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How do we eliminate the paradox of poverty & privation amid plenty & abundance?

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Geolibertarian:
There are many knowledgeable and well-meaning reformers -- most notably Webster Tarpley -- who maintain that the solution to the worsening levels of lower class poverty and middle class privation is for everyone to “produce” more.

Yet that is exactly what the hard-working people of this country have done for the past several decades. So much so, in fact, that by early 2008 worker productivity was triple what it was in the mid-1950s:

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http://www.opednews.com/articles/opedne_richard__080109_if_productivity_has_.htm

If productivity has tripled, why are we working ever longer hours?

By Richard Clark
OpEdNews
January 9, 2008

More specifically, if worker productivity has tripled in the last 53 years, why are Americans working longer hours than any time since 1938?

Yes, it’s true:  U.S. labor productivity has tripled over the last 53 years.

Source: http://www.dallasfed.org/eyi/free/0406product.html

Even more remarkably, productivity in Denmark has tripled over the last 40 years:

http://www.ambnewdelhi.um.dk/en/servicemenu/News/Danishproductivityhastripledsince1966.htm

One might respond to the title question by simply answering that Americans have chosen to enjoy more consumer goods than ever before.  Most of our homes are considerably larger than they were in the mid-to-late 1950s, and our automobiles have much greater quality, durability and life expectancy.  In addition, the amount of home electronics and appliances most of us possess is many times larger than what we had access to back then.  So what’s the beef?
 
The ‘beef’ is that a growing majority of Americans have real incomes that purchase less housing, less college education, and less health care than they did 40 or 50 years ago.  Until very recently, the minimum wage purchased less, generally, than it did 30 years ago, and still purchases less in the way of basic goods and services like health care, college education, and housing.  Working class couples now work (both of them) so as to be able to make mortgage payments on houses that were once paid for by one person, the head of the family.  This was 40 years ago – back in the days when physicians would come to your home if you were sick, and college tuition was much less than today.

[Continued…]

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Yet despite this productivity surge, wealth and income were -- and continue to be -- concentrated in the hands of the top 20 percent at a level not seen since at least the 1920s (if not since the Gilded Age about which Austrian School cranks love to wax nostalgic).

And, perhaps more importantly -- particularly from the point of view of family life and child rearing, -- most wage-earners were, and are, having to spend more time at work instead of less just to make ends meet (as both the above article and the following two explain):

       http://www.epi.org/publications/entry/briefingpapers_bp120/
       http://www.epi.org/economic_snapshots/entry/webfeatures_snapshots_07072004/             

Now, I think most will agree that, if workers are producing three times more than they were in the mid-1950s, then, all else being equal, they should be able to earn the same real income in less than half the time -- and thereby enjoy a (horror of horrors!) “leisure dividend.” Yet all else is clearly not equal, which means someone else got the difference.

Who is that someone else?

Not just one person, obviously, but rather a segment of the population composed of people who, through the use of various privileges (see this, this and this) are able to extract enormous amounts of wealth and income from the economy each year while rendering in return either no commensurate “service” or, worse, an actual disservice.

An obvious case in point is our debt-based money system, which allows private bankers to extract countless billions in usurious interest from the economy each year in exchange for the nothing out of which they create the “money” they loan.

Of at least equal import, however, is our anti-labor/pro-land speculation tax system, which parasitizes workers both by

* levying crippling tolls on wages, sales, houses and capital goods, mostly so corrupt politicians can use the revenue thus generated to fund the numerous disservices they gleefully impose -- including the “six basic functions” of compulsory government schooling, the horribly destructive and ridiculously hypocritical drug war, Soviet-style surveillance of “We the People,” Nazi-style police state thuggery, and imperialist, terroristic, hornets’ nest-stirring wars of aggression; and by

* allowing what is, in effect -- and in the words of economist Fred Foldvary, -- a “forced transfer of wealth from workers to landowners” (see this, this and this ).

Those two systems, i.e., our money system and tax system, are undoubtedly the two primary reasons for the alarming wealth and income disparities in this country (not to mention other countries) -- disparities that are so large and so destructive to the very fabric of society, they have us on the verge of a hellish new Dark Ages.

