Pensions and dreams

Many people like to dream about the things they will do in retirement and count on their pensions and savings to make the dreams come true.  For lots of current seniors this has been true but younger people may not get beyond the dream.  All the uncertainties of the economic future come to the fore when one starts thinking about pensions.

One hears two major concerns about pensions:  most  people are not saving enough and too many pensions are based on unfunded liabilities.

The one certainty about retirement futures is that well-being and standard of living will depend upon the quantity of goods and services we are capable of producing and the number of people with whom those goods and services must be shared.  Inflation or bankruptcies could easily wipe out  pensions and savings. In any case an increasing population and people living longer into retirement will put pressure on pensions.

There are two ways we can try to ensure our futures into retirement – we can work our butts off in an attempt to return to economic growth or we can reduce our expectations so that we don’t need so need so many goods and services.  It is possible the second option will be forced upon us.  That may not be all bad.  This blogger knows from experience that canoe camping is a lot cheaper and more enjoyable than the large cruise ships..   I also have to recognize that camping would be a lot less fun if we had to share the lake with 2,000 people at a time.

Most  of us are subject to a lot of media hype about the importance of pensions and saving for retirement.  We should keep in mind that we are in for the long-term while the people selling investments are more interested in their next pay cheque.  What is good for them may not be good for their customers and by the time you find out you may not even remember their name.

Some people are worried about government pensions and see private investments as the answer.  I figure the whole financial system is at risk of either inflation or bankruptcy.

In planning for the future we have to evaluate the potential for a return to economic growth.  If one believes we are going to return to growth then it might  be okay to put a lot of effort into a pension.  .  Personally, I think the best long-term investment at this time is a market garden.

 

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Why we have unemployment

We have unemployment because our agricultural surplus is such that we don’t need for everyone to be “working”.  More important issues are who decides how to use the surplus and how is it distributed.

This post was prompted by a question on Reddit asking why we have unemployment.  It’s an important  question because unemployment can be devastating.

The agricultural surplus is the food produced by workers which exceeds their own needs.   This surplus means some/many people can do things other than produce food.  In our society we have used this surplus to produce a wide range of goods and services which have themselves become a part of the surplus.  Unemployment is an indicator of how rich we are.

Think of a small group of hunters/fishers and gathers on a small island where the living is so easy food and shelter requires only and hour or two a day.  By our terms these people would have a high unemployment rate.  Distribution of food would probably not be a problem as they would probably share their produce but they would have to decide what to do with all the spare time.

This model could get  complicated if they had lots of children and increased their population to the limits of the available food.  It would still take only an hour or two a day to harvest the food even though there wasn’t enough for everybody.

In such a small society distribution of food would be by sharing.  I know an anthropologist who did his field work in such a society and he said you could not buy food there.  Whatever one needed was shared.  What to do with the “free” time would probably be up to individuals with collective activities partly by consensus.

Modern technology, especially that applied to agriculture, gives us the same magnitude of surplus.  We too could be approaching the limits of our ability to produce food.

We too have to decide how to share the produce and what to do with the time. So far these decisions have been influenced by our commitment to the work ethic.  Everyone should spend most of their time working and their share of the surplus should come in the form of wages.

As our exchange of goods and services is facilitated by money the decision-making goes with the money.  To the extent that a person has money one can decide how the surplus will be used.  So the more equally money is distributed the more decision-making will equal. The ancient Egyptians did not use money and it appears the pharaohs decided the surplus would be used to build burial chambers.

In the industrial economies we do not need full employment but we do need a more equitable way of distributing the surplus.  With the ups and downs of the economy full employment may not be a realistic goal.  There are lots of things people could do that would be satisfying but which do not contribute to gross national product.

I believe a universal income scheme would give us a more equitable distribution  of the agricultural surplus.  If we are approaching the limit of our ability to produce food, it might provide a more equitable way of dealing with shortages.   It would also spread the decision-making among more people.

Unemployment can be financially and psychologically  devastating for the people who experience it.   But it is not the real problem.  The urgent problems are an equitable distribution of the agricultural surplus and how it is to be used.

 

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.

 

Promoting economic growth

This post is in reaction to two articles in this week’s Economist..

The first article shows how the insurance industry is using digitization to sell more insurance to those who need it the least.  The second article talks about digitization as a factor of economic growth.

Perhaps the real issue for the second article is how digitization can be used so the marketing people can con us into working our butts of so we can purchase more goods and service we don’t really need for the sake of economic growth.

What we really need is some way of evaluating things such as music, arts, crafts, exercise and meditation so they can be included in gross national product.  They could then  become the growth industries of the future.

 

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