Consumption or Wealth

Cutting consumption is better that trying to replace all the energy we get from oil, because it can be much quicker and cheaper than providing new supplies of energy. Cutting consumption now will give us enough time to build alternative energy systems, and it will allow an immediate reduction in pollution rates, which we need to head-off climate change. Lower consumption will reduce the amount of alternative energy we need to provide.

It will be easier than it seems now to reduce consumption after we have reconsidered a few bad assumptions commonly made about economics. Correcting those assumptions will allow us to have wealth and economic security without any need to continue our waste of scarce resources.

Consumption Reduces Wealth

The consumer economy is benefited by unrepairable goods, planned obsolescence, throw-away living, and war. It seeks increased consumption to make jobs, but an efficient system cannot develop so long as we make growing consumption our goal.

Efficiency will be able to cut consumption by a large percentage if we use the kind of efficiency goes beyond auto mileage, building insulation, and energy-star appliances. Waste not; want not would not support our consumer economy. That kind of efficiency, or frugality, was once common sense.

After the industrial revolution, the old value of frugality combined with the automation of production to cut the need for human labor. One cure for that unemployment was to replace grandpa's frugality with consumer waste. Jobs are created when early consumption leads to quick replacement. We need growth in consumption to prevent automation from causing too much unemployment. Any kind of consumption, even war, is "good" for the economy when we want to create more jobs.

Building an efficient system will create many jobs, for a while. Once the new system is ready, the large number of construction jobs will fall to the much lower level reqired for operation of the finished system. Increased durability will make the need for replacements fall to low levels. A sustainable economy will not provide full employment except during its initial construction.

We have lost sight of the goal of economic activity.

The consumer economy is not designed to make people wealthy; it is designed to make people consume more. If consumption means "use-up" then we could say that our wealth is approximately all that we ever acquired minus all that we ever consumed.

The Producer Economy

A producer economy seeks to produce all the goods we need, in contrast to a consumer economy that seeks to consume all the goods we can produce. A producer economy designed to provide the goods and services that we require would allow a big reduction in oil consumption and CO2 emissions, but without demand stimulation unemployment will become a problem. If we could find another way to provide income for those workers replaced by machines we could cut our consumption to sustainable levels.

One of the greatest obstacles to building an efficient and durable world has been our failures to separate the economic and the social functions of work.

A loss of income is not the only problem that unemployment causes. For most workers "employment" is not just a matter of economics. It's a matter of being a member of society, of individual satisfaction and identity, of being human. We have made work so important that many people doubt that life has any purpose without work. We may give thanks to God for the gift of food, but we really believe that we earn our livings.

Without the use of demand stimulation, war, and other methods of increasing waste, there would be a shortage of paid work in any automated economy. Should we go home and open cans to keep our can openers busy?

The business of any economy is to produce. Most economies can produce, but they should not produce too much just to stay busy. That would make them consumer economies.

The Other Invisible Gorilla

The consumer economy is not our only problem. Population growth is another cause of resource scarcity and global pollution. As most people know, we can't rely on economic reform alone to solve these problems. Why is the population problem ignored?

The Automation of Services, Robotic Mothers

Some of the most important work is unpaid. But there will always be plenty of unpaid work, like motherhood, that could be done properly if people weren't too busy working for money. If human dignity hinges on work why not give unpaid work its due respect? Must money be involved for work to be good? Should moms be hired help, in it for the money?

Since robots require little energy they can still operate efficient machines and probably take your job even without abundant oil. Let's hope some service jobs will not be automated. Who would want their mom replaced by a robot?

Who Pays for Unearned Income

Inheritance is a form of unearned income. When we use durability to conserve resources, more goods will be inherited, and unearned income will grow. Inherited unearned income came from previous generations who cared enough to leave us something. Inheritance of personal property may not provide money income, but it does avoid the expense of providing it for one's self. That represents provision of wealth without the need for additional consumption. Inheritance could be the most efficient economic operation possible.

Another growing source of unearned income is the unpaid wages of robots. The wages that all robots would get if they were human should be used to fund un-earned income for people who are not owners.

Another important source of unearned income can come from taxing or borrowing any surplus private income. Surplus being defined as income not spent on personal consumption or invested in new offerings. Surplus income is income used for speculation plus the income withheld from additional circulation.

Who Gets Unearned Income

Try a thought experiment. In a robot-run economy the total of all wages would be zero. All income would go to the owners of the robots and the owners of the resources processed by the robots. In that case all workers would be displaced.

