It’s Not China; It’s Efficiency That Is Killing Our Jobs

by mattm • 15 years ago

195 195 15 years ago

rcthompson2• 15 years ago

This reminds me of the observation that a perfect (i.e. zero-drag) kite would rocket straight to the top of its flight envelope and then dive-bomb the person holding the strings.

jmadsen• 15 years ago

Yes! I'm so glad your comment didn't get lost in the shuffle.

This is just a boring repeat of all the people who once read an Econ 101: Intro to Macroeconomics textbook, and then sit and describe the world economy based on these first step economic theory building blocks.

More bluntly - no effing clue.

Like the guy who argues that wage prices will find a "natural level", because he is still using a base model that assumes labor is 100% fluid.

Yep, we'll all just move to Vietnam and wages will average out.

littlegiantcap2• 15 years ago

I absolutely loathe these arguments.

The economy is not a zero sum game! When I gain a dollar another person doesn't inherently lose one. We build wealth, and while efficiency eliminates certain jobs, it just shifts employments to other sectors as long as people continue to innovate. For this argument to hold any sort of water we would still be fretting over what to do with all the unemployed candle makers after the advent of electricity. The answer isn't to move backwards, or as the author suggest to promote inefficiency, but to use our creativity to move forward. The world has plenty of problems that need fixing, and as long as there are problems with the world, and there always will be, and as long as we as a society and a planet continue to strive to make tomorrow better than the day before it, we will continue to innovate and create jobs.

mobileman• 15 years ago

The fundamental problem is that people don't like change. I've encountered this a few times. I invent a system process to make a work flow simpler, people resist because they don't want learn.

One key example was an intranet out of office board. The secretaries maintained a list of who was in or out (context: 13 years ago with very little good groupware). Engineers would sign out the scratch themselves off. Was it consistent? No. The system was very simple and engineers loved it. Did the secretaries? Nope. Did it get traction? Nope.

datasage3• 15 years ago

I think the secretaries were inherently aware that one of their roles was being replaced and thus resisted it.

Those who's jobs rely on inefficiency are not incentivized to improve efficiency.

stablechaos• 15 years ago

Agreed. The solution presented is by far the absolute worst to the wealth-gap issue. It reminds me of the Kurt Vonnegut story "Harrison Bergeron". The only way to achieve pure equality is to handicap those individuals and businesses who are the most effective.

dasil003• 15 years ago

I admit the author is a little bit out there, but it does seem like a quite real possibility that there will not be enough work for humans if A) the population keeps growing and B) technology gets smarter and can automate more.

I'm not saying it will happen (we're too early on the AI curve), but it might, and then there will have to be some kind of major social upheaval because humans, as all animals are meant to work for their own survival. Socially we don't tolerate welfare very well (neither the envious worker nor the unemployed recipient, frankly).

How will we do that? Will we shift people to purely intellectual pursuits? What happens when are brains are feeble by comparison to the AI that surrounds us? These are all interesting questions to ponder. So while it may be a turnoff to hear some crackpot proclamations about the fate of humanity, I wouldn't say it's necessarily a worse guess than "everything will work out just like it always has."

jcampbell1• 15 years ago

It already has happened. Modern farmers are as productive as 10,000 peasants. When basic needs are taken care of by machines/robots/automation people move into entertainment/healthcare/service industries. Starbucks, Disney, Hollywood, Facebook, are all businesses that exist because our caloric, shelter, textile needs are easily met.

I look forward to the future. The less effort humans spend making the things we need the more time we can spend creating the things we want.

neutronicus• 15 years ago

A lot of innovation replaces labor input with energy input. So far, we've been replacing jobs that disappear by consuming more raw materials and energy to make more crap so everyone can have a higher standard of living. If energy/raw materials is the bottleneck instead of labor, all of a sudden the economy is a zero-sum game.

sorenbs2• 15 years ago

Not if the universe is infinite i suppose?

yxhuvud3• 15 years ago

It would still not be a zero sum game since we could still be (a lot!) more effective in how we use the energy and the resources.

orangecat• 15 years ago

Nope: http://mjperry.blogspot.com/2010/05/2009-most-energy-efficie.... The amount of energy needed to produce $1 of output keeps falling.

timr• 15 years ago

"while efficiency eliminates certain jobs, it just shifts employments to other sectors as long as people continue to innovate."

Oh yeah? Prove it. (Hint: when you do, you should wait patiently for your Nobel, because you'll have earned it. You're re-stating a very popular theory, but that popularity doesn't make the theory a fact.)

The problem that I have with the "innovation" canard is that it inherently assumes equality of potential for every worker in the labor force: we don't have much room for unintelligent people in our society if you now have to "innovate" just to get a job. Most people can't innovate, and never will.

Your argument about candle-makers is also a straw man: thus far through our history, we've been able to replace each declining low-skill industry with the ascendancy of another equally low-skill industry (argiculture to factory labor, factory labor to "service" work, etc.) But that era appears to be coming to an end. In a world where there are no jobs for people in the bottom X% of intelligence, we don't automatically get more innovation -- we just get structurally unemployed people.

littlegiantcap2• 15 years ago

I don't view my candle maker argument as a straw man rather than an example. I could provide more examples starting at the industrial revolution moving forward, and I assure you there are countless, which would by definition make it not a straw man argument because I'm not misrepresenting anyone's position nor am I cherry picking 1 instance to prove my own argument.

As far as you're argument for unskilled labor, I have two things to say. 1. I think you are greatly overestimating and marginalizing people. Plenty, if not the majority of people have the ability to be innovators at least in some small way. 2. Even if your argument about unskilled labor does hold water, which I don't believe it does, you can break down a task into enough moving parts, or create a user experience in a way that people don't necessarily need to have genius levels of knowledge to be productive with the tools given to them. A perfect example is the military, where you take something like operating a jet aircraft and make it more accessible to people. There are countless of other examples in almost every field.

Finally, I can't prove it. I'm not a professional economist, I don't have the background nor the data to provide any sort of coherent theory on the subject. What can I point to though is history, the history of innovation throughout time. Horses to cars, the transition to computers, the internet, there are so many things that have increased efficiency and people have shifted and adapted and continued to innovate and move forward and there continue to be jobs and task for people.

forensic4• 15 years ago

The anti-luddite argument is actually an argument in favor of social darwinism.

When people say that the jobs will shift to other sectors, they are really saying that an elite few will control all the wealth and if you can't appeal to their self-interest you are expendable.

The elite few who control all the wealth right now are not even spending or investing their money. They are just sitting on it. Because they'd rather have the money tomorrow than the services of the poor today. This is another way of saying that the current world's poor are expendable to the elite.

I don't see this mindset changing any time soon. All logic indicates that the world's poor are going to starve to death in their ghettos while the elite technologists sit on their money piles -- money piles defended by predator drones and LDAP.

aaam2• 15 years ago

With new jobs requiring increasingly more knowledge and skill there comes a point that it take longer to learn a new job then it takes for this job to become obsoleet?

Also, who is going to pay the bills while you are learning for your next job?

Innovation happens mostly during periods of abundance not during periods of actual scarcity. Innovation requires access to sufficient resources for experimentation and testing.

