The economy feels like it’s booming. Stock prices are up, house prices are up, growth is somewhat up, unemployment is virtually non-existent, but wages are barley moving from their lowest level in decades.
While our parents in youth saw wage growth of as high as 8%-9% a year, this generation has to make due with barely 2.5%. Less than the current general inflation rate of 3%, and far less than the real inflation rate which takes into account house or rent prices.
The above chart is incredibly curious. In fact, besides the chart showing a significant spike in monetary supply around 2008-10, there is no more defining chart in economics.
Something clearly happened in the 80s, precisely around 1982. What, exactly, is difficult to say, but we suspect the matter of money creation is at the root of all this.
Most of the millennials, currently the biggest generation across the globe, was born in the late 80s or early 90s. One of their defining image is the fall of the Berlin wall, and thus the fall of communism. But that was preceded by a different fall of a communism of sorts in developed, western, nations like Britain and America.
Keynesianism, or a state driven market economy, had dominated post World War II Europe and America. Yet its policy of borrowed spending and money printing growth seemingly led to an inflation rate of more than 20% in Britain, some 15% in America, and unemployment levels unseen since the Great Depression.
Just before all that, in or around 1975, national currencies were decoupled from any anchor to reality by fiat money no longer becoming equivalent to any amount of gold.
It is here, in this very decade, in the 70s and early 80s, when the current mess we have seen for the past two decades in Arabia begun. For there was the oil crisis by Arab nations flexing their muscles, here is when suicide bombing ideology was invented as a political tool, and so on.
Finally, it is in this decade when developed economies structurally transformed from producing raw, or primary, materials, to manufacturing and then service economies.
That was or appears to have been due to an increase of exchange rates by developed nations making their imports far cheaper, thus their production of primary materials uncompetitive, to the point “by April 1983, Britain, once known globally as the “workshop of the world” became a net importer of goods for the first time in modern times.”
It is also during this decade when Keynesianism was shelved in favor of the Austrian school, or Hayek, or neoliberalism, or monetarism, or whatever you want to call it. With Hayek then shelved again in favor of Keynesianism in/after 2008 like silly football.
We are not told any of this history in school, even though now 50% spend 18 years of our lives there, but even current elders take no time to educate whatever.
Instead we have economists arguing not just between left and right any longer, but within their own camps. And their arguments regarding this pitiful wage growth, which in reality is actually wage decreases due to inflation, focuses on the same old debates that they keep repeating like a broken tape.
They keep telling us of supply and demand. Yet what choice does labor have to not supply? Currently, or at least recently, that choice is/was pretty much none.
Now, however, or soon enough, everyone will, or we hope will, be able to choose between a fixed wage or taking a sink or swim to start their own project which can provide sufficient income comparable or higher than wages.
In this space we are currently fighting for this freedom of choice, for the freedom to allow individuals across the globe and within our own nations to be able to finance their own ventures, so that they do not have to sit in cubicles at the diktats of Bezos and the rest who publicly proclaim they have so much money, our money, they do not even know what to do with it.
Without this choice, which the law currently prohibits thanks to the discriminatory Securities Act which limits value creation to only accredited rich investors and banks, there is no real labor supply, for one has little option but to supply that labor.
Which is why ICOs are so radical, even in their current form. They would be a lot more radical in a DAO setting and avoid the many problems of trust which can lead to fraud or theft, but even in their current form, with some self-regulation, giving the people this choice of whether they want to work for someone or work for themselves or get together and together work for themselves, is pretty radical.
It is probably only once that barrier is removed, only once labor has a choice whether to supply or not, only once employers have to compete with far better alternatives, that we’ll see some proper wage growth in line with productivity and that we’ll see a reduction of inequality, and that we’ll see more meritocracy, and that we’ll be spared aristocrats using so many words and subtleties to in effect tell us they are still aristocrats.
But that freedom won’t just be given by anyone. Plenty in fact will do their best to confuse, and tell us they are lauding us while within the same words in fact chaining us.
Nor does it need to be given. This miraculous time has gifted us the asymmetric knowledge of code, so making the world, at least here, fully flat. It won’t last, but for a decade at least we can hopefully enjoy this unique period when man can see how he can get out of the box.