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I think this a a demonstration that trickle-down economics doesn't work, because additional capital injected into a capitalist system tends to be captured by th

I think this a a demonstration that trickle-down economics doesn't work, because additional capital injected into a capitalist system tends to be captured by the capital at the top. Rationally, you would expect productivity gains to be captured disproportionately at the point where the gain occurs, on the assembly line, not back up through the hierarchy. But because of the rich-get-richer mathematics of capital, those gains tend to get sucked up to the wealthiest tier in the corporate structure.

SpicyLemonZest 6y ago
But do productivity gains occur on the assembly line in the first place? I would guess that people today are about as good at working on an assembly line as they were 50 years ago, and we're more productive only because of capital improvements in machinery and infrastructure. That's not to say we shouldn't work to improve the average worker's wealth and quality of life, of course! I'm all in favor. But it's not a matter of gains getting "sucked up" from where they naturally would have gone; recent gains in manufacturing productivity just aren't at the individual level in the first place.
- vannevar 6y ago
  That "machinery and infrastructure" is on the assembly line, not in the C-suite. It is literally there to make the assembly line workers more productive, so it takes fewer of them to do the same work. Now, you can say that the workers contributed nothing to the improvement, so why should they benefit? But the system is set up so they can't contribute improvement---they can't accumulate the capital it would take to upgrade the machinery and infrastructure because their wages are minimal, and there's no mechanism in place for them to capture the benefits if they could. Sure, there are token rewards for assembly line improvements, but those kinds of sporadic rewards are generally minuscule compared to the long-term benefit realized by the company.
  - SpicyLemonZest 6y ago
    I agree with what you're saying, but I think it's inevitable. The system is set up that way as an inevitable consequence of modern technology; automation and economies of scale are simply better at producing valuable things, so much better that an individual worker with no capital can't compete. We can change who has access to capital or reallocate the benefits of capital, but we can't change the fundamental problem that capital is required to get anything done under modern technological conditions. The most dedicated shopkeeper on the planet couldn't match Amazon's capital-intensive delivery network, nor could the best machinist on the planet make a better washing machine than Whirlpool's capital-intensive assembly line.
    - vannevar 6y ago
      It's inevitable only if we decline to regulate capital. Just as it's also inevitable that a speeding truck will crash, unless the driver puts on the brakes at some point. There is nothing in the laws of physics that dictates that our financial system must be as it is. It is the result of our collective choices, and we can change it when it becomes in our best collective interest to do so.
      - SpicyLemonZest 6y ago
        The fundamental problem is, if you need a factory with 100 workers in order to effectively manufacture anything, then the ability to innovate in manufacturing is limited to groups who have sufficient capital to direct the efforts of 100 people. There are of course different ways to organize that capital. Capital can be owned by rich people, by corporate firms, by the government, by worker collectives. But it's still a finite resource. As a matter of mathematical inequality, there's no way to give everyone the power to direct a large factory.
        vannevar 6y ago
        Sure. But there's a wide range between the concentration of capital we have now, and the notion of it all being somehow distributed equally. It's not so much about giving capital to workers, it's more about retarding the natural flow of capital to itself. If the economy were only made up of 100-person factories, then there might be enough competition and experimentation that more capital would find its way to innovation and labor, rather than being drawn to large concentrations of wealth. I'm not saying we need to go to that extreme, but there is much room for progress in that direction. Looking farther into the future, with AI and robotic labor, it's quite possible that everyone would have the capital to direct a large factory. As it stands now, it appears likely that any such robotic future would be owned almost exclusively by a tiny fraction of humanity.
- QuercusMax 6y ago
  Isn't that what Lean, Six Sigma, and all those processes were about originally? Everybody working to improve their productivity, going all the way down to looking at what workers on the line are doing? I'd expect that in the last 50 years we actually have gotten better at sequencing assembly-line work, and improving worker productivity through better techniques.
  - SpicyLemonZest 6y ago
    It is, and I'd guess that the companies who've used such processes are disproportionately likely to be the ones paying employees better than in the 70s. It's my understanding that nobody on the GE assembly lines makes close to minimum wage.
- content_sesh 6y ago
  I'm not sure what you mean by "gains getting sucked up from where they naturally would have gone". If you have a capitalist economy where: - productive output increases - wages remain the same - the length of the working day remains the same then you have gains accruing to the capitalists and not the workers. (In the case where wages also increase but at a lower rate than productive output, gains are accruing to both capital and labor but disproportionately so to capital)
dehrmann 6y ago
I never said trickle-down economics work. I just found it ironic that the sort of group would would normally claim it doesn't work completely ignored that with. Basically, if trick-down economics doesn't work, why would you expect productivity gains to trickle down?

