Getting back to Stiglitz.
Many years ago Keynes posed a question. For thousands of years, most people had to spend most of their time working just to survived-for food, clothing, and shelter. Then, beginning with the Industrial Revolution, unprecedented increases in productivity meant that more and more individuals could be freed from the chains of subsistence living. For increasingly large portions of the population, only a small fraction of their time was required to provide for the necessities of life. The question was, How would people spend the productivity dividend?
This is that quote from Chapter 4 that I wanted to pull out and examine on its own. The reason for this is that it ties directly into our economy. In the United States, people spend that productivity dividend on consumption and, as Stiglitz notes, their consumption relative to others. This is where that whole "Keeping up with the Jones'" comes into play. In particular, he notes that Europe opted for more goods AND more leisure while America opted for less leisure and more goods.
So, are we really working harder and harder "for the family?" Or are we simply playing a continual game of catch up with no end regarding consumption? No doubt that our economy is heavily based on consumption but is that a good thing? Should we consider more leisure time and less of keeping up with the Jones'? As we consider how to mend our economy, we should examine the basic question of the productivity dividend.
Another idea that came out of this quote was the issue of fear and anxiety about the future. There are many on the Right that believe America is going to end soon because of the president and the Democrats. Would they be worried about this if they had to provide the basics (food, clothing, shelter)? Further, would anyone worry as much about all the silly stuff we fret over if this were the case?
I doubt it.
10 comments:
Nice to see you finally stop and think about what consumption based economics implies. And actually the guy who really delved into this first was Veblen.
However, there is an error in the assumption that an economic surplus never existed prior to capitalism and the Industrial Revolution.
So the Keynesian model is based on consumption driven economics. If we assume basic needs have been met, what is the nature of consumption above and beyond that? You M should be criticizing consumption based on both the left's perspective on social degradation and as a Christian on spiritual grounds. Yet you have routinely argued that our economy is based on consumption (aka aggregate demand) and it must be stimulated and/or sustained for economic growth to happen.
I don't think even Gumby can twist himself into that kind of an intellectual pretzel.
Okay, so where is the great rending of our social fabric that was supposed to be discussed this chapter?
Good grief...
At this point, I don't what else I can show you, juris. Maybe something will come up in the next six posts I do on Stiglitz but it seems to me that your are being purposefully ignorant. Even Charles Murray agrees that our social fabric is falling apart and he's conservative.
Regarding consumption, what replaces it, then? I agree that keeping up with the Jones' is part of the problem but if we consume less, how do we achieve the growth necessary to keep demand up?
Does Charles Murray believe that income inequality is the cause of the social fabric unraveling, or is it an effect?
Murray's a libertarian, by the way, not a conservative. Not that that means anything to you. And why should it, when you randomly redefine words on the fly anyway?
Even Charles Murray agrees that our social fabric is falling apart and he's conservative.
Actually his concern is with white people, and as a matter of fact, he himself does not actually describe this elusive social fabric. All this concern about something that not one fucking person can define - that's rather amazing don't you think? Isn't it just possible that the concern is as immaterial as this vaunted fabric?
how do we achieve the growth necessary to keep demand up
Well, you might consider that the theory that says consumption is vital to growth is wrong. That could lead you to a lot of different options, as opposed to doggedly defending the primacy of consumer spending.
Murray believes that our social fabric is unraveling due to an erosion of traditional, family values. He fails to note that in his Fishtown creation that the people there do not have equality of opportunity due to inequality.
That could lead you to a lot of different options
What would those options be?
our social fabric
And just what the fuck is that fabric that you and he are so obsessed with? That blue collar whites don't bowl in leagues anymore? That racial desegregation led to economic segregation? Every fucking reference to this always seems to throw back to what the U.S. was like, socially, in the 50s. That was not such a great time; the nostalgia for it (especially from liberals/proggies) is really mind-boggling.
an erosion of traditional, family values
Now here you stumble upon the paradox of capitalism for conservatives. Prosperity is a great enabler of social experimentation and fermentation - moving away from traditional structures. Women could never thrive like they do today if their opportunities were as limited as they were in the 50s. Of course govt has helped in this as Moynihan said it would in the Johnson Admin.
He fails to note...
Since you haven't read that whole book you should be more contrite about arguing what he does and doesn't do.
What would those options be?
Study some more economics [ye of "depth of knowledge"] instead of insisting on defending a theory that may not be correct. You could spend less time trolling about Republicans and more reading. That would do you good on two fronts.
That's not an answer, juris. I'm asking for your view on what those options might be backed up with evidence and facts. Is ripping me the only answer you have?
I'm asking for your view on what those options might be backed up with evidence and facts.
Go do your own homework. If you actually had read a decent amount of economics you would know without me having to feed it to you (which of course you would spit out like a baby being fed brocolli).
Besides, you haven't given me an answer on the social fabric and I've been asking about that for a lot longer. Quid pro quo.
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