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[Mykl:] This is actually the exact problem in the US at the moment. Money is trickling to the top and not making its way back down. Those at the top are hoarding it, thus keeping it out of, and slowing, the economy. This in turns damages the businesses that they own, because their customers can't afford to spend money that they don't have.
The problem would be largely solved by handing out a bunch of cash to employees, who will use it to go out and spend, stimulating the economy and generating demand (thus improving the outlook of business). It would actually be a win-win, but the cash hoarders can't see beyond having the biggest number in the bank they can (which they'll never spend).
The big thing missed is that due to inflation, hoarding money means losing money. Rather than wonder why businesses aren't hiring people or building up capital right now, Mykl merely suggests that the business give away that money to create a little short term economic activity and something that will be better than the present state of affairs while ignoring that the business has just thrown away its cheapest means to expand and employ more people. Later on in the same thread, we have this gem:
[deimtee:] I think this is actually becoming one of the major problems, especially on the small end of the investment scale. At some point, the economy is producing enough to feed, house, and entertain everyone without requiring anywhere near enough human work to keep everyone employed.
Investing in a new business requires identifying an under-filled need in order to attract customers. It is getting to the point where starting a new business means competing with a giant company, it is just not viable unless you can come up with something that is both truly new and valuable. Not many people can do that, and every time one does there is one less opportunity left. At the same time, big companies are streamlining and using automation and economies of scale to reduce the number of employees.
The solution, of course, was to shrink the labor market, not fix the problems described above.
[khallow:] Deliberately shrinking the labor market won't identify under-filled needs nor create more small and medium sized businesses.
[deimtee:] The labour market is currently over-supplied. This is evidenced by the difficulty young people have in entering it. Raising the retirement age is like eating your seedcorn. By the time those geriatrics are finally knocked off by COVID 2040 or something society is going to hit a wall where no-one knows how to do the jobs. 30 year-olds on unemployment for 10 years are not ideal trainees and no trainers will be around anyway. Early retirement forces the companies to train the next generation now.
Yes we should be massively investing in life-extension, medical research, space, all that stuff. Now what percentage of people do you think can realistically contribute to that sort of endeavor? I would say less than 1% of people have the capability to undertake research at that level.
Notice the insistence on shrinking the labor market even when presented with clear evidence that we need that labor for hard, open-ended problems and to preserve institutional knowledge. In the recent story, Kill the 5-Day Workweek (which was about some business that does 4 day workweeks), we see more examples of this dysfunctional reasoning in action. There's anecdotes about bad bosses, insistence that economies is less rigorous than physics, and lots of fantasizing about all the amazing things you'd do, if your employer was forced to give you one more day off. Let's start with the "bullshit jobs":
[Thexalon:] Counterpoint: A lot of jobs are completely useless and exist for basically bullshit reasons. If you've ever worked in a larger corporation or non-profit, you will have no difficulty identifying a bunch of Wallys or Peter Gibbonses walking around who are accomplishing absolutely nothing but vaguely looking like they might be working. And no, that's not limited to government, because despite what a lot of libertarians seem to think private corporations are not even close to perfect models of efficiency.
To summarize the above link, some clueless idiot doesn't understand a variety of jobs. So those jobs must not have a reason for being and are thus "bullshit jobs". Notice that once the author has failed to understand the purpose of these jobs, he then has to come up with a conspiracy theory for why they exist.
[author David Graeber:] The answer clearly isn't economic: it's moral and political. The ruling class has figured out that a happy and productive population with free time on their hands is a mortal danger (think of what started to happen when this even began to be approximated in the '60s). And, on the other hand, the feeling that work is a moral value in itself, and that anyone not willing to submit themselves to some kind of intense work discipline for most of their waking hours deserves nothing, is extraordinarily convenient for them.
Who here really thinks that Joe Billionaire is going to burn money on that?
Then there's the fantasizing about how shortening the workweek and the amount of work per job won't have any impact on competition from other countries.
[AC1:] A lot of Asian companies still work on Saturday (6 day week ). If going to a 4 day workweek in any way hurts productivity these Asian firms will have an advantage
[AC2:] Ridiculous, and already proven wrong since they are open an extra day already and haven't taken all the business.
"Proven wrong" because those Asian companies haven't eaten entirely our lunch. We still have some left. Funny how half a century of off-shoring can be ignored.
Moving on, it wouldn't be complete without a contribution from the peanut gallery. fustakrakich continues his bid to destroy Western civilization:
[fustakrakich:] Also demand a six hour work day. Make each day a little less tiresome
Here's my take on all this. It's basically a supply and demand problem in the developed world. Due to labor competition from the developing world, developed world labor has lost much of its pricing power. For some reason, most of the above posters think we can get back to higher labor prices by reducing the supply of labor. What's missing from that is that the developing world is still increasing its supply of labor (more from building out trade/transportation infrastructure to populations than from birth rate). Those moves won't actually reduce labor supply as a result.
