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Goods, services and their production.
tbloxham
Registered User regular
Registered User regular
So, something has been bothering me lately and I'm wondering if I'm just tramping on a well covered path or if this genuinely is a new (or at least not heavily discussed) concern.
My thought is this. In the past, people could produce nowhere near enough goods and services to meet all their wants and needs. Most people didn't even think about buying goods to service simple desires as they were struggling to even meet their needs for food and shelter. Those few luxuries society did produce were concentrated on a few people. This massive shortage of goods created a demand for continual population growth, as it was easy to blame lack of manpower for the deficit. The same deficit also controlled population growth, but over time advances in farming and so on allowed populations to grow. There were also deficits in the amount of raw materials required to produce the goods, and in the skill sets required for some things. In addition, many people were required for 24 hour childcare and housework.
We then moved on from that, into a phase where suddenly the amount of goods which could be produced shot up and we became much closer to producing as many goods and services as everybody wanted. One person could produce one persons worth of goods and services, and so we trended towards full employment. As technology advanced, people just wanted more stuff, and the cycle of demand matching supply continued since demand grew as supply did.
However, is it possible that we are no longer in such a phase. Not because we have infinite raw materials, but because our technology has advanced to the point where there is no longer any need for many of the raw materials and processes we used to require to fulfill our 'wants'. We no longer require so many people as 24 hour carers because we created schools. We now produce vast amounts of food, millions of calories more base food (grain and the like) than we could possibly eat. Yes, we now have 100 times as much stuff that we want, but when almost all that stuff can be delivered to a single multipurpose electronic device using no more than a few watts of electricity what use is someone who used to make tape drives, or pack widgets into boxes. Where once you needed a million singers to entertain a nation, and then you needed 1000 singers and 100000 guys making records and tapedecks, now you can do the same with 100 engineers, 1000 workers and 1 singer and a whole pile of iPods. And those iPods are also fulfilling their needs for movies, board games, long range communication.....
Now, this might seem like a good thing, lots of stuff for everyone but we live in a capitalist society. Striving for more stuff, and it creating more jobs and wealth is the base motivator of how things work. If a person in the workplace can now produce (on average) enough stuff for say 1.5 people then what do we do about all the people who are simply unneeded by the new economy. Furthermore, we can't solve the problem by contracting the population, since that would just lower overall demand and make another x% unemployed. Could it be that the idea of 'full' employment is a thing of the past. Are we moving into an era where technological growth has rendered it impossible? Even if we aren't there today, what about tomorrow when people might start to take virtual reality trips as fuel grows pricier? Each step forward with technology makes it easier to produce the stuff we want, meaning we have more stuff, but require less workers. Yes, we need energy and it will grow more expensive without major breakthroughs but will that mean more employment considering we'll have robots and so on to do so many of the tasks.
In short, how does Capitalism survive in any kind of equitable form when all you need to entertain 10 million people for months is 100 guys making farmville.
My thought is this. In the past, people could produce nowhere near enough goods and services to meet all their wants and needs. Most people didn't even think about buying goods to service simple desires as they were struggling to even meet their needs for food and shelter. Those few luxuries society did produce were concentrated on a few people. This massive shortage of goods created a demand for continual population growth, as it was easy to blame lack of manpower for the deficit. The same deficit also controlled population growth, but over time advances in farming and so on allowed populations to grow. There were also deficits in the amount of raw materials required to produce the goods, and in the skill sets required for some things. In addition, many people were required for 24 hour childcare and housework.
We then moved on from that, into a phase where suddenly the amount of goods which could be produced shot up and we became much closer to producing as many goods and services as everybody wanted. One person could produce one persons worth of goods and services, and so we trended towards full employment. As technology advanced, people just wanted more stuff, and the cycle of demand matching supply continued since demand grew as supply did.
