Social Calculation and Coordination Problems

February 28, 2011 7:28 AM

Trust, Coordination Technology* & The Experience Economy - "It could be that the nature of technological change isn't causing the slowdown** but a shift in values.*** It could be that in an industrial economy people develop a materialist mind-set and believe that improving their income is the same thing as improving their quality of life. But in an affluent information-driven world, people embrace the postmaterialist mind-set. They realize they can improve their quality of life without actually producing more wealth." (via mr)

also btw, here're some TGS critics:
-BOOK REVIEW: THE GREAT STAGNATION
-Tyler Cowen and "Act of God" Economics
-Don't Worry, Be Unhappy

BONUS
-Microconsignment [1,2]
-Social Impact Bonds [1,2]
-How Skyscrapers Can Save the City [1,2]
-Shirky: Facebook and Twitter Speed Up Revolutions [1,2]

---
*SRW makes a list "from assembly lines to the limited-liability joint-stock corporation," which might also include money, cities, co-ops/employee ownership, war, religion, moral/emotional/primal appeals (marketing), scientific processes/empiricism, government/NGOs and social networking, etc., i.e. techniques inducing/enforcing agreement -- either thru incentives, coercion and/or reason -- for the coordination of collective action to produce/achieve social outcomes, cf. Two followups, in way too many words & The Problem of the Commons: Still Unsettled After 100 Years, viz. Veneer Theory
**more on demographics
***previously

posted by kliuless (46 comments total)

The post about everything?
posted by grobstein at 8:06 AM on February 28, 2011

It's a post about the economist Tyler Cowen's theory that we are in an age of economic stagnation: partly because we've already made all the easy economic gains, partly because recent technological innovation is giving us improved leisure rather than generating jobs, productivity and growth.
posted by TheophileEscargot at 8:20 AM on February 28, 2011 [1 favorite]

For the past few decades, Americans have devoted more of their energies to postmaterial arenas and less and less, for better and worse, to the sheer production of wealth. During these years, commencement speakers have urged students to seek meaning and not money. Many people, it turns out, were listening.

The elite fraction that busily and effectively put a stranglehold on wealth and political capital during those decades sure weren't listening. That hasn't exactly left the rest of us with much choice.

There hasn't and will not be any seismic change in values - most people are still very interested in material things, they just have less and less of a shot at ever getting them.

Some folks will throw up their hands and try non-material avenues to happiness (difficult when the material things you're being denied have to do with food and health care, though.) The majority are going to keep doing what they're doing now, just harder and more desperately, and with steadily diminishing returns. Hoping for a different outcome while the ship lists and then finally breaks up.
posted by ryanshepard at 8:25 AM on February 28, 2011 [11 favorites]

ryanshepard, that was lovely. poetry even.
posted by daq at 8:53 AM on February 28, 2011

Makes me think of Slavoj Žižek's take on Buddhism and global capitalism.
posted by fleetmouse at 9:21 AM on February 28, 2011

I'm generally a fan of Cowen, and it's a provocative book, but it depends on the claim that total factor productivity is down while doing quite a lot to ignore the possibility that GDP underestimates real income growth. Cowen uses sleight of hand to show you that possibility then deny it, without ever giving us any good reasons. We're supposed to believe that the entire computer revolution is reducible to a few Facebook status updates and a bunch of pirated music, and that's just not persuasive. The third richest man in the US owns a business database company. Granted, Oracle is pretty incompetent and coasting on unearned reputation and contractual legerdemain, but Larry Ellison is in a whole different class from Biz Stone.

More to the point, the book mostly discounts the claim that the largest kind of inequality, between the developed and the underdeveloped world, has shrunk substantially even in the last decade. Since that's the inequality that kills the most people, it seems like an important consideration.
posted by anotherpanacea at 9:22 AM on February 28, 2011

anotherpanacea: as an aside, any idea to what extent this noted decrease in inequality you allude to is due less to any particular improvements in developing world conditions (where my intuition is we're still seeing a fairly steady litany of woes from follow-on effects of worsening environmental conditions and from violent conflicts, including increasing numbers of displaced refugee populations around the world) so much as simply declines in the developed world.

Eliminating inequality by erasing previous unequally shared gains and making everyone a little more miserable--if that is, as I suspect, what's really happening--might be satisfying to some of the more sadistic human moral impulses, but it's not really what I would consider an improvement on status quo.
posted by saulgoodman at 9:40 AM on February 28, 2011

It's a post about the economist Tyler Cowen's theory that we are in an age of economic stagnation: partly because we've already made all the easy economic gains, partly because recent technological innovation is giving us improved leisure rather than generating jobs, productivity and growth.

I think recent technological innovation is giving us lots of productivity, with no job creation. Despite claims in other threads, the USA still manufactures a lot stuff, it just requires less people. All the unskilled-low paying jobs have either been moved aboard or automated to require a tiny fraction of the workers.

