Archives for category: Money as goal

Basically, ‘doing business’ means obtaining sustenance by being useful to other people.
As opposed to hunting/picking/growing your own food, building your own shelter and using pelts to cover your back.

‘Doing business’ obviously implies trading. Raw materials are being transformed to fit the needs of the intended customers, transported to where they are needed and offered to those who might buy them.

For this process to take place, ‘business’ needs far more than entrepreneurs, customers raw material and workforce.

It needs a suitable environment.

It needs roads, markets – not only ‘stable’ but also safe, and – maybe the most important thing, it needs the right kind of ‘popular sentiment’.
For business to work as intended, people need to have faith in each-other.

Yep, faith!

Who would eat in a restaurant without trusting that the cook hadn’t spit in the soup?
Who would buy a car to drive their children to school without actually believing that the car had been built as it should have been?
Who would even drive on a two way road without believing that the drivers going in the opposite direction will stay on their side of the road?

And do you really think that German farmers of yore – who had enjoyed a relative safety while working their own land, living at the bosom of an extended family and being personally acquainted with all the members of the community,  would have gladly come to the ‘unknown’ city to become industrial workers  during Bismark’s ‘reign’ without the ‘safety net’ extended by the Chancellor?

Taxes are the manner in which we pay for all these.
But they are much more than this.
The willingness of the people to pay taxes means that they have faith that the money will be well spent. That they have faith that those in charge will spend the money wisely and that, in the end, those in charge will be held accountable.

Whenever any of the parties involved in this deal – or both at the same time, no longer trusts the other to do its part of the deal – or tries to use their position to access undue benefits… things go south. Way south.

Just as it happens in any other deal.

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What do we want?

Money.

When do we want it?

Now.

How do we get it?

By being efficient.
‘Give as little as you possibly can while taking as much as you can possibly grab.’

And who’s going to get the job done?

Huh?!?

Capisci?

Let’s take it one step at a time.

A guy hires a woman. A ‘working girl’, to be precise.

After a while, an attorney pays a hefty sum to the working girl and has her sign a confidentiality contract.

When asked about the whole thing, the guy first said that he didn’t know much about anything and then that he had reimbursed the hush money to the attorney.

The attorney apparently gets a lot of money from somebody else. Which somebody else might be, now or become in in the future, in a conflict of interests with the organization presently run by the guy who had once hired a working girl.

It becomes apparent that the attorney is a confidante of this guy. Or, in plain English, that this attorney takes care of the dirty laundry that ‘happens’ around this guy.

It also becomes apparent that this attorney is not satisfied with the amount of money he gets from this guy. That this guy is not his only client. And that this attorney is not very particular when accepting other clients.

What am I to understand from all this?

This guy is cheap?
This attorney is very greedy?
This guy is not very particular when choosing who takes care of his dirty laundry?

two sided coin

So, Japan and Germany have huge trade surpluses. Despite their workers being the best paid in the whole world. In both absolute and relative terms. Among the major economies, anyway.
Meanwhile, the US has a humongous trade deficit. Yet the American CEO-s are ‘compensated’ as if they were the best in the world…

Interesting, right?

More ideas about the same subject here:

Why is Japan Economy (surplus of over $100 Billion) a considered Weak Economy? & Why is USA Economy (deficit of over $400 Billion) Strong Economy?

 

Apparently, modern civilization ‘is all about the money’.

Fundamentally, it’s still about trust.

Drivers trust their follow drivers that each will stay on their side of the road, stop at the red light and yield at the famous yellow triangle.

yield

 

Each of us trusts that the elevators we use daily won’t fall under their own weight, that our daily bread contains exclusively what’s mentioned on the label and that tap water has been adequately filtered before being pumped into our homes through proper pipes.

We trust, and follow their advice, ‘higher authorities’. Science people, teachers, government ‘agents’…

Modern ‘consumers’ order a lot of stuff online, food included. From people they’ve never met, trusting they’ll get what they’ve read about in an add they never asked for.

