Skip to main content
No. of Recommendations: 22
Creative Destruction. It makes for nice theory, but it's simply not true. I just read an article in the NYT about the millions of long term unemployed - the 50 something administrative assistants and the like. I laid off 2 employees recently, both in their early 50's. Their jobs aren't coming back. They will be replaced with automated machinery, as are so many jobs in manufacturing.

The problem is that we're destroying more than we're creating. And that trend only increases with time. It's the natural by-product of a competitive capitalist society that rewards businesses for producing more with fewer people. As businesses become ever more productive, it takes fewer and fewer workers to meet consumer demands. The only sustainable path forward is a structural shift in which government takes up more and more of the slack in employment in step with the pace that businesses require fewer employees. This will also require higher and higher taxes to sustain.

The alternative is what we have now - structurally high unemployment. Which is why I think the stimulus is a good idea with a bad name. It implies that the private sector will pick up the slack in employment when the stimulus recedes. That isn't going to happen.
Print the post Back To Top
No. of Recommendations: 29
Regarding it takes fewer and fewer workers to meet consumer demands - consumer demands are infinite. When 3% of your population feeds the rest, the other 97% can engage in an infinite variety of activities (like founding Google or volunteering in Peace Corps). Eventually someone will want to pay for some these extra activities. Bingo, a whole new market. When 70% of your population is busy being farm laborers, you don't produce any great scientists or strippers or NBA players for that matter. Those jobs just don't exist in those societies.

You cannot stop creative destruction. Only people with a bureaucratic mindset like to do it by stifling new initiatives. Do you want to subsidize horse carriages so they can compete with cars? Yet the government blithely reallocates tax money to prop up uncompetitive endeavors.
Print the post Back To Top
No. of Recommendations: 17
The only sustainable path forward is a structural shift in which government takes up more and more of the slack in employment in step with the pace that businesses require fewer employees. This will also require higher and higher taxes to sustain.

Therein lies the circular argument that perpetually fails (both in reality, and in its death among the hopeful.)

The more government provides employment that rational society will not or can not, the less society actually produces.
The less society actually produces, the less discretionary income is available to tax.
The less available to tax... well... its pretty obvious where this always leads.

Government has valid purposes... creating economic growth ain't one of them.
Print the post Back To Top
No. of Recommendations: 36
The problem is that we're destroying more than we're creating. And that trend only increases with time. It's the natural by-product of a competitive capitalist society that rewards businesses for producing more with fewer people. As businesses become ever more productive, it takes fewer and fewer workers to meet consumer demands. The only sustainable path forward is a structural shift in which government takes up more and more of the slack in employment in step with the pace that businesses require fewer employees. This will also require higher and higher taxes to sustain.

=============================

The problem is not necessarily that we're "destroying" more than we're "creating". The problem is that we are at a point in the technology curve where technology substitutions aren't like:

* steam engine to diesel engine
* Model T to Model A
* carburetors to fuel injection
* 75 Camaro to 2000 Taurus SHO

In other words, relatively continous transformations that add new capabilities but continue leveraging similiar expertise and foundational education.

The problem is that many of the technology substitutions creating job loss now involve transitions like:

* 50-year-old machines replaced by CNC (computerized numerically controlled) gear
* internal combustion engines to lithium batter optimization
* manually intensive analytical work replaced by complex software systems

In these cases, the new generation solution bears so little resemblance to what it replaces that holders of all of the support jobs of that tool (machinists, tool & die makers, or detailed analysts) don't have the skills to land the support jobs (DB admins, coders, testers, requirements writers, etc.) of the new technology supplanting the old. Those skills take a long time to develop and all of the new support work winds up going to an entirely different generational demographic of workers, producing huge spikes in long-term unemployment or under-employment.

In other words, there IS an equal amount of destruction and creation going on, but the destruction and creation take place far apart from each other physically and conceptually in "job space".

The one main exception of current technology substition trends involving like for like advanced technology doesn't help either.

Ubiquitous worldwide internat connectivity allows companies to shop even complicated computer system design and implementation work to the cheapest bidder anywhere in the world. Even thought all the bidders are using the same technology (computers, databases, languages), the technology itself helps destroy any proximity advantage and drives down prices. This might be good if you're trying to get a system built but not good if you make $80k/year writing Java programs and people somewhere else are willing to do it for $20k.


WTH
Print the post Back To Top
No. of Recommendations: 4

The more government provides employment that rational society will not or can not, the less society actually produces.


well said

that which is worth doing, is worth doing for a profit
the rest is funded by government
Print the post Back To Top
No. of Recommendations: 7
To reply to dwonhoff:
Your argument breaks down at step #1 (or maybe I just don't understand what you're trying to say): "The more government provides employment that rational society will not or can not, the less society actually produces". We've seen over the past couple of years that the private sector is keeping up just fine with consumer demand with fewer employees.

WTH,
Think about the jobs you described being created - "DB admins, coders, testers, etc". Then think about the people and positions that have been automated away: the checkout clerks at home depot or the grocery store replaced by scanners, the secretaries replaced by office software, the laborers replaced by CNC's. How many of these people are going to become database administrators, software coders or testers, etc? They aren't. Or what about what everyone says is the next new field that's going to create all these new jobs - ENERGY. These are going to be mostly very technical jobs - scientists, engineers, etc.

The core problem is that most people just aren't very smart. (Don't mean that in a negative way). And what's happening is that technology is automating away jobs for the not-so-smart, meanwhile setting the bar higher and higher for those looking for the available tech jobs.

My argument is that government will have to be there to provide these people something to do. Because there are always going to be lots of people who are better suited as grocery baggers than scientists, and the private sector isn't providing those low-end jobs - it's taking those jobs away at an accelerating pace.
Print the post Back To Top
No. of Recommendations: 34
Eventually someone will want to pay for some these extra activities.

Interesting assertion. Why would I want to PAY for something if I myself am redundant?

The OP has made a point. You reject it but you aren't providing anything that looks real to me. I agree with the OP.

This is automation caused unemployment and it is happening in every field but high-tech and THERE the problem is that the skill-set and talent required excludes 90% of the population at the outset, and it isn't getting any easier.

This was inevitable, and in the limit it becomes more obvious.

If 6 people can control a small army of robots to produce all the automobiles, or stereos or whatever in a country, what do you pay the 6 people and what does everyone else do? You make the assumption and it is unwarranted IMHO, that they can find something else to produce and package and sell to one another, but you omit any consideration of the initial distribution of money with which to buy things.

We USED to be able to count on working hard and getting ahead. That has always been the underlying assumption in our social structure. In the aforementioned scenario, all we need is produced by a few wizards and technicians and their robotic minions, and the rest of us have a lot of free time.

Nobody pays you for free time.

Can some few people break out of this trap? Probably. But not all. Not even most. The model itself is broken. Has been for at least a decade, and there are a lot of people in denial about it.


respectfully
BJ
Print the post Back To Top
No. of Recommendations: 5
The core problem is that most people just aren't very smart. (Don't mean that in a negative way). And what's happening is that technology is automating away jobs for the not-so-smart, meanwhile setting the bar higher and higher for those looking for the available tech jobs.

Over a century ago, the typical person in this country was working in subsistence farming, or what we would call unskilled labor today. A similar event took place at that time which is happening today in other areas - slowly agricultural employment shrunk over the following decades until it represented only a tiny fraction of overall employment in the country.

And once agricultural employment evaporated, the same fears you are voicing about jobs disappearing were heard following the peak of factory employment following the industrial revolution. The Luddites destroyed automated weaving looms almost 200 years ago out of fear that automation would threaten their jobs. None of those fears have ever materialized, because new jobs are constantly being created as a result of new technology and innovation. A key example is the vast number of jobs the development of the PC and the internet have managed to create over the last few decades.
Print the post Back To Top
No. of Recommendations: 4
None of those fears have ever materialized, because new jobs are constantly being created as a result of new technology and innovation. A key example is the vast number of jobs the development of the PC and the internet have managed to create over the last few decades.

This does not respond to the requirement of ever more talent and skill that attend to the newer jobs created, nor to the diminishing returns in terms of the number of newer jobs vs the number destroyed.

It does not make the OP correct either. It is by no means a certainty that this difficulty is answered by government. It is not IMHO, an answerable question in terms of our current societal models.

However, not having an ANSWER does not obviate the existence of the question.

Denying that the problem exists however, makes it impossible to even seek a solution.

I would not deny a possible role of government in a very different social model, but I do not claim to know how that would work, if it would work.

The underlying problem breaks an unquestioned assumption that underlies both the Constitution and every organized society I have ever heard of... and adapting to this (or failing to adapt to it) will be central to the evolution of human civilization.

respectfully
BJ
Print the post Back To Top
No. of Recommendations: 31
I agree with both the original post and WTH.

When I was in kindergarten, the Soviet Union launched a basketball into orbit (Sputnik) and scare the living daylights out of the US. The response was to train my generation in science and math. The technology training I received in high school was without peer and is not replicated anywhere today. My generation spawned the engineers and scientists which created much of the technology we take for granted as the underpinnings of our culture (the personal computer and the internet are two examples which leap to mind). For me to transverse the time between kindergarten and engineer took over a decade. Our current generation of workers (largely) has not had the benefit of either the background or emphasis that I had and have concentrated on "following the money" either into high paying union jobs or white collar jobs based on non-technical degrees. Even engineering majors have gravitated towards the financial industry because their problem solving abilities are better compensated there.

The jobs which have been cut are largely not coming back. As a businessman I can say that the people who have been laid off over the past few years were replaced by changes in business "process" rather than by other people. Some of their work has been outsourced to former competitors (while their labor is duplicated, the supporting overhead personnel, who were also laid off, were not) and some was redundant to finding more efficient ways to handle the business (shipping clerks no longer needed if goods are drop shipped from manufacturer to end user, as an example).

While I believe our educational system needs an overhaul (big time!), the products of this change, if it comes, will not be available in the job market for some time. In the mean time, we have a mass of inappropriately trained workers who are simply not well suited to the new environment. Will new Google’s be created? Sure. They will hire the finest people they can find. Unfortunately, since other countries have surpassed us in technical education over the past couple of decades, many of the finest are foreign trained.

We are largely the product of our education and the American workforce has had a poor background (frequently by the workers themselves not taking the most useful path out of complacency - incidentally, both my engineering degree and my MBA were acquired in night school, while working full time - not a pleasant task, but obviously doable if one truly WANTS to acquire skills). While I am saddened by the sorry state we are in, I understand that few wished to give up years of evenings to give themselves options. OTOH, I don't have much sympathy for those who took the easy path which has now left them with few options as the rest of us are now left paying for their inappropriate choices.

America is a great country and offers the opportunity for those with an appropriate skill set and the incentive to use it to succeed. Skills and techniques can be learned, but it is important for those in need of improvement to realize it and do something about it rather than simply wait for their old job to open up again. People have to start thinking and imagining outside the box. The old ways will not work anymore.

Life is all about choices. We live by the choices we have made. I guess my personal gripe (and I guess it is a selfish one at that) is that the choices I made were not easy ones and now I, and millions of others like me, are forced to support the poor choices made by a large portion of the balance of our population. Now admittedly, many of those choices that others made were encouraged by "following the American Dream". A cushy easy well paying job, a house, a plasma TV, a fancy car and an unending amount of credit. It was fun while it lasted, but the music has stopped and the new tune requires different dance steps, but the system is still trying to encourage people to try to keep in step by following a tune that is no longer playing.

Jeff
Print the post Back To Top
No. of Recommendations: 4
Creative Destruction. It makes for nice theory, but it's simply not true. I just read an article in the NYT about the millions of long term unemployed - the 50 something administrative assistants and the like. I laid off 2 employees recently, both in their early 50's. Their jobs aren't coming back. They will be replaced with automated machinery, as are so many jobs in manufacturing.

The problem is that we're destroying more than we're creating. And that trend only increases with time. It's the natural by-product of a competitive capitalist society that rewards businesses for producing more with fewer people. As businesses become ever more productive, it takes fewer and fewer workers to meet consumer demands. The only sustainable path forward is a structural shift in which government takes up more and more of the slack in employment in step with the pace that businesses require fewer employees. This will also require higher and higher taxes to sustain.

The alternative is what we have now - structurally high unemployment. Which is why I think the stimulus is a good idea with a bad name. It implies that the private sector will pick up the slack in employment when the stimulus recedes. That isn't going to happen.



Heh heh heh.

What's interesting about this post is matty's assumption that it is the general populace's obligation to "take up the slack" caused by his firm's "creative destruction." Rather than taxing the general populace to take up this "slack," why can't the government just require you, the employer, directly responsible for the "slack," to provide guaranteed lifetime employment to these individuals?

"Problem solved." Just like in Western Europe.


---

Actually matty, YOU are supposed to be taking up the slack, by reallocating your saved payroll to a more economically productive purpose than paying obsolete employees to continue performing obsolete functions.

I trust you to do a better job of reallocating your conserved resources than I do the government, for example, by increasing your taxes in some direct or indirect manner, as you irrationally seem to now be advocating.

Are you SURE you run a business matty?
Print the post Back To Top
No. of Recommendations: 2
Regarding it takes fewer and fewer workers to meet consumer demands - consumer demands are infinite. When 3% of your population feeds the rest, the other 97% can engage in an infinite variety of activities (like founding Google or volunteering in Peace Corps). Eventually someone will want to pay for some these extra activities. Bingo, a whole new market. When 70% of your population is busy being farm laborers, you don't produce any great scientists or strippers or NBA players for that matter. Those jobs just don't exist in those societies.

I don't even want to think of a world without strippers. ;-)
Print the post Back To Top
No. of Recommendations: 4
Jeff,

I know where you are coming from, but your post gives me pause. I see people making 100,000 a year as operators in the oil refineries, but cushy? Oh the job is not physically demanding, and the demand to come up with something new is not there, but evenings? There are no evenings! There are 12 hour days of unending boredom, and if you do your job right, never any terror. The plant never stops not for Chistmas, not for Thanksgiving, not for Labor day or Memorial Day.

The cushy government jobs I had seemed to always involve getting injections for diseases I never heard of and traveling to
places no one ever heard of to do thing no one knew was happening.

