There’s more than just gross indifference to public expectations in the excessive pay raise that the governing Liberal MLAs recently arranged for themselves in the British Columbia legislature. It isn’t so much that they helped themselves to extra income—it’s what they personally do with that extra income that rankles. More income for anyone invariably means more consumption, and more consumption, in the form of a bigger house or house renovations, a bigger car, maybe a yacht, maybe a longer vacation further away, invariably means a larger drain on scarcer resources and more greenhouse gases.

A closer reading of neo-con favourite Francis Fukijama’s seminal book, The End of History, (1989), reveals other aspects of our unique times besides the end of competition for superpower status for the United States. He also predicted the end of massive economic convulsions, as Western economic and business science had, for Fukijama, proved it could, from now on, produce endlessly increasing productivity and prosperity.

We had solved at least in theory the twin devils of Western society, if not global society: political competition and economic instability. Insomuch as these core problems lay at the root of so much war in history, and insomuch as war is the primary driver of history, Fukijama concluded that, in finally solving political competition and economic instability, we had entered an age beyond typical history.

America’s quagmire in Iraq seems to put the lie to Fukijama’s first assertion, a fact even he tentatively acknowledged recently, putting the blame on Bush administration officials who failed to act as the sole superpower and thereby invited the reappearance of competition in the political field, and therefore the resumption of history.

Economic end of history, maybe

But, on the economic front, things are holding up much better. There may be ever-increasing gaps between rich and poor both locally and globally (an element of society usually associated with revolt). The macro-fundamentals might be increasingly teetering (like massive trade imbalances between nations, low or even negative savings rates in leading national economies, and thinning crutches that are left alone to prop up big economies, like inflated housing prices). But the indices on growth, corporate profits, and currency reserves appear as encouraging as ever. Threats abound, like currency collapses, jumps in inflation, and jumps in interest rates, but so far the US Federal Reserve and other leading Western central banks have managed affairs—one might say—scientifically well.

He was certainly wrong on the end of history from the political competition point of view, but Fukijama may well be proven right about the end of history from the economic stability point of view. Humans have mastered the science of making money and, so long as policy makers do what the economic technicians instruct them to, it seems nothing can stop us from making more and more money indefinitely.

And more and more money buys more and more things. There may never again be an economic restraint imposed on our consumption of resources or destruction of our environment. Our society will become more enriched every day, even when everything around us is in serious decline. We’ll likely be at our wealthiest on the very eve of collapse. That’s how good our economic and business scientists—and the policy advisors who follow their instructions—have got at running the economy.

Everybody gets what they can

Our BC MLAs are behaving no different from our business executives, union workers, taxi drivers, and pipeline welders: when the opportunity presents itself, we take more pay, and when we get more pay, we get more things like bigger houses, more appliances, and longer, more further-away vacations. Why shouldn’t everyone get what they deserve and take what they can? And why should MLAs be any different from the rest of us? We really can afford it: executives paid obscene mid-eight-figure salaries run companies that return great share value to stock holders; unionized companies that pay workers much more than non-unionized companies perform much better in the market; and government finances and tax rates are in better shape now that MLAs are paid twice what they were ten years ago. Not only can our economy afford all these higher wages right across the board, but the higher they go, the better the economy seems to perform. The economies with the highest paid executives, the most unionized workforces, and the lowest tax rates all produce the best growth rates, the highest productivity rates, and the most wealth the fastest.

In the past, like in the early 1970s, a momentary shortage of a key commodity in some key markets, like gasoline shortages in America, led to a severe economic recession, loss of jobs, the closure of companies, and drastic changes in public behaviours when it came to driving habits, heating homes, and car purchases. In the intervening years, economists have solved those risks. The price of gasoline has jumped by almost as much in the last two years as it did in the early 1970s, but this time, there is virtually no sign of lost jobs, company closures, changed driving habits or smaller cars being sold, all of which would have led, like they did last time, to reduced consumption of gasoline. Instead, the Dow Jones measure of US corporate performance has hit new all-time record highs during the period of steepest energy price rises.

Recession in the wake of key resource shortages used to act like a natural brake on the consumption of those resources. The recession in the 1970s, though tough on individuals trying to manage mortgages with double-digit interest rates, is today regarded as necessary medicine that lowered North American rates of oil consumption enough to head off a more serious collapse in the economy. Some joblessness, a few company closures, and a public turning its heat down, taking fewer vacations abroad, and driving slower, is what saved our societies. A key resource shortage led to a contraction in consumption mostly caused by a real drop in income that resulted from inflation due to spiking prices in that key commodity. That is, the key to our survival during the last serious threat to our economy was an effective cut in pay across the board and a resulting cut to consumption.

That is the mechanism that our brilliant scientific economists have now conquered and our policy makers, listening to them, have dispensed with. No longer will lowered pay and therefore lowered consumption result from the spiking price of a key commodity hitting a period of shortage.

No pain, no stopping

But it’s like solving the risk of dangerously hot electric stove elements by severing the nerves that feel pain in your child’s hand. We have no mechanism left to provide a natural brake on our society’s drive to create ever more wealth and ever more consumption. We will go past the point where the planet’s stock of resources can supply our consumption, and past the point where the environment can support that consumption. We may even find we are wealthier and more productive with more growth and investment the further past the point of system-wide breakdown we go, so perfectly constructed and tuned have economists and policy makers got the system. But there is a brake on consumption still ahead. It isn’t economic and it isn’t gradual or measured. It is reality and it is a wall. Key resources will run out. And the environment will stop absorbing abuse. The change will be as sudden as a car hitting a wall just as it achieves its top speed.

This is the outcome any thinking person, and anyone involved in public policy as both an advisor and a leader, should be thinking about. Because the natural, involuntary brake of recession has been removed, they are now required to voluntarily construct an artificial braking effect on over-consumption of key resources.

Since it is income that almost alone determines consumption, the only effective brake on our society’s rate of consumption is likely to involve a society-wide brake on income. And because we call them leaders, it is our society’s leaders who will be responsible for leading the way in taking the first steps toward voluntarily applying brakes on growth of their own income. If someone else were expected to go first, then they would be called our leaders.

This is why Liberal MLAs should go back into the finance committee room and develop a bill that removes their recent pay raises and in fact negotiates some level of pay cuts for themselves—not because they are worth less, and not because the economy, as constructed, requires them to, and not because we can’t afford a pay raise for them, nor for everyone else hard at work, too. They need to reduce their pay to take the lead in their society in encouraging across-the-board pay reductions for all, beginning with the executive class on down, in order to systematically and methodically apply a brake on our society’s proven capacity to consume resources past the point of calamity.

Fat chance of that, I know. But that is what’s required.