We keep a lot of data online. Mails, tweets, pictures, more or less intimate thoughts shared on our FB walls. That’s the ‘free’ part. We also pay increasingly handsome amounts of money to ‘upload’ for safekeeping ‘in the cloud’ a lot of sensitive commercial and personal data.

Where ‘apparently’ meets ‘fundamentally’, in our individual/personal lives, we are flabbergasted when cars become weapons and are used to kill innocent bystanders. Our friends and relatives.

When manufacturers implement planned obsolescence, artificially increase nicotine contents in cigarettes and replace sugar with corn syrup in ‘soft drinks’.
When piped water is dirty and the authorities shrug their shoulders.
When we discover that animal fat is not as bad for us as we’ve been told for the last 50 years or so. When we realize that our children are saddled with huge debts simply because they wanted a good education. When we realize that some of the people involved with ‘government’ become part of the problem instead of part of the solution.

When our personal data becomes a merchandise.
Traded to be transformed into a manipulative tool.
Used to influence us into buying certain things.
Used to influence us into making certain political decisions.

Trust will, probably, survive for a while.
But I fear the day when too many people will have lost it.

Price tag

 

 

Survival of the fittest“.

Evolution is not about survival of the fittest but about the demise of those unable to adapt. Even if the difference seems trivial this approach has vast consequences. As Ernst Mayr explains it What evolution is, (Basic Books, New York, 2002) one can never know what “best” may mean, in any situation. First of all because (Werner Heisenberg, Herbert Simon, Dan Ariely) you can never have a complete picture of anything and secondly because in the real world ‘situations’ are changing constantly – Panta Rhei.
So the only relevant test is survival, being able to cope with whatever comes along and not the brilliance with which one might be able to solve a very particular problem, at a particular moment in time.

Division of labor

After understanding ‘survival’, it’s a lot easier to figure why social strategy functions better than sheer individualism: by creating the right environment for its members to become specialists a complex team will cope better when confronted with  different complex situations than a mob composed of identically qualified members.
With the caveat that this arrangement works only as long as every member of the team realizes that it’s better for him to belong than to get out and only as long as all the members of the said team act consistently as if ‘one for all and all for one’. Otherwise put, complex teams where each has it’s own more or less indispensable role work properly only as long as most of the members continue to be ‘socially intelligent‘.

For those who feel there is an apparent contradiction here please note there are two levels of analysis/interaction.
Individually, each of us has to take care of him/herself (and his/hers immediate family).
Socially, each of us has the duty to evaluate the other members of the group and to exchange information with them about the well being of the whole group.

This can be taken even further. Whenever a subgroup becomes too ‘specialized’ –  as is in ‘becoming so preoccupied with it’s own well being as to stop caring about the rest’, its own survival is in danger. Time and time again, history shows us that those who become estranged from the rest of the society end up badly. Creating problems for the entire society, true, but ultimately their behavior amounts to a form of suicide. Callous royals end up on the chopping block, seemingly indestructible dictators end up at the hands of angry mobs… Erstwhile top of the feeding chain (too big to fail?!?) companies end up broke or bailed out by the government…

Politics versus Economics

I’m constantly amazed by the fact that politics and economy have grown so apart from each other and each of them so disconnected from reality.
Politics has become a constant struggle for administrative power while economy has ‘metastasized’ into a battle field where the foot soldiers struggle to survive while the big brass  gorge themselves with ‘money’.

Nowadays, too many politicians have forgotten that their job is to figure out, in close cooperation with the rest of the society, how to solve the various problems which  challenge us on a daily basis. Too many of them do nothing but fight among themselves, each of them attempting to impose their particular vision on all of us.
In the same time, the economic mechanism is no longer geared towards ‘making the ends meet’ – the original meaning of the Greek word oikonomia.
Our not so distanced ancestors have invented a self governing mechanism which very efficiently allocated the available resources to those who were able to put them to good use. Adam Smith described this mechanism as ‘the free market’.
Presently, we’ve corrupted this previously self leveling mechanism into a collective MMA arena where the heavier knock the wind out of the weaker in the name of ‘king profit’.

