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What value does technology provide other than increasing labor efficiency? If tech helps me build 10x the number of widgets, should all of that surplus value on

What value does technology provide other than increasing labor efficiency? If tech helps me build 10x the number of widgets, should all of that surplus value only be captured by the technology owners? What about the people who build and service the technology which allows these improvements to be implemented?

adrianmonk 6y ago
The surplus value should definitely not go 100% to the owners and 0% to the laborers. Otherwise, as economic output increases, workers' share of the reward can only continually decrease forever. But the surplus value should definitely not go 100% to the workers and 0% to the owners. Otherwise, there is no reward for creating the surplus value, and productivity gains will not happen, which in general is no way to run a society. Plus productivity helps reduce scarcity, and scarcity disproportionately affects poorer people.
rayiner 6y ago
If you replace 1,000 workers with 50 and a very expensive machine, should you pay each worker who remains 20 times as much? Because that’s the assumption in the article. The people who build and service the technology are paid well. They’re techies who live in Silicon Valley, etc. But there are just very few of them compared to the 950 newly obsolete workers.
- pydry 6y ago
  If efficiency has gone up why hasnt rent gone down? Since rent has been pushed up by political means why not wages? Also, why are we assuming that technology brought down wages when offshoring has skyrocketed. What makes you think it wasn't competition from the third world labor rather than robots? There is a political position embedded in the assumption that robots are responsible for the missing jobs.
  - dantheman 6y ago
    How about let's fix rent and not carry mistakes over to other domains.
    - pydry 6y ago
      I'm all in favor of a 100% land value tax but I'll happily take a higher minimum wage to compensate for a lack of it while the political system gets its act together.
  - codekansas 6y ago
    I would guess this speaks more to political mismanagement than an intentional goal. No politician is going to get elected on a platform of higher rents and lower wages. Increased rents, at least, are usually caused more by good intentions gone bad than by intentional malice
    - pydry 6y ago
      >No politician is going to get elected on a platform of higher rents and lower wages Have you noticed how little the media focuses on the actual platforms of most politicians and focuses on the spectacle and drama of politics instead? That distraction serve a purpose (for the owners of said media). Also, a platform of higher rents and lower wages will usually be called "lower taxes" and "freedom from onerous regulations". If you want to see more of this type of propaganda, look at https://www.aei.org/ https://www.aei.org/ for instance. This type of thing falls apart when analyzed too closely, which is partly why the media will use it to drive soundbites but won't dive in too deep. Politicians get elected on a platform of higher rents and lower wages because the donations they rely upon come from people who want it and the media coverage they rely upon come from people who want it.
      - SamReidHughes 6y ago
        What. Lowering taxes doesn't lower wages. Higher rents are caused by regulations, not freedom from regulations. You have to ask permission for something as simple as building places to live.
        pydry 6y ago
        No, it raises rents. California rents can be traced back to prop 13, for instance. Prop 13 wasn't run on a platform of raising rents, was it?
        SamReidHughes 6y ago
        Lowering taxes on renters can raise rents, if new housing is banned, because renters then have more money to compete for limited housing with. Likewise, the recent corporate income tax cuts raised wages at the bottom.
  - bhupy 6y ago
    > Also, why are we assuming that technology brought down wages when offshoring has skyrocketed. What makes you think it wasn't competition from the third world labor rather than robots? Do we think that increasing minimum wage will hasten or slow down this trend?
    - pydry 6y ago
      If the United States government wanted to speed up or slow down this trend or even halt it altogether it could do so tomorrow no matter what the minimum wage did. Currently it views offshoring as a geopolitical threat and is opting to slowly repatriate supply chains. No matter what happens to the minimum wage that opinion is unlikely to change. I don't think it makes sense to treat an explicit political choice as a fait accompli.
- jahaja 6y ago
