Oh noes! We’re being replaced by machines!

by Chris Bertram on March 7, 2011

Paul Krugman is worried that lots of jobs will be replaced by machines in the near future. What will all those people do!? Brad DeLong thinks there’ll still be plenty of jobs, but massive income inequality. Some of Brad’s commenters think that the reserve army of unemployed will take up prostitution on a large scale. Oh dear.

Allow me to suggest a third possibility. Instead of mass unemployment or horrendous inequality, technological improvement could reduce the time people spend working to meet their needs and give them more free time. Free time that they could use for other purposes (such as their all-round human development) . The Jerry Cohen video that I posted the other week centres on this very point. For more discussion see ch.11 of Karl Marx’s Theory of History , which, I now see, furnished much of the script for that talk. Of course, if you take “free markets”, extensive private property and the domination of the political system by money (so that you can’t do much about the first two) as givens, then the third possibility will appear impossible or utopian. So you’d have to be an incompetent idiot to mention it, wouldn’t you?

{ 192 comments }

1

dsquared 03.07.11 at 11:52 am

Some of Brad’s commenters think that the reserve army of unemployed will take up prostitution on a large scale

Strange, as I would have thought that was precisely the kind of routine, repetitive manual task that would be ideal for mechanisation given sufficiently sophisticated robots. I am given to understand that there is quite a substantial literature on the subject in the “science fiction” section of the bookshop, next to the vampire books.

2

dsquared 03.07.11 at 11:55 am

I actually think that the problem will be dealt with by requiring more and more qualifications for every job (perhaps inventing some additional levels beyond PhD), so that in the USA, middle class children go to school and university, then spend twenty years in “graduate school”, nine years doing internships and then five years’ work before early retirement.

3

ajay 03.07.11 at 12:04 pm

Allow me to suggest a third possibility. Instead of mass unemployment or horrendous inequality, technological improvement could reduce the time people spend working to meet their needs and give them more free time. Free time that they could use for other purposes (such as their all-round human development) .

Apparently, it already has.
http://eh.net/encyclopedia/article/whaples.work.hours.us

But may I suggest that you and Krugman appear to be talking about two different problems? If a machine can help you do your job more efficiently, it may well allow you to scale back your work hours and/or increase your income, depending on your personal preferences. If you’re a tailor and you get a sewing machine, then you could make twice as many suits a week (and get twice as much money) or you could get your current workload dealt with by Wednesday lunchtime and take the rest of the week off to learn the cello, or somewhere in between those two. This is the situation you’re talking about, I think – and it’s what has actually been happening, if those figures are correct.

But if a machine _alone_ can do your job more efficiently than you can, then you won’t be able to do that: you’ll be out of a job. Inventing automatic telephone exchanges doesn’t mean that you have lots of part-time telephone operators learning the cello. It means you have lots of unemployed telephone operators. This, I think, is what Krugman is talking about.

I think that you may be misreading DeLong: he doesn’t say anything about income inequality or what it’ll do in the future. What he does say is: “the high salary occupations in the future will be those that manage to construct and maintain barriers to entry to entrench incumbents”, which is slightly different. Mechanising some industries actually did a lot of good for the human workers there: a coal miner in the 1890s was a man with a pick. A coal miner in the 1980s was a highly skilled industrial worker who oversaw the operation of large amounts of complicated and expensive machinery, and he got paid accordingly.

4

ajay 03.07.11 at 12:06 pm

Agree with 2. This means good times for anyone in the business of creating and overseeing the barriers to entry and monitoring who is allowed through them. AKA “academics”.

5

Chris Bertram 03.07.11 at 12:10 pm

_I think that you may be misreading DeLong: he doesn’t say anything about income inequality or what it’ll do in the future._

Um, I’d hate to misread him, but his final para does begin:

_What is of interest is the effect of all of this on the wage distribution._

So I take it that the rest of the para is intended to address that point. It finishes with the following point about Oprah Winfrey:

_and she is just the tip of the spear of the winner-take-all sector in which social network barriers to entry appear to loom large that now consumes such a large share of total income in our society_

6

Hidari 03.07.11 at 12:13 pm

#1 and#2

Much work has already been done to deal with the problem of the employment prospects of the over-educated. For example, what about “self-important newspaper columnist”, regurgitating semi-understood gobbets of semi-digested factoids gained via skimming through (and then quickly googling) whatever happens to be ‘trending’ on Twitter? This is a job that didn’t exist 50 years ago, and which no one asked to be created, for the good reason that the ‘product’ of this trade was something no one wants or needs. Nor does it require any skills or abilities to be a ‘columnist’ which hasn’t stopped it being almost exclusively the preserve of the white middle classes.

But the moral of the story is: don’t discount the capacity of capitalism to simply create whole new swathes of meaningless employment for the sons and daughters of the bourgeoisie, and then creating equally meaningless ‘qualifications’ which price these (pointless, but well paid) jobs out of the grasp of the proletarian hordes. Cf, advertising, management consultancy, most ‘research’, most work in ‘think tanks’ etc. etc. etc. In a de-industrialised country like the UK, most work is already simply the intellectual equivalent of digging a hole and then filling it in again.

It’s grossly unfair, incidentally, to compare people who work in these kinds of jobs with sexworkers: whatever else one might think of them, prostitutes satisfy real human needs: not an accusation that anyone is going to be leveling at Brad DeLong anytime soon.

7

ajay 03.07.11 at 12:15 pm

Yes, agreed, he says it’ll be interesting to see what effect it will have on the wage distribution, and the rest of the para says “and here are the factors that I think will be important in determining this: labour supply and barriers to entry; in the recent past education has been the main barrier to entry, but social network barriers are also important”.
But then he stops; he doesn’t say “and therefore I think that income inequality is going to be massive”. He leaves that question unanswered, I think (and wisely).

8

Chris Bertram 03.07.11 at 12:16 pm

ajay:

_Apparently, it already has._

But not, in the US, since about the mid 1970s, where the number of hours worked has been steadily rising.

_According to government survey data, the average working person was putting in 180 more hours of work in 2006 than he or she was in 1979 … Married couples aged twenty-five to fifty-four with children were on the job 413 more hours than in 1979._ Juliet Schor, _Plenitude_ p. 105.

9

Chris Bertram 03.07.11 at 12:21 pm

ajay: Sorry, but I can’t find any way of reading that final para that doesn’t lead to the conclusion that Brad DeLong believes that the US of the future will be a massively unequal society (as it is today).

10

ajay 03.07.11 at 12:28 pm

in the US, since about the mid 1970s, where the number of hours worked has been steadily rising.

Really? OECD has average annual hours worked per worker at 1,768 for the US in 2009, the lowest it’s been since 1950 (which is as far back as I can get it to go). In 1975 it was 1,839 hours.
As for the quote you give, the OECD figures are 1,829 for 1979 and 1,802 hours for 2006.

http://stats.oecd.org/Index.aspx?DatasetCode=ANHRS

The same seems to be true more or less across the OECD – 2009 was either the lowest or close to the lowest, and the general trend is down everywhere.

11

Matt 03.07.11 at 12:30 pm

From Brad’s comments:

One obvious such skill (for some fraction of the population) is sex, and I would not be surprised to see over the remainder of my life-time, sex work becoming a more mainstream issue, with all the politics that entails — more people “forced” into that industry means lower prices, anger and attempts to keep out the competition through “licensing”, etc etc.

In the 90′s in Russia there were polls purporting to find that the most desired jobs among high-school students and recent graduates were “hard currency prostitute” (reasonably, no one wanted to be a Ruble prostitute) and “mafia hit-man”. I always assumed that this was at least a bit of a put-on by kids, but maybe this is where the future lies.

12

Platonist 03.07.11 at 12:30 pm

“Of course, if you take “free markets”, extensive private property and the domination of the political system by money (so that you can’t do much about the first two) as givens…”

What? Are you suggesting there is someone who would _not_ take these as givens? Who are they, and why not? Where do you see signs of hope that this will change in the near future–not counting, of course, the total collapse of our economy, the breakup of the U.S. into civil war, and the decline of the civilization into to Mad Max thunderdome country. In which case, our new-found free time will surely not be used for “human development.” Cannibalism, yes, development, not so much.

13

Chris Bertram 03.07.11 at 12:32 pm

@10 Schor’s numbers come from Mishel, Bernstein and Schierholz, _The State of Working America, 2008/2009_ Economic Policy Institute.

14

Anonymoose 03.07.11 at 12:40 pm

The third possibility is dependent on the independence of utility functions (as in Von Neumann–Morgenstern rationality). This is not the case.

15

Fabien 03.07.11 at 12:41 pm

To be fair if you really believe in ““free markets”, extensive private property” and neo-classical economics in general, it seems to me that you shouldn’t be thinking that machines will replace labour since capital and labour are not the same thing.

As you said, it is a very marxist idea to believe that machines will replace us so I have trouble seeing on what Krugman bases its reasoning. And am I the only one that think that this idea that highly-educated people are much more productive than other is a bit exaggerated ? Speaking as someone who is “highly-educated” I suspect that the point of this education was much more to create for yourself a social network than anything else (let alone learn technical skills since we mostly learn them during our first job).

16

ajay 03.07.11 at 12:48 pm

13: Then Schor appears to have misquoted the EPI report. Here’s a link to the latest “State of Working America”:
http://www.stateofworkingamerica.org/charts/view/110

1979: 1,829 hours worked. 2007: 1,798 hours worked.
Unsurprisingly, since it draws from the OECD data. The BLS agrees.
ftp://ftp.bls.gov/pub/suppl/empsit.ceseeb2.txt

And this could have been better phrased for UK readers:

Married couples aged twenty-five to fifty-four with children were on the job 413 more hours than in 1979

…Well, that’s obviously one option for what to do with your free time.

17

djw 03.07.11 at 12:51 pm

I’ve run into this issue before: Schor, citing what seems to be a reasonably authoritative data source, showing the number of hours worked on the rise, whereas other seemingly authoritative data sources show the opposite. Anyone who has a good handle on this sort out what’s going on? Are there some fundamental differences is measurement strategies that can explain this?

18

djw 03.07.11 at 12:54 pm

Cross-posted; thanks ajay.

19

dsquared 03.07.11 at 1:08 pm

I suspect that changes in the population will have made a difference – the labour force participation rate has gone up from just under 60% to around 65% over the same period. Viz, if in 1970 I was working 40 hours a week and Mrs D was out of the labour force, then if by 2005 she has joined the labour force working 25 hours a week, then I could be working a lot more (and obviously so would she) and the average gone down. I don’t know if that’s what’s going on in the US statistics but it might be.

Also, average commute times have increased somewhat over the period; this isn’t recorded as work but it’s not exactly leisure either. Probably not a big enough effect to change the aggregate picture, but I doubt it’s wholly insignificant.

20

dsquared 03.07.11 at 1:17 pm

And yes, here we are I think:

http://www.stateofworkingamerica.org/charts/view/128

(note also this is for married couples with children – ie, not by any means the whole story when it comes to the labour market, but not a politically or socially unimportant demographic slice)

21

Chris Bertram 03.07.11 at 1:42 pm

OK here’s the google books link to the table in Mishel et al from which Schor has derived those figures.

That is, the figures supporting:

_According to government survey data, the average working person was putting in 180 more hours of work in 2006 than he or she was in 1979_

22

Chris Brooke 03.07.11 at 1:52 pm

James Meade, Efficiency, Equality, and the Ownership of Property (1964) is fun on this kind of thing (as well as being an important source for John Rawls, who openly takes his notion of a ‘property-owning democracy’ from Meade).

[One of the benefits of the property-owning democracy, Meade suggests, curiously, is that those who act in plays and take part in sports will 'no longer be degraded as the poor sycophants of immoderately rich patrons'.]

23

Phil 03.07.11 at 1:53 pm

Back in the 1970s, when The Computer was still something that was going to happen to the world of work, I remember quite respectable futurologists talking about nobody needing to work more than three days a week, everyone being able to work from home, etc.

Over the last 15 years, as it happens, I very often haven’t worked more than three days a week, a lot of which I’ve done from home. But I’ve also been insecurely employed and chronically under-employed, with intervals of no work at all – which is the real answer to the question of what all those people will do. So I guess everybody’s right (apart from the sex work guy).