However, is it possible that we are no longer in such a phase. Not because we have infinite raw materials, but because our technology has advanced to the point where there is no longer any need for many of the raw materials and processes we used to require to fulfill our 'wants'. We no longer require so many people as 24 hour carers because we created schools. We now produce vast amounts of food, millions of calories more base food (grain and the like) than we could possibly eat. Yes, we now have 100 times as much stuff that we want, but when almost all that stuff can be delivered to a single multipurpose electronic device using no more than a few watts of electricity what use is someone who used to make tape drives, or pack widgets into boxes. Where once you needed a million singers to entertain a nation, and then you needed 1000 singers and 100000 guys making records and tapedecks, now you can do the same with 100 engineers, 1000 workers and 1 singer and a whole pile of iPods. And those iPods are also fulfilling their needs for movies, board games, long range communication.....
Now, this might seem like a good thing, lots of stuff for everyone but we live in a capitalist society. Striving for more stuff, and it creating more jobs and wealth is the base motivator of how things work. If a person in the workplace can now produce (on average) enough stuff for say 1.5 people then what do we do about all the people who are simply unneeded by the new economy. Furthermore, we can't solve the problem by contracting the population, since that would just lower overall demand and make another x% unemployed. Could it be that the idea of 'full' employment is a thing of the past. Are we moving into an era where technological growth has rendered it impossible? Even if we aren't there today, what about tomorrow when people might start to take virtual reality trips as fuel grows pricier? Each step forward with technology makes it easier to produce the stuff we want, meaning we have more stuff, but require less workers. Yes, we need energy and it will grow more expensive without major breakthroughs but will that mean more employment considering we'll have robots and so on to do so many of the tasks.
In short, how does Capitalism survive in any kind of equitable form when all you need to entertain 10 million people for months is 100 guys making farmville.
"That is cool" - Abraham Lincoln
tbloxham on
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And if that doesn't work, you bilk your customers even more for Farmville England, Farmville Lady Gaga, Cityville, Suburbville, Exurbville, Outbackville, Arcticville, Blightville, Droughtville, Landfillville, and Roller Coaster Tycoonville.
the "no true scotch man" fallacy.
It's a pretty old idea; Star Trek: The Next Generation is an example of it in popular fiction.
http://www.peterfrase.com/2010/12/anti-star-trek-a-theory-of-posterity/
Here's where most of us would be employed: Given the skyrocketing prison rate in the US, I think we're headed there fast.
Or more ideally you get everyone working smaller and smaller proportions of the time.
That's crazy talk. You're talking crazy. Crazy talker.
the "no true scotch man" fallacy.
1. The OP might more or less describe the first world, but economic empowerment has definitely not saturated the globe. When the proportion of people on this planet living on $1.00 to $2.00 a day is no longer a huge swath of the populace, then I guess this discussion might become relevant.
2. The more interesting discussion to be had on this topic, imho, is the trajectory of a (primarily) service-based, post-industrial economy and how you cope with the transition to such.
So...how *did* capitalism survive?
And to answer that, you have to answer a question whose answer causes raging firestorms of debate and hateful rhetoric. A question with a thousand answers and a million perspectives. The question, "what happened between 1930 and 2011?"
I have watched people say it was due to America being the only industrialized nation that hadn't been bombed to rubble cramming its goods down everyone's throat. I have heard sputtering rage screaming it was all due to former soldiers coming home from war and demanding a fair wage for their labors. I have heard delusions explaining it was due to high religion, low taxes, and other myths created by fans of Leave it to Beaver. I have seen racist screeds explaining it was all because America kept the minorities in their proper place. And this is but the tip of the "why" iceberg.
Sorry, got a little pompous-sounding there, didn't I? My point is "yes," also "I don't know," and a little "It's complicated."
I suggested that exact same thing last time a similar thread got brought up and I pretty much got shouted out of the thread in exactly that way.
but they're listening to every word I say
I always thought it was a significant amount of excess laborers being blown the smithereens in the war. Plus, because all factorys had to go to full gear to survive, literally, they put tons of women to work, creating essentially placeholders for lots of jobs. Then the remaining men come back and fill those places, and women went back to homes.
