How women got more economical freedom - the biggest failure of modern politics?

[Rodion Romanovich]

As the topic title says. It's IMO complex problem. The only time I can think of when unemployment was a smaller problem was when most women stayed at home and only men worked. While this was perhaps unfair from a genus perspective, it granted employment for all who WANTED a work, without requiring a huge growth. In fact, it seems today that it's impossible to achieve a growth as massive as is needed in order to employ all who want jobs, because there's too little request for products and services, and salaries are pushed down by the competition over the few jobs that exist, so few can at all buy products and services and get the growth circle started. Another disadvantage of both sexes working is that instead of now giving men 8 hours workday and women 8 hours of household work, both men and women now get at least 12 hours because they both need to work and do household work, which causes stress and disease to increase, increasing the need for physicians and hospitals, which hurts the stately finances, and is gradually making governments abandon parts of the free healthcare.

Could the feminists, or whoever "solved" the problem of women not getting a chance to career or economical freedom have solved this problem in another way than creating massive unemployment, weakening the laborers compared to employers, lowering salaries and increasing health problems due to overwork and stress which a mimimum of 12 hours work per day results in? Finally, women are still discriminated with lower salaries, so the solution was hardly successful at achieving it's objective, outside creating so many new problems.

In my opinion, that women had few or no economical rights before this development was a problem that needed to be solved, but the way it was solved in is perhaps one of the biggest failures of modern politics IMO.

Opinions? Suggestions? How should it have been solved instead?

[Watchman]

The unemployement problem is a recent issue. Take one look at how much of it was around for example during the so-called postwar "Golden Era" (until the Seventies), or even as little as twenty years ago. Besides, women were present in force on the factory floors of the Industrial Revolution already...

Plus I've never ever heard of any other workable scheme that would allow women financial and hence social independence; a whole lot of thinly veiled reactionarism yes, but nothing worth the while.

[Rodion Romanovich]

Plus I've never ever heard of any other workable scheme that would allow women financial and hence social independence;

yes same here, and that's what I want to find - another workable scheme that would allow that. It's tragical how I'm seing good guys and girls turn from hopeful children into overworked tragical depressed patients because of the overwork, frustration, lack of works and lack of future. I find it fascistical how modern society discriminates and considers people who can't work 12 hours a day "weak" and "trash". And the weakest (in terms of how LONG TIME they can work) women who were worst oppressed before this change, are thus still oppressed.

[Watchman]

But isn't that overwork, stress et-multiple-cetera (at least in its epidemic form) rather more a feature of modern business practice ? Squeezing the employees dry in a quite likely misguided quest for short-term efficiency ?

I don't quite see what the sex of the employees has to do with it.

[English assassin]

IMHO all this stress and angst is because we don't have ENOUGH to worry about. (I exempt the Dutch, who are very concerned about sparrows and dominos.)

If I was Victorian no doubt I would have had eight children by now, half of whom would have died, I could catch smallpox at any moment, if I lost my clients I could quite literally starve to death, etc etc. Things like that probably took people's minds off more minor issues like whether they felt, yunno, personally fulfilled.

As for women working I think the basic premise is flawed. Size of the workforce should be essentially irrelevant. What, IMHO, you have overlooked is that by working, women both create new services and create the demand for (and power to buy) new services. The effect is seen on both sides of the supply-demand equation. The economy is not a zero sum game, in short. There may be short term transitional effects but by doubling the workforce yes, you double labour supply, but you also double demand because the women want to spend their wages) so overall the effect shiould be about neutral.

No doubt in real life its much more complicated as men and women have different working patterns, things like union membership will have been different, the transitional effects I airily dismiss may in practice be substantial, and so on, but I think I am right in saying the introdduction of women to the workforce should not have been the cause of the effects you describe.

The same arguments get put forward against immigration and they are wrong too.

[Watchman]

And, of course, it would be pretty difficult to explain in the context of modern open societies why exactly women who want to work should or could not... Personal freedom, right ?

[Rodion Romanovich]

As for women working I think the basic premise is flawed. Size of the workforce should be essentially irrelevant. What, IMHO, you have overlooked is that by working, women both create new services and create the demand for (and power to buy) new services. The effect is seen on both sides of the supply-demand equation. The economy is not a zero sum game, in short. There may be short term transitional effects but by doubling the workforce yes, you double labour supply, but you also double demand because the women want to spend their wages) so overall the effect shiould be about neutral.