If scarcity really was the mother of invention then there would be no poor?

tatsuke955• 15 years ago

>Your argument about candle-makers is also a straw man: thus far through our history, we've been able to replace each declining low-skill industry with the ascendancy of another equally low-skill industry (argiculture to factory labor, factory labor to "service" work, etc.) But that era appears to be coming to an end. In a world where there are no jobs for people in the bottom X% of intelligence, we don't automatically get more innovation -- we just get structurally unemployed people.

Not a straw man at all.

Low Skill Industry will just change its definition. Maybe computer programming becomes a "low-skill", commoditized field. Who knows? It will be probably be something we haven't even thought about yet.

It's funny you ask someone to "prove it". You are also restating a popular theory, but your theory has failed when we look at economic history.

>But that era appears to be coming to an end.

That's news to me. Before the recession, there were more jobs being created than at any point in history.

ThomPete3• 15 years ago

Between 1995-2002 the us lost something around 2 million jobs to Chinese manufacturing. But at that same time the chinese lost 15 million jobs to the robots.

Efficiency is taking away jobs because technology is to some extent a zero sum game.

Once technology is able to compete with us in a certain field, that will be used in other fields quickly.

So we need to innovate as you say. But, what happens when technology becomes better at innovating than we are?

Tichy3• 15 years ago

Artificially reducing efficiency is of course stupid. However, I think new forms of wealth distribution might be required, because it certainly isn't a given that there will always magically emerge new jobs to replace the old ones.

Of course as an alternative to new forms of wealth distributions, people without jobs can simply starve to death. After a few years, there will again only be people with jobs. (I don't suggest this is a good solution, just that it is one reason there will magically always be jobs for people).

bennesvig• 15 years ago

We then move to work in areas that aren't efficient. That can't be duplicated. Work that can't be done by a computer, at least yet.

Technology replacing jobs has been happening for a long time, it's just that it happened much more slowly in the past. Now, as it's happening at a rapid pace, some people are finding themselves fit to work in a world that no longer exists.

nextparadigms• 15 years ago

"We need to protect our jobs."

That's all I've been hearing in the past few years, and it's exactly the kind of thing that, although counter-intuitive, leads to the loss of jobs in the long-term, and a slower economy.

Let companies compete fair and square among themselves, and it will lead to better products, lower prices, and more jobs. Otherwise, most of those companies will just move to some other country, and then you'll have fewer companies to provide jobs, and their products will gradually lose competitiveness. It's what happened to GM.

andraz• 15 years ago

What author suggests at the end (abolishing private corporation) is pretty absurd. But he makes a pretty good argument that the economy might be a zero-sum game if technologies can take us zero cost of production, distribution or providing of service. We're closer than ever, but still very far from that point.

If cost of replication and distribution of every product globally can be driven (close) to zero, only a few best products in each category can have economic existence. Therefore as distribution gets more efficient it's winner-takes-all market. In winner-takes-all markets wealth distribution is extremely skewed by definition.

So if technology takes us so much further that a lot of people won't be able to add more value to the economy than they will be 'taking away', the governments will have to find a way to keep balance before social unrest takes the main stage.

Some more thought should be put in this direction. Here's a milder possibility of controlling for winners-take-all phenomenon - limiting the maximum market cap of companies and then splitting them up after they reach it. This wouldn't shock the economy as much and would provide sort of balancing and competition at the top. Also stock owners wouldn't be too much worse off.

hasanove• 15 years ago

This reminds of wonderful book - "Economics in One Lesson". Written half a century ago it describes most economy fallacies, that are dominating even among intelligent people. If you didn't know, you would think it was written today.

There is a chapter on "The curse of machinery" (read online - http://www.fee.org/library/books/economics-in-one-lesson/#0....), that explains why this whole post is thousand years long delusion, that keeps coming back every decade or so.

Highly recommended to anyone who wants to understand true fundamentals of the sound economies.

rcthompson2• 15 years ago

I always assumed that there was something horribly wrong with the idea that technology kills jobs, but that link explains the fallacy quite clearly. It's actually the same logic as that which disproves the fallacy that destroying things stimulates the economy (yes, some people actually believe this).

bambax2• 15 years ago

> the fallacy that destroying things stimulates the economy (yes, some people actually believe this)

"Cash for clunkers": did it work?

wtallis• 15 years ago

New technology can cause unemployment, but only short-term unemployment. (New workers don't generally aspire to obsolete jobs, so the unemployment is limited to one generation.) Unfortunately, many people whose jobs disappear from underneath them find that they are no longer qualified for the remaining skilled jobs, they can't easily afford to go back to school for several years, and the unskilled jobs are disappearing even faster!

jaekwon4• 15 years ago

No, the text in that link is also flawed. You're assuming that owners of efficient machines actually spend their money. What if they don't? What if they invest their money in privatized land, IP patents, TBonds, cornering the food futures market instead?

That's not spending... that's exploiting & extracting. Jobs would disappear as money dries up. I believe this is happening, no?

dan85• 15 years ago

If you don't spend any money, the State can print without creating inflation.

Imagine that there are $1000 in the world, and you earn $450 of them. Then you burn all your money instead of spending them. The State can now print another $450 without worries because... you have just been taxed at 100%. Also, investing isn't the same as not spending money.

OstiaAntica• 15 years ago

The idea of "money on the sidelines" is also an economic fallacy. Money invested in land, futures, or TBonds still gets circulated into the economy. There's still another person on the other side of the trade. The landowner who sold will have cash to spend, the government with new borrowed funds will spend them on a new bridge, and so on.

wisty• 15 years ago

It could be worse. Imagine you were trapped in a giant reality TV show the size of a planet, set up for the entertainment of a ruling elite, who through generations of decadent luxury have degenerated to the point where recreating the 21st century actually seems like an amusing thing to do with their essentially unlimited resources.

Kind of a "The Matrix" meets "Doctor Who: Bad Wolf" sort of thing. Maybe our unseen overlords are just too lazy to make good TV, and want a planet of genuinely suffering artists to do it for them?

But really, who knows? Strong AI, automation, and resource recycling might head off a lemming-like bust in the next 100 years.

wetbrain2• 15 years ago

The only thing I'd add to this is how things move so much quicker.

It takes time to find a new job. Like the Joe Smith example, a skilled worker is now unskilled because his job has been made obselete. Anecdotally, I've seen friends parents try to find a job in the industry they used to do, unsuccessfully. There are some people who don't like change. There's a refusal to accept that all that time you spent was wasted and you need to change industries, or at least focus. There's also the stigma associated with having worked in that now dead market. Though many skills are transferable, it seems some companies have a bias that it's easier to train a new worker than retrain one with 'useless skills'. Again, that's all anecdotal.

So while Joe Smith will eventually find a new job, it does take a while. And that can stack such that a significant workforce is unemployed. Everything in the article holds until the hypothetical day that a new disruptive technology is released continuously, and your skills are worthless every other year. Which will probably never happen, but an interesting thought experiment nonetheless.

davidw• 15 years ago

Which is probably an argument for giving a helping hand to the Joe's of the world in their moment of need, rather than throwing shoes into the machinery.

cwb• 15 years ago

The author makes the implicit and false assumption that humans will always be able to compete with machines in something that other people are willing to pay for. That has been, and probably still is, the case. I see no reason to think that will continue indefinitely. Humans have three key properties that have kept us competitive with machines:

- "Intelligent" observation-based decision making

- Flexible manipulation of objects

- Teachability

Technology still have some way to go to match our capability here, but they're getting there. The dynamics are roughly that humans improve or change linearly through education, but technology can improve roughly exponentially.

