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Let's start by pulling this discussion apart into three questions: 1. What effect will technology-based efficiency gains have on total wealth? 2. What effect w

Let's start by pulling this discussion apart into three questions: 1. What effect will technology-based efficiency gains have on total wealth? 2. What effect will technology-based efficiency gains have on the distribution of total wealth? 3. What should we do about #1 and #2, especially #2? The answer to #1, IMO, remains very favorable. And I think that's obvious so long as you measure wealth by the value and owner-/consumer-perceived quality of what is owned and consumed, rather than by market prices. As for #2 -- a rising tide is clearly lifting a lot of boats worldwide. In the richer countries, that's more debatable -- but I think it's still true. Dollar incomes may be flat, inflation-adjusted, but electronic entertainment (for example) is a lot better than it used to be. But it's hard to deny that income disparities are on the rise. And it's reasonable to think about those income disparities in part by counting numbers of "good" jobs (probably down) and (of which there are fewer) "great" jobs (probably up). Historically, "good" jobs have arisen to more than make up for those lost, perhaps after an uncomfortable transition period. If that's what's going on again, we can muddle through without great answers to #3. But if This Time It's Different -- and it well may be -- then we need to reorganize our economy, our work practices, and everything else, rebalancing work/leisure in the way some people (often socialists) were already (and falsely) arguing was necessary decades ago. -------------------------------------------- And finally -- at a minimum, we're causing problems that society needs to deal with in terms of general job loss. We're also causing other problems, such as privacy threats. So it's our duty, as very fortunate individuals, to also put some effort into alleviating them, or in some other ways of improving the world. I, of course, have put some effort into the privacy issue. (http://www.dbms2.com/category/liberty-privacy/page/2/ http://www.dbms2.com/category/liberty-privacy/page/2/ -- more coming soon). Others may look at general economics (e.g. the OP here), or censorship, or the need for better STEM teaching, or in unquestionably beneficial applications of technology, or whatever. But we all should be thinking of what, personally, we can do to try to help.

aspensmonster 14y ago
I think you've already highlighted an interesting signal that This Time It's Different: in the U.S., productivity has increased while wage gains have flat-lined. Workers aren't sharing in the additional created wealth. Sure, the aggregate amount of wealth to the poor has increased over time. I'd think that's a given. If that hasn't happened something has gone horribly wrong. But its value relative to other wealthier groups has steadily declined. That's a bad spot to be in. The workers' increasing productivity is earning themselves a smaller return over time. Indeed a shrinking return. The nastiest consequence of this in my observation has been political; when a large majority of the population has relatively little wealth to toss around (even taken as a whole) it's easy for their political representatives to become unresponsive. Now, whether It's Different This Time because of characteristics inherent to a steadily improving economic system, or simply because of self-destructive tendencies that wealth-hoarding tends to exhibit, is a question I'd love an answer to. But I'm sure there will be others to tell me that this time is just like all the others too. Maybe I'll hear a decent explanation that allays my concerns.
- smsm42 14y ago
  If you can get a flat-screen TV for $300 today, you're sharing the wealth - never before you could get anything close to that, let alone for so little money. If you compare the things accessible even to somebody who is considered "poor" today - in terms of quality of food, shelter, gadgets, etc. - it has never been more. 62% of people considered "poor" have two or more TVs. 48% own a computer. Look here: http://money.cnn.com/2012/08/01/news/economy/poor-income/index.htm http://money.cnn.com/2012/08/01/news/economy/poor-income/ind... The average household defined as "poor" in 2005 had air conditioning, cable TV and a DVD player, according to government statistics cited by Robert Rector, a senior research fellow at the Heritage Foundation. If there were children in the home, the family likely had a game system, such as a Microsoft Xbox or Sony PlayStation. If you go back 50 years, would any poor person have access to anything like that? Would many middle-class ones? If this is not sharing the created wealth - albeit unequally, but undeniably - then what is it?
  - chime 14y ago
    Almost everything you listed can be bought for under $1000 total and others rented for very little cost. That does not mean they're sharing the wealth. That just means economies of scale and planned obsolescence works and makes things cheaper over time. Things you cannot import from China are still prohibitively high - education, healthcare, insurance etc. Giving people $300 gadgets does not make them wealthy. Even having a $99 iPhone with $40/mo data plan does not mean you are rich. It means you have $99 and can afford $40/mo. Anyone on minimum wage can theoretically do that. I don't disagree with you that quality of life has improved due to technological progress for almost everyone but I would hardly define that as sharing the wealth. I would define sharing the wealth as not having to declare bankruptcy when your kid has cancer. Or not having to take whatever job is available in any field instead of your speciality just to pay rent because you cannot collect unemployment anymore. Or not being stuck living in a city you want to move away from but can't because the house you purchased has fallen in price through no fault of yours and will barely make 50% of your mortgage in rent. I don't see how adding a $300 TV or air conditioning to this mix would make one feel like they're sharing the wealth.
eli_gottlieb 14y ago
I don't think it is Different This Time. But the thing is, last time the world's response to overproduction and depression was social democracy version 1, also known as the Postwar Consensus. That deliberate rebalancing of society's wealth distribution resulted in the huge boost of consumption, demand, innovation and productivity we saw for 30 years after that. Then came the oil shocks, which led to a completely different politics: neoliberalism, or, an economy once-again organized around maximizing capital gains rather than net earnings.
holmak 14y ago
Whenever the income inequality of the US is discussed, I wonder about the global income distribution. The US is no longer a closed system, so it may not be meaningful to consider the US income distribution on its own. Does anyone here know how income inequality is doing globally?
- CurtMonash 14y ago
  I don't have numbers at my fingertips. That said: Less developed countries seem to be growing faster than developed ones. That said, while gratifying huge numbers of people in China, India and smaller countries are moving up in the middle class, they're leaving many of their poorer countrypeople behind. (Also, beware of any attempt to present the numbers so simply that commodity price swings are allowed to have a major influence.)
qu4z-2 14y ago
This is not directly replying to you, but something you said made me think: > so long as you measure wealth by the value and owner-/consumer-perceived quality of what is owned and consumed What about things that aren't really owned or consumed? Clean air/water, forests. Do they factor into this function somehow? If not, I have difficulty trusting any suggestions based on that definition of "wealth". And just in general, I'd much rather optimise for happiness than wealth. But it's much harder to quantify, so I guess that's why people don't.

