Tuesday, 14 June 2011

Wealth - the market as a weapon against unfairness.

From a left wing, more scientific point of view.

Wealth is an abundance of goods in useful quantities.

Goods are created and entropy decays them (depreciation of assets). Just as there is maximum possible about of wood a forest can have within it, when the balance between creation and decay is reached. Likewise, depreciation of assets which rises with stock levels of goods - limit total wealth creatable to the production capacity of the economy.

You cannot keep on building a bigger cake. Contrary to neoliberal economics (of the freemarket fundamentalists and libertarians) you cannot keep building a bigger cake by ramping up production endlessly. Energy is the limit.

Energy was abundant in the early industrial era. But now energy limits growth. And yet we can still improve our lives.

The market is a mechanism that doesn't care about human needs, it cares for the ability to pay. Our economies now utilise gargantuan amount of energy, but because of a rising rentier class who enjoy the fruits of most peoples labour - production priorities have become skewed from normal people, to the people with all of our rightful wealth.

Perhaps an incoming socialist government, inheriting a capitalist economy. Might adapt the economy to serve the needs of all. Simply evening out the distribution of disposable income should force the market to change its production priorities to the requirements of the majority.

To round up.
If peoples income distribution is the same, then their consumption patterns should be similar. This means in effect people are enjoying the fruits of their labour via even equitable trade. Without this redistribution people become redundant, start to require charity/welfare as a patch over job.

We need the left, especially if the era of growth is now over. We need to consider the possibility that we must manage our decline in net production as energy reserves fail and yet improve living standards for the majority. Only the left has the ideology that matches this future challenge.


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