WHY do you think communism is better?

One day, somebody will construct a Von Neuyman machine – an artificially intelligent universal replicating device. Whatever person or entity builds the first Von Neuyman machine will be able to produce anything and everything at virtually no cost. (Don’t forget that a Von Neuyman machine can construct other Von Neuyman machines.)

First off this is not a von Neumann machine. The standard computer is much like the von Neumann machine. What is described above is probably better described as artificial intelligence.

As to the costless assertion above, that is just plain false. So suddenly you have increased your labor pool. Big deal. It will still require resources to construct one of the above machines. Since you will be using these resources to construct the machine you cannot use them to construct something else. You will still have opportunity costs. Further, labor is only one input that goes into the production of most commodities and services.

Just because you have invented a machine that can do some work for you does not suspend the laws of economics. This has not happened with the age of the telephone, the automobile, the computer nor the internet, despite the moronic predictions of some people with regards to these devices.

Thank you, sven, for giving the question a shot.

**Why do you think that living in a communist system would be better than another system (say capitalism for example)? **

Well, it depends upon the capitalism. If unemployment is at 20% and rising, all income support is run by impovered localities and everybody seems to be getting poorer by the month, then central planning can look pretty attractive. That is, seen from the perspective of the US in February 1933, Communism doesn’t look too bad.

Of course, we would have to compare the more benevolent strains of communism to the harshest laissez faire systems of capitalism in order to prefer the former. Meaning, let’s set aside Stalin and Mao and focus on the slow-growth world of Kruschev (sp) and Breznhev.

Another comparison might be between Hungary in 1975 vs. parts of Latin America during the same time period. (The latter had death squads).

And Cuba arguably received a pretty good deal under Communism before the Wall fell. Any system that can extract huge subsidies from a foreign power has its attractions. And Cuba did a fair job of spreading the mana around, notwithstanding the decline in (say) restaurant quality.

*That is, seen from the perspective of the US in February 1933, Communism doesn’t look too bad. *

However, lets not forget that it was government that helped bring us the Great Depression. The Federal Reserve reacted badly to the stock market crash and the contraction of the money supply (an internal drain), and the Congress did not help things with the Smoot-Hawley tariff.

And Cuba arguably received a pretty good deal under Communism before the Wall fell. Any system that can extract huge subsidies from a foreign power has its attractions. And Cuba did a fair job of spreading the mana around, notwithstanding the decline in (say) restaurant quality.

But in the end somebody always has to pay, and when the Soviets went belly up the tap was turned off for Cuba. So if your a small fish this might look good, but if your a large country who is going to supply these subsidies?

Communism is a horrid system because it destroys any incentive to produce. Its underlying principle is

“To each according to their need, and from each according to their ability.”

Sounds just peachy, but the problem is how does one determine both need and ability. I suppose you could come up with a minimal diet for existance, the barest minimum of shelter, and so forth. But ability is the real kicker.

“So tell us, how many widgets can you produce in an hour? And please don’t lie, this is for the Central Planning Council and we just need to know or else we can’t make a plan.”

You’ll find this problem in the economics literature, it goes by various names. Moral Hazard, Principal Agent, Adverse Selection. The basic gist is that I know something you don’t and I don’t have any incentive to tell you the truth. In the economics literature the problem is solved by revelation mechanisms (you offer a price, wage, etc.) that induce the person with the information to reveal it.

Sure I am a good worker.
Sure I am a safe driver.
Trust me.

You could make contracts on this. Produce so much or you wont get your food, shelter, or something. But then we aren’t talking capitalism anymore know are we? Not only that these things are incredibly complex. Why should we have the government do these things when individuals are willing to do them in the market place.

Is it good for something? Yeah, confusing young college students who depend on Mom and Dad for everything…kind of like a micro version of communism.

According to Paul David (?), who has taken a look at the numbers, Smoot-Hawley had little to do with the US Great Depression, largely because trade was such a small share of the economy.

Of course, the tarriffs didn’t help.

I agree that the government made policy errors. Both monetary and fiscal policy were too tight.* Then again, a general model of the economy didn’t exist until 1936, so at least they have an excuse.

Implicitly, I was noting that Keynesian Economics (and what came afterward) along with various safety nets (eg unemployment insurance and other automatic stabilizers) removed much of the attraction of central planning.

Cuba: agreed (& no kidding).

Another problem with Communism is creating incentives for responsible maintanance of capital goods. Or incentives for innovation/initiative. Put another way, how do we choose who is going to stay up with Bessie the cow when she has a cold?

