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Libertarian Thread # 3: Liberty will never die

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rogerthat View Drop Down
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    Posted: November 15 2014 at 21:09
Well, on the subject of demand, the current crude oil price slide has the potential to improve cost conditions and give producers more elbow room to reduce prices and in this way spur demand.  This is what could and would have happened in the normal course a couple of years earlier anyway, if the G8 hadn't prevailed on emerging markets to put their economies on steroids to 'maintain' growth.  When there's a global slowdown in consumption, commodity prices start to fall and lower costs and the balance of power slowly begins to favour producers again (at the height of the boom, it's commodity suppliers who make a killing).  This is how the market adjusts but the various heads of state in their infinite wisdom have shown scant faith in it.   And by trying to pump up economies, they unwittingly helped commodity sellers keep their prices firm which was pretty bizarre. 

Edited by rogerthat - November 15 2014 at 21:10
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Post Options Post Options   Thanks (0) Thanks(0)   Quote JJLehto Quote  Post ReplyReply Direct Link To This Post Posted: November 15 2014 at 15:52
Originally posted by rogerthat rogerthat wrote:

@JJlehto

I don't think staying right out of the way in the face of fraud is either libertarian or even liberal, it's just crony capitalist.  Wink 

Well that's exactly it! I find it funny how today, both left and right seem to have agreed upon ignoring fraud, even trying to justify it!, when as pointed out, even the most libertarian of folk say that is ONE area of government necessaryLOL That was the classic line "rules, courts, fight fraud, make the foundation for a true free market" amazing what crony capitalism has done indeed...

Also the reinforcing cycle of exec pay! I sincerely don't care if people are making $20 million a year, but I do think the stock based pay has been negative: lots of reasons, one  being it pressures regulators and lawmakers to de regulate/not enforce regulations. 

Oh yeah, that rant was just because I always see liberal people, though they don't realize it, supporting trickle down-ish policies, and it makes me a bit crazy. Also I had a bit of a debate with someone about the need to lower taxes more, lower corporate taxes, the basic bullet points, so yeah I was angryLOL
That video by Nick Hanauer says it all in my opinion but yeah, I just don't see real life evidence at all supporting trickle down ideas. As stated before I'm all for just eliminating the corporate tax, but I still don't think that'll do much, until demand is boosted. As for wealthy people, I think it's just a silly idea. Like, how will they create jobs? Esp today...most super wealthy are finance, they don't make jobs or products (not good ones at least!) and I don't buy the consumption rationale either. I know Rob here often said how them going out and buying will help us all but again: 1- How will buying Ferraris, Yachts and Mansions trickle down to the Bronx, 2- even if they buy more "regular" or weekly items, there's only soooo much one can buyLOL This isn't a theory or philosophy of mine, just how much can a few thousand people really buy?

That's all fair, but that's kind of why I'm into the idea of more jobs, higher wages. As you say, if supply won't increase it means demand is not there, so why not boost demand? But NOT in "new Keynesian" ways...I think they're not super effective and would be inflationary before successful...I DO believe in NAIRU still, so it's not wise to try to prod from the outside, maybe demand could be boosted long term and sincerely, though I see that only happening through more gov. 
I count ZIRP and printing money as part of the New Keynes ideas btw, which I agree I don't see as very effective. This should be obviousLOL 



Edited by JJLehto - November 15 2014 at 16:14
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Post Options Post Options   Thanks (0) Thanks(0)   Quote rogerthat Quote  Post ReplyReply Direct Link To This Post Posted: November 14 2014 at 21:47
Trickle down, as Bush sr himself put it, is just voodoo economics.  More to the point, a political sugarcoating of a market-based economic policy to get a buy-in from voters.  Since the days of Keynes, the long run has been dead so you can't tell voters that we must move to a free market economy for the sake of the long run.  Trickle down makes it sound like they might get a slice of the pie too and artificially conjures up an image of capitalism as a system with income redistribution (like socialism).  

By the by, I don't doubt that reducing the tax rate will in fact increase the incentive to invest by allowing for more capital formation.  But I doubt there's any empirical basis to derive the exact amount of trickle down at different income levels from a particular tax rate.

