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Making Do With More

Author(s): Bradford DeLong

Ensuring that the workers of today and tomorrow can capture the benefits of the information age will require us to redesign our economic system. Only by finding ways to put true value on the goods we produce can we sustain a middle-class society, rather than one of techno-plutocrats and their service-sector serfs.

From Project Syndicate:

In the United States, just three out of ten workers are needed to produce and deliver the goods we consume. Everything we extract, grow, design, build, make, engineer, and transport – down to brewing a cup of coffee in a restaurant kitchen and carrying it to a customer's table – is done by roughly 30% of the country's workforce.

  The rest of us spend our time planning what to make, deciding where to install the things we have made, performing personal services, talking to each other, and keeping track of what is being done, so that we can figure out what needs to be done next. And yet, despite our obvious ability to produce much more than we need, we do not seem to be blessed with an embarrassment of riches. One of the great paradoxes of our time is that workers and middle-class households continue to struggle in a time of unparalleled plenty.

 

  We in the developed countries have more than enough to cover our basic needs. We have enough organic carbon-hydrogen bonds to break to provide us with calories; enough vitamins and other nutrients to keep us healthy; enough shelter to keep us dry; enough clothing to keep us warm; enough capital to keep us, at least potentially, productive; and enough entertainment to keep us from being bored. And we produce all of it for an average of less than two hours a day of work outside the home.

  John Maynard Keynes was not off by much when he famously predicted in 1930 that the human race's “economic problem, the struggle for subsistence," was likely to be “solved, or be at least within sight of solution, within a hundred years." It will take another generation, perhaps, before robots have completely taken over manufacturing, kitchen work, and construction; and the developing world looks to be 50 years behind. But Keynes would have been spot on had he targeted his essay at his readers' great-great-great-great grandchildren.

  And yet there are few signs that working- and middle-class Americans are living any better than they did 35 years ago. Even stranger, productivity growth does not seem to be soaring, as one would expect; in fact, it seems to be decelerating, according to research by John Fernald and Bing Wang, economists in the Economic Research Department of the Federal Reserve Bank of San Francisco. Growth prospects are even worse, as innovation hits gale-force headwinds.

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