7 ms·

Lessons from the Long Depression

106 points by jajag 7y ago

microcolonel 7y ago
(2013) A lot of this essay is about "right now", which at the time was November 2013.
- foobarbecue 7y ago
  Yes - and conditions are not the same. You might say we still have high underemployment, but we certainly don't have high unemployment in the USA today.
  - shusson 7y ago
    > we certainly don't have high unemployment in the USA today When you take into account labor participation it's not such a clear cut picture. [1] [1] https://en.wikipedia.org/wiki/Labor_force_in_the_United_States https://en.wikipedia.org/wiki/Labor_force_in_the_United_Stat...
andrepd 7y ago
Reading this sort of things is getting gradually more grating for me to read. We organise ourselves in a system where: "a world in which goods and services are so cheap to produce that less and less capital is required for investment, and so easy to produce that less and less labour is required to produce them" is not a life-transforming utopia, but a catastrophe. The author constantly points this, points how growth in the "long stagnation" never materialised into better conditions and a better standard of living, and how that didn't change until war came. Yet he never ceases to operate in the same system and to try to find the answers within the system. It never even crosses his thought that... perhaps the fundamental tenets of the system should be changed, or at the very least questionable. All he does is find convoluted ways of patching the a broken system from within the system.
- park77 7y ago
  What would you say are the changes that should be made then?
  - andrepd 7y ago
    What I want to emphasise, is that it's not even the changes in concrete, but the fact that it is impossible to question the fundamentals right now, or to enact any kind of meaningful changes. When faced with a crisis in the system (or with its everyday problems and flaws), the answer is only to look at ways within the system that can correct that, and the possibility of deeper fundamental changes does not even cross the mind. Plain and simple, the current arrangement has attained the status of "dogma". But to answer your question, my opinion is that much of the power in our world is held undemocratically. Progress must be made to bring as much responsibility, power, property, etc, into democratic rule of the people whom that power affects. This is about as condensed a description as I can manage of my main convictions. After a certain point, that requires rethinking the fundamental structures and concepts of our society, or at list be willing to question them critically and honestly, rather than taking them as laws of nature.
    - wool_gather 7y ago
      > Progress must be made to bring as much responsibility, power, property, etc, into democratic rule of the people whom that power affects. Agree. And as a counterpoint to your other point, physical/material safety is a prerequisite to this. Nobody has time to vote, or agitate to get the vote, if they're starving and have no place to sleep. That's why the cheap goods and services are potentially important.
      - haskellandchill 7y ago
        or UBI type ideas which give everyone a voice, I think yang 2020 is the best chance to try out those ideas
- deleted 7y ago
  [deleted]
roenxi 7y ago
The paragraph starting "Some people regard this sort of deflation as benign." is a lead in to some interesting observations and raises classic questions about what 'success' means in an economy. Consider a case of demand deflation where farmers decide they don't need anything any more, stop growing crops in excess of what is needed to feed themselves and sit on productive land like stone toads. I think there would be near-absolute consensus that the situation was very bad. The same situation but with coal and oil swapped for farmland would be different. I happen to think that would still be a bad outcome, but there is a pretty sizeable environmental lobby that wants exactly that and would call it good. Assuming it happened over a bit of time so that alternatives could be bought on line. There is a key question here - who exactly should have the power to deny an economy access to primary resources (particularly those linked to land ownership)? Under what circumstances is that acceptable and unacceptable? That is the mechanical underlying issue for why bad employment numbers correlate to bad outcomes. At the end of the day, reflecting on these issues makes me think we just need a land tax based on an assessed value of land + mineral wealth underneath the land. Something large enough that families have to repurchase their land once a generation. That is the only idea I have that is even a little consistent with property rights. The issue with dropping demand isn't that people are unemployed - I like being unemployed in the classic not-looking-for-work sense. The problem is that people are willing to work and don't have enough to live comfortably but are unable to get raw resources to do so. The correct solution is to acknowledge that land is maybe the only resource that a human can't fabricate through hard work and then construct a gentle system of rewards and incentives to make sure that resources are deployed.
- pixl97 7y ago
  >stop growing crops in excess of what is needed to feed themselves and sit on productive land like stone toads. I see some of the same problems in housing. It seems every homeowner wants the value of their house to increase, and many times will lobby in such a manner that causes their home prices to increase significantly by limiting development. I've had people argue with me on Reddit that home values must continually increase or people will stop making homes?! The insanity required to believe that has become endemic in our society.
paulpauper 7y ago
