Saturday, November 9, 2019

Those Left Behind

When God kicked Adam and Eve out of The Garden he spoke to Adam saying:

“By the sweat of your brow you will eat your food until you return to the ground, since from it you were taken, for dust you are and to dust you will return.”- Gen 3:19

God also told Adam that the ground was cursed because of his disobedience and his life would be one of painful toil and sorrow.

Whether it all happened exactly as reported in Genesis is debatable, but I am inclined to agree with the message. Life is hard. One is born and has a brief childhood that prepares or scars them for what comes next. Then one works during the best years of their life and sometimes beyond. Then one dies. Gee thanks Adam and Eve.

Somewhere along the way from leaving The Garden to living in gated communities, a few of our ancestors figured out that eating your food by the sweat of someone else’s brow might be a better strategy. If you could find a way to leverage the labor of others you might just sweat less, have plenty to eat and live in a nicer neighborhood.

At first we leveraged the labor of others by violence and the power to rule that it brings. Religion was also used to make others work harder. For most of human history Kings and Queens, divine monarchs chosen by God himself, called the shots. Slowly, beginning most notably in 1215 with the Magna Carta, the divine right of monarchs to rule without regard to human rights was challenged. And life got better for a few more people.

New technology gave us the ability to publish books affordably and in large quantities. More people started to read and to think. Vast wealth brought us the Renaissance Period. And with it came decades of what amounted to public works projects and a redistribution of wealth via job creation. It also created some financial hardships on the Church which led to some creative fund-raising ideas which ultimately triggered the Protestant Reformation. Wars were fought over it and a lot of people were forced to relocate because their side lost. New lands had been discovered and some people went there. And life got better for a few more people.

The Age of Enlightenment shifted our attention from the pursuit of beauty and worship through the arts and architecture to the pursuit of knowledge, freedom and happiness. Revolutions and wars created free republics as well as dictatorships. A lot of blood was shed, but life got better for a few more people.

Then along came the Industrial Revolution. While we hear grim stories regarding the lives of the working poor in the 19th century, for most it was an upgrade to the misery of living “off the land” in places where those who owned the land (the capitalists) leveraged the labor of others to their advantage. And life got better for a few more people.

The Industrial Revolution created more assets that could be used to perform economically useful work. The assets (capital) certainly made labor more productive and prosperous. But those who owned the capital assets benefited the most from the increased production. Marx and Engels realized early on that, in an industrialized free market, labor could not win the battle versus capital. Perhaps guilds and labor unions could balance the scales a bit. But, in the long run they theorized that the capitalist economic model would self-destruct. Some form of communism would evolve where “the people” (or “the state”) would own the assets (capital) and we would all live happily ever after. Now as we look back over the past 100 years, communism has clearly failed and failed on a massive scale killing more people than any other “movement” or ideology in human history.

But, free market capitalism has its own problems. The Industrial Age of mechanical and analog technology has given way to new digital technology and we now live in the Age of Information. This has multiplied the productive capacity of labor and even made some jobs obsolete. Much of the “manual” work that must still be done has migrated to lower cost labor elsewhere in the world. What remains for those left behind rarely pays enough to live without some sort of subsidization. The higher value work that has developed in advanced economies requires skills, education and abilities which are in short supply. Those who can do this work are well compensated. But those who own the assets, the capitalists, do even better. In a world where capital may be employed more productively than ever is it any wonder that the rich are getting richer?

Thus, the gap between those who “have” and those who have been left behind continues to grow. The big question is what happens when too many people have been left behind? For one thing, you have social unrest. We see it now on both the Left and the Right. People who have been left behind and see no way to get ahead.

The second thing that happens, and this is the game-changer, is the erosion of the customer base that was buying the goods and services which made the Capitalists so wealthy in the first place. I am guessing the smartest and the richest people at the top of the pyramid have already figured this out. It’s why the Warren Buffets and the Bill Gates of the world lean to the left. Higher taxes and government transfer payments, investment in training, education and work force development. More affordable healthcare. In effect, redistribution of wealth. How else will those left behind be able to buy the stuff the capitalists have for sell? When it comes down to it…our future is not going to be determined by Republicans or Democrats…left or right. It’s going to be about doing whatever is necessary to keep the doors open for business. And that means having fewer of those left behind.

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