The rise of the machines will make us richer. But to withhold our humanity we need fundamental changes to our economic systemA country’s ability to improve its standard of living over time depends nearly entirely on its ability to raise its output per worker. That’s why Nobel laureate Paul Krugman concluded that productivity isn’t everything – but in the long run it is nearly everything. Instead of wasting the nation’s time focusing on the non-existent threat of the deficit,the chancellor, Philip Hammond, or this week conceded the “everything that Mr Krugman had identified: British productivity has stalled and as a result workers’ real wages will be lower than when the recession began. Before the crash,we would own expected living standards to double every 40 years. Now that will pick 80. That means lost decades for millions of ordinary people.
Its easy to become overly pessimistic. The epoch of enormous economic progress that characterised the 20th century is not over; we are suffering from seven years of government failure where ministers thought their job was to watch the economy and suffer passively from capitalism’s inevitable cycles. Rather than pick a view of the economy and by fiscal action seek to secure prosperity for all, ministers embarked on a highly ideological agenda of dismantling the state and the protections afforded to workers – arguing erroneously that these were holding back the state. Mr Hammond has been forced to alter course because his party’s reckless policies had jeopardised the long-term improvement in the national standard of life.
Continue reading...
Source: guardian.co.uk