Compassionate austerity to deal with the economic crisis

To cope with the economic crisis we need austerity with compassion.  Stimulus as a policy will likely make things worse more quickly and austerity as currently practiced is mean and hurting victims.  Those people voting for politicians urging austerity may regret their votes when they too get caught in the crisis.

Compassionate austerity would recognize we are dealing with events beyond our control and would therefore not blame the victims.  It would include some sort of income support for people caught in the crisis

How one wants to deal with the economic crisis depends upon how strongly one believes in economic growth.  If one believes this is just a temporary setback, then one probably wants either stimulus to keep things going or some austerity until the economy corrects itself and growth returns.  This blogger figures the crisis results from problems in the resource base and it is unlikely we will again see the golden  years of prosperity which we have experienced in recent decades.

If this is the case, then austerity is something which will be forced upon us and we should try to cope with it with as little human suffering as possible.

I figure the basic economic problem is that while we have lots of energy and mineral resources left in and on the surface of the planet we have used up the most easily accessible.  Those that are left take so much energy to extract it is becoming less feasible to do so.  Suppose that during the age of prosperity we were able to build an automobile with 1,000 units of energy and labour and suppose it now takes 2,000 units to build the same car.  Not only is this going to double the real cost of building a car it will probably limit the number of cars that can be built.  It will certainly limit the number of people who will be able to afford them.

If this is a correct analysis of the problem, then clearly we need to make some revolutionary changes in the way in which we organize ourselves to produce and exchange goods and services.  I predict there is little likelihood of the revolution starting until the economic crisis hits pensioners.  For the time being it is mostly young people who are hurting.

There is a need to rethink our commitment to economic growth and rearrange our economy so we take advantage of modern technology so that most of us can live comfortably without having a job.

What disturbs me about austerity is that the people who promote it have so little compassion and understanding for those who have been caught by the crisis.  Many of those who vote for politicians pushing austerity need to rethink their votes as it could be only a matter of time before they too will find their comfortable lifestyle being challenged,

Austerity with compassion should include some sort of income support.  This blogger would like to see  a guaranteed annual income scheme combined with changes in the way in which we create money.  However, the need is so great I will say we need anything that will provide everyone with a more or less equal share of the goods and services we are capable of producing.

If you liked this post your are invited to comment, press the like button and/or click  one of the share buttons. If you disagree you are invited to say why in a comment.  While I like the idea of sharing this platform, my personality is such that I don’t reply to many comments.

 

 

A guaranteed income – another impossible dream

I believe the arguments in favor of a universal income scheme are overwhelming.  The problem is this belief is not shared by everyone.  I would go even further than an income scheme and say there is an urgent need to reform the way in which we create money and the two reforms should be combined.

Our survival and our enjoyment of life depends upon our being able to provide ourselves with food, shelter, clothing and smart phones.  The way in which we do this involves a lot of complex relationships with people we do not know.   As, for the most part,  we do not understand how these relationships work,  any attempt to change them will be a threat and arouse a lot of fierce emotions.  On top of that a lot of people have a vested interest in the current way of exchanging goods and services and will resist change.

It may be impossible to overcome these problems, but is that a good reason to not discuss them and to not try?  With current economic trends it could be that changes will be forced upon us and maybe we should try to influence them rather than just let them happen.

The essay “LETS go to market; Dealing with the economic crisis”  on this weblog deals with a proposal for a guarantee income scheme and how it could be combined with a different way of creating money.  Do have a look at it.

A major question around an income scheme is how much work needs to be done.  Modern technology has reduced the amount of labor needed for survival.  I think we are at the point where a lot of work is just for the sake of working to satisfy the work ethic.  The work ethic allows a lot of people to build empires to fulfill their own ambitions.  The work ethic is unnecessary and makes a lot of people into slaves.

A guaranteed income scheme would be a major transfer of decision-making power to individuals because having money allows people to make decisions.    No longer would people be dependent upon an employer for their total income.  No longer would we be slaves to employers.  We would be able to decide what we want to do with our time.