SpicyLemonZest 6y ago

But do productivity gains occur on the assembly line in the first place? I would guess that people today are about as good at working on an assembly line as they were 50 years ago, and we're more productive only because of capital improvements in machinery and infrastructure. That's not to say we shouldn't work to improve the average worker's wealth and quality of life, of course! I'm all in favor. But it's not a matter of gains getting "sucked up" from where they naturally would have gone; recent gains in manufacturing productivity just aren't at the individual level in the first place.

vannevar 6y ago
That "machinery and infrastructure" is on the assembly line, not in the C-suite. It is literally there to make the assembly line workers more productive, so it takes fewer of them to do the same work. Now, you can say that the workers contributed nothing to the improvement, so why should they benefit? But the system is set up so they can't contribute improvement---they can't accumulate the capital it would take to upgrade the machinery and infrastructure because their wages are minimal, and there's no mechanism in place for them to capture the benefits if they could. Sure, there are token rewards for assembly line improvements, but those kinds of sporadic rewards are generally minuscule compared to the long-term benefit realized by the company.
- SpicyLemonZest 6y ago
  I agree with what you're saying, but I think it's inevitable. The system is set up that way as an inevitable consequence of modern technology; automation and economies of scale are simply better at producing valuable things, so much better that an individual worker with no capital can't compete. We can change who has access to capital or reallocate the benefits of capital, but we can't change the fundamental problem that capital is required to get anything done under modern technological conditions. The most dedicated shopkeeper on the planet couldn't match Amazon's capital-intensive delivery network, nor could the best machinist on the planet make a better washing machine than Whirlpool's capital-intensive assembly line.
  - vannevar 6y ago
    It's inevitable only if we decline to regulate capital. Just as it's also inevitable that a speeding truck will crash, unless the driver puts on the brakes at some point. There is nothing in the laws of physics that dictates that our financial system must be as it is. It is the result of our collective choices, and we can change it when it becomes in our best collective interest to do so.
    - SpicyLemonZest 6y ago
      The fundamental problem is, if you need a factory with 100 workers in order to effectively manufacture anything, then the ability to innovate in manufacturing is limited to groups who have sufficient capital to direct the efforts of 100 people. There are of course different ways to organize that capital. Capital can be owned by rich people, by corporate firms, by the government, by worker collectives. But it's still a finite resource. As a matter of mathematical inequality, there's no way to give everyone the power to direct a large factory.
      - vannevar 6y ago
        Sure. But there's a wide range between the concentration of capital we have now, and the notion of it all being somehow distributed equally. It's not so much about giving capital to workers, it's more about retarding the natural flow of capital to itself. If the economy were only made up of 100-person factories, then there might be enough competition and experimentation that more capital would find its way to innovation and labor, rather than being drawn to large concentrations of wealth. I'm not saying we need to go to that extreme, but there is much room for progress in that direction. Looking farther into the future, with AI and robotic labor, it's quite possible that everyone would have the capital to direct a large factory. As it stands now, it appears likely that any such robotic future would be owned almost exclusively by a tiny fraction of humanity.
QuercusMax 6y ago
Isn't that what Lean, Six Sigma, and all those processes were about originally? Everybody working to improve their productivity, going all the way down to looking at what workers on the line are doing? I'd expect that in the last 50 years we actually have gotten better at sequencing assembly-line work, and improving worker productivity through better techniques.
- SpicyLemonZest 6y ago
  It is, and I'd guess that the companies who've used such processes are disproportionately likely to be the ones paying employees better than in the 70s. It's my understanding that nobody on the GE assembly lines makes close to minimum wage.
content_sesh 6y ago
I'm not sure what you mean by "gains getting sucked up from where they naturally would have gone". If you have a capitalist economy where: - productive output increases - wages remain the same - the length of the working day remains the same then you have gains accruing to the capitalists and not the workers. (In the case where wages also increase but at a lower rate than productive output, gains are accruing to both capital and labor but disproportionately so to capital)

dehrmann 6y ago

I never said trickle-down economics work. I just found it ironic that the sort of group would would normally claim it doesn't work completely ignored that with. Basically, if trick-down economics doesn't work, why would you expect productivity gains to trickle down?