December 10th, 2013, 2:10 pm
QuoteOriginally posted by: exneratunriskQuoteOriginally posted by: Traden4AlphaQuoteOriginally posted by: gardener3QuoteOriginally posted by: exneratunriskNo, free trade is not the problem - the problem is capital accumulation by fixed market occupation. The solution is not protectionism and regulation, but progressive taxes and an unconditional basic income (citizen income) ...I think managing this well will be key. Someone doing deliveries for the past 20 years won't put on a lab coat (in your example) and start developing next generation of delivery drones. As consumption becomes less material, capital productivity increases and labor productivity becomes highly concentrated at the top, wealth distribution will become severe and there won't be enough demand to get the economy working. One solution is to reduce work hours as productivity increases. Keynes had the idea that generation's grandchildren would be enjoying 15 hr workweeks, which never materialized. It's difficult to do.Reducing the workweek (whilst holding annual salaries constant) doesn't make labour more valuable, only more expensive. Moreover, although some people might choose to work a modest X/2 hours per week, they will always have a lower standard of living than people that decide to work X per week by taking two jobs, working off the clock, or choosing self-employment (which combines the two strategies ).To a first approximation it comes down to: what can person_i accomplish in one hour that motivates person_j to work a hour so they can have person_i's output or services? That's just an approximation: person_j may need to work 1.5 hours to get 1 hour worth of after-tax earnings; or something might take N hours labour to produce but be worth M hours to consumers (creating wage disparities).One major challenge in today's world is the rise of hyper-productive labour in which one person might spend one hour creating a digital good that motivates one thousand or one million people to give one hour of wages for that good (e.g., sports stars, best selling authors, etc.). Rising inequality may say more about fundamental changes in the structure of consumption and fundamental changes in the structure of production, than class warfare ideologies. It's not the rich making the rich richer, it's the poor making the rich richer by choosing products and services dominated by winner-take-all competition.The analysis is correct, but the conclusion seems a little unfair. "We" (at least here) have sermonized the "dignity of slavery work" (the left) and withhold real education for the masses (the conservatives) and now wonder how stupid they are as workers, consumers, "infotainment recipients", ....But, IMO, we cannot deny that new technology developments will make human work less and polarized (the "Nobel laureates" and and the salt mine workers )? The reason, IMO, is not so much Kurzweil's "Singularity", but the fractal model of development. In classical automation there was a trade off between purpose/automation width and depth - but flexible systems (with higher level of domain engineering) are capable of automating wide and deep. In sw it is symbolic, domain specific programming .... 3 clever people can now do things for that I needed 100 for, 25 years ago. And the results replace another 100 at the user side.Agreed!Perhaps one key issue is that all these new technologies dramatically increase the productivity of the creators -- more people can invent more things, see them produced, and find customers for them than ever before. But the only way to make a exponential increase in the variety products also be economically sustainable (for the creators) is through free trade. The "long tail" by which a few products reach super-star status and most products sell in pathetically low volumes would seem to create a ghetto for most creators. If I create a product that 99.999% of people don't want because of long tail effects (but a niche 0.001% do), then I'll sell only 810 copies if I'm confined to selling in Germany due to trade protectionism. But I'll sell 70,000 copies if I have access to a world market.(P.S. Product (and service) differentiation is a huge missing factor in the "free trade is bad" narrative. Some domestic production -- usually at the higher-end of the value-scale -- will survive and make the economy larger (e.g., France manufactures luxury goods). Economic models that assume a fixed pie of money and a fixed portfolio of products are simply and dangerously wrong.)