I listened to a program on NPR radio yesterday that focused on a problem that I have recognized since studying economics in college, the US need for labor is constantly declining, so how do we continue to have a system that dictates that one shares in the output according to what one contributes to production?   To illustrate the overall trend I point first to our agricultural sector that at the beginning of the 20th Century employed 50% of the work force but by the end of the century had less than 4% of the work force producing more food than we can eat.  My second lesson is manufacturing which reached a high point of employing 25-26% of the work force in mid-20th Century but fell to 13% by the end of the century.

My point is that we do not need everyone working to supply us with all the food and products we consume.  Of course this is due to automation and to a lesser degree imports.  To maintain our distribution system we expanded our service sector to provide jobs that are the basic way to contribute to production and thus share in the output.  But the NPR program addressed this by saying that there seems to be a limit to how many may be needed in the service sector thus we are faced with the real problem of  how to distribute output without contributing to production.

One other way to share in output without working is the growing group of those living by “rents” or income on investment and assets.  This group shares in output according to where and how it places its money and other income producing assets.  However, many oppose this distribution under an  ”is-this-fair” debate that captures the attention of many economists, with the new book by French economist Thomas Piketty calling for striping the wealth from the wealthy, on top of the best seller list.

Another way to distribute without contributing is the share going to retirees and to those still in school.  They take a large part of the production without actually providing any input.  No one denies these their share, but it is not in accord with our American capitalist ideal of sharing in output according to input.

And this inherent flaw in our capitalistic system, one shares in production according to one’s contribution to production, will only become more obvious as we see further decline in the need for workers.