Yes, that’s about right - but not completely right. Being an informal ‘state of mind,’ the Hippie Movement had no official creed, but ‘hippieism’ might be boiled down to a belief in peace and love (and a strong anti-war stance), anti-materialism/anti-consumerism, love of music, cultural and religious diversity, individualism, hedonism, healthy living, communal living, a longing to ‘get back to nature,’ intake of drugs and a strange adherence to Frisbee. Comparing US culture before the hippies (which espoused a widespread conservatism) to that afterwards and looking at today’s culture, not just in the US but in Europe and elsewhere, it’s interesting to note how many of these hippie beliefs have gained traction in the mainstream. Maybe Frisbee not so much.
I’ve been reminded of the hippies in the last couple of months due to the general weakness of trading results of cement companies around the world. (‘How are these connected?’ I can almost hear you thinking). First of all, let’s look at the current state of the cement industry worldwide. In Europe the industry is still coping with a massive crash after the boom in the early-2000s. Every country has seen a fall in demand, some by as much as 80%. Production capacity has been scaled back, moth-balled, closed and in some cases demolished. We are groping our way back to a sustainable level of production capacity, after the ‘irrational exuberance’ of the pre-crash years. Eastern Europe has also now seen a decade’s worth of weak growth: remember when those post-Communist states were seen as the new ‘Tiger Economies’ of the New Europe? That seems a long time ago now. India and China are in a similar situation but for different reasons: China went mad for a decade, building perhaps 50% too much production capacity, building too many dwellings and more infrastructure than its economy can usefully use (and afford) at the moment, and is now busy destroying a fair proportion of the un- and under-used cement production capacity, partly by diktat from central government (they can do that in Communist China). In India, too many ambitious and perhaps unrealistic cement companies have been building castles in the sky, laying claim to future market share that has not materialised, resulting in a similar massive over-capacity. Both huge countries (which between them make up 40% of the world’s population and perhaps half of the world’s cement production capacity) are now confronted with the near-impossibility of making money from cement production without turning to cartelisation.
Southeast Asia is suffering from oversupply, the Middle East is riven with factional and sectarian infighting and has been hit by the drop in the oil price (with even Saudi Arabia running a budget deficit in 2015). US companies are doing better, with higher levels of cement demand - but levels that are not nearly as high as the PCA had forecast them to be. South America has its hotspots (and low-points - Brazil is descending into recession, only a few years after it was touted as one of the ill-fated BRICs) and Africa could yet be an economic dynamo for the rest of the world (it has the population, after all). Overall, the cement industry around the world is in the doldrums.
What is happening out there? Are people (and companies) sitting on their hands, not spending money, not investing, hoping that prices will fall in today’s deflationary environment? Perhaps they are squirrelling it away for a rainy day (the Chinese, Japanese, and Germans, for example, are inveterate savers, with some of the highest savings rates in the world2). The Global Savings Glut3 means that European non-financial companies have over Euro1trn of cash on their balance sheets. High savings rates might make the much-touted Chinese pivot from export-led industrial development towards an economy powered by domestic consumption a very difficult U-turn to accomplish.
What’s this got to do with the hippies though? Well, perhaps the anti-materialism/anti-consumerism ethos of the hippies is finally being affirmed (and being reflected in plateauing cement demand). Once you have your water, food, warmth, clothes, habitation/home, safety, friends and the means for self-respect, you may not need a whole lot more4. A Rolex, a 60” flat-screen TV, Gucci handbags, a Maserati and holidays in Mauritius might be something that a few might aspire to, but most people, I suggest, are happiest with orderliness and quiet, family and friends, security, stability and - yes - peace and love.
1 https://en.wikipedia.org/wiki/History_of_the_hippie_movement
2 http://data.worldbank.org/indicator/NY.GNS.ICTR.ZS
3 https://en.wikipedia.org/wiki/Global_saving_glut
4 https://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs
