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Won't the venture funds just own the machines and use them to concentrate wealth even better? Automation inherently strongly favors capital over labor, so whome

Won't the venture funds just own the machines and use them to concentrate wealth even better? Automation inherently strongly favors capital over labor, so whomever has the money when automation revolutionizes an industry is the one that makes the profits. With no value judgment intended, that's just kind of obvious right? Machines are capital and owned by someone who makes money from them instead of paying for labor.

perl4ever 7y ago
"Automation inherently strongly favors capital over labor" That's an odd thing to say. If machines and programs are capital, which seems reasonable, the more automation there is, the more capital, which drives down the returns and makes labor relatively more expensive. Isn't this obviously happening in a world where savings accounts pay 0.01% but it costs $120/hr to hire a plumber? Maybe it would be better to say that the extremely low returns on capital favor automation, which favors the people who make the highest wages. That's obviously? not the same as capital vs. labor.
- neltnerb 7y ago
  What I mean is that if we assume automation reduces the number of people required to complete a job, those that remain have a high pay rate. Agreed? This continues as technology gets more sophisticated until the only people left producing things and making money are those that own the tools that do the job. It only costs $120/hr to hire a plumber because of artificial barriers to entry and a guaranteed market. A better example might be a typist who previously had a solid middle class job taking notes and dealing with faxes because their boss didn't have a cheaper way to do it. That is what I mean by favoring. Eventually Bezos just owns a machine that runs everything he controls and needs no employees. Eventually. Don't doubt he would if he could. Your statement contains the core of it though -- systems that favor the people who make the highest wages are in an unstable equilibrium where eventually very very few people make all the wages.

perl4ever 7y ago

"Automation inherently strongly favors capital over labor" That's an odd thing to say. If machines and programs are capital, which seems reasonable, the more automation there is, the more capital, which drives down the returns and makes labor relatively more expensive. Isn't this obviously happening in a world where savings accounts pay 0.01% but it costs $120/hr to hire a plumber? Maybe it would be better to say that the extremely low returns on capital favor automation, which favors the people who make the highest wages. That's obviously? not the same as capital vs. labor.

neltnerb 7y ago
What I mean is that if we assume automation reduces the number of people required to complete a job, those that remain have a high pay rate. Agreed? This continues as technology gets more sophisticated until the only people left producing things and making money are those that own the tools that do the job. It only costs $120/hr to hire a plumber because of artificial barriers to entry and a guaranteed market. A better example might be a typist who previously had a solid middle class job taking notes and dealing with faxes because their boss didn't have a cheaper way to do it. That is what I mean by favoring. Eventually Bezos just owns a machine that runs everything he controls and needs no employees. Eventually. Don't doubt he would if he could. Your statement contains the core of it though -- systems that favor the people who make the highest wages are in an unstable equilibrium where eventually very very few people make all the wages.