Excellent post, Sam, truly.
Another one of my favorites (and I actually wrote a rant about this to the Port Authority of NY/NJ, but this was before the unfortunate unpleasantness and I haven’t had the stomach to make myself a nag since) is the weird pricing scheme of toll roads. The tolls barely rise during rush hour. Perhaps this is good out where there’s no mass transit alternatives, but in the NYC area there are just huge amounts of mass transit alternatives to driving, that could go a long way towards alleviating the morning rush at least as far as the trans-Hudson crossings are concerned. Given that there are no freight train links into NYC, it becomes, I would think, absolutely imperative to keep the bridges and tunnels going across the Hudson as clear as possible so that freight truck traffic can get through. But the rush hour tolls are maybe a buck higher than normal tolls, hardly enough to affect traffic at all. It’s a classic case of a shortage (the rush hour traffic jams being an expression of that shortage) being engendered by a price that’s way too low for what the market will bear.
Thank you. And your right. I am probably going too far in my objections to the point the I percieve he is trying to make. If I am taking his points too far, then I will express a mia culpa and back off.
However, when he says things like this: “*There is still no distortion of incentives. To put another way, finding a maximum on a curve is a calculus problem. When you find it, all the fixed things drop away and become irrelevant. *” it seems to me that he is saying that taxes have no effect whatsoever on the market.
And I am not talking about 7 or 8%. I’m thinking more like 50% unemployment!
If we try to cut the birthrate to compensate for less work (one child per couple anyone, ala China?), then there won’t be enough younger people to support retirees, who because of technology, are living longer and longer. Maybe this is why Bush has suddenly decided that we need to get back to the Moon and to Mars. We can always send the unemployed there. 
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Isn’t this slightly contradictory? On the one hand you argue that automation has advanced so much that permanet high unemployment has come to stay.On the other hand you argue that because of this there will be too few people employed to support retirees. If indeed it was true that all our needs could be fulfilled by few employees surely their wealthcreation could pay for the retirees?
If the created wealth was being distributed equally, sure. But, as you can see from our current situation, it isn’t. Employees create wealth, earn a fraction of what they create, and the rest goes to the corporations who employ them.
In the US, if you’re not wealthy or employed, you’re toast.
I’ve been hearing the claim that automation was going to kill our jobs for at least 30 years now. In the 1970’s and 1980’s the auto unions fought against automation of auto plants.
Here’s the thing: The only reason we automate is because it makes us more efficient. Becoming more efficient creates wealth. Creating wealth creates new opportunities. The economy grows. New industries spring up, new jobs are created.
If we automated everything so well that every single commodity was made without human intervention, you’d simply see a rise in employment in industries that humans can do and machines can’t. Perhaps one day 90% of our population will be engaged in creating art and making movies. Or something we can’t even imagine yet. But I will offer a bet to anyone willing to take it that ten years from now there will be more jobs than there are today. Fifty years from now, too. The only thing that will kill job creation is a recession or depression. As long as the GDP is growing, new jobs will come along.
Employees by themselves can not create much wealth. Employees partnered with capitalists who built systems to enhance productive efficiency, determine what people need, and efficienty market and distribute it create the real wealth. And for their contribution, the capitalists make profit. There is nothing wrong with this - in fact, it’s necessary and good.
Do you think an auto worker would be worth $40/hr if he made cars by hand? Pounded steeel into shape with a hammer, turned pistons on a lathe by himself, etc? Not a chance. The reason auto workers are highly paid is because each one of them has his or her labor magnified a thousand fold by millions of dollars of capital equipment, and has the product of his or her labor distributed by an efficient system he didn’t have to expend his time and energy creating. Busiiness is a mutually-beneficial collaboration between employees and capitalists. Both gain from the transaction. The old Marxist notion of ‘social surplus’ is twaddle.
So far, sure. But what reassurance can you offer that this will pertain in the future? How much demand is there really going to be for things that can’t be automated? How many different machine-produced products are really necessary?
I’m not saying we should fight against automation, or even outsourcing. I’m saying that these things have consequences which could completely restructure society. I’m saying that the whole point of increasing efficiency in the workplace is to eliminate workers, and not acknowledging that we very well may get so good at it that we won’t need a significant percentage of the labor pool anymore. And I’m saying that nobody has anything more reassuring to offer than “That won’t happen.”
I admire your faith in industry taking care of us all, Sam, but I don’t share it. And right now you seem to be taking a lot on faith.
Which assumes that there will be enough people around with sufficient income to support a nation of filmmakers.