Here's a thought provoking article about the depression:
http://www.advisorperspectives.com/newsletters09/Bruce_Greenwald_on_Structural_Problems.php

There is entire side conversation about over-optimization which while leading to short term profit increasing, might expose various industries to destructive black swan. The rare earth uproar a few months, highlighted this issue.
posted by KaizenSoze at 9:53 AM on February 28, 2011 [1 favorite]

saulgoodman -- you aren't seriously doubting that the populations of China and India (2 billion plus people right there) have gained economically a lot in recent decades, are you?

Sure there has been a lot of pollution and other side effects, same as the West suffered when it industrialized, and probably much less severe than when we went though it. But, come on.
posted by msalt at 10:32 AM on February 28, 2011

... and probably much less severe than when we went though it.

Pollution in China

Interview with photographer Lu Guang
posted by ryanshepard at 10:42 AM on February 28, 2011

I think we need to establish a new way of understanding and compartmentalizing utility. Utility gained from material things and purchased experiences can be absolute or positional. By absolute I mean things that really do make your life more fun, interesting, satisfying, enjoyable, conveinent, or comfortable. This covers a lot of stuff but most of this is pretty easily available.

I'm not particularly well off. Like at all. But I'm also far from being poor and when I think about the things that I want but don't have they mostly fall significantly in a second category of things which I'm going to call positional utility. It's basically goods whose utility is tied to their exclusivity, to their signaling value, to their rarity. Now very few things offer only positional utility, but if you look at a luxury car, or a meal at a nice resteraunt, or designer clothing, or a nice cigar leather trunk from restoration hardware, those sorts of things, you'll find that a lot of the utility that comes from the goods is wrapped up in the goods furthering the purcharsers self-conception as one of life's winners or impressing others. Utility that comes from signalling outwards and inwards. Hell, a lot of medicine is positional rather than absolute. It isn't as though your life expectancy sky-rockets when you move from making 60,000 a year to 2,000,000.

The thing about the second sort of utility is that it really is a zero sum game. Me buying a fashionable sport coat makes my life better but it does so largely by distinguishing me from poorly dressed men. I'm using my money to get the feeling of moving up the status hierarchy and to let other people know that I have done so. This advancement happens by displacing the next marginal person from the status hierarchy.

My big problem with Cowen and his 'low hanging fruit' example is that it is a supply side theory rather than a demand side theory. When I think of the low hanging fruit I think of things like cheap clothing, cheap food, effective prevention for infectious disease, etc. It is a struggle for me and many other first worlders to think of a purchase no matter how extravagant that would meaningfully make my life better if no one else knew about it.

Our preocupation with economic growth is a hold over from a time when there simply wasn't enough to go around. From the days when not everyone could have central air. It isn't like that anymore, or at least it doesn't need to be. Economic growth doesn't really get us anywhere anymore because for most of us there isn't really all that far to go. We can focus on making sure that everyone has the same basic stuff that we take for granted, making sure that our affluence is sustainable, and then, I don't know, not working so damn hard. If we come up with some new must have technology (netflix streaming) then great, more power to us, but as an organism we can only be so happy. We can only be so content, and we're operating damn close to that horizon.
posted by I Foody at 10:58 AM on February 28, 2011 [6 favorites]

Like too many things he writes about, Zizek either does not understand Buddhism or is uninterested in trying to understand it beyond his narrow purposes. As if Buddhism was one thing. But whatever, that doesn't stop him from manufacturing these weird, David Brooks style oppositions. [/aside]

Nice post.
posted by hank_14 at 11:00 AM on February 28, 2011

you aren't seriously doubting that the populations of China and India (2 billion plus people right there) have gained economically a lot in recent decades, are you?

No, but those gains haven't necessarily been evenly distributed, and China and India aren't the only two developing countries in the world. I'm just wondering if there's any detailed data that really digs into these questions in a way designed to avoid falsely equating GDP growth with measurable improvements in general prosperity. Yes, China reputedly has a middle class now, and it's larger even than our own, but its still a relatively small proportion of China's population overall. And although India has seen improvement, there still very much appears to be an entrenched oligarchy in India that benefits disproportionately from that nation's economic growth.
posted by saulgoodman at 11:12 AM on February 28, 2011 [1 favorite]

No, but those gains haven't necessarily been evenly distributed

They never are. Doesn't mean life isn't getting better with better oppurtunities for everyone. Sure the rich are getting richer, but the poor are getting richer also but probably not as fast. Same as it ever was. This is also very true in our country, although the gains are starting to get dangerously lopsided here if you use the existing metrics. However I expect there is more going on then the old measures can, well, measure. It is materially better to be poor here now than it was 40 years ago. I know this because of my families history and our quality of life getting better even though I don't really make more than my father did 40 years ago. But my life is much , much easier, I didn't grow up working on a farm with toxic chemicals and the kids being useful labor (very common on family farms in the US until the 1980's). i can easily afford more entertainment than I have time to enjoy, I can easily afford more than 1 car (mostly because I was taught how to maintain old ones but still...). Plenty of high quality (meaning non-tainted not necessarily healthy) food is readily available for a much lower percentage of total income than ever before in history. The list goes on. This article strikes close to home for me and maybe the old measures of GDP and wealth distribution are not as useful and meaningful as we think they are.
posted by bartonlong at 11:28 AM on February 28, 2011

However I expect there is more going on then the old measures can, well, measure. It is materially better to be poor here now than it was 40 years ago.

