How Technology Is Destroying Jobs(technologyreview.com)
technologyreview.com
How Technology Is Destroying Jobs
http://www.technologyreview.com/featuredstory/515926/how-technology-is-destroying-jobs
13 comments
It's the result of the Fed's policies.
They kicked us into two massive recessions in a mere 10 years, two stock market crashes, and one giant real estate crash, destroying trillions in wealth through malinvestment. If the Fed severely distorts the economy - which it has been doing frequently (currently 'printing' 6% of the entire economy) - it leads Jane to appraise her financial surroundings incorrectly, inevitably leading to disaster.
Try figuring out a way to get minimum wage to keep up with even just 3% to 4% real annual inflation over 40 years. Impossible.
Try figuring out how to get Americans to make sound financial decisions with 3.x% mortgage rates. Impossible.
Try figuring out which stocks to buy, when everything is going up courtesy of easy money policies. When will the party stop? Only Bernanke & Co. know. It's not earnings growth driving the stock market, it's pure PE expansion.
Try keeping the savings rate up, when your dollar loses value every day that you attempt to hold onto it. So you spend it today when it has maximum purchasing power. Wait 10 years and it'll lose half of its purchasing power. The Fed spurs an anti-savings culture through inflation. Ever since Nixon unlocked the dollar from the gold standard, the savings rate has been in a death spiral, to the point where now America has an extreme negative savings rate when all debt is accounted for (and nearly everything priced in dollars has soared in price since 1971; from health care to education to commodities to stocks to housing, meanwhile the real standard of living is lower than it was 50 years ago).
At a time when America is creating more oil than nearly any other time in its history, oil prices are at $106+. See this USA today story from just a decade ago by comparison:
http://usatoday30.usatoday.com/money/industries/energy/2003-...
"Instability in oil producing nations like Iraq, Venezuela and Nigeria helped boost U.S. crude oil prices to an average of $31 a barrel in 2003, the highest yearly average in more than 20 years, energy experts said Wednesday."
Global commodities are of course priced in dollars primarily. As the Fed debases the dollar, the input cost of goods soars.
The Fed's policies affect every single aspect of the US and global economy. Their policies are extreme by any US historical measure, and the consequences are guaranteed to be extreme accordingly.
They kicked us into two massive recessions in a mere 10 years, two stock market crashes, and one giant real estate crash, destroying trillions in wealth through malinvestment. If the Fed severely distorts the economy - which it has been doing frequently (currently 'printing' 6% of the entire economy) - it leads Jane to appraise her financial surroundings incorrectly, inevitably leading to disaster.
Try figuring out a way to get minimum wage to keep up with even just 3% to 4% real annual inflation over 40 years. Impossible.
Try figuring out how to get Americans to make sound financial decisions with 3.x% mortgage rates. Impossible.
Try figuring out which stocks to buy, when everything is going up courtesy of easy money policies. When will the party stop? Only Bernanke & Co. know. It's not earnings growth driving the stock market, it's pure PE expansion.
Try keeping the savings rate up, when your dollar loses value every day that you attempt to hold onto it. So you spend it today when it has maximum purchasing power. Wait 10 years and it'll lose half of its purchasing power. The Fed spurs an anti-savings culture through inflation. Ever since Nixon unlocked the dollar from the gold standard, the savings rate has been in a death spiral, to the point where now America has an extreme negative savings rate when all debt is accounted for (and nearly everything priced in dollars has soared in price since 1971; from health care to education to commodities to stocks to housing, meanwhile the real standard of living is lower than it was 50 years ago).
At a time when America is creating more oil than nearly any other time in its history, oil prices are at $106+. See this USA today story from just a decade ago by comparison:
http://usatoday30.usatoday.com/money/industries/energy/2003-...
"Instability in oil producing nations like Iraq, Venezuela and Nigeria helped boost U.S. crude oil prices to an average of $31 a barrel in 2003, the highest yearly average in more than 20 years, energy experts said Wednesday."
Global commodities are of course priced in dollars primarily. As the Fed debases the dollar, the input cost of goods soars.
The Fed's policies affect every single aspect of the US and global economy. Their policies are extreme by any US historical measure, and the consequences are guaranteed to be extreme accordingly.
