Full Employment(locusmag.com)
locusmag.com
Full Employment
https://locusmag.com/2020/07/cory-doctorow-full-employment/
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> we're trapped in a system that doesn't provide workable means to solve our pressing problems
Generalization: most of those problems are political rather than technical, and unlike with technical problems, if you make a wrong guess about how to solve a political problem, the costs might be unboundedly catastrophic (e.g. world war).
I personally believe that the best response to global warming is open borders, because it would mean that all the people who:
* are living in the global south could relocate somewhere colder and further inland, if they wanted;
* are subsistence farming, but who would be great engineers, scientists, etc. given the right opportunities, would be more likely to get those opportunities.
Most people think that open borders would be bad, and I don't think I will be able to persuade them otherwise in my lifetime.
In general, alternatives to persuasion in politics amount to seizing power and/or changing the rules of the game. Even if I thought I could do that, which I don't, I wouldn't, because all too often in history, the cure is worse than the disease.
That's why I think these problems are hard -- and why I'm scared of people who propose grand solutions to them.
Generalization: most of those problems are political rather than technical, and unlike with technical problems, if you make a wrong guess about how to solve a political problem, the costs might be unboundedly catastrophic (e.g. world war).
I personally believe that the best response to global warming is open borders, because it would mean that all the people who:
* are living in the global south could relocate somewhere colder and further inland, if they wanted;
* are subsistence farming, but who would be great engineers, scientists, etc. given the right opportunities, would be more likely to get those opportunities.
Most people think that open borders would be bad, and I don't think I will be able to persuade them otherwise in my lifetime.
In general, alternatives to persuasion in politics amount to seizing power and/or changing the rules of the game. Even if I thought I could do that, which I don't, I wouldn't, because all too often in history, the cure is worse than the disease.
That's why I think these problems are hard -- and why I'm scared of people who propose grand solutions to them.
The more obligations a state takes to its population (not limited to citizens), the harder it is to enact an open-borders policy while keeping these obligations.
The US used to accept basically anyone, but it did not have any Medicaid, Medicare, Social Security, unemployment benefits, etc. In EU states, the problem is even more severe, as they provide more benefits, to those who pay taxes an to those who don't alike.
So, high life standards, advanced social protections, open borders: pick any two.
The US used to accept basically anyone, but it did not have any Medicaid, Medicare, Social Security, unemployment benefits, etc. In EU states, the problem is even more severe, as they provide more benefits, to those who pay taxes an to those who don't alike.
So, high life standards, advanced social protections, open borders: pick any two.
> The more obligations a state takes to its population (not limited to citizens), the harder it is to enact an open-borders policy while keeping these obligations.
The opposite is true. Immigrants generally work very hard and accept minimal wages. (This is one reason why many citizens would prefer not to compete with them in the labor market.) Their labor can be highly effective in supporting an economy with strong, potentially expensive, social programs.
In the US, our problem is that we've found that we can make them work even harder for even lower wages, and provide them even less social support, by making them "illegal."
The opposite is true. Immigrants generally work very hard and accept minimal wages. (This is one reason why many citizens would prefer not to compete with them in the labor market.) Their labor can be highly effective in supporting an economy with strong, potentially expensive, social programs.
In the US, our problem is that we've found that we can make them work even harder for even lower wages, and provide them even less social support, by making them "illegal."
> Immigrants generally work very hard and accept minimal wages.
Not if they are eligible for social programs without working hard, then you get a different kind of immigration than US gets. US gets hard working people since immigrating there as a non hard working person is just dumb. However when Europe takes refugees who are eligible for social programs as soon as they arrive then they don't really get hard working people, those are the kind of people you would get more of if you opened your border and gave everyone the same social security nets.
Not if they are eligible for social programs without working hard, then you get a different kind of immigration than US gets. US gets hard working people since immigrating there as a non hard working person is just dumb. However when Europe takes refugees who are eligible for social programs as soon as they arrive then they don't really get hard working people, those are the kind of people you would get more of if you opened your border and gave everyone the same social security nets.
The opposite is true. Social programs are funded by tax dollars, not cheap labor that may or may not be reported for taxes at all. If you want to make an argument that immigrants are good for these programs you need to limit immigration to higher economic output (and thus tax revenue) individuals like many other countries do.
> Social programs are funded by tax dollars, not cheap labor that may or may not be reported for taxes at all.
The economy provides tax dollars. If immigrants are working hard for low wages, they're supporting the economy and economic growth. You're thinking very unclearly if you gauge the economic impact of a worker, or a class of workers, solely on how much income tax they pay.
The economy provides tax dollars. If immigrants are working hard for low wages, they're supporting the economy and economic growth. You're thinking very unclearly if you gauge the economic impact of a worker, or a class of workers, solely on how much income tax they pay.
> The economy provides tax dollars. If immigrants are working hard for low wages, they're supporting the economy and economic growth. You're thinking very unclearly if you gauge the economic impact of a worker, or a class of workers, solely on how much income tax they pay.
That economic growth is going to shareholders, not the immigrants who are being squeezed for their labor at low wages.
People with high wages pay into social programs (Medicare and Social Security comes out of W2 income). Shareholders, via taxes on capital gains, do not. Ergo, underpaid immigrants are exploited by the shareholder class, at the detriment to society as a whole.
Economic growth for growth’s sake is not a metric to be chased when you're discounting quality of life to achieve it.
That economic growth is going to shareholders, not the immigrants who are being squeezed for their labor at low wages.
People with high wages pay into social programs (Medicare and Social Security comes out of W2 income). Shareholders, via taxes on capital gains, do not. Ergo, underpaid immigrants are exploited by the shareholder class, at the detriment to society as a whole.
Economic growth for growth’s sake is not a metric to be chased when you're discounting quality of life to achieve it.
==If you want to make an argument that immigrants are good for these programs you need to limit immigration to higher economic output (and thus tax revenue) individuals==
Do you have any sources on this claim? I'd be interested to read.
Do you have any sources on this claim? I'd be interested to read.
Sure, see pages 35-36 (combined with the previous section on poverty) of [1]. Note that most studies claiming otherwise do not account for income level of immigrants, which is what I am responding to here. Higher income immigrants are generally a net positive for social programs, but lower income immigrants are not.
[1] https://cis.org/sites/cis.org/files/articles/2001/mexico/mex...
[1] https://cis.org/sites/cis.org/files/articles/2001/mexico/mex...
1. I don’t see where your charts show that lower income immigrants leading to a deficit in the safety net.
2. Your study is 20 years old.
3. The Center for Immigration Studies is not un-biased on immigration. The exclusive focus on Mexico might have been a giveaway. The first section of their Wikipedia entry:
“The Center for Immigration Studies (CIS) is an anti-immigration think tank. It favors far lower immigration numbers, and produces analyses to further those views. The CIS was founded by historian Otis L. Graham and eugenicist and white nationalist John Tanton. The organization was founded in 1985 as a spin-off from the Federation for American Immigration Reform, and is one of a number of anti-immigration organizations founded by Tanton, along with FAIR and NumbersUSA.”
https://en.m.wikipedia.org/wiki/Center_for_Immigration_Studi...
2. Your study is 20 years old.
3. The Center for Immigration Studies is not un-biased on immigration. The exclusive focus on Mexico might have been a giveaway. The first section of their Wikipedia entry:
“The Center for Immigration Studies (CIS) is an anti-immigration think tank. It favors far lower immigration numbers, and produces analyses to further those views. The CIS was founded by historian Otis L. Graham and eugenicist and white nationalist John Tanton. The organization was founded in 1985 as a spin-off from the Federation for American Immigration Reform, and is one of a number of anti-immigration organizations founded by Tanton, along with FAIR and NumbersUSA.”
https://en.m.wikipedia.org/wiki/Center_for_Immigration_Studi...
I suppose similar was the reasoning behind the H1 visa program, which explicitly limited the lower bounds of salaries for the immigrants. (It did not limit other immigration types, of course.)
If you haven't seen it, you might like Open Borders by Bryan Caplan and Zach Weinersmith[1]. Comic-book form advocating for open borders, with pretty good reasoning.
[1] https://smile.amazon.com/Open-Borders-Science-Ethics-Immigra...
[1] https://smile.amazon.com/Open-Borders-Science-Ethics-Immigra...
Ha, I originally provided a cite to this but took it out to make my comment shorter :) Glad you liked it!
My issue with open borders is that everyone seems to come to the most populated places.
It seems kind of insane how everyone crams into the same old cities.
Companies do it because the workers are there, workers do it because the companies are there, and every city just becomes a crowded, unaffordable hellscape.
Is it not possible to build new towns and expand them anymore? There's plenty of land as far as I can tell...
It seems kind of insane how everyone crams into the same old cities.
Companies do it because the workers are there, workers do it because the companies are there, and every city just becomes a crowded, unaffordable hellscape.
Is it not possible to build new towns and expand them anymore? There's plenty of land as far as I can tell...
What we've experienced is not open borders, at least in America it's mostly a mix of unskilled workers coming in over the Southern border and high-skilled workers coming in via visas. Naturally those recruited specifically to join companies are going to cluster where those companies are.
I also think that immigrants from a generation or two back tend to be spread out much farther. There's a large Indian population in the Detroit area, for instance: https://en.wikipedia.org/wiki/History_of_Indian_Americans_in...
Bottom line: Immigrants, like the rest of Americans, go where the jobs are, and if that gets more spread out -- as might happen as a long-term response to COVID -- then so will the distribution of new arrivals.
Can't really speak to the experience elsewhere.
I also think that immigrants from a generation or two back tend to be spread out much farther. There's a large Indian population in the Detroit area, for instance: https://en.wikipedia.org/wiki/History_of_Indian_Americans_in...
Bottom line: Immigrants, like the rest of Americans, go where the jobs are, and if that gets more spread out -- as might happen as a long-term response to COVID -- then so will the distribution of new arrivals.
Can't really speak to the experience elsewhere.
There is simply an advantage to being close to a network node with multiple connections that outweigh the costs. Whether you define that node in people in your field, different fields, different cultures, different ideas, availability of direct flights, trains, highways, whatever connection it may be. There is an advantage to maximizing available connections that can't be ignored.
And ultimately, it may even work out in your favor to live in a high COL place. The rents are higher, but usually your pay is relative so proportionally cost of living is about the same. That means in a high cost of living state, x% of your income is more money to invest and grow, and over a career that can lead to a significant difference in wealth.
And ultimately, it may even work out in your favor to live in a high COL place. The rents are higher, but usually your pay is relative so proportionally cost of living is about the same. That means in a high cost of living state, x% of your income is more money to invest and grow, and over a career that can lead to a significant difference in wealth.
I think that some of the issue is that cities have more opportunities even outside of employment. Arts, dining, sporting events, museums, world class instructors in various hobbies, cultural events, etc.
You can build new towns, but they tend to have a chicken-and-egg problem with respect to jobs. No employers will set up shop in a new town because there are no employees, people moving in get jobs in the nearest city because there are none suitable in town. These places are often called bedroom or commuter towns.
FWIW I moved to Tokyo in part because it’s not a hellscape, but a great place to live if you like cities (and have income). I guess if you only consider American cities then maybe you might conflate cities with hellscapes.
If those cities are so bad, why does almost everyone want to live there?
If you don't like the cities, why not take advantage of open borders leave?
Open borders seems to be the solution to your problem, not the cause.
If you don't like the cities, why not take advantage of open borders leave?
Open borders seems to be the solution to your problem, not the cause.
[deleted]
I am a fan of open borders, but you can't have any kind of public assistance and open borders.
Bryan Caplan addresses this as one of his "keyhole solutions" to various perceived negative externalities: [0]
> For instance, if the problem lies with migrant welfare use, the most keyhole solution-like approach is to change the rules, or enforcement of rules, surrounding migrant welfare use.
Another option is open borders with a migration tax [1].
At the end of the day, I think that once someone adopts the mindset that, prima facie, it's morally wrong to deny people the right to move where they wish,[2] it becomes a lot easier to shift one's thinking away from "identify that there are hard problems and give up" to solving those problems.
[0] https://openborders.info/keyhole-solutions/
[1] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2035616
[2] http://www.owl232.net/papers/immigration.htm
> For instance, if the problem lies with migrant welfare use, the most keyhole solution-like approach is to change the rules, or enforcement of rules, surrounding migrant welfare use.
Another option is open borders with a migration tax [1].
At the end of the day, I think that once someone adopts the mindset that, prima facie, it's morally wrong to deny people the right to move where they wish,[2] it becomes a lot easier to shift one's thinking away from "identify that there are hard problems and give up" to solving those problems.
[0] https://openborders.info/keyhole-solutions/
[1] https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2035616
[2] http://www.owl232.net/papers/immigration.htm
Most countries have "migration tax" - wealthy investors can buy visas. That's obviously not "open borders" the way most people understand that expression.
> For instance, if the problem lies with migrant welfare use, the most keyhole solution-like approach is to change the rules, or enforcement of rules, surrounding migrant welfare use.
This is just bad. The quality of my life is directly related to the amount of support people around me get. I'm expecting a reduction in social support for the poorest would directly lead to increase in crime. In addition, people generally want things like emergency services being available to everyone, otherwise they'd have to see people dying on the street. I'd rather avoid both of those, and avoid open borders, than have open borders, rampant poverty, crime and people dying on the street. "But without open borders, that problem just translates elsewhere - there are poor people dying of crime on the streets of Africa right now!" Yeah, but then let's solve that problem instead. It's much cheaper for me & my taxes to give someone in a low-PPP country social support, basic job, housing and medical insurance.
> For instance, if the problem lies with migrant welfare use, the most keyhole solution-like approach is to change the rules, or enforcement of rules, surrounding migrant welfare use.
This is just bad. The quality of my life is directly related to the amount of support people around me get. I'm expecting a reduction in social support for the poorest would directly lead to increase in crime. In addition, people generally want things like emergency services being available to everyone, otherwise they'd have to see people dying on the street. I'd rather avoid both of those, and avoid open borders, than have open borders, rampant poverty, crime and people dying on the street. "But without open borders, that problem just translates elsewhere - there are poor people dying of crime on the streets of Africa right now!" Yeah, but then let's solve that problem instead. It's much cheaper for me & my taxes to give someone in a low-PPP country social support, basic job, housing and medical insurance.
this raises more questions than it answers for me. the migration tax in particular doesn't make a lot of sense to me. immigrants are either going to a) consume more services than they pay for in "normal" taxes, or b) make enough money that their taxes more than offset the services consumed. in case b), the people probably already have some valuable skills; you don't want to discourage these people from entering with a special tax. they would already be a net benefit to the balance sheet upon entry. in case a), they probably couldn't afford to pay a meaningful migration tax in the first place. do you just turn them away if they can't pay?
restrictions on use of welfare for immigrants seems "fair" in a sense. at least, it doesn't leave them worse off than they were in the first place. I have to suspect this is a non-starter politically though. outside of a certain group of libertarians, most people who think it's morally wrong to prohibit free movement probably also consider it morally wrong to let people starve in the streets once they get there.
restrictions on use of welfare for immigrants seems "fair" in a sense. at least, it doesn't leave them worse off than they were in the first place. I have to suspect this is a non-starter politically though. outside of a certain group of libertarians, most people who think it's morally wrong to prohibit free movement probably also consider it morally wrong to let people starve in the streets once they get there.
These are fair points, all of which I think could be addressed by finding the optimal taxation point.
The keyhole solution I favor would be something like: a US passport for 10 years, with no political rights or access to SS/Medicare/medicaid/etc., costs $10k, if you lived here for 10 years and didn't get arrested or anything then that transitions into full citizenship; maybe if you earned a certain amount of money/paid a certain amount of taxes in that time, you get your 10k back. Something like that, anyway.
(FWIW my first choice would be a much, much lower barrier to entry -- this is what I came up with to try to address concerns like those raised in this thread.)
But, again, if you accept that the default moral position is non-violence -- i.e. people have a prima facie right to move where they want, and if you threaten to hurt them for doing so (by putting them in jail, or making the only available border crossing extremely dangerous), then you are acting wrongly -- then I think it becomes natural to begin looking for solutions to whatever externalities you can think of. That's why I favor arguing the moral case for immigration before anything else: http://www.owl232.net/papers/immigration.htm
The keyhole solution I favor would be something like: a US passport for 10 years, with no political rights or access to SS/Medicare/medicaid/etc., costs $10k, if you lived here for 10 years and didn't get arrested or anything then that transitions into full citizenship; maybe if you earned a certain amount of money/paid a certain amount of taxes in that time, you get your 10k back. Something like that, anyway.
(FWIW my first choice would be a much, much lower barrier to entry -- this is what I came up with to try to address concerns like those raised in this thread.)
But, again, if you accept that the default moral position is non-violence -- i.e. people have a prima facie right to move where they want, and if you threaten to hurt them for doing so (by putting them in jail, or making the only available border crossing extremely dangerous), then you are acting wrongly -- then I think it becomes natural to begin looking for solutions to whatever externalities you can think of. That's why I favor arguing the moral case for immigration before anything else: http://www.owl232.net/papers/immigration.htm
What makes you so sure that economics is entirely constructed? Things like supply and demand are clearly natural consequences of resource scarcity, and doesn't only apply to economics. While we do have certain frameworks that are man-made that prop up and support the economy, AN economy of some description just seems like a natural consequence of things being perceived as having value. We even see this in animals.
An economy is the net result of individual and collective (social) behaviours. You could, indeed, argue that other species such as other primates or even ants behave in a way that bears resemblance to an economy with a due stretch of imagination. Even so, you have to be mindful about projection bias when you make such assertions.
The difference is that humans have this unique ability: self awareness. Humans are able to see themselves as a separate entity, as opposed to other humans. This also us to reflect on our own needs and desires, but also about the desires and needs of other individuals. It's this ability that has led to the emergence of language, culture and technology.
A human economy is an extension of the behaviours you'd see in other species. It just so happens that humans are able to steer that behaviour. The trouble is that we aren't that good at gauging the extent to which we get to control individual as well as collective and emergent behaviour.
So, reality is layered. On an abstract level, a human economy is seemingly based off a complex set of artificial social constructs used by humans to describe and handle that reality; but on a much lower level, a human economy is the net result of emergent individual and social behavioural patterns which, in themselves, have a clear overlap with other species. The fallacy then is to try and draw a clear border between those two levels.
The difference is that humans have this unique ability: self awareness. Humans are able to see themselves as a separate entity, as opposed to other humans. This also us to reflect on our own needs and desires, but also about the desires and needs of other individuals. It's this ability that has led to the emergence of language, culture and technology.
A human economy is an extension of the behaviours you'd see in other species. It just so happens that humans are able to steer that behaviour. The trouble is that we aren't that good at gauging the extent to which we get to control individual as well as collective and emergent behaviour.
So, reality is layered. On an abstract level, a human economy is seemingly based off a complex set of artificial social constructs used by humans to describe and handle that reality; but on a much lower level, a human economy is the net result of emergent individual and social behavioural patterns which, in themselves, have a clear overlap with other species. The fallacy then is to try and draw a clear border between those two levels.
I have yet to meet a human that exhibits this so called self-awareness
Just to clarify, you don't believe anyone including yourself is self-aware?
If you believe you are self-aware then I suspect that it's more a problem of recognition than self-awareness being absent.
If you don't believe that you are self-aware, that's really interesting. Please elaborate!
If you believe you are self-aware then I suspect that it's more a problem of recognition than self-awareness being absent.
If you don't believe that you are self-aware, that's really interesting. Please elaborate!
I think kingkawn is using a less technical meaning that I hear often... "having no self-awareness" ≅ not considering the effects of one's actions.
Certainly I think that's what my parents were implying when they accused me of it. At least I doubt they were worried I was a p-zombie.
Certainly I think that's what my parents were implying when they accused me of it. At least I doubt they were worried I was a p-zombie.
That's fair, however I'd put forward that considering consequences is hard and mentally taxing which is why people don't do it much, as opposed to them being unable to do so.
Supply and demand are natural consequences of scarcity, but they're also consequences of all sorts of market manipulation, and there are good reasons to believe that the supply and demand created by market manipulation far outweighs the supply and demand created by scarcity.
There are approximately 570,000 homeless people in the US[1]. Jeff Bezos has a net worth of $188 billion[2]. The median price of a house in the US is $218,000. Jeff Bezos could buy every homeless person in the US a house at that median price, and still have $63.7 billion[3], leaving him the 5th richest person in the world[4].
And that's massively more money than is necessary to solve the actual homelessness problem in the US, which doesn't require 570,000 homes (because more than one person can live in one home) and doesn't require median value homes (because much cheaper homes are adequate). Yes, buying housing for hundreds of thousands of people would drive up housing prices, but surely a massive influx of capital would prompt more construction to meet demand. This is absolutely doable if Bezos decided to do it.
In short, the entire US housing crisis is smaller than a manufactured scarcity that only exists because Jeff Bezos has decided that $63.7 billion isn't enough incentive to work at Amazon, so 570,000 people should be homeless.
I realize I'm singling out Bezos here--yes, Bezos is a terrible person, but there are other billionaires who could easily solve the US housing crisis, and there's an entire system of people who have sided with the billionaires over the homeless time and time again. The responsibility for this travesty doesn't rest solely on Bezos' shoulders.
I also realize that homelessness isn't our only problem. There is real scarcity, and simply fixing income inequality isn't going to fix all scarcities.
But there can be no doubt that at least some of our most chronic problems only exist because there is a consensus that solving those problems isn't worth the wealthy giving up a portion of their wealth. You can argue whether that's justified or not, but you can't argue that these problems aren't solvable.
[1] https://endhomelessness.org/homelessness-in-america/homeless...
[2] https://www.forbes.com/profile/jeff-bezos/#575a78ae1b23
[3] 188,000,000,000 -(218,000 * 570,000) = 63,740,000,000
[4] https://www.forbes.com/billionaires/
There are approximately 570,000 homeless people in the US[1]. Jeff Bezos has a net worth of $188 billion[2]. The median price of a house in the US is $218,000. Jeff Bezos could buy every homeless person in the US a house at that median price, and still have $63.7 billion[3], leaving him the 5th richest person in the world[4].
And that's massively more money than is necessary to solve the actual homelessness problem in the US, which doesn't require 570,000 homes (because more than one person can live in one home) and doesn't require median value homes (because much cheaper homes are adequate). Yes, buying housing for hundreds of thousands of people would drive up housing prices, but surely a massive influx of capital would prompt more construction to meet demand. This is absolutely doable if Bezos decided to do it.
In short, the entire US housing crisis is smaller than a manufactured scarcity that only exists because Jeff Bezos has decided that $63.7 billion isn't enough incentive to work at Amazon, so 570,000 people should be homeless.
I realize I'm singling out Bezos here--yes, Bezos is a terrible person, but there are other billionaires who could easily solve the US housing crisis, and there's an entire system of people who have sided with the billionaires over the homeless time and time again. The responsibility for this travesty doesn't rest solely on Bezos' shoulders.
I also realize that homelessness isn't our only problem. There is real scarcity, and simply fixing income inequality isn't going to fix all scarcities.
But there can be no doubt that at least some of our most chronic problems only exist because there is a consensus that solving those problems isn't worth the wealthy giving up a portion of their wealth. You can argue whether that's justified or not, but you can't argue that these problems aren't solvable.
[1] https://endhomelessness.org/homelessness-in-america/homeless...
[2] https://www.forbes.com/profile/jeff-bezos/#575a78ae1b23
[3] 188,000,000,000 -(218,000 * 570,000) = 63,740,000,000
[4] https://www.forbes.com/billionaires/
>There are approximately 570,000 homeless people in the US[1]. Jeff Bezos has a net worth of $188 billion[2]. The median price of a house in the US is $218,000. Jeff Bezos could buy every homeless person in the US a house at that median price, and still have $63.7 billion[3], leaving him the 5th richest person in the world[4].
What about the people living in those homes now? Where do they move? And: Wouldn't the price of homes rise if Jeff Bezos were to start buying them up?
What about the people living in those homes now? Where do they move? And: Wouldn't the price of homes rise if Jeff Bezos were to start buying them up?
The post you're responding to addresses your questions in the paragraph immediately after the one you quoted.
I agree with your points overall but I also think there are situations where scarcity is artificial like diamonds or anything that requires money to get to market including government programs like healthcare. For private enterprise, funding is critical. But if the barrier to success of a public or government program is lack of budget then recent events indicate the issue is political, not economics. There will always be debate over which public programs should actually be funded but I think we can generally agree on topics like education, healthcare, and a basic safety net like food and housing.
With recent cash injections by the US Fed and government totaling over $5 trillion, loans or not, we've demonstrated that the dollar is not scarce. Even in the face of inflation worries these injections will probably continue to offset losses and try to make the current administration not look as bad for mishandling the pandemic and following economic crisis. The inflation worry seems mitigated by international use of the dollar with maybe 10x more people interfacing with the currency in some way week to week versus just the US population. People working as Economists vs me with just a degree say things like "...the sharp drop in demand and prices for certain services and energy implies a significantly lower trajectory for both core and headline inflation." I'm not saying it won't catch up to the Dollar eventually, just that the short term worries seem appear offset by the massive pool of international users and curbed by the projected loss of GDP across that pool. I will not that this is not the same during economic booms, in fact that's exactly the right time to pull cash out of the system via higher taxes as it is being generated by the economy and productivity, not the Fed.
Before those injections, I've always thought that if we can provide the better part of a trillion dollars per year to Defense and now can pass on trillions to businesses (deserving or not), we can afford Universal healthcare, proper mental health services, an overhaul of public servants to counter corruption, favoritism, and police brutality. We can afford to feed and house those who cannot afford it themselves AND those impacted by the current economic crisis from those who lost their jobs to those working an 'essential' position but making less than a living wage. Perhaps if businesses were freed of the costs of healthcare administration and related benefits they can be obligated to turn that into investment in their business and employees vs pocketing the savings.
As an non-US example, the UK suddenly has the funding to feed millions of underprivileged kids through the summer. It's 120M sure but is a prime example of a politically explosive (the funding, not the cause) but totally feasible program if we recognize the money exists or can exist at little downside compared to the outcome ie feeding children. In terms of global hunger that does still seem to be a distribution issue, not a scarcity issue.
Investments in our youth are one of the best long term ways to fight inequality and more. We should be aggressively fighting to keep them fed, well educated, and motivated be that in the US, UK, or Senegal.
Again, I generally agree with your comment. Economics is all about resource scarcity and solutioning around those limitations. But I think some scarcity is absolutely self imposed be it for political reasons or simple human greed. Leveraging your access to a scarce resource is an incredibly viable business model in capitalism just like DeBeers. But, we can step back from the drive to more profit and recognize we have an ethical obligation to (channeling leave no trace here) not only leave things as good as we found it but do our best to make the world better and propel the next generation into even more opportunity. That's why people came to the US, opportunity, and we owe it to our ancestors and the spirit of America to continue that legacy.
Thanks for coming to my TED talk on ethical capitalism.
Fed balance sheet and inflation: https://www.cnbc.com/2020/03/27/the-feds-balance-sheet-just-...
Also but not from a major outlet: https://www.coindesk.com/fed-officials-see-anemic-inflation-...
And from a well reviewed blog: https://www.moneyandbanking.com/commentary/2020/4/26/inflati...
UK meals program: https://edition.cnn.com/2020/06/16/football/marcus-rashford-...
Investment in youth: https://www.brookings.edu/research/investing-in-the-next-gen...
And from another .edu: https://news.harvard.edu/gazette/story/2019/07/opportunity-i...
World hunger as a distribution issue (2013): https://www.cnbc.com/id/100893540
And here from a related non profit (find the 'Does the world produce enough food to feed everyone?' section): https://www.worldhunger.org/world-hunger-and-poverty-facts-a...
With recent cash injections by the US Fed and government totaling over $5 trillion, loans or not, we've demonstrated that the dollar is not scarce. Even in the face of inflation worries these injections will probably continue to offset losses and try to make the current administration not look as bad for mishandling the pandemic and following economic crisis. The inflation worry seems mitigated by international use of the dollar with maybe 10x more people interfacing with the currency in some way week to week versus just the US population. People working as Economists vs me with just a degree say things like "...the sharp drop in demand and prices for certain services and energy implies a significantly lower trajectory for both core and headline inflation." I'm not saying it won't catch up to the Dollar eventually, just that the short term worries seem appear offset by the massive pool of international users and curbed by the projected loss of GDP across that pool. I will not that this is not the same during economic booms, in fact that's exactly the right time to pull cash out of the system via higher taxes as it is being generated by the economy and productivity, not the Fed.
Before those injections, I've always thought that if we can provide the better part of a trillion dollars per year to Defense and now can pass on trillions to businesses (deserving or not), we can afford Universal healthcare, proper mental health services, an overhaul of public servants to counter corruption, favoritism, and police brutality. We can afford to feed and house those who cannot afford it themselves AND those impacted by the current economic crisis from those who lost their jobs to those working an 'essential' position but making less than a living wage. Perhaps if businesses were freed of the costs of healthcare administration and related benefits they can be obligated to turn that into investment in their business and employees vs pocketing the savings.
As an non-US example, the UK suddenly has the funding to feed millions of underprivileged kids through the summer. It's 120M sure but is a prime example of a politically explosive (the funding, not the cause) but totally feasible program if we recognize the money exists or can exist at little downside compared to the outcome ie feeding children. In terms of global hunger that does still seem to be a distribution issue, not a scarcity issue.
Investments in our youth are one of the best long term ways to fight inequality and more. We should be aggressively fighting to keep them fed, well educated, and motivated be that in the US, UK, or Senegal.
Again, I generally agree with your comment. Economics is all about resource scarcity and solutioning around those limitations. But I think some scarcity is absolutely self imposed be it for political reasons or simple human greed. Leveraging your access to a scarce resource is an incredibly viable business model in capitalism just like DeBeers. But, we can step back from the drive to more profit and recognize we have an ethical obligation to (channeling leave no trace here) not only leave things as good as we found it but do our best to make the world better and propel the next generation into even more opportunity. That's why people came to the US, opportunity, and we owe it to our ancestors and the spirit of America to continue that legacy.
Thanks for coming to my TED talk on ethical capitalism.
Fed balance sheet and inflation: https://www.cnbc.com/2020/03/27/the-feds-balance-sheet-just-...
Also but not from a major outlet: https://www.coindesk.com/fed-officials-see-anemic-inflation-...
And from a well reviewed blog: https://www.moneyandbanking.com/commentary/2020/4/26/inflati...
