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Economies of Scale? A critique on Assessing Labor Equilibrium in Today's post-industrial American Economy in "Exodus 23:1" by Pusha T.

Economies Of Scale? A Critique On Assessing Labor Equilibrium In Today's Post-industrial American Economy In
Pusha T - "Exodus 23:1"



Welcome back Raponomics! To piggyback on Keynes previous post, I would like to touch on a very important economic idea in our current times. I am of course talking about the dramatic decrease in the production of real goods in today's economy. America has lost its comparative advantage in the manufacturing of goods: other economies, such as China, Malaysia and Brazil, have lower reservation wages, lower production costs and a large pool of employees who are willing to do low-skilled manufacturing work.

Long gone are the days of American factories producing real goods that could be purchased in a market and provide a discernible value to the consumer. Today we find that most of what we produce in today's economy is academic: speculation, providing training, advice and non-essential goods. The success of an average business in today's economy relies more on marketing than functionality, salesmanship than substance and spits in the face of traditional economic models of efficiency.

So, in today's world does the old addage: "more workers equal more efficiency" still ring true? Does adding to the labor increase the quality of our goods and decrease its cost in the market like it did during the auto boom of the 1930's? Many intellectuals, including Richard Posner, are continuously questioning this idea, painting a dismal future for the American economy and their ability to compete against the Tiger Economies and survive in the 21st century.

Other economists are not so pessimistic. Most notably, the great orator and economist, Pusha T, has recently published a treatise that provides a new idea; namely that there is no cause for alarm because the returns to economies of scale have been severely overstated in foreign economies due to changing economic realities.

Let us unearth the arguments that Pusha T presents in his oeuvre "Exodus 23:1."

Beef is best served like steak well done
Get a gun in your face, bitch nigga
Beef will have you praying to God
Move your kids, have you hiding your mom
Beef is when you hide behind them other niggas
But they ain't killers they ain't pullin them triggers, fuck niggas
Beef will have you keying our cars
Heartbroke, yours don't look like ours 

Pusha T, in Alligherian fashion, begins his discussion by outlining what the stakes are in this modern economic struggle. The way in which he paints our future appears to be grisly and pessimistic. He follows a prevalent paradigm: it has been long held that there is a direct correlation between poverty and crime, thus it should also follow that increased poverty will in turn increase misery and suffering.  Pusha T seeks to demonstrate the long term effects of an unsustainable economy in his Dickensian portrayal of the decline of moral conduct in an economy with low employment numbers.

I admire this humanistic approach. To draw his readers in, Pusha T seeks to create a tangible picture of the raw data and projections in narrative form. Let us see how he follows this literary technique.

Contract all fucked up
I guess that means you all fucked up
You signed to one nigga that signed to another nigga
That's signed to three niggas, now that's bad luck

Damn that shit even the odds now


Here Pusha T unleashes a scathing critique on employment practices. He scoffs at the fact that many businesses are merely there to own other companies and do not produce any actual wealth themselves. From this we are given a pointed question: "if your wealth producing capacity is being used to support other companies, then are you actually becoming more efficient by the expansion of your business?" This is a very poignant assessment when one considers the old understandings of business expansion.

Traditionally, when one expands a business by employing more individuals you see a measurable increase in production and efficiency. It acts as the driving force for moving towards full employment. Increased production and efficiency is the incentive structure that causes owners to employ more individuals and thus grow the economy.

However, this theory rests on the assumption that each individual that is being added to the business is contributing to the production. It appears from Pusha T's strenuous research that this is no longer the case. He is bravely pointing out a significant market inefficiency. As Pusha aptly states "now thats bad luck." What has driven the original nigga to be associated with so many companies? Why is he increasing the wealth of others with no seeming contribution on the part of these beneficiaries?

Could it be that because our economy produces less real goods but continues to maintain similar population numbers that there are not enough real jobs out there? That in order to reach full employment we must accept inherent inefficiencies and free riders? Perhaps this is why Pusha T is not as concerned as other economists regarding the recent rise of smaller economies in the manufacturing market. Pusha insinuates that the increased employment numbers are not indicators of actual growth, but instead the Chinas, Malaysias and Brazils of the world are merely artificially increasing their growth at an unsustainable rate.

Conversely, Pusha T praises America for not falling into this same trap. While the American economy appears to be failing to compete in today's global market, Pusha is unfazed. He believes that our current fall is laying the foundation for a new economic model that will provide truly sustainable growth in the future.

It shows in the homes I done tried that
That's why you'll never be my neighbors
Smile as you waving but we know you niggas hate us

Fuck you playing games for?
Don't be scared get everything you came for

They got you talking that big shit
Little do you know we don't miss shit

Them niggas using you as a pawn
You see they never loaded they guns

Now you out here all by yourself
Ask Steve Jobs' wealth don't buy health


This is where Pusha T really brings it home! He issues a challenge and a referendum to the artificial growth of the Tiger economies. One phrase deserves reiterating:

It shows in the homes I done tried thatThat's why you'll never be my neighborsSmile as you waving but we know you niggas hate usFuck you playing games for?

Pusha T analogizes sustainable economic growth with purchasing a home. To illustrate, in order to purchase a home you must either have: (1) all the capital up front; or (2) a down payment and enough future income to support your mortgage payments. If an individual is artificially inflating his income, then he may be able to make the down payment on the home, but he will not be able keep up with his mortgage payments down the road. We have seen this phenomenon play out very clearly in the most recent housing crisis. He rebukes China's standing in the global economy as a mere "Emperor's New Clothes" cautionary tale. While China believes their new found growth is sustainable, it is merely an invisible cloak that cannot disguise the real truth: the Tiger model will ultimately collapse.

Pusha T then engages in a very aggressive undressing of the idea of the modern economy fallacy. He seems to offer a Nostradamus like prediction, we will see a precipitous fall of the rising economies in the future. The phrase "them niggas using you as a pawn" harkens back to the idea that artificial growth is really a government tactic designed to legitimize regimes and appease the people. Pusha indicates that the people are being bamboozled by the false promise of future growth. They are pawns in this game and their national sacrifice is not being rewarded with sound economic policy.


In his last two phrases Pusha all but comes out and warns the foreign economic engines that death is certain. One cannot help but to be optimistic given Pusha T's diagnosis of current economic trends. I give Kudos to his argument style as well as his deviation from the current fear-mongering in economic scholarship. I believe Pusha T has hit on an important issue here that demands more research. Let us hope that Pusha is not done addressing the fallacies of the current booms and busts in the modern economy, and that this is merely an introduction in a long line of treatises on the subject.

Argument Presentation: B+




This post first appeared on Raponomics, please read the originial post: here

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Economies of Scale? A critique on Assessing Labor Equilibrium in Today's post-industrial American Economy in "Exodus 23:1" by Pusha T.

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