All this because we mistakenly believe free market capitalism to be an ideology when it is nothing but a mechanism for allocating resources.
The best to date, admittedly, but only as long as we’re wise enough to preserve the freedom of the market.
And as soon as we’ve mistakenly ‘anointed’ profit as the most important goal of any economic venture… the market had ceased to be free!  You see, profit is the best measure for efficiency – which, in its turn, is the best indicator for economic survivability, yet efficiency itself is pointless if the needs of the market are not met. Smith’s famous characters – the baker, the brewer and the butcher, went to the market to meet the needs of their customers. They became comfortably well off because they were successful in meeting those needs in an efficient manner, not because they were successful in cornering the market… as some of the present day tycoons are teaching us

Why do I maintain that a ‘profit obsessed’ market is no longer free?
Well, simply because the participants to such a market are just as free as those addicted to heroin. Both kind of addicts think of nothing but the object of their addiction and are oblivious to everything else. As in blind to everything else!
And I’m sure you all agree with me that being blind is detrimental to being able to stay alive. Specially so for those unaware of their blindness!
Or unaware of their addiction…

 

We are constantly being told that we’re living in the best possible world.

I agree with that.
Of course it’s the best possible one… specially since there’s no other!

On this side of the Styx, anyway…

Let’s get real now.

This is the Century when we’ve managed to open up all corners of our round Planet. We’ve ‘conquered’ the most remote and inhospitable places – both poles, all mountain tops and most of the ocean floor, including that beneath the Arctic Ice Sheet, and, way more important, made most of the Earth solid surface accessible for almost everybody. By car, by train, by plane, by bike, by ferry …
We’ve managed to populate all the ‘cubicles’ designed by Mendeleev and we found uses for most of them.
We’ve managed to identify a vast array of natural resources. We’ve developed matching technologies to exploit each of them, to transform and combine them into what we thought it would fit our fancies and to distribute the results to whomever wished to receive them.
We’ve continued to develop already invented means of communication and we transformed them into something totally different. Practically, we’ve restored the world to it’s ‘Golden Age’. We now live in the Global Village.

Which is not that much different from the old one…

Now, with the world watching Aleppo burn, Daraya fall, and Idlib and other Syrian cities suffer so brutally, Pope Francis’s description of Syria as “abandoned and beloved” rings chillingly accurate. After Bosnia, I was sure the international community would never again stand by and watch in silence as hundreds of thousands of people were bombed relentlessly, starved, beaten, traumatized, and denied the most basic human rights, including education and medical facilities. During the height of the worst years in Sarajevo, from 1992 to 1994, you could chart the ebb and flow of the city’s hope, like the steady flow of the Mijacka River, whose shelled bridges we had to run across to avoid getting hit by snipers. Food supplies ran out; soldiers were getting slaughtered on the fronts; the hospitals’ generators went down.

Janine Di Giovanni, From Sarajevo to Aleppo, Lessons on Surviving a Siege,
The Atlantic, October 12, 2016

What happened with “only a fool learns from his own mistakes, the wise man learns from the mistakes of others“?

OK, back to square one…

1918 had seen the end of the First World War.
Which was the first ‘mixed’ war and the one which should have been the last…

‘The last’ part is obvious, let me elaborate on ‘the first mixed’ one.

Basically, people are both lazy and easily frightened. Their natural tendency is to ‘give in’, a.k.a. ‘trade in’ rather than ‘fight for it’ ‘to the ultimate consequence’.
Which actually makes a lot of sense. Just imagine what would have happened if we were just a tad more combative than we used to…

Need a clue? Click on the picture below.

sex bonobos chimps

Welcome back.

The proposition “Laziness and congeniality is our default mode (mood?)” is valid but from a ‘statistical point of view’.
On a ‘case by case approach’, the manner in which each of us reacts in specific circumstances depends both on those circumstances and on our own interpretation of what’s going on. In fact, it’s our individual consciousness which makes things even more complicated than the situation described in the video above.