UK meals program: https://edition.cnn.com/2020/06/16/football/marcus-rashford-...
Investment in youth: https://www.brookings.edu/research/investing-in-the-next-gen...
And from another .edu: https://news.harvard.edu/gazette/story/2019/07/opportunity-i...
World hunger as a distribution issue (2013): https://www.cnbc.com/id/100893540
And here from a related non profit (find the 'Does the world produce enough food to feed everyone?' section): https://www.worldhunger.org/world-hunger-and-poverty-facts-a...
I agree, we invented this stuff, and we should be able to fix it when it 'breaks.'
However, we see this constantly in any manmade system (system as defined by Systemics), where we can't control the emergent behavior of the system.
It's worse than that because we're talking about systems where change is necessarily political, so in-group/out-group dynamics dominate the perceived discussion ("Democrats think this, but Republicans say that").
This is made worse when one is pleased with the emergent outcome of a system and so ex post facto makes up justifications, but wouldn't feel comfortable arguing directly for the outcome publicly (see "States rights").
It's a problem I think about a lot, and there just aren't any easy answers to either combat bad faith participants or to be convincing that systems thinking needs to be given more weight in discourse.
However, we see this constantly in any manmade system (system as defined by Systemics), where we can't control the emergent behavior of the system.
It's worse than that because we're talking about systems where change is necessarily political, so in-group/out-group dynamics dominate the perceived discussion ("Democrats think this, but Republicans say that").
This is made worse when one is pleased with the emergent outcome of a system and so ex post facto makes up justifications, but wouldn't feel comfortable arguing directly for the outcome publicly (see "States rights").
It's a problem I think about a lot, and there just aren't any easy answers to either combat bad faith participants or to be convincing that systems thinking needs to be given more weight in discourse.
Our available methods for engaging with the economic are, perhaps functionally, not able to answer for any problems. Walters Streeck describes economic theory as race horses hitched to a plow: The complexity of the models developed do nothing to advance the work to be done. The work of economic analysis has to re-orient according to Streeck - > "I am hungry for facts, not for concepts; concepts I access through facts and through the questions they raise, including the need to organize them into a coherent picture."
> Yet we continue to treat it (economics, the global financial system) as some kind of inevitable force of nature, rather than as something that we invented and (to some degree) chose. I wish I knew why that is.
This is well said, and I have been very frustrated by this in recent years, too. The simplest clue I have is to look at who benefits from this perspective, and what means they have to spread this idea in the public sphere and discourse.
This is well said, and I have been very frustrated by this in recent years, too. The simplest clue I have is to look at who benefits from this perspective, and what means they have to spread this idea in the public sphere and discourse.
> The simplest clue I have is to look at who benefits from this perspective
Start with the billions of people lifted out of poverty. Never in history have so many people enjoyed such a high standard of living.
The market isn't perfect and it isn't magic, and I don't mean to minimize climate change and other tragedies-of-the-commons, but in practice it's been very successful at improving peoples lives.
Start with the billions of people lifted out of poverty. Never in history have so many people enjoyed such a high standard of living.
The market isn't perfect and it isn't magic, and I don't mean to minimize climate change and other tragedies-of-the-commons, but in practice it's been very successful at improving peoples lives.
That could equally be a consequence of technological and scientific development than any particular economic structure.
But if everyone has access to the same scientific developments, then why the disparity in standards of living around the world?
You might chalk it up to power structures, but that couldn’t explain the disparity in standard of living between the Soviet Union and Western Europe.
You might chalk it up to power structures, but that couldn’t explain the disparity in standard of living between the Soviet Union and Western Europe.
What motivates technological and scientific development?
That is a problem that has not been thoroughly explored. What has been motivational historically, and what is necessary to motivate in the future, do not have to be the same.
And even looking at history, the motivations of scientific development seems quite varied. War has been a key promoter of many fields of science, which has in turn lifted may people out of poverty. So we should have more world wars?
And even looking at history, the motivations of scientific development seems quite varied. War has been a key promoter of many fields of science, which has in turn lifted may people out of poverty. So we should have more world wars?
This is always attributed to the market, or capitalism, or some other such thing. Why is that? Citation please.
The system not only encourages but requires inequality. Today's billionaires accumulated that wealth off the back of countless toiling workers, many doing so in miserable conditions.
Why is it so clearly capitalism that lifted those people out of poverty, and not modern advances in technology, such as in food production, efficient transportation of goods, sanitation, and medicine?
The system not only encourages but requires inequality. Today's billionaires accumulated that wealth off the back of countless toiling workers, many doing so in miserable conditions.
Why is it so clearly capitalism that lifted those people out of poverty, and not modern advances in technology, such as in food production, efficient transportation of goods, sanitation, and medicine?
> Why is it so clearly capitalism that lifted those people out of poverty, and not modern advances in technology, such as in food production, efficient transportation of goods, sanitation, and medicine?
Because of the evidence of India and China is compelling.
https://forms.gapminder.org/s3/test-2018
Because of the evidence of India and China is compelling.
https://forms.gapminder.org/s3/test-2018
I think I provided the wrong link. To be clear, the Gap Minder tools show the majority of the improvement came to India and China after they opened their economies.
https://www.gapminder.org/tools/
And in fairness, 'capitalism' is a very imprecise term which often means different things to different people.
https://www.gapminder.org/tools/
And in fairness, 'capitalism' is a very imprecise term which often means different things to different people.
I think that's a good comparison. Indeed while in China living condition of the middle class are good and comparable to what you can get in the west, and the low income class still have a fair access to basic needs (housing, water, toilet) this not exactly the same in India.
So if the open market would be the only reason of the progress we should've seen something similar in the two countries.
The only similarity that they both share is a growing disparity between high income class and low income class
Also Chinese policy is more towards open trade than open market. I feel that complicated topic such as progress can't be condensed into one action that can deliver the expected results. In fact is always a combination of policy that bring the desired effect
So if the open market would be the only reason of the progress we should've seen something similar in the two countries.
The only similarity that they both share is a growing disparity between high income class and low income class
Also Chinese policy is more towards open trade than open market. I feel that complicated topic such as progress can't be condensed into one action that can deliver the expected results. In fact is always a combination of policy that bring the desired effect
This is the first time I've heard that the financial system has lifted "billions" of people out of poverty.
I thought that the financial system was the consequences of wealth rather than the cause (otherwise this doesn't explain why none of the African stock exchange are fighting with NYSE for the most attractive stock market)
I thought that the financial system was the consequences of wealth rather than the cause (otherwise this doesn't explain why none of the African stock exchange are fighting with NYSE for the most attractive stock market)
Private property, law, and markets is what lifts people out of poverty.
Wealth inequality is a side effect as some people do better than others.
Wealth inequality is a side effect as some people do better than others.
> Yet we continue to treat it (economics, the global financial system) as some kind of inevitable force of nature, rather than as something that we invented and (to some degree) chose. I wish I knew why that is.
If you want a good guess; the economy is complicated, there is no consensus on how it works and the plurality position on how it works among the public is badly misaligned with reality.
If you want a good guess; the economy is complicated, there is no consensus on how it works and the plurality position on how it works among the public is badly misaligned with reality.
I find that that misalignment tends to stem not from any failing of the public, but from the institution of finance itself. I have encountered no vein of human endeavor so mired in jargon or completely disconnected from everyday experience such that most of the public stands little if any chance of properly understanding it than finance.
The public has a relatively simple working model of the financial world.
A)Keep money somewhere safe. B)Lend money only to those you trust. C)Save for a rainy day, because while things are good now, they won't be forever. D)debt above your means is undesirable. E)debt should be paid F)no one is going to bail you out so manage things carefully
It takes a proper finance person to make the jump to:
A) Debt is fungible B) when Credit is cheap, use it C) Better to bust with a limited liability corp or other legal fiction than to not try D) Money gets printed all the time. Don't worry about where it comes from or where it goes, it'll all come out in the wash (in theory, and in spite of the fact we know sometimes it doesn't) E)If you do go bust, don't sweat it, bankruptcy is there for you, and if you're big enough, the government will bail you out through the taxpayers via enough lobbyist pressure.
Case and point: when the system has such stark separations between front and "back-office" concerns, and most of the "back-office" is never tackled as part of primary education, I find it a bit cheap to take potshots at the public for not knowing every intimate detail about how the sausage is made. The info may exist in the knowledge graph, but a successful query of the all the bits and pieces that result in something workable forming that stands the test of time is non-trivial.
The public has a relatively simple working model of the financial world.
A)Keep money somewhere safe. B)Lend money only to those you trust. C)Save for a rainy day, because while things are good now, they won't be forever. D)debt above your means is undesirable. E)debt should be paid F)no one is going to bail you out so manage things carefully
It takes a proper finance person to make the jump to:
A) Debt is fungible B) when Credit is cheap, use it C) Better to bust with a limited liability corp or other legal fiction than to not try D) Money gets printed all the time. Don't worry about where it comes from or where it goes, it'll all come out in the wash (in theory, and in spite of the fact we know sometimes it doesn't) E)If you do go bust, don't sweat it, bankruptcy is there for you, and if you're big enough, the government will bail you out through the taxpayers via enough lobbyist pressure.
Case and point: when the system has such stark separations between front and "back-office" concerns, and most of the "back-office" is never tackled as part of primary education, I find it a bit cheap to take potshots at the public for not knowing every intimate detail about how the sausage is made. The info may exist in the knowledge graph, but a successful query of the all the bits and pieces that result in something workable forming that stands the test of time is non-trivial.
It takes a proper finance person to make the jump to:
1) There is a temporal mismatch between the need to consume economic value and the ability to produce economic value. The so called desirability of savings, and taking on debt within your capacity to reasonably repay are not first principals but rather results of this temporal mismatch.
2) Assets (as distinct from goods) are the best means to achieve the saving and borrowing in (1). A farmer cannot save food for retirement. Selling goods and services and lending the money to, or purchasing an equitable share in a productive enterprise is the best way to save.
1) There is a temporal mismatch between the need to consume economic value and the ability to produce economic value. The so called desirability of savings, and taking on debt within your capacity to reasonably repay are not first principals but rather results of this temporal mismatch.
2) Assets (as distinct from goods) are the best means to achieve the saving and borrowing in (1). A farmer cannot save food for retirement. Selling goods and services and lending the money to, or purchasing an equitable share in a productive enterprise is the best way to save.
> to solve our pressing problems
We will always have finite resources. Given finite resources not every human need/wish will ever be achievable, and various people have various needs and wishes. There will always be a boundary between the needs that are achievable with very little resource allocation and needs that are completely out of the realm of possibility. On that boundary, people will always have disagreements about what's more urgent or not. Some things will necessarily be deprioritized, and for a segment of the population it will look like pressing problems are not solved and the system is broken to the core.
There is no way to get out of this, in any conceivable system with finite resources.
We will always have finite resources. Given finite resources not every human need/wish will ever be achievable, and various people have various needs and wishes. There will always be a boundary between the needs that are achievable with very little resource allocation and needs that are completely out of the realm of possibility. On that boundary, people will always have disagreements about what's more urgent or not. Some things will necessarily be deprioritized, and for a segment of the population it will look like pressing problems are not solved and the system is broken to the core.
There is no way to get out of this, in any conceivable system with finite resources.
Separating needs and wishes would be a good start. Security and dignity would serve as nice starting points imo. Then, we could argue over the rest, but we're not there. Most people - in the US anyway - see everything as something to fight for, and if you fight for more than you need while others are unable to fight for what they need - or fight well enough to get what they need - it just means you're winning.
> I don't know how we get from here to a place where these problems become solvable (or even what that place looks like) and from there to a world that is actually going to sustain us again.
Austrians argue that this is the inevitable force of nature. Basically that economic plans are inherently under-informed.
Austrians argue that this is the inevitable force of nature. Basically that economic plans are inherently under-informed.
Mises' fans "argue" without any empirical evidence that no plan is the best plan. Pseudo-science in action.
It’s clear that past attempts to “fix” the economic system (e.g. Nixon’s price controls, rent control) have often made things worse.
So to a degree, a free market is “inevitable” to a degree. There is only so much control you can exert without mucking it up. The other alternative is place more of the economy under gov’t control and we’ve seen how well that works.
And have no idea why you think the future will be worse. Think about living in 1930’s France. The world was far more unstable than it is now, yet prosperity and freedom are more broadly available than ever before. Not sure what the doom and gloom prediction is based on - we are NOT in unique times here.
So to a degree, a free market is “inevitable” to a degree. There is only so much control you can exert without mucking it up. The other alternative is place more of the economy under gov’t control and we’ve seen how well that works.
And have no idea why you think the future will be worse. Think about living in 1930’s France. The world was far more unstable than it is now, yet prosperity and freedom are more broadly available than ever before. Not sure what the doom and gloom prediction is based on - we are NOT in unique times here.
> Yet we continue to treat it (economics, the global financial system) as some kind of inevitable force of nature, rather than as something that we invented and (to some degree) chose. I wish I knew why that is.
Because markets and financials systems behave like a force of nature. Nobody sat down and invented them, they emerged. The only thing you can invent is regulations.
However, you can't arbitrarily regulate markets, or credit. If you do, black markets and informal credit systems emerge. You can't arbitrarily set prices, if you do, shortages and scalping are the result.
There is a window where regulation doesn't fail, which is going to be fairly close to where the market wanted to go anyway - kind of like building a dam.
Because markets and financials systems behave like a force of nature. Nobody sat down and invented them, they emerged. The only thing you can invent is regulations.
However, you can't arbitrarily regulate markets, or credit. If you do, black markets and informal credit systems emerge. You can't arbitrarily set prices, if you do, shortages and scalping are the result.
There is a window where regulation doesn't fail, which is going to be fairly close to where the market wanted to go anyway - kind of like building a dam.
>Yet we continue to treat it (economics, the global financial system) as some kind of inevitable force of nature, rather than as something that we invented and (to some degree) chose. I wish I knew why that is.
The powers that develop and promote this ideology will profit from it even as the planet is destroyed.
The powers that develop and promote this ideology will profit from it even as the planet is destroyed.
> Should that day come to pass, the money-issuer – the central bank – can procure all that idle labor, without creating inflation. If the private sector doesn’t want labor, then there’s no bidding war between companies and a federal jobs program or a universal basic income, so creating money to buy people’s labor won’t drive up the price of that labor.
I had to stop reading after this. This is not how inflation works and it borders on the preposterous to surmise that CBs can monetize deficits without creating inflation because there is excess supply in one market.
All of these people who would otherwise have less/no money are now spending that printed money to purchase goods like food, thus driving inflation higher. You can debate the merits of people being entitled to basic services like food, but the economic pressures are fairly well understood, even by MMTers
I had to stop reading after this. This is not how inflation works and it borders on the preposterous to surmise that CBs can monetize deficits without creating inflation because there is excess supply in one market.
All of these people who would otherwise have less/no money are now spending that printed money to purchase goods like food, thus driving inflation higher. You can debate the merits of people being entitled to basic services like food, but the economic pressures are fairly well understood, even by MMTers
While I don't agree with Doctorow's argument at all, I would say that inflation is misunderstood more than it's understood.
For example, there is a naive belief that inflation is proportional to the money supply. This seems to be a garbled version of monetarism, which is no longer how central banks think about it, but even monetarism is more complicated than that.
Monetarist theory is based on MV = PQ, where M is the money supply and V is the "velocity of money".
