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Great comment. The standard argument given by capitalists is that the "pie" will keep on growing, so while the existing owners of capital will get richer, it wi

Great comment. The standard argument given by capitalists is that the "pie" will keep on growing, so while the existing owners of capital will get richer, it will also lift others out of poverty. Why is this not happening any more? Is it because earlier automation used to create "new" jobs which require labour, while now automation is removing the need for labour at all?

adventured 12y ago
It's because the US is no longer a Capitalist nation; as such it no longer derives the maximum benefits of Capitalism. It was a mixed economy 30 or 40 years ago. Today it's a welfare state that depends on its central bank to remain solvent, with hyper regulation, high levels of debt, and high levels of taxation. The number of economic regulations and general laws passed each year in the US is truly astounding, and literally impossible to either keep up with or manage (this includes the laughable tax code). A century ago there were hardly any regulations or taxes. Today every segment of the economy is highly regulated outside of tech and nearly everything you can taste, touch, smell, eat or look at is taxed (often multiple times).
- brc 12y ago
  Capitalism still works fine, because it's not a designed system, it's not a central plan. In fact, countries like the USA should give it a try again. It worked quite well for them last time.
  - jasonwocky 12y ago
    > Capitalism still works fine, because it's not a designed system, it's not a central plan. What logic is this? "Anything which is not a designed system works fine"?
    - allthatglitters 12y ago
      F.A. Hayek wrote in The Fatal Conceit, “the curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.
      - dllthomas 12y ago
        We need to be careful that this differs materially from "the curious task of auronautics engineers" circa 1900. One place it surely does differ is that we've quite a few more people on this plane of the economy than on any test flight. We should, indeed, be correspondingly more careful. That said, "be careful" and "do nothing" are two very different propositions. Being careful may motivate doing nothing, or it may motivate doing quite a lot. While I don't think it was present in Hayek's reasoning, this frequently spills over into something that looks like "We're dealing with people's lives/rights here! How can you be so crass as to talk about numbers and make decisions?" When things are difficult and important, that's precisely the time you need to be most careful in your reasoning. Abstaining is still an action. Proposals for reduced or constrained intervention are still proposals, and only deserve reduced scrutiny to the degree that they are supported by "we've done that before and it worked out well".
- themartorana 12y ago
  A century ago we had the Great Depression, followed by a major application of regulation, followed by the biggest and longest boom in middle-class history in the US. In the 80s we started massive deregulation including killing Glass-Steagall, opening up banks to so destroy the global economy that we're having this discussion today. Your history of regulation and relative wealth is backwards. Edit: I'll acquiesce that the tax code is laughable, but mostly in how upper-class income tax levels are half what the middle class pays.
ef4 12y ago
> Why is this not happening any more? It is happening. The average manufacturing wage in China is up 700% in fourteen years. It isn't happening in the US and Europe, but that's because the average worker here still makes absurdly more money than the average worker in the developing world. The gap is closing quickly. As it does, we'll be able to see more evenly spread growth again. But purely from a humanitarian standpoint, it's hard to argue that it's a bad thing for workers who make $7000 a year to be getting bigger raises than workers who make $37000.
- SwellJoe 12y ago
  From a purely humanitarian standpoint, it's hard to argue that it's a good thing for CEOs who make $9.6 million a year to be getting bigger raises than workers who make $37000. http://www.csmonitor.com/Business/2014/0527/CEO-pay-hits-10-million-257-times-worker-pay.-The-gap-s-been-bigger http://www.csmonitor.com/Business/2014/0527/CEO-pay-hits-10-... http://www.huffingtonpost.com/2012/05/02/ceo-pay-worker-pay_n_1471685.html http://www.huffingtonpost.com/2012/05/02/ceo-pay-worker-pay_... http://www.csmonitor.com/Business/2013/1212/CEO-vs.-worker-pay-Walmart-McDonald-s-and-eight-other-firms-with-biggest-gaps/AT-T http://www.csmonitor.com/Business/2013/1212/CEO-vs.-worker-p... http://www.epi.org/publication/ceo-pay-231-times-greater-average-worker/ http://www.epi.org/publication/ceo-pay-231-times-greater-ave...
  - ef4 12y ago
    Agreed, but that's actually a separate problem. There are so few CEOs relative to average workers that their aggregate pay isn't enough to explain why workers in the west aren't experiencing wage growth.
    - SwellJoe 12y ago
      Actually, in some of the most egregious examples (Walmart), management and/or owners are paid enough to make a real difference in what workers are paid. The six Walton heirs hold as much money as the entire bottom 42% of Americans combined. A pay raise of $2/hour for every non-management Walmart worker (raising hundreds of thousands of people out of poverty), and/or giving them reasonable benefits, would not change that statistic in dramatic fashion. http://www.motherjones.com/mojo/2012/09/sam-waltons-fortune-walmart-employees-7-million-years http://www.motherjones.com/mojo/2012/09/sam-waltons-fortune-... It's not enough to explain it, but it is a relevant piece of the puzzle.
barbudorojo 12y ago
I don't know if the pie is growing or not. In my country they are going to include sex trading in the GPD and 23% of the econmy is supposed to be black money (money that don't pay any taxes). Statistics about numbers of jobs are crook because change every day what's mean to be employed so there is no a real historical record to compare or see trends. Also if you pay 50$/moth and you are below 30, you get into the health system and later will receive money for jobless and other resources, so is not clear if there is really creation of jobs or people are paying for themselves to receive more tomorrow from the government.

