Capital Ed. Is the government capital poor or cash poor? Can you imagine a country the size of the U.S. as Capital poor. I can't. How about Canada? These countries sound like the rich folks I know who complain about paying for services because they are poor. Hohokum!
REH From: [email protected] [mailto:[email protected]] On Behalf Of Ed Weick Sent: Wednesday, July 14, 2010 11:10 AM To: [email protected] Subject: [Futurework] Fw: [Ottawadissenters] Fw: More dismal stuff ----- Original Message ----- From: Ed Weick <mailto:[email protected]> To: [email protected] Sent: Wednesday, July 14, 2010 11:08 AM Subject: Re: [Ottawadissenters] Fw: More dismal stuff The main trends I see are continuing population growth, continued urbanization (see Mike Davis's Planet of Slums for example), reduced employment per unit of output (increasing efficiency in production), a continuing shift of production to the low wage world, and the increasing importance of the financial sector as opposed to the goods producing sector in the advanced world. All of this means an exacerbation of the unemployment problem we have now. I don't think that the world we're moving into will be a pretty place. A little over a decade ago I spent a month in a vast slum of Sao Paulo, then a city of 20 million people. Many, perhaps most, of the families of that slum were migrants from the countryside who had lost jobs on plantations because machinery had replaced them. They were stuck; there was no way that they could go back to the land and grow their own food. The people I worked with lived in a third stage favela (slum). Accommodation consisted of very crowded but solid brick-block buildings. People in second stage favelas lived in shacks cobbled together out of whatever wood and tin could be found. First stage favelados slept in cardboard boxes under overpasses. People did whatever they could to stay alive. Quite a few worked in hotels downtown, others ran local shops, but many sold drugs and turned to petty or even major crime. Standoffs and shootings between the police and drug dealers or criminals were commonplace. I'm not suggesting that our situation will be like that of Sao Paulo, but given the kinds of changes now apparent, we will go some distance in that direction. Our kids won't have the kinds of opportunities we had, and it will likely be worse for our grandkids. We increasingly hear the word "deflation", which suggests a prolonged slump and falling prices because people cannot or will not spend as they did before. Paul Krugman argues that if people are not spending, the government must, but governments already have high debts and their powers to tax are diminishing. Sorry that this posting is a downer, but I'm not an optimist so I might as well say it how I see it. Ed ----- Original Message ----- From: balfourarch <mailto:[email protected]> To: [email protected] Sent: Monday, July 12, 2010 11:11 PM Subject: Re: [Ottawadissenters] Fw: More dismal stuff Ed That kind of scenario cannot play out; post oil food if not raised locally is not coming from afar. The economy that allows the city state to exist collapses. The dregs cannot exist if the flotsam above has sunk; the folks will be busy trying out how to raise a little food inner city wise or moving to the hinterland to take over the monoculture abandoned fields. Or die. As in the latter day urbanization as saviour days are not sustainable. The inner city has nothing to trade for the food from the hinterland. They have to get their hands dirty..... No room left for the drug culture. rb On 2010.07.12, at 3:14 PM, Ed Weick wrote: ----- Original Message ----- From: Ed Weick <mailto:[email protected]> To: Keith <mailto:[email protected]> Hudson Sent: Monday, July 12, 2010 5:40 PM Subject: Re: More dismal stuff Keith, I understand what you are saying, but I'd still maintain that the world has changed greatly over the past half century. Production takes place over a much larger part of the globe, container ships and aircraft move what is produced around much more rapidly, communications are instant and America and Europe have lost much of their economic clout. Because production has become more efficient it needs fewer people per unit of output and yet the global population continues to grow and its growth is expected to continue. I see the question of how increasingly urbanized populations will make a living as a major problem. Increasingly via drugs and crime probably. Ed ----- Original Message ----- From: Keith Hudson <mailto:[email protected]> To: Ed Weick <mailto:[email protected]> ; RE-DESIGNING WORK, INCOME DISTRIBUTION, , <mailto:[email protected]> EDUCATION Sent: Monday, July 12, 2010 1:45 PM Subject: Re: More dismal stuff Ed, At 11:34 12/07/2010 -0400, you wrote: There's been a lot of discussion, too much in fact, on Keynes and Hayek on the list recently. I recall reading them, and others like Friedman, a very very long time ago. They understood the world from the perspective of their times, but now they're all dead. Well Krugman, essentially a Keynesian, isn't dead, but the kinds of things he keeps saying in his columns, which I've characterized as "spend, spend, spend", seems out of place too as belonging to a past era rather than now. What kind of a world do we live in now and how might we think about it? One of the greatest differences between the worlds of Keynes and Hayek is the extent of globalization. There was as much, if not more, globalized trade (as between many different importers and exporters in different countries)(as a percentage of total world GDP) in the 1870s/80s as now. A very great deal of globalized "trade" today is the shifting of components and sub-components within and between large corporations. Economic decisions and actions that are now made a very long distance from us can have a huge effect on our well being. When Keynes and Hayek lived, and thought, unemployment in a particular country was seen as caused by a fall in effective demand in that country or by market imperfection such as too much monopolization and too little competition. I don't think that is the case now. Many Americans for example are unemployed because a large chunk has been ripped out of their economy and shipped off to China. But it's still the case that most high-value components (with higher profit margins) are made elsewhere and only assembled in China. Even so, Chinese wage rates are rising rapidly now -- just as they did in Japan and Korea in the 1960s and the 1980s respectively -- and will be equivalent to ours in the not too distant future. Chinese firms will then start to move to the UK and the US just as the Japanese and the Koreans have done. Another major difference between the world of Keynes and Hayek and our world is that of the efficiency of the productive process. Even if production has or has not been shifted to China and the BRICs, the productive process employs far fewer people than in would have in Keynes' and Hayek's day. But because of population growth there are far more people needing work. Even the production of an increasing proportion of consumers goods in China has done little to increase the proportion of the Chinese population that is employed. And globally, while the efficiency of production has increased greatly, so has the proportion of the global population needing employment. In 1950, global population was approximately 2.5 billion; by 2000 it had increased to over 6 billion. And a much larger proportion of global population lived in cities where they would be less able to fend for themselves if they did not find jobs. Yet another major difference between our world and that of Keynes and Hayek is the greatly expanded role of the financial sector, which can play a very large role in global economic illness or health, as the US subprime mortgage debacle has demonstrated. Yes indeed, as James Galbraith argues, catch the bastards, incarcerate them, apply tough laws, etc., but will that stop them? Hardly, given the vast number of hiding places that electronic communications now provide them. So, let us nod respectfully in the directions of Keynes and Hayek and earlier economic thinkers like Adam Smith, Jean Baptiste Say, David Ricardo, etc., but let's not forget that we live in a very different world than they did. But the basic nature of economic transactions remains exactly the same as then -- and probably the same as in 75,000BC when sea-shell necklaces were traded over long distances. My greatest fear is that our world of growing population, job shrinkage, and the growth of nefarious practices could, in a couple of decades, resemble the world portrayed in Soylent Green, a very classic movie about a world gone totally out of kilter. All the signs are that when people are in Soylent green scenarios -- as they surely will be in many regions of the world -- then fertility rates go way down. There'll also be a huge amount of starvation but, within a generation or so, the world population should start to sink. I think the basic technologies will be extremely sophisticated by then so the big issue within the advanced countries (not necessarily those of today) will be whether they can educate their children up to a standard to be able to force job sharing on the adults with interesting. 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