During most of our history, human social arrangements have closely resembled those of the chimpanzees. Alpha males have somehow managed to climb to the top of the food chain while the ‘laziness’ of the rest kicked in and allowed the alpha males to do more or less what they pleased.
Which had included a lot of unwarranted aggression.

Up to WWI, most wars had been started by aggressive rulers who had somehow convinced their followers to attack one or more of the neighbors. Which neighbors were also organized more or less like a chimpanzee troupe – ‘lazy and congenial people’ ruled by which ever alpha male was aggressive/cunning enough to remain in power.
These social arrangements had a very interesting consequence.
All conflict was between rulers and all wars were ‘turf wars’.
The belligerents were not attempting to out-kill each-other but to establish hierarchies. More prosaically, war was nothing but ‘protection racket’. The loser had to pay a certain amount of money to the winner – ‘war reparations’, surrender a piece of the ‘turf’ or both at the same time.

In time – due to particular circumstances, some of what are currently known as ‘nations’ have learned that ‘chimpanzee social order’ leads to unnecessary suffering and have (re)invented an alternative. A.k.a. democracy.

WW1 was the first major war which pitted authoritarian regimes against democratic ones.
Yes, humankind had already witnessed some wars which had been started by more or less democratically run countries – the British Empire had attacked the Boer Republics in South Africa, for example, only this is but a blog post, not a 500 page dissertation…
Unfortunately, the democracies which had won the WWI had behaved totally inappropriately… with dire consequences. For them, as well as for the rest of the world.

The Treaty of Versailles imposed a huge amount of war reparations upon the main loser. Germany.
Two consequences have arisen from here.

The obvious one was WWII. And almost nobody disputes this.
The less obvious one was that those war reparations had transformed war itself.

A democratically run coalition imposing war reparations upon a defeated and leaderless/dispirited population had transformed war from a dispute between rulers into a dispute between nations.

This was the ‘accelerant’ used by Hitler to start the second funeral pyre which had engulfed Europe…

Democratically run nations behaving inconsiderately towards other nations also established an immensely dangerous precedent.

The first example of which had occurred less than 20 years later in Spain.

 

Remember Midas, the character who, after being granted a wish by a grateful Dionysus, “asked that everything he touched would turn into gold“?
And who was happy as a pig in mud after his wish was fulfilled … only to find out that he was going to die of hunger since everything he touched did turn into gold? Including his beloved daughter who had enthusiastically embraced her father upon his return from the fateful meeting with Dionysus?

Under the Violent Crime Control and Law Enforcement Act of 1994, the “Three Strikes” statute provides for mandatory life imprisonment if a convicted felon: (1) has been convicted in federal court of a “serious violent felony”; and (2) has two or more previous convictions in federal or state courts, at least one of which is a “serious violent felony” (the other offense may be a serious drug offense). The sentencing enhancements in this law can have a significant impact on a criminal defendant.

Now wait a minute! What has this got to do with anything?

Well, more than two and a half millennia after Midas had driven himself into a tight corner we continue to ignore his lesson. As a species…

And the key words here are ‘continue to’.

The axe.

Very soon after our flint knapping ancestors discovered that a shaped stone is very useful at chopping wood they tied it to a shaft and started bashing the heads of their neighbors with it.

stone axe

‘Corrupting’ tools into offensive weapons, strike one.

 

Articulated language.

Soon after learning to fight our fellow humans, we started to speak to each-other.
It might have started while hunters tried to coordinate their efforts or when strangers tried to barter things… Does it really matter?
For me, it’s enough that very soon after we learned to speak we were masters in the art of lying.

internet lies lincoln

Corrupting words into lies, strike two

Money.

At some point in our more recent history, we discovered that it was easier for each of us to learn a particular skill and to exchange goods among rather than each of us providing for all his (family’s) needs. Eventually we invented money and replaced barter with proper trading.
Soon after, some of us forgot that money was meant to facilitate trade and started to hoard it.

follow the money

Elevating money to stardom against all historical advice, strike three.