The money supply can go up but velocity can go down (the people getting the money tend not to spend it), in which case there's no inflation. For inflation to happen, people have to want to spend more.
People can spend more or less due to fear, but it depends on the nature of the fear. Currently fear tends to make people spend less (if they can).
For example, there is a naive belief that inflation is proportional to the money supply. This seems to be a garbled version of monetarism, which is no longer how central banks think about it, but even monetarism is more complicated than that.
Monetarist theory is based on MV = PQ, where M is the money supply and V is the "velocity of money".
The money supply can go up but velocity can go down (the people getting the money tend not to spend it), in which case there's no inflation. For inflation to happen, people have to want to spend more.
People can spend more or less due to fear, but it depends on the nature of the fear. Currently fear tends to make people spend less (if they can).
Yes this is all very true, but he makes the case explicitly for money velocity to increase. He’s not suggested printing money for savers or rent seekers, he’s suggested printing money for the express purpose of consumption: I have been automated and thus can not afford basic staples without basic income. This is inflationary not matter how you slice it.
It’s inflationary, but the wealth inequality, unemployment/underemployment, and recession we have are all deflationary forces, e.g. CPI inflation is well below historical trends since 2008.
The argument is we have room to nudge inflation back to normal while also helping people.
The argument is we have room to nudge inflation back to normal while also helping people.
You’ve moved the goalposts. OP claims that it’s not inflationary. You’re claiming it’s inflationary but that it’s beneficial. I’m only taking issue with the former.
Well that depends. If it's preserving spending power (you were laid off) then it wouldn't be a spending increase. The supply was already there.
Inflation is an average of price increases. You get price increases when supply can't expand as fast as demand while keeping the price of inputs the same. This depends on whether there are supply bottlenecks and what the nature of those bottlenecks are. There have been some supply bottlenecks due to deliberate closures, but mostly temporary.
In a recession, the assumption is that there is extra capacity already, particularly for labor.
Inflation is an average of price increases. You get price increases when supply can't expand as fast as demand while keeping the price of inputs the same. This depends on whether there are supply bottlenecks and what the nature of those bottlenecks are. There have been some supply bottlenecks due to deliberate closures, but mostly temporary.
In a recession, the assumption is that there is extra capacity already, particularly for labor.
I think this thread is full of people confusing absolute inflation with relative inflation (“inflationary”). A policy resulting in zero absolute inflation can be inflationary provided that absent such policy, deflation would have occurred.
I took this with OP stating (incorrectly imho) that a certain policy was not inflationary. I am not advocating that all inflation is bad.
I took this with OP stating (incorrectly imho) that a certain policy was not inflationary. I am not advocating that all inflation is bad.
I'll take the side that you are right based on the argument in the article but there are better arguments to make. Right now other factors are driving inflation down like lack of consumer spending, consumers outright not paying rent, and that the US dollar is spread across billions of people outside the US where the dollar underpins their economy or USD reserves back their currency. These factors offset the on paper inflation of injecting $5 trillion into the US/world economy but if this was, say, 2017 then they would definitely not.
Our current economic situation is more like 2008/2009 than a boom year where the velocity of money, not technically perhaps but the idea more or less, is very high. Even the decade since the 2008 crash has seen low inflation, at least in the US, and we've seen double digit drops in revenue and sales volumes for several months let alone numbers for the rest of 2020.
For a relevant example here, would WeWork/Uber/Tesla have raised billions in private funding in late 2009 or early 2020? Did the last decade boom in private equity cash on hand drive ability to gain investment ex. increase velocity of money in private investing? None of those companies are critical day to day for US citizens or the economy, at least compared to major banks or grocery stores and maybe they did actually see huge investments during difficult times, but I think the thought experiment stands.
Our current economic situation is more like 2008/2009 than a boom year where the velocity of money, not technically perhaps but the idea more or less, is very high. Even the decade since the 2008 crash has seen low inflation, at least in the US, and we've seen double digit drops in revenue and sales volumes for several months let alone numbers for the rest of 2020.
For a relevant example here, would WeWork/Uber/Tesla have raised billions in private funding in late 2009 or early 2020? Did the last decade boom in private equity cash on hand drive ability to gain investment ex. increase velocity of money in private investing? None of those companies are critical day to day for US citizens or the economy, at least compared to major banks or grocery stores and maybe they did actually see huge investments during difficult times, but I think the thought experiment stands.
But isn't the need to buy food to eat a certain guaranteed base level of velocity?
You do need a certain amount of spending, but that's M*V, not V. More money means less of it needs to circulate to cover spending on food. (If amount spent on food is fixed.)
But this is based on a very simple model that doesn't take inequality into account at all.
But this is based on a very simple model that doesn't take inequality into account at all.
> I had to stop reading after this. This is not how inflation works and it borders on the preposterous to surmise that CBs can monetize deficits without creating inflation because there is excess supply in one market.
I think the government doesn't have to run deficits, it can always tax the money back out of the economy. (The only problem is nobody likes that, for some reason. People seem to prefer inflation to taxation.)
It's actually more honest, because it better shows what actually happens. Government prints money, (hopefully) invests into places that benefit the society as a whole, and then taxes the excess money back from wherever they ended up, destroying them (by not spending them again).
I think the government doesn't have to run deficits, it can always tax the money back out of the economy. (The only problem is nobody likes that, for some reason. People seem to prefer inflation to taxation.)
It's actually more honest, because it better shows what actually happens. Government prints money, (hopefully) invests into places that benefit the society as a whole, and then taxes the excess money back from wherever they ended up, destroying them (by not spending them again).
We’re not talking about the Treasury. We’re talking about Central Banks who lack the power to tax (directly at least).
> People seem to prefer inflation to taxation.
That’s because they’re not the same thing, not at all.
> People seem to prefer inflation to taxation.
That’s because they’re not the same thing, not at all.
I think when Doctorow talks about the CB, he pretty much puts it under government at large. Which I think is fair, various attempts at making CB independent on the actual government are rather puny in my opinion.
Regarding inflation, you're right, there are other sources of inflation than just government printing money. Money are also created privately, and certain inflation is IMHO inevitable, because most goods and assets depreciate.
But I do think that the inflation, induced by government printing additional money, can be negated by taxation.
Regarding inflation, you're right, there are other sources of inflation than just government printing money. Money are also created privately, and certain inflation is IMHO inevitable, because most goods and assets depreciate.
But I do think that the inflation, induced by government printing additional money, can be negated by taxation.
It's not too dissimilar if you think of from the perspective of the government taking away purchasing power from the individual
How is a 1% inflation rate meaningfully different to a 1% tax on savings and investments, and a 1% subsidy on debt?
It’s a tax on savings, but not on most investments which would typically be assets that rise with inflation.
It’s a tax on debt issuers. Anybody loaning money will have to charge a much higher interest rate or they’ll get back less than they lent out.
> (The only problem is nobody likes that, for some reason. People seem to prefer inflation to taxation.)
the reason for this is fairly obvious. if you have a positive net worth, cash is probably a small fraction of your total assets, which limits the direct harm you face from inflation. if you have a negative net worth (ie, you have debt), inflation erodes the real value of your obligations over time. in general, this is already priced into the interest, but you certainly wouldn't want to see inflation decrease while you're repaying a loan, and you might be happy to see it increase.
the reason for this is fairly obvious. if you have a positive net worth, cash is probably a small fraction of your total assets, which limits the direct harm you face from inflation. if you have a negative net worth (ie, you have debt), inflation erodes the real value of your obligations over time. in general, this is already priced into the interest, but you certainly wouldn't want to see inflation decrease while you're repaying a loan, and you might be happy to see it increase.
> All of these people who would otherwise have less/no money are now spending that printed money to purchase goods like food, thus driving inflation higher.
This assumes those goods are a scarce resource, so that increased consumption eventually leads to shortage. I can't quote sources, but my understanding is that we have enough food to feed everyone ATM, and any remaining hunger is just a failure of the economy to solve the distribution of currency.
This assumes those goods are a scarce resource, so that increased consumption eventually leads to shortage. I can't quote sources, but my understanding is that we have enough food to feed everyone ATM, and any remaining hunger is just a failure of the economy to solve the distribution of currency.
Millions of potatoes were recently discarded by Idaho farms due to surplus and lack of demand. I would point to Yemen's hunger crisis, but there are people literally inside of Idaho who don't have food. If you can't even distribute excess food within your own borders it's no longer a logistics problem, people just don't care.
These goods are scarce in the economic sense, even if you think they are “cheap”. They are not free to produce.
We do have enough food to feed the world, but that would mean your food gets more expensive as other people consume what would otherwise contribute to downward supply pressure.
We do have enough food to feed the world, but that would mean your food gets more expensive as other people consume what would otherwise contribute to downward supply pressure.
If there is excess food and it is given to people who would not otherwise buy food, there would be no negative effect on prices or the economy in general. Maybe examples of these types of people don't exist in America all that much but they certainly do in the rest of the world.
Your argument only makes sense if the excess food is given to people who can afford it and just want to eat for free.
Your argument only makes sense if the excess food is given to people who can afford it and just want to eat for free.
I’m sorry, that’s just not how economics works. A market with excess supply necessarily has lower prices than one that is balanced, ceteris paribus.
Idaho potatoes were mentioned above. They are only being thrown away because the market does not want them. The mechanism by which this happens is price: prices drop low enough that it’s cheaper to throw away (we saw negative oil prices recently). One explanation is that other farmers saw this supply glut and raced to slash their prices. If we took all those excess potatoes and gave them away, then absent this excess supply, those other farmers would not have done this and prices would have remained steady or not gone down as much. Thus the artificial increase in quantity demanded is necessarily inflationary.
Idaho potatoes were mentioned above. They are only being thrown away because the market does not want them. The mechanism by which this happens is price: prices drop low enough that it’s cheaper to throw away (we saw negative oil prices recently). One explanation is that other farmers saw this supply glut and raced to slash their prices. If we took all those excess potatoes and gave them away, then absent this excess supply, those other farmers would not have done this and prices would have remained steady or not gone down as much. Thus the artificial increase in quantity demanded is necessarily inflationary.
Incorrect. The use of discarded product by non-market flows has no effect on market price.
You’re putting the cart before the horse: price came first, then the product was discarded.
The risk that these potatoes might be dumped into the market pushed prices down. If you magically take this risk away, it doesn’t matter by which mechanism, that threat goes away and price responds.
If I’m another potato farmer and all of a sudden all those extra potatoes are teleported somewhere else, I will in all likelihood raise my prices.
Even the most progressive theorists would not debate this. It’s basic aggregate supply and demand.
The risk that these potatoes might be dumped into the market pushed prices down. If you magically take this risk away, it doesn’t matter by which mechanism, that threat goes away and price responds.
If I’m another potato farmer and all of a sudden all those extra potatoes are teleported somewhere else, I will in all likelihood raise my prices.
Even the most progressive theorists would not debate this. It’s basic aggregate supply and demand.
> If I’m another potato farmer and all of a sudden all those extra potatoes are teleported somewhere else, I will in all likelihood raise my prices.
There seem to be two different scenarios being conflated here.
You describe producers acting in response to the risk of future price changes.
It seems to me that others in the thread are describing a scenario where product is discarded because the price has already fallen so far that it is no longer profitable after accounting for various processing costs (ie things such as packaging and transportation).
In the latter scenario, if someone were to foot the bill for the redistribution itself there should be no direct effect on that specific part of the market. This assumes of course that the producers aren't compensated for the redistributed good (so it isn't significantly different than simply disposing of it). It also assumes that people don't resell or otherwise barter the product they receive (it's food and they're presumably starving so that assumption seems fairly reasonable in this case). (And of course there are bound to be countless indirect effects on the market as a whole.)
There seem to be two different scenarios being conflated here.
You describe producers acting in response to the risk of future price changes.
It seems to me that others in the thread are describing a scenario where product is discarded because the price has already fallen so far that it is no longer profitable after accounting for various processing costs (ie things such as packaging and transportation).
In the latter scenario, if someone were to foot the bill for the redistribution itself there should be no direct effect on that specific part of the market. This assumes of course that the producers aren't compensated for the redistributed good (so it isn't significantly different than simply disposing of it). It also assumes that people don't resell or otherwise barter the product they receive (it's food and they're presumably starving so that assumption seems fairly reasonable in this case). (And of course there are bound to be countless indirect effects on the market as a whole.)
> It seems to me that others in the thread are describing a scenario where product is discarded because the price has already fallen so far that it is no longer profitable after accounting for various processing costs (ie things such as packaging and transportation).
I understand what people are saying. Unfortunately this just isn’t how things work. If there were a way for this to occur, prices would respond. Ultimately markets aggregate information and package it up in a single metric we call price. If all of a sudden there was a new future demand for some good, no matter how you frame it, prices will respond.
I understand what people are saying. Unfortunately this just isn’t how things work. If there were a way for this to occur, prices would respond. Ultimately markets aggregate information and package it up in a single metric we call price. If all of a sudden there was a new future demand for some good, no matter how you frame it, prices will respond.
In the limited case where redistribution is equivalent to disposal from the perspective of the producer, and the food goes directly to people who are otherwise starving (ie literally incapable of purchasing food) I just don't see how that can be the case.
Obviously this includes a number of assumptions which might not hold. The redistributed product can't reenter the market. It must only go to those who otherwise could not have purchased it or an equivalent in the near term. The total value being redistributed must be insignificant relative to the market as a whole (to limit secondary effects). Etc.
> markets aggregate information and package it up in a single metric we call price
In terms of the movement of information, product that would otherwise have been destroyed seems irrelevant. Consumers who were otherwise incapable of consuming seem irrelevant. Am I missing something?
Obviously this includes a number of assumptions which might not hold. The redistributed product can't reenter the market. It must only go to those who otherwise could not have purchased it or an equivalent in the near term. The total value being redistributed must be insignificant relative to the market as a whole (to limit secondary effects). Etc.
> markets aggregate information and package it up in a single metric we call price
In terms of the movement of information, product that would otherwise have been destroyed seems irrelevant. Consumers who were otherwise incapable of consuming seem irrelevant. Am I missing something?
> It’s basic aggregate supply and demand.
Okay, so then we have absolutely no idea in which way the demand curve will curve then. If the demand curve can be any polynomial, then we have no clue if this will happen or not.
Okay, so then we have absolutely no idea in which way the demand curve will curve then. If the demand curve can be any polynomial, then we have no clue if this will happen or not.
What? Nothing I said has anything to do with the demand curve. This is all supply side. We hold the demand curve constant for any such analysis.
But it’s irrelevant anyway: a basic tenet of economics is that people are, in aggregate, utility maximizers. So yes, we do have an idea of some fundamental properties of the demand curve and it cannot simply be any polynomial.
But it’s irrelevant anyway: a basic tenet of economics is that people are, in aggregate, utility maximizers. So yes, we do have an idea of some fundamental properties of the demand curve and it cannot simply be any polynomial.
> We hold the demand curve constant for any such analysis.
And this is the portion that I'm critiquing. You're holding it as a constant curve sloping downwards.
> So yes, we do have an idea of some fundamental properties of the demand curve
Okay, sure, it relies on there being people who have demand for some commodity.
> it cannot simply be any polynomial
"Any polynomial" might be overselling it, but we can't assume it's sloping downwards.
And this is the portion that I'm critiquing. You're holding it as a constant curve sloping downwards.
