Aggregate demand describes the total demand for goods and services in an economy. It is used often in economic analysis but it is a difficult concept to handle in argument. What makes up that demand matters as much as the total demand for purposes of describing quality of life in that economy, the general welfare of the Founding Fathers.
An aggregate demand made up of Teslas and one made up of Rolls Royces are two radically different categories in their consequences and that is the trend in the American economy. As wealth concentrates in a consumerist economy either transfers of wealth will be made or the whole thing will collapse in demand shortfalls.
That, interestingly, is the same effect one gets when introducing capable, intelligent, and dextrous robots to the assembly line, transfers of wealth or demand shortfalls. We're just rehearsing for the potential catastrophe to come.
How do we manipulate the composition of aggregate demand so that we support the economy against demand shortfalls and promote quality of life?
The question is beyond Keynes. First, Keynes originated the view that in recession one could borrow against the body politic to maintain employment and support aggregate demand and repay the loan when prosperity returned.
This is not that situation.
There is no natural fix to the kind of demand shortfalls we're facing. Robots generate low demand and have no disposable income. It will take generations to reconstitute the economy into small custom manufacturing shops using technology under human direction and perhaps have a market generated effective demand.
What we need to do is to transfer wealth from robot labor to human demand agents to support aggregate demand and direct the economy humanely. This could be done by having a GSE corporation assess a registration fee per each robot deployed and distribute that fee and tariffs designed to protect registered robots from unregistered robots as dividends on a share of non-transferable voting stock issued to every citizen.
This registration fee is essentially a license to do business in this polity and will address the coming demand shortfalls and inhumane composition of aggregate demand.
Do Well and Be Well
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