Daily Kos: The End of Economic Growth, Economic Inequality, and Class War by TomP
Quote:
Capitalism is based on constant economic growth, but what happens if it ends?
|
I disagree with this premise - capitalism can and does exist in steady-state societies. TomP also asks what kind of growth can happen in strongly stratified societies -- not much, if any, he suspects.
The Self-Destruction of the 1 Percent - NYTimes.com by Chrystia Freeland
She appeared in
Bill Moyers on the Plutocrat Elite - Secular Café along with Matt Taibbi.
She discussed what happened to Venice in the early 14th cy. After a period when entrepreneurs could easily finance trading expeditions, Venice's elite made themselves a closed club. In 1315, they published their Book of Gold (Libro d'Oro) of Registered Aristocrats, an event called The Closure (La Serrata). They cut off commercial opportunities for those outside their circle, and Venice slowly declined.
She then notes a distinction between inclusive and extractive states; inclusive ones try to create economic opportunity for all, while extractive ones have elites who try to extract wealth from the rest of society.
Quote:
The history of the United States can be read as one such virtuous circle. But as the story of Venice shows, virtuous circles can be broken. Elites that have prospered from inclusive systems can be tempted to pull up the ladder they climbed to the top. Eventually, their societies become extractive and their economies languish.
That was the future predicted by Karl Marx, who wrote that capitalism contained the seeds of its own destruction. And it is the danger America faces today, as the 1 percent pulls away from everyone else and pursues an economic, political and social agenda that will increase that gap even further — ultimately destroying the open system that made America rich and allowed its 1 percent to thrive in the first place.
|
Like getting themselves exempted from taxes, as Warren Buffett has noted, and getting government bailouts for themselves while decrying bailouts as morally corrupting.
Quote:
Historically, the United States has enjoyed higher social mobility than Europe, and both left and right have identified this economic openness as an essential source of the nation's economic vigor. But several recent studies have shown that in America today it is harder to escape the social class of your birth than it is in Europe. The Canadian economist Miles Corak has found that as income inequality increases, social mobility falls — a phenomenon Alan B. Krueger, the chairman of the White House Council of Economic Advisers, has called the Great Gatsby Curve.
|
The US had started out relatively equal, a nation with lots of small farmers. But industrialization changed that, bringing about the Gilded Age. I think that it's fair to say that we are now in Gilded Age II.
This need not be a great conspiracy, but the effect of elites making lots of immediate decisions. Since their purchasing power is much greater than that of the rest of the population, they can end up pricing important things out of reach. They may also not want to invest very much in people who seem like losers to them.
No More Industrial Revolutions? - NYTimes.com by Thomas B. Edsall
noting
Is US Economic Growth Over? by Robert J. Gordon
RJG notes
Quote:
IR #1 (steam, railroads) from 1750 to 1830; IR #2 (electricity, internal combustion engine, running water, indoor toilets, communications, entertainment, chemicals, petroleum) from 1870 to 1900; and IR #3 (computers, the web, mobile phones) from 1960 to present.
|
He argues that each one was followed by a period of expansion, but once "the spin-off inventions from IR #2 (airplanes, air conditioning, interstate highways) had run their course, productivity growth during 1972-96 was much slower than before." About IR #3,
Quote:
created only a short-lived growth revival between 1996 and 2004. Many of the original and spin-off inventions of IR #2 could happen only once – urbanization, transportation speed, the freedom of females from the drudgery of carrying tons of water per year, and the role of central heating and air conditioning in achieving a year-round constant temperature.
|
TBE then notes David Autor:
Quote:
My guess is that the big gains in the next couple of decades are likely to come from the medical arena — prolonging life, tackling disease, correcting genetic deficiencies, regrowing limbs, reversing the course of Alzheimer's. ...
It's my hope — but here I'm less confident — that advances in energy generation (solar, wind power, efficiency itself) will contribute to stemming global warming by reducing carbon emissions. That would be a major improvement to the expected trajectory of G.D.P.
|
I myself think that continuing advancement in computer hardware and software will continue. Some aspects of it will likely slow down, while others will likely continue, increasing the amount of processing power and memory that will be readily available.
Artificial intelligence has been one of the great disappointments of my life. It has progressed FAR more slowly than many people had expected in the 1960's and 1970's. But it is nevertheless progressing, and robotics is also progressing, with applications like automated warehousing and crop picking. I wouldn't be surprised if, in a decade, it became good enough to displace a *lot* of human workers in these and similar fields.
TBE then notes Martin Wolf in the Financial Times:
Quote:
For almost two centuries, today's high-income countries enjoyed waves of innovation that made them both far more prosperous than before and far more powerful than everybody else. This was the world of the American dream and American exceptionalism. Now innovation is slow and economic catch-up fast. The elites of the high-income countries quite like this new world. The rest of their population like it vastly less. Get used to this. It will not change.
|
This article was US-centered; what's been happening elsewhere?
Finally,
PLoS ONE: Entrepreneurs , Chance, and the Deterministic Concentration of Wealth is a nice article on how wealth concentration can happen without anything special going on, and how concentrations of wealth can impede economic growth. That article uses a statistical approach, with random fluctuations in fortunes and positive feedback. This combination is all that is necessary, contrary to the favored hypotheses of both the Left and the Right.