And if even neo liberal thought suggests that the govt should do something to jumpstart the private sector, then we are still in a demand-based trap, still stuck in Keynesian economics, one way or the other.  Supply should form the basis of demand.  If the producers do not want to produce more, then that means there isn't enough demand to warrant more supply.  The thing to do in such a situation is to wait, which of course is what Keynesians feel is the wrong thing to do.  But, really, the only feasible option is to wait till other conditions like say the interest rate have altered sufficiently to spur demand.  If even near zero interest rates don't spur demand, which we have seen in advanced economies recently, then the problem is very fundamental and printing more money will only temporarily paper over these problems.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote rogerthat Quote  Post ReplyReply Direct Link To This Post Posted: November 14 2014 at 21:30
@JJlehto

I don't think staying right out of the way in the face of fraud is either libertarian or even liberal, it's just crony capitalist.  Wink  For any free market system to work effectively and for people in a democratic society to believe in it, legal rights cannot be compromised.  Not being illegally conned of money is a right I am entitled to, under any Contract Act of any number of national jurisdictions.   That right should be upheld, whether by private legal enforcement agencies (in a hypothetical fully libertarian society) or by the govt.  If people start saying that's anti-markets, then what we are involved in is just a race to the bottom, driving down market conditions to an unregulated, Wild West mess where none of the entities involved can trust each other to make good their word after a point.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Toaster Mantis Quote  Post ReplyReply Direct Link To This Post Posted: November 14 2014 at 14:44
The authors at that webzine I linked to, The Mitrailleuse, do seem to be unified by coming from a libertarian political background but all making some kind of attempt thinking outside the "homo economicus" mentality: that they do so in different directions, but with a uniformly high level of writing quality, is one of the reasons I find that site so interesting even if I disagree with most of that write.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote JJLehto Quote  Post ReplyReply Direct Link To This Post Posted: November 14 2014 at 11:40
So guess my question, if any of the libertarians are even still around, is how they feel about fraud?
The "old" market view that fraud is something that must be dealt with to ensure we have actual free markets?
Or the new market view, that just leave it be and it'll all sort itself out?

If no one responds, we can keep talking liberal sh*t I guess LOL

Though I don't think this is even liberal, just fact: Trickle down ANYTHING doesn't work. It's not just conservatives and their ridiculous beliefs about trickle down stuff, many liberal economists and people basically believe it too. "Spur on job creation" "jump start the private sector" The old Keynesian pump priming. I'm all for boosting the private sector, but with direct demand....not these outside attempts to spur job creation. Many liberals do seem to believe we can prod from the outside and have em create jobs, or some at least say huge military spending is OK since it IS gov spending after all, and all gov spending is good for the economy. One guy I like even said Wubya's military spending was at least beneficial to all, even if it was skewed to the top. 

I disagree there, I don't see how it is. Sure, it caused a huge swell in Northern VA, but not much else. How will benefiting defense contractors and DC Lobbyists trickle down to the Bronx? It's insane. The rest of the spending is then being sent out of country, basically, often getting destroyed (including potential labor). More military R&D is fine and that can benefit us, but not more war. 
Other liberal economists have, until recently, basically supported bubbles saying it is all we have for growth, and at least good does come from it. Insane! These bubbles DO benefit only the top, increasingly, and hurt the rest. But ya know, it'll trickle down. These words may not be said by the left, but I've thought about their words and policies, and I think many also believe in trickle down. It's a shame, we need "bump up" economics. The Reagan days brainwashed us allLOL liberals at best accept we need a little bit more gov, progressive go farther but still seem to be in a "trickle down" mindset. Only fringe people dare go as far as post WWII policy....our golden age of high employment, high wage capitalism with strong gov backing


Edited by JJLehto - November 14 2014 at 11:44
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Post Options Post Options   Thanks (0) Thanks(0)   Quote JJLehto Quote  Post ReplyReply Direct Link To This Post Posted: November 14 2014 at 11:18
From everyone's favorite Post-Keynesian blog! 
As I read/listen to them more and more btw, I realize a lot of their ideas are not as insane as they sound, and in fact need not be "liberal" depending how its sold. 