I might note though that large corporations face some of the same asymmetric control problems as the Soviet Union did. Which is to suggest that the problems with the Soviet system may be more varied than you suggest. (Although this topic is rather beside the point right now.)

I might also note that the Soviets maintained a higher standard of living than much of the third world. So I wouldn’t say that Communism didn’t work per se. It just didn’t work particularly well.

  • And NIRA was a disaster.

I agree that the government made policy errors. Both monetary and fiscal policy were too tight. Then again, a general model of the economy didn’t exist until 1936, so at least they have an excuse. *

What are you talking about there was the classical model. I believe it was David Hume who came up with the Quantity Theory of Money. The Federal Reserve failed to act as a lender of last resort.

Look at the stock market collapse in the 80s. The Federal Reserves actions were quite different.

Communism as practiced in the “Real World”, i.e. not the fantasies many like to talk about on college campuses and elsewhere, were anything but. It wasn’t:

“Tell us how many widgets you make so we can make an accurate plan.”

It was more like:

“Tell us how many widgets you make, and if you lie to us we’ll be back to shoot you, your family, and just for good measure, your neighbors as well.”

Needless to say, people probably low balled the numbers.

I can normally make 10 an hour…so I’ll say 4. This way, I can even look good if I occassionaly make 5 and still have lots of room to spare!

“I should be able to make 4 an hour, Mr. Central Planner, sir.”

So yeah you got 4 widgets, sometimes 5. But ideally you could have gotten 10. Definitely inefficient.

Since there is disconnect between what you can do and what you need there is no reason not to lie. They don’t know you can make 10, so telling them 4 is a great strategy. Just make sure you look real busy while making those 4.

First off, it is you who are incorrect. The term “Von Neumann machine” has more than one common meaning, and the meaning I have used it for is proper.

Frank J. Tipler, We are Alone in Our Galaxy, New Scientist, Oct. 7, 1982, available at http://www.fortfreedom.org/s21.htm

http://www.wikipedia.com/wiki/Von+Neumann+machine

I agree that goods and services created by Von Nuemann machines will not be absolutely free. In fact, if you read my previous post, you will see that I alluded to that possibility.

But goods and services would obviously be much much cheaper. Enough so that it would be feasible for the government to give them away. In any event, absolutely free goods and services are not a necessary pre-condition for communism to work.

Well, I submit that the development of Von Neumann machines will radically change the world economy. Consider that the world economy is, for the most part, based on the scarcity of labor. Even when you buy stuff that’s dug out of the ground, you are mainly paying the cost of hiring people to dig it up. Throw in machine labor that comes at (virtually) no marginal cost, and you’re in for some big changes.

As for suspending the law of economics, that’s not really necessary, because the real question is, what political system is proper. Just as certain inventions made constitutional democracy workable, Von Neumann machines will make communism workable.

luc: “Well, you haven’t really contradicted my main point - that if (when?) we get to the point where goods and services can be churned out with (virtually?) no marginal cost, there’s no reason why the government should not take over the means of production and hand stuff out.”

lucwarm, you may be speaking from a pragmatic rather than utopian position: that is, you may be saying that such a technological bonanza would be well-suited to government intervention. So let me say from the start that I’m not weighing in on that debate at this moment.

What I do want to address is that you’ve conceded to aspects of Sam’s position that are antithetical to the underlying spirit, and much of the detail, of Karl Marx’s thought. Maybe that was intentional as there after, after all, different communist viewpoints. But let’s, for the moment focus on Marx.

Marx didn’t see the problem of industrial capitalism as being centered on the scarcity of goods (Sam’s key assumption). As a result, he didn’t see the primary goal of communism as redistribution.

Marx saw the problem of industrial capitalism as being the alienation of labor. He believed (as I said in another recent thread devoted to Marx) that humans are by nature producers and that it is in their very being to want to add the impress of their labor to the world. Labor is made onerous, he believed, because under the capitalist system people are alienated from the product of their labor (through division of labor and through the commodification both of labor, of products, of exchange and therefore of all social relations), and, in addition, they are alienated from the “surplus” of their labor–which becomes the capitalist’s profit. (I took a crack at explaining this in the Marx thread if this seems a little abstract as I’ve just stated it).

None of this had anything to do with scarcity. Indeed, the scarcity model is a conservative myth. It’s useful for conservatives because it allows them to posit a view of human nature in which we are all destined inevitably to compete with one another for scarce resources like many animals do (unless technology frees us from this destiny in the manner posited by lucwarm).

