It’s been said, accurately, that economics will never be a science because there are no objective analysts, and every school of analysts creates winners and losers. In other words, every economic theory affects the income and wealth of different categories of people and in different ways.

    Each analyst operates from a base of assumptions: that an economy should benefit the greatest number of people, and even the least should have a comfortable living—or it should benefit primarily the elite, however they are defined, and the lowest on the economic scale should be willing to sacrifice some comforts in return for the leadership by the elite.

    The following front page story in the Wall Street Journal describes the different philosophies perfectly, and illustrates why our current economy is deliberately designed to create an American aristocracy, with its attendant servant class.

From The Wall Street Journal, April 2.

The Future of Jobs:
New Ones Arise,
Wage Gap Widens

Outsourcing, Technology Cut
Need for Rote Workers;
Brainpower Is in Demand
Hot Area: Massage Therapy

… Tens of millions of increasingly skilled Chinese and Indian workers are joining the global economy at a moment when technology can dispatch white-collar work overseas almost instantly—from call centers to sophisticated design projects, the very jobs that discouraged U.S. factory workers hoped their children would get.

The good news: The U.S. almost certainly isn't going to run out of jobs, even though history shows that it's impossible to predict what new jobs will replace those that are destroyed. The bad news: Outsourcing overseas and technology could widen the gap between the wages of well-paying brainpower jobs and poorly paid hands-on jobs….

One unpleasant possibility, acknowledged even by those firmly in the trade-is-good camp, is that jobs will proliferate at both ends of the barbell—and fewer in the middle. The result would be an ever-wider gap between well-paying jobs and poorly paid jobs. That, too, has happened before, as recently as the 1980s when unionized skilled manufacturing jobs evaporated….

The overall pace of wage increases in the U.S. generally tracks growth in productivity, the amount of goods and services produced for each hour of work. But in any economy, wages for workers in high demand rise and wages for others lag or even fall….

Without a major change in policy, such as an increase in the minimum wage or restraints on immigration, or a seismic shift in the economy, such as a surge in unions or limits on imports, the economic forces widening the gap between wages of winners and losers appear strong….

"There are two kinds of lies that politicians tell about outsourcing," says Mr. Levy, the MIT economist. "One is that we can turn it all back. But even if you cut off all trade, technology can do the same things to workers. The other is that education is all that matters. That's true, of course, but only in the long run."…

Without better elementary and high schools, wider access to college and more training of mature workers, the gap between those with well-paying and poorly paid jobs is certain to grow.

Over the next five or 10 years, though, better high schools, more college-student aid and more pervasive workplace training don't seem sufficient to stop outsourcing, trade, improving technology and relentless cost-cutting from widening that gap.

 

• "Outsourcing overseas and technology could widen the gap between the wages of well-paying brainpower jobs and poorly paid hands-on jobs.” Of course, that’s the whole point. The established wealthy and their offspring will have lives of luxury, and the poor and their offspring will be their servants.

   

• "The result would be an ever-wider gap between well-paying jobs and poorly paid jobs. That, too, has happened before, as recently as the 1980s when unionized skilled manufacturing jobs evaporated.” And that, ladies and gentlemen, is why corporations have always done everything they could to destroy unions. Prior to globalization, unions had at least some power to negotiate for better wages and working conditions.

   

• "The overall pace of wage increases in the U.S. generally tracks growth in productivity.” This is one of the most pernicious lies of conservative economists. Wage increases are always the result of power—not productivity increases. Our 40-hour workweek and time-and-a-half for overtime didn’t result from increasing productivity, it was because a progressive President Roosevelt and a progressive Congress passed the Fair Labor Standards Act in 1938.

   

• "Without a major change in policy, such as an increase in the minimum wage or restraints on immigration, or a seismic shift in the economy, such as a surge in unions or limits on imports, the economic forces widening the gap between wages of winners and losers appear strong.” This one statement has the real answer for making our economy work for the benefit of working Americans as well as for our current crop of greedy, materialistic and powerful investors (our new class of aristocrats).

      We’ve got to repeat the same kind of 1930’s legislation that allowed our country to overturn the wretched excesses of the 1920s. And it’ll never happen as long as Republicans and conservative Democrats remain in control of Congress and the executive office.

   

• "One (lie) is that we can turn it all back.” That’s simply not a lie; we can turn it back. We had globalization in the 1920s (although not nearly as much and with not nearly the detrimental effect on our middle-class) and we turned it back. With the proper legislation, we can do it again.

   

• "But even if you cut off all trade, technology can do the same things to workers.” True, but it doesn’t have to be true. Through legislation, we could insist that workers share in the increases of technology and productivity, by, among other things, reducing the national workweek—just as we did in 1938.

   

• "The other (lie) is that education is all that matters. That's true, of course, but only in the long run." It’s not even true in the long run. India, China and other countries are also improving the education of their citizens. As always, education isn’t the the key to a good living standard in any country. In every country in the world, it’s those with political power who get most of the benefits from their economy. The only role education plays is that the educated and wealthy are better positioned to exert their political influence than are the poor and uneducated.

   

• "Over the next five or 10 years, though, better high schools, more college-student aid and more pervasive workplace training don't seem sufficient to stop outsourcing, trade, improving technology and relentless cost-cutting from widening that gap (between the aristocracy and the poor).” This is the truest statement in the article. And, amazingly, it’s on the front page of The Wall Street Journal.

    Note: this is a very brief excerpt of a very long front-page article and is intended for purposes of criticism only. Those who wish to gain a greater appreciation of the entire issue as presented by the Journal—or feel that I may have misrepresented the article’s intent (and I took pains to make sure I haven't)—should read the original.

Chuck Kelly is at http://www.KellySite.net. He holds a Ph.D. in industrial communications from Purdue University, is now a retired management consultant, and author of the books, THE DESTRUCTIVE ACHEIVER, THE GREAT LIMBAUGH CON, and CLASS WAR IN AMERICA. This article is originally published at opednews.com. Copyright Chuck Kelly, but permission is granted for reprint in print, email, blog, or web media so long as this credit is attached