Love? Generosity? Life in the Post-Pandemic Economy
In considering this topic here at Metanoia, we considered who we needed to bring in. Economics is a vast and complicated issue, and, despite its importance, something often relegated to the boring ‘boomer-Dad-who-votes-for-ACT’ kind of realm.
I (Jaimee) want the record to reflect that the only A+ I received in my undergrad was in an economics Gen-Ed. Yet, despite my undeserving brilliance in the field, we all knew this was an area beyond my expertise. So instead I invited Liam Bates to join me in a conversation about the current economic situation and the relationship between Christianity and consumerism. Liam was a top graduate in economics at AUT and has worked in both small business and start-up culture, now being part of a global enterprise.
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So I hear that the pandemic is going to have some consequences for the global economy. Could you briefly explain what these might be and the impact they would have on our day to day lives?
To simplify it, the world economy is built around a model of cash flow. Particularly in a local economy, money moving between businesses and banks is what stimulates growth. When spending is down, the economy suffers. The same goes for lending, which is why we’re seeing banks drop interest and mortgage rates to try and encourage people to be borrowing and spending money again. Because we see a drop in spending, the same applies worldwide as people also buy less imported goods.
If we take New Zealand as an example, tourism accounts for a decent portion of our economy, ranging as high as 20%. With tourism at a standstill, there is no longer this cashflow being injected into local businesses, and therefore, the owners and employees of those businesses are spending less also. While New Zealand might not have a drastic impact on the world economy, we are a by-product of bigger countries such as the USA, China and India suffering also as their economies struggle also.
For day-to-day lives, we’re going to see people balancing decreasing demand with higher costs and prices to mitigate damage. We’ll also see unemployment rise, as businesses can no longer make enough revenue to sustain these cost centres. Alongside this small businesses will suffer as less people are purchasing from them and this creates the downwards spiral that sends us into a recession. A lot of people look to the stock market as a reflection of this which is correct as it reflects the value of the businesses trading in it but a more immediate effect in our local communities is the damage it does to local business, and the financial status of those in it. We are going to see a spike in people falling below the poverty line, and unemployment also. People have predicted as high as 24% unemployment but I believe we’re more likely to see it range around the 10% mark for at least the next 5-7 years.
I’ve heard it said that consumption is important for helping to rejuvenate the economy?
It is. Ultimately, the way an economy gains traction is spending. When money is moving through hands it stimulates the economy and increases businesses bottom line, allowing for people to increase their financial status and ultimately return to normality.
It’s much more imperative though that this spending is local. Buying from overseas does not directly impact our local economy first hand, and has a much longer cycle before we see the positive impacts on our shores. You’ll notice that a common theme coming out of recessions is people indulging in small, affordable consumerism practices such as buying coffees or local, affordable eateries. This is the best way to restimulate the economy, and while small businesses might not show up on national radars, they are critical to the change in direction for our dollar. Because of the global economy we now live in though, this is hard to encourage as people are used to having access to anything and everything, worldwide with low tariffs and limited barriers to entry.
Following on from that, are there really particular forms of spending that should be prioritised or is it just about making sure that money moves from one person to another?
As mentioned above, buy local. It’s a catchphrase we hear a lot of the time and don’t fully comprehend its importance. Supporting local business only does good for the economy, particularly those who do not have a large off-shore presence. While this can be tricky, it’s a factor we’ll all have to weigh into our decisions going forward if we want to get out of the inevitable recession, sooner rather than later.
“You’ll notice that a common theme … is people indulging in small, affordable consumerism practices such as buying coffees or local, affordable eateries. This is the best way to restimulate the economy.”
What you’ve said raises really interesting questions for me about globalisation and the way that a capitalist system has seemed to prioritise the growth of large, international companies over and above the local system. Is this an area where we should be pushing for change? Personally, I wonder how the almost ‘nationalistic’ narrative of ‘buy local’ could impact the way that New Zealand relates to a globalised world, potentially encouraging an insular ideology to drive not soley our economic but our political.
Regardless of political view, there is no denying the monumental shift towards there being a global economy. I truly believe one day we will see a global currency also, similar to the EU. As countries start to develop stronger trade relationships, advancements in technology and partnerships across the globe, we move closer and closer to a world where there is no nationalistic view. 100 years ago it would take 6 months for a shipment to come from the UK to NZ. Now you can order something online and have it at your doorstep within 5 days. The advancement of the digital world has only accelerated this, giving us access to multiple countries and stimulating multiple economies worldwide. In the current climate however, we still exist with national currencies which means the value of our dollar still needs to be competitive on a world stage for us to grow our economy. This is why the imperative to buy local is so important, because ultimately, our dollar value is now even more tied to how our economy recovers. While you might not be able to buy a device made in New Zealand, other items are made here and these are the ones where we can have a direct impact on restoring our small businesses and ultimately, economy.
Okay. So we buy local so that we can compete internationally?
