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Full Employment

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Re: Full Employment

#61

Post by wz1000 »

zumachase wrote: post #25
wz1000 wrote: post #12

Earlier quoted context omitted.

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

No, I’m not. You’re making a very simple argument of an extremely complex issue. That only holds up in a world of unlimited resource. As long as energy and raw materials are finite, the above does not hold. More importantly, you’re conflating two things: we needn’t necessarily print money. Let’s presume your comment were correct. Nonetheless, in the absence of such monetary policy, consumption would plummet and defla…

Again, you are missing the point. Yes, it is inflationary, but the inflation caused will not be the end of the world. As you admit, most of it will simply counteract the deflationary effects of unemployment and full automation.

Re: Full Employment

#62

Post by zumachase »

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)

Another commenter rightly noted that inflation is only partially driven by supply of money. The other factor is velocity of money, which is how quickly money is “recycled” within the economy. If that 40k is now going to investors who have a much lower propensity to spend it (likely) then velocity drops and so does inflation.

Re: Full Employment

#63

Post by wz1000 »

eru wrote: post #2

Compare https://en.wikipedia.org/wiki/Economic_impacts_of_climate_ch... Wikipedia quotes studies that put the estimated aggregate impact at losing about 0% to 20% of world GDP. That's comparable eg to moving from NYC to a place with average US GDP per capita. That's certainly a lot, but perhaps not a world shattering impact. (Edit: the studies quoted on that Wikipedia page are quite old by now. It would be useful to…

You are missing all the second order impacts, such as conflict and mass migration.

From the Wikipedia article you linked:

> As stated, economic estimates of climate change impacts are incomplete.[31] Analysts have used integrated assessment models to estimate the economic impacts of climate change. These models do include estimates of some impacts, for instance, the effects of climate change on agriculture.[31] In other areas, models exclude some impacts. An example is the possibility that climate change could lead to migration or conflict.[31]

Re: Full Employment

#64

Post by zumachase »

skybrian wrote: post #48
zumachase wrote: post #32

Earlier quoted context omitted.

Yes this is all very true, but he makes the case explicitly for money velocity to increase. He’s not suggested printing money for savers or rent seekers, he’s suggested printing money for the express purpose of consumption: I have been automated and thus can not afford basic staples without basic income. This is inflationary not matter how you slice it.

Well that depends. If it's preserving spending power (you were laid off) then it wouldn't be a spending increase. The supply was already there. Inflation is an average of price increases. You get price increases when supply can't expand as fast as demand while keeping the price of inputs the same. This depends on whether there are supply bottlenecks and what the nature of those bottlenecks are. There have been some s…

I think this thread is full of people confusing absolute inflation with relative inflation (“inflationary”). A policy resulting in zero absolute inflation can be inflationary provided that absent such policy, deflation would have occurred.

I took this with OP stating (incorrectly imho) that a certain policy was not inflationary. I am not advocating that all inflation is bad.

Re: Full Employment

#65

Post by uxcolumbo »

js8 wrote: post #28

It's always refreshing to read someone who really gets that economy is not about money, but rather about what is being produced. The title reminded me of the famous Kalecki essay, Political Aspects of Full Employment, which actually explains deeper why this is not so easy to do as Cory Doctorow imagines (if you hadn't read it, I really recommend it, it's one of the best works on economics ever). Here I think is the c…

So what's the solution?

So if I understand you correctly is that blue collar jobs are not attractive enough?

So does the solution include one or more of the following?

- Increase the status of those jobs in society. This pandemic has shown us who the key workers are, so increasing the status of jobs that actually benefit society, e.g. street cleaner vs product manager for a betting company.

- Pay more for these key worker jobs

- Move to a 4 day work week, so people have more leisure time and live life a little bit more

- Provide other perks if you're classed as a key worker, e.g. discount on public transport etc?

Re: Full Employment

#66

Post by Reelin »

zumachase wrote: post #59
Reelin wrote: post #52

Earlier quoted context omitted.