Robots will never displace all workers, but without growth in consumption automation would have already displaced most workers. Why should the workers remaining after automation get to split the fruits of automation with the owners without any cut going to those displaced by the machines?

In addition to those displaced by machines, we might agree to support the young, the old, the sick, and the crippled. Respect and love should not be limited to those who we believe are useful.

Rise Early for Tennis

People on welfare and those on private incomes are not living on the work of others. Unearned income comes from the free wealth of nature. Wealth is no longer limited by a shortage of human labor. We have increased productivity to such high levels that resource limits have replaced labor as the scarce factor limiting production. When robots do most unpleasant work we will no longer be able to pretend that wealth comes from human labor. Maybe true wealth comes from human play.

Face it; we are all parasites on the planet. We need to consider why if parasitic dividends are good how can parasitic welfare be so bad? We can't do or respect important unpaid work so long as work is just about money. Unearned income will give us the time we need to do important unpaid work, such as being good parents, stewards of our wealth, and thoughtful citizens. Except for frequent bashing of welfare queens the existence of unearned income is rarely discussed. It is not very odd that unearned income has so few public friends.

Merriam-Webster online defines as, "to receive as return for effort and especially for work done or services rendered." Although some people worked hard for their 'unearned' income, most big fortunes have been inherited, not earned. Our capitalist system could be defined by its inclusion of unearned income.

Looking at the big picture, how can we ever feel that we deserve the many gifts we have received? We are all, rich and poor, parasites on natural systems, which are free to us. Natural wealth, the basis of all wealth, cannot be earned. Unearned income is our most basic kind of income. Unearned income is legal, and there is nothing wrong with it.

Unearned income reflects that wealth from nature was processed by organization and automation. For many people unearned income doesn't seem to exist. Unearned income has been grabbed by the greedy, hidden from view, and squandered by our pursuit of consumption. Others claim that their unearned income was really earned. We're too proud to admit we're all parasites on the planet, no matter how hard we work.

Refining the Work Ethic

Not doing unneeded work will save more oil than any other innovation. While oil is still abundant we can easily build systems that don't need high consumption to operate, and we can stop wasteful busy-work any time. Are we just going to fight for the dwindling space, water, air, and oil, while ignoring the possibility of painless conservation? It would be much better to address these issues now. Our fear of change can be overcome by our fear of not changing.

We don't need to change our basic values, or make new laws to end the destructive growth in resource consumption. There's no law against planning for inheritance by keeping a stable family size, or against using durability as the basis for real conservation, but before people can adopt low-consumption lives of abundance, we must use unearned income to supplement wages. Otherwise the need to keep all human labor busy with paid work will make sustainable economics impossible. To become sustainable we need to reduce consumption, but full employment needs growth.

The pressure placed on workers to fill needed jobs does not require the threat that unemployment means zero income. People want to do the right thing. The desire for additional income and the desire to be a good person will motivate workers even though they are still receiving unearned income.

The amount of unearned income can be varied to motivate just the right number of workers as indicated by rising or falling wages.

How much income would that be? I suppose that it should be the same for everyone. It should support basic needs at a minimum, and it could grow as the need for human labor declines.

Frugality Maximizes Wealth

Conservation in a consumer economy is like driving with the brakes and the accelerator pressed at the same time. Should we stimulate the economy to make jobs, or slow the economy to avoid scarcity and pollution? Although building an efficient producer economy will create jobs, once it's built, the unemployment natural to any durable automated economy will appear.

Future generations will need more than hard work to prosper. They will also need natural resources, low levels of pollution, and an economy that doesn't need resource consumption growth to function. . Labor alone is not enough.

We have already wasted too much oil. Even if we stopped using fossil fuels today the climate will still change a lot, and the sea will rise high enough to submerge many costal cities. We have already committed future generations to hardships we didn't have to face. Now that we know the harm we are causing it is wrong to continue with business-as-usual. Frugality was not such a bad idea. Perhaps frugality and thankfulness are basic to being a true conservative.

Our biggest duty is to be good stewards of all we have inherited. We can easily make the large reductions in resource consumption we need to avoid causing thousands of years of strong storms and high heat if we change our economic goal from staying busy to just providing goods and services. Our full-employment consumer economy is in basic conflict with conservation, because it must stimulate consumption. Don't give-up hope, because ending the need for consumption growth will make it easy to conserve and increase our wealth at the same time.

Barry Brooks

The Open Directory, Environmental Economics Section

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