tl;dr: Malthus was right.
"Over the past couple of millennia, the amount of work required simply to live has decreased dramatically, at least in the western world. It used to be almost your entire life was taken up simply in an effort to survive; now most of us work 40 hours per week and it takes care of all of our needs."
That's not really true. I suggest reading "A Farewell to Alms" (http://www.amazon.com/Farewell-Alms-Brief-Economic-History/d...)
A more accurate description would be something like "After several thousands of years where civilization has made life more difficult for the vast majority of people, over the last 200 years, in a few countries that have experienced the industrial revolution, the effort required to survive has returned to roughly the same level as required by paleolithic hunter-gatherers. Though with significantly longer life spans almost entirely due to a large reduction in infant and child mortality."
has the basic argument that as a direct result of modern technology, there are people living on the planet now (in sub-saharan Africa), with the lowest standards of living ever present on this planet, significantly worse than that experienced by Paleolithic hunters and gatherers.
Uncivilized lifestyles turned out not to be that brutal, and in fact modern medicine is the primary mechanism by which the poorest countries have significantly lower standards of living than undiscovered tribes.
Because the government needs to run a deficit, it's the only way to inject financial resources into the economy.
The central fact of economics is: The economy grows. The number of people on earth is still growing. The productivity of individual workers is still growing. We are capable of making more stuff in every year than we did in the previous year.
Now, suppose the supply of money were finite. But the amount of stuff being made keeps getting larger. So, every year, the price of everything goes down, because there's an ever-larger supply of pizza and beer but a constant amount of money.
But this creates a serious problem for the economy. Because now we've got deflation. And that produces a really big incentive to save. Too big an incentive. Everything will be cheaper tomorrow, so every individual benefits by burying money in the backyard and spending as little as possible.
But as people bury more and more money, the economy shrinks, because there is less and less money to spend, and everyone is trying to hang on as long as possible without spending anything. You end up with lots of people sitting, unemployed, with tools idle, and resources idle, and money buried in the backyard, staring at each other and waiting for someone to make the first move. Because, thanks to deflation, the first person who spends anything is a relative loser. And now your economy has deadlocked.
And that's why the government always runs a deficit, and why the inflation target is always higher than zero. The government prints money to make sure that the supply of money stays good. This produces some amount of inflation, of course, but the growth benefits of liquidity outweigh the inconvenience of having to do something more interesting with your money than bury it.
(Why don't more people understand this? Partly it's because the growth of the economy is a historically new phenomenon, dating back only about 150 years. Before that, as far as we can tell, human economic production per capita barely grew throughout millennia of history:
The other cause for misunderstanding is that if you, say, define "gold" or "silver" as equivalent to money, and your society's economic productivity grows, but society's ability to dig up gold or silver grows exactly as fast as overall productivity at all times, the currency magically manages itself. Because of this, for a hundred years and more of the Industrial Revolution the world managed to struggle along with a gold-based money system. But, of course, the gold standard was abandoned when people finally figured out that this process is very haphazard -- indeed, it cannot be controlled. You can't discover gold overnight, but sometimes you need more money in the economy overnight. Like now, for example.)
How many have kept up the effort, after getting through (or not)?
As I said before, a conventional trajectory passing through a marriage in the mid-twenties, is also one that makes the uptake of risk (and consequently effort) much harder in life. I keep bringing up risk because effort without the possibility of significant success is rather pointless. And without risky opportunities that afford that kind of success, people reach for the cruise control after just-enough.
Malthusian scarcity should reward and select for effort, ( and also voluntary birth control and later marriage) as it did in the period right before Industrial England (( ; descriptive review: )), but, in India, it strangely doesn't! Predestiny, passivity, and fatalism, all predate socialist India. Our mythology reflects this.
I do agree that we are turning a new chapter and we are host to a whole new set of cultural ideas, but the numbers aren't, unfortunately, high enough. Yes, while about 300 million people, are (or were in 2001) technically urban, 50 million are slum dwellers; I'd wager that only a tiny slice is literate enough to accept cultural transmissions.
Still, I hope that this tiny slice of a humongous pie proves to be big enough....
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