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>“The lesson you get from the end of the Luddites is: Do the people that are profiting off automation today want to participate in distributing their profits mo

by bko 10y ago

>“The lesson you get from the end of the Luddites is: Do the people that are profiting off automation today want to participate in distributing their profits more widely around the population, or are they going to fight just as hard as they did back then?”... [Luddites] just thought if you’re going to make more money because you’re more productive, you need to kick some of that money back down to the workers. In actuality, what happens is as expenses decrease through automation, either capital is bid up or prices are reduced so that the profit margin (net income over revenue) is in line with the amount of risk, along with other things. So, true, a market economy does not "kick some of that money down to the workers", but rather spreads the benefits and lower costs to everyone through lower prices or higher quality. Were all the benefits of automation going to the bottom line of the business owners, you would see a steady increase in corporate profit margin [0]. Right now they're near historic highs but that is only very recent and the trend is not in line with the trend of automation in the US. Furthermore, if you look at the top 1%, much of their income came from wages and self-employment business income: > The richest 1% earn roughly half their income from wages and salaries, a quarter from self-employment and business income, and the remainder from interest, dividends, capital gains and rent. According to an analysis of tax returns by Jon Bakija of Williams College and two others, 16% of the top 1% were in medical professions and 8% were lawyers: shares that have changed little between 1979 and 2005, the latest year the authors examined (see chart). The most striking shift has been the growth of financial occupations, from just under 8% of the wealthy in 1979 to 13.9% in 2005. Their representation within the top 0.1% is even more pronounced: 18%, up from 11% in 1979. [1] [0] https://si.wsj.net/public/resources/images/ON-BL063_StWise_G_20150612191313.jpg https://si.wsj.net/public/resources/images/ON-BL063_StWise_G... [1] http://www.economist.com/node/21543178 http://www.economist.com/node/21543178

marcosdumay 10y ago
> Were all the benefits of automation going to the bottom line of the business owners, you would see a steady increase in corporate profit margin. It's no coincidence that "corporation" was something that only became viable on that time. Really, you got a very selective symptom, got a positive result, and are just dismissing it. Why? > The richest 1% earn roughly half their income from wages and salaries That's only because 1% is too big a number. Square it and look again.
- bko 10y ago
  > That's only because 1% is too big a number. Square it and look again. Sure. Not exactly 0.01% but you can look at Forbes 400 and where they got their wealth and any trends. > This year, we gave each member of The Forbes 400 a score on a scale from 1 to 10 -- a 1 indicating the fortune was completely inherited, while a 10 was for a Horatio Alger-esque journey. We also did the analysis for every 10 years going back to 1984. Looking at the numbers over time, the data lead us to an interesting insight: in 1984, less than half of people on The Forbes 400 were self-made; today, 69% of the 400 created their own fortunes.[0] [0] https://www.forbes.com/sites/afontevecchia/2014/10/02/the-new-forbes-400-self-made-score-from-silver-spooners-to-boostrappers/#3e573e5b2aff https://www.forbes.com/sites/afontevecchia/2014/10/02/the-ne...
  - coldtea 10y ago
    >Looking at the numbers over time, the data lead us to an interesting insight: in 1984, less than half of people on The Forbes 400 were self-made; today, 69% of the 400 created their own fortunes. They make it sound like some triumph of the American dream, when it's at best a humble change. After 3 decades of what has been a huge change in economy, moving to the "information economy" and the "digital age", and with all the celebrated tech moguls being added to the world's richest people, there's only ~20-25% more self-made rather than inherited fortunes. As if the digital age just impacted/disrupted 1/4 of the established wealth. Meanwhile, the part they've missed, is that the American dream is not about getting to the "Forbes Top 400", but in general to moving up from poor/working class/lower middle class, and this has been problematic for decades, with increasingly less people making more than their parents.
    - bko 10y ago
      The point that I was trying to make is that most of the inequality and wealth concentration we're seeing is due to entrepreneurship rather than passive growth of wealth. I'm hopeful that the trend continues and leads to a more equitable distribution of opportunity
  - marcosdumay 10y ago
wycx 10y ago
You can look at other statistics, such as the wage share of income, and the correlation between productivity and wages. In the case of Australia at least, the wage share has been declining for the past 20 years, and productivity growth decoupled from wages growth in the late 1990. If you then look at real net national disposable income per capita, it has not been rising (in fact it is in the same place today that it was in ~2012) in a way that would indicate that benefits of technology/automation are spreading via lower prices/higher quality. In Australia we have observed a steady rise in profit share of total factor income from the early 1970s, with only recent decreases related to commodity prices/terms of trade. This [1] report indicates that falling wage share is ubiquitous among developed countries. [1] https://www.oecd.org/g20/topics/employment-and-social-policy/The-Labour-Share-in-G20-Economies.pdf https://www.oecd.org/g20/topics/employment-and-social-policy...