Women bought a lot of stuff when their husbands did all the work. The basic idea of economical freedom for the women was to counter marriages because the man was rich. I claim that the size of the workforce does matter.

There are some ways of changing it. Either you pass laws which forbids workdays above 4-6 hours, or you make a system where for instance only one of the persons in a couple works, making it possible for a family to live on one wage (whether the woman or man works here shouldn't matter). Those are examples of solutions to the problem, but none are really satisfactory to most. You could also choose the Marxistic point of view and make smaller "teams" consisting of several familiies where the best workers work and those best at home are kept at home. And so on. But they all seem to restrict freedom and equal rights in some way or another. But letting the price of equal rights be to drive people ill, which is almost as bad as killing, is a too high cost for freedom of choice IMO.

This debate is a little unusual because I don't even have anything resembling a good solution to defend. All I can do is explain how the current ones are bad, and why they're bad, and encourage people to try hard and find better solution. Which one of the current, all bad, solutions is the best, I'm not intending to debate, as it's more a matter of opinion and which group you belong to - in such a case people end up simply defending their own group and wanting the others to take the damage. Such a personal debate was not my intention. Again, I ask, could we come up with a better solution?

I was for instance thinking that if maids for household work are employed more commonly, a couple will have the ability to both work, and still not get overworked. The problem is, the maids then need to make approximately half, or less than half, of what the employer of the maid does. So this can only be used in cases where the working couple have well paid jobs. The only way to solve the problem for other couples could be to have limited work time per day for lower salary jobs, but then we need tax relief etc. for those persons, in order for their salaries to suffice if they share it with others because of the shifts introduced. Perhaps a removal of vat on all food and finding a way to lower the costs of flats, apartments, villas etc. could compensate that, as the main things you need to use your salary for is accomodation and food. But won't that lower the salaries of workers in the construction and food sectors? Well, one of the reasons why houses are so expensive is the shortage of it, at least in Europe. The average couples live at home until around 30, or something horrible like that. Could someone continue this reasoning or point out flaws in it at this early stage?

[English assassin]

Sorry, Legio, maybe we need an economist to explain it to us both, because I didn't put my point very well but I still think its right.

Your comment that women still bought things when only their husbands worked is not the answer, because they bought less. You had to support two people on one wage, or more exactly, the value of one worker. Now you have two. There is more money to spend, more demand for goods and services, hence more jobs.

The point about the maid is a mistake too I think. Its not the case that you need to be wealthy to have a maid, and that even then she won't earn much, because one couple do not produce enough domestic work in a week to need a full time maid. My cleaning lady, for instance, does only three hours a week, and that's enough to clean the whole house. So she can look after 10 or more houses at a very modest cost per house and still make an OK wage.

If you demanded that everyone worked only a half day, all that would happen is half as much stuff would be made, half as much wages would be paid, half as many things would be bought, you would be no better off at all. Quite the reverse.

And, finally, it can't be the case that women in the workforce cause unemployment, because if that was so we would have high levels of unemployment in the Uk and we don't.

[Kommodus]

I agree with English assassin that women entering the workforce is not, in itself, a significant cause of unemployment. They have the ability to generate wealth for a society, just as men do.

I do, however, strongly believe that it's very beneficial for families with children to have only one spouse work full-time, while the other focuses on raising the children. I recognize that sometimes this is not possible, but I suspect that families often choose to have both spouses work for more "selfish" reasons (extra income for more stuff they don't really need, unwillingness to give up a career for the good of the children, etc.)

I'm not biased: either spouse can take either role, as far as I'm concerned. The different ways in which the sexes are wired may result in things turning out one way as opposed to another more often, but that doesn't matter. Besides, advances in technology are making it easier for people to work from the home.

[Hurin_Rules]

Sorry, but unemployment is NOT due to feminism, nor is it a recent problem.

You've heard of the Great Depression, I presume?

[Rodion Romanovich]

Sorry, Legio, maybe we need an economist to explain it to us both, because I didn't put my point very well but I still think its right.

Your comment that women still bought things when only their husbands worked is not the answer, because they bought less. You had to support two people on one wage, or more exactly, the value of one worker. Now you have two. There is more money to spend, more demand for goods and services, hence more jobs.

