Too much of everything

A small theory of changing times

The original (Spanish) version of this post can be found here.

A few days ago, the U.S. Treasury Undersecretary warned in a conversation with journalists about the risk that Chinese government subsidies to its industry could lead to a major problem of oversupply in global markets.

"I often speak with officials from the EU, the UK, and India, and as expected, Washington is not the only country deeply concerned about how China is choosing to resolve its manufacturing overcapacity."

You may remember how we resolved our own "manufacturing overcapacity" in Europe and the U.S.: with the 2008 crisis.

I can't help but wonder if this is not the second round of the same phenomenon—not an economic one, but an anthropological one: the collapse in the East of the idea of progress that was built in the Western world over the two centuries of the industrial era.

Keynes once said that money is "a link between the present and the future." Since the present is the only thing we can consider "real" and the future is a fiction, a story we tell ourselves, it follows that money in the first decade of the 21st century also explained the idea of the future we had until 2008.

And that idea was this:

In Spain, in 2006, we thought the country would need to build 650,000 homes per year—about 3% of the total housing stock. Who was going to live in those homes? In reality, no one. What lay on the collective horizon was the belief that we would all own multiple properties. Each of them filled with new things that would be manufactured in new factories, creating more and more jobs with excellent conditions.

This is the only way to explain how, while we were building millions of homes, we were also creating tens of thousands of university seats—multiplying by 10 or 20 the demand for graduates in some fields compared to what the labor market actually required. The result is that today, 40% of university graduates are overqualified for their jobs.

And since housing prices never dropped, all those houses were supposed to be like a perpetual economic energy source, defying even the first law of thermodynamics.

As Margaret Thatcher once said, "People think there’s not much room at the top. They tend to see it as Everest. My message is that there’s plenty of room at the top."

It later turned out that there wasn’t that much room at the top. The generation that came of age in the 2000s and 2010s found neither affordable housing nor good salaries to fill those homes with things. But that wasn’t the only thing that broke in the 2000s.

What truly broke for millennials in the post-2008 era was the world’s appetite for all of it. We no longer want multiple houses. We don’t want to fill them with sofas, new bedding, and Ikea cutlery. Maybe, if they fell from the sky like they did for our parents, we would buy one, furnish it, and kick the can down the road a bit longer. But at today’s prices and with the costs they entail? No way.

Except for the few ultra-rich—who have people to clean their homes—millennials and Gen Z live between the impossibility of accessing that world of abundance dreamed up by our parents and the disdain for an ideal of life that we already understand all too well. Because we know what it meant for our parents: an overwhelming demand for personal sacrifice in exchange for accumulating a few goods that may no longer even hold their value. It’s your money or your life, literally.

Meanwhile, landfills are filling up with gadgets bought cheaper and discarded faster, with no one assigning them the slightest value.

The reason there is an oversupply in the world is that we no longer want more things. We have too much of everything.

The question—the ghost haunting the world—is this: If the era of 650,000 homes per year is not coming back, if we will no longer work in factories making sofas for those homes, if there will no longer be many good jobs in industries that come packaged with a suburban condo and two kids in a private school—then what will we do? What will be the ideal of life beyond the pursuit of opulence?

The answer to that question holds the bridges to the future.