An economy based on surplus rather than scarcity
Today's op-ed by Paul Krugman in The New York Times titled A Permanent Slump? brings to mind the prediction by Buckminster Fuller that the world would be facing an economy which would have to be based on surpluses rather than a scarcity of goods and services. Fuller had laid a timeline of year 2000 as when this would happen.
Are you spontaneously enthusiastic about everyone having everything you can have?
Neither the great political or financial powers of the world nor the population in general realize that the engineering-chemical-electronic revolution now makes it possible to produce many more technical devices with ever less material. We can now take care of everybody at a higher standard of living than anybody has ever known. It does not have to be “you or me,” so selfishness is unnecessary and war is obsolete. This has never been done before. Only twelve years ago technology reached the point where this could be done. Since then it has made it ever so much easier to do.
We must do away with the absolutely specious notion that everybody has to earn a living. It is a fact today that one in ten thousand of us can make a technological breakthrough capable of supporting all the rest. The youth of today are absolutely right in recognizing this nonsense of earning a living. We keep inventing jobs because of this false idea that everybody has to be employed at some kind of drudgery because, according to Malthusian-Darwinian theory, he must justify his right to exist. So we have inspectors of inspectors and people making instruments for inspectors to inspect inspectors. The true business of people should be to go back to school and think about whatever it was they were thinking about before somebody came along and told them they had to earn a living.
I have been quite disappointed that this prediction of Fuller's did not come true even a decade later. I see signs of global surpluses in things like food, metals, cars, plastics etc but not across the whole economy.
However, Krugman sees such signs across the US economy. In his op-ed, he says that the classic way of allocating resources i.e. by cost of capital or interest rate, is already dead as the new norm is low interest rates for increasing debt by individuals and governments. There is no moral value in savings!
Krugman claims this is not just his own view, it is also the view of Larry Summers who was recently a contender for the president of the US Federal Reserve.