Monday, October 31, 2011

Halloween Horror Special XIII (-I): Baby Seven Billion (Gasp)

Notice first the sequence of this posting in the Halloween Horror Special series. We goofed. We thought we had it "timed" perfectly to have The Big Number Thirteen on Halloween itself. At least this is posting #913. Still, we ended up with the Lucky Dozen instead. So, in contrast to the habit that the Bureau of Labor Statistics has developed of manipulating statistics to avoid scaring people (such as reporting approximately half the real unemployment rate), we are manipulating the statistic in order to scare people. That's why we're calling today's final posting in this year's Halloween Horror Special series "13-1" rather than "12."

There's panic in the streets. On the front page of the Washington Post, we have, at one and the same time, concerns about over-population in the developing world, and fears that there're not enough new wage slaves being born in the developed world to support aging populations.

Obvious question: If developed countries don't have enough workers to generate the labor income to tax to support those who no longer or can't sell their labor, and developing countries have more workers than there are wage slave jobs to support them, what's the problem?

Obvious answer: in the short term, allow people who can't find wage slave jobs at home to move freely to where they can find a wage slave job. Of course, the wage slave jobs are disappearing, so the concern expressed by the developed countries is actually the wrong question. We need to ask a new question, because simply allowing unrestricted immigration isn't going to do anything but put a strain on the social services of the developed countries that would make the barbarian migrations into the Roman Empire look like a Sunday School picnic.

The right question: How, at a time when the wage slave system is clearly inadequate, and is rapidly reaching the point where maintaining it is counterproductive and costing more than is realized in benefits — if benefits are still being realized! — is it possible for people to gain enough income?

The capitalist and State-capitalist ("socialist") solution is to redistribute existing wealth from producers to non-producers. In capitalism, this is an expedient to keep the economy running, deplorable, but necessary. In State-capitalism, redistribution is the essence of the system.

Neither regular capitalism nor capitalism lite — State-capitalism, a.k.a., "socialism" — really give us a workable answer. If redistribution could work, regardless how you do it, then we wouldn't be in the trouble we're in today. So what's the real answer?

The Just Third Way, of course. (What, you were expecting us to say something different?) Specifically, Capital Homesteading. Capital Homesteading solves both problems: inadequate wage income, and "over-population."

One, by adding capital income to wage income, or even replacing wage income completely with capital income, consumption and production can once again be linked directly together. This is "Say's Law of Markets." In the Just Third Way, the purpose of production is consumption, not reinvestment to "create jobs." All financing ideally comes from "future savings," not past restrictions in consumption, which is how "mainstream economics" (and most of the little creeks) define all saving. All income can be used for consumption, thereby providing natural job creation, and matching supply with demand. In the Just Third Way under Capital Homesteading there is no excuse for anyone having insufficient income.

Two, "population" is a funny thing. Poor people have, biologically speaking, a lower chance of survival than people who have a sufficiency. According to Buckminster Fuller, nature takes this into account. Poor people tend to reproduce at a high rate simply to ensure the survival of the species. (Nature doesn't know about those social welfare programs that redistribute income and provide medical care, ensuring that more poor people will survive who ordinarily would have died.)  People with a biologically better chance of survival — i.e., a higher standard of living — tend to have a lower rate of reproduction. As a number of economists have pointed out over the past couple of centuries in refutation of Malthus's 1798 Essay on Population, the level of economic development does not rise as population decreases.  No, the rate of population growth varies inversely with the level of economic development.  (In mathematical terms, population growth rates, not the level of economic development, are the dependent variable.)

Yes, shocking. Population control in developed countries has been justified on the grounds of "reproductive rights," which translated from today's Newspeak means the right to kill your offspring after you've reproduced, not the right to choose whether to reproduce. Population control in developing countries has been justified on the grounds that reducing population will somehow spur development and raise living standards . . . by removing the demand
essential to provide the incentive to develop economically.

This, of course, makes perfect "sense" in Keynesian economics. In Keynesian economics you can redistribute forever without worrying about production, just as long as you provide sufficient effective demand through inflation to force savings (shifting purchasing power from consumers to producers by reducing consumption) and create jobs in response to increased savings and reduced demand for jobs. You then grow the economy by eliminating people and reducing the amount of effective demand even further, then continue to inflate the currency to stimulate demand, inflating it faster as there are fewer people with jobs, or fewer people all around. This increases demand by decreasing consumption, and everybody who is left has a job producing things that nobody has the money to buy.

Or you could generate real savings in the future by creating investment funds by monetizing the present value of future marketable goods and services so that everybody can own the capital that is carrying out production, that is, by promising to repay everyone in the future once you start producing marketable goods and services.

Well, this is Halloween. You wouldn't want to see rational behavior.


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