The same thing happened in the oil patch. I ended up on the crown of a rig in a rain storm trying to get the antenna pointed right. I never wanted a degree, I might go study poetry now, but I never got the cushy job either, until it kind of tracked me down.

I am not really sure what I am trying to say, maybe it is jus that the brush you are using doesn't seem to capture the nuances of life.

Cheers
Qazulight
Print the post Back To Top
No. of Recommendations: 7
Heh heh heh. So difficult to have this discussion when so many seem to lack a basic understanding of economics.


Interesting assertion. Why would I want to PAY for something if I myself am redundant?

Because you pay for things, or not, based on the value you think you are receiving in exchange. That does not imply that you are capable of rendering value to someone else. If someone loses their job at the buggy whip factory, that doesn't mean they suddenly lose the desire to buy groceries--and, in buying their groceries, want to get the best value for their money. Indeed, losing one's job "focuses the mind" in a very real fashion about making the most efficient use possible of one's resources--which means it creates a strong incentive to get the most value for one's available money.



The OP has made a point. You reject it but you aren't providing anything that looks real to me. I agree with the OP.

While the OP said he laid off a couple of people, implying that somehow he was responsible for the capital allocation decisions of a private enterprise, somehow I actually doubt that inference to be correct. I suspect he is either a supervisor or manager in a public/semi-public organization or if he is associated with a totally private/for profit outfit he is not really responsible for its capital allocation decisions. If he was he would not be advocating higher taxation simply because he acted in an economically rational fashion. Only a bureaucratic mentality could advocate that--totally ignoring the fact that saying "government will take up the slack" does not absolve his employer, because when "government takes up the slack" it has to raise taxes on all of us, and when it "takes up the slack" it invariably does so in a less efficient manner than operation of market forces.



This is automation caused unemployment and it is happening in every field but high-tech and THERE the problem is that the skill-set and talent required excludes 90% of the population at the outset, and it isn't getting any easier.

No "automation" does not cause this at all. What "causes" this is the notion that private enterprise wishes to increase return on capital investment by re-allocating operating capital in (hopefully) the most efficient manner. That has NOTHING to do with "automation."

People, individual employees, who retain outmoded skill sets have simply not made the most efficient use of their "personal capital." Thus they are at risk for sudden change in circumstances, i.e. "creative destruction." But, to a greater or lesser extent, this problem confronts all of us.

It is ridiculous to assert that technological innovation, which increases overall economic efficiency for society, is a "problem." It is NOT a "problem." It is a BOON, a strong positive for our society.

Automation doesn't "cause" unemployment. Assumptions/expectations about "permanent employment" are wrong to start with.

In our society we are either "at will" employees, or perhaps we have an employment contract for a specific term of employment. (Or if we are self-employed then we eat what we kill.) Unions have also provided collective bargaining benefits which create other expectations, however, in many cases, these have been excessive and destroyed the employer. Too much of a good thing.

"At will" employee means that either the employee or employer can terminate the relationship "at will." Thus the employee should have NO EXPECTATION of continued future employment if it becomes economically irrational for the employer to continue to employ that employee.

The biggest problem might be that Americans have so much plenty and wealth that they are spoiled. For every employee who has been laid off--including the two spoken of by the OP--how much have they actually done over their careers to constantly improve their value to their employer, or perhaps, to increase their skill level, broaden their skill sets, educations, etc., on their own time? Precious little most likely.

Why were they laid off? Why did the OP/his employer not offer them retraining/outplacement resources? How much "warning" was given that these layoffs might be necessary? Were the employees involved, aware that we have been in a recession for three years? Did they not even contemplate the possibility of cutbacks, and that the cutbacks might be themselves?


This was inevitable, and in the limit it becomes more obvious.

There is nothing that is inevitable except "death and taxes."


If 6 people can control a small army of robots to produce all the automobiles, or stereos or whatever in a country, what do you pay the 6 people and what does everyone else do?

What you TRY to do, in theory, is to pay the six people the "right amount" so as to maximize your enterprise's return on investment. Depending on the type of business, return on investment can be measured in different ways; but the overall concept is the same: You're trying to maximize the economic value you receive from the six people.

What does everyone else do? They do whatever they want to do. Unless there is a binding employment contract, if they are "at will" employees, then the employer is within its rights to discharge them pursuant to governing law. It is not the employer's obligation to subsidize these employees. It is THEIR obligation to create a productive economic niche for themselves. (I am assuming we are talking about competent adults who are not medically or psychologically disabled from the ability to work.)

This is true for every one of us. At bottom we are all "independent contractors" working for ourselves, pursuing our own personal economic interests. If I do not do everything I possibly can to maximize my economic value to society, and hence to potential employers, why should I expect anyone else to do more for me than I am willing to do for myself?


You make the assumption and it is unwarranted IMHO, that they can find something else to produce and package and sell to one another, but you omit any consideration of the initial distribution of money with which to buy things.

No, it's not about an "initial distribution of money." The worker gets the money (wages, benefits) in exchange for providing something of reasonably equivalent economic value. If the worker is unable to provide economic value to the employer, then it makes no sense for the worker to expect to receive economic value in exchange.


We USED to be able to count on working hard and getting ahead.

And we can still count on that. Do you think the two employees OP laid off, were the most productive, or the least productive, at that workplace?

Also, please don't confusing working hard with working efficiently. Yes you do have to work hard but it has to be an activity which has economic value to someone else, i.e. to an employer.


That has always been the underlying assumption in our social structure. In the aforementioned scenario, all we need is produced by a few wizards and technicians and their robotic minions, and the rest of us have a lot of free time.

Nobody pays you for free time.


Well, no one should pay you for "free time." However one of the reasons the autos have gone down is because they WERE essentially paying a LOT of their employees for "free time." And we can see that doesn't work, at all. Not in the long term.



Can some few people break out of this trap? Probably. But not all. Not even most. The model itself is broken. Has been for at least a decade, and there are a lot of people in denial about it.



You are perfectly free to stop working hard and stop trying to make yourself valuable to your employer, but please don't complain if that has consequences.
Print the post Back To Top
No. of Recommendations: 3
I don't even want to think of a world without strippers. ;-)


MC,

Would you believe neither did Immigration Canada. }};-O


**** not signed ****

http://www.washingtonpost.com/wp-dyn/articles/A35851-2004Dec...

Canada Invites Strippers and Gets Scrutiny
Scandal Renews Debate on Program to Import 'Exotic Dancers'

By Doug Struck
Washington Post Foreign Service
Sunday, December 5, 2004; Page A12

TORONTO -- Coiled around a brass pole on a barroom stage, clad only in towering stiletto heels, a 31-year-old Romanian woman named Veronica is helping to fill what has suddenly become Canada's most talked-about shortage: a scarcity of strippers.

A government program to import hundreds of "exotic dancers," which was already controversial, took center stage recently when Canada's immigration minister, Judy Sgro, was found to have given preferential visa treatment to a nude dancer who did volunteer work in her reelection campaign for Parliament.

...

Nude dancers come here under one of several programs aimed at recruiting foreign workers with specialties sorely needed in Canada. Last year, the country imported more than 19,000 construction workers, almost 5,000 nannies and 1,560 university professors. In addition, 661 work permits were issued or renewed for foreign exotic dancers.

------------------------------------


My daughter got her nanny via the program.

Note: the girl is a professional nanny and would not make a lot of money stripping. }};-O
Print the post Back To Top
No. of Recommendations: 170
"Government has valid purposes... creating economic growth ain't one of them."

I've been watching an interesting series on the History Channel called "America - the story of us". The United States has had a remarkable history compressed in just three short centuries.

One fact stands out in high relief: we once enjoyed a government of the people, by the people and for the people that created vast economic opportunity for hundreds of millions. That's right, I said it: the government created the opportunities. Don't believe me? Watch the series and pondercate the seminal lessons.

Consider the Louisiana Purchase. The government purchased vast tracts of land to allow for expansion. Later, that land was offered free to settlers via The Homestead Act in 1862. The government gave 10% of the puchased land to anyone willing to seize the opportunity. A massive redistribution of wealth that enriched the Nation mightily.

Or consider the Transcontinental Railroad. The government financed the construction of the railroad via government bonds and land (the railroad companies that built the lines ended up owning about another 10% of federal lands). The railroad opened the entire continent to unprecedented economic development.

Or consider the Erie Canal that connected the Atlantic to the Great Lakes allowing transport of goods from the east coast to the middle west. It was championed by DeWitt Clinton, then governor of New York, financed by government funds. It transformed the economy of New York and fueled an economic explosion in the Great Lakes states.

Consider the Land Grant Universities that propelled our agriculture into the economic behemoth it is today.

Consider the locks and dams financed by government that opened the Mississippi River and many others as corridors for the transport of goods.

Consider the Interstate Highway System that, once again, transformed the face (and wealth) of America.

We became the world's greatest economic power by utilizing government to create an infrastructure that provided untold opportunities for countless individuals to pursue their economic self-interest.

That was then. Nowadays people blather that government can't create opportunities. Nowadays, we allow the infrastructure we created decades ago to rot and disintegrate.

We've got a Power Grid held together by baling wire and bubble gum, maxed to capacity and wholly incapable of providing the energy necessary to fuel untold future economic opportunities. We allow our roadways, sewers and water supplies to crumble as we deplore any efforts to channel government spending towards infrastructure repair, development or enhancement as "SOCIALISM."

There's lots of work begging to be done. Work that can't be out-sourced. Work begging to be done by our own citizenry on behalf of our own citizenry. There's so much more we could and should be doing to foster economic growth. But are we doing all the must and should be done!?! No. We sit on our thumbs simpering that government can't create economic growth...even after centuries of breath-taking proof that it can and did.
Print the post Back To Top
No. of Recommendations: 0
Mattybags,

Thanks for this fine thread. Your original theroy seems patently obvious to me, and I've been operating under that assumption for years.

Expect high native unemployment until the easy energy runs out.
Print the post Back To Top
No. of Recommendations: 4
If 6 people can control a small army of robots to produce all the automobiles, or stereos or whatever in a country, what do you pay the 6 people and what does everyone else do?

They give those three people massages, carry their golf bag, baby sit their kids, clean their pool, install their fishing pond at their estate, walk their dogs . . . err, tigers and giraffes, clean their yachts, cook their dinner, build fences at their ranches . . .

I could go on . . .
Print the post Back To Top
No. of Recommendations: 1
Interesting assertion. Why would I want to PAY for something if I myself am redundant?

The OP has made a point. You reject it but you aren't providing anything that looks real to me. I agree with the OP.

This is automation caused unemployment and it is happening in every field but high-tech and THERE the problem is that the skill-set and talent required excludes 90% of the population at the outset, and it isn't getting any easier.


Maybe I didn't explain myself well. The OP's point was, creative destruction theory is flawed because the number of jobs created is far less than the number of jobs destroyed. What I was pointing out was, this surplus of people's time then goes into other activities that then produce completely new, previously non-existent jobs. Like WTH said, they are not in the same space, and not all whose job is taken away get a new one automatically.

Automation-caused unemployment is an age-old problem in Western societies (hence my example of horse carriages vs cars - which had unintended consequences such as making many vets unemployed too).

I am sorry, but having a job is not a right. You really have to earn it by being useful to someone else. If your skill-set and talent exclude you from getting a job, it is not the government's or the society's responsibility to change the world to match your skill-set. You either change yourself or change the world and either get or create a job for yourself.

I know the society still has to deal with people whose jobs went away, and we don't. We only provide them basic support (to make sure they don't die, pretty much) but no positive encouragement. This is where the government comes in. If they made it easier to start a business or provided real training or stopped their NIMBY attitude about manufacturing and other real jobs (here in California anyway), OP's two unemployed admin assistants would not be stuck at what to do next.
Print the post Back To Top
No. of Recommendations: 0
Putnid,
your examples (Eirie canal, locks and dams, Interstate Highway) are exactly the kind of infrastructure spending that the government should do. Nonetheless, how is that relevant to the creative destruction problem? Do you think OP's admin assistants (two ladies in thei fifties, IIRC) will suddenly start working in construction?
BTW the money for the infrastructure spending has to come from somewhere - dare I say from bloated entitlement programs, which is where most Fed money goes?
OK, I will stop before Wendy cracks the figurative whip.
Print the post Back To Top
No. of Recommendations: 20
"Government has valid purposes... creating economic growth ain't one of them."


....followed by long list of examples by Putnid of government action which created economic growth....

...followed by me listing governmental responses to WWII which caused multiple unforeseen benefits.

1. the Manhatten project which was instituted not for the purpose of creating economic growth but which led to a massive investment in basic research which ultimately led to developments in theoretical physics, x-ray technology, internet, etc., which transformed the world; and

2. the GI bill which enabled an army (literally) of working class Americans, dirt farmers, etc., to get advanced degrees and compete with engineers, lawyers, doctors, etc., who formerly came mostly from the upper classes who could afford to pay for advanced education of their children.

Many of our most prominent scientists, leaders, lawyers, doctors, engineers, etc., would not have had the opportunity to change America forever but for the GI bill.

So even if government action for the PURPOSE of spurring growth is often misplaced, government action which strengthens the infrastructure by investing in basic research which is not immediately profitable, and which allows people to advance their educational opportunities, does promote growth in important and sometimes subtle ways.

IMO, we have failed to understand this for the better part of 30 years and now we are scratching our heads wondering what happened.
Print the post Back To Top
No. of Recommendations: 56
OTOH, I don't have much sympathy for those who took the easy path which has now left them with few options as the rest of us are now left paying for their inappropriate choices.

Therein lies the classic right wing myth. If you didn't do as I did than you must have taken the "easy" path. I will argue with anyone that pushing bowl in an iron foundry, or working green chain in a ply wood mill is not "easy path". The technology class NEEDED labor to make the products our society depended upon.

You were as dependent on the labor of the low skilled back breaking jobs as they were on technology. Your position defines arrogance.
Print the post Back To Top
No. of Recommendations: 47
your examples (Eirie canal, locks and dams, Interstate Highway) are exactly the kind of infrastructure spending that the government should do. Nonetheless, how is that relevant to the creative destruction problem? Do you think OP's admin assistants (two ladies in thei fifties, IIRC) will suddenly start working in construction?
BTW the money for the infrastructure spending has to come from somewhere - dare I say from bloated entitlement programs, which is where most Fed money goes?