However, there is in actuality no major problem with scarcity on our planet, and certainly no scarcity in ultra-prosperous countries like the United States and Canada. The planet offers us the resources for people not only to survive, but to thrive. What do people need? Food, shelter, comparionship, a decent natural environment and, beyond that, education, leisure and the arts. What do people (at least conventionally in Western societies) desire: happiness, freedom, autonomy, self-development. The resources to provide people with the former already exist. The tricky question in prosperous countries is how to make sure that the fulfillment of needs becomes the fulfillment of desires.

Here’s the rub though: as an economic and cultural system, capitalism doesn’t want people to have their desires fulfilled. Indeed, “scarcity” is and must be the illusion of a capitalist economy, which can’t operate without the desire for more and more consumption.

For an example: think about what happened after 9/11. People became too concerned with issues of mortality and safety to be interested in buying stuff. Did they cease to eat or drive or go to work: to do what’s required for comfortable subsistence? No. They ceased to shop; they ceased, for a short while, to be responsive to advertising; they watched less TV or different kinds of TV.

And then they were exhorted to shop till they dropped in order to be patriots. This is a huge subject one important transition in which was the post-World War II/cold war era when government and other powerful institutions began, in concerted fashion, to exhort Americans to be mega-consumers rather than thrifty savers. In today’s capitalist economy, much more so than in Marx’s time, the system depends upon each and every one of us wanting the latest version of the gizmo/gadget; a closet full of up-to-the-minute clothes to replace the still quite wearable ones we bought six months ago, etc.

Now Sam paints the picture of a poor person as being heaven in comparison to past ages. As a matter of fact, that’s a major distortion (and shows that Sam knows very little about the actual material life of poor people). Most poor people, including the working poor, lack decent healthcare and have very lousy access to education. Although their healthcare and education may indeed be better than those of a medieval serf, and although their working conditions are likely to be much less harsh than that of either a nineteenth-century factory worker (or a third-world factory worker today), these kinds of comparisons are not very meaningful since the goals that matter most to people–happiness, freedom, autonomy, self-development–are developed within a web of social relations.

So, yeah, if books don’t exist then naturally the “rich” head of a feudal clan has even less access to them than an impoverished child in the South Bronx. But–to return to my main point of difference–neither one of these people lacks access to books because of scarcity. One lacks them because civilization hasn’t reached the level of print technology; the other lacks them because he or she is part of a web of social relations that his doomed him or her to grow up without the skills and resources that are needed to seek after happiness, freedom, autonomy and self-development in the early 21st century.

I don’t want to go on forever or to quibble with you, lucwarm. Most nineteenth-century thinkers–including Marx–assumed that self-development was crucial to human nature; that without development people became something less than human. Therefore work of some kind (intellectual, manual, artistic) would be sought out as the fulfillment of one’s nature: each according to his/her ability if were able to work well. Socialism, as Oscar Wilde wrote at the end of the nineteenth century (although he didn’t have Marx especially in mind), would allow people to complete themselves as personalities. Distribution of “stuff” was not really on their minds. They thought much more about what people would be able to do to cultivate their minds, bodies their social relations if they didn’t have to live under grueling conditions of labor.

Now actually mssmith is a better example of what Marx’s thought can add to our understanding of our lives than is that of a hypothetical poor person. Although the poor person is very likely to lack the healthcare and education to seek effectively after happiness, freedom, autonomy and self-development, mssmith does not lack these things.

And yet, ironically, mssmith is (in my limited experience of him) one of the most “alienated” of posters on this board.

ms, before I say another word on this vein, as I am eager not offend you in any way: I don’t know if you read the Karl Marx thread (I’ll post a link if you like). But you were the person I was referring to at the end when I said that there were posters here on the SDMB whose posts suggested that earning $300k/year wasn’t sufficient to allow one to develop one’s full humanity. If you want me to elaborate I will, but I’d like to know first if you’d read that thread.

By the way, here here a short column countering the view of the poor I addressed above.

Also, sorry, msmith for misspelling your name throughout my last.

Also, I ought to have added that much of what I said was implicit in even sven’s thoughts on happiness.

And, finally, I should added this proviso: I’m not pro-communist (in sense of favoring activist politics with a view towards collectivizing wealth and the means of production and placing it under state management). My position, rather, is that Marxist thought (and also that of many Marx-influenced thinkers of various kinds) is crucial to understanding society as it is and might be. I believe that collectivization of various kinds has been and remains necessary to effective democracy and humanist notions of the good (freedom, self-development and the like) and any position that ignores that fact (as neo-liberal and some conservative positions typically do) does so as its peril. But I don’t think that capitalism need be or, at present, should be (or can be) abolished.

