5 ms·

Increasing population, automation, and globalization. That's what I've been thinking for a long time. Seems unsustainable. Despite that, the author is right. S

by codyb 13y ago

Increasing population, automation, and globalization. That's what I've been thinking for a long time. Seems unsustainable. Despite that, the author is right. Something has to give.

dnautics 13y ago
I happen to think that inflation and sovereign debt transfer wealth from the poor and middle class to the rich. https://docs.google.com/document/d/137cC3inVNcfof44Pq1nMiyz1iRPekBsGhSnhAW_GSLs/edit https://docs.google.com/document/d/137cC3inVNcfof44Pq1nMiyz1...
- EGreg 13y ago
  They do, but sovereign debt in the USA is mitigated by automatic stabilizers in progressive taxes. On the other hand, the structural problems come from the increased ability for multinational corporations (like Amazon) with small margins to disrupt the comparative advantage of LOCAL businesses and thus lower demand for a lot of local human labor. All the working conditions we've been legilating for in the past 100-200 years make our population more expensive to hire, and when you are now able to hire people in areas with a lower cost of living, or automate the jobs, the problems are systemic. If you reqd Stiglitz, he points out how before the great depression 20% of Americans worked in farm related jobs. After -- 2%. Notice the similarity with manyfacturing? This time it's taken longer but it's steadily eroding demand for local labor. Programmers arent hit by this economic phenomenon yet, because we program the machines that "disrupt" industries.
  - dnautics 13y ago
    are you making the claim that progressive taxation schemes automatically adjust to mathematically compensate? Because, inflation is a compounding effect, and having first action on created money is so powerful that I doubt that taxing the banking classes at anything but 100% or greater would do much for that. Plus bailouts, contracting work, etc. etc. etc.
    - EGreg 13y ago
      I read your essay, and I am not discounting the deleterious effects of inflation on the domestic economy. In fact the growth in the M0 money supply should have us expecting a 3x inflation in the near future: http://www.tradingeconomics.com/united-states/money-supply-m0 http://www.tradingeconomics.com/united-states/money-supply-m... So yes, this is very worrying. As Milton Friedman said, "inflation is always and everywhere a monetary phenomenon" and argued that it always follows an increase in the mouney supply. What I am saying is that there are ways to mitigate the transfer of wealth to the rich, which are in place. If you look at inflation as a flat tax on everyone, it can be offset by sufficiently progressive taxation and welfare assistance to the poor (I am a fan of Friedman's negative tax scheme or Basic Income schemes). Overall you are right, income inequality grows during inflations. But at least we can mitigate this with policy. On the other hand, I am saying that the structural changes are systemic and this is far worse for the population as we have very limited means to "bring manufacturing jobs back" as both presidential candidates promised in this last election. They ain't coming back - not to humans, anyway. The real big shift we are facing is how quickly we can grow our safety nets and redistribution schemes like Basic Income or Negative Tax so that our unemployed class can continue being consumers at some rate which we as a society think they "should afford to be" just by virtue of being human.
      - dnautics 13y ago
        but inflation isn't a flat tax on everyone, it's regressive. In the case of the two families in the admittedly extreme inflation example, the poor family takes a 50% tax and the rich family takes a <2% tax. In your graph, I see a 25% inflation, not a 3x inflation. If prices increase too quickly, there will be a dragging effect from the multiplier effect as stressed consumers default on loans, so if M0 doesn't increase as much, that 25% inflation may be dragged out over a longer period of time... Not to understate my worry about it, however. But you're right, the technological displacement is a structural problem in our economy, if the populace has a sense of entitlement towards jobs, or "their job" in particular, or even if not - in the case that there are not enough social resources to effect retraining in the labor force, or those social resources are misdirected, for example towards useless college degrees. In the non-inflationary fantasy universe where I wish I lived, technological displacement wouldn't be such a problem, since it would effect deflation. Yes, people would lose jobs, but they could afford to lose jobs or often, just afford not to work for protracted periods of time if necessary or desired.
  - tsotha 13y ago
    We may be gone before it happens, but it's only a matter of time before most brain work is automated as well.
kenster07 13y ago
Your argument is wrong or poorly articulated. What isn't sustainable is an economy where those whose labor has been displaced by technological or economic advances have no opportunity to meet their basic human needs. Automation and globalization are sustainable. An increasing population is sustainable so long as it is in lockstep with technology's ability to support it. Malthus would have never imagined in his wildest dreams that 7 billion people could live simultaneously. The reality is, none of us can predict the future, and what kind of advances we will see in the productivity of essential goods. To think otherwise is gross intellectual masturbation.

by codyb 13y ago

Increasing population, automation, and globalization. That's what I've been thinking for a long time. Seems unsustainable. Despite that, the author is right. Something has to give.

dnautics 13y ago

I happen to think that inflation and sovereign debt transfer wealth from the poor and middle class to the rich. https://docs.google.com/document/d/137cC3inVNcfof44Pq1nMiyz1iRPekBsGhSnhAW_GSLs/edit https://docs.google.com/document/d/137cC3inVNcfof44Pq1nMiyz1...

