Productivity, Growth – and a Wealth Tax

The logic is simple: wages depend on economic activity which is number of workers x productivity per capita. But this makes several assumptions, and leaves me with several questions.

The biggest assumption is that economic growth is a must, so if either the number of workers, or their individual productivity is not continually rising, there is a problem. Although some of us have long argued not only that this must be unrealistic in the long term, it cannot be ruled out without more ado due to the Tragedy of the Commons rule that

No one can afford to allow themselves to be put at a disadvantage.

The answer could be that those with the most frugal lifestyle would gain, provided they could at the same time continue selling products to the rest of the world’s unabated demands. If we are to halt climate change, or any of the other forms of ecological degeneration of which David Attenborough’s Blue Planet II gently reminds us, then all societies should be aiming for public transport with private cars as a luxury, domestic goods lasting a lifetime, this being underpinned by an efficient network of repair workshops and recycling. Oh yes, and having replacement sized families everywhere, where all children could be guaranteed to reach adulthood.

But all this (and more) is improbable with good reason. In the first place we are all hard wired against perceived loss. And on the one hand those still making a profit from the present unsustainable systems will not allow it, but on the other, mothers who don’t know how many children will sur vive will continue to have more than their enviroment can sustain.

So productivity must go on rising, right?

I have to accept, I guess, that my long term Asperger’s generated vision, however necessary, is out of the question in the here and now.

But even if technology renders my worst fears groundless, productivity still does not make sense for me. This article by Sarah O’Connor in the Financial Times sheds light on one of my puzzles: productivity takes no account of the unemployed. Why is the calculation not all possible workers x per capita productivity?

Productivity might make sense if limited to the production of widgets, or even cars and the roads they run on. But is a hairdresser, nurse or teacher supposed to work faster, supervise more patients or children, or what? Oh, I forgot, Artificial Intelligence will sort this out. That to me nightmarish option is inevitable if growth continues to be a shibboleth.

More useful insights into the usefulness (or not) of productivity are also to be found in this article by Gillian Tett, also in the FT.

Productivity would be relieved of its apparently central role in the economy if taxation were transferred primarily from income from employment, to income from land and other more novel assets (such as broadband spectrum), and a proportion directly from wealth.

This last suggestion is normally seen as only possible once the proles have defeated their class war oppressors. I guess I must blame my Asperger’s for this, er, novel approach.

The problem is that if the inevitable utopia (as any normal person must see my ‘vision’) which I have outlined above will almost certainly mean an overall reduction in economic activity. Bear in mind that unless you are a climate denier, the economy will contract anyway, just a bit later, and a lot worse.

Not a lot of people know that slavery was only abolished in Britain in 1833 at the cost of compensating each and every slave owner. I want to save a habitable planet, not just for David Attenborough’s threatened corals, vital though they are, but for my grandchildren. Like the slave owners, Cuadrilla, Exxonmobil, Tata Steel et (many) al will have to be offered something which is preferable for them than having to cope with the ecological breakdown which as Attenborough points out, is already gathering pace.

Like it or not (I don’t), the neoliberals have to be brought on board. They will have to be paid not to frack, produce cars etc. etc. So on the one hand, everybody everywhere will receive a Universal  Basic (Citizens’) Income to guarantee security, but at the other extreme, a wealth tax is the least the wealthy can expect.

Funny how one thing leads to another if you have that kind of mind.



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