No. The "displacement of labour by technology" has always been a concern of economics, at least since the late 18th century. The orthodox rebuttal to that was the notion of the self-adjusting economic system that Keynes criticized, which I cited in my first post.
On Fri, Apr 13, 2012 at 2:19 PM, Ed Weick <[email protected]> wrote: > ** > Another thing Keynes did not seem to take into account is that a growing > portion of investment concerns the displacement of labour by new > technology. This may not have been a significant economic concern in his > day, but it most certainly is now. > > Ed > > > ----- Original Message ----- > *From:* Tom Walker <[email protected]> > *To:* RE-DESIGNING WORK, INCOME > DISTRIBUTION,EDUCATION<[email protected]> > *Cc:* Keith Hudson <[email protected]> > *Sent:* Friday, April 13, 2012 3:41 PM > *Subject:* Re: [Futurework] "Efficiency's Promise: Too Go od to Be True" > "More Jobs Predicted for Machi nes, Not People" > > "Economic Possibilities for our Grandchildren" is a good starting point. > Keynes made the same point with more precision 15 years later in a letter > to T. S. Eliot and a couple years before that in a Treasury Department > memorandum on full employment after the war. > > http://econospeak.blogspot.ca/2009/08/skidelsky-on-keynes-and-queens.html > > Here's how Keynes biographer Lord Skidelsky summed up the relationship > between the earlier essay and the later letter: > > My final section can best be introduced by quoting from a letter Keynes >> wrote to T.S. Eliot on April 5, 1945: "The full employment policy by means >> of investment," he wrote, "is only one particular application of an >> intellectual theorem. You can produce the result just as well by consuming >> more or working less" (CW, XXVII, p. 384). >> >> To make sense of this mysterious remark, one has to go back to Keynes' >> essay, "Economic Possibilities for our Grandchildren," first read to >> Winchester schoolboys in 1928, or even further back to G.E. Moore's Principia >> Ethica, the bible of his youth and the source of his ideas about the >> good life. Economics, Keynes always insisted, is only useful if it can get >> us over the hump of scarcity, as quickly as possible, into the realm of >> plenty, when man would confront his "real, his permanent problem--how to >> use his freedom from pressing economic cares ... to live wisely and >> agreeably and well" (CW, IX, p. 328). "The full employment policy by means >> of investment" is Keynes' method of accelerating through the barrier. From >> this perspective, the mass unemployment of the interwar years was not just >> the result of a random collapse of confidence, but the precursor of what >> can happen to rich societies that fail to make adequate preparations for >> the good life which wealth makes possible. >> >> It is typical of Keynes that he should have returned to this vision >> during the war itself, as soon as it became clear that the Allies would >> win. The core of it is contained in a memorandum he wrote on May 25, 1943, >> entitled "The Long-Term Problem of Full Employment." He saw three phases >> after the war. In phase I, which he thought might last five years, >> investment demand would exceed full employment saving, leading to inflation >> in the absence of rationing and other controls. In this phase, the emphasis >> should be on securing a high rate of saving in order to reconstruct the war >> damaged economy. In phase 2, which he thought might last between five and >> ten years, he foresaw a rough equilibrium between investment and full >> employment saving "in conditions of freedom," with the state active in >> varying the pace of investment projects. In phase 3, investment demand is >> so saturated that it cannot be brought up to the level of full employment >> saving without embarking on wasteful and unnecessary programmes. In this >> phase, the aim of policy should be to encourage consumption and discourage >> saving, and so absorb some of the unwanted surplus by increasing leisure, >> with shorter hours and more frequent holidays. This will mark the entrance >> to the "golden age," the age of capital saturation. Eventually, Keynes >> thought, "depreciation funds should be almost sufficient to provide all the >> gross investment that is required" (CW, XXVII, pp. 321-324; also see Keynes >> to Josiah Wedgwood, July 7, 1943, p. 350). It is the age, foreshadowed in >> the General Theory, of the "euthanasia of the rentier," since there will be >> no demand for new capital. >> >> The same objection can raised against this essay in prophecy that was >> raised against Keynes' earlier "Economic Possibilities for our >> Grandchildren": that it assumes that all material wants in the wealthy >> nations will be quickly saturated, and that it completely ignores the >> capital needs of the poor countries. In these respects Keynes was a child >> of his times. He did not foresee that technology would constantly create >> new products and underestimated the ability of advertising constantly to >> create new wants. Above all, he did not foresee the postwar population >> explosion in the developing countries. This factor, more than anything >> else, has rendered his prophecy academic. >> >> Nevertheless, it does raise some pretty fundamental questions about what >> economics is for, as well as the distinctly awkward question of how far the >> peoples of wealthy nations should continue postponing their own "golden >> age" until everyone in the world has caught up with them. What is certain >> is that Keynes would never have worshipped at the altar of GDP. The rate of >> per-capita income growth was only important to him as an indication of the >> speed at which societies were approaching material abundance. Beyond that >> point, he expected that rates of growth would and should slow down. One can >> surmise that he would have had little sympathy for "endogenous growth >> theory" which promises to postpone the slowdown of rich countries, and thus >> the "catch up" of poorer countries, into a far distant future. >> >> My purpose in this paper has not been to enter into an argument with >> Keynes. It has been to show that his thought, from whatever period of his >> life one chooses to take it, is richer, more suggestive, and more >> unexpected than the textbook Keynesianism that still flourishes, or the >> administrative Keynesianism that ruled policy in the 1950s and 1960s. His >> views on the minimum sustainable rate of unemployment and his fiscal >> philosophy still have a great deal to offer governments. His reminder that >> economics needs to retain its connection with the non-economic ends of life >> as these have been conceived by moralists and ethical philosophers remains >> a necessary warning against blind worship of the golden calf, and against >> marketization carried to extreme lengths. So I say: Down with Keynesianism, >> and up with Keynes! > > > > On Fri, Apr 13, 2012 at 11:50 AM, Arthur Cordell <[email protected]>wrote: > >> Keith see the url below Economic Possibilities for our Grandchildren >> >> >> http://www.marxists.org/reference/subject/economics/keynes/1930/our-grandchi >> ldren.htm<http://www.marxists.org/reference/subject/economics/keynes/1930/our-grandchi%0Aldren.htm> >> >> Keynes saw the world quite clearly. He saw a future where we wouldn't >> have >> create work and worry about unemployment. >> >> -----Original Message----- >> From: [email protected] >> [mailto:[email protected]] On Behalf Of Ed Weick >> Sent: Friday, April 13, 2012 2:12 PM >> To: Keith Hudson; RE-DESIGNING WORK, INCOME DISTRIBUTION, EDUCATION >> Subject: Re: [Futurework] "Efficiency's Promise: Too Go od to Be True" >> "More >> Jobs Predicted for Machi nes, Not People" >> >> Not sure that you have Keynes and Marx right here, Keith. When I studied >> economics, Keynesianism was still very much the vogue. I don't recall >> that >> his solutions were to be applied via the banks or printing money. Rather, >> the idea was to involve large scale public works etc. when the private >> sector ran out of steam and the public sector had to kick in. I suppose >> that borrowing and printing money might have been part of this, but it was >> not emphasized. As for Marx, the ideas were very good, but how would you >> ever do what he recommended. Well, as Lenin and Stalin demonstrated, the >> state would do it, and in doing it, they would convert a humane idea into >> a >> horror show. >> >> One of the best books I've read on why good ideas go terribly wrong is >> John >> Gray's "Black Mass". If you haven't read it, do take a look. >> >> Ed >> >> >> ----- Original Message ----- >> From: Keith Hudson >> To: RE-DESIGNING WORK, INCOME DISTRIBUTION,EDUCATION ; Tom Walker >> Sent: Thursday, April 12, 2012 10:32 PM >> Subject: Re: [Futurework] "Efficiency's Promise: Too Go od to Be True" >> "More >> Jobs Predicted for Machi nes, Not People" >> >> >> Tom, >> >> Your previous comments over the years on FW concerning the "lump of labour >> fallacy" caused quite a change of mind in my own thinking, so I was >> interested to read your recent exegesis of the increasing >> automation-joblessness problem on your ecologicalheadstand website. There, >> you contrast the different approaches taken by Marx and Keynes in trying >> to >> solve the same problem. Here, I'd just like to describe what I think are >> the >> reasons why they both failed. >> >> Marx was writing at a time when factory conditions were still atrocious >> (or >> at least had been a few years previously according to the out-of-date >> statistics that Engels was feeding him with) and workers (mostly fresh >> from >> the countryside and highly biddable) were being badly exploited by the >> factory owners (with the exception of a few such as Robert Owen, and some >> of >> the Quakers, etc). On the whole, though, workers were slowly beginning to >> prosper and, due to gradually improving water and sewage works in the >> large >> cities, children were surviving in larger numbers and the population was >> expanding at a fast clip. They were beginning to buy modest versions of >> the >> sort of consumer products that the middle-class were already buying. >> Growing >> production efficiencies were such that a growing demand could be met and >> even if workers were displaced from one factory due to more automation >> they >> could usually find another job in a factory in a slightly newer industry. >> Note, however, that when Marx was writing none of the consumer goods were >> yet important enough (or pricey enough) that they were transformational >> both >> in their economic effects (the saving of money to buy the goods) and in >> their social use. Within two or three decades, however, workers were able >> to >> buy a bicycle, for example, which enabled them to be much more choosy >> about >> where they might work for the best wages. >> >> By the time Keynes was writing most of the iconic consumer goods that we >> have today (electrical goods of many sorts, telephone, radio, television, >> car) were already in existence for the enjoyment of a growing middle-class >> (what I term the 20-class of today), but not yet for most of the >> population >> (what I term the 20-class of today). And