'With industrial society, on the other hand, we work as much as possible because it is labor that gives us money. '.
Labor doesn't give us money. Creation of value in goods or sevices (as perceived by others) which may or may be accompanied by proportionate labor provides us with money. Marx, a clever man, nevertheless made this fundamental mistake.
Exactly. That's basically the one thing the author fails to acknowledge. Money doesn't magically appears from labor. It results as a voluntary exchange between a worker and a employer. There's no "capitalistic system", unless you consider "economic freedom" to be a "system".
This also shows that labor still is connected to needs, despite what the author claims. Somebody wants something done, finds someone willing to do it for money, and they make a deal. Nothing new under the sun, except our society is much richer in needs of various forms which might explain why the author has the feeling our "pace of lives" is much more intense than "that of our grandparents".
"Economic freedom" is a loaded term that carries a lot of unexamined ideological baggage. It presumes without evidence that unconstrained markets allocate resources better than regulated markets. It's a strongly held belief that is impervious to experience.
Since "free" is better than "unfree", naturally economic freedom must be better than any alternative, right? But word games like this don't shine much light on what actually works in the real world.
What happens when free-market ideology meets the real world? Let's compare the labor markets in Germany and California.
The German minimum wage is about $10.78 at current exchange rates, 20% higher than California's recently increased minimum of $9.00. Germany has far greater and more intrusive regulation. German taxes are much higher. In almost every way, California has greater economic freedom than Germany.
What are the results of California's relatively greater economic freedom? California's economy produces a few more billionaires than Germany does, which benefits a small number of people. But the vast majority of Californians are worse off than Germans.
The unemployment rate in California is much higher than in Germany. More Californians want jobs but can't find them, or are working part-time when they want full-time work. Millions of Californians don't have health insurance or retirement security. More Californians than Germans are homeless, living in their cars, or in abandoned buildings, or on the streets, or in shelters. More Germans get at least four weeks of paid vacation per year than Californians.
Where is the empirical evidence that "economic freedom" delivers better results for more people than other systems? On the contrary, free-market ideology seems to create extremely good outcomes for the few at the expense of the many.
>There's no "capitalistic system", unless you consider "economic freedom" to be a "system".
"Economic freedom" is merely an emotive label applied to certain aspects of the current system, which is defined as much by people being unable to use underutilized economic resources without contracting with other parties as it is by there being relatively few restrictions on the nature of contracts and associations that might be made. An economic system in which people didn't have to contract with "owners" in order to use their surplus land or equipment or fork their codebase is arguably more "free" (though in many respects likely to be less productive). Trivially and infinitely replicable software is substituting for elements of expensive physical capital as much as for human labour, and the necessity and defensibility of IP is a concept subject to rather more challenge that the concept of working for a living.
I'd agree with you that the author is well wide of the mark on the assumption the useful services we can provide other humans are being automated away. That argument, along with labour-based theories of surplus value, and the idea of self-sufficient communities feels dated rather than futuristic now.
Well, creating jobs means that money get's given to those that get those newly created jobs. Now, I agree with the OP's assertion that it's kinda ridiculous to claim that labor automagically creates money. But the end result in this case is that money spent on "job-creation" is money that is given (or if you want to go further, redistributed) to those that got the jobs.
I think that we've somehow, as a society, been convinced in thinking that state-intervention needs to "create" jobs because industry won't do it by itself. That's the assertion we need to fix/educate about, not the one that job creation means more money, as you claim.
No, not all (or even most, or even much) of our society is built on that assumption in this day and age, thank God. The era of the New Deal and Soviet Russia, maybe.
Creation of value doesn't even give us money anymore. Money are now days created to keep the system stable. There are far more money in the system than there have been value created.
When a bank for instance in Denmark lends you 300.000USD it actually ads 300.000 to the economy out of no where.
We live in a world where there is no direct correlation between the value of goods or services and the creation of money.
> When a bank for instance in Denmark lends you 300.000USD it actually ads 300.000 to the economy out of no where.
No - it does not. You have completely misunderstood how money works. There are two entries in the ledger, not one. The credit of 30K and the liability of 30K which together cancel out. The only surplus comes from interest and fees.
No, he's actually right. Banks create money and it's totally a well-known recognized widely-accepted economic phenomenon, and it is trivial to look up the logic -- use Google.
The thing to criticize him on is the idea that the money is "not related" to the economy. If you borrow $300,000 USD, it's precisely because you plan to use that money to make a difference in the economy. Moreover, broad statistics are available on price stability, tracking the value of money against a value of a basket of goods like the "consumer price index". Most years the value of the dollar is stable to within 2%. If you actually want crazy uncorrelated money-creation in USD you'll have to go back to the 1980s.
> There are far more money in the system than there have been value created.
