-----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at least had been a few years previously according to the out-of-date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
--
Cheers,
Tom Walker (Sandwichman)
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Keith Hudson, Saltford, England http://allisstatus.wordpress.com
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