Two secondary, though far from insignificant, reasons are (a) a rigged, privilege-based regulatory system that -- mostly through prohibitively high “licensing” barriers and overextended “patent” protection, and with the aid of court-protected “corporate personhood” -- gives rise to an economy dominated by price-gouging cartels and oligopolies, and (b) a corporatist trade policy that -- with the aid of subsidies and favored tax treatment afforded by bought-off politicians to select corporations -- gives rise to a retail sector dominated by slave goods-selling, small business-destroying corporate retail chains.

Having identified the underlying causes of our present trouble, the question arises as to what the best solutions are.

The Austrian School approach is a non-solution at best, because it involves allowing the ever-worsening economic collapse to simply “run its course,” which means sheepishly letting the very bankers who engineered this collapse in the first place foreclose on everyone, even though they (the bankers) gave no lawful consideration for any of the collateral-backed IOUs they accepted in exchange for the non-existent "money" they loaned! And if that weren’t bad enough, it also involves adding insult to injury by euphemistically characterizing this parasitic transfer of wealth from the poor and middle class to filthy-rich oligarchs as a mere case of “market forces” imposing a just and necessary “correction” on the economy (implying thereby that to politically interfere with this divine “correction” in any way would be to wage a blasphemous assault on “liberty” and the “free market").

The Keynesian approach of establishment politicians is also a non-solution at best, because it mostly involves perpetuating the very economic policies (particularly our debt-based money system and anti-Georgist tax system) that got us into this mess in the first place.

This brings us back to Webster Tarpley, who advocates the so-called “American System” of political economy (see this and this) as not only a far preferable alternative to both the Austrian School and Keynesian School, but as the “only” alternative worthy of consideration.

Now, as much as I like and admire Mr. Tarpley, and as much as I enjoy and agree with his scathing critiques of the Austrian School, I nevertheless think he is sadly off the mark when he suggests that the solution to involuntary poverty and privation is merely to increase “production” on a mass scale, and in the particular style of FDR’s New Deal. This seems to imply that the reason so many Americans lack the wealth they need is that there’s a shortage of wealth. Yet this is simply not the case, as a trip to virtually any nearby supermarket, shopping mall or car lot will illustrate.

What most people lack is the money with which to buy that wealth. And, as explained above, this is due to the combined effect of our parasitic money system, backwards tax system, oligopoly-creating regulatory system and race-to-the-bottom trade policy.

If the socioeconomic structure that currently underlies all economic activity is such that the bulk of the returns on new production is always appropriated by the top 20%, then increasing production will only enrich the top 20% that much further while leaving everyone else either little or no better off than before.

Thus, even if we all agree with Mr. Tarpley that the American School of economics is superior to what either the Austrians or Keynesians have to offer, that doesn’t mean it can’t be greatly improved upon. On the contrary, not only “can” it be improved, it must be if we are to avoid repeating in the future the same old mistakes and failures of the past.

It’s not enough, for instance, that we have higher production levels, and hence (presumably) higher wages and lower unemployment. We must also have a tax system that

(a) puts everyone on a level economic playing field with regard to land (the only alternative to this being a system that -- irrespective of “production” -- eventually gives rise to an overprivileged class of landed aristocrats, on the one hand, and an underprivileged class of landless peasants, on the other -- with perhaps a relatively small “middle class” consisting mostly of bureaucrats, prison guards and militarized goons-for-hire to keep the peasants in line); and

(b) doesn’t penalize or discourage any of the wealth-producing activity which occurs on that playing field (in other words, one that doesn’t tax wages, sales, houses or capital goods; only land values).

We must have a monetary system that provides not only an adequate money supply, but a permanent money supply that exists independently of debt, thus making money our servant for a change instead of our master.

We must have a regulatory system that penalizes and discourages fraud, but which does not -- in the name of protecting consumers from fraud (but for the actual underlying purpose of protecting politically-connected businesses from competition) -- effectively criminalize the very sort of grassroots entrepreneurship that would otherwise allow poor families and communities to produce their way out of poverty.

We must have a non-corporatist trade policy that allows for genuine free trade instead of the corporate-managed trade we have now (see this, this and this).

And last but certainly not least, we must have a Guaranteed Income below which no one can ever fall; and we need for it to be funded not from a tax on the very productive activities that generate monetary “income” in the first place, but from both our national credit and the economic rent of land (more on this here).

