These increases or decreases, it must be emphasised, would be not necessarily absolute, but relative to what real wages would have been, depending on other variables, if the money wage change had not taken place. It is necessary to be reminded constantly that we are dealing with an array of interdependent dynamic variables. … Read more
To repeat in another way a point discussed earlier, there is an achievable optimum flow of money through the aggregate income (wages plus social welfare) channel in relation to the flow through other channels. The optimum state is characterised in two ways: (i) full employment, that is no involuntary employment of able people, prevails; (ii) economic activity, the wealth throughput rate, is at the maximum possible within the constraints imposed by other factors. … Read more
In the Great Depression, and in the stagflationary predicament of the 1970′s and 80′s which threatens to recur as a result of the US credit crisis and the run-up in the cost of resources and food, the work could have been available to employ everyone if the money had been available to pay them. … Read more
It is necessary here to repeat a point made or implied earlier, that the level and rate of change of economic activity and the level of unemployment are to a large extent independent of one another. Not totally independent of course, each is one determinant of the other. … Read more
So, environmental conservation must be the primary goal, and economic well-being depends on it – not the other way round.
That last phrase refers to the spurious argument that economic “progress” as currently understood, i.e., increasing throughput of wealth, provides money which can be spent on conserving the environment. … Read more
The principle of consuming resources at a rate no faster than their rate of renewal appears to be untenable in the case of resources whose renewal rate is almost zero, as is true of fossil fuels, gas, oil, and coal, also fissile uranium and thorium. … Read more
The extraction of minerals often leads not just to the consumption and depletion of the mined material, but also to the unintended but unavoidable consumption and depletion of rich and necessary biological resources, which are quite wasted in the process. … Read more
Full Wage Indexation (FWI), indexing wages to the full Consumer Price Index (CPI), that is, increasing money wages at regular intervals by the same proportion as the rate of price increases during those intervals, is intended to maintain living standards by maintaining real wages. … Read more
Before going on any further it is necessary to discuss the term aggregate demand.
Aggregate demand is the sum of two components – investment spending and consumer spending. It would be better if these were treated separately as independent channels through which money flows, since the relation between them is by no means constant in the sense that they can be lumped together and boosted or damped down together. … Read more
During the 1970′s and 1980′s governments and people generally in the more perfluent nations were waiting for an economic “upturn” or “recovery” to reduce what had become chronic high unemployment. The underlying assumption was that the high throughput-increase rates, the so-called “economic growth” rates of the 1950′s and 1960′s, were normal and that the more sluggish throughput-increase (TI) rates of latter years were an abnormal phenomenon that could be expected to speed up in time through this or that brilliant policy initiative or going back to the early economics of the eighteenth and nineteenth centuries; or by eliminating (depending on your point of view) businessmen, unions, migrants, taxes, civil servants, or computers; or just by waiting. … Read more