I honestly do not understand much about economics or employment.
Accepted theories seem contradictory. For example, economists are
always telling us Americans need to save more, then when people save
more -- as they are doing now -- economists say we need to spend more
to stimulate the economy. Which is it?!?
I have read that there are more unemployed people in China than the
entire U.S. workforce. So I do not see how free trade can fix the
employment problem. It seems like a giant game of musical chairs in
which only large corporations can win, and even they cannot win for
long, because if they lower wages too much, they will have no customers.
My father knew a thing or two about factories. In the 1960s I saw a
video of the GM assembly plant production line and said to him: "it
looks like they could automate a lot more of that." He said sure,
everyone knows they can, but as the president of GM once put it,
machines can't buy cars.
Then again, in my book, chapter 20, I wrote:
"There is already a great deal of unemployment for reasons that have
always baffled me. Everywhere you look, you see work crying out to be
done. Houses, buildings and streets need repair. Children in schools
need more time with teachers, tutors and mentors. Software is sloppy
and written in haste. Mechanics and repairman work long hours. All of
the scientists and researchers I know work 10 hours a day, 5 or 6
days a week, even when they are supposedly retired and are no longer
paid. I know little about economics, but employment seems to have
little or no connection with the amount of work that actually needs
to be done."
These problems have been discussed for over a century. I do not know
much, but I have read some economics and I know that Marx and others
described the paradoxes, such as the fact that capitalist enterprise
tends to succeed too well and drive itself out of business. For
example, IBM sold so many personal computers it turned that product
into a profitless commodity, which eventually forced IBM out of the
market. (Say what you like about Marx, he made some brilliant and
original observations, and accurate predictions about the future of
capitalism.)
I have read the classic economists such as Adam Smith, Marx,
Thornsein Veblen, Keynes, Schumpeter and others, so I know the
basics. Plus things such as P. Krugman's recent book "The Return of
Depression Economics" and various books about employment such as J.
Rifkin, "Technology, Jobs and Your Future, the End of Work" (yes,
that Rifkin -- kind of a nitwit), K. S. Newman "Declining Futunes" and so on.
I do not understand the technical details of economics, and my
knowledge is probably 50 years out of date but . . . Even though
these capitalist and socialist economic theories are very different,
and reach vastly different conclusions and recommendations, they are
all predicated on one thing: that most people must exchange labor for
money. Most people do not have great wealth so they must work for a living.
I do not recall any classic economist who addressed the fundamental
problem of what to do when human labor becomes worthless. Before the
late 19th century people did not even imagine that was possible. Even
in the 1950s, it was widely assumed that people will be driving
taxies, farming the land with tractors, and doing other manual labor
far into the indefinite future. Whereas I cannot imagine such labor
will be needed a century from now.
As far as I can tell, that throws the whole of economic theory out
the window. It makes both capitalism and socialism unworkable. I
suppose there must be some modern economists trying to come to grips
with these problems. But I have not heard of any. Krugman did not
address the problem.
Aristotle said "we shall need slaves so long as the shuttle will not
run in the loom by itself." Giorgio de Santillana described this as
"a great mental block" and said that Aristotle should have grasped
the possibilities of applied science. I think that is asking too much
from someone living in 300 BC. It is not surprising that Aristotle
never imagined that a shuttle might run by itself, or that it might
be economical to pay people to run the shuttle rather than force
them. Roger Bacon (13th century) was the first to grasp this sort of
thing. Modern people should know better.
People have been predicting that automation will drastically reduce
employment since the 1870s. It did not happen, and did not happen,
and eventually some people concluded that it will never happen. The
predictions have been so wrong so many times they accuse the
pessimists of crying wolf. This reminds me of predictions that oil
production will peak and then decline rapidly. People have been
saying this since the 1920s. They were wrong again and again, and
today's "cornucopians" say they will be wrong again now. This does
not follow. A prediction might be made too early. It might be wrong
100 times in a row and then right the 101st time. There is no doubt
that oil production in the lower 48 states peaked in the 1970s, when
Hubbert predicted it would. It has declined precipitously. I do not
think any amount of enhanced recovery technology can reverse this,
because the energy overhead goes up and up, and eventually it will
take more than 1 barrel of oil to recover 1 barrel.
- Jed
