The Age of Stagnation: Why Perpetual Growth is Unattainable and the Global Economy is in Peril by Satyajit Das

The Age of Stagnation: Why Perpetual Growth is Unattainable and the Global Economy is in Peril Reviews

• 
  Ina Cawl

  A great book about coming age of slow or Zero rate Economic Growth in the world
  with China Economic Engines slowing down and it is mystical growth rate falling down to 6%
  the World will fallow what has happened to japan where it is Economy has Stagnated for a Decade
  according to the Author.
  also the Author has criticized poor policies which it is outcome will not only affect the Business or Finance sector but also lifestyles and prosperity of average citizens and future generations.
  
  what is required from us as a citizens of a global world is stop believing in California Model and to enact the tough structural changes needed especially in Oil and Finance sectors
• 
  Dave

  This isn't exactly the best book on degrowth but it is one of the only ones I've read that I'd expect "normal" people to take seriously. There's really nothing in here that could be labeled "hippie bullshit." The guy's a well respected financial expert and he words his arguments accordingly. The only thing that might turn off the mainstream crowd is the fact that his name is Satyajit and not Steve or something else more "American" sounding. It's probably safe to say that most of the people who'd worry about that are just too big of assholes to be persuaded by any rational argument though.
  
  The analysis of finance is definitely more thorough than the analysis of environmental issues but his understanding is at least a little better than I'd expected from a guy whose forte is derivatives. He gets that there's more to saving the planet than just manufacturing solar panels. He also gets that there are problems with relying on growth to make our lives better. The end of growth isn't something we should necessarily grieve over, although making the adjustments will be very difficult for most of us. It's actually been a long time since growth genuinely improved living standards. Now it's coming from things like planned obsolescence, private prisons, bombing countries so we can rebuild them, getting people sick so we can sell medicines, financial scams, data mining and "surveillance capitalism." If some new innovation allows the economy to keep growing, it's pretty scary to think of what that might be (selling us air maybe?).
  
  The "so what do we do?" section of this book is only a few pages long but he mentions some decent ideas. I do have some mixed feelings about his prescriptions though. It's basically a combination of financial regulations and lifestyle changes. His financial stuff challenges some ideas I've heard prescribed by other alternative economics types, mainly the downsides of negative interest, decaying currency and peer to peer. I've always had some issues with those ideas too so it's kind of nice to get counter arguments from someone with relatively respectable views. The way I see it, if you want to promote equality then it doesn't make sense to penalize all savings. Rather than encourage circulation by having all money lose value, why not just discourage excessive hoarding by making all money over a certain amount in your bank account depreciate every year. Say that everything under a million dollars is basically left how it is now but everything over that loses a certain percentage per year, getting near 100% per year for anything over 100 million or something. Similarly, a lot of the peer to peer stuff has been sold as a way to create community but in a lot of ways has really just led to further exploitation and lower standards. So it's just nice to see smart criticisms of some of these things.
  
  For the lifestyle changes, he mentions strict limits on electricity usage, banning air conditioners, a global one child policy, legalized euthanasia, mandatory vegetarianism, urban living, and localization. He also thinks that raising the retirement age and cutting welfare benefits will be necessary, which I think is true long-term when humans are actually settled into simpler living arrangements but not really something that should be our top priority now when the vast majority of consumption is currently done by such a small minority. A lot of the things that the lower classes would buy if they had the money are things that are currently being wasted anyway, like food that ends up in landfills and houses and apartments that are left empty and unmaintained, etc. The population control stuff is obviously the most controversial of his recommendations. Frankly, I'm not sure if he really takes them literally or was just trying to be provocative. I was actually more annoyed with his advocacy of high population densities and his demonization of meat though.
  