by bko 10y ago

marcosdumay 10y ago

> Were all the benefits of automation going to the bottom line of the business owners, you would see a steady increase in corporate profit margin. It's no coincidence that "corporation" was something that only became viable on that time. Really, you got a very selective symptom, got a positive result, and are just dismissing it. Why? > The richest 1% earn roughly half their income from wages and salaries That's only because 1% is too big a number. Square it and look again.

bko 10y ago
> That's only because 1% is too big a number. Square it and look again. Sure. Not exactly 0.01% but you can look at Forbes 400 and where they got their wealth and any trends. > This year, we gave each member of The Forbes 400 a score on a scale from 1 to 10 -- a 1 indicating the fortune was completely inherited, while a 10 was for a Horatio Alger-esque journey. We also did the analysis for every 10 years going back to 1984. Looking at the numbers over time, the data lead us to an interesting insight: in 1984, less than half of people on The Forbes 400 were self-made; today, 69% of the 400 created their own fortunes.[0] [0] https://www.forbes.com/sites/afontevecchia/2014/10/02/the-new-forbes-400-self-made-score-from-silver-spooners-to-boostrappers/#3e573e5b2aff https://www.forbes.com/sites/afontevecchia/2014/10/02/the-ne...
- coldtea 10y ago
  >Looking at the numbers over time, the data lead us to an interesting insight: in 1984, less than half of people on The Forbes 400 were self-made; today, 69% of the 400 created their own fortunes. They make it sound like some triumph of the American dream, when it's at best a humble change. After 3 decades of what has been a huge change in economy, moving to the "information economy" and the "digital age", and with all the celebrated tech moguls being added to the world's richest people, there's only ~20-25% more self-made rather than inherited fortunes. As if the digital age just impacted/disrupted 1/4 of the established wealth. Meanwhile, the part they've missed, is that the American dream is not about getting to the "Forbes Top 400", but in general to moving up from poor/working class/lower middle class, and this has been problematic for decades, with increasingly less people making more than their parents.
  - bko 10y ago
    The point that I was trying to make is that most of the inequality and wealth concentration we're seeing is due to entrepreneurship rather than passive growth of wealth. I'm hopeful that the trend continues and leads to a more equitable distribution of opportunity
- marcosdumay 10y ago

wycx 10y ago

You can look at other statistics, such as the wage share of income, and the correlation between productivity and wages. In the case of Australia at least, the wage share has been declining for the past 20 years, and productivity growth decoupled from wages growth in the late 1990. If you then look at real net national disposable income per capita, it has not been rising (in fact it is in the same place today that it was in ~2012) in a way that would indicate that benefits of technology/automation are spreading via lower prices/higher quality. In Australia we have observed a steady rise in profit share of total factor income from the early 1970s, with only recent decreases related to commodity prices/terms of trade. This [1] report indicates that falling wage share is ubiquitous among developed countries. [1] https://www.oecd.org/g20/topics/employment-and-social-policy/The-Labour-Share-in-G20-Economies.pdf https://www.oecd.org/g20/topics/employment-and-social-policy...