Lets say you throw a rock through a window.
I'm not suggesting that replacing a broken window adds to GDP. I'm saying that having consumer debt is what drives workers to stick with their jobs. Slaving away for 40 years in a coal mine is not something anyone would do if they weren't somehow motivated, and paying for that new iphone every year is good motivation.
Consumer debt keeps the workers working. If no one had debt, they would all stop working. If no one worked, the economy would collapse.
But economists DO say that replacing a window adds to GDP. The entire way we have of looking at the economy is flawed.
Of course we don't need debt to keep people working! Life has ongoing expenses. Most notably food. Also shelter - even if you own a home with no mortgage, you need to pay property taxes and maintenance and insurance. I have no debt. I still work! As far as I understand it, outside of modern America large amounts of consumer debt was never the norm.
When I was in Mexico I noticed a lot of houses had rebar sticking up out of the concrete roofs. Someone explained to me that the reason was that most people didn't get loans to build houses, they paid in cash, and they only built as much as they could afford. The rebar was there because someday in the future, when they had saved up enough, they could add a second story to the building.
Or another way: Imagine you are on an abandoned island with three other people. Lets say you happen to come across a limited number of a certain type of seashell, and decide to use them as currency. Lets say one person is a masseuse, one is a banker, one is a shopkeeper, and the last is an accountant. All of these people can provide their services to each other, and seashells can trade hands, and according to economists, the island's GDP grows with every transaction. But obviously nothing of any real value - food, clean water, shelter - is actually being created. All services amount to economic masturbation. They don't increase the wealth of a society.
Capitalism argues that such transactions ARE the basis of wealth in large part because we don't use a fixed money supply. Instead, we create money out of thin air every time we write a check or make a loan. That newly created money is spent on real work and real things that would not have been performed or made without that newly made up money.
I know that is the argument! That's the whole point of the thought experiment: it is obvious that in real terms the island residents are NOT getting any wealthier, no matter what the theory says. If they had an unlimited supply of seashells, but only introduced more into circulation when a transaction occurred, they could keep track of transactions, but the point is that just because real work was preformed doesn't mean any actual wealth - as in some tangible benefit - has actually been created.
The result of us creating money out of thin air is inflation. It is one of (if not THE) largest drivers of inflation. It basically means that the government gets additional purchasing power at the expense of the value of everyone's existing money. In other words, it is, in practical terms, a flat tax.
But since we already have more than we could ever need, the only way to expand the economy is to produce more and more crap that no one needs.
I hear and recognize your argument, but my grandiose version of the future has loftier aspirations. Instead of manufacturing more plastic crap that will go into a landfill in a week, what if society worked towards renewable energy sources, or grand public architecture, or human colonization of space? Surely there are worthwhile goals for humanity's excess productivity. I think we could continue to expand our economy for thousands of years without just making a bunch of useless crap.
I challenge that we have any need to create more energy or colonize space. And though I grant it would be a better use of resources and labor than what we are doing now, I propose that we could do those things without all working 40 hours per week.
In any event, the original argument was that people shouldn't all stop working, because failing to do work - any paid work, not work which inherently benefits society - would reduce GDP. That is what I was responding to.
if society were restructured the way I am suggesting in terms of labor, corporate profits would plummet, and there would be much less money to be made in the stock market.
That's exactly why it feels like a hack to me. It's way to beat the system that only works if only a minority of people do it.
Before I was suggesting that our productivity has increased so much that there is no reason 40 hours should still be the standard. Because of technology, one person can accomplish in 2 hours what would have taken 40 hours at the turn of the last century.
In our current system, one worker puts in 40 hours a week, 48 weeks per year, for about 40 years = 76,800 hours.
But our productivity per person has increased 20 fold since 1900, when the 40 hour work week was being created. Accounting for increased productivity, we only need 3,840 hours per person of lifetime work. And given our standardized work week, that only amounts to 2 years per person. If instead of giving all of the benefits of technological advancement to corporate profits, society reduced labor hours proportionately to productivity, we could either work 2 hours per week (like I suggested before) or we could work full-time for 2 years.
This is perhaps an extreme example - we might be more comfortable with the standard of living of the 1950s than the 1900s. But given that the standard of living
hasn't actually improved for most American's since the 1950s, there is no advantage to having a total productivity any higher than that. Even so, we are grossly over-producing, which means that actually, yes, everyone could retire early, and no one would suffer for it.
What you are getting at is that it wouldn't work if no one did any work at all, and that is obviously true, but in order to "retire early" you have to actually have been working, in order to have something to retire from.
The financially independent citizens of the world are totally dependent on the rest of the slaves continuing to support their own subjugation. I can't retire early if everyone else does too, for precisely the reason you have pointed out.
You seem to be assuming that the only possible way to be financially independent is to invest capital. Lets say a person can live off of $10k per year. They spend 10 years working at a high-paying but not-uncommon 100k per year job. They could then retire at around age 30, and be FI for the rest of their life with absolutely no investments of any kind - even if they live to be 130! Obviously the stock market, rental homes, or owning a business makes it a lot faster and easier, but it is not a necessity.
If not for our low wages, creating-money-out-of-thin air driven inflation, and investor owned housing, it would actually be a lot easier to do this, because people would make more per hour of labor and stuff would cost less. In other words, it is our system of prioritizing economic growth over individuals itself which actually creates the conditions that make it relatively difficult to retire early. The system isn't set up this way because it is actually ideal, it is set up this way because it benefits the people with the most capital (not the MMM/ERE/FI levels of capital, but the billionaires who get to make the rules, the upper 0.001%). They could not exist without skimming off the labor of everyone else (early retirement people included).
Consider: GDP has increased 1400% since 1970. Since that time, inflation adjusted median wages has increased 0%. What, then, is the point?