24

Tim Worstall 03.07.11 at 1:54 pm

On working hours: sorry, but the EPI (and almost everyone else) relies upon market/paid working hours way too much.

There are four sets of time. Personal time (you can’t get someone else to eat, sleep or wash for you), leisure time, household production hours and market production hours.

One of the stories of the century just gone is the way that mechanisation (ie, the machines are doing it all for us) had cut, hugely, the number of household production hours required. Some of this reduction turns up in rising female market hours and the rest in very large increases in leisure hours for both men and women.

So we have an example of what happens when technological progress makes human labour unnecessary: people take more leisure.

There’s another part of this debate which I’ve never really understood (cue various stating so what’s new with Worstall not understanding something?).

If everything’s being made by machines, including machines making the machines, then everything becomes extraordinarily cheap. We might even be able to say that that long awaited day of communism has dawned, a surplus of everything. In which case, really, who is worried by the distribution of income when every physical good and most services (there will always be positional goods and services of course) is as cheap as chips?

I just don’t get the worry about human labour being made technologically obsolescent. If what was formerly made by human labour is now made by machines, can’t we all be farmers in the morning, philosphers in the afternoon and musicians at night? (I’m sure I’ve butchered that part of Marx ….)

As to commercial sex getting cheaper: everyone forgotten their Baumol? The ultimate in services is going to be priced according to the average productivity of labour isn’t it?

25

Charlie 03.07.11 at 1:55 pm

I have a pet theory about status inequality, rejection of modernity and working hours. The greater the status inequality in a society, the less capacity an employee has to resist arbitrariness in employer demands. Work is at high risk of rejection. Simple (modernist) labour-reducing designs are disfavoured: complex designs requiring many hours of craft labour are demanded. All of which amounts to digging a hole and filling it in again, even if real human needs are served somewhere along the way. Exhibit A. Exhibit B. In the fantasies, this stuff will all be done by robots. In reality, it’ll be done by humans.

26

JulesLt 03.07.11 at 2:07 pm

The funny thing is that back in the late 70s/early 80s there was a lot of ‘the robots are coming’ hype with the idea that manufacturing jobs would be replaced largely by robots. And of course, that Japan was going to dominated the global economy.

As it turned out, workers in developing nations were a lot cheaper than robots – and I expect that to remain the case until capital runs out of any cheaper stable locations to move.

The really big question is whether the supranational elite are going to be pulled back down to earth, in much the same way as the European aristocracy. You can only ignore the needs of the population you live amongst for so long.

27

ajay 03.07.11 at 2:08 pm

18: ah ha, that makes sense. The numbers are average hours per worker, so if people (ie women) are moving into the workforce as part-timers then that would bring the numbers down.

20: ah, OK. That’s based on the monthly BLS current population survey. But that table doesn’t back up Schor either. Schor said “According to government survey data, the average working person was putting in 180 more hours of work in 2006 than he or she was in 1979″. That table shows an increase from 38.8 hours per week to 39.8 hours per week. One more hour per week. That’s only 52 more hours a year, not 180.

Incidentally, the latest figure is Feb 2011, which is 38 hours per week.
http://www.bls.gov/cps/lfcharacteristics.htm#hours

And here’s a page that’ll give you a CPS time series graph going back to 1967:
http://data.bls.gov/pdq/SurveyOutputServlet

“Steady increase” isn’t really the story there. There was a sharp drop in the 70s, then a rise again, and since then it’s been steady or falling.

28

Chris Bertram 03.07.11 at 2:11 pm

Ajay: the numbers in the table I just linked to are

1979: 1703 hours p.a
2006: 1883 hours p.a

= an increase of 180 as Schor says.

29

bianca steele 03.07.11 at 2:12 pm

I don’t think the rise in hours worked with increasing automation is paradoxical. With computerization, you need fewer bookkeepers and fewer low grade accountants. (You need more data entry clerks, who earn lower pay.) But when something out of the ordinary comes up, or some task requires face to face contact, you don’t have an office full people who might have an hour or two free and might be interested in being promoted someday. Everyone’s already working as hard as they can. (Also, they’re presumably skimping on IT costs and training for non-IT personnel, too, so people are wasting days doing things like upgrading software.)

As for the Cohen video (and half-seriously), why shouldn’t we conclude that people ought to use their free time to work even harder in order to bring about socialism?

30

bianca steele 03.07.11 at 2:15 pm

Of course, with the Singularity, all the thinking will be done by digital brains in vats and the peons will just know what has to be done.

31

dsquared 03.07.11 at 2:15 pm

That table shows an increase from 38.8 hours per week to 39.8 hours per week. One more hour per week. That’s only 52 more hours a year, not 180

The number of weeks worked per year also rises (I am not at all sure that I understand this table, but this might reflect a diminution in paid holiday??) – the 180hrs increase comes from subtracting 1703 from 1883 in the fifth column.

32

ajay 03.07.11 at 2:15 pm

As it turned out, workers in developing nations were a lot cheaper than robots – and I expect that to remain the case until capital runs out of any cheaper stable locations to move.

This isn’t entirely true: there are 1,300,000 robots working in industry at the moment. And one of the best areas to be selling industrial robots is, in fact, in emerging markets – China, Taiwan, Indonesia, India. This wouldn’t be the case if they could employ cheaper human workers instead.
The story is more to do with the technological limits on what industrial robots can do, rather than the economic limits on their employment.

33

Chris Bertram 03.07.11 at 2:15 pm

_That table shows an increase from 38.8 hours per week to 39.8 hours per week. One more hour per week. That’s only 52 more hours a year, not 180._

Is that because you’ve failed to note that the total number of weeks worked also increases from 43.8 to 47.3 over the same period?

34

dsquared 03.07.11 at 2:20 pm

Looking at it, in fact, the “hours per week” series is practically trendless – all of the increase has come in “weeks per year”.

35

dsquared 03.07.11 at 2:21 pm

And I think that the Bernstein & Mishel table must definitely be for a subset of the BLS labour force, as an average 47.3 weeks work/year doesn’t leave much room at all for any part time employment.

36

Kieran Healy 03.07.11 at 2:26 pm

I actually think that the problem will be dealt with by requiring more and more qualifications for every job (perhaps inventing some additional levels beyond PhD)

Habilitations for all!

37

F. Blair 03.07.11 at 2:28 pm

“Is that because you’ve failed to note that the total number of weeks worked also increases from 43.8 to 47.3 over the same period?”

But the magnitude of that increase should tell you that something’s screwy about the number — the average American worker obviously hasn’t lost 3.5 weeks of vacation time since 1979.

38

ajay 03.07.11 at 2:30 pm

31, 33: ack. Good point, I failed to note that. Sorry.

a) I am now puzzled by what that change represents. It surely can’t be paid holiday: US workers don’t get four weeks of holiday now and they certainly didn’t get eight weeks back in 1973. Is this representing people leaving or entering the workforce part way through the year? As in, I was unemployed at the start of the year and got a job in February, therefore weeks worked =46 out of 52? Did the average worker in 1973 really spend almost two months of the year out of work?

b) I am also puzzled why the BLS annual hours figures that I cited in 16 show a clear decline and the CPS figures (also from the BLS!) show an equally clear increase over exactly the same period.

c) as 24 points out, social shifts make this whole exercise somewhat futile, because it counts only paid employment outside the home, and assumes that time spent (eg) washing clothes by hand is “free time”.

39

Chris Bertram 03.07.11 at 2:31 pm

_I actually think that the problem will be dealt with by requiring more and more qualifications for every job (perhaps inventing some additional levels beyond PhD)_

The effect of that, even more than is the case at present, would be to force professional women to put off childbearing until an age where their fertility would start to become a problem. (Or, alternatively, to force them out of careers paying substantial premiums if they want to have children at all.) This is already a major problem in academia and all the more so in Germany (as Kieran points out) because of the Habilitation thing.

40

Chris Bertram 03.07.11 at 2:37 pm

Ajay: interesting as these statistical sub-dispute is, the numbers you originally linked to show that the US working week has hovered somewhere around the 40 hour mark since about the 1930s! So there’s been massive technological progress and little extra leisure (except for the very important caveat about female domestic labour). The bias of capitalism for output over leisure is pretty plain here.

And 40 hours in a _job_ (as opposed to a the self-realizing career of, say, an academic) is just far too much (imho).

41

SamChevre 03.07.11 at 2:44 pm

It’s worth noting that the US work week has stayed around 40 hours, but I’m fairly certain that average years spent working has gone down (and certain that proportion of lifetime spent working has gone down.)

I would incline to say that it’s a sub-optimal distribution of leisure, but much of the increase in non-working time has been in later career starts and longer retirements.

42

chris 03.07.11 at 2:46 pm

If you’re a tailor and you get a sewing machine, then you could make twice as many suits a week (and get twice as much money) or you could get your current workload dealt with by Wednesday lunchtime and take the rest of the week off to learn the cello, or somewhere in between those two. This is the situation you’re talking about, I think – and it’s what has actually been happening, if those figures are correct.

But if a machine alone can do your job more efficiently than you can, then you won’t be able to do that: you’ll be out of a job. Inventing automatic telephone exchanges doesn’t mean that you have lots of part-time telephone operators learning the cello. It means you have lots of unemployed telephone operators. This, I think, is what Krugman is talking about.

I don’t think these two scenarios are actually that different. Suppose, instead of the tailors owning their own machines, someone else (let’s call him a capitalist) employs ten tailors. Sewing machines come on the market; they’re expensive, but because of the productivity increase, in the long term more efficient than the labor-intensive way.

Then the capitalist wants the most efficient solution: instead of ten tailors working part-time, who would need ten machines that sit idle while the tailors are at cello practice, the capitalist wants three tailors each to work full-time (in shifts) on just one machine (to keep down costs), and lays off the other seven. Of course he doesn’t offer them a raise, even though their productivity has tripled — the three that stay on are lucky to be staying on at all, any of the other seven would be happy to take their place rather than go learn a completely new trade. (Machine assisted tailoring is a *partly* new trade, but I’m assuming that skilled tailors have some advantage at it — otherwise they’re even worse off, you might as well lay off all ten and hire three new unskilled workers at minimum wage, if you’re going to have to train them anyway. Or stick to the old ways until you are put out of business by a new startup with a smaller labor force, which is economically equivalent.)

Unless there’s a social institution to prevent him from instituting that solution, that is what he will do, and since it is the most efficient, it will win in market competition too (i.e. a rival worker-owned company that keeps on all ten of its tailors part-time and has multiple machines so they can all work convenient hours can’t compete on quality and/or price while also paying a decent wage to all of its members).

Or, in short, if three human workers time-sharing a machine can outproduce ten workers without machines, that’s bad news for seven out of ten workers, and with the resulting slackness in the labor market, the other three will be lucky just to tread water. And in any case at least 70% of the human capital represented by the skilled tailors has become worthless surplus overnight (100% if you assume it doesn’t carry over to make them more skilled at machine-assisted tailoring).

43

Henri Vieuxtemps 03.07.11 at 2:49 pm

And 40 hours in a job (as opposed to a the self-realizing career of, say, an academic) is just far too much (imho).

It used to be, but in the age of the internet and blog comment threads it’s now tolerable for anyone with a PC under their desk.

44

ajay 03.07.11 at 2:50 pm

40: I don’t think you should be using the weekly hours worked figures as a basis for comparison, because that ignores changes in the number of weeks worked, as your namesake pointed out in 33.
Annual hours worked seem to have fallen in every OECD country by between 10% and 20% since the 1960s. There’s a steady drop in every one of them.
I think this is a fairly important statistic.

But leaving statistics aside: do you see the distinction I was trying to make in 3? You’re arguing that technological advancement will make everybody more productive in their jobs. Krugman and DeLong are pointing out that in fact it will also make some people obsolete and these two outcomes are not equivalent in anything except the very basic “total hours worked” sense.

45

Sandwichman 03.07.11 at 2:51 pm

“So you’d have to be an incompetent idiot to mention it, wouldn’t you?”

Or you’d have to be obsessed to investigate the validity of the “incompetent idiot” legend. According to William H. Hutt, what we need to be doing to create more jobs is lengthen the hours of work for people in existing jobs and postpone retirement.