I assume by “alienated” in the context of this thread, you mean alienated from the actual product of my labor (because there are A LOT of people on this board who seem pretty alienated from reality). If that is the case, you are correct. Like many people in business related service industries (consulting, finance, accounting, law, etc) I am very detatched from the actual results of my labor (which mostly consists of analysis, reports and presentations). I don’t really have a sense of “producing” anything, other than “synergy”. In general, crunching numbers is not particularly satisfying. You don’t get a sense of “I built this” or a “big win” that you get in some other professions. It’s mostly just an endless toil of pushing paper and ideas. Even when a project ends successfully, usually all you have to show for it are a lot of frequent flier miles and a 2" document that sits on a CEOs bookcase for 20 years. The only advantage I see over a factory worker is better pay and better conditions.

As for relating it to Marxism or communism, I fail to see how Marxism would improve the lot of the the average worker. Assuming that the Marxist society can provide the same level of material comfort, I doubt it would provide a higher level of “spiritual” comfort or self-fullfillment. People would still hold the same positions (accountant, factory worker, truck driver). They would still have to answer to some higher authority who directs how their labor is utilized. And their work would seem just as detatched as it was under capitalism or any other system in an industrialized/high tech economy.

So in other words, I think that people would still feel like a worker ant under a communist system, there would just be one hive instead of many.

I remember vaguely reading the $300k part. If you could post the link, that would be great. There are a lot of Communist/Marxist threads out there.

I’m getting hungry so I’ll check it out sometime after lunch.

msmith, yes, that’s the kind of “alienation” that I meant. More of a response to this later after you have a chance to take a look at this thread. About midway through page one, after I’m saying stuff about Adam Smith, I say “Here’s an example of where Marx is invaluable…” Comparing my paraphrase of your position, which was from memory, to what you’ve written above, there my be a difference in degree though not, I think, in kind. Of course, you may disagree.

*But goods and services would obviously be much much cheaper. Enough so that it would be feasible for the government to give them away. In any event, absolutely free goods and services are not a necessary pre-condition for communism to work. *

We have seen these predictions with “fantastic discoveries/inventions” in the past. Hell, the most recent was the dotcom bust and the implosion of the New Economy.

“Processors are what is driving the economy!!”

Was the frantic cry. Then the Old Economy woke up and gave this New Economy an ass whuppin.

However, the effect on the price of goods is highly questionable. Computers were given a similar reputation. Yet, the massive burst of productivity has not been seen.

The thing is people don’t necessarily want to do more work…even with the same effort. If I can have more leisure time, and still maintain the same standard of living I might very well decide to take the leisure time.

Enough so that it would be feasible for the government to give them away.

TANSTAAFL: There Ain’t No Such Thing As A Free Lunch.

Somebody will still have to pay for them. But since the government is giving them away for free why work (i.e. do the things these AI robots are not doing)?

In any event, absolutely free goods and services are not a necessary pre-condition for communism to work.

I never indicated that it was a pre-condition. What I would consider a necessary condition is that humans learn to get rid of self-interest. However, I doubt that is an evolutionary stable outcome. In short, your just S.O.L.

Well, I submit that the development of Von Neumann machines will radically change the world economy.

As I noted the very same things have been said about the car, the telephone, the computer, and the internet. I seriously doubt this. The same basic laws will hold. At best instead of being constrained by human labor (and other constraints) the new constraint will be human labor plus AI labor.

Consider that the world economy is, for the most part, based on the scarcity of labor. Even when you buy stuff that’s dug out of the ground, you are mainly paying the cost of hiring people to dig it up.

Ahhh, yes. The old Labor Theory of Value. It boggled the minds of many great economists. Adam Smith and David Ricardo to name a couple. Karl Marx bought the notion hook, line and sinker. Fortunately Alfred Marshall completely killed (intellectually speaking) that idea. Now only those who read Das Kapital or other communist works cling to it. The price of a good is determined by the demand for the good and the supply of that good. While labor is one component that goes into the determination of costs, it is not the only one and the relationship is not one-to-one.

Throw in machine labor that comes at (virtually) no marginal cost, and you’re in for some big changes.

The marginal cost of the next machine is exactly what it costs to produce that machine. Since this is not zero the marginal cost is strictly positive. Actually a more interesting quesion, IMO, is whether or not these machines would qualify as life forms and be considered labor, or as machines and therefore capital.

