More Luddism

by Don Boudreaux on November 11, 2011

in Complexity & Emergence, Creative destruction, Growth, Myths and Fallacies, Seen and Unseen

Adam Simpson sent to me this essay in today’s Taipei Times; here’s my letter to the editor in response:

Martin Ford fears that continuing automation will usher in a future where “virtually no one would have a job or an income; machines would do everything” (“How automation could cause wide-scale unemployment and sink the global economy,” Nov. 11).

Not only is he 200 years behind the times – the original Luddites began breaking machines in textile factories in 1811, playing on fears that the loss of jobs such as hand-weaving would cause ever-rising unemployment, stagnation, and misery – his argument also is internally inconsistent.  If it’s really true that machines will soon do “everything,” then all human wants will be met without anyone having to work.  Far from most of us being cast into poverty – which is a situation of too many human needs remaining unsatisfied – every last one of us will be fabulously rich because, by Mr. Ford’s assumption, all human needs will be satisfied automatically, by machines.

In fact, of course, no such nirvana awaits us.  As was true 200 years ago, the falling costs of satisfying some wants (such as those for food and clothing) enable us to turn our attention to satisfying other wants, many of which today were unimaginable to our 19th-century ancestors.  Indeed, it’s only because most of the jobs that existed in the past have been destroyed that we today have the luxury to fret about just how we’ll pay for junior’s college education, dad’s blood-pressure medicine, the mortgage on that 1,500 square-foot house with solid floors and a hard roof, and next summer’s family vacation to DisneyWorld.

Sincerely,
Donald J. Boudreaux

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{ 160 comments }

Daniel Kuehn November 11, 2011 at 8:37 am

Do you consider Arnold Kling’s PSST Luddism? Job loss due to automation is central to what he’s been talking about. He’s even endorsed that Obama ATM comment as an example of Obama embracing PSST?

My view is short term technological unemployment is very real and long-term technological unemployment is not a problem.

But I’m still puzzling over your embrace of PSST when Arnold has been pounding this technological unemployment point very hard. I think you need to either specify why you’re not critical of PSST in this respect, or else back off Simpson, Obama, and others for making reasonable claims about short-term technological unemployment.

Josh S November 11, 2011 at 9:24 am

Of course short-term technological unemployment is very real. But it doesn’t crash the global economy because it’s caused by growth. It also doesn’t last very long if the government doesn’t subsidize it.

Daniel Kuehn November 11, 2011 at 11:41 am

Right and right.

Randy November 11, 2011 at 9:36 am

Short term technological unemployment is not a reason for political interference. It is a reason for those with unrequired skills to learn required skills. Also, in the tech world there isn’t a single worker who is not aware that staying current with the advancing technology is a key requirement of every job. And now that I think about, this is true for nearly every career field I can think of… with the possible exception of political jobs… which could explain why they are still referring back to the 1930s for their proposed solutions…

Invisible Backhand November 11, 2011 at 1:34 pm

It is a reason for those with unrequired skills to learn required skills.

Actually, the manufacturing environment is fairly atomized and learning new skills is done all the time, almost seamlessly. But, I’m sure you’ve noticed people are kept compartmentalized in one or more of your own workplaces. They actively prevent people from learning too much, becoming too vital or (gasp) indispensable. I’ve seen it up close and personal at major corporations and I bet you have too.

Also, in the tech world there isn’t a single worker who is not aware that staying current with the advancing technology is a key requirement of every job. And now that I think about, this is true for nearly every career field I can think of

Companies prefer to dispose of you along with the obsolete technology. Don’t want employees building up seniority and higher pay grades.

It’s really about keeping employees powerless and cheap by rotating them out and the new hires in.

Randy November 11, 2011 at 2:10 pm

IB
I work for a software development company, and I haven’t seen either of the trends you describe. I’m also having trouble imagining a company that would deliberately hold its employees back for any reason. Perhaps you can give me an example.

Nikolai Luzhin, Eastern Promises November 11, 2011 at 3:05 pm

Randy

you must be deaf and blind.

most employees are held back by their bosses. you have no idea how the world works.

Randy November 11, 2011 at 3:14 pm

That is simply not my experience, and I’ve been in the work force for over 40 years now. Again, perhaps you have an example?

Invisible Backhand November 11, 2011 at 3:45 pm

Randy, you should really try to keep your feigned ignorance believable. On the off chance you are sincere, have you every heard the word “temp” at your company?

Randy November 11, 2011 at 4:03 pm

Sure, we use temps. They are given an opportunity to gain some skills and experience and to make a bit of money. Some of them who do well have been offered full time positions. In what way is this holding them back?

CalgaryGuy November 11, 2011 at 4:04 pm

IB, what does temp work have to do with what you describe? Are you saying that anytime an employee is hired it must be permanent? Are you saying, in your world, you see no situation where an employee’s services are only needed temporarily?

Invisible Backhand November 11, 2011 at 4:58 pm

Randy now:

Sure, we use temps. They are given an opportunity to gain some skills and experience and to make a bit of money. Some of them who do well have been offered full time positions. In what way is this holding them back?

Randy then:

…and until you learn how to produce something of value to me I have no interest in your visions or your opinions.

Like I said, it was an off chance that you were sincere.

Randy November 11, 2011 at 5:25 pm

IB,
I’m guessing that you’re trying to make a point, but I’m not seeing what it is. I recommend just answering the question, to repeat, How is this holding them back?

Invisible Backhand November 11, 2011 at 6:19 pm

How is this holding them back?

Because you lay them off.

Randy November 11, 2011 at 6:40 pm

IB,
A job is a cost, not a benefit. Not laying someone off after the job is done would be a benefit. Producers don’t do benefits – we trade. But more to the point, laying someone after after the job is done is not oppression or holding them back, it is simply the end of the deal.

Invisible Backhand November 11, 2011 at 6:55 pm

Me then: But, I’m sure you’ve noticed people are kept compartmentalized in one or more of your own workplaces.

Randy then: I haven’t seen either of the trends you describe.

Randy now: …it is simply the end of the deal.

Like I said, it was an off chance that you were sincere.

Randy November 11, 2011 at 7:12 pm

What does that have to do with workers being compartmentalized? People are hired to do a job. The job usually has a description. But in most of the jobs I’ve done there was an opportunity to learn something, and at the very least there was an opportunity to prove myself, a thing which could be leveraged into the next job.

Andrew_M_Garland November 11, 2011 at 4:30 pm

IB,
You write “They actively prevent people from learning too much, becoming too vital or (gasp) indispensable. I’ve seen it up close and personal at major corporations and I bet you have too.”

Would you care to give your experience? What did you see, personally?

Invisible Backhand November 11, 2011 at 5:18 pm

No thanks, how about some of yours? And I’m sure Russ and Don have some stories about how associate and adjunct professors are treated.