However, the well-off don’t like paying taxes to support the unemployed and the low-paid, so they use their electoral muscle to pressure governments to cut welfare bills. As welfare bills are cut, poverty rises among the unemployed and poorly paid. Governments may adopt draconian measures to force the unemployed into work, even at starvation wages, and to quash civil unrest. The opposite has happened. In spite of low taxes, entitlement spending keeps rising, such as dissablty, healthcare, education, and housing. Who is paying for it? Bondholders. Other countries are unable to sell so much debt so cheaply and thus have to resort to austerity.
- kasey_junk 7y ago
  At the US federal level that’s largely only true for entitlement spending for the elderly which is spread across large swaths of the economic spectrum. The trend of the last 40 years or so has been relative cuts to entitlements to the poor specifically.
11thEarlOfMar 7y ago
"..for production costs to fall, either there must be fewer people earning wages, or wages must be lower." Prices can go down without production or labor costs falling. Equipment is frequently capitalized. The approach that CFOs take to applying both the payments (interest) and depreciation are valves they can turn to modulate the P&L. This is totally disconnected from supply, demand and pricing. Moreover, the margins earned can be very high at the beginning of a product cycle and therefore, still robust enough to justify the investment and labor costs even when prices have dropped. Finally, in many cases, the lower prices induce more demand. Average selling price drops, demand grows, offsetting the price decrease. This is all modus operandi for the display, semiconductor and computing industries, among others.
- 1PlayerOne 7y ago
  I think you will agree that high tech industries fall into the higher end of the bifurcated labor market.
simonh 7y ago
That's a log way from being the whole story, then or now. In the 1870s ok unemployment was high at 25%, but the rate of growth of the population had only just dipped below 30% per decade. Job growth was actually also booming, just not as much. Similarly if we take a global view over the last few decades, China added hundreds of millions of people to the labour force. It's been the period of the greatest reduction in poverty ever. That's got to count for something. EDIT In fact enormous wealth has been created, and it's not all been concentrated in the top 1%. The bottom 30% or so globally has also benefited massively. It just hasn't really benefited mid range workers in the West, but let's not pretend the last few decades have been a disaster, or even particularly bad in the grand scheme of things.
- dsfyu404ed 7y ago
  Agreed. And the post-civil war south adds a bunch of confounding factors that make comparison hard. In the 1870s there were a lot of newly free blacks who were saying "fuck sharecropping, fuck being scared of the klan, I'm gonna work in a factory up north" and they weren't moving north with jobs already lined up.
  - padobson 7y ago
    Wow. So do you see an analagous relationship between the freed blacks entering the American labor market in the late nineteenth century and the Chinese peasants entering the global labor market in the last 4 decades?
    - bwanab 7y ago
      It's not that far off. In both cases, it involved agricultural laborers in a mass migration to jobs in newly opened factories that were building stuff for mostly far off other people.
kangnkodos 7y ago
The author refers to creating economic opportunities as making watering holes. In the Florida everglades, each alligator makes a watering hole in the flat, hard limestone ground. I don't know how big the holes are. About 20 feet across and 6 feet deep? The alligator mostly lives in it for several years. The hole fills with water when it rains, and tends to stay full of water during the dry season. This is a huge benefit to all animals around it. And of course, the alligator benefits by occasionally eating one of the visitors, but fewer than you might think. But even with the alligator eating, making the watering hole is a huge net benefit to the ecosystem as a whole. I think the question boils down to, "How can the government encourage the creation of new job-creating watering holes, instead of pushing policies which increase the rent of existing watering holes?"
- dsfyu404ed 7y ago
  Why is it the government's job to encourage the creation of job creating watering holes? Why can't it just curtail rent seeking? It's much easier to identify bad behavior as you see it than encourage good behavior of a yet unknown form.
  - kangnkodos 7y ago
    I agree that if the government only discouraged rent seeking, that would be an improvement. The article shows how the government is encouraging rent seeking.
    - snidane 7y ago
      'Rent seeking' is a straw man. Of course everybody searches for opportunities yielding rent. Nobody wants to set up a business to see its profits competed away in 2 years. They'd prefer long term stable profits. The real problem instead is unearned rent extraction. Lot of rent which is unethically taken away from workers and business is given to the extractors at the expense of those workers and businesses who provide it. Largely through taxes on labor, but also through increased prices. There is no such thing as passive income without work. It's just that the profit is collected by someone else than who provided the labor. Example 1. open source community building free stuff resulting in near trillion dollar valuations of cloud providers. Example 2. taxes collected from labor (income and sales taxes) used for public works and new infrastructure resulting in increase of land and real estate value in vicinity of the new construction. Common with a new subway or highway systems. Example 3. Communication, Pharma industry and other network systems. Any innovation funded by public money or other individuals can only benefit those who already operate the network infrastructure, because of the impossibility to compete with these established monopolies. Especially when regulations are set up to protect the incumbents from new entrants to their markets. These cases illustrate not only redistribution of value from those who provide it to those who sit on it. It also shows that the goods these people helped to create then become even more expensive for them. The more of it they produce, the more expensive it gets - higher living rents, more expensive drugs, more expensive railroad services, etc. This phenomenon is called the paradox of progress and poverty. You get it every time you set up the society in a way where the profits are extracted from the laborers and redistributed to the rentiers. Blame the system I guess. Don't tax the workers, tax the rentiers collecting their results.
PeterStuer 7y ago
If only we could price in negative externalities, we would see a very different supply/demand point. Since this is completely antithetical to the current socio-economic powers and mores, I'm confident that true costs of consumption and thus production will never be charged to the culpable.
imtringued 7y ago
Honestly the problem doesn't appear to be very complicated. Basically people primarily buy stocks (maybe housing too?) not for the income they produce but for the price gains of the stock itself. The goal of the central bank is to meet it's inflation target by injecting money into the economy via policies like QE. The stocks rise in price as intended and therefore the yield decreased. What was not expected is that the stock owners do not care about the low yield because the capital gains caused by QE outweigh the comparatively low dividend payments (in some cases none at all). So why not tax capital gains more and dividend payments less? Capital gains happen whenever anyone (central bank or other investors) buys stocks for more than you bought, the profits are not bounded by the success of the company. Dividend payments however always have to be paid out by the company based on how much profit it made and therefore they are independent of the share price. A stock with low yields is unattractive and therefore gets sold to buy a stock with higher yields.
- tabtab 7y ago
  RE: The goal of the central bank is to meet it's inflation target by injecting money into the economy via policies like QE. Not really. QE was a semi-emergency move. The hope was that managing interest rates alone would be sufficient, but it turned out not to be for deep slumps. QE creates a lot of nasty side-effects and draws criticism to the Central Bank they'd rather not have. I think the chairman once said the job of stimuluses outside of interest rates was or should be Congress's job, not them. But Congress bungles it with debt and reverse Keynesian timing due to political and tax squabbles.
- merpnderp 7y ago
  I've always thought this too, but never seen it laid out as clearly as you did. We should be incentivizing long term growth and planning over bare knuckle struggling over the next quarter.
nostrademons 7y ago
The other part of the Long Depression that's frequently glossed over is the substitution effect. While prices in aggregate declined, some prices declined extremely rapidly while others (thanks to Baumol's Cost Disease) declined slowly or not at all. The resulting cost differential led to a fundamental change in the structure of society and its values. What represents wealth in an agrarian society? Land, livestock, horses, slaves, servants, leisure time, and social connections. Many of these goods increased in price during the Gilded Age, or became impossible to obtain. No more homesteading the West, no more slave plantations, independent ranchers & farmers were driven out of business by the meatpacking & agribusiness industries, the domestic servant class largely disappeared. But what happened, eventually, is that these definitions of wealth became marginalized in favor of ownership of new luxury goods. What represented wealth in the 1950s? Having an expensive car. Owning a house in the suburbs with electricity & running water, and a washing machine, dishwasher, and vacuum cleaner. Flying on jets. None of these even existed during the Gilded Age. It's possible we'll see a similar resolution to the current crisis, where the expensive and un-automatable pillars of a middle-class existence - health care, education, housing - simply get marginalized as a backward remnant of a previous era, and new status symbols - perhaps control of virtual currencies, prowess in computer games, neural net uplinks, bionic implants - take their place.
- existencebox 7y ago
  So while I concur with your thesis, that events like this can motivate fundamental changes in the structure of a society and its values, I'm going to nitpick the "why", as I think the context of how these changes are forced is at the heart of understanding their nature. As such, I think your enumeration isn't quite accurate. Prior definitions of wealth only became impossible to obtain if you didn't have enough money. You cite land, certain notables in our own government owe much of their empire to land (real estate.) While there certainly is a transferrance of many technological goods via progress, key pillars such as social connections and leisure time continue to be significant carriers of value, and as you say, potentially become more difficult to obtain. If health care, education, housing, become marginalized, I don't believe it's as an anachronism, but out of unavailability, and new social signifiers will inevitably emerge out of our very animal nature, but within our new price range, and not out of lack of want for "more traditional luxuries". (to cite anecdata, the number of peers who are at peace with their housing/commute/work life situations, increasing inversely corresponding to pay)
flipper_c 7y ago
Some very interesting takes I was unaware of.