aspensmonster 14y ago

I think you've already highlighted an interesting signal that This Time It's Different: in the U.S., productivity has increased while wage gains have flat-lined. Workers aren't sharing in the additional created wealth. Sure, the aggregate amount of wealth to the poor has increased over time. I'd think that's a given. If that hasn't happened something has gone horribly wrong. But its value relative to other wealthier groups has steadily declined. That's a bad spot to be in. The workers' increasing productivity is earning themselves a smaller return over time. Indeed a shrinking return. The nastiest consequence of this in my observation has been political; when a large majority of the population has relatively little wealth to toss around (even taken as a whole) it's easy for their political representatives to become unresponsive. Now, whether It's Different This Time because of characteristics inherent to a steadily improving economic system, or simply because of self-destructive tendencies that wealth-hoarding tends to exhibit, is a question I'd love an answer to. But I'm sure there will be others to tell me that this time is just like all the others too. Maybe I'll hear a decent explanation that allays my concerns.

smsm42 14y ago
If you can get a flat-screen TV for $300 today, you're sharing the wealth - never before you could get anything close to that, let alone for so little money. If you compare the things accessible even to somebody who is considered "poor" today - in terms of quality of food, shelter, gadgets, etc. - it has never been more. 62% of people considered "poor" have two or more TVs. 48% own a computer. Look here: http://money.cnn.com/2012/08/01/news/economy/poor-income/index.htm http://money.cnn.com/2012/08/01/news/economy/poor-income/ind... The average household defined as "poor" in 2005 had air conditioning, cable TV and a DVD player, according to government statistics cited by Robert Rector, a senior research fellow at the Heritage Foundation. If there were children in the home, the family likely had a game system, such as a Microsoft Xbox or Sony PlayStation. If you go back 50 years, would any poor person have access to anything like that? Would many middle-class ones? If this is not sharing the created wealth - albeit unequally, but undeniably - then what is it?
- chime 14y ago
  Almost everything you listed can be bought for under $1000 total and others rented for very little cost. That does not mean they're sharing the wealth. That just means economies of scale and planned obsolescence works and makes things cheaper over time. Things you cannot import from China are still prohibitively high - education, healthcare, insurance etc. Giving people $300 gadgets does not make them wealthy. Even having a $99 iPhone with $40/mo data plan does not mean you are rich. It means you have $99 and can afford $40/mo. Anyone on minimum wage can theoretically do that. I don't disagree with you that quality of life has improved due to technological progress for almost everyone but I would hardly define that as sharing the wealth. I would define sharing the wealth as not having to declare bankruptcy when your kid has cancer. Or not having to take whatever job is available in any field instead of your speciality just to pay rent because you cannot collect unemployment anymore. Or not being stuck living in a city you want to move away from but can't because the house you purchased has fallen in price through no fault of yours and will barely make 50% of your mortgage in rent. I don't see how adding a $300 TV or air conditioning to this mix would make one feel like they're sharing the wealth.

eli_gottlieb 14y ago

I don't think it is Different This Time. But the thing is, last time the world's response to overproduction and depression was social democracy version 1, also known as the Postwar Consensus. That deliberate rebalancing of society's wealth distribution resulted in the huge boost of consumption, demand, innovation and productivity we saw for 30 years after that. Then came the oil shocks, which led to a completely different politics: neoliberalism, or, an economy once-again organized around maximizing capital gains rather than net earnings.

holmak 14y ago

Whenever the income inequality of the US is discussed, I wonder about the global income distribution. The US is no longer a closed system, so it may not be meaningful to consider the US income distribution on its own. Does anyone here know how income inequality is doing globally?

CurtMonash 14y ago
I don't have numbers at my fingertips. That said: Less developed countries seem to be growing faster than developed ones. That said, while gratifying huge numbers of people in China, India and smaller countries are moving up in the middle class, they're leaving many of their poorer countrypeople behind. (Also, beware of any attempt to present the numbers so simply that commodity price swings are allowed to have a major influence.)

qu4z-2 14y ago

This is not directly replying to you, but something you said made me think: > so long as you measure wealth by the value and owner-/consumer-perceived quality of what is owned and consumed What about things that aren't really owned or consumed? Clean air/water, forests. Do they factor into this function somehow? If not, I have difficulty trusting any suggestions based on that definition of "wealth". And just in general, I'd much rather optimise for happiness than wealth. But it's much harder to quantify, so I guess that's why people don't.