Vince Cable is the deputy leader of the Liberal Democrat Party in the UK, and their main economic spokesman. He made a name for himself during his recent brief tenure as acting leader. It was Vince Cable who at Prime Minister’s Question Time in 2007 referred to Gordon Brown’s “remarkable transformation in the last few weeks from Stalin to Mr Bean, creating chaos out of order rather than order out of chaos”, called by The Economist, "the single best line of Gordon Brown's premiership.”
Anyway, he has a clear and forthright and sensible way of putting things, and in an article I was reading yesterday he talked about the paradoxical situation we have, in that in the short term people need to be encouraged to spend more, while in the longer term they need to be encouraged to save. How you explain that to the man down the Dog and Duck, he continued, he didn’t know.
But I can see what he means. In the West we have been living beyond our means and have built up huge levels of debt, in the UK more than in any other country. So we need to break the habit. We need to start living within our means, and we need to start saving again. This is the message of Pluto in Capricorn: a realistic (Capricorn) approach to wealth (Pluto), the need for which we ignore at our peril (Pluto).
But you can’t necessarily do that all at once. The patient is on life support, and you have to keep the circulation going. At present, the patient is haemorrhaging, and will in all probability sink deeper into a coma over the course of the next year. But you have to keep giving him blood transfusions.
Imagine a very simple economy in which the main business is agriculture, and there is also a certain amount of trade in goods which you occasionally need like pots and pans and building materials. Imagine that all the farmers have got into a certain amount of debt, and all at once they all put off buying pots and pans and bricks and medicines etc. What will happen is that everyone will still have enough to eat. But the farmers will be selling off their food surpluses for gold which they will then stash under their floorboards before paying off the local money-lender. The pot makers and brick makers, who are also in debt, have now lost most of their market, and before you know it they are out of business and have sold off their equipment, so that they could no longer make pots and bricks even if they wanted. And quite quickly they can no longer afford even to eat. And then the farmers also lose their markets.
So a large part of the economy freezes and then collapses, and takes perhaps decades to recover. And this applies just as much in our infinitely more complex economy. You can’t have everyone just stopping spending on everything apart from immediate necessities and making do for a while. You need to keep the economy flowing enough so that large parts of it do not collapse and never, perhaps, recover.
I think this is also Pluto in Capricorn: Capricorn as proportionate, realistic response. Capricorn is about what works, rather than being about extreme ideological measures, like the Sagittarian free-market dogma which has been our undoing. Capricorn is certainly about saving money for a rainy day and not living beyond our means. But it is also about a healthy economy with firm foundations, in which all the pieces are alive and working.
So I think Vince Cable is right. For the moment, the priority is to keep the economy alive. Not inflated and reckless like it was, but at least alive. I don’t think we need worry too much about people over-spending, because the credit isn’t there any more for that, even if people still wanted to spend recklessly.
Once we are sure the patient is not dead, then we can begin again with a different kind of economy, that pays more attention to basic book-keeping. It’s a cyclical process, which we have seen before in the booms and busts of the late twenties and late eighties. We get carried away by prolonged booms, and then come rather heavily down to earth again.
So I don’t think that governments necessarily don’t understand the need to live more proportionately when they advocate pumping money into the economy, as both the British and American governments are doing. They are trying to keep the patient alive, and avoid too many amputations, and I think they have to do that.
All the same, I am hoping that Pluto in Capricorn will be more than just a periodic reminder to live within our means. Pluto in Capricorn may also, for a while, take the edge off the philosophy of unlimited economic growth, in which wealth becomes the main end of life, instead of playing an important but supporting role. But humanity has always been fascinated by wealth, and astrology teaches us that life is cyclical. So we may get a bit saner about money and the purpose of work, at least for a while. Until, perhaps, Pluto enters Pisces, another sign that doesn’t know about boundaries.