As for suspending the law of economics, that’s not really necessary, because the real question is, what political system is proper. Just as certain inventions made constitutional democracy workable, Von Neumann machines will make communism workable.

No they wont. The same problems will still exist. The disconnect between incentives and rewards.

Consider these factors.

So long as you have a finite number of von Neumann Machines (VNMs) you will have opportunity costs. Whatever task you set them too means there are other tasks that they cannot be set to. If you want them to grow wheat then they cannot grow barely, corn, oranges, or build a bridge, a road, or houses.

As noted before, whatever resources you utilize to create a single VNM, those resources cannot be used elsewhere. This is also an opportunity cost. It is a realy cost. If you could use the resources to make a medical machine or a VNM if you make the VNM it logically follows you cannot make the medical machine with the same resources.

Since at any given time resources are finite, the laws of economics and scarcity will dominate and communism is doomed to failure (at best it will lead to a tyrannical form of government).

And I personally don’t find that a proper political system.

Did anyone seriously predict that dotcoms would replace human labor?

Come on!!

Anyway, history also shows that fantasy can become reality. People tried to build flying machines for centuries. Then one day, it actually happened.

**

Sounds good to me.
**

Sure, most of the population will not have to work. I imagine that some jobs, such as legislative positions and judgeships, will not be delegated.

**

Well, I argued that communism could work after the invention of Von Neumann machines, and you argued (at some length) that even with Von Nuemann machines, nothing would be absolutely free.

Of course, we both know that you were just pushing down a straw man, but I decided to take your argument at face value.
**

Why?

**

Well, will you concede that (1) AI labor could replace most human labor (2) the marginal cost of AI labor would be significantly less than that of human labor; and (3) it follows from (1) and (2) that most people will not need to work?

Well, let’s get into specifics . . . let’s suppose you buy a car for $20,000. How much of that $20,000 is going towards salaries and wages? How much is going towards other things? What are those other things?

Or, if you think I’ve somehow “cooked the books” by choosing a complicated manufactured item, let’s pick something else . . . a ton of coal; or a $5000 operation at the hospital.

You haven’t contradicted my point that the cost is very small.

**

No, you could first tell your VNM to construct enough other VNM’s to get the job done reasonably quickly.

Again, the cost is very low.
**

Look, the argument you make could be made about the air we breath. There’s only a finite supply, right? And it’s treated as a collective resource, right? (not even government-owned, actually) So are we doomed? Should we privatize the atmosphere before it’s too late?

Mandelstam said:

Oh, man, I hate having to do the old Monty Python “We had it tough when we were young” shtick, but I can’t count how many times people have assumed that I’m unacquainted with poverty simply because I oppose a large welfare state.

For the record, I grew up poor. VERY poor. I was raised by a single mother, in a tiny apartment, and on a poor farm where we didn’t even have indoor plumbing or heat until I was 12. My mom was too proud to accept social assistance of any kind, so even though we lived in a ‘welfare’ neighborhood, we never took it. As a result, we were probably the poorest family even in our welfare neighborhood.

The fact is that even the worst public health care today is orders of magnitude better than what even kings had available to them a couple of hundred years ago. Even the poorest welfare families have creature comforts much greater than even kings had a few hundred years ago.

As for education, it wasn’t that long ago that the vast majority of people got no education at all, and what they did get was usually severely lacking in teaching aids. You know, like books and paper. My mother went to a one-room school in Saskatchewan, which had exactly one teacher who had to teach every subject. Needless to say, I’m sure there were areas that the teacher wasn’t exactly an expert in. My grandmother went to that same one-room school. My grandfather had to leave school after grade 8 to work on the farm, as they could no longer afford to have him away during the day.

This isn’t that long ago - my grandparents were in grade school in the 1910’s - 1920’s, and my mother in the 1940’s - 1950’s.

Before that, only a small percentage of people even got an education. A high school diploma was a rarity.

My point was not that the poor should be happy, but exactly the opposite. The fact is, poor people don’t feel like kings, because the bar of expectations has been raised by a phenomenal amount. We judge ourselves by our peers. That was the essence of my point, which you apparently missed, Mandelstam. In other words, if Von Neumann devices caused our GDP to grow by a factor of 20, we’d still have ‘poor’ people who would be phenomenally wealthy by today’s standards but would still consider themselves poor, simply because they don’t have as much as everyone around them.

*Did anyone seriously predict that dotcoms would replace human labor?

