Do not make the mistake of thinking that because my conclusion is the same as another person's that my reasoning is the same
Humans are animals. We have physical needs. We are conscious beings, so we have psychological needs. And society is our environment, our habitat. It provides the common means by which we satisfy our physical and psychological needs. With that in mind, I ask this question.
What if the corporations win?
Suppose production and service efficiencies reach their theoretical maximum. It is no longer possible to reduce the cost of production. We've automated everything from mining to recycling, fast food service to garbage collection and minimized its dependance on human labor. That's the goal, right?
Suppose everything our economy needs to produce can be produced by, say, 25% of the current work force.
What social conditions could support this without major pathologies? Is there more that one type of society where this condition could obtain and provide for our physical and psychological needs? Given our current beliefs, are any of these societies reachable?
Posted by P6 at October 4, 2003 04:10 AM | Trackback URL: http://www.prometheus6.org/mt/mt-tb.cgi/1837"Suppose everything our economy needs to produce can be produced by, say, 25% of the current work force. What social conditions could support this without major pathologies?"
An easy solution would be to have mandatory 5-day weekends.
Rather than supporting the corporate system, either as an employee or a consumer, it is better to buy local and produce goods or services to fulfill the needs of people directly. That is how I have restructured my life over the last year, following the lead of many others who have gone off the grid. How widespread it will be, I can't say. But it is right for me now and its relative benefit will only grow as the nature of the corporate system plays out.
Of course, it is not important to me to have a lot of manufactured "toys" so I can be happy with limited resources. Having reached my 30's, I also have a lot of skills so I can offer direct services without needing a corporation to train me as an indentured servant. The transition may take real effort for some people, beginning with a change of values and conception of what happiness is.
DoF:
Do you think there would be any social repercussions to that? Like, for instance, what would the impact of a two day work week be on wages? And, since we're numerically driven, how would that affect the the economic models used to make decisions?
I don't think it's easy at all.
IO:
Rather than supporting the corporate system, either as an employee or a consumer, it is better to buy local and produce goods or services to fulfill the needs of people directly.
Interesting that you write that on a computer. A computer that I'd be willing to bet you'd not give up willingly.
The corporate system is the framework that enables you to provide services other than manual labor. In other words, in order for you to move off the grid in this fashion, the grid must exist.
Yet it will play out. A socioeconomic foundation exists on which we, collectively, are building. And like any other building, the maximum height that can be reached is limited by the depth and breadth of that foundation.
Not playing Jerimiah at all. Just checking the physics.
An even semi-free economy is not a zero-sum game so except by some kind of deus ex machina you could not get to the hypothetical state you describe. As the theoretical maximums of productivity and efficiency are phased in to existing companies and industries, new ones would rise up to absorb the surplus labor. You'd simply have a larger, wealthier, more productive economy making the same goods and selling them at much cheaper prices
But, assuming these maximums existed starting, say, tomorrow, the short term effect would be a massive depression and a deflationary price-wage spiral. In the long term though, the result would be the same as in the above paragraph.
The other alternative to depression/deflation would be for the government to embark upon a burst of military keynesianism like the world has never seen and deal with surplus labor through a draft and procurement spending.
But as I said earlier, getting to your hypothesis state involves a time lag and since economies are dynamic you can't really get there.
Interesting thought though.
Mark:
I believe you underestimate the "machina" part. Not just that, you're not recognizing that economies of all types are the product of mind, and therefore recursively modify as mind and knowledge recursively modify.
Still, let's assume that 25% figure isn't a theoretical but a reachable maximum (given a controlled economy and current motivations, it's not just reachable, it's predictable…in fact, given current motivations a controlled economy is predictable). Same chaotic result, right?
Well, if say, we could produce current output with only 25% of labour, prices should go down to a quarter of their former value.
Anyway, I disagree with the premise. Output is going to quadruple, and we'll start building some interstellar spaceships. Or other cool stuff from a Niven novel.
DoF:
Happy happy, joy joy.
That "should" is a wishful-thinking should, not a physics—or even an economics—should.
Even if prices went down to 25% of current prices (which assumes labor is 100% of production costs—maybe not unreasonable in this thought experiment), only 25% of people would have any money to buy stuff. And stock prices would crap out (which seems to be a bigger social concern than people living in poverty which is why I focus on that). The focus on profits rather than larger social concerns means the prices would more likely quadruple. Maybe more, since unions would refuse the give-back necessary to accurately reflect the increased productivity of the workers. And, after all, investors and economists are expecting to see consistant growth.
But you reject the premise. Which means you think the corporate quest for increased productivity is just so much tail-chasing, right?