  This makes me think of this passage by Bertrand Russell wrt. increases in efficiency and working hours: "The War showed conclusively that by the scientific organization of production it is possible to keep modern populations in fair comfort on a small part of the working capacity of the modern world. If at the end of the War the scientific organization which had been created in order to liberate men for fighting and munition work had been preserved, and the hours of work had been cut down to four, all would have been well. Instead of that, the old chaos was restored, those whose work was demanded were made to work long hours, and the rest were left to starve as unemployed. Why? Because work is a duty, and a man should not receive wages in proportion to what he has produced, but in proportion to his virtue as exemplified by his industry. This is the morality of the Slave State, applied in circumstances totally unlike those in which it arose. No wonder the result has been disastrous. Let us take an illustration. Suppose that at a given moment a certain number of people are engaged in the manufacture of pins. They make as many pins as the world needs, working (say) eight hours a day. Someone makes an invention by which the same number of men can make twice as many pins as before. But the world does not need twice as many pins: pins are already so cheap that hardly any more will be bought at a lower price. In a sensible world everybody concerned in the manufacture of pins would take to working four hours instead of eight, and everything else would go on as before. But in the actual world this would be thought demoralizing. The men still work eight hours, there are too many pins, some employers go bankrupt, and half the men previously concerned in making pins are thrown out of work. There is, in the end, just as much leisure as on the other plan, but half the men are totally idle while half are still overworked. In this way it is insured that the unavoidable leisure shall cause misery all round instead of being a universal source of happiness. Can anything more insane be imagined?" https://harpers.org/archive/1932/10/in-praise-of-idleness/ https://harpers.org/archive/1932/10/in-praise-of-idleness/
  - dantheman 6y ago
    Those displaced (50% in the example above) can go and provide services in another area... Why should only the pin producers get 4 hour weeks. What about those have to toil in the field for 8 hours a day to produce food? What happens is that those 4 can go do something else; now in reality that something else is often not as good as what they were doing before or else they would have already been doing it. But people are not static and can improve, develop skills, and learn new things. Also prices normally go down, which encourages innovation, and can create whole new classes of jobs. For instance before medical imaging we didn't have x-ray technicians, etc - But I'm glad that new field was created.
- tl 6y ago
  From my experience building very expensive industrial machines, the gain is more like 2x-4x not 20x, and that assumes that the game of telephone in the engineering pipeline actually gets it right. In a recent HN discussion, someone suggested that step one of emulating successful tech companies (Netflix was used as an example) was to fire half your workforce and pay the remaining half double. That logic meshes with my experiences; the machines made you more efficient, but you needed more intelligence to use them than the tools they replaced.
leetcrew 6y ago
> If tech helps me build 10x the number of widgets, should all of that surplus value only be captured by the technology owners? idk about the owners specifically, but I think it's fair that the lion's share of the gains go to the people who made it happen. in this example at least, the widget maker didn't do anything to increase their productivity.
- lilactown 6y ago
  Someone else elsewhere made this point: the widget makers are not generally capable of increasing their own productivity because they don't have access to the capital required. This method of organizing labor and value which disallows workers' to gain anything from increases in their own output keeps them from ever being able to participate in it, leading to alienation from their jobs and living in a perpetual cycle of poverty.
  - chordalkeyboard 6y ago
    Thats why they invented the joint stock company. Individuals invest their surplus wages in a joint venture in order to gain access to capital that costs too much for any one of them to afford. They also capture these gains because the increased productivity of the company results in more products of greater value on the market. In short, they benefit as consumers.
chordalkeyboard 6y ago
> should all of that surplus value only be captured by the technology owners? No, and neither is that the case. The increased profit is the wage the technology earns for the investor who wisely chose to make a successful investment. Other investors made different, less wise automation decisions and in so doing, earned less (or negative) profit. The remainder of the surplus value is captured by the consumer who now has available to him or her a greater variety of higher quality products at lower prices. They capture this value when they go to market and get more better and newer things. > What about the people who build and service the technology which allows these improvements to be implemented? They are typically more skilled workers who get paid more because they are performing a higher skilled job. The old way of doing things was less productive and required less skill from the workers. The new way is more productive and requires greater investments in capital and skilled labor.

