Ralf Einert

THE WORLD SPIRIT - Part 2:

Studies of Economic Change

Fundamentals

It became evident that from the parameters of the economic performance as the gross domestic product, the population, the employment rate, the hours worked, and the labour productivity only the hours worked and the unemployment rate deduced from the employment rate remain as controllable variable. The option to increase employment by reducing the productivity caused by wage and social dumping should not be considered as a solution as it leads to a lack of international competitiveness in the long term. Different assumptions about the development of the gross domestic product and the labour productivity are the reason for the fact that economic growth does not stand on the left side of the equation any longer.

The traditional thoughts assume that economic growth is good in any case. Wolfgang Uchatius for example writes in the article "Wir können auch anders" in DIE ZEIT no. 22/2009: "The individual benefit increases if more goods and services are purchased." [Translated by the author]. Therefore the economic principle "more is better" would be true. Contrary to this the "law" of diminishing marginal utility says that "marginal utilities are diminishing if the use of a good or service continues until saturation takes place." [Wikipedia, translated by the author] This means "economic growth makes you happy, but only if you possess a little. Beyond a specific level more growth does not increase your happiness any more." [Wolfgang Uchatius, translated by the author] More is consequently only a little better. Therefore we do not need economic growth.

This means declining economic growth rates in industrialised countries are normal and similar to a natural law.

The Deutsche Bundesbank believes according to the article "Zur Entwicklung der Produktivität in Deutschland" in its monthly report from September 2002 that an increase of the labour productivity is a disadvantage by writing: "The rate of the labour productivity is influenced amongst others by the real development of the labour costs. If they increase too fast labour is disposed to be substituted by capital and the employment threshold, the level when employment increases, goes up." [translated by the author] Despite this labour can also be replaced by intelligent and efficient communication. Contrary a high productivity rate seams to be an essential criteria to ensure the international competitiveness in the long term in my opinion. Low wages are according to the statement of the Deutsche Bundesbank necessary to reduce the unemployment and to increase the economic growth. Transferring the idea of the evolution theory to the economic development it can be shown that as continuous acting impacts on the environment support the development of the creatures high economic impacts on companies contribute to the increase of the productivity. Therefore high wages can be positively evaluated as they support the increase of the productivity.

This means increasing productivity rates caused by high efforts ensure the international competitiveness.

Economic growth rates which are higher than the increase of the labour productivity solve the problem of unemployment according to the traditional thoughts. But only a positive attitude towards high wages ensures the competitiveness as well because it leads to increasing productivity rates above the level of the economic growth.

The in fact decreasing productivity rates in the last years could be contrary to the thesis of increasing productivity rates. But this is mainly caused by low efforts as low wages increases and stagnating working hours.