The point about the maid is a mistake too I think. Its not the case that you need to be wealthy to have a maid, and that even then she won't earn much, because one couple do not produce enough domestic work in a week to need a full time maid. My cleaning lady, for instance, does only three hours a week, and that's enough to clean the whole house. So she can look after 10 or more houses at a very modest cost per house and still make an OK wage.

If you demanded that everyone worked only a half day, all that would happen is half as much stuff would be made, half as much wages would be paid, half as many things would be bought, you would be no better off at all. Quite the reverse.

And, finally, it can't be the case that women in the workforce cause unemployment, because if that was so we would have high levels of unemployment in the Uk and we don't.

The fallacy I see in your view, which seems correct in most other aspects, is that people DON'T buy twice us much if they earn twice as much. The first thing you do when you get slightly more money is to start saving. You buy perhaps 50 percent more. There's no infinite demand for goods, so there won't be the same increase in goods as in wage when you pass a certain point.

[Ironside]

The black death was an exellent unemployment solver BTW :hide:

The unemployment problems is neither new or dependant on females entering the workforce.

And the 1 parent system or shorter working days (my preference) would probably be the doom of the current system of capitalism, known as consumerism, as the market would no longer grow, or it can possibly die because it cannot sustain enough jobs for everyone (not there yet though), although at that time it can still sustain the entire population with food and stuff.

[Rodion Romanovich]

@Kommodus: I think your point of view is exactly the one I have if it comes down to opinion. But it also has a few fallacies because it's hard to implement without causing a fight over who should be at home/go away and work. But I'll perhaps have to give up the hope of finding a solution without disadvantages, it's perhaps a too complex problem.

@Hurin_Rules: now what was the cause of the Great Depression? I think there's limits in areas where very biased modern economists claim there aren't any. Just to give an example: more computerization and introduction of robots reduces the need for employees to do the work. You can cut 10 persons working and replace them with one machine and one supervisor, etc. If that continues unemployment will also increase, which means we either need fewer people to be working, extreme increases in consumption by perhaps passing laws against saving (bye bye economical freedom), or pass laws against too long workdays, and so on.

The reason why both men and women in every couple working is a problem, then, is because of the inhumane inofficial 12 hours workdays for the average worker. The unemployment is partly caused by it, but also has other causes. I guess the debate question was poorly chosen, as there are two debates...

Ok, the questions are:
1. how to reduce unemployment?
2. how do we avoid a situation where all have an inofficial 12 hours workday?

[Kanamori]

There's no infinite demand for goods, so there won't be the same increase in goods as in wage when you pass a certain point.

Contrary, this is one of the guiding concepts of economics, and it is quite correct that there is infinite 'wants'.~;) It is simple, there is more disposable income in a system, there is going to be more spending. In order to meet the demand producers want to produce more to make more profit. Of course, there will be a small period of time between when the workforce shifts to producing more, therefore requiring more employment, and its current production level.

In teh USA, we essentially have full employment, and I daresay this is where many points of the feminist movement began and still exist in strength.

[Kanamori]

1. how to reduce unemployment?

Increase production.

How to do that depends on the system we're talking about and what is causing the inadequate production.

[Rodion Romanovich]

Contrary, this is one of the guiding concepts of economics, and it is quite correct that there is infinite 'wants'.~;) It is simple, there is more disposable income in a system, there is going to be more spending. In order to meet the demand producers want to produce more to make more profit. Of course, there will be a small period of time between when the workforce shifts to producing more, therefore requiring more employment, and its current production level.

In teh USA, we essentially have full employment, and I daresay this is where many points of the feminist movement began and still exist in strength.

On the contrary, one of the basic principles of pshycology is the search for safety, and just looking a little around you you'll notice how people start saving when they get more. Very few consume everything they make when they've passed a point where they've covered both the most essential stuff and some basic entertainment. It's strange if economy bases it's conclusion drawing on such an axiom which is incorrect - no wonder why they end up making incorrect analyses and predictions.

