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Post-Scarcity Economics

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Re: Post-Scarcity Economics

#11

Post by brownbat »

"There is a long history of exaggerated concern, rightly derided by economists, with the replacement and hence displacement of workers by machines."

- Judge Posner

http://www.becker-posner-blog.com/2013/03/automation-and-emp...

To be fair, the tone is stronger than his ultimate argument. He goes on to outline four or five examples where the short term effects could be pretty devastating.

It's important to note that in the long run, labor markets reach an equilibrium, adapting to any current technological capabilities.

Then again, it's also important to note that in the long run, we're all dead.

Re: Post-Scarcity Economics

#12

Post by rndmize »

__itall wrote: post #4

Investment bank ex-employee here. I'm pleasantly surprised that Hacker News front-page has finally landed an article on the history of modern macroeconomics whose author knows what he's talking about instead of masking their ignorance with popular voodoo buzzwords like "Ron Paul" and "Bitcoins". Ironically but predictably, very few karma points are given. I'm happy to find this little gold nugget and the intellectual…

Articles like this (semi-political stuff) tends to get flagged and thus, disappears from the front page at speed. When I clicked the link to read the article, it was around #6 with 20-something points after 2 hours; when I refreshed HN ten minutes later, it had gained ten points but fallen all the way to the second page (~30 odd places).

I'd say there's a not unreasonable chance that the article was flagged because a reader didn't like the history it puts forth.

Re: Post-Scarcity Economics

#13

Post by zanny »

nbouscal wrote: post #8
zanny wrote: post #6

Earlier quoted context omitted.

I'm a software dude, not an economist, but as a guy on the Internet who reads reddit and hacker news, I feel 15% qualified to answer this question! I want to quote some passages from the article, which is kind of long, and I think misses some of the point. All personal internet nerd opinion. > Unemployment would drive wages down until, at some certain level, workers would be so cheap to hire that once again, men woul…

> Tax policy has a huge impact on expanding a business. No, absolutely not. As someone who has run a small business, there is exactly one thing that made me hire a new employee: too much work (aka demand). That's it, period, absolutely nothing else. Taxes did not have a single thing to do with it. Barring tax policies far removed from everyday reality in the U.S., hiring a new employee to meet demand will always be m…

The new hire puts you up a tax bracket, and you lose profit to gain productivity.

Your immediate finances can't support adopting a new hire or division because tax proceeds from your profit margin limit your growth potential.

If you can immediately make a return on a new hire, with instant productivity gains and immediate bottom line improvements, yes, you absolutely make the hire. But that doesn't always happen, and in major skill movements across the labor market it never happens. You need financial capital to invest in broadening or transitioning your business rather than just increasing labor to meet more demand, principally because in this modern age it is easier to automate increased demand (circumstantially, but frequently) than to hire more workers to cover it. IE, if your market grows 10%, you might as well invest in a contracted software team to automate your systems to enable your current labor staff to be 10% more productive than to hire 10% more people.

Re: Post-Scarcity Economics

#14

Post by nbouscal »

zanny wrote: post #13
nbouscal wrote: post #8

Earlier quoted context omitted.

> Tax policy has a huge impact on expanding a business. No, absolutely not. As someone who has run a small business, there is exactly one thing that made me hire a new employee: too much work (aka demand). That's it, period, absolutely nothing else. Taxes did not have a single thing to do with it. Barring tax policies far removed from everyday reality in the U.S., hiring a new employee to meet demand will always be m…

The new hire puts you up a tax bracket, and you lose profit to gain productivity. Your immediate finances can't support adopting a new hire or division because tax proceeds from your profit margin limit your growth potential. If you can immediately make a return on a new hire, with instant productivity gains and immediate bottom line improvements, yes, you absolutely make the hire. But that doesn't always happen, and…

That's not how tax brackets work. Tax brackets in the US are marginal, which means that the increased rate only applies to income above the threshold. It is impossible for an increase in income to be accompanied by a larger increase in tax burden.

(I guess I should mention that the Business degree came with a Professional Accounting option.)

