Higher Wages For The Workers Help EVERYONE
By Sprott Money
Higher Wages For The Workers Help EVERYONE
Written by Jeff Nielson (CLICK FOR ORIGINAL)
Much of what is known as “economic theory” is gibberish. It is propaganda, implanted into the minds of academics for one reason: to preserve the status quo of always favoring the (very) wealthy over all other members of the population. The facets of economic doctrine which are valid, are valid because they do little more than express principles of simple arithmetic and common sense.
“Supply and demand” is just simple arithmetic and common sense. If supply exceeds demand (i.e. there is a surplus), the price falls. This depresses supply and stimulates demand, until equilibrium is restored. If demand exceeds supply (i.e. there is a deficit), the price rises. This stimulates supply and depresses demand, until equilibrium is restored.
Similarly, the principle of economics known as the Marginal Propensity to Consume, is nothing more than an expression of simple arithmetic and common sense. Put a dollar into the hands of a poor person, and that person will spend the entire dollar, providing maximum stimulus to the economy. That’s not a “theory.” It is an elementary fact.
Put a dollar into the hands of a middle class person (the few who remain), and that person will spend most of the dollar, and save a small portion of it. Again, this is not a “theory.” It is an elementary fact. Put a dollar into the hands of a wealthy person, and that person will hoard the vast majority of that dollar. The wealthier the person, the greater the percentage that is hoarded.
Thus economic theory tells us that the more-equitably that wealth is distributed in any economy (and society) the stronger and more prosperous that economy will become. The last century of empirical evidence shows us precisely the same thing. In the 1960’s; wealth was distributed in our societies more equitably than at any other time in our history. In the 1960’s, our economies were more prosperous than at any other time in our history.
Today, wealth is distributed less equitably than at any time in our history, i.e. the oligarchs at the very top, are hoarding a greater percentage of wealth than at any time in our history. Our economies are bankrupt. (Real) unemployment is at record levels. The middle class has almost been wiped out, and individually, we are drowning in more debt than at any other time. And this is how things look as the Next Crash looms before us.
When was the only other time in history when our economies were in almost this horrific a condition? During the Great Depression. The Great Depression is the only other time in our history when wealth was concentrated almost as extremely and inequitably as it is today.
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