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Indian people always included death in the
calculations about what was for the best. Today, non-Indians do the
same in the market with people's ability to eat and feed their
children. Frankly considering that culling the herd by making sure
that all life has the ability to eat and the balance of nature survives seems
more in the long term interest of humanity than any of these market
parallels. In the end it all seems to come down to whether you
believe process travels or reality is fragmented and bears no relationship to
the whole. Sort of the Ant mentality or the Human since humans can
choose another way.
You could make the same statement about not taking
medicine but simply accepting all illness as nature's way of maintaining the
balance of reality and eliminating the supremacy of any one specie over the
other. We could call taking medicine "protectionism" and point out
that death is sometimes good for all but then that would mean letting the
disabled, the elderly and others simply die as they sickened. Where
does protectionism and its principles cross the line between what is good for
all and what is simple selfishness at the cost of all?
REH
----- Original Message -----
Sent: Wednesday, October 08, 2003 11:04
AM
Subject: RE: [Futurework] Lumps of
unskilled labour
I
guess it all depends on whose "ox is gored." If it is your job that is
threatened, then panic. If we are sitting back on looking at the "big
picture" then in the long run things will work out. And just because
things have worked out in the past doesn't mean that they will work out in the
future. And even if they do are all costs being
considered?
Dislocation costs, uncertainty, worker anxiety, etc., all add up to
something. Usually these costs are not figured into the economic
calculus.
arthur
A few comments in
blue.
Ed Weick
----- Original Message -----
Sent: Tuesday, October 07, 2003 2:43
PM
Subject: [Futurework] Lumps of
unskilled labour
It is good to read America's premier left-of-centre
economist, Paul Krugman, writing in today's New York Times about
the "lump of labour" fallacy and trying once again to put it to rest. This
is the delusion that re-emerges periodically when trade unions, or even
white-collar groups, start to panic at what seems to be a surge in the
number of jobs leaving their own country and going abroad where labour is
cheaper. At the present time, this mainly concerns manufacturing jobs
leaving for China and some sorts of middle-skill white collar jobs leaving
for India.
If you believe that there is a fixed number of jobs in a
country then it is logical to deduce that if some of them are out-sourced
to other countries then unemployment at home is bound to rise. However,
the premise is wrong because it implies that no new jobs ever get created.
Presumably, the number of jobs was divinely created once and for all, and
must therefore be protected. The problem with this is that, without
competition, the protected businesses inevitably become more
inefficient as time goes by and the goods they produce become more costly
than they needed to have been if they had been made abroad. A country that
protects its jobs and begins to cut itself off from the rest of the world
inevitably spirals downwards, with an increasingly lower standard of
living. This something that happened for decades in the Soviet Union
before the system finally gave way under the strain in1992 despite
Gorbachev's valiant attempts to forestall it.
I think one has to figure
time into this. In the short-run, declines in particular industrial
sectors or the outsourcing of jobs will leave people stranded.
In the medium to long run, the economy and the labour force may adjust,
but it should not be taken for granted that it will. During the past
century or so, Canada has seen a large scale movement from primary
industries to secondary manufacturing to services. This movement has
left many communities and many workers stranded.
To remain
in the game, each country must be continuously creating new products and
new jobs. However, there are two problems with this scenario. The first
has been considered by only a few economists; the second, to my knowledge,
has never been considered by any economist at all so far .
The
first is problem was first raised by the Prof Fred Hirsch, an economics
professor at Warwick University in his book, The Social Limits to
Growth (1976) that was published not long before he died while in his
30s. He was mainly thinking of goods, services and facilities that would
be so much in demand by consumers that their very supply would cause
congestion and a deterioration in the environment for all. My own
elaboration of this is a slightly narrower one but, with the beneift of
hindsight, a more powerful one, I think. This is that the main congestion
that will strangle economic growth is that of lack of time and attention
by the prime consumer group -- the middle-class -- the class with enough
disposable income that always initiates new consumer items that are
profitable enough to drive the whole system. Increasingly, this class --
what I call the initiatory class -- are now so time-starved and
stressed in normal daily and weekly life that they can barely cope with
the consumer goods that they already use in their limited spare time,
never mind buying more.
Or maybe they are just tired
of the glut of stuff and don't want any more?
The second
problem is that there must be natural limits to the abilities of a
population to respond to higher job-skill requirements. In the prevalent
political philosophy of the last 30 or 40 years or so, the supply of
skills was never seen to be a problem because a government could simply
pour more resources into education. However, today, we need a growing
proportion of very high-skill people to keep the system going. Unlike 'New
Age' thinkers who believe that there are no limits to the abilities of the
brain, those who are more practically involved with this problem --
educationalists and neuroscientists -- know that our brains are as finite
in their processing abilities as they are in size.
What you may have is
something one might call a "betrayal factor". A few years ago, high
tech was in full flight in the Ottawa area, then known as "Silicon Vally
North". Ever so many bright young people bought into the industry,
learned the necessary skills, got high paying jobs, etc. Then the
whole thing began to crash. People got very badly burned. They
had skills but little to transfer them to. The next wave of young
people would likely be more cautious in what they committed themselves to
learn. They would likely opt for a broader, more universally
transferable set of skills.
The first problem above is
already being recognised as such and is usually termed the 'work-life
balance' problem -- and it is growing. We are not entering the life of
leisure and abundance that many futurologists foretold a generation ago
despite the fact that we have more energy, technology and automation than
ever before. Life is becoming more stressful, particularly for those with
professional responibilities. The second problem doesn't register at all
in the public consciousness yet. However, in events such as the Chernobyl
and Half Mile Island nuclear accidents, the increasing number of
electricity grid blackouts, the rapid spread of antibiotic-resistant
staphylococci and new varieties of influenza, and so on, we have the first
hints that we are beginning to live right on the edge of our
expertise.
Ah, yes, but I do think we
learn from our experience. If new nuclear plants are built, they
will be less prone to failure. I guess what I'm saying is that it is
not really the capacity of the brain that is important here. It is
the accumulation of knowledge that the collective brain has to
work with. We now know, or should know, far more than we
did in the fifties, sixties and seventies when the nuclear plants and
power grids that we still work with were put in place. There is good
reason to believe that it would be done better now and will probably be
done even better thirty years from now.
Ed
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