What growth-economists can’t get into their heads is that most of us in the advanced countries have now reached personal limits in the way of life that is characteristic of our times. In our urban and suburban locales we have a limited amount of time, energy, space and perceptions with which to work, . . . raise a family and relax in leisure pursuits. After about 250 years of rapid change in every aspect of our immediate antecedants’ way of life in the countryside, we have now arrived at quite different, but now largely-stabilised, daily habits.
What this means is that, from now onwards, any goods we buy will either be cheaper or improved versions of those products we already buy and use. They won’t change our way of life to any significant extent. If there are any entirely novel goods (which is doubtful) then they will only find a place in the market place by displacing existing goods — that is, they will cannibalize on the time, energy, space and perceptual attention that previously attended the use of former products. GDP per capita in real money terms thus cannot possibly rise. At the present time, advanced country governments can only increase their taxation inputs by encouraging immigration — by making hay while the sun shines — and forgetting the more distant unemployment that looms as automation continues to make humans redundant in the productive process.
This being so it is difficult to see where a growing per capita GDP — so much desired by politicians — is going to come from except by improvements in productive efficiency by automation which will save on the application of energy (human and machine combined). But this can only produce a stream of declining profits. Although individual firms can achieve high profits for short periods of time because of the immensity of the consumer market all round the world, profit margins overall in the advanced countries, commensurate with declining employment in production, will continue to decline because of intensive competition. The widespread saving-investment-production cycle of the last 250 years — its principal innovation — will gradually dry up.
Obviously enough, economists have been glibly saying for some time that we are now moving into a post-industrial services-based economy but that, otherwise, we have nothing to worry about in the advanced countries. All we have to do is to adjust the educational curricula for the masses. The trouble is that the populations of the advanced economies are now dividing between those who provide increasingly humdrum lowly-paid services to one another for which high levels of education and training are not required, and a smaller body of those increasingly highly-educated personnel who provide highly-paid services. As automation proceeds, then the total consumer market will dry up and only those who are highly-paid will be able to continue enjoying the repertoire of goods that we are used to.