> So yes, we do have an idea of some fundamental properties of the demand curve
Okay, sure, it relies on there being people who have demand for some commodity.
> it cannot simply be any polynomial
"Any polynomial" might be overselling it, but we can't assume it's sloping downwards.
It’s not free to transport and distribute the product though. If the surplus has driven down price, the supplier may also be facing a lack of revenue that means any extra cost on transport is too much to bear, even if they really wish they could donate the discardable surplus.
Additionally they may be able to count the discarded product in a business loss category that yields a better tax write-off or qualifies them for assistance in a way that straight donation doesn’t.
To me your example feels like a Chesterton’s Fence scenario where government involvement is responsible for disincentivizing the common sense option of donating a surplus.
Additionally they may be able to count the discarded product in a business loss category that yields a better tax write-off or qualifies them for assistance in a way that straight donation doesn’t.
To me your example feels like a Chesterton’s Fence scenario where government involvement is responsible for disincentivizing the common sense option of donating a surplus.
it's not just the distribution of currency; it's the distribution of food itself. a lot of food waste happens because the cost of transporting and storing it would result in a net loss.
The problem is that all consumption levels stay the same but the production costs surge because a bunch of people aren’t working to help produce supplies. The only way inflation doesn’t occur is if all of the unemployed people were doing useless things that nobody wanted in normal times, which is not how most of the worlds markets function.
How many people do you need to grow potatoes?
Exactly that! As I read the article, I kept thinking "this guy is not following the money".
The author's ultimate assumption is that money supply is somehow decoupled from accumulation. People receiving money from the government and using it to buy their basic needs may not drive inflation because their labor is not being procured by anyone else AND those basic goods they are buying would not be produced otherwise. However, the constant money stream will drive accumulation on the other side of the economy.
The owners of capital (or the 1%, however you may want to call them) would become unimaginably wealthy in a scenario like this. And it would be hard to prevent that. A super wealthy class is already a big problem today. Imagine the influence that group would have in politics if they had 10x the purchase power they have today.
Another problem that I believe exists with instituting a UBI through money creation (e.g., MMT) is lack of innovation and market disruption. It essentially puts a tax on innovation. In order to hire people you now have to be able to afford to pay more than the government and still have sufficient funds to fight well-established mega corporations.
The author's ultimate assumption is that money supply is somehow decoupled from accumulation. People receiving money from the government and using it to buy their basic needs may not drive inflation because their labor is not being procured by anyone else AND those basic goods they are buying would not be produced otherwise. However, the constant money stream will drive accumulation on the other side of the economy.
The owners of capital (or the 1%, however you may want to call them) would become unimaginably wealthy in a scenario like this. And it would be hard to prevent that. A super wealthy class is already a big problem today. Imagine the influence that group would have in politics if they had 10x the purchase power they have today.
Another problem that I believe exists with instituting a UBI through money creation (e.g., MMT) is lack of innovation and market disruption. It essentially puts a tax on innovation. In order to hire people you now have to be able to afford to pay more than the government and still have sufficient funds to fight well-established mega corporations.
But think about this: if you're a startup founder, you can get co-founders for so much cheaper and more easily. If your buddy and you both know you have UBI, you can start a business without risking that much. The next hires can be lured with equity - this is a great thing because people have emotional and professional ownership in startups, but the one to three founders generally have all the equity. What if UBI forced those founders to both distribute equity and alongside that, the responsibility for the company? I think it would benefit all parties. Talking to founders, those first months and years are stressful as heck - I would wish that on nobody for any price. We can do better.
Think about startups before financing. Loans with interest used to be considered immoral - it's prohibited in the Bible. If you wanted to start a business, you had to save or find a lender that would let you take money and then just wait for you to give it back. And if you didn't pay it back, the lender could put you in prison. No wonder people didn't do that very often. Even with these new ways to fund a startup, you could lose your job and with it your income and healthcare coverage. What if that risk just went away? Of course some people would waste it, but think of all those folks that would turn their lives into hackathons until they struck gold.
Think about startups before financing. Loans with interest used to be considered immoral - it's prohibited in the Bible. If you wanted to start a business, you had to save or find a lender that would let you take money and then just wait for you to give it back. And if you didn't pay it back, the lender could put you in prison. No wonder people didn't do that very often. Even with these new ways to fund a startup, you could lose your job and with it your income and healthcare coverage. What if that risk just went away? Of course some people would waste it, but think of all those folks that would turn their lives into hackathons until they struck gold.
I am actually in favor of a UBI, as long as it is truly universal. That means money every month, no questions asked.
I agree with your point: under a true UBI, workers would be able to seek their passions, do whatever they like to do. Doesn't matter if the position is risky or if the pay is low. Worst case scenario, if anything goes wrong, people can fall back on UBI and have their basic needs covered.
In my comment I meant to talk about the guaranteed government job thing that the article mentioned. In that case workers wouldn't have the kind of mobility or guarantees granted by UBI. Startups would actually be competing with the government for people.
I apologize I misused the term UBI before (which is what caused the confusion.)
I agree with your point: under a true UBI, workers would be able to seek their passions, do whatever they like to do. Doesn't matter if the position is risky or if the pay is low. Worst case scenario, if anything goes wrong, people can fall back on UBI and have their basic needs covered.
In my comment I meant to talk about the guaranteed government job thing that the article mentioned. In that case workers wouldn't have the kind of mobility or guarantees granted by UBI. Startups would actually be competing with the government for people.
I apologize I misused the term UBI before (which is what caused the confusion.)
Inflationary policy in a deflationary market doesn’t lead to inflation (see US or Japan). There are lots of issues but I don’t think inflation is one we need to worry about.
Again, this is not what I said. Inflationary policy in a deflationary market is still inflationary.
But irrelevant to the point he is making? He clearly intends to claim that the outcome is not inflationary.
I agree that in many points the article is not written carefully (and sometimes straight up wrong... Ca has no vent shortage, current thermal load doesn’t melt ice caps, zootonic pandemics even with current covid are not world shattering)
I agree that in many points the article is not written carefully (and sometimes straight up wrong... Ca has no vent shortage, current thermal load doesn’t melt ice caps, zootonic pandemics even with current covid are not world shattering)
You're missing the point. There is no inflation taking the no automation stage as a baseline.
I.e. the scenario is workers spending $X of their employer granted salaries on goods they produce vs spending $X of basic job salaries that machines produce
I.e. the scenario is workers spending $X of their employer granted salaries on goods they produce vs spending $X of basic job salaries that machines produce
No, I’m not. You’re making a very simple argument of an extremely complex issue. That only holds up in a world of unlimited resource. As long as energy and raw materials are finite, the above does not hold.
More importantly, you’re conflating two things: we needn’t necessarily print money. Let’s presume your comment were correct. Nonetheless, in the absence of such monetary policy, consumption would plummet and deflation would reign. Thus, it is still inflationary.
More importantly, you’re conflating two things: we needn’t necessarily print money. Let’s presume your comment were correct. Nonetheless, in the absence of such monetary policy, consumption would plummet and deflation would reign. Thus, it is still inflationary.
Again, you are missing the point. Yes, it is inflationary, but the inflation caused will not be the end of the world. As you admit, most of it will simply counteract the deflationary effects of unemployment and full automation.
If the CBs are missing their inflation/nominal income target, they can monetize deficits while not creating more inflation/nominal income flow than is warranted.
This of course gets into the matter of why we would want CBs to create inflation in some circumstances: the simple answer is that it makes the economy a lot more predictable if they do. When the flow of nominal incomes grinds to a halt, prices throughout the economy have trouble adjusting downwards in response, so we get a recession and widespread unemployment. Stability is what matters here, not just minimizing inflation at all costs.
This of course gets into the matter of why we would want CBs to create inflation in some circumstances: the simple answer is that it makes the economy a lot more predictable if they do. When the flow of nominal incomes grinds to a halt, prices throughout the economy have trouble adjusting downwards in response, so we get a recession and widespread unemployment. Stability is what matters here, not just minimizing inflation at all costs.
Say that 100k truckers making 50k a year lost their jobs to self driving trucks, which cost 10k year. If the government paid those people 40k a year the demand and purchasing power for food would not change for those 100k people.
Yes, it would absolutely. Purchasing power is (roughly) the ratio of production divided by the money supply. If supply of money goes down, purchasing power goes up and vice versa.
In your example, these truckers have stopped producing goods (services in this case). That means that production has gone down. If the supply of money remains fixed, there is more money chasing fewer goods and services. This drives prices up.
Said another way: if those truckers had less money (or no money) then they wouldn’t be competing with other buyers for goods, and prices would fall (purchasing power increases).
This is an extremely simplistic analogy and ignores other forces such as velocity and trade balances, but illustrates the point.
In your example, these truckers have stopped producing goods (services in this case). That means that production has gone down. If the supply of money remains fixed, there is more money chasing fewer goods and services. This drives prices up.
Said another way: if those truckers had less money (or no money) then they wouldn’t be competing with other buyers for goods, and prices would fall (purchasing power increases).
This is an extremely simplistic analogy and ignores other forces such as velocity and trade balances, but illustrates the point.
Sure, but the robot truck owners are also getting 40K additional per year, no? Or if they're not completely capturing the marginal difference between a human driver and a robot driver, someone elsewhere is, right?
Maybe the 40K labor savings is actually offset by a 37K a year replacement to the labor force, who also now enjoy lower prices on all shipped goods. (Assuming there is still real competition in shipping)
Maybe the 40K labor savings is actually offset by a 37K a year replacement to the labor force, who also now enjoy lower prices on all shipped goods. (Assuming there is still real competition in shipping)
The 40k goes to the profits of the shipping companies, which goes to the dividends of the stock owners, who are generally spending the dividends on investing in more stock.
In theory shipping prices would go down immediately, but in the real world it could take years for competitors to force the industry to lower costs by the full 40k.
In theory shipping prices would go down immediately, but in the real world it could take years for competitors to force the industry to lower costs by the full 40k.
I'm a bit out of my depth here (I always am when it comes to macroeconomics or monetary theory).
Let's say that the equity holders of the various shipping companies keep the $40k savings all for themselves, and use those profits to buy more stock. Isn't that still going to drive inflation? The price of shares will continue to rise solely due to more money chasing them. And every buyer of stock is giving money to a seller of stock on the other side, who will then do what with that money? If it's capitalizing a new company, then the money will be spent into the economy. If it's buying existing shares, then the seller will now have cash to spend.
Either way, the money is still an active participant in the money supply. Meanwhile the government is creating new money each year to offset the salary losses of the displaced truckers. What used to be a 40K transfer from employer to employee is now a $40k diversion to other uses at the employer's end, and $40k of brand new money on the employee's end.
Let's say that the equity holders of the various shipping companies keep the $40k savings all for themselves, and use those profits to buy more stock. Isn't that still going to drive inflation? The price of shares will continue to rise solely due to more money chasing them. And every buyer of stock is giving money to a seller of stock on the other side, who will then do what with that money? If it's capitalizing a new company, then the money will be spent into the economy. If it's buying existing shares, then the seller will now have cash to spend.
Either way, the money is still an active participant in the money supply. Meanwhile the government is creating new money each year to offset the salary losses of the displaced truckers. What used to be a 40K transfer from employer to employee is now a $40k diversion to other uses at the employer's end, and $40k of brand new money on the employee's end.
From the article
> The 30% who are working under federal jobs programs will have working lives completely decoupled from the workings of the market. The movements of markets – particularly financial markets – will be irrelevant to everyone except for a group of weird, chart-watching, twitchy nerds who fulfill the boring job of capital allocation to an increasingly irrelevant section of the economy.
And earlier
> That money is mostly chasing the same goods that were available before the crisis (rent, groceries, and debt service) so it’s not crowding out other buyers and causing inflation (inflation occurs when more money chases the same goods, so buyers get into bidding wars that drive up prices – when the same quantity of money is chasing the same quantity of goods, there’s no inflation).
> The 30% who are working under federal jobs programs will have working lives completely decoupled from the workings of the market. The movements of markets – particularly financial markets – will be irrelevant to everyone except for a group of weird, chart-watching, twitchy nerds who fulfill the boring job of capital allocation to an increasingly irrelevant section of the economy.
And earlier
> That money is mostly chasing the same goods that were available before the crisis (rent, groceries, and debt service) so it’s not crowding out other buyers and causing inflation (inflation occurs when more money chases the same goods, so buyers get into bidding wars that drive up prices – when the same quantity of money is chasing the same quantity of goods, there’s no inflation).
Market competition will force prices down long-term. If they're not, that's a problem and there's probably an anti-trust suit somewhere that needs implementing. Also - investing in stock isn't a bad thing, because it's redistributing capital to entrepreneurs who are taking risks to make things better for everyone.
Another commenter rightly noted that inflation is only partially driven by supply of money. The other factor is velocity of money, which is how quickly money is “recycled” within the economy. If that 40k is now going to investors who have a much lower propensity to spend it (likely) then velocity drops and so does inflation.
Those people are already being provided necessities in richer countries paid from state issued debt, surely that causes inflation too according to your train of thought?
It's always refreshing to read someone who really gets that economy is not about money, but rather about what is being produced. The title reminded me of the famous Kalecki essay, Political Aspects of Full Employment, which actually explains deeper why this is not so easy to do as Cory Doctorow imagines (if you hadn't read it, I really recommend it, it's one of the best works on economics ever).
Here I think is the crux of the problem. In our (western civilization) societies, everyone wants to be a manager or a scrum master or at least a programmer, have a nice white collar job in the home office. Not many people want to do actual manual jobs, like painting or plumbing, even though these would actually be needed a lot. If we truly payed blue collar guys a market rate, no white collar jobs would exist, because what is the price for risking your health?
I think we are plagued by a very similar problem that plagued any human civilization before us. We have a system sustained by a psychopathic upper class, where clueless middle class, which wants to keep their white collar jobs, knows only one thing for sure - they do not want to become blue collar losers.
And the only innovation of the system we figured out was that we can make the middle class really big, thanks to productivity of technology. But unfortunately, that means we are actually underutilizing the possible technological advances. By relegating the maintenance of the technology to lower classes, we are limiting its potential, in order to preserve the middle class social status.
Here I think is the crux of the problem. In our (western civilization) societies, everyone wants to be a manager or a scrum master or at least a programmer, have a nice white collar job in the home office. Not many people want to do actual manual jobs, like painting or plumbing, even though these would actually be needed a lot. If we truly payed blue collar guys a market rate, no white collar jobs would exist, because what is the price for risking your health?
I think we are plagued by a very similar problem that plagued any human civilization before us. We have a system sustained by a psychopathic upper class, where clueless middle class, which wants to keep their white collar jobs, knows only one thing for sure - they do not want to become blue collar losers.
And the only innovation of the system we figured out was that we can make the middle class really big, thanks to productivity of technology. But unfortunately, that means we are actually underutilizing the possible technological advances. By relegating the maintenance of the technology to lower classes, we are limiting its potential, in order to preserve the middle class social status.
> In our (western civilization) societies, everyone wants to be a manager or a scrum master or at least a programmer, have a nice white collar job in the home office.
That’s a very coastal city attitude which in most parts of the US would seem utterly provincial. The man who owns the roofing company that’s redoing my roof shakes his head when he hears me talk about staring at a computer screen all day. The HVAC repairman who was at my house yesterday was horrified to find out that I need a special keyboard to prevent pain in my hands from too much typing. “Don’t you have insurance or workers comp?” he asked. He thought I was lying or mistaken when I laughed and explained that my injuries are mine to deal with on my own.