Does that sound like a possibility?
but they're listening to every word I say
Basically, the idea is that we have a lot of needs, and when the most basic ones are satisfied (the needs of survival: food, water, air, shelter), we find we have others. Maybe there are more needs out there that we have yet to discover.
I don't have any issues with it myself -- it seems to me to be the natural consequence of the mature first-world economies making the inevitable transition to post-industrialism.
But take for instance all this rhetoric about keeping manufacturing jobs in the U.S.
The protectionist argument is that we need to keep manufacturing jobs in America because economics is a zero-sum game and there are only so many manufacturing jobs to be had; protectionists would also argue that every U.S. manufacturing job lost is one gained by (to put it very simply) one of our global economic competitors, and also to some degree an erosion of our proud heritage of "building stuff" -- though these latter two are sort of secondary arguments.
The macroeconomic argument would be that global economics is not a zero-sum game -- that the reallocation of Manufacturing Job X to China or Brazil or Singapore frees up that local capital (U.S. labor) for other uses, like say working in the importing industry to get that $5.00 t-shirt back here to the U.S. (though obviously this is a simplification). The premise is basically that the world as a whole is made wealthier through trade and specialization. The dark side to that increase in wealth, of course, is that you have to make certain changes structurally to ride the wave of globalization -- or risk being caught unprepared by the tidal wave. The U.S. has largely already made that transition -- from the foremost manufacturer of goods, in the early 20th century, to the global leader in financial and other very technical services.
Way I see it, given the trends of the past 20-30 years, we sort of need to complete that transition, and all this noise over outsourcing seems like a lot of rearranging the deckchairs.
People who know better about these sorts of things should feel free to point out any glaring mistakes I've made in that summation.
As I understand it, the US had a large manufacturing industry (even before the war) that was able and willing to retool to building things people wanted at a time when there was a lot of demand and not too many other sources. The US also had a lot of available resources that it could get relatively cheaply, which always helps production. Combine that with a serious attempt at upgrading infrastructure and a very serious attempt at producing the best educated people on the planet and you have a pretty straightforward plan for seriously impressive growth (or seriously disappointing failure if you can't manage to make it happen).
You can work less hours, and work less of your expected lifetime (i.e., spend more time in school), and you can study and work under increasingly better conditions and with less intensity - flexible hours, etc. And you can retire earlier. If it is so easy to make stuff, then each person can just do less work.
As late as the beginning of the 20th century, Saturday was conventionally a full working day, and of course most people joined the workforce earlier and did not retire. So already there is some of this in effect.
And, as it stands, there are still some very large growth industries that face rising demand and are trying to expand to keep up - principally healthcare and education. So we are not yet in a post-scarcity economy, regrettably.
Like wirelessly transmitted pornography directly into my dreams?
but they're listening to every word I say
Doesn't France rock the 4 day work week?
but they're listening to every word I say
Why provide healthcare and training to 10 employees when you can have 6 working double overtime unpaid for fear of 40% unemployment.
The whole, make more farmvilles argument would just be corporate welfare, with companies providing extra jobs to replicate the work of others to deliberately lower productivity. Does anyone think that modern companies have the long term economic foresight to do that?
No, but it did try the 35-hour workweek (without much success).
It's possible that we will not see significant reductions in work week length for many decades, with labor savings instead going toward holiday breaks or even longer schooling.
If you could have 6 working double overtime unpaid for fear of 40% unemployment, why would you wait for technological advancement to do so? Wouldn't you have done it in the distant past? Why aren't other employers pulling away the unemployed, or your workers?
(how are you supposing that the labour market works, anyway?)
Farmville is about making profit, not idle job replication, at that.
