What will we do if the system can no longer create jobs?
libcom.org
libcom.org
Labor doesn't give us money. Creation of value in goods or sevices (as perceived by others) which may or may be accompanied by proportionate labor provides us with money. Marx, a clever man, nevertheless made this fundamental mistake.
This also shows that labor still is connected to needs, despite what the author claims. Somebody wants something done, finds someone willing to do it for money, and they make a deal. Nothing new under the sun, except our society is much richer in needs of various forms which might explain why the author has the feeling our "pace of lives" is much more intense than "that of our grandparents".
Overall, this article is full of communist FUD : https://en.wikipedia.org/wiki/Fear,_uncertainty_and_doubt
Tell that to job creation programmes. Our society is built on assertion that they do.
I think that we've somehow, as a society, been convinced in thinking that state-intervention needs to "create" jobs because industry won't do it by itself. That's the assertion we need to fix/educate about, not the one that job creation means more money, as you claim.
"Economic freedom" is merely an emotive label applied to certain aspects of the current system, which is defined as much by people being unable to use underutilized economic resources without contracting with other parties as it is by there being relatively few restrictions on the nature of contracts and associations that might be made. An economic system in which people didn't have to contract with "owners" in order to use their surplus land or equipment or fork their codebase is arguably more "free" (though in many respects likely to be less productive). Trivially and infinitely replicable software is substituting for elements of expensive physical capital as much as for human labour, and the necessity and defensibility of IP is a concept subject to rather more challenge that the concept of working for a living.
I'd agree with you that the author is well wide of the mark on the assumption the useful services we can provide other humans are being automated away. That argument, along with labour-based theories of surplus value, and the idea of self-sufficient communities feels dated rather than futuristic now.
Since "free" is better than "unfree", naturally economic freedom must be better than any alternative, right? But word games like this don't shine much light on what actually works in the real world.
What happens when free-market ideology meets the real world? Let's compare the labor markets in Germany and California.
The German minimum wage is about $10.78 at current exchange rates, 20% higher than California's recently increased minimum of $9.00. Germany has far greater and more intrusive regulation. German taxes are much higher. In almost every way, California has greater economic freedom than Germany.
What are the results of California's relatively greater economic freedom? California's economy produces a few more billionaires than Germany does, which benefits a small number of people. But the vast majority of Californians are worse off than Germans.
The unemployment rate in California is much higher than in Germany. More Californians want jobs but can't find them, or are working part-time when they want full-time work. Millions of Californians don't have health insurance or retirement security. More Californians than Germans are homeless, living in their cars, or in abandoned buildings, or on the streets, or in shelters. More Germans get at least four weeks of paid vacation per year than Californians.
Where is the empirical evidence that "economic freedom" delivers better results for more people than other systems? On the contrary, free-market ideology seems to create extremely good outcomes for the few at the expense of the many.
When a bank for instance in Denmark lends you 300.000USD it actually ads 300.000 to the economy out of no where.
We live in a world where there is no direct correlation between the value of goods or services and the creation of money.
No - it does not. You have completely misunderstood how money works. There are two entries in the ledger, not one. The credit of 30K and the liability of 30K which together cancel out. The only surplus comes from interest and fees.
The thing to criticize him on is the idea that the money is "not related" to the economy. If you borrow $300,000 USD, it's precisely because you plan to use that money to make a difference in the economy. Moreover, broad statistics are available on price stability, tracking the value of money against a value of a basket of goods like the "consumer price index". Most years the value of the dollar is stable to within 2%. If you actually want crazy uncorrelated money-creation in USD you'll have to go back to the 1980s.
Poppycock of the highest order. The US economy generates about $16.8 trillion a year. Its wealth is estimated at ~$120 trillion. M2 is about $11 trillion.
That won't work. Imagine you've occupied a factory, and it needs a 20 $ worth of oil to produce a shirt. Meanwhile you can only sell that shirt for 15 $.
You can think of most things around us as of made from oil (i. e. energy). Once you spend more energy than you can buy after selling your wares, you are bankrupt. This is why deindustrialization happen and why you can't overcome it by snapping fingers.
https://www.youtube.com/watch?v=7Pq-S557XQU
I suspect most of what is said in there is well known to the HN crowd, but it's all put together in a very pleasant video and is a nice thing to link to people who don't understand just how far along we are in the process of automating a lot of people's jobs.
If you ask the question, "What will we do if the system can no longer create jobs?", it's hard not to see this question as suggesting the answer "well, we change the system.".
But what if I phrase the question like this: "What will we do if economic freedom can no longer create jobs?". It's much harder then to answer, "well, we abolish economic freedom", isn't it?
Capitalism is all about the right to exchange and collect means of production. It's a natural consequence of economic freedom.
It can be worrying if technology turns many people's labor useless, thus questioning their means of sustaining their lives, but to me that's not enough to question the rights of the others.