Randy November 11, 2011 at 5:40 pm

So, if I’m reading you correctly, you’re saying that anyone who hasn’t reached the top of their profession is being abused or held back… by definition?

Invisible Backhand November 11, 2011 at 6:29 pm

So, if I’m reading you correctly, you’re saying that anyone who hasn’t reached the top of their profession is being abused or held back… by definition?

Reductio ad absurdam. Are you just trying to waste time or what?

Randy November 11, 2011 at 6:43 pm

Nope, not trying to waste time. Just trying to get to what it is that you’re trying to say. You seem to assume that associate and adjunct professors are abused or held back, and I’m not seeing any reason to assume that.

Nikolai Luzhin, Eastern Promises November 11, 2011 at 8:46 pm

Andrew

let’s just try a little thought experiment. to make it easy enough for you to understand, lets assume one project and you have 2 employees, No. 2 one who cannot do the job and No. 1 who can do his job, your job and any other job in the company. in the short run you cannot replace either of your two direct reports.

at 9:00 a.m. you get a new assignment from you boss who says, this is a make or break project for you. It will take your entire team (and it will) if it is not down, we follow the GE system and you are out the door.

at 10:00 a.m., HR calls and asks you what kind of an employee No. 1 has been so far, as the best employee in the East who accounted for 50% of the companies profits was just hit by a bus.

Do you tell HR, No. 1 is the greatest, take him. Or do you do what every boss in the world does. “No. 1, he hardly cuts it for me,” so that you keep No. 1, get your project done, and don’t get fired.

IOW you are a fool

Andrew_M_Garland November 11, 2011 at 9:24 pm

To Nikolai Luzhin, Eastern Promises,

() I asked IB for his claimed personal experience. He doesn’t feel like answering. Your made up example is not your personal observation either.

() Your example is reasonable to me, but would be rare, and it doesn’t explain IB’s claim, that companies “actively prevent people from learning too much”. Your example has a manger who needs the abilities of his best team member.

() Your example does not arise from corporate policy, adopted intentionally, but emerges from individual behavior. Human Resources wants the name of the best employee. Your example manager is acting against the wishes of his company. That opposes IB’s opinion that companies are evil.

Nikolai Luzhin, Eastern Promises November 11, 2011 at 11:32 pm

you have the same closed mind as everyone else here

I gave you a simple thought experiment to prove to you that your entire mental model is wrong. You admit my experiment works and then you fall into a bunch of defensive crap

The experiment shows that corporations, because they are composed of people, do not work on a command and control basis. Someone may give the order or have a desire or wish that something happen but whether it does is pretty much chance, for context, which cannot be controlled, determines all the actions of all the employees of the firm.

This is why the ideal business model is the GM factory. Hire people who are smarter than required for the work, do not train or advance them, reduce the job down to a single act, and put the car on a conveyor belt that moves past the employee so that you can force the number of cars built each day.

Peter Drucker spent a lifetime thinking and writing about how this all changes with knowledge workers and I am not about to do your work of reading him, except to tell you that you are wrong and have no idea what you are talking about.

carlsoane November 12, 2011 at 3:13 am

Nikolai:
Interesting that you claim that the GM factory is the ideal business model. Last I checked, GM wasn’t the most profitable company in the world.

And, your thought experiment didn’t prove anything. My experience is that managers can’t hide their most talented people. But let’s assume my experience is unusual, and that your thought experiment actually proved that managers hoard talent. All your experiment would have proved is that managers slow the upward mobility of their best people not by trying to dispose of them as you and IB are trying to claim, but by trying to hang on to them.

Randy November 12, 2011 at 5:33 am

Andrew,

Agreed that NI’s hypothetical could happen but that it would be rare. Also, it ignores the fall out. A manager that doesn’t support his or her people will quickly be recognized as such, and the best employees will find a way around. A manager that would promote a problem child would quickly be recognized by upper management and pay the price.

Randy November 12, 2011 at 5:40 am

Carlsoane,

Agreed that managers do sometimes try to hold on to their best people, but they do it by giving them raises and honors, not by subterfuge. So I’m still waiting for examples of employees being deliberately oppressed or held back.

Randy November 12, 2011 at 5:50 am

All that said, I have, over the years, been acquainted with many an employee who imagines him or herself to be god’s gift to the company, but is actually a routine screw-up. These folks usually imagine that they are being oppressed and held back, and when fired they always find someone to blame. So certainly there are plenty of “stories” out there.

Nikolai Luzhin, Eastern Promises November 12, 2011 at 8:07 am

carlsoane

you are an idiot with a mind remarkable in it being so closed.

no Company better proves my theory than GM

you are such an idiot that you can’t ask the obvious question, why couldn’t GM leverage its ability to make cars into an ability to sell cars at a profit. The people who make the cars do not decide what cars to make, how to sell them, or at what price. The answer to that is, as Drucker says, your “knowledge workers” have to be effective. GM’s knowledge workers became less and less effective over time.

Beyond that, your defense of companies (hiding talent causes people to leave, etc.) proves my point. Whether a company is effective at knowledge work is entirely context or facts and circumstances driven. You admit talent is hidden. Since the problem is hidden, we have no tools for measuring the loss or damage caused, but there is some work now being done using micro data that is able to measure the overall effectiveness of management and it is finding that very similar size firms can differ in productivity on a scale of 4 or 5 or even 10 times.

An argument being made is that, if you are bad a one thing you are likely bad at another. Thus, if your managers are holding back talent, then other bad things are also likely happening. In sum, you have no idea what you are talking about. Just because you have a job and see what happens where you work gives you little idea of what business is really about across the vast scale

carlsoane November 13, 2011 at 12:10 pm

Nikolai:
If a company is doing one bad thing, they must be doing other things that are terrible. That’s your counter-argument? Really?

All I can say is I hope you’re not a judge.

LowcountryJoe November 12, 2011 at 9:10 am

It’s really about keeping employees powerless and cheap by rotating them out and the new hires in.

As if employees are completely powerless over their lives and cannot use their off-hours to sharpen those skills which are currently in demand from industries. One can also freely shop their labor services to anyone else or even to themselves! It is simply not acceptable to call individuals powerless here; UNACCEPTABLE.

If this was a sincere comment that I’m responding to, it is one of the more ignorant things I’ve read at the Cafe in quite some time. Don’t get me wrong, I’ve seen you, IB, write things far more ignorant than this during that time span but I knew you were being deliberate obnoxious. This time, I think, you were making an attempt at a valid point…and failed!

Invisible Backhand November 12, 2011 at 11:18 am
Dan Phillips November 11, 2011 at 9:37 am

Daniel, this is an honest question. In all of human history has there ever been a time when there has not been short term technological unemployment?

Daniel Kuehn November 11, 2011 at 11:41 am

I’m not sure how I would know that… probably periods when there wasn’t much technological progress or reliance on capital equipment for output.