The reason for that in health care isn't fear mostly, its the training/education barrier, and the whole 'training on the job' portions of it forces 2 health workers to work where only one is needed, increasing the total hours needed for the system to work.
I thought what cause the Great Depression was investors realized they could borrow against profits from their previous investments (without selling the previous investments) to further invest. Which is a great idea if the market only ever sees profit, but then the market goes into the red and suddenly that $100k profit that you borrowed against doesn't exist anymore, then the creditors who are reeling from the same problem are asking for you to pay back on your loan; everybody owes money that never actually existed.
The latest depression IIRC was caused by a similar problem except instead of being on the stock market it was on the housing market. Allegedly modern economic theory had two possible ways of fixing a depression. The first one they tried didn't work out so well in the 20's and 30's, but luckily it seems the other option worked out for this latest depression.
... but I'm not an economic theorist so I'm probably way off base here.
However, the increase in soldiers attending college, huge number of civilians moving up to the middle class, and the eventual invention of the personal computer created the consumer class. R&D fueled the middle class by either creating jobs for families through high paying research and low paying sales. Thus, the middle class became the consumer class. The middle class could afford to eat out more, requiring more restaurants. The middle class could afford to buy clothes instead of making them. Etc etc.
I don't know what or i, there is a proper way to describe our current mix of consumer and service based markets and industries.
There's a good bit of Marxist theory on "what happens next" as well. He correctly predicted a trend in large companies that ends with less innovation, bloat, and corporate buyouts, takeovers, and acquisitions to keep a company floating, as well as all of the negative attributes that comes with it, and how they affect the job market.
Because in the past employee productivity couldn't be high enough to do the job with only 6 workers. With modern technology and the internet, it can, and if demand doesn't grow with the increase in productivity then an increase in productivity (technology or skill improvement) will cause unemployment if there isn't a deliberate effort to decrease hours while keeping wages the same. And the reason why other employers aren't pulling people away is because they ALSO have seen the same effect in increased productivity due to technology, or have already matched consumer demand for their product. They have no need for more workers.
And yes, that's why I made this comment. Someone said 'All the extra workers will just be put to work making other farmvilles' but when farmville can be cloned infinity times with minimal effort the company doesn't need hundreds of new versions, just the same 10 guys it currently has keeping the old one updated.
My point is very simple. If 1 worker can provide more than 1 persons worth of stuff on average, then what do we do with the other workers.
I said providing healthcare to the workers, not working in healthcare
No.
Even if we took your basic premise that we now lack scarcity - which we* don't. Zynga has 100 ish employees. Their product is delivered by the internet, whose maintenance takes tens of thousands of workers. Using it requires a power grid, the manufacture of computer components, the assembly of computer components, the design of computer components, the extraction of raw materials necessary to manufacture the components, roads to deliver the components, warehouses and inventory systems to organize the shipping of components, truckers or other delivery people to move the components, police to discourage the components are not stolen, a financial system that allows for the secure payment of goods at a distance, human resources to assign individuals to different responsibilities.......
The idea that we have a system that allows for a person to produce the stuff 'necessary' for 1.5 people, if one could even work it out that way, presupposes the existence of a massive system to enable such productivity. The system only works because people work.
And honestly, the use of farmville, a casual form of entertainment that didn't exist a few years ago, as some kind of necessity that must be met just completely undercuts the entire point. Supply creates demand. The example of farmville supports that idea, not some kind of theoretical post-scarcity paradigm.
*And the we here refers to those of us in a developed world who live in middle class situations. Tell a homeless person there's no such thing as scarcity anymore. Tell a Somali
QEDMF xbl: PantsB G+
I'm not talking about one particular industry. I'm not thinking small like you think. Of course one person making cars produces more cars than one person needs. I'm saying that considering all goods and services that are created, and all goods and services that are consumed that one person makes on average more than one person wants. At least in a high tech economy. Yes, there are many people excluded from a society like that but more and more people are involved in one.
