HomeLatest ThreadsGreatest ThreadsForums & GroupsMy SubscriptionsMy Posts
DU Home » Latest Threads » Forums & Groups » Topics » Economy & Education » Economy (Group) » Productivity, The Miracle...
Introducing Discussionist: A new forum by the creators of DU

Mon Apr 23, 2012, 09:53 PM

Productivity, The Miracle of Compound Interest and Poverty [View all]

By Michael Hudson

This is a re-working of my second talk at the Rimini MMT conference, as heard on Guns and Butter.

Suppose you were alive back in 1945 and were told about all the new technology that would be invented between then and now: the computers and internet, mobile phones and other consumer electronics, faster and cheaper air travel, super trains and even outer space exploration, higher gas mileage on the ground, plastics, medical breakthroughs and science in general. You would have imagined what nearly all futurists expected: that we would be living in a life of leisure society by this time. Rising productivity would raise wages and living standards, enabling people to work shorter hours under more relaxed and less pressured workplace conditions.

Why hasn’t this occurred in recent years? In light of the enormous productivity gains since the end of World War II – and especially since 1980 – why isn’t everyone rich and enjoying the leisure economy that was promised? If the 99% is not getting the fruits of higher productivity, who is? Where has it gone?

Under Stalinism the surplus went to the state, which used it to increase tangible capital investment – in factories, power production, transportation and other basic industry and infrastructure. But where is it going under today’s finance capitalism? Much of it has gone into industry, construction and infrastructure, as it would in any kind of political economy. And much also is consumed in military overhead, in luxury production for the wealthy, and invested abroad. But most of the gains have gone to the financial sector – higher loans for real estate, and purchases of stocks and bonds.

Loans need to be repaid, and stocks and bonds receive dividends and interest. For the economy at large, people are working longer just to maintain their living standards, which are being squeezed. Women have entered the labor force in unprecedented numbers over the past half-century – and of course, this has raised the status of women. Mechanization of housework and other tasks at home has freed them for professional life outside the home. But on balance, work has increased.

Read more: http://michael-hudson.com/2012/04/productivity-the-miracle-of-compound-interest-and-poverty

5 replies, 1155 views

Reply to this thread

Back to top Alert abuse

Always highlight: 10 newest replies | Replies posted after I mark a forum
Replies to this discussion thread
Arrow 5 replies Author Time Post
Reply Productivity, The Miracle of Compound Interest and Poverty [View all]
girl gone mad Apr 2012 OP
Skittles Apr 2012 #1
DJ13 Apr 2012 #2
LineLineLineNew Reply .
Skittles Apr 2012 #3
girl gone mad Apr 2012 #5
canoeist52 Apr 2012 #4