Instead, let's increase the demand for labor. Rather than rhetorically ruling out the creation of new businesses and such, how about we enable those things to happen. Because plenty of new businesses still happen - indicating the narrative is faulty.
But that would mean acknowledging that protecting labor is less important than nurturing business growth and creation. Who will do that?
(Score: 1) by khallow on Tuesday June 29 2021, @01:51AM (9 children)
To the contrary, I understand that we've been cranking on the capitalism machine for centuries and have yet to experience this positive feedback loop you allege. Presently, we're seeing the greatest improvement [voxeu.org] not just in the human condition, but also in income inequality (and that's despite me not even caring if income inequality decreases or not).
There's something wrong with the narrative. Go with what works, not the feelz.
(Score: 2) by Azuma Hazuki on Wednesday June 30 2021, @12:56AM (8 children)
This is willful blindness on your part, plain and simple.
Furthermore, your bizarre, anti-realist insistence that things will continue improving indefinitely misses a few key facts, like resource depletion or the punishing effects of globalization on American wages and purchasing power. It also assumes things that are completely physically impossible, such as infinite growth, unlimited (or as close as makes no difference) raw materials, unlimited ability to extract the same, relative climate and geopolitical stability, etc etc etc.
Again: this is willful blindness. You refuse to engage with reality. The reality is that we are perched on an unstable maximum, something akin to an economic false vacuum state, which could collapse to something more stable at any time. I don't simply mean a market correction; I mean all the above factors coming home to roost, likely all at once and bouncing off one another as complex systems are wont to do.
And underneath it all, again, is that implicit assumption that economic activity is an end unto itself.
Why do we pursue it, Hallow? What is the purpose of economic activity?
I am "that girl" your mother warned you about...
(Score: 1) by khallow on Wednesday June 30 2021, @04:18AM (7 children)
A "blindness" that reality shares. Notice I provided evidence - among other things two thirds of the poorest part of humanity seeing a 30% or greater increase in income (adjusted for inflation) over a recent twenty year period (1988-2008). What evidence do you provide? Anything more than feelz?
The problem with this narrative is that we have a lot of resource alternatives. Resource depletion actually means that we end up using moderately harder to access resources at modestly higher cost and/or technological development, not that we run out.
And my take is that we're nearing the end of those punishing effects of globalization because China is nearing wage parity with the US (mean wages in China currently are nearing a third of the mean wages in the US, and increasing at a rapid rate). When that happens, it'll be the relative strengths of the economic systems that determine what wages and purchasing power stabilize at. Protip: the US is doing surprisingly well at that.
Sure, there will be more poor workers out there. But when China reaches wage parity with the US at least a quarter of the world will be developed world at that point. We're running out of cheap labor. Incidentally, in case you should think that labor is a resource we can deplete, I'll note that we have the resource alternative of automation and it has served for centuries to make human labor more valuable and generated considerable power for labor.
If you should ever be interested in economic history, there's quite an impressive example of the successes of capitalist systems over the past few centuries, including the development of the modern, more humane world.
I already stated that assertion is incorrect, and you haven't provided any reasoning to back your side. So I consider the subsequent leading question a waste of my time to answer.
(Score: 2) by Azuma Hazuki on Wednesday June 30 2021, @05:00AM (2 children)
You can't answer it, can you? It's not a leading or complex question either; the answer to that question should determine economic policy. This isn't difficult...
I am "that girl" your mother warned you about...
(Score: 1) by khallow on Wednesday June 30 2021, @11:40AM
Definition of leading question [wiktionary.org]:
Let's review the question in question:
"is that implicit assumption that economic activity is an end unto itself" That's the leading question. Assume I'm wrong and then ask questions that lead to your desired answer.
(Score: 1) by khallow on Wednesday June 30 2021, @11:47AM
(Score: 0) by Anonymous Coward on Wednesday June 30 2021, @06:53PM (3 children)
I think that I can help here.
We pursue economic activity because every activity necessary to sustain life beyond perhaps breathing, is economic activity.
Gathering berries? Economic activity.
Fetching water? Economic activity.
Hunting? Economic activity.
But you know, if dying an ascetic's death of thirst and exposure is your bag, who should tell you not to?
(Score: 1) by khallow on Thursday July 01 2021, @04:31AM (2 children)
Why are you replying to me instead of Azuma? Azuma is merely pushing a narrative, "that implicit assumption" remember? The implicit assumption is not implicit. There's no point to me answering the question in a serious way because she has already decided what the answer is.
(Score: 0) by Anonymous Coward on Thursday July 01 2021, @09:13PM (1 child)
Because I clicked the wrong link.
Sorry for the confusion.
But she asked the question, and it has an answer, so it's there for the record.
(Score: 1) by khallow on Friday July 02 2021, @11:22PM