This blog post original appeared on the Colorlines blog.
As the New York Stock Exchange reached an all-time high this month, you’d think that the good times were back. But that would be incorrect. What happens on Wall Street has very little to do with what’s going on in the real economy. Corporate profits have never been higher, but — excluding the highest earners — real wages are at a 40 year low. With this fundamental disconnect — and political gridlock in Washington — it’s unlikely that our economy will return to health anytime soon.
The good news is that in thousands of communities across America, people are working together to bring about what may be the beginning of a new national economic contract. Where Washington and Wall Street are falling down citizens are banding together, not just to ameliorate the suffering caused by national stagnation, but to launch innovative economic initiatives that might create a brighter, fairer future for everyone.
These localized efforts, which fall broadly under the banner of “post-growth economics,” are beginning to stitch themselves together into a national force that holds the promise of stronger neighborhoods and greater individual well being. As Dr. Margaret Flowers, co-founder of Its Our Economy and co-author of the report “An Economy for the People and the Planet” said to me recently, the point of the post-growth movement is to create “an alternate economy that’s designed to meet human needs.”
With its focus on human beings and the preservation of the natural habitat that sustains us, this growing movement is actually the fusion of two areas of alternative economic thought, one environmental and the other social. For decades both have recognized that our current economic structure is unsustainable and leaves too many people behind. Modern capitalism has core deficiencies that harm the planet and contribute to human suffering. Rather than relying on the national political class to soften the blow, the post-growth movement seeks to remake capitalism from the bottom up.
Instead of subsidizing global corporations focused on scattering short-term profits amongst distant shareholders, post growth initiatives foster local economies that are cooperative and based on trust.
Think it’s too good to be true? Gladly, it’s not. Here are three ways in which these alternative economic values are playing themselves out and providing hope.
We have capitalism, socialism, mercantilism, feudalism, etc. we need an ‘ism’ for this.
Read Erik Frank Russell’s classic “And then there were none” to get an idea of perhaps what is being discussed. What sort of society is created when economic needs are not dependent purely on growth? When social obligations become the currency, not strictly labor and capital needs? When central control of almost everything is disbursed?
What happens to the idea of labor and capital when the means of production are so automated as to drive incremental costs near zero? What does a post-growth economy really look like?
In many ways, free market capitalism replaced mercantilism. It focussed more on the market relationship of the user rather than the manufacturer. Instead of solely focussing on the goods being made – how to tax them, how to control their movement across borders, etc. – capitalism grew to a more disbursed model, one where the interactions across national borders between capital and labor become much more paramount.
This has resulted in increasing growth of the economy. In fact, the growth in GDP per capita in the United States has been almost constant since the early 1820s.
The amount of ‘product’ produced per person is one way to describe productivity – how much of the economy each person provides. When we look at productivity over the last 70 years or so, we see the same curve.
The productivity curve has continued along the same line as it has since the 1820s. And so did household income – whether median wages, hourly wages etc. were looked at. Then around 1980 things changed. Worker pay stagnated.
One large reason for this appears to be technology. More work can be done by fewer people because of technology. This puts downward pressure on wages as we see more and more people trying to fill fewer and fewer positions.
we can see this in the increasing time it takes for employment to recover. Here is a figure showing the recovery times for post WWII recessions:
Before 1980, every recession was back to original levels inside of 24 months. NOw look at the recessions since: 1981 – 27 months; 1990 – 31 months; 2001 – 47 months; 2007 – ? Each one longer than the previous, as the economy continues to grow.
Corporate profits are at all time highs. Our economy is 2.5% higher than it was before the last crash, yet we have 3 million fewer people employed. These are not generally the works of evil people but of long term trends
So what happens at the end game – when technology and robots essentially make everything for zero incremental cost but people have no wages to pay for them?
I think it may have aspects of the Moyers article. And of the Russell story. It may be somewhat like the Jetsons, where they had an upper middle class lifestyle with one person working 1 hour a week. Perhaps a life stipend will be in order.
The gap between the riches from productivity and what people are ‘paid’ will be greatly reduced. It won;t be free market capitalism – which elaly works to disburse scarse resources – because resources will, in many cases, no longer be scarce.
So we need something we can add ‘ism’ to.