106 points by jajag 7y ago

microcolonel 7y ago

(2013) A lot of this essay is about "right now", which at the time was November 2013.

foobarbecue 7y ago
Yes - and conditions are not the same. You might say we still have high underemployment, but we certainly don't have high unemployment in the USA today.
- shusson 7y ago
  > we certainly don't have high unemployment in the USA today When you take into account labor participation it's not such a clear cut picture. [1] [1] https://en.wikipedia.org/wiki/Labor_force_in_the_United_States https://en.wikipedia.org/wiki/Labor_force_in_the_United_Stat...

andrepd 7y ago

Reading this sort of things is getting gradually more grating for me to read. We organise ourselves in a system where: "a world in which goods and services are so cheap to produce that less and less capital is required for investment, and so easy to produce that less and less labour is required to produce them" is not a life-transforming utopia, but a catastrophe. The author constantly points this, points how growth in the "long stagnation" never materialised into better conditions and a better standard of living, and how that didn't change until war came. Yet he never ceases to operate in the same system and to try to find the answers within the system. It never even crosses his thought that... perhaps the fundamental tenets of the system should be changed, or at the very least questionable. All he does is find convoluted ways of patching the a broken system from within the system.

park77 7y ago
What would you say are the changes that should be made then?
- andrepd 7y ago
  What I want to emphasise, is that it's not even the changes in concrete, but the fact that it is impossible to question the fundamentals right now, or to enact any kind of meaningful changes. When faced with a crisis in the system (or with its everyday problems and flaws), the answer is only to look at ways within the system that can correct that, and the possibility of deeper fundamental changes does not even cross the mind. Plain and simple, the current arrangement has attained the status of "dogma". But to answer your question, my opinion is that much of the power in our world is held undemocratically. Progress must be made to bring as much responsibility, power, property, etc, into democratic rule of the people whom that power affects. This is about as condensed a description as I can manage of my main convictions. After a certain point, that requires rethinking the fundamental structures and concepts of our society, or at list be willing to question them critically and honestly, rather than taking them as laws of nature.
  - wool_gather 7y ago
    > Progress must be made to bring as much responsibility, power, property, etc, into democratic rule of the people whom that power affects. Agree. And as a counterpoint to your other point, physical/material safety is a prerequisite to this. Nobody has time to vote, or agitate to get the vote, if they're starving and have no place to sleep. That's why the cheap goods and services are potentially important.
    - haskellandchill 7y ago
      or UBI type ideas which give everyone a voice, I think yang 2020 is the best chance to try out those ideas
deleted 7y ago
[deleted]

