4 ms·

It seems like a bit of a paradox. We gave up being builders in favor of increasing productivity and giving more Americans white collar jobs that improved stand

It seems like a bit of a paradox. We gave up being builders in favor of increasing productivity and giving more Americans white collar jobs that improved standard of living. But at the same time, doing that kind of doomed future generations to stagnation and decline of equality. I don't know if there is an actual way that both goals could have been accomplished.

Baeocystin 6y ago
Germany has a strong labor force, and their economy is one of the best in the world. It is 100% possible.
- SpicyLemonZest 6y ago
  I don't think this has much to do with a manufacturing economy. On a per capita basis, the US is competitive with or even ahead of Germany (depending on which statistics you believe) on manufacturing output.
  - nicbou 6y ago
    Then again, America has a giant, English-speaking market right at hand. The relatively new EU is comparable, but it's new, and not quite equivalent.
- georgeplusplus 6y ago
  Germany’s economy has a negative interest rate on their Bond yields. That isnt the sign of a healthy and strong economy.
- adventured 6y ago
  If Germany's economy is one of the best, why is their median net wealth lower than the US and why hasn't the German economy net expanded since 2007-2008? The US median adult wealth figure is now 85% higher than Germany's figure, and the US figure is nothing spectacular. If Germany's labor position is so great, why are their workers so relatively poor? People constantly applaud Germany for their supposedly great labor protections and unions. So where's the wealth? Germany's median wealth per adult is below that of Greece. Let that sink in for a moment. It's 1/2 that of South Korea. It's nearly 1/3 that of France. For 2019 Germany's GDP was $3.84 trillion. In 2008 it was $3.73 trillion. Inflation adjusted, Germany's economy contracted by at least 1/4 in a mere 11 years. That's a vanishing economy, and that's all pre-Covid. A decade plus with zero net growth is one of the best economies in the world? No it's not, it's a contracting economy with no wealth creation occurring and an impending assault by China on their high value manufacturing. Germany is standing in a very bad spot. Whether they realize that yet or not is another matter. Here's the next 20 years for the German economy: China will take a giant chunk out of their high value manufacturing export machine. The average German will have to work a lot more hours just to stand still, while they attempt to retire with very little savings at the median ($35k isn't going to cut it). The industrial hollowing out that Germany will suffer, is one that the US has already gone through, and it's a brutal thing for a society to endure, especially starting from a position of a terrible median wealth figure and an economy that is contracting persistently. Those super low hours per week that they've been enjoying? They've been trading on their future and haven't been generating enough wealth to sustain against what's coming for them.
javajosh 6y ago
"We gave up being builders in favor of increasing productivity". Ah, what an ironic statement. Not building increases productivity? What ends up happening is that if you allow that just the leaves of an administrative tree are builders, then the administration grows at r^2 whereas the workers only grow at r. You can visualize this if you lay out the tree with the root at the center of the circle. Even if 80% of administrative work is mechanical and could be done by a computer (which I think is reasonable), automation still provides only a constant factor which only delays the time at which the worker/admin ratio falls to 0, but does not avoid it. I would guess that the optimum human society capable of mutual defense (IOW, a nation) is something like OOM 1M, in proximity to enough land and water to sustain itself, divided into ~50 institutions of ~10k each. And I would imagine it would be best if there was a council in charge of each institution, effectively in charge of 2nd order issues regarding the programming, and overriding, of computer mediation and management. That describes a society where only a very small fraction of the work is what we would call white collar administration. Consider all the jobs who's net effect on the world is to slightly change the paperwork in 1 or 2 files in an office somewhere, and all the secondary, tertiary jobs that exist to support that goal! That is white collar work too, but I'd not call it an improvement to productivity, but rather an unfortunate side-effect of moribund information systems that people dare not streamline.
georgeplusplus 6y ago
I like your comment the most. I want to add to it that it also had the effect of increasing the quality of the world by outsourcing the building to third world nations. The countries that are now manufacturing and building have crawled out of poverty in doing so. This backfired a bit because the countries were supposed to become friendly to democracy, but it seemed it just fueled more dictators than anything else.
Gustomaximus 6y ago
I think 3 things have a massive benefit to reducing stagnation and decline of equality; 1) Estate tax - reduce dynastic wealth and recirculate it to even the playing field with good education opportunities in all regions and similar social programs to separate birth to income. Its always going to be there but reducing this should be a goal. 2) Focusing on small business vs large corporate. Literally making policy that favours smaller companies be it lower regulation, taxes etc. But you have to actively help the up and comers to disrupt the market vs protect large interests. 3) Break monopolistic behaviour. We really need to reduce the acquisition takeover culture. And not just mega corp but so often to see things like all the Dentists in a small city are owned by one family type thing. Im not sure the way to deal with this but possibly proportional asset taxes? Generally I think governments role is to run the nation for the benefit of the people and economic efficiency is the the be all and end all of achieving this.
- kortilla 6y ago
  > 1) Estate tax - reduce dynastic wealth and recirculate it to even the playing field with good education opportunities in all regions and similar social programs to separate birth to income. Its always going to be there but reducing this should be a goal. Most of the billionaires are first generation and waiting for the rich to die to spread wealth is not going to help anything economically (estate tax is a drop in the bucket compared to the GDP itself just growing a couple of percent). > 2) Focusing on small business vs large corporate. Literally making policy that favours smaller companies be it lower regulation, taxes etc. But you have to actively help the up and comers to disrupt the market vs protect large interests. This will make it very difficult to compete globally in the capital intensive industries. Would this be coupled with nationalistic trade policies as well?
  - WalterBright 6y ago
    Big business drives the economy. Small businesses are the future big businesses. Squelching big business will doom the economy to mediocrity.
    - 6y ago
Hokusai 6y ago
> But at the same time, doing that kind of doomed future generations to stagnation and decline of equality. I do not see that relationship. To not invest in people's well being and education is what has doomed America economically and politically. Increase taxation, invest in your infrastructure, education and health care. That way, the USA would create jobs, and wealth. Giving the benefits of all the increases on productivity to a selected few, it is not a way of improving your country.