 

Are you wondering whether I’ve lost it entirely?
Neah… just came home from the movies…

All the money in the world

Since the movie ended on the bright(-ish) side, I’m going to remind you that Midas also found a way out of his predicament.
The ‘golden’ King begged Dionysus to lift the cursed blessing bestowed upon his head, was instructed to wash his hands and everything else he wanted turned back to its original state in the Pactolus River – in present day Turkey, and presto, everything was fine again.

There’s only one small problem left.
Where are we going to wash our hands…. or should we cleanse our minds first?

Hopefully, before experiencing the hunger pangs which had driven Midas to wisdom…

 

 

Autumn of 2008.
The Bucharest Stock Exchange assembled a conference for the investors where some relatively junior guys working for the ‘Global Banking Establishment’ tried to uplift our mood by outlining their bosses’ envisioned reaction to the crises. Something which would later be known as  ‘quantitative easing’.
I asked one of them:
‘The current crises is the straight consequence of money having been used improperly. Are you sure that throwing a fresh amount of it on the market would make things any better?’.
‘Well, nobody has come yet with a better idea…’

Almost ten years later, it seems that ‘throwing fresh money at it’ did revive the market.
Dow Jones has climbed through the clouds, unemployment is low, inflation is low, interest rates are also low…

Some 120 economies, accounting for three quarters of world GDP, have seen a pickup in growth in year-on-year terms in 2017, the broadest synchronized global growth upsurge since 2010.“, according to the IMF.

Only the very same words could have been used to describe the 1990’s…

But there is something that at least some of us have noticed.

income-inequality-08

©Elliot Wave International (www.elliotwave.com)

Both major economic crises which have scarred us in less than a century have been closely predated by spikes in ‘income inequality’.

To make things worse, we are confronted by yet another fast moving development which pushes us towards uncharted waters.
Large scale replacement of ‘human capital’ by industrial robots, some of them driven by ‘artificial intelligence’.

Reaction has been mixed.

Some of the very rich have pledged to make available to charity important chunks of their estates while other ‘concerned parties’ promote  heavier involvement of the government – ‘guaranteed universal income’, etc., etc…
All these in the name of an illusive ‘equality’.

‘On the other side of the isle’, where inequality is seen as being not only natural but also harmless, people are happy with what’s going on and see no problem in everything continuing to march to the same beat.

I argued earlier that ‘heavy involvement of the government’ has already been experimented. And failed. Check the fate of every communist dictatorship.
Actually, check the fate of all dictatorships.
You’ll find that whenever a society becomes too centralized, that thing alone considerably diminishes its survival chances.
Same outcome whenever people in a group/community evaluate things using a single yardstick/from a single perspective.
To make things worse, the speed of the degenerative process becomes catastrophic when decision making becomes centralized while the reduced number of decision makers are partially blinded by too many of them using a single yardstick to do their job.

We are fast approaching that situation.

Extreme wealth polarization means that economic resources become concentrated in very few hands. Hence economic decision making.
And since policies cannot be put in place without resources…

The funny thing is that this concentration of power/decision making take place regardless of property remaining private or communism taking over.
As long as those who control the whole system are too few, ‘who owns it’ makes no difference.
Absolute monarchies faltered in the very same way as their communist successors.

It doesn’t matter whether an universal basic income would be supported by a tax exacting government or by a small coterie of ‘concerned investors’, sooner or later any such arrangement would become sour.

One other thing.
Claims for equality might become so deafening as to impede clear thinking.

