« previous   misc   next »

Economic Possibilities for our Grandchildren


By Vicente   Follow   Sun, 6 Jan 2013, 2:35pm PST   2,396 views   43 comments   Watch (0)   Share   Quote   Permalink   Like   Dislike (2)  

From Keynes 1930 paper looking forward to 2030:

http://www.marxists.org/reference/subject/economics/keynes/1930/our-grandchildren.htm

"For many ages to come the old Adam will be so strong in us that everybody will need to do some work if he is to be contented. We shall do more things for ourselves than is usual with the rich to-day, only too glad to have small duties and tasks and routines. But beyond this, we shall endeavour to spread the bread thin on the butter – to make what work there is still to be done to be as widely shared as possible. Three-hour shifts or a fifteen-hour week may put off the problem for a great while. For three hours a day is quite enough to satisfy the old Adam in most of us!"

He envisioned the miracle of capitalism would reduce man's workload so that you could live a comfortable life on a 15-hour work week. Please discuss why this vision hasn't panned out.

« First     « Previous     Comments 4-43 of 43     Last »

Peter P   befriend   ignore   Sun, 6 Jan 2013, 3:35pm PST   Share   Quote   Like (1)   Dislike     Comment 4

Vicente says

From what I've read, measurable US worker productivity has been up about 2% EVERY year since 1950.

By what measure? The value extracted from unit-labor might have been increasing. That does not mean that people are actually productive.

Many real-life corporate environments make Office Space and Dilbert look sane.

Kevin   befriend   ignore   Sun, 6 Jan 2013, 3:45pm PST   Share   Quote   Like   Dislike (1)     Comment 5

I think the vision of a 15-20 hour work week will still happen, it'll just take a lot longer than Keynes thought. Globalization happened in such an asymmetrical way that it'll be an extra decade or two before robots are cheaper than Chinese workers.

swebb   befriend   ignore   Sun, 6 Jan 2013, 4:55pm PST   Share   Quote   Like (1)   Dislike (1)     Comment 6

Kevin says

I think the vision of a 15-20 hour work week will still happen, it'll just take a lot longer than Keynes thought. Globalization happened in such an asymmetrical way that it'll be an extra decade or two before robots are cheaper than Chinese workers.

I'm not so optimistic. First, with that much excess time the population will get restless. Increased consumption may be the best outcome we could hope for. Besides, a 15 hour workweek would require a sea change in our social norms, which I wouldn't expect in any mid term time frame (low single digit decades). If I can work 15 hours and have all I need, maybe I will work 20 hours and get 1/3 more. Of course I also believe that we are somewhere in the neighborhood of maxing out our resources -- I don't believe the earth can sustain the current population, much less the rate of increase we have been experiencing. Less work coincident with widespread abundance sounds like a fairy tale to me -- or something that we have already experienced.

Kevin   befriend   ignore   Sun, 6 Jan 2013, 5:53pm PST   Share   Quote   Like   Dislike (1)     Comment 7

swebb says

First, with that much excess time the population will get restless.

The same arguments were used when the 40 hour workweek was made mandatory (by factory owners). It didn't pan out. People found things to do.

swebb says

Besides, a 15 hour workweek would require a sea change in our social norms, which I wouldn't expect in any mid term time frame (low single digit decades).

It happened within two decades when we transitioned from agriculture to industry and again when we instituted the 40-hour work week. I don't know how long it took when we went from hunter / gatherer to agrarian since our record keeping was poor.

swebb says

If I can work 15 hours and have all I need, maybe I will work 20 hours and get 1/3 more.

No, you won't, because it won't be easy to do so.

In low-paying jobs, people who WANT to work more are already finding that their employer won't give them more hours. A combination of overtime laws, balancing the requests of other employees, etc. all work in concert to make this the norm.

You can certainly, as an individual, choose to do more work outside of an employer (or multiple employers), but few do because society doesn't encourage it. Most people will gladly work less. The exceptions are the relatively few people who work in a highly creative discipline where their work is as much of a hobby as it is a source of income.

swebb says

Of course I also believe that we are somewhere in the neighborhood of maxing out our resources -- I don't believe the earth can sustain the current population, much less the rate of increase we have been experiencing

"much less" what? Population growth has been on the decline for decades. World population quadrupled over the past 100 years but it will increase by a mere 40% over the next 100.

The only resources that we're remotely at risk of exhausting are temperature (global warming) and water (but not because of population -- because of misuse). The former happens no matter how many people we have (and it can probably only be limited at this point, not stopped) and the latter can be and is being fixed.

swebb says

Less work coincident with widespread abundance sounds like a fairy tale to me -- or something that we have already experienced.

