Wednesday, June 16, 2010

How are we going to pay for it?

Let's assume we want to do something "expensive". The first question is: how are we going to pay for it?

It's simple (simple does not necessarily mean easy). Just off the cuff, the population of the US is about 300,000,000. I'm guessing the working age population is about 200,000,000. The unemployment rate is about 10% and the under-employment rate is about 20%. So let's figure that's about equivalent to an overall 15% virtual unemployment rate (i.e. 2 people 50% employed is about equivalent to 1 person 100% unemployed). That's 30,000,000 people unemployed. A person can work a scosh more than 2,000 hours per year, and an hour of unskilled labor is worth about $10. So 30,000,000 * 2,000 * $10 = 600,000,000,000 = six hundred billion dollars a year we're wasting, money we're simply leaving on the table. (And that doesn't count the accumulated training and experience of unemployed skilled labor that's also being wasted.)

It's a little harder to estimate the surplus value ratio, the amount of productivity an individual creates over and above what's necessary to sustain a civilized, dignified life, and which is captured by the rentier classes. there are 170,000,000 people working, which generates 170,000,000 * 2,000 * $10 = $3.4 trillion dollars*. If the surplus value ratio were only 10% (which feels low, but could be completely wrong: consult a professional economist), that's another 340 billion dollars a year that's doing nothing right now but sitting in the pockets of the ruling class to finance their internecine conflicts.

*The nominal US GDP is $14.2 trillion. Obviously, this number is not being calculated on a labor basis; there's probably a lot of inflation in this number. It's very difficult to figure out how much actual productive labor a dollar represents.

How much consumption do we waste? Wasted consumption is consumption for its own sake, not to satisfy any actual desire for the good or service or what it provides. For example, "planned obsolescence", where a product is designed to wear out quickly so the consumer must purchase another, thereby keeping those producing the product in business, is (to a certain extent, there are some good reasons for planned obsolescence) wasted consumption. Again, if we guess that wasted consumption is about 10% (that number comes, of course, straight from my ass) that's another $340 billion.

If we could capture half of the productivity we're wasting, we could use more than $600-700 billion every year. That's close to the entire annual budget of the Pentagon (which also arguably entails a lot of wasted productivity). Capitalism is the most efficient economic system possible? Yeah, right!

What could we do with $600,000,000,000 per year? Shit! What couldn't we do? We could go to the stars with that kind of money.

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