On the Rachel Maddow Blog on May 4, 2012, Laura Conaway posts:
“We haven’t had this low a percentage of working-age Americans actually working or trying to get a job since the early 1980s (chart above). In April alone, more than half a million people gave up, which is scary.”
“Meanwhile, productivity continues to rise while wages stagnate (chart below). Workers are doing more with less, and often for less. Sound familiar, where you live?”
I wish that Rachel Maddow, her producers and her staffers would really tackle the topic of the falsehood of labor “productivity (labor’s ability to produce economic goods) continues to rise.” The fact is that the non-human factor of production––productive capital––makes many forms of labor unnecessary. And this has been the historical trend that will continue––constantly shifting the production of products and services off of people on to “things.” This tectonic shift in the technologies of production can readily be seen in everyday life by looking around and inquring how products are made and services delivered. They are exponentially the result of manufacture or delivery by digital robotic, computerized automated fabricating, packaging, and delivery that is driven by accelerating technology that is formulating the economy of the future.
In simple terms, binary economics recognizes that there are two factors of production: people (labor workers who contribute manual, intellectual, creative and entrepreneurial work) and capital (land; structures; infrastructure; tools; machines; computer processing; certain intangibles that have the characteristics of property, such as patents and trade or firm names; and the like owned by capital workers). Fundamentally, economic value is created through human and non-human contributions. NOTE, real physical productive capital isn’t money; it is measured in money (financial capital), but it is really producing power and earning power through ownership of the non-human factor of production. Financial capital, such as stocks and bonds, is just an ownership claim on the productive power of real capital. In the law, property is the bundle of rights that determines one’s relationship to things.
The role of physical productive capital is to do ever more of the work, which produces income. Full employment is not an objective of businesses. Companies strive to keep labor input and other costs at a minimum. Private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever increasing role. Over the past century there has been an ever-accelerating shift to productive capital––which reflects tectonic shifts in the technologies of production. The mixture of labor worker input and capital worker input has been rapidly changing at an exponential rate of increase for over 235 years in step with the Industrial Revolution (starting in 1776) and had even been changing long before that with man’s discovery of the first tools, but at a much slower rate. Up until the close of the nineteenth century, the United States remained a working democracy, with the production of products and services dependent on labor worker input. When the American Industrial Revolution began and subsequent technological advance amplified the productive power of non-human capital, plutocratic finance channeled its ownership into fewer and fewer hands, as we continue to witness today with government by the wealthy evidenced at all levels.
People invented tools to reduce toil, enable otherwise impossible production, create new highly automated industries, and significantly change the way in which products and services are produced from labor intensive to capital intensive––the core function of technological invention. Kelso attributed most changes in the productive capacity of the world since the beginning of the Industrial Revolution to technological improvements in our capital assets, and a relatively diminishing proportion to human labor. Capital, in Kelso’s terms, does not “enhance” labor productivity (labor’s ability to produce economic goods). In fact, the opposite is true. It makes many forms of labor unnecessary. Because of this undeniable fact, Kelso asserted that, “free-market forces no longer establish the ‘value’ of labor. Instead, the price of labor is artificially elevated by government through minimum wage legislation, overtime laws, and collective bargaining legislation or by government employment and government subsidization of private employment solely to increase consumer income.”
Furthermore, according to Kelso, productive capital is increasingly the source of the world’s economic growth and, therefore, should become the source of added property ownership incomes for all. Kelso postulated that if both labor and capital are interdependent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all. Yet, sadly, the American people and its leaders still pretend to believe that labor is becoming more productive.