Buuuuuuuut that's for other times

I've posted this guy before, William K Black. He dealt with fraud in the 80s, very successfully, and discussed the role fraud plays in an overly financialized economy/lax regulation. This is a fascinating interview where he speaks about how 9/11 shifted our focus, Obama and co totally unwilling to prosecute, many regulators are afraid to touch big bankers and could even hurt their jobs, and that free markets can't say fraud will magically be wiped away, but should be accepted and dealt with, citing Rand, Hayek and Mises evenShocked


I understand as things are, these "systemically important institutions" can't just be allowed to fail, but Black brings an interesting view to the table, and makes me think "If the gov will bail you out and send trillions to prop you up, there should be the caveat: We have to investigate you" and if need be, take control/put others in charge to try and clean up the institution. He's spoken in other videos I mentioned of how the Fed must be a stronger regulator as well.  A wise man who I wish could get more press





Edited by JJLehto - November 14 2014 at 11:22
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Post Options Post Options   Thanks (0) Thanks(0)   Quote The T Quote  Post ReplyReply Direct Link To This Post Posted: September 21 2014 at 15:56
Originally posted by dr wu23 dr wu23 wrote:

Originally posted by The T The T wrote:

At moments I think there comes a time where extra technological advance is only benefitial to the elites and detrimental for the majority of the population. 
 
 
What.......you don't believe in the 'trickle down effect'...?
 
Wink
No. I believe the "trickle down effect" is actually the "trickle laterally to our other wealthy friends" effect. 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Toaster Mantis Quote  Post ReplyReply Direct Link To This Post Posted: September 21 2014 at 11:06
I think this is what that blog post's purported content is: The common thread has something to do with Western classical liberalism, as ostensibly represented by NATO in proclaimed ideals if not in practice, being descended from Athenian democracy which Plato opposed with his hierarchial communitarian utopia detailed in The Republic. His fable of Atlantis was then meant as a cautionary example of what happens to a decadent civilization.

Hence, the Anglo-American classical liberal model of parliamentary democracy and free market economy comes to represent Atlantis if viewed from the outside. The openly hierarchial and shamelessly elitist in structure, yet collectivist rather than individualist in ideology, vision that Plato proposed as an alternative we can then see at work as counter-reactions in the Jacobite monarchist uprisings, the Confederate States of America, the Axis Powers of WW2 and now again the peculiar type of conservatism that dominates Russian political discourse. The United States then become the decadent Atlantis that Vladimir Putin and his allies throughout Eurasia are reacting against, pushing their societies in similar directions as Plato and for that matter Aristotle promoted. Aleister Crowley then stands out as an example of that surfacing in the least likely places, as his own political beliefs on occasion tended towards a neo-aristocratic ideal of the Nietzschean variety... which might have ended up having an influence on the more eccentric corners of the Italian Fascist movement since Crowley did live in Italy for a long time while Fascism was gestating. (and the overall high strangeness of Eastern European nationalism means that ideas either originated in or popularized by Fascist Italy have bled into mainstream conservatism in Russia)

I get the impression The Mitrailleuse's writers are trying to describe the "Whig history" narrative of civilization being driven by a conflict between liberal democratic ideals vs. collectivist authoritarianism... but from a perspective more open towards the possibility that the other side might have valid points. A sort of political Turing test, you might call it. Notice that their blogroll on the right contains not just way more far-left websites but also representatives of the authoritarian right than you would expect from a libertarian blog.

Edited by Toaster Mantis - September 21 2014 at 11:26
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Post Options Post Options   Thanks (0) Thanks(0)   Quote dr wu23 Quote  Post ReplyReply Direct Link To This Post Posted: September 21 2014 at 10:17
Originally posted by Toaster Mantis Toaster Mantis wrote:

Does anyone here follow The Mitrailleuse? It's a new political group blog of a vaguely libertarian bent. I say "vaguely" because while most of the contributors come from such an ideological background, the common denominator seems to be a willingness to think very far outside that box often in openly communitarian directions and they're all very well-read... which results in some eye-openingly strange perspectives I very rarely agree with not even understand, but always find thought-provoking.