A1kmm• 15 years ago

After a long rant, the chapter of that book comes to the core thesis that consumption will increase, and that consumptive increase will increase demand for labour.

The economy finds a way to efficiently use resources until constraints are hit. Historically, despite automation, the constraint (or rate limiting factor) that has been hit has been human labour. What if increasing population, increasing automation, and natural resource depletion mean that natural resources and land become the predominant rate limiting factor holding back the economy, rather than human labour? Then, we won't see full employment, we will see full natural resource utilisation instead.

That said, in the medium term, natural resource depletion is actually likely to inhibit automation - automation is largely dependent on energy derived from fossil fuels, and as we approach and pass peak oil and supplies dwindle, sustainable energy sources will need to take over.

The other problem is that it is not just employment that should be considered, but equality (see http://www.equalitytrust.org.uk/why/evidence for why equality matters). To see why this is a problem, lets take the reductio ad absurdum approach: suppose that we had the technology and natural resources to give everyone on the planet the capital they needed to live independently, sustainably and happily without having to do any work at all - everything is automated. In this perfect society, there is no inequality and no transfer of wealth. Now consider the exact same situation - still no workers, but a small percentage of people own most of the wealth, and everyone else pays rent to them for the equipment (this is essentially the current economy). Wealth transfer will continue to flow from the poor to the wealthy, and there will be very little economic mobility because the wealthy don't need the poor.

Obviously, in reality things are not quite so grim as in the hypothetical scenario because not everything can be automated, and there is still a need for labour. However, when pressed against natural resource limits and a lack of land, I think that something very similar is happening in the global economy.

nate_meurer3• 15 years ago

A bunch of excellent points about basic economics.

I would add, regarding this part:

  "The economy finds a way to efficiently use resources until constraints are hit."

... that "efficiently" is only true to the extent that resources are scarce. For resources that are not scarce, as was the case with oil until relatively recently, and as is the case with nat gas now in the U.S., the market optimizes for volume much more than efficiency. Hence the reason we're sucking the stuff out of the ground as fast as we possibly can.

bambax2• 15 years ago

The post doesn't discuss efficiency as productivity (ie, quantity of output per hour of labor), which could be called "curse of machinery", but rather, increases in the efficiency of distribution which results in a "winner takes all" economy.

ashishgandhi2• 15 years ago

Efficiency DOES NOT purely kill jobs, it transfers them. When robotic arms replace factor workers:

- Factor worker jobs are destroyed.

- Robotic arms designing, manufacturing, shipping, etc. are created.

There may be temporary unemployment because factor workers may not know how to design, manufacture, ship, etc.

EDIT: Found an article "Technology and Automation Create, Not Destroy, Jobs" that is relevant. http://www.innovationpolicy.org/technology-and-automation-cr....

PS: Don't understand why someone down voted me. Never realized down votes are for disagreement.

city41• 15 years ago

But how many factory workers were there, and how many robotic arm designers are there now? Something tells me that's not a 1:1 relationship.

ashishgandhi2• 15 years ago

It's not 1:1. It seems there would be more jobs created because of the robotic arms business (and business related to this business). Updated parent comment to include a link.

adrianN• 15 years ago

How much education do you need to screw caps on toothpaste as compared to designing robot arms? How many people just can't attain that level of education?

jwblackwell4• 15 years ago

This is the problem, I agree more jobs are created and people can retrain but a certain sector of society will simply not be able to do so.

We need to make sure they are looked after.

ippisl6• 15 years ago

Two data points:

There is a robot manufacturing facility , i think by KUKA, that is totally run by robots.

A robotics company is talking about producing a factory robot for $5000. if it's possible, it doesn't even makes sense to invest too much time in fixing these robots.

vph• 15 years ago

>This pattern called “power law” or “80-20 rule” is found everywhere.

Is it found in China?

>If we could ban public corporations from the entire world, I would imagine that we would make the power law curve flatter.

Would it be flatter in China as well?

Author seems to suggest "our" inefficiency is caused by certain universal laws, which mysteriously does not apply to China.

Kliment• 15 years ago

Yes, the same rule applies to the Chinese economy, specifically its export zones. The primary advantage Chinese manufacturing has is that its price is artificially depressed by public policy. Chinese workers in the export zones are cheaper because the Chinese currency is artificially held low, the government gives the export zones preferential treatment and overlooks the working conditions in there, and the safety and quality standards are enforced by the buyer only.

The Chinese economy is exploiting the gap between automation and non-Chinese human work. Automation is slowly eating the Chinese export market, but it won't cover it for a while. Machines are expensive, but they are cheaper than locally hiring humans because of running expenses. However, if you have a simple process, large quantities and simple materials, and are prepared to wait somewhat longer, it is cheaper to have things made in China than it is to buy and setup the tooling to make things yourself. This is doubly so if you are doing a short-time, high-volume batch (say a seasonal product), and would have to retool for the following quarter. As machines get cheaper, more versatile and easier to retool, this gap slowly erodes. For VERY small runs, in the hundreds to thousands of units, Chinese factories are no longer interested in these orders. For individual units, in plastic, it is actually cheaper to make them on a home 3d printer than to have them made in China (including the cost of the printer). Within China, the same process takes place, but because of the gap in cost of employment, they can use cheaper, less safe machines with a higher maintenance effort (because humans that maintain machines are cheaper) and flexibly switch between automated and manual processes according to demand. Outside China, this flexibility is much more expensive. So yes, the power law applies, but the power factor is somewhat smaller. The gap between the two will close at some point, but it has not yet.

sorenbs2• 15 years ago

As long as we keep reaching for higher goals increasing efficiency in society is a good thing. We might need to structure society in a different way to encourage more people to pursue those higher goals and to ensure that those incapable of that will still be able to live a decent live.

Hominem• 15 years ago

I write software that makes people more efficient. I look at their process, write an application to help them, and next thing you know they are doing 100 tasks where before they did 10. My company can then take on more work, or let people go. Turns out it is easier to let people go.

So these people are pounding the pavement looking for work. Great you say, information economy! Learn to program. Well most of them can't. Do something a computer can't do! That means the service industry, and stuff I haven't figured out how to get a computer to do. Turns out I can hire someone in India to do most of the latter, and most people resent going from white collar professionals to working at The Gap.

Probably the best thing for them to do is learn how to make gourmet jams and sell it to rich people.

In short, no nothing is destroyed, but jobs get shifted outside of the geographical location where the person lives. And jobs tied to the location the person does live are usually unsuitable.

erikstarck2• 15 years ago

I can see two very clear trends when it comes to where new jobs are created.

One is the shift from industry jobs to service jobs.

Did you know that globally, farming has been the most common profession since basically the dawn of civilization up until about a decade ago? [1] Now it's service jobs.

Humans helping other humans, this is a type of jobs that will never go away because humans have qualities that machines can never possess regardless of if they pass Turing tests or not.

