U.S. Inequality Keeps Getting Uglier (Demo)

Both the cause and the solution is our technological advances.

Why are technological advances the cause? Because tectonic shifts in the technologies of production are displacing the need for human labor and at the same time devaluing the worth of labor. Yet labor is the ONLY means to an earned income that the vast majority of people have.

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 in order to maximize profits for the owners. They strive to minimize marginal cost, the cost of producing an additional unit of a good, product or service once a business has its fixed costs in place. Reducing marginal costs enables businesses to increase profits, offer goods, products and services at a lower price, or both. Increasingly, new technologies are enabling companies to achieve near-zero cost growth without having to hire people. Thus, 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.

Most changes in the productive capacity of the world since the beginning of the Industrial Revolution can be attributed to technological improvements in our capital assets, and a relatively diminishing proportion to human labor. Capital 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.

Why are technological advances the solution? Because productive capital is increasingly the source of the world’s economic growth. Therefore, productive capital should become the source of added property ownership incomes for all. Simply put, if both labor and capital are independent 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.

The system of big government and socialistic programs funded by tax extraction and non-asset-based national debt  are not the answer to anything.  The socialistic system almost always results in increased oppression, increased poverty or sameness as EVERY citizen becomes dependent on the State.

What we need is a system that empowers individuals and families to become fully productive, be creative, build businesses and to take care of themselves. The MOST IMPORTANT need is to extend equal opportunity to EVERY child, woman, and man to  share individually in the FUTURE wealth-creating, income-producing capital assets of corprations whereby financing new capital formation and transfers of existing assets is accomplished from the bottom-up and without redistributing property rights of the rich and super-rich with regard to their existing assets

Instead, we have a system where all power and all wealth are increasingly controlled by giant banks and giant corporations that are in turn controlled by the global elite.  The “financialization” of the global economy has turned almost everyone on the planet into “deft serfs,” and the compound interest on all of that debt enables the global elite to constantly increase their giant piles of money.

Not only has EVERY person become a debt slave, but also a wage slave, and increasingly a welfare and charity slave.  Over the past four decades the total amount of consumer debt in America has gone from about 2.2 trillion dollars to nearly 60 trillion dollars.  As Snyder notes, “many of us work as ‘debt serfs’ our entire lives, and we never even know the names or the faces of those that we are making rich as we slowly pay off our debts.”

Most thinking people should realize that never-ending consumer is not a wise situation to put one into. Such consumer debt requires a source of income that is promised to be paid to the owners of the note, credit card, or mortgage.

But there is a good form of debt, which is constantly used by the rich and the super-rich to make themselves richer. It is capital credit, a loan specifically tailored to finance FUTURE investment, repayable out of FUTURE earnings, without the need for “past savings” or the reduction in one’s personal consumption needs and wants. In the business world, physical capital is expected to go on producing income indefinitely with proper maintenance and with restoration in the technical sense through research and development. This is how technological advances occur and develop over time.