As an example: Take their analysis of the geopolitical split between NATO and Russia which incorporates perspectives on not just the Cold War but also the Greek myth of Atlantis, the Jacobite uprisings in 18th century Britain, the American Civil War and Aleister Crowley's possible influence on Italian Fascism into its analysis in a more or less coherent manner. It's almost Robert Anton Wilson-esque!
I don't often read esoteric political things but your link looked interesting so I took a look.
Pretty esoteric indeed.....not sure how these kinds of analyses relate to everyday life ....certainly not Realpolitik.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote dr wu23 Quote  Post ReplyReply Direct Link To This Post Posted: September 21 2014 at 10:12
Originally posted by The T The T wrote:

At moments I think there comes a time where extra technological advance is only benefitial to the elites and detrimental for the majority of the population. 
 
 
What.......you don't believe in the 'trickle down effect'...?
 
Wink
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Toaster Mantis Quote  Post ReplyReply Direct Link To This Post Posted: September 21 2014 at 08:06
Does anyone here follow The Mitrailleuse? It's a new political group blog of a vaguely libertarian bent. I say "vaguely" because while most of the contributors come from such an ideological background, the common denominator seems to be a willingness to think very far outside that box often in openly communitarian directions and they're all very well-read... which results in some eye-openingly strange perspectives I very rarely agree with not even understand, but always find thought-provoking.

As an example: Take their analysis of the geopolitical split between NATO and Russia which incorporates perspectives on not just the Cold War but also the Greek myth of Atlantis, the Jacobite uprisings in 18th century Britain, the American Civil War and Aleister Crowley's possible influence on Italian Fascism into its analysis in a more or less coherent manner. It's almost Robert Anton Wilson-esque!


Edited by Toaster Mantis - September 21 2014 at 08:09
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Post Options Post Options   Thanks (0) Thanks(0)   Quote The T Quote  Post ReplyReply Direct Link To This Post Posted: August 30 2014 at 11:55
At moments I think there comes a time where extra technological advance is only benefitial to the elites and detrimental for the majority of the population. 
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Post Options Post Options   Thanks (0) Thanks(0)   Quote JJLehto Quote  Post ReplyReply Direct Link To This Post Posted: August 30 2014 at 11:46
Originally posted by The T The T wrote:

Even service-type jobs are disappearing thanks to automation and the internet. What used to be done by bankers, tellers, salesmen, etc, is also being eliminated and changed to activities that can be done by the final consumer. Menial, underpaid jobs will be the rule and not the exception after all is said and done.


Yes, of course I know people have been worrying automation and technology for centuries but I think you hit on it. Not that there won't be jobs, as many cry, there will be just as you mentioned. 

With all the politics and theory I often wonder if simply: open trade/borders and technology are the root cause of many issues ie transformation into a service economy being the underlying issue. We're not alone, I mentioned this once and someone said many European countries face the same prospect and issues. 

So who knows!
I do find it a bit funny that many people I know are libertarian-ish or conservative and while railing against Obama's "socialism" and blah blah and free market capitalism, they HATE how we no longer manufacture, and basically that we've become service oriented. Seems the natural progression with free trade/open borders but who wants to hear that inconvenient truthLOL

Edit: This is not to say it hasn't created good opportunities, like the exploding tech/computer sector. need for numbers people etc etc but this is a smaller sector...we also face competition from other countries for these things now. Radical as it is, I do always go back to that job guarantee idea and think if it could be a useful idea for the future


Edited by JJLehto - August 30 2014 at 11:47
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Post Options Post Options   Thanks (0) Thanks(0)   Quote rogerthat Quote  Post ReplyReply Direct Link To This Post Posted: August 29 2014 at 08:08
Originally posted by Dean Dean wrote:

The bleakness of life after the Industrial Revolution (and during it) was a matter of population growth and not a consequence of direct unemployment. (the demographic transition). While this explosion in the population was ultimately a result of increases in manufacturing and food production, you had to be in employment to enjoy the benefits and there were not enough jobs to support the larger population. The result of this was a surplus workforce and that meant that employers could lower wages, this in turn resulted in increased crime, debtors prisons, transportation and the formation of (legal and illegal) workers associations what would later become trade unions.