roenxi 7y ago

The paragraph starting "Some people regard this sort of deflation as benign." is a lead in to some interesting observations and raises classic questions about what 'success' means in an economy. Consider a case of demand deflation where farmers decide they don't need anything any more, stop growing crops in excess of what is needed to feed themselves and sit on productive land like stone toads. I think there would be near-absolute consensus that the situation was very bad. The same situation but with coal and oil swapped for farmland would be different. I happen to think that would still be a bad outcome, but there is a pretty sizeable environmental lobby that wants exactly that and would call it good. Assuming it happened over a bit of time so that alternatives could be bought on line. There is a key question here - who exactly should have the power to deny an economy access to primary resources (particularly those linked to land ownership)? Under what circumstances is that acceptable and unacceptable? That is the mechanical underlying issue for why bad employment numbers correlate to bad outcomes. At the end of the day, reflecting on these issues makes me think we just need a land tax based on an assessed value of land + mineral wealth underneath the land. Something large enough that families have to repurchase their land once a generation. That is the only idea I have that is even a little consistent with property rights. The issue with dropping demand isn't that people are unemployed - I like being unemployed in the classic not-looking-for-work sense. The problem is that people are willing to work and don't have enough to live comfortably but are unable to get raw resources to do so. The correct solution is to acknowledge that land is maybe the only resource that a human can't fabricate through hard work and then construct a gentle system of rewards and incentives to make sure that resources are deployed.

pixl97 7y ago
>stop growing crops in excess of what is needed to feed themselves and sit on productive land like stone toads. I see some of the same problems in housing. It seems every homeowner wants the value of their house to increase, and many times will lobby in such a manner that causes their home prices to increase significantly by limiting development. I've had people argue with me on Reddit that home values must continually increase or people will stop making homes?! The insanity required to believe that has become endemic in our society.

paulpauper 7y ago

However, the well-off don’t like paying taxes to support the unemployed and the low-paid, so they use their electoral muscle to pressure governments to cut welfare bills. As welfare bills are cut, poverty rises among the unemployed and poorly paid. Governments may adopt draconian measures to force the unemployed into work, even at starvation wages, and to quash civil unrest. The opposite has happened. In spite of low taxes, entitlement spending keeps rising, such as dissablty, healthcare, education, and housing. Who is paying for it? Bondholders. Other countries are unable to sell so much debt so cheaply and thus have to resort to austerity.

kasey_junk 7y ago
At the US federal level that’s largely only true for entitlement spending for the elderly which is spread across large swaths of the economic spectrum. The trend of the last 40 years or so has been relative cuts to entitlements to the poor specifically.

11thEarlOfMar 7y ago

"..for production costs to fall, either there must be fewer people earning wages, or wages must be lower." Prices can go down without production or labor costs falling. Equipment is frequently capitalized. The approach that CFOs take to applying both the payments (interest) and depreciation are valves they can turn to modulate the P&L. This is totally disconnected from supply, demand and pricing. Moreover, the margins earned can be very high at the beginning of a product cycle and therefore, still robust enough to justify the investment and labor costs even when prices have dropped. Finally, in many cases, the lower prices induce more demand. Average selling price drops, demand grows, offsetting the price decrease. This is all modus operandi for the display, semiconductor and computing industries, among others.

