Harry,
Arthur is quite right (below) in saying that other sorts of equilibria
(other than full employment and a degree of prosperity for all) are quite
possible. Indeed, lop-sided economic equilibria have operated throughout
most of man's civilized history. We in the Western countries have only had
the illusion of possible prosperity for all during the past 300 years when
a prodigious cataract of (ever-cheaper) energy opened up, a cornucopia of
iconic (uniquely new) consumer goods tumbled forth and full employment was
necessary. It led to wild dreams of utopia by both the extreme wings of
political ideology -- socialism and the free-enterprise.
But we're already fast entering a different situation. The cost of energy
(as a proportion of personal expenditure) is now rising remorselessly,
there have been no uniquely new consumer goods for the past 30 years or so,
and automation is now biting into mass employment (and thus also forcing
down average real wages for the past 30 years). We (in the West) are now
becoming as securely locked into our present urbanized way of life with all
its limitations as all well-developed agricultural cultures were locked
into theirs in Eurasia and Central America.
I'm generalizing, of course. There have always been slow historical changes
going on in previous times but, by and large, there have always been huge
wealth divisions between an elite and the masses. And this is now happening
again. There was a pronounced surge towards the back end of the 19th
century, subsequently softened somewhat by the exigencies of two massive
wars but then resuming again in the last few decades, firstly by big
business, more recently joined by big finance. In West European countries
the wealthy elite are fed from a relatively thin stream of private schools
and a small number of elite universities in each case. America is now fast
approaching the same situation. The American Dream of hard work leading to
success -- the Horatio Alger myth -- no longer applies. In order to make a
fortune it's now more of a matter of "Who you know" within the elite
network (particularly the civil services of big governments from which
major contracts are to be garnered) rather than "What you know" (the
technical know-how can always be bought).
Besides lower wages and increasing unemployment among the masses in the
"advanced" countries, higher energy costs and increasing automation are
leading to lower profit margins (robots are becoming easier and quicker to
install almost anywhere than to be able to access sufficient suitable
labour). Increasingly, possible opportunities for success in the mass
production of food and consumer products will become humdrum occupations
and not be as attractive to young talented individuals as before. At the
present time they are streaming into the financial sector (now about 15% of
the total GDP of all advanced countries) which is now a considerable part
of the decision-making elite (my estimate: about 25% of the population
ranging from the very wealthy down to high specialized professionals).
There is nothing to stop the hour-glass job structure necking in even
further in the coming years. And it is this which has to be accepted as a
modern reality before any attempt can be made in trying to find a
socio-economic solution to it. So far, no economics textbooks mention this
new phenomenon. The classsical economists -- and Henry George also -- had
many useful insights in their day (the beginning of the industrial
revolution) but we're in a very different situation now.
Keith
At 15:52 23/12/2010 -0500, you wrote:
Harry,
I read and follow what you write. And like the writings of George. But I
just don't understand your jumps of logic.
As here,
We are going to need shoes whether or not there is automation. In the
paragraph above, there is the assumption that people are unable to buy the
shoes made by automation. But then we must ask why is the automated plant
operating if there's no one to buy its products?
This is not a binary situation. People will be able to buy shoes. Lots
of shoes, maybe not. But some shoes. Would they buy more if they had
jobs? Yes. As income levels fall the shoe mfg automated plant sees that
shoe sales are falling and then they cut back on output. And down the
line cutbacks take place and a new equilibrium is reached. Shoes are
produced. The plant is operating at 60 percent output. Unempl is at 25
percent. And this becomes stable.
I think what you dont take into account is leads and lags. The economy is
dynamic and is constantly adjusting and re-adjusting to new information.
Considering the enormous improvement in the power to produce even with
modest automation, how come we have involuntary unemployment and wages for
those at the bottom which verge on subsistence levels? How come we don't
have everything that we need or, for that matter, everything we want?
What is your answer to this?
The introduction of the perils of automation is simply a red herring
designed as is contrived worries about outsourcing and imports to keep us
from carefully examining the real situation.
Dont agree with this, above.
One of the two assumptions of classical political economy is that,
"People's desires are unlimited." As they satisfy their basic desires, so
they go to others. No matter how many desires they satisfy, always new
desires open up in front of them asking to be satisfied. If this
assumption is credible, there cannot be unemployment. No matter if we all
work 24 hours a day, we can't satisfy unsatisfiable desires
What does this mean? What kind of background logic or theory leads to
this outcome?
Arthur
From: [email protected]
[mailto:[email protected]] On Behalf Of Harry Pollard
Sent: Thursday, December 23, 2010 3:01 PM
To: 'RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION'; 'Keith Hudson'
Subject: Re: [Futurework] A Robot Stole My Job: Automation in the
Recession | Singularity Hub
Perhaps the silliness of this is summed up by this paragraph.
