Abundant Scarcity
Paul then continues his Malthusian vision of the immediate future, by discussing the projections of a growing global population, and the effects of that population increasingly being an older population, with a smaller proportion of working-age people to support it. There are numerous problems with this analysis. Firstly, Paul takes the growing population of Africa, and projects this forward to also draw conclusions about future migration to Europe etc. But, nowhere in this analysis does Paul take into consideration the role of African economic development. Of the ten fastest growing economies in the world, seven are in Africa, over the last decade. Ethiopia has been one of the best performers, with annual growth of more than 10%, for more than a decade. Not only will African economic development have a powerful positive feedback loop, but, as with economic development everywhere, the consequence is likely to be a sharp fall in birth rates, and slowing of population growth.
As far as an ageing population generally is concerned, Paul's argument falls under two headings. Firstly, this ageing population will impose greater health and social care costs, and secondly, it becomes more difficult to sustain the pensions it requires, especially as a global debt timebomb for sovereign bonds is likely to explode and thereby destroy the capital base of all those funds invested heavily in those assets. The short answer to this is pensioners do not eat paper money, or paper share and bond certificates, but consume real commodities and services. If as Paul suggests we are headed for abundance of such commodities and services, resulting in lots of “free stuff”, his problem disappears. It's a growing surplus product that pensioners depend upon.
I referred to Paul's first point, in relation to Chapter 8. My next door neighbour, who is a consultant plastic surgeon, on Merseyside, recently appeared on Newsnight's coverage of the NHS at 70, and the role of technology in its future. He made some of the points I have made here, and that I have also set out further in various posts over the years. Technology is already such that data about our health can be constantly streamed from wearable devices, monitored and analysed by AI systems. Early diagnosis and intervention by investment in primary care, rather than expensive hospitals, is cheaper and more effective. Technology is also rapidly developing to provide a range of cheaper and more effective remedies using gene therapy, and individually designed drugs etc.
As far as the financing of pensions is concerned, Paul here seems to be suffering from a form of money illusion. Firstly, if we take all of these bonds held by pension funds, the real problem is not that prices will correct, but that they have been so astronomically inflated over the last thirty years. Its that which prevented workers acquiring them for their pension funds, but which also simultaneously led to falling yields on those bonds, thereby reducing the revenue stream that pension funds require to meet their future liabilities.
A crash in bond prices means that workers pension funds will be able to buy far greater quantities of them (as well as company shares etc.) thereby effecting a considerable transfer of wealth out of the hands of money-lending capitalists, and into the hands of workers. It also means that the yields on those assets will rise considerably, making pension funds more, not less sustainable.
But, secondly, in focusing on the money pensions that these funds can provide, Paul simply accepts the line that governments, and the apologists for capital have been pushing. What pensioners require is not money per se, but the commodities they buy with that money. The reason that the arguments put forward for raising the retirement age are bunkum is that, over the last century, productivity levels have increased massively. A worker today, even allowing for a higher standard of living, produces a surplus product way in excess of what a worker a century ago produced. The workers' pension is, in the end, nothing more than a portion of the surplus product, stored up, and consumed later, as deferred wages. Whatever might be the case with the monetary values in pension funds, the real basis of the sustainability of pensions is the size of that surplus product, and that is a function of the development of technology and labour productivity.
In discussing Bogdanor's “Red Star”, in relation to an earlier chapter, I noted the incongruence between a Martian communism founded upon abundance with the idea that Martians voluntarily committed suicide when their numbers exceeded the planet's resources, or that they needed to colonise Earth to resolve their own scarcity of resources. That very same incongruence is obvious in the last three chapters of Paul's book, compared to the first seven, and compared to his central thesis that info-capitalism is creating abundance, reducing values to zero, and thereby making available lots of free stuff.
If productivity rises, and values fall, alongside growing abundance, then even falling money wages and money pensions buy all of the consumption goods we require, which is also why things like a Universal Basic Income, which is itself an ill-conceived idea, become irrelevant. Moreover, that same abundance makes talk of energy shortage nonsensical, alongside problems of pollution and climate change, because near zero value commodities mean that we could rapidly install all of the wind, solar, tidal and other power generation required; we could quickly replace petrol engined cars with electric cars and so on.
In short, the catastrophist narrative that Paul seeks to utilise as the vehicle for the failure of capitalist production, and spark for the rise of a post-capitalist alternative is inconsistent with his central thesis that capitalism itself had morphed into info-capitalism, which raises productivity, and generates abundance, which is the material foundation upon which his post-capitalist society is based. The ultimate reason for Paul falling into this contradiction is that a) he believes that for a new mode of production to arise, the previous mode of production must collapse, b) he focuses his attention on the mode of distribution – obligation, market, abundance – rather than on the mode of production, and the central issue identified by Marx and Engels – the property question.
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