7 ms·

If there are only 19 bones for every 20 dogs, then it doesn't matter how good a bone hunter they all are there will always be one dog disappointed and the other

If there are only 19 bones for every 20 dogs, then it doesn't matter how good a bone hunter they all are there will always be one dog disappointed and the other 19 will be grateful for the bone no matter how thin and weedy it is. Systemically the 'interest rate targeting' approach starts to tighten up policy when unemployment gets below 5% - which they consider 'full employment' even though 1 in 20 haven't got jobs. Interest rate targeting uses an unemployment buffer to keep wages and therefore prices under control. Poverty for those in work is entirely part of the plan. To fix the poverty problem you need to fix the structural viewpoint and return to the Beveridge condition - everybody must have an alternative living wage job offer available to them so that job competition works properly in favour of people. There must always be more jobs available than people that want them, not slightly fewer. But that then runs into what Kalecki called "The Political Aspects of Full Employment" - a recommended read if you haven't already: https://mronline.org/2010/05/22/political-aspects-of-full-employment/ https://mronline.org/2010/05/22/political-aspects-of-full-em... Truly a 'wicked problem' - tied up with the concept of power

candiodari 8y ago
And, of course you need a way to prevent employers from using various alternatives available to them. * You need very high import taxes, so goods have to be produced with local labour * If truly automation were to become pervasive, that needs taxing * You probably need restrictions to prevent money from crossing borders too easily * You can't have open borders (or) * You have to strongly respond to illegals working (or legalize them, while still killing those illegal jobs), because they'll destroy the bargaining power of others (this is, incidentally, why for 90% of history leftists and communists were strongly against immigration, and the right was pro-immigration. Even today, the right is still in favor of (limited) immigration, that doesn't seem to have changed much. But I sometimes wonder if it isn't the case that Trump won because a significant portion of the left electorate voted for him because of the labour competition due to immigration and tolerating of illegal immigrants and illegal immigrants' labour)
- PeterStuer 8y ago
  Alternatively, we could ditch the neo-feudalism, embrace automation, and give people a more meaningful live than having to slave 60 hour weeks to be allowed to survive, at meaningless jobs that could easily be done by machines.
  - throwaway77384 8y ago
    But the neo-feudalism makes like 100 people happy, so, checkmate, you communist!! (On a more serious note, I fully expect automation to simply lead to automated armies defending the rich from the poor, rather than relieving any suffering anywhere. Productivity increases have not lead to (proportional) wage increases, have not lead to (proportional) reductions in working hours. The internet has not lead to information-driven utopia, but instead ad-serving dystopia. Automation will also fall to the deathly grip of capitalism, as does everything else.)
- pjc50 8y ago
  > leftists and communists were strongly against immigration This is revisionism and ignores the whole "internationalism" vs "socialism in one country" debate. It also fails to recognise the history of nativist (far-)right anti-immigration parties and lefty anti-borders activists.
  - candiodari 8y ago
    Internationalism on the left was going to force the world to become leftist by having a border between leftist and other governments. THAT border was going to have huge import taxes. So no, I think not revisionist at all.
YayamiOmate 8y ago
I'm not sure what is the point of the first paragraph but it's considered full employment at 5% because not everyone is interested in having a job. It is impossible to have 100% employment rate. So there's no point in pursuing it. Its a kind of thing like the average number of hands per population is less than two. Seems counter intuitive, but when you think about it, it does make sense. One shouldn't relay on the expected value of people having two hands, for global population it's a tad lower.
- flukus 8y ago
  > I'm not sure what is the point of the first paragraph but it's considered full employment at 5% because not everyone is interested in having a job. It is impossible to have 100% employment rate. So there's no point in pursuing it. People not looking for a job aren't included in that 5%, to be considered unemployed you have to be working less than 2 hours a week and looking for work. More importantly that figure doesn't include the underemployed, those working at least 2 hours but looking for more.
- tonyedgecombe 8y ago
  People who aren't looking for a job aren't included in those figures. The reason 5% is considered full employment is there will always be a number of people who are unemployed because they are between jobs, for instance their partner has moved or they are rejoining the workforce after pregnancy or even looking for their first job.
burfog 8y ago
There is something wrong with this: "There must always be more jobs available than people that want them, not slightly fewer." Even at 5% unemployment, your condition can be satisfied. For example, jobs might be unfilled because the candidates are unwilling to move. The candidates might be unqualified... shall we hire a random person as a brain surgeon? There could be a dozen job openings per person, and still the unemployment rate remains above zero. As you move toward 0% unemployment, you push harder and harder against the problem of unsuitable workers. Reaching 0% is a bit like traveling at the speed of light: it is an unreachable goal, with difficulty rising dramatically as you get close.
- atq2119 8y ago
