Good afternoon, dear friends!
Greetings from the Team of the project Investments Time!
Мy name is Andrey Mikhailin.
In our today's article we are going to tackle upon the topic of the crisis analysis of 2020, therefore we are to step aside from the direction of hands-on, practical specific of articles presented by us concerning investment, as we are going to add a certain publicistic point to our analytics.
To begin with let's consider some notions worth our attention, which determine our modern economic reality.
The term "consumer society" is to identify the complex of social relations, organised on the basis of the principle of individual consumption. A consumer society is characterised by mass consumption of material wealth and framing up an according system of values and settings. So, we are living within a fading out era of a consumer society, whereas the "western" form of the consume system is changing actively as well as its more americanized version "the society of mass consumption", and the European approach too, namely Welfare state (based on the example of Northern Europe).
Welfare state is a concept of political organisation, which assumes that the state plays the key role regarding defense and development of economic and social welfare of citizens.
2020 revealed new types of establishing social connections, interactions and ways of developing the economy process. We can observe forming up a new social order, and it is especially explicit in countries with developed economies. A new kind of influence is a fixed income of a citizen (while there is no regularly fulfilled work as it has been before), which is secured by state payments in return for the political stability and absolute obedience to the state. On the one hand it leads to setting up a more socially focused state policy, on the other hand it results in wanishing the limits of the social and ethical development of the state. Is the new consuming system being formed probably worse than the "society of mass consumption"...? May anybody have thought it over? Worse at least due to lack of need of expressing individual's competitiveness while receiving social benefits (as thinking of a new human being is in process of forming, to be firm, "consuming the content of social networks non-stop", which easily influence a person's opinion and direct their area of thinking). At the moment it is next to impossible to explain, but as a matter of fact we feel it without difficulty more often ...
Let's get back to our theme, to be precise, where did the crisis of 2020 come from? When the economic system works as it is supposed to do and we have a number of services and goods to be produced and it is more or less balanced with the needs of the society in those services and goods, then we can state, the system is working alright. If there is overproduction of services and goods and there is nobody to consume them, the system starts disfunctioning.
And what about the cornerstone reason for the crisis of 2020? I can guess that it is exactly the overproduction of all services and goods etc. So how was it doable to rescue the economic run? COVID-19 is a structure component, which "appeared" to save the world economy, it was necessary to make people stay at home, so there was no longer need to produce anything, to have a "break" in the economical consuming process, in order to consume what had been beingproduced and stored at production storehouses and shops for quite a while. That's why, for instance, there was no inflation, while "printing" of money by the world central banks (the USA, the European Union, China, Japan) was so active, everybody "printed" money, but inflation didn't "boost". In the USA the inflation rate hardly reached 2 %, in Europe it was about 0 % it was even identified as deflation, just like in Japan, for example. The amount of goods and services produced in the world is so big, so it results in the fact thatnobody knows what to do with them, and the prime cost of production and distribution of the major part of consumer commodities becomes less every year. As a rule it corresponds with the following:
- use of robots during production cycles;
- automatisation of distribution systems (appearing such techno-giants like amazon.com and alibaba.com);
- a wide range of offer of raw material resources from third world countries, which by means of active growing of processing extractable resources try to raise their level of development;
- overproduction of power resources;
- coal, oil and gas extraction in volumes which are no longer needed for the world economy;
- switching to renewable power resources by developed countries, which in a long-term perspective will make the production cycle even cheaper;
- and the last but not the least, use of new technologies based on new scientific researches and approaches.
Let's not forget about the new trend in the area of consuming: "rational cost-effectiveness", which is inspired by the new ecological thinking of a "modern" actual person of western formation. It is worth mentioning, that the fact of the society's development in this direction is becoming more and more obvious and determined by fashion and behaviour of the new generation, which may be a conceptual version of society progress, and perhaps just by the historical stage of forming "new thinking". Observing people's behaviour of the modern generation (for instance aged up to 35 for the moment) we can see total change of social values, that form the image of the faded epoch of a consumer society. Summing up, features which are typical for this "new" consuming format are:
- rejecting stereotypes, namely in its extreme versions - anarchism in a certain way (as a rule the age group up to 20 years old);
- thinking set up by trends of social networks (as a rule "the herd instinct" in fashion and its actualisation);
- the basis of the need is aesthetic pleasure and sexual satisfaction (their raising to a kind of comprehensive);
- building of banal forms of consumption, which are convenient and simple for a human being of the electronic epoch (all processes of life-sustaining activity at one click on the screen of the phone);
- replacement of values of a long-term development for a short-term pleasure and the effect of living "here and now".
Thus, we got a double-natured image of development forms of social thought (characterising the development of consumption), running counter to each other, on the one hand complete sluggishness and degradation (whereas such individuals due to being so ordinary very often get powerful actualisation in social networks and because of this move forward in the income stream immensely intensively to a new social level), on the other hand there is ecological rationalism, which makes them decline the main part of benefits of the consumer society (a kind of anarchy asceticism in consumption), as a rule it is more common for individuals of the second category to question themselves like "For what reason do I actually do it?", "What profit will I get from it?" Both the first and the second ones more and more often get the internal impression, that their lives within the social networks are far more exciting and much better, so their "avatars" are happier than the real people (which naturally leads to minimization of social contacts). I am wondering, have we described the extreme forms of individualization? What do you think? Will the development be totally different ...?
Team of the project InvestmentsTime
Translated by Alex Ladilov