adventured 12y ago

It's because the US is no longer a Capitalist nation; as such it no longer derives the maximum benefits of Capitalism. It was a mixed economy 30 or 40 years ago. Today it's a welfare state that depends on its central bank to remain solvent, with hyper regulation, high levels of debt, and high levels of taxation. The number of economic regulations and general laws passed each year in the US is truly astounding, and literally impossible to either keep up with or manage (this includes the laughable tax code). A century ago there were hardly any regulations or taxes. Today every segment of the economy is highly regulated outside of tech and nearly everything you can taste, touch, smell, eat or look at is taxed (often multiple times).

brc 12y ago
Capitalism still works fine, because it's not a designed system, it's not a central plan. In fact, countries like the USA should give it a try again. It worked quite well for them last time.
- jasonwocky 12y ago
  > Capitalism still works fine, because it's not a designed system, it's not a central plan. What logic is this? "Anything which is not a designed system works fine"?
  - allthatglitters 12y ago
    F.A. Hayek wrote in The Fatal Conceit, “the curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.
    - dllthomas 12y ago
      We need to be careful that this differs materially from "the curious task of auronautics engineers" circa 1900. One place it surely does differ is that we've quite a few more people on this plane of the economy than on any test flight. We should, indeed, be correspondingly more careful. That said, "be careful" and "do nothing" are two very different propositions. Being careful may motivate doing nothing, or it may motivate doing quite a lot. While I don't think it was present in Hayek's reasoning, this frequently spills over into something that looks like "We're dealing with people's lives/rights here! How can you be so crass as to talk about numbers and make decisions?" When things are difficult and important, that's precisely the time you need to be most careful in your reasoning. Abstaining is still an action. Proposals for reduced or constrained intervention are still proposals, and only deserve reduced scrutiny to the degree that they are supported by "we've done that before and it worked out well".
themartorana 12y ago
A century ago we had the Great Depression, followed by a major application of regulation, followed by the biggest and longest boom in middle-class history in the US. In the 80s we started massive deregulation including killing Glass-Steagall, opening up banks to so destroy the global economy that we're having this discussion today. Your history of regulation and relative wealth is backwards. Edit: I'll acquiesce that the tax code is laughable, but mostly in how upper-class income tax levels are half what the middle class pays.

ef4 12y ago

> Why is this not happening any more? It is happening. The average manufacturing wage in China is up 700% in fourteen years. It isn't happening in the US and Europe, but that's because the average worker here still makes absurdly more money than the average worker in the developing world. The gap is closing quickly. As it does, we'll be able to see more evenly spread growth again. But purely from a humanitarian standpoint, it's hard to argue that it's a bad thing for workers who make $7000 a year to be getting bigger raises than workers who make $37000.

SwellJoe 12y ago
From a purely humanitarian standpoint, it's hard to argue that it's a good thing for CEOs who make $9.6 million a year to be getting bigger raises than workers who make $37000. http://www.csmonitor.com/Business/2014/0527/CEO-pay-hits-10-million-257-times-worker-pay.-The-gap-s-been-bigger http://www.csmonitor.com/Business/2014/0527/CEO-pay-hits-10-... http://www.huffingtonpost.com/2012/05/02/ceo-pay-worker-pay_n_1471685.html http://www.huffingtonpost.com/2012/05/02/ceo-pay-worker-pay_... http://www.csmonitor.com/Business/2013/1212/CEO-vs.-worker-pay-Walmart-McDonald-s-and-eight-other-firms-with-biggest-gaps/AT-T http://www.csmonitor.com/Business/2013/1212/CEO-vs.-worker-p... http://www.epi.org/publication/ceo-pay-231-times-greater-average-worker/ http://www.epi.org/publication/ceo-pay-231-times-greater-ave...
- ef4 12y ago
  Agreed, but that's actually a separate problem. There are so few CEOs relative to average workers that their aggregate pay isn't enough to explain why workers in the west aren't experiencing wage growth.
  - SwellJoe 12y ago
    Actually, in some of the most egregious examples (Walmart), management and/or owners are paid enough to make a real difference in what workers are paid. The six Walton heirs hold as much money as the entire bottom 42% of Americans combined. A pay raise of $2/hour for every non-management Walmart worker (raising hundreds of thousands of people out of poverty), and/or giving them reasonable benefits, would not change that statistic in dramatic fashion. http://www.motherjones.com/mojo/2012/09/sam-waltons-fortune-walmart-employees-7-million-years http://www.motherjones.com/mojo/2012/09/sam-waltons-fortune-... It's not enough to explain it, but it is a relevant piece of the puzzle.

barbudorojo 12y ago

I don't know if the pie is growing or not. In my country they are going to include sex trading in the GPD and 23% of the econmy is supposed to be black money (money that don't pay any taxes). Statistics about numbers of jobs are crook because change every day what's mean to be employed so there is no a real historical record to compare or see trends. Also if you pay 50$/moth and you are below 30, you get into the health system and later will receive money for jobless and other resources, so is not clear if there is really creation of jobs or people are paying for themselves to receive more tomorrow from the government.