The 'creative destruction problem' is ameliorated via the creation of economic opportunities here, there and everywhere. Infrastructure supports economic development/growth. Economic growth takes many forms, many unforeseen. The admin assistants needn't become construction workers. Take the Power Grid example. Modernizing our Nation's power grid (which, incidently, currently dissipates roughly 30% of the electricity generated before it even reaches a user) would require all manner of jobs: construction, engineering, manufacturing, supply, administrative, accounting, managerial, planning, research, etc., etc., etc.

And, yes, the money must come from somewhere, as it always has and must. There must be an interplay between taxation and spending. As it is, we dole out billions of taxpayer dollars in subsidies to profitable corporations. We spend roughly a third of the discretionary budget on defense. We spend billions in service to narrow interests. And, yes, we spend a great deal on entitlement programs. Should we adopt saner policies (policies such as those that propelled this Nation to greatness), we'd devote far more dollars to infrastructure projects that will put substantial numbers of people to work. Consumers with money will purchase goods and services that will, in turn, create even more economic opportunities and those economic opportunities will further lead to economic growth and prosperity ameliorating the need for entitlements to keep our citizenry from descending into poverty.

Or...we can keep doing what we've been doing for the past three decades: enriching the already wealthy, subsidizing the already profitable, building things that go "Boom" and simply disappear, neglecting our schools and our infrastructure as, all the while, our economy merely bumbles/stumbles along...
Print the post Back To Top
No. of Recommendations: 1
Bullseye Putnid.
Print the post Back To Top
No. of Recommendations: 4
putnid

GO MAN, GO! One shouldn't minimize the contributions of the space programs either. they funded research in "plenty of room at the bottom," i.e. miniaturization. The internet was originally a military operation and AL Gore got it out to be used by the public. Can you imagine modern life without the internet? And what about GPS, that is another government contribution. I'm just adding a few things.

Often the government role is to get something started and eventually industry is able to take it over by themselves. Good examples of this are the desktop and notebook computers.

Perhaps the government has played a lesser role in pharmaceuticals, but industry was able to do this because they are so incredibly profitable. I suspect, however, that the government has played a major role in the discovery and development of certain kinds of pharmaceuticals of importance to the military. And I wonder about the development of artificial limbs, for example. I wouldn't be surprised if the DoD has played a major role in their development.

brucedoe
Print the post Back To Top
No. of Recommendations: 10
OK, let's run with the notion that government has an important role in helping to develop the economy, you gave examples such as Erie Canal, interstate highway system, railroads, Louisiana Purchase, and others.

But we need to break that down and define exactly what type of government participation we are talking about. It may not be politically acceptable.

The most economically efficient allocation of government expenditures would necessarily/on the whole imply that the government funding is increasing, not decreasing, available investment capital, and most efficiently by directing those flows of funds towards the most efficient private sector capital allocators--i.e., the elite: rich capitalists, scientific elite, etc.

That means if you want government to subsidize railroads, then what is really happening is that railroad barons are being subsidized. The rich will get richer. That's OK if like me you believe in Pareto's Principle and that societal wealth is distributed according to a power law rather than according to normal distribution; very skewed, mega kurtosis.

Good or bad? From a generic "social justice" viewpoint, a political viewpoint, reflexively "bad." Why do we want Bill Gates to get even richer with the help of the government? From a strictly economic viewpoint, it makes sense to give the biggest subsidies to the best capital allocators in our society--who like it or not tend to be the richest among us because of their peculiar skill set.

Warren Buffett is donating $5 billion/year to the Gates Foundation. Why is that you may ask. The obvious answer is that Buffett believes the Gates (and their underlings they have chosen to run their foundation) are the best available capital allocators of Buffett's charity largesse. Note well, however much Buffett harps on about the inequities of the tax system, he's not donating an (extra) $5 billion a year to the federal government.

Look at the Manhattan Project. Yes the government contributed the equivalent of many billions to develop nuclear weaponry, however, the people actually in on the project, were a group of brilliant genius level scientists. The intellectual elite.

Nowadays, the political imperative is such that those who want a larger government role want to "share the wealth" with the "common man," not to "concentrate the wealth in the hands of the existing financial, intellectual, scientific, and corporate elite."

If we want a modern day Panama Canal, funded or heavily subsidized by the federal government, that means your tax dollars, or more of them, will be directed to....Halliburton.

Is that what you are really trying to advocate for?
Print the post Back To Top
No. of Recommendations: 0
MC,

Would you believe neither did Immigration Canada. }};-O


Oh great. Government subsidized strippers. You're about to make MC's head explode. :-)

-synchronicity
Print the post Back To Top
No. of Recommendations: 2
No "automation" does not cause this at all. What "causes" this is the notion that private enterprise wishes to increase return on capital investment by re-allocating operating capital in (hopefully) the most efficient manner. That has NOTHING to do with "automation."

No, you describe only motivation. Which, until the advent of machines that also think, had no capacity for expression.

If you think that the average person can retrain themselves (or afford to) for more than one or two "careers" in a lifetime, being able to work at any of them for no more than a decade before the tech moves on to the "next big thing", you have made an error.

BJ
Print the post Back To Top
No. of Recommendations: 0
What does everyone else do? They do whatever they want to do.

Using what money?
Print the post Back To Top
No. of Recommendations: 2
"The most economically efficient allocation of government expenditures would necessarily/on the whole imply that the government funding is increasing, not decreasing, available investment capital, and most efficiently by directing those flows of funds towards the most efficient private sector capital allocators--i.e., the elite: rich capitalists, scientific elite, etc."

I believe that's an utterly blind idealogically-skewed assumption.

Transcendent infrastructure projects result in capital flowing to the most efficient, most creative, most competitive entities that can contribute to project execution. That does not neccessarily mean that the established "elites" will automatically garner the wealth solely or even in most part. Some may benefit, sure. Some may not. Capitalism is all about competition...not the perpetuation of the status quo.

Let's use Bill Gates as an example. He/Microsoft did not begin as an "elite." To the contrary. He and his fellow Microsoft founders were a band of creative, plucky thinkers who satisfied a corporate need and, in so doing, fueled a technological revolution that exploded in growth. They built a "better mousetrap." They weren't "elites" when they did so. In fact, they displaced contemporary enterprises that were considered far more "elite" at the time.

I can give you example after example.
Print the post Back To Top
No. of Recommendations: 3
Oh great. Government subsidized strippers. You're about to make MC's head explode. :-)

-synchronicity

==============================

Nope, in fact the government probably made money on them... let me think about that! }};-O

The companies or even individuals who hire them under the program must pay fees and expenses. Once in country they are legal but of course must pay taxes on earnings as well as the usual other taxes on just about everything you do or buy in our country.

My daughter's nanny is from the Philippines, since she arrived awhile back she has become a Canadian citizen*** and loves it. A few years back her sister has also been hired through the program. Both are wonderful nannies and work overtime as cleaning ladies when the work is available.

*** - There is an accelerated program, they get citizenship after just 36 months as long as they work (and pay taxes) for 30 of those months.


Tim <sees nothing wrong with encouraging good immigrants> 443
Print the post Back To Top
No. of Recommendations: 1
Well, no one should pay you for "free time." However one of the reasons the autos have gone down is because they WERE essentially paying a LOT of their employees for "free time." And we can see that doesn't work, at all. Not in the long term.

I never said it did. Nor, had you been paying attention, did I make an assertion that the government was the answer.

What I said was there is a problem, not that I know the answer to it, nor that the answer is what you assume is my answer, and you are failing utterly to understand or accept that it IS a problem.

In simplest terms. If we increase production efficiency so much that ONE person can produce all the goods in the country through supervising an army of robots and machinery.... what do we pay him or her and where does everyone else get money to put food on the table?

This BREAKS the model that we have used for all of the history of human civilization. It is happening in the lifetimes of ourselves and our children and we are not thinking it through.

Plumbers remain employable far longer than I have been in any career I have learned.

respectfully
BJ
Print the post Back To Top
No. of Recommendations: 6
The 'creative destruction problem' is ameliorated via the creation of economic opportunities here, there and everywhere. Infrastructure supports economic development/growth.

Actually, as always, it depends upon what the money is actually spent for. Bridges to nowhere provide no apparent value to society, yet some people would count them as "infrastructure" and therefore "good."

Particular infrastructure projects may, or may not, provide a net economic benefit. Unfortunately it is not politically popular to evaluate government funded infrastructure projects on their merits. There is a very long history of log rolling in the U.S. when it comes to the public funding of infrastructure projects.

The $20 million dollar highway renovation project in your district may be an economic positive, but in my district maybe it's just a boondoggle. I would tend to agree that maintenance of say the major routes in the interstate highway system is a critical infrastructure issue. I would disagree if you were to advocate for an expansion of government funded passenger rail service such as Amtrak. Both are arguably "infrastructure."

The problem of course is effectively being able to quantify the return on investment from infrastructure projects. Without a doubt if a very good case could be made for a particular project that costs say $5 billion, that it would return $10 billion worth of economic value that would not otherwise have been recognized, then we could all agree that it's probably a very good idea.

In my own area, I constantly see repaving of local roads, modification of intersections, and so forth, that while they may represent plausible improvement work, don't usually strike me as particularly "necessary."

But, WDIK?



Economic growth takes many forms, many unforeseen. The admin assistants needn't become construction workers. Take the Power Grid example. Modernizing our Nation's power grid (which, incidently, currently dissipates roughly 30% of the electricity generated before it even reaches a user) would require all manner of jobs: construction, engineering, manufacturing, supply, administrative, accounting, managerial, planning, research, etc., etc., etc.


Where is Nikola Tesla now that we really need him?



And, yes, the money must come from somewhere, as it always has and must. There must be an interplay between taxation and spending. As it is, we dole out billions of taxpayer dollars in subsidies to profitable corporations.


Would you prefer to dole out public money to unprofitable corporations, i.e., corporations which are poor capital allocators/wasters of money?

If you had a billion dollars to subsidize an oil company, would you rather it go to Exxon or to BP? True, Exxon has more money than BP, but doesn't BP have a greater "need" for that hand out?

The government should take the same approach as a private investor: try to dole out your investment dollars to the good capital allocators, "the rich," not to the poor capital allocators, the "failures".

You can't have it both ways. You can't set as your goal highest and best use of government funds without realizing this will inevitably mean the rich will get richer. What you are advocating is a fundamentally different role than redistribution of wealth, i.e. transfer payments from rich to poor.

But, it's OK for me if the rich get richer. We would all have probably been much better off if a competent oil company such as Exxon rather than BP had been in charge of that rig. Instead we are stuck spending billions of government money on cleaning up the damage of incompetence.

What you are saying is that you are willing to tax the (relatively) poor, the ineffective capital allocators, and transfer that capital and concentrate it via the public sector into the hands of more efficient capital allocators: the corporations; the Halliburtons; the already-wealthy. However the poor will therefore benefit as all of society benefits. Again that is perfectly fine with me.


We spend roughly a third of the discretionary budget on defense. We spend billions in service to narrow interests. And, yes, we spend a great deal on entitlement programs.

So are you willing to redirect entitlement program expenditures to other purposes which will actually increase rather than decrease societal wealth, but in the process, will inevitably make the rich even richer? I am willing. Are you? I am all in favor of subsidizing robber barons if they are good at what they do. Because that means I have trains to ride on, steel mills, gas stations, and the like.


Should we adopt saner policies (policies such as those that propelled this Nation to greatness), we'd devote far more dollars to infrastructure projects that will put substantial numbers of people to work.

Again be very very careful. Each infrastructure project must be evaluated on its own merits to the extent possible. We don't really want to pour millions of cubic feet of cement for a dam just to be able to say: "Look! INFRASTRUCTURE!"



Consumers with money will purchase goods and services that will, in turn, create even more economic opportunities and those economic opportunities will further lead to economic growth and prosperity ameliorating the need for entitlements to keep our citizenry from descending into poverty.

To the extent government is going to intervene, I am all in favor that it does so in a way which maximizes the economic gain to society as a whole. That does not necessarily mean, and generally does NOT equate with, greater equality in the distribution of wealth. It strongly implies greater inequality in the distribution of societal wealth. I am all in favor of greater inequality in the distribution of societal wealth to the extent that, and in return, the overall wealth of society, i.e. average or mean wealth, is increased as a result. (With the caveat of some sort of safety net which is something that can be funded out of the overall increased societal wealth.)

You can't have it both ways. You can't simultaneously expect to get 1) greater equality in wealth distribution AND 2) greater average wealth or greater total wealth.

If you want to fund society's effective capital allocators with public money, that money will be coming from somewhere; the place it will be coming from is entitlement expenditures.

I am willing to make that trade off. But, are you?



Or...we can keep doing what we've been doing for the past three decades: enriching the already wealthy, subsidizing the already profitable,

If you have to make the choice of subsidizing someone, and your goal is maximizing your return on investment, is it better to subsidize "the already profitable" or "the already UNprofitable"? Is that how you direct your personal investment capital, Putnid? You invest in UNprofitable corporations? (Well we all make mistakes but hopefully you don't knowingly try to invest in unprofitable enterprises.)

Who would you rather have running your infrastructure project? Bill Gates, or Roger Clinton? Warren Buffett, or whoever was supposed to be in charge of risk management on the Deep Water Horizon?



building things that go "Boom" and simply disappear, neglecting our schools and our infrastructure as, all the while, our economy merely bumbles/stumbles along...

You have to make a choice. There are finite funds available for public investment in things like infrastructure projects. Even if government could impose a 100% taxation rate, the funds would still be finite.

Do we direct those funds to the failures, the poor, the incompetent, the unprofitable?

Or, does it make more sense to direct those funds to the successes, the wealthy, the highly competent, the highly profitable, the excellent capital allocators?

You make the call.
Print the post Back To Top
No. of Recommendations: 0
*** - There is an accelerated program, they get citizenship after just 36 months as long as they work (and pay taxes) for 30 of those months.

citizenship as long as they work 30 out of 36 months?

Is there a similar program for old men with beer bellies?
Print the post Back To Top
No. of Recommendations: 2
I never said it did. Nor, had you been paying attention, did I make an assertion that the government was the answer.

