The Limits of Capitalism(avc.com)
avc.com
The Limits of Capitalism
http://www.avc.com/a_vc/2013/12/the-limits-of-capitalism.html
4 comments
Uhh..not always. The work is balanced out, but often, there is a net loss of jobs. There may always be a need for mundane labor, but that doesn't mean it will be priced at a point that makes living very sustainable. And no, technology doesn't necessarily make sustenance cheaper -- perhaps in theory but not in practice. Technology, like any other kind of a driver of industrial development, frequently concentrates power in the hands of those who can take it. Sometimes, that happens in a way that does make it such that more people can live better on less. It also sometimes happens in a way that blots out much of China's skyline with dangerous smog.
The ability for people to be able to live well, on the whole, is something that depends on society. Technology is merely a lever, not an autonomous agent or operator.
The ability for people to be able to live well, on the whole, is something that depends on society. Technology is merely a lever, not an autonomous agent or operator.
Technology doesn't inherently reduce the number of quality jobs, but in very recent history it appears to have had this effect. From the MIT Technology Review:
http://www.technologyreview.com/review/426436/tectonic-shift...
http://www.technologyreview.com/review/426436/tectonic-shift...
Obviously, when 7 billion people are involved (or whatever the current population of the planet) the dynamics of this are complex and take time to play out. My point was countering the "jobs lost!" hysteria with "jobs get created, tends to balance out." Pardon the lack of encyclopedic thoroughness in a 3-line post in casual discussion.
There is no reason to think that the number jobs gained by new technology are equal to the number of jobs lost. In fact, based on the fact that we currently have a 40 hour standard work weak, it seems like the average time spent working per person has decreased. Over a long period of time, I suspect this is the number that will adjust to maintain employment.
The market is a system for solving problems. However, not all problems are obvious to market participants. The problem might cause harm on a longer timeframe than their typical focus (for example: environmental destruction). Or the problem might cause harm to people who participate less fully in the market (for example: the problems of poverty).
One of the roles of government is to pose these problems to the market, for the market to solve.
For example, we, as a society, don't want old people to die starving in the street. So we have posed this problem to the market in the forms of Medicare and Social Security taxes. The market needs to find a way to pay those taxes while meeting consumer demand, and it largely has.
We don't want to drink polluted water, so we have posed this problem to the market in form of limits on pollutants that can be released. The market has to find a way to meet consumer demand while staying within these limits, and it largely has.
So, we need to be clear about what problem we are asking the market to solve if we create a guaranteed government-supplied income for everyone. Is the problem a basic standard of living for everyone? Or is the problem full employment for everyone? I agree with Fred that those two things are not equivalent.
One of the roles of government is to pose these problems to the market, for the market to solve.
For example, we, as a society, don't want old people to die starving in the street. So we have posed this problem to the market in the forms of Medicare and Social Security taxes. The market needs to find a way to pay those taxes while meeting consumer demand, and it largely has.
We don't want to drink polluted water, so we have posed this problem to the market in form of limits on pollutants that can be released. The market has to find a way to meet consumer demand while staying within these limits, and it largely has.
So, we need to be clear about what problem we are asking the market to solve if we create a guaranteed government-supplied income for everyone. Is the problem a basic standard of living for everyone? Or is the problem full employment for everyone? I agree with Fred that those two things are not equivalent.
"People need to work. They need to have something to feel good about doing every day. Work is a big part of self image and self worth. Any system that makes it possible for people to sit at home eating bon bons (as the Gotham Gal likes to say) is not a good system."
This reminds me about the importance of choosing our questions. The quoted piece is focused on the individual, and I presume that the feed-back would be accounted on that level too. The thing is, any given system makes things easy/comfortable for some kinds of individuals and not so much for the other kinds, so framing the problem around a generic citizen doesn't bring up in my view even a stable desirable target. (The communist system is the first relevant example that comes to my mind - they thought that they can afford to please just the limited kind of individuals that happened to form the mediocre majority. They were wrong, of course. They avoided mass unrest and violent revolutions, but suffered brain drain à la "Atlas Shrugged".) The framing level that I see relevant in this regard comprises the entire humanity and considers the effects on its entirety - what will allow us (all of us) to evolve, to get better, to "get there" (where "there" is to be continuously defined). Please note that I didn't tried to answer the question that was being implied, I merely tried to fix it.
This reminds me about the importance of choosing our questions. The quoted piece is focused on the individual, and I presume that the feed-back would be accounted on that level too. The thing is, any given system makes things easy/comfortable for some kinds of individuals and not so much for the other kinds, so framing the problem around a generic citizen doesn't bring up in my view even a stable desirable target. (The communist system is the first relevant example that comes to my mind - they thought that they can afford to please just the limited kind of individuals that happened to form the mediocre majority. They were wrong, of course. They avoided mass unrest and violent revolutions, but suffered brain drain à la "Atlas Shrugged".) The framing level that I see relevant in this regard comprises the entire humanity and considers the effects on its entirety - what will allow us (all of us) to evolve, to get better, to "get there" (where "there" is to be continuously defined). Please note that I didn't tried to answer the question that was being implied, I merely tried to fix it.
I think of this stuff like a the search for an energy function. you have gradiant decent or greedy alogrithems which find local minimums but to find global or to get off the current peak you need to add entropy. Redistribution of wealth is entropy. but you probably shouldn't listen to me because I advotcate randomly picking large companys and breaking them apart just so we have different solutions.
This has all happened before, and it will all happen again. Jobs taken out by technology are balanced by jobs created, directly and indirectly, by the same technology. There is always a need for mundane labor. The shift may be painful, but stagnating innovation is not preferable.
Be thankful that, on the whole, technology makes sustenance cheaper so more people can live better on less (not nothing, but costs of basics are dropping). The shifting baseline confuses many.