Your post is full of assertions, but empty of evidence. I disagree with almost every hyberbolic point you make:
-There is NOT consensus that the Fed's creation of money caused the last two crashes. In fact, market monetarists argue the last recession was exacerbated by how LITTLE the Fed did. http://www.themoneyillusion.com/?page_id=3443
-Inflation is not 3%-4%. It has been very low since 2008. http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1&year1=2008&ye...
-Stock market gains have not been due to pure PE expansion. This is demonstrably untrue. http://www.multpl.com/
-Inflation does not, by itself, hurt savings rates. A world with 1% inflation and 1% interest should be identical to a world with 2% inflation and 2% interest (this is not strictly true, but the simple toy model is a good thought experiment to see where your reasoning fails.)
-American oil production has almost NO impact on global prices. In fact, causation works the other way around. High oil prices make more American oil fields profitable, and drives production. (Even OPEC has very little market power. Saudi Arabia arguably has the most market power.)
-The Fed was more aggressive than the central banks of most countries in the last recession (compare to BoE or ECB or whoever). The USA has recovered better than most other countries with passive central banks. There's not consensus, but many economists believe there is a causal connection. Your theory does not fit these data.
-There is NOT consensus that the Fed's creation of money caused the last two crashes. In fact, market monetarists argue the last recession was exacerbated by how LITTLE the Fed did. http://www.themoneyillusion.com/?page_id=3443
-Inflation is not 3%-4%. It has been very low since 2008. http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1&year1=2008&ye...
-Stock market gains have not been due to pure PE expansion. This is demonstrably untrue. http://www.multpl.com/
-Inflation does not, by itself, hurt savings rates. A world with 1% inflation and 1% interest should be identical to a world with 2% inflation and 2% interest (this is not strictly true, but the simple toy model is a good thought experiment to see where your reasoning fails.)
-American oil production has almost NO impact on global prices. In fact, causation works the other way around. High oil prices make more American oil fields profitable, and drives production. (Even OPEC has very little market power. Saudi Arabia arguably has the most market power.)
-The Fed was more aggressive than the central banks of most countries in the last recession (compare to BoE or ECB or whoever). The USA has recovered better than most other countries with passive central banks. There's not consensus, but many economists believe there is a causal connection. Your theory does not fit these data.
I think the argument goes like this:
1. There's a crash (cause unspecified)
2. The Fed creates money to smooth things out
3. This new money eventually gets things going, but it comes at a price: the way it gets things going isn't sustainable
4. Once people (traders/investors/general public) realize it is/was unsustainable, they begin to unwind everything
5. This unwinding is a new crash (cause specified)
6. The Fed creates money to smooth things out
7. Rinse and repeat
1. There's a crash (cause unspecified)
2. The Fed creates money to smooth things out
3. This new money eventually gets things going, but it comes at a price: the way it gets things going isn't sustainable
4. Once people (traders/investors/general public) realize it is/was unsustainable, they begin to unwind everything
5. This unwinding is a new crash (cause specified)
6. The Fed creates money to smooth things out
7. Rinse and repeat
> It's the result of the Fed's policies.
They kicked us into two massive recessions in a mere 10 years, two stock market crashes, and one giant real estate crash, destroying trillions in wealth through malinvestment.
I think there's a much better case to be made that Congress' fiscal policy (and financial industry deregulation ) did that than that the Fed's monetary policy did.
> At a time when America is creating more oil than nearly any other time in its history, oil prices are at $106+.
Oil prices are driven by global supply and demand , not US production in isolation.
I think there's a much better case to be made that Congress' fiscal policy (and financial industry deregulation ) did that than that the Fed's monetary policy did.
> At a time when America is creating more oil than nearly any other time in its history, oil prices are at $106+.
Oil prices are driven by global supply and demand , not US production in isolation.
Since 2008, money has been tight and inflation has been low. Yet the decoupling has continued. I think your implied hypothesis is very unlikely. However, I agree that interest rates play a large role in the decision of whether a company invests in capital.
> Brynjolfsson and McAfee are not Luddites.
No, but you try to force that argument by calling your article "How Technology Is Destroying Jobs". I don't see any citation in the article doing the same. They just matter-of-factly state what is happening and it's the author of the article trying to somehow convert that into a Luddite case.