In my part of America, which is neither overly cosmopolitan nor a big city where all the wide-eyed, bushy-tailed dreamers are flocking, most people aim to work in the various trades after high school. The ambitious ones will move up in the world by owning businesses which employ tradesmen, but that’s about as far as most will go. To most HN readers this will seem like a colossal economic hole, but it’s nothing like it. Tradesmen with only a few years of experience make decent money, and business owners are enjoying conditions similar to those which HNers with “lifestyle businesses” aim to attain.
Yes, there are untold millions of Americans working menial jobs. Those jobs require no special skills or experience, which is why such workers are seen as expendable. To lump such workers and their plight together with decidedly blue-collar tradesmen is a mistake.
That’s a very coastal city attitude which in most parts of the US would seem utterly provincial. The man who owns the roofing company that’s redoing my roof shakes his head when he hears me talk about staring at a computer screen all day. The HVAC repairman who was at my house yesterday was horrified to find out that I need a special keyboard to prevent pain in my hands from too much typing. “Don’t you have insurance or workers comp?” he asked. He thought I was lying or mistaken when I laughed and explained that my injuries are mine to deal with on my own.
In my part of America, which is neither overly cosmopolitan nor a big city where all the wide-eyed, bushy-tailed dreamers are flocking, most people aim to work in the various trades after high school. The ambitious ones will move up in the world by owning businesses which employ tradesmen, but that’s about as far as most will go. To most HN readers this will seem like a colossal economic hole, but it’s nothing like it. Tradesmen with only a few years of experience make decent money, and business owners are enjoying conditions similar to those which HNers with “lifestyle businesses” aim to attain.
Yes, there are untold millions of Americans working menial jobs. Those jobs require no special skills or experience, which is why such workers are seen as expendable. To lump such workers and their plight together with decidedly blue-collar tradesmen is a mistake.
Counterpoint as someone who group around the trades and whose friends parents where mostly in working class trades, they all stressed going to college so we didn't end up working hard like them.
My parents knew I could make really good money with welding and masonry like other family members but also knew that we were rough to our body, I had a uncle who lost an eye on the job! To someone working 8-10 hrs in the Texas heat all year wearing your body everyday and being physically exhausted by closing time. Sitting in an office and surfing HN is paradise to my old friends.
My parents knew I could make really good money with welding and masonry like other family members but also knew that we were rough to our body, I had a uncle who lost an eye on the job! To someone working 8-10 hrs in the Texas heat all year wearing your body everyday and being physically exhausted by closing time. Sitting in an office and surfing HN is paradise to my old friends.
I agree but seems like sitting in a chair in front of a computer and not working out hard to fight the effects of the sedentary lifestyle is as bad on the human body. Some programmers spend so much time in front of the computer that they don’t have enough time, energy or motivation to hit the gym.
Also the skills learned in this field are inflating fast. Compare that to learning a trade and applying that knowledge for a lifetime of work while build solid experience in time is also a bit different.
Also software jobs quite frequently lead mental wear as much as those trade jobs are rough on the body
Also the skills learned in this field are inflating fast. Compare that to learning a trade and applying that knowledge for a lifetime of work while build solid experience in time is also a bit different.
Also software jobs quite frequently lead mental wear as much as those trade jobs are rough on the body
Sorry, I know you wanted to communicate a lot with that paragraph but I gotta ask - what keyboard do you use? I want to avoid carpal tunnel myself but haven’t been able to find any recommendations online.
I use the ErgoDox EZ (https://ergodox-ez.com/) with those sculpted caps that come without letters printed on them. I love this keyboard: it's one of my most prized possessions. I only wish they'd made one where the sculpted caps do have letters printed on them. This would make it possible for other persons in my household to use my keyboard.
I had some wrist pain building up during typing, which stopped since I switched to the ergodox. But it is a bit huge in my opinion.
You should aim for orthogonal and spitted keyboards. Big changes, you possibly need to relearn to type, but potentially life changing. One model among others which is safe for recommendation is Ergodox EZ. Warning: not cheap, none are.
> If we truly payed blue collar guys a market rate, no white collar jobs would exist, because what is the price for risking your health?
Isn't that exactly what we do though? Doesn't pay (very approximately) correlate with required skill? For example, compare the salary of a skilled carpenter with some of the lower skilled "tech" jobs. All of your examples (manager, scum master, programmer) are decidedly high skill jobs when compared to the economy as a whole.
(As far as software goes, consider that demand for laborers currently outstrips supply. Prices adjust to reflect that.)
What you're really describing (IMO) is that everyone is competing with each other and we all want to be above average. Going back to your tech industry examples, I've heard it said that the majority of programmers think they're above average.
Isn't that exactly what we do though? Doesn't pay (very approximately) correlate with required skill? For example, compare the salary of a skilled carpenter with some of the lower skilled "tech" jobs. All of your examples (manager, scum master, programmer) are decidedly high skill jobs when compared to the economy as a whole.
(As far as software goes, consider that demand for laborers currently outstrips supply. Prices adjust to reflect that.)
What you're really describing (IMO) is that everyone is competing with each other and we all want to be above average. Going back to your tech industry examples, I've heard it said that the majority of programmers think they're above average.
My polemic is that at least some of this "high skill" distinction that we attribute to cushy high skilled jobs is a myth. They are well paid, because we claim they are high skill. And everybody with power in that system has an interest in perpetuating that myth. (Including me, I am a programmer.) Part of the myth is that it is skill, not health risks, that should be well paid.
And I suspect one reason why we don't want to tackle climate change (or even generally take more advantage of technological progress) is that it requires a different skill set, the one that is lot more blue collar, and to make that transformation we would have to upset the existing social order.
In other words, I generally don't believe there is only one solution to the "market equations". Remuneration, price of different types of labor, also depends on cultural factors.
And because there is not always unique solution, you might end up in a local maximum of productivity. One way around it is what Doctorow suggests, we all gather around a table (well, metaphorically, with a government as our proxy) and decide, well, we have to do these things, and here are the jobs to be filled (and he further argues that we are in such local maximum regarding the climate change, and we can get out of it).
Sadly, it's been really difficult historically to get out of such local maxima without profound rifts in the society, civilizations often chose death rather than do this. And that's what I worry about, and I think we need to come to terms with.
And I suspect one reason why we don't want to tackle climate change (or even generally take more advantage of technological progress) is that it requires a different skill set, the one that is lot more blue collar, and to make that transformation we would have to upset the existing social order.
In other words, I generally don't believe there is only one solution to the "market equations". Remuneration, price of different types of labor, also depends on cultural factors.
And because there is not always unique solution, you might end up in a local maximum of productivity. One way around it is what Doctorow suggests, we all gather around a table (well, metaphorically, with a government as our proxy) and decide, well, we have to do these things, and here are the jobs to be filled (and he further argues that we are in such local maximum regarding the climate change, and we can get out of it).
Sadly, it's been really difficult historically to get out of such local maxima without profound rifts in the society, civilizations often chose death rather than do this. And that's what I worry about, and I think we need to come to terms with.
I agree with both your posts, but I want to share an exception. At the Post Office, almost all the smart people, who have their shit together, are carriers and clerks - the blue-collar jobs. The difference in pay between workers and management is small, and it's very easy for OT to push carriers/clerks above management. This is not a secret within the Post Office, so it only makes sense to go into management if you're shooting for upper management, which most don't reach, or you just hate physical activity or like telling people what to do.
Most of the people who go into management seem to do it reflexively. They see the word promotion and go for it. As you can imagine, they don't even get a respect upgrade, because everyone knows the cards.
Of course, the Post Office has a relatively strong union - particularly by US standards. That's the major hurdle for most blue-collar jobs. They don't even have a seat at the negotiating table. Without a coordinated voice and some power, workers take first offers. Companies can afford to pay shit wages the same way that factories during the Industrial Revolution could afford to work people to death.
Most of the people who go into management seem to do it reflexively. They see the word promotion and go for it. As you can imagine, they don't even get a respect upgrade, because everyone knows the cards.
Of course, the Post Office has a relatively strong union - particularly by US standards. That's the major hurdle for most blue-collar jobs. They don't even have a seat at the negotiating table. Without a coordinated voice and some power, workers take first offers. Companies can afford to pay shit wages the same way that factories during the Industrial Revolution could afford to work people to death.
> Part of the myth is that it is skill, not health risks, that should be well paid.
It's hard and expensive to turn somebody into a programmer, and you can't scale it up as you wish. It's easy in comparison to have more people who can do dangerous jobs: you just need more children and wait 20 years.
For management and similar roles, I agree somewhat (it's much harder to pinpoint the skills required, and they often have less direct influence in the success of the company/project), but for the actual jobs, like software development and engineering? Yeah, they are high skill.
> Remuneration, price of different types of labor, also depends on cultural factors.
I don't think so. Unless you include religion and royalty where you can't just get into some career, the ones that are easy, low-risk and high-pay/high-power will always be attractive and you will be able to predict movements pretty well with market models.
It's hard and expensive to turn somebody into a programmer, and you can't scale it up as you wish. It's easy in comparison to have more people who can do dangerous jobs: you just need more children and wait 20 years.
For management and similar roles, I agree somewhat (it's much harder to pinpoint the skills required, and they often have less direct influence in the success of the company/project), but for the actual jobs, like software development and engineering? Yeah, they are high skill.
> Remuneration, price of different types of labor, also depends on cultural factors.
I don't think so. Unless you include religion and royalty where you can't just get into some career, the ones that are easy, low-risk and high-pay/high-power will always be attractive and you will be able to predict movements pretty well with market models.
> It's hard and expensive to turn somebody into a programmer, and you can't scale it up as you wish.
Is it? We work in one of the few industries where self-taught may actually be the norm (or at least, a significant minority).
Is it? We work in one of the few industries where self-taught may actually be the norm (or at least, a significant minority).
I believe the self-taught (which is hard to define, as most are still learning by reading and imitating, it's not like people are completely removed from the world and suddenly walk out of the woods as a software developer) are pretty much here because it's so hard. If it was easier to scale the number of developers up, the people who took up programming as a hobby and then (often accidentally) transitioned into doing it for money would still be hobbyists. They're being recruited because we can't fill the seats with formally trained people.
I am an autodidact, and I'm clearly worse than actual CS people in the CS stuff, but that's not a problem for me, because we're in an industry where we lump together people who work on hard problems and people who basically translate requirements into business logic code. The CS people could do my job, I couldn't do theirs (there are some autodidacts that could, but they are a tiny minority imho), and for most intents and purposes, it doesn't matter, because most requirements don't require high level computer science, they require python, php, javascript and css etc.
I am an autodidact, and I'm clearly worse than actual CS people in the CS stuff, but that's not a problem for me, because we're in an industry where we lump together people who work on hard problems and people who basically translate requirements into business logic code. The CS people could do my job, I couldn't do theirs (there are some autodidacts that could, but they are a tiny minority imho), and for most intents and purposes, it doesn't matter, because most requirements don't require high level computer science, they require python, php, javascript and css etc.
Partially with much of that pay won via union work or like building codes to prevent a race to the bottom while enforcing some standard for safety. That skilled carpenter might be offered a contract for $10/hour under their union requirement but chooses to enforce their standards instead of subverting their fellow tradesmen.
A good comparison is quality comments and coding standards. Consider if there was an enforceable standard for code structure, comments, documentation, etc like most decent github repos with developers striving to reach Linux kernel level overall quality. This would include a standard training/education process, collective bargaining and action for pay/benefits and standard to changes. It is a field where not every ISO standard needs to be applied in full, but there could still be some base enforcement.
Like, what if every code base was commented, well structured, and followed general best practices like to-code electrical or plumbing work? What if code review or inspections against a standard were enforced time set aside and sign off required before wrapping a project? What if the lowest bidder on a coding job had a floor due to set benefits and standing agreement on rates and max hours per week/day? These are practices the best employers may strive for and are able to apply but are required in most trades.
I appreciate a line comparing how artists are payed compared to trades: If a band is asked to do a show for the 'exposure' they should ask the planner to call the local plumbers union and ask their going rate for 4 plumbers for a 4 hour job. Home advisor has a few estimates but project data puts an average at $317/hour. Maybe a random band isn't worth $1200/hour or $5k a gig but some definitely can command that price. If most bands stuck to a standard rate range the planner will expect and budget for proper pay.
https://www.homeadvisor.com/cost/plumbing/hire-a-plumber/
A good comparison is quality comments and coding standards. Consider if there was an enforceable standard for code structure, comments, documentation, etc like most decent github repos with developers striving to reach Linux kernel level overall quality. This would include a standard training/education process, collective bargaining and action for pay/benefits and standard to changes. It is a field where not every ISO standard needs to be applied in full, but there could still be some base enforcement.
Like, what if every code base was commented, well structured, and followed general best practices like to-code electrical or plumbing work? What if code review or inspections against a standard were enforced time set aside and sign off required before wrapping a project? What if the lowest bidder on a coding job had a floor due to set benefits and standing agreement on rates and max hours per week/day? These are practices the best employers may strive for and are able to apply but are required in most trades.
I appreciate a line comparing how artists are payed compared to trades: If a band is asked to do a show for the 'exposure' they should ask the planner to call the local plumbers union and ask their going rate for 4 plumbers for a 4 hour job. Home advisor has a few estimates but project data puts an average at $317/hour. Maybe a random band isn't worth $1200/hour or $5k a gig but some definitely can command that price. If most bands stuck to a standard rate range the planner will expect and budget for proper pay.
https://www.homeadvisor.com/cost/plumbing/hire-a-plumber/
So what's the solution?
So if I understand you correctly is that blue collar jobs are not attractive enough?
So does the solution include one or more of the following?
- Increase the status of those jobs in society. This pandemic has shown us who the key workers are, so increasing the status of jobs that actually benefit society, e.g. street cleaner vs product manager for a betting company.
- Pay more for these key worker jobs
- Move to a 4 day work week, so people have more leisure time and live life a little bit more
- Provide other perks if you're classed as a key worker, e.g. discount on public transport etc?
So if I understand you correctly is that blue collar jobs are not attractive enough?
So does the solution include one or more of the following?
- Increase the status of those jobs in society. This pandemic has shown us who the key workers are, so increasing the status of jobs that actually benefit society, e.g. street cleaner vs product manager for a betting company.
- Pay more for these key worker jobs
- Move to a 4 day work week, so people have more leisure time and live life a little bit more
- Provide other perks if you're classed as a key worker, e.g. discount on public transport etc?
There is something about working with your hands that can't be understated. If you haven't done a hard working job, you wouldn't know. The only thing stopping me is the salary. If I could make as much money as a knowledge worker cutting greens at golf courses, I'd go back to being a groundskeeper in a heartbeat. That job is pure zen, hard work, but bliss. Most important is that you are able to leave it behind and removed from your life and headspace entirely the minute you step off the property, unlike our email driven petty political rat race.
The essay "The political aspects of full employment" by Michal Kalicki
https://www.jacobinmag.com/2018/05/political-aspects-of-full...
https://www.jacobinmag.com/2018/05/political-aspects-of-full...
The only way your breakdown differs from The Theory and Practice of Oligarchical Collectivism is that the "clueless middle class" in Oceania seems to split into two mutually antagonistic but still self policing Outer Parties.
