26th November 2009
Because productivity in agriculture had been growing faster than demand, we needed to shift resources out of agriculture. The Great Depression did this, rather painfully. I would add that the advent of the internal combustion engine greatly re-organized economic life. Because you could move agricultural produce and other goods around by truck, you did not need central cities surrounded by farms. The farms that used to surround big cities were now converted either to suburbs or wilderness.
World War II got people off of the farms and into industry in cities.
Greenwald goes on to say that the same thing is happening today in manufacturing–productivity has been growing faster than demand. This is a problem for the United States, but we have a fair amount of the restructuring behind us. Japan, China, and Germany are the most vulnerable economies right now.
So we need to get people out of industries and into … what?
The transition would be easier if (a) we did not tell workers in declining industries to expect to get their jobs back and (b) we did not limit access to employment in education and health care through licensing, accreditation, unionization, etc.
And then what happens when we eventually automate education and health care, as we did manufacturing, thus bringing the productivity expansion that hit agriculture and manufacturing?