  Yes, there's frictional unemployment. How much, though? This may differ by country, but you typically only show up in the numbers if you were fired. After all, if you quit your job, you aren't involuntarily unemployed, which is what the numbers are supposed to measure. How often do people get fired? I remember reading numbers of every 20 years on average (don't have the source handy, I'm afraid), but let's call it every 10 years to make it conservative. In a situation of true full employment, with a plethora of employers looking for employees, at least low to medium skill workers should be able to find a new job basically immediately -- within a week perhaps. Let's be conservative again and call it two months. This means people are unemployed for two months every 10 years on average, which translates to ~1.7% frictional unemployment. That's way less than the 5% number you cite. In fact, several industrialized nations saw unemployment rates below 1% for some time between the Second World War and the 1970s. In other words, achieving well below 2% unemployment rate is absolutely realistic. If you convert the delta to the 5% number you cite to the US workforce, you get about 5 million people. 5 million people who are suffering simply due to political ideology. On a more political level, I think it's important to keep in mind that the current situation (where people misleadingly talk about full employment even for unemployment rates much higher than 2%) is very beneficial to employers, because it greatly strengthens their bargaining position. Now add the fact that the majority of funding for economics think tanks is aligned with employer interests, and it's clear why the public discourse may be somewhat skewed and biased towards accepting inhumanely high rates of unemployment.
coldtea 8y ago
>If there are only 19 bones for every 20 dogs, then it doesn't matter how good a bone hunter they all are there will always be one dog disappointed and the other 19 will be grateful for the bone no matter how thin and weedy it is. Or, if the dogs are intelligent, they could split those 19 bones to 20 pieces...
- throwaway8879 8y ago
  That wouldn't make them intelligent at all. This idea that there should always be fairness and equality in existence is very naive.
  - pwm 8y ago
    What’s wrong with the idea of sharing?
    - kingofhdds 8y ago
      Nothing, unless you force a dog which hunted its bone to share it with one who slept the whole day, and call it "equality".
      - ddalex 8y ago
        Or you can share 5% of your hunt to keep the lazy dog from attacking you while you sleep. Is it 'fair'? No. Is it a wise move? Maybe.
        throwaway8879 8y ago
        Or I can eliminate that dog so I don't have to share my 5% of the kill every single time.
        TheOtherHobbes 8y ago
        Or the other dogs can pack together to eliminate you. Considering the number of times this has happened in human history, any ideas of kingly invincibility you may have are unlikely to be realistic.
salty_biscuits 8y ago
The maximum entropy situation is one dog with 6+ bones and lots with none. It is structurally broken at a statistical mechanics level if you are concerned about fairness.
- spython 8y ago
  It's not easy to imagine somebody having 6+ full time jobs. Just because the time of the worker is the limiting resource.
  - salty_biscuits 8y ago
    I was thinking of the financial rewards of said jobs (and probably stretching the metaphor a little thin). I think that without more constraints then you end up with a distribution that most people would consider unfair.
  - TheBobinator 8y ago
    It is however easy to imagine "royalty employment": 1 executive employing 20 "clergymen" who don't work a lot but keep the executive happy, and who's needs are then maintained by 200 "peasants".
deleted 8y ago
[deleted]
perfunctory 8y ago
> Thus in the not too remote future, the rate of interest would have to be negative and income tax would have to be replaced by an income subsidy. Interesting. We definitely have negative interest rates in some places by now. Now waiting for the income subsidy.
- amelius 8y ago
  I'd like to see a simulation of this scenario.
madmulita 8y ago
If the hungry dog is always the same, maybe the problem is not the missing bone.
liftbigweights 8y ago
> If there are only 19 bones for every 20 dogs, then it doesn't matter how good a bone hunter they all are there will always be one dog disappointed and the other 19 will be grateful for the bone no matter how thin and weedy it is. The example I've come across was of musical chairs. If there are 3 seats and 10 people, no matter what, some people will be out of luck. I find it strange reading all the "get an education" or "don't have babies out of wedlock" attacks. If everyone in the country got PhDs, we still have the same level of poverty. If everyone married and then had babies, we'd still have the same level of poverty. Lets say every american went to medical school and become doctors. You know what we'd have? A lot of doctors in poverty. If everyone became a software developer like me, we'd have hordes of poor developers. The dominant economic system ( quasi mercantilistic capitalism with some social protections ) today pretty much guarantees poverty for a portion of the population. It's structurally systematic. The system is designed for income inequality and no matter what, we will have few extraordinary wealthy and lots of people in poverty. This is the dominant trend with a few blips ( the burgeoning of the middle class post ww2 US, but that was an anomally ).
- stale2002 8y ago
  The world is not zero sum. If everyone had PhDs then those PhDs would be able to produce many more goods and services than exist now. If everyone was doctors, then healthcare would be plentiful, and nobody would suffer from not having access to healthcare. If the world was full of software engineers, then we would have a plentiful amount of software. This is easier to consider by thinking about the opposite situation. Imagine if we got rid of all of the doctors, software engineers, and farmers? What would happen? We would quickly lose access to all of our healthcare, new software and then all of our food.
tomjen3 8y ago
The economy is not a fixed sum. Wealth can be created and destroyed.

