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> The unemployment rate at the height of the Great Depression was "only" about 25%. If 3 people doing the work of 4 is already a huge problem, 1 person doing th

by runeks 3y ago

> The unemployment rate at the height of the Great Depression was "only" about 25%. If 3 people doing the work of 4 is already a huge problem, 1 person doing the work of 50 or 100 is massive. So your hypothesis is that the Great Depression was caused by a sudden 25% increase in productivity? If so, what data do you have to back this up?

digitcatphd 3y ago
High unemployment means fewer consumption spending, which according to Adam smith is the invisible hand fueling the economy. Remove this hand so to speak, and the economic cycle is at risk of being disrupted. Think of an economy like an ecological environment entangled with interdependence. I think generally it’s hard to think that modern economics has only really exist for the past couple hundred years. The last major shift that created it? The cotton gin starting the Industrial Revolution. AI is akin to the cotton gin.
- runeks 3y ago
  To be clear: I'm not rejecting the hypothesis, simply asking for supporting data. Ie. data that links the supposedly higher productivity to the higher unemployment at precisely that point in time.
georgemcbay 3y ago
> So your hypothesis is that the Great Depression was caused by a sudden 25% increase in productivity? No, that isn't the hypothesis nor is it relevant to the point I am making. The cause of the 25% unemployment rate in the Great Depression is actually completely insignificant to why I mentioned it. The point being made with that is to highlight that 1 in 4 people no longer being in a position to make a steady living was enough to cause an economic situation so bad that nearly 100 years later in the USA it's still treated as the common example of how bad things can get when things are Really Really Bad. The oncoming rush of automation across virtually every aspect of the "knowledge worker" economy easily has the ability to create a situation in which the percentage of people made redundant is an order of magnitude more than that benchmark 1 in 4, and since it is likely to cut across so much of the economy very fast all at once there is likely to be no time for the economy to reasonably deal with. The go-to advice for people who are automated out of jobs is "retrain and find another one", how do you do that when the disruption is "everything everywhere all at once" and your competition for the new jobs is likewise coming from everywhere all at once and the job contraction impacts nearly every company? How scary this all sounds is probably colored to some degree by where you live and all of my concern is admittedly biased towards the USA where our current social safety net systems are woefully inadequate for dealing with this sort of disruption (even in the short term) and still constantly under attack.
- dragonwriter 3y ago
  > The cause of the 25% unemployment rate in the Great Depression is actually completely insignificant to why I mentioned it. The point being made with that is to highlight that 1 in 4 people no longer being in a position to make a steady living was enough to cause an economic situation so bad that nearly 100 years later in the USA it's still treated as the common example of how bad things can get when things are Really Really Bad. The cause isn’t irrelevant, in fact, you've reversed cause and effect. > The oncoming rush of automation across virtually every aspect of the "knowledge worker" economy easily has the ability to create a situation in which the percentage of people made redundant is an order of magnitude more than that benchmark 1 in 4, So 10 in 4? Seems... unlikely.
  - georgemcbay 3y ago
    > So 10 in 4? Seems... unlikely. See the word "percentage" which you quoted and would suggest I meant 1 in 40? Or are you doing The Internet Thing of not actually reading/understanding and just trying to look for things to clumsily attempt to dunk on without being able to elucidate whatever it is your own point is supposed to be?
    - dragonwriter 3y ago
      > See the word "percentage" which you quoted and would suggest I meant 1 in 40? Mixing fractions and percentages doesn't change that an order of magnitude more than 1 in 4 (25%) is 10 in 4 (250%). If you meant 1 in 40, you should have either said “less” instead of “more” or, “the denominator in the fraction of people made redundant is an order of magnitude more than in that benchmark 1 in 4” in place of “the percentage of people made redundant is an order of magnitude more than that benchmark 1 in 4”, and in either case that’s 2.5% , which while not insignificant if intended as a delta on top of normal unemployment, is less than the delta in a most recessions (the Great Recession peaked at about +5% from the pre-recession trough, which wasn't itself a long-term steady baseline), is also not significant enough to warrant the kind of hyperventilating you are doing. Its also very much not the obvious intent of the words you wrote.

