[A-List] Economic policy considerations beyond the merely measurable.

["Barry Brooks" <durable@xxxxxxxxxxxxx>]

The concept that the easy options are in the past is important
because this is still the past regarding oil.  Oil production is
near it's peak, which means that we have about half of the world's
oil left.  We need to identify our easy options.  A few people have
said that conservation is the easy option, but few leaders have been
persuaded. Very few people really want to conserve; it might hurt
our "way of life."

Like it or not, we have come to suspect that we may need to throttle
back our economy to reduce the burden we place on natural systems,
and not just energy. But that would require a "post-Keynesian"
economic policy. Labor power been increasing, due to productivity
growth, for centuries.  Automation multiplying labor power has not
caused much unemployment recently because the consumer economy has
kept us busy by making demand grow along with productivity. Our
economy, indeed our world, is being arranged to consume or waste all
that that multiplied labor can produce.  Now, because we have become
a significant burden on the other components of nature, we need to
abandon what has been blamed on Keynes, the consumer economy.

If the goal of the economy was only to produce goods and services we
could give it up easily. The hyper-active consumer economy designed
to make jobs.  The consumer economy has a lot of support.  Yet, the
economy can be slowed, and real income can fall without a decline in
wealth if we realize that our stock of wealth depends on the wise
use resources.  Human labor is no longer the longer the scarce
factor that should be limiting output in our economy.

How should we measure economic efficiency?  Is it (Actual
Output)/(Maximum Possible Output)?  Should we open cans all day to
keep our can openers busy?  That would be an efficient use of the
can opener, but a waste of food. When productive capacity is more
than needed, efficient (full) use of that capacity is a partial
waste of the inputs.

A more logical and useful concept of efficiency would focus on (be a
ratio of) the desired output factor, goods-in-service, and the
really scarce input factor, resources.  Goods-in-service is the
product of the rate of production times the lifespan of the goods.
Thus,

efficiency =
output(GoodsProductionRate·ServiceYears)/input(ResourceTons).

Maybe it's the problem of apples and oranges that makes this useful
concept of efficiency so hard to quantify.  While the most important
concepts may defy precise measurement, that doesn't justify ignoring
them. Maybe such judgments aren't scientific, but failure to make
them retards economic thought to the merely measurable.

Our natural resources are obtained through the application of human
skills and technology. Wealth comes from nature, and nature can't be
paid. Thus, prices reflect only human considerations.  The market
doesn't just pretend that resources are free, they really are. Since
the market only looks at money it is blind to looming scarcity of
something that is free. That's one reason the market doesn't respond
to resource scarcity before it occurs, which may to too late for
easy correction.  When a system doesn't have an indication of
looming trouble, planning tends to be impaired.

The highest economic goal is to sate demand. Increased durability is
an important tool for achieving economic satiation of non-perishable
goods with low rates of production. As we approach a durable sated
economy the economic throttle can be backed-off by increasing the
level of income transfers.  We can adjust the dole to stabilize
wages and supply all the really needed labor.

The needed labor will decline as automation replaces workers, and as
the need for production is cut by conservation and the end of
population growth.  As we approach full-automation of services,
perishable production, and durable goods production then total wages
will fall to toward zero while profit income will rise.  This  trend
is underway now.

While some people think we can't afford to offer unearned income to
everyone the numbers aren't so bad.  With the present income levels
in the U.S., and taking the poverty level to be $9000 makes the
total universal payments of $9000/person equal about 38% of all
personal income.  The tax rates needed to support a universal income
with the current U.S. income, poverty level, and income distribution
could be:

Income Percentile           Bottom1/5    2/5    3/5     4/5
Top1/5
Percent Total Income              3.6      9     15    23.2
49.2
Percent Tax Rate                    0     10     20      35
53
Revenue as Percent of Total Income  0     .9      3     8.1
26  =  38%

With a direct income to paupers and others the need for many social
programs and economic stimulation would decline.  Thus, the
expenditure of taxes on a universal income would cut the need for
other kinds of government spending.

Once we don't need to "make" (fake) jobs anymore we can really cut
CO2 emission by 90% like they say we must to be safe, we could make
the oil last until the next big comet hits, and the insecurity of
work or starve could end for people with no capital.

Barry Brooks