Meanwhile, a Google books search of mentions of “lump-of-labor” and its cognates over the last 120 years turns up 577 unique instances, with no more than a dozen or so being critical of the fallacy claim. That’s a 60-1 consensus that black is white (but that prior to 1869, when J.S. Mill recanted the Wages-Fund doctrine, white was black).

46

William Timberman 03.07.11 at 2:53 pm

Prostitution? Well, that’s one possibility. Although…. If the same few people own (control) all the same stuff they do today, I’d expect the only real jobs to be in a) security (protecting their stuff from the rest of us), and b) propaganda (making sure we don’t find out what they’re up to.) Using that model, and looking around the country today, I’d say that Joe Arpaio and David Brooks have a lock on the future.

And yes, 47 years ago, some people had a different idea: The Triple Revolution.

47

ajay 03.07.11 at 2:54 pm

42: chris, presumably there’s some terribly simple reason why he wouldn’t just get a bank loan, buy ten sewing machines, keep all his tailors on staff, produce three times as many suits while keeping his labour costs exactly the same, and triple his EBITDA? Are capitalists supposed to have some aversion to growing their businesses?

48

bianca steele 03.07.11 at 2:55 pm

chris’s argument @ 42 brings up the question of entrepreneurship. chris assumes the person who buys the sewing machine is a capitalist who hires unskilled sewing machine operators and relies on the expertise of the machine manufacturer. In reality, what is more likely is that a tailor buys the machine and hires operators or other tailors, and relies on his own expertise. In the next generation, of course, the tailor has been bought out or out-competed by a financial manager, and the question rises where the expertise will be coming from (the singularity, I guess).

49

Sandwichman 03.07.11 at 2:55 pm

that should have been a 50-1 consensus…

50

Chris Bertram 03.07.11 at 3:02 pm

Yes indeed, I see that distinction ajay. It does prompt some dystopian/utopian thoughts though. Should we expect a future with service-sector peons (and sex-workers) catering to the whims of the people lucky enough to own the amazing machines that have taken all the good jobs? Or should the benefit of these wonderful machines be distributed among the population as a whole, who freed from the need to labour (including in the provision of services to the gilded few) to satisfy their needs, increasingly engage in arts and crafts?

Hang on a minute? What’s that you say?

_after the enslaving subordination of the individual to the division of labor, and therewith also the antithesis between mental and physical labor, has vanished; after labor has become not only a means of life but life’s prime want; after the productive forces have also increased with the all-around development of the individual, and all the springs of co-operative wealth flow more abundantly _

51

That Girl over there 03.07.11 at 3:05 pm

Cohen video reference. Do you think they will ‘machinize’ the schmoo’s also? Where can I find one of these creatures? They seem to be the solution.

52

dsquared 03.07.11 at 3:05 pm

It isn’t paid vacation. The CPS (from whence these numbers all come) codes paid vacation time as time spent working. I think this has to be an increase in full-time working relative to part-time, and I am duly amazed that stay-at-home mothers are as rare as they apparently are.

http://wox.sagepub.com/content/28/1/40.full.pdf

seems useful, and points out that the right-hand tail of the distribution of household hours worked (ie, very long work weeks) has fattened considerably over the period.

Also note that we really haven’t had that many marvellous labour-saving devices invented in the 1990s – the decline in self-reported hours of nonmarket domestic work is largely a result of Americans (and others) having fewer children and starting families later.

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dsquared 03.07.11 at 3:07 pm

presumably there’s some terribly simple reason why he wouldn’t just get a bank loan, buy ten sewing machines, keep all his tailors on staff, produce three times as many suits while keeping his labour costs exactly the same, and triple his EBITDA?

an individual tailor, if he could keep the existence of the machine a secret, might be able to do this, but the industry as a whole can’t triple output and assume that prices will be unaffected.

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Colin Reid 03.07.11 at 3:08 pm

No matter how good robots get, there’ll still be menial jobs which don’t require any high-level skills, but where people are prepared to accept worse service as long as they get the ‘human touch’: things like call centre operators, sales assistants in shops, and yes, prostitutes. (It’s not clear how flexible demand will be for these services, though.) Some people even pay a premium for ‘hand-made’ goods, so there’s a guaranteed niche for humans in manufacturing as well, albeit a small one.

I think industrial automation has been staved off by globalisation to some extent – it’s still cheaper to employ human beings in much of Asia than to build robots in the US – but this won’t be true forever. I think the next big acceleration in automation will come as China and India start to deplete their reserve armies of inefficiently employed labour (which is still vast in India’s case at least), or even later if sub-Saharan Africa manages to industrialise in a big way.

55

Dennis 03.07.11 at 3:10 pm

In “The Lights In The Tunnel”, Martin Ford proposes that companies that replace their labor force with automation–and then rely on the remaining human wage-earners at other companies to buy their products–be regarded as free riders and taxed accordingly.

The taxes would be then transferred to the masses of permanently unemployed.

I’m fascinated by this notion. Is Communism going to come in through the back door–via robots and artificial intelligence?

Somehow this seems unlikely.

http://www.thelightsinthetunnel.com/

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hartal 03.07.11 at 3:22 pm

Marx does not first emphasize the job-destroying aspects of technical change. Technical change, i.e. transition from manufacture to machino-facture, reduces the need for muscle power. This allows the entry of women and children into industrial production; that, in turn, allows capital to hire the whole family for the wage once paid to the male breadwinner. Moreover, since the introduction of machinery which otherwise creates the possibility for the minimization of labor time burdens capitalists with the threat of moral depreciation, they seek longer hours and the relay system to make sure the new expensive equipment is in fact amortized.

It is also cheaper for capitalists to extend the working day and add extra shifts to produce additional surplus value than it would be to purchase additional plant and hire workers to work in that plant.

Here we see that capitalists have an incentive to prolong the working day due to the introduction of machinery. That is, to increase the length of individual shifts and to increase the number of shifts per day.

Hence, the paradox that the most efficient means for the reduction of working times becomes the most unfailing means for prolonging it.

Now it is true that Marx seems to think in the course of capital accumulation the absolute size of the surplus part of industrial reserve army of labor will grow.

His reasoning seems to be that as capital accumulates and the organic composition of capital therewith, capital will not be able to sustain the rate of growth needed for the demand for labor to keep apace with the increasing supply of labor created by (i) the dispossession of those in traditional sectors of agriculture and handicraft production (this was especially true in the early phases of capital accumulation–hence, Malthus) ; (ii) the workers displaced in sectors made obsolescent by what Schumpeter would later call the gale of creative destruction; and (iii) population growth.

But even given all this Marx does not emphasize the job-displacing effects of technical change. In fact it is wholly possible that if accumulation becomes strong enough that the demand for labor would outstrip the supply actually available for exploitation even as the organic composition of capital is increasing. This undersupply could be compounded by restrictive immigration law or the lack of infrastructure in places where labor could be plentiful.

For Marx, the rate of accumulation drives the process. It slows down once the organic composition of capital rises to the point that there is insufficient surplus value to finance and to expect from further accumulation. This is what fundamentally causes unemployment, not technical change in itself.

I am not quite sure whether this is what GA Cohen was saying that Marx was saying. I don’t think he gets Marx right in his book.

57

MPAVictoria 03.07.11 at 3:31 pm

ajay:
There is a limit to how many suits people need to buy.

58

Lee A. Arnold 03.07.11 at 3:33 pm

Have a look at Asimo:
http://www.youtube.com/watch?v=Q3C5sc8b3xM
If you follow the allied videos, you’ll see that it (he, she) catches balls and does other things. Just amazing stuff.
“Asimo” is in honor of Asimov, by the way.
Now I’m sure he (she, it) costs a mint. So did the Eniac computer.
But when she (he, it), is fully functional, lovely hair, and priced as a consumer good, I will have two questions:
Can I have the one who looks like Angelina Jolie?
And can I send it to my job, to do the work for me?

59

ajay 03.07.11 at 3:35 pm

50:Should we expect a future with service-sector peons (and sex-workers) catering to the whims of the people lucky enough to own the amazing machines that have taken all the good jobs? Or should the benefit of these wonderful machines be distributed among the population as a whole, who freed from the need to labour (including in the provision of services to the gilded few) to satisfy their needs, increasingly engage in arts and crafts?

I reject the assumption that anyone in a service sector job is a peon, and that the only good jobs are manufacturing jobs. Manufacturing can be really, really dull – also uncomfortable, unhealthy and dangerous.

Also, aren’t both of these really descriptions of the same state of affairs: one in which most of the manufacturing is done by machine, and the human population limits itself to activities that can’t be done by anyone except humans?

It is also cheaper for capitalists to extend the working day and add extra shifts to produce additional surplus value than it would be to purchase additional plant and hire workers to work in that plant.

This is not so much an unchanging law of economics as a statement (which may be true or not) about the relative costs of capital and labour.

Hence, the paradox that the most efficient means for the reduction of working times becomes the most unfailing means for prolonging it.

Which, and I hate to resurrect the statistical argument, hasn’t really happened, certainly not over the last 100 years.

I think industrial automation has been staved off by globalisation to some extent – it’s still cheaper to employ human beings in much of Asia than to build robots in the US – but this won’t be true forever.

As noted above, this isn’t even true right now in India, which is one of the growth markets for industrial robots.

60

hartal 03.07.11 at 3:35 pm

Also remember that Marx thought that the capital-wage labor relation was a fetter on mechanization. Because capitalists pay for only labor power, not labor time, it may well be cheaper for them to use labor even when a machine would cost less labor time than it would replace.

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That Girl over there 03.07.11 at 3:38 pm

Would it be inappropriate to start quoting from Arnold Schwarzenegger and the movie The Terminator?

62

hartal 03.07.11 at 3:40 pm

But Ajay why hasn’t the working day continued to decrease with the continual rise of productivity.

More can be produced in a given period, so i. workers could all work less with the same level of output or ii. they could work the same time and produce more, with profits rising or iii. they could work more with wages rising.

Why not i? And why have profits risen more than wages to the extent that working time remains the same. Dumenil and Levy show that this in fact to have been the case.

63

That Girl over there 03.07.11 at 3:40 pm

Perhaps more prostitutes should indeed be replaced by machines to benefit society and also their progression as a group of human beings born with human rights.

64

Chris Bertram 03.07.11 at 3:45 pm

_I reject the assumption that anyone in a service sector job is a peon_

I didn’t make an assumption that anyone in a service sector job is a peon, I made the assumption that the service sector jobs available in one of my future scenarios involved peonage.

_Also, aren’t both of these really descriptions of the same state of affairs: one in which most of the manufacturing is done by machine, and the human population limits itself to activities that can’t be done by anyone except humans?_

What? Are you insane?

In one of my scenarios most people who had jobs had ones which involved servicing the needs of the small class of machine-owners, in the other the machines were owned by everyone so no-one was obliged to work in such jobs.

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ajay 03.07.11 at 3:46 pm

There is a limit to how many suits people need to buy.

But probably not the same as the limit on how many they want to buy. If a suit costs you two months’ wages, you’ll have one. If it costs you, say, three days’ wages, you might have four or five. If it costs you £1.50, you could buy a new one every day and chuck it away in the evening. Example in the real world: you probably buy a lot more paper hankies than you would silk ones.

66

musical mountaineer 03.07.11 at 3:50 pm

I once worked in a software shop when the CEO started a major (and secret) strategic effort called Project Noah, to eliminate our dependence on one critical partner (who was also a potential competitor). Why “Noah”? “Because Noah built the Ark before the flood.”

So I told my manager I was working on a shell script to auto-generate production code for new features, so we wouldn’t have to depend on development staff. I called it Project Moses, as in “let my people go”.

Ha ha! A shell script! Hee hee!

Oh shit.

67

hartal 03.07.11 at 3:53 pm

Ajay the problem is in proportional growth. As the system grows it is likely the demand for the output of some sectors will be saturated before the demand for the output of other sectors, e.g. just because six forks cost just as much as two used to cost does not mean that the consumer will want to buy six forks. This means that the system has to achieve a mobility of labor to less saturated sectors and create new sectors the demand for the output of which can continue to grow. Consumers have to be constantly “educated” so that their demands keep apace with growth (the neoclassical assumption of the sovereignty of the consumer is laughable). There is a lot of possibility for short to mid term difficulties and hence unemployment in the course of the normal growth of the system. Luigi Pasinetti has studied such problems.