Once all those reform measures are fully implemented, only then will “poverty amidst plenty” truly be a thing of the past. Indeed, not only will poverty be nonexistent, so too will middle class privation in all its current degrees and variants. No longer will it be necessary, as it is now in most cases, for both parents to work just to make ends meet. Nor will it any longer be necessary for relatively low-skilled wage-earners to spend all or most of their working lives living “paycheck to paycheck” -- working spirit-crushing “dead end jobs,” just to survive.

michaelsuede:
If productivity has tripled, why are we working ever longer hours?

This one is easy.

Because government has the ability to create debt, it has the ability to create money, as all money in our corrupt fascist system is a function of debt.  The more debt, the more money in the system.  As debt is repaid, the money supply decreases accordingly.

All money in our corrupt fascist system is also a function of labor.  Since money is used as nothing more than a valuation of labor, and all debt must be repaid through labor, it is simply stating all citizens are slaves and must labor to repay the debt burden it has chosen to create.

Now, given these facts, it becomes clear that when government creates debt and purchases something with it, it is typically purchasing something unproductive and of no value.

If government purchases a dozen aircraft carriers, it has not enriched the lives of the citizens one iota.  It has redirected labor that would otherwise be used to create and purchase things people want for something no private citizen could use.

A dozen aircraft carriers built, is 100,000,000 plasma TVs not built, since those productive labor hours must now be spent repaying the debt created by government to buy the carriers.

No matter if government taxes to collect its revenues, or simply issues debt, the effect is exactly the same.

Thus, people will be forced to work ever longer hours to pay back the unproductive purchases of government on top of meeting their daily needs and purchasing things that actually enrich their lives.

Socialist would argue that government could spend money productively instead of unproductively, however this is rare indeed considering that in order for that to happen, a government purchase must be something ALL members of society happen to want.  Of course, if all members of society wanted something, the private sector would rise to meet that need.





michaelsuede:
bah, after all that I forgot to give the answer to the question, if it wasn't obvious enough already.

The answer to the post title question of "How do we eliminate the paradox of poverty & privation amid plenty & abundance?"  is - we simply eliminate government.

By eliminating government, we eliminate all unproductive spending, and thus all unproductive labor, thereby making the economy only produce things people actually want that enrich their lives.




flaming_red_pill:
I think families who have the time and space should try growing some of their own food. That's production at one of its most efficient levels. You pay no shipping, taxes, etc, and save money while giving yourself a reason to get fresh air, exercise, and sunlight.

Is that silly? =(

I've often wondered why the Fed would rather that people sit on their butts in the inner city projects when we have so much workable land going to waste. Instead of letting the Bush family and other people buy everything up, our gov should be PROTECTING public lands and putting them to use. Who is going to end up in prison first, the thug on the street or the federally funded sodbuster working with his hands?

Don Quixote:

How to eliminate poverty etc...? The banksters/illuminati  will slaughter the leader who does it:

Hold up the example of one of the greatest statesman who outlawed secret societies, outlawed slavery, grew the economy from nothing to one of the most productive in the Southern Hemispheres. President Gabriel Garcia Moreno, slaughtered (knifed, shot, arm cut off) as he left Church one day. This is what happens to leaders who eliminate poverty and shun the banksters, much like JFK.

'"Economic Climate of Ecuador"  from wiki. (keep in mind not fully accurate)

 http://en.wikipedia.org/wiki/Gabriel_Garc%C3%ADa_Moreno

"In more worldly things, he came to office with an empty treasury and an enormous debt. To overcome this, he placed the government on stringent economy and abolished useless positions, as well as cutting out the corruption which siphoned off tax dollars. As a result he was able to provide Ecuadoreans with more for less. Slavery was abolished, but there was full compensation for the owners; (thus neither former slaves nor masters suffered economically). The army was reformed, with officers being sent to Prussia to study, and illiterate recruits taught basic skills. Houses of prostitution were closed, and hospitals opened in all the major towns. Railroads and national highways were built, telegraph extended, and the postal and water systems improved. City streets were paved, and local bandits suppressed. García Moreno further reformed the universities, established two polytechnic and agricultural colleges and a military school, and increased the number of primary schools to 500 from 200. The number of students in them grew from 8000 to 32,000. To staff the enormously expanded health-care and educational facilities, foreign religious were brought in. All of this was done while expanding the franchise and guaranteeing equal rights under the law to every Ecuadorean.

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