Notwithstanding a variety of reasonably important things like Taxes or Labor Market Regulations or even Regulatory Capture which detract from the purity of this model in practice, this is:
(a) essentially the textbook definition of what 'capitalism' is (b) a natural consequence of the combination of property rights and basic economic freedoms like "i can purchase capital" -- be it a billion-dollar oil rig or a fifty-dollar sewing machine (c) and a common path taken by many or most people who have some wealth and wish to obtain more wealth, be they entrepreneurs themselves or ordinary people saving for retirement or homeowners looking to save money by insulating their basement or what the heck ever.
So yes, in a general way we do enjoy that sort of system, and if someone has some explaining to do around here, it's actually you. We're not in some sort of political echo chamber such that you just say "capitalism" and people will automatically translate that to "Satan, and all his evil works, and all his empty promises" and implicitly remind people of their mission to elect ${politician} to support ${cause}. What do you redefine these words to mean?
Ah. You're using the word 'freedom' to mean 'power'. This means you can raise the specter of power being concentrated in a few hands to advocate for concentrating power in a few (powerful politicians') hands, and at least it won't sound utterly ridiculous. Clever.
E.g, I'm free to drive a luxurious car if I want to but if I don't own or rent one, I can't.
You may be free, but it does not mean your beer is.
In other words we are not free by any definition of the word, so lets stop pretending we are.
Freedom is a deep concept, but I'm pretty sure not being able to do something does not mean you're not free to do it.
I am totally not comfortable allowing people to starve. That is why I pay taxes, and I expect them to be fed using that money. And I am downright pissed-off that it's still an issue.
I don't think it's capitalism that you should be directing any undue criticism over "value of labor" when it's currently government that is the cause#1 of hunger/starvation.
#1: They're the cause because they're not fixing it.
The left have normally been fairly right about their criticism of parts of the capitalist system.
Where they normally go wrong is when they start suggesting another system i.e..
Capitalism is not about right to exchange there is no right in capitalism that is in liberalism. Capitalism is an economic system that just is.
There is clearly something thats not working and it has nothing to do with economic freedom or lack thereof but everything to do with technology and how it affect our current system.
Even if I'm ok with calling capitalism a "system", it still is a "system" which consists in abstractly dividing capital into shares that can then be exchanged on a market.
This "system" is an abstract representation which you can't do without unless you prohibit the use of maths or freedom of exchange. That's what I meant: capitalism is a natural consequence of economic freedom. Calling it a system sounds very derogative to me as it colors it as artificial and optional. It is not.
Everything is an abstract representation at the end of the day. Capitlism not less so. And everything is the natural consequence of something.
You seem to be doing exactly what you accuse the OP for which is playing rethorical games instead of addressing the actual points the article is going through.
Just try to contemplate this question: what would a society, an economy look like if everyone was provided with everything for their basic needs, like a house or a flat, food and an "allowance" to participate in social activity, people could still be able to choose to work if they wanted to, but not working would not be frowned upon? How would this society develop, what would people do because they can do what they please all day, what would the influence on society's creativity and inventiveness be?
"Basic income would negatively affect our current economic system" is not the right answer to that question. Automation will not become less, full employment will be less and less feasible, so answering these questions will be inevitable.
1) With full automation, scarcity is pushed down, availability up, cost down, so price necessarily is pushed down.
2) Companies have a tendency of trying to avoid killing the golden eggs goose, and decreasing prices by higher availability is usually frowned upon by the people making the money, understandably so, I might add. It's perfectly rational, it just sucks for everyone else. Just look at the history of the music, books and movie/TV entertainment industries.
3) The road from "here" to "there" is going to be necessarily tumultuous, no matter what, precisely because of 2). I'm sure we'll get that omelette, but eggs on every side will be broken.
4) There is a sizable percent of the population (let's say 10%, pulling it from my backside) that have not found any artistic, professional or personal aspirations, regardless of social class. It might sound like I'm dissing "those" people, but I'm not. People are wired differently, and just in the same way a Linux user doesn't understand why somebody would be a VB.Net developer, or a programmer why anyone would be a lawyer, that doesn't mean those people are lesser in any way, they just have different interests and motivations. The increase in "leisure time" should be accompanied by an increase in availability and promotion of "entertainment" (I believe "pursuits" would be a better word) of many different kinds, to have a higher chance of people actually finding what does drive them.
1. Basic income. Redistribute wealth, since enough wealth
is produced, it just isn't available to everyone.
2. Force everyone to work less (for more money). If you
lower the maximum number number of hours people are
allowed to work, more people will need to be employed to
do the same amount of work. You would probably need to
accompany this by an increase in minimum wage.
3. We could all do more. Government could take a more
active roll in back-filling demand. If we decided to
employ a million more doctors, or revamp the entire
power grid, or build a Moon base, or colonize Mars, or
move Mars into orbit around Venus, or accelerate Venus's
rotation to support colonization, we could easily
achieve full employment.How is basic income better than the current system? Note that unemployed people get money today, at least in (most of?) Europe.
