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Right but the money saved will now be spent someplace else instead thus creating new jobs. It will never be the case that a company will say "let's just sit on

Right but the money saved will now be spent someplace else instead thus creating new jobs. It will never be the case that a company will say "let's just sit on this money we used to spend on the old process". Sure in your example foxconn fires all its workers. Now foxconn has a pile of money. Either they spend that doing some other thing (which requires labor) or their executive's go out on a personal spending spree creating a demand for labor in the leisure sector. Free trade can't kill employment. Only technology can kill employment in the long term. And technology only starts killing jobs after its played a ton of sector-to-sector automation whack-a-mole.

ryandvm 9y ago
> It will never be the case that a company will say "let's just sit on this money we used to spend on the old process." Don't be so sure. As of last year, Apple was sitting on a quarter of a TRILLION dollars in the bank.
- IIAOPSW 9y ago
  For an example in the opposite direction look at Amazon. Amazon spends practically every penny of excess on expanding. This brings their on-paper earnings down to laughably low levels and nets them a seemingly absurd P/E ratio. Amazon is projected to overtake Apple as biggest tech firm. Seems to me that sitting on cash is a dumb medium-long term strategy, and companies which do it will eventually be out-competed by those which don't.
wslh 9y ago
> Right but the money saved will now be spent someplace else instead thus creating new jobs. It will never be the case that a company will say "let's just sit on this money we used to spend on the old process". We are living in a post scarcity world (take it with a grain of salt) in the sense that a lot (really a lot) of capital is unallocated or (the same) only allocated in portfolios but bot producing anything in a direct way. I always share this example which happen alnost everyday in my software development company: if my customer is technical (another software company) they care (even not explicitly) about HOW I am charging them "per resource per hour" and less thinking in terms of pure ROI. When the deal involve financial people trying to leverage their capital they care more about the ROI and see the service as an investment when they don't need to go into so many details. In this case the same service can be charged with a much higher multiplier that makes you think the value they put to money is less significant. Indeed there is a third case when finance people think they have more power because they just have money, I pass those.

ryandvm 9y ago

> It will never be the case that a company will say "let's just sit on this money we used to spend on the old process." Don't be so sure. As of last year, Apple was sitting on a quarter of a TRILLION dollars in the bank.

IIAOPSW 9y ago
For an example in the opposite direction look at Amazon. Amazon spends practically every penny of excess on expanding. This brings their on-paper earnings down to laughably low levels and nets them a seemingly absurd P/E ratio. Amazon is projected to overtake Apple as biggest tech firm. Seems to me that sitting on cash is a dumb medium-long term strategy, and companies which do it will eventually be out-competed by those which don't.

wslh 9y ago

> Right but the money saved will now be spent someplace else instead thus creating new jobs. It will never be the case that a company will say "let's just sit on this money we used to spend on the old process". We are living in a post scarcity world (take it with a grain of salt) in the sense that a lot (really a lot) of capital is unallocated or (the same) only allocated in portfolios but bot producing anything in a direct way. I always share this example which happen alnost everyday in my software development company: if my customer is technical (another software company) they care (even not explicitly) about HOW I am charging them "per resource per hour" and less thinking in terms of pure ROI. When the deal involve financial people trying to leverage their capital they care more about the ROI and see the service as an investment when they don't need to go into so many details. In this case the same service can be charged with a much higher multiplier that makes you think the value they put to money is less significant. Indeed there is a third case when finance people think they have more power because they just have money, I pass those.