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> And this will leave more time for people to spend with each other instead of in drudgery, This assumes that those increased profits from the increased produc

> And this will leave more time for people to spend with each other instead of in drudgery, This assumes that those increased profits from the increased productivity would end up in the hands of the lower-class laborers. What makes you think this would happen?

dabuess 9y ago
The fact that it has happened over and over, almost without fail, in the entire history of human economic activity?
- pjc50 9y ago
  .. up until the 1970s, when the wages-productivity link was broken. http://www.outsidethebeltway.com/what-happened-to-the-wage-and-productivity-link/ http://www.outsidethebeltway.com/what-happened-to-the-wage-a...
  - grandmczeb 9y ago
    Using just wages is misleading since benefits (like healthcare) make up a much larger portion of total compensation than they used to. If you adjust for this, you'd find that that total compensation has roughly kept pace with productivity. http://www.nber.org/digest/oct08/w13953.html http://www.nber.org/digest/oct08/w13953.html
    - pjc50 9y ago
      Similar phenomena are visible in other developed countries, perhaps with different dates; this page gives a graph for the UK, where healthcare is paid from general taxation and has not suffered the same cost explosion: http://touchstoneblog.org.uk/2013/05/the-progress-of-exploitation/ http://touchstoneblog.org.uk/2013/05/the-progress-of-exploit... In that case the decoupling seems to have happened around 1990. The healthcare cost explosion in the US seems to be a whole other phenomenon which it's hard to get a handle on.
      - Consultant32452 9y ago
        Those charts almost never adjust for feminism and the fact that we added about 40% more people into the work force by allowing women to work. And for the US it certainly doesn't account for the 30 million or so in additional population we've gained through illegal immigration which increases wage competition on the low end of the spectrum, keeping the working poor wages down to the benefit of the upper classes. I've noticed that the "decoupling" in your UK chart roughly coincides with the creation of the EU which allowed cheap Eastern European laborers to come in which potentially had a similar impact to the illegal immigration in the US. Though I'm less confident of that since I'm not as familiar with economic changes in the UK over that time period. Productivity and wages are still related, it's just that productivity is not the only variable.
gumby 9y ago
A secular shift in the economics of production by definition can’t be monopolized, thus competition should, as it has through history, force the cost of goods towards the marginal cost of production. Believing this does not require belief in the goodness of people nor some abstruse economic theory+, just look at the examples of history. +I love such economics but must admit its predictive power has been poor.
- Dirlewanger 9y ago
  History has also never seen nor experienced anything like the Amazons and Googles and Facebooks of present day. They make the Rockefellers and JP Morgans of yester-century red with envy. As much as I like to say that today is the greatest day in the history of human civilization, I'm quite reticent and fearful for the future. It's inevitable that we will live with either Big Government or Big Corps, but both of them in tandem will not be good for civilization.
  - gumby 9y ago
    Have you read history? Rockafeller’s net worth was 1.5% of the gdp. In the early 20th century a handful of people could solve the government debt crisis. Going back further Augustus was actually wealthier than the government.
Theodores 9y ago
Competition. So your competitors are also able to automate the supply chain. So you have to too. To be competitive. Therefore all of the people doing backend tasks with spreadsheets and 'copy/paste' of addresses, sku codes etc. get to be made redundant. The computer does most of it with the process being customer driven as much as possible. However this is not where the story ends. To be competitive in this new online marketplace where reviews are everything, there is a new requirement for skilled customer service agents, able to do the things that were not automated, i.e. the things that need customer interaction, product knowledge and skill. There is a need for the language support, e.g. French/German/Italian/Spanish/Portuguese and more if selling into the E.U. So now instead of having a room full of data entry people doing dull work there is now a room full of people doing thinking person work, where skill and independent thought is helpful. These new staff need to be treated differently, they can't be hired and fired ad-hoc, they need to be paid properly and given opportunities to grow with the company. Because you now have intelligent staff it is also possible to involve them in more things, so being able to compete in foreign language markets becomes much more possible as there is now in-house translation facilities from someone customer focused and with product knowledge. When speaking with customers the 'intelligent human agents' will have a more insightful interaction, so less 'lonely' than when everything was manual and not automated. The agents will essentially be dealing with new edge cases, not routine interactions, e.g. to get address details from a customer. Because the 'intelligent customer service agents' are creating value they are not a cost in the way the previous 'data entry agents' were. It is not all doom and gloom, there will be winning companies that will thrive by putting the customer first and hiring better people that are paid better.

