Tuesday, April 2, 2013

Measure your government with your disposable income

So here's my train of thought for today -
  • Industrial robotics is on the rise - http://www.ifr.org/industrial-robots/statistics/
  • This means that either (1) manufactured goods should be more affordable or (2) demand is far outpacing production
  • So imagine we take (1) to extremes and we see many manufactured goods becoming cheaper and cheaper
  • I think it's valid to say that more robotics in an industry means less people earning in those same industries
  • Lets also assume that we can take the metaphor further, that "automation" and other labor efficiency will reduce the number of jobs involved in the output of goods and services.
  • Where will those people go? Without significant re-education, they'll go to lower-income jobs.
  • They'll have less disposable income than they would have had with the job they knew at the manufacturing enterprise.
  • What limits the growth of such enterprises dependent on the average consumer? It's the disposable income of the average consumer.
  • More disposable income = more manufactured goods consumed. How many smartphones can one rich guy buy?
  • Enterprises are not interested in creating more disposable income, but only on getting a "slice of the pie".
  • As the disposable income of more "average-Joe" consumers goes down, more enterprises will look elsewhere for income.
  • They'll look to government contracts, to large enterprises, to the wealthy. They'll look B2B. But they'll also look to war, healthcare, and prisons.
  • They'll reduce the goods they supply to the average consumer and increase the goods and services to wealthy organizations.
  • This means that those same manufactured goods will become less affordable to the average consumer.
  • We'll see more and more households marginalized and debt-ridden. Wage-slaves living day-to-day. More alcohol and drug use, more crime, more desperation.
  • The government will spend more, and enterprises respond with more products and prisons just to keep the peace.
  • So something has to change. At least the measure has to change. The way we measure the success of our governments perhaps.
  • Our measure has to be more on the demand-side. When WE have more money, they're doing well. 
  • So measure your government on one thing. Not jobs, not inflation, not how well they're doing in the latest war. 
  • Measure your government on what really counts. Your disposable income.

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