Baeocystin 6y ago

Germany has a strong labor force, and their economy is one of the best in the world. It is 100% possible.

SpicyLemonZest 6y ago
I don't think this has much to do with a manufacturing economy. On a per capita basis, the US is competitive with or even ahead of Germany (depending on which statistics you believe) on manufacturing output.
- nicbou 6y ago
  Then again, America has a giant, English-speaking market right at hand. The relatively new EU is comparable, but it's new, and not quite equivalent.
georgeplusplus 6y ago
Germany’s economy has a negative interest rate on their Bond yields. That isnt the sign of a healthy and strong economy.
adventured 6y ago
If Germany's economy is one of the best, why is their median net wealth lower than the US and why hasn't the German economy net expanded since 2007-2008? The US median adult wealth figure is now 85% higher than Germany's figure, and the US figure is nothing spectacular. If Germany's labor position is so great, why are their workers so relatively poor? People constantly applaud Germany for their supposedly great labor protections and unions. So where's the wealth? Germany's median wealth per adult is below that of Greece. Let that sink in for a moment. It's 1/2 that of South Korea. It's nearly 1/3 that of France. For 2019 Germany's GDP was $3.84 trillion. In 2008 it was $3.73 trillion. Inflation adjusted, Germany's economy contracted by at least 1/4 in a mere 11 years. That's a vanishing economy, and that's all pre-Covid. A decade plus with zero net growth is one of the best economies in the world? No it's not, it's a contracting economy with no wealth creation occurring and an impending assault by China on their high value manufacturing. Germany is standing in a very bad spot. Whether they realize that yet or not is another matter. Here's the next 20 years for the German economy: China will take a giant chunk out of their high value manufacturing export machine. The average German will have to work a lot more hours just to stand still, while they attempt to retire with very little savings at the median ($35k isn't going to cut it). The industrial hollowing out that Germany will suffer, is one that the US has already gone through, and it's a brutal thing for a society to endure, especially starting from a position of a terrible median wealth figure and an economy that is contracting persistently. Those super low hours per week that they've been enjoying? They've been trading on their future and haven't been generating enough wealth to sustain against what's coming for them.