I find it fascinating how this kind of sentiment is often uttered by Americans. Other western countries have long accepted the fact that we should better put the rewards of technological progress into a social system that at least takes care of the people who cannot anymore contribute to the workforce. In the US, the delusion of full employment for everyone as part of the fight against evil socialism seems strong as ever. I suppose it works as a good scare.
No, but you try to force that argument by calling your article "How Technology Is Destroying Jobs". I don't see any citation in the article doing the same. They just matter-of-factly state what is happening and it's the author of the article trying to somehow convert that into a Luddite case.
I find it fascinating how this kind of sentiment is often uttered by Americans. Other western countries have long accepted the fact that we should better put the rewards of technological progress into a social system that at least takes care of the people who cannot anymore contribute to the workforce. In the US, the delusion of full employment for everyone as part of the fight against evil socialism seems strong as ever. I suppose it works as a good scare.
One can think that technology destroys jobs, but still not be a Luddite because they support the change that technology brings.
An example would be people who are looking forward to the technological singularity which will make all work obsolete, and usher in a utopia.
An example would be people who are looking forward to the technological singularity which will make all work obsolete, and usher in a utopia.
No, I think "destroy" carries a clearly negative connotation.
The people cited in the article talk about jobs becoming obsolete. The author talks about jobs being destroyed.
The people cited in the article talk about jobs becoming obsolete. The author talks about jobs being destroyed.
Isn't that the idea? At least in one sense, technology must destroy jobs, or at least it should. In theory, it frees us from drudgery and allows us to go on to do more productive tasks. In practice it isn't always so easy to find employment those who are displaced by machinery.
"allows us to go on to do more productive tasks"
The idea only works as long as there are sufficient number of jobs in "more productive tasks". If jobs are destroyed but there is no place to deploy the resources gained by the productivity increase, then there is not much value, and there are many negative side effects.
That's true as long as people need jobs in order to have a decent life. Eventually, the productivity gains from technology should produce enough gain to allow for a guaranteed basic income [1] sufficient to allow displaced workers to effectively retire if they wish. You'll only need to find a job if you want more than the GBI can provide.
[1] http://en.wikipedia.org/wiki/Basic_income_guarantee
[1] http://en.wikipedia.org/wiki/Basic_income_guarantee
Question is, at what point do you implement that?
Any politician who stands up and says "We have given up on lowering unemployment, time to pay everyone to stay at home" is not going to be popular until the problem is of such a magnitude that you cannot ignore it.
Even in such a situation, what incentive besides purely humanitarian does an individual with a job have to sacrifice income for those who do not?
Currently you can justify subsidising a non productive person in the hopes that they will be productive later. What happens if that is highly unlikely and instead they devote their time to breeding more people who will also likely become unproductive and require subsidy?
Even in such a situation, what incentive besides purely humanitarian does an individual with a job have to sacrifice income for those who do not?
Currently you can justify subsidising a non productive person in the hopes that they will be productive later. What happens if that is highly unlikely and instead they devote their time to breeding more people who will also likely become unproductive and require subsidy?
We know that intrinisically motivated people will aspire to do, even if there isn't a need for them too. If we provide for both the intrinsic and extrinsic, we effectively cover 100% of motivated individuals. By making it easy for those with passion to act on it we do all of society a favor. As for the non-productive members of society, it's not a huge issue because they don't need to be productive to live. This means that your right to live is unconditional. Excuse my corniness, but after all, why should there be conditions on your right to life, liberty, and the pursuit of happiness?
What about the jobs that still need doing but people are not generally highly intrinsically motivated to do relative to other things they could be doing if they had free choice?
For example if you gave software developers a bunch of cash and told them to work on whatever they wanted, how many would go and build video games or invent esoteric programming languages (fun but not important) vs how many would want to build (or worse maintain) a system for the administration of taxes (less fun but very important). Hell, how many would even develop software at all vs just take up some other activity of even less value.
Therefor the best way to motivate these people is to extrinsic motivate them with money. However what happens if most of that money is taken as taxation and spent on people who sit around and do whatever they want all day? Do they still have the same incentive to do the boring but necessary jobs?
