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Full Employment

locusmag.com

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Re: Full Employment

#11

Post by function_seven »

bob33212 wrote: post #8
zumachase wrote: post #4

> Should that day come to pass, the money-issuer – the central bank – can procure all that idle labor, without creating inflation. If the private sector doesn’t want labor, then there’s no bidding war between companies and a federal jobs program or a universal basic income, so creating money to buy people’s labor won’t drive up the price of that labor. I had to stop reading after this. This is not how inflation works…

Say that 100k truckers making 50k a year lost their jobs to self driving trucks, which cost 10k year. If the government paid those people 40k a year the demand and purchasing power for food would not change for those 100k people.

Sure, but the robot truck owners are also getting 40K additional per year, no? Or if they're not completely capturing the marginal difference between a human driver and a robot driver, someone elsewhere is, right?

Maybe the 40K labor savings is actually offset by a 37K a year replacement to the labor force, who also now enjoy lower prices on all shipped goods. (Assuming there is still real competition in shipping)

Re: Full Employment

#12

Post by wz1000 »

zumachase wrote: post #4

> Should that day come to pass, the money-issuer – the central bank – can procure all that idle labor, without creating inflation. If the private sector doesn’t want labor, then there’s no bidding war between companies and a federal jobs program or a universal basic income, so creating money to buy people’s labor won’t drive up the price of that labor. I had to stop reading after this. This is not how inflation works…

You're missing the point. There is no inflation taking the no automation stage as a baseline.

I.e. the scenario is workers spending $X of their employer granted salaries on goods they produce vs spending $X of basic job salaries that machines produce

Re: Full Employment

#13

Post by eru »

redis_mlc wrote: post #10

1) I tried to read the article, but it's badly structured and edited. 2) The SF Bay Area has never had a ventilator shortage. In fact, we gave away 500 in March/April to other states because we have too many. 3) The article mixes up various timelines into an incoherent wall of text - General AI, corona pandemic and global warming effects all have different timelines. 4) The USA is run by oligarchs who have a policy o…

> 4) The USA is run by oligarchs who have a policy of discarding workers, so that completely undermines the article - the unemployed will not be working on moving cities inland, they will just be forgotten and destitute.

What's your evidence for that? Unemployment was really quite low in the last decade up until a few months ago, with presumably the same 'oligarchs' already in power?

Re: Full Employment

#14

Post by climwe »

jusssi wrote: post #7
zumachase wrote: post #4

> Should that day come to pass, the money-issuer – the central bank – can procure all that idle labor, without creating inflation. If the private sector doesn’t want labor, then there’s no bidding war between companies and a federal jobs program or a universal basic income, so creating money to buy people’s labor won’t drive up the price of that labor. I had to stop reading after this. This is not how inflation works…

> All of these people who would otherwise have less/no money are now spending that printed money to purchase goods like food, thus driving inflation higher. This assumes those goods are a scarce resource, so that increased consumption eventually leads to shortage. I can't quote sources, but my understanding is that we have enough food to feed everyone ATM, and any remaining hunger is just a failure of the economy to…

Millions of potatoes were recently discarded by Idaho farms due to surplus and lack of demand. I would point to Yemen's hunger crisis, but there are people literally inside of Idaho who don't have food. If you can't even distribute excess food within your own borders it's no longer a logistics problem, people just don't care.

Re: Full Employment

#15

Post by climwe »

eru wrote: post #13
redis_mlc wrote: post #10

1) I tried to read the article, but it's badly structured and edited. 2) The SF Bay Area has never had a ventilator shortage. In fact, we gave away 500 in March/April to other states because we have too many. 3) The article mixes up various timelines into an incoherent wall of text - General AI, corona pandemic and global warming effects all have different timelines. 4) The USA is run by oligarchs who have a policy o…

> 4) The USA is run by oligarchs who have a policy of discarding workers, so that completely undermines the article - the unemployed will not be working on moving cities inland, they will just be forgotten and destitute. What's your evidence for that? Unemployment was really quite low in the last decade up until a few months ago, with presumably the same 'oligarchs' already in power?