We previously
<http://singularityhub.com/2009/12/15/martin-ford-asks-will-automation-lead-to-economic-collapse/>reviewed
Martin Fords book
<http://singularityhub.com/2009/12/15/martin-ford-asks-will-automation-lead-to-economic-collapse/>The
Lights in the Tunnel, which argues that as the economy becomes fully
automated, consumers wont have capital to keep consuming and the whole
global economy will grind to a halt.
We are going to need shoes whether or not there is automation. In the
paragraph above, there is the assumption that people are unable to buy the
shoes made by automation. But then we must ask why is the automated plant
operating if there's no one to buy its products? In another post, I
mentioned the automated plant (I think it was in RUR) that was producing
like crazy even though the products were not removed. Eventually, it
disappeared under a mountain of products. Well, that was fiction.
Just imagine the enormous increase in automation provided by the invention
of the hammer and saw. Suddenly, it was possible to make a table in an
hour instead of the week. However, the table would not be made if it had
not been a consumer for it. In similar fashion, if there was no consumers
with "capital" someone would have to turn off the automated plant. But,
the desire for shoes would continue and someone would satisfy it perhaps
on a cobblers last.
By far the greatest part of production is getting the product from the
factory to the consumer. I'm not sure how that could be automated. Perhaps
we buy a motherboard from China for five dollars and get it from the dock
to the consumer at the Denver Wal-Mart who pays $80. Most of the cost goes
to Americans.
The history of mankind's production has been a continual improvement in
the quality of production at ever lowering costs. Inevitably, this means
that fewer people are needed to produce larger amounts of better things.
This is good. It's the reason why we have a 20 hour workweek and pay that
exceeds $200 an hour. Also, it's the reason why we have such a tremendous
service economy which makes life so much more pleasant for all of us.
What's that? We don't have the 20 hour workweek and pay that exceeds $200
an hour?
Considering the enormous improvement in the power to produce even with
modest automation, how come we have involuntary unemployment and wages for
those at the bottom which verge on subsistence levels? How come we don't
have everything that we need or, for that matter, everything we want?
The introduction of the perils of automation is simply a red herring
designed as is contrived worries about outsourcing and imports to keep us
from carefully examining the real situation.
One of the two assumptions of classical political economy is that,
"People's desires are unlimited." As they satisfy their basic desires, so
they go to others. No matter how many desires they satisfy, always new
desires open up in front of them asking to be satisfied. If this
assumption is credible, there cannot be unemployment. No matter if we all
work 24 hours a day, we can't satisfy unsatisfiable desires.
Henry George summed it up very well when he asked, "Why are people looking
for jobs? Why aren't jobs looking for people?"
However, in the absence of any such pertinent questions, we must be
satisfied with the somewhat idle conjectures of people who want to get
something into print.
Harry
******************************
Henry George School of Los Angeles
Box 655 Tujunga CA 91042
(818) 352-4141
******************************
From: [email protected]
[mailto:[email protected]] On Behalf Of Michael Gurstein
Sent: Wednesday, December 22, 2010 9:51 AM
To: 'Keith Hudson'; 'RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION'
Subject: Re: [Futurework] A Robot Stole My Job: Automation in the
Recession | Singularity Hub
What I find interesting about the comments is how reflective they are...
Where are the right wing attack hounds that seem to be present in
virtually every other comment forum...
M
-----Original Message-----
From: [email protected]
[mailto:[email protected]] On Behalf Of Keith Hudson
Sent: Wednesday, December 22, 2010 7:19 AM
To: RE-DESIGNING WORK, INCOME DISTRIBUTION,EDUCATION
Subject: Re: [Futurework] A Robot Stole My Job: Automation in the
Recession | Singularity Hub
At 10:03 22/12/2010 -0500, Robert wrote:
Some may find this interesting - particularly the comments.
<http://singularityhub.com/2010/12/15/a-robot-stole-my-job-automation-in-the-recession/>http://singularityhub.com/2010/12/15/a-robot-stole-my-job-automation-in-the-recession/
An excellent article, plumb in the middle of this list's interests. At the
end of it one can be left in little doubt that our present governmental,
corporate and social structures, as they have developed over the last 300
years or so, are fast becoming inadequate and we are in effect writing-off
chunks of our population as simply not required any longer.
Keith
Keith Hudson, Saltford, England
<http://allisstatus.wordpress.com/2010/12/>http://allisstatus.wordpress.com/2010/12/
Keith Hudson, Saltford, England
<http://allisstatus.wordpress.com/2010/12/>http://allisstatus.wordpress.com/2010/12/
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