Which is the real question for me, actually. I’d love to not work for a living, and it looks like I’ll soon have the opportunity to do just that. Industry doesn’t need me, and I’m fine with that, as there are things I’d much rather be doing. Writing another novel, for instance. Painting miniatures. Navel gazing. But I can’t very well do those without some source of income, and I don’t get income (at least not after the unemployment runs out) unless I work, and I don’t work if nobody needs me. Which leaves begging for change on a median strip. Not a career option I’m awfully fond of, and not one that leaves an awful lot of time or resources for my creative endeavors.
Soon a lot of people will be in my position; willing, skilled workers in need of work, but for whom work isn’t available. What do we do when that number hits 15%? 20%? 50%? Do we leave them to starve, because we don’t need them anymore? I’m guessing you’re not a big fan of government handouts, Sam, and you know that corporations aren’t going to foot the bill out of the kindness of their hearts. How are these people going to pay their rent, their bills, and keep food on the table without jobs?
Yeah. That’s the bet here, isn’t it? It’s an awfully big wager to make with the social safety nets down.
That would qualify for an official MrVisible “no-duh.”
And all of that goes out the window when they don’t need their employees anymore.
Well, we’ve got to 2088 (at least according to this story):
Wired magazine
Issue 3.03 - Mar 1995
Faded Genes
By Greg Blonder
In 2088, our branch on the tree of life will come crashing down, ending a very modest (if critically acclaimed) run on planet earth. The culprit? Not global warming. Not atomic war. Not flesh-eating bacteria.
Not even too much television. The culprit is the integrated circuit - aided by the surprising power of exponential growth. We will be driven to extinction by a smarter and more adaptable species - the computer. And our only hope is to try and accelerate human evolution with the aid of genetic engineering.
Behind this revolution lies a simple story of exponential change. You hear about exponential curves all the time. Exponential inflation is out of control - running 15 percent, 25 percent, 100 percent a year! Exponential population growth is overwhelming the earth! Yet exponentials don’t seem real - if population growth is out of control, why can I still get a seat on the bus? In fact, humans endure a more or less confined life, far removed from the hurried pace of exponentials. Forty-five Fahrenheit is cold, eighty-five Fahrenheit is warm. Five hundred calories a day, you starve; three thousand, you may grow as fat as a pig. Our lives advance between two narrow signposts, and our minds can’t grasp even the vaguest concept of rapid but predictable change. So how do we know the computers are coming?
Or
How Robots Will Steal Your Job
By Joanna Glasner
02:00 AM Aug. 05, 2003 PT
Listening to Marshall Brain explain the future as he sees it, it’s relatively easy to suspend disbelief and agree how plausible it is that over the next 40 years most of our jobs will be displaced by robots.
After all, it only takes a typical round of errands to reveal how far we’ve come already. From automated gas pumps to bank ATMs to self-service checkout lanes at major retailers, service jobs already are being replaced by machines on a scale of obvious magnitude.
Fast-forward today’s innovations another few decades, and it doesn’t require a great leap of faith to envision how advances in image processing, microprocessor speed and human-motion simulation could lead to the automation of most current low-paying jobs.
Factor in the historical speed of technological advancement in the modern era, epitomized by Moore’s Law of semiconductor power expansion, and it starts to sound like a no-brainer.
At least that’s how Brain (yes, that is his real name) sees things unrolling.
“We aren’t realizing it, but it’s only going to accelerate and magnify as we go forward,” he said, segueing into a lengthier discussion on why job loss due to robotic displacement will be one of the key economic issues facing future generations.
Well, hasn’t it killed some car jobs?
Whoa, Sam. I question the “new industries spring up” line there, as well as what follows.
This is ludicrous reasoning. The “industries that humans can do and machines can’t” are already pretty much full of all the labor they need. Name one that isn’t. Barbers? Actors? Novelists? Do you mean to say that as manufacturing jobs dispappear, demand itself automatically (and conveniently!) expands in industries where automation is impossible?
For someone who understands economics very well, you sure don’t understand economics very well. If people will be free to work in the movie industry in the future in such numbers, the unemployed are just as free to work in it right now. As you well know, you need the pull of DEMAND to effect increases in employment. Increasing merely the SUPPLY of labor (i.e., the fired, layed-off, outsourced, and otherwise “freed”) does not gurantee that there are things for these people to do.
Until now, things have worked rather well: people have been “freed” to work in other industries, and there has been employment for them. But note ALSO that the work week has shrunk by a very large measure (to 40 hours or lower); this required a change in social structure. Even now, I think, we could go to a 4-day week and run the economy at the same pace–IF we are willing to make that social change and spread wealth more evenly.
Sucker’s bet. If I’m selling lemonade in front of my house, I have a “job.” But I might not be very happy about it. Many people are in essentially the same position right now.