Re: Post-Scarcity Economics

#15

Post by coldtea »

panarky wrote: post #5

"On the one hand, technology has made us all much more productive ... on the other, jobs have evaporated." "Most of us are working harder, for less money and with no job security." My econ classes taught me that increased productivity causes short-term pain for displaced workers, but results in long-term higher standards of living for everyone. That relationship seems to have broken down. What if the internet destroy…

>My econ classes taught me that increased productivity causes short-term pain for displaced workers, but results in long-term higher standards of living for everyone.

That's ideology, not science. Economists sell ideology instead of science all the time (for one, it helps them tout the "free market" from cushy government or teaching positions).

The outcome described above is not inevitable, like gravity. It depends on who has control of the situation and what the increased productivity is used for.

If the elites owning industry etc can get by by employing far less people, why would they care about huge parts of the population not having a job or living in slums? As long as they get to sell their products to a market (which can even be abroad), they are fine.

Re: Post-Scarcity Economics

#16

Post by ahomescu1 »

zanny wrote: post #6
will_asouka wrote: post #2

Can anyone with more economic insight than myself comment on how increased automation leading to higher unemployment (ie, self-driving car) might change the recommendations? Are we back to the Basic Income? Seems to be an increasingly relevant proposal.

I'm a software dude, not an economist, but as a guy on the Internet who reads reddit and hacker news, I feel 15% qualified to answer this question! I want to quote some passages from the article, which is kind of long, and I think misses some of the point. All personal internet nerd opinion. > Unemployment would drive wages down until, at some certain level, workers would be so cheap to hire that once again, men woul…

> If everyone got reset, the elite culture would be the entrepreneurs and geniuses that can move the world, not the ones who rolled a good set of birth parents and got beyond-world-class education.

I'm always skeptical when I hear this education argument. In STEM at least, it doesn't seem that you can get a better education just by throwing money at it (ignoring the fact that a lot of rich kids don't actually major in STEM fields). You can still learn world-class Math/CS/Physics/Chemistry even if you don't go to MIT/Stanford. What exactly is this "beyond-world-class education" that rich kids get?

If you ask me, the major problem is that most people (from all social and economic classes) aren't interested or talented in activities that are productive at present (like STEM or Medicine), in addition to not being rich or connected. No amount of education can correct that, IMHO.

Re: Post-Scarcity Economics

#17

Post by nbouscal »

ahomescu1 wrote: post #16
zanny wrote: post #6

Earlier quoted context omitted.

I'm a software dude, not an economist, but as a guy on the Internet who reads reddit and hacker news, I feel 15% qualified to answer this question! I want to quote some passages from the article, which is kind of long, and I think misses some of the point. All personal internet nerd opinion. > Unemployment would drive wages down until, at some certain level, workers would be so cheap to hire that once again, men woul…

> If everyone got reset, the elite culture would be the entrepreneurs and geniuses that can move the world, not the ones who rolled a good set of birth parents and got beyond-world-class education. I'm always skeptical when I hear this education argument. In STEM at least, it doesn't seem that you can get a better education just by throwing money at it (ignoring the fact that a lot of rich kids don't actually major i…

You're missing a lot of auxiliary factors when you just look at college, let alone a specific college program. The educational advantage rich kids get starts at birth. A huge amount of it simply comes from having parents that make you do homework, etc. You say that you can learn world-class STEM without going to MIT/Stanford, but you're presuming a hell of a lot of prerequisites there that the majority of poor people do not have. You say that most people aren't interested or talented, but talent doesn't have a damn thing to do with it and the reason they aren't interested is because nobody has ever helped them get to the point where it's interesting. The popular perception of math, for example, is about as distant from actual mathematics as you can possibly get. That is not the kid's fault, it's the fault of the education system and society at large.

Re: Post-Scarcity Economics

#18

Post by ahomescu1 »

nbouscal wrote: post #17
ahomescu1 wrote: post #16

Earlier quoted context omitted.

> If everyone got reset, the elite culture would be the entrepreneurs and geniuses that can move the world, not the ones who rolled a good set of birth parents and got beyond-world-class education. I'm always skeptical when I hear this education argument. In STEM at least, it doesn't seem that you can get a better education just by throwing money at it (ignoring the fact that a lot of rich kids don't actually major i…

You're missing a lot of auxiliary factors when you just look at college, let alone a specific college program. The educational advantage rich kids get starts at birth. A huge amount of it simply comes from having parents that make you do homework, etc. You say that you can learn world-class STEM without going to MIT/Stanford, but you're presuming a hell of a lot of prerequisites there that the majority of poor people…

> A huge amount of it simply comes from having parents that make you do homework, etc.

