image: Wikimedia commons (link).
As one year rolls into a New Year, it is only natural to contemplate the passing of time, and to consider the future.
Recently, I was reading Warren Mosler's essential book entitled The 7 Deadly Innocent Frauds of Economic Policy, which he graciously makes available for free in the "Mandatory Reading" section of his website, and there encountered the following vitally important passage under the "fourth fraud" (regarding the notion that the social security system in the united states "is broken" and will eventually "run out of money" and, according to some proponents of neoliberalism, should be privatized.
After explaining that a sovereign government can always make social security payments, should it have the will to do so, Warren Mosler goes on to explain that (as with virtually everything else in economics) it is not the "payments" or the "availability of money" that are the real issue, but rather the availability of actual resources, and the ability to turn those resources into the goods and services men and women (and children) require.
Regarding the ability to provide for the aged in the future (the heart of the social security question), he writes:
Let's look at it this way: 50 years from now when there is one person left working and 300 million retired people (I exaggerate to make the point), that guy is going to be pretty busy since he'll have to grow all the food, build and maintain all the buildings, do the laundry, take care of all the medical needs, produce the TV shows, etc. etc. etc. What we need to do is make sure that those 300 million retired people have the funds to pay him??? I don't think so! This problem obviously isn't about money.
What we need to do is make sure that the one guy working is smart enough and productive enough and has enough capital goods and software to be able to get it all done, or else those retirees are in serious trouble, no matter how much money they might have. So the real problem is, if the remaining workers aren't sufficiently productive, there will be a general shortage of goods and services. [. . .]
And the story gets even worse. Any mainstream economist will agree that there pretty much isn't anything in the way of real goods we can produce today that will be useful 50 years from now. They go on to say that the only thing we can do for our descendants that far into the future is to do our best to make sure they have the knowledge and technology to help them meet their future demands. The irony is that in order to somehow "save" public funds for the future, what we do is cut back on expenditures today [he is referring to the various forms of "fiscal austerity" preached by proponents of neoliberalism in all its horrible and deleterious permutations], which does nothing but set our economy back and cause the growth of output and employment to decline. And worse yet, the great disappointment is that the first thing our misguided leaders cut back on is education -- the one thing that the mainstream agrees should be done that actually helps our children 50 years down the road. [link to source document here]
The heart of the issue are the resources given to a nation by the gods (or, if you prefer, by nature -- gifts which the ancient wisdom preserved in the myths, scriptures, and sacred traditions of the world universally saw as originating in the divine realm, the realm of the gods).
And the most important of all those resources given to any nation by the divine realm are the men and women whom the gods allow to be born into that nation.
If we allow those gifts to be wasted or squandered, we are going to have serious problems. And, judging by the level of unemployment, under-employment and homelessness in the united states (as well as in other nations, but the problem is reaching crisis levels in the united states), the gifts of the gods (or, if you prefer, the resources given by nature) are being wasted by bad economic policy.
Warren Mosler in his "Deadly Innocent Frauds" book takes the charitable view that this bad economic policy is "misguided" in its origin, as he says in the quoted passage above (in the final sentence of the cited text). In fact, while some of the bad economic policy may be innocently or naively "misguided," it is far more likely that these policies are deliberate, because fiscal austerity leads very directly to privatization, by the following mechanism:
- Fiscal austerity, by definition, requires higher taxes and lower government expenditures, and demands "balanced budgets"
- This austerity policy seeks to take away fiscal authority from elected leaders and deliberately hinder their ability to provide proper infrastructure and services, which
- leads to demands to "privatize" that infrastructure and those services (and, if "balanced budgets" are not met, the same policies can also lead to demands to sell-off the public domain in order to help "reduce the deficit")
Privatization is incredibly profitable for those connected insiders who are able to purchase the public domain and the services that properly stem from the gifts of nature to the people of a nation (such as privatizing rivers, forests, ports, roadways, and the electromagnetic spectrum).
Previous posts discussing the problems of neoliberal austerity include:
(among many others)
Indeed, as Warren Mosler (and other pioneering MMT economists) explain elsewhere (including in earlier chapters in his "Seven Deadly Innocent Frauds" book), the presence of widespread unemployment and under-employment is irrefutable proof that either taxes are too high, government spending is too low, or some combination of the two (i.e., "both!"). In other words, unemployment is a sign of the deleterious impact of fiscal austerity (which, by definition, demands higher taxes and lower government expenditures).
The reason high taxes and low government spending lead to unemployment is that the taxes remove the ability of the people (outside the government) to buy goods and services, and if the government does not spend a commensurate amount to countervail the impact of those taxes, then goods and services (including labor) will be left un-purchased.
image: Wikimedia commons (link).
To correct the problem, the government can increase spending to purchase un-purchased goods and services -- and the most important thing it could offer to buy is any un-hired labor of those who wish to work but cannot find work (and do so at a living wage that enables workers to put a roof over their heads and food on their table).
If defenders of neoliberalism (as many will do) wish to declare that those who are homeless are homeless because "they don't want to work," they should see what happens if (as MMT proponents suggest) the government creates a "transition job" program, also known as a "job guarantee" -- using its power to purchase idle resources in an economy, including idle labor of anyone who wants to work, by providing voluntary (not forced) jobs for anyone who wishes to perform productive labor.
Otherwise, it is extraordinarily callous (and almost certainly false) to declare that anyone who is homeless is making a choice to be homeless.
In another paper entitled "Soft Currency Economics," made available in his "Mandatory Reading" section of his website, Warren Mosler declares:
"In the midst of great abundance, our leaders promote privation."
This statement goes to the heart of neoliberalism and austerity, which are destroying people's lives around the world, including in the united states.
The ancient myths declare that the natural resources are gifts of the gods -- gifts from the divine realm -- and that includes the gifts and talents and abilities of men and women.
When we deliberately squander them, it is an affront to the divine realm, an affront to the gods.
The most important thing we can do for future generations, as Warren Mosler states in the passage cited above, is to ensure they have the skills and ability to provide the goods and services they will need, and at the heart of ensuring that is to provide education.
There are those who would deliberately sabotage such education of the next generation, in order to more easily impose austerity (and thus more easily privatize those gifts of nature which the ancient myths teach are gifts given by the gods to all the men and women of a nation).
The ancient wisdom preserved in the myths has lasted for untold millennia, having been passed down from generation to generation, and those ancient myths can continue to inform and educate us today. Although there are those who try to suppress the ancient message preserved in the world's myths, those myths still proclaim a message which is diametrically opposed to the austerity and false privation which is preached by the proponents of neoliberalism.
It is a message from the infinite realm. And it is a message of abundance, and not artificial privation imposed upon the people.
image: Wikimedia commons (link).