The concept that the easy options are in the past is important because this is still the past regarding oil. Oil production is near it's peak, which means that we have about half of the world's oil left. We need to identify our easy options. A few people have said that conservation is the easy option, but few leaders have been persuaded. Very few people really want to conserve; it might hurt our "way of life."
Like it or not, we have come to suspect that we may need to throttle back our economy to reduce the burden we place on natural systems, and not just energy. But that would require a "post-Keynesian" economic policy. Labor power been increasing, due to productivity growth, for centuries. Automation multiplying labor power has not caused much unemployment recently because the consumer economy has kept us busy by making demand grow along with productivity. Our economy, indeed our world, is being arranged to consume or waste all that that multiplied labor can produce. Now, because we have become a significant burden on the other components of nature, we need to abandon what has been blamed on Keynes, the consumer economy.
If the goal of the economy was only to produce goods and services we could give it up easily. The hyper-active consumer economy designed to make jobs. The consumer economy has a lot of support. Yet, the economy can be slowed, and real income can fall without a decline in wealth if we realize that our stock of wealth depends on the wise use resources. Human labor is no longer the longer the scarce factor that should be limiting output in our economy.
How should we measure economic efficiency? Is it (Actual Output)/(Maximum Possible Output)? Should we open cans all day to keep our can openers busy? That would be an efficient use of the can opener, but a waste of food. When productive capacity is more than needed, efficient (full) use of that capacity is a partial waste of the inputs.
A more logical and useful concept of efficiency would focus on (be a ratio of) the desired output factor, goods-in-service, and the really scarce input factor, resources. Goods-in-service is the product of the rate of production times the lifespan of the goods. Thus,
efficiency = output(GoodsProductionRate·ServiceYears)/input(ResourceTons).
Maybe it's the problem of apples and oranges that makes this useful concept of efficiency so hard to quantify. While the most important concepts may defy precise measurement, that doesn't justify ignoring them. Maybe such judgments aren't scientific, but failure to make them retards economic thought to the merely measurable.
Our natural resources are obtained through the application of human skills and technology. Wealth comes from nature, and nature can't be paid. Thus, prices reflect only human considerations. The market doesn't just pretend that resources are free, they really are. Since the market only looks at money it is blind to looming scarcity of something that is free. That's one reason the market doesn't respond to resource scarcity before it occurs, which may to too late for easy correction. When a system doesn't have an indication of looming trouble, planning tends to be impaired.
The highest economic goal is to sate demand. Increased durability is an important tool for achieving economic satiation of non-perishable goods with low rates of production. As we approach a durable sated economy the economic throttle can be backed-off by increasing the level of income transfers. We can adjust the dole to stabilize wages and supply all the really needed labor.
The needed labor will decline as automation replaces workers, and as the need for production is cut by conservation and the end of population growth. As we approach full-automation of services, perishable production, and durable goods production then total wages will fall to toward zero while profit income will rise. This trend is underway now.
While some people think we can't afford to offer unearned income to everyone the numbers aren't so bad. With the present income levels in the U.S., and taking the poverty level to be $9000 makes the total universal payments of $9000/person equal about 38% of all personal income. The tax rates needed to support a universal income with the current U.S. income, poverty level, and income distribution could be:
Income Percentile Bottom1/5 2/5 3/5 4/5 Top1/5 Percent Total Income 3.6 9 15 23.2 49.2 Percent Tax Rate 0 10 20 35 53 Revenue as Percent of Total Income 0 .9 3 8.1 26 = 38%
With a direct income to paupers and others the need for many social programs and economic stimulation would decline. Thus, the expenditure of taxes on a universal income would cut the need for other kinds of government spending.
Once we don't need to "make" (fake) jobs anymore we can really cut CO2 emission by 90% like they say we must to be safe, we could make the oil last until the next big comet hits, and the insecurity of work or starve could end for people with no capital.
Barry Brooks