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Hi all,
[Charles Mueller wrote..]
> I don't recall that anyone here has addressed the question of what a
>successful program of 'voluntary simplicity'--say the suggested 10%
>reduction in the overall consumption of each family--would do to the economy
>at large and, in particular, to the national employment rate. This is a
>routine exercise in every undergraduate college course in economics. A drop
>in consumption means a fall in sales, which in turn requires producers to
>cut down their output volume, and that of course requires that a part of
>their workforce be laid off--thus raising unemployment.
>
> As jobs are lost, consumer purchasing power (involuntarily)
>declines, causing a 2nd round of shrinkage in consumer spending--which leads
>to further cuts in production, the laying off of still more workers, and a
>2nd ratcheting up of the unemployment rate. When that 2nd wave of workers
>loses its paycheck, overall consumption takes a 3rd drop, setting off a 3rd
>round of production cuts, job cuts, and hikes in the national unemployment.
>New investment in new plants and equipment will first decline, then stop,
>and the familiar 'reverse multiplier effect' will kick in, setting in motion
>an ever-enlarging cycle of recurring plunges in consumption, production,
>jobs--and thus in overall consumer income.
>
> During the 1929-1933 Great Depression years, as I recall, this
>country's GNP declined by some 50% and the unemployment rate rose to roughly
>25%.
>
> I would be very interested in learning how the supporters of a 10%
>(and ultimately maybe 50% or more?) cut-back in nationwide consumption
>propose to keep it from cascading into a serious recession or even a repeat
>of our Depression of the '30s. Is there a plan for protecting the
>non-volunteers, to prevent their jobs and incomes--and thus their
>consumption--from being involuntarily taken from them by this 'voluntary
>simplicity' program?
>
> Charles Mueller, Editor
> ANTITRUST LAW & ECONOMICS REVIEW
> http://webpages.metrolink.net/~cmueller
>
> ******************
>
>
Well, Charlie has a real good point there. So good, in fact, that if
a voluntary reduction is bad, then a voluntary increase must be good!
So let's everyone double our spending for Christmas this year. If
we buy twice as much, surely our employers will pay us twice as much
to make all those goods and services that will be sold.
I'm sure that there MUST be enough energy, water, clean air and
raw materials to make all that stuff. We seem to have an unlimited supply.
If we can't find enough in our Country, surely those kind folks in the
third world will be happy to sell us whatever we need. Even if that means
that they will not have enough for their needs.
Gee, guys and gals. What am I thinking! If doubling our use of limited
resources is good, why not triple or quadruple our use. The sky's
the limit!
This must be the best of all possible worlds, or words to that effect.
Dennis Paull