  I do get that meat is currently being produced in really evil and destructive ways and that urbanites are currently getting what they need with less carbon emissions per capita. I just want to make that explicitly clear right away. Don't assume that I'm some stupid hick trying to justify my habits and stop reading this because of that. It's really important that environmentally minded people wake up to what truly sustainable lifestyles look like. The statistics you get from Cowspiracy don't exactly tell you the whole story. If we want to get away from fossil fuels, reliance on high-tech crap, soil erosion and everything else then we're going to have to be more self-sufficient. As this author shows by his advocacy of localization, we need to get our stuff from closer to where we live. Does that work with high population densities? When millions of people live in a small area, can they get what they need locally? Just do the math. If people need a full acre for their bare necessities (it could be significantly higher than that by the way) then 10 million people would need 10 million acres of land around them. That many acres is 125 miles by 125 miles. Is that still considered "local"? And that also doesn't take into account how inherently destructive the building materials for such tall buildings are, the necessity of complex sewer systems to manage the concentrated waste, the high-tech medicines needed to prevent disease outbreaks in such filthy conditions, etc. Das actually pointed out some of these flaws with high population densities earlier in the book, leading me to think that he would probably be smart enough to not recommend it as a solution. I was really surprised when I got to his conclusion and saw it in there, especially since he advocates localization too. The two really don't work together at all. And to get back into the topic of meat, what does an ecological farm look like? It's not going to be mostly corn, potatoes, quinoa and rice. It's mostly perennials like grasses and nut trees. It mimics natural ecosystems like forests, savannas, grasslands and wetlands, which are all healthier and more productive with animals than without them. That's what our diets should be based on. I highly recommend that people look more into that topic because way too many environmentalists are still not getting it.
  
  Anyway, like I said, the main advantage this book has is just the fact that it can appeal to an audience that isn't ready to hear what the rest of the degrowth crowd talks about. The criticisms of the current system, which make up 99% of the book, are better than the solutions proposed to fix it, which are just kind of thrown in as an after thought anyway. Even though it falls short in a lot of ways and hits on some of my biggest pet peeves, I can still recommend it for certain people.
• 
  Sean Goh

  I agree with the general premise of the book, because perpetual growth is the mantra of the cancer cell. However Satyajit's tone throughout this volume is rather pessimistic, and after being told repeatedly that we're pretty much screwed one might become rather disillusioned with life.
  Furthermore this book is made hard to read by the glaring lack of sub-headers, which made it troublesome for this reader to follow the logical trains of thought to their conclusion.
  Interesting take on the sharing economy as well, which contrasted sharply to what I learnt about it in Vijay's class.
  ___________
  
  Many national banks are several times the size of their nation's GDP (e.g. UK >500%) especially those nations which are major financial centers channeling capital between countries.
  
  A large banking system creates problems only when its role expands beyond support for the real economy - facilitating payments, providing a safe space for savings, financing real activity, and managing risk.
  The drive for growth and higher profitability lead banks to take greater risks, make more loans by lowering lending standards, or channeling funds to speculative activities.
  
  To maintain or increase earnings in a difficult environment, businesses have reengineered their structure and finances rather than their operations. Creative accounting becomes commonplace, e.g. writing off/understating liabilities.
  
  Low interest rates create zombie economies. Weak businesses survive, directing cash flow to cover interest on loans that cannot be repaid but that banks will not write off. The capital tied up in these zombies reduce available credit for productive enterprises, especially SMEs.
  Firms do not dispose of or restructure underproductive investments. The creative destruction and reallocation of resources necessary to restore the economy does not occur.
  
  Japan highlights the difficulty of engineering a recovery from the collapse of a debt-fueled asset bubble. It reveals the limitations of traditional policy options - fiscal stimulus, low interest rates, and debt monetisation. The only safe option appears to be to avoid the situation of buildup of public borrowing in the first place.
  
  Economic growth subtly softened the impact of increasing inequality as the improved living standards reduced pressure for wealth distribution. The democratisation of credit allowed lower income groups to borrow and spend despite stagnant real incomes.
  
  Emigration causes the home country to lose the results of their investments in the education system as well as future tax revenues.
  
  Many new technologies displace existing industries, limiting the effect on growth and productivity.
  
  70% of water demand comes from agriculture, with a disproportionate amount going to produce meat. A 450g serving of beef requires 9600 litres of water to produce (!!?)
  (See virtual water concept)
  
  Emission reduction potential of renewable technologies is understated. The infrastructure is made with fossil energy.
  
  Dutch academic Dirk Schoenmaker: It is impossible to reconcile national sovereignty, international finance and financial stability. Big banks operating across national boundaries require a global system of regulation, but national governments seek flexibility to modify the rules and preserve sovereignty, resulting in instability.
  
  America's ability to tolerate failure is a crucial differential. Few countries consider bankruptcy a normal step in the evolution of an entrepreneur.
  
