Innovation is a buzz-word we hear a lot. It offers a vague promise of a techno-fix for all problems. Yet, we haven't even adjusted to the biggest innovations of the past, tools, machines, automation and robots.
Should we be producing as much as possible in a world with overpopulation and robot labor? When human labor is surplus, wage-dependence makes growth beyond sustainability seem necessary.
Physical vs. Financial Economics
Getting people off of welfare by creating jobs for them is a popular idea. If people had good jobs others would not have to pay to support them. If we wish to think clearly about the need to make entitlement cuts it is important to separate the economy of money from the economy of stuff. The paper economy and the physical economy both need basic changes, but they are very different in kind.
Cuts in physical consumption are needed to avoid excessive demands on natural resources and to avoid pollution problems. Physical cuts are not optional if we wish to preserve the natural systems we all depend on.
Living beyond one's means usually refers to going into paper debt. In physical economics we can never consume something we don't have. Some advocates of cuts are thinking about money, about ending excess borrowing and cutting taxes. Other advocates of cuts are thinking about cutting the consumption of physical goods.
It seems that cutting entitlements would cut the physical consumption of people on welfare. That would be true if their lost welfare income is not replaced by wages. Whether a dollar comes from welfare or wages that dollar will allow the same amount of physical consumption, so if welfare cuts are going to cut physical consumption that lost welfare income must not be replaced by wages.
From a physical point of view a person's consumption could be less if he didn't have to do so many things. Having a job will increase a person's consumption above his basic personal needs. Commuting to work and many other kinds of consumption related to having a job can only be justified if the job is really needed for the physical economy.
The physical consumption needed by the economy can be cut by increased efficiency in the use of resources and by adopting streamlined and direct methods of operation. A robot economy that uses direct delivery, bypassing the need for many retail outlets, will cut physical consumption and jobs. Robot workers can cut the physical consumption needed to operate businesses, because machines don't need to commute and they have less need for workplace amenities.
If we focus on who is paying for what, the waste of idle labor, and excess government debt we may conclude that cutting entitlements is a good idea. Yet, it is perfectly clear that a person would need to consume less physical stuff by staying home on welfare than by going to work.
The need for income could be expected to fall after the economy matures. Inheritance will make it possible for a mature economy to provide wealth without much production. If people already have what they want they can enjoy abundance without high income. Inheritance of a durable system will provide future generations a high living standard without high consumption or high production.
Our physical needs for food and shelter and our need to operate within natural limits can not be changed. Our more flexible paper economy must be changed to serve the physical economy bound by the laws of nature.
Increased entitlements can avoid the need to create jobs when they aren't needed. Without the need to stimulate physical consumption to make jobs we could stop trying to consume more physical stuff than the planet can continue to supply.
The level of the basic income could be lowered as required to force-out the labor needed by the economy. If too many people choose leisure, and wages are rising to attract more workers, then the basic income is too high. In that way we can induce the just the needed amount of labor, control inflation without tight money, and conserve resources without poverty.
With a basic income there is no good reason that the labor market could not continue to function. Pressure on people to work would still come from both the desire for extra income and the desire maintain one's self respect, even without the threat that if you don't work you don't eat. Wasn't that threat a law in the USSR?
The time available to do good work would be increased if the right to an income didn't depend on work. Many important kinds of work are unpaid, and should remain unpaid. We don't want mothers for profit do we? When some people choose to work it is fair for them to get extra income, and it is fair that others may choose to spend their time in other ways.
One bad choice would be to end all welfare and face hungry unemployed mobs. Another bad choice would be to consume as much as possible, trying to make jobs, because that would deplete and toast the planet.
Our good choices will require breaking the bounds of ideology. We could begin to see inheritance as the most efficient economic action, and we could start thinking of entitlements as dividends for ex-workers paid from the wages of robots.
Barry Brooks http://home.earthlink.net/~durable/
Zero durability yields zero items in service regardless of the rate of production. Economics a joke if it can't see the goal is provision of goods and services; not hyper-activity.