The Motley Fool Discussion Boards
Investing/Strategies / Bonds & Fixed Income Investments
|Subject: Re: OT: Man in the White Suit||Date: 2/11/2009 12:51 PM|
|Author: Lokicious||Number: 25938 of 35992|
I'd say it's not some "law" of capitalism, but in a closed system, the theory worked pretty well. Once you "opened" the system -- primarily with the introduction of a huge amount of available low-cost labor in less developed nations -- things were turned on their head to some degree. Because at that point, even if workers in this formerly closed system were more productive, they had to suddenly start competing with labor that was one-tenth the cost.
Competing with cheap overseas labor has certainly been a major factor in job losses and reduced wages, just as waves of immigrants to this country provided cheap labor in the 19th and early 20th centuries (and provided cheaper labor in the North than slavery did in the South).
But increased productivity in the pure sense of more goods and services produced per hour of labor (regardless of per hour labor cost) in and of itself reduces the need for labor, unless new needs for labor replace old ones. Historically, the major earlier periods of major increases in productivity, in the this (industrial revolution, pre-computer era automation) through many people out of work and reduced pay, but were eventually followed by working people being better off. But it took a long time and wasn't simple, like the magic formula suggests, and immigration, migration, organized labor, and government intervention had a lot to do with it.
The industrial revolution and automation primarily affected manufacturing. The computer-internet age affects everything from manufacturing (where there is even more automation) to shopping to clerical work to financial services (once feather bedding is eliminated) to entertainment. The problem has been compounded because the potential for the internet to provide new jobs has been hampered by the idiotic early models for how it would pay for itself (information wants to be free, advertising as Ponzi scheme), and the public got used to a free lunch—network TV/commercial radio was not a legitimate model, as anyone with the right expertise could have told Wall Street had they been consulted, instead of some morons passing themselves off as analysts.
We keep hearing the hype of education and job training leading to new jobs, but so far the jobs that have been identified at best might replace 20% of jobs being eliminated permanently through increased productivity and outsourcing.
I'm a lot smarter thinking about what might be in the future than anyone in government or on Wall Street (not bragging, I expect most people on this board are a lot smarter, because we can separate hype from reality, since we have no vested interest in hype). I can come up with some possibilities for new jobs, like alternative energy, but all I can think of are basically new ways of accomplishing old needs. we are basically waiting for someone to invent something completely new that will employ tens of millions of people doing who knows what. I don't think that's inevitable.
|Copyright 1996-2017 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|