Makes no sense. A lack of jobs is one element of a depression, not a result. It’s not as though this abstract thing called a “recession” comes along, and suddenly we stop losing jobs.
Hogwash. Managers make a contribution through leadership. There is no class or sector of people called “capitalists” who by dint of being “capitalists” add value to society.
No joke.
You’re using the terminology incorrectly, and any economist would laugh at this. You need to distinguish between the term “manager” and “capitalist.” A capitalist merely owns something. He or she does not necessarily contribute to the management of business. The terms under which capital is owned and used are social/political constructs and have no direct bearing on how said capital is used to improve efficiency, etc. Also, keep in mind that the term “capitalist” and “capitalism” did not exist at the time of Marx and were not used much until well into the 20th century.
The new divine right of kings … the divine right of money. GWB and his ilk will always do better than us because he has money and we don’t. It’s a “partnership” donchaknow.
It’s important to note how little the wealthy care about the rest of us. One of the most telling points I have encountered was an account of the elegant parties held by wealthy families during the Depression. People starved to death in those days, y’know, and many more were homeless. Meanwhile the Vanderbilts and the Astors were holding dinner parties where the guests got a pail and a shovel. The pail was filled with sand, and in the sand were jewels worth thousands of dollars. The guests got to dig for jewels prior to dinner while people starved in the street.
History shows that if the bulk of the labor force becomes unnecessary, they will be allowed to starve by the wealthy, here in the U.S. as in the Third World. Only countries that have a well-developed tradition of taking care of the whole society, as in European democracies, will the workers have a chance to survive. And as attitudes like Sam’s indicates, the closest we have here is a historically inaccurate, tragically misplaced faith in the generosity of the Invisible Hand.
SS: Here’s the thing: The only reason we automate is because it makes us more efficient. Becoming more efficient creates wealth. Creating wealth creates new opportunities. The economy grows. New industries spring up, new jobs are created.
Again, this is a “no-duh” in a simplistic (but still useful) sketch of economic theory. Nobody’s denying that markets can work this way, to the undoubted benefit of all. We’re just pointing out that there can be market failures and other complicating factors that mean that sometimes markets don’t work this way.
I repeat: if what we’re currently seeing is just a phase of a standard well-understood process of higher productivity leading to wealth creation leading to more jobs, then why has the Administration been so wildly off in predicting its progress? They’ve been telling us for over a year now that we were soon going to see two or three hundred thousand new jobs per month, which simply hasn’t happened. Are they just pulling the wool over our eyes, or is there something new going on here that they (and perhaps you) aren’t taking into account?
For example, in the current recovery there is an unprecedented divergence between wages and profits, as James Tasini recently pointed out:
*As long as the GDP is growing, new jobs will come along. *
When? And will there be enough of them of sufficiently high quality to provide decent livings? If you know the answers to those questions, then why doesn’t the Bush Administration seem to know them? If you don’t know the answers, then why should we trust your advice on economic policy?
It is not enough just to repeat platitudes about the general principles of how markets work. What we’re considering here is the possibility of some fundamentally different conditions that may permanently distort the market patterns that over the past sixty years we’ve come to consider “normal”. Your reiterated general descriptions of what these “normal” market patterns look like aren’t really doing anything to address that possibility.
But you aren’t. You are complaining that the market might not work this way in the future. And you are pointing out that in certain ways the market is not working this way right now. What sort of thing do you think is happening that is so different from other market fluctuations?
Perhaps because they are policitally motivated to over estimate future jobs. Perhaps because the economy is so complicated that the formula which worked quite accurately last year isn’t so accurate this year. And maybe, just maybe, simply because they just got it wrong.
Finally, I’d like to ask, what sort of assurances do you want? Do you need to know exactly which jobs will be developed in the future before you believe they will be developed? How precise does a prediction of future growth need to be before you believe the growth is occuring?
I’m in agreement. I think they did get it wrong, precisely because they’re proceeding from the same unfounded assumptions you are, which is why you are getting it wrong.
I can’t speak for Kimstu but I can speak for myself – I think free traders are making extraordinary claims when they say that outsourcing American jobs to a labor pool of 2 billion (China+India) very, very poor people is not going to have a radical, and from the point of view of the would-be employed, unfortunate consequence for the job market. By the standards of the U.S., China and India constitute vrey nearly bottomless labor markets. It’s going to take a LONG time for things to equalize. And somehow, I don’t know how families losing so much income that they’re reduced to living in one-room apartments and eating nothing but a large bowl of rice every day, will constitute a benefit. I see it more as a huge, fucking disaster for average Americans.
So, how about some extraordinary proofs for your extraordinary claims? It’s pretty much the standard, y’know.
