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CAPITALISM’S FUTURE – PART II

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The “vision” that could be our future, as described by Adam Smith and John Maynard Keynes, could still be one to two hundred years in the future, because the process will be slowed by the need to produce the future’s new demands and technological improvements.  Smith pointed to the end as a time when “the growth momentum will come to a halt”.  Since Adam Smith’s time we have already seen vast technological improvements, but there will likely be diminishing returns for new technological inventions because the capital costs will increase while providing smaller returns.  Maybe the prediction that “everything that could be invented has already been invented” will finally come true.

Keynes noted that the future economic problems will not be the production of foods and goods but leisure time.   How wonderful!!!  An acquaintance, who recently retired as editor of an international magazine, was asked how she liked retirement; she replied “The only thing better than working in a job that you loved was not working at all”.   I have friends who play duplicate bridge five days a week; other retired friends play golf up to seven days a week, others play tennis, some play poker, some paint, some purse small businesses or inventions and other intellectual pursuits.  There are many activities and hobbies that we can pursue if we had the time and the necessary resources to facilitate our leisure time activities.  The future of “universal plenty”, as described by Adam Smith and John Maynard Keynes, should provide us both the time and the resources.

We can picture a “vision” of the world far in the future at a time with “universal plenty”.  It is easier to describe the future “vision” as a state of mankind, without specific descriptions of the technological innovations.  We need a “vision” of where we are going, a goal that we strive to achieve.  It will require building more golf and tennis courts, rather than military equipment.  Likely the leaders who are the best and brightest will be in charge, because they will still be best equipped to lead the future companies and governments.  And there will likely still be some form of capitalism with economic rewards and a distribution of income for good works, but it will likely be more equitable.

Picture a world of no wars.  What if society were to become more moral and civilized and decide that war was uneconomic.  That is what the Chinese leaders figured out almost two thousand years ago…after massive battles and millions of deaths; their current defense budget is only one tenth of the U.S’s.  The goal of world peace would have to be a consensus agreement among all nations, that war only destroys the economic goods of mankind and doesn’t improve anyone’s standard of living.  Our enemies in WWII, Germany, Japan, and Italy, are among our best allies today, because after the war we treated them like friends.  We should be able to negotiate  differences, be more civilized and get along with one another; in the best case – eventually we might not need an army, navy, or air force… or the military industrial base which manufacturers the military equipment. Recently President Obama talked about how to move past “perpetual war”…a good start.

Picture a world without crime.  As we provide more jobs and equitable incomes, learn to nurture people’s problems and develop a more mature sense of community and caring, crime will decrease.  Eventually, this could be a world without crime and the need for prisons and police.  Europe already has much less crime and far fewer prisons than the U.S.

Picture a world with no sickness or illness.  We will have learned to conquer heart disease, cancer, diabetes, and other diseases by measures such as preventive medicine, modifying our DNA and genetic engineering, including growing new body parts to replace damaged body parts.  We would be much healthier and have a longer life expectancy.  Already the U.S. is replacing manual health records with computerized systems, which will reduce the administrative requirements.

Picture a world of automation.  Our food would be grown by automatic tractors that plant the seeds, cultivate the fields, pick the finished crops, and automatic sorters that separate the fruits and vegetables by quality; much of this is already available.  Automation of the industrial processes will transfer production from labor to machines, such as a recent plant with 2,000 workers that was shut down and replaced with a new plant with the latest automation but only 200 workers.  Today “lights out” plants are taking over the industrial processes because they require little labor except to operate and maintain the automatic manufacturing equipment.  Even mining processes are being automated.

Picture a world where new materials are invented which can be substituted for existing materials.  Already carbon fiber is used to replace aluminum in areas such as on the new Boeing Dreamliner.  The new materials will help meet the demand for commodities as the world population increases from 6 billion to 9 billion, and improve the standard of living for the less privileged and underdeveloped countries.

Picture a world where education is taught with online computer programs, where each individual can pursue his own interests and at his own pace.  Already a youngster who was encouraged by his mother, because of his strong computer interest, to drop out of high school so he could be home schooled on his computer full time, and at age 26 he just sold his computer business for $1.1 billion.  Online computer education programs will likely revolutionize education and minimize the need for teachers and classrooms.

Picture a world without greed; where society admires morality and good works instead of money, power, and a survival of the fittest attitude.  Instead we must have compassion toward our fellow man, an understanding of morality and the belief “there but for the grace of God go I”.  Without changes in the moral character of mankind, it is unlikely that we will reach the end and a time of leisure and “universal plenty”.

A “vision” of where we are going is important…we should work towards the goals that we can eliminate war and crime, reduce sickness and disease, improve automation, and improve society’s character.  Reducing the workweek and paying increased wages gradually over time, as productivity increases, is the path to an end utopia.  The path will also be without causing fear that some people will be unemployed and without income.  Without a lower workweek, in order to reduce the current unemployment for just the next 10 years, it would take greater employment increases than we had during the economically strong decade of the 1990’s.  And if another recession occurs during the decade, the structural unemployment will increase further.

Reducing the workweek can lead to more leisure time and a better sustainable environment, but those are not the best reasons for following the path to Adam Smith’s end… instead it seems that reducing the workweek is a basic law of economics, just as the laws of supply and demand.  Over time, as the productivity increases, the workweek needs to be reduced and wages increased.  Otherwise, with the existing 40 hour workweek, we will have a dysfunctional economy where there won’t be enough jobs for everyone resulting in increasing unemployment, increasing taxes, and increasing government spending to assist the unemployed with a minimum sustenance.

All of the advances to new technologies could eventually reduce the required work to a small percentage of today’s required work, and we would have a choice between adding most workers to the unemployed, or to a life of more leisure and shared work.



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