Does economics belong in this forum? If not, mods please move as appropriate. I put it in here instead of politics because I'm interested in numbers discussions more than ideological posturing.
From Wikipedia on the topic:
That was not the last time we had a massive increase in productivity. automation and computerization produced similar leaps.
If productivity increases massively, but wages do not, that means the money went somewhere besides the producers of the goods. This is the same pattern as the later waves of productivity increase. Where did it go? And was that wise?
What if Smoot and Hawley recognized that wealth accumulation was what was stalling consumption? What if we recognized that now? A bunch of new money was made - and it did not contribute to economic growth. What can we do with that information?
From Wikipedia on the topic:
By the late 1920s the economy of the United States had made exceptional gains in productivity due to electrification, which was a critical factor in mass production. Horses and mules had been replaced by motorcars, trucks and tractors. One-sixth to one-quarter of farmland previously devoted to feeding horses and mules was freed up, contributing to a surplus in farm produce.
Although nominal and real wages had increased, they did not keep up with the productivity gains. As a result the ability to produce exceeded market demand, a condition that was variously termed overproduction and underconsumption.
Senator Smoot contended that raising the tariff on imports would alleviate the overproduction problem; however, the US had actually been running a trade account surplus, and although manufactured goods imports were rising, manufactured exports were rising even faster. Food exports had been falling and were in trade account deficit; however the value of food imports were a little over half that of manufactured imports.[6]
That was not the last time we had a massive increase in productivity. automation and computerization produced similar leaps.
If productivity increases massively, but wages do not, that means the money went somewhere besides the producers of the goods. This is the same pattern as the later waves of productivity increase. Where did it go? And was that wise?
What if Smoot and Hawley recognized that wealth accumulation was what was stalling consumption? What if we recognized that now? A bunch of new money was made - and it did not contribute to economic growth. What can we do with that information?