Why do the USA have full employment and enough demand? Because they can sell their goods abroad. There isn't enough demand within the USA to cover it all. In Europe, for instance, unemployment is ridiculously high because they import too much compared to what they can export to other industrialized countries and the third world. So, conclusively, it seems like you can't get the demand needed from the same population which sells. It seems like capitalism requires that another population becomes poor beyond reasons and works ridiculously much, in order to get full employment for all who want to work. It's in the interest of the USA and Europe to find a replacement system before China and southeast Asia gets the upper hand in economy, or they'll face the same problems as the third world. Europe and the USA have a common cause in solving this society philosophical and political problem within around 10 years, and make China and other upcomers implement such a system when Europe and the USA still have the power to do so. That's an important thing to do in order to avoid creating a competition and possible hot future conflict between west and east, IMO.

[Ironside]

Why do the USA have full employment and enough demand? Because they can sell their goods abroad. There isn't enough demand within the USA to cover it all. In Europe, for instance, unemployment is ridiculously high because they import too much compared to what they can export to other industrialized countries and the third world.

Uhm, US exports for less money than they imports nowadays.

[Rodion Romanovich]

@Ironside: that's very interesting, if it's true. So how does the economy go around? Or does this smaller export mean the USA is on the way to a depression? I just don't find it making sense how smaller export than import can happen at the same time as almost full employment and a fairly good economy. Could other countries implement this method and get the same positive economical results?

[Kanamori]

On the contrary, one of the basic principles of pshycology is the search for safety, and just looking a little around you you'll notice how people start saving when they get more.

I would like to see the study of that came to this conclusion. When I get money, especially more in the long run (like getting a job in the first place for women), I spend more.



Very few consume everything they make when they've passed a point where they've covered both the most essential stuff and some basic entertainment.

I have seen no basis for this conclusion anywhere. I see around me people who like to spend lots and lots of money. In the US, the MPC (Marginal Propensity to Consume) is 90%, i.e., Americans spend 90% of what they make. The cost of living is nowhere near that high.


It's strange if economy bases it's conclusion drawing on such an axiom which is incorrect - no wonder why they end up making incorrect analyses and predictions.

We are not known for our economic incompetency; ours has been doing very well for sometime.


Why do the USA have full employment and enough demand? Because they can sell their goods abroad. There isn't enough demand within the USA to cover it all. In Europe, for instance, unemployment is ridiculously high because they import too much compared to what they can export to other industrialized countries and the third world.

In 2004, the United States spent $606.2 billion more on imports than was made on exports, ie net exports were -$606.2bil. The value of all goods and services produced in an system can be found from adding together: government spending, consumer spending , investment, net exports. So, if our net exports were positive it would not even necessarily be the determining factor.


So, conclusively, it seems like you can't get the demand needed from the same population which sells. It seems like capitalism requires that another population becomes poor beyond reasons and works ridiculously much, in order to get full employment for all who want to work.

It is not in the interest of any economy to have poor people, again more income means more spending. This conclusion is baseless, and incorrect. Business men want people to buy their goods so they can have money, it does not suit their interest to have the world plagued with poor people.

[Kanamori]

So how does the economy go around? Or does this smaller export mean the USA is on the way to a depression? I just don't find it making sense how smaller export than import can happen at the same time as almost full employment and a fairly good economy.

There is an equation of exchange that may help an understanding of the concept here. M*V = nominal GDP (Gross Domestic Product) -- the nominal GDP by itself is not enough, it needs to be fixed by factoring in the price level, thus real GDP. Where M=money in the system and v=velocity of the money (how many times it changes hands). Therefore, an increase in spending results in an increase in production. Our economy has been showing signs of coming into a period of inflation; greenspan has jacked interest rates as a preventive measure.

[bmolsson]

Increase production.

How to do that depends on the system we're talking about and what is causing the inadequate production.

This is actually incorrect. Today production can be increased without increasing employment. Furthermore, GDP is not an accurat measurement on a country with a decreasing and aging workforce. A retire receives his support from capital gain, which in itself is not production and a part of GDP, even though it actually is an important part of the economy. :bow:

[Sasaki Kojiro]

As the topic title says. It's IMO complex problem. The only time I can think of when unemployment was a smaller problem was when most women stayed at home and only men worked. While this was perhaps unfair from a genus perspective, it granted employment for all who WANTED a work,

Uh...except women, which is kind of the point.


