Jul 24, 2013
The LA Times Review of Books has an article by Tom Streithorst about his new book titled – Post-Scarcity Economics. In a sense, he chalks out the parameters of the debate concerning the direction of this country and in general of the world, should a technocrat assume the reins of power.
WE LIVE LIKE GODS, and we don’t even know it.
And so begins this auto-review of this book. There’s lot of meat and potatoes in this review – in fact, it is more than a review:
Progressive economists, led by Paul Krugman, have argued persuasively that what the world economy needs now is government deficit spending to put money in workers’ wallets, to stimulate consumption, to give the private sector a reason to invest and expand. This is the classic Keynesian solution, one proved by years of experience. Krugman tells us that the problem with the world economy now is lack of demand. Indeed, solving the problem of demand has been the essential capitalist dilemma of the past 80 years. As productivity rises, we can make more with the same level of inputs. Demand has to rise just as fast or the economy shrinks. For an economy to be at full employment, demand needs to equal the society’s productive capacity. If it does not, then supply will shrink to meet demand and millions of workers will become redundant. To achieve full employment, we must find a way to instead push demand up to meet the economy’s productive capacity. Since the Great Depression, we have solved this problem of demand three different ways: war, rising wages, and debt.
What I’d like to attempt is a simple minded critique of the same. That is to follow…