candiodari 8y ago

And, of course you need a way to prevent employers from using various alternatives available to them. * You need very high import taxes, so goods have to be produced with local labour * If truly automation were to become pervasive, that needs taxing * You probably need restrictions to prevent money from crossing borders too easily * You can't have open borders (or) * You have to strongly respond to illegals working (or legalize them, while still killing those illegal jobs), because they'll destroy the bargaining power of others (this is, incidentally, why for 90% of history leftists and communists were strongly against immigration, and the right was pro-immigration. Even today, the right is still in favor of (limited) immigration, that doesn't seem to have changed much. But I sometimes wonder if it isn't the case that Trump won because a significant portion of the left electorate voted for him because of the labour competition due to immigration and tolerating of illegal immigrants and illegal immigrants' labour)

PeterStuer 8y ago
Alternatively, we could ditch the neo-feudalism, embrace automation, and give people a more meaningful live than having to slave 60 hour weeks to be allowed to survive, at meaningless jobs that could easily be done by machines.
- throwaway77384 8y ago
  But the neo-feudalism makes like 100 people happy, so, checkmate, you communist!! (On a more serious note, I fully expect automation to simply lead to automated armies defending the rich from the poor, rather than relieving any suffering anywhere. Productivity increases have not lead to (proportional) wage increases, have not lead to (proportional) reductions in working hours. The internet has not lead to information-driven utopia, but instead ad-serving dystopia. Automation will also fall to the deathly grip of capitalism, as does everything else.)
pjc50 8y ago
> leftists and communists were strongly against immigration This is revisionism and ignores the whole "internationalism" vs "socialism in one country" debate. It also fails to recognise the history of nativist (far-)right anti-immigration parties and lefty anti-borders activists.
- candiodari 8y ago
  Internationalism on the left was going to force the world to become leftist by having a border between leftist and other governments. THAT border was going to have huge import taxes. So no, I think not revisionist at all.

YayamiOmate 8y ago

I'm not sure what is the point of the first paragraph but it's considered full employment at 5% because not everyone is interested in having a job. It is impossible to have 100% employment rate. So there's no point in pursuing it. Its a kind of thing like the average number of hands per population is less than two. Seems counter intuitive, but when you think about it, it does make sense. One shouldn't relay on the expected value of people having two hands, for global population it's a tad lower.

flukus 8y ago
> I'm not sure what is the point of the first paragraph but it's considered full employment at 5% because not everyone is interested in having a job. It is impossible to have 100% employment rate. So there's no point in pursuing it. People not looking for a job aren't included in that 5%, to be considered unemployed you have to be working less than 2 hours a week and looking for work. More importantly that figure doesn't include the underemployed, those working at least 2 hours but looking for more.
tonyedgecombe 8y ago
People who aren't looking for a job aren't included in those figures. The reason 5% is considered full employment is there will always be a number of people who are unemployed because they are between jobs, for instance their partner has moved or they are rejoining the workforce after pregnancy or even looking for their first job.

burfog 8y ago

There is something wrong with this: "There must always be more jobs available than people that want them, not slightly fewer." Even at 5% unemployment, your condition can be satisfied. For example, jobs might be unfilled because the candidates are unwilling to move. The candidates might be unqualified... shall we hire a random person as a brain surgeon? There could be a dozen job openings per person, and still the unemployment rate remains above zero. As you move toward 0% unemployment, you push harder and harder against the problem of unsuitable workers. Reaching 0% is a bit like traveling at the speed of light: it is an unreachable goal, with difficulty rising dramatically as you get close.