OK, so you don't think government is the answer. That leaves the private sector.



What I said was there is a problem, not that I know the answer to it, nor that the answer is what you assume is my answer, and you are failing utterly to understand or accept that it IS a problem.

Not at all. I accept that someone losing their job in their 50's is a very serious problem for them. I accept that 10% unemployment is a very serious problem for the unemployed and for society.



In simplest terms. If we increase production efficiency so much that ONE person can produce all the goods in the country through supervising an army of robots and machinery.... what do we pay him or her and where does everyone else get money to put food on the table?

Do you really think this is a legitimate statement of the actual problem? I don't.

If you are going to accuse me of failing to "accept the problem," then you have to actually talk about the "real" problem. Not an absurd unrealistic hypothetical which you just made up out of thin air.

The "real" problem is that we have 10% unemployment, of which some much smaller percentage is a direct result of efficiency/automation improvements. The "answer" to that problem is for the displaced employees to attempt to adjust to their changed circumstances by relocating geographically and/or learning new skill sets, if they want to return to the workforce. I didn't say it would be easy for them, and it probably won't be. But it's the only answer there is.



This BREAKS the model that we have used for all of the history of human civilization. It is happening in the lifetimes of ourselves and our children and we are not thinking it through.

What "model"? The industrial revolution has been going on since, oh I don't know, the 1800's? Or are you now going to tell me that you apprenticed with a blacksmith or something but just now have lost your job due to automation. The only "model" I am aware of, at least since the Civil War, is a constant development of new technologies which from time to time result in various occupations becoming obsolete, often quite suddenly.


Plumbers remain employable far longer than I have been in any career I have learned.

That's because dropping a deuce never goes out of style.
Print the post Back To Top
No. of Recommendations: 1
When I was in kindergarten, the Soviet Union launched a basketball into orbit (Sputnik) and scare the living daylights out of the US.

http://www.prometheus-music.com/audio/surprise.mp3
Print the post Back To Top
No. of Recommendations: 3
The problem is that we're destroying more than we're creating. And that trend only increases with time. It's the natural by-product of a competitive capitalist society that rewards businesses for producing more with fewer people. As businesses become ever more productive, it takes fewer and fewer workers to meet consumer demands.



Let's see, the Pony Express died out, manual farmers mostly died out, the steam locomotive died out, horse carriages died out.....this has occurred for decade after decades after decade. One outmoded industry after another, one outdated product after another....

Wow, the unemployment rate must have started in 1900 century at 0.0001%, and certainly must now in 2010 have grown to 99.99%. Correct?

Yet, for over 100 years, unemployment continues to fluctuate constantly between 4% to 12% for the most part.

How does this happen?
Print the post Back To Top
No. of Recommendations: 2
citizenship as long as they work 30 out of 36 months?

Is there a similar program for old men with beer bellies?

==============================================

jqc,

Hmmm I suppose stripper is out then and I don't know if you would meet the "highly qualified nanny" requirements?


http://www.cic.gc.ca/english/immigrate/index.asp


If you have a significant sum of money to invest you might consider this program? I actually know some people who came in under the program but they were from Hong Kong.

http://www.cic.gc.ca/english/immigrate/business/index.asp

In truth I think the "citizenship as long as they work 30 out of 36 months" was a special thing for nannies as the Dept of foreign affairs runs it and my daughter just happens to work for them.


If things get a bit rough in your area you might look at the refugee thing? }};-D

http://www.cic.gc.ca/english/refugees/index.asp

Refugees
Refugees and people needing protection are people in or outside Canada who fear returning to their home country. In keeping with its humanitarian tradition and international obligations, Canada provides protection to thousands of people every year.


Hopefully things are not going to get that bad. }};-O



Enough fun I have to go make supper for the outlaws.


Tim <here to help, no really> 443
Print the post Back To Top
No. of Recommendations: 2
I never said it did. Nor, had you been paying attention, did I make an assertion that the government was the answer.

OK, so you don't think government is the answer. That leaves the private sector.


No... I don't think the private sector is the answer either.

What "model"? The industrial revolution has been going on since, oh I don't know, the 1800's? Or are you now going to tell me that you apprenticed with a blacksmith or something but just now have lost your job due to automation.

The model of human behaviour that says that every one of us has the ability to work hard enough to get ahead. That it is a matter of individual will and motivation.

Part of the problem is that there are no more frontiers to open. As Putnid pointed out with the Louisiana purchase example. However, the problem as I stated it, is a natural progression from where we are now. You think 10% is as far as it will go? What happens when it reaches 50% and more?

Broken. You can't pay the people who work so much more and then tax them enough to support the rest through government, you can't educate people into new careers fast enough and by definition, half the population is of below-average intelligence and can't compete in the tech fields.

Until about 1990, the promise of automation was still unrealized. We didn't have the sort of robotics, fuzzy-logic, ANN implementations, and adaptive technologies that allow the systems to replace floor traders on the stock exchanges, welders on the assembly lines and middle-managers in the corporate structure.

I am describing something that can happen, something that I have seen happening, something that I have helped to happen.

it's the only answer there is.

That is neither an answer nor a justification for accepting an answer, and the model that limits you to that single answer is broken.

Something new has to be invented.
Print the post Back To Top
No. of Recommendations: 2
"OK, so you don't think government is the answer. That leaves the private sector."

Do we have to reduce every debate to simplified sound bites and arguments from the extremes?
Print the post Back To Top
No. of Recommendations: 2
Transcendent infrastructure projects result in capital flowing to the most efficient, most creative, most competitive entities that can contribute to project execution. That does not necessarily mean that the established "elites" will automatically garner the wealth solely or even in most part.

The claim was not that all of the wealth would flow to the previously existing elite.

MOST of it probably will - they have the connections, and have presumably demonstrated the ability, to mobilize large amounts of labor and capital resources to a productive end. If you need a million tons of dirt moved, you're going to hire a company that already has quite a few dump trucks bearing its logo - not a company that's going to use your contract as collateral to buy a second truck.

(That is - most of it will flow to them in the sense that it will pass through their hands. Over the US as a whole, out of every dollar spent on goods and services, business after-tax profits only amount to about 10 cents. After-tax wages take half the dollar and taxes take the rest. And the 10 cents typically gets divided up among several companies: The company with lots of trucks is buying fuel and tires and parts for those trucks.)

However, the portion that doesn't flow through the hands of the previously existing elite will instead flow through the hands of the most likely candidates to join the elite.
Print the post Back To Top
No. of Recommendations: 1
What "model"? The industrial revolution has been going on since, oh I don't know, the 1800's?

Longer than that. The Domesday book, a census of Norman England in 1086, documented over 5,000 waterwheels. The first reasonably-well-documented windmill in England was built in 1191.

A steady source of rotation powered by something that did not require feeding or cleaning up after...

Also... "1066 and a wave of gadgets"... http://www.deirdremccloskey.com/docs/pdf/Article_70.pdf A sample:

The 'Dark Ages' contributed more to our physical well-being than did the spirit-gladdening ages of Pericles or Augustus. From classical times we got toy steam-engines and erroneous principles of motion. From the ninth and tenth centuries alone the cold plains of the North supplied the horse collar, the stirrup, and the mold-board plough. An explosion of ingenuity down to 1300 yielded in addition the blast furnace, cake of soap, cam, canal lock, carrack ship, cast iron pot, chimney, coal-fueled fire, cog boat, compass, crank, cross-staff, eyeglass, flywheel, glass window, grindstone, hops in beer, marine chart, nailed horseshoe, overshoot waterwheel, printing press, ribbed ship, shingle, ski, spinning wheel, suction pump, spring watch, treadle loom, water-driven bellows, weight-driven clock, wee drop of whiskey, wheelbarrow, whippletree, and the windmill.
Print the post Back To Top
No. of Recommendations: 2
The OP has made a point. You reject it but you aren't providing anything that looks real to me. I agree with the OP.

The original argument was incredibly weak. The history of capitalism has seen rapid increases in productivity. If the OP's argument held up, there should be almost no jobs by now. Of course this is not what has happened. Each generation sees far more jobs than the previous generation, which is why we are not seeing continuously increasing unemployment rates (cyclically, occasionally, but not as a long-term trend). Real standards of living continue to increase. How is this possible if all the jobs are just disappearing?

Productivity is the key to high wages and a high standard of living. I'm realistic enough to understand that economically illiterate Luddites are never going to understand this though.
Print the post Back To Top
No. of Recommendations: 1
There is nothing new going on. Automation has caused jobs to disappear for as long as automation has existed. How many jobs disappeared due to farm automation. A crew with a combine has replaced the need for hundreds of farm workers.

There is and always will be an ongoing disruption, a little more now than a few years ago, but over time, those who are flexible, willing to learn, will do well, those who can't learn a new skill, will slip away.
Print the post Back To Top
No. of Recommendations: 1
There must be an interplay between taxation and spending. As it is, we dole out billions of taxpayer dollars in subsidies to profitable corporations. We spend roughly a third of the discretionary budget on defense. We spend billions in service to narrow interests. And, yes, we spend a great deal on entitlement programs. Should we adopt saner policies (policies such as those that propelled this Nation to greatness), we'd devote far more dollars to infrastructure projects that will put substantial numbers of people to work.

This is morphing into an interesting discussion which may actually have value. One about what should our spending priorities be, that is the discussion we,as a nation, lack.
Print the post Back To Top
No. of Recommendations: 1
"The most economically efficient allocation of government expenditures would necessarily/on the whole imply that the government funding is increasing, not decreasing, available investment capital, and most efficiently by directing those flows of funds towards the most efficient private sector capital allocators--i.e., the elite: rich capitalists, scientific elite, etc."

I believe that's an utterly blind idealogically-skewed assumption.

Transcendent infrastructure projects result in capital flowing to the most efficient, most creative, most competitive entities that can contribute to project execution. That does not neccessarily mean that the established "elites" will automatically garner the wealth solely or even in most part. Some may benefit, sure. Some may not. Capitalism is all about competition...not the perpetuation of the status quo.



But we're not really talking about "capitalism" per se, since we're talking about how the government should spend its tax dollars; we're talking about where government should funnel tax dollars to get a maximum return on its investment.

It's simply a matter of logic to grasp that the most efficient use of government capital will be to apply it, or most of it, to those who have already proven themselves to be the most efficient capital allocators; and which have a demonstrated ability to make reasonably efficient use of massive amounts of capital, on a very massive scale.

That's precisely why "evil" Halliburton keeps getting all those infrastructure contracts, despite electrocuting soldiers in the showers, and why "Joe the Plumber" does not. Who gets offshore oil drilling leases? BP, Exxon, etc etc., not some unknown wildcatter.

On the margins, I suppose a small percentage of the funds will be devoted to technology start ups and pilot projects of various kinds. But the bulk of the funds will have to go to the "big boys." You are talking about billions, perhaps hundreds of billions, of dollars in expenditures.

When the government wants a new jet fighter there are only one or two places it can go. The same would apply to multi-billion dollar infrastructure projects.



Let's use Bill Gates as an example. He/Microsoft did not begin as an "elite." To the contrary. He and his fellow Microsoft founders were a band of creative, plucky thinkers who satisfied a corporate need and, in so doing, fueled a technological revolution that exploded in growth.

As far as I know Bill Gates/Microsoft was not funded by the federal government. That strikes me as an odd example for what you're advocating. It's actually more of a counter-example, it would suggest that we would be better off if the government stayed out of things as much as possible and let innovators innovate. You see the problem with the government big footing all over the place is that massive government subsidies to gigantic corporations can have the effect of stifling innovations by the little guys.


They built a "better mousetrap." They weren't "elites" when they did so. In fact, they displaced contemporary enterprises that were considered far more "elite" at the time.

Yes but they did it without being favored by the government. However who do you think the government hires when it needs to do a massive IT infrastructure project, say, replace all the computers in the GSA, and provide IT support services? Do you think it looks to do business with two anonymous guys working out of a garage in Silicon Valley or is it more likely it calls upon Dell, HP, Apple, Oracle, SAS, and so forth? "Hello this is Harry from the GSA. I'd like to order 40,000 laptops. And 40,000 bottles of Mountain Dew." I mean seriously now.

I can give you example after example.

The only example you provided was Bill Gates, who I don't really believe was "created" by government subsidy. I'm reasonably sure at the time IBM probably had a lot more government contracts to provide IT equipment and services then did Microsoft.
Print the post Back To Top
No. of Recommendations: 1
Hi Matty,

Your argument breaks down at step #1 (or maybe I just don't understand what you're trying to say):

Based on the following, I suspect the latter is the reality.

I said;
"The more government provides employment that rational society will not or can not, the less society actually produces".

You countered;
We've seen over the past couple of years that the private sector is keeping up just fine with consumer demand with fewer employees.

Whether the private sector has succeeded with fewer employees or not has no bearing on my statement, above.

Government can serve a decent role (as noted throughout this thread) of uniformly building "great reach" projects that require far greater capital-at-risk than the existing private sector cares to take on. Past examples being the building of space exploration programs, building interstate highways, building dams (which were, at that time, grander than what private industry could/would take on,) and the like, etc.

Government, however, is very inefficient. For every dollar it spends, it produces some significant LESSER amount of value than private industry does, when they are scaled equally.

That is NOT SLIGHTING the very real value government provides as an "investor of last resort" for such "great reach" developmental infrastructure projects and the like. Because the government *IS* the investor of last resort at this scale, "it is the only girl at the ball"... it doesn't HAVE to be the comparative/competitive prettiest, cheapest, most efficient or most profitable.

HOWEVER... ONCE the cost of scale shifts to the point where government can be replaced, it immediately becomes the WORST girl at the ball... it is the least efficient, most expensive, most corrupt, stinkiest and ugliest.

NOW... re-read my statement to understand;
"The more government provides employment that rational society will not or can not, the less society actually produces".


As further well-explained in this thread, it is not Capitalism that is causing unemployment, but rather the natural cycle of technological advancement. All the metaphorical "buggy whip factories" of the 2000's are shutting down, to never be re-opened, and that is the painful but truthful evidence of EVERYTHING RIGHT in technological development.


You said;
The problem is that we're destroying more than we're creating. And that trend only increases with time.