Could the feminists, or whoever "solved" the problem of women not getting a chance to career or economical freedom have solved this problem in another way than creating massive unemployment, weakening the laborers compared to employers, lowering salaries and increasing health problems due to overwork and stress which a mimimum of 12 hours work per day results in? Finally, women are still discriminated with lower salaries, so the solution was hardly successful at achieving it's objective, outside creating so many new problems.



Well, there's an easy solution, how about we make it so you as a man can't have a job and you have to pick you spouse based on the amount she makes and if you find out you hate her you can't get a divorce because you have no money?

:duel:

[Rodion Romanovich]

@Kanamori: an equation doesn't say much unless it can be shown where it comes from. Is it supported by statistics or a theoretical approach? I'm not ranting here, just curious and willing to learn, with a normal critical mind until I've seen enough proof.

Some other replies:
- 90 percent consumption was a little higher than I thought, but still proves my point. 90 percent is not 100 percent, so increase in consumption is NOT proportional to wage by a factor as large as one. So the basic axiom is wrong, which means any theses based on it may be, but aren't necessarily, wrong. Wherever the axiom is used it must therefore be a justification that the approximation error is neglectable.
- The greater import than export still seems illogical. Is this export/import rates made by government and ruling, or are all companies included etc? Which institutions are included in the study?

[Rodion Romanovich]

Uh...except women, which is kind of the point.


That is partly true, but I've also met many women who preferred the old style. Also, the new system gives women freedom to choose to work, but prevents them from working at home if they want to. The earlier system gave women freedom to choose to stay at home, but prevented them from working. Both systems contain as little freedom as choice as they possibly could. But like I said this old solution wasn't good in my opinion, and that was the point of the thread. I'm not debating a view, and searching for a view. I want a discussion of suggestions, judging all factors in society honestly and without letting personal opinions in individual political questions affect it, in order to solve this problem. Unsolved problems lead to society crises and conflicts, which are best avoided by solving the problems before the conflicts begin.



Well, there's an easy solution, how about we make it so you as a man can't have a job and you have to pick you spouse based on the amount she makes and if you find out you hate her you can't get a divorce because you have no money?

:duel:

The point of the thread was to find a better solution for preventing this to happen for women or men. In a way, if there's fair wages for the sex that works, then it doesn't matter for a person of the other sex which person of the first sex he/she chooses. The problem then remains only for singles. If they'd recieve some kind of support the problem would be almost solved. That's what I meant with that the old system wasn't a complete failure. But I still agree that it was a failure.

If there's one OPINION I'm holding here, it's that all existing solutions to the problem in question are bad because they always involve oppressing someone, they only differ by who is chosen to be oppressed.

[A.Saturnus]

Why do the USA have full employment and enough demand? Because they can sell their goods abroad.

The country with the highest export to import ratio is Germany, yet it has high unemployment.
As a psychologist I content your assertion that people with higher wages safe more because of their need of savety. If you have a high wage, savety is not a concern for you because of steady income. If your wages are low, you worry more about savety and think how you can save some. I´m not saying that higher wages correlate perfectly with spending - because I don´t know that - but your reasoning is flawed. Besides, saving is a good thing. Saving means financial stability. Someone how saves now, spends later. In the end, he will give out more money than someone he spends all and gets into financial problems. Also remember that saved money works of it own. Unless you hide it in a sock of course.

[Rodion Romanovich]

The country with the highest export to import ratio is Germany, yet it has high unemployment.
As a psychologist I content your assertion that people with higher wages safe more because of their need of savety. If you have a high wage, savety is not a concern for you because of steady income. If your wages are low, you worry more about savety and think how you can save some. I´m not saying that higher wages correlate perfectly with spending - because I don´t know that - but your reasoning is flawed. Besides, saving is a good thing. Saving means financial stability. Someone how saves now, spends later. In the end, he will give out more money than someone he spends all and gets into financial problems. Also remember that saved money works of it own. Unless you hide it in a sock of course.

I didn't say that. I said that extremely low wage is all consumed to cover the basic needs. Slightly higher, and people can start saving, and will do so because they have such a small safety margin. The poorest would also like to save, but can't. You need to get much higher wage before you start spending a larger percentage of your wage again.

As for your economical argument, saving is a bad thing if you want the growth which is necessary for a capitalism to avoid huge unemployment. If there's not enough demand, i.e. consumption as opposed to saving, the capitalism results in unemployment.