For example if you gave software developers a bunch of cash and told them to work on whatever they wanted, how many would go and build video games or invent esoteric programming languages (fun but not important) vs how many would want to build (or worse maintain) a system for the administration of taxes (less fun but very important). Hell, how many would even develop software at all vs just take up some other activity of even less value.
Therefor the best way to motivate these people is to extrinsic motivate them with money. However what happens if most of that money is taken as taxation and spent on people who sit around and do whatever they want all day? Do they still have the same incentive to do the boring but necessary jobs?
> What about the jobs that still need doing but people are not generally highly intrinsically motivated to do relative to other things they could be doing if they had free choice?
There will be luxuries some people want that are beyond the reach of those who live just on the guaranteed basic income. Those people will do the jobs that have not yet been replaced by technology to earn the extra money they need.
For instance, some people might want more living space. Some might want fancier cars than those people on the GBI can afford. Some might fancy a boat. Some might want a high end home entertainment system. Some might like expensive food and drink.
There will be luxuries some people want that are beyond the reach of those who live just on the guaranteed basic income. Those people will do the jobs that have not yet been replaced by technology to earn the extra money they need.
For instance, some people might want more living space. Some might want fancier cars than those people on the GBI can afford. Some might fancy a boat. Some might want a high end home entertainment system. Some might like expensive food and drink.
If you want to earn money to have these luxuries , why pay to those who don't give you anything in return (nor have the potential to)?
Well, first of all, I'm not arguing for equal pay for everyone, I'm in favor of a guarenteed minimum income.
Secondly, money doesn't work as a motivator for non menial tasks.[1] And you know, a task that seems boring and uninteresting to you might not for someone else. As for how many of us would even develop software at all, I need only point to the open source community. Extrinsic notivation has its place, but it is no substitute for that internal drive.
[1] http://www.ted.com/talks/dan_pink_on_motivation.html
[1] http://www.ted.com/talks/dan_pink_on_motivation.html
I don't think it's true that money doesn't work as a motivation for non-menial tasks, if that were the case then there would be no incentive for tech companies to offer developers anything over a sustenance wage since they would show up to work for free.
Open source software is an interesting example, but I think it mostly supports my case.
If you look at the projects out there, you can divide them into roughly 3 camps.
1) Projects that have a lot of paid developers working for companies or organisations that pay wages to their developers. So stuff like Android , V8 and Ubuntu would fall into this camp.
2) Projects that people were not necessarily paid to develop , but were developed mostly as a biproduct of something that they were or as a way to do that thing more effectively. "Scratch an itch" software effectively. I guess something like RoR would fall into this category.
3) Pure passion projects that were developed for fun. This is the only group that is purely intrinsically motivated.
The thing with projects that fall into camp #3 is that they tend to be stuff that the developer themselves found useful or interesting rather than something that necessarily serves society at large, though the two may sometimes intersect there is no guarantee.
If you don't make peoples incomes at least somewhat dependant upon the software they develop you will see far more camp #3 projects than camps #1 or #2.
Open source software is an interesting example, but I think it mostly supports my case.
If you look at the projects out there, you can divide them into roughly 3 camps.
1) Projects that have a lot of paid developers working for companies or organisations that pay wages to their developers. So stuff like Android , V8 and Ubuntu would fall into this camp.
2) Projects that people were not necessarily paid to develop , but were developed mostly as a biproduct of something that they were or as a way to do that thing more effectively. "Scratch an itch" software effectively. I guess something like RoR would fall into this category.
3) Pure passion projects that were developed for fun. This is the only group that is purely intrinsically motivated.
The thing with projects that fall into camp #3 is that they tend to be stuff that the developer themselves found useful or interesting rather than something that necessarily serves society at large, though the two may sometimes intersect there is no guarantee.
If you don't make peoples incomes at least somewhat dependant upon the software they develop you will see far more camp #3 projects than camps #1 or #2.
tzs is right though, at some point we will automate most of the labor/service jobs away. We either need to dispense with the whole protestant-work-ethic sing-for-your-supper crap, or make damn sure that we have enough stuff to do, and that people have the resources (access to education) they need to do new jobs.
" time to pay everyone to stay at home"
There are various levels of "paying everyone to stay at home" There is moving to a part-time employment model. There are also possibilities for interesting good things to happen to the labor market once everyone is not trapped in "must always work" mode.
