Re: "Infinite Wants"

[Hyman Blumenstock <hystock@xxxxxxxxx>]

S R Larsson wrote:
>
> Greg Nowell:
> >2.  One of the major themes in the General Theory is the
> >reverse of that thesis.  It is phrased thus: "the decreasing
> >marginal propensity to consume."  What that means is that
> >wants DO get fulfilled (for individuals) and that they
> >cut consumption accordingly (resulting in "savings").
>
> S R Larsson:
> This is true for single types of wants, such as the want for food. However,
> this is not true for human needs in total. Once we have satisfied the need
> for food (or cheese or beef, if we have that preference) we move on to the
> next unsatisfied need, such as the intellectual want for stimulus. After a
> good T-bone we thus turn on TV and watch The Good, The Bad, The Ugly. On a
> macro level, stable and sustainable societies first satisfy their needs for
> food, then erect health care, education and entertainment industries in
> order of appearance. Those needs are unlimited - look e.g. at what needs
> they were capable of satisfying in Europe some 1,000 years ago and compare
> that to what we have accomplished today.

Hyman: Absolute, unconditional needs, that without fulfillment means
certain death, do not extend beyond Air, Water and Food.  Everything
else we now feel we "need" are here only through the benefit of
increased technology, that could only exist among the already well fed.
How else did the Industrial Revolution come about?
>
> Greg Nowell:
> >3.  The decrease in consumption (caused by the
> >decreasing marginal propensity to consume) causes producers
> >to perceive a decrease in "aggregate demand."  In response
> >to that, they cut back in investment.
>
> S R Larsson:
> In the wrong hands (not in Nowell's) this argument could be used to
> advocate macroeconomic thriftiness. The line of argument among
> environmentalists is often that man must curb his needs to reduce his
> vicious impact upon nature. Consequently, a fall in investment is viewed as
> something good. Any argument asserting that needs are not infinite should
> safeguard against being merged with such semi-religious attitudes. Again -
> this point is not directed towards Nowell.

Hyman: The function of every economic action, including "investment" is
to assure an adequate Feeding that is otherwise perceived to be
threatened.  Virtually all, if not all, of economic activity is due to
that fear.  Eliminate that fear by assuring everyone, in the face of
abundance, an adequate feeding, to the same extent that they are assured
an adequate supply of air, and all such destructive economic actions can
be curtailed totally.  As the concept of "cost" is sourced, and has
meaning only in a Food scarce environment, (can we afford the depletion
of the too scarce Food supply, if we use his labor?) then "Cost" can
easily be eliminated as a factor in doing anything, no matter how
grandiose.
>
> Greg Nowell:
> >4.  When they cut back in investment, as a response to
> >the decrease in aggregate demand, unemployment rises.
> >This leads to "unnecessary scarcity."  The GT mounts
> >a sophisticated attack on major capitalist investment
> >institutions precisely with the intent of demonstrating
> >that because human consumption is not infinite (the
> >decreasing marginal propensity to consume) and because
> >distribution (given the state of our society) depends
> >primarily on jobs,  that
> >something needs to be done to prevent a crisis in
> >access to resources (food is one, but Keynes more often
> >talks about housing, since even in the 1930s the
> >masses of indigent were more often fed than housed).
>
> S R Larsson:
> I believe this is a misinterpretation of the core of General Theory.
> Keynes's argument is that because it is uncertain what shape human needs
> will take in the future, investment is partly unstable. What matters is not
> to bring investment down on some level defined by finite wants, but to
> stabilize it over time.

Hyman:  So long as we unduly restrict our imaginations to that dictated
by economic writ, we are trapped into such uncertainty.  Assuring
everyone whatever supply of nourishment and use of GDP that technology
has already wrought and will create, then everyone's potential labor is
already paid for in full for whatever project of any magnitude we can
dream of.

Hyman
>
> -----
> Sven Robert Larsson
> Address:        Roskilde University
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