  In periods of high inflation gains accrue when assets purchased appreciate while the fixed debt is repaid with shrinking money. In periods of minimal inflation, low interest rates allow leveraging of financial investments to enhance returns, where the asset's income is greater than the cost of borrowing.
  
  Low interest rates and QE benefited financiers. Banks increased profits by borrowing at nearly nothing from central banks and investing the funds in government bonds or lending it out.
  
  Lower costs come primarily from lower wages. Developed countries have outsourced the problems of fair wages, workers' rights and environmental degradation as well as production.
  
  Problems of excessive debt can only be solved with growth, inflation, austerity or default. Growth and inflation have been low. Austerity appears to be self-defeating. Default or debt restructuring would wipe out savings and trigger another crisis.
  
  Eliminating the freedom, privacy and anonymity allowed by cash also enables control over the lives and access to the savings of individuals.
  
  Mobility of labour is restricted by skills and immigration opportunities, as well as family, social and financial commitments.
  
  The economic argument in favour of a flexible workforce does not factor in the inefficiency and high costs of constant re-education and retraining of workers who may not want to change occupation.
  
  The sharing economy, in reality, relies on disintermediating existing businesses and minimising regulatory costs. It requires abundant cheap contract labourers to be available at the touch of a smartphone screen.
  
  Overinvestment in housing is inefficient because once built houses produce limited income, profits, employment or investment.
  
  A policy of rising house prices makes housing unaffordable for many if it succeeds and creates an hard to manage unwinding asset bubble if it fails.
  
  No amount of synthesised growth can evaporate global debt.
  
• 
  Anil Swarup

  Very rarely one comes across a book that analyses complex contemporary economic issues that makes sense even to those that may not be conversant with the intricacies of economic concepts. This book manages to do that because the author chooses examples that any aware reader can relate to. He warns against the impending stagnation and does that after an elaborate analyses of what is going wrong with the international economy. He is critical of the financial institutions that had got down to "financial engineering" that continues to " mask the true performance and real position of enterprises and nations". He exhorts them to "return to their actual role of supporting economic activity, rather than engaging in or facilitating speculation". His apprehensions are based on the manner in which "Banks continue to be regarded too big to fail by the governments". He quotes Governor of Bank of England, Sir Mervyn King : "It is not in our national interest to have banks that are too big to fail, too big to jail, or simply too big".
  The author admits that economies have witnessed remarkable growth during the past couple of decades but hastens to add the inequality had grown. Despite the fact that people living below poverty line dropped to 40 percent from 70 percent in 1980, the Gini coefficient for the world rose to 68 in 2005 from 49 in 1820. In 2010 the wealthiest 10 percent of US households owned 70 percent of all the wealth, while 1 percent owned 35 percent.
  A book worth reading and worth keeping.
• 
  Amol Sheogaonkar

  The author does well to visit the history of global economics and explains it in easy language. A wonderful read for individuals having a keen interest in economics.
• 
  Evan

  Wow, probably the craziest book I have ever read. I heard Das on Andrew Horowitz's podcast "the Disciplined Investor" twice, and really enjoyed hearing him speak about finance. After reading his opinions about everything besides finance, I wonder if he is reliable when it comes to finance (although I am inclined to agree with him).
  
  The first 100 pages were great. Then he starts writing about the environment, and says that anyone who disputes global warming is reminiscent of the tobacco industry trying to undermine the scientific evidence on the dangers smoking. At this point, he becomes intolerant of anyone who disagrees with modeling that he admits is not perfect. I was disappointed that he stooped to name-calling for anyone who disagrees with his outlook. He then builds his hypothesis for the future on imperfect modeling.
  
  I then noticed how many of his facts lacked citations, and his prose contained more opinion (pessimistic) than facts: (pg 227) "the use of private wealth to pursue specific objectives undermines democracy." really? always?
  
  The kicker is his books conclusion. This is the future, and taking action now can only delay his vision by around 15 - 30 years:
  -people work til they die or can't physically work
  -gov't mandated restrictions on individual space
  -mandatory vegetarianism
  -punitively expensive private car ownership
  -consuming only locally grown foods
  -air conditioning is banned
  -bottled water is banned
  -non-essential air-travel is restricted (no leisure travel)
  -electricity consumption is rationed
  -mandatory one-child policies in every country
  -voluntary euthanasia is permitted
  
  As I read his book, I realized most of his facts could be used to paint a different version of the future, as done by Matt Ridley in the Rational Optimist and Robert Bryce in Smaller Faster Lighter Denser Cheaper. The difference between Das and the 2 authors above, is that Das views the future through the prism of today; he can't imagine things changing. Technology is done improving, we are stuck with what we have already created (he actually argues this point in his book).
  
