In college, Economics 101 is often described as the social science discipline that deals with the production, distribution and consumption of goods and services. MIT Economist Paul Samuelson liked to focus on scarcity, or more specifically, the allocation of scarce resources. “Abundance” was always a pretty word with an idyllic connotation for Professor Samuelson. I often wonder why there weren’t a few classes about the real-life consequences of abundance, along with scarcity and people’s material welfare.
The present generation of internet technology is a proper subject of study within an economic framework. It might help us understand what is happening to our society.
Let’s start with today’s highly-touted information age. At our finger-tips is the greatest free trove of information in human history. We can get it quickly and efficiently. Are we more informed? Are we hungry for more information? Do we read more books in an era of record production of books? Do we know more about what our congressional and state legislators are about? Are we more knowledgeable about history and its lessons?
My sense is that the present generation of students knows about popular art and music, and has a nascent awareness of current events. But an unfortunate consequence of the abundance of information available to them is that too many students have left themselves less informed than their predecessors about serious information regarding our overall society and the world. This includes geography, politics, economics, literature, history, the side effects of technology, the interactions between consumers, workers, taxpayers and corporations, the doings of City Hall, or even how to cultivate gardens. Alas, the virtual reality of the culture of addictive distractions and stupefying daily routines still reign.
Just about everyone now has a smart phone with which they can enter an endless world of spectator entertainment, video games, and checking of messages by the minute, to name a few of the engagements. Granted, serious news, feature stories, lectures, rallies, programs, and other materials are also available. Judging by the Twitter followers of Hollywood celebrities and even famous cats, dogs, and horses, for some internet users there is a crowding out of information that matters most for a functioning democracy. And unless you’re in one’s inner circle, try having a two-way communication with someone using any of the new technologies without long waits. The age of dial phones and letters had more than charm.
Energy presents another example of abundance. Historically, the United States had abundant, cheap energy and, with Canada, set the world’s record for wasting it; while Japan had limited domestic energy resources and became much more efficient in using what they produced and favored efficient cars, homes, and appliances. Energy efficiently used means less pollution and fewer greenhouse gasses.
Abundant cheap water has led to much waste of water. When water rates go up there is more efficient usage. California is experiencing water shortages and as a result of scarcity in combination with regulatory restrictions, people in California are wasting less water.
Making our abundant “commons” – owned by the American people – available to exploit freely or nearly so by corporations has led to vast wastelands. The public lands – one-third of the U.S. landmass plus huge off shore areas – are open to oil mining and timber companies for ridiculously low-price leases. For hard-rock minerals like gold and silver, the 1872 mining act only requires as little as $5 an acre to extract billions of dollars of minerals a year. No Royalties are required. Such unlimited use takes away the people’s resources with nothing but cleanup costs for the mining wastes left behind for taxpayers. (See bollier.org.)
When FCC chairman, Newton Minow, called television a “vast wasteland” in 1961, he wasn’t just speaking metaphorically. The radio and television broadcast stations control our public airways 24 hours a day. Because “We The People,” who are the landlords, do not reserve time daily for audience networks and also do not charge the stations for their use of public airwaves, broadcasters can waste their round-the-clock abundance (see Claire Riley’s “Oh Say Can You See: A Broadcast Network for the Audience,” Virginia Law Review (Fall, 1988)).
A relatively new entry in the world of abundance is corporate capital. The cries from business about a capital shortage in the 1970’s, so as to get more tax breaks, have long been muted by the trillions of dollars the U.S.’s big businesses have lying inert here and abroad. Such abundance has led to hundreds of billions of dollars in unproductive stock buybacks since 2000.
A leading analyst of big business behavior, Robert Monks, has called such buybacks a clear sign of incompetent or unimaginative management. By this he means that such profits should be used for productive investment, better wages, or more dividends to shareholders, mutual funds, and pension trusts who should be exercising more of their ownership leverage.
Instead, the corporate bosses prefer to apply such profits, derived from the sweat of their workers and also government provided corporate welfare, to reduce the earnings per share ratio which enhances the criteria for increasing their already sky-high executive compensation. Stock buybacks rarely sustain a higher share price.
What to do with this expanding phenomenon of “abundance” in a world wracked by public and private poverty and its damaging fallouts? We must impose wisely-used charges or taxes on the abundant commons. For example, charging royalties for hard-rock mining and raising leases to market-based prices for other publically-owned resources can be used for needed land reclamation. Charging rent for the use of public airways can pay for better interactive programming and establishing audience networks. Imagine how an audience network could facilitate the potential for the people to summon campaigning politicians to real debates on their own radio and T.V. stations.
Requiring telecommunications companies to donate some of the profits they make from customers who pay exorbitant fees to use smart phones could provide revenues for the development of civic applications, and would help to offset the trivialization that has arrived with the technology.
As for the capital glut, an excess accumulated profits tax will provide an incentive to put such capital to productive work or return it the shareholders – the owners of the corporations.
We’d better think more about “abundance” and its negative consequences.