Yesterday, NPR’s Steve Inskeep interviewed billionaire investor Wilbur Ross who, other than being a billionaire investor, is notable for having been buying stocks during the recent stock panic. Think, conservatives of the Dope: he’s rich! An investor! A rich investor, a billionaire! Surely he understands money matters!
Here’s the part of the interview that you should really find alarming:
Here’s a link to the full interview, I highly recommend it, he has an interesting comment about green technologies and America’s future as well.
So here’s the point, and why we liberals have been spooked for so long: it’s not a matter of industries going from buggy whips to automobiles, people. It’s a matter of industries going from needing employees (that’s us, in case you were wondering) to NOT needing employees. It’s a structural change.
Now Wilbur did not say how industries will do well while their user base is ground into poverty due to not being needed, hence not able to buy the industries’ products or services: I assume growing foreign markets will be where the corporations that are employing fewer and fewer Americans will take up the slack.
Sucks to be us, though. Which seems to be what the big guys in American finance, politics and economics are content with saying: sucks to be you, average Americans.
When will we figure out that corporations while legally persons, are sociopaths?
You left out the part where the Chinese are kicking our (US) ass in job creation in green technologies.
I listened to the interview. Ross is quite accomplished, and he is entitled to his opinion. It does not make his thoughts the only right thoughts, and I didn’t hear the us vs. them left vs. right that you did. I did think what he had to say was thought provoking, but the human race has often been incredibly short sighted, regardless of political affiliation.
But that is the buggy whip phenomenon. Part of the change in going to advanced technology is the requirement for fewer people.
When you call corporations “sociopathic,” I sense a strong flavor of feeling that corporations should be involved in making sure people have jobs, even at the expense of staying with less profitable or more expensive methods or processes.
Er, no. Technological advance in and of itself changes the mix of jobs, but (until recently, if Ross is correct) hasn’t decreased the size of the overall pool (obviously not, as population has increased with only minor fluctuations in the employment rate).
That seems to be one natural conclusion of what Ross is saying, but it doesn’t seem to be what he means.
I read it as corporations have figured out how to keep labor costs low during a recession. After all, it’s not reasonable that workforces across multiple economic sectors can be drastically cut due solely to technology. It tends to hit one industry first.
It’s no secret that people have been less willing to simply leave their jobs and been more willing to take pay cuts or work longer hours in the current economic climate.
So, my reading is that Ross believes this is a cultural shift and people will continue to accept a new norm of lower pay with more hours. Time will tell if he’s correct in his assessment. I rather doubt it, since you can’t substitute capital for a Cadillac parked in a newly built garage, as he seems to believe.
No, you’re not getting it Bricker. “The substitution of capital for labor” means that overall, rich people need less labor to run the corporations that make them rich. It does not matter WHAT kind of corporation it is, what they build, what services they offer, they need less people. They work the people they have harder. Which means overall, fewer jobs for Americans. The buggy whip idea is that when an old technology is lost, a new one will come in to replace it so there will be new jobs. But the trend toward the substitution of capital for labor means no matter what the industry, product or service, fewer people will be needed to produce it. It is not buggy whips that are being phased out. It is jobs. Jobs themselves, get it?
Now if you will recall corporations often like to refer to themselves as important and responsible part of the communities they have factories, stores or whatever located in. And they can be helpful. But they are not human. They do not “care” even if their PR campaigns say they do. They will leave a community, shut down factories, close stores, downsize, lay off, get away with doing whatever environmental damage regulators let them (and bribe Congressmen to pass laws to let them get away with a lot) … whatever it takes to make a profit. They are not human. If they WERE human, as the idiots on the Supreme Court seem to think, they would clearly be sociopaths. We should think about corporations like that: powerful, dangerous sociopaths who can do great good or harm.
Who will found the corporations and what will they use for money? The wealthy elite are rolling in cash, if they want to found a corporation they can found it. They found corporations to exploit economic opportunities, just founding corporations won’t make those opportunities magically appear. And historically, the trend is to replace small businesses with larger businesses: see, Wal-Mart.
Ironically, I’ve seen Sam Stone mention several of these things (the ‘structural change’ bit specifically) in various posts in the past. Of course, I’m sure the OP doesn’t actually read Sam’s posts all the way through and is automatically skeptical of anything he says. And, afaik, Sam isn’t a billionaire seemingly saying what the OP wants to hear on NPR (which automatically makes it gospel).
Corporations are founded to supply demand. The problem is that there is not enough to demand to financially justify forming large numbers of new businesses. It’s not like corporations can just form out of the blue and create millions of jobs.
They’re only going to be created if they see people who are ready, willing, and able to spend money on whatever goods or services the corporation plans to supply.
I don’t think Sam Stone is much of a conservative any more. His thinking has been corrupted by the Dope and possibly, reality itself. Happens! I mean, he still has to come round on several points, but he will, he will … as will you … BWAHAHAHAHAHAHAHAHAHA!!!
What’s new in what he says? The trend since the beginning of industrialization has been to make more with fewer hands, and economic recessions and depressions are good at forcing companies to optimize production further and faster. Meanwhile the West is still facing a coming massiv demographic restructuring, with a shrinking work force. Around here the process is still preparing for this event.
It’s not enough to have a demand. You need people with money to spend on that demand. People with jobs, typically. You know, those things that are being phased out …
The idea is that people will be employed in supplying this demand, and thus will have money to pay for it. Circular as hell, but that’s how it works.
Think about the home computer industry, or the cell phone industry. They’re not like buggy whips being replaced by cars - before they existed, there was no demand for them; now, millions of people are employed making computers and phones, people who can now afford to buy computers and phones.
The essential point of the story is the structural changes, I was pointing out that a billionaire investor was basically saying the same thing liberal economics types on the Dope have been saying for some time. But the central point of the change is that corporations are engaging in a structural change that means there are fewer jobs. I think corporations are amoral, then again, that does not bother me: they are not people. (They should not have the legal advantage of people, not being people, another hijack.) My real concern is that the structural loss of jobs means that things are going to suck for average working folks (and that includes middle class people who ordinarily would hold white collar jobs) for a long time. It’s time to change the game plan, people.
I didn’t hear the interview but I totally agree with the quote. The whole world economy is changing. But my question is, since we have e permanent job shortage why do corporations keep saying they have to import cheap workers from abroad? Whenever they talk about this they make it sound like Americans are lazy or something.