(also I think calling "white collar" "middle class" is a bit ahistorical: https://news.ycombinator.com/item?id=23671937 but, as with "hacker", I guess I should make an attempt to go with the times, if reluctantly)
Cleese: I get a feeling of superiority over them↓.
Barker: I get a feeling of inferiority from him↑, but a feeling of superiority over him↓.
Corbett: I get a pain↑ in the back of my neck.
(also I think calling "white collar" "middle class" is a bit ahistorical: https://news.ycombinator.com/item?id=23671937 but, as with "hacker", I guess I should make an attempt to go with the times, if reluctantly)
Cleese: I get a feeling of superiority over them↓.
Barker: I get a feeling of inferiority from him↑, but a feeling of superiority over him↓.
Corbett: I get a pain↑ in the back of my neck.
Not that I especially want to validate your reference to a piece of diegetic COINTELPRO agitprop in a not very good and rather outdated polemical novel, but if it's "two mutually antagonistic but still self policing Outer Parties" you want, have you seen the ostensibly competing libertarian tendencies that currently make up American public politics?
Are you kidding me? What are these "ostensibly competing libertarian tendencies that currently make up American public politics"?
We have a broken two-party system where both parties abandoned their philosophical beginnings more than 3 decades ago to pursue headlong corporatist and globalist goals, with varying spins depending on what personally benefits party leadership the most. Both parties are working hard to systematically eliminate any real measure of freedom which exists for the average person in the nation, but taking different angles to do so. One party makes direct attacks on the very basis of our Constitution, the other party more subtly manipulates processes to disenfranchise people while acting to prevent them from having secure communications and privacy. Both parties actively support a police state, and both parties are out of touch with the realities of the majority of residents, especially those outside of cities. In neither case would I describe the current system as "ostensibly competing libertarian tendencies."
There are obviously many possible negative consequences and externalities that come from absolute freedom (libertarianism), but the current actions and words of both parties fly in the face of the claim that they are in any way advocating such a position; hidden, blatant, or otherwise.
Also, referring to "1984" as "COINTELPRO agitprop" is so tone deaf that it's nearly daft. George Orwell was a British author, first of all, and COINTELPRO was a domestic operation of the FBI in the US. Secondly, if you were to observe a theme in "1984" and follow it to its logical conclusion, I think it obvious that the books premise and message would be opposed to government operations exactly like COINTELPRO. In fact, 1984 captures the essence of our current situation pretty well to show you the dystopian future that awaits from giving up control to the state combined with technology capable of absolute surveillance.
Your comment reads like something written in a Chinese troll farm to push public opinion in support of Communism.
We have a broken two-party system where both parties abandoned their philosophical beginnings more than 3 decades ago to pursue headlong corporatist and globalist goals, with varying spins depending on what personally benefits party leadership the most. Both parties are working hard to systematically eliminate any real measure of freedom which exists for the average person in the nation, but taking different angles to do so. One party makes direct attacks on the very basis of our Constitution, the other party more subtly manipulates processes to disenfranchise people while acting to prevent them from having secure communications and privacy. Both parties actively support a police state, and both parties are out of touch with the realities of the majority of residents, especially those outside of cities. In neither case would I describe the current system as "ostensibly competing libertarian tendencies."
There are obviously many possible negative consequences and externalities that come from absolute freedom (libertarianism), but the current actions and words of both parties fly in the face of the claim that they are in any way advocating such a position; hidden, blatant, or otherwise.
Also, referring to "1984" as "COINTELPRO agitprop" is so tone deaf that it's nearly daft. George Orwell was a British author, first of all, and COINTELPRO was a domestic operation of the FBI in the US. Secondly, if you were to observe a theme in "1984" and follow it to its logical conclusion, I think it obvious that the books premise and message would be opposed to government operations exactly like COINTELPRO. In fact, 1984 captures the essence of our current situation pretty well to show you the dystopian future that awaits from giving up control to the state combined with technology capable of absolute surveillance.
Your comment reads like something written in a Chinese troll farm to push public opinion in support of Communism.
Thanks for that! It's been a few years now since I was accused on HN of being a paid agent of a foreign government. It's nice to see that standards here haven't changed as much as is so constantly alleged.
I think you might want to read my earlier comment again. I said "libertarian", in the "classical liberal" sense; I did not say "anarcholibertarian" or "anarchocapitalist" or "libertarian anarchist" or "autarkist". You've also mistaken my description of The Theory and Practice of Oligarchical Collectivism for a description of the not very good and rather outdated polemical novel in which it appears.
Given that nothing here responds to anything I actually said, there doesn't seem to be any basis for a more fruitful response than the one I have given. Please feel free to make another attempt, ideally without the misapprehension of my points. You're welcome to double down on the slander, though! For all that the intent is to insult, I can't help but find it amusing.
I think you might want to read my earlier comment again. I said "libertarian", in the "classical liberal" sense; I did not say "anarcholibertarian" or "anarchocapitalist" or "libertarian anarchist" or "autarkist". You've also mistaken my description of The Theory and Practice of Oligarchical Collectivism for a description of the not very good and rather outdated polemical novel in which it appears.
Given that nothing here responds to anything I actually said, there doesn't seem to be any basis for a more fruitful response than the one I have given. Please feel free to make another attempt, ideally without the misapprehension of my points. You're welcome to double down on the slander, though! For all that the intent is to insult, I can't help but find it amusing.
It’s sociopath (not psychopath), clueless, and loser...
For those lost in this minutia, they are referencing The Gervais Principle theory of company management:
"Sociopaths, in their own best interests, knowingly promote over-performing losers into middle-management, groom under-performing losers into sociopaths, and leave the average bare-minimum-effort losers to fend for themselves."
Rao intentionally uses mean words to describe all players in the system.
https://www.ribbonfarm.com/the-gervais-principle/
"Sociopaths, in their own best interests, knowingly promote over-performing losers into middle-management, groom under-performing losers into sociopaths, and leave the average bare-minimum-effort losers to fend for themselves."
Rao intentionally uses mean words to describe all players in the system.
https://www.ribbonfarm.com/the-gervais-principle/
This is a great essay, but it doesn’t give me much hope for the US. Our behavior during this pandemic has been for one part of the country to finger wag and disbelieve while the other part suffers, while doing very little to actually fight the disease. It feels like we are so incapable of responding to this crisis that we are simply retreating into fantasy and pretending it’s not a big deal. This is all with a fast moving crisis that is in each of our own neighborhoods, and has already directly impacted about one in every hundred Americans.
When it comes to responding to climate change, I expect we will do basically nothing to prepare, and that we will abandon flooded coastal cities only after they’ve already been permanently flooded.
When it comes to responding to climate change, I expect we will do basically nothing to prepare, and that we will abandon flooded coastal cities only after they’ve already been permanently flooded.
> while doing very little to actually fight the disease
Are you saying that there isn't much in the way of medical research going on to try to come up with treatments, preventive measures, and potential vaccines or cures for the disease?
What do you think could be done to start that kind of research in the US?
Are you saying that there isn't much in the way of medical research going on to try to come up with treatments, preventive measures, and potential vaccines or cures for the disease?
What do you think could be done to start that kind of research in the US?
350 million people. How many are pursuing medical research in any of its myriad forms? How many are posting 5g conspiracies, refusing to wear a mask or claiming that people dying years early on average isn’t a big deal?
The second cohort is a multiple in size of the first.
The second cohort is a multiple in size of the first.
> The second cohort is a multiple in size of the first.
That's a weird way of looking at it. The people who do $job provide food, energy, building materials etc and taxes so some people can specialize on medical research.
It would be terribly inefficient if we just switched over the majority of the population to medical research. I doubt they'd make much progress, and at the same time pulling them from their normal jobs would create a lot of problems that would make some 10 million excess deaths projection pale in comparison.
That's a weird way of looking at it. The people who do $job provide food, energy, building materials etc and taxes so some people can specialize on medical research.
It would be terribly inefficient if we just switched over the majority of the population to medical research. I doubt they'd make much progress, and at the same time pulling them from their normal jobs would create a lot of problems that would make some 10 million excess deaths projection pale in comparison.
Compare https://en.wikipedia.org/wiki/Economic_impacts_of_climate_ch...
Wikipedia quotes studies that put the estimated aggregate impact at losing about 0% to 20% of world GDP. That's comparable eg to moving from NYC to a place with average US GDP per capita.
That's certainly a lot, but perhaps not a world shattering impact.
(Edit: the studies quoted on that Wikipedia page are quite old by now. It would be useful to find more up to date material.)
For some thoughts on a government job guarantee, see https://web.archive.org/web/20200404052902/https://slatestar...
Wikipedia quotes studies that put the estimated aggregate impact at losing about 0% to 20% of world GDP. That's comparable eg to moving from NYC to a place with average US GDP per capita.
That's certainly a lot, but perhaps not a world shattering impact.
(Edit: the studies quoted on that Wikipedia page are quite old by now. It would be useful to find more up to date material.)
For some thoughts on a government job guarantee, see https://web.archive.org/web/20200404052902/https://slatestar...
Assuming that continued economic growth takes place (a safe assumption; the so-called third world countries are growing at a fast pace), the net economic result could still be positive.
Here's a quote from Nick Bostrom from the Wikipedia article:
> Even the Stern Review on the Economics of Climate Change, a report prepared for the British Government which has been criticized by some as overly pessimistic, estimates that under the assumption of business-as-usual with regard to emissions, global warming will reduce welfare by an amount equivalent to a permanent reduction in per capita consumption of between 5 and 20%. In absolute terms, this would be a huge harm. Yet over the course of the twentieth century, world GDP grew by some 3,700%, and per capita world GDP rose by some 860%. It seems safe to say that (absent a radical overhaul of our best current scientific models of the Earth’s climate system) whatever negative economic effects global warming will have, they will be completely swamped by other factors that will influence economic growth rates in this century.
Here's a quote from Nick Bostrom from the Wikipedia article:
> Even the Stern Review on the Economics of Climate Change, a report prepared for the British Government which has been criticized by some as overly pessimistic, estimates that under the assumption of business-as-usual with regard to emissions, global warming will reduce welfare by an amount equivalent to a permanent reduction in per capita consumption of between 5 and 20%. In absolute terms, this would be a huge harm. Yet over the course of the twentieth century, world GDP grew by some 3,700%, and per capita world GDP rose by some 860%. It seems safe to say that (absent a radical overhaul of our best current scientific models of the Earth’s climate system) whatever negative economic effects global warming will have, they will be completely swamped by other factors that will influence economic growth rates in this century.
Yes, that's what I was aiming at. Fortunately, these days poor countries develop so quick, that even a 20% hit is equivalent to only a few years of growth.
However, I would go by the formulation in your quote "swamped by other factors" and not with "the net economic result could still be positive."
To make your formulation work, you'd have to say the net impact of business-as-usual growth and climate change. It's easy to misinterpret that.
Do keep in mind that difference places on earth will most likely be hit at a different magnitude. So some will suffer more than others.
That's a good argument for allowing more migration around the world.
However, I would go by the formulation in your quote "swamped by other factors" and not with "the net economic result could still be positive."
To make your formulation work, you'd have to say the net impact of business-as-usual growth and climate change. It's easy to misinterpret that.
Do keep in mind that difference places on earth will most likely be hit at a different magnitude. So some will suffer more than others.
That's a good argument for allowing more migration around the world.
> Wikipedia quotes studies that put the estimated aggregate impact at losing about 0% to 20% of world GDP. That's comparable eg to moving from NYC to a place with average US GDP per capita.
That's basically Nordhaus' idiotic argument. Agriculture is only about 3% of GDP, so it looks like we can take that hit, no problem. Except - if we have no food, there is no civilization. See https://braveneweurope.com/steven-keen-4c-of-global-warming-...
Measuring climate change impacts on the economy only by total GDP is a really bad idea. You really can't neglect the dependencies in the economic production, especially on agriculture.
That's basically Nordhaus' idiotic argument. Agriculture is only about 3% of GDP, so it looks like we can take that hit, no problem. Except - if we have no food, there is no civilization. See https://braveneweurope.com/steven-keen-4c-of-global-warming-...
Measuring climate change impacts on the economy only by total GDP is a really bad idea. You really can't neglect the dependencies in the economic production, especially on agriculture.
In a sense, it's great that agriculture is only 3% of GDP. A disaster that would make agriculture much harder globally, would mean that agriculture would become a much _larger_ share of GDP, say 50%. And we would be worse off for it.
However, the studies quoted in the Wikipedia article take such considerations into account.
Measuring climate change impact by GDP is a good idea. It's not the only way to measure it, just one out of a number of useful ways.
For example, it is a useful way to figure out how much of our economic wealth we should be spending on fighting climate change:
US GDP seems to be about 60k USD per capita, or about 20 trillion USD total. Spending up to about 10% of that, or 2 trillion USD per year, on reliably fighting climate change might be worth while by that metric.
It also helps us to put into perspective the cost of programmes like the one talked about in https://news.ycombinator.com/item?id=23770718 and make it comparable to energy efficiency campaigns or carbon sequestration, etc.
However, the studies quoted in the Wikipedia article take such considerations into account.
Measuring climate change impact by GDP is a good idea. It's not the only way to measure it, just one out of a number of useful ways.
For example, it is a useful way to figure out how much of our economic wealth we should be spending on fighting climate change:
US GDP seems to be about 60k USD per capita, or about 20 trillion USD total. Spending up to about 10% of that, or 2 trillion USD per year, on reliably fighting climate change might be worth while by that metric.
It also helps us to put into perspective the cost of programmes like the one talked about in https://news.ycombinator.com/item?id=23770718 and make it comparable to energy efficiency campaigns or carbon sequestration, etc.
You are missing all the second order impacts, such as conflict and mass migration.
From the Wikipedia article you linked:
> As stated, economic estimates of climate change impacts are incomplete.[31] Analysts have used integrated assessment models to estimate the economic impacts of climate change. These models do include estimates of some impacts, for instance, the effects of climate change on agriculture.[31] In other areas, models exclude some impacts. An example is the possibility that climate change could lead to migration or conflict.[31]
From the Wikipedia article you linked:
> As stated, economic estimates of climate change impacts are incomplete.[31] Analysts have used integrated assessment models to estimate the economic impacts of climate change. These models do include estimates of some impacts, for instance, the effects of climate change on agriculture.[31] In other areas, models exclude some impacts. An example is the possibility that climate change could lead to migration or conflict.[31]
My only concern with this, is he assumes that all that work is going to take an extremely long time and doesn't even consider the fact that it might take significantly less time than he proposes. He acknowledges this but doesn't actually go down the rabbit hole.
> Remediating climate change will involve unimaginably labor-intensive tasks, like relocating every coastal city in the world kilometers inland, building high-speed rail links to replace aviation links, caring for hundreds of millions of traumatized, displaced people, and treating runaway zoontoic and insectborne pandemics.
This does sound like a lot of work, but realistically it's like, what... maybe 10-20 years worth of actual human labor at current levels? Our capacity is so enormous that probably 90% of the things you'll interact with today were created in the past 10 years. If machines are slated to replace that amount of manufacturing, imagine the labor that would be displaced! If we could hypothetically throw double the labor into these projects than before these cities would go up instantly. Like Chinese Ghost cities.