If technology didn't lead to more goods and services being produced overall, then we wouldn't use it. The simple fact that we do cuts the legs out completely from your 'Farmville needs the internet' thought. A technological society can only maintain full employment if average demand also rises as productivity does. Maybe today we can maintain things for a few years while we sell stuff to Chinese and Indian people, but what then. Probably up till now we've done well in the US simply because even though we've been above the 1:1 ratio for a while, the average worldwide ratio has been below it encouraging employment and so on, but now I'm saying that maybe the average has shifted worldwide and if it hasn't it soon will.
I think most of what people consume is created by industrial manufacturing in attaining the raw materials, designing the devices, building the goods and shipping them. On selling and design we may be changing to a non-industrial model but raw material gathering, recycling, production and shipment is still done on an industrial scale.
Using the word post-industrial, in the sense I think of the term, would be like calling our current society post-agricultural. We have an information economy, with a socialist economy, an industrial economy and an agricultural economy.
To the OP's point, I think entertainment and other easily transmittable information being market driven may gradually decline as society adjusts to getting it for free and the producers giving it away for free. This will require a change to the social contract that those who produce this kind of thing can make a living at it even though they are not selling it. No idea how that will happen.
I suspect that will produce many more people pursing creative fields full time who would otherwise not be able to in a market driven economy. The end product may also end up fundamentally different and I do not know that anyone could say for certainty what the quality of media in such a society would be.
Then why is unemployment so high? Why are companies sitting on massive cash reserves that they are doing, essentially, NOTHING with?
we have a large supply of capital and a large supply of labor yet no demand for either has been created.
Seriously though, this is why I'm happy I'm not living in a very capitalist society, one that uses capitalism in those areas where it benefits people instead of looking at it as an end goal in itself.
So much more flexible as our technology and science advances.
Yes I understand that's what you're saying. Its unsupported by reality. Demand expands to meet supply. It has nothing to do with the United States society. Its a much older phenomenon than that. It goes back to any time that humanity exceeded sustenance hunting and gathering. Its called advancement.
Hell Capitalism is built on this very concept. Its the central assumption that a person or people can produce more than they would want or need. The excess between what they want/need and what they produce is called profit.
QEDMF xbl: PantsB G+
The current unemployment rate is half that of the Great Depression. Excess productivity doesn't cause economic collapse.
Hell, excess demand - in the form of people buying homes that exceeded their ability to pay for them causing a crash in real estate and a loss of general confidence- has a lot more to do with it than the idea that we've crossed some kind of theoretical threshold where economic theory doesn't apply due to excess productivity.
QEDMF xbl: PantsB G+
I'm pretty sure 'supply creates its own demand' has been thoroughly discredited in mainstream economic thought.
But unless you've found a way to torrent corn, iron ore, plastic, Coke, etc we're nowhere fucking close to a post scarcity world.
1: its worth noting that you may need to adjust to a kickstarter sort of system if you don't trust copyright, but that's not a huge difference.
Existance is built on the idea that people can produce more than they need, but full employment capitalism is based on the fact that demand is ALWAYS greater than the amount of goods that everyone working together could possibly produce. Wants are not needs, they are different. If overall demand is no longer greater than overall possible supply then unemployment is inevitable without intervention.
This is not a post scarcity society, this has very little to do with it. It's a post scarcity society in the same way that a pony is a space shuttle. People still need to work, dig, build shit, be creative and so on but we just need less people doing everything. Large segments of the population must go to work but it will no longer be true that everyone is required.
The supply of [good music] is not infinite in that there are a finite number of works of music that you'd enjoy. The supply of any given work of music pretty much is. And what's a reasonably price for a commodity that I can have 1 or 1 million copies of for essentially the same cost? $0, basically. Which is what the piracy debate is really about; content is essentially valueless as a commodity these days. It's kind of a 'what if money actually DID grow on trees?' situation.