It is something that we have already experienced -- three times in human history! Every single time it was new technology, followed by social norms changing.

We figured out farming and suddenly were able to actually think about things other than our most basic of human needs.

We figured out how to harness energy and were able to allow average people to experience the concept of "leisure time" that was rare to non-existent outside of the upper class.

Now we're letting machines and software do work for us.

In the near future, small machined parts will be available for anybody to print instantly on demand, completely eliminating an entire industry, but dramatically reducing the cost of producing things.

In the near future, transportation (of people and goods) will be entirely automated, more or less eliminating the automobile industry, but dramatically reducing the cost of goods and personal transportation.

And these are just the easily predictable things that are in the late prototype stages and on the verge of mass availability. There are also breakthroughs happening every day in areas like medicine that could dramatically reduce our health care costs (but eliminate the need for many health care workers), construction that would dramatically reduce our housing costs (but eliminate the construction industry), and who knows what else.

fil   befriend   ignore   Mon, 7 Jan 2013, 3:05am PST   Share   Quote   Like (2)   Dislike     Comment 8

I see lots of people working 15 hour work weeks. Sure they spend more time than that at the office, but most of it isn't working.

Ironman   befriend   ignore   Mon, 7 Jan 2013, 3:13am PST   Share   Quote   Like (3)   Dislike (1)     Comment 9

fil says

I see lots of people working 15 hour work weeks. Sure they spend more time than that at the office, but most of it isn't working.

It's spent posting here on Patnet.......

raindoctor   befriend   ignore   Mon, 7 Jan 2013, 11:07am PST   Share   Quote   Like   Dislike     Comment 10

It has not happened because of rentier capitalists. Wherever you find jobs, there you end up spending most of your earnings on paying rent (or mortgage), insurance, etc.

Robots and automation should improve the quality of lives. Instead, people are forced to have 3 jobs, forcing both husband and wife to work, etc, just to pay the rentiers.

Otherwise, how much does one need to live in a log cabin in Wyoming or Montana? Not much. However, the moment jobs are there, rentiers spring in and extract the new form of toll. That's why Institutional economists and economists before and other than neo-classicals advocated to tax rentier capitalists because they leech off productive aspects.

APOCALYPSEFUCKisShostikovitch   befriend   ignore   Mon, 7 Jan 2013, 11:21am PST   Share   Quote   Like (2)   Dislike     Comment 11

It's not about the work.

The psychopaths who run the show just love face-fucking the drones who work for them and making them thank them for the workaday torture of working for pennies that have nothing to do with the actual cost of living.

Oh, poor baby, hahahahahahaha!, you need health insuwance? We have that. Oh, you mean one that doesn't cap insurance at $25,000? Sowwy. I can lend you money to hire a bankruptcy lawyer at 10 percent - I know a banker who can help. Vacation, too? Haven't rested in 13 years and blood is coming out your nose and ass? Oh, good thing you have health insurance.

Kevin   befriend   ignore   Mon, 7 Jan 2013, 11:44am PST   Share   Quote   Like   Dislike     Comment 12

Oh please. Outside of illegal immigrants and miners, nobody in america works in those conditions. A greeter at wal mart who can't pay for her insulin isn't exactly The Jungle.

Dan8267   befriend   ignore   Mon, 7 Jan 2013, 1:02pm PST   Share   Quote   Like   Dislike (1)     Comment 13

Vicente says

From what I've read, measurable US worker productivity has been up about 2% EVERY year since 1950.

Damn straight! And those are real gains, not nominal. At 2% a year, it only takes 36 years, one and a half generations, to double productivity. Since 1950, productivity has increased about three and a half times.

If capitalism rewarded productivity, our real wages would have risen by 3.5 times since 1950. In 1950, the median income was $5,000. Adjusted for inflation, that is roughly $46,540.59 in today's dollars, the median income of the middle class worker today. If the increases in productively were equally shared between producer and capital, then the median income would be about $160,000/yr in today's dollars.

The Middle Class is getting raped by those who control capital.

APOCALYPSEFUCKisShostikovitch   befriend   ignore   Mon, 7 Jan 2013, 1:04pm PST   Share   Quote   Like (2)   Dislike     Comment 14

It's the Prison Rape Economy.

You can scream, but there's no place to go!

