- Most everyone who follows energy knows “Peak Oil” as the moment when even the optimists can no longer postpone confronting the limitations of fossil fuel supply. Today I’m writing about “Peak Stuff”, a term I coined about 5 minutes ago to describe the point after which humanity realizes it cannot afford, does not need, and is better off without what can simply be called “Stuff.”
Background: In the early 1990’s I watched areas of Guangdong Province begin the slide from lush 3-crop-per-year productive farmland into what is now toxic (perhaps irreversibly so) industrial swamp. The factories I visited were making what the retail business calls “Trim-a-Tree,” a product category that is the very epitome of “Stuff.” You know what I mean: those holiday slash licensed character-themed mantel figures, cookie jars, door decorations; objects devoid of artistry that spend a few weeks in service, and a few centuries if not millennia decomposing in landfill. Thanks to the recession, among the things that Americans can no longer afford to order from Chinese factories is a large volume of “Stuff.”
The economic paradigm I’m putting out here is that when the American consumer moves permanently beyond “Peak Stuff” it’ll be a moment of great opportunity for the US-China economic relationship. Because, did anyone really think that:
1> Retailers clearing 100% gross margins on crap no one needs, for which
2> Chinese manufacturers accept at most a 7% net margin, such that
3> Factories operate on insufficient surplus to fund QC, environmental stewardship, R&D, meaningful social benefits to employees, communications, branding, marketing, or even a decent finance function, while
4> Chinese banks underwrite American consumer debt to keep the consumption of crap growing
was anything other than the macro version of the quintessential codependent relationship? “Everything will be okay, honey. You just need to buy more Stuff!”
Listen, I begrudge no one the enjoyment of holiday decorating, nor the trade-up from grueling subscale agricultural drudgery to a salaried indoor job. If there’s a moral basis for “Peak Stuff”, it’s this: Green Light the desire to create and to share objects with others. It’s a driver of human progress. Question the compulsion to purchase or own increasing volumes of things devoid of real quality.
And now… time for China’s consumers to find their “Peak Stuff”. Even as China’s government works to stimulate domestic demand, I’m thinking the impulse to acquire “Stuff” in China will never reach the full expression of America’s post-Reagan consumer binge. (For one thing, I can’t see China underwriting the consumer debt of its own people.) Good thing. Because the key to full employment and economic and social stability in China is not manufacturing, but services.
Meanwhile, and since all you readers are internationally minded adventurers this may be preaching to the converted, here’s hoping that Peak Stuff brings more of us to choose Experience instead of Stuff more often. Take whatever carbon footprint and cash we’ve got and spend it connecting with people, in places that feed that green-lighted creativity. And so, a plug here for The Castle, a boutique hotel owned by TCBN Charter Members Sarah Yao
and Howie Snyder
. Yao turned the outbuildings of the former German Governor’s mansion in Qingdao into a place where discerning, well-traveled people from China and beyond can feel at home. In her video interview with me
, she talks about the connections between citizens of the world, and having a place with an authentic identity in which to make and build upon them. Check the pictures and if you’re in the market for a getaway from Beijing or Shanghai this fall, book here
. For the money one could easily spend on fake Prada handbags, get on a bullet train and head to a city where a 2-hour massage still costs less than 200 RMB.
Peak Stuff – rearview mirror. Service economy, full speed ahead.
In parallel: exchanging goods and money over b2b sourcing sites – great for the maintenance of the material economy. People and their ideas meeting in online communities like The China Business Network – post peak stuff cutting edge.