I want to propose some ideals about Wealth to complement these. Our physical economy began to grow rapidly about 1800. I suppose that this was enabled in part by the Enlightenment. It began the era where we produced in volume things beyond the bare necessities. Ordinary people could afford tablecloths. In short production of physical things began to shift to ‘discretionary’ wealth—things that we ‘wanted’ but did not ‘need’.
I, for one, am very glad of this. David Thoreau celebrated the earlier ‘simple’ life but I like the gadgets. To exaggerate for effect we might say that today 95% to 99% of what we produce is unnecessary for bare survival. Some commentators bewail the corporate tendency to ‘create needs’ with a Thoreau like distain. I think that it is at the core of the economic advance for since 1800.
The new sorts of wealth that we have learned to produce and demand are quite various, and they come in waves. The first half of the 20th century gave us many household gadgets such as vacuum cleaners, automatic hot water heaters, central heating, automatic washing machines, dishwashers, etc. The last quarter has shifted to information products and services. Economists often do not want to include information as wealth, or at least in the GDP for it is ‘too cheap’ to measure, despite its great value. Including information disrupts their models—I say make better models. As I understand these models they assert that the economy would be better if it were more expensive to build the personal computer. Perhaps more expensive computers would ameliorate unemployment, but I do not consider that to be an improved economy.
Late in recent recessions there is a period in which unemployment causes us to wonder whether there are ‘sufficient opportunities’ for the less educated people to contribute to our economy. In other parts of the economic cycle it seems that our economy has shifted the sorts of wealth that it produces, and thereby created new jobs. Often entirely new sorts of services and products gradually emerge to extend our gamut of ‘unnecessary’ goods and services.
Here available jobs are viewed as good because our society distributes goods in accordance to our individual ‘productivity’, indeed this is mostly what we mean by property rights. Other systems of distribution have been proposed and even tried but the results are not promising. Darwin’s logic would have components of the population disappear but we do not like to see segments of the population that are unable to make a decent living due to lack of a job. My own feeling is that the productive elements of the population will demand either money or other sorts of recognition. No solution other than money has worked yet.
Much of the technological imperative has been to eliminate labor of the uneducated, and often even the educated. I don’t know what the outcome will be.
This paper bears on these issues from a somewhat different perspective. I have not read it yet.