68

ajay 03.07.11 at 3:57 pm

But Ajay why hasn’t the working day continued to decrease with the continual rise of productivity.

It has, see comment 10.

What? Are you insane?

No, I just get these headaches.

In one of my scenarios most people who had jobs had ones which involved servicing the needs of the small class of machine-owners

In other words: most of the population (except for the wealthy few) spends its time doing service-sector jobs which cannot be automated…

in the other the machines were owned by everyone so no-one was obliged to work in such jobs.

…but the jobs that cannot be automated will still exist, and people will still have to do them. In both these scenarios, we’ll still need human doctors, human teachers, human artists, human designers, human academics, etc. Whatever jobs you class as non-automatable will still need to be done.

All you’re proposing is a change in the ownership of the machines, so that in one future you’ve got a very small owner class of very rich people who don’t have to work, and in the other one you haven’t because the machines are owned in common. But, by definition, that won’t change the fact that the majority of people will be doing non-automatable jobs in either scenario.

I suppose in your dystopia there might be a few more openings for Decadent Nude Ballet Dancers and Ludicrously Elaborate Banquet Chefs and Obsequious Court Entertainers than in your common-ownership utopia but that’s hardly going to be a major sector of the economy. (And maybe the emancipated citizens of Utopia might quite like a ludicrous banquet from time to time too.)

69

R.Mutt 03.07.11 at 4:04 pm

Sex robots may be coming soon, there already is “an engineer in Germany, Michael Harriman, who has developed a doll that has heating elements so most of the body is warm, apart from the feet.” (“I think the sex robot will happen fairly soon” – An interview with David Levy)

70

Myles 03.07.11 at 4:10 pm

I suggest another, more optimistic possibility, from the historical evolution of the post-industrial economy: people will go into discretionary, “life-enriching” services, like yoga instruction, cultural production, culinary services, which can provide quite good incomes.

Just as the industrial revolution freed up from farming to make more things beyond food, and enrich their lives materially as a result, so will robots free people from making things materially, to making experiences, thereby transcending material production. The economy of the future will have more DJ’s, yoga studios, professional trainers, counselors, Freudian analysts, or even “life gurus”; perhaps we will even have more poets and writers and artists and philosophers.

In a way, does this not reach almost the same “all-around human development” that Prof. Bertram wishes for? We might laugh at people who subscribe to New Age “life gurus,” but are they not just as valid a line of spiritual and overall development as any? Are not people who make regular visits to their Freudian psychologist (or Jungian, depending on personal preference) not improved and developed in an “all-round” way? Regular, well-supported training regimens are known to improve not just physical but also psychological conditions; are they thus not indeed “all-round human development?” Is the recent fad for cooking television not of that genre, too? Whereas people used to cook primarily for sustenance, now they now often cook for pleasure and aesthetic satisfaction, and this in fact has increased the sales of splashy cookbooks and gourmet ingredients and specialist cooking tools and other supporting products and services?

Have ye hope yet.

71

Chris Bertram 03.07.11 at 4:14 pm

Well ajay, I’m certainly bemused by your thought that a society in which most of the productive assets (and, hence, the wealth) are owned by a few is “the same” as one where they are in common ownership. Very odd.

72

mpowell 03.07.11 at 4:17 pm

This is a pretty interesting issue, but I think more work needs to be done before we can even say whether leisure time has increased or decreased since 1970. There seems to be some disagreement on average worked hours alone, but mostly, as Worstal mentions, we need to add household work time to the equation. In general I think this will have gone down, even since 1970, but I am curious about certain issues like household help. On the one hand, a full-time nanny has gotten a lot more expensive. On the other, the 2-hour a week maid service has become much more common.

73

Myles 03.07.11 at 4:19 pm

After all, people must have said the same about combines and other agricultural machines throwing farmers out of perfect good jobs, but in the end we had a better society. Robots will throw us out of robotic jobs and in turn we will take up more and more fundamentally human jobs that no robot can take up. If my years spent learning music is any experience to go by, no robot is ever going to be a good teacher or dance or music or art.

And they will be better, not worse, jobs, because they will necessarily be more human. Music teachers get paid relatively well; so do art tutors, or owners of specialist gyms. I hate to get all Matt Yglesias-like about this, but he’s right, you know, at least about this.

74

ajay 03.07.11 at 4:23 pm

71: sorry, I don’t see how I can be clearer than by saying what I said:

“In both these scenarios, we’ll still need human doctors, human teachers, human artists, human designers, human academics, etc. Whatever jobs you class as non-automatable will still need to be done.
All you’re proposing is a change in the ownership of the machines, so that in one future you’ve got a very small owner class of very rich people who don’t have to work, and in the other one you haven’t because the machines are owned in common. But, by definition, that won’t change the fact that the majority of people will be doing non-automatable jobs in either scenario.”

And by adding that you are wrong to say that, if the machines were commonly owned, no one would be obliged to work in such jobs. They would, because an economy based on scarcity of non-automatable products and services would still exist.

I’m not saying that your dystopia and utopia are indistinguishable, or that one isn’t obviously preferable to the other; simply that the majority of people would do very similar jobs in each one, just as the majority of people in the USSR did jobs that people also did in the UK, despite the very different economic and social structures of the two countries.

75

Myles 03.07.11 at 4:26 pm

I didn’t make an assumption that anyone in a service sector job is a peon, I made the assumption that the service sector jobs available in one of my future scenarios involved peonage.

But you are underestimating the multiplier effect. You are thinking of the feudal model where wealth comes from land and is dependent upon it. What if in the future, control of material production doesn’t imply control of wealth? Could we not have said the same about agriculture? After all, agricultural production in the West is now more concentrated than it had been before, and what’s the result? The economy grew beyond agriculture; the economy is bigger than agriculture; agriculture is now only a small part of the economy.

Might we not say the same about material production in the future? That our reaction to someone owning all the robots isn’t fearful obeisance, but rather insouciant disregard? So what, if he owns all the robots? He’s still a small part of the economy, and getting increasingly smaller. The norms of a future society will be dominated by non-material rather than material production, and all the robots in the world can’t give him a good time because our social norms will have moved beyond valuing material products as the most important thing.

76

Henri Vieuxtemps 03.07.11 at 4:26 pm

The economy of the future will have more DJ’s, yoga studios, professional trainers, counselors, Freudian analysts, or even “life gurus”; perhaps we will even have more poets and writers and artists and philosophers.

It’ll be like a hippie commune, only you do it from 9 to 5 and for a wage, with performance reviews and occasional layoffs.

77

Chris Bertram 03.07.11 at 4:27 pm

Ajay: well that’s rather like saying that in both a feudal society and an agrarian communitarian one most people are farmers, so there’s no difference.

78

Myles 03.07.11 at 4:28 pm

It’ll be like a hippie commune, only you do it from 9 to 5 and for a wage

And what’s wrong, exactly, with this? Is this better than wasting amongst industrial drudgery?

79

Chris Bertram 03.07.11 at 4:30 pm

_What if in the future, control of material production doesn’t imply control of wealth? _

And I thought I was the one playing the role of the starry-eyed utopian in this thread!

80

Myles 03.07.11 at 4:35 pm

I think Chris will find, when he had achieved common ownership of the robots, or machines, or whatever, that they aren’t worth very much anymore, just as nobody in the West now much can be much bothered about the common ownership of agricultural land. I would be more than happy to let him have all the factories.

Reminds me of one of the things said about Japan; it looked like it had all the chips (in both the computer and figurative sense), but the chips turned out to be not worth that much in the end. All the while, that which we thought to be worthless, the software, turned to be the most valuable thing after all.

81

ajay 03.07.11 at 4:35 pm

77: no, it isn’t.

In both your scenarios the majority of people would have to do non-automatable jobs for pay. It’s more like saying that in both Pittsburgh and Magnitogorsk most of the men make a living by working in the steel mills. The fact that one of the mills is owned by Andrew Carnegie and the other one is owned by the people of the USSR really doesn’t alter that fact.

What I’m trying to point out is that you seem to have forgotten that almost all these non-automatable jobs (Decadent Chefs etc aside) will still need doing even if all the machines are owned in common. You seem to think that common ownership of the machines means that no one will have to work at all – you used phrases like “freed from the need to labour” in #50 – and this isn’t true.

82

MPAVictoria 03.07.11 at 4:41 pm

ajay:
“But probably not the same as the limit on how many they want to buy. If a suit costs you two months’ wages, you’ll have one. If it costs you, say, three days’ wages, you might have four or five.”
Yes I have also take economic 101. That doesn’t change the fact the eventually a new equilibrium is reached and that equilibrium may not employ the same number of people as the previous one. Which brings us back to the issue of what do to with these people who have suddenly become unemployed.

83

engels 03.07.11 at 4:41 pm

The economy of the future will have more DJ’s, yoga studios, professional trainers, counselors, Freudian analysts, or even “life gurus”;

I thought the permanent war economy was horrific, but Myles’ vision of the future of capitalism sounds truly nightmarish…

84

dsquared 03.07.11 at 4:46 pm

Ajay: well that’s rather like saying that in both a feudal society and an agrarian communitarian one most people are farmers, so there’s no difference.

To be honest, although there are considerable political benefits in terms of autonomy, and presumably one set of affairs would be associated with a better distribution of resources, the actual shit-shovelling is pretty similar. The difference I suppose would be that if resources were commonly owned, society could democratically agree to reduce working hours in some industries, but I bet this wouldn’t actually happen all that often.

85

Myles 03.07.11 at 4:46 pm

And I thought I was the one playing the role of the starry-eyed utopian in this thread!

But Prof Bertram, I protest that this isn’t really utopian. For surely the Duke of Westminster is not the biggest landowner in England, but he is the richest. He merely owns London, which had and has no agricultural value, and of which no agrarian communist could have been thinking. Why would you value material production that much, if there is material abundance? Do you value an extra car or a double portion of porridge every morning more greatly? And why can’t we say the same of the car and dancing lessons when cars will have become plentiful, as food in the West is now, and dancing lessons, being taught by human beings, will have not?

86

ajay 03.07.11 at 4:47 pm

83: put like that it sounds horrific. David Langford (I think) once remarked that Larry Niven’s books all predict that in the future everyone will be exactly like people in Southern California are now, and the worrying part is that Niven thinks this is a good thing.

87

Myles 03.07.11 at 4:51 pm

(The economic concept here is marginal cost; and rivalrous, excludable goods are worth, or more accurately, priced at the less and less as their marginal cost drops.)

88

ajay 03.07.11 at 4:54 pm

The difference I suppose would be that if resources were commonly owned, society could democratically agree to reduce working hours in some industries, but I bet this wouldn’t actually happen all that often.

Resources wouldn’t be commonly owned, though: land, minerals etc would still be in private hands. All we’re postulating is a setup in which large chunks of manufacturing industry are a) unstaffed b) owned in common and c) extremely productive. Normal economics will continue in the rest of the system.

89

Myles 03.07.11 at 5:01 pm

in the future everyone will be exactly like people in Southern California are now

But not necessarily. For “life gurus” you can have genuine priests and cathedrals. For specialist gyms and yoga studios you can have ballet studios and Mitteleuropaeische spas and ancient Greek training regimens. For DJ’s you can have string quartets and and ever-increasing number of indie bands. And we can have more, not less, gourmet coffee-shops serving not Starbucks but genuinely good espresso, owner-operated, the baristas earning good incomes as the coffee-shop becomes more than just a convenience. And Freud and Jung were hardly Californian creations.

90

Charlie 03.07.11 at 5:05 pm

The fact that one of the mills is owned by Andrew Carnegie and the other one is owned by the people of the USSR really doesn’t alter that fact.

And it seems that conditions for the USSR steel mill worker were a fair bit worse, all in all. Spufford’s book has this factoid (from memory): the consequence of turning up late for work for the third time (in a row?) was a penal sentence for economic sabotage. As someone who turns up late for work every day, this really stings in the imagination.