JodyChunder   befriend   ignore   Mon, 7 Jan 2013, 1:08pm PST   Share   Quote   Like (1)   Dislike     Comment 15

Kevin says

There are also breakthroughs happening every day in areas like medicine that could dramatically reduce our health care costs (but eliminate the need for many health care workers), construction that would dramatically reduce our housing costs (but eliminate the construction industry), and who knows what else.

That's a nice bit of blue sky, but there's a volume or two of small print on the underside of your crystal ball that you've neglected to read.

Peter P   befriend   ignore   Mon, 7 Jan 2013, 1:13pm PST   Share   Quote   Like   Dislike     Comment 16

Perhaps the middle class was just a myth or an anomaly. It is always about strong hands and weak hands. The middle class never had the upper hand. It was an illusion created by the post-war boom.

I am reasonably sure that the middle class will not exist in any sufficiently large economy after 15-20 years.

Capitalism rewards strength. Productivity is a rather abstract concept.

Maybe thinking about classes will make you age faster. Who cares? Things happen so quickly nowadays pretty much anyone can become anything. We cannot tie ourselves to labels.

Vicente   befriend   ignore   Mon, 7 Jan 2013, 2:13pm PST   Share   Quote   Like (1)   Dislike (1)     Comment 17

raindoctor says

It has not happened because of rentier capitalists. Wherever you find jobs, there you end up spending most of your earnings on paying rent (or mortgage), insurance, etc.

Ah, an interesting theory! The thinking in the time of Keynes I believe revolved around "industrial productivity". And to this day people still think in terms of making more/better widgets equals Better Life!

However, perhaps we are missing the fact that Making Things is no longer the focus of capitalists. The rising size and stature of the FIRE component is where the money goes. Why build a factory, when you can place bets with CDO-squared?

So it may boil down to FIRE found a way to consume all the gains.

Hmph.

Kevin   befriend   ignore   Mon, 7 Jan 2013, 2:46pm PST   Share   Quote   Like   Dislike     Comment 18

Dan8267 says

The Middle Class is getting raped by those who control capital.

I have never been forced to have sex with a rich person. Sounds like a good time! (it never ceases to amaze me how people who have never experienced rape, slavery, or oppression compare everything that they experience to those horrible facets of human behavior).

I don't think it's as simple as dollars and cents. While we certainly didn't get a 3.5x increase in wages from that productivity, we have received the benefits of technology, the increases in food production, cheap air travel, etc.

That's actually quite good by historical standards. In the early days of the industrial revolution, it wasn't the coal miners who got access to electrical power, and it wasn't the factory workers who got to drive the automobiles.

Would you be happy living in a world where the rich had 99.999% of the wealth, but every human being had access to free housing, health care, food, transportation, etc., and had the freedom to do whatever they wanted with their time (say, Star Trek)? I certainly would be.

JodyChunder says

That's a nice bit of blue sky, but there's a volume or two of small print on the underside of your crystal ball that you've neglected to read.

I am a technology optimist, but history shows that the optimists tend to grossly underestimate actual progress. Find one of those ridiculous popular mechanics from the 50s for some amusing examples. Things are so much better than most of what they predicted, and the stuff that never appeared doesn't really matter.

Peter P says

Perhaps the middle class was just a myth or an anomaly. It is always about strong hands and weak hands. The middle class never had the upper hand. It was an illusion created by the post-war boom.

Or maybe there is no "upper hand". I've had two great conversations with two different billionaires in my life. Neither of them seemed to think of themselves as being a different type of person than anybody else, or had any agenda to keep people down. If they wanted to bring down anybody, it was their fellow billionaires. The "us vs them" mentality certainly exists, but I think it's overblown and played up by aristocratic archetypes that don't really exist in the US.

Wealth inequality today is much worse than it was 50 years ago, but is it worse than it was 100, 200, or 500 years ago? It seems to me that, on the scale of human history, there is a very strong trend towards more fairness. It seems most likely to me that it's the present disparity that is the anomaly.

Peter P says

I am reasonably sure that the middle class will not exist in any sufficiently large economy after 15-20 years.

I will take that bet. If you think the middle class will cease to exist in less than two decades, then you're essentially betting on armageddon. If that's the case, why on earth are you spending time posting about this online?

Peter P   befriend   ignore   Mon, 7 Jan 2013, 3:10pm PST   Share   Quote   Like   Dislike     Comment 19

Kevin says

Neither of them seemed to think of themselves as being a different type of person than anybody else, or had any agenda to keep people down.

What do you expect them to say? :-)

Most billionaires are smart people. Smart people will always say what you want to hear.

