Gene wrote:
The question is, can technological
progress keep going if consumption can't or won't keep up as jobs
disappear?
Xxxxx
Gene,
your question relates to one of several types of abnormal employment growth
(long-term) that I defined in my study. (I call them maltrophies.) The
maltrophy related to your question is my maltrophy #4 and is labelled
“hyper-productivity”. [Operational definition in the book, the label cannot
tell all.}
[quote
from the summary of my survey of 100 countries for the period 1990-2003]
Hyper-productivity
growth (productivity growth too strong): A synonym for that is “jobless growth”
or “job-destroying growth”. A
country may experience GDP growth, but productivity growth may be so strong
that it suppresses or diminishes employment growth. In the countries of the
former Soviet block, about half had this condition during the 1990s. In the
countries outside the former Soviet block, nine had this condition, namely, six
OECD countries (Denmark, Finland, Germany, Japan, Sweden, Turkey) and three
Asian countries (Hong Kong, Singapore, Thailand). The condition of
hyper-productivity growth tends to be associated with increasing income
polarization in society. While one segment of society (capital owners and fully
employed workers) may have rising incomes (capital income or wage income) due
to rising aggregate productivity, others may be left out of that rising tide as
underemployed or unemployed labour.[end quote]
In some cases, this maltrophy was very weak and borderline (e.g. Denmark).
The most dramatic examples for this maltrophy were in the former Soviet Block
after 1990, e.g., Poland or former East Germany and others, due to so-called
“transition” (a.k.a. “shock therapy”). The U.S. did not have that maltrophy in
1990-2003, given my definitions.
The types of (long-term) employment maltrophy defined and applied in my
study are labelled:
(1) “anomaly” (with sub-types), (2) “hypo-GDP”, (3) “underemployment”,
(4) hyper-productivity”. Note that those maltrophies are sensitive to historical
conjunctures, so that a one-fits-all economic theory or model for them appears
elusive.
Thanks for your comment.
Gernot
Replying
to
Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Re: [Pen-l] job creation - beyond slave
auction
* /From/: Eugene Coyle
<[EMAIL PROTECTED]
* /Date/: Wed, 7 May 2008 20:02:27 -0700
------------------------------------------------------------------------
It
seems to me that the long term growth of employment depends on the
long
term growth of consumption.
The
familiar way of stating the issue, "job creation resulting from
technological
progress" always bothers me.
Technological progress
destroys,
doesn't create jobs. What occurs is
that technological
progress
frees resources, i.e. what was produced yesterday can be
produced
today with less/fewer inputs. Those
now-available inputs can
be used
to produce something more than before, or something that wasn't
produced
before. But what actually gets
something produced is monetary
demand
for it. Thus if workers have the income
to buy more stuff --
after
technological progress -- and they spend that money, jobs will be
created.
The
liberal view, IMHO, is that workers must fight for and get a fair
share
of the GDP in order to keep consumption growing. But what has
happened
over the past thrity years is that almost all workers did not
get a
fair share of the increased output.
Nevertheless, jobs and the
economy
kept growing, as did technological progress.
I think we have
come to
the end of that. Growth kept going in
spite of the fact that
incomes
did not because people kept consumption on track by drawing down
whatever
saving they had and then borrowing to keep consuming. We all
know
the story. Credit cards, easy and then
easier mortgages, with cash
back,
and then second mortgages, car loans stretching from three years
to
four, then five, then six, then seven.
Student loans. Consumption
kept up
with technological progress in this way, but perhaps no longer.
The
question is, can technological progress keep going if consumption
can't
or won't keep up as jobs disappear? Or
will things grind us up
more
slowly than before?
I'll
look for your book, which sounds very useful.
Gene
Coyle
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