On Fri, Oct 3, 2008 at 12:40 PM, Jim Devine <[EMAIL PROTECTED]> wrote: > the very simple Harrod model of growth (a.k.a. Harrod-Domar) says that > all else constant, technological change leads to falling employment. > Thus, the real GDP needs to grow to absorb the unemployed.
Well, yes, "all else constant" that makes sense. Technology leads to falling unemployment. However, expanding real GDP is not the only conceivable way of absorbing the unemployed. Back in the day when the OLD conventional wisdom (in its original incarnation) still prevailed, Ira Steward proposed a very different solution than simply growth of real GDP -- although economic growth would indeed have been one of the end results of the approach. That approach began with cutting the hours of work. Keynes had the same idea during the second world war. Marx got the same idea from an anonymous 1821 pamphlet, the Source and Remedy of the National Difficulties. Growth doesn't happen by itself. The conventional prescription for growth starts from debt. What is debt? In banking terms it is a WITHDRAWAL from a bank that occurs in anticipation of future deposits. In effect, it creates something from nothing. What is reduced working time? It is a WITHDRAWAL from labor activity in anticipation of future work at an increased level of productivity. Both debt and SWT share a future orientation -- the present withdrawals underwrite the future deposits -- but with debt it is capital that receives the interest payment for the future creation of value; with SWT, that interest accrues to labor. -- Sandwichman _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