Dan Phillips November 11, 2011 at 7:32 pm

I guess I misunderstood you. I thought when you said it was your view that short term technological unemployment was real you were implying that it was something relatively new and was a problem that needed to be addressed by some sort of public policy. You never said that. I thought you were implying it.

George Selgin November 11, 2011 at 10:12 am

That there’s no contradiction between Don’s criticism of Mr. Ford and his finding merit in Kling’s PSST argument seems perfectly obvious: Ford, like the Luddites, imagines that technological progress must eventually put everyone out of work; his is a (clearly false) claim about the long-run bearing of technology on unemployment. Kling’s thesis is about the inevitability of structural change and unemployment; it doesn’t at all imply that that (or any other sort) of unemployement is bound to get worse and worse as technology progresses.

Daniel Kuehn November 11, 2011 at 11:44 am

I think that’s perfectly obvious too. As I thought I noted, there’s a difference between my and Kling’s thoughts on short-term unemployment and long-term technological unemployment.

I’m not sure why you think I’m suggesting there’s a contradiction – I thought I made a point of spelling that out, George. I agree with Don on Ford.

The thing is, Don has ridiculed other references to short term technological unemployment as Luddism as well. I’ve repeatedly asked him what he makes of Kling’s reference to technological unemployment and so far he hasn’t spoken to it.

vikingvista November 11, 2011 at 1:42 pm

You know, DK, there is one common denominator in all the supposed misinterpretations that so many different people are constantly taking from your comments.

Daniel Kuehn November 11, 2011 at 3:05 pm

I said I don’t think long-term technological unemployment “is not a problem”. How much clearer could I have gotten vikingvista? What the hell do you want me to say? I literally cannot think of a simpler way of saying it. If you have ideas – tell me.

Josh S November 11, 2011 at 2:41 pm

This wasn’t a reference to short-term unemployment. The title of the article is literally “How automation could cause wide-scale unemployment and sink the global economy.” The author concludes the article by claiming that *this* time, for the first time in human history, machines are going to cause “structural unemployment.”

Daniel Kuehn November 11, 2011 at 3:06 pm

Right – I raised a question about short-term unemployment because of a long-standing unwillingness to differentiate between the two in Don’s posts, as well as his unwillingness to speak to Kling’s views on technological unemployment despite repeated (and justified) praise of PSST.

Andrew_M_Garland November 11, 2011 at 9:48 pm

The Luddist argument is:
• Technological advance leads to many lost jobs.
• Losing jobs brings poverty and heartache, especially to the children.
• We must oppose changes in technology which lead to job loss, or at least tax new technologies to assist the job losers.

People who emphasize job losses from technological change always want programs and taxes on the productive to support those who lost jobs. This hinders growth in productivity and the development of better jobs in more useful activities. The lost jobs are usually lost permanently, but other opportunities emerge.

The irony is that more government intervention produces a deadweight loss in jobs, as employers avoid hiring people to do low-margin work. That is exactly the work that people are likely to lose their jobs doing, after a while.

Daniel Kuehn November 11, 2011 at 11:45 am

I was thinking of Alan Simpson on the ATM comment in this originally when I said “or else back off Simpson, Obama, and others”, but I realized it was actually Volcker who made those comments…

Sam Grove November 11, 2011 at 12:05 pm

…is short term technological unemployment is very real

Is it a problem, and, if so, why?

Invisible Backhand November 11, 2011 at 12:49 pm

It depends how long ‘short term’ is. I can tread water for the short term, provided it’s not too long.

Economic Freedom November 11, 2011 at 1:53 pm

Librarians profess to care about overdue books, and individual liberty. But when someone loses her job, they don’t care much. It now becomes all about the aggregates. Has unemployment gone up overall? Actually, they don’t care about the size of unemployment, either They are not concerned about size except as it affects their sex life and bank account. As far as that person who lost their job starving to death along with his 3 children, that’s not a librarian’s concern. Show me where in the librarians’ cynical platform they express a concern about the unemployed as an individual? They believe in sink or swim. One person, just like one vote, is irrelevant to them or to the outcome of an election. Librarians give lip service to human dignity when in reality they foist indignity on mankind.

Economic Freedom November 11, 2011 at 8:28 pm

I can’t read what you wrote, because it is repetitive, Revolutionary Communist Party USA foolishness,regurgitated by Lisa Fithian and Debra Sweet from the last demonstration. I’d consider sending you money to get you to stop trolling and spewing left-wing inanities on this classical-liberal blog. Please tell me how much you’d want and where to send the check.

Economic Harmonies November 12, 2011 at 4:48 am

As far as that person who lost their job starving to death along with his 3 children . . .

Your fantasy scenario never happened in the US under capitalism. It only happened during the Roosevelt years under the New Deal (a far cry from capitalism). Read “The Forgotten Man” by Amity Shlaes for documentary evidence.

Invisible Backhand November 12, 2011 at 5:21 am

It depends how long ‘short term’ is.

Which is my disingenuous, Anonymous-approved way of admitting that in principle, short-term unemployment really isn’t a problem; it’s a condition of existence — a bit like the economy-equivalent of gravity. It simply is. The important thing is to remove or prevent artificial obstacles that might prevent these short-term unemployed from finding new employment in the industries that displaced them from their original jobs, or in those industries that will arise from the capital now made available because of lowered costs of production in their original jobs.

These artificial obstacles to finding new employment would include: 1) financial inducements to remain unemployed (Unemployment Insurance); 2) organizations the unemployed might be required to join in order to be considered for new work but which he either cannot afford to join or finds it repugnant to do so. The organizations typically require employers to pay wages that are far above what ordinary labor supply and demand would establish and therefore make the overall amount of hiring in that industry (Unions); 3) a wage-floor, below which a worker may not negotiate when seeking new employment (Minimum Wage).

Since 1) , 2), and 3) require the active intervention of government, it follows that the best way to be certain that “short-term” unemployment is, indeed, short is to get government out of the economy as much as possible.

kyle8 November 11, 2011 at 8:42 am

Something I learned in Econ 101 solves that problem: Human wants are infinite.

Bret November 11, 2011 at 10:40 am

Human’s are finite beings – there’s only 24 hours in the day. Unlikely our wants are infinite.

Nate November 11, 2011 at 11:20 am

Mathematically you are correct. In practical matters however, wouldn’t it be correct to say that there will always be wants beyond haves? As in the richest people in the world now want for things that people 200 years from now might take for granted.

Now if we all became Buddhists, maybe its a different story. Though even the purest Buddhists struggle with wants.

Bret November 11, 2011 at 1:32 pm

I’m surprised. When I took economics 30+ years ago I didn’t recall scarcity being defined using the phrase “infinite wants” but I see that is common usage now. I’ll have to go and look at my economics text and see if my recollection is faulty (unfortunately, actual books don’t have a search button) or if the definition of scarcity has just changed slightly over time.