  Absolutely horrible novel - don't waste your time.
• 
  Arup

  Satyajit Das believes that we are stuck between Scylla (existing policies that promise stagnation and slow growth) and Charybdis (decisive action that leads to immediate loss of living standards). He outright rejects (in the epilogue) the possibility of some miracle that will bring back growth to this world. As one can gather from the title of the book, he doesn't believe much in the power of the human spirit. For me, this was a dab at knowing the other side.
  For readers, this book gives you a summary of the current state of the world. The facts are well sourced and I have come across most in other places (blogs and books). But I found the many arguments contradictory. For example, the author hates negative rates and deflation because it is unsustainable with high debt levels and with the deficits faced by public and private pension plans. However, in the following lines, he is worried about inflation because it will hurt savers, give unnecessary support to the borrowers (the top 1%) and exacerbate the inequality problem. Well, we can't not have both! The problems cited are genuine with most having no easy fix. I suggest reading with a pinch of salt, always remembering to analyze the facts on your own.
  This book lacks any of the humor of Traders, Guns and Money.
• 
  Tyler Leary

  Not even Donald Trump could call this a perfect book, but I'm glad I trudged through it. It's basically 300 pages of data showing how precarious the world's economic picture looks, while financial stimulus and political rhetoric mask the problem. The data in the book is a few years old now, but the author would probably just add an exclamation point today to what he already wrote. It's an important message and written with erudition—the author's frequent literary references help to break up some of the tedium in page after page of bad news. Ultimately, though, it's heavy on diagnosis and light on prescription. As a consumer and small-time investor I'm left wondering what, if anything, I should be doing differently. I would have liked to see more solutions offered section by section, rather than a few paragraphs about frugality and living in larger family groupings buried in an epilogue at the end.
• 
  Mike Soule

  The majority of the book reads like a dissertation. Then you get to Epilogue and his opinions and conclusions finally become concise, but without context his research and his conclusions both suffer.
• 
  Tobias

  Bit dull at times but serviceable, accessible account of the Great Stagnation debate.
• 
  David

  Let me write this freely..(not carefully)
  
  Das's previous book was Extreme Money was one of the worst book I have ever read..
  Now people praise him as one of the forethinker of global finance?
  He complained the world and the global corporation have been playing too many games on financial engineering..he himself was part of the game!!
  
  He seems to read a lot and watches a lot of movies in which I have read 90% of what he read and watch..but these are fancy references..
  so blah blah about the global financial history as of I have not read any books in the past 10 years especially during the Sub Prime fallout...(I guess many have not been reading much so they think Das is good, but he just re-generalized many good authors have previously pointed out)...so he re-packaged the history outline..
  
  so I am more interested in his solutions to the global problems:
  he is correct about people should be more stoic
  he is correct about the future is bleak and many will be continuously poor (which many writers wrote already)
  3 pages of his solutions (total pages 300+)...nice one Da!
  
  he did not point out the existing government policies are too liberalistic and too democratic which drives individual selfishness to hinder public projects plus corporate greed..no one mentions the flaw of American business school: to make companies to strive for $$ profit making which CONFLICTS with government via lobby, merger, all kinds of dirty tricks..
  
  so to make people to be more stoic is one way to save the earth, but having EVERYONE, government, corporations, NGO to work together to utilize the production of food, and distribution of food are not mentioned..daily waste of food, products, etc and daily waste of production of useless things are another thing...not even mentioned..
  
  This book is a good general history of recent human activities but lack philosophical backbone nor sociological one neither..as I was reading one page, I CAN actually know what he will say in the next 20 pages..speed reading? no..I just find him a fraud...(literally)
  
  And who runs the world? not mentioned at all..it is not about red nor blue pill...they are both blue pills!! Probably only 10% of the population have taken the red pill and they are rising against hypocrite like Das...yes he used to be in ML and play the game against the so called poor he indirectly created...
• 
  Jason

  The future's arrived; you won't be needing sunglasses.
• 
  noblethumos

  Satyajit Das's "The Age of Stagnation" presents a thought-provoking analysis of the challenges faced by the global economy and the inherent limitations of perpetual growth. Das argues that the prevailing model of economic expansion is unsustainable and highlights the various systemic risks that threaten the stability and prosperity of nations. This review aims to provide an academic evaluation of Das's arguments, discussing the book's strengths, weaknesses, and its significance within the field of economics and global finance.
  