javajosh 6y ago

"We gave up being builders in favor of increasing productivity". Ah, what an ironic statement. Not building increases productivity? What ends up happening is that if you allow that just the leaves of an administrative tree are builders, then the administration grows at r^2 whereas the workers only grow at r. You can visualize this if you lay out the tree with the root at the center of the circle. Even if 80% of administrative work is mechanical and could be done by a computer (which I think is reasonable), automation still provides only a constant factor which only delays the time at which the worker/admin ratio falls to 0, but does not avoid it. I would guess that the optimum human society capable of mutual defense (IOW, a nation) is something like OOM 1M, in proximity to enough land and water to sustain itself, divided into ~50 institutions of ~10k each. And I would imagine it would be best if there was a council in charge of each institution, effectively in charge of 2nd order issues regarding the programming, and overriding, of computer mediation and management. That describes a society where only a very small fraction of the work is what we would call white collar administration. Consider all the jobs who's net effect on the world is to slightly change the paperwork in 1 or 2 files in an office somewhere, and all the secondary, tertiary jobs that exist to support that goal! That is white collar work too, but I'd not call it an improvement to productivity, but rather an unfortunate side-effect of moribund information systems that people dare not streamline.

georgeplusplus 6y ago

I like your comment the most. I want to add to it that it also had the effect of increasing the quality of the world by outsourcing the building to third world nations. The countries that are now manufacturing and building have crawled out of poverty in doing so. This backfired a bit because the countries were supposed to become friendly to democracy, but it seemed it just fueled more dictators than anything else.

Gustomaximus 6y ago

I think 3 things have a massive benefit to reducing stagnation and decline of equality; 1) Estate tax - reduce dynastic wealth and recirculate it to even the playing field with good education opportunities in all regions and similar social programs to separate birth to income. Its always going to be there but reducing this should be a goal. 2) Focusing on small business vs large corporate. Literally making policy that favours smaller companies be it lower regulation, taxes etc. But you have to actively help the up and comers to disrupt the market vs protect large interests. 3) Break monopolistic behaviour. We really need to reduce the acquisition takeover culture. And not just mega corp but so often to see things like all the Dentists in a small city are owned by one family type thing. Im not sure the way to deal with this but possibly proportional asset taxes? Generally I think governments role is to run the nation for the benefit of the people and economic efficiency is the the be all and end all of achieving this.

kortilla 6y ago
> 1) Estate tax - reduce dynastic wealth and recirculate it to even the playing field with good education opportunities in all regions and similar social programs to separate birth to income. Its always going to be there but reducing this should be a goal. Most of the billionaires are first generation and waiting for the rich to die to spread wealth is not going to help anything economically (estate tax is a drop in the bucket compared to the GDP itself just growing a couple of percent). > 2) Focusing on small business vs large corporate. Literally making policy that favours smaller companies be it lower regulation, taxes etc. But you have to actively help the up and comers to disrupt the market vs protect large interests. This will make it very difficult to compete globally in the capital intensive industries. Would this be coupled with nationalistic trade policies as well?
- WalterBright 6y ago
  Big business drives the economy. Small businesses are the future big businesses. Squelching big business will doom the economy to mediocrity.
  - 6y ago

Hokusai 6y ago

> But at the same time, doing that kind of doomed future generations to stagnation and decline of equality. I do not see that relationship. To not invest in people's well being and education is what has doomed America economically and politically. Increase taxation, invest in your infrastructure, education and health care. That way, the USA would create jobs, and wealth. Giving the benefits of all the increases on productivity to a selected few, it is not a way of improving your country.