The life and death
of the consumer economy

Increasing consumption of all kinds has been a popular way to stop machines from causing too much unemployment. After WWII the new consumer economy created decades of prosperity by turning our economy in a new direction. Before WW2, provision of goods and services was our goal, and frugality was understood to be the road to riches. Everyone knew that we only have the things we haven't consumed yet.

The consumer economy was an innovation that used stimulation of demand to increase consumption. U.S. government wanted to create full employment, but the frugality and low worker income of the past were not compatible with keeping all workers busy. As automation allowed workers to produce more and more, we needed an economy that could consume all that full employment could produce.

Although the consumer economy led to resource waste and pollution, it was able to stop the return of another depression after WW2. Increasing consumption caused little inflation so long as supply could be increased to match the growing demand; but war and shifting oil markets created a mismatch, and demand began to exceed supply.

Price inflation became a problem in the 1970's. To stop inflation the U.S. government covertly dropped the goal of creating full employment. We have a new policy. We slow the economy to reduce demand and create enough unemployment to limit demands for higher wages. In the slowed consumer economy our stimulus policies are adjusted to create enough unemployment to stop inflation.

Government began to create unemployment to keep wages down in various ways. In addition to spending cuts, government helped business to move production to other countries, and it allowed low-wage workers to enter the country. Business continued to create unemployment too by automating jobs, although their motive may only be to cut their internal wage costs. Attacks on labor unions in law and in media propaganda helped to limit demands for higher wages.

Today, some economies are managed like a game of musical chairs. Some unemployment is planned. Training and motivating workers will only change who is left unemployed.

Once resource scarcity becomes an important driver of inflation, the required level of unemployment needed prevent inflation will become high enough to bring back large groups of angry unemployed workers demanding real changes to the system.

One common plan is to give people a pole instead of giving them a fish. Pole distribution could stop free-riders from begging and offer them the dignity we give to workers. Selling or giving out poles is taken to be an example of system level planning by many people.

A real system level plan would not assume that giving people a pole will stop our growing population from finally wiping-out fish populations. Some people believe that more people and more hard work alone can always create more fish. That implies that there are no limits to the level of wealth creation that can be achieved by properly motivated, healthy, organized, confident, skilled, and most of all hard-working folks.

If more work can always make more wealth why does overpopulation cause poverty? Since tribes migrated to flee hunted-out forests, people have had some clue that overpopulation causes poverty. Their hunting could "create" more wealth than the local forest could give them, but migration was still an answer. Now, our false pride as God-like creators of wealth would be shattered if people remembered why we had to migrate and remembered where our food really comes from. Farmers still know.

We don't need to replace all the energy we consume today, because so much of it is wasted trying to stay busy. When we discover how we can end our "need" to waste resources, we will also discover solutions to many problems that seem impossible, like being able to make drastic cuts in our co2 emissions and having more wealth and economic security at the same time.

Could it be true that the more we consume the more we will have? We are lost if we confuse growth in the rate of consumption with growth in the stock of wealth. Our goal of consuming more than we need to create jobs is going to make us poor, because we only have what we haven't consumed yet.

KEYNES: from a 1934 BBC radio address..."the necessity of drastic social changes directed towards increasing consumption."
Today we know that consumption must not be increased too much. That is why use of waste to increase consumption is obsolete.

We can set up an economy that doesn't need increasing consumption if we first take a new perspective on economics

A New Perspective on Our Need for Growth

____________________________________

Universal Basic Income: A ?Social Vaccine? for Technological Displacement?
(...)
The New York Times reports that some top researchers have already acknowledged that automation and robotics in manufacturing have resulted in a large net of loss of employment, declining wages, and disruption of working-class communities. The Times concludes that given unemployment levels, “there is no clear path forward, — especially for blue-collar men without college degrees.”

But it is not just working-class men in industrial jobs who are suffering. Automation also affects jobs in other economic sectors. In fact, 38% of all US jobs are at risk due to automation, including service sector work in fields such as  finance, transportation, education, and food services. Nor does is technological displacement limited to the working class. Middle-class workers also stand to lose jobs and wages.