Edward Luce has written a very depressing book, ‘Time to Start Thinking, America in the Age of Decline’.
His basic thesis is that as manufacturing declines in America there is evolving two tiers, the very wealthy and those who provide services for the very wealthy. In other words it is inevitable that only two classes will exist, the rich and the poor, with a dwindling middle class.
The anecdotal evidence seems to support this theory.
We see the wealth concentrated in a few and the middle class seems to be losing.
Is this inevitable?
As the service sector increases and manufacturing decreases it does seem inevitable. Service jobs seem destined to offer smaller rewards. An economy that is driven by consumers doesn’t seem very stable or even sustainable.
This conclusion would seem to support the Democratic view of the country. By catering to the demands of the lower class they can maintain their power and position. As America declines their positions put them in the higher class and provides a higher standard of living. They are in a position to take advantage of a shrinking economy. It will even be to their advantage to accelerate the decline at least initially.
The question is whether there is a way out of this apparent ‘death spiral’?
I’m not sure, but I am sure that the current emphasis on regulation and taxation is only going to speed up the process. Making it harder to start a new business will only drive that business to another country where it is easier. Taxing earnings will only decrease the initiative to earn.
Building a welfare system that penalizes earnings will only lead to less effort.
Cronyism, protecting existing business via the tax code and regulations, only stifles competition and innovation.
We must not let the government force us into economic ruin.