atq2119 8y ago
Yes, there's frictional unemployment. How much, though? This may differ by country, but you typically only show up in the numbers if you were fired. After all, if you quit your job, you aren't involuntarily unemployed, which is what the numbers are supposed to measure. How often do people get fired? I remember reading numbers of every 20 years on average (don't have the source handy, I'm afraid), but let's call it every 10 years to make it conservative. In a situation of true full employment, with a plethora of employers looking for employees, at least low to medium skill workers should be able to find a new job basically immediately -- within a week perhaps. Let's be conservative again and call it two months. This means people are unemployed for two months every 10 years on average, which translates to ~1.7% frictional unemployment. That's way less than the 5% number you cite. In fact, several industrialized nations saw unemployment rates below 1% for some time between the Second World War and the 1970s. In other words, achieving well below 2% unemployment rate is absolutely realistic. If you convert the delta to the 5% number you cite to the US workforce, you get about 5 million people. 5 million people who are suffering simply due to political ideology. On a more political level, I think it's important to keep in mind that the current situation (where people misleadingly talk about full employment even for unemployment rates much higher than 2%) is very beneficial to employers, because it greatly strengthens their bargaining position. Now add the fact that the majority of funding for economics think tanks is aligned with employer interests, and it's clear why the public discourse may be somewhat skewed and biased towards accepting inhumanely high rates of unemployment.

coldtea 8y ago

throwaway8879 8y ago
That wouldn't make them intelligent at all. This idea that there should always be fairness and equality in existence is very naive.
- pwm 8y ago
  What’s wrong with the idea of sharing?
  - kingofhdds 8y ago
    Nothing, unless you force a dog which hunted its bone to share it with one who slept the whole day, and call it "equality".
    - ddalex 8y ago
      Or you can share 5% of your hunt to keep the lazy dog from attacking you while you sleep. Is it 'fair'? No. Is it a wise move? Maybe.
      - throwaway8879 8y ago
        Or I can eliminate that dog so I don't have to share my 5% of the kill every single time.
        TheOtherHobbes 8y ago
        Or the other dogs can pack together to eliminate you. Considering the number of times this has happened in human history, any ideas of kingly invincibility you may have are unlikely to be realistic.

salty_biscuits 8y ago

The maximum entropy situation is one dog with 6+ bones and lots with none. It is structurally broken at a statistical mechanics level if you are concerned about fairness.

spython 8y ago
It's not easy to imagine somebody having 6+ full time jobs. Just because the time of the worker is the limiting resource.
- salty_biscuits 8y ago
  I was thinking of the financial rewards of said jobs (and probably stretching the metaphor a little thin). I think that without more constraints then you end up with a distribution that most people would consider unfair.
- TheBobinator 8y ago
  It is however easy to imagine "royalty employment": 1 executive employing 20 "clergymen" who don't work a lot but keep the executive happy, and who's needs are then maintained by 200 "peasants".

deleted 8y ago

[deleted]

perfunctory 8y ago

> Thus in the not too remote future, the rate of interest would have to be negative and income tax would have to be replaced by an income subsidy. Interesting. We definitely have negative interest rates in some places by now. Now waiting for the income subsidy.

amelius 8y ago
I'd like to see a simulation of this scenario.

madmulita 8y ago

If the hungry dog is always the same, maybe the problem is not the missing bone.

liftbigweights 8y ago

> If there are only 19 bones for every 20 dogs, then it doesn't matter how good a bone hunter they all are there will always be one dog disappointed and the other 19 will be grateful for the bone no matter how thin and weedy it is. The example I've come across was of musical chairs. If there are 3 seats and 10 people, no matter what, some people will be out of luck. I find it strange reading all the "get an education" or "don't have babies out of wedlock" attacks. If everyone in the country got PhDs, we still have the same level of poverty. If everyone married and then had babies, we'd still have the same level of poverty. Lets say every american went to medical school and become doctors. You know what we'd have? A lot of doctors in poverty. If everyone became a software developer like me, we'd have hordes of poor developers. The dominant economic system ( quasi mercantilistic capitalism with some social protections ) today pretty much guarantees poverty for a portion of the population. It's structurally systematic. The system is designed for income inequality and no matter what, we will have few extraordinary wealthy and lots of people in poverty. This is the dominant trend with a few blips ( the burgeoning of the middle class post ww2 US, but that was an anomally ).

stale2002 8y ago
The world is not zero sum. If everyone had PhDs then those PhDs would be able to produce many more goods and services than exist now. If everyone was doctors, then healthcare would be plentiful, and nobody would suffer from not having access to healthcare. If the world was full of software engineers, then we would have a plentiful amount of software. This is easier to consider by thinking about the opposite situation. Imagine if we got rid of all of the doctors, software engineers, and farmers? What would happen? We would quickly lose access to all of our healthcare, new software and then all of our food.

tomjen3 8y ago

The economy is not a fixed sum. Wealth can be created and destroyed.