The second is the bleeding edge of innovation and super-brands that have shorter and shorter lifespans. The share of the economy belonging to the mega-corps is decreasing. Smaller and faster is the way of the future. This is the era of the startup economy.

So there you have it: services, super-brands and startups.

That's what the economy will look like the next 50 years. Heck, it's what it looks like today! At least the part that's working.

[1] http://johnhawks.net/weblog/topics/social/farming_bypassed_a...

wetbrain2• 15 years ago

I completely agree. It's why creativity and general aptitude is more important than a focused expertise.

stygianguest• 15 years ago

Excuse me? Not to say that creativity is unimportant, but to say that it trumps expertise is going very far, even if it is the zeitgeist. Without a thorough understanding of the world around us, aka expertise, creativity is not worth much. General aptitude is great, but experts lead the way to true innovation. Creativity is a commodity: we all have it to some, usually sufficient, degree.

nandemo• 15 years ago

The shift from industry jobs to service jobs has been going on for a long time. Virtually all developed countries depend more on the service sector than on manufacturing.

alexandros• 15 years ago

"humans have qualities that machines can never possess regardless of if they pass Turing tests or not"

I don't think you understand the Turing test.

Jach2• 15 years ago

To be fair, I don't think you do either (in fact most people don't), but I agree with your underlying point that we ought to be able to make a machine that mimics human behavior well enough to fool people and eliminate the human-à-human jobs.

BIackSwan• 15 years ago

What happens if the world stops all the innovators from innovating... just to protect the poor. Atlas Shrugged. right?

tatsuke955• 15 years ago

Not sure why you're down-voted.

When governments buy into the mentality presented in the article, this becomes a real concern. In reality it's difficult to financially support people who can't work, but not incentivize people to not work.

gbog• 15 years ago

> The efficiency of the kitchen equipment in the future would allow one chef to serve millions of diners a day.

This is stupid and show zero or negative understanding of cuisine. One chef cannot cook millions of diners a day. A big factory could, but this would be industrial food, not to be compared with chef's or home's.

If the rest of his arguments show the same mechanical and superficial understanding of economy mechanism, then the article is doomed, even if it's conclusion (not China's fault) still holds.

niklasl• 15 years ago

The only thing that would be more soul destroying than having a dull job would be having a dull job that you knew was just easily automated busywork that you were allowed to keep as a favor.

Doing a major intervention in the economy to protect jobs by injecting inefficiency seems rather misguided. If you are going to mess around that much, why not do it by creaming off a bit of the surplus and use it to encourage people to have more leisure time instead? Play beats work most of time, and with creative people, play can create more work.

zasz4• 15 years ago

Wow, no! Not if that dull job was the only way I was permitted to get food and shelter!

yxhuvud3• 15 years ago

It would still be daycare for grownups.

aaam2• 15 years ago

I think we need an unconditional basic income for all?

philwelch2• 15 years ago

Considering the stupidity and ignorance of technology the average person has, "easily automated busywork that you were allowed to keep as a favor" is something the average person can easily confuse with honest work.

toddh• 15 years ago

Not being able to provide for your kids is far more soul destroying, don't ya think?

suyash• 15 years ago

MAnufacturing is a major sector of US Economy and China has captured a huge share of that which cannot be disagreed looking at the past 2 decades. Thus we can blame Corporations for outsourcing to countries such as China and thereby American's loosing jobs. Technology on the other hand also indirectly kills jobs as processes become more efficient, thus there are fewer jobs for many people and it comes down to the survival of the best.

SeoxyS• 15 years ago

I think what will need to happen, is that we will need to subsidize other means of acquiring and distributing wealth. America is the wealthiest nation on earth, and we have ample resources to feed and tend to the basic needs of all our people—however, what we lack is a system for fairly (and note how I did not say equally—there's a huge difference) distributing this wealth.

In a way, what we need is to shift our culture to start flowing money into creative and artisanal sectors. We need to shift our efforts into circulating wealth by moving it to sectors that are artificially unscalable, like paying more for small-business service-industry and other luxury goods. Goods that are not mass-produced, and therefore will employ people in their creation. Efficiency in most industries is a good thing, but the dark side is that margins rise instead of prices going down, when production costs sink.

That is, unless we can come up with a completely new way to distribute wealth. Perhaps through some kind of artificial game, as an alternative to performing real work. As a species, we will reach a point where work is no longer a necessity. But when that happens, we must make sure we do not become complacent. We still need a challenge, a goal, something to strive towards, and some way to move wealth and earn it.

macavity23• 15 years ago

The problems that the author describes are real, but IMHO he attributes them to the wrong cause. They are not caused by efficiency per se; they are caused by the enormous increase in the productivity of Capital relative to Labour.

There has been a 'cold war' between Capital and Labour for almost 200 years now, and it seems clear to me that we are currently witnessing the final victory of Capital. As the author describes, it is now possible for one person to create an idea, build a widget (particularly if it is a software widget) and distribute that widget to the whole world, because of the vast amount of productive Capital that has been created and is available for his/her use.

As hackernews readers who work in great startups know, the power of a small group of talented and committed people is astonishing in the modern world - because of the 'force multiplier' effect of Capital.

So what to do? (and the answer is not to 'reduce efficiency' or eliminate public corporations, heavens)

The answer is that in order to prosper, you must become a master of Capital. You must be able to use all the wondrous force-multiplier tools at your disposal. If you cannot, if you are rather dependent on your Labour to earn your crust, then in today's world you are going to be a peasant. This might be hard to hear (although probably not for HN readers) but it is true.

Of course, being able to use all this Capital requires education, and so at society's level, the solution lies in massive boosts to education funding. It seems blindingly self-evident to me that in our Capital-dependent world, tertiary education (university or vocational) should be provided free for all, paid for by the state. In fact, education is becoming more expensive globally; this trend is extremely pernicious, is causing massive problems and should be remedied as fast as possible.

The cost of this education provision is irrelevant - it is an investment that will repay itself many, many times over - and in any case it is well within the developed world's grasp. The total cost to the US of the Iraq war is at least $2 trillion. How many college educations would that have paid for?

ThomPete3• 15 years ago

The owner of capital in a knowledge society is those who have information. The "workers" in the information industry are the owners of their own means of production, namely their knowledge.

So I would slightly adjust your answer and say, it's a matter of becoming the master of your own means of production which means. Educate yourself and learn as much as possible. Every time an employer fires you or you move somewhere else you are taking your capital with you (the means of production)

But I would caution against talking about education. It's not about education it's about knowledge. Knowledge which can be acquired in so many other ways than education. In fact I would say the less your knowledge is based on education the more unique your knowledge is and thus the more valuable you are.

JVirissimo• 15 years ago

I think by "education" you mean "schooling". The conflation of these two concepts causes all kinds of mischief.

jwblackwell4• 15 years ago

But capital in itself isn't productive. What you saying is you can just produce/distribute/market a product for less than you could previously. I.e. your money goes further.

In order for this to be the case there must be reasons why this capital is so much more productive - one could then easily argue efficiency and/or cheaper labour.

