Why Prosperity Requires a Welfare State

[Hannah Bell]

What would happen if labor productivity increased a thousandfold? So creating a certain amount of stuff/goods/prosperity currently requires a thousand workers; suddenly, it only requires one. Those 999 workers suddenly have no "legitimate" claim to any of that stuff, because they don't do anything to "earn" it....Can such an economy work?

No. Because those 999 people don't have any money to buy the goods that the one person produces. And there's no way that one person can purchase/consume all the goods produced. So they don't get purchased. So they don't get produced.

The economy--which is essentially a huge logrolling enterprise--stalls and stops...It's simplistic, but it still represents--accurately and increasingly--the state of modern economies since the industrial revolution. The spectacular efficiencies of technology and corporate capitalism make labor (especially low-skilled labor) increasingly valueless. So in the real world a few people make a lot of money and a lot of people make less money. Absent some intentional intervention, it's an inevitable result of rising labor productivity.

Left to its own devices, this system will inevitably grind (or crash) to a halt as more people fall off the log. That one person can't keep it rolling while all the others drown nearby.

So why does the log keep rolling? Because of redistribution...


http://trueconservative.typepad.com/trueconservative/2008/11/why-prosperity-requires-a-welfare-state.html

[Hannah Bell]

1. If you rec, pls kick....

[cliffordu]

2. I've been waiting for this post for a while. K&R.

[progressive_realist]

3. Very true. K&R n/t

[Greyhound]

4. You are right. We already have far more people than is necessary to do what is needed.

Millions upon millions of us are engaged in busy work and have confused it with a career.

The plain truth is that we passed the mark of economic necessity about a century ago. This has spawned multiple industries devoted to producing what is not needed and yet more industry to create the desire for it.
:kick: & R

[leftstreet]

5. K&R

[Bitter_Clinger]

6. Given a choice...

I'll be one of the ones not working but living off of the redistribution. In those circumstances, working would be for dumbasses.

[Vickers]

12. You want to be a welfare queen...like the Enron Blackwater AIG cocksuckers?

:shrug:

Welcome to DU!

Enjoy your stay!

[Hannah Bell]

13. "Redistribution" can take a lot of forms: like a 10 hour work week with full employment.

Or like a lot of bullshit "McJobs" at $8/hr, to keep the peons busy doing nothing much.

Or like a bunch of bullshit "professional" paper-pushing jobs, where 1/2 of the surplus workforce exerts control functions over the other half, & pretends they're superior.

Or like high salaries for useless crooks on Wall Street.

It just depends on what kind of redistribution you like, since every distribution where people work together entails redistribution.

[Cleita]

7. K&R

[mudesi]

8. The other 999 workers would work somewhere else

They would produce something else and earn money from there.

The increased productivity to produce the initial product would lower its price, and thus would be purchased.

[bemildred]

9. This seems to be contrary to simple observation? nt

[Hannah Bell]

11. how so?

[bemildred]

16. Historically, rebellions and revolutions occur when enough people are thrown out of work.

We came pretty close here in the 1930s. People starve. They move to California and can't find work there either. Businesses fail because their market evaporates.

Economics is supposed to be science, not a religion.

[applegrove]

10. Great explanation.

[judasdisney]

14. Do plutocrats WANT prosperity? Or do they want Neofeudal Landed Gentry?

[glitch]

15. I believe we are seeing that answer play out in the "marketplace" nt

[The2ndWheel]

17. All that corporate productivity and state welfare

is the reason we have such a massive impact on the environment.