Come on!! *

Yeah some of the more wild eyed claims were not too far off. “It is the number of processors not the number of people that matter.”

*Anyway, history also shows that fantasy can become reality. People tried to build flying machines for centuries. Then one day, it actually happened. *

I am not saying we wont have something like this, but that you are, given historical evidence, seriously overestimating the impact they will have.

Well, I argued that communism could work after the invention of Von Neumann machines, and you argued (at some length) that even with Von Nuemann machines, nothing would be absolutely free.

Correct, but that does not mean I have agreed or disagreed with your pre-condition.

*Of course, we both know that you were just pushing down a straw man, but I decided to take your argument at face value. *

You did say costless. If costs are zero, it follows that marginal cost is zero. Now unless you view every market as being characterized as a monopoly prices will tend towards zero (in the long run).

What I would consider a necessary condition is that humans learn to get rid of self-interest.

Why?

When faced with a labor/leisure decision that is disconnected from my standard of living (i.e. my consumption is independent of how much work I do) then the choice is trivially obvious. I do nothing and push my consumption out as far as possible.

Since most goods are not public goods (i.e. if I eat an apple you can’t eat it too). This means that everybody is going to want more than is avialable.

*Well, will you concede that (1) AI labor could replace most human labor (2) the marginal cost of AI labor would be significantly less than that of human labor; and (3) it follows from (1) and (2) that most people will not need to work? *

Except that there is absolutely no empirical support for this position and lots against it. The same thing could be said for computers, telephones, cars, and other major technological break throughs. Also, I have not conceded that AI could replace most human labor, it could probably replace some. As for the cost of AI labor, please point to where I said it was cheaper. It might even be more costly.

So your logic is resting on a mire of fallacies, IMO.

Well, let’s get into specifics . . . let’s suppose you buy a car for $20,000. How much of that $20,000 is going towards salaries and wages? How much is going towards other things? What are those other things?

Don’t know and don’t care. The point is that the price isn’t just a function of labor. You could spend decades working on a car, but if nobody wants it, it might as well be worthless. The price is a function of the demand and the supply. It is in the costs underlying the supply function that the labor elements are found. There are also capital costs, as well as entrepenurial skill. The other half of the equation is demand. How much do people want it. If the demand is zero I don’t care what your cost structure is, the price will be zero.

The value is the useful ness that the item brings the consumer. If I put value on it of $25,000 and pay only $20,000 then I will buy it and be better off.

You haven’t contradicted my point that the cost is very small.

Because you have not point. You have only an assertion that may or maynot be true.

*No, you could first tell your VNM to construct enough other VNM’s to get the job done reasonably quickly. *

Not if you have finite resources. You can only make so many. Further, every machine you make means that other people will have to have less. Stop thinking of these as a production version of a perpetual motion machine.

If you assume away finite resources, well Hell that solves everybody’s problems right there.

Look, the argument you make could be made about the air we breath. There’s only a finite supply, right? And it’s treated as a collective resource, right? (not even government-owned, actually) So are we doomed? Should we privatize the atmosphere before it’s too late?

Ahhh yes, but currently there are not enough people to use up all the air in a single breath. When we start to get close to that point, I’ll begin to worry.

kesagiri: “Ahhh, yes. The old Labor Theory of Value. It boggled the minds of many great economists. Adam Smith and David Ricardo to name a couple. Karl Marx bought the notion hook, line and sinker. Fortunately Alfred Marshall completely killed (intellectually speaking) that idea. Now only those who read Das Kapital or other communist works cling to it. The price of a good is determined by the demand for the good and the supply of that good. While labor is one component that goes into the determination of costs, it is not the only one and the relationship is not one-to-one.”

kesagiri, would you mind telling where Alfred Marshall criticized the labor theory of value. I am aware that the Fabians didn’t accept it; but I know that Marshall was not a Fabian–and I’d be curious in any case.

That said, it’s worth noting that Marx wasn’t talking about the derivation of price pure and simple. He was talking about value and, in so doing, distinguishing between use value and exchange value. Price only corresponds to one of these: exchange value. Marx was concerned to recuperate use value. I have never come across a critique of the labor theory of value that was able to answer to this distinction satisfactorily (on the other hand, I haven’t looked exhaustively either).

lucwarm, I’m not sure whether you missed my post on the bottom of p.1 or simply wish to to pass over it. Either is fine with me…

Sam: “But I can’t count how many times people have assumed that I’m unacquainted with poverty simply because I oppose a large welfare state.”