I think the obvious point is that the prerequisite for an equitable sharing of the benefits of automation is vigorous democracy. Who, if anyone, gets to dictate terms and conditions of employment? Who gets to say how the automation is deployed? Who shapes the market environment in which all of this goes on? Where, if anywhere, do employees get the means and encouragement to develop skills, or retrain if necessary? Where, if anywhere, do employers get the means and encouragement to adopt better, liberating working practices?

91

The Raven 03.07.11 at 5:07 pm

“Instead of mass unemployment or horrendous inequality, technological improvement could reduce the time people spend working to meet their needs and give them more free time”

It could… Does anyone believe that, with your current rulers, this is a likely outcome? People who are out of work have lots of “free” time…to be impoverished.

92

Chris Bertram 03.07.11 at 5:13 pm

_You seem to think that common ownership of the machines means that no one will have to work at all – you used phrases like “freed from the need to labour” in #50 – and this isn’t true._

I meant what I said, but it doesn’t follow that no-one will have to work at all. In a society with a guaranteed basic income it might well be that no-one would _need_ to labour in order to _satisfy their needs_ [the bit you didn't quote]. Which would be perfectly sustainable just so long as enough people chose to work to earn more than the guaranteed basic income. So it might be true for any given person that they have no need to work in order to meet their basic needs, without it being true that we could get by without anyone working. (I’m just making the logical point here, not advocating)

93

Chris Bertram 03.07.11 at 5:14 pm

_in the future everyone will be exactly like people in Southern California are now_

Wrong thread!

94

ajay 03.07.11 at 5:19 pm

92: ah, I see. OK, that sounds reasonable (with due caution surrounding the “I’m sure enough people would choose to work” thing as well as the definition of “needs”).

95

Charlie 03.07.11 at 5:19 pm

And we can have more, not less, gourmet coffee-shops serving not Starbucks but genuinely good espresso, owner-operated, the baristas earning good incomes as the coffee-shop becomes more than just a convenience.

If only. I watch the rise and fall of this sort of coffee shop in London. There’s a trajectory as the new, proud proprietors come to realise just how long and hard the hours will be, even with a minimum spend per customer of £4+. Lower rents might help them, though. And don’t forget the coffee pickers: their job can’t be mechanised, ISTR.

96

Henri Vieuxtemps 03.07.11 at 5:21 pm

Resources wouldn’t be commonly owned, though: land, minerals etc would still be in private hands.

The usual justification for private ownership of firms is the need for incentives; in a hypothetical world where incentives are not needed, what’s the reason for private ownership of land and other natural resources? Or anything at all, for that matter.

97

Hidari 03.07.11 at 5:22 pm

# True freedom will be only be achieved when the last management consultant is strangled by the guts of the last life coach.

98

Myles 03.07.11 at 5:28 pm

If only.

The reason I am optimistic about this sort of thing is that the mother of one of my friends actually owns one of those new, specialist training gyms, and it’s actually a great business. They earn a nice upper-middle-class income, and it’s good, enjoyable, dignified work, helping people get fit and healthy in a comprehensive way. He even met his girlfriend through the gym! (his mother introduced her to him)

And to think that such an existence would have been largely impossible fifty years ago!

99

engels 03.07.11 at 5:35 pm

For DJ’s you can have string quartets and and ever-increasing number of indie bands. And we can have more, not less, gourmet coffee-shops serving not Starbucks but genuinely good espresso, owner-operated, the baristas earning good incomes as the coffee-shop becomes more than just a convenience.

Iow in the future the whole world will be giant liberal American college town. Well, I’m glad to have escaped 100 years of SoCal suburbia but I’m still not completely sold on it, I’m afraid.

100

mpowell 03.07.11 at 5:39 pm

There is a tension in this thread between Myles view of the a post-materialistic future and Bertram’s and I think it ought to be addressed directly. I think the problem here is whether we are talking about a truly post-materialistic society enabled by robotic automation or a materialistic society driven by robotic automation. But I don’t think the latter vision makes much sense except under very specific circumstances. Unless we posit a shortage of energy or some fundamental material required for robotic production, you cannot get an economy that undermines the value of human labor in the production process while keeping the cost of material production high. Even if all the robots are controlled by an upper echelon, they will have to sell goods at lower and lower cost due to competition amongst themselves until it is possible to purchase all the material goods you wish on a Starbuck barista’s income. Myles’ vision is the only one that makes sense unless we take into account (real) potential problems like resource shortages. Otherwise, Myles’ robotic post-materialistic future is virtually inevitable and it is only the transition and health care costs that need to be managed.

101

Myles 03.07.11 at 5:52 pm

about a truly post-materialistic society enabled by robotic automation or a materialistic society driven by robotic automation

Much better than I could have put it myself.

102

Hidari 03.07.11 at 5:54 pm

‘and an ever-increasing number of indie bands’.

Oh great. So that’s what the future holds? An ever-increasing number of Coldplays and Travis’s? I think I’d rather have the boot stamping in the human face. At least that might be rhythmic.

103

Tim Worstall 03.07.11 at 5:55 pm

“except for the very important caveat about female domestic labour”

It’s not just female domestic labour. The amount of domestic labour men need to do has fallen substantially as well. Cars need less maintenance, boilers just work without needing the coal dust scoured out of them etc etc.

One of the Regional Feds did a paper showing that the average male, since the 1970s, now has 8 hours a week more leisure, the average female 6.

That’s a pretty big change.

104

Jake 03.07.11 at 5:55 pm

In a society with a guaranteed basic income it might well be that no-one would need to labour in order to satisfy their needs [the bit you didn’t quote].

It looks like many people have a need to not be poorer than most of their acquaintances, and somewhat fewer people have a need to be richer than as many people as they can; can a basic income even theoretically do anything about this?

105

Henri Vieuxtemps 03.07.11 at 5:57 pm

Myles’ vision is not post-materialistic; it’s based on market exchange of services. It’s very much materialistic.

106

Myles 03.07.11 at 5:59 pm

I think I’d rather have the boot stamping in the human face. At least that might be rhythmic.

Well, if you are down for that sort of thing, the experiential economy of the future might have that service available for an hourly fee. I think it’ll be located next door to the message therapist, to which you might schlep to after the face-stamping experience, much like one goes through a Turkish bath.

107

Henri Vieuxtemps 03.07.11 at 6:00 pm

…in fact, it’s very much like DeLong’s, only in addition to prostitutes there are also indie bands and trainers.

108

engels 03.07.11 at 6:24 pm

If you want to imagine the future, imagine a hipster watching a Bon Iver concert on an iPad in an independent coffee shop FOREVER.

109

Myles 03.07.11 at 6:47 pm

a Bon Iver concert on an iPad in an independent coffee shop FOREVER.

You know, Orwell allusions are only effective if the prospect is actually quite frightening, as opposed to merely banal and frivolous…

110

MPAVictoria 03.07.11 at 6:52 pm

“If you want to imagine the future, imagine a hipster watching a Bon Iver concert on an iPad in an independent coffee shop FOREVER.”

My. God.

111

Myles 03.07.11 at 7:12 pm

ever-increasing number of Coldplays and Travis’s

By the way, I actually do like Coldplay a lot. There’s this “realness” about their sound, a sort of soulful honesty.

112

ben w 03.07.11 at 7:26 pm

But if a machine alone can do your job more efficiently than you can, then you won’t be able to do that: you’ll be out of a job. Inventing automatic telephone exchanges doesn’t mean that you have lots of part-time telephone operators learning the cello. It means you have lots of unemployed telephone operators. This, I think, is what Krugman is talking about.

Conclusion: in the grimleisure-filled future of robotic laborers, not everyone need have a job. If it really is true that there just isn’t that much work that needs to be performed by people, what’s the problem?

113

ben w 03.07.11 at 7:27 pm

There’s this “realness” about their sound, a sort of soulful honesty.

Oh you cannot be serious.

114

mpowell 03.07.11 at 7:31 pm


Myles’ vision is not post-materialistic; it’s based on market exchange of services. It’s very much materialistic.

If you choose to define post-materialism as the elimination of all markets for goods and services, sure. What we are hypothesizing, however, is a substantial reduction in the cost of material goods so they are not a significant part of the economy. If your utopia requires the elimination of markets, sure, robots aren’t going to get you there. But the distopia of robots producing goods that nobody but a few can afford because of joblessness… that doesn’t make any sense.

115

Myles 03.07.11 at 7:33 pm

Well, to be fair, I like Diagram of the Heart more.

116

Henri Vieuxtemps 03.07.11 at 7:57 pm

Mpowell, well, my idea of a post-materialistic vision is the one where there is no economy. Gurus, prostitutes, and indie bands do their things voluntarily, simply because they like doing it.

117

Lee A. Arnold 03.07.11 at 8:07 pm

Tim Worstall: “It’s not just female domestic labour. The amount of domestic labour men need to do has fallen substantially as well. Cars need less maintenance, boilers just work without needing the coal dust scoured out of them etc etc.”

If you are going to allow for reduction of nonmonetized costs (personal domestic labour) as a value-addition (and that is after all what a useful innovation like a better boiler also presents, because it lets you save time and energy to do something else: you are reducing opportunity costs) then you ought to include those same improvements in the calculations about government spending, too. This would significantly increase the value of government activity far beyond its market dollar amount, as given in the usual discussions. Institutions reduce transaction and transformation costs of many different sorts, and these are value-added items.

118

geo 03.07.11 at 8:08 pm

mpowell: that doesn’t make any sense

Why not? Why can’t there be a huge underclass/surplus population /reserve army of the unemployed alongside the regular economy, like the current global population of slum-dwellers? Why won’t the regular economy be two-tiered, producing vast amounts of cheap junk for the underclass and luxury goods for the global overclass?

119

tom bach 03.07.11 at 8:19 pm

They earn a nice upper-middle-class income, and it’s good, enjoyable, dignified work, helping people get fit and healthy in a comprehensive way. He even met his girlfriend through the gym! (his mother introduced her to him)

Recently, 158 workers lost their paper mill jobs in northeastern Wisconsin to machines, are you really suggesting that all of them go out and start gyms? Who are going to be their clients?

Also geo asks the obvious question.

120

Tim Worstall 03.07.11 at 8:27 pm

@ 117.

“If you are going to allow for reduction of nonmonetized costs (personal domestic labour) as a value-addition (and that is after all what a useful innovation like a better boiler also presents, because it lets you save time and energy to do something else: you are reducing opportunity costs) then you ought to include those same improvements in the calculations about government spending, too.”

Sure, entirely happy to do so. As long as, of course, we are allowed to study opportunity costs in what government insists that we do. Like, you know, recycling and stuff. Opportunity costs are, after all, opportunity costs.

121

chris 03.07.11 at 8:34 pm

It looks like many people have a need to not be poorer than most of their acquaintances, and somewhat fewer people have a need to be richer than as many people as they can; can a basic income even theoretically do anything about this?

Those are wants, not needs. Failing at social one-upmanship won’t kill you. On the other hand, social one-upmanship might provide motivation to work in a post-scarcity-of-essentials society.

But we’ll never reach a post-scarcity-of-essentials society if robot owners consider larger robot-built yachts for robot owners a higher priority than more robot-made food, clothing, housing, etc. for non-robot-owners.

122

Tim Worstall 03.07.11 at 8:40 pm

“Failing at social one-upmanship won’t kill you. “

Well, doesn’t that just kill the entire idea of relative poverty?

123

MPAVictoria 03.07.11 at 9:02 pm

119:
That is exactly the point tom. There just aren’t enough advertising and telemarketing jobs to go around.

124

bianca steele 03.07.11 at 9:04 pm

@Kieran Healy
It might work if the Habilitations link the recipients into the Singularity.

125

Myles 03.07.11 at 9:15 pm

Recently, 158 workers lost their paper mill jobs in northeastern Wisconsin to machines, are you really suggesting that all of them go out and start gyms? Who are going to be their clients?

I think it might behoove us to keep in mind that absent the deliberate, planned late 19th-century and 20th-century American industrial policy to artificially build up a giant industrial base in the Midwest instead of letting it develop organically on the coasts, an industrial-age policy that is now more or less showing its side-effects, Wisconsin wouldn’t have the post-industrial problems it has.

