The Pressing Problem Nobody Dares Discuss

The Pressing Problem Nobody Dares Discuss

Perceptions may well change when the global illusions of solvency and “growth” collapse in a heap.

The list of pundits jostling for air time to add their two cents to discussions of hot-button issues such as immigration is endless. The airwaves and social media are overflowing with people wanting to comment on hot-button social issues, but when it comes to the the one truly critical dynamic that will shape the future–everyone’s strangely silent.

The reason nobody dares address this problem is that it has no solution within the current mode of production, i.e. the status quo. The problem is an oversupply of labor.

One of the key takeaways from historian Peter Turchin’s new book Ages of Discord is that real wages stagnate or decline in periods of labor oversupply and rise in periods of labor shortages.

This is common sense: the price/value of everything is ultimately set by the dynamics of supply and demand: the price/value of anything that is overly abundant drops. Or put another way: if demand is outstripped by supply, prices decline as long as there is surplus supply.

If supply continues to exceed demand by a wide margin, price can drop to near-zero. Consider the cost of telephony bandwidth. With the advent of fiber optics, the quantity of bandwidth available globally for telephony far exceeded demand, and the cost of bandwidth fell to pennies.

What generates an oversupply of labor? David Hackett Fischer discussed the core demographic dynamic in The Great Wave: Price Revolutions and the Rhythm of History: as labor productivity/land under production increases, food supplies increase. This increase supports a higher birth rate /population, and eventually the population of workers swells to the point that the supply of labor exceeds the demand for labor by employers.

Once the available productive land is under cultivation, the surplus population is pushed onto marginal lands that cannot reliably sustain high yields. The net results are famines and food shortages as crop failures on marginal lands are inevitable.

With labor in permanent surplus, wages stagnate or decline, and the result is a generalized immiseration of the laboring class that eventually leads to instability/upheaval.

In the current era, Turchin identifies three sources of surplus labor: the increase in population from birth rates above replacement levels; immigration and the mass movement of women into the work force after 1970.

Each of these demographic sources added tens of millions of laborers to the work force.

If we set aside the many emotions generated by immigration and just consider statistics, we find that the U.S. added almost 14 million new immigrants in the decade 2000-2010. A Record-Setting Decade of Immigration: 2000-2010.

In periods of strong job growth, demand from employers is high enough to absorb the added supply of labor from native population growth and immigration. In periods of stagnant job growth, immigration adds to the oversupply of native labor from population expansion.

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