Economic reflection on the post Covid economy
The aftermath of the Covid 19 pandemic has seen nearly a global turn to stagflation, in which the cost of good and services increases regardless of the economy growth. This is quite a familiar setting for a lot of European countries who manpower shortage after world war two. Duo to the casualty of that war led to more jobs than people. In which the demand for worker was so high it led to decades of continued wage raises. Which fed into ever growing price rises.
This time round we see damaged supply lines and possible massive out take in early retirement at least in Europe less so in America. Reduced the work force creating demand for workers which allows worker to set large increase in pay. Which drive up price where employer try to make up for losses in increased salary and wages. Also with such a small pool of workers companies can’t cut staff or reduce wages without worker easily finding work elsewhere and the company finding it very hard to replace workers.
The difficulty is that a lot of technology firms have already tried to solve this difficulty with creating humanoid robots using artificial intelligence. To create a worker who needs not pay , breaks , pension or benefits. Which when developed on mass no worker can compete against and will displace millions of workers from jobs.
I want to examine how we through a economic reformation can reduce inflation and keep unemployment low. While future proofing our society against technological change.
Reducing inflation beyond tax cuts
Tax cuts as a short term measure have merit. They reduce business overhead and so should in responsible business owners lead to them reducing the cost past onto consumers. There may be some who fall into the trap of greedflation but for most this would incentivize reducing cost of goods.
I do feel a more general change in taxation could be of help in which we see taxes move away from removing value from productive work. Henry George ideas in progress and poverty in 1878 spring to mind. In which we move away from taxing income and focus on taxing property and natural resources. I am going to recommend rather than tax surplus from being a shareholder in companies concerning natural resources.
This wouldn’t on it own get rid of income based taxation but could see it reduced. Even allowing some taxes to abolished. A example being Donald Trump’s valiant effort to scrap tax on over time and tips. Could very well be funded by replacing that tax revenue by raising revenue through government becoming a shareholder in the natural resources America has which are bountiful.
While waiting for such effort to take shape to keep up with the US debt payment without cutting the federal government. This could be done by selling some of the publicly owned land in America. As well as a temporary increasing taxes on property owned by people who live outside of the USA. Increasing bail for jail on all offenses and all other fines for breaking the law. US should sell 25 percent of it asset in stocks and shares not linked to natural resources. Allowing surplus to buy stake in natural resources and cut the debt.
This should give the government time to replicate the Alaskan model of gaining a stake hold in all natural resources sales of 25 percent stake in gas , oil , coal , water , renewable electricity and precious metal extraction. Expanding to collecting surplus from shares in timber and possibly looking to rent out public land for housing and business. It would raise hundreds of billions. Which could be at first used to pay down the national debt. Then creating enough surplus revenue to fund a new welfare system which is ready to tackle automation.
While any surplus which was raised above the needs of paying down the national debt or providing a new welfare system. Could be returned to the people of America as a national dividend.
Future proofing employment
Elon musk has wisely long warned us about the rise of robots. How they will eventually replace the jobs done by most of us. First hitting those in blue collar work places and then as there programming improves possibly threatening white collar jobs too.
The loss of work is horrific life event. It strip a person of their pride. It leaves them and those they depend on in risk of poverty. It is the driving reason behind crime and other solution ills. We need a fair plan to combat it.
I am about to suggest that we would need a new system of welfare which no longer gives to people short term payment while they seek work. Instead seeing a system in which the state would facilitate work or create it to compensate for job loss in the face of artificial intelligence especially humanoid robots. Especially as such robot are beta tested in Amazon factories. Which human worker couldn’t compete against.
This would differ from a green new deal job guarantee offered by the Democratic party. It would offer wages under those found in the private sector. Creating jobs in partnership with the private sector where government grant could be given to business to take on unemployed workers for six months to a year. Our the unemployed could be made to participate in civic work scheme which could vary from government construction programs too simple tasks of maintaining the nation national parks. The possibilities are endless.
It would avoid the potential trap of universal basic income which could lead to those receiving payment not desiring to rejoin the work place. Falling into a trap some call welfare dependency. This system would compassionately save worker from the no fault job loss which would be caused by automation.
This approach would fiscally responsibility tackle this by gathering revenue from America abundant natural resources about to be exploited to their full potential by a new administration. Which would help pay down the national debt , reduce inflation and save worker from job loss in automation.
This is still a market economy we all know and love but focused on the compassionate effort to offer economic security yet unseen without diminishing market forces. This could work elsewhere in the world and isn’t the only way forward. It is however the most compassionate we have.