" time to pay everyone to stay at home"
There are various levels of "paying everyone to stay at home" There is moving to a part-time employment model. There are also possibilities for interesting good things to happen to the labor market once everyone is not trapped in "must always work" mode.
Could you move to a part time employment model without legally imposing a maximum on the number of hours each person can work?
I know I would certainly not willingly give up half my hours and income and have to put all of my work in a state where someone else can take over every few days.
I know I would certainly not willingly give up half my hours and income and have to put all of my work in a state where someone else can take over every few days.
>Could you move to a part time employment model without legally imposing a maximum on the number of hours each person can work?
I think the taxman's bludgeon would be the weapon of choice here.
>I know I would certainly not willingly give up half my hours and income and have to put all of my work in a state where someone else can take over every few days.
What do you propose as an alternative? A worker-class and a loafer-class? Prisons? Eugenics? Population control isn't very warm and fuzzy. https://www.youtube.com/watch?v=u5iFESMAU58&list=PL381A1925D...
I think the taxman's bludgeon would be the weapon of choice here.
>I know I would certainly not willingly give up half my hours and income and have to put all of my work in a state where someone else can take over every few days.
What do you propose as an alternative? A worker-class and a loafer-class? Prisons? Eugenics? Population control isn't very warm and fuzzy. https://www.youtube.com/watch?v=u5iFESMAU58&list=PL381A1925D...
Would you tax people based on the number of hours they worked? What about people who are not paid hourly, which would increase drastically unless you outlawed it.
Then you have to define what counts as "work", does reading HN count towards your daily allowance since it is tangentially related to your work? What about reading documentation? Or is it only the hours you are typing code into an editor?
All options seem undesirable when you take them to their logical conclusions.
Then you have to define what counts as "work", does reading HN count towards your daily allowance since it is tangentially related to your work? What about reading documentation? Or is it only the hours you are typing code into an editor?
All options seem undesirable when you take them to their logical conclusions.
>Would you tax people based on the number of hours they worked?
Not me man, I have a job. I just said taxes because that seems like the favorite/most humane weapon of gov't with which to influence people.
>All options seem undesirable when you take them to their logical conclusions.
Such is the case for doing nothing as well, I believe.
Not me man, I have a job. I just said taxes because that seems like the favorite/most humane weapon of gov't with which to influence people.
>All options seem undesirable when you take them to their logical conclusions.
Such is the case for doing nothing as well, I believe.
You're not from around here, are you?
No. Mechanical farm equipment arguably replaced way more jobs than any modern technological movement. And just look at the human potential it unlocked.
I'm not sure you read the article. What timescale are you making your assertions from, and what numbers are we talking about?
Have you read the article? The article actually says:
>In 1900, 41 percent of Americans worked in agriculture; by 2000, it was only 2 percent.
>In 1900, 41 percent of Americans worked in agriculture; by 2000, it was only 2 percent.
Mechanical farm equipment existed before 1900, and I also don't know whether the gp is referring to the US, globally, or what. That's why I'm asking.
That's a very generous definition of "job creation". Don't get me wrong, I'm not lamenting mechanized agriculture, but there's no way the inventor of combine harvester can look at modern civilization and go "I created that".
Indirectly. Would we be able to have artist communes without the combine harvester?
I find it curious you don't consider mechanized farming as modern technology.
I mean electronic hardware & software.
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Obviously technology creates more jobs than it destroys over time, because the nations who have developed the most technologies tend to have the lowest unemployment rates.
Obviously chemotherapy causes cancer, because all the people who have chemotherapy end up having cancer.
Technology in one country can most definitely affect employment rates in another. One example from history is when the Industrial Revolution in England destroyed a large textile cottage industry in India.
This seems to be the flaw in the data cited:
"By 2011, a significant gap appears between the two lines, showing economic growth with no parallel increase in job creation"
It seems the data set is US jobs only. In our new flat world, how many jobs did US-based companies create in other countries that previously were created in the US?
Not sure the US middle class has been destroyed, more that it has moved to other countries.
"By 2011, a significant gap appears between the two lines, showing economic growth with no parallel increase in job creation"
It seems the data set is US jobs only. In our new flat world, how many jobs did US-based companies create in other countries that previously were created in the US?
Not sure the US middle class has been destroyed, more that it has moved to other countries.
