Apparently the market leaders Ocado have never made a profit in their 10 year history. I presume this is largely because of the expense of the distribution network which of course Amazon already have in place. At the moment it’s just non-perishable items (no meat or veg) but I presume they’ll need to invest in some refrigerated vans before long – I can’t see people bothering to order meat/veg/fruit/bread from Sainsburys/Ocado/Tesco and everything else from Amazon.

There’s still some work to do on the website too to get it a bit more geared towards the needs of food shoppers rather than book shoppers (ie a weekly shopping list).

Another of the strengths of the supermarkets is their own-brand, cheaper alternatives to much of what they sell. How will Amazon compete unless they have their own Amazon branded baked beans etc and perhaps their own even cheaper Amazon Basics/Value range?

All that said, I wouldn’t bet against Amazon – they’ve  gone from being just a book seller to being the first place I look for books, music, DVDs and electricals so why not food?

Another important question is whether they will keep the “buyer reviews” functionality for the food section. I look forward to reading people enthuse about a particular loo roll or packet of crisps!

Peace and the Plundered Planet
Paul Collier
12 May 2010, 18.00-19.00
At-Bristol, Bristol

How Are We to Live?
With Sarah Bakewell, John Cottingham and Michael Foley
13 May 2010, 19.30-21.00
Arnolfini, Bristol

The Future of Capitalism
Will Hutton
24 May 2010, 19.30-20.30
St George’s Bristol

Pandora’s Seed: The Unforeseen Cost of Civilisation
Spencer Wells
26 May 2010, 18.10-19.10
Watershed Media Centre, Bristol

The Story of Stuff
Annie Leonard
26 May 2010, 19.40-21.00
Watershed Media Centre, Bristol

The implications are clear. It took years – from 1929 until the 1940s – and a World War, before the US cleansed itself of the 1930s debt sludge.   Japan is still trying to purge itself of debts built up in the 1980s.  18 years after the Japanese ‘debtonation’ of 1990,  the economy is still  the weakest of all the OECD countries. Eighteen years after the property bubble burst, Japanese house prices are still falling!

Will it take 12-18 years for the US economy to recover, after purging debts equivalent to 350% of GDP?  On this reckoning: more than likely.

…and George Monbiot is saying what many of us UK taxpayers are starting to think on his blog today:

For the first time in my life I resent paying my taxes. Until now I have seen this annual amputation as a civic duty – like giving blood – necessary to sustain the life of a fair society. Suddenly I see it as an imposition. Its purpose has reverted to that of the middle ages: subsidising the excesses of a parasitic class. A high proportion of the taxes I pay will be used to bail out companies which, as the Guardian’s current investigation shows, have used every imaginable ruse to avoid paying any themselves.

I agree with John that the only way to persuade more than a minority of people to make material changes to the way they live is to make it expensive to be wasteful. At the moment sustainability for the common man is costly in both time (eg sorting your recycling) and money (eg taking public transport which usually takes longer and costs more than driving (except within London)). Given a choice between two options of equal cost where one is “greener”, I’m sure most people would choose sustainability. Unfortunately that isn’t a choice we are often able to make much at the moment in a world where the price we pay for many products does not reflect their true cost (I’m looking at you Primark) so we are used to paying prices that don’t factor in the long term environmental (or human) cost. In that environment, it is very hard for the sustainable option to be priced competitively.

Unfortunately, one big problem with making it expensive to pollute is that many of the ideas that are thrown about (such as increasing fuel duty) hit the poorest in society hardest (those that can already barely afford to heat their houses) while we, the middle class responsible for much of the problem, can afford to buy our way out of having to face up to the inconvenience of changing the way we live. Unlike John, the increasing price of petrol made no difference to the way I drove. Even at the peak of petrol prices, it was still a cheaper (and much quicker) way to get to London than taking the train and on a Friday night after work, I just want to get there as quickly as possible. As John says, his behaviour changed out of motivation to save money more than out of motivation to save the environment. For me the petrol price didn’t reach the point where my own personal cost/benefit analysis motivated me to change my behaviour to save either! I need to be incentivised just like everyone else.

As John implied, government policy on climate change all comes down to discount rates – how you balance the costs/benefits of action now with the costs/benefits of action later. For us, the benefits of convenient and cheap travel now will certainly result in costs down the line but, unlike in business, it’s very hard to estimate those costs and it will be someone else who pays the price anyway. For all the money parents spend on giving their children the best future they can through education, health care etc, we haven’t yet found a way not to steal from them by using up as many resources as we can from the pot that we share with them.

I’ll take this opportunity to recommend the New Economics Foundation. They’ve been talking for a while about a “triple crunch” – the financial crisis, climate change and increasing energy prices. Interestingly, at the moment the recession caused by the financial crisis has resulted in a reductions in energy prices but this will only be temporary. However, in the long run, as non-renewable fuel prices go up again (as they surely will being a finite supply in a market with demand growth that shows no signs of stopping any time soon) and as renewables technology is refined in efficiency and lowering cost of production, green electricity will eventually become competitive and then cheaper in real terms (ie excluding the green subsidies).

Hopefully this will be the case in other areas where we need to move towards sustainability too (manufacturing, transport, water supply, etc).

Through innovation in policy and technology we need to make saving the world not only possible but easy!

One of the metrics that I think is particularly interesting and that you don’t see very often in the news is the ratio of average house price to average (annual) earnings, which both Nationwide and Halifax produce along with their other house price indexes. Here then are two plots of this metric that show where we’ve been and possibly suggest where we’re going…

Nationwide first time buyer house price to earnings ratio

Halifax all houses price to earnings ratio

Looking at these plots, clearly where we have just been with the average house costing around 6 times the average earnings is an above average value for the ratio compared to the last 25 years. Therefore the questions that I’m asking are how low will it go this time around?

As an interesting final thought, even at the top of the peak when you could get a mortgage of 5 times your annual salary, the FSA’s advice was that single people should borrow up to 3 times salary and couples 2.5 times combined salary.

What day of the year do you think we used up all the natural resources the Earth will produce this year?

According to the Global Footprint Network it was 23rd September this year and is (unsurprisingly) getting earlier every year. To put it another way, since 23rd September we have been living beyond our ecological means.

Now living beyond our financial means is something that many in the West have gotten quite used to. Even our governments do it. We see talentless “celebrities” living lavish lifestyles in the tabloids and think that we deserve that lifestyle too. Unfortunately, many who’ve fallen into this trap don’t have the celebrity income to pay for it. I watched In Debt We Trust (you can watch it here) last week. It highlighted to me again that we have developed this sense of entitlement in western culture – “the people on TV have fancy cars and the latest fashions so I deserve to have those things too”. However, just because you can’t afford doesn’t mean you shouldn’t have it, just put it on credit.

In recent months, we’ve started to see the fruits of our behaviour. The credit has dried up and people and businesses are feeling the force of a mess that has been repeatedly covered up by borrowing more (or by Gordon Brown manufacturing growth by redefining it).

How long before we have a similar ecological crunch?

Here’s a final thought – we now need 1.4 Earths per year for our existence to be ecologically sustainable. Until that number goes down to one, we are stealing from our children.