Maybe our society needs a refresher course on just what supply and demand means in order to fully understand what has created both the May Day demonstrations and the push for a $15 an hour minimum wage in Seattle.
It has been well understood that if demand outpaces supply, costs rise.
But that understanding seems to have faded. In today’s world dominated by political and economic thinking that believes unlimited growth is possible — even as demand inexorably continues outpacing the supply of all resources — that economic truism has faded from consciousness. To pursue this growth is the basis of our economic policy. Those with money and political power push for whatever fuels demand-enhancing rapid population growth, while ignoring the fact that the demand is created amid an ever-diminishing supply.
So we print more and more money inflating the value of the top few percentages, and that makes the unrest among the increasing numbers on the margins understandable. And this is exacerbated politically as the more malleable middle class continues diminishing.
This increase in demand has made a mockery even of the use of the word inflation. It is probably why we put out “official” statistics on inflation that essentially ignore most of what people spend money on, from food and energy to living quarters, and we constantly ignore the meaning of compounding.
The compounding of the rate of growth means that what appears to be a small percentage gain, say 2 percent, actually produces a doubling of growth that will occur in about a third of a lifetime. One becomes two, and 150 million becomes 300 million in 36 years. Thus a small sounding percentage gain sounds like minimal growth when it actually is producing rapid growth.
Rapid growth profits those who have at least some form of ownership over extensive resources, whether money, land or industrial capability, and the political and economic system makes sure their interests have a constant priority.
The push for more of everything, and the thinking that abundantly available people provides what is needed, permeates every level of society today. Consequently there is a push for whatever policy maximizes access to more and more people. Because this population creates ever-more economic demand while at the same time providing profit-enhancing cheap labor, it develops special traction. All these economic and political forces are now mobilizing behind the banner of Comprehensive Immigration Reform, a kind of Obama “reform” that is a regurgitated George W. Bush reform. It would change our past inundation of illegal immigrants to a policy of legalizing the status of millions of those immigrants every year while also significantly increasing legal immigration.
This results in population growth at an “explosive” rate, and that causes essential resources to be consumed ever more rapidly. To understand how absurd our policy is, consider two things: The explosive population-growth rate provides the biggest contributor to our poverty rate while at the same time it rapidly increases ecological degradation. And ecological health is the most essential factor necessary for an expanding population.
What does this have to do with a $15 minimum wage?
First, in order to societally finance the accumulation of debt that results from maximizing this demand, we ignore the relationship of money to value. How much we can “borrow” is now determined by how much “value” we can declare already exists — by printing more money, we give that value an appearance of being. As a consequence, a 1 percenter millionaire from the 1940s now has to be a billionaire to be a 1 percenter. And those 1 percenters now allocate to themselves whatever they wish, and this especially involves ignoring limits.
Second, the knowledge of this has slowly sunk into the 90-plus percent who find themselves slipping downward in value. Believing they have a voice in an assumed democracy, they now use whatever is at their disposal to get at least some room in the trough. Thus, previous promises of democracy — that a society is of, by, and for the people — justifies making and demanding more.
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