adrianmonk 6y ago

The surplus value should definitely not go 100% to the owners and 0% to the laborers. Otherwise, as economic output increases, workers' share of the reward can only continually decrease forever. But the surplus value should definitely not go 100% to the workers and 0% to the owners. Otherwise, there is no reward for creating the surplus value, and productivity gains will not happen, which in general is no way to run a society. Plus productivity helps reduce scarcity, and scarcity disproportionately affects poorer people.

rayiner 6y ago

If you replace 1,000 workers with 50 and a very expensive machine, should you pay each worker who remains 20 times as much? Because that’s the assumption in the article. The people who build and service the technology are paid well. They’re techies who live in Silicon Valley, etc. But there are just very few of them compared to the 950 newly obsolete workers.

pydry 6y ago
If efficiency has gone up why hasnt rent gone down? Since rent has been pushed up by political means why not wages? Also, why are we assuming that technology brought down wages when offshoring has skyrocketed. What makes you think it wasn't competition from the third world labor rather than robots? There is a political position embedded in the assumption that robots are responsible for the missing jobs.
- dantheman 6y ago
  How about let's fix rent and not carry mistakes over to other domains.
  - pydry 6y ago
    I'm all in favor of a 100% land value tax but I'll happily take a higher minimum wage to compensate for a lack of it while the political system gets its act together.
- codekansas 6y ago
  I would guess this speaks more to political mismanagement than an intentional goal. No politician is going to get elected on a platform of higher rents and lower wages. Increased rents, at least, are usually caused more by good intentions gone bad than by intentional malice
  - pydry 6y ago
    >No politician is going to get elected on a platform of higher rents and lower wages Have you noticed how little the media focuses on the actual platforms of most politicians and focuses on the spectacle and drama of politics instead? That distraction serve a purpose (for the owners of said media). Also, a platform of higher rents and lower wages will usually be called "lower taxes" and "freedom from onerous regulations". If you want to see more of this type of propaganda, look at https://www.aei.org/ https://www.aei.org/ for instance. This type of thing falls apart when analyzed too closely, which is partly why the media will use it to drive soundbites but won't dive in too deep. Politicians get elected on a platform of higher rents and lower wages because the donations they rely upon come from people who want it and the media coverage they rely upon come from people who want it.
    - SamReidHughes 6y ago
      What. Lowering taxes doesn't lower wages. Higher rents are caused by regulations, not freedom from regulations. You have to ask permission for something as simple as building places to live.
      - pydry 6y ago
        No, it raises rents. California rents can be traced back to prop 13, for instance. Prop 13 wasn't run on a platform of raising rents, was it?
        SamReidHughes 6y ago
        Lowering taxes on renters can raise rents, if new housing is banned, because renters then have more money to compete for limited housing with. Likewise, the recent corporate income tax cuts raised wages at the bottom.
- bhupy 6y ago
  > Also, why are we assuming that technology brought down wages when offshoring has skyrocketed. What makes you think it wasn't competition from the third world labor rather than robots? Do we think that increasing minimum wage will hasten or slow down this trend?
  - pydry 6y ago
    If the United States government wanted to speed up or slow down this trend or even halt it altogether it could do so tomorrow no matter what the minimum wage did. Currently it views offshoring as a geopolitical threat and is opting to slowly repatriate supply chains. No matter what happens to the minimum wage that opinion is unlikely to change. I don't think it makes sense to treat an explicit political choice as a fait accompli.
jahaja 6y ago
This makes me think of this passage by Bertrand Russell wrt. increases in efficiency and working hours: "The War showed conclusively that by the scientific organization of production it is possible to keep modern populations in fair comfort on a small part of the working capacity of the modern world. If at the end of the War the scientific organization which had been created in order to liberate men for fighting and munition work had been preserved, and the hours of work had been cut down to four, all would have been well. Instead of that, the old chaos was restored, those whose work was demanded were made to work long hours, and the rest were left to starve as unemployed. Why? Because work is a duty, and a man should not receive wages in proportion to what he has produced, but in proportion to his virtue as exemplified by his industry. This is the morality of the Slave State, applied in circumstances totally unlike those in which it arose. No wonder the result has been disastrous. Let us take an illustration. Suppose that at a given moment a certain number of people are engaged in the manufacture of pins. They make as many pins as the world needs, working (say) eight hours a day. Someone makes an invention by which the same number of men can make twice as many pins as before. But the world does not need twice as many pins: pins are already so cheap that hardly any more will be bought at a lower price. In a sensible world everybody concerned in the manufacture of pins would take to working four hours instead of eight, and everything else would go on as before. But in the actual world this would be thought demoralizing. The men still work eight hours, there are too many pins, some employers go bankrupt, and half the men previously concerned in making pins are thrown out of work. There is, in the end, just as much leisure as on the other plan, but half the men are totally idle while half are still overworked. In this way it is insured that the unavoidable leisure shall cause misery all round instead of being a universal source of happiness. Can anything more insane be imagined?" https://harpers.org/archive/1932/10/in-praise-of-idleness/ https://harpers.org/archive/1932/10/in-praise-of-idleness/
- dantheman 6y ago
  Those displaced (50% in the example above) can go and provide services in another area... Why should only the pin producers get 4 hour weeks. What about those have to toil in the field for 8 hours a day to produce food? What happens is that those 4 can go do something else; now in reality that something else is often not as good as what they were doing before or else they would have already been doing it. But people are not static and can improve, develop skills, and learn new things. Also prices normally go down, which encourages innovation, and can create whole new classes of jobs. For instance before medical imaging we didn't have x-ray technicians, etc - But I'm glad that new field was created.
tl 6y ago
From my experience building very expensive industrial machines, the gain is more like 2x-4x not 20x, and that assumes that the game of telephone in the engineering pipeline actually gets it right. In a recent HN discussion, someone suggested that step one of emulating successful tech companies (Netflix was used as an example) was to fire half your workforce and pay the remaining half double. That logic meshes with my experiences; the machines made you more efficient, but you needed more intelligence to use them than the tools they replaced.

