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This post was edited by abramicus at 2016-7-10 04:58|
Traditional economic theory conveniently assigns four factors of production as being land, labor, capital and enterpreneurship (risk-taking activity), or maybe five, including technology. The output is a product, which can be a good or a service. In reality, the goods produced can in turn become factors of production, as could the services be used for further production. This much is part of traditional economic theory.
What is logical for the firm, however, may be inadequate or incomplete for the country, in that for a country, labor should not be considered a mere factor of production, but also a product of consumption. And this is very true in how upper class families employ maids and chaffeurs for their personal comfort and convenience. The functionalities of cellphones and social media serve the needs of individuals to communicate with friends and family. This much is standard fare for a consumption-driven economic theory.
But this too is inadequte to conceptualize the economy of a country as big as China that can be the equivalent of a small planet, that can subsist on its own for centuries, without trading with any country, if it chose to.
In fact, a sustainable economic model for a country like China has to be self-innovating, self-regenerating, and basically, remaining in self-equilibrium for as long as it wishes.
This article begins the debate about just one aspect of what a self-sustaining economy should be like in the context of the China of today, 1.35-billion-strong.
Today, we will discuss the most important aspect of a self-sustaining economy, how to regenerate labor. Here, we deviate from the tenets of Western economics, and posit that the ultimate aim of production efficiency is not to achieve the greatest profit (for the firm), but the redeployment of labor, freed from menial, boring or dangerous activities, toward the satisfaction of the higher and more sophisticated needs of the human being (for humanity).
If machines can replace manual labor in producing cars, human labor should be re-deployed in using cars to satisfy the needs of the populace in traveling to see sights, to meet folks, or to coordinate business. Of course, we have not yet reached that point, and labor is still needed in the production of cars. But as Uber demonstrates, people need other people to drive cars for them, to even own the cars for them and maintain them. As computers replace human calculators, they need programmers. As programs are created, they need expert users, and so forth. In short, one of the main objects of production is the production of jobs. This is an essential part of the self-sustaining economy of the future that China should aim for - to produce ever more jobs, requiring less sweat, and permitting more human creativity and achieving not just satisfaction of basic needs for food, shelter, healthcare, transportation, communication, and clothing, but of higher needs to help those who are less fortunate in their biologic endowments or in their economic status, and such jobs should be jobs, not volunteered unpaid work. Such jobs cannot be created by private enterpreneurs, because they do not generate profit for individuals. Such jobs must be created by the state, because they generate benefit for the public. This is the direction that reform of SOES needs to take seriously into account, in that the jobs they create did satisfy the basic needs of their workers, but the SOES should not be dismantled just because the private sector has finally caught up with the heavy industrial firms that formed the SOES, and can replace them with more efficient technology, and thus, leave the old SOES workers to find jobs on their own! That would have been repaying the heroes of China's economic advances of the past with layoffs and starvation! Rather, the SOES must ensure that each worker laid off a job that is replaced with technology with greater efficiency, can now work in another capacity at equal or better pay, to provide a new service based on the efficiencies created by China's new technological products. Creating jobs is not easy, but it is an inescapable responsibility of the state, especially towards those who helped the country achieve its present day prosperity. Farmers who fed the people using water buffaloes when mechanized equipment were not available should not be left to beg for food when mechanized farming becomes widespread. Maybe, they should be given jobs as orderlies or guards of nursing homes for the aging population, where their work is much needed, as the young people are working at newer jobs now available, but not earning enough to employ them using their limited earnings yet. Government subsidized healthcare workers may be the kind of labor now needed by a society able to replace 100 farmers with only 1 using mechanized farming tools.
The list can go on and on. Things that the government says it does not have funds for, actually it does. The government have to just assign a person in an old job at a SOES to another job that provides a service that modern equipment cannnot yet provide, such as basic nursing home care, that is now in great demand, as the traditional family structure is replaced by mobile nuclear families. The money is there, the need is there, but it is up to the government to create the job and the training for it, to satisfy a social need that private enterpreneurship has no incentive to provide, maybe because its resources are better deployed at more profitable activities which the country ALSO needs.
So, please, do not follow the self-serving advice of Western economists to dismember the SOES and send their workers out with minimal guarantees and chances for re-employment. Rather, create new SOES adapted to the location and resources of the regions where the old SOES are situated, build the facilities, provide the initial funding, and training, and then re-employ these workers in jobs that pay equally well, but require less hardship, to generate new services that the public needs but cannot yet obtain. This is the meaning of regenerating LABOR, rather than simply destroying it or discarding it, like the wasteful ways of the old industrial countries, that leave in their wake a Chernobyl of demoralization, anger, and social injustice.
The need for human labor that machines cannot provide in healthcare and long term care of the elderly and disabled is something that should form the nidus of the new Chinese economy. And, unlike the West that is embarrassed by its GDP reaching 18% spent in healthcare, China should choose to achieve it ahead of the world, because the purpose of all the economic prosperity of the country is not just to live, but to live healthily, and with as much comfort and convenience as its renewable resources and workforce can provide. At that point, China would have the highest standard of living, without the cost, in the world.