Unemployment was lower but jobs became worse. If there was no increase in federal minimum wage in a decade, you can see why employment went up in that exact same decade.

It's not good enough to just point to one statistic and cancel out a deeply complex claim like that one.

Re: Full Employment

#16

Post by zumachase »

jusssi wrote: post #7
zumachase wrote: post #4

> Should that day come to pass, the money-issuer – the central bank – can procure all that idle labor, without creating inflation. If the private sector doesn’t want labor, then there’s no bidding war between companies and a federal jobs program or a universal basic income, so creating money to buy people’s labor won’t drive up the price of that labor. I had to stop reading after this. This is not how inflation works…

> All of these people who would otherwise have less/no money are now spending that printed money to purchase goods like food, thus driving inflation higher. This assumes those goods are a scarce resource, so that increased consumption eventually leads to shortage. I can't quote sources, but my understanding is that we have enough food to feed everyone ATM, and any remaining hunger is just a failure of the economy to…

These goods are scarce in the economic sense, even if you think they are “cheap”. They are not free to produce.

We do have enough food to feed the world, but that would mean your food gets more expensive as other people consume what would otherwise contribute to downward supply pressure.

Re: Full Employment

#17

Post by kortilla »

jusssi wrote: post #7
zumachase wrote: post #4

> Should that day come to pass, the money-issuer – the central bank – can procure all that idle labor, without creating inflation. If the private sector doesn’t want labor, then there’s no bidding war between companies and a federal jobs program or a universal basic income, so creating money to buy people’s labor won’t drive up the price of that labor. I had to stop reading after this. This is not how inflation works…

> All of these people who would otherwise have less/no money are now spending that printed money to purchase goods like food, thus driving inflation higher. This assumes those goods are a scarce resource, so that increased consumption eventually leads to shortage. I can't quote sources, but my understanding is that we have enough food to feed everyone ATM, and any remaining hunger is just a failure of the economy to…

The problem is that all consumption levels stay the same but the production costs surge because a bunch of people aren’t working to help produce supplies. The only way inflation doesn’t occur is if all of the unemployed people were doing useless things that nobody wanted in normal times, which is not how most of the worlds markets function.

Re: Full Employment

#19

Post by bob33212 »

function_seven wrote: post #11
bob33212 wrote: post #8

Earlier quoted context omitted.

Say that 100k truckers making 50k a year lost their jobs to self driving trucks, which cost 10k year. If the government paid those people 40k a year the demand and purchasing power for food would not change for those 100k people.

Sure, but the robot truck owners are also getting 40K additional per year, no? Or if they're not completely capturing the marginal difference between a human driver and a robot driver, someone elsewhere is, right? Maybe the 40K labor savings is actually offset by a 37K a year replacement to the labor force, who also now enjoy lower prices on all shipped goods. (Assuming there is still real competition in shipping)

The 40k goes to the profits of the shipping companies, which goes to the dividends of the stock owners, who are generally spending the dividends on investing in more stock.

In theory shipping prices would go down immediately, but in the real world it could take years for competitors to force the industry to lower costs by the full 40k.

Re: Full Employment

#20

Post by skybrian »

zumachase wrote: post #4

> Should that day come to pass, the money-issuer – the central bank – can procure all that idle labor, without creating inflation. If the private sector doesn’t want labor, then there’s no bidding war between companies and a federal jobs program or a universal basic income, so creating money to buy people’s labor won’t drive up the price of that labor. I had to stop reading after this. This is not how inflation works…

While I don't agree with Doctorow's argument at all, I would say that inflation is misunderstood more than it's understood.

For example, there is a naive belief that inflation is proportional to the money supply. This seems to be a garbled version of monetarism, which is no longer how central banks think about it, but even monetarism is more complicated than that.

Monetarist theory is based on MV = PQ, where M is the money supply and V is the "velocity of money".

The money supply can go up but velocity can go down (the people getting the money tend not to spend it), in which case there's no inflation. For inflation to happen, people have to want to spend more.

People can spend more or less due to fear, but it depends on the nature of the fear. Currently fear tends to make people spend less (if they can).

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