- Population Research Institute on 'Full Development' vs. 'Subsistence'
The essence of subsistence is that men produce at a very low technological level. Moreover, subsistence economic activity is geared toward producing the minimum necessary to keep people alive. Surplus is sold to buy what people cannot make for themselves, to pay taxes, and service consumer debt. People attempt to save in order to acquire productive assets out of what is left. Reliance on past savings to form capital, though not restricted to subsistence economies, is inevitably linked to subsistence, want and need...Of course, it's painfully obvious once you see it that as fertility drops, consumption increases. Resource needs per household actually rise.
Other characteristics of subsistence economics are 1) restricted ownership, such as ownership of an elite class of landowners or the state 2) corporate and political corruption 3) hard class lines, and 4) widespread envy as a social and political motive...
There are four characteristics of the fully developed economy. These are: 1) widespread ownership of capital 2) free and open markets 3) private property, and 4) limited economic power of the state...
The disconnect between people and full economic development is the result of inhibitions that prevent widespread ownership of capital. The result is poverty. Widespread ownership of capital is an absolute mandate for a fully developed economy because capital produces the majority of goods and services in developing and developed economies.
Historically, dysfunction between population growth and participation in economic growth (widespread poverty in the midst of plenty) is the result of the way that capital formation has been financed. In developing economies, ownership of new instruments of capital has been closed to most people. As inadequate and self-defeating as the strategy ultimately becomes, having more children remains the only means to increase wealth. Ownership, on the other hand, naturally includes participation in greater production, and thus includes greater income resulting from the employment of productive capital...
In a subsistence economy, income is generated by human labor. In a developing economy, by capital. As technology advances, human labor becomes less competitive with capital, and consequently less valuable as an input to production. Where people are restricted to gaining income solely from wages, more and more people in a family must obtain wage system jobs in order to secure a declining amount of income.
- Book: Tony Waters, The Persistence of Subsistence Agriculture: life beneath the level of the marketplace, 2007
- Book: Charles Sellers, The Market Revolution: Jacksonian America, 1991
- Article: Tony Waters, Farmer Power: The continuing confrontation between subsistence farmers and development bureaucrats
- Research Report: Abele & Frohberg, Subsistence Agriculture in Central and Eastern Europe: How to Break the Vicious Circle?, 2003
Sunday, December 25, 2011
Today's Research Notes
Google search for "subsistence economics":