New Zealand is limited in its’ export pool. We simply don’t have large scale manufacturing or the population to grow in this space such as many Asian countries do. Our largest exports are tourism, meat and dairy, and in recent times, technological advancement (still on the rise). Even if we don’t want to accept it, these are what provide us with a competitive edge on the world stage. Buying local keeps the money on our shores, and provides the fuel that allows our business sector to restore itself.
When the situation clears over, we will be faced with a vastly different landscape, one that will be more limited than the ‘global’ view we had before. These industries will still grow, but the momentum will have subsided. More importantly, we have to remember that the people working in those industries will be the cost centres that are laid off, as more often than not, employees are the most expensive part of any business. When people aren’t working, they aren’t spending, which means the rest of New Zealand business suffers. This is why you see the government injecting money into these industries, to try and save jobs and refuel the spending that’s so critical to recovery.
I have my concerns about consumerism from a theological perspective. Consumerism can lead to a form of consumption where the owning of many things becomes a defense against the existential threat of meaninglessness. These objects become, then, a central part of the individual’s identity, rather than the centrality of Christ as would be encouraged by a Christian vision of the world. John Paul II defines consumerism as “a crass materialism, and at the same time a radical dissatisfaction, because one quickly learns—unless one is shielded from the flood of publicity and the ceaseless and tempting offers of products—that the more one possesses the more one wants, while deeper aspirations remain unsatisfied and perhaps even stifled” [from his 1987 encyclical]. That’s a fairly major claim. Is this sort of consumerism the natural outcome of our capitalist system? Is it possible for us to help restore the economy without bolstering a form of consumerism that seems diametrically opposed to Christian values of simplicity and justice?
The biggest divide between Christian principles of limited consumerism and the capitalist system is that businesses ultimately have one agenda: profit. We see production and other areas moving off-shore as this increases profit margins, and this can also be tied to the incessant push for spend, spend, spend. The capitalist system is ultimately flawed, as while it’s supposed to give equal opportunity to all, situation and position often dictate who rises, and who falls. Companies aren’t willing to increase cost centres at the expense of profits, so even moving many of our production facilities on shore would just in turn, increase prices to counteract the loss in profit margin and ultimately, remove the competitive edge that these businesses had.
An economy which didn’t promote consumerism and followed the Christian values of simplicity, spiritual connection and equality can’t function effectively under a capitalist system. Ultimately, we rely on cash flow and unnecessary spending to fuel growth and the cut-throat world of competitive business means pushing consumeristic tactics is critical to their development. Other systems such as socialism have their benefits, but ultimately we have moved into a world where people’s value on social status has outweighed their innate understanding of the value of things, outside of the economic structure. This makes it tricky for people to separate themselves from this narrative, and makes it difficult for Christians to promote a message that is in a parallel view to this. If you ever want an example of where the lines have blurred between Christian principle and capitalism, look to mega-churches. It’s easy to pick an agenda that suits your own materialistic gains when it also increases your image on a world stage. We value what success looks like from a materialistic sense more than we do from a spiritual sense, and often we forget that Jesus walked in sandals, not $2000 Yeezys.
I think those are really interesting points. There seems to be a diametric opposition between Christianity and materialism but I’m also struck by the impact on the wellbeing of others that the economy has. It’s integral that as Christians we don’t check out of an economic system that seems unfair, yet we also need to work out a way to engage in it that is ethical and that consciously aligns with our values. I kind of see our existence within an economic system to be fairly unconscious, we buy things often without considering where they came from or the impact that the purchase might have, and yet I am struck by the scale of impact that the wider economy has on both the wider wellbeing of society and our personal wellbeing in relationship to materialism.
“The biggest piece of advice I can give to Christians … is think from a place of love, not individual gain.”
The biggest piece of advice I can give to Christians in the current economy is think from a place of love, not individual gain. Will you buy from Starbucks, or Jeffs roastery? Will you eat McDonalds, or Jims Burger Joint? While we don’t have to be happy with the way the economy clashes with our core values, we have a choice whether we complain about it or do the best with what we have. We are called to walk a life that will often be in contrast to what the world says to do, it doesn’t mean we need to be protesting on street corners but it does mean we need to be empathetic towards those who do not understand our values. Kindness and love was always Jesus' message, we can live this through how we consume and where we consume. You cannot be perfect, but you can try. Support your neighbour, look out for those who are victims of a system not designed for them, and at every turn, show love through our spiritual, emotional and even financial means. We know that there is so much more to life than just what is on this planet, it’s our duty to use the blessings we have been provided to give others a chance in this life, and ultimately the next. Tip your waitress, thank your bus driver, buy from your local dairy and rest easy knowing Jesus is proud of you for doing the best with what you have.
Thank you so much, Liam. I know I’ve learnt a lot and have a lot to keep considering in terms of my own personal response.
Anytime! Thanks for the opportunity.
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Liam Bates is an economics graduate from AUT. Jaimee van Gemerden is the current editor of Metanoia.