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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.
A preliminary point is that wage fixing must be taken away from the arena of conflict among stronger and weaker unions, stronger and weaker companies, and political ideology and vote-catching. High unemployment is such a serious social blight (as Keynes knew, but too many people seem not to recognise) that wage fixing should not be left to the vagaries of human nature but must be the sole province of an independent objective authority assisted by the best information technology and given legal power to obtain any and all statistics relevant to its work.
It is possible for some time to consume a resource faster than its renewal rate, just as a business can for some time consume its accumulated money capital faster than it takes money in (this is only an illustration and does not confuse money with wealth). But for the business to survive and go on providing jobs, it must lay money out no faster than the money comes in.
Accurate data are available on the quantity, depletion rate, and natural renewal rate of many resources. This availability can be expected to improve in accuracy and completeness as time goes on.
Current economics assumes a world of unlimited resources, unlimited wealth. No matter how rapidly a resource is used, either (i) “They” will always find more, or (ii) substitute resources will always be found to serve to any required extent as well or better in place of the depleted resource.
Such conditions would characterise a flat world extending indefinitely in every direction, clearly not the world we live in. In such a hypothetical world, economic systems of any kind would be unnecessary. The very existence of economic systems on earth results from the fact that all resources, however abundant, are limited in five ways - in quantity, in potential extraction rate, in concentration, in accessibility and in renewal rate.
A fault of flat earth economics as practiced in free enterprise economies is that it chops a nation’s economy into sections that are too often treated as being self-contained and independent of other sections. This is not a useful or realistic view. An economy’s resources, economic activities, and people must be viewed as a whole. This whole must in turn be treated as part of the larger whole, the world economy.