That's not something exclusive to rich people. I got a lot of encouragement as a kid from my parents to learn stuff and read books, without them being rich (grew up in Romania). Money isn't the big factor in your argument, quality parenting is (which I agree is important).

Re: Post-Scarcity Economics

#19

Post by zanny »

ahomescu1 wrote: post #18
nbouscal wrote: post #17

Earlier quoted context omitted.

You're missing a lot of auxiliary factors when you just look at college, let alone a specific college program. The educational advantage rich kids get starts at birth. A huge amount of it simply comes from having parents that make you do homework, etc. You say that you can learn world-class STEM without going to MIT/Stanford, but you're presuming a hell of a lot of prerequisites there that the majority of poor people…

> A huge amount of it simply comes from having parents that make you do homework, etc. That's not something exclusive to rich people. I got a lot of encouragement as a kid from my parents to learn stuff and read books, without them being rich (grew up in Romania). Money isn't the big factor in your argument, quality parenting is (which I agree is important).

I'd say hes giving a lesser example. Private tutors, the ability to acquire any scientific equipment you want, not having to worry about what your next meal is, not having to get a job at 14 to make ends meet in the family hurting your studies, private schools that do career tracks from 8 with career tracks per student rather than factory public school education, and like I said, more importantly than anything, the connections you get by being in the rich kids club from birth.

You get a stacked hand economically, culturally, and socially. We often focus on the economic part, but I think it is the other two that contribute way more to the status quo being limited upward movement from poorer classes to the wealthy / elite / prosperous.

Re: Post-Scarcity Economics

#20

Post by ahomescu1 »

zanny wrote: post #19
ahomescu1 wrote: post #18

Earlier quoted context omitted.

> A huge amount of it simply comes from having parents that make you do homework, etc. That's not something exclusive to rich people. I got a lot of encouragement as a kid from my parents to learn stuff and read books, without them being rich (grew up in Romania). Money isn't the big factor in your argument, quality parenting is (which I agree is important).

I'd say hes giving a lesser example. Private tutors, the ability to acquire any scientific equipment you want, not having to worry about what your next meal is, not having to get a job at 14 to make ends meet in the family hurting your studies, private schools that do career tracks from 8 with career tracks per student rather than factory public school education, and like I said, more importantly than anything, the c…

Still sticking to STEM, here are my thoughts on each of your points:

> Private tutors

Not sure about these, don't know much about them.

> the ability to acquire any scientific equipment you want

If you're studying math/CS, how much of these do you need? Maybe for Physics or Chemistry, but even then?... When I was a kid, my parents bought me a cheapo Electronics kit and I learned a lot about circuits from that and a couple of books.

> not having to worry about what your next meal is, not having to get a job at 14 to make ends meet in the family hurting your studies

I don't know that many Romanian kids with that problem, so I expect it's even less common in the western world (disclaimer: I currently live in the US). However, I do see a lot of kids skipping school, acting cool and picking on nerds (and this is a global problem IMHO, not limited to the US or Eastern Europe). That's not poverty, that's just bad attitude.

> private schools that do career tracks from 8 with career tracks per student rather than factory public school education

Not sure about these either, never had contact with private schools.

> more importantly than anything, the connections you get by being in the rich kids club from birth

I think these matter a lot more in the legal and financial worlds. In tech, with all the startup money being thrown around, it's not that hard to get funding for an idea.

> You get a stacked hand economically, culturally, and socially. We often focus on the economic part, but I think it is the other two that contribute way more to the status quo being limited upward movement from poorer classes to the wealthy / elite / prosperous.

I personally know a few people from poor families who became tech millionaires in a decade or less, by starting their own company or working pre-IPO at a startup. While these are only anecdotes, they show it's not impossible to become rich. You do have to pick a high-growth field.

I think there's still a lot of mobility in fields where personal contribution and talent still matter, like technology, science and art (for example, you can still be poor and later become a millionaire, see Justin Bieber and Psy for recent examples). It's much harder to do this in finance, law and politics; but then again, hasn't it always been so?

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