I agree with you on many levels, especially on education. But I can't really compare Capital and labour in the same way you have - it's not either or.

brador3• 15 years ago

And where are 20 year olds to aquire capital from? Who gets the greater % return on investment...the capital owners. Hence, Rich get richer. Poor and young get poorer, work harder for smaller crusts. The economic cycle repeats. Just faster. Thanks to automation.

rdl• 15 years ago

Capital's multiplier effect includes all society's wealth available to you -- you're richer because you can buy aluminum foil for $1 a roll when it used to cost more than gold; richer due to COTS computers available at white and glass stores worldwide; richer due to the Internet; and richer due to open source software.

Even a poor person today has access to potentially far more labor-amplification than anyone in the past.

ajankovic• 15 years ago

I think his message was that education IS the capital. By giving opportunity to people to acquire education and turn it into knowledge, people will have better chance of having a quality life.

As for the article, it starts off with good logic but then tends to be oversimplified and ignorant. There are many variables that have to be considered when discussing this type of subject and efficiency is just one of them.

angus77• 15 years ago

I agree with a lot of what you've written, except for one of my favourite topics that you've stumbled across--- the idea that increasing education funding will result in more education. I've pointed out a couple of times on hn that Canadians spend about $3000 less per student per year than Americans, and yet Canadian students consistently rank higher on average than American students.

ctdonath5• 15 years ago

Spending isn't the problem. Students unwilling to work is. Most who fail my classes just don't try.

yummyfajitas3• 15 years ago

Could you explain how "massive boosts to education funding" would solve this problem? I'm sure you could boost the number of degrees held by this method, but why do you believe you would create more "masters of capital"?

Also, you do realize that if you subsidize something more, you are likely to increase demand for it and raise prices further, right?

yequalsx3• 15 years ago

It isn't always true that subsidizing something increases its demand and thus its price. So it must be argued that this would be so in this particular instance.

By increasing higher education spending, while limiting the number of people who get in, we could create a system of free higher education. Such people, being released from the present system of debt burden when they graduate, might contribute more to economic growth. It might not work out that way but it could. I have no data either way except to say that in the U.S. the so called greatest generation mostly had free higher education.

Of course increasing higher education funding and spending it unwisely wouldn't be of much benefit.

csomar3• 15 years ago

You are here looking for "Super People". Young 20 something, learning and working hard in large scale problems. Great. They might make it big, and that's what we are looking for.

But don't confuse this with education. They'll educate themselves, and they'll pick the things/fields that they need and learn them better than you can do in a college. They'll figure out, they have super minds.

But you don't have lots of Super People. Fine. Make use of the ones you have, attract them from others countries, and build an environment that can generate them. That's all.

Now the guy making $100K/month selling his iPhone app, is probably in need of someone to do something for him. And he can afford to pay him generously. Home cleaning, food cooking, Home repair, Real Estate. He pays generously. So the other person benefits from this pay increase.

Unemployment problems solved. Yes, there will be a guy making $200K/month, and other one struggling to make $3K/month. However, the poor guy is already at benefit. He has access to an intelligent car, phone, Internet services, TV... that wouldn't be accessible without that super mind.

sleight42• 15 years ago

But the "poor guy" won't be able to afford most of these wonders of technology because he has been obviated by market efficiencies...

Tycho2• 15 years ago

But wait, education is pretty much free already. You can watch all of Stanford's lectures online. You just don't get a piece of paper saying you've been to Stanford. But that certification does not seem relevant to your point.

rubashov• 15 years ago

Businesses are investing capital in automation rather than hiring people in large part because laws artificially inflate the cost of labor. The government keeps making it worse with things like obamacare. I'm pretty sure CVS would rather have plenty of cashiers rather than self-checkout machines, but hiring them has become uneconomical despite very high unemployment.

msutherl• 15 years ago

I totally don't understand this perspective. I use automated checkout at every opportunity – despite the fact that it sucks – because the sooner people never have to suffer the indignity of being a cashier again, the better! Repetitive, dehumanizing jobs are a means to an end for those with no privilege. The challenge of this century is to find better means to that end.

viandante• 15 years ago

This post is a total flaw. It mistakenly confuses wealth distribution with wealth creation.

Let's say that, given the same inputs (raw materials, labour, capital, etc.), in 2011 an economy produces 100 with technology A and that in 2015 it produces 120 with technology B. Then this is a wealth creation of 20.

Now, how that 20 is distributed becomes the question. That is totally and completely detached from the efficiency gain passing from technology A to B. It has much more to do with how the State works and how society works. For example, in the Nordic countries, they somehow manage to redistribute wealth creation between the population (unskilled workers included). But I repete, that is a tottally different discussion.

And also, please use data. This post uses none. If it did, it would have seen the GDP per capita on a rasing trend everywhere from the start of the 20th century. Which basically means that efficiency has already improved a lot the life of everybody, rich and poor.

bfe• 15 years ago

It's the replicator, not the transporter, that instantly creates any meal on Star Trek.

jwblackwell4• 15 years ago

My Dad said to me once that at school his tutors said that everyone should prepare for a future in which they wouldn't be working.

I believe there was even some classes on how people might possibly entertain themselves in the future since computers would be doing everyone's work for them.

Have we really seen this? I think not. What happened was the computers just enabled people to do their jobs faster and those whose jobs were genuinely removed by technology have simply found work elsewhere.

Perhaps we are at a point where efficiency (read computers) are seriously putting people out of work. But the reality is labour forces are actually flexible and over time they adapt. New jobs will and are being created and as long as our labour forces remain educated enough and can harness technology to their advantage there will no problems.

It's those who are incapable or unwilling to adapt to the new world we live in that will fall by the wayside.

prodigal_erik• 15 years ago

I'm not seeing the new jobs. US unemployment has spiked from 5% to 9% officially (it's probably a lot higher, since we stop counting "discouraged workers") and new industries haven't popped up which could use twelve million freshly retrained workers. A lot of people had terrible jobs which don't really require human-level intelligence, and now our economy is punishing them for having only surplus unskilled labor for which there isn't enough demand. I have no idea what I'd be doing if I weren't obsessed with software, which has a no doubt temporary labor shortage on account of being almost impossible to do competently with today's tools.

jwblackwell4• 15 years ago

Unfortunately these things take time. Were at a difficult stage right now and people take time to adjust.

You've solved the problem with your own statement - " I have no idea what I'd be doing if I weren't obsessed with software"

More people need to be like you.

matwood• 15 years ago

Shifts on the job side take time. This isn't the first time that technology has removed jobs, but what is novel about this time around is the speed at which those jobs were removed. Instead of it taking a generation for a technology shift to happen, it takes years. That speed is what displaces many people, especially those that have not grown up in the information age.

redwood2• 15 years ago

Thank you: I'm very surprised by the HN group mind on this topic. Sure this is a community of technology entrepreneurs who generally do not have trouble finding new and innovative ways of surviving in the modern world's job market. But how naive it is for this community to project its experience onto the masses.

It's also a good reminder that these minimal intelligence jobs that most are falling back on will A) be automated next, and B) should not be considered as good for our society as more challenging jobs before. They lead to an overall brain rot in society.

Sure if we all have more free time to pursue what we wish, that's great. But what no one wants to discuss is how that new society will function vis a vis wealth circulation, assuming wealth continues to be the key to survival.

teyc• 15 years ago

In some ways, the author has got this point right.