they certainly weren't for the >> millions of workers in the industries which had been highly profitable >> (producing highly exportable goods) in the years before World War I. These >> were cotton, coal, ship building, heavy engineering (bridges, railway >> locomotives, etc). These were no longer profitable (or exportable) >> because, >> although money had inflated three times during the War, the Bank of >> England >> (then more powerful than the Government) was intent on deflating the pound >> until it was as valuable as the pre-war pound. Many workers' wages in the >> big industries were ground down and owners couldn't get the capital to >> reinstate their machinery, worn-down by the war. Exports were drying up. >> Keynes' General Theory was therefore concerned mostly with how to overcome >> this large-scale unemployment problem rather than to describe an economic >> theory of an economy in equilibrium. Although there was a cornucopia of >> consumer goods that were, in theory, available for millions of workers to >> buy they simply hadn't enough wages (or had none at all) to buy them with. >> >> But neither Marx or Keynes were able to imagine a world in which credit >> would become so widely available as today (or, rather until 2008). By >> 1980/90 or so, not only were workers receiving wages that enabled them to >> buy consumer goods that Marx could never even dream of, workers were able >> to >> get credit for money far beyond anything Keynes could possibly imagine. In >> his day (when he wrote his Theory), the big commercial banks were growing >> so >> fast and so out of control of the Bank of England (or of the Fed in >> America) >> that instead of keeping up to 20% or even 30% of cash in reserve when they >> created credit (to carefully assessed customers) they allowed their >> reserves >> to decline to almost nothing (0% to 2% or 3%) by the time of the 2008/9 >> crash, Instead of being constrained to give credit of something up to 3 >> or 4 >> times their reserves, they were beginning to give almost unlimited credit. >> And, just to make sure (so they thought) they were all in addition buying >> and selling insurance policies (derivatives) from one another. In Japan, >> America and Europe, the commercial banks felt impregnable until 2008/9 hit >> them (though it hit Japan in 1990). (The small number of investment banks >> were in far better condition because they were clever enough to invent the >> myriad of derivatives with which they conned the high street banks.) >> >> But despite the limitations of their respective theories, both Marx and >> Keynes (geniuses both to be sure) were aware that the very real problem of >> almost total automation of consumer goods still existed over the longer >> term. Who would be able to buy them? It is this ultimate problem which >> neither has been able to solve. Marx's solution (communism) has already >> collapsed, Keynes' solution (government controlled money-printing and >> attempted bail-outs of the banks) looks very much as though it is not >> succeeding. >> >> Keith >> >> >> At 00:11 13/04/2012, you wrote: >> >> An invisible thread connects David Owen's The Conundrum ( "Efficiency's >> Promise: Too Good to Be True") and Erik Brynjolfsson's and Andrew McAfee's >> Race Against the Machine ( "More Jobs Predicted for Machines, Not >> People"). >> Both books address real -- and very important -- problems but they both >> arrive at false conclusions. >> >> The "conundrum," according to Owen, boils down to a lack of commitment >> driven by conflicting motives, "Do we honestly care?" he laments at the >> end, >> citing George Orwell's observation that, "All left-wing parties in the >> highly industrialized countries are at bottom a sham, because they make it >> their business to fight against something which they do not really wish to >> destroy." >> >> Meanwhile, Brynjolfsson and McAfee prescribe the clichéd panaceas of >> education, "flexibility" and entrepreneurship: "Our skills and >> institutions >> will have to improve faster to keep up lest more and more of the labor >> force >> faces technological unemployment." >> >> continued at: >> >> >> http://ecologicalheadstand.blogspot.ca/2012/04/efficiencys-promise-too-good- >> to-be-true.html?spref=fb<http://ecologicalheadstand.blogspot.ca/2012/04/efficiencys-promise-too-good-%0Ato-be-true.html?spref=fb> >> >> -- >> Cheers, >> >> Tom Walker (Sandwichman) >> _______________________________________________ >> Futurework mailing list >> [email protected] >> https://lists.uwaterloo.ca/mailman/listinfo/futurework >> Keith Hudson, Saltford, England http://allisstatus.wordpress.com >> >> >> >> >> _______________________________________________ >> Futurework mailing list >> [email protected] >> https://lists.uwaterloo.ca/mailman/listinfo/futurework >> >> _______________________________________________ >> Futurework mailing list >> [email protected] >> https://lists.uwaterloo.ca/mailman/listinfo/futurework >> >> >> _______________________________________________ >> Futurework mailing list >> [email protected] >> https://lists.uwaterloo.ca/mailman/listinfo/futurework >> > > > > -- > Cheers, > > Tom Walker (Sandwichman) > > ------------------------------ > > _______________________________________________ > Futurework mailing list > [email protected] > https://lists.uwaterloo.ca/mailman/listinfo/futurework > > > _______________________________________________ > Futurework mailing list > [email protected] > https://lists.uwaterloo.ca/mailman/listinfo/futurework > > -- Cheers, Tom Walker (Sandwichman)
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