Just as money is a very good tool/servant but a lousy goal/master, equality is a commendable goal but a lousy tool.
Human beings ‘work best’ as autonomous individuals who cooperate freely inside what has been described as ‘free market’.
Whenever that market was cornered, either from outside – by the government, or from inside – too many of the players acting in ‘concert’/sync because they had been ‘mesmerized’, remember the ‘Tulip mania” of yore? – it had faltered. Sometimes abysmally.
Attempting to fit everybody in a ‘one size fits all’ mould would be catastrophic.
Just as catastrophic as when less and less people can develop and express their true potential. Remember that we haven’t changed, biologically, during the last 50 000 years or so. But, generation after generation, we’ve been able to do more and more things simply because each generation made it easier for the next one. Most of the times, anyway.
Let’s not change this.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I keep hearing about this issue and I can’t stop wondering about how parallel to each other are those defending this idea with those denying its merits.

Pro:

-Robots are eating more and more jobs so more and more people will end up hungry.
-AI will make robots so productive that it will be far more efficient to use robots than human workers.
-A decent income is a human right.

Con:

-This is a socialist move, hence it will end up in failure – no other reason offered.

As it is obvious to all, both sides score big.

Yes, including ‘a decent income is a human right’ and ‘all socialist ideas end up in failure’.

Then what are they fighting each-other about?!?

Let me rephrase that.
WHY are they fighting, in the first place?

Because neither listen to what the other has to say… as simple as that…

Let me discuss some of the practicalities involved.

Robots eating up jobs and AI being able to continually increase financial efficiency are so evident that they do not deserve much consideration.

‘All socialist moves ended up in failure’.
We need to define socialism in order to make sense of this sentence.
Mainly because ‘socialism’ is one of the most abused words nowadays, on a par with liberalism. Sometimes they are even considered synonyms…
Well, ‘liberalism’ comes from liberty and  bona fide liberalism is concerned with individual freedom.
Socialism, on the other hand, comes from social. And is concerned with the the workings of the entire society.
The point being that there are two types of socialism. One which is ‘somewhat’ synonym with liberalism – the ‘reverse’ side of liberalism, actually, while the latter is the exact opposite.

I’m not making any sense?

Let me start from the other side.
All forms of socialism which have failed have been excessively centralized forms of government. And it was because of that excessive centralism that they had failed, not because of being ‘socialist’. The evident proof being that the same thing has happened with all right-wing dictatorships, which had used the very same excessively centralized decision making mechanism – the totalitarian government …

Which brings us back to the problem at hand.

For Universal Basic Income to work – or Guaranteed Basic Income, as some insist on calling it, it has to be financed.
Through taxes, right? Which means that those owning the robots would have to be somehow convinced to give up a huge proportion of their profits… Then why bother in the first place…? Why start any businesses, at all?
We’ll have the government run the whole show? Remember what history teaches us about centralized decision making?

So?!?

Well, not all is lost while there’s still hope!

Let me rearrange the arguments.

We not only live in an inherently limited space, with inherently limited resources, but we’ve also finally started to understand our predicament. Which calls for as much efficiency as possible.
Only for a different kind of efficiency than that we’ve accustomed ourselves to.

Until recently, we’ve been trying to get as much money under our belts as possible. Without much regard for anything else.
That’s why we’ve been cutting down secular forests, feeding almost all the fish we’ve been pulling from the oceans to the domestic animals we were raising for their meat, polluting our breathing air, selling our fellow humans which happened to had a different skin color than ours into slavery… As if there was no tomorrow…

Slowly, we’ve started to realize that this won’t work for very much longer.

That no matter whether we’re responsible for the global warming – or if it’s real at all, sooner or later we’ll exhaust the planet.
OK, it is highly plausible that we’ll discover/learn to use new classes of resources.
But this eventuality doesn’t constitute, in any way, a valid reason for us to continue squandering the meager resources we have at our disposal.

Hence the need for increased efficiency.

Only this has to be a different kind of efficiency. The kind that focuses on minimizing waste instead of maximizing profits. The kind that recycles because it makes obvious sense, not because it is cheaper.

Along the same path we’ll discover that it would make a lot of sense to help the less developed nations to catch up with the most advanced ones.
For starters, because the ‘advanced economies’ no longer need cheap workers. They use robots instead.
Secondly, because better living people tend to have less children than those struggling to survive. And we’ve already agreed about the planet being rather limited…

Nothing too fancy… until now, right?

