Tom, (I believe that's your name isn't it?)
My disagreement with the below concerns some relatively minor details. I
already expressed a different opinion re: Keynes on another forum. And
not Dilke but Sismondi originally defined wealth (in 1819) as the time
one can live off the avails from previously accomplished work; but let
me suggest an answer to your final question on how to proceed.
First, it may be worthwhile to point out that the input of the financial
sector, comprising somewhere between 15 and 20% of GDP; by their own
standard has succeeded in accomplishing between 1.5 and 2% yearly growth
over the last generation or so. i.e. Their efficiency rate is about 10%,
with a 90% waste. But the facts are actually a lot worse. Ever since the
seminal work of E.F. Denison in 1962, it has been known that new capital
formation can only account for *at most* 15% of the accomplished growth
in productivity, and that the lion's share of growth is due to acquired
knowledge of all kinds (education, experience, etc,). So now we're down
to about 1% efficiency and 99% waste. Given that at least a tiny
fraction of them could be re-schooled and actually perform some useful
work in the real economy, the efficiency rate of the financial sector as
a whole is well into negative territory; thereby doing tremendous harm
to productive workers. Talking about wasted transfer payments!
Now, most of the above holds within the mainstream paradigm. Denison was
an NC economist and his findings were never successfully challenged. So
that even by their own standards, the *attempt* at economic growth by
the financial sector is pathological as far as its outcome is concerned.
It's inherent effect is a usurping of productive output from the meek,
who don't know any better but assume it to be the natural result of free
enterprise. No wonder that for most, the boom never happened. This not
only speaks volumes as to the power of that sector, but also that as
long as heterodox approaches are just as stuck as NC on treating capital
as an accumulatable stock with a positive value, they will unlikely be
able to make a dent in its hegemony; for the gathering of "funds" for
investments is a necessity, isn't it? And the more capital the better, no?
Successfully countering those arguments requires a very different
approach to the meaning of capital and growth, perhaps along the lines
of the one I outlined in: http://www.vcn.bc.ca/~vertegaa/ontology.pdf
John V
Sandwichman wrote:
On 4/9/08, Marsh Feldman asked (and answered) the what-to-do question:
Of course, my comments beg the question of what to do. As a starting point,
I'd suggest a better analysis of the problem.
Digging through my charlatan's bag of economical cure-alls (and
associated analyses), I retrieve a dusty vial prescribed by a English
factory inspector, R.J. Saunders, in 1848:
"Further steps towards a reformation of society can never be carried
out with any hope of success, unless the hours of labour be limited,
and the prescribed limit strictly enforced."
Eighteen years later, the first congress of the International
Workingman's Association paraphrased our factory inspector in a
resolution:
"The legal limitation of the working day is a preliminary condition
without which all further attempts at improvements and emancipation of
the working class must prove abortive and The Congress proposes eight
hours as the legal limit of the working day."
Now said resolution for an eight-hour day was adopted 142 years ago,
but as economist Sydney J. Chapman argued in 1909, technological
advance would require the perpetually recurring and progressive
reduction of working time to the extent that today's "utopian dream"
of leisure time would appear as the day-after-tomorrow's timid
anachronism.
Even John Maynard Keynes, to whose name many economists even today
attach an epigonic "-ian", prescribed shorter working time as one of
three "ingredients for a cure" to unemployment and specified that of
the three ingredients, working less was the "ultimate solution."
Way back in 1821, Charles Wentworth Dilke had already defined wealth
itself as disposable time (and nothing more!):
"After all their idle sophistry, there is, thank God! no means of
adding to the wealth of a nation but by adding to the facilities of
living: so that wealth is liberty -- liberty to seek recreation --
liberty to enjoy life -- liberty to improve the mind: it is disposable
time, and nothing more."
But wait! All these ideas about the remedial properties of shorter
work time are based on the insidious and laughable notion that there
is "only a fixed amount of work to go round." How do we know that?
Because unnamed "economists" say so! Because the Wall Street Journal,
the Economist magazine, Paul Samuelson's introductory textbook and
countless audio-animatronic econ professors standing in front
blackboards have for years drilled this gem of revealed wisdom into
the heads of nodding students, business managers and distracted
perusers of the disinterestedly reported public-opinion consensus.
More doctors smoke Camels than any other cigarette -- and the
lump-of-labor fallacy is the best known fallacy in economics (look it
up)!!!
Who to believe? The factory inspector, the Workingman's Association,
Keynes, Chapman, Marx, Dilke (and many more I didn't mention)? Or
unspecified "economists" whose collective anonymous authority goes
unquestioned by paid pimps for perpetual pump-priming? Believe those
guys or your lying eyes?
But, hey, I'm a mere sandwichman bearing a sign, "the end is nigh",
leaping up on his soap box from time-to-time to rant about things that
are either "too complex for ordinary people to comprehend" or "too
simple-minded to be of any real use for policy" or maybe both. As the
Madison Avenue crowd asks, "What good is happiness if it can't buy you
money?"
So, what to do? Anything but.
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