Exactly my point too.  That in the interim, the effects of the Revolution wouldn't have been pleasant.  Which is what we will experience too and we are reacting to.  But what Theo addressed was how it would EVENTUALLY pan out and according to me, we cannot judge how it will pan out over the next 100, 200 whatever years.  Our views are based on extrapolating today's trends to the next 30-40 years and yes, automation will cause a lot of bleeding in that time.  All the more so because the debt mountains of today are bound to collapse on their head.  Without those and the artificial valuations they built up, it would probably be a less painful adjustment.
Originally posted by Dean Dean wrote:


This horse vs car example isn't comparable to the current situation because the change in mode of transportation was essentially in the same discipline. The transition from horse drawn to horse-less was a gradual process over some 50 years or more with most of those employed in one simply moving over to the other, coach-making skills for example were simply transferred to the new industry; the postillion, coachman and guard became truck-driver, bus-driver and bus-conductor; and while there were some obvious redundant jobs, such as groom and stable boy, there was a new jobs such as garage mechanics and fuel attendants. Farm-hands who operated horse-powered farm machinery where the same ones that drove tractors and steam-driven threshing machines.

While it was a change in discipline, it was also a change to a much faster way of doing things and would have surely reduced employment proportionally.  But what happened was at the same time industrialisation facilitated a rapid growth in the size of the world economy and helped create more jobs to compensate for this shift.   I am not sure people writing in at around or before the onset of the Revolution fully expected THAT.  In the same way, we don't yet know how the world economy is going to adjust to the situation over a really long time frame.  My guess is that there will be a suitable readjustment eventually but maybe we won't live long enough to see that.
Originally posted by Dean Dean wrote:



Typists are out of work, the role has disappeared, large companies and institutions do not employ a typing pool and even the role of secretary is all but gone. Now all these tasks are essentially performed by the managers themselves you do wonder at what productivity has been lost and whether answering emails and producing reports is the most cost-effective use of their time.

With banking, as Teo implied there are fewer tellers working inside the banks here and in the USA, branches are merging and closing and those that remain are dealing with other activities such as loans and insurance sales. India may be lagging here but it will happen ... one day you will 'phone your bank and get directed to a call-centre in China or some-such.

Maybe not China because the cost differential is low, if any.  Anyway India is not a good example because we can afford to move such jobs within the country to the hinterland outside the big cities to save cost.  Again, I don't disagree with your comment per se.  All I am saying is that just reflects what might be in store for the next half a century at the most.  We can't judge what its eventual impact on the world will be because that will play out over a longer timeframe. 

QUOTE=Dean]
It is already difficult for new start-ups to survive, (the statistics vary depending on who you listen too but the figure is high either way). Far too many new businesses fold once their initial capital (often the redundancy money from their previous employment) is exhausted. Too many skilled and professional people are being pressured into contract and free-lance self-employment without the proper advice and support (or any long-term guarantees of work); the move from salaried to contract is not done for the benefit of the (ex)employee but for the employer. There has to be a dramatic reversal of fortunes for this to be viable and sustainable. [/quote]

I think a lot depends on what industry and what kind of business.  From an Indian perspective, I only see more start ups blossoming now than at any time before.   And I am certain that the way internet and telecommunication have shrunk distances in the country has had a huge role to play in that.  More automation will ultimately help more small sized businesses to compete as they won't have to bear the legacy costs of large companies.  At any given point, in any case, starting and running a business successfully has never been a bed of roses.  So you are going to have lots of businesses shutting down early and at the same time companies like Whatsapp being bought out at massive valuations.  

Originally posted by Dean Dean wrote:


I disagree, the move from working on the land to working in larger towns and cities was seen as a beneficial opportunity for those making the move and in many ways it was. [remembering that this period extends from the mid-18th century to the mid 20th century]. As I said earlier, the concept of full-time all year round employment was born in this era and while the population remained low it was a "golden age" with workers enjoying a steady living wage, improved living conditions and a better life style. The population boom of the mid 19th century put an end to that and not as a result any reduction in the total number of jobs available (which actually increased over that period) or the change in job functions. This latter period also saw an increase in emigration from Europe to (alleged) better prospects in the Americas and beyond.