I’m also surprised because in mathematics “infinite” has specific meaning and by the mathematical meaning human wants cannot be infinite and I rather thought that economics fancied itself enough of a science that it would use a formal mathematical definition.

Will there always be scarcity (material “wants beyond haves”)? As long as the ultimate resource is people (in Julian Simon’s view anyway), then my guess is that we’ll always be able to think up new material wants faster than we can figure out how to satisfy them. But, if one day the ultimate resource is an artificial intelligence coupled with as of yet unknown technologies, which I think is possible one day, then it’s less clear.

Methinks1776 November 11, 2011 at 2:48 pm

Bret, I don’t understand your complaint. Kyle8 merely said that wants are infinite, implying that we shouldn’t worry about employment because human beings will always be engaged in fulfilling their ever-changing and ever-expanding wants.

I don’t see where he’s attempted to define scarcity.

House of Cards & Economic Freedom November 11, 2011 at 11:20 am

Human’s are finite beings – there’s only 24 hours in the day. Unlikely our wants are infinite.

Idiotic statement. Kyle8 did not say “Each individual human being’s wants are infinite.”

Each individual human being is a finite being for whom the 24 hours in a day limit the number of wants. The phrase human wants, however, refers to the species as a whole, and the entire time it has been in existence, and the entire time it might persist into the future — a time that is, in practical terms, infinite.

Economic Freedom November 11, 2011 at 2:47 pm

Troll

Economic Freedom November 11, 2011 at 8:29 pm

I can’t read what you wrote, because it is repetitive, Revolutionary Communist Party USA nonsense,regurgitated by Lisa Fithian and Debra Sweet from the last demonstration. I’d consider sending you money to get you to stop trolling and spewing left-wing inanities on this classical-liberal blog. Please tell me how much you’d want and where to send the check.

Methinks1776 November 11, 2011 at 2:49 pm

What do you mean? My wants are infinite :)

Just ‘coz I don’t want something today……

Economic Freedom November 11, 2011 at 1:55 pm

Don’t feed the troll.

Economic Freedom November 11, 2011 at 8:30 pm

I can’t read what you wrote, because it is repetitive, Revolutionary Communist Party USA propaganda,regurgitated by Lisa Fithian and Debra Sweet from the last demonstration. I’d consider sending you money to get you to stop trolling and spewing left-wing inanities on this classical-liberal blog. Please tell me how much you’d want and where to send the check.

SaulOhio November 12, 2011 at 7:30 am

That human beings are finite means about ability to satisfy our wants is finite. Our ability to imagine has no set limits, so our ability to imagine new things we want is unlimited (I think unlimited is a better word than infinite).

That we are finite is precisely part of the reason why there can always be more work to do. We can never get everything we want done in a 24 hour day.

Jon Murphy November 11, 2011 at 9:10 am

I think someone has watched Terminator one too many times

Greg Webb November 11, 2011 at 9:16 am

Short term unemployment caused by technological change is undoubtedly real. It is a signal by consumers that there is a better, more efficient way of providing a service or producing a good than before. Consumers, by switching to the new technology, are telling those who provide that inefficiently produced good or service to find a more efficient or effective way to produce that good or service or find other ways of satisfying consumer demand. Since human wants are infinite and consumers now have more money to spend, the unemployed will be able to find alternative employment so long-term unemployment is not caused by technological change.

Short-term unemployment is natural and necessary as the economy restructures to address the technological improvement and improve efficiencies. Government intervention merely distorts and delays this necessary change.

Nate November 11, 2011 at 11:22 am

I’m going to stitch this on a pillow.

Greg Webb November 11, 2011 at 12:45 pm

Happy stiching!

Sam Grove November 11, 2011 at 12:09 pm

Short term (involuntary) unemployment is only a problem for those who have not buffered themselves with sufficient savings.

Government policies have punished saving and rewarded unemployment.

vikingvista November 11, 2011 at 1:47 pm

Government policies have also increased the cost to an employee of changing jobs, and to an employer for hiring a new employee. Government policies strive to inhibit both dynamism and employment.

nailheadtom November 11, 2011 at 9:23 am

Everybody wants a job, nobody wants to go to work. The issue isn’t employment, it’s income.

iamreddave November 11, 2011 at 9:34 am

In Politics, Aristotle writes that if “the shuttle would then weave, and the lyre play of itself; nor would the architect want servants, or the master slaves.”
http://acoldandlonelystreet.blogspot.com/2011/11/when-looms-can-operate-themselves-all.html

txslr November 11, 2011 at 9:58 am

And what happens if food becomes so plentiful that the prices plummet and put the farmers out of business? We’ll all starve!

Methinks1776 November 11, 2011 at 2:50 pm

Good. We’re all fat!

LowcountryJoe November 12, 2011 at 9:26 am

The implication that food grows on trees now? Oh, wait, some of it actually does.

Look, as long as there still is a price, not all the farmers went out of business, right? But if the costs fell enough, I’m sure that every individual would become their own personal farmer/food source and still have roughly the same amount of time in the day to earn the same amount of income, right?

Invisible Backhand November 11, 2011 at 10:03 am

“…his argument is internally inconsistent. If it’s really true that machines will soon do “everything,” then all human wants will be met without anyone having to work.

Reductio again. How original. Why is it always two letters a week? Is there a quota? I think I’ve seen three letters in a week before too. Do you get a bonus or do you only have to write one the next week?

Jim November 11, 2011 at 10:29 am

Do you have anything useful to say or are you here only to critize Don? Please show us how Don’s argument is a simple reduction and not a useful explanation. I for one agree with it and find value in his thoughts on this subject. If human desire was limited, then I would agree that Don’s argument is incorrect. But by the simple fact that human desire knows no end, one thing that is replaced by another will mean that there will always be new jobs and new challenges to tackle. Yes, some people will lose their jobs in the short run. But progress cannot be stopped and will not be stopped, so sticking one’s head in the sand won’t do anything.

Invisible Backhand November 11, 2011 at 10:49 am
James N November 11, 2011 at 1:59 pm

Well, you’ve failed miserably!

LowcountryJoe November 12, 2011 at 9:27 am

Again!

Nikolai Luzhin, Eastern Promises November 11, 2011 at 3:18 pm

Jim

You misstatement the argument. No one is suggesting to “stop progress.” We are pointing out that very soon the problems of progress are going to take on entirely new and different meaning.

Your argument is based on a false premise or assumption. That we will create new technology that will offer sufficient jobs to replace those destroyed by new technology. No rule of technology or science compels such a result. That there are exceptions in the patterns of how work is done today (some people still make glass works of art) is no predictor of the future for billions of people.

Jim November 12, 2011 at 4:46 am

But if technology (machines) do everything for the human race, then why would you need a job? Once you have a machine that can do anything you ask of it, then it can create whatever capital you are in want of. Of course it’s a bit more complex than this, but it’s an interesting thought experiment, one that cannot be predicted very well as to exactly what will happen.