There is an inflexion point where the level of specialisation required exceeds the cost of acquiring the said skills. A couple of generations ago, basic literacy was all that was required to be able to operate machinery, read some instructions, etc. However, with machines providing leverage, it requires a prolonged (and expensive) period of study, followed by industry experience, before someone can be hire-able.

One example is Chinese construction workers in Africa. You'd think that construction is a labourer's work. But even so, it requires skills such as welding, and some level of expertise. An enterprise in Africa, especially a Chinese enterprise would find it expedient to import relatively more expensive workers from China rather than hiring locally.

The unemployed in the previous case would represent the throng of unskilled, who lack sufficient capacity to even bootstrap themselves into construction jobs.

Similarly in the US where basic education is already provided, increasingly, a university degree is the minimum level required for even a basic job. If a person's parents couldn't save enough, then we have a situation not too different from Africa where people are in no position to bootstrap themselves into a job, at a time when employers are declaiming skills shortages.

davekinkead• 15 years ago

The author confuses money for wealth when they are two very different things. Look at the teleporting chef example - if food production could be done so efficiently that only a few chefs around the world were needed, then social wealth has increased. There would be a massive pool of surplus labour that the now redundant chefs could put to use elsewhere.

As others have noted, the newly redundant chefs would be out of work temporarily and if that is the only skill they had, then they would be at a disadvantage relative to everyone else. Yet that disadvantage would be many more times offset by the benefit us non-chefs would accrue (from cheaper meals for example) and still allow the redundant chefs to do something else.

That's the nature of capitalism - creative destruction. The process is beneficial collectively, but some individuals benefit or loose more than others. And that's why (most) countries provide some sort of redistribution mechanism to smooth out those individual inequalities. The solution to any dehumanizing effects of the capitalist system is not to limit the market's ability to drive innovation and efficiency, but rather to ensure everyone enjoys those benefits more equality.

Tycho2• 15 years ago

It seems natural to me that in a modernized, relatively free state, the mega-rich would edge even further ahead of the pack. Throughout history and even today we have examples of groslly unjust states, basically dictatorships, where the wealthy ruling classes are basically parasites, stealing and hoarding their wealth from a population of victims/subjects.There is however a limit on how much they can actually take.

In contrast, todays rich, who have (increasingly) built up businesses, actually know how to genearte value/wealth in the first place, so they can keep getting rich indefinitely.

Is there a flaw in my logic somewhere?

fab13n• 15 years ago

Efficiency kills jobs. But what people want is not jobs: they want revenue, then something giving them a sense of self-worth. The latter can be provided by better means than through artificially wasteful jobs.

Moreover, as he notices, the balance of power is between the owners of the means of productions, and "normal people" who can decide to riot. This balance can be altered by changing people's willingness to riot, and/or by making their riotous actions more efficient.

Don't forget that value is created through the enjoyment of useful things: if you produce useful stuff, but for some reason nobody enjoys them, you have not created any wealth. So if you produce stuff to be enjoyed by the plebe, this plebe have as much power on it as you do, although they have a harder time organizing and exploiting their share of power.

I'd like to insist on the legitimacy of people's ability to revolt, or at least on why it's no less legitimate than shareholders' "property rights". Our social definition of property rights is arbitrary; according to "natural law", you're only the owner of what you can defend, by force if necessary. If your ownership is defended by the state's police, i.e. by the people, it is ultimately the people's property, and you have rights on it only because the people decided to grant you these rights.

ippisl6• 15 years ago

>> Efficiency kills jobs. But what people want is not jobs: they want revenue

They don't want revenue. they want decent housing, education, healthcare ,energy,transportation and food. Make those affordable to anyone , and there would be much less of a problem.

And you would expect that the improving technology would enable this. but somehow the cost of those goods mostly hasn't declined in the US.

Is there something to be done? Yes. if you look india and china, they are starting to offer those goods for much lower prices. the US should emulate them.

ctdonath5• 15 years ago

Those ARE affordable to anyone. Without enumerating the solutions, I assure you it's all out there cheap or free to anyone willing to put in some effort to earn and adapt.

The problem is so many want luxuries brought to them on a silver platter.

Our biggest sociopolitical issue now is that it is illegal to be poor, that varoius regulations prohibit "functional poverty". Jobs below a certain wage are illegal, housing below high standards are prohibited, products & services must achieve lofty idealistic goals. I'm not saying low standards are desirable, but if you're not allowed to stand on the bottom rungs of the ladder you can't climb higher.

aba_sababa2• 15 years ago

Shirky's cognitive surplus comes to mind. In the context of #OWS, a lot of the youth are complaining that they don't have jobs. But then I remember that my generation wasn't raised to find a job - we were raised to "do what we loved". And after a while in the real world, we found that there weren't very many opportunities to actually do what we loved, and we're a bit upset about it.*

The step FORWARD is to try to create an environment where ANYONE can create ANY kind of wealth they want. Companies like Etsy and Skillshare (both NYC babies!) are propelling us to this world. It's a world where we have projects instead of jobs. A place where you don't ask a man what he DOES for a living; instead, you ask him what he's WORKING on.

Sounds nice, huh? And the wrong answer, obviously, is to "solve" it by making things more inefficient. Then we'll just stay in a world where jobs, you know, suck.

*the royal we, of course. I'm a programmer, and I have a job, and I love it. yeeee :)

sanderjd2• 15 years ago

Kickstarter and development of affordable 3D printing are another two, just to lengthen the arrow pointing in the direction of the future you're imagining.

Having said that, the transition from our current world to that world could be pretty darn rocky, if it's even possible.

zasz4• 15 years ago

Okay, so there's this problem with there not being enough work that people enjoy doing. I don't see why stuff like Etsy is going to be a solution to that. I don't want 99.9% of the stuff I've seen on Etsy. Most of it is crap. I don't think most people will be able to consistently make things that other people want. This does not seem like a solution either.

dyske• 15 years ago

I read several comments made about those who lost their jobs can now re-train themselves and apply their productivity elsewhere. But would there really be such opportunities in today's hyper-efficient economy? Think about iPhone apps. Only a small percentage of developers at the top make money. In a sense, the rest of the developers are out of work. Now, if they were to apply their productivity elsewhere, they would need to find a different market. So, they might try the Android market but there too, there are only small percentage of people making any money. Do you think there would be enough markets in the world for everyone to be in the top percentile that makes money?

Furthermore, the efficiency is an effect of the entire market. It is the market collectively that identifies the best products/ideas and rewords them disproportionately. We humans have limits in how quickly we can become efficient. At the rate the world is becoming efficient, we humans cannot humanly catch up with that speed. It is dehumanizing to expect people to do so. So, I don't think it is fair to blame those who failed to adapt quickly enough.

DanielBMarkham• 15 years ago

E-gads man, this is terrible.

This reminds me of when you first watch the Matrix. If you're young, you spend a while thinking "But it could all just be a simulation!" Until you finally realize that yes, it could all just be a simulation, but it doesn't matter. You grasp the really cool part of the concept -- we all live on computers -- and forget that details and practical implications -- simulated people living in a simulation and real people living in reality aren't really different. So it doesn't matter.