  
  "The Age of Stagnation" by Satyajit Das offers a comprehensive examination of the factors contributing to the current state of the global economy. Das challenges the prevailing belief in perpetual growth and argues that the world is entering a period of stagnation characterized by low growth rates, rising debt burdens, and diminishing returns on investment. He explores the systemic risks embedded within the global financial system, such as unsustainable levels of public and private debt, increasing income inequality, and the limitations of monetary policies. Das suggests that a paradigm shift is necessary to address these challenges and promote sustainable economic development.
  
  Das's work stands out for its critical analysis of the assumptions and practices that underpin the traditional growth-oriented economic model. He explores the interconnectedness of global economies, financial markets, and geopolitical dynamics, shedding light on the systemic vulnerabilities and potential triggers for economic crises. By incorporating historical context and drawing upon diverse economic theories, Das offers readers a holistic understanding of the complex web of factors driving the current state of the global economy.
  
  
  One of the notable strengths of "The Age of Stagnation" lies in Das's ability to demystify complex economic concepts and present them in a comprehensible manner. He uses accessible language and real-world examples, making the book engaging and approachable to both experts and non-experts. Das's talent for distilling intricate economic ideas into clear and concise explanations contributes to the book's accessibility and broader appeal.
  
  Moreover, Das's analysis is enriched by his vast experience in the financial industry, providing readers with insights derived from real-world observations and practical expertise. His exploration of the interplay between economic forces, policy decisions, and market behavior adds a layer of credibility and depth to his arguments.
  
  
  While "The Age of Stagnation" presents a compelling analysis, it is not without its limitations. Some critics argue that Das's narrative may be overly pessimistic, potentially overshadowing potential solutions or opportunities for economic progress. A more balanced exploration of the challenges and potential avenues for growth could enhance the book's analytical rigor.
  
  Additionally, Das's examination primarily focuses on the macroeconomic and financial dimensions of the global economy, potentially neglecting the social, cultural, and environmental factors that shape economic outcomes. A more comprehensive analysis that incorporates a broader range of perspectives would provide a more holistic understanding of the challenges and prospects for sustainable economic development.
  
  
  "The Age of Stagnation" holds significant importance within the field of economics and global finance as a thought-provoking critique of the prevailing growth paradigm. Das's examination of the systemic risks and limitations of perpetual growth challenges conventional wisdom and stimulates critical reflections on the future trajectory of the global economy. The book's contribution lies in its ability to foster discussions around alternative economic models, sustainable development, and the urgent need for prudent policy interventions.
  
  
  Satyajit Das's "The Age of Stagnation" offers a comprehensive analysis of the challenges faced by the global economy and the need for a reevaluation of the perpetual growth model. While the book has its limitations, it stands as a significant contribution to the field of economics, encouraging a nuanced understanding of the systemic risks and constraints of the global economic system.
  
  GPT
• 
  Shahnawaz Haque

  The book primarily focuses on growth using debt and the long term implication of debt on an economy.Overall its a good one and in the last few chapters also reflect the true value of sharing economy.Before reading complex books on economics this can act as a motivator
• 
  Tony

  The narrative clips along at an exciting pace as it covers the build up to the GFC; at times I found it like a thriller yet the tale told actually happened and is not a airport paper book. At about Chapter 8 the thrill for me dropped off and replaced by a dark narrative with only one outcome. I struggled not to see or understand the authors points but there is no alternative. The author does not really offer anything concrete. It is for this reason I suggest read, but read with caution. If you were to make investment decisions, changes to your goals etc after reading this book there would only be one. For many it will justify their positions, but while I liked the book and learnt from its anecdotes & references the world does not need more despair...we need alternatives and i hoped I would find them in a novel written by someone as smart as Satyajit Das...but I didn't
• 
  Matt Rose

  This book is really excellent. I'm planning on reading some books with a counter-arguments but this one seems pretty tightly argued.
• 
  Kevin

  The bucket is full! Flat will be the new norm in economic growth.....or retraction. Good cross section of examples dating way back in time and across different geographic economies.