I made no such assumption Sam since you weren’t writing about your opposition to a large welfare state. Rather, what you wrote about the condition of poor people today was–and remains–sufficient to suggest to me that you lack a basic understanding of their typical material condition. For various reasons–including especially lack of decent health care and education–many if not most are disadvantaged in terms of their ability to seek after the things that people in Western societies typically desire: happiness, autonomy, freedom and self-development. Does that strike you as implausible?

“For the record, I grew up poor. VERY poor.”

Well if it isn’t Josiah Bounderby :wink:

Actually, I remember from the last time you brought this up. And you’ve been very successful. Congratulations, Sam.

I mean that sincerely.

But I think if you check you’ll find that upward mobility such as yours, at least in the United States (I know almost nothing about Canada), is unusual. There are, of course, exceptions.

“The fact is that even the worst public health care today is orders of magnitude better than what even kings had available to them a couple of hundred years ago.”

Actually, I doubt that very much. If we were to check the mortality rates and other relative statistics I think we’d find that this would entirely depend on the nature of the illness in question. On purely technological grounds, treatment of certain illnesses is bound to be better under “even the worst public health care” than where no effective treatment existed. OTOH, the general health of kings 200 years ago was undoubtedly much better than that of those living today who depend on “the worst public health care.”

More to the point, however, it is irrelvant to what I said about the web of social relations.

“Even the poorest welfare families have creature comforts much greater than even kings had a few hundred years ago.”

Gosh, Sam, if you’re trying to argue that there have been technological and material advances in the last 200 years you don’t have to reach for such ludicrous examples. A few hundred years ago the king of France was living in Versailles! Have you ever checked out the creature comforts in that place?

“As for education, it wasn’t that long ago that the vast majority of people got no education at all…”

Exactly Sam. And those were also the days when there was a lot of need for unskilled labor. We live in a service economy now. And that is precisely why anyone who seeks to get out of poverty requires educational opportunities beyond what many poor children today can get.

“We judge ourselves by our peers. That was the essence of my point, which you apparently missed, Mandelstam.”

No, actually you missed my point.

You were saying that because of scarcity the human condition would always entail a divisive struggle over goods no matter how great the improvement in the condition of the poorest.

Conservatives love to say this since it justifies their, um, conservatism.

I was disputing the existence of scarcity (as you defined it), and the consequent implications about the human condition. It was only by-the-by that I felt compelled to remark that your description of the poor lacked a basic understanding.

At the risk of boring fellow Dopers let me repeat my point: **many if not most poor people lack what is required to seek effectively after happiness, freedom, autonomy and self-development. **

My other point was much like even sven’s: beyond a certain basic level, people don’t tend to get these cherished ends from more purchasing power. I take that to be implicit in what msmith has said and it has also, as sven said, been shown by many studies.

If you want to dispute that statement, go right ahead.

Reference, please.

**

IMHO, AI would be unprecedented. And for the record, I never made a similar prediction about the internet.

**

Here’s what I said:

I clearly allowed for the possibility of small marginal costs, and yet you repeatedly chose to ignore me.

I wonder why . . . :rolleyes:

I can trivially show that your reasoning fails: The amount of air that people are permitted to breath is independant of how much work they do. Yet, few (if any) people go around hyperventilating to use up as much air as possible.

Specifically, what human labor could not be replaced by AI?

Please point to where I said that you said that AI labor is cheaper.
**

If the cost of labor drops dramatically, the cost of a car will drop dramatically, all things being equal. Why won’t you concede this obvious point?

See, this is the essence of my argument. There’s enough air out there that (for now) we can ignore the fact that there’s a finite amount. The same is true of resources in the world I envision.


Anyway, I’m tired of debating these issues with you. When you are done nitpicking, pushing down straw men and spouting irrelevant platitudes, let me know, ok? (No need to answer any of the above questions)

Pardon if I jump in (and not refer to many posts), but I’m new here ;). I’ve had experience in these debates at other forums.

There is no benefit to hording air… unless it becomes scarce. Then you’ll see people having tons of people trying to horde it (like Spaceballs ;)).

Most resources in this world are scarce, that is why people attempt to horde it. They want enough so that they can continue having it… other people be damned. Humans might not be evil, but they can be damned selfish at times :D.

[q]Well, let’s get into specifics . . . let’s suppose you buy a car for $20,000. How much of that $20,000 is going towards salaries and wages? How much is going towards other things? What are those other things?[/q]

That does depend on how much labor and capital are being used. The other things are, of course, capital costs (rate of return for capital) and depreciation. Also there is some there for profit, which is usually reinvested into R&D.