Well, yeah. We've been helping develop the middle classes in china, india, and other such south east asian, central american, and african countries for a couple to a few decades now.
I should hope so. Jobs aren't a goal. Jobs blow.
I wonder if these shifts disproportionately affect the less intelligent. By definition, half the population is below average. If the jobs being destroyed are low skill, and they are replaced with jobs in math/science/tech, people with learning disabilities may not be able to get a job at all in the future.
Whatever the merits of socialism vs. capitalism in the past, doesn't this sort of progress portend an eventual move toward the former? And is this necessarily a bad thing - when machines do more of the work, shouldn't humans be at leisure - or free to pursue formerly "frivolous" careers in arts, literature, sport, etc. while being supported by a strong social safety net?
well, no, socialism is a system where a central authority decides the allocation of resources. The guiding philosophy is "From each according to his ability, to each according to his needs" - and what constitutes "ability" and what constitutes "need" become very important questions, and whoever gets to make those decisions wields incredible power.
Free-marketism, by contrast, exerts no moral judgement on the needs (or wants) of individuals nor who can provide by what ability, and lets the individuals work those parameters out in a decentralized fashion. If one wants to pursue "frivolous" careers, that's fine, so long as the needs that require the effort of other people (materiel, supply, whatever) can be met through free enterprise.
Capitalism is a different beast altogether, where "the accumulation of capital" is in and of itself considered a moral virtue.
Free-marketism, by contrast, exerts no moral judgement on the needs (or wants) of individuals nor who can provide by what ability, and lets the individuals work those parameters out in a decentralized fashion. If one wants to pursue "frivolous" careers, that's fine, so long as the needs that require the effort of other people (materiel, supply, whatever) can be met through free enterprise.
Capitalism is a different beast altogether, where "the accumulation of capital" is in and of itself considered a moral virtue.
Kurt Vonnegut's Player Piano is a very interesting read on just this, albeit fictional and taken to the extreme, but it has some interesting insights.
No, there are unlimited amounts of jobs, technology frees people to do jobs that previously weren't done. Read Armen Alchian.
Does it always has to be the same in all cases?
The results of technology advancement are various and complicated. It's not all white and black.
The results of technology advancement are various and complicated. It's not all white and black.
It doesn't destroy jobs, it obviates the ones it replaces (and sometimes creates new ones). Which is a good thing, right? It makes it so that no one has to do those jobs to receive the same productivity. Thus freeing up our time for either leisure or something else productive.
Also it should be noted that technology is a double edged sword and can also make things worse. An example: a big farming corporation decides to improve profits by using new chemicals to preserve their food longer. Of course this may seem like a productive decision on paper, but it could actually be unproductive to society as a whole if the chemical has subtle but negative side effects that take a bigger toll.
Also it should be noted that technology is a double edged sword and can also make things worse. An example: a big farming corporation decides to improve profits by using new chemicals to preserve their food longer. Of course this may seem like a productive decision on paper, but it could actually be unproductive to society as a whole if the chemical has subtle but negative side effects that take a bigger toll.
Unfortunately a lack of jobs that people are being paid for also creates a wealth disparity. You can't buy food if you don't have a job
We need a stronger social safety net because there's just not going to be enough wealth-producing activity for humans to do that we will all be able to live on that alone.
If you're right we are headed towards a society where we are collectively resting on the backs of the robots who are there to do our most mundane chores. If the robots produce enough economic output then, assuming our society restructures itself to distribute that economic output proportionally, we should be able to arrange it so that we lift everyone out of poverty.
Or maybe the robots will decide they no longer need us and that will be that. It could go either way, really.
We need a stronger social safety net because there's just not going to be enough wealth-producing activity for humans to do that we will all be able to live on that alone.
If you're right we are headed towards a society where we are collectively resting on the backs of the robots who are there to do our most mundane chores. If the robots produce enough economic output then, assuming our society restructures itself to distribute that economic output proportionally, we should be able to arrange it so that we lift everyone out of poverty.
Or maybe the robots will decide they no longer need us and that will be that. It could go either way, really.
