Thursday, August 13, 2015

A Nuclear Restart and a Consumer Spending Lull

Japan has gone back into nuclear power. After two years of cold shutdown for safety improvements, the first nuclear power plant restarted this week. The restart comes with considerable trepidation and has been the topic of heated discussion for months, an unusual occurrence in Japan’s usually more reserved political life. Importing oil cannot be the ultimate answer either, but do we really want to be so dependent on an energy technology that renders whole cities uninhabitable?

It looks like some of the trepidation around the energy supply has translated into consumer behavior. People might think that if they consume less in general, it reduces the need for the risks of nuclear power. Though not everyone will arrive at that connection through logical analysis, the logic is nevertheless correct. There is only a small decline in Japanese consumer spending in recent months, less than 1 percent, but that is enough to make a difference when you measure the direction of a national economy. GDP is expected to show a decline for the latest quarter when that report is released on Monday.

Some of the hesitation will fade after the first few nuclear plants have been humming along for a few months, but I have started to wonder about a longer-term trend away from consumption in favor of feel-good abstractions like peace of mind. This is the theme I have started to explore in the China Crash blog, focusing on China because if the world is turning away from manufactured products, the effect will show up in the world’s biggest manufacturing nation first. There are signs of a slowing pace of manufacturing worldwide, but only China, Russia, and Greece (three countries facing serious financial problems) appear to have actual declines.

The book Fear of Nothing is seven years old now, and one of the points I argue in that book is that we can’t keep consuming more and more products. We already use only roughly ten percent of the material possessions we have at home, and if we keep adding more and our houses fill up with stuff we will run out of space to live our lives. Most of us in North America and Europe have reached the point where the need for space is more urgent than the need for more stuff, and that has to affect the way people shop. Since 2008, we have seen a trend toward smaller houses in the United States, and whole categories of products keep getting smaller (especially televisions and computers). The long-term trend toward more stuff and bigger houses has already been interrupted.

I experience some consumption hesitation myself when I consider that most of my electricity comes from nuclear power stations and coal-burning plants and I pause to turn out the lights. It is an experience common enough that conservative commentators in the United States regularly make a point of cautioning against this kind of thinking, telling listeners, for example, not to limit their driving distance or replace their legacy light bulbs. If consumption hesitation has become so commonplace that it is part of the social conversation, perhaps it will shortly become a measurable worldwide trend.