I don’t particularly feel that the post-materialist is to be held responsible for deliberate miscalculations in industrial planning.

126

engels 03.07.11 at 9:22 pm

Failing at social one-upmanship won’t kill you.

Actually, it can.

127

christian_h 03.07.11 at 9:45 pm

Uhm… tendency of the rate of profit to fall anyone? Seems pertinent to the discussion.

128

ajay 03.07.11 at 9:50 pm

On the other hand, social one-upmanship might provide motivation to work in a post-scarcity-of-essentials society.

Basically, we’ll not need to work to get food or clothing or shelter, but we’ll all want to join Contact or better still Special Circumstances because of the social status and excitement it offers.

Hmm. Given what those institutions correspond to in present-day society, I’m not sure that’s a positive development.

129

Norwegian Guy 03.07.11 at 9:50 pm

“It’s not just female domestic labour. The amount of domestic labour men need to do has fallen substantially as well. Cars need less maintenance, boilers just work without needing the coal dust scoured out of them etc etc.”

I think much of this development has, since the 1970s or so, been caused not by technical innovations in household appliances, but by increasing prosperity. It has become more uncommon to produce and repair stuff like foods and cloths at home, people are more likely to hire someone to do construction work or car repairs etc.

There has also probably been a loss of knowledge in some technical skills, like light construction work. The younger generation of men, at least those of us with higher education, are simply not the handymen that earlier generations of farmers, fisherman and manual workers were (and are).

130

ajay 03.07.11 at 9:54 pm

Uhm… tendency of the rate of profit to fall anyone? Seems pertinent to the discussion.

Well, only if you think it actually exists.

131

ajay 03.07.11 at 9:58 pm

I think much of this development has, since the 1970s or so, been caused not by technical innovations in household appliances, but by increasing prosperity.

But in the US there hasn’t been increasing prosperity, at least not for most people; IIRC real median wages have been static since the seventies. The technical innovations are that labour-saving devices are now much more reliable and much cheaper. Cars too: it’s not that more people can afford to take their cars to be mended now, it’s that they have to be mended so much more rarely.

132

mpowell 03.07.11 at 10:00 pm


But we’ll never reach a post-scarcity-of-essentials society if robot owners consider larger robot-built yachts for robot owners a higher priority than more robot-made food, clothing, housing, etc. for non-robot-owners.

What you are assuming is a high concentration of wealth, more than anything else. But if material goods are cheap in real terms (because robots can make them easily and robots make more robots, etc), then owning a bunch of robots will not make anyone super rich. They would have to be super rich for different reasons.

Let me add that we are very far from this kind of world, however. The world productivity in the US is not high enough to provide all the material goods that everyone here could reasonably want. And 3/4 of the world’s population is even further away. In my view, the optimistic part of this view is that the needed productivity levels will ever be attained, not the consequences if they can be.

133

Lee A. Arnold 03.07.11 at 10:04 pm

@120, “Sure, entirely happy to do so. As long as, of course, we are allowed to study opportunity costs in what government insists that we do. Like, you know, recycling and stuff. Opportunity costs are, after all, opportunity costs.”

Recycling is a good example. Many people find utility in knowing that their consumer goods have used a reduced throughput from raw materials into finished products. (This utility comes from both aesthetic feeling as well as a general belief that good logic should be inculcated always, in the hopes of swaying all the future unknown outcomes in the world.) Now, there is a transaction cost in finding out whether the product you wish to purchase was created in the product cycles you would have preferred: You are going to the grocers to buy something for lunch. Did the can of tuna kill a dolphin? How much of your time and energy must you spend to find that out? It is a transaction cost, the cost of your being informed, the cost of having the information for proper consumer demand to price that product — if indeed we are to hope that the market will be the instrument of environmental friendliness or salvation to our liking. “Recycling” (as a social institution which attempts to guarantee all product cycles) greatly reduces your transactions costs of having to be informed about each and every product. Just try to do it for a few of all the products you use, and you’ll realize that the overall savings of personal time and energy must be very large and indeed incalculable.

134

tom bach 03.07.11 at 10:24 pm

Myles,
The paper mills were profitable before they introduced the labor saving, which is to say job destroying, machines. The reason that part of Wisconsin has so many paper mills doesn’t have anything to do with a planned economy; it has to do with the proximity to lumber and water power.

135

chris 03.07.11 at 10:50 pm

But if material goods are cheap in real terms (because robots can make them easily and robots make more robots, etc)

Wait, what? That still requires raw materials and energy. And I thought we were assuming that these robots still required some human supervision and/or maintenance (although the wages of the operators and mechanics are questionable, given the possibility of a permanently slack labor market).

If the robots don’t need us for *anything*, then we’d better just hope they’re not smart enough to realize that — because in that case they’re a slave class.

Did the can of tuna kill a dolphin? How much of your time and energy must you spend to find that out?

Potentially a very large amount, if you can’t trust the first-order sources of information. This is one reason why false advertising laws are important. Even if you accept that the amount the average consumer cares about dolphins is the “right” amount to care about dolphins, consumers can’t even signal their dolphin-related preferences without accurate information.

136

Lee A. Arnold 03.08.11 at 12:16 am

Does a first-order source of information have to be accurate enough for prediction? If so, then there will also be cases in which there is really no such thing as a first-order source, because the evil that you have preference to avoid is a disaster which can never be precisely predicted, probably not even statistically predicted, because it is disaster in a complex system like the climate system.

This saving — the saving on time that is spent worrying about the risks of the incalculable or unknowable — has personal utility value. It is regularly welcomed by 50-100% of the people, depending on the specific topic in social or environmental welfare: whether it is protecting retirement security, bailing-out the system of bank accounts in a financial crisis, avoiding a climate disaster, having the strongest military, helping the poor, having universal healthcare, etc. The avoidance of future disaster by providing for each of these things counts as incalculable savings in the personal use of time and energy.

137

Myles 03.08.11 at 12:39 am

Wait, what? That still requires raw materials and energy.

Nothing in Marx would suggest that high costs of raw materials and energy would be the reason for the proletariat being kept down, so let’s not kid ourselves here, I mean really.

Ecological marxism is not a tenable position to hold.

138

Myles 03.08.11 at 12:41 am

If the robots don’t need us for anything, then we’d better just hope they’re not smart enough to realize that—because in that case they’re a slave class.

Dude, you can’t subscribe to both the Singularity and to belief in limits to post-material economic growth. Pick one and stick with it.

139

Myles 03.08.11 at 12:42 am

The paper mills were profitable before they introduced the labor saving, which is to say job destroying, machines.

And farming was profitable before they abolished the Corn Laws. What’s your point?

140

Myles 03.08.11 at 1:00 am

Why won’t the regular economy be two-tiered, producing vast amounts of cheap junk for the underclass and luxury goods for the global overclass?

The regular economy won’t be relying on the production of goods. You are presuming that a $3000 Eames chair is a good in the conventional sense, when in fact $300 of it at most is a “good” and $2700 of it is a “service” or “experience”. When the Eames chair was originally invented, it was the other way around. Whether or not a robot makes the Eames chair is absolutely inconsequential; the $2700 in “experience” is being produced by a person or multiple persons, and it’s being paid out to armies upon armies of marketing departments, advertising agencies, corporate PR departments, accountants, lawyers, splashy magazines, corporate sponsorship, nonprofit foundations, what have you. And the advertising and marketing executives and PR spokespersons and accountants and lawyers in turn pay out their salaries to trainers and music lessons and ballet studios and realtors and art dealers and art teachers and neighbourhood baristas and so on.

We are, whether or not we admit it, engaging in a post-materialist economy. Every time you buy a Apple device you are engaging in a post-materialist economy. How much do you reckon Apple spends on advertising campaigns?

141

David 03.08.11 at 3:49 am

Loath as I am to bring this back to the mundane world of actual jobs and employment, I’ll point out that Krugman is probably right, on the ground. And foreshadowed by fellow Nobel Economics prize winner Wasilly Leonitiff, who wrote in a special edition of Scientific American devoted to emerging computer technology and associated issues (sometime in the early eighties, I’ll have to dig the issue out) that the cyber revolution, unlike earlier economic revolutions which created more jobs than they destroyed, was very likely to result in a net loss in jobs. I think we’re on the verge of that.

Re desquared @2: the otherwise hack SF author Mack Reynolds wrote a short novel based around a similar idea back in the early 70′s. Everyone was on a perpetual student scholarship program collecting Ph.ds and nobody actually worked. Hero discovers why.

142

john c. halasz 03.08.11 at 5:25 am

chris @ 42:

Thanks for re-inventing the wheel!

143

john c. halasz 03.08.11 at 6:36 am

@100:

“you cannot get an economy that undermines the value of human labor in the production process while keeping the cost of material production high. Even if all the robots are controlled by an upper echelon, they will have to sell goods at lower and lower cost due to competition amongst themselves until it is possible to purchase all the material goods you wish on a Starbuck barista’s income.”

But what then happens to the “value” of capital goods controlled by the upper echelon, if they only result in ever lower output prices, while labor incomes somehow remain fixed and affected, and thus are ever-rising in “real” terms?

I must say, I really enjoyed this thread. At least insofar as it shows how utterly adventitious, looney, and ungrounded the argument styles of certain commenters,- (er, Myles, ajay, chris)-, are, which, of course, doesn’t impede their assiduousness, fluency, and insistency, whatsoever.

144

john c. halasz 03.08.11 at 6:44 am

“Unaffected”- I was correcting a misspelling/solecism when I dropped the prefix.

145

Henri Vieuxtemps 03.08.11 at 7:04 am

But what then happens to the “value” of capital goods controlled by the upper echelon, if they only result in ever lower output prices, while labor incomes somehow remain fixed and affected, and thus are ever-rising in “real” terms?

Am I correct thinking that they will probably all agree to destroy most of the robots and ban their production, just like in that ‘shmoo’ story?

146

Matt 03.08.11 at 8:51 am

If robots start making most end-products then robot-making itself is going to be a key cost. The obvious competitive advantage: have robots make the robots that make the end-products.

But once machines reproduce machines the industrial capitalist has painted himself into a corner. There’s enough sunlight, water, and/or wind and rocks in any nation to set up another robot-reproduction facility with local energy and materials. At most you have 20-something years for the good times to roll until the patents expire and everyone on Earth has maker-bots produced at minimal marginal cost by other maker-bots. But people probably won’t even wait that long if the global manufacturing economy becomes robot dominated: unlicensed copies of physical goods will become as common as unlicensed music and software copies are today.

147

ajay 03.08.11 at 10:00 am

the otherwise hack SF author Mack Reynolds wrote a short novel based around a similar idea back in the early 70’s. Everyone was on a perpetual student scholarship program collecting Ph.ds and nobody actually worked. Hero discovers why.

A similar theme in Keith Waterhouse’s novel “Office Life” – in which Grice, an unambitious clerk in an unnamed British city, starts to become increasingly puzzled about what his employer, British Albion plc, actually does. (Spoiler: nothing at all. It’s the result of a discovery that it’s almost as cheap to give people makework jobs as it would be to keep them unemployed and drawing on the DHSS, and it conceals the true size of the British unemployment problem, thus preserving business confidence and the government in power.)

“Excuse me,” one of the characters asks at the end. “But instead of providing jobs to keep us in work, why didn’t the government try providing work to keep us in jobs?”
“That,” replies the civil servant in charge of British Albion, “is outside my province.”

148

Hidari 03.08.11 at 10:24 am

‘(Spoiler: nothing at all. It’s the result of a discovery that it’s almost as cheap to give people makework jobs as it would be to keep them unemployed and drawing on the DHSS, and it conceals the true size of the British unemployment problem, thus preserving business confidence and the government in power.)’

Did anyone ask Keith Waterhouse what he thought of the situation now that his prediction has come true?

149

Tim Worstall 03.08.11 at 11:19 am

“Many people find utility in knowing that their consumer goods have used a reduced throughput from raw materials into finished products. “

Sure, and many do not.

Many find utility in actually doing the recycling: many o not. Which is why we have laws that insist that you must recycle. To force those who don’t gain utility from doing it to do it.

