Consumer materialism is  the realisation both of anomie and of  environmental degradation.. The cost  in both human and financial terms will  always spiral in parallel with the  ‘growth’ as the volume of redundant  utility grows, whilst the net potential  utility of the total ‘stock’ of ‘labour- saving’ appliances relatively declines.  We all pick up the hidden costs.

All this exhibits a form of decadence  which redefines ’austerity’. The further  primary poverty is left behind the  more austerity becomes a relative  notion. ‘Austerity’ becomes the  inability to afford a new BMW or two  foreign holidays every year. It be- comes not a question of hardship, but  of relative

diminution of access to surplus utility  and a matter of social ideology.

This ideology is, of course, of vast  benefit to the major corporations and  massively promoted by them. The  advertising does not itself matter so  much as the publications which the  advertising creates. The media is  stuffed with every frivolous whimsy  under the sun. It has become a  whorehouse to maintain the level of  titillation which the accumulation of  surplus utility requires.

This ideology also permeates every  corner of politics. Even the concept  of ‘child poverty’, setting aside the  risible notion that ‘the child’ can  somehow be cut out of its immediate  social and familial environment like  snipping a coupon out of a newspaper, has become infected with it.  ‘Child poverty’ is now more to do  with interpersonal competition,  consumerism and keeping-up-with-the-Joneses than any concept of  poverty that Rowntree or Beveridge  would recognise.

Central to this ideology is the supremacy of acquisition and the related  phenomenon of conspicuous consumption. Conspicuous consumption  is the decadent aggrandisement of  waste. The aristocrat might once have  had footmen dressed in absurd  uniforms, rendering them wholly  useless. Here was a man so wealthy  that he could preen himself by wasting  the lives of his minions as pointless  decorations.

Thus the utility of goods becomes  irrelevant. It is the ownership and the  display of that ownership that matter.  The whole point is for people to fill  their lives with piles of frivolous,  resource-guzzling gadgetry.

The consequences of conspicuous  consumption loom ever larger.  Conspicuous consumption can never  be consistent with sustainability. From  a practical point of view could the tax  system be changed to calm and reduce  demand for frivolous merchandise?

The answer is for a massive shift to  indirect taxation. It will be argued that  such a shift will be to disadvantage the  poor. This need not be so if we revive  a principle, lost with the disappearance  of purchase tax thirty years ago, of  differentiating between ‘luxuries’ and  ‘necessities’. In that case indirect  taxation can become just as progressive as direct taxation. The poor get  what they need whilst the affluent pay  extra for their resource guzzling  frivolities.

For want of a better term I will call  this Utility Taxation. Taxation would  be graded in accordance with the real  utility that the merchandise confers. It  would be a basic sales tax banded into  three rates. The lowest rate which  would approximate to the present  level of VAT and would be applied to  high utility goods. There would be an  intermediate rate for more marginal  goods, at perhaps three times the  present level of VAT, and a top rate  for the wholly frivolous at, say, ten  times the present level of VAT. There  would be an opportunity to phase the  tax if a particular industry needed time  to make a soft landing.

For example a washing machine has a  high domestic utility whereas a tumble  drier does not. The former would be  low rated, the latter top rated. A later  policy option would be to transfer  domestic machines to the intermediate  rate leaving only launderette machines  in the lower rate. Dishwashers, which  again add very little to household  utility yet guzzle energy and water,  would be high rated. There is no need,  in most domestic gardens for powered  lawn mowers. Thus a hand mower  would be low rated and a powered  mower top rated. The application to  cars is clear. A small saloon would  remain about the same price, the cost  of a Rolls Royce doubled.

Aerosols provide a further example.  Their manufacture is highly material  and energy intensive, they use carbon  base propellants, so only a proportion  of their contents are active ingredient  in any event. Disposal is a major  problem. Yet there are very few things  that an aerosol can do that a refillable  squeezy bottle can’t. Thus the refill- able bottle would be low banded and  the aerosol top rated.

Such taxation could be directed  against a range of high energy-use  products such as air conditioning  (unlike VAT, this tax would not be  recoverable by companies). In addition  it could be used to attack other points  of unsustainability. For example  broiler produce could be high rated..

It may also be objected that such a  radical increase in indirect taxation  would lead people to buy abroad. The  tax would have to be payable on the  item entering the country, effectively  operating as an import duty. Of  course this is not compatible with  WTO and EU rules, but that battle  has to be fought at some stage.

There is a policy choice between  taxing at the point of production or  the point of consumption. Too often  either taxation or regulation applied at  the point of production will only serve  to drive that production abroad as  with the Climate Change Levy and the  Landfill Levy. These are cumbersome  instruments and there is little evidence  that they have brought about anything  beyond the most marginal reductions  in waste or energy use. Far greater  gains can be made by taxing at the  point of consumption.

Frank Taylor

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