1PlayerOne 7y ago
I think you will agree that high tech industries fall into the higher end of the bifurcated labor market.

simonh 7y ago

That's a log way from being the whole story, then or now. In the 1870s ok unemployment was high at 25%, but the rate of growth of the population had only just dipped below 30% per decade. Job growth was actually also booming, just not as much. Similarly if we take a global view over the last few decades, China added hundreds of millions of people to the labour force. It's been the period of the greatest reduction in poverty ever. That's got to count for something. EDIT In fact enormous wealth has been created, and it's not all been concentrated in the top 1%. The bottom 30% or so globally has also benefited massively. It just hasn't really benefited mid range workers in the West, but let's not pretend the last few decades have been a disaster, or even particularly bad in the grand scheme of things.

dsfyu404ed 7y ago
Agreed. And the post-civil war south adds a bunch of confounding factors that make comparison hard. In the 1870s there were a lot of newly free blacks who were saying "fuck sharecropping, fuck being scared of the klan, I'm gonna work in a factory up north" and they weren't moving north with jobs already lined up.
- padobson 7y ago
  Wow. So do you see an analagous relationship between the freed blacks entering the American labor market in the late nineteenth century and the Chinese peasants entering the global labor market in the last 4 decades?
  - bwanab 7y ago
    It's not that far off. In both cases, it involved agricultural laborers in a mass migration to jobs in newly opened factories that were building stuff for mostly far off other people.

kangnkodos 7y ago

The author refers to creating economic opportunities as making watering holes. In the Florida everglades, each alligator makes a watering hole in the flat, hard limestone ground. I don't know how big the holes are. About 20 feet across and 6 feet deep? The alligator mostly lives in it for several years. The hole fills with water when it rains, and tends to stay full of water during the dry season. This is a huge benefit to all animals around it. And of course, the alligator benefits by occasionally eating one of the visitors, but fewer than you might think. But even with the alligator eating, making the watering hole is a huge net benefit to the ecosystem as a whole. I think the question boils down to, "How can the government encourage the creation of new job-creating watering holes, instead of pushing policies which increase the rent of existing watering holes?"

dsfyu404ed 7y ago
Why is it the government's job to encourage the creation of job creating watering holes? Why can't it just curtail rent seeking? It's much easier to identify bad behavior as you see it than encourage good behavior of a yet unknown form.
- kangnkodos 7y ago
  I agree that if the government only discouraged rent seeking, that would be an improvement. The article shows how the government is encouraging rent seeking.
  - snidane 7y ago
    'Rent seeking' is a straw man. Of course everybody searches for opportunities yielding rent. Nobody wants to set up a business to see its profits competed away in 2 years. They'd prefer long term stable profits. The real problem instead is unearned rent extraction. Lot of rent which is unethically taken away from workers and business is given to the extractors at the expense of those workers and businesses who provide it. Largely through taxes on labor, but also through increased prices. There is no such thing as passive income without work. It's just that the profit is collected by someone else than who provided the labor. Example 1. open source community building free stuff resulting in near trillion dollar valuations of cloud providers. Example 2. taxes collected from labor (income and sales taxes) used for public works and new infrastructure resulting in increase of land and real estate value in vicinity of the new construction. Common with a new subway or highway systems. Example 3. Communication, Pharma industry and other network systems. Any innovation funded by public money or other individuals can only benefit those who already operate the network infrastructure, because of the impossibility to compete with these established monopolies. Especially when regulations are set up to protect the incumbents from new entrants to their markets. These cases illustrate not only redistribution of value from those who provide it to those who sit on it. It also shows that the goods these people helped to create then become even more expensive for them. The more of it they produce, the more expensive it gets - higher living rents, more expensive drugs, more expensive railroad services, etc. This phenomenon is called the paradox of progress and poverty. You get it every time you set up the society in a way where the profits are extracted from the laborers and redistributed to the rentiers. Blame the system I guess. Don't tax the workers, tax the rentiers collecting their results.