How this relates to the modern day is only partially relevant in my estimation, while overall world population continues to increase, in the West birth-rates are decreasing but the population in those countries is still increasing, and that is now more the result of migration rather than procreation. That migration is a result of employment prospects being relatively better in the destination countries than their home countries and while this isn't in turn resulting in a proportional decrease in wages, it is leading to a slowing (to stagnation) of wage increases so they no longer track any increase in the true cost of living (as opposed to the artificial accountant/economist measure: inflation) for the indigenous workforce. However, unlike the 19th century, the total number of available jobs is not increasing at a proportional rate either on a local or world-wide level. How we deal with that in the medium to long term is critical but I fear that if we continue to leave the workforce to find its own equilibrium as we have done in the past will not work in the future.

Again, your view of the industrial revolution relates to a long period of nearly 200 years while your outlook for the future is much more near term in comparison.  You may not admit it, of course, but you cannot in any event accurately predict what will happen 200 years from today.  We know about the benefits of industrial revolution through hindsight.  But this does not mean disruption did not take place in the interim.  And while disruption may have been more limited from a Western point of view, the revolution also left behind many Asian and African countries in its wake.  Both regions are dotted with failed states and a part of the reason for that is their failure to find that so called competitive territorial advantage in the modern globalised world of trade and commerce.  I am sure the next revolution will leave many more failed states in its wake along with islands of prosperity.  And 200 years from now, people will once again focus on the islands of prosperity and ignore the failed states, choosing to believe that it was the mismanagement and ineptitude of said states that led to their downfall.  Which would not be entirely wrong, of course, but it would also mean large swathes of population left to fend for themselves.    There will be churn, as I said, and there will be death and suffering on a massive scale again as the world economy realigns to these developments.  I tend to be skeptical that Western economies will necessarily bear the brunt of it.  There will be more Iraqs and wartime activity will once again jack up demand to allow the realignment to happen.  Because demand is the missing piece of the puzzle.  Where there is demand, there is production and where there is production there are jobs of some sort.  
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Dean Quote  Post ReplyReply Direct Link To This Post Posted: August 29 2014 at 06:55
Originally posted by rogerthat rogerthat wrote:

Again, those sort of things happened under the industrial revolution too.  There must have been a whole horse drawn carriage 'economy' with its own component and ancillary manufacturers before the advent of motor cars and that just disappeared.   And from what I have heard, predictions of life after the revolution were pretty bleak too.  Now whether they were right or wrong also depends on how fortunate one has been.  
The bleakness of life after the Industrial Revolution (and during it) was a matter of population growth and not a consequence of direct unemployment. (the demographic transition). While this explosion in the population was ultimately a result of increases in manufacturing and food production, you had to be in employment to enjoy the benefits and there were not enough jobs to support the larger population. The result of this was a surplus workforce and that meant that employers could lower wages, this in turn resulted in increased crime, debtors prisons, transportation and the formation of (legal and illegal) workers associations what would later become trade unions.

This horse vs car example isn't comparable to the current situation because the change in mode of transportation was essentially in the same discipline. The transition from horse drawn to horse-less was a gradual process over some 50 years or more with most of those employed in one simply moving over to the other, coach-making skills for example were simply transferred to the new industry; the postillion, coachman and guard became truck-driver, bus-driver and bus-conductor; and while there were some obvious redundant jobs, such as groom and stable boy, there was a new jobs such as garage mechanics and fuel attendants. Farm-hands who operated horse-powered farm machinery where the same ones that drove tractors and steam-driven threshing machines.

Originally posted by rogerthat rogerthat wrote:

 
I am not saying everything will be hunky dory.  I am just saying we don't really know much yet about how this will play out.  It could be catastrophic or it could be great or it could be just meh.  There were similar fears expressed also when the information age arrived and put typists out of work.  Yes, it did affect a certain section of people as all such disruptions do but it cannot be said that it had a deleterious impact overall.    When ATMs arrived in India years late, there were fears expressed that bank clerks would lose their jobs.  That actually hasn't really happened because banks make big fat profits anyway and would be loathe to sack employees whom they could find use for.  Such jobs are not being replaced when the incumbents retire, yes, but on the other hand with the overall increase in economic activity, there is more work for everyone.  
Typists are out of work, the role has disappeared, large companies and institutions do not employ a typing pool and even the role of secretary is all but gone. Now all these tasks are essentially performed by the managers themselves you do wonder at what productivity has been lost and whether answering emails and producing reports is the most cost-effective use of their time.