Poppycock of the highest order. The US economy generates about $16.8 trillion a year. Its wealth is estimated at ~$120 trillion. M2 is about $11 trillion.
Which I can understand, because it's only in recent years where labor and value have gotten quite obviously disconnected. To the point such that we've got quite a lot of data points to assert that the theory doesn't hold true anymore.
"A social movement that would directly occupy the workshops and the factories. Capitalism is abandoning many productive forces, because they are no longer profitable, but they are still capable of functioning effectively"
That won't work. Imagine you've occupied a factory, and it needs a 20 $ worth of oil to produce a shirt. Meanwhile you can only sell that shirt for 15 $.
You can think of most things around us as of made from oil (i. e. energy). Once you spend more energy than you can buy after selling your wares, you are bankrupt. This is why deindustrialization happen and why you can't overcome it by snapping fingers.
I suspect most of what is said in there is well known to the HN crowd, but it's all put together in a very pleasant video and is a nice thing to link to people who don't understand just how far along we are in the process of automating a lot of people's jobs.
The use of the word "system" here is obviously a rhetoric device. Only far-left-oriented people use this term.
If you ask the question, "What will we do if the system can no longer create jobs?", it's hard not to see this question as suggesting the answer "well, we change the system.".
But what if I phrase the question like this: "What will we do if economic freedom can no longer create jobs?". It's much harder then to answer, "well, we abolish economic freedom", isn't it?
Capitalism is all about the right to exchange and collect means of production. It's a natural consequence of economic freedom.
It can be worrying if technology turns many people's labor useless, thus questioning their means of sustaining their lives, but to me that's not enough to question the rights of the others.
The word system make total sense as long as you are only using it as an observation post.
The left have normally been fairly right about their criticism of parts of the capitalist system.
Where they normally go wrong is when they start suggesting another system i.e..
Capitalism is not about right to exchange there is no right in capitalism that is in liberalism. Capitalism is an economic system that just is.
There is clearly something thats not working and it has nothing to do with economic freedom or lack thereof but everything to do with technology and how it affect our current system.
> Capitalism is not about right to exchange there is no right in capitalism that is in liberalism. Capitalism is an economic system that just is.
Even if I'm ok with calling capitalism a "system", it still is a "system" which consists in abstractly dividing capital into shares that can then be exchanged on a market.
This "system" is an abstract representation which you can't do without unless you prohibit the use of maths or freedom of exchange. That's what I meant: capitalism is a natural consequence of economic freedom. Calling it a system sounds very derogative to me as it colors it as artificial and optional. It is not.
Well I can't be held responsible for your use of the term system. I use it like it's used normally which implies both articial and natural (eco-systems.
Everything is an abstract representation at the end of the day. Capitlism not less so. And everything is the natural consequence of something.
You seem to be doing exactly what you accuse the OP for which is playing rethorical games instead of addressing the actual points the article is going through.
I'm not sure if it's what you are implying , but would you really be comfortable allowing people to starve if the value of their labor drops below that required to sustain them?
We're no where near that point where the value of their labor is less than what is required for them to feed themselves, and yet millions of people a year go to sleep hungry, or die of starvation, have their growth stunted, etc.
I am totally not comfortable allowing people to starve. That is why I pay taxes, and I expect them to be fed using that money. And I am downright pissed-off that it's still an issue.
I don't think it's capitalism that you should be directing any undue criticism over "value of labor" when it's currently government that is the cause#1 of hunger/starvation.
#1: They're the cause because they're not fixing it.
Very few people starve to death in first world countries, at the same time however there are millions of people who are completely unemployed and would likely be unhoused and without food if it were not for gov welfare programs.
The correct question to ask is what happens to these people when they have nothing to lose AND have access to guns. We ony have to look a bit south of our border for those answers.
Are you suggesting that we currently enjoy "economic freedom" or that Capitalism in it's internet-libertarian definition is synonymous with "economic freedom"? Also, "Communist FUD" doesn't do you any favours.
We have a system where an individual who happens to have wealth is generally allowed to take the wealth, purchase capital, use the capital (or pay someone to use the capital) to create something that he or someone else will value, and then either use that something himself or (attempt to) sell it to a third party for More Wealth.
Notwithstanding a variety of reasonably important things like Taxes or Labor Market Regulations or even Regulatory Capture which detract from the purity of this model in practice, this is:
(a) essentially the textbook definition of what 'capitalism' is (b) a natural consequence of the combination of property rights and basic economic freedoms like "i can purchase capital" -- be it a billion-dollar oil rig or a fifty-dollar sewing machine (c) and a common path taken by many or most people who have some wealth and wish to obtain more wealth, be they entrepreneurs themselves or ordinary people saving for retirement or homeowners looking to save money by insulating their basement or what the heck ever.
