Partial Accounting: Another spurious “cost” often used as a basis for policy appears as a result of partial accounting. An urban public transport service might be reduced or eliminated on the grounds that the costs of the service are nowhere near covered by passenger fares, and that costs can be reduced and the nation or city thereby enriched by cutting the service. ... Read more
I was asked recently if I thought that American dominance of the world was over, if America would decline like other great powers before it, and what nation would take its place.
I replied that the old idea of a nation becoming ‘great’ and ‘wealthy’ by hugely increasing its consumption and getting control of other nations to keep its own consumption growing, had always been part of human history, but would be quite inappropriate for the future. ... Read more
The factor of people’s expectations, left out of this discussion so far, would change the outcome somewhat.
The effect of rising expectations would be to stop the “boom” and return to “stagflationary” conditions sooner than if resource depletion alone were the depressing factor. ... Read more
The world economy isn’t working as well as it should and could. Some countries that enjoyed for some years near full employment, low interest rates, and a bearable rate of price increases, with fast-rising material living standards, all achieved without anything like current high levels of government and private debt, do so no longer. ... Read more
Good Trends, Not Good Conditions
It is not the intention in this blog to establish a perfect world of perfect conditions. Such a thing has been imagined and described by many in the past, but it must always remain an abstract possibility in the indefinite future. ... Read more
The Mitterand socialist government in France during the 1980’s hoped to create tens of thousands of jobs by cutting working hours. The basic working week was to carry the same pay, therefore each hour worked was to carry more pay. ... Read more
Measures to reduce expenditure and increase revenue raising by governments will often be seen in current economic terms as “costs” to the nation. But if seen in the light of the ideas put forward in the post about “Costs – What Really Costs Us and What Doesn’t?” they are economic gains. ... Read more
Huge sums are spent by governments on weapons and troops, particularly in certain countries. There are two remedies for this drain on government expenditure, one long-term and one short-term.
The long-term answer lies in the evolution of the world community towards political and economic unity – that is unity in the cooperative rather than in the monolithic sense. ... Read more
Governments in many less perfluent countries have borrowed thousands of millions of dollars in attempting to achieve permanent increases in the level of national economic activity and living standards.
The belief was that by borrowing “wealth” from the “rich” nations, they would be able to use it to generate more “wealth” of their own, enough to pay back the original “wealth” with interest and still leave enough to make their own country permanently wealthier. ... Read more