With banking, as Teo implied there are fewer tellers working inside the banks here and in the USA, branches are merging and closing and those that remain are dealing with other activities such as loans and insurance sales. India may be lagging here but it will happen ... one day you will 'phone your bank and get directed to a call-centre in China or some-such.

Originally posted by rogerthat rogerthat wrote:

What I am more certain of - and I don't know if that was in fact the actual question you, Theo, had in mind - is in the less distant future of say the next 30-40 years, it will either which way cause a lot of disruption and upheaval and the business class, rather than the working class, will benefit more from it though some in the business class who fail to anticipate and prepare for these trends will also pay heavily.  It could be that we will see a fresh flight to self employment again, which was more or less the way it was pre revolution (barring slaves), even as they all fight the tide of falling demand and pricing power.  It will become much easier to start a business, requiring much less capital, and at the same time much more difficult also to survive and thrive in it and not necessarily a ticket to luxury (if at all it ever was).
It is already difficult for new start-ups to survive, (the statistics vary depending on who you listen too but the figure is high either way). Far too many new businesses fold once their initial capital (often the redundancy money from their previous employment) is exhausted. Too many skilled and professional people are being pressured into contract and free-lance self-employment without the proper advice and support (or any long-term guarantees of work); the move from salaried to contract is not done for the benefit of the (ex)employee but for the employer. There has to be a dramatic reversal of fortunes for this to be viable and sustainable.

Originally posted by rogerthat rogerthat wrote:

  The days of 'specialisation' will come to an end if they haven't already.  In the same way, I tend to think that the generation that was already in the workforce at the onset of the industrial revolution must have had markedly more negative impressions about it than the way we view it now with the benefit of hindsight.    It will be difficult for those already in the system to prepare and adapt to these tides.  It sounds nice to write about it in management books but it's much more difficult for real people in real situations to actually do it and even if they do, it is usually with no small amount of suffering along the way.  The real economy also doesn't adapt and create a new paradigm fast enough to mitigate such suffering.  There will be churn.  
I disagree, the move from working on the land to working in larger towns and cities was seen as a beneficial opportunity for those making the move and in many ways it was. [remembering that this period extends from the mid-18th century to the mid 20th century]. As I said earlier, the concept of full-time all year round employment was born in this era and while the population remained low it was a "golden age" with workers enjoying a steady living wage, improved living conditions and a better life style. The population boom of the mid 19th century put an end to that and not as a result any reduction in the total number of jobs available (which actually increased over that period) or the change in job functions. This latter period also saw an increase in emigration from Europe to (alleged) better prospects in the Americas and beyond.

How this relates to the modern day is only partially relevant in my estimation, while overall world population continues to increase, in the West birth-rates are decreasing but the population in those countries is still increasing, and that is now more the result of migration rather than procreation. That migration is a result of employment prospects being relatively better in the destination countries than their home countries and while this isn't in turn resulting in a proportional decrease in wages, it is leading to a slowing (to stagnation) of wage increases so they no longer track any increase in the true cost of living (as opposed to the artificial accountant/economist measure: inflation) for the indigenous workforce. However, unlike the 19th century, the total number of available jobs is not increasing at a proportional rate either on a local or world-wide level. How we deal with that in the medium to long term is critical but I fear that if we continue to leave the workforce to find its own equilibrium as we have done in the past will not work in the future.


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Post Options Post Options   Thanks (0) Thanks(0)   Quote rogerthat Quote  Post ReplyReply Direct Link To This Post Posted: August 29 2014 at 03:46
Again, those sort of things happened under the industrial revolution too.  There must have been a whole horse drawn carriage 'economy' with its own component and ancillary manufacturers before the advent of motor cars and that just disappeared.   And from what I have heard, predictions of life after the revolution were pretty bleak too.  Now whether they were right or wrong also depends on how fortunate one has been.  

I am not saying everything will be hunky dory.  I am just saying we don't really know much yet about how this will play out.  It could be catastrophic or it could be great or it could be just meh.  There were similar fears expressed also when the information age arrived and put typists out of work.  Yes, it did affect a certain section of people as all such disruptions do but it cannot be said that it had a deleterious impact overall.    When ATMs arrived in India years late, there were fears expressed that bank clerks would lose their jobs.  That actually hasn't really happened because banks make big fat profits anyway and would be loathe to sack employees whom they could find use for.  Such jobs are not being replaced when the incumbents retire, yes, but on the other hand with the overall increase in economic activity, there is more work for everyone.  

