Squilliam wrote:These aren't opposites. The movement of production from the west to the east wasn't hunting higher efficiency. Infact the higher efficiency producers are all in the west (hence the story of our relative wealth). If you consider the ultimate inputs, outputs and conversion efficiency of those with respect to the negative externalities produced like pollution we do it better, and are improving all the time. Hence the economic ecology of the west being better than many other countries such as China. If you are willing to work 10 hours and produce slightly more than what another person does in 6 it doesn't mean you're a 'more efficient' person. Comparatively speaking you may get the job, but it doesn't mean you're better at it. The fact that China's growth is coming at the expense of the environment is policy issue rather than a pollution/economic issue.
They are the complete opposite of each other because conservation means decreasing resource use. Higher efficiency in capitalist systems means doing the opposite. That's why resource availability has been dropping while economic output has been rising worldwide, together with pollution. See the graphs in the article I shared for details.
The rest of your paragraph proves my arguments. The U.S. and other countries outsourced because labor costs were lower elsewhere and environmental regulations were lacking, leading to lower overall costs. The use of the dollar as a reserve currency, and then later the petrodollar, only encouraged that movement. The same petrodollar allowed for heavy borrowing and spending to create an "American dream" where less than 5 pct of the world's economy was consuming at least a fifth of world oil production.
There's your "economic ecology": funny money creation to fuel a consumer spending economy.
If we look at the way the economy is set out there are significant numbers of 'low productivity' workers working in the 'service' sector. This is because a significant part of the economy is so damn efficient that it wouldn't matter if 70% of people don't show up to work because economic output would not fall by much at all. Again it is an issue of policy at a political level rather than an issue of the economy. A lot of workers simply replicate in the monetary economy what was once done in the non-monetary economy. Furthermore inequality in incomes means that it is relatively cheap for high income workers to essentially employ a bunch of servants at low cost to do things they could easily do themselves (or wouldn't consider important enough to bother with). High incomes force efficiency from people/businesses, and low incomes the reverse.
That's also connected the first point. Labor costs were rising, and more people no longer wanted to work in factories and farms. Instead, they wanted to work in the service industry and then use large amounts of credit created to buy cheap good from China. Meanwhile, Chinese workers were saving, and then later with the rest of the world started copying the U.S.
http://www.bbc.com/news/business-22956470That's the same U.S. that has less than 5 pct of the world's population but had been consuming around a fifth of world oil production.
Thus, the economy was so "damn efficient" because it was borrowing and spending heavily form the early 1980s onward:
http://blogs.reuters.com/rolfe-winkler/ ... s-of-debt/Virtual wealth is still tied to actual wealth. There can be no disconnect between the two because there is a constant conversion between them. If debt rises and the economy doesn't grow, then the debt won't get repaid. There is no real 'crisis' of debt, there just is a need to rationalise the divergence between the two.
Virtual wealth refers to credit. Actual wealth refers to goods and services that money can buy. Those same goods and services require material resources and energy.
The current credit market is many times larger than even global GDP. That disconnect has been taking place for years.
Sure technology is no panacea. The world is having problems, but those problems are a question of 'how' we run the economy more so than 'what' we run the economy on. Capitalism isn't the problem. It's crony capitalism whereby large businesses are capable of distorting the market and the political system for their own ends. Large corporations in the west are not significantly different compared to large state owned enterprises in China for instance except in terms of how they are owned. Technology keeps making the equations tighter in terms of those inputs/outputs tighter, but like a kid with a trust fund and a coke habit we keep blowing it. The paradox still stands because we are moving from a complex globalised system back towards a less complex and yet higher development model. Knowledge and technology are more portable than people, so we will likely see a movement back towards local production of goods/services because robotics/computers are leading a third industrial revolution that makes the comparative advantage of low wage economies much in the same way that subsistence farming cannot compete with industrial agriculture on an open market due to the sheer productivity differences.
Capitalism with competition is how the global population runs the economy. How it runs the economy determines what it is run on. What determines that are profits and returns on investment, both of which are churned into the same economy to make even more profits and returns. And since that involves increasing sales from increasing production (which requires increasing resource and energy use), then it requires more complex systems, including "robotics/computers".
That's why there is no move from a complex global system to a less complex and localized one. The "robotics/computers" used even for "local production of goods/services" required extensive supply chains to manufacture and even to ship. The same "robotics/computers" are not only made using complex processes they also don't make processes simpler. Rather, they make them faster. And as businesses competing with each other dream of even faster "robotics/computers" to provide even more "goods/services" to more people, then the process involves not only more complexity but less localization.