The problem you are talking about arises from the result of competition in the markets. If someone has a cheaper production because of better technology, then the market as a whole will use their business (as the buyer has the freedom to choose who they buy from). This is fair, consensual, and it makes sense to help society gain more value as a whole. Limiting this in any way (as many regulations unfortunately do) is a restriction of people's free choice and thus an aggressive and unethical act. But of course the negative part comes in when the person who used to work in that market has now lost their job and thus their income. Well that is like crying about the slow gazelle who got eaten by the cheetah. It's nature and unfortunately you can't artificially make everybody win, or nature would push back.
Some solutions include higher taxes to make an assured living wage. This is possible today but not if everyone keeps raising the standard of what a "living" wage is. If we could produce a guaranteed living wage, we could get rid of minimum wage and thus give people a ladder to compete in markets they otherwise wouldn't be able to get experience/train in. This would be because you could literally work for free, so the company could only see a benefit to hiring you (rather than being stymied by minimum wage).
The wealth disparity is normal, look at any statistical data like humans and you will see outliers. Thus you will see people with ideas that are a million times more productive than others. Don't worry, if someone else gains wealth and you didn't lose, it does indirectly benefit you. Don't be jealous bro.
Some solutions include higher taxes to make an assured living wage. This is possible today but not if everyone keeps raising the standard of what a "living" wage is. If we could produce a guaranteed living wage, we could get rid of minimum wage and thus give people a ladder to compete in markets they otherwise wouldn't be able to get experience/train in. This would be because you could literally work for free, so the company could only see a benefit to hiring you (rather than being stymied by minimum wage).
The wealth disparity is normal, look at any statistical data like humans and you will see outliers. Thus you will see people with ideas that are a million times more productive than others. Don't worry, if someone else gains wealth and you didn't lose, it does indirectly benefit you. Don't be jealous bro.
Not being jealous just wondering how people who don't own or make robots will be able to make a living wage off of their labor in the coming decades. There's just not going to be enough work for them to do once we have unlimited, skilled, cheap robots.
the only solution i see without massive inequality is one where we can distribute wealth. it's not jealousy. it will be a technological utopia if executed correctly - nobody will have to work, we all get to do whatever we want all day.
there will always be inequality, but if we live in a just society it will be one where the least well off person is still reasonably well off. a guaranteed living wage might do that - and that's exactly what i'm talking about, actually. but there might be enough breathing room in the future to give more than a living wage.
obviously it's a little pie in the sky at this point, but in 10 years it won't seem so much.
the only solution i see without massive inequality is one where we can distribute wealth. it's not jealousy. it will be a technological utopia if executed correctly - nobody will have to work, we all get to do whatever we want all day.
there will always be inequality, but if we live in a just society it will be one where the least well off person is still reasonably well off. a guaranteed living wage might do that - and that's exactly what i'm talking about, actually. but there might be enough breathing room in the future to give more than a living wage.
obviously it's a little pie in the sky at this point, but in 10 years it won't seem so much.
This is a poor way to promote free market economics. Most people don't want to see a tooth and claw society where low income families are torn apart by hungry capitalists.
It is certainly true that wealth disparities may be the price paid for the benefits of a free market economy but that does not make them unimportant. I think most would agree that an extreme case where a single individual owns 100% of the wealth and nobody else has anything would be a poor society, so the question becomes where does one start to worry?
If somebody can be one million times more productive, and you are one of the million people put out of work and unable to find further employment then you absolutely do lose.
It is certainly true that wealth disparities may be the price paid for the benefits of a free market economy but that does not make them unimportant. I think most would agree that an extreme case where a single individual owns 100% of the wealth and nobody else has anything would be a poor society, so the question becomes where does one start to worry?
If somebody can be one million times more productive, and you are one of the million people put out of work and unable to find further employment then you absolutely do lose.
I respectfully disagree. When you really think about it, the jobs which tend to become automated away are typically blue-collar, lower level jobs. Additionally, the jobs which tend to displace those older jobs are higher level, technical jobs. I personally believe that tech tends to widen income disparity as a result of this.
Doesn't help that many of those lower level jobs are being automated away in no small part thanks to altruistic legislation demanding they be paid more than their work is worth, raising the cost of labor to the point that the cost of automation is cheaper and more compatible with the value of the work. Pressures to innovate prompt innovation - go figure.