Likewise, this author has realized the great revelation that strikes everybody who looks around: jobs are going away! There are no more buggy-whip manufacturers, chimney sweeps, blacksmiths, coopers, automobile welders, and so on. In fact, it's only getting worse! Technology accumulates on itself. Pretty soon we'll be able to make anything!

Okay fine, but here's the details that are very important to remember: economies don't run on jobs, they run on the creation and distribution of scarcities. Being able to build your own B-1 bomber in your basement isn't going to make everybody's job go away. Jobs are not about building tangible things. They are about providing something people want. Yes, you might only need a few chefs for each cuisine worldwide in order to manufacture food, but eating is about much more than simply consuming things that have been manufactured. So while the eating experience may evolve, there's no guarantees one way or the other about how chefs fit into the picture. We simply don't know.

I could go on, but you get the gist: those things that involve simple, robotic, manufacturing of goods will commodotize. But that doesn't matter. Making movies cost a millionth as much as it did 100 years ago; it's mostly free. But we still make and distribute movies even though the manufacturing cost is negligible.

Visit a retirement community for rich people. They have most every physical need they could want -- food, goods, services. Yet the economy flourishes. There are social events, artistic events, clubs, contests, etc. People without any physical needs still create and distribute things that are scarce. The economy isn't going anywhere.

Worse yet, the author takes his limited understanding of the world, extrapolates it, then calls for a war on efficiency! Good grief, it's so lame it's almost trolling.

People ask me what I worry about most? It's that we never leave this planet. It's that the millions of people like this who want to war on efficiency, capitalism, science, and technology, finally win. We stagnate. The Great Fizzle.

tansey• 15 years ago

> Good grief, it's so lame it's almost trolling.

Because it is trolling. HN is reading, upvoting, and commenting on an economics essay by someone who studied "Fine Arts" at the "School of Visual Arts" in NY and now works at "CYCLE Interactive" as a designer. The author hand waves about the 80/20 rule as if discussing things using their own common sense is equivalent to mathematical rigor or scientific evidence. It's simply a link-bait headline that evokes a response from a large portion of the users on HN.

Honestly, it's disturbing how many red flags there are in this article and yet it makes the front page of HN.

Everyone's half-baked opinion is not equal. The way I feel every time I watch a movie where a machine spontaneously "comes alive", and then have to listen to people talk about "what if it really happened", must be similar to how economists feel every day. No wonder it's the dismal science.

bestes• 15 years ago

Ignore an idea/essay/whatever because the author doesn't have a college degree in the area?

Jarred• 15 years ago

Genetic Fallacy?

joelthelion• 15 years ago

> Okay fine, but here's the details that are very important to remember: economies don't run on jobs, they run on the creation and distribution of scarcities.

The problem is that are current economy relies on jobs to distribute the wealth. We need a new system, and we need it fast, because things are changing quickly.

protomyth4• 15 years ago

are there actually less jobs than there were 100 years ago?

acgourley• 15 years ago

It sounds like you're implying there will always be waiter, organizer, dancer, and other service jobs with human elements that robots can't do. That seems reasonable, but if there is a huge pool of people willing to do them, wouldn't the supply level depress the wages to below what we consider minimum wage? Unless we lower minimum wage, we'd have massive unemployment. And if we did, we'd have a very poor class of people.

I have a more charitable view of the essay, I don't think he's claiming we should have a war on efficiency, I think he's claiming we need a new structure to our economy that works when you have a massive spread between the rich and poor.

And I think he has a point, if we don't try to get ahead of the curve on this one we'll just end up with our current system with higher progressive taxes using that money on social programs, make-job programs, and bureaucratic jobs that will never go away for lack of budget pressure.

edit: After thinking more, maybe the original author IS implying we should retard efficiency and not just create structural change that copes better. In that case, I think he's misguided.

rndmize3• 15 years ago

> Jobs are not about building tangible things. They are about providing something people want.

For most of the world, I'm pretty sure jobs are about making money to survive. Providing stuff that people want is for entrepreneurs and others willing to take the risk that starting a business entails.

Furthermore, you're mistaken about "simple, robotic manufacturing". Automation extends far beyond that. Pharmacists used to mix medication for people; these days they effectively spend years in school to do nothing more than clerical work, and that's about to be replaced shortly http://www.slate.com/articles/technology/robot_invasion/2011... .

Cashier work at supermarkets, traditionally a starting place for kids in their teens and a fall-back for poor and lower-middle class people that lost their jobs, are rapidly being replaced right now by self-checkout.

More complex tasks, like travel agents, translation services, accountants and others are being displaced by DIY web services and the like. Even extremely complex work like surgery is becoming much more efficient, possible to do remotely, with greater precision, and without assistance.

The point of all this being that efficiency and automation today is not limited to effects on boring manufacturing jobs, but people at all levels of the workforce. And unless we have some way of providing those unemployed people with ways to adapt, or at least survive at a reasonable level if they're no longer needed, there's naturally going to be trouble.

jerf2• 15 years ago

"For most of the world, I'm pretty sure jobs are about making money to survive."

That's the end. The means is to provide something somebody wants. This is, quite profoundly, the purpose of an economy and any economic model that neglects this is forever doomed to produce gibberish.

Why is the classic "paying 5 guys to dig holes and 5 guys to fill them in" not a great way to produce 10 jobs? After all, sometimes we want holes and sometimes we want them filled in. Answer: Because implicit in the formulation is that we aren't putting holes where people want them, or filling in holes people want filled in. It's a waste. On the other hand, put those 10 guys to work digging holes to run a highway through, and now we're talking.

Why is the Broken Window Fallacy a fallacy? Because between the beginning of the story and the end of the story, nobody has any more of what they want, except the glassmaker, who would have been just as happy to put the window pane anywhere else, and it's countered by the loss to the original window owner, which is pure loss, not an economic gain.

Why do third-world people dig through the trash piles? Is it because they're poor and that's just what poor people do? No, it's because it's the best way they seem to have of finding things that people want out of the trash, which they then can sell, because somebody, somewhere, wants it.

The economy doesn't fundamentally break until there no longer exists any needs that can be better filled by someone else rather than yourself, and that's actually a hard world to imagine, in which everybody is equally good at everything and there exist no relative advantages anywhere. The job situation, which is not the same as "the economy", does become dire if there is created some set of people who have no skills whatsoever that someone is willing to pay them for rather than do themselves (with robots, AI, etc). And if you really think about what that means, personally I think we're easily 10 years away from this really being the reason why jobs are disappearing.

It's not efficiency, it's bad economic policy and the 30-year business cycle doing its thing. But the next bad economic business cycle may have this as a real effect.

philwelch2• 15 years ago

> This reminds me of when you first watch the Matrix. If you're young, you spend a while thinking "But it could all just be a simulation!" Until you finally realize that yes, it could all just be a simulation, but it doesn't matter. You grasp the really cool part of the concept -- we all live on computers -- and forget that details and practical implications -- simulated people living in a simulation and real people living in reality aren't really different. So it doesn't matter.