The problem only APPEARS to be destroying more than we are creating, and only to its parabolic point, at which it naturally reverses in cycle (as it always has.) MUCH of the problem is *NOT* that there is insufficient employment, but rather that the newly unemployed are not aware of HOW TO BE EMPLOYED in the completely new technological world.

Although this is a problem, it is *NOT* a problem of insufficient jobs. That would be like arguing about the lack of jobs for buggy whip packagers, when the mechanical transmission shops were begging for workers (and the buggy whip packagers were ignorant of metal fabrication.)

The trend is not what you are presenting it to be. Society is in a technological shift of production (and although Capitalism is neither to blame nor to congratulate, the shift will occur more fluidly with less impediment to the open markets and Capitalism, than with more.)


MY LAST POINT;
If we *are* to engage government as an infrastructure Contractor, let us do so on the durable and critical territorial development that is beyond the scale of private industry to manage in a uniform basis. Given a release of economic restrictions, terra-based infrastructure (land transport & power grids) are easily of the scale that the far more efficient private sector can outperform the government. Advanced space exploration is an OBVIOUS choice to focus on.
Print the post Back To Top
No. of Recommendations: 1
"OK, so you don't think government is the answer. That leaves the private sector."

Do we have to reduce every debate to simplified sound bites and arguments from the extremes?



So you're saying the clergy is the answer?
Print the post Back To Top
No. of Recommendations: 4
<Should we adopt saner policies (policies such as those that propelled this Nation to greatness), we'd devote far more dollars to infrastructure projects that will put substantial numbers of people to work.>

Bridge repairs, toll roads and nuclear facilities come to mind.

I've always said we need a national water infrastructure to de-salinate seawater and pipe it (just like the oil pipelines) to dry areas, thus greening the vast deserts and allowing us to feed all the (legal) immigrants we will need to support our massive entitlement spending.
Print the post Back To Top
No. of Recommendations: 1
We've got a Power Grid held together by baling wire and bubble gum, maxed to capacity and wholly incapable of providing the energy necessary to fuel untold future economic opportunities. We allow our roadways, sewers and water supplies to crumble as we deplore any efforts to channel government spending towards infrastructure repair, development or enhancement as "SOCIALISM."

Not surprisingly, the power industries are highly regulated, and most of the infrastructure is run by the government. What a coincidence!

The problem is that the government has interfered with markets in both cases, just as it has interfered with health care markets, education markets, financial markets, and all sorts of dysfunctional markets. The most dysfunctional markets all share one common trait: high government intervention. It's not a coincidence. It is a predictable result of preventing market mechanisms from working properly.
Print the post Back To Top
No. of Recommendations: 57
Not surprisingly, the power industries are highly regulated, and most of the infrastructure is run by the government. What a coincidence!

The problem is that the government has interfered with markets in both cases, just as it has interfered with health care markets, education markets, financial markets, and all sorts of dysfunctional markets. The most dysfunctional markets all share one common trait: high government intervention. It's not a coincidence. It is a predictable result of preventing market mechanisms from working properly.


Ah MC,

Your usual nonsense, we have had this discussion before.

If it were left to private industry only the densely populated cities would have electricity, too expensive to run all those wires out in the boondocks.

Private industry has only one purpose, make profits. Unfortunately they have also developed an amazing tendency to short term thinking, I blame that on quarterly reporting and the bonus cycle. Without the long term view, that big cliff comes up and smacks your right in the chops or perhaps I should say the banking and real estate industry to name just two. The Mad Capitalists running the US have discovered that there is no need to maintain the power grid, I mean that costs money. If it dies they may be able to get these huge contracts to fix it or perhaps we can just run wires from countries that haven’t been so short sighted... oh wait you are already doing that.

If you want to see real capitalism with long term thinking, watch the Chinese. While the US is arguing about drilling in their own territory and sending all their borrowed money to the oil producers all over the world, the Chinese are buying up control of oil assets in such diverse places as West Africa, Venezuela and Alberta.


Tim <thinks MC reminds me of Larry Kudlow> 443
Print the post Back To Top
No. of Recommendations: 2
In Wendy's absence:


http://www.shutterstock.com/pic-31715836/stock-photo-dominan...


Tim made me do it ;-D

*** Not Signed ***
Print the post Back To Top
No. of Recommendations: 1
BTW the money for the infrastructure spending has to come from somewhere - dare I say from bloated entitlement programs, which is where most Fed money goes?

The total amount for all entitlement programs -- the "bloated" ones, the underfunded ones and the appropriately funded ones -- all of them, in other words, is not where "most Fed money" goes; that amount is less than the amount of Fed money that goes to pay the interest on deficit spending, for example. http://en.wikipedia.org/wiki/United_States_federal_budget

--SirTas
Print the post Back To Top
No. of Recommendations: 3
We've got a Power Grid held together by baling wire and bubble gum, maxed to capacity and wholly incapable of providing the energy necessary to fuel untold future economic opportunities. We allow our roadways, sewers and water supplies to crumble....

And....let's not forget: we have a JOKE of a transportation system. It is built around automobiles and highways.

If the USA wishes to be a leader in anything, we need to modernize our system of rails, in particular. Travel from city to city should be easy and relatively cheap. As it is in many other countries.

Jack
Print the post Back To Top
No. of Recommendations: 3
The only sustainable path forward is a structural shift in which government takes up more and more of the slack in employment in step with the pace that businesses require fewer employees. This will also require higher and higher taxes to sustain.

This post received 21 Recs so far. I am fighting the urge to vomit.

-Darth
Print the post Back To Top
No. of Recommendations: 2
I've always said we need a national water infrastructure to de-salinate seawater and pipe it (just like the oil pipelines) to dry areas, thus greening the vast deserts and allowing us to feed all the (legal) immigrants we will need to support our massive entitlement spending.

If we cut STUPID crop subsidies, we'll be abandoning farmland because there isn't enough demand for the crops.

The extreme case being the use of tax dollars to subsidize the production of non-edible corn so that we can subsidize its conversion into ethanol for use as a subsidized fuel in place of fossil fuels, where the energy content of the delivered ethanol is less than the energy content of the fossil fuels that went into its production.

We don't have a need for more water for crops we shouldn't be producing.
Print the post Back To Top
No. of Recommendations: 1
It's simply a matter of logic to grasp that the most efficient use of government capital will be to apply it, or most of it, to those who have already proven themselves to be the most efficient capital allocators; and which have a demonstrated ability to make reasonably efficient use of massive amounts of capital, on a very massive scale.

As far as I know Bill Gates/Microsoft was not funded by the federal government. That strikes me as an odd example for what you're advocating. It's actually more of a counter-example, it would suggest that we would be better off if the government stayed out of things as much as possible and let innovators innovate. You see the problem with the government big footing all over the place is that massive government subsidies to gigantic corporations can have the effect of stifling innovations by the little guys.

The only example you provided was Bill Gates, who I don't really believe was "created" by government subsidy. I'm reasonably sure at the time IBM probably had a lot more government contracts to provide IT equipment and services then did Microsoft.
– wburble

It is logical to assume that a large government-funded project will be awarded to the best TEAM that offers the best proposal to conduct the work. Note the word TEAM.

I don’t know if you’ve had much experience doing work under contract for public and private sector clients. I have.

The contracts are much the same: lump sum, fixed fee, or time and materials. The contract terms vary...some are more onerous than others. It varies widely from customer to customer. Some private sector contracts are impossible burdens. Some not. Some government contracts are onerous. Some not. It makes no difference in the end. When all is said and done we’re left with the basic Capitalist opportunity/challenge: satisfy the customer or perish.

Transcendent infrastructure projects require the marshalling of a myriad of suppliers/talents. It’s ALWAYS a team effort. Sure, there may be a well-established prime contractor/project manager. The “Prime” will handle the chores and the administrative headaches. Then there are all the sub-contractors. The depth/breadth/creativity/cost-effectiveness of the “subs” will determine if a major project succeeds or fails. This is where Capitalism’s “magic” happens.

Let’s take the Transcontinental Railroad as an example. Sure, the Central Pacific and the Union Pacific Railroads won the contract(s) to build the infrastructure. These entities, in turn, contracted with steel manufacturers to supply the rails, lumber companies to supply the ties, and countless sub-contracts to surveyors and engineers galore to engineer/implement the project. The “primes” were the “pass-through”. Yes, they profited handsomely (after beating other established “elites” for the work). Even so, the “subs” that made the project/work possible were countless numbers of entrepreneurs, creatives, highly-competitive enterprises that fought for (and won) the chance to participate in a great enterprise.

That’s the beauty of Capitalism. It’s the competitive struggle in which the best/brightest/most nimble win. It ain’t got nothing much to do with “elites” or the status quo.

Capitalism has never been about the established “elites” holding sway for very long. Today’s wunderkind are tomorrow’s old news.

And it don’t matter not a whit if the customer is a private or public sector customer.

It all boils down to a customer...and an enterprise willing to satisfy that customer’s needs.
Print the post Back To Top
No. of Recommendations: 2
If manufacturing goes the way of 19th century agriculture there are plenty of things iron castings bowl pushers can do (apparently they have good work ethics) that will benefit the polity. The problem is that most of the jobs they can do will involve things like fighting Iran, reducing class sizes, building high-speed rail lines, building nuclear power plants and things like that which have become governmental functions.

So, the vast profits made by the shareholders of the corporations which have fired all their workers and replaced them by robots will have to be taxed to pay for Marines, nuclear welders and elementary school teachers of tomorrow.

Automation will make us all richer and eliminate jobs no one should aspire to (checkout clerk, assembly line bolt turner, iron bowl pusher). Hopefully we'll do something sensible with that extra productivity like impose a 24-hour work week which would be really good for the leisure industry (strippers - the investment bankers of the 2030s).
Print the post Back To Top
No. of Recommendations: 12
Not surprisingly, the power industries are highly regulated, and most of the infrastructure is run by the government. What a coincidence! - MadCapitalist

Yo! Rip Van Winkle/Crazed Randian!

Ever hear of the Energy Policy Act of 1992?

I’ll first offer up a highly political view of the effects of DEREGULATION on this Country’s electric energy regime (that’s not to say it isn’t true, just that it’ll make a Randian’s head explode). This article points the finger at the major players who pushed so aggressively for DEREGULATION (Enron ring a bell?) and the consequences thereof:

http://www.prwatch.org/prwissues/2003Q3/dereg.html

Electricity deregulation was supposed to bring cheaper electricity prices and more choice of suppliers to householders. Instead it has brought wildly volatile wholesale prices and undermined the reliability of the electricity supply. The rising electricity prices and blackouts in California and the northeastern states of the US are consequences of the changes engineered by vested interests; changes that were accomplished through a massive PR campaign to deceive politicians and opinion leaders about their benefits.

Despite efforts to manufacture an appearance of grassroots support, deregulation was primarily driven by large industrial users, who thought they could save money, and energy companies, who thought they could make money out of it. The case for deregulation could not be presented in self-interested terms to the public. It had to be presented as being in the interests of the wider public. Groups such as large industrial energy users used the language of free-market advocates to state their case in terms that disguised their self-interest.

Enron spent more than $345,000 lobbying for deregulation in California and another $438,155 on political contributions. It hired former legislators and Californian PUC officials to shape legislation that created the disastrous energy market which would later be referred to as "the Enron model."

Even after the profiteering of Enron and other electricity companies got out of hand, the spin doctors worked to divert the blame from deregulation. Even as the utilities threatened bankruptcy and ongoing blackouts unless the state government bailed them out, the major media outlets in California and throughout the world depicted the problem as a shortage of energy itself. Hundreds of articles were published insisting that the crisis stemmed from a booming economy and industrial growth, coupled with unusually hot, dry weather which caused energy demand to surge.


Funny, isn’t it (well...not so much) that California’s electricity supply problems simply VANISHED after Enron went bankrupt?

Of course, one can spend a bit o’ time viewing the film: “Enron: The Smartest Guys in the Room” (or reading the book), if one seriously wanted to understand what happened after DEREGULATION.

http://en.wikipedia.org/wiki/The_Smartest_Guys_in_the_Room

Here’s a more sober view of the effects of DEREGULATION from an engineering/scientific perspective:

http://www.aip.org/tip/INPHFA/vol-9/iss-5/p8.html

The warnings were certainly there. In 1998, former utility executive John Casazza predicted that “blackout risks will be increased” if plans for deregulating electric power went ahead. And the warnings continued to be heard from other energy experts and planners.

Prior to deregulation, which began in the 1990s, regional and local electric utilities were regulated, vertical monopolies. A single company controlled electricity generation, transmission, and distribution in a given geographical area. Each utility generally maintained sufficient generation capacity to meet its customers’ needs, and long-distance energy shipments were usually reserved for emergencies, such as unexpected generation outages.

The net result of the new rules was to more tightly couple the system physically and stress it closer to capacity, and at the same time, make control more diffuse and less coordinated—a prescription, engineers warned, for blackouts.


And, most damning of all, from the American Society of Civil Engineers:

http://apps.asce.org/reportcard/2005/page.cfm?id=25

The U.S. power transmission system is in urgent need of modernization. Growth in electricity demand and investment in new power plants has not been matched by investment in new transmission facilities. Maintenance expenditures have decreased 1% per year since 1992. Existing transmission facilities were not designed for the current level of demand, resulting in an increased number of "bottlenecks," which increase costs to consumers and elevate the risk of blackouts.

In a letter to Congress in February 2004, the North American Electric Reliability Council (NERC), a consortium of public and private power producers that seeks to enforce compliance with voluntary reliability standards, was blunt in its assessment of the performance of the North American transmission grid:

"NERC's analysis of the actions and events that led to the blackout showed that several violations of NERC operating policies contributed directly to the August [2003] outage. This is yet another clear signal that voluntary compliance with reliability rules is no longer adequate, and underscores the urgent need for Congress to authorize the creation of a mandatory reliability system that provides for the establishment and enforcement of reliability rules by an independent, industry-led electric reliability organization, subject to oversight by the Federal Energy Regulatory Commission (FERC) within the United States."

A safe, reliable electrical transmission grid is vital to the security and the economic health of the nation. The U.S. grid can no longer be allowed to operate under weak voluntary reliability guidelines from industry. The nation cannot afford to continue a piecemeal approach to the siting, construction and repair of the national transmission grid.
Print the post Back To Top
No. of Recommendations: 3
In Wendy's absence:

...