What I am more certain of - and I don't know if that was in fact the actual question you, Theo, had in mind - is in the less distant future of say the next 30-40 years, it will either which way cause a lot of disruption and upheaval and the business class, rather than the working class, will benefit more from it though some in the business class who fail to anticipate and prepare for these trends will also pay heavily.  It could be that we will see a fresh flight to self employment again, which was more or less the way it was pre revolution (barring slaves), even as they all fight the tide of falling demand and pricing power.  It will become much easier to start a business, requiring much less capital, and at the same time much more difficult also to survive and thrive in it and not necessarily a ticket to luxury (if at all it ever was).  The days of 'specialisation' will come to an end if they haven't already.  In the same way, I tend to think that the generation that was already in the workforce at the onset of the industrial revolution must have had markedly more negative impressions about it than the way we view it now with the benefit of hindsight.    It will be difficult for those already in the system to prepare and adapt to these tides.  It sounds nice to write about it in management books but it's much more difficult for real people in real situations to actually do it and even if they do, it is usually with no small amount of suffering along the way.  The real economy also doesn't adapt and create a new paradigm fast enough to mitigate such suffering.  There will be churn.  


Edited by rogerthat - August 29 2014 at 03:47
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Post Options Post Options   Thanks (0) Thanks(0)   Quote The T Quote  Post ReplyReply Direct Link To This Post Posted: August 28 2014 at 13:43
Even service-type jobs are disappearing thanks to automation and the internet. What used to be done by bankers, tellers, salesmen, etc, is also being eliminated and changed to activities that can be done by the final consumer. Menial, underpaid jobs will be the rule and not the exception after all is said and done.
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Dean Quote  Post ReplyReply Direct Link To This Post Posted: August 28 2014 at 13:25
The Industrial Revolution was a one-off made possible by the preceding Agricultural Revolution (all hail Jethro Tull, etc.) - more people were employed in the textile trade after industrialisation than before, and those people came from surplus workforce created by the improved mechanisation of farming. 

The Industrial Revolution gave birth to the "consumer" - before then people didn't have surplus income to spend on non-essential products because they didn't need to. Prior to then the majority of people were never in full-time employment, (unless they were tradesmen), because farm working was at that time seasonal and so were employed as casual labour. As a consequence of this they had a shorter working week and a shorter working year, kept livestock and grew vegetables. Even the textile trades of spinning and weaving were seasonal and never involved full-time employment so the out-cry against Hargreaves and Arkwright was not that their inventions would put skilled people out of work, but that it would take this seasonal work away (the difference is a lot less subtle than it appears). The concept of full-time employment for the majority of the population is barely 200 years old. It was a product of the Industrial Revolution and perhaps its time has passed.

The current 'Automation Revolution' is creating a similar surplus workforce, and has been since the mid-60s when CNC (Computer Numeric Control) Automation really took off. The employment shift to counter that has up to now been from Manufacturing to Services, which currently employs somewhere between 70 and 80% of the workforce depending on were you live. However, there is a limit to how many people the Service sector can employ and that sector numbers many of the lowest paid jobs in employment history outside subsistence farming. The Service sector is not immune from the Automation Revolution.

History bears this out - we improved food production and now less than 1% of the workforce is employed in Agriculture & Fishing. We have improved manufacturing and now less than 10% of the workforce is employed in Manufacturing. We have yet to see the full impact of what the Internet can and will do to the Service sector - employment in Retail is certainly the most visible as more goods are being purchased online than from brick'n'mortar stores, but similar changes are happening in other Service industries and there will be more to come.

The 'revolution' that is required to solve this is not re-employment or the creation of new jobs in other market sectors (because we are fast running out of market sectors that need large workforces), but a total re-think on the fundamental nature of Employment in the 21st century. 


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Post Options Post Options   Thanks (0) Thanks(0)   Quote The Doctor Quote  Post ReplyReply Direct Link To This Post Posted: August 28 2014 at 13:24
I can understand your anger at me, but what did the horse I rode in on ever do to you?
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