But none of the free traders are claiming this. We are simply claiming that it will not be as bad as the issolationists claim it will be. Namely that it will not lead to the end of life as we know it. 
Yes, and from the standards of the day, the Irish imigrants constituted a very nearly bottomless labor pool. By the standards of the day, the newly freed blacks constituted a very nearly bottomless labor market. By the standards of the day, (I can’t think of a third example, can anyone out there help?).
The point is that this claim has been made many times before and each and every time the doom predictions have utterly failed to come true. In fact, the market expanded every time instead making everyone richer.
Given that it has never worked this way for very long or for very many people, I’d ask that you follow you own advice.
Quite. But it is your side of the argument that is claiming something fundamentally different about this business cycle. Therefore it is your side of the argument that needs to provide extraordinary proofs.
I would like to add, that for my part history stands as an extraordinary proof that this current economic situation is neither unprecidented nor catastrophic. Look back a little farther than 20 years, and you will find innumerable examples of downturns which wer far worse than what we suffered a few years ago. As you go back in history, you’ll also notice that each and every time the market corrected for them. Certainly this is not proof that the market will correct this time, but I’m not betting that the sun will not come up either.
The problem is that you appear to be ignoring all current evidence to the contrary and resting your hopes on what has happened in the past. If you recall a few years back, it was exactly this reliance on what had gone before that got a lot of people in trouble when they kept believing that the Nasdaq would hit 10k and the DOW 30k. Also, equating human economy theory to whether the sun rises in the morning is quite the stretch. This isn’t even like comparing apples to oranges. It’s more like comparing apples to a piece of steak. I think all anyone is asking from you is some clear predictions on what technologies/industries seem poised right now to rise. What will have the capacity to not only employ the people currently out of work, but will also be able to grow enough to employ new people coming into the country and new people displaced from old jobs. Please provide some evidence or cites to back up any assertions you make.
Saying that “something” magical will happen because it happened in the past is exactly what we are arguing against here.
No, you have this exactly backwards. It was the people willing to ignore history who insisted that the 90s was some sort of “new” economy and that the old cycle of boom and bust did not apply anymore. Many people willing to examine historical precedents knew that the dot com bubble was just that. A bubble. Like all the other bubbles in the most important ways.
How precise do you need it? That’s what I asked before.
Well, now let’s be sure we are talking about the same thing. The economy will certainly produce more jobs in the future, the question will be what those jobs require. Are we talking about numbers, or types of jobs? What I am asking is whether or not jobs which might be quite unlike previous jobs would satisfy you. Some of the posters seem to have additional restrictions. Did I remember you suggesting that you are only interested in San Francisco area jobs? Or am I misreading you.
Escept that no one is claiming that anything magical happened in the past. You are characterizing it that way, but that is not even close to what anyone is claiming. The claim is that extra unemployment acts as extra supply of labor. This extra supply will effect demand for labor at some point. Its not magic, and it is similar to the rising of the sun in that it is a fundemental law of nature.
Bah, trying to debate with you is an exercise in frustration! Instead of always trying to find ways to dance around the questions presented and/or play semantic games, for once, I’d like to see a straight and clear response, if not to the exact question, then to the spirit of the question. You aren’t in sales or politics, are you? If you’re looking for a new career path, you should give these areas some consideration. :rolleyes:
I don’t believe used the technical term “yadda”.
That’s unfortunate.
Forgive me, but then you have to ask sensible question. Asking what job am I going to have in 10 years is not one of them. 
No, actually. Those fields are too perverted for me.
However, I recognize the intense amounts of talent involved in those careers, so I take that as a compliment. Thanks.
Now, in the spirit of debate, let me ask, is this the question you were refering to?
“I think all anyone is asking from you is some clear predictions on what technologies/industries seem poised right now to rise.”
If so, how about answering my question, how clear do you need it to be? Will you need names and phone numbers? Or will general trends do?
In the mean time, you might try browsing through the BLS “Occupation” section. It contains a lot of information about recent trends and projections on a large variety of jobs and industries.
Posing never ending qualification questions is not an answer.
It was either here or in one of the similar threads that I replied to you directly regarding the same question and using your favorite bogus reference - The BLS site itself. To wit:
Link
Service-providing industries. The long-term shift from goods-producing to service-providing employment is expected to continue. Service-providing industries are expected to account for approximately 20.8 million of the 21.6 million new wage and salary jobs generated over the 2002-12 period
Do the simple math and you’ll discover that the BLS itself is forecasting that 96.3% of ALL NEW JOBS created through 2012 will be service level jobs.
And didn’t you say you were “bowing” out of this thread a while back?