That's the basic premise of what I think is a pretty cool philosophical paper: The Matrix as Metaphysics by David Chalmers. http://consc.net/papers/matrix.html

0x12• 15 years ago

Even crappy articles can lead to interesting discussions.

mark_l_watson• 15 years ago

I love the idea of prohibiting public corporations, but as the author says, that will never happen. If people could still negotiate to buy part of companies, but not have the rapid buy/sell cycles made very easy, then that probably would stabilize things and put more emphasis on long term productivity.

The elite do have a balancing act here: their children and grandchildren need to live in this world so they must somehow balance their greed with maintaining the world in some sort of livable state.

One thing the author left out: we need to rid ourselves of the "religion of constant growth" and concentrate more on the basic quality of life and sustainability. I met for the first time a good friend's adult children last night and we all enjoyed a good but simple meal in my friend's home - "the best things in life are free" may be a cliche, but it is still true.

etz• 15 years ago

it's the trade deficit that threatens the US (and other) economies. Overproduction by one country that refuses to fairly trade with another. China's weath increases should be trickling down to the masses increasing their ability to buy goods that they couldn't afford, either from China's vast supply chain, or other countries. Instead the chinese are buying american treasury notes to keep the money hidden, and keep us paying them forever creating invisible debt, as well as keeping a lid on the changes in society that come with a well fed, and powerful middle class.

herdcall• 15 years ago

The beauty of the capitalistic model is that it is self-correcting without needing intervention like bans and such. E.g., say one person dominates production to the point he makes everything and has no incentive to sell anything, then as far as the rest of the world is concerned, he doesn't exist (or is of no consequence). Meaning, we just have the original situation, except with one less person, and people will have to again figure out how to survive. And new corporations will be born that will become productive themselves.

IMO what will happen in the future (at least what I hope) is that production will become so efficient that regular goods, like food and basic amenities, will become dirt cheap so machines will be doing most of the work and people working more by choice than necessity...and for reasons that are higher up on the Maslow pyramid. E.g., imagine you're so rich that you could supply food to a million starving kids in Africa with little impact on your situation, wouldn't you do it? Different parts of human nature will play out when all our needs are met.

cjy• 15 years ago

Awful article. Others have discredited it well, but I wanted to comment on this plausible assertion that it makes:

"The market cannot accomodate everyone to be the best at something; in fact it is impossible by definition."

Actually, this isn't impossible by definition (think of an island with 100 people), but practically some people aren't the best at anything. That doesn't matter. Everyone has a comparative advantage in something (see Wikipedia for definition). This is because even superstars only have 24 hours in a day. The person who mows our lawns or picks up the trash doesn't do it because they are "best at it" they do it because they have the lowest opportunity cost.

etanol• 15 years ago

I would like to point out some counter-examples:

«Think of journalists. Many are losing their jobs. Newspapers are barely surviving. In the old days, for every news event, there were probably hundreds of journalists writing about the same story for their own local newspapers. Now, because of the efficiency of the Internet and search engines, a few journalists writing about it would suffice for the whole country. People would be able to find them. There is no reason why hundreds of newspapers should write and publish their own versions of the same story.»

And yet, you can still find incompetent people. I've read so many inaccuracies, grammar and typographic mistakes from information professionals (apparently) that makes me wonder if the price to pay for such efficiency is too high. And I'm talking as a consumer, information consumer.

«Corporations are increasingly getting bigger (in terms of market caps), more global, and more powerful, yet they are getting smaller and smaller in terms of the number of people they employ, because they have mastered the art of efficiency.»

Okay, take IKEA for example. IKEA sells furniture and other home accessories world wide, and everywhere you can find the same model. However, how many people do they employ on each store? A hundred? I don't know but I'm under the impression that is not a shrinking number. And IKEA is a particularly good example because it's expansion model is not based on a franchise like fast food restaurants.

Of course, I might not understood the intention of the author.

datasage3• 15 years ago

On your IKEA example, the question is how furniture was produced and sold before IKEA existed and how it is build and sold now.

There are other furniture makers who are out of business because they cannot match the efficiency of IKEA. The argument is that people put out of work because of IKEA is greater than the number of people hired by IKEA. (Provided that the market size does not change)

ericsilver• 15 years ago

With the cost of re-training for new jobs going up, and the value of un-skilled labor going down, there are certainly more and more folks for whom it's more expensive to get a job than any benefit that they'll receive from it.

So there can be lots and lots of stuff, but if you aren't very good at learning, and you don't own capital, the world can become quite unfriendly - even if we've gotten really good at making things and most of us own quite a few digital watches.

gmaslov• 15 years ago

Stanislaw Lem wrote a pointed satire [1] on what might happen when new technology destroys all jobs. I think it's a brilliant distillation of the issues. (Alas, deploying Strong AI to solve the problem doesn't work out so well in this story.)

[1] The Twenty-fourth Voyage: http://www.scribd.com/doc/37246256/Stanislaw-Lem-The-Star-Di... (starts at page 9)

loup-vaillant• 15 years ago

> We need the governments from around the world to intervene in the global economy and make things more inefficient.

What. The. Fuck? Is he seriously proposing we reduce the efficiency of human work? That would be one of the worst solution ever suggested, pure Luddism.

OK, efficiency currently is vastly misused. But at the core, efficiency mostly reduce the need for mandatory work. Even slavers wouldn't relinquish that (they would have to manage more slaves).

Now, if we drive this to the point where no work is mandatory any more, then why should we refuse "communism"? Just split the wealth and be done with it! You don't have to work for it! Want to work anyway? As you wish, but don't think it will entitle you to more wealth (or at least, to deprive others of any wealth).

This is really obvious in hindsight. Just remember that most human labour is a source of suffering that we should get rid of if we can, and that work is a moral obligation only to the extent that it is a need.

jacoblyles• 15 years ago

Or, you know, a business cycle could be killing our jobs. You never see these articles when unemployment is 5%.

rfugger• 15 years ago

Don't resist efficiency, just find a better way to distribute wealth so that people are less driven by fear, creating a more caring society without killing the incentive to innovate. I like the idea of a basic income for all paid for by resource usage fees.

JabavuAdams2• 15 years ago

Why do people need jobs?

They don't. They need water, food, shelter, security, health-care and something to believe in.

The problem is that we're at a stage where people need jobs to survive.

Since my jobs consist mostly of doing whatever I please, I'm perfectly content to let other people not work, as long as we can find a way to do it sustainably, and as long as they don't prevent me from doing what I want.

marris• 15 years ago

Why are we accepting this guy's premise that "equality of wealth" should be a target at all? We could get equality tomorrow if we took most of the stuff that the rich owned and just destroyed it. Does any sane person think that would be a good thing to do?

The fact is that things have gotten better for the some of the POOREST people in the world over the past 50 years. They have benefited from improved meds, better food, cheap telecom, etc. And unless there is some major screwup, things will probably get _better_ for them, not worse. Just compare the unemployed in the US today with the unemployed in the Great Depression. Do we have large herds of unemployed moving out to California to become migrant farm workers? No. Do we have them all turning into servants for the rich? No.

People will not be replaced by robots as long as human+robot is more productive than robots alone. This is true for many jobs today and it will continue to be true for many jobs in the future.

If you think of things on a super-long timescale, then we're eventually going to hit intelligence enhancements. And then things are going to get really exciting.

It’s Not China; It’s Efficiency That Is Killing Our Jobs

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