So, when we look at the costs of government regulations insisting upon recycling we must measure both the utility not gained by those who would do it anyway and the disutility of those who would prefer not to do it.

150

Walt 03.08.11 at 11:58 am

Tim, I derive disutility from the fact that the government prevents robbers from stealing all of your possessions. Should we take that into account too?

151

Barry 03.08.11 at 12:04 pm

mpowell 03.07.11 at 4:17 pm

” This is a pretty interesting issue, but I think more work needs to be done before we can even say whether leisure time has increased or decreased since 1970. There seems to be some disagreement on average worked hours alone, but mostly, as Worstal mentions, we need to add household work time to the equation. In general I think this will have gone down, even since 1970, but I am curious about certain issues like household help. On the one hand, a full-time nanny has gotten a lot more expensive. On the other, the 2-hour a week maid service has become much more common.”

Actually, full-time nannies have gotten cheaper, for the top 1% of the US population, and probably for the top 10%, judging by wage trends over the past 30 years.

152

ajay 03.08.11 at 12:49 pm

Did anyone ask Keith Waterhouse what he thought of the situation now that his prediction has come true?

It hasn’t come true. Secretly-nationalised companies with the sole mission of providing unproductive jobs to the otherwise unemployed?

(Also, Keith Waterhouse RIP since 2008 or so, so you can ask him but you won’t get much of an answer.)

153

engels 03.08.11 at 1:27 pm

It hasn’t come true. Secretly-nationalised companies with the sole mission of providing unproductive jobs to the otherwise unemployed?

…cough…. RBS ….cough…. Morgan Stanley …cough…

154

Tim Worstall 03.08.11 at 1:42 pm

“It hasn’t come true. Secretly-nationalised companies with the sole mission of providing unproductive jobs to the otherwise unemployed?”

Well, we do actually have, to my vast amusement, an advisor to the TUC stating exactly this. That since, given the benefits system, employing civil servants costs about the same as not employing them, therefore there should be no cuts at all in the number of civil servants.

155

engels 03.08.11 at 2:15 pm

Secretly-nationalised companies with the sole mission of providing unproductive jobs to the otherwise unemployed?

Sounds like a reasonably accurate description of Lockheed Martin, actually. As Paul Krugman said, writing about the end of the Great Depression: ‘A war — the one kind of public works programme that conservatives approve of.’

156

Hidari 03.08.11 at 2:16 pm

# 153.

Quite.

Although what the bankers do is much worse than merely digging a hole and then filling it in. Intellectually speaking, what the bankers do is more the equivalent of digging a hole, shooting lots of people, robbing them, putting the bodies in the hole, and then persuading central government to reimburse the cost of the bullets and providing the bankers with financial recompense for the emotional distress the whole experience has caused them.

And then filling in the hole.

157

Myles 03.08.11 at 2:34 pm

Did anyone ask Keith Waterhouse what he thought of the situation now that his prediction has come true?

I am somewhat bothered by your implication (in conjunction with your earlier post cf. “It’s grossly unfair, incidentally, to compare people who work in these kinds of jobs with sexworkers”) that somehow consulting or advertising or public relations aren’t “real jobs.” That’s not really thinking things through as much as a sort of reflexive habit of the mind toward falling for easy but false answers.

158

chris 03.08.11 at 3:13 pm

@142-144: Uh, thanks for sneering in all directions while contributing absolutely nothing of substance, I guess.

Which is why we have laws that insist that you must recycle. To force those who don’t gain utility from doing it to do it.

We do? I didn’t know that. Maybe I’d better look out or the Recycling Police will get me. (Or, who is “we” exactly, in this sentence?)

159

chris 03.08.11 at 3:19 pm

@157: Well, there is a certain Red Queen’s race quality about them that makes them wasteful from a whole-economy perspective, in the same sort of way as the US’s infamous constant legal arguments over who is going to pay for health care massively increase the cost of US health care.

If someone invents a genuinely better mousetrap, they have to advertise that, I guess, but most advertising is just trying to promote brands that are no better (or even no different) than competing brands. The fact that a company that doesn’t engage in this will fall behind in market share notwithstanding the quality of its product points to a failure of the market, not a validation of advertising. (Indeed, in the sort of idealized market that shows up in some people’s models, advertising is unnecessary — consumers are assumed to already be fully informed and undeceivable.)

160

Lee A. Arnold 03.08.11 at 3:37 pm

Tim Worstall #149: “Sure, and many do not.”

But (1) they are outnumbered, and (2) their disutility is restricted to the greater price of the product, and not the additional transaction costs in determining the environmental friendliness of the product.

“So, when we look at the costs of government regulations insisting upon recycling we must measure both the utility not gained by those who would do it anyway and the disutility of those who would prefer not to do it.”

Almost all of those who would do it anyway are still gaining the utility. (That is why they pushed for, and were successful in achieving, the legislation.) Of course, those measures should also be included in the calculation.

“Which is why we have laws that insist that you must recycle. To force those who don’t gain utility from doing it to do it.”

We have the laws because you are outnumbered. But I would agree, if you also include the business firms that started to pay attention to the environment and to examine their entire production cycles.

161

Chris Williams 03.08.11 at 3:41 pm

I think that a number of commenters upthread need to adjust their sarcasm detectors with regard to ajay’s comment on secret nationalisation.

Mack Reynolds was a great one for political economy stories. What’s the name of the capitalist make-work one, featuring ‘Freer Enterprises’?

162

ajay 03.08.11 at 4:24 pm

161: well, yes and no: we do sort of have backdoor-nationalised companies, certainly – not just the ones that are part-owned by the state, but all the other ones that are heavily supported by the state – but I don’t think anyone’s suggested that we bailed them out to prevent the damaging social consequences of all their staff becoming unemployed.

We do, of course, bail out BAE Systems by, say, ordering overpriced helicopters in order to prevent threatened redundancies in Yeovil, but that’s not so much an act of social policy as a surrender to successful blackmail.

163

bianca steele 03.08.11 at 4:58 pm

Henri Vieuxtemps:
That’s the point you got from the schmoo story? (I thought everyone knew the point is that we have to preserve the environment, and in Cohen’s might plausibly be that the British left has trouble understanding North American populism.)

The only possibly relevant SF story I remember had jet-age scientists complaining about the number of conferences they had to attend. It turned out these were planned by the aliens, and their purpose was to prevent the scientists from getting anything done.

164

Substance McGravitas 03.08.11 at 5:13 pm

That’s the point you got from the schmoo story? (I thought everyone knew the point is that we have to preserve the environment

That is just baffling.

165

Myles 03.08.11 at 5:30 pm

We do, of course, bail out BAE Systems by, say, ordering overpriced helicopters in order to prevent threatened redundancies in Yeovil, but that’s not so much an act of social policy as a surrender to successful blackmail.

I can hardly see why BAE should be in for unique calumny when Boeing rigged the whole damn tanker bidding process. Even blackmailers aren’t the house.

166

ajay 03.08.11 at 5:34 pm

The only possibly relevant SF story I remember had jet-age scientists complaining about the number of conferences they had to attend. It turned out these were planned by the aliens, and their purpose was to prevent the scientists from getting anything done.

Obligatory Pratchett – the Patrician musing about the superiority of committees as a mechanism for suppressing dissenting voices. Better than the Iron Maiden, because less messy, and people actually volunteer to enter committees.
(The only drawback was the expense of tea and biscuits halfway through, which was rarely necessary with the Iron Maiden.)

167

ajay 03.08.11 at 5:35 pm

165: because the British government doesn’t prop up Boeing’s UK operations by buying overpriced British-built kit.

168

Myles 03.08.11 at 5:55 pm

because the British government doesn’t prop up Boeing’s UK operations by buying overpriced British-built kit.

My reason for not opposing the propping up of BAE is my distaste for anyone (in this case, the Americans) trying to corner the market, which was more or less the intention of the F-35 international participation program. If BAE manages to prevent this market being cornered by suppliers from a single country, I say, carry on.

I very much doubt that one would be paying less for arms when the NATO arms market has been cornered.

169

Myles 03.08.11 at 6:07 pm

(Which is another way of saying that no matter how bad the BAE is, they can’t possibly be as bad as the Hunt brothers of NATO.)

170

ajay 03.08.11 at 6:08 pm

I am not able rightly to apprehend the kind of confusion of ideas that could provoke such a statement.

171

MPAVictoria 03.08.11 at 6:48 pm

“I can hardly see why BAE should be in for unique calumny when Boeing rigged the whole damn tanker bidding process. Even blackmailers aren’t the house.”

I think it is amazing that people are surprised that an American company got a contract from the American government to supply equipment for the American military. As far as I am concerned governments should source contracts from domestic companies where it is reasonable* to do so even if it costs a bit more. I would want the Canadian government to behave similarly.

*By reasonable I mean where the quality and price is roughly comparable.

172

Myles 03.08.11 at 7:29 pm

I would want the Canadian government to behave similarly.

As a fellow Canadian: the Canadian policy in this respect has been more or less a complete farce. “Buying Canadian” has meant contributing toward the F-35 subsidy without getting any of the goodies. It has also meant being locked into American fighter aircraft at extortionate prices without possibility of buying from alternative vendors (such as Eurofighter or Dassault).

I think it is amazing that people are surprised that an American company got a contract from the American government to supply equipment for the American military.

The Americans insisted that this was going to be a fair process, with no consideration of national champions. The USAF, for its own part, preferred Airbus. If the bidding process had been sound it would have set an formidable precedent in market-based public procurement.

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Myles 03.08.11 at 7:40 pm

(Oh, and to add insult to injury: the Ontario automotive plants, who have long been nourished by the “Buy Canadian” policy, are now trying to scuttle the Canada-EU free trade pact, which is one of the greater pieces of luck to befall Canada in recent decades. I wasn’t much surprised, to be honest.)

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MPAVictoria 03.08.11 at 7:40 pm

Myles:
“As a fellow Canadian: the Canadian policy in this respect has been more or less a complete farce. “Buying Canadian” has meant contributing toward the F-35 subsidy without getting any of the goodies. It has also meant being locked into American fighter aircraft at extortionate prices without possibility of buying from alternative vendors (such as Eurofighter or Dassault).”

Did anything in my comment lead you to believe I disagree? I said I would want the Canadian government to look first to Canadian companies, not that I think they are currently doing so.

“The Americans insisted that this was going to be a fair process, with no consideration of national champions. The USAF, for its own part, preferred Airbus. If the bidding process had been sound it would have set an formidable precedent in market-based public procurement.”

I do not believe that a completely marked-based public procurement process is a good thing and I am no longer at all surprised that the US government lies about what it is going to do.

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ScentOfViolets 03.08.11 at 8:44 pm

Didn’t I just post my Lem quote last summer?

A certain learned constructor built the New Machines, devices so excellent that they could work quite independently, without supervision. And that was the beginning of the catastrophe. When the New Machines appeared in the factories, hordes of Drudgelings lost their jobs; and, receiving no salary, they faced starvation. . .”

“Excuse me, Phool,” I asked, “but what became of the profits the factories made?”

“The profits,” he replied, “went to the rightful owners, of course. Now, then, as I was saying, the threat of annihilation hung. . .”

“But what are you saying, worthy Phool!” I cried. “All that had to be done was to make the factories common property, and the New Machines would have become a blessing to you!”

The minute I said this the Phool trembled, blinked his ten eyes nervously, and cupped his ears to ascertain whether any of his companions milling about the stairs had overheard my remark.

“By the Ten Noses of the Phoo, I implore you, O stranger, do not utter such vile heresy, which attacks the very foundation of our freedom! Our supreme law, the principle of Civic Initiative, states that no one can be compelled, constrained, or even coaxed to do what he does not wish. Who, then, would dare expropriate the Eminents’ factories, it being their will to enjoy possession of same? That would be the most horrible violation of liberty imaginable. Now, then, to continue, the New Machines produced an abundance of extremely cheap goods and excellent food, but the Drudgelings bought nothing, for they had not the wherewithal. . .”