"which assumes labor is 100% of production costs"
And it mostly is. When you buy raw materials, you are actually paying the people who produced or transported those raw materials. The money you pay will end up with other people, as you don't have to pay machines to work.
I agree that there will be transient problems, where people can not find jobs matching their skills. This could lead to catastrophic failure, as say, in late 18th centure France, where things got so bad they triggered a revolution.
Some system must be in place to smooth the transients, and to direct people to more productive jobs. One of these systems is democracy, a byproduct from the French revolution.
I don't agree with workforce dwindling to 25%.
Let's face it, if your wage would quadruple, would you still want to work a whole week? Would there be wholescale social protest againts the mandatory 2day workweek?
Not sure why stock price would diminish. If we assume pruductivity increases by a factor of 4, and people only work a quarter of the time with their hourly wage quadrupled, we can have the pricelevel remain unchanged, which would have stockprices remain unchanged.
DoF:
The money you pay will end up with other people, as you don't have to pay machines to work.
That's why I figured it was a fair assumption. This speculation assumes an absurd level of automation.
Some system must be in place to smooth the transients, and to direct people to more productive jobs. One of these systems is democracy,
I'm not clear on how democracy would do that.
At any rate, more productive jobs is part of the conditions that I'm postulating. Advances in technology make each employed person capable of intiating and controlling the production and distribution of more and more goods or services until all that is needed can be produced and distributed under the control of 25% of the potential work force.
I grant that the natural response would be to do as much work as necessary to support the life you choose, then stop. But you have to factor in more than the desires of the potential workers. What about the desires of those who own the means of production and distribution?
If this hypothetic were to be obtained (and I don't think it could) the end result is very tidy: the 25% factionalizes, and hires up the remaining 75%, outfits them with the insanely cheap weapons, and sets them out to kill the opposing factions (and thier portion of the 75%.) When enough people have killed each other, a new equilibrium is established.
"What about the desires of those who own the means of production and distribution?"
That would be everyone with a car, or phone, or computer and internet access.
from http://www.cia.gov/cia/publications/factbook/geos/us.html#Econ
US GDP - composition by sector:
agriculture: 2%
industry: 18%
services: 80% (2002)
80% of GDP production is not tied to ownership of land or a factory, but by people working in a "shop" or from an "office", which can be just a phone or email address.
Actually, this is a conservative estimate, because agrarian and industrial activities are very difficult to hide from the IRS, compared to services.
In Lenin's time, it made sense to fear concentration of means of production in a single "capitalist" class, but with services at 80% of GDP and increasing I don't think this makes much sense these days.
DoF:
(Services) ≠ (Means of production)
Without production, what would you service?
Yours is the same argument Indigo Ocean put forward, and my response is the same: in order to run a service business, you need to have something to service.
All your figures mean is the 80% is even more at the mercy of the 18%
And still, service companies "can be" run out of your closet but you'll lose business to folks who, because of economies of scale, can undercut your prices.
You know, I don't think you're taking this seriously at all.
I'm not talking fear of a capitalist class. I'm thinking about what the natural progression of events will be given current conditions (which conditions include the prevaling management paradigms). If that progression raises fears, well, that says a lot right there.
rollerball, starring james caan.
what do you mean, 'WHAT' IF they win?
some people would argue that this is exactly the source of our current woes. others of course would argue that the winning needs to be deregulated even more, which i must confess i find hard to imagine.
'give me convenience or give me death' -- the dead kennedys
"All your figures mean is the 80% is even more at the mercy of the 18%"
How is someone writing software dependent on a manufacturer? Are you going to buy undocumented hardware that's only programmable by the vendor?
Some services can scale, some can't. People want to buy tobacco, newspapers, alcohol, coffee and other stuff for immediate consumption close to home. Or the service can't be easily automated, say dogwalking, or housecleaning.
And even those that can scale have to scale a lot before they can compete with someone not paying overhead for an office or CFO.
I think regulation is a bigger problem for service industry. In some places it does more good (Health services), others, I'm not sure.
How is someone writing software dependent on a manufacturer?
No manufacturer, no computer.
eh. that should read
No manufacturerS, no computer.
That's the good thing about competition: if X doesn't want to build or sell a computer, Y and Z will.
And how many manufacturers are there…not assemblers, but the guys who make the CPUs?
Two.
And one is scrambling to keep up. It's only hope is that Microsoft (another monopoly) keeps them in mind with it's 64 bit version of Windows.
What would the assemblers do without the chip fab plants?
And back to your software example, even if the assemblers were manufacturers, the software venders still could not exist without them. You haven't supported your point at all.
You need to look a little deeper.