by runeks 3y ago

digitcatphd 3y ago

High unemployment means fewer consumption spending, which according to Adam smith is the invisible hand fueling the economy. Remove this hand so to speak, and the economic cycle is at risk of being disrupted. Think of an economy like an ecological environment entangled with interdependence. I think generally it’s hard to think that modern economics has only really exist for the past couple hundred years. The last major shift that created it? The cotton gin starting the Industrial Revolution. AI is akin to the cotton gin.

runeks 3y ago
To be clear: I'm not rejecting the hypothesis, simply asking for supporting data. Ie. data that links the supposedly higher productivity to the higher unemployment at precisely that point in time.

georgemcbay 3y ago

> So your hypothesis is that the Great Depression was caused by a sudden 25% increase in productivity? No, that isn't the hypothesis nor is it relevant to the point I am making. The cause of the 25% unemployment rate in the Great Depression is actually completely insignificant to why I mentioned it. The point being made with that is to highlight that 1 in 4 people no longer being in a position to make a steady living was enough to cause an economic situation so bad that nearly 100 years later in the USA it's still treated as the common example of how bad things can get when things are Really Really Bad. The oncoming rush of automation across virtually every aspect of the "knowledge worker" economy easily has the ability to create a situation in which the percentage of people made redundant is an order of magnitude more than that benchmark 1 in 4, and since it is likely to cut across so much of the economy very fast all at once there is likely to be no time for the economy to reasonably deal with. The go-to advice for people who are automated out of jobs is "retrain and find another one", how do you do that when the disruption is "everything everywhere all at once" and your competition for the new jobs is likewise coming from everywhere all at once and the job contraction impacts nearly every company? How scary this all sounds is probably colored to some degree by where you live and all of my concern is admittedly biased towards the USA where our current social safety net systems are woefully inadequate for dealing with this sort of disruption (even in the short term) and still constantly under attack.

dragonwriter 3y ago
> The cause of the 25% unemployment rate in the Great Depression is actually completely insignificant to why I mentioned it. The point being made with that is to highlight that 1 in 4 people no longer being in a position to make a steady living was enough to cause an economic situation so bad that nearly 100 years later in the USA it's still treated as the common example of how bad things can get when things are Really Really Bad. The cause isn’t irrelevant, in fact, you've reversed cause and effect. > The oncoming rush of automation across virtually every aspect of the "knowledge worker" economy easily has the ability to create a situation in which the percentage of people made redundant is an order of magnitude more than that benchmark 1 in 4, So 10 in 4? Seems... unlikely.
- georgemcbay 3y ago
  > So 10 in 4? Seems... unlikely. See the word "percentage" which you quoted and would suggest I meant 1 in 40? Or are you doing The Internet Thing of not actually reading/understanding and just trying to look for things to clumsily attempt to dunk on without being able to elucidate whatever it is your own point is supposed to be?
  - dragonwriter 3y ago
    > See the word "percentage" which you quoted and would suggest I meant 1 in 40? Mixing fractions and percentages doesn't change that an order of magnitude more than 1 in 4 (25%) is 10 in 4 (250%). If you meant 1 in 40, you should have either said “less” instead of “more” or, “the denominator in the fraction of people made redundant is an order of magnitude more than in that benchmark 1 in 4” in place of “the percentage of people made redundant is an order of magnitude more than that benchmark 1 in 4”, and in either case that’s 2.5% , which while not insignificant if intended as a delta on top of normal unemployment, is less than the delta in a most recessions (the Great Recession peaked at about +5% from the pre-recession trough, which wasn't itself a long-term steady baseline), is also not significant enough to warrant the kind of hyperventilating you are doing. Its also very much not the obvious intent of the words you wrote.