Kevin says

I will take that bet. If you think the middle class will cease to exist in less than two decades, then you're essentially betting on armageddon.

Or most economies (except small, isolated ones) will polarized into the working class and the rich. I think that is the nature tendency of humanity.

Kevin says

It seems to me that, on the scale of human history, there is a very strong trend towards more fairness. It seems most likely to me that it's the present disparity that is the anomaly.

I think that "trend" towards "fairness" was either an illusion or an anomaly. It was rather a counter-trend correction. We cannot expect history to move in a straight line, can we?

Peter P   befriend   ignore   Mon, 7 Jan 2013, 3:11pm PST   Share   Quote   Like   Dislike     Comment 20

Remember, there is no collective will in humanity.

There is the individual will to power.
Then there is the herd madness.

Those who retained their individuality will always end up with more power.

JodyChunder   befriend   ignore   Mon, 7 Jan 2013, 3:14pm PST   Share   Quote   Like (1)   Dislike     Comment 21

Kevin says

I am a technology optimist, but history shows that the optimists tend to grossly underestimate actual progress. Find one of those ridiculous popular mechanics from the 50s for some amusing examples. Things are so much better than most of what they predicted, and the stuff that never appeared doesn't really matter.

Maybe...this certainly is not true of futurists like Sir Arthur C. Clarke or pioneers like Marvin Minsky or Ed Fredkin, or even visionaries like Stanley Kubrick. I think if anything, the present very much pales compared to their visions from over half a century ago.

What I was referring to in my original comment was the ever-expanding stumbling blocks to technological advancement, from multinational consolidation to copyright policy and patent monopolists.

Kevin   befriend   ignore   Mon, 7 Jan 2013, 5:58pm PST   Share   Quote   Like   Dislike     Comment 22

Peter P says

What do you expect them to say? :-)

Most billionaires are smart people. Smart people will always say what you want to hear.

Given that we were half drunk both times and talking about video games, I'm going to go out on a limb here and say that they weren't thinking about their image.

Peter P says

Or most economies (except small, isolated ones) will polarized into the working class and the rich. I think that is the nature tendency of humanity.

Yep, you heard it from Peter P folks. Total collapse of the middle class. The exact opposite of what has been happening globally for the past 100 years. All in 20 years time!

Peter P says

I think that "trend" towards "fairness" was either an illusion or an anomaly. It was rather a counter-trend correction. We cannot expect history to move in a straight line, can we?

No, we can't, but a 4000+ year trend beats the fuck out of a 50 year one (and never mind that, globally, even the 50 year trend is STILL towards greater equality...you just don't notice it because you're the one in the top 5% giving to the world's poor).

JodyChunder says

Maybe...this certainly is not true of futurists like Sir Arthur C. Clarke or pioneers like Marvin Minsky or Ed Fredkin, or even visionaries like Stanley Kubrick. I think if anything, the present very much pales compared to their visions from over half a century ago.

This seems like just a difference of opinion. I'd much rather the real 2001 than the lame ass version Mr Clarke and Mr Kubrick imagined.

The real innovations of the late 20th century (microprocessors, the internet, etc.) were either completely missed or only hinted at by futurists from the early 20th century. Everybody was infatuated with space travel and robots.

JodyChunder says

What I was referring to in my original comment was the ever-expanding stumbling blocks to technological advancement, from multinational consolidation to copyright policy and patent monopolists.

You say this through the lens of someone living in the present. These are legitimate concerns, but they're passing concerns. If you asked a futurist from decades past they would have had other concerns that would seem ridiculous today.

Every time I read a new publication about graphene, quantum entanglement, or stem cells, I think "the future is going to be awesome. I hope I live to see it".

JodyChunder   befriend   ignore   Mon, 7 Jan 2013, 6:43pm PST   Share   Quote   Like (1)   Dislike     Comment 23

Kevin says

The real innovations of the late 20th century (microprocessors, the internet, etc.) were either completely missed or only hinted at by futurists from the early 20th century.

2001: A Space Odyssey: I think you need to sit your happy ass down and watch that film again. Maybe the shantung spacesuits and beehives haven't aged so well, but it was miles more ahead of the curve than you give it credit for being. Just one example that springs to mind is the SLM-like crystal memory that we see David removing when eviscerating Hal. Hinting at holographic data storage in an age of Ampex and IBM was pretty amazing stuff to this kid.

Kevin says

If you asked a futurist from decades past they would have had other concerns that would seem ridiculous today.