Now, I won’t get too far into the debate (it is almost 4 in the morning here ;)), but it is my belief that while communism is a noble goal, it falls short in practicality. When technology is so advanced that human labor is obsolete, then I can see a form of socialism being successful. However, before that, we have to take into account of the human self-interest and that when someone works and earns pay based on the attributes of supply and demand, he considers that pay to be his property. This is where communism fails, I think. Humans want property, they want their own things, we like being materialists in short :D. Until human labor is not needed, this materialism can only be advanced by capitalism, which fuels technological process… which means more toys :D.

What do you mean when you say “scarce”? After all, there’s only a finite amount of breathable air.

My point is that technology may advance to the point where goods and services can be as free as the air we breathe. Resources will be “scarce” in the sense that there will still only be a finite amount. But they will not be “scarce” in the sense that you seem to be using the word. i.e. there will be such an abundance that we can treat them like the air we breath.

**

Again, what do you mean by “scarce.”

**

Again, it seems clear to me that if labor costs drop dramatically, the cost of a car will drop dramatically too, all things being equal. Note that if there is switch to AI-supported communism, capital costs too will pretty much go out the door. The government will be able to produce stuff and give it away.

Agree.

So was the airplane. the radio, the cotton gin and the wheel. technological advances only allow you to do more. They don’t allow you to do everything at once.

75% of the Earth is covered by water. You still pay a water bill, don’t you. The reason is part of the cost of any item includes distribution. You have to get your product from you Van Neumann machine to where the products are actually used. They don’t do anyone any good if they just keep piling up in the Van Neumann factory.

Love…
…Ok just kidding. Since we don’t know anything about the capabilities of AI there is no point discussing it.

Historically, advances in technology free up people to do diferent kinds of work. Since a backhoe can replace 100 ditch diggers, those ditch diggers can go do other things and increase the overall productivity of society. AI would do the same. It wouldn’t replace all human labor, it would replace the more mundane stuff that people don’t want to do.

Don’t forget to take into account the cost of capital. Just because I have a $200,000 backhoe does not mean that I will automatically replace 100 workers. If I live in a capital-poor country where cheap labor is plentiful, I may be better off just hiring laborers to do the same job. Why would AI be any diferent? If it is expensive, I may not want to replace all my managers with thinking computers. I may not even be able to use AI for jobs that require leadership or creativity.

Well that’s what you get for bringing things like Van Nuemann machines and AI labor into a serious political/economic discussion.

AI labor might make a dent, but not as much as you’d think. Most western economies have already moved away much of their industry and manufacture, and are increasingly dominated by service jobs. Lawyers, doctors, teachers, computer programmers, cab drivers, restaraunt workers, etc. Some of that might be replaced by AI, but not nearly as much as you’d think.

As for cars, the labor component of a car’s price isn’t that high any more. Cars are built on highly automated assembly lines. I believe just the raw material cost in most cars is around $3000-$10,000. Then there’s the cost of the factory, the price of capital, the cost of management and distribution and shipping… The cost of maintaining dealerships, demo vehicles, advertising, and finally profit. And not as much profit as you’d think, either. American business as a whole only has a profit margin of about 3%. Some businesses do better than that (GE is at something like 18%), while many, many more go out of business.

If we had von Neumann machines to build things for us, someone would still have to ship the products around, design them, program the machines, repair things, dispose of them when they are useless, etc. The ore still has to be mined and smelted. The raw materials still have to be produced.

We WILL get wealthier. MUCH wealthier. A compounded growth rate of even 2-3% means that our great grandchildren will live in a world so wealthy we can’t imagine it today. But that means very little in terms of how best to organize society, because the same basic forces will still be at play.

What I expect to happen will be a continuation of the same trends we’ve seen since the start of the industrial revolution. The work week will get shorter, the value of services will increase, and the expectations of the population as a whole will grow.

On the other hand, we have another problem coming, which is that the work force is shrinking. In 30 years, retired people will make up the bulk of the population. That may be another trend of wealth - people having fewer children, leading to a type of population where the work force is small and heavily taxed to support a very large retired population. So even if we become wealthier, all that may translate into is more and more people who don’t work at all. Drop the average retirement age to 55 and extend the human life by 20 years, and you’ll have a situation where the average person spends only a fraction of his life actually producing things. We’ll spend the first 25 years being educated, the next 30 years working, and then 50 years after that in retirement. You need a lot of wealth to sustain that.