That's the unemployment benefit but if / after you're not entitled to that, you get different benefits. In Germany it's 382 EUR + housing and healthcare expenses according to wiki.
The main points I see in the article, are that weak labour = weak market, and not every country can be an exporter.
It seems that pressure to increase profitability, ends up exerting itself by reducing labour utilisation (via efficiencies or other means). Which (can eventually) in turn, exert further pressure to increase profitability (due to a weaker market).
What I find disheartening is, the current tools governments have to improve the situation are hamstrung in a global environment.
* Corporate Taxation wont work without global reform
* Minimum wages, employment conditions, and other regulations don't work if the job can be outsourced / performed overseas
* Import tariff's on the former, usually result in your own exports being penalised (in retaliation)
* Existing players wish to maintain the status quo
The other issue, is "free time". There could be a considerable portion of the labour market are willing to take a part time-job "for the love of it" with their free time. Effectively volunteering or taking a "token" wage.
Industries accessible to hobbyists / free timers, will suffer a further devaluation of labour, if they haven't already. Anecdotally, it appears this has already started for some roles like teaching / professorships.
The odds seem firmly stacked against a good percentage of the global population. Hopefully those capable of making lasting change do so, before it's too late.
A German philosopher says this to a Portuguese interviewer, and it is not questioned? I am convinced that most people in Europe nowadays work less and less hard than they did 40 years ago. I can understand that it is not questioned on HN, given that most of us live in a culture where working 80 hours a week is considered normal, but in Europe? Come on.
I'm from the Netherlands. My grandfather was an old man at 65, tired and broken from a life of hard farm work. When I came to visit as a child, we'd talk a bit and that was it. My parents, now older than my granddad then, play with my son with vigor and love. They're fitter and happier, because they didn't work as hard.
I work 4 days a week. My girlfriend three. We don't consider these numbers a temporary situation. Everybody I know thinks what we do is normal.
I didn't look up the stats, but it seems to me that either I'm really weird, or the quoted philosopher likes to selectively pick out those facts that support his rant.
I study six days and two evenings a week. I have trouble affording food.
For instance they complain that people spend too much time in their studies, and are trying to incentivize people to graduate faster by granting some benefits related to the student loan if you graduate on a planned timeline. In my case however, I would get more if I had postponed my studies instead of starting studying in UoAS this year. I'd get more still if I dropped out of school entirely and lived on social security, unemployed...
I know other people who are in a similar situation. For example, unemployed and unqualified middle-aged men with families and kids to feed. For them, the students' benefits are impossible to live on so they're incentivized against getting an education. They can somehow make it though, through crazy hoops than make no sense for the state nor for themselves.. it makes no sense for anyone.
It's not clear what this all will lead to. I'm expected to graduate in about four years. The job prospects in my area have been piss poor (this reflects badly on my CV), and it's not sure yet whether they're getting better or not.
So yeah, my lack of money is in part my own choice. I chose to study because I want to graduate sooner rather than later. Either way it sucks. And people around here want to downvote me for not wanting to pay $40 for a game/movie/book/software. Not realizing that it's almost two weeks worth of food for me...
But some of the people are in the situation they are in now because some time ago, it was easy to get by. You didn't need qualifications if you were willing to work. That's how we got people who are now in their mid-to-late 40s, with no formal education. And they're suffering for it because today getting a job just isn't the same.
And looking at how it goes today, young people are expected to spend a small eternity in educational institutions, and finally they come out with a piece of paper which states that they have the bare minimum of knowledge everyone else in the field already has. So they have to compete against every other fresh graduate, as well as everyone else who's already got a job history & real world experience to boast with. It does make me feel that maybe my grandpa had it better. And no, he wasn't a farmer.
This is surely correct for a great many working people in many parts of the world. Moreover, the span of life over which people work is shorter at the young end, as people pursue more schooling before entering employment, and a reduced percentage of lifespan at the old end, as people have many years of retirement in reasonably good health with retirement benefits.
P.S. I fear there was a mistaken downvote here, because this is a good comment.
Because people in Europe and Far East no longer overreproduce.
Also, the environment only has value to us if we're still able to use it. No value in the clean environment if humanity gets extinct.
Western kids are going to live their life in their tiny home, which is going to become more and more green and self-sufficient.
On the other hand, poor subsistence farmers live on large swaths of land with lots of wildlife, which they're going eat literally.
And then they'll try to recapture western standards of living, but without all that green concern. Won't they?
There are enough parameters in "the system" that we should be able to change almost any single one of them and get some improvement in employment numbers. Change wages, change education levels, change the scale of industrialization, change the number of humans working, change laws surrounding mergers/acquisitions, etc.
The real struggle here is getting anyone to do any of these things consistently, and then measuring the results.
The problem is, we're going to hit Vladimir Sorokin world order if we try to implement it - 'cause he's already figured that out. I'd rather not :)
kill the jobs using the most resources