Professor John Kozy helps us understand real world economics
... "The Root of all Evil"
PROFFESSOR KOZY EXPLAINS WHAT THE VERY DECEPTIVE TERM GDP REALLY MEANS... How primitive human beings dealt with the harsh conditions of life can hardly be imagined.
I suppose humans emerged in racial and ethnic groups that then merged to some extent, sometimes easily, sometimes not. All, however, face the same hardships to which they responded in various ways. All people require the stuff that is essential to life. Acquiring it is what life is all about. Since all people cannot fend for themselves, these groups made arrangements to take care of the needy. The groups' survival required it.
Political considerations are always the basis of these arrangements. Political differences always produce different economic practices. Each group has its own political-economy.
Capitalism, Socialism, and Democratic Socialism, for instance, are political-economies and each has numerous variations.
Economies do not exist in isolation. Any attempt to alter a society's economic practices requires a corresponding change to its political practices. For instance, raising the minimum wage substantially is futile unless prices are kept from rising. A large enough rise in prices can negate the effects of any pay raise. Controlling prices, however, is political.
Any attempt to compare the economies practices of different societies is also difficult. Unless the political differences are understood, the economic differences cannot be.
American society (which Australia has been mimicing since 1973) has been organized to produce ever higher levels of Gross Domestic Product which is said to be the value of all goods and services produced in a year. Although GDP is defined as domestic product, it is calculated by adding up all the money spent on consumption by households, businesses, and governments.
When one year's GDP is greater than the previous year's, the “growth” of the economy is revealed. Growth is what American culture strives for. Economic growth brings goods and services to everyone. The moregrowth the better! In that way, America's attempts to provide people with what they need to live. Growth is the solution to all human problems.
Would that it were so!
GDP is said to be the value of products and services measured by the costs of consuming them. But that is not what it really measures. What it really measures is the amount of money that is moved from the pockets of consumers (buyers) to the pockets of merchants (sellers). That's all it does; nothing more and nothing less. And that's all the society cares about.
America has been organized for the purpose of transferring money from consumers to merchants. This organization functions with enormous efficiency. The wealth of the merchant class increases by quantum amounts. Such is the greatness of America!
But the gloss of its greatness has been tarnished by its failure to provide for its needy. The word “economics” is derived from the Classical Greek οίκος νέμoμαι (household management). If household management were taken as the goal of human activities, a completely different set of data would reveal the underside of the wealthiest nation the world has ever known. But nobody cares.
No economic indicators exist that display this dark underside. Wouldn't it be helpful to know, for instance, how many employed people have gain-less jobs, jobs that provide so little income that they cannot save even a dime. Are those people employed or enslaved? When the employment rate is calculated monthly, why isn't the gainless rate calculated? The only answer is that because nobody cares.
America is said to lack a state religion. It lacks one only in name. America's state religion is Mammonism! Every mercantile is a temple, and every sales counter an altar.
Will Americans ever be virtuous enough to make the changes to those political practices needed to enable the necessary changes to its economic practices? Doubtful! Americans have been inured to ignoring the needy.
A primitive society could not do that and survive. Today's developed societies can. The needy are no longer needed.