Tim made me do it ;-D

*** Not Signed ***

========================================


Jeff,

You know you are not supposed to tell them when Wendy is away. Now we will have another hundred posts on this "urination distance competition". <groan>

Clearly I am innocent as you only used three stars so anyone can look at the handle up top and see it is indeed you who posted that picture of Wendy.


Tim <I take all of the responsibility and none of the blame> 443
Print the post Back To Top
No. of Recommendations: 3
Real standards of living continue to increase. How is this possible if all the jobs are just disappearing?

Unless you count increased debt as an part of the standard of living, you aren't getting the real picture. The statistics you are working with are so thoroughly gamed that I don't think anyone can prove anything with them.

You are of course, out of line with your last sentence. I respect you enough to reckon that you realize that now and will not repeat it. This is not a political board.

Productivity is the key to high wages and a high standard of living.

Always used to be... but "too much of a good thing" now. Productivity improvements mean that it is simply not possible for a large plurality or possible even for the majority, of working age citizens to be "gainfully employed" at real and productive jobs. No frontier, remember? We can't "grow" unless we manage somehow to consume ever more stuff, yet we HAVE to continue to "grow" and that requirement comes from the miserable mistake of adopting a fractional-reserve fiat currency monetary base. So we borrow from our future. We do that in every possible way.

It is unsustainable, it will collapse. The shonky stats on the non-existent recovery we saw recently... you know the one which deflated the S&P by equating it with Gold rather than dollars and discovered that the entire "recovery" was simply inflation. That message should be giving you pause when it comes to cheerleading for the current meme.

People are out of work for a reason... and it isn't that they are lazy.

Machines that did the hard physical work released humans to work at more cerebral pursuits. Some few fell by the wayside at that point but most had the ability to function.

Now we have machines that think pretty well and do the physical work. The only thing left to humans is to invent new things, and that is beyond the abilities of most of the population. Yup, it improves productivity. It also screws up basic social contract when all productivity is concentrated in the hands of a very few.

BJ
Print the post Back To Top
No. of Recommendations: 4
There is nothing new going on. Automation has caused jobs to disappear for as long as automation has existed. How many jobs disappeared due to farm automation. A crew with a combine has replaced the need for hundreds of farm workers.

With all due respect, you are dead wrong.

The assembly lines and factories were there and semi-skilled jobs were available still. People without much training could move from one to another job.

Now however, it takes half a decade to train in a specialty that will be obsolete by the end of that decade. Engineers disappear, replaced by CAD and CAM. Middle Managers are replaced by complex optimizing spreadsheets and "expert systems". Floor workers are replaced by robots. About the only people NOT worried about automation are scientists and engineers developing and maintaining it, politicians and plumbers. It takes more than flexibility and a willingness to learn to do well now. MUCH more.

"Slip away" - Is that a euphemism for dying? The society I live in frowns on just letting people die. Maybe you want society to work differently? I suspect you will get your wish in a way, as we can only have the morality we can afford and by most accounts, the USA is broke.

Just like the underlying assumption.

I don't envy you that future. Nor the sick feeling you will get when you realize that it is not as civil or civilized as you expected, and that libertarian ideas fail very quickly when confronted with actual human nature... even more quickly than the communist's notions.

respectfully
BJ
Print the post Back To Top
No. of Recommendations: 2
"Transcendent infrastructure projects require the marshalling of a myriad of suppliers/talents. It’s ALWAYS a team effort. Sure, there may be a well-established prime contractor/project manager. The “Prime” will handle the chores and the administrative headaches. Then there are all the sub-contractors. The depth/breadth/creativity/cost-effectiveness of the “subs” will determine if a major project succeeds or fails. This is where Capitalism’s “magic” happens."


---------

Putnid,

your use of terms like "transcendent" and "magic" are illuminating. They prove that you view this entire process as some kind of secular religion.

I guess in your dreams as the money spigots fueled by government's confiscation of private wealth are opened wide, going over the spillway of the transcendant mighty billion cubic square feet dam in your mind's eye, the ghost of FDR will hover over all of us, with his hands outstretched, "magically" massaging and stimulating the entire economy.

It's not transcendant, and it's not magic.

Lord protect us from the faithful.
Print the post Back To Top
No. of Recommendations: 2
Now we have machines that think pretty well and do the physical work.

As a technologist, I can assure you that this is simply not true, as much as you would like it to be.
Print the post Back To Top
No. of Recommendations: 4
Now however, it takes half a decade to train in a specialty that will be obsolete by the end of that decade. Engineers disappear, replaced by CAD and CAM. Middle Managers are replaced by complex optimizing spreadsheets and "expert systems". Floor workers are replaced by robots. About the only people NOT worried about automation are scientists and engineers developing and maintaining it, politicians and plumbers. It takes more than flexibility and a willingness to learn to do well now. MUCH more.


Wow, just... wow. Here, I've got some light reading for you. I think you'll really enjoy it.

http://cyber.eserver.org/unabom.txt
Print the post Back To Top
No. of Recommendations: 1
Tim "<thinks MC reminds me of Larry Kudlow> 443"

And Kudlow reminds me of a corporate version of Baghdad Bob. Every fact can be twisted to fit a talking point.
Print the post Back To Top
No. of Recommendations: 2
Electricity deregulation was supposed to bring cheaper electricity prices and more choice of suppliers to householders. Instead it has brought wildly volatile wholesale prices and undermined the reliability of the electricity supply. The rising electricity prices and blackouts in California and the northeastern states of the US are consequences of the changes engineered by vested interests; changes that were accomplished through a massive PR campaign to deceive politicians and opinion leaders about their benefits.

Might I point out (again) that under California's "deregulation" the state dictated who was allowed to generate power wholesale, who was allowed to buy power wholesale, who was allowed to transmit power wholesale, the price of transmission, several of the terms of contracts to buy power wholesale, AND the retail price of power?
Print the post Back To Top
No. of Recommendations: 0
Now we have machines that think pretty well and do the physical work.

As a technologist, I can assure you that this is simply not true, as much as you would like it to be.

**********************

Are you forgetting about Commander Data?

He is a highly competent starship officer.
Print the post Back To Top
No. of Recommendations: 3
It is hard to predict what "infrastucture investment" will pay off.

I guess since this is the 50th anniversary of the invention of laser, I'll use that as an example.

When it was invented no one knew what it was good for. Now it is everywhere.

Here is part of a letter that just went out to members of the Optical Society of America from OSA's president:


I am pleased to share some exciting news about the recognition of the 50th anniversary of the laser by the US government....

...Earlier this month, the US House of Representatives passed House Resolution 130, which also commemorates the laser anniversary. The resolution was sponsored by Rep. Vernon Ehlers, who holds a PhD in nuclear physics from the University of California, Berkeley, USA. According to Ehlers, “Fifty years ago, when the laser was invented using funds from the Department of Defense, the technology was referred to as a ‘solution looking for a problem.’ Today, this technology contributes billions of dollars to the US economy and is a shining example of the importance of long-term, sustainable federal funding for scientific research and development.” A congressional resolution is meaningful because the US Congress formally recognizes the importance of this invention.

Both of these recognitions are fitting tributes for this important technology that has made such a tremendous impact on the world economy and individual lives.

...May 16 is the exact day 50 years ago of Maiman’s ruby red laser demonstration.

James C. Wyant
OSA President
Print the post Back To Top
No. of Recommendations: 1
Productivity is the key to high wages and a high standard of living.

Always used to be... but "too much of a good thing" now.


Garbage. It will always be a good thing, because it frees people to work on different things.

Let's say there are 4 people named A, B, C, and D.

A and B work to create the food for all 4 people. A becomes more productive so that he can undercut B, so now C and D only buy from A. A will only bother to produce more if he exchange it for something he values. Now that B's time is freed up, he can work at providing something else that A, C, and D value. Total output of the economy increases. The total value of goods and services increases.

My recommendation is to read up on the theory of comparative advantage. You will learn that it doesn't just apply to trade between nations. It applies to any individuals that trade with one another. When one person becomes more productive, everyone benefits. The problem that exists, however, is that certain people feel entitled to work in a particular career or a particular industry even after the job is no longer valued as highly as it once was. To them I say, I'm sorry, but it doesn't work that way. You need to provide what others value.
Print the post Back To Top
No. of Recommendations: 1
Not surprisingly, the power industries are highly regulated, and most of the infrastructure is run by the government. What a coincidence! - MadCapitalist

Yo! Rip Van Winkle/Crazed Randian!


Get something new already, would you?

I’ll first offer up a highly political view of the effects of DEREGULATION on this Country’s electric energy regime

It wasn't freaking deregulated. It was just re-regulated in a different fashion. There is still a massive amount of regulation, and THAT is the problem.

Please deal with the reality, and not your dreamworld where calling something "deregulated" makes it so.
Print the post Back To Top
No. of Recommendations: 1
If 6 people can control a small army of robots to produce all the automobiles, or stereos or whatever in a country, what do you pay the 6 people

Their pay level would probably not be based on the amount of product they are producing, but on how unique their skills are in being able to control the robots. If any six people can do the job, the job probably won't be highly paid. If less than ten people in the country are able to do the job, it may be a highly paid one.
Print the post Back To Top
No. of Recommendations: 0
MadCapitalist says

Let's say there are 4 people named A, B, C, and D.

A and B work to create the food for all 4 people. A becomes more productive so that he can undercut B, so now C and D only buy from A. A will only bother to produce more if he exchange it for something he values. Now that B's time is freed up, he can work at providing something else that A, C, and D value. Total output of the economy increases. The total value of goods and services increases.

It's wonderful! It's marvelous! It's just like a Mickey Mouse Watch!
Print the post Back To Top
No. of Recommendations: 0
In the example of the 6 highly productive workers with the robot, the high pay more likely goes to the designers and builders of the robot. Deservedly so.
Print the post Back To Top
No. of Recommendations: 0
In Wendy's absence:
http://www.shutterstock.com/pic-31715836/stock-photo-dominan...


You look surprizingly good in drag, Jeff :-D
I thought the whip was figurative .
Print the post Back To Top
No. of Recommendations: 0
In the example of the 6 highly productive workers with the robot, the high pay more likely goes to the designers and builders of the robot. Deservedly so.

Reminds me of the joke about the engineer who retired from the plant where he worked. His only responsibility for decades had been to maintain the machine that was the key to all of the manufacturing for the company. The machine later breaks down. After a week and a number of engineers had looked at it and nobody could fix it, the retiree was asked to come back and help. Within an hour he had the machine working again. He submitted an invoice for $10,000 which the company insisted he must itemize before they would pay it. He itemized it as follows:

Replacing the part: $1
Knowing which part to replace: $9,999
Print the post Back To Top
No. of Recommendations: 1
Whafa

Middle managers have disappeared like the Arctic Ice in Summer. Their principle functions in terms of data analysis and projections, have been ceded to spreadsheets and they are greeting people at Wal-Mart if they can find anything at all.

The machines are indeed working in place of routine/mundane/repetitive decision makers.

Perhaps "think" is too strong a term... but people who are not using MUCH of their mental capacity, or do not have much to use, are being replaced by more efficient machinery. Everywhere.

I doubt you have dealt in technology much longer or deeper than I, but I do accept that using the word "think" there is perhaps too strong a statement.

BJ
Print the post Back To Top
No. of Recommendations: 1
Yes, he sees part of the problem.

I would not agree with his choice of solutions.

The current place we have for banks and bankers is mistaken. Jefferson agrees with me quite directly.

http://www.quotationspage.com/quote/37700.html

... and I have no problem with advancing technology. I am astonished that you make such a mistake about me. I want the abilities it brings. I want the efficiencies it provides. I want the leisure.

What I do not want however, is to think less of my fellow humans who are not able to understand all the new stuff as quickly and thoroughly as I do, or to condemn them to death on account of economic factors beyond anyone's control.

What I observe is a problem that these advances generate for our socio-economic model, or more precisely , for the underlying assumptions of our society. Do you fail to see it? Perhaps you failed to notice that I did not champion ANY answer as well? I am not sure what answer can work for us. The problem is clear.

Ever greater efficiency and automation of society disrupts an underlying assumption of our socio-economic system. I would not eschew the advances in technology... but rather I expect that the socio-economic system will have to adapt and adjust. Given that the current role of banks and financiers has been elevated beyond reason one can easily expect some unpleasantness associated with the adaptation and adjustment.

I think you need to pull in your horns a bit mate. You've been a bit rude and you are apparently not paying enough attention.

BJ
Print the post Back To Top
No. of Recommendations: 3
Unfortunately they have also developed an amazing tendency to short term thinking...
All patently ridiculous pablum. As though the government could have come up with railroads, cars, personal computers, web browsers, massively parallel search engines, dishwashers, refrigerators, robots that crawl the ocean floor to plug oil leaks... ad infinitum.

And then invoking the Chinese as capitalists with long term thinking because they "bought up control of oil assets"?! Seriously?? Yet Western Europe and the US are evil colonialist capitalist imperialists for doing *exactly* the same thing in the Middle East and Africa??

Stupefyingly illogical.

FC
Print the post Back To Top
No. of Recommendations: 3
Private industry has only one purpose, make profits. Unfortunately they have also developed an amazing tendency to short term thinking...

And government is better? You can't possibly tell me that you think that our politicians have been making intelligent long-term decisions over the last century. Our politicians have been acting incredibly irresponsible ever since it decided that it could unilaterally solve all of societies problems, even the ones that were created by the government in the first place but politicians are too cowardly or stupid to admit. This process began mostly in the late 1800s and early 1900s with the Progressives and just took off once the government created an amazing opportunity to expand government power by putting us into the Great Depression.

Do us all a favor and get rid of your statist delusions of a noble government that solves free market problems. We haven't had anything nearly resembling a free market since at least before the Great Depression, and I would argue since at least before the creation of the Fed.

Our country became prosperous long before there was any significant government intervention, so you statists can spare us the lectures of how government is the driving force behind prosperity. It is pure fantasy on your part.
Print the post Back To Top
No. of Recommendations: 1
Productivity is the key to high wages and a high standard of living.