However, I would like to hear your proposal for an alternative. Even in the worst case scenario where machines would do everything and humans are completely poor, what could possibly be done today to curb this? Governments can’t completely ban this future forever, 100% of the population will never be against this, and so there are always cracks in a ban that will usher in the inevitable. I’d rather start figuring out how I can be apart of this amazing new future of increasing automation instead of trying to hold on to my current state of being. Life is too short to remain stagnant.

Nikolai Luzhin, Eastern Promises November 12, 2011 at 7:47 am

Jim

I am not at all proposing to “stop progress.” My comments are merely to point out the obvious proposition that the future is not “economics.” No “rules” or “laws”of economics will make it work. We need entirely new mental models for organizing society. They talk about armies being build to fight the last war. That is what these people are doing.

It is self-evident that modern life requires a massive, effective government. Instead we have to waste all our time with no gov’t types (abolish the Commerce Department?) when we should be making gov’t effective, a battle we never get to fight.

If Democrats in Congress discover that a program is being less than effective they are blocked by the Republicans who will only attempt to embarrass over the program for starters and who are not about to help correct any errors or mistakes.

A wonderful example is the Dept of Energy, including green energy. The decisions are very very difficult. Take this oil pipeline across Nebraska. While I favor the pipeline to somewhere, it seems to me that the concerns about its location are real. What never gets said, but what I infer is that we want to send the oil to Texas because we cannot get permits to build a new refineries further north that will do away with the need to send the oil to Houston.

Someone has to decide this. The logical place would be the Dept of Energy, but who could have confidence in the entire process, today.

In fact, I believe the future is already here and that the reason why nothing is gaining traction in our current economy is that there is nothing we can do to create jobs except to divide up the work we already have. Look at the current economy. You don’t see anyone out there saying, I have a great idea, lets go in to the capital markets and raise $x billions and do it, except some very limited natural resource plays (pipelines and natural gas)

The business model is the opposite. It takes no money or people to go into business on the Internet (Groupon) and the IPO is merely to get $$$ for the shareholders. These firms have very few people. MFGlobal had 1000 employees. I could go on but the facts are subtle and the denial is so deep here that there is no point to it

Nikolai Luzhin, Eastern Promises November 11, 2011 at 10:12 am

what a horrible display of the inability to draw factual distinctions.

within 20 to 40 years there were be no “jobs,” and mankind will face the horrible prospect, as best described by Twain, of heaven on earth. It is one thing for machines to replace labor when labor is still required to build and maintain the machines.

It is quit another when machines are able to build and replace themselves, an environment we are quickly approaching.

One can see the first symptoms already—all those empty cities in China. Why are they empty? China has millions of people who need the housing, but because of technology it cannot provide enough jobs for the people who would move in, if they had a job.

The arguments you are making are not economic, they are observational. In the past, we have been able to adjust to improvements in manufacturing, but this has not been because of any law or rule of economics.

But the facts are changing (and the confirmation bias here is resistant, as always to the facts)

As Tyler Cowen writes, this has just been picking low hanging fruit.

Last, as machines do more work, How will the “income be distributed” If machines are doing all the work, what happens to capitalism and markets?

ArrowSmith November 11, 2011 at 11:10 am

You mention the empty cities of China, but that’s a product of their top-down authoritarian nature. That doesn’t happen in America. Funny you mention the foibles of a Communist country in a lame attempt to blast free market capitalism.

Invisible Backhand November 11, 2011 at 11:24 am

That doesn’t happen in America.

In America we have 9.8% rental vacancy rates while there are homeless everywhere. Yay free market capitalism.

http://www.census.gov/hhes/www/housing/hvs/qtr311/files/q311press.pdf

ArrowSmith November 11, 2011 at 11:30 am

The only “ghost towns” of America are the legacy of unionism. Places like Gary, Indiana.

Nikolai Luzhin, Eastern Promises November 11, 2011 at 8:38 pm

the legacy of unionism

what a truly silly statement

Gary and Detroit have been destroyed by technology

in 1980 we have 1.5 million people +/- employed by the big 3

we now have 600,000 employed by all automakers, if I am reading the charts correctly.

Gary and Detroit prove that “job destruction” by technology does not work on a local or regional leverl

Jim November 12, 2011 at 4:53 am

@Nikolai: So what is the alternative? That the government should save these 900,000 jobs that the Big 3 can’t afford anymore because they got destroyed by their competition? Should the government ban the use of automation technology and have every car be manufactured by hand? Ask the UK auto industry how that is going. It’s easy to say “Gary and Detroit have been destroyed by technology,” but not actually come up with a proposal for progress. These 900,000 people need some new skills. They need to shift industries. They need to create new businesses and hire people.

anomdebus November 11, 2011 at 11:33 am

If it weren’t so hard to evict people, landlords could take “less than market value” for vacant properties until they could find someone who would pay “market value”.

Darren November 11, 2011 at 1:42 pm

I sometimes think if I had the money, I’d like to build a structure with many small rooms and a communal kitchen and eating area, solely for those people who could not afford anything better. It would probably look something like a prison, but without the bars, since I’d go for functionality, not style. However, the multitude of rules and regulations would squash it very quickly. Admittedly, most neighborhoods would strongly resist anything like this. I suppose this is why government must do it, because it won’t allow anyone else to.

vikingvista November 11, 2011 at 2:39 pm

One of the homeless shelters downtown near where I live charges a mere $5 for a clean bed, shower, and laundry for a day, plus a meal. So, it is common for the panhandlers to specifically beg for $5. You’d think there would be all kinds of one-time tasks downtown business owners would be willing to pay $5 for, from picking up litter, to raking leaves, to hosing down pigeon guano, to painting, to sweeping, to any number of things.

But they can’t. You take someone into your employ, you are responsible for them and what they might do to people and property while working for you. You must provide benefits, and pay minimum wage. And if someone decides you’ve unfairly fired or discriminated against them, you may be paying for the next 10,000 nights at the local hotel, rather than a night at the shelter.

There is a minimum government-imposed cost to any employer that far exceeds the $5/day that the homeless downtown desire. It’s something of a loss to potential employers sure, but it is a far greater loss to the homeless.

Doc Merlin November 12, 2011 at 3:27 am

“China has millions of people who need the housing, but because of technology it cannot provide enough jobs for the people who would move in, if they had a job.”

Actually, China has crippling labour shortages right now.

Nikolai Luzhin, Eastern Promises November 12, 2011 at 8:12 am

Doc says, “China has crippling labour shortages right now.”

What are some of the fiction books your have written doc?

muirgeo November 11, 2011 at 10:20 am

NOTE ON THIS POST;

We are for the moment not addressing this to the 2.5 billion people of the world living on less than $2.50 a day. Even though your numbers are 3 times the numbers of ALL the people of the world when the luddites revolted.