So yes, in a general way we do enjoy that sort of system, and if someone has some explaining to do around here, it's actually you. We're not in some sort of political echo chamber such that you just say "capitalism" and people will automatically translate that to "Satan, and all his evil works, and all his empty promises" and implicitly remind people of their mission to elect ${politician} to support ${cause}. What do you redefine these words to mean?
> We have a system where wealth is accumulated. If that wealth goes in fewer and fewer hands then there is no economic freedom.
Ah. You're using the word 'freedom' to mean 'power'. This means you can raise the specter of power being concentrated in a few hands to advocate for concentrating power in a few (powerful politicians') hands, and at least it won't sound utterly ridiculous. Clever.
In a few countries they will give you a flat fee as long as you are unemployed (UK) but in others it's linked to your previous salary and only for a short time (Spain and Germany). Others I don't know much about.
> but in others it's linked to your previous salary and only for a short time (Spain and Germany)
That's the unemployment benefit but if / after you're not entitled to that, you get different benefits. In Germany it's 382 EUR + housing and healthcare expenses according to wiki.
You're not thinking in the grand scheme. The shift from full employment towards (idealistically) full automation requires drastic paradigm shifts in how we view economics.
Just try to contemplate this question: what would a society, an economy look like if everyone was provided with everything for their basic needs, like a house or a flat, food and an "allowance" to participate in social activity, people could still be able to choose to work if they wanted to, but not working would not be frowned upon? How would this society develop, what would people do because they can do what they please all day, what would the influence on society's creativity and inventiveness be?
"Basic income would negatively affect our current economic system" is not the right answer to that question. Automation will not become less, full employment will be less and less feasible, so answering these questions will be inevitable.
I think there are at least three answers to the problem.
1. Basic income. Redistribute wealth, since enough wealth
is produced, it just isn't available to everyone.
2. Force everyone to work less (for more money). If you
lower the maximum number number of hours people are
allowed to work, more people will need to be employed to
do the same amount of work. You would probably need to
accompany this by an increase in minimum wage.
3. We could all do more. Government could take a more
active roll in back-filling demand. If we decided to
employ a million more doctors, or revamp the entire
power grid, or build a Moon base, or colonize Mars, or
move Mars into orbit around Venus, or accelerate Venus's
rotation to support colonization, we could easily
achieve full employment.
I mostly agree with you, but there are a couple of things to keep in mind:
1) With full automation, scarcity is pushed down, availability up, cost down, so price necessarily is pushed down.
2) Companies have a tendency of trying to avoid killing the golden eggs goose, and decreasing prices by higher availability is usually frowned upon by the people making the money, understandably so, I might add. It's perfectly rational, it just sucks for everyone else. Just look at the history of the music, books and movie/TV entertainment industries.
3) The road from "here" to "there" is going to be necessarily tumultuous, no matter what, precisely because of 2). I'm sure we'll get that omelette, but eggs on every side will be broken.
4) There is a sizable percent of the population (let's say 10%, pulling it from my backside) that have not found any artistic, professional or personal aspirations, regardless of social class. It might sound like I'm dissing "those" people, but I'm not. People are wired differently, and just in the same way a Linux user doesn't understand why somebody would be a VB.Net developer, or a programmer why anyone would be a lawyer, that doesn't mean those people are lesser in any way, they just have different interests and motivations. The increase in "leisure time" should be accompanied by an increase in availability and promotion of "entertainment" (I believe "pursuits" would be a better word) of many different kinds, to have a higher chance of people actually finding what does drive them.
Not necessarily. Prices might rise because minimum wage labor gets more expensive (competing with BI) but excess profits will get sucked out of the system fast by competition.
Not a great article on this topic. But still interesting.
The main points I see in the article, are that weak labour = weak market, and not every country can be an exporter.
It seems that pressure to increase profitability, ends up exerting itself by reducing labour utilisation (via efficiencies or other means). Which (can eventually) in turn, exert further pressure to increase profitability (due to a weaker market).
What I find disheartening is, the current tools governments have to improve the situation are hamstrung in a global environment.
* Corporate Taxation wont work without global reform
* Minimum wages, employment conditions, and other regulations don't work if the job can be outsourced / performed overseas
* Import tariff's on the former, usually result in your own exports being penalised (in retaliation)
* Existing players wish to maintain the status quo
The other issue, is "free time". There could be a considerable portion of the labour market are willing to take a part time-job "for the love of it" with their free time. Effectively volunteering or taking a "token" wage.
Industries accessible to hobbyists / free timers, will suffer a further devaluation of labour, if they haven't already. Anecdotally, it appears this has already started for some roles like teaching / professorships.
The odds seem firmly stacked against a good percentage of the global population. Hopefully those capable of making lasting change do so, before it's too late.
> But what takes place is just the opposite. Today we work much more than ever before. All you need to do is to compare the pace of our lives and that of our grandparents.