Well, the next item will be trickier..

Remember that Ford had raised dramatically the wages he paid to his workers?
With tremendous results?

OK, his reasons were not the ones, generally but erroneously, attributed to him.
He didn’t do it to ‘encourage’ his workers to buy cars from him… or because of philanthropy…

Actually, it was the turnover of his staff.

At the time, workers could count on about $2.25 per day, for which they worked nine-hour shifts. It was pretty good money in those days, but the toll was too much for many to bear. Ford’s turnover rate was very high. In 1913, Ford hired more than 52,000 men to keep a workforce of only 14,000. New workers required a costly break-in period, making matters worse for the company. Also, some men simply walked away from the line to quit and look for a job elsewhere. Then the line stopped and production of cars halted. The increased cost and delayed production kept Ford from selling his cars at the low price he wanted. Drastic measures were necessary if he was to keep up this production.”

But, whatever Ford’s reasons were, the long term results have been abundantly clear.
Nowadays people who build cars are being paid well enough to afford buying the same kind of cars they are building. At least in the advanced economies…

What happened was that Ford, in order to keep the assembly line going, paid his workers as much as he afforded to. With spectacular results.
While nowadays most employers tend to ‘compensate’ their employees with as little as possible. Which makes perfect economic sense… doesn’t it?

The same economic sense which used to drive us into “cutting down secular forests, feeding almost all the fish we’ve been able to pull from the oceans to the domestic animals we were raising for their meat, polluting our breathing air, selling our fellow humans which happened to had a different skin color than ours into slavery… As if there was no tomorrow…”

See what I mean?
Instead of attempting to mandate a ‘Guaranteed Basic Income’, calculated by the central government and financed through forcefully levied taxes, how about hiring as many people as it would make sense, let them work as little days per week as they want and pay them as much as we can afford to instead of programmatically replacing as many of them with robots and paying the remaining ones as little as we possibly can?

OK, some of us won’t get as rich, as fast, as our grand-fathers did… So what? None of us can eat even close to what our grand-fathers used to… and food is a lot cheaper, anyway…

This is would be a considerably shorter way to get more people out of poverty than any scheme concocted by any government and it would have the same snow-ball effect as Ford’s wage increase had.

Economists describe this as Rostow’s ‘take off effect’.

 

For attaining adequate finance for take off it is necessary that:

(a) The community’s surplus over consumption does not flow into the hands of those who will utilize it by hoarding, luxury consumption or low productivity investment out-lays;

(b) Institution for providing cheap and adequate working capital be developed;

(c) One or more sectors of the economy must grow rapidly and the entrepreneurs in these sectors must plough back a substantial portion of their profits to productive investment; and

(d) Foreign capital can profitably be utilized for building up social and economic overheads.”

 

Obviously, any attempt to instate a guaranteed basic income, (except for those too young, too old or otherwise un-able to pull their weight, of course) would grind any ‘take-off’ to a stand-still.

And no, getting people out of poverty is not a valid goal, per se.
Poverty is a relative thing, which relies more  on feelings than on hard reality.
The real problem with poverty is that it reduces the ability of poor individuals to lead meaningful lives. Poor people are a lot less autonomous than self sufficient ones, meaning that decision making ability is impaired by the fact that they need to focus their attention on the short term time span.

This whole thing has long term consequences on societal level.

Remember what I said about centrally planned socialist countries constantly failing.
About all dictatorships eventually crumbling under their own weight, because of too much decision power being concentrated in too few hands?

Excessive wealth polarization produces the same results. Economic decision becomes too concentrated, political decision follows through and…

What next?
The world has already experimented with communism. Didn’t work.
It also experienced two economic meltdowns, exactly when wealth polarization was at relative peaks.

income-inequality-08

When are we going to learn anything from what happens to us?
Why do we continue to waste the accumulated lessons collectively known as ‘history‘?

 

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