Hinderances to the Economy, Society and Environment

The system of the economy demands that people be able to participate in it.

Money needs to flow amongst people in order for goods to be produced, which then drives demand, production and wages.  This is not unlike the vision of the economy that noted philosopher and proto-economist, Adam Smith actually conceived of, where the government acts as a tool to safeguard the public’s wealth, not the private individual’s.

However, unlike Mr. Smith’s astoundingly intuitive and reasonably accurate proto-model of the economy and economic function, there are two things which will hinder the demand for workers in a functional and properly regulated economy and a third which will always prevent Capitalism from being a truly functional social system for the sake and well being of humanity.  The two factors are: automation and the carrying capacity of economic demand, while the third hinderance is self-destructive greed.

Automation reduces the number of workers that are demanded in an economy, preventing people from being hired, earning wages and, thus, driving up the real wages of workers.  Work remains scarce, even though production is booming if robots are handling all of the production.  Technology replaces workers and, thus, saves the companies production costs and drives up shareholders’ returns on the product with higher profits.  Thus, we see Mr. Smith’s prediction that businesses tend toward the increase of their profit at the expense of the rest of society and are left with a host of non-producing people who are without income and without necessary motivation to work.  Many human societies will not accept or tolerate people receiving money that they did not, somehow, earn and, in American society at the very least, many workers may not want to receive money for a lack of work.  We are then left with a surplus of people in the economy with no necessary way of figuring out what to do with them.  The simplest solution would be to cut back on automation and have a greater number of jobs available for workers.  However, this will be met with stiff resistence from the financier and business communities, who will lose cost saving and production increasing devices and a whole sector of our economy designed to the research and production of these automation technologies.  These are what I can see as being the trade-offs between automation and the availability of work that helps fuel wages, demand and productivity.

The second factor which can hinder demand is the success in meeting demand (in other words, reaching a kind of carrying capacity for demand).  While it may be true for most human beings that wants are always going to be present (and, indeed, for all of us, needs are always going to be present, whether we’re aware of those needs or not), the fact of the matter is, is that there does come a point where many humans have all of their needs met and most, if not all, of their wants satisfied.  This then causes demand to level out and cease to grow in such an overt manner (if at all), even though there is still plenty of consumption going on down below.  This hypothetical state would, again, hinder the growth of workers’ real wages, as they reach a steady level of production.  Surplus births, again, would then either cause wages to decrease, as there are more workers than work that is available and stagnation is achieved within the economy (which goes to show that, contrary to Mr. Smith’s predictions, increased birth rates aren’t actually always a good thing in terms of the success and preservation of the economy or, according to modern environmental science).

This then leads us to the fundamental flaw in Capitalism and Capitalistic ways of thinking about and perceiving the rest of the world that is around them (and that they are apart of).  Capitalism and, more specifically, Capitalists, do not pay attention to the non-monetary consequences and benefits that are relevant to humanity and our individual and collective well being.  Contrary to Mr. Smith’s predictions, human beings do not actually always act in their own larger self interests, let alone, for the sake of their own small self interests.  We consistently prove, time and time again, that even when reasonably and rationally presented information that goes contrary to a deeply held belief or interest, we’ll continue with our biases rather than accept and acknowledge the facts of the matter, even if they’re readily apparent and open to exploration.  Proof of this can be found with the reception of Mr. Smith’s own work, The Wealth of Nations, which very explicitly warns against the temptation for profiteering and capitalizing off of human misery.  Rather than liberate our economy from the clutches of the private interests and defacto aristocracies, Mr. Smith’s work has been used to justify and rationalize their non-rational and anti-social actions against the body of society and the environment that they, themselves, are apart of.  Apart from being unable and unwilling to see fault in their own philosophies and actions, Capitalism also has blinded individuals from seeing and accepting the real life, non-monetary or wealth based necessities and benefits that drive our species’ survival, individually and collectively.  When posed with the question of transitioning to a sustainable and non-environmentally destructive energy source (solar, wind or other future technologies), many human beings hem and haw, or else, argue vehemently against the project of saving one’s own skin for the financial “benefits” of the existing economy and against the financial costs of developing and transitioning a more sustainable, renewable and less pollutive energy source.  They deny and work to confuse the consistent evidence that shows the damage that our current energy and environmental regimen is causing for the sake of financial profit, failing to recognize that, without their lives or other peoples’ lives around them, they would not be able to have or spend their financial wealth to begin with. 

Worse still, they pursue and maintain contrary positions for the sake of ideologies and ideas that, when put into practice, yield only death, destruction and dysfunction in their social lives and in their individual lives.  They maintain their allegiance to these ideas and beliefs in spite of the evidence that’s obviously stacked against them, and preserve them with religious fervor unmatched by the most zealous among us.  Religion itself is harmless.  But when it leads us to deny reality and to deny facts that can be repeatibly shown in the outside world, they become symptomatic of an apparently pathological state of mind, brain and body that would, all things left equal, kill the species and the individual in the process.  Such is the nature of political ideologies, other than the ideology to be for reality, in spite of the cold and uncomfortable truths of the matter.

In conclusion, Mr. Smith made three mis-calcuations in his design of his economic model, as far as I can tell.  He did not take into account the effects of automation, and he also didn’t take into account the carrying capacity of the economy’s demand.  This led to him mistakenly advocating for a continuously reproductive human species, which would, hypothetically, drive down the economy’s productive capabiltiies for its people when/if it goes past a certain point.  The environment also has its natural carrying capacity for the human species (which is bounded by the amount of resources we have available).  But the economy itself has a carrying capacity to a population size, depending upon how much work is needed.  There can be an excess supply of labor, especially when automation is taken into account (something Mr. Smith failed to account for), which then drives the value of work down, or else, leaves a surplus of humanity that is both unable to work or participate in the economy and ostracized to boot by the human society for not being able to work, in spite of the willingness to do so.  Thus, the economy also sets a carrying capacity for humanity that does not shift according to the availability of resources.  Finally, Mr. Smith failed to appreciate the destructive and myopic side of Capitalism and the essential non-rationality of humanity, in spite of noting many dozens of cases of it in The Wealth of Nations.  Human society is going to kill itself for a pay day that it will not be able to spend.  Only with a more socially inclined and environmentally logic in our financial system (which determines what grows and what doesn’t grow in our economy) will we be able and willing to move ourselves away from this current “money for death” arrangement that we have.  Human beings are essentially non-rational creatures.  And it shows through our individual actions with regards to society, economy, government and finance.

It’s all thanks to our brains,bodies and environments that we work in these self-destructive manners.

And that is a simple scientific fact.

Think about it.