PeterStuer 7y ago

If only we could price in negative externalities, we would see a very different supply/demand point. Since this is completely antithetical to the current socio-economic powers and mores, I'm confident that true costs of consumption and thus production will never be charged to the culpable.

imtringued 7y ago

Honestly the problem doesn't appear to be very complicated. Basically people primarily buy stocks (maybe housing too?) not for the income they produce but for the price gains of the stock itself. The goal of the central bank is to meet it's inflation target by injecting money into the economy via policies like QE. The stocks rise in price as intended and therefore the yield decreased. What was not expected is that the stock owners do not care about the low yield because the capital gains caused by QE outweigh the comparatively low dividend payments (in some cases none at all). So why not tax capital gains more and dividend payments less? Capital gains happen whenever anyone (central bank or other investors) buys stocks for more than you bought, the profits are not bounded by the success of the company. Dividend payments however always have to be paid out by the company based on how much profit it made and therefore they are independent of the share price. A stock with low yields is unattractive and therefore gets sold to buy a stock with higher yields.

tabtab 7y ago
RE: The goal of the central bank is to meet it's inflation target by injecting money into the economy via policies like QE. Not really. QE was a semi-emergency move. The hope was that managing interest rates alone would be sufficient, but it turned out not to be for deep slumps. QE creates a lot of nasty side-effects and draws criticism to the Central Bank they'd rather not have. I think the chairman once said the job of stimuluses outside of interest rates was or should be Congress's job, not them. But Congress bungles it with debt and reverse Keynesian timing due to political and tax squabbles.
merpnderp 7y ago
I've always thought this too, but never seen it laid out as clearly as you did. We should be incentivizing long term growth and planning over bare knuckle struggling over the next quarter.

nostrademons 7y ago

The other part of the Long Depression that's frequently glossed over is the substitution effect. While prices in aggregate declined, some prices declined extremely rapidly while others (thanks to Baumol's Cost Disease) declined slowly or not at all. The resulting cost differential led to a fundamental change in the structure of society and its values. What represents wealth in an agrarian society? Land, livestock, horses, slaves, servants, leisure time, and social connections. Many of these goods increased in price during the Gilded Age, or became impossible to obtain. No more homesteading the West, no more slave plantations, independent ranchers & farmers were driven out of business by the meatpacking & agribusiness industries, the domestic servant class largely disappeared. But what happened, eventually, is that these definitions of wealth became marginalized in favor of ownership of new luxury goods. What represented wealth in the 1950s? Having an expensive car. Owning a house in the suburbs with electricity & running water, and a washing machine, dishwasher, and vacuum cleaner. Flying on jets. None of these even existed during the Gilded Age. It's possible we'll see a similar resolution to the current crisis, where the expensive and un-automatable pillars of a middle-class existence - health care, education, housing - simply get marginalized as a backward remnant of a previous era, and new status symbols - perhaps control of virtual currencies, prowess in computer games, neural net uplinks, bionic implants - take their place.

existencebox 7y ago
So while I concur with your thesis, that events like this can motivate fundamental changes in the structure of a society and its values, I'm going to nitpick the "why", as I think the context of how these changes are forced is at the heart of understanding their nature. As such, I think your enumeration isn't quite accurate. Prior definitions of wealth only became impossible to obtain if you didn't have enough money. You cite land, certain notables in our own government owe much of their empire to land (real estate.) While there certainly is a transferrance of many technological goods via progress, key pillars such as social connections and leisure time continue to be significant carriers of value, and as you say, potentially become more difficult to obtain. If health care, education, housing, become marginalized, I don't believe it's as an anachronism, but out of unavailability, and new social signifiers will inevitably emerge out of our very animal nature, but within our new price range, and not out of lack of want for "more traditional luxuries". (to cite anecdata, the number of peers who are at peace with their housing/commute/work life situations, increasing inversely corresponding to pay)

flipper_c 7y ago

Some very interesting takes I was unaware of.