Thus… we safely conclude, “See this is working” and can still feel smug about our grand proclamation. So selesction bias or reality aversion.

ArrowSmith November 11, 2011 at 11:16 am

That’s more because of overpopulation then any failure of capitalism. A simple culling will do.

Invisible Backhand November 11, 2011 at 11:29 am

A simple culling will do.

Do you propose bio-weapons or nuking their major cities? Conventional bombing of infrastructure like dams, pipelines and power plants? How?

Sam Grove November 11, 2011 at 12:11 pm

Give them socialism.

muirgeo November 11, 2011 at 1:13 pm

2.5 billion Sam…. yeah I’d suggest a little more socialism such that 1% doesn’t control such ridiculous amounts of wealth. This is where capitalism fails miserably and undeniably and only mass delusion on the part of people like yourself able to completely ignore and brush off the plight of 2.5 billion with trite statement makes your immoral position tolerable to yourself.

Invisible Backhand November 11, 2011 at 1:43 pm

To be fair, libertarianism attracts sociopaths, aspies and autistics so we shouldn’t be surprised when we see them here.

Sam Grove November 11, 2011 at 2:45 pm

muirgeo, you are still clueless in addition to being unimaginative, and intellectually superficial.

HaywoodU November 11, 2011 at 6:03 pm

IB,

Grow up.

LowcountryJoe November 12, 2011 at 9:30 am
muirgeo November 11, 2011 at 1:10 pm

No just some HIV, starvation, through in an occassional mass genocide… but again look how easily they brush off this fact. They have to ignore 2.5 billion people to say the “serious ” things they say.

CalgaryGuy November 11, 2011 at 2:27 pm

Do those areas have more or less Capitalism than the West? How can you claim to care about them when you advocate for policies to close of trade “for the benefit of American workers.” How do you square your desire to eliminate foreign jobs AND help them out of poverty?

Economic Freedom November 11, 2011 at 2:24 pm

Librarians are in favor of overpopulation. They call poor people “human capital,” except when they are calling them unproductive garbage. You must not be a foul librarian.

Josh S November 11, 2011 at 2:44 pm

The 2.5 billion people living on $2.50 a day all live under despotic, totalitarian, socialist regimes of the sort you think create prosperity.

muirgeo November 11, 2011 at 4:57 pm

And we capitalist have loved the dictators… they make doing busiess far more effecient. But again don’t worry yourself with details and 2 billion people..it’s ALL their own fault that they are how they are and nothingg to do with us.

HaywoodU November 11, 2011 at 6:07 pm

….or our spell check.

brotio November 12, 2011 at 12:53 am

And we capitalist have loved the dictators

What’s this “we” stuff? It’s your beloved St Franklin of Roosevelt who had an Uncle Joe Stalin.

Andrew_M_Garland November 11, 2011 at 10:12 pm

To muirgeo,

Do you have an example of the non-capitalist societies which are spreading their wealth-creating policies to the poor people of the world?

Why should the US, or still relatively prosperous European countries be blamed for not reforming the disastrous policies of poor countries?

To restate this, is the US at fault for being free-market (capitalist) and not forcing other, poor countries to be the same?

Or, just what is going on, and what is your prescription?

ArrowSmith November 11, 2011 at 10:33 am

Wake me up when the machines can do all of our farming for us. We’re not even within 100 years of total automation, maybe in 300-400 years. By then we might evolve into a higher level of being. Not muir-types.

Darren November 11, 2011 at 1:44 pm

Not all evolution means improvement. There are plenty dead ends.

SmoledMan November 11, 2011 at 2:16 pm

F.e., all the great apes are evolutionary dead ends along with every other animal on this planet. What if humans are the only intelligent life form in the entire universe – that would be depressing as hell.

Josh S November 11, 2011 at 2:46 pm

Only extinct animals are evolutionary dead ends. “Best” doesn’t mean “smartest.” Bacteria and viruses have been evolving just fine and getting along just fine, and will probably be the longest-lived life form on this rock.

SmoledMan November 11, 2011 at 3:13 pm

But bacteria and viruses will never evolve to become truly intelligent life. They are forever condemned to breeding themselves for the sake of breeding.

Justin P November 11, 2011 at 11:59 pm

smoldman
How can possibly know that bacteria will never evolve into intellegent life? Assuming your on the evolution side of the evolution/creationism debate, didn’t life on this rock start with a few amino acids and nucleic acids mingling around? Bacteria certainly have a bit more to offer than that. Also given mitochondria were at one point bacteria that developed a symbiotic relationship with our ancestor animal cells, one could make an arguement that we owe our intellegence to bacteria.

Josh S November 13, 2011 at 1:44 pm

So what? Intelligence isn’t the goal of evolution; survival is.

Nikolai Luzhin, Eastern Promises November 11, 2011 at 2:53 pm

not even within 100 years of total automation, maybe in 300-400 years–really

what’s the basis for your estimate?

there are GPS controlled tractors now in the Great Plains, etc. If you just took the trend line for US farm employment, when does it hit Zero

You sound like cotton workers the month before April 1793, when Eli Whitney designed and constructed the cotton gin

SmoledMan November 11, 2011 at 3:13 pm

What’s your timeline on all farming being completely robotized? 2070?

HaywoodU November 11, 2011 at 6:08 pm

So you wish they were still “employed” in the fields?

Mesa Econoguy November 12, 2011 at 2:02 am

Just start banging your shoe here please, Nikki Khrushchev.

It’s far cleaner, and much more entertaining.

Josh S November 13, 2011 at 1:44 pm

And yet somehow, after the cotton gin, we still found things that needed doing.

Bret November 11, 2011 at 10:39 am

If it’s really true that machines will soon do “everything,” then all human wants will be met without anyone having to work.

What’s not clear is how individuals would be able to claim part of the “everything” if they don’t have a job to pay for it. Perhaps a benevolent government ensuring that “everything” is distributed fairly?

Randy November 11, 2011 at 10:48 am

Bret,

It is an interesting thought experiment, but I think we’re a long way away from needing or wanting a political distribution system. The way I see it we are now well into a luxury economy, and there will be plenty of jobs created in this economy for a very long time to come. For example, we already have a huge number of workers writing, testing, marketing and distributing computer games and accessories. Like Kyle8 says, econ 101, infinite wants.

Bret November 11, 2011 at 11:04 am

I agree that machines doing “everything” is a long way off. I just think that that particular argument of Don’s hasn’t been fully thought out.

Rick Hull November 11, 2011 at 11:15 am

Bret,

You fail to realize the basic economic situation of humans on earth. If machines can produce all of the goods and services we demand, like manna from heaven, there is no demand for human labor, and so human labor is not necessary in order to receive the manna. However, it seems quite unlikely that the manna machines could operate without input — for example bags of coal.

The job of humans would then be to supply the coal, and perhaps a tiny nugget would be enough to supply a year’s worth of manna demanded. Instead of working 2000 hours a year, you might work 20 hours a year. Wouldn’t that be nice?

