Useless Eaters

Any society must face the Iron Law of Net Production, or decline.

I’d never heard of EBT TikTok before last week. The term originated with a trend started by welfare recipients who, before the government shutdown, would flaunt their cartloads of EBT purchases or discuss ways to game the SNAP benefits system. Some sell their EBT cards for cash. Others buy fake nails or DoorDash. Such posts inflame the working poor, who feel they must work overtime to subsidize the profligacy of the idle while making ends meet.

If the shutdown continues into November, many EBT cardholders are warning of widespread theft and looting to gain benefits they believe they’re entitled to—especially those who have many children who are wards of the state. A few working-class voters say they’ll defend stores, and these viral messages paint a starker picture of an ongoing showdown between the working class and the dependent class, a conflict Karl Marx himself probably never imagined. The Lumpenproletariat has become the dependent class.

With this, I won’t seek to adjudicate the morality or politics of these programs or their perverse incentives. Instead, I want to point to something more fundamental—an iron law that is civilization’s scaffolding.

The Production to Consumption Ratio

Every society consists of distinct economic segments:

• Net Producers have a production-to-consumption ratio greater than 1. These are typically working-age, employed, productive individuals who generate more economic value than they consume.

• Net Consumers have a ratio less than 1. This category includes children, retirees, dependents, and the unemployed—those who consume economic value but produce little or none in market terms.

• Neutrals maintain a ratio approximately equal to 1, producing roughly what they consume.

I should point out that none of the above designations has much to do with income or wealth. Unless one has no income at all, people across all income quintiles can be Net Producers, Net Consumers, or Neutrals. And in most cases, government intervention in the economy makes this reality possible.

Though it’s difficult to calculate or observe directly, there exists an iron law governing the wealth of society:

Any civilization must maintain a preponderance of net producers over net consumers to generate and accumulate wealth.

What do I mean by preponderance?

We can imagine a group of highly productive individuals from the planet Krypton capable of generating an inordinate amount of goods and services. We can also imagine a tiny minority of people own highly productive capital, such as productive superrobots and automated factories. Assume everyone else is a consumer. Passing over debates about whether these individuals are entitled to the full fruits of their productive capacities, we can say definitively that they, with their superrobots and automatic production facilities, produce more than the rest consume if we count them as deployers of capital.

When too many people maintain consumption-heavy or consumption-only economic ratios, civilization inevitably declines. This principle operates with the same inexorability as physical laws.

The Core Principle

Ceteris paribus, for any society to generate wealth over time, its aggregate production must exceed its aggregate consumption. The surplus—production minus consumption—forms the foundation of investment, capital accumulation, and long-term economic growth. This fundamental relationship can be expressed simply as:

ΔW=P−C

Here, P represents total production, C total consumption, and ΔW the change in aggregate wealth. When a society produces more than it consumes, the surplus becomes savings and investment, which can fuel future productivity. If production merely equals consumption, the society maintains its current stock of wealth but does not advance. If consumption exceeds production, the society must draw down its existing capital, leading to decline.

Of course, this simplified expression abstracts from the realities of depreciation and obsolescence. A portion of each period’s production must be devoted to maintaining or replacing existing capital—machinery that wears out, infrastructure that deteriorates, or knowledge that loses relevance. What remains after this maintenance can be considered actual net wealth creation. Changes in wealth can also arise from shifts in asset values, natural resource stocks, or technological progress—though these effects are dynamically incorporated into the production–consumption ratio over time, even as this is hard to measure.

In essence, sustainable prosperity depends on maintaining a persistent surplus of productive output over consumption, sufficient not only to replace what decays but to expand what endures.

The Critical Threshold

The iron law can be restated precisely: The productive surplus generated by net producers must exceed the consumption deficit created by net consumers. More formally, the percentage of the population that consists of net producers, multiplied by their average production-to-consumption ratio, must be greater than the percentage of net consumers multiplied by their average consumption-to-production ratio.

For wealth generation, a necessary condition emerges: the number of producers multiplied by their average production must exceed the total population multiplied by their average consumption. This simplifies to the fundamental requirement that average production must exceed average consumption across the entire society.

If this condition fails, the society is consuming its capital stock.

Why is this an Iron Law?

Several facts establish this as an iron law rather than a mere tendency.

First, consumption alone does not create wealth. To transfer existing value from one party to another, only to have it consumed, is not generative. It is destructive.

