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The foundation for solid returns on investment is a large population with the disposable income to buy products that they did not previously purchase. Since th
by bleepblorp 6y ago
The foundation for solid returns on investment is a large population with the disposable income to buy products that they did not previously purchase.
Since the neoliberal revolution in the 1980s, disposable income for the median person has stagnated or fallen, to varying extents, in the anglosphere. While nominal compensation has risen, these gains have been consumed by inflation and massive increases in unavoidable expenses. In most Anglosphere countries, cost increases for housing, food, transportation, and communications have consumed most wage gains. In the US, the situation has been made far worse by explosive growth in the costs of education and healthcare. In addition, government policies to support the reformation of extractive monopolies for products and monopsonies for labor have further reduced wages and buying power.
The net result is that the bulk of the population is too financially strained to expand their spending to provide a return on investment for companies that create new products and new markets. The median person lives in a stagnating, or even shrinking, economy and all spending is zero sum. Buying the next Shiny Widget means doing without something else, and that's a choice most people can't afford to make.
If capital wants greater returns on investment it needs to redistribute some of its gains to the public in the form of wages and other compensation. Capital, however, has refused to do this and has instead opted for rentier economic strategies that seek to seize a greater percentage of the economic pie for monopolists instead of growing the pie for everyone.
The solution is policies that lower income inequality and reverse re-monopolization, but that's a political third rail that no politician can afford to touch on pain of losing support from the donor class. For an example of how well these ideas fare in American politics, look at the fate of Elizabeth Warren's presidential campaign bid.