leetcrew 6y ago

> If tech helps me build 10x the number of widgets, should all of that surplus value only be captured by the technology owners? idk about the owners specifically, but I think it's fair that the lion's share of the gains go to the people who made it happen. in this example at least, the widget maker didn't do anything to increase their productivity.

lilactown 6y ago
Someone else elsewhere made this point: the widget makers are not generally capable of increasing their own productivity because they don't have access to the capital required. This method of organizing labor and value which disallows workers' to gain anything from increases in their own output keeps them from ever being able to participate in it, leading to alienation from their jobs and living in a perpetual cycle of poverty.
- chordalkeyboard 6y ago
  Thats why they invented the joint stock company. Individuals invest their surplus wages in a joint venture in order to gain access to capital that costs too much for any one of them to afford. They also capture these gains because the increased productivity of the company results in more products of greater value on the market. In short, they benefit as consumers.

chordalkeyboard 6y ago

> should all of that surplus value only be captured by the technology owners? No, and neither is that the case. The increased profit is the wage the technology earns for the investor who wisely chose to make a successful investment. Other investors made different, less wise automation decisions and in so doing, earned less (or negative) profit. The remainder of the surplus value is captured by the consumer who now has available to him or her a greater variety of higher quality products at lower prices. They capture this value when they go to market and get more better and newer things. > What about the people who build and service the technology which allows these improvements to be implemented? They are typically more skilled workers who get paid more because they are performing a higher skilled job. The old way of doing things was less productive and required less skill from the workers. The new way is more productive and requires greater investments in capital and skilled labor.