Credit Debt Cures
Winners & Losers of the Economy?
Here're my opinions on the current economy... The economy isn't a zero-sum game. As long as resources (tangible & intangible) continue to be utilized, recycled & re-utilized again, value will continue to be created & net economic wealth will always increase. Yet, it's still a win-lose game where there's rich, there's poor. In the end, the theory of demand & supply still determine all, including wealth distribution, production & buying power. Even though the wealth pie continue to increase consistently through value creation, the way it's distributed continue to create winners & losers. And true enough, where there're winners there're losers. And all these lie in wealth distribution. Unequal wealth distribution can't create all-winners situation. There won't be equilibrium in demand & supply. Imagine world production is at $1 trillion & yet world buying power is only at $0.5 trillion, how will there be prosperity with $0.5 trillion difference? This difference is possible when companies around the world continue to restructure & people continue to be laid off. The idea behind this is to cut costs & increase productivity. The best solution is to replace human labor with new technologies. The result is increasing productivity with decreasing market buying power. Ironically, while many continue to get laid off, high-level executives continue to get fat bonuses & other financial rewards. Rich-poor gap gets severe. When there's not enough buying power to cover production, overproductivity occurs. Consumer debt is created as a short-term solution which later result in bankruptcies. Inflation doesn't provide a fair & level playing field here. Governments around the world urge us to spend to save the ailing economy & yet major companies around the world are the biggest savers by cutting costs through layoffs, sub-standard employments & reduced benefits. Increasing productivity doesn't necessarily come with increasing value as the motive is to increase profits & most "values" created aren't what everyone wants or else no advertising or promotion will be needed since people will automatically go out & spend on every product/service produced. And I'm well aware of advertising used to instill awareness & another used to instill perceived values & needs to generate spending. When these happen (creating false values & generate the needs to accept these values), a lot of resources would have gone to waste. The market can never be efficient no matter whoever genius say otherwise as long as self-interest continue to be at stake. Or else no company advertising & promotion to instill consumer spending will work because everyone will know what's good for them without being impulsive buyers, as a reason. New job creation from the tech & knowledge-based industry is a bullsh*t excuse if the cost incurred from these jobs are less than the cost of retaining traditional jobs. These new jobs don't retain/increase net market buying power or else there won't be cost-saving from restructuring. And if market buying power decrease, overproduction occurs, consumer debt be promoted as short-term cure & the economy get into recession. Healthy competition isn't relevant here because in creative destruction only capital & resources change hands while everything else remain the same. Creative destruction producing competitive companies being effective, efficient, generous, benevolent & look after the market remain just a theory only kids will fall for as truth. In fact, there's no such thing as creative destruction in the current state of the world's economy. That means while a lot of values & more "values" continue to be created, a lot of resoures continue to be utilized as well as wasted. That leaves some doubt on whether the economic system is really not a zero-sum game. There's no such thing as win-win solution or else no one will be motivated to work, innovate & contribute. Imagine everyone has $1 million. While there won't be poor guys, neither will there be rich guys because there won't be differences to compare to. And being equal isn't an interesting thing for everyone. So if we want to be rich & well off, others must be made poor & lose. There's no other way even if the economy isn't a zero-sum game. Now, is the economy a great system or what?
Public Comments
- What's the question? You must have a lot of time on your hands....
- A win-win situation doesn't necessarily mean that everyone is well off and equal. It simply means that most people are better off than they were before, which is the case in Capitalistic countries. There are two dominant schools of economic thought, Capitalism and Socialism. Observing each system's historical track record is enough to judge which is better. Capitalism is by no means perfect. But, free markets are by far the best system for allocating resources to where they are most needed. * Also, you discredit the advantages of increases in productivity, but you fail to point out that increases in efficiency and productivity allow for the consumption of more and higher quality goods for everyone.