Finally, I again ask what kind of exports and imports these statistics are measuring. Is it only governmental import/export, or are also companies involved, or are only companies and no governmental affairs included? It matters a lot.

[Watchman]

Uh, Legio ? By which token does the modern system prevent anyone from "working at home" ? Indeed, to be literal about it, much of the "outside" work nowadays *has* to be brought home because otherwise you don't have enough hours in the day... But between assorted household machinery (the washing machine being perhaps the most important of them), to my knowledge the average home remains quite livable even if there's only one person both bringing in the bread and keeping the walls standing.

Or at least ours did. Us kids just had to learn to be a little flexible and self-sufficient (which is proving quite useful now that mom's moved out, but anyway).

And if someone wants to play the housewife/-hubby, then he or she is entirely free to (bar, perhaps, odd looks from friends and relatives, but those aren't the point) - assuming the spouse is able to foot the bill just by his or her job. And many do, out of either choice or necessity (read as "unemployement"). Sounds like as much freedom of choice in the matter as can be expected; AFAIK nowhere there exists any law against it...

[Papewaio]

1) You could all learn to be something other then being an employee... like a small business owner or even just self employed.

2) With an unemployment rate of 5% in Australia, I think it would be hard to man (pun intended) all the jobs without women in the workforce. If literally half the full time equivalent jobs is men and the other half women, then if all the women went home then we would possibly employ the 5% of men who do not wish to work... however all the employers would have to start paying far more for bottlenecked skills, inflation would go up and then you would wish you had two incomes to cover the situation.

3) The dad can always choose to be the primary care giver, as can the mum. It should be the couples choice on who stays at home. I work and my wife looks after our child... that situation will probably change as the baby gets older.

4) Wages, I remember a survey in the dim recesses of my memory and essentially they found virtually all workers wanted about 20% more then they currently earned... the catch was once they had that 20% they wanted another 20%... the only class of workers that have shown to have anywhere near that ability to command such increases are CEO's... the rest of us should learn not to rely on our bosses to increase our incomes, we need to learn how to make our incomes increase for ourselves...

[Kanamori]

Today production can be increased without increasing employment.

Yes, only to a certain extent though, and especially with labor laws (overtime, etc.). If you increase your production enough, ie more than a sliver, it is more cost efficient to hire more people rather than to pay them more per hour. And if there is unemployment, I can think of no other way to increase fulltime employment than through an increase in production.


@Kanamori: an equation doesn't say much unless it can be shown where it comes from. Is it supported by statistics or a theoretical approach? I'm not ranting here, just curious and willing to learn, with a normal critical mind until I've seen enough proof.

They are the way measurements are made.

A simpler way of thinking of it is: I have $50; I spend it on an eigth ounce of some nugget; the person that received my $50 spends it on a cheap DVD player. The $50 is called m (the amount of money doing the purchasing), the velocity (how many times it was used to purchase something) is two, and so, in this simple system, the nominal product is $100. The model M*V=nominal GDP is simply on a larger scale -- I do not know how they measure velocity, but this is an older model anyways which was just supposed to illustrate that more spending tends to result in more production.


- 90 percent consumption was a little higher than I thought, but still proves my point. 90 percent is not 100 percent, so increase in consumption is NOT proportional to wage by a factor as large as one. So the basic axiom is wrong, which means any theses based on it may be, but aren't necessarily, wrong. Wherever the axiom is used it must therefore be a justification that the approximation error is neglectable.

I'm not sure I understand. The 90% represents a quantity, not a probability. It means that when an American has $1.000 they tend to spend $900. Wage distribution is complex to talk about, and I am uneducated in this area and theory of it. I am simply saying that employment of women is not going to cause more unemployment (those who are looking but unable to find) in the long run -- good thing I took off my Keynes quote.~;)


- The greater import than export still seems illogical. Is this export/import rates made by government and ruling, or are all companies included etc? Which institutions are included in the study?

The government records the value of everything that is shipped overseas and the value of everything that is brought here.

[Papewaio]

Doesn't taxes (even small ones) apply a large velocity break on individuals compared with companies?

Individuals can all use their after tax money. Companies can use the whole amount as pre-tax money.

Even at a tax of 10% after 3 exchanges you are going to be left with 73% of the money for the fourth person. 10 Exchanges and only 35% of the money can be spent... by that point the rest is in tax to the government.

