Studies of Economic Change

Introduction

The "Studies of Economic Change" are divided into theory and practice. The practical part is described by chapter 1 to 9. From each chapter the fundamentals of practical action can be derived from. These fundamentals are summarised to a system of goals. Finally a list of measures is proposed as solution while considering the conflicts of goals.

The following chapters are looking for the evidence and the consequences of the theses that ...

1. the economic growth is determined by the "law" of diminishing marginal utility and
2. the labour productivity is influenced by the idea of the evolutions theory.

From these studies a system of goals is derived from which contains the necessity of ...

1. increasing the wages and
2. reducing the hours worked.

Therefore it should be shown that ...

1. there are wrong interpretations of economic statements and
2. profit maximising by increasing the hours worked is stupid.

• Begin:
  At first it is outlined that and why the executed principles of the economic policy do not match with the current economic and social situation. Consequently there is a problem which has to be solved and which leads to the necessity for a change of perspective.
• Assumptions:
  Then the gross domestic product is analysed as a factor of population, employment, hours worked, and labour productivity. If it is true that the gross domestic product is determined by the "law" of diminishing marginal utility only working hours, unemployment, and wage and social dumping remain as variable.
• Demography:
  An analysis of the labour force participation for different age groups of European countries is transferred to the demography of Germany to show that the relation of the employed to the population can remain on the same level even in the year 2050. As a result the retirement pays are secure.
• Unemployment:
  The development of the gross domestic product, the population, the hours worked and the labour productivity is extrapolated to scenarios about the unemployment rate. In connection with the assumptions only the variation of the hours worked remains as controllable variable which contributes substantially to the solution of the social problems.
• Worst case:
  The extrapolation of historical trends to the future is limited. This is demonstrated by the impact of taxes and duties caused by ensuring the social welfare due to the unemployment on the average income. The social cohesion in the sense of a community based on the principle of mutual solidarity is therefore in danger.
• Life cycle:
  The life cycle of industrialised countries is based on the idea of the evolution theory and follows the "law" of diminishing marginal utility. A sustainable development requires consequently a change of perspective as the economy is nearly saturated.
• Wage spiral:
  High wages force employers to establish problem solving capacities. The successive rationalising of the company processes has two alternative consequences: First the disintegration and collapse of the society by making jobs redundant. Second the appearance of society of leisure time by reducing the hours worked. Low wages are a confession of failure.
• Labour demand:
  The increasing labour productivity caused by innovations leads to a decline of the labour demand. This is interchanged with the decline of the labour market caused by high wages. In fact this effect is compensated by an additional demand for goods and services caused by an increase of innovations.
• Labour market:
  The consequence of the analysis of the supply and demand of the labour market is that there will be no intersection between supply and demand in the near future anymore. There is no real market for labour. The arise of unemployment is a mistake of the system. Measures which put to much pressure on the unemployed could cause the fury and courage born of despair.
• Inequality:
  The continuous increasing labour productivity causes the arise of unemployment and wages below the poverty line. As a result making money is based on the use of the social structures while e.g. unemployed are systematically cut off from the use of the social structures.
• Goals and measures:
  The last chapter summarises the consequences of the previous chapters. They are reformulated to a system of goals. Considering the conflicts of goals measures are deduced to solve the economic problems. Finally the quality of the measures is evaluated.

Theses at the beginning