> If I’m another potato farmer and all of a sudden all those extra potatoes are teleported somewhere else, I will in all likelihood raise my prices. There seem to be two different scenarios being conflated here. You describe producers acting in response to the risk of future price changes. It seems to me that others in the thread are describing a scenario where product is discarded because the price has already falle…

> It seems to me that others in the thread are describing a scenario where product is discarded because the price has already fallen so far that it is no longer profitable after accounting for various processing costs (ie things such as packaging and transportation). I understand what people are saying. Unfortunately this just isn’t how things work. If there were a way for this to occur, prices would respond. Ultimat…

In the limited case where redistribution is equivalent to disposal from the perspective of the producer, and the food goes directly to people who are otherwise starving (ie literally incapable of purchasing food) I just don't see how that can be the case.

Obviously this includes a number of assumptions which might not hold. The redistributed product can't reenter the market. It must only go to those who otherwise could not have purchased it or an equivalent in the near term. The total value being redistributed must be insignificant relative to the market as a whole (to limit secondary effects). Etc.

> markets aggregate information and package it up in a single metric we call price

In terms of the movement of information, product that would otherwise have been destroyed seems irrelevant. Consumers who were otherwise incapable of consuming seem irrelevant. Am I missing something?

Re: Full Employment

#67

Post by jpxw »

js8 wrote: post #28

It's always refreshing to read someone who really gets that economy is not about money, but rather about what is being produced. The title reminded me of the famous Kalecki essay, Political Aspects of Full Employment, which actually explains deeper why this is not so easy to do as Cory Doctorow imagines (if you hadn't read it, I really recommend it, it's one of the best works on economics ever). Here I think is the c…

We do pay blue collar workers the market rate. Why do you think we don’t?

Re: Full Employment

#68

Post by ivalm »

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…

Inflationary policy in a deflationary market doesn’t lead to inflation (see US or Japan). There are lots of issues but I don’t think inflation is one we need to worry about.

Re: Full Employment

#69

Post by zumachase »

ivalm wrote: post #68
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…

Inflationary policy in a deflationary market doesn’t lead to inflation (see US or Japan). There are lots of issues but I don’t think inflation is one we need to worry about.

Again, this is not what I said. Inflationary policy in a deflationary market is still inflationary.

Re: Full Employment

#70

Post by js8 »

Reelin wrote: post #57
js8 wrote: post #28

It's always refreshing to read someone who really gets that economy is not about money, but rather about what is being produced. The title reminded me of the famous Kalecki essay, Political Aspects of Full Employment, which actually explains deeper why this is not so easy to do as Cory Doctorow imagines (if you hadn't read it, I really recommend it, it's one of the best works on economics ever). Here I think is the c…

> If we truly payed blue collar guys a market rate, no white collar jobs would exist, because what is the price for risking your health? Isn't that exactly what we do though? Doesn't pay (very approximately) correlate with required skill? For example, compare the salary of a skilled carpenter with some of the lower skilled "tech" jobs. All of your examples (manager, scum master, programmer) are decidedly high skill j…

My polemic is that at least some of this "high skill" distinction that we attribute to cushy high skilled jobs is a myth. They are well paid, because we claim they are high skill. And everybody with power in that system has an interest in perpetuating that myth. (Including me, I am a programmer.) Part of the myth is that it is skill, not health risks, that should be well paid.

And I suspect one reason why we don't want to tackle climate change (or even generally take more advantage of technological progress) is that it requires a different skill set, the one that is lot more blue collar, and to make that transformation we would have to upset the existing social order.

In other words, I generally don't believe there is only one solution to the "market equations". Remuneration, price of different types of labor, also depends on cultural factors.

And because there is not always unique solution, you might end up in a local maximum of productivity. One way around it is what Doctorow suggests, we all gather around a table (well, metaphorically, with a government as our proxy) and decide, well, we have to do these things, and here are the jobs to be filled (and he further argues that we are in such local maximum regarding the climate change, and we can get out of it).

Sadly, it's been really difficult historically to get out of such local maxima without profound rifts in the society, civilizations often chose death rather than do this. And that's what I worry about, and I think we need to come to terms with.

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