dabuess 9y ago

The fact that it has happened over and over, almost without fail, in the entire history of human economic activity?

pjc50 9y ago
.. up until the 1970s, when the wages-productivity link was broken. http://www.outsidethebeltway.com/what-happened-to-the-wage-and-productivity-link/ http://www.outsidethebeltway.com/what-happened-to-the-wage-a...
- grandmczeb 9y ago
  Using just wages is misleading since benefits (like healthcare) make up a much larger portion of total compensation than they used to. If you adjust for this, you'd find that that total compensation has roughly kept pace with productivity. http://www.nber.org/digest/oct08/w13953.html http://www.nber.org/digest/oct08/w13953.html
  - pjc50 9y ago
    Similar phenomena are visible in other developed countries, perhaps with different dates; this page gives a graph for the UK, where healthcare is paid from general taxation and has not suffered the same cost explosion: http://touchstoneblog.org.uk/2013/05/the-progress-of-exploitation/ http://touchstoneblog.org.uk/2013/05/the-progress-of-exploit... In that case the decoupling seems to have happened around 1990. The healthcare cost explosion in the US seems to be a whole other phenomenon which it's hard to get a handle on.
    - Consultant32452 9y ago
      Those charts almost never adjust for feminism and the fact that we added about 40% more people into the work force by allowing women to work. And for the US it certainly doesn't account for the 30 million or so in additional population we've gained through illegal immigration which increases wage competition on the low end of the spectrum, keeping the working poor wages down to the benefit of the upper classes. I've noticed that the "decoupling" in your UK chart roughly coincides with the creation of the EU which allowed cheap Eastern European laborers to come in which potentially had a similar impact to the illegal immigration in the US. Though I'm less confident of that since I'm not as familiar with economic changes in the UK over that time period. Productivity and wages are still related, it's just that productivity is not the only variable.

gumby 9y ago

A secular shift in the economics of production by definition can’t be monopolized, thus competition should, as it has through history, force the cost of goods towards the marginal cost of production. Believing this does not require belief in the goodness of people nor some abstruse economic theory+, just look at the examples of history. +I love such economics but must admit its predictive power has been poor.

Dirlewanger 9y ago
History has also never seen nor experienced anything like the Amazons and Googles and Facebooks of present day. They make the Rockefellers and JP Morgans of yester-century red with envy. As much as I like to say that today is the greatest day in the history of human civilization, I'm quite reticent and fearful for the future. It's inevitable that we will live with either Big Government or Big Corps, but both of them in tandem will not be good for civilization.
- gumby 9y ago
  Have you read history? Rockafeller’s net worth was 1.5% of the gdp. In the early 20th century a handful of people could solve the government debt crisis. Going back further Augustus was actually wealthier than the government.

Theodores 9y ago

Competition. So your competitors are also able to automate the supply chain. So you have to too. To be competitive. Therefore all of the people doing backend tasks with spreadsheets and 'copy/paste' of addresses, sku codes etc. get to be made redundant. The computer does most of it with the process being customer driven as much as possible. However this is not where the story ends. To be competitive in this new online marketplace where reviews are everything, there is a new requirement for skilled customer service agents, able to do the things that were not automated, i.e. the things that need customer interaction, product knowledge and skill. There is a need for the language support, e.g. French/German/Italian/Spanish/Portuguese and more if selling into the E.U. So now instead of having a room full of data entry people doing dull work there is now a room full of people doing thinking person work, where skill and independent thought is helpful. These new staff need to be treated differently, they can't be hired and fired ad-hoc, they need to be paid properly and given opportunities to grow with the company. Because you now have intelligent staff it is also possible to involve them in more things, so being able to compete in foreign language markets becomes much more possible as there is now in-house translation facilities from someone customer focused and with product knowledge. When speaking with customers the 'intelligent human agents' will have a more insightful interaction, so less 'lonely' than when everything was manual and not automated. The agents will essentially be dealing with new edge cases, not routine interactions, e.g. to get address details from a customer. Because the 'intelligent customer service agents' are creating value they are not a cost in the way the previous 'data entry agents' were. It is not all doom and gloom, there will be winning companies that will thrive by putting the customer first and hiring better people that are paid better.