Could be. I don't deny the lens I'm looking through lost most of it's rosy tint years ago, starting with the anti-monopoly laws that Reagan helped roll back in the eighties. Obviously, I would love to look back one day and reflect on how dumbass my concerns were and witness humanity transcend all the red tape, greed and stupidity that has historically impeded so much innovation and creativity. Anything could happen. In the meantime, I'll stick to my Larry Niven paperbacks.

raindoctor   befriend   ignore   Tue, 8 Jan 2013, 4:28am PST   Share   Quote   Like   Dislike     Comment 24

Vicente says

However, perhaps we are missing the fact that Making Things is no longer the focus of capitalists. The rising size and stature of the FIRE component is where the money goes. Why build a factory, when you can place bets with CDO-squared?

In old days, there was some sort of antagonism between mercantilists (like today bankers, and financial asset swappers/betters) and Industrial capitalists. Today, you hardly see Industrial capitalists. What we see is a deadly mixture of both stripes.

Look at venture capitalists: they are in the game to exit as soon as possible with huge returns. When they exit, they swap their shares with hedge funds, mutual funds, pension funds, etc.

When you look at private equity, it is the same. Today's Private Equity is a reincarnation of old junk bonds business. Buy the company, take it private, load up with debt, strip all assets, stop investing in the company, transfer that debt as bonuses for PE firms. Then exit.

If you look at asset swappers on the wall street, they don't really add any value, even though they help (serve) moving assets from one class to another class, from one owner (investor/fund) to another owner (investor/fund). A nanny or home cleaning service is more useful to many folks than these financial services industry.

Financial services industry as a whole does one thing: they jack up the asset prices. They also think that they can jack up forever; but this is not going to happen for a couple of reasons: look at recent ap ple stock price; all the funds have been trying to value it more, but are constrained by portfolio choice (don't keep more than 10% of one company), etc.

The whole sector of financial asset pricing, asset swapping (portfolio management, composition), etc, does not serve 99 percent of the population. Even a guy at McDonalds serve many joes, even if that guy does not like his job.

Peter P   befriend   ignore   Tue, 8 Jan 2013, 4:45am PST   Share   Quote   Like   Dislike     Comment 25

Again, traders and speculators provide liquidity. The add value to the financial markets by making them efficient price discovery mechanisms.

Their value is not immediate visible.

raindoctor   befriend   ignore   Tue, 8 Jan 2013, 5:26am PST   Share   Quote   Like   Dislike     Comment 26

Peter P says

Again, traders and speculators provide liquidity. The add value to the financial markets by making them efficient price discovery mechanisms.

Their value is not immediate visible.

Yes, it is an indisputable fact that those whole hold financial instruments can immediately swap their instruments for dollars. It is also indisputable that a bridge to nowhere serves those who use that bridge.

These financial markets don't serve companies much, except for the top 1%, who holds their savings in those equities, etc.

The commonsense thinks that markets help companies raise funds to invest in their production: this is disputed by economists. All companies invest in their production, R & D out of their savings. How about those companies, who don't have any savings? Well, thats an interesting case: that's when they go to IPO--even here they just use 10% of IPO proceeds for investment-- if it is a new company; if its a public company with losses, they can raise capital via additional shares or debt market.

When you look at the number of publicly traded companies, you don't see that many use financial markets to raise money for future production, R &D. Michael Hudson has some interesting statistics on this, couldn't locate his paper.

Financial markets just serve those 1%, who holds 'monetary' wealth. All others use whatever paycheck they get to buy things they consume, services they can use, in non-financial markets.

Price discovery, liquidity, is for those 1 percent folks.

Vicente   befriend   ignore   Tue, 8 Jan 2013, 9:47am PST   Share   Quote   Like   Dislike (1)     Comment 27

I'm re-reading the original essay again.

"From the earliest times of which we have record – back, say, to two thousand years before Christ – down to the beginning of the eighteenth century, there was no very great change in the standard of life of the average man living in the civilised centres of the earth......"

......

"This slow rate of progress, or lack of progress, was due to two reasons – to the remarkable absence of important technical improvements and to the failure of capital to accumulate. "

Well, that explains it eh?

iwog   befriend   ignore   Tue, 8 Jan 2013, 10:37am PST   Share   Quote   Like   Dislike     Comment 28

Vicente says

and to the failure of capital to accumulate. "

There you go. The modern economy has quantified every last grain of soil on earth and created a convenient marker to represent it, therefore there is nothing to prevent capital from accumulating in a tiny minority of hands or even the hands of a s