“But, my dear Phool!” I cried. “Surely you do not claim that the Drudgelings did this voluntarily? Where was your liberty, your civic freedom?! ”

“Ah, worthy stranger,” sighed the Phool, “the laws were still observed, but they say only that the citizen is free to do whatever he wants with his property and money; they do not say where he is to obtain them. No one oppressed the Drudgelings, no one forced them to do anything; they were completely free and could do what they pleased, yet instead of rejoicing at such freedom they died off like flies.”

Weird. This is sooo 19th century, but what it all comes down to (again) is “Who controls the means of production?” Or if you like, “Economics is the study of who gets how much of what.”

Personally, I’m voting for some sort of centralized technocracy :-) It might very well be the case that come the end of the 21st century, local, national, world economies won’t be on the bleeding edge of the production frontier . . . but it’s high time for an official statement that wanting to be there is a strictly normative judgment call anyway. Not an exercise is cold dispassionate logic that some would have the rest of us believe.

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leederick 03.08.11 at 8:53 pm

Maybe I’m missing something in the time worked argument. I’m sure people who work are working longer hours, but there’s also been a huge increase in the amount of lifespan spent in retirement. Surely that counts?

“Instead of mass unemployment or horrendous inequality, technological improvement could reduce the time people spend working to meet their needs and give them more free time. Free time that they could use for other purposes (such as their all-round human development).”

What do you mean by needs? If you’re living hand to mouth and just aspire to pay your rent this week, clothe and feed yourself, etc I can see this working. But practically, people have needs which involve finance costs – like paying off a mortgage or building up a pension – which if you want to meet these needs then sitting on your hands for half the week isn’t good advice.

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chris 03.08.11 at 9:17 pm

As far as I am concerned governments should source contracts from domestic companies where it is reasonable to do so even if it costs a bit more.

But if you think that governments should do this, or even that they will do this, then American companies’ dominance of the global arms market is practically inevitable, because of the hyper-militarization of the US compared to everywhere else. (In spending terms, if not necessarily in troops per capita terms.) To a first approximation the American military IS the global arms market.

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Salient 03.08.11 at 9:29 pm

But practically, people have needs which involve finance costs

It would be a reasonable societal goal to reduce such needs as much as possible. For example, folks shouldn’t need to work extra for a pension, because society can and should provide adequate means for retirement. Personal pensions (compared to e.g. social security) derived from working more and saving more aggregate to a drag on the economy during lean times (when the paradox of thrift applies) and an inefficient allocation of resources during boom times (pension investors need to be more risk-averse and conservative than the norm, to account for the greater risk involved in losing one’s retirement fund, and thus will be less responsive to upticks in economic growth than the norm).

It’s also unclear why taking on long-term debt in order to sustain one’s living condition (mortgage) ought to be the norm (instead of e.g. renting). In general, one takes on long-term debt in order either to make purchases one can’t do without [needs], or to make optional purchases one is willing to pay a long-term premium for [wants]. In the case of debt-financed needs, it would be sensible to marshal technology to reduce those needs (e.g. more efficient mass transit replacing one’s need for a car in a city).

You have a good point when you bring up mortgages, but it’s not clear to me whether the average person would prefer “spend thirty percent of my income on the mortgage for forty years, with lots of leisure time” to “spend forty percent of my income on the mortgage for twenty-five years to pay it off faster, with much less leisure time.” The latter case may be more the norm, but in the absence of the former option that norm can’t be interpreted as evidence for a typical preference.

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Salient 03.08.11 at 9:39 pm

Also — assuming that it will remain normal for most people to have debt-financed needs, like a mortgage, is probably buying into the “extensive private property” hypothesis that CB is calling into question. Moving away from that hypothesis, it’s hard to see why most people ought to have to be debt-burdened in order to get by.

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Josh G. 03.09.11 at 12:09 am

Salient: “It’s also unclear why taking on long-term debt in order to sustain one’s living condition (mortgage) ought to be the norm (instead of e.g. renting).”

Because:
(1) Most people like to have some level of control over their living space. They don’t want to have to beg someone else’s permission to paint the walls, put in a different light fixture, etc.
(2) Most people want to believe that the money they’re paying for their house will eventually benefit them (as owners), and not someone else. Renting is pouring money down an endless rat hole. If you own a house and prices take a nosedive, you can mail the keys to the bank and walk away. If you rent and housing prices go up, you’re screwed.
(3) Most landlords are scum. They tend to be failed, bitter small businessmen who couldn’t make it in other endeavors. They pinch pennies and argue about *everything*. And they all think it’s a way to get rich quick.

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Myles 03.09.11 at 3:08 am

(3) Most landlords are scum. They tend to be failed, bitter small businessmen who couldn’t make it in other endeavors.

Word.

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MPAVictoria 03.09.11 at 3:14 am

Chris:
I would argue that it would result in the exact opposite as countries would purchase arms from domestic suppliers even if it would be a bit cheaper to purchase from an american supplier.

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Phil Rothman 03.09.11 at 4:43 am

Another possibility: the ‘hollowing out’ claim is not an accurate characterization of what’s going on in US labor markets. See: http://www.americanprogress.org/issues/2010/05/middle_job_market.html

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Myles 03.09.11 at 5:21 am

I would argue that it would result in the exact opposite as countries would purchase arms from domestic suppliers even if it would be a bit cheaper to purchase from an american supplier.

It’s literally impossible for non-American countries to attain the economies of scale necessary for most domestic weapons. Everybody can produce rifles, but rifles aren’t really the big defence item here. Even the pan-European arms projects are perpetually on the brink of collapse. If the Americans had insisted on an American jump jet, the Harrier would have died a lot sooner; if everybody wanted to build their own tanks European armies would be paying high-than-JSDF prices for tanks (Japan paid F-15 prices for a enlarged, underpowered F-16 copy); if everybody wanted to build their own submarines they would all end up like HMCS Chicoutimi (ex-RN Upholder, renaming ships incredibly unlucky and pisses off Poseidon).

This is the sort of thing that makes me hopeless about Canadian public policy: no, Canada is not a continental-sized economy, and it is not capable of the things the U.S. economic and industrial base is capable of. Canada’s hope is comparative advantage.

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SamChevre 03.09.11 at 1:58 pm

You have a good point when you bring up mortgages, but it’s not clear to me whether the average person would prefer “spend thirty percent of my income on the mortgage for forty years, with lots of leisure time” to “spend forty percent of my income on the mortgage for twenty-five years to pay it off faster, with much less leisure time.”

I think (again, retirement needs to be considered here) that the last sentence needs to be “spend forty percent of my income on the mortgage for twenty-five years to pay it off faster, with much less leisure time during those twenty-five years, and more leisure time in the following 15 years.

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chris 03.09.11 at 2:53 pm

(2) Most people want to believe that the money they’re paying for their house will eventually benefit them (as owners), and not someone else.

Well, sure they *believe* that, but they’re deluded. For most of the term, they’re mostly paying interest, which benefits someone else. Furthermore, as owners, they bear the costs of maintenance and depreciation and the risks of faster-than-average loss of value, which can destroy their “paying to eventually benefit themselves” in rather a hurry.

Renting is pouring money down an endless rat hole.

Well, you have to live somewhere. That’s going to cost you, one way or another. Maintaining a dwelling place is a form of continuous consumption; mixing it with an investment (let alone a leveraged one, which is what a mortgage is) makes you highly likely to confuse yourself about how much of that money you are really ever going to see again.

Even if you could save up to the point of buying a house outright, and so avoid interest, you’d still have to pay the taxes and maintenance on a house whose value *as a building* would probably be diminishing as the technology embedded in it becomes obsolete (although the land it is on might rise in value).

If you own a house and prices take a nosedive, you can mail the keys to the bank and walk away.

Only in some states, and even then, (a) whatever equity you *did* manage to build up with all those years of paying a few hundred dollars more a month than comparable rent plus doing all your own maintenance is now gone, and (b) good luck finding your next place to live.

If you rent and housing prices go up, you’re screwed.

If housing prices go up faster than wages, everyone is screwed one way or another.

You leave out “if you rent and termites are discovered in the foundation, you can move”, and similar scenarios. (Including “if you rent and find a new job opportunity 50 miles away”.) Of course that kind of one-sided view will make ownership look better than it is.

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MPAVictoria 03.09.11 at 3:45 pm

Myles:
In fact many European countries build their own tanks and their own planes and their own ships. See for example:
http://en.wikipedia.org/wiki/Challenger_2
http://en.wikipedia.org/wiki/Merkava
http://en.wikipedia.org/wiki/Dassault_Mirage_2000
http://en.wikipedia.org/wiki/Astute_class_submarines
This list could go on for pages.

As for your second comment, where did I say that a country should buy everything from domestic suppliers? I believe that when it is (this next word is key) reasonable they should look to domestic suppliers first even if it costs a bit more. Canada no longer has any domestic capability to produce our own fighter plane (thanks Diefenbaker) so it would not be reasonable for us to produce our own.

Finally a little less condescension would be appreciated Myles.

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Dogsbody 03.10.11 at 6:12 am

Free time that they could use for other purposes (such as their all-round human development)

Or contemplating, and lamenting the loss of, the prosperity their parents and grandparents enjoyed.

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Laban Tall 03.10.11 at 2:44 pm

A few points

a) haven’t we been here before – say with the handloom weavers, harvesting hands and all those farriers and saddlers who went out of business in the early 20th century? They ended up doing other things, the problem was the transition period when they weren’t getting paid. Aren’t human desires pretty much infinite ? Who, 100 years back, could have predicted some of the ways people now earn a crust ?

b) this machine utopia is surely only possible with lots of cheap energy – and that’s just what we ain’t got no more. Unless something like thorium reactors come to the rescue, it looks as though energy’s going to be more scarce than wot it has been. Food, warmth and shelter are the basics of survival. All are now getting more expensive, not cheaper – and two of them are directly linked to energy costs.
This ‘machines making anything’ idea seems far fetched. So you’ve got one and want to clone your neighbour’s new car. Where do you get the carbon fibre and aluminium?

c) There are some things machines are very bad at making. Land and (in the UK houses) being one of them. When ‘things’ (cars, TVs, snazzy electronic gizmos, dishwashers) became a lot cheaper, house and land prices rose steeply. The money has to go somewhere.

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dictateursanguinaire 03.11.11 at 1:53 am

Just a thought on the housing/debt thing talked about in Salient and Josh’s posts …I recently was talking to a professor of mine from Switzerland, and she mentioned that some Euro. countries have roughly 20-80 ratios of renters vs. homeowners. I think the whole U.S. and housing-fetish thing has clearly been influenced by our culture and gov’t (for better or worse), and obviously taking on huge amounts of personal debt is not endemic to the human condition but is a fairly recent phenomenon. I know incentives are very tricky when they run counter to cultural standards but I wonder if there isn’t a way to convince people to rent. I’m skeptical of arguments like Josh’s that suggest that people inherently prefer houses with 30 year mortgages to apartments but being relatively debt free.

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Sandwichman 03.11.11 at 4:35 pm

“a) haven’t we been here before – say with the handloom weavers, harvesting hands and all those farriers and saddlers who went out of business in the early 20th century?”

The Luddite Question: http://ecologicalheadstand.blogspot.com/2011/03/luddite-question-rhythm-rebounds-and.html

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hartal 03.13.11 at 9:37 pm

Chris Bertram,
I thought that I would just mention why I am critical of GA Cohen’s work. We can have an honest debate about it; there was an interesting and rigorous criticism of Cohen’s recent moral and political philosophy by Julius Sensat in the Journal of European Philosophy.

But here are some critical questions in regards to his theory of history book.

1. His definition of relations of production is so formal that he can’t follow Godelier in seeing how kinship, politics and religion can at times serve as relations of production. In fact I don’t think he discusses Godelier at all. Derek Sayer draws on his work in his criticism of Cohen.

2. His discussion of the Asiatic Mode of Production is terribly impoverished as compared to the work of, say, Brendan O’Leary. We can’t just make marginal such an important topic. Cohen was unbelievably Eurocentric.

3. When he comes to understanding the dynamics of capitalism itself, he develops no coherent theory of crisis and the limits of the mixed economy.

Yet in spite of such obvious limits and flaws in his work he became the dominant interpreter of Marx in the Anglo American academy. I would say that even Elster had less influence on the interpretation of Marx.

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