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Where has all the money gone?

Will the Global Information Society create new work opportunities?

When people ask me how work is going, I feel like replying: "There's no shortage of work, but no money to pay for it." Where has all the money gone? Here lies a fundamental problem.

Apparently it is not healthy for the economy that the mass of money available expand. In so doing money itself depreciates. That is what is called inflation. Yet, if the total amount of money remains constant then, with an ever increasing world population, surely there is going to be an ever decreasing amount available per person, resulting in unemployment, poverty and wide-scale social-unrest if not war.

To come back to the question of the availability of money for new work opportunities, presumably, it has to be taken from elsewhere: by taking it away from competitors, by paying less for raw materials, by reducing costs, by cutting taxes, by lowering wages, by withholding dividends, by diminishing waste,... But hold on a moment, isn't that a self-defeating exercise? Where does the money come from? From exports, from companies, from individuals and from administrations not to mention savings. But if you reduce exports, costs, taxes, wages, etc. so that products are cheaper, then other countries, companies, administrations and individuals are going to have less money available to buy them or other products!

What happens if we redistribute more equitably the total amount of money available? The money to buy goods and services remains the same seen from a global point of view. As far as individuals or families are concerned, a relatively incompressible part of their budget is dedicated to essentials (No not TV! but food, rent, ...). The reduction of wages or fees, will considerably diminish their budget for "non-essential" goods. This would seem to point the way to a more frugal way of living. How many votes do I get for that idea? As for companies and administrations, the redistribution of wealth would imply producing the same quantity and quality with less money. Beyond a certain point, this must prove impossible. Aren't we then obliged to re-consider the nature of products and services that are provided? This is one of the arguments put forward by advocates of the Global Information Society. But will the GIS be sufficient if we don't also change our monetary system?

So what about the Global Information Society?

When governments talk of the Global Information Society, they insist that it will combat unemployment and increase prosperity. How is it supposed to do that?
  1. "Technology reduces costs"
    Experience has shown that technology often reduces costs by replacing a large number of unskilled or semi-skilled work by a much smaller number of highly skilled jobs. More positively it can reduce costs by having people work from home or teleworking centres. Unfortunately, as the whole economy is interconnected, such an apparent saving only results in a shift of income away from transport systems - including the car industry, traffic control, handling pollution,... - , as well as building, fitting out, renting and maintaining office space, to information and communication technologies, builders (for increased sized homes), teleworking centres, community help (to handle inherent social problems),.... This move could very well also reduce company costs by shifting the onus for certain things to the individual (rental, equipment,...) leaving the worker out of pocket.
  2. "Technology increases efficiency and productivity"
    The advent of the Information Society is seen as an occasion to "re-engineer" companies with a view to increasing efficiency and flexibility. On the positive side this restructuring can result in increased empowerment of employees (especially in the case of telework) and consequent improved job satisfaction. On the negative side, at least in terms of employment, the resulting flattening of hierarchies leads to the laying off of much middle management.
  3. "Technology creates new opportunities"
    In the thrilling Wild West of the Information Society a multitude of new opportunities are open to enterprising people. You only have to think of Microsoft, Netscape, and company. "Find your niche, young man or young lady!" Isn't Mr. Bill one of those investing in new talent! Sure. But seen globally, if these entrepreneurs work according to existing commercial logic - and they do - the new opportunities they create are just putting somebody else out of business.
  4. "A knowledge-based economy offers unlimited growth possibilities"
    In the quest for so-called "sustainable development", the reduction of consumption of irreplaceable raw materials can be achieved by shifting more and more commercial activity to information and knowledge products. Such a strategy is limited by the material nature of existence and sustenance. In addition, the apparent unendless possibilities of information markets run up against a very serious and real barrier: the finite quantity of money available to pay for it.

World wares or world wars?

Money has come to mean so much things to so many of us. For some people all can be expressed in terms of money. The other day an economist told me I was a Martian for thinking otherwise. Initially designed to facilitate exchange, money is a representation of value in terms of numbers. Fixing the monetary value of a product is theoretically based on market mechanisms that are supposed to strike a balance between the desirability of the product (i.e. its perceived value or utility for the buyer) and its availability (how rare or common-place it is). You only have to think of Windows to realise that market reality doesn't work that way. In addition, in its greed to englobe everything the market has continually extended the field of objects and activities that can be bought and sold. Just think of the flourishing market in genetic code to realise how far this phenomenon has gone.

Would it be exaggerated to call the current cut-throat commercial competition a World War? A war waged between giant world-wide concerns in which the arms are globalisation and high tech and the casualties by thousands if not millions are the poor, the unemployed, the underdeveloped and the State. Against such a bloody set, worthy of a Shakespeare play but without the humour, there is clearly an urgent need to revise not just our monetary system but more importantly the whole mechanisms of commerce.

Alan McCluskey, Saint-Blaise.

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ISSN: 1664-834X Copyright © , Alan McCluskey,
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Created: November 25th, 1996 - Last up-dated: November 25th, 1996