There's plenty I'd like to hire people to do, but can't afford to dole out "minimum wage" (much less a "living wage") and prolific benefits for - not because I'm cheap, but because I've only got limited funds to spend. Result is the unemployed have fewer options, and the self-altruistic compel others to support them.
There's plenty I'd like to hire people to do, but can't afford to dole out "minimum wage" (much less a "living wage") and prolific benefits for - not because I'm cheap, but because I've only got limited funds to spend. Result is the unemployed have fewer options, and the self-altruistic compel others to support them.
The issue is that automation will only get cheaper as time goes on. Therefor in order to compete with automation the lower skilled will have to reduce their wage further over time in order to compete.
This begins to lead to an unsustainable situation in which the workers wage is no longer enough to sustain their own life in the economy.
Then you end up with three basic options.
1) Simply let people starve or rely on begging/charity/crime.
2) Support people via welfare or minimum income guarantee schemes, leading to a more socialist economy where there is no expectation to work. This increases power of government significantly because people are now dependant on these handouts for their livelihood.
3) Reduce expectations of quality of life. Stop building suburban homes and start building large "workers dorm" type accommodation. Feed people more effectively from shared canteens rather than individuals cooking for themselves etc. Hope that income from the spending of the wealthy and exports can keep the economy up when general consumer spending starts to drop.
This begins to lead to an unsustainable situation in which the workers wage is no longer enough to sustain their own life in the economy.
Then you end up with three basic options.
1) Simply let people starve or rely on begging/charity/crime.
2) Support people via welfare or minimum income guarantee schemes, leading to a more socialist economy where there is no expectation to work. This increases power of government significantly because people are now dependant on these handouts for their livelihood.
3) Reduce expectations of quality of life. Stop building suburban homes and start building large "workers dorm" type accommodation. Feed people more effectively from shared canteens rather than individuals cooking for themselves etc. Hope that income from the spending of the wealthy and exports can keep the economy up when general consumer spending starts to drop.
The issue is that automation will only get cheaper as time goes on. Therefor in order to compete with automation the lower skilled will have to reduce their wage further over time in order to compete.
A classic narrow view meme, overlooking many other balancing factors. Thanks to increased automation: prices drop (making basics & luxuries more affordable to all), new markets are created, new mundane jobs are created before they can be automated. The cycle repeats; disparities happen, but they get worked out and equilibrium is restored.
I'm concluding the biggest barrier to self-sustinence is socialistic government has made functional low-income living practically illegal. You can't live in settings considered normal not long ago, you can't start businesses without traversing a bureaucratic nightmare, you can't own land without near-prohibitive taxes amounting to rent.
We've been here before many times. It will work out, suffering thru the same unlearned-from mistakes.
A classic narrow view meme, overlooking many other balancing factors. Thanks to increased automation: prices drop (making basics & luxuries more affordable to all), new markets are created, new mundane jobs are created before they can be automated. The cycle repeats; disparities happen, but they get worked out and equilibrium is restored.
I'm concluding the biggest barrier to self-sustinence is socialistic government has made functional low-income living practically illegal. You can't live in settings considered normal not long ago, you can't start businesses without traversing a bureaucratic nightmare, you can't own land without near-prohibitive taxes amounting to rent.
We've been here before many times. It will work out, suffering thru the same unlearned-from mistakes.
Housing and food costs don't seem to be getting any more affordable. There is only so much land to build or plant on.
There is also nothing to guarantee that new labour intensive industries will appear enabled by new technology. Startups are a classic example of this, they often employ extremely few people compared with their valuations and share of the economy.
You could eliminate minimum wage laws to make automation or outsourcing less attractive but with that you have to accept a regression in living standards for a great many people.
There is also nothing to guarantee that new labour intensive industries will appear enabled by new technology. Startups are a classic example of this, they often employ extremely few people compared with their valuations and share of the economy.
You could eliminate minimum wage laws to make automation or outsourcing less attractive but with that you have to accept a regression in living standards for a great many people.
Well the problem in the US is that if you don't work, you don't necessarily enjoy more leisure because your purchasing power goes through the floor.
You're looking at replacing a $50k/year worker with a system that costs $1mm in NRE and negligible ongoing cost. If interest rates are at 8% you're a fool. With interest rates at 3% you're a genius.
http://research.stlouisfed.org/fred2/series/FEDFUNDS