An income scheme would deal with problems of poverty, inequality and economic inefficiencies.  With an income scheme there would no longer be a case for subsidies to producers and this would remove a lot of price distortions from the economy.  The result would be a more efficient economy.

Value is determined by supply and demand.  As all of us have a limited lifespan time should be the most valuable thing we have.  Therefore we should by trying to use modern technology to give us more time in which to do the things we most enjoy.  Instead it seems modern technology is mostly being used to sell us more smart phones which are used to sell us more junk.  That’s stupid.

Equality – the impossible dream

Charlie can’t breathe

The most evil of all people are those who believe they can force their religion, beliefs, values and will upon others.  There are evil people in all nations, religions and cultures.

Inequality is an issue that will probably never go away because it has traditionally been the natural order and because its solution, perfect competition,  is something few people will be able to accept.

Inequality was a feature of Roman and Medieval societies and probably of most historical large-scale civilizations.  To find true equality one would probably have to look to small tribal groups where everybody knew each other and were probably related.  (I suspect these groups had relationship problems in that lots of people didn’t speak to each other.)

In historical civilizations the elite depended upon the work of the peasants for their food and luxuries.  The challenge was to confiscate as much of the agricultural surplus as possible while leaving enough for subsistence.  Probably a factor in the calculations was the supply of workers.  If there was a shortage, the workers were able to retain a little more than when there was a good supply.

Inequality has historically been so much the norm that the general prosperity following  the industrial revolution should be considered an aberration. One of the things which has happened since the start of the industrial revolution has been  the exploitation of energy and mineral resources found in the earth’s crust.  The result has been a lot of prosperity which had to be shared with most of the population because the prosperity depended upon the labor of the working people.  Once again supply of workers was  a concern and generally  there was a shortage – until recently.  With a limited supply of labor the elite had to tolerate sharing some of the wealth.

In historical times the agricultural surplus was probably taken with the use of force or the threat of its use.    Since the industrial revolution the elite has discovered a less messy way of getting the greater share – legislation which restricts competition and allows for profits.  If we had perfect competition there would be no profits, we would have equality and the one percent would be just like the rest of us.  Licensing, copyrights, patents, health and safety regulations and tariffs all work to restrict competition.  If we did not have copyright Bill Gates would be just another programmer and we would all be using super great software. Recent prosperity has been so great leaving some for the rest of us was not an issue.

Other ways in which  the elite exploit us are  by the work ethic and debt.  So long as we believe in the divine nature of work we will continue to produce the profits which the elite need to maintain their fortunes.  So long as our money system is based on debt we will be chained to our employers.

It may be the golden age of prosperity is coming to an end.  We still have lots of mineral and energy resources but the most easily accessible have been taken.  It now takes more energy and effort to get at what is left and this limits the potential for future growth.

With the end of growth and a surplus of workers we are ripe for a return to historical inequality.where the elites take for themselves most of the agricultural surplus and leave a minimum for everybody else.  The difference is that we now have technology to replace workers.  This guy does not want to think about the implications of this.

It is my understanding that in some parts of the United States some local level governments are getting a significant part of their revenues from petty  fines enforced by police.  This source of revenue falls heaviest on poor people.  The justice of this program is questionable. Another source of revenue is called civil forfeiture where authorities confiscate the proceeds of crime even if there has been no conviction.  Once again this has potential for abuse and raises justice questions.   I am sad to report that my home province of British Columbia uses this process.

I have to wonder if these developments are part of increasing inequality and a return to inequality enforced with force in that they have a lot of potential for abuse of poor people and involve police.

This writer is pessimistic about the future.  To increase equality we will probably have to increase competition and introduce an income scheme.  These are controversial concepts although they will never come into being if we don’t talk about them.  In the meantime,   probably the best way for individuals to deal with inequality is to become a part of the minority  and one does that by taking advantage of legislation which restricts competition.

If you liked this post your are invited to comment, press the like button and/or click  one of the share buttons. If you disagree you are invited to say why in a comment.  While I like the idea of sharing this platform, my personality is such that I don’t reply to many comments.

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