There’s truth in that – productivity is/was the key to higher standards of living. It’s been true for most of the Nation’s history.

Notice that I wrote history. That was then, this is now. Things have changed....dramatically.

The median weekly earnings for American workers have not grown in real terms over the last eight years.

http://tinyurl.com/pj7ep3

Feel like you’re working a lot harder these days, putting in longer hours for the same pay — or even less? The latest round of government data on worker productivity indicates that you probably are.

http://tinyurl.com/yboyqeo

In 1970, CEOs made $25 for every $1 the average worker made. Due to technological advancements, production and profit levels exploded from 1970 - 2000. With the lion's share of increased profits going to the CEO's, this pay ratio dramatically rose to $90 for CEOs to $1 for the average worker...an in-depth study in 2004 on the explosion of CEO pay revealed that, including stock options and other benefits, CEO pay is more accurately $500 to $1.

Paul Buchheit, from DePaul University, revealed, "From 1980 to 2006 the richest 1% of America tripled their after-tax percentage of our nation's total income, while the bottom 90% have seen their share drop over 20%." Robert Freeman added, "Between 2002 and 2006, it was even worse: an astounding three-quarters of all the economy's growth was captured by the top 1%."

Due to this, the United States already had the highest inequality of wealth in the industrialized world prior to the financial crisis. Since the crisis, which has hit the average worker much harder than CEOs, the gap between the top one percent and the remaining 99% of the US population has grown to a record high. The economic top one percent of the population now owns over 70% of all financial assets, an all time record.


http://tinyurl.com/25bokc6

In 2000, at the end of the previous economic expansion, the median American family made about $61,000, according to the Census Bureau’s inflation-adjusted numbers. In 2007, in what looks to have been the final year of the most recent expansion, the median family, amazingly, seems to have made less — about $60,500.

This has never happened before, at least not for as long as the government has been keeping records. In every other expansion since World War II, the buying power of most American families grew while the economy did. You can think of this as the most basic test of an economy’s health: does it produce ever-rising living standards for its citizens?

Real median family income more than doubled from the late 1940s to the late ’70s. It has risen less than 25 percent in the three decades since. Statistics like these are now so familiar as to be almost numbing. But the larger point is still crucial: the modern American economy distributes the fruits of its growth to a relatively narrow slice of the population.


http://www.msnbc.msn.com/id/21309318/

Despite all those $200 sneakers you hear about and the long lines at Starbucks, consumers are actually spending less of their income — much less — on discretionary items like clothing, entertainment and food than their parents did. In fact, after taking care of essentials like housing and health care, today’s middle class has about half as much spending money as their parents did in the early 1970s...

The basics, according to Warren, now take up close to three-fourths of every family's spending power (it was about 50 percent in 1973), leaving precious little left over at the end of the month — and leaving many families with no cushion in case of a job loss or health crisis.

Household incomes have largely stagnated in recent years, even shrinking 2.8 percent from 2000 to 2006. Housing costs skyrocketed 32 percent in that time.
Print the post Back To Top
No. of Recommendations: 0
Now that B's time is freed up, he can work at providing something else that A, C, and D value. Total output of the economy increases. The total value of goods and services increases.

Except that now B has to re-educate himself, months and possibly years of "unproductive" work, or he cannot provide anything that A, C and D value.

Total output of the economy in that case may not increase but A, C and D have much more of it as they bury B and his family.

Maybe you haven't worked out however, that my questions involve what happens when (effectively) all of A, B, C and D are displaced..?

Comparative advantage is no magic bullet. It can be applied within reason, but... it can also be abused.

http://www.huffingtonpost.com/ralph-gomory/manufacturing-and...

Paying someone else to do something that you can do yourself makes sense if you have the skills and talents to earn the money to pay them. Becoming utterly dependent on their abilities is a mistake, and sometimes people don't have the necessary skills and talents.

The problem that exists, however, is that certain people feel entitled to work in a particular career or a particular industry even after the job is no longer valued as highly as it once was.

I wasn't talking about unions mate. If you really want to go there, we have to go to another board. I am talking about technology, and how many years of training it takes to make someone in the society productive and what happens when most of the production happens without human hands or minds having a part in it.

I'm sorry, but it doesn't work that way. You need to provide what others value.

In the current socio-economic system that is true.

I have not imagined otherwise and I am not sure what other sort of system we can organize. However, when productivity is taken to extremes, that rule is not viable.


BJ
Print the post Back To Top
No. of Recommendations: 1
The larger question please.

What does everyone else do?

BJ
Print the post Back To Top
No. of Recommendations: 3
As though the government could have come up with railroads, cars, personal computers, web browsers, massively parallel search engines, dishwashers, refrigerators, robots that crawl the ocean floor to plug oil leaks... ad infinitum.

And then invoking the Chinese as capitalists with long term thinking because they "bought up control of oil assets"?! Seriously?? Yet Western Europe and the US are evil colonialist capitalist imperialists for doing *exactly* the same thing in the Middle East and Africa??

Stupefyingly illogical.

FC


That is what I hate about the "Best of...", it brings in the board trolls who can't be bothered reading the thread in context.

To your "railroads, cars, personal computers, web browsers, massively parallel search engines, dishwashers, refrigerators, robots that crawl the ocean floor to plug oil leaks...", I give you Radar, Sonar (that also gave us Ultra Sound), main frame computers, nuclear power, GPS, currency, rockets (invented by the Chinese military a very long time ago) oh and your robot on the ocean floor was based on military technology though the civil version doesn't seem to be doing a great job at the moment.

The Chinese pay up for what they buy (usually in good US$), the "evil colonialist capitalist imperialists" often did it at the point of a gun or by putting "friendly" dictators in charge.

The Chinese were wonderful Capitalists long before the US as a country existed, they have just modified it a bit to add some long term planning to smooth out the rough edges. Try not to confuse the form of government with business acumen.

Tim <getting sort of bored with this, have to go watch a hockey game> 443
Print the post Back To Top
No. of Recommendations: 4
And government is better? You can't possibly tell me that you think that our politicians have been making intelligent long-term decisions over the last century. Our politicians have been acting incredibly irresponsible ever since it decided that it could unilaterally solve all of societies problems, even the ones that were created by the government in the first place but politicians are too cowardly or stupid to admit. This process began mostly in the late 1800s and early 1900s with the Progressives and just took off once the government created an amazing opportunity to expand government power by putting us into the Great Depression.

Do us all a favor and get rid of your statist delusions of a noble government that solves free market problems. We haven't had anything nearly resembling a free market since at least before the Great Depression, and I would argue since at least before the creation of the Fed.

Our country became prosperous long before there was any significant government intervention, so you statists can spare us the lectures of how government is the driving force behind prosperity. It is pure fantasy on your part.

=============================

MC,

I'm sorry, I thought we were talking about "governments" in general and "Private Industry" in general, why didn't you say you were only talking about yours?

Wow, I had no idea that your government created the Great Depression in order to take over power. Again I apologize clearly they have also taken over the writing of the history books and have removed all reference to the real cause of the Great Depression.

I've always sort of thought of government as a "manager" of the country, sometimes a bit bumbling but generally well intended. I've also always sort of thought that for all their warts we are better off with them than without. Clearly that makes me (according to you) a statist with serious delusions or perhaps someone who has read enough history to know that humans without government descend into dark ages and chaos run by the guys with the guns.

I have just one question left, are you for real? }};-O


Tim <wishes to apologize to Kudlow, at least he gets paid for his whacky single song> 443
Print the post Back To Top
No. of Recommendations: 3
It's always tempting to respond to people who call you 'stupefyingly stupid' because they don't even know enough to make such a judgment in the first place. I am learning to put them in the peebox.
Print the post Back To Top
No. of Recommendations: 1
Obviously, there is a point of diminishing returns when it comes to automation and productivity.

When one guy can run the entire world by pushing buttons, he'll be very lonely.

On the other hand, when everyone spends all day scambling to get enough food, life is pretty miserable.

So there ought to be a happy point in between with both enough work and enough food.

The question is, where is that point, and how do we get to it and stay there?
Print the post Back To Top
No. of Recommendations: 0
Wow, I had no idea that your government created the Great Depression in order to take over power. Again I apologize clearly they have also taken over the writing of the history books and have removed all reference to the real cause of the Great Depression.

The history books are not economics books, and economics books have talked at length about the incredibly poor government policies leading to the Great Depression -- monetary policy, massive increases in individual and corporate income tax rates, increases in estate taxes, massive hikes in tariffs, regime uncertainty regarding all the government programs, and on and on.

I'm sorry Tim, but ignorance of economics is not a defense.
Print the post Back To Top
No. of Recommendations: 0
What does everyone else do?

Anything they want to do? Arts? Education? Research? Gardening?

What do retirees do when they no longer work? Some sit around and watch TV all day. Some are more active than when they worked 40-60 hours per week.

Does every pursuit have to be for monetary gain?

The biggest question is how much skill it takes for the six people to run the robots. If anyone can do it, maybe each person only needs to take a one-hour shift once a month. Keep in mind that resources should be plentiful (and cheap, if not free) since only six people are needed to create them for an entire country.

When I was in college, I worked for 15 hours per week in exchange for room and board. That left me plenty of time for other things -- even classes. And, even after I left school and then worked a full-time job for about 15 years, I started working part time for the next 13 years, down to only 20 hours per week when I retired. Plus, my commute to work was only a 10-minute walk, which left me with even more spare time.
Print the post Back To Top
No. of Recommendations: 0
THANK you.

How to organize society in that manner, while still learning and becoming capable of more and greater things. It is a puzzle for me. I would not abandon the science or the machines for they are our best tools. Yet the conundrum is real.


respectfully
BJ
Print the post Back To Top
No. of Recommendations: 0
Does every pursuit have to be for monetary gain?

The biggest question is how much skill it takes for the six people to run the robots. If anyone can do it, maybe each person only needs to take a one-hour shift once a month. Keep in mind that resources should be plentiful (and cheap, if not free) since only six people are needed to create them for an entire country.


Exactly right, but how does your vision match the social and economic realities we currently have?

How do we get THERE from HERE. How do we govern ourselves in such an environment. It will not be all-at-once either. There is still enough real work for a fair lot of us to prosper in the old form, but that does not last. It is change. We have to reckon with it in the largest sense of MACRO-economics. It will be another generation or two perhaps, in making itself intractable. Perhaps we will have other concerns that obviate the issue (Climate Change, War). It is not however, unthinkable.

I am not saying that there is no answer... only that I do not think we know well how to reach it... or that the social fabric we have evolved is compatible with it.

respectfully
BJ
Print the post Back To Top
No. of Recommendations: 0
The Chinese pay up for what they buy (usually in good US$), the "evil colonialist capitalist imperialists" often did it at the point of a gun or by putting "friendly" dictators in charge.

Do you relish in taking utterly ridiculous positions on topics? Or perhaps you've actually never heard of Mao? Or the "Cultural Revolution", in which millions of their own citizens died in the name of your "capitalist growth".

Bored? Going to watch a hockey game? Maybe if you actually opened your mind, instead of breaking your arm patting yourself on the back, you'd learn something about how things actually work.

But I shouldn't have expected more from a Philadelphia fan. Here's hoping the Bruins kick the Flyers asses, for once.

FC
Print the post Back To Top
No. of Recommendations: 3
It's always tempting to respond to people who call you 'stupefyingly stupid' because they don't even know enough to make such a judgment in the first place. I am learning to put them in the peebox.

jqc,

He can call me anything but a Philly fan, now that is going way overboard. }};-O

The only time I cheer for Philly is when they are playing Toronto. }};-D




Uh Jeff, you will warn us (well at least me) in lots of time when Wendy is due back? }};-O
Print the post Back To Top
No. of Recommendations: 3
The history books are not economics books, and economics books have talked at length about the incredibly poor government policies leading to the Great Depression -- monetary policy, massive increases in individual and corporate income tax rates, increases in estate taxes, massive hikes in tariffs, regime uncertainty regarding all the government programs, and on and on.

I'm sorry Tim, but ignorance of economics is not a defense.

============================

Ah scheesch MC,

Since you wish to continue making a fool of yourself, there were multiple causes for the Great Depression, some but far from all of those "poor government policies"... well unless you think the government started the dust bowl as well? }};-O

My idea of defense is barbed wire, landmines, machineguns on the flanks, pre-registered artillery targets...

OK enough of this nonsense, I've been told to put you in the pee box and in truth nothing else makes sense as you are no longer living in the real world.

****not signed****
Print the post Back To Top
No. of Recommendations: 0
<monetary policy, massive increases in individual and corporate income tax rates, increases in estate taxes, massive hikes in tariffs, regime uncertainty regarding all the government programs, and on and on.>

Policies we appear to be following based on what I hear on TV news.

History repeats itslf. Again.
Print the post Back To Top
No. of Recommendations: 1
The history books are not economics books, and economics books have talked at length about the incredibly poor government policies leading to the Great Depression -- monetary policy, massive increases in individual and corporate income tax rates, increases in estate taxes, massive hikes in tariffs, regime uncertainty regarding all the government programs, and on and on.

I'm sorry Tim, but ignorance of economics is not a defense.

============================

Ah scheesch MC,

Since you wish to continue making a fool of yourself, there were multiple causes for the Great Depression, some but far from all of those "poor government policies"... well unless you think the government started the dust bowl as well? }};-O

My idea of defense is barbed wire, landmines, machineguns on the flanks, pre-registered artillery targets...

OK enough of this nonsense, I've been told to put you in the pee box and in truth nothing else makes sense as you are no longer living in the real world.

****not signed****


You *should* put me in your Penalty Box, seeing as how you are extremely determined to wallow in economic ignorance.
Print the post Back To Top
No. of Recommendations: 2
Guys - you are SO lucky Wendy isn't watching.

http://boards.fool.com/Message.asp?mid=28510714

Jeff
Print the post Back To Top
No. of Recommendations: 3
What does everyone else do?

Anything they want to do? Arts? Education? Research? Gardening?

What do retirees do when they no longer work? Some sit around and watch TV all day. Some are more active than when they worked 40-60 hours per week.

Does every pursuit have to be for monetary gain?

The biggest question is how much skill it takes for the six people to run the robots. If anyone can do it, maybe each person only needs to take a one-hour shift once a month. Keep in mind that resources should be plentiful (and cheap, if not free) since only six people are needed to create them for an entire country.