A company on the other hand spending from one to the next will not have to pay tax until it is a profit... companies are the true accelerators as they have a different tax order model to that of individuals.

[Kanamori]

Yes, in as far as I've been taught. Mine was more of an illustration. Perhaps I should have used only examples of purchasing of drugs so as to eliminate the tax idea altogether. Which is another discrepency in the GDP=total production model: drugs are a significant part of our economy.~:)

[Rodion Romanovich]

I must admit I was very wrong. It turns out on the international level, what I thought was true isn't true. You have provided me with much interesting information and I've now realized that it's my own country that is crap, perhaps due to another causality than I first thought, perhaps not.

[Papewaio]

It is often not the system of government that is at fault it is how it is used/abused... lack of accountability is a prime reason for the abuse.

[bmolsson]

Yes, only to a certain extent though, and especially with labor laws (overtime, etc.). If you increase your production enough, ie more than a sliver, it is more cost efficient to hire more people rather than to pay them more per hour. And if there is unemployment, I can think of no other way to increase fulltime employment than through an increase in production.


You are using an outdated view when looking at employment. Income from capital require no employment and no actual work. The importance of capital combined with technology has changed the old "production based"view. Compare GDP per capita and you will see that there are countries with small values, but still appear "rich". This is due to their capital income which is used for consumption.
Further more, we will in the future see an increased part of the population NOT being a part of the employed mass.

[A.Saturnus]

I didn't say that. I said that extremely low wage is all consumed to cover the basic needs. Slightly higher, and people can start saving, and will do so because they have such a small safety margin. The poorest would also like to save, but can't. You need to get much higher wage before you start spending a larger percentage of your wage again.

But then there´s no point here. Only a small part of the population have so little income that they can´t possibly save any and this part is the least affected by emancipation. The point is that due to higher wages, the average household will be less concerned with saving money and by consequence, spend more.


As for your economical argument, saving is a bad thing if you want the growth which is necessary for a capitalism to avoid huge unemployment. If there's not enough demand, i.e. consumption as opposed to saving, the capitalism results in unemployment.

I find that too simplistic. Saving is - most of the time - a form of investment and investments are good for the economy. Less spending is bad if the people don´t have money to spend but if they just use the money in another way, the money is still in the economy.


Finally, I again ask what kind of exports and imports these statistics are measuring. Is it only governmental import/export, or are also companies involved, or are only companies and no governmental affairs included? It matters a lot.

As far as I know it´s the total amount of export of the entire economy. Anyway, it´s a simple truth that America is an import oriented country and Germany an export oriented one and Germany has higher unemployment.

[Kanamori]

The importance of capital combined with technology has changed the old "production based"view. Compare GDP per capita and you will see that there are countries with small values, but still appear "rich". This is due to their capital income which is used for consumption.

I'd be interested in seeing some examples or a book describing this.

[bmolsson]

I'd be interested in seeing some examples or a book describing this.

I got all this on a seminar held by a senior economist from Handelsbanken (Swedish large bank). It was a real eye opener for me and it explains a great deal on why the Europeans economies are as they are today. Unfortunately I don't have any direct references to literatures.

[Papewaio]

Use a better lever, produce more with less labour.

In other words a Japanese car plant that uses robots is going to have a very productive capital and less labour then another plant that hand crafts the cars using unskilled labour.

[Watchman]

These days the production of goods is becoming increasingly automatized and employs less and less people. Well, unless they can be gotten cheaper, but that is then why production is moved into for example SE Asia and similar minimal-wage areas. QED; how many manufacturing industries you know that haven't been mothballing their facilities, firing employees and "optimizing production" via automatization and the "China phenomenom" for the past decade or more ?

Thus far they haven't managed to do the same with the production of services (well, given that computer tech help numbers these days may well connect you to India this is debatable), but then again I for one have for a while now suspected the enterpreneurs of that field are starting to run out of sensible business ideas... Or at least I fail to see why else they would produce such weird stuff.

[bmolsson]

It's not only automation of factories, but the products itself as well. A very good example is table calculators. In old times a mechanical calculater required a tremendous amount of energy and manpower to be produced, while today a electronic chip made automatically out of a teaspoon of sand do the job even better.