Second, investment requires surplus. A society can only invest what it does not consume. Capital accumulation—the foundation of increasing prosperity—requires production to exceed consumption, freeing resources for future uses. People who hold assets—capitalists—are stewards of capital.

Third, wealth equals the accumulated production surplus over time. There is no other mechanism by which societies become richer, which is one reason the degrowth movement is as absurd as it is antisocial, mainly since people can and do produce ideas, experiences, technological solutions, and services, all of which are forms of wealth.

Demographic Implications

Given the iron law, a society faces structural challenges when certain conditions prevail.

For example, an aging population creates too many retirees with high consumption but low production. A high dependency ratio means too many children or non-workers per worker, overwhelming the productive capacity of the working population.

Low productivity leaves even workers with production-to-consumption ratios close to 1, generating insufficient surplus for investment. Excessive redistribution extracts value from producers faster than they can generate surplus, eventually depleting the productive base.

I have already discussed my concerns about the baby bust in the West, that is, the pronatalist’s dilemma.

The tipping point to decline occurs when the productive minority cannot generate enough surplus both to support the consumptive majority and to invest in future productivity through infrastructure, education, and research. Beyond this point, decline becomes inevitable.

Observable Indicators

While individual production-to-consumption ratios remain difficult to calculate, societies can observe several proxy metrics that indicate whether they are approaching a violation of the iron law.

• The dependency ratio—the number of non-workers divided by the number of workers—provides a measure of how many net consumers each producer must support.

• Productivity growth indicates whether output per person is increasing over time, offsetting rising dependency ratios.

• The savings rate serves as a proxy for the production-consumption surplus, indicating the percentage of production not immediately consumed.

• The investment rate shows the fraction of GDP that flows into capital formation rather than current consumption.

Countries experiencing declining savings rates combined with rising dependency ratios are demonstrably approaching violation of the iron law. Their current consumption exceeds their sustainable productive capacity.

Net Consumers Across Classes

Remember, net consumers exist across classes, so you can get vast social parasitism across major categories, including:

1. Investor Class — This class loses its own resources or others’ resources, so its parasitism doesn’t last in a market economy unless its members are politically protected rent-seekers. For example, large banks that create loan funds out of thin air, print money with the Fed, or receive bailouts can be parasitic.

2. Entrepreneur Class — Members of this class can lose their own money or others’ money, but their business failures stop the process. Or, imagine a CEO who runs a public company into the ground, but exits with a golden parachute. It’s easy to imagine members of this class receiving subsidies or lavish government contracts. Net consumers in this class are called rentiers.

3. Salary Class — This class can be chock-full of net consumers, whether hiding as HR or middle management in corporations, staffed in bureaucracies, or coasting on tenure at a university. They are arguably the most numerous of the parasitic workers, though it’s unclear whether they are the most parasitic.

4. Wage Class — This class has a harder time hiding its net consumers unless they belong to powerful unions. A sizable subset of this class becomes net consumers when they receive redistributed supplemental benefits. Indeed, we must confront the reality that, when the wage class is paid in a currency that loses purchasing power over time, more will have to turn to such benefits.

5. Welfare Class — The class is almost definitionally a net consumer, and can include not just the healthy unemployed, but the elderly and infirm.

Social parasitism knows no class. Because government officials tax your resources to subsidize various roles, industries, bureaucracies, and benefits programs, the growth of government spending changes the ratio. One can only hope productivity growth outstrips government spending on the consumptariat.

Quasi-Slavery and Thermodynamics

The perceptive reader will notice a disconcerting dimension here. If the system is set up as a transfer state, that is—a means of redistributing resources from net producers to net consumers—then a moral corollary presents itself. Those who produce are coerced into working for those who consume.

We might call that quasi-slavery. But let us not digress.

Like thermodynamic laws that govern energy, the iron law governs the wealth of nations, whether we like it or not. No amount of political will, monetary policy, or wishful thinking can circumvent it. Of course, we can imagine holodecks that give us plenty, but make us look like the astronauts in the movie WALL-E. We can imagine AI and automation churning out products and services for a goliath welfare state UBI that turns us all into brilliant artists human housecats. And none of this would violate the iron law.

But is that the future we really want?

Societies that maintain a preponderance of net producers accumulate wealth and prosper. Those societies that fail to do so inevitably decline, regardless of their prior achievements or current resources. The mathematics are unforgiving, and history confirms the pattern without exception.