When I was in college, I worked for 15 hours per week in exchange for room and board. That left me plenty of time for other things -- even classes. And, even after I left school and then worked a full-time job for about 15 years, I started working part time for the next 13 years, down to only 20 hours per week when I retired. Plus, my commute to work was only a 10-minute walk, which left me with even more spare time.


I think we are making this far more difficult than it needs to be. Let's assume that there are two people. You and me. That's it. Let's say that I am productive enough to produce enough necessities for both of us. Obviously it won't make sense for me to produce more than I need for my own use unless I want to trade it for something that you can offer (or unless I want to donate it out of the goodness of my heart). So either you have a job producing something or providing some service that I value, or you don't, in which case I won't bother producing a surplus, and you will have a job producing for your own needs. This is why the argument that productivity kills jobs is and always has been completely asinine.
Print the post Back To Top
No. of Recommendations: 3
The assembly lines and factories were there and semi-skilled jobs were available still. People without much training could move from one to another job.

Those jobs have gone the way of haberdashers, my great aunt was a haberdasher and her industry is gone, my grandparents ran a 5 acre chicken ranch, the land is now a city and chicken ranches are now huge industrial factories. My field (programming) has major changes every 4 years, and completely reinvents itself every decade.

Now however, it takes half a decade to train in a specialty that will be obsolete by the end of that decade. Engineers disappear, replaced by CAD and CAM. Middle Managers are replaced by complex optimizing spreadsheets and "expert systems". Floor workers are replaced by robots. About the only people NOT worried about automation are scientists and engineers developing and maintaining it, politicians and plumbers. It takes more than flexibility and a willingness to learn to do well now. MUCH more.

I suspect it is easier to retrain an engineer than to learn to read. My grandfather didn't make it past the 6th grade, my father and I, BA's, my son, post-graduate. When I graduated to be in the top 10% of educated people in the US you needed a BA, now to be in the top 10% you need a masters.

Those unable to maintain relevancy will, in general, do poorly have shorter, harder lives. Life is kinder now than in the past, but it's still true. If you can't compete as an individual or a society you will slip away.

"Slip away" - Is that a euphemism for dying? The society I live in frowns on just letting people die. Maybe you want society to work differently? I suspect you will get your wish in a way, as we can only have the morality we can afford and by most accounts, the USA is broke.

Dieing is one form of slipping away, living in abject poverty is another, early retirement, regardless of net worth, to do nothing is as well. Anything that makes your contribution to society irrelevant is slipping away, the mechanism is unimportant.

Just like the underlying assumption.

I don't envy you that future. Nor the sick feeling you will get when you realize that it is not as civil or civilized as you expected, and that libertarian ideas fail very quickly when confronted with actual human nature... even more quickly than the communist's notions.


Being neither a Communist or Libertarian, I don't see a dim future. I don't think the US is broke, however, I see the need for fundamental changes in values. I see a bright future, if not for the US, then whichever society replaces us. Capitalism is the best financial system we currently know about, however, as a species we're always trying new stuff. Capitalism will one day be replaced by a better, more effective financial system. The US will eventually fade and be replaced at the world's helm by a better, more effective country.

If you can't cope with constant change, you will slip-away, and perhaps your blood-line will end, but someone else will do better in that society and thrive.

I have very thick glasses, 200 years ago I would have most likely been a blind beggar. Since I was born recently, I have glasses, a good education, and a very good life. Some if it is just luck.
Print the post Back To Top
No. of Recommendations: 1
Middle managers have disappeared like the Arctic Ice in Summer. Their principle functions in terms of data analysis and projections, have been ceded to spreadsheets and they are greeting people at Wal-Mart if they can find anything at all.

The machines are indeed working in place of routine/mundane/repetitive decision makers.


At first, I thought this was entirely a hypothetical question - a possible future "what if?" But it sounds as though you truly believe that a portion of humanity is being phased out of the work force permanently as machines take over like something straight out of the Terminator.

I'm curious what evidence you have that supports your claim? Unemployment rates have been within the same low range that they were at a hundred years ago, barring the current recession which is irrelevant to the topic at hand. Your proposed exodus of low-skill workers from the work force cannot be taking place without evidence of it showing up through a steadily rising unemployment rate.

Attrition from the work force due to automation or other technological advances has taken place since the beginning of modern industry. This has always been a force of good for society as a whole, for the economic reasons already said. Two cases in point that I already briefly mentioned: the agricultural and the manufacturing sectors. To make a long story short, visit this website and look at the graphs. I feel like i've posted this link a million times in response to repeated assertions by people who are under false pretenses that the U.S. economy is losing its manufacturing base and is doomed as a result, but here it is again.

http://www.clevelandfed.org/research/trends/2007/0307/02ecoa...

The two sectors which were historically and arguably the most labor intensive and most uncomfortable work settings - agriculture and manufacturing - have seen some of the largest productivity gains anywhere. And in each case, a similar trend has played out.

Employment in each of those sectors once made up over 35% of the US economy by those charts at different periods of time - agriculture at in 1900 and then manufacturing in 1945. In each case, although agricultural and manufacturing output has either risen or remained constant, employment has fallen drastically in those two sectors due to new technology and automation. In each case, both sectors thrived as a result of the new technology. In each case, naysayers panicked about the loss of employment using the same argument about a lack of jobs being present and predictions of a doomed U.S. economy. And in each case, the economy was made better because of the improved technology and automation that provided us with cheaper products, freed up labor for more productive and comfortable jobs, and greatly improved the standard of living for everyone in this country.

The real kicker though is that these two industries have historically had some of the harsher worker environments to boot. Agriculture - slaving away under the sun with back breaking labor for simple subsistence farming for food, which our ancestors spent centuries doing just to survive. Manufacturing - sweating away in cramped, crowded factories doing insanely repetitive jobs non-stop around the clock their entire lives that no doubt drove a number of people insane. Technology has allowed us to create the same products we did in the past with now only minimal human sacrifice and hardship. Honestly, if that isn't the single greatest contribution to the human condition, I don't know what is.
Print the post Back To Top
No. of Recommendations: 0
MC

That works for farmers.

It doesn't work for todays society.

Ownership of things gets in the way.

DOESN'T it.
Print the post Back To Top
No. of Recommendations: 0
OK... I can work with that. It is just luck and your meaning for "slip away" is more clear with that. You get a rec on balance.

:-)

I am not however, as optimistic as you are.

It IS easier to retrain an engineer. How many people can be trained to be engineers in the first place is another question.

I think Capitalism would work OK in general if we fixed the monetary system. The fractional-reserve fiat currency arrangement puts the bankers too far ahead of everyone else. The key to THIS problem is to arrange things so that people have leisure AND resources. We've arranged things so that wealth automatically concentrates. That can't, from a thermodynamic perspective, be correct... but that is another topic too.

Thanks
BJ
Print the post Back To Top
No. of Recommendations: 0
And in each case, the economy was made better because of the improved technology and automation that provided us with cheaper products, freed up labor for more productive and comfortable jobs, and greatly improved the standard of living for everyone in this country.

Looking at statistics of employment and standard of living in isolation is a good way to deceive yourself. One also has to contemplate sovereign and personal debt loading. One also has to examine the statistics being used... really carefully.

My observations are my own. Over a lifetime. What people do, what they produce, what the nation as a whole produces, and at what cost. Where is the money going, who is living better or less well.

The ground truth started diverging from the statistical indicators back in the 70's and 80's I didn't notice right away... was not in country, but when I returned I saw the changes. Perhaps that is part of the reason I am as skeptical of the claims that things are better.

Here is one indication about the "things are better" lie being told.

The S&P index in terms of Gold.

http://2.bp.blogspot.com/_H2DePAZe2gA/S-wbNT0-cOI/AAAAAAAAMy...

The other, more relevant to this discussion, is here:

http://www.shadowstats.com/

I don't subscribe though, so I don't have access to details and longer history.

People were defined out of existence. I remember that too. As for what I expect.... I expect that it has not happened THIS way before.

Automation can replace a wide range of menial and semi-skilled labour now, not something that was possible even in the early 1990's. It isn't serious yet, but I don't think the good jobs are coming back for anyone who isn't at least 2 sigma above the mean in terms of ability... and those of us who ARE in that fortunate position have to retrain every year or two.

I expect it to get worse as we get better at automating things.

I don't know that it will in fact reach the state I projected here, because there are limitations of energy and resource use, and externalities like AGW and war can throw the progress towards this state completely out the window. My personal expectation is that the externalities will overwhelm us before we actually HAVE to answer the problem...

Yet... even there.

http://www.fas.org/programs/ssp/man/uswpns/air/attack/x-45_u...

One needs to consider it.

respectfully
BJ
Print the post Back To Top
No. of Recommendations: 3
MC

That works for farmers.

It doesn't work for todays society.

Ownership of things gets in the way.

DOESN'T it.


No, it doesn't. Property rights are absolutely vital to prosperity. That hasn't changed, and it's not going to.

The idea that our current economic challenges are related to productivity increases is asinine. It requires completely avoiding any rational thought whatsoever to come to that conclusion.
Print the post Back To Top
No. of Recommendations: 1
No, it doesn't. Property rights are absolutely vital to prosperity. That hasn't changed, and it's not going to.

What he means is that in your scenario, where one person produces all of the goods and the other person has to provide for himself, the second person can't feed himself if the first person owns all the land.
Print the post Back To Top
No. of Recommendations: 3
<<<No, it doesn't. Property rights are absolutely vital to prosperity. That hasn't changed, and it's not going to.>>>

What he means is that in your scenario, where one person produces all of the goods and the other person has to provide for himself, the second person can't feed himself if the first person owns all the land.

=============================

Wind,

Well actually no, he will need to hire that person and several others to protect his property rights.

He clearly doesn't trust the government to do it and there is nothing more dangerous than a hungry person with nothing to lose. Of course you usually learn such stuff from history books as the people who write about economics tend to be coddled educators and their students who have little experience with hunger and poverty.


**** not signed ****


OK guys I'm putting this thread on ignore before Wendy catches me and beats the pulp out of me. }};-O
Print the post Back To Top
No. of Recommendations: 1
TECO built a huge power plant at Gila Bend. California wanted the power but the grid wouldn't take it. The CEO at TECO lost his job, and the company wrote off the Gila Bend project. I don't know whatever happened to the plant.

TECO also built another huge power generator, I think it was in Mississippi, which they also wrote off for the same reasons. The grid wouldn't take it.

brucedoe
Print the post Back To Top
No. of Recommendations: 1
OK... I can work with that. It is just luck and your meaning for "slip away" is more clear with that. You get a rec on balance.

Thanks for the rec.

I am not however, as optimistic as you are.

Optimism may depend upon perspective which depends upon life experience. I suspect I'm older than you, late 50's. I remember duck and cover drills in school, Bay of Pigs, Cuban Missile Crisis, Cold War, Vietnam. Korea and WWII were recent history. Cities burning due to social unrest, political assassination (Kennedy's and MLK), discrimination being accepted and legal. Being unable to see and rivers burning from pollution. Family members with numeric tattoos on their arm. S&L crisis, housing crash of the 80's, divorce, then the usual deaths of friends and loved ones.

We'll muddle through this one, hopefully learn a couple of lessons. From my perspective, life is good.
Print the post Back To Top
No. of Recommendations: 28
The idea that our current economic challenges are related to productivity increases is asinine.

Did I say that it did? MC - I have been patiently exploring a macro effect of disruptive technology that is not more than 10 years old and which cannot yet be truly disruptive except in the wealthiest nations on the planet. Places where the technology is developing.

A nascent threat to the system.

I have described what can happen and why, insofar as I can, but I warn that in this area I have a pretty good crystal ball. I AM a technologist, I worked on the machines, I understand the challenges and the solutions. I know what can be done and you have described well the economic motivations that make the doing inevitable.

If B has no "means of production" those being owned in total by A or Z (who owns everything). B dies. You provided a simplistic answer straight out of the current bible of economics, and called the discussion asinine, not for the first time.

People who can't discuss and contemplate change are ill-equipped to face it... and change is what happens all the time.

I didn't take it the one-step-further, just said that there was a problem.


One-step-further... so you understand what you risk. You seem to accept that the economic machinery you love so well can grind people into sausage paste indefinitely. Yet human history shows that humans have always found ways to wreck the machinery.

B (and C and D and the rest of the alphabet) join together, rip A (or Z or both) out of his castle of privilege and take government and economics in a less efficient, more egalitarian direction.

Revolution. The penultimate macro risk.

You cannot accept rising inequality without accepting greater risk of revolution.

Which is something that consistent whingers about tax-and-spent-and-welfare-rorts here do not take seriously as it hasn't happened in the USA ... YET.

Such an outcome is not to be desired. It IS a risk. Automation taking economic place from the least capable in society IS a trend.

The growing underclass is I think, a reality. Still small enough to be masked by other things, and the young ones can always join the military and we can find war enough to get them killed.

But to call that destruction "creative" is a mistake.

BJ
Print the post Back To Top
No. of Recommendations: 0
Which is something that consistent whingers about tax-and-spent-and-welfare-rorts here do not take seriously as it hasn't happened in the USA ... YET

It's happened and it's happening. We ahve more people in jail per capita than any country on the planet. Leave out the sexual predators, and the crimes of passion prisoners, and the rest were involved in economic crime. The inner cities in the US are mostly in anarchy, as our many rural areas in the West. That is revolution by another name. Then, of course, we can go back to the riots of the late 60's and early 70's, and further than that thye riots of the labor movement in the late 19th, early 20th Century.
Print the post Back To Top
No. of Recommendations: 0
Not a serious revolt - the people who caused and are still causing the mess are still in office... and I am not describing politicians, pawns that they are.

BJ
Print the post Back To Top
No. of Recommendations: 2
1) 'Socialism confuses the distinction btw Governmentt and Society. As a result of this, every time we object to a thing being done by the Govt, the socialists conclude that we object to its being done at all.'

2) There are some things I want our Government to do. Virtually *none* of them should be done by the Federal Government. The Fed, yes, the Armed Forces yes. International treaties, sure.

Just about everything else can and should be done at the local/state levels.
Print the post Back To Top