Saturday, October 6, 2012

50 more years of growth may be possible through green economy!

The current techniques of neoliberalism (including the greatest neoliberal project of all: the Euro) have led to economic stagnation.  Ultimately, they profited the rentiers of society, but not so much median workers, so much that I believe the basic engine of capitalist growth is now broken.  The fix: increase wages to reverse 30 years of wage deflation.  I'd put that about 300%.  The rentiers would like to believe they can build a slave ship economy amidst the planetary wreckage of the carbon miracle instead.

Unfortunately, they may be correct.   Methods of political control through media control have gotten so good they made the George W Bush Presidency possible.

But anyway, it would be technically possible, I believe, to have 50 more years of growth to rival the period from Jan 1933 (yes, that was the very bottom) to 1969.  That was actually 36 years, I'm not quibbling here.  And I'm not so much projecting increase in population, energy use, or other things that can't easily be increased anymore.  But more a general prosperity, lack of economic fear (as well as lack of other fears), and technical and political development that would be hedonically measureable as being as that much improved--if not much much more.

(Note: Hedonic measurement is done by economists to determine the relative worth of different things by finding how much in relative terms people would pay for things.  So if, for example, people would only pay two times more for a computer that could crunch ten times more data, it's actual worth is two times more, not ten times more.)

The path to doing that would be the warlike footing (as in the US industrialization for WWII) to building fully renewable energy and sustainable transportation (electric) everywhere on earth, replacing all carbon and nuclear energy use except speciality chemical and medical use not related to bulk energy.

This kind of transition might have only needed carbon taxes if we had started in about 1965.  But now, the changes needed are needed too quickly and the changes needed are far larger.

Now we need direct central public investment, most likely through national governments, but to really really solve the problem it might well need a large trans national element as well, to fund all the new systems everywhere.

This could be run the old fashioned way, just as the Eisenhower economy was, with high taxes and correspondingly high spending.  It would be best, I believe, to have as much direct public employment and management as possible, and as little contracting.  That is ultimately at least as cost effective in most cases, and works to increase the general wage rather than "save money" by decreasing it.

In fact, increasing the general wage should be one new principle!

The result would be full employment and high wages everywhere.  Even Wall Street might well hold on (though personally I believe most of their activities should be outlawed and the outlawing enforced) even if most of the new economy is public, simply through servicing the still remaining private economy which would likely do at least as well as it does now feasting on 80% of the roast.

Along the business as usual, now defined as neoliberalism, path, there is no hope, I believe, of ever having robust growth again.  That may be acceptable to some people as long as they keep their huge cut of the small pie, or so they think, not realizing how small that pie can become.  There may indeed be warlike footings--continued warlike footing in the US for the useless war on terror--but they won't have a positive economic impact against the global destruction being caused by the final phases of the carbon extraction economy.

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