Nikolai Luzhin, Eastern Promises November 12, 2011 at 8:14 am

read Mark Twain on why he doesn’t want to go to heaven

ArrowSmith November 11, 2011 at 10:57 am

In Star Trek everyone has a food replicator, but they still haven’t solved human mortality.

Invisible Backhand November 11, 2011 at 11:30 am

…or baldness.

SmoledMan November 11, 2011 at 2:17 pm

Make it so…

Economic Harmonies November 12, 2011 at 10:59 pm

How do you know they didn’t solve baldness?

Justin P November 12, 2011 at 12:00 am

They still use currency too.

Sam Grove November 11, 2011 at 12:14 pm

If plenty can be produced without the cost of human labor, the that plenty will be essentially free for consumption. If all needs can be provided for without cost, no one will “need” a job.

SMV November 11, 2011 at 1:06 pm

Even if machines “could” do everything does not mean that people would not choose to have some things done by other people. Today you can have all your music delivered by machine, where and when you want it,. Yet many people still enjoy live music and I think the demand for musicians is larger today than ever.

vikingvista November 11, 2011 at 1:50 pm

Machines pump out perfect glassware by the truckload for pennies a glass, and yet glassblowing artisans the world over still sell their products for hundreds or thousands of dollars an item.

Josh S November 11, 2011 at 2:47 pm

If there exist people with unsatisfied wants, then the machines aren’t doing “everything,” are they?

Rick Hull November 11, 2011 at 11:09 am

Don — keep it up with the positions you’re taking. It’s hilarious to see the knee-jerk reactions from the trolls and the resulting positions they are thereby forced to take.

Randy November 11, 2011 at 11:44 am

It does reveal a basic character flaw of Progressives – they lack imagination. They are able to conceive of a world in which one caste, the workers, keep right on doing what they are doing so that all that remains for their caste, the politicians, is to distribute the goods in accordance with the ideal systems of “justice” that they have worked out in their ivory towers. When they are confronted with the fact that the workers aren’t interested in being locked into a caste system they get brain freeze. But how, they ask, can we achieve our vision if you peons refuse to comply? To which I reply, well, you can’t… and until you learn how to produce something of value to me I have no interest in your visions or your opinions.

Sam Grove November 11, 2011 at 12:16 pm

They exhibit a profound lack of imagination.
Unable to see possibilities, they must reference everything to their tiny little box.

Randy November 11, 2011 at 12:36 pm

This could be the defining fact of our times – that rapid change in the production system has outpaced the political system. It seems to me that perhaps all of their concerns can be boiled down to, “Slow down! We’re afraid that you are leaving us behind”. And, you know, we just may be able to leave them behind… Press on.

Bret November 11, 2011 at 1:35 pm

And, you know, we just may be able to leave them behind…

Then the Luddites and Martin Ford were right.

Randy November 11, 2011 at 2:27 pm

Only if they choose to allow themselves to be left behind. I have no problem with anyone climbing on board for prosperity, and we’ve told them what they need to do to do that. But If they choose to ignore the advice then its their problem. And if they prefer to use political methods instead, then it is in our interest to leave them as far behind as possible.

Nikolai Luzhin, Eastern Promises November 11, 2011 at 2:56 pm

I am glad you picked on Don’s knee jerk reaction, for there is a real distinction between machines that build and repair and operate themselves and machines which we build, repair, and operate.

GrizzlyAdam November 11, 2011 at 12:32 pm

“In the late 1800s, roughly three-quarters of all workers in the US were employed in agriculture. Today, the number is about 2 percent to 3 percent. Advancing mechanization eliminated millions of jobs.”

OK. So? Today everyone of us has ready access to more food choices – organic, gluten-free, processed, fast, slow-cooked, Vietnamese, bar-b-q’d, and so on – than any of the most wealthy people of the 1800s ever had, or could have ever dreamed of having, and at a fraction of the cost.

Brad November 11, 2011 at 2:06 pm

If he had watched Terminator or the original Star Trek episode “What Are Little Girls Made of?” he would know that when the machines no longer need us they are going to kill us off.

SmoledMan November 11, 2011 at 2:17 pm

But humanity won out in The Terminator, but just barely.

Sam Grove November 11, 2011 at 2:47 pm

Machines lack something that humans have.

SmoledMan November 11, 2011 at 3:14 pm

Tell that to Commander Data.

JWH November 11, 2011 at 5:53 pm

I find it amusing that many of those who worry about what machines are going to do the “working class” have not done the backbreaking, dangerous or monotonous work that machines are developed to perform. Farm labor has numerous examples, as well as mining, manufacturing, construction, administrative work and others too numerous to list. Most people who are asked to dig a ditch with a shovel are very happy when the backhoe is unloaded. I don’t hear people in the cotton industry begging that the mechanized cotton picker be outlawed so they can drag a 600 pound bag down the rows while their hands are bleeding from snatching the fiber from the plants. People who work in air conditioned and heated offices that are safe and well lighted wax poetic about the dignity these jobs give the “Working Man” but far too few of them have ever had to face the prospect of a life ahead of sweat, sore muscles and the prospect of a life changing injury. Machines and automation have a 200 year history of improving lives and living standards, not the other way around.

Randy November 11, 2011 at 6:47 pm

Thank you!

GiT November 11, 2011 at 8:10 pm

Surprise surprise, another letter directed at a caricature.

At no point does Ford encourage Luddism. What he fears is not increasing efficiency and productivity, but the potential inadequacy of the chief mechanism for distributing returns. To quote: “However, if automation is relentless, the basic mechanism for putting purchasing power into the hands of consumers will break down.”

And Don completely misses this point when he says that an entirely automated world would correlate to a paradise – it only does so if the system of distribution of returns is capable of distributing what is produced to all. But if machines do all the work, then the system of distribution can’t be based on wages (tied to work), it would have to be based on rents and profits (tied to ownership). And if not everyone has property which generates rents or profits, then, what?

The concern isn’t with progress, it’s with the distribution of returns through the wage system.

The fear is that, on the one hand the rate at which jobs are destroyed will exceed the rate at which jobs are created, and, on the other hand, that a sufficient degree of ownership will not be universally distributed to all. That doesn’t have to do with a fear of progress, and it doesn’t entail a demand to smash the looms, as it were.

The question then has to be whether or not that condition holds. Don appeals to history and says it doesn’t. Ford says we shouldn’t always expect the future to be like the past, and speculates that history might not be a decent guide in this case (what was that about Hume a few days ago?).

The debate lies in that question, not strawman allegations of luddism, no where suggested or necessarily entailed in the piece in question.

Randy November 12, 2011 at 6:06 am

Re; “if automation is relentless”

Don does address this, by demonstating that the hypothetical is implausible. As some wants are met by automation other wants will kick in, and history fully supports this contention – e.g., the agricultural revolution, the industrial revolution, and the information age. The time to have this discussion will be when the replicator (Star Trek) is invented, not now. Now its just a weird hypothetical used as propaganda to support a socialist ideology.