A German philosopher says this to a Portuguese interviewer, and it is not questioned? I am convinced that most people in Europe nowadays work less and less hard than they did 40 years ago. I can understand that it is not questioned on HN, given that most of us live in a culture where working 80 hours a week is considered normal, but in Europe? Come on.
I'm from the Netherlands. My grandfather was an old man at 65, tired and broken from a life of hard farm work. When I came to visit as a child, we'd talk a bit and that was it. My parents, now older than my granddad then, play with my son with vigor and love. They're fitter and happier, because they didn't work as hard.
I work 4 days a week. My girlfriend three. We don't consider these numbers a temporary situation. Everybody I know thinks what we do is normal.
I didn't look up the stats, but it seems to me that either I'm really weird, or the quoted philosopher likes to selectively pick out those facts that support his rant.
A German philosopher says this to a Portuguese interviewer, and it is not questioned? I am convinced that most people in Europe nowadays work less and less hard than they did 40 years ago. I can understand that it is not questioned on HN, given that most of us live in a culture where working 80 hours a week is considered normal, but in Europe? Come on.
This is surely correct for a great many working people in many parts of the world. Moreover, the span of life over which people work is shorter at the young end, as people pursue more schooling before entering employment, and a reduced percentage of lifespan at the old end, as people have many years of retirement in reasonably good health with retirement benefits.
P.S. I fear there was a mistaken downvote here, because this is a good comment.
Northern Europe. There are others like me, though I don't know how many there are. The problem is that there are some serious holes and twisted disincentives built into the welfare system. Basic income would be godsend.
For instance they complain that people spend too much time in their studies, and are trying to incentivize people to graduate faster by granting some benefits related to the student loan if you graduate on a planned timeline. In my case however, I would get more if I had postponed my studies instead of starting studying in UoAS this year. I'd get more still if I dropped out of school entirely and lived on social security, unemployed...
I know other people who are in a similar situation. For example, unemployed and unqualified middle-aged men with families and kids to feed. For them, the students' benefits are impossible to live on so they're incentivized against getting an education. They can somehow make it though, through crazy hoops than make no sense for the state nor for themselves.. it makes no sense for anyone.
It's not clear what this all will lead to. I'm expected to graduate in about four years. The job prospects in my area have been piss poor (this reflects badly on my CV), and it's not sure yet whether they're getting better or not.
So yeah, my lack of money is in part my own choice. I chose to study because I want to graduate sooner rather than later. Either way it sucks. And people around here want to downvote me for not wanting to pay $40 for a game/movie/book/software. Not realizing that it's almost two weeks worth of food for me...
But some of the people are in the situation they are in now because some time ago, it was easy to get by. You didn't need qualifications if you were willing to work. That's how we got people who are now in their mid-to-late 40s, with no formal education. And they're suffering for it because today getting a job just isn't the same.
And looking at how it goes today, young people are expected to spend a small eternity in educational institutions, and finally they come out with a piece of paper which states that they have the bare minimum of knowledge everyone else in the field already has. So they have to compete against every other fresh graduate, as well as everyone else who's already got a job history & real world experience to boast with. It does make me feel that maybe my grandpa had it better. And no, he wasn't a farmer.
Out of interest, did you buy a property before the credit bubble? Here in Spain, and in the UK, people of a certain age (baby boomer generation) seem to be doing pretty well, while it looks like the younger generation are expected to pay for it.
Hmm, I'm not sure I entirely follow your logic, but no, I bought my house after the credit bubble. Still, it is currently worth less than when I bought it. I'm not happy about that, but I can just stay a homeowner until the prices are back up (if ever) and it won't hurt me much.
No, I won't. HN is a place for civilized discussion, but not a place where only deeply and scientifically researched observations may stand a chance. It's so easy to debunk an argument with "you have no stats". I bring just as many stats to the table as the philosopher in the article, and we're here, discussing the article, no?
Ants consume many more resources than we do, not to mention bacteria. We are part of the environment, and our impact, as horrible as it seems, is not consequential in the big picture (though we will hurt ourselves if we don't conserve, for sure).
Well, that's a silly question. The answer is simple: "change the system."
There are enough parameters in "the system" that we should be able to change almost any single one of them and get some improvement in employment numbers. Change wages, change education levels, change the scale of industrialization, change the number of humans working, change laws surrounding mergers/acquisitions, etc.
The real struggle here is getting anyone to do any of these things consistently, and then measuring the results.
By doing blind changes you have much better chances of ruining the society in question. Blind evolution works, but it does so by killing most of its subjects by a painful death.
Labor doesn't give us money. Creation of value in goods or sevices (as perceived by others) which may or may be accompanied by proportionate labor provides us with money. Marx, a clever man, nevertheless made this fundamental mistake.