[lbo-talk] more class!

[Wojtek Sokolowski]

> W. Kiernan wisely asked:
> 
> But where in 1965 the average family could afford to feed and clothe
> themselves, live in a house, own a car and the usual array of consumer
> gad-goes, on the income from one full-time job, now as everyone knows
> it requires two full-time workers.  That's a fifty-percent pay cut for
> all of us except the privileged few; this at the same time that
> per-worker productivity has soared.  Where did all the wealth go?
> 
> ***************************
> 
> Not into the Social Security fund.
> Not into free education.
> Not into free medical care.
> Not into shorter work time and more leisure to take care of the family
> matters.
> Not into free daycare.
> 
> Best,
> Mike B)

It goes to the so-called "transaction costs" - which seems to be specialty
of the US economy.  Specifically this refers to added complexity to things
that can be otherwise done easily and inexpensively, and then hiring an army
of middlemen and helping professions to solve that artificially created
complexity.  Examples include: 
- private insurance schemes with their Byzantine bureaucracies, 
- automobile based transportation that requires armies of auto mechanics,
insurance agents, loan officers, salesmen, policemen, road and garage
construction crews, and administrators to run smoothly;
- suburban homes that again require armies of construction and maintenance
crews, including road construction and maintenance, loan officers, real
estate agents, insurance agents etc;
- preservation and maintenance of accumulated wealth that require armies of
stock brokers, financial advisors, investment bankers, and kindred
speculators;
- preservation of the US imperial ambitions that requires armies of
mercenaries, security agents, weapons procurements, etc..

If you take the transactions cost out of the US economy, there will be not
much left, as most commodities are imported.  It thus follows that a
sizeable and growing chunk of the US economy is basically unproductive
activities disguised as "services" - which could have been altogether
eliminated by a more efficient organization of the economy.  

However, those unproductive activities are remunerated, usually at rates
that substantially exceed the minimum wage.  That money has to come from
somewhere, because unlike economics where things are created out of thin
air, by the power of the invisible hand, in the real world resources must be
created and someone has to pay for them.  The trick of economic "theories"
is make that someone invisible.  

So the answer to your question is:
"somebody has to pay for armies of middle men who oil the artificially
created Byzantine complexities of the US economy, so more and more people
have to work more to create more and more wealth that seems to 'disappear'
in the black hole, but in reality they fund the unproductive middle men.  It
is like what they used to say about the Russian banks - nye propadnyot, no
nye powoocheesh (which translates as "it won't get wasted, but you won't get
it back").  

Wojtek