Our civilization is already built. Most of the work went into building the required tools and technology which enable us to do more with less. Building skyscrapers is just large scale Legos when you have the right tools. What took Egyptians thousands of people now takes about 12 equipment operators. Now that we have those tools, now that we've commoditized them all this isn't really a "daunting" task for us as a species. Societally it presents new challenges, but humans are nothing if not resilient.
> Remediating climate change will involve unimaginably labor-intensive tasks, like relocating every coastal city in the world kilometers inland, building high-speed rail links to replace aviation links, caring for hundreds of millions of traumatized, displaced people, and treating runaway zoontoic and insectborne pandemics.
This does sound like a lot of work, but realistically it's like, what... maybe 10-20 years worth of actual human labor at current levels? Our capacity is so enormous that probably 90% of the things you'll interact with today were created in the past 10 years. If machines are slated to replace that amount of manufacturing, imagine the labor that would be displaced! If we could hypothetically throw double the labor into these projects than before these cities would go up instantly. Like Chinese Ghost cities.
Our civilization is already built. Most of the work went into building the required tools and technology which enable us to do more with less. Building skyscrapers is just large scale Legos when you have the right tools. What took Egyptians thousands of people now takes about 12 equipment operators. Now that we have those tools, now that we've commoditized them all this isn't really a "daunting" task for us as a species. Societally it presents new challenges, but humans are nothing if not resilient.
This is just Cory's musings based on a list of very questionable assumptions. At several points he is not quite factually wrong but almost factually wrong (30% unemployment sounds huge, till you realise the employment rate has been falling, is around 50% and much lower in plenty of Rust Belt towns without total collapse). Why are we even discussing it?
Seconded. This strikes me as the half confused ramblings of someone who has smoked too much weed and watched Mad Max once too often.
There's a lot to digest in this article and I have yet to digest most of it. But I don't think Doctrow understands the nature of immanent technological unemployment. It does not depend on the development of General AI, as he seems to suppose.
90% of professional motor-vehicle operators, retail workers, call center staff, radiologists, surgeons and other jobs can be unemployed due to the deployment of special purpose technologies whose development is well underway.
Some of those people, through the normal avenues of market-based resource distribution, will become plumbers, construction workers, and fill other-hard-to-automate roles in order to earn a living.
If the state institutes something like UBI, then still more of them will become artists, writers, community organizers and fill other roles that might earn them some money but would not on their own guarantee a full, stable income.
When global heating and sea-level rise create clear market incentives to rebuild the national infrastructure, those among the unemployed who are capable to work on that stuff will have a strong incentive to do so.
But for the state to, through a guaranteed jobs program, make effective use of 40-50% of the population in reconstructing national infrastructure as a response to global heating does not seem (to me) realistic. Are enough of those people capable of gaining the required skills for those kinds of projects? Where should they go and what should they do?
90% of professional motor-vehicle operators, retail workers, call center staff, radiologists, surgeons and other jobs can be unemployed due to the deployment of special purpose technologies whose development is well underway.
Some of those people, through the normal avenues of market-based resource distribution, will become plumbers, construction workers, and fill other-hard-to-automate roles in order to earn a living.
If the state institutes something like UBI, then still more of them will become artists, writers, community organizers and fill other roles that might earn them some money but would not on their own guarantee a full, stable income.
When global heating and sea-level rise create clear market incentives to rebuild the national infrastructure, those among the unemployed who are capable to work on that stuff will have a strong incentive to do so.
But for the state to, through a guaranteed jobs program, make effective use of 40-50% of the population in reconstructing national infrastructure as a response to global heating does not seem (to me) realistic. Are enough of those people capable of gaining the required skills for those kinds of projects? Where should they go and what should they do?
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I think the general marketing problem with climate change is that people know it's going to happen, but not exactly when. Are we going to have issues next year, 5 years, 20 years, etc? How will these issues impact me and my neighbors? It's difficult to predict these things, so I think many people become skeptical of the milestones we are supposed to be hitting due to climate change and we just become reactive as a society rather than fully proactive.
But... we are having issues right now? People aren't acting because there's no economic incentive, it is only in part due to denial or ignorance. Many of the world's leaders who have to power to shift the narrative are not doing so because it would be a short term economic loss and businesses aren't happy about it.
I mean, many technologies like carbon scrubbers already exist. Why aren't businesses buying them?
This is something we need to decide as a society to act on out of pure good faith, there will not be any profit to be made from the sacrifices that need to take place. People need to come to terms with just... being kinder. It would help if world leaders created jobs for this industry on a budget deficit and helped people get into those jobs.
I mean, many technologies like carbon scrubbers already exist. Why aren't businesses buying them?
This is something we need to decide as a society to act on out of pure good faith, there will not be any profit to be made from the sacrifices that need to take place. People need to come to terms with just... being kinder. It would help if world leaders created jobs for this industry on a budget deficit and helped people get into those jobs.
Totally agree that we, as in the world, are having issues right now and this is clearly being observed. My only point with this is to say that the impact is not being felt by most people just yet. The economic incentives for reducing our carbon footprint are not there for the public market to make any significant improvements to the situation. If the economic incentives are not there for the public markets, then that means new policy needs to be enacted in order to tackle this, which given the state of the world right now, seems unlikely.
I live in a part of Germany, where I thought we would not run out of water. Some hot summers later we already have dying trees and crops because of a lack of water. And this will not get better in the future I fear.
People could paint their roofs white, but they just buy more A/C units instead. Sadly I don't see people "deciding as a society" unless they're forced to by something or someone.
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One thing I think is not said often enough is that money might be a store of value on an individual level, but in the level of the whole economy, it is not. It’s just lubricant for making transactions. You can’t take a big pile of money out of the economy one one year and then spend it 10 years later. You would get deflation and unemployment when you took the money out, then inflation when you put it back in. That’s because money has no real value, it’s just paper or numbers in a database. Property and labor power have real value but not money. That’s why claims of there being a “social security trust fund” just seem bizarre to me- the account holding that money is purely imaginary and in reality they spent all the money collected right away. They had to spend it because otherwise it would have decreased the money supply. And whether the money they spend on the program later comes out of the trust fund or whether they just print it makes no difference. On the level of the nation as a whole, money is only lubricant. Not a store of value.
If anyone saw a path to general AI from current tech then we’d already have general AI.
Pretty week argument for or against general AI being possible.
Pretty week argument for or against general AI being possible.
> If we’re willing to stipulate a fundamental breakthrough that produces an AI, what about a comparable geoengineering breakthrough? Maybe our (imaginary) AIs will be so smart that they’ll figure out how to change the Earth’s albedo.
Marine cloud brightening was proposed in 1990.
Marine cloud brightening was proposed in 1990.
>One side effect of this is that it thoroughly forecloses on the dream of a General AI. Societies whose primary industry is digging through rubble for canned goods while drinking your own urine to survive do not make fundamental AI breakthroughs.
I find this deeply resonating.
I find this deeply resonating.
> Remediating climate change will involve unimaginably labor-intensive tasks, like relocating every coastal city in the world kilometers inland
Isn't sea level rise likely to only be a few feet? Regardless, Holland seems fine living below sea level. I don't think we really need to move cities kilometers inland.
Isn't sea level rise likely to only be a few feet? Regardless, Holland seems fine living below sea level. I don't think we really need to move cities kilometers inland.
2.3m per degree C. That's about 7ft per degree. And we're looking at a 5C (aka 35ft) rise.
And that's without the "leverage" of flat land: you might have to go a mile in land to find the first place that's an inch about the beach. Ever been on a flat beach when the tide came in? You can lose a lot of land to a very small rise in sea...
And that's without the "leverage" of flat land: you might have to go a mile in land to find the first place that's an inch about the beach. Ever been on a flat beach when the tide came in? You can lose a lot of land to a very small rise in sea...
Thanks. Either way, it seems much simpler to do something similar to what Holland has done than to move millions of people (hundreds of millions if we're talking about the entire world) inland.
Broadly I agree, but I think that is location specific: can you imagine doing that over the whole east coast? Is the beach\seabed stable enough? What about rivers going out, can we cope with them? Will anyone want to live in Miami if there's no beach? Will we need Mexico\Canada to do their sections to match?
I think smaller local mixed solutions are more likely given the scale and the US approach to government...
I think smaller local mixed solutions are more likely given the scale and the US approach to government...
I live in Holland so I'm a bit worried about what is going to happen to this place which was already below sea level, despite having the world's best water engineers, a functional cooperative society, and no shortage of capital.
How many pollution do we need to make to "relocate every coastal city in the world kilometers inland"? The notion that the objective for the human race it's to be employed is one of the two main reasons that we are destroying the planet.
It's not IA that eleminated our jobs, it was our parents. We need to be gratefull for what they have done and stop this full employment bullshit.
I'm sorry but this article is garbage.
> That is, I believe that even if we were – by some impossible-to-imagine means – to produce a general AI tomorrow, we would still have 200-300 years of full employment for every human who wanted a job ahead of us.
The guy think that automation is far ahead. And people are needed for the economy to function.
> That money is mostly chasing the same goods that were available before the crisis (rent, groceries, and debt service) so it’s not crowding out other buyers and causing inflation
Which is the same as saying that all people quarantined are doing BS jobs. Since they can be without that work but the economy is functioning and supporting all of them. Which means, if I'm reading it correctly, that we are already past the automation stage.
Here is one job that we could do without: The OP job. He is writing BS articles that probably could be written by the next few iterations of GPT-X.
The irony.
> That is, I believe that even if we were – by some impossible-to-imagine means – to produce a general AI tomorrow, we would still have 200-300 years of full employment for every human who wanted a job ahead of us.
The guy think that automation is far ahead. And people are needed for the economy to function.
> That money is mostly chasing the same goods that were available before the crisis (rent, groceries, and debt service) so it’s not crowding out other buyers and causing inflation
Which is the same as saying that all people quarantined are doing BS jobs. Since they can be without that work but the economy is functioning and supporting all of them. Which means, if I'm reading it correctly, that we are already past the automation stage.
Here is one job that we could do without: The OP job. He is writing BS articles that probably could be written by the next few iterations of GPT-X.
The irony.
I like the way this guy writes. I wonder if the idea that 30% unemployment cannot exist might be challenged by the ability of right wing authoritarian governments, which are on the rise globally, to tamp down dissent.
1) I tried to read the article, but it's badly structured and edited.
2) The SF Bay Area has never had a ventilator shortage. In fact, we gave away 500 in March/April to other states because we have too many.
3) The article mixes up various timelines into an incoherent wall of text - General AI, corona pandemic and global warming effects all have different timelines.
4) The USA is run by oligarchs who have a policy of discarding workers, so that completely undermines the article - the unemployed will not be working on moving cities inland, they will just be forgotten and destitute.
(I hope when Cory is able to focus he can improve the article. Maybe there is something worthwhile in there.)
2) The SF Bay Area has never had a ventilator shortage. In fact, we gave away 500 in March/April to other states because we have too many.
3) The article mixes up various timelines into an incoherent wall of text - General AI, corona pandemic and global warming effects all have different timelines.
4) The USA is run by oligarchs who have a policy of discarding workers, so that completely undermines the article - the unemployed will not be working on moving cities inland, they will just be forgotten and destitute.
(I hope when Cory is able to focus he can improve the article. Maybe there is something worthwhile in there.)
The ventilator shortage is irrelevant to the point the author is trying to make. It doesn't have to be true or false and should be taken as an hypothesis.
The point he was trying to make is that economy is not about money, it's about resources. Money has no value as such, it's a number in a system, or at best a piece of paper. Food is a resource, a ventilator is a resource. Economy is about choices, about how you allocate a resource, it's not about numbers.
The point he was trying to make is that economy is not about money, it's about resources. Money has no value as such, it's a number in a system, or at best a piece of paper. Food is a resource, a ventilator is a resource. Economy is about choices, about how you allocate a resource, it's not about numbers.
> 4) The USA is run by oligarchs who have a policy of discarding workers, so that completely undermines the article - the unemployed will not be working on moving cities inland, they will just be forgotten and destitute.
What's your evidence for that? Unemployment was really quite low in the last decade up until a few months ago, with presumably the same 'oligarchs' already in power?
What's your evidence for that? Unemployment was really quite low in the last decade up until a few months ago, with presumably the same 'oligarchs' already in power?
Unemployment was lower but jobs became worse. If there was no increase in federal minimum wage in a decade, you can see why employment went up in that exact same decade.
It's not good enough to just point to one statistic and cancel out a deeply complex claim like that one.
It's not good enough to just point to one statistic and cancel out a deeply complex claim like that one.
Jobs became “worse”? Wages were up the quarter or 2 before Covid.
> Unemployment was lower but jobs became worse.
How do we know that?
> If there was no increase in federal minimum wage in a decade, you can see why employment went up in that exact same decade.
That's great news, if true. It suggest a very actionable strategy to keep unemployment in check.
(Though, of course, looking around the globe, even the absence of a minimum wage law doesn't make all other unemployment problems magically vanish.)
> It's not good enough to just point to one statistic and cancel out a deeply complex claim like that one.
Indeed. This was just to point out that the claim would have to be backed by quite a bit of evidence, because the surface facts about unemployment need quite a bit of explaining away first.
There was no evidence at all provided in the comment I replied to. So this was an invitation to bring some evidence.
I have no opinion on 'oligarchs', only on hypothetical 'oligarchs who have a policy of discarding workers'.
How do we know that?
> If there was no increase in federal minimum wage in a decade, you can see why employment went up in that exact same decade.
That's great news, if true. It suggest a very actionable strategy to keep unemployment in check.
(Though, of course, looking around the globe, even the absence of a minimum wage law doesn't make all other unemployment problems magically vanish.)
> It's not good enough to just point to one statistic and cancel out a deeply complex claim like that one.
Indeed. This was just to point out that the claim would have to be backed by quite a bit of evidence, because the surface facts about unemployment need quite a bit of explaining away first.
There was no evidence at all provided in the comment I replied to. So this was an invitation to bring some evidence.
I have no opinion on 'oligarchs', only on hypothetical 'oligarchs who have a policy of discarding workers'.
I mean... have you read the Wikipedia page of the current head of the Dept. of Education? See also: page of the head of the Dept. of Justice?
If you haven't... you really should
If doing that doesn't change any of your opinions on the matter... oh well, we're already doomed.
If you haven't... you really should
If doing that doesn't change any of your opinions on the matter... oh well, we're already doomed.
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What's really quite low? Ours hit 3,4% in May due to the virus, but June just came out at 3,2%...
Which place are you talking about?
https://www.bls.gov/news.release/pdf/empsit.pdf says that US unemployment rate for June 2020 was 11.1%.
https://www.bls.gov/news.release/pdf/empsit.pdf says that US unemployment rate for June 2020 was 11.1%.
"Ours" being swiss. This unemployment level is still very high, 50+% over June 2019.
https://www.admin.ch/gov/de/start/dokumentation/medienmittei....
(caveat: bei uns gibt's Kurzarbeit.)
https://www.admin.ch/gov/de/start/dokumentation/medienmittei....
(caveat: bei uns gibt's Kurzarbeit.)
Ok, that makes more sense.
It's useful to point out which countries / places you talk about. We only let the Americans get away without it.
It's useful to point out which countries / places you talk about. We only let the Americans get away without it.
I don't know how we get from here to a place where these problems become solvable (or even what that place looks like) and from there to a world that is actually going to sustain us again. So its hard to have much confidence that we have much of a future beyond the later part of this century. My children will by my age then and I don't envy them.