The Stuff Wars

Two men local to the area show tourists from larger centers in China around on traditional river rafts. One of them takes a break to make a call. Yangshuo, China. 2010.

Today is May 13th, 2019 and I have been wasting time watching the markets dip pretty hard. As I start this draft, the Dow is down 2.54% for the day while IEMG, an emerging market ETF denominated in US Dollars, is down 3.64%. By the time of pressing ‘publish’, it will probably be May 14th, and markets will have recovered a bit, as they overreact to their overreaction on May 13th.

And they did.

So why is this happening?

Well, the answer, of course, is easy: it is due to an overreaction by the markets to the re-escalation of the Stuff Wars between US and China in recent weeks, including a new set of retaliatory trade tariffs placed on US goods by China today. That is, tariffs placed on the obscene amount of things – stuff – that we ‘trade’ with each other have turned the markets from a state of greed to a state of fear – their two primary emotions.

Throughout China people practice Tai Chi. Here in Hong Kong, a group gathers at about 6am for their daily routine. I had been wondering around Victoria Park for a few hours at this point – jet lag.

Now let’s just set the context a little bit – China is huge. Like…HUGE! It is one of the largest countries in the world with a ton of inhabitable land, and boasts a population approaching 1.4 billion people! In contrast, America – a huge country in its own right and still the world’s largest economy – is less than 330 million people. An entire one billion people less!

However, a massive trade deficit exists – but in the reverse direction! Yes, that’s right – America imports so much STUFF, that they actually buy far more from China than China does from America, even as China looks poised to become the largest economy in the world (actually for this reason, ironically).

In 2018, USA imported $539.5 billion in goods from China, highlighted by $186.5 billion in computers & electronics and $49.9 in electrical equipment. Meanwhile, China imported ‘just’ $120.3 billion.

And the American Government claims this is an outrage! (And they’re right – although not for the reasons they think they’re right for).

It is an absolute outrage that a country who is obsessed with consuming and has developed a deeply-seeded ‘throw-away’ culture is blaming its largest trade partner for not doing the same (or for trading with others as well). And to boot, this same American consumer (or those who support the tariffs at least) is now willing to pay even more themselves just to ultimately stick it to the Chinese producers who have been supplying them with their mainline of cheap stuff from the beginning, all while potentially harming the global economy (and environment).

Basically, the American government’s outrage at this discrepancy is the equivalent of shitting in one’s own back yard despite having the proper plumbing infrastructure in your house and then getting angry at your neighbor for not shitting in his own yard as much or more than you did – regardless of whether or not he has the option to shit indoors and flush away all the mess like you do.

You follow? Good.

What I’m saying is, this whole thing simply takes for granted this notion that Americans buy a ton of shit and always will and that’s just the way it is so everyone else better catch up to keep this global economy running strong.

Yanghuo in the evening from The Marvelous Monkey Jane’s Rooftop Bar.

Nobody ever sits back and says, “hey, instead of our government taxing the goods we buy from China to force us to buy less and/or them to buy more, what if we just bought less all around? Then, wouldn’t our deficit would be reduced?”

It sure would be, but the economy would ‘suffer’ a slowdown.

But Why should China have to buy more to reduce the deficit? We could always buy less (or find alternative trade partners if we think China is so crummy after all).

Yes, there are some things that are not so easy to find an alternative source for, such as certain agricultural products and raw materials. However, there is also a ton of completely useless stuff made in China simply to sell to Americans for CHEAP, because that’s what they want! Hell, Westerners go to China to set up businesses nowadays because of the labor and manufacturing cost advantage they provide. Because we want to take advantage of discrepancies in labor markets and regulatory gaps in other countries to get more stuff in our toy chests while keeping as much money in our greedy little coffers as we can. Damn the environment, damn the future. We need to keep the economy growing.

For a little perspective, just think what an iPhone might cost you at $25-$35/hour instead of something more like $1-3/hour in labor costs.

And think of what the environmental and social impacts might be if all $1.4 billion Chinese people lived the way the average American does?

And I’m not here to preach – I am as guilty as anyone of over-consuming. I have documented in the past how the ‘low-impact, simple’ life that I am still striving to achieve would still require 3.8 planets if everyone else on the planet lived the way I strive to. And I’ve written about how fortunate most people in developed countries are just by virtue of being born in a developed country!

I am simply here to call it for what it is – Stuff Wars. In fact, it is this very fortune we are born with that blinds us to just how fortunate we truly are, and perpetuates the over-spending and over-consuming that has become ‘normal’ in just the last 50-80 years of many hundreds of thousands of years of human history.

Like the cancer sell, and virtually nothing else in the universe besides the universe itself, our economy assumes perpetual growth. In fact, the entire #FIRE community, myself included, relies on the idea that they can just invest their money in capitalism and look the other way while it will inevitably grow at a nice, relatively steady rate.

But when will we reach our limit? Some say it is already happening. China claims to have grown its GDP by about 6% in 2018. Down from closer to 10% just a few years earlier. The planet is in peril and we have burned a large majority of our fossil fuels in just a few decades. These, of course, took millions of years to be produced by nature.

Can our economies continue to grow as we continue to move from a resources-driven economy to a technology-driven economy, or will it sink as soon as it becomes unfeasible and un-affordable to continue to extract those resources?

We live like there are infinite tomorrows – spending the majority of our time working as a cog in some system we don’t really believe in rather than with the people, pursuits and places we really do, spending the money we earn there on plastic junk that is piling up on our beaches around the world, and burning our precious energy reserves as quickly as we can in order to maximize the growth of the economy and the level of convenience in our lives.

And maybe it’s time that we accept this, and stop looking around the world for others to live more like us, and instead look for lessons from those around the world. Lessons of simplicity, lessons of industriousness and lessons of a culture independent of capitalism and consumption. For from behind the mountain of stuff from which we point our fingers, we are clearly no longer able to hear the echoes of these teachings from generations past.

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