----- Original Message -----
From: <mailto:[email protected]>Keith Hudson
To: <mailto:[email protected]>RE-DESIGNING WORK, INCOME
DISTRIBUTION,EDUCATION
Sent: Saturday, October 02, 2010 5:13 AM
Subject: Re: [Futurework] Not a very positive picture
At 13:49 01/10/2010 -0700, Pete Vincent wrote (in a civilized and
non-abusive way):
On Fri, 1 Oct 2010, Keith Hudson wrote:
> Apart from the necessary supply of increasingly cheap fossils fuels, the
> industrial revolution (that is when the idea of "economic growth"
emerged
> and GDP has been worshipped) depended foremost on the mass production of
> what were originally hand-made luxury items enjoyed by the
land-owning rich
> of the agricultural era. Despite what Marx and Engles said about the
> increasing impoverishment of the factory workers they were, in fact,
> prospering all the way through the 19th century and most of the 20th. As
> each new consumer product, hitherto expensive (cotton clothing,
porcelain
> pots, curtains for the windows, bicycles, etc) became cheaper in
successive
> swathes then, with hard saving at each stage -- the professional
> middle-class (see Samuel Pepys diaries), then the middle-class, then the
> working class -- became a cornucopia flowing downwards, and a whole
> population working hard and aspiring upwards.
[PV]
I'm finally moved to comment on this thesis. If I were to contemplate
the arc of the western prosperity flowing from the industrial
revolution, I would pinpoint the key drivers as being a synergy of
several. Obviously key are the extraction of high energy content
fossil fules, first coal then oil, in combination with the development
of devices to extract and exploit them for motive power and ancillary
applications, particularly smelting. But what I would identify as the
key additional factor which catalyzed the advance of wealth is the
simultaneous advent of vast open frontiers, offering the opportunity
of carte blanche application of the new technologies and accompanying
explosive population growth. At the same time, intellectual freedom
led fairly directly to great advances in public health and sanitation,
which brought about such an improvement in the living conditions of
the already "fully" populated regions of the world that it was the
virtual equivalent of the opening of another frontier, in terms of
the resulting increase in population.
All this growth and expansion provided the main wealth driver, not
in consumer goods, but in major industrial production for housing,
transportation and commercial infrastructure: steel rails and girders,
brick, concrete, and asphalt; multistorey buildings, highways, bridges,
ships. I suggest that an entire absense of consumer products may not
have caused a substantial reduction in the overall arc of productive
activity and accompanying growth of wealth (if we consider housing
to be distinct from consumer goods). You can consider the automobile
a consumer good, but in its absense, an equivalent flourishing of
public transportation would necessarily have resulted.
In my view you are putting the cart before the horse. Infrastructure
follows industrialization-consumerism (apart from the minimal industrial
infrastructure paid for privately). Typically in a developed modern
economy, consumer spending accounts for 65-70% of GDP; infrastructure
15%. Consumer spending supplies immediate profits, part of which can be
re-invested soon afterwards. There's no doubt that infrastructure
spending supplies extremely important long-term benefits, but it is
smoothed-out over the nation as a whole and supplies no specific
financial surpluses.
When political parties present their manifestos at election times they
speak to the selfish class interests of the electorate and, increasingly
in recent decades, to the sub-classes within them. Politicians don't
present infrastructure projects at the top of their lists because they
know that it is the immediate interests of the individual and his family
which, added together, supplies the national motivation which can also
pay for infrastructure as a byproduct. Stalin and Mao Zedong with their
concentration on heavy industry made the bad mistake of trying the
infrastructure-first route, and both the Soviet Union and China failed as
a consequence -- the former collapsed, the latter became moribund.
The irony of all this is that when consumerism is in full spate (e.g.
England in the 19th century, China and Russia today) -- even with low
levels of taxation -- then abundant local and state infrastructure
(physical and welfare) can be relatively easily laid down out of the
general prosperity. Today, with few, if any, uniquely new consumer
products (only embellishments of 20th century ones) to motivate their
electorates, all advanced governments are deeply in debt and cannot even
maintain their existing infrastructures from taxation, never mind
extending them.
Keith
Keith Hudson, Saltford, England
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