My post, yesterday, on the error of obsessing over the fluid measuring stick of a capitalist economy (money) was quick and abstract, so I’ll swing a bit in the other direction for a few posts.

Suppose a technological innovation comes around that enables a business to radically lower production costs.  To keep it tangible, think of fully automated fast-food restaurants or grocery stores with robots that stock the shelves.

Economics has a sort of parallel to kinetic and potential energy in physics.  Automation has huge potential to be profitable, but it comes at a cost of large kinetic use of money as an initial investment.  (There are also human factors, such as many business owners’ liking the fact that their organizations support families — that is, their employees make the business more valuable to them — but we’ll put that aside for now.)  To the degree that the government increases the “kinetic” cost of employees through public assistance and minimum wages, the “potential” benefit of automation becomes a better investment in comparison.

Once the investment is made, though, a large number of lower-wage jobs are eliminated and a handful of higher-wage, more-technical jobs are created.

The gap is filled with machines, which simply do what they’re built to do, unlike people, who are masters of their own “kinetics” and “potentials” when it comes to economic behavior.  A machine can be made more efficient, but it’s just a tool.  It can make a business more valuable, as a thing, but it can’t impart additional value to the economy.  Only beings with free will can do that.

So, after this technological change, there are two separate equations:  A business (thing) with products that have the same kinetic value to the economy, and a workforce (people) including many whose economic energy is now mostly potential, with only the consumer’s kinetic output enabled by government subsidies.

(more later)