Re; “The concern isn’t with progress, it’s with the distribution of returns through the wage system.”

This, of course, is the socialist ideology that the weird hypothetical is intended to support.

Re; “The fear is…”

In other words; the fear that the socialists would like to instill.

Re; “Ford says we shouldn’t always expect the future to be like the past, and speculates that history might not be a decent guide in this case”

In other words; Ford speculates – badly.

GiT November 13, 2011 at 2:08 am

“Don does address this, by demonstating that the hypothetical is implausible. …”

That’s not a demonstration of implausibility. That’s an anecdotal appeal to history. The article in question makes the explicit claim that past history is not a good guide. Throwing one brief interpretation up against another brief interpretation demonstrates nothing. But please remember. My point was that this conflict of interpretations is what is at issue. Luddism only enters the picture because of Boudreaux’s paranoid fantasies, just as socialism only enters the picture because of yours.

“This, of course, is the socialist ideology that the weird hypothetical is intended to support.”

I’m not particularly interested in hearing you hyperventilate about socialism when the words ‘distribution’ or ‘wages’ are mentioned. Economies distribute things. One of the things they distribute are returns (to the factors of production). Those are summarized in the familiar Econ 101 mnemonic WIRP.

Wages happen to be how the bulk of the world supports itself, so the ease of access individuals have to the labor market in general is accordingly pretty important, just as, to anthropomorphize, the ease with which a gallon of oil can get from its natural resting place to a gas pump is pretty important for whether or not the oil gets bought.

“In other words; the fear that the socialists would like to instill.”

Again with the paranoia. Making hypotheses about the future is not ‘instilling fear.’ That the future will be different from the past is pretty much a truism. Figuring out how it will be so is putting reason to work (as loathe as many here are to do that).

“In other words; Ford speculates – badly.”

He speculates. Whether he does it poorly or well cannot be surmised by anecdotal accounts of what history tells to us as construed either in Ford’s, Boudreaux, or your editorial comments. What one can tell is that Ford nowhere suggests luddism, and in fact his position, from looking at his book’s description, is solely about coping with technological advances, not turning them back.

Randy November 13, 2011 at 5:04 am

IB,
You refer to the historical evidence as “anecdotal” while referring to the author’s ahistorical speculation as “an explicit claim”. Come on… really?

I actully have given the idea of a non-working society some thought. In fact, I’m convinced we are already living in a luxury economy, which has leisure as a primary objective of a large part of society. But I give the credit to free markets for making this possible. I don’t even believe in the idea of “market failure”, so I’m not about to be taken in by propaganda alluding to a “potential market failure”.

GiT November 13, 2011 at 6:27 pm

I referred to it as an explicit claim because a claim requires evidence, it is not in itself evidence. By focusing on the explicit claim I am focusing on what Ford is arguing, as opposed to what Boudreaux misconstrues Ford as arguing.

Pointing to previous historical trends is not evidence. It is only evidence given a theoretical framework in which we should expect previous trends to correspond to future trends. That is only sometimes appropriate. Ford says, for a variety of reasons, he thinks job creation will no longer keep pace with job destruction, breaking with historical precedent, and that this will be problematic. (clearly, this could occur and not be problematic, as long as some non-wage distributive mechanism was in place – rents, interest, profits, transfer payments, whatever does the trick).

Boudreaux says in the past, job creation has kept pace with job destruction. That, again, misses the point.

If you believe in the possibility of a non-work society (job destruction outpacing job creation), then you must believe that returns will have to be distributed (not necessarily ‘redistributed,’ to address the socialism bugbear) by a method other than wages. What that will look like requires speculation. So, in fact, you and Ford would be in agreement about what will happen to work and labor but in disagreement about whether or not existing institutions can adjust to this reality while retaining widespread/increasing access to adequate returns for all.

As to not believing in market failures, I’m not even sure what you mean by that. Specific markets do specific things. If you look to them to do things which they aren’t in the business of doing, they will fail your expectations. Labor markets, for example, aren’t in the business of providing everyone with an income. In fact, they’re in the business of not providing people with an income if they’re not worth the money.

The economy providing everyone with income isn’t a function of the economy, it’s a contingent effect. ‘The economy’ doesn’t fail if it doesn’t provide everyone with income, but it will fail you if you expect it to.

Clearly, what one expects to provide everyone with an income is not the market, which is a mechanism for earning money, but human ingenuity, which is a mechanism for making humans valuable as commodities, or for humans making valuable commodities – making themselves or their possessions ‘marketable’ – and human kindness, which gives out resources for reasons detached from a dollar payoff (not that there isn’t a market in charity.)

But ingenuity and kindness are capacities, not markets, and capacities need not be adequate to the tasks assigned them. They depend on what we demand of ourselves in trying to meet the expectations of what others demand of us. But neither markets, nor individuals, ever get everything they demand.

Randy November 13, 2011 at 8:13 pm

My bottom line is this;

I want the politicians to stay out of it. They haven’t the imagination to design anything more elaborate than a caste system. Keynes and his disciples, for example, can’t imagine anything better than “full employment”, and Ford lends his speculation to the same unimaginative psuedo-intelligentsia.

Randy November 13, 2011 at 5:09 am

GiT, not IB, my apologies.

GiT November 13, 2011 at 9:53 pm

And my bottom line is that at no point does Ford say or imply that requiring men to do more work (which is not the same as full employment) is desirable. He says that it may become the case that the job market can no longer work effectively as the ‘basic mechanism’ for distributing income, and that this should/would require other mechanisms, which we should try to imagine if what he thinks may become the case does become the case.

As to the limited imagination of those who want full employment, that concern doesn’t speak to a lack of imagination. More employment is good. More people being employed isn’t necessarily good. The two concern very different things, and high employment is generally desirable, while more human time and energy being spent to produce things for the purpose of a wage (a higher amount of wage laborers, or number of people employed) is, holding the value of stuff produced constant, generally undesirable.

Manuel Álvarez November 12, 2011 at 7:55 am

If You Want Jobs Then Give These Workers Spoons Instead of Shovels.
(http://quoteinvestigator.com/2011/10/10/spoons-shovels/)

Nikolai Luzhin, Eastern Promises November 12, 2011 at 8:22 am

and what is never mentioned is that everyone who knows anything about mental health knows that the people with the shovels are better off than if they were sitting home, unemployed.

It is for this reason that Eastern Promises believes that gov’t should always have jobs with shovels instead of minimum wage laws or welfare.

Randy November 12, 2011 at 8:32 am

How about we just pay for memberships at the fitness center and let them find their own jobs? Otherwise we’ll have to hire overseers to make sure they don’t just lean on the shovels and smoke cigarettes all day.

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