EGreg 13y ago
They do, but sovereign debt in the USA is mitigated by automatic stabilizers in progressive taxes. On the other hand, the structural problems come from the increased ability for multinational corporations (like Amazon) with small margins to disrupt the comparative advantage of LOCAL businesses and thus lower demand for a lot of local human labor. All the working conditions we've been legilating for in the past 100-200 years make our population more expensive to hire, and when you are now able to hire people in areas with a lower cost of living, or automate the jobs, the problems are systemic. If you reqd Stiglitz, he points out how before the great depression 20% of Americans worked in farm related jobs. After -- 2%. Notice the similarity with manyfacturing? This time it's taken longer but it's steadily eroding demand for local labor. Programmers arent hit by this economic phenomenon yet, because we program the machines that "disrupt" industries.
- dnautics 13y ago
  are you making the claim that progressive taxation schemes automatically adjust to mathematically compensate? Because, inflation is a compounding effect, and having first action on created money is so powerful that I doubt that taxing the banking classes at anything but 100% or greater would do much for that. Plus bailouts, contracting work, etc. etc. etc.
  - EGreg 13y ago
    I read your essay, and I am not discounting the deleterious effects of inflation on the domestic economy. In fact the growth in the M0 money supply should have us expecting a 3x inflation in the near future: http://www.tradingeconomics.com/united-states/money-supply-m0 http://www.tradingeconomics.com/united-states/money-supply-m... So yes, this is very worrying. As Milton Friedman said, "inflation is always and everywhere a monetary phenomenon" and argued that it always follows an increase in the mouney supply. What I am saying is that there are ways to mitigate the transfer of wealth to the rich, which are in place. If you look at inflation as a flat tax on everyone, it can be offset by sufficiently progressive taxation and welfare assistance to the poor (I am a fan of Friedman's negative tax scheme or Basic Income schemes). Overall you are right, income inequality grows during inflations. But at least we can mitigate this with policy. On the other hand, I am saying that the structural changes are systemic and this is far worse for the population as we have very limited means to "bring manufacturing jobs back" as both presidential candidates promised in this last election. They ain't coming back - not to humans, anyway. The real big shift we are facing is how quickly we can grow our safety nets and redistribution schemes like Basic Income or Negative Tax so that our unemployed class can continue being consumers at some rate which we as a society think they "should afford to be" just by virtue of being human.
    - dnautics 13y ago
      but inflation isn't a flat tax on everyone, it's regressive. In the case of the two families in the admittedly extreme inflation example, the poor family takes a 50% tax and the rich family takes a <2% tax. In your graph, I see a 25% inflation, not a 3x inflation. If prices increase too quickly, there will be a dragging effect from the multiplier effect as stressed consumers default on loans, so if M0 doesn't increase as much, that 25% inflation may be dragged out over a longer period of time... Not to understate my worry about it, however. But you're right, the technological displacement is a structural problem in our economy, if the populace has a sense of entitlement towards jobs, or "their job" in particular, or even if not - in the case that there are not enough social resources to effect retraining in the labor force, or those social resources are misdirected, for example towards useless college degrees. In the non-inflationary fantasy universe where I wish I lived, technological displacement wouldn't be such a problem, since it would effect deflation. Yes, people would lose jobs, but they could afford to lose jobs or often, just afford not to work for protracted periods of time if necessary or desired.
- tsotha 13y ago
  We may be gone before it happens, but it's only a matter of time before most brain work is automated as well.

kenster07 13y ago

Your argument is wrong or poorly articulated. What isn't sustainable is an economy where those whose labor has been displaced by technological or economic advances have no opportunity to meet their basic human needs. Automation and globalization are sustainable. An increasing population is sustainable so long as it is in lockstep with technology's ability to support it. Malthus would have never imagined in his wildest dreams that 7 billion people could live simultaneously. The reality is, none of us can predict the future, and what kind of advances we will see in the productivity of essential goods. To think otherwise is gross intellectual masturbation.