Higher productivity guarantees more output per worker. To offset the productivity increases, consumption possibility is enabled to go up. If rates of increases of consumption don't keep up with rates of productivity increases, you get price deflation and unemployment.
The answer is to enable consumption to increase. Last I checked, 95% of the world has way way lower consumption than the upper 5% (the US, Europe, etc). There's plenty of room for the developing world to generate aggregate demand for all of the stuff the producer nations of the world create.
Anyone who argues that technology increases will only result in job losses forgets to remember most of the world lives in relative poverty to the upper 5%... There's a lot of potential for agg demand to increase.
A broken credit system is the problem that has only to do with destroying the fundamental relationships between prices, wages, etc. in developed nations. A breakdown of the credit system is equivalent in a developed economy to a nuclear bomb hitting. For us to arbitrarily revert to become a cash society, you need a lot more base money in circulation to keep most capital assets (property, plant, etc) near current price levels. On the flip side, I guess that that same increase in money supply will astronomically increase the price of base commodities that most of us need to survive (ie food).
Just wait what can happen to demand in the second tier nations of the world when they develop their own credit systems more substantially. Everyone forgets Russia, much of Asia, etc. are generally cash societies with inefficient use of capital.
The Austrians (even though they believe in capitalist evolved credit - which in reality will not naturally evolve in substantial means for a few decades without govt intervention) are basically arguing for us to become a cash society. The outcome will be massive unemployment, destruction of wealth of capital holders, lower wages, etc.. a paradigm downshift in the size of the economy. Not to mention since taxbase will be essentially chopped in half, a situation that results in the govt forced to print or default on debt unpayable under new balances. Or of course, gutting of budgets if money's value is to be preserved. (basically, no defense, no health care, minimal social security) Real trend into poverty.
Each economy runs on the assumption of certain balances .. ie, amount of available credit, labor, technology, capital, etc. If you alter any one of those substantially, we know the result.
Free markets don't care about social welfare. So your stand on these matters depends on if you give a shit if we collectively experience massive social chaos and poverty or not... If you only care about buying assets on the cheap with a cash hoard despite the welfare of your neighbor, then you likely are an Austrian.
The answer is to enable consumption to increase. Last I checked, 95% of the world has way way lower consumption than the upper 5% (the US, Europe, etc). There's plenty of room for the developing world to generate aggregate demand for all of the stuff the producer nations of the world create.
Anyone who argues that technology increases will only result in job losses forgets to remember most of the world lives in relative poverty to the upper 5%... There's a lot of potential for agg demand to increase.
A broken credit system is the problem that has only to do with destroying the fundamental relationships between prices, wages, etc. in developed nations. A breakdown of the credit system is equivalent in a developed economy to a nuclear bomb hitting. For us to arbitrarily revert to become a cash society, you need a lot more base money in circulation to keep most capital assets (property, plant, etc) near current price levels. On the flip side, I guess that that same increase in money supply will astronomically increase the price of base commodities that most of us need to survive (ie food).
Just wait what can happen to demand in the second tier nations of the world when they develop their own credit systems more substantially. Everyone forgets Russia, much of Asia, etc. are generally cash societies with inefficient use of capital.
The Austrians (even though they believe in capitalist evolved credit - which in reality will not naturally evolve in substantial means for a few decades without govt intervention) are basically arguing for us to become a cash society. The outcome will be massive unemployment, destruction of wealth of capital holders, lower wages, etc.. a paradigm downshift in the size of the economy. Not to mention since taxbase will be essentially chopped in half, a situation that results in the govt forced to print or default on debt unpayable under new balances. Or of course, gutting of budgets if money's value is to be preserved. (basically, no defense, no health care, minimal social security) Real trend into poverty.
Each economy runs on the assumption of certain balances .. ie, amount of available credit, labor, technology, capital, etc. If you alter any one of those substantially, we know the result.
Free markets don't care about social welfare. So your stand on these matters depends on if you give a shit if we collectively experience massive social chaos and poverty or not... If you only care about buying assets on the cheap with a cash hoard despite the welfare of your neighbor, then you likely are an Austrian.