I don't think that's consistent with my experience at all.
posted by saulgoodman at 11:41 AM on February 28, 2011

Not as someone who is personally poor, but as someone whose family is working class and who's seen a lot of poverty up-close.

My family might have some more stuff (not really even that much though), but we've got far less security and social and political power.
posted by saulgoodman at 11:45 AM on February 28, 2011

where my intuition is we're still seeing a fairly steady litany of woes from follow-on effects of worsening environmental conditions and from violent conflicts, including increasing numbers of displaced refugee populations around the world

I think your intuition is not born out by the facts.

I'm just wondering if there's any detailed data that really digs into these questions in a way designed to avoid falsely equating GDP growth with measurable improvements in general prosperity.

Take a look at the Millennium Development Goals Report for 2010.

And although India has seen improvement, there still very much appears to be an entrenched oligarchy in India that benefits disproportionately from that nation's economic growth.

There's always somebody with more than somebody else. If you want to avoid what you called the "sadistic human moral impulses," focus less on who's got more than you, and focus more on who has less.

There's always somebody dying. Someday, it'll be you and I. The question of absolute inequality is about the quality of our lives while they are lived, about the numbers of people dying of easily-treated poverty-related diseases, or living under the threat of daily violence, or oppression, or intolerance. As a species, human beings are doing better in 2011 on those things than in any time in the past, even with the Second Great Depression nipping at our heels. Relatively rich Americans (who think of themselves as middle class only by comparing themselves to richer and poorer Americans) have taken a bit of a hit, it's true. We've found ourselves stumbling just as the rest of the world begins to catch up. But they are catching up, and the absence of an iPhone app as revolutionary as the Model T automobile can't possibly matter as much as that. Everything else is just ressentiment.
posted by anotherpanacea at 12:44 PM on February 28, 2011 [1 favorite]

Take a look at the Millennium Development Goals Report for 2010.

I'd just point out the whole Millenium Development Goals project has been roundly ridiculed as basically just being malarkey all over the place.

focus less on who's got more than you, and focus more on who has less.

Huh? That's exactly what you're doing. Saying its okay for people here to see there conditions decline because conditions elsewhere might be improving. From where I sit, you're the one suggesting we look at this as a contest in which "our side" has to accept some losses because those others have it so much worse and we should be ashamed.

That's classic false consciousness class warfare nonsense. We're all in it together, and we shouldn't ignore declines in anyone's standards of living on the basis of improvements somewhere else. You're implicitly viewing this in terms of one group being pitted against another here.
posted by saulgoodman at 12:50 PM on February 28, 2011

In other words, I'm not saying gains elsewhere aren't good--just that those gains have nothing to do with declines here and to promote this view that our own standards have to be brought down to raise standards elsewhere is not only a sham, but one of the oldest shams in the book.
posted by saulgoodman at 12:52 PM on February 28, 2011

"...their conditions..." dammit.
posted by saulgoodman at 12:56 PM on February 28, 2011

Isn't this why illegal drugs are illegal? Or, as somebody said on here a while ago, weed helps through times of no money better than money helps through times of no weed.
posted by yoHighness at 12:59 PM on February 28, 2011

Here's some of that criticism of the Millennium Development Goals I claimed above. Among other things, the project relies on sketchy and incomplete data.
posted by saulgoodman at 1:01 PM on February 28, 2011

Here's some of that criticism of the Millennium Development Goals I claimed above.

Seriously?

Among other things, the project relies on sketchy and incomplete data.

There's a difference between noting that the data frequently depends on household surveys and saying it's being falsified. But household surveys are how we figured out the mortality rates in Iraq: the law of large numbers tends to smooth some of these weaknesses out, when appropriately applied and caveated and margin of error'd.

we shouldn't ignore declines in anyone's standards of living on the basis of improvements somewhere else.

There's a difference between a decline and a failure to grow at the expected rate. There hasn't been a decline in the median income in the US, just slower growth of the last thirty years than there was in the thirty that preceded it. I for one think this is a great time to start working on more domestic redistribution, but that doesn't mean that the the slowdown can somehow be blamed on income inequality. It's just diminishing returns.

we've got far less security and social and political power

I'm not sure what you mean about security, unless it's the loss of job security, but neither my parents nor my grandparents ever had that, because they couldn't get work in a union. My grandfather did actually eventually get work at a union shop, right before they went out on strike for two years. Then he had a heart attack. Union members used to beat my dad and his brothers up for "stealing their jobs," i.e. doing roofing work in the sixties in Philly without a union card. They couldn't get into the union, so my Dad ended up having to volunteer for the army.

My Dad's favorite meal is baked macaroni and spam, because that's what it meant to have meat for dinner when he was a growing up. Five people split two boxes of pasta, two cans of spam, and some cheddar cheese.

As for political power, you should have less than your parents did. In 1981 there were 80 million fewer people in the US, half of whom were diempowered because they were women, and about 30% disempowered because they were not white. So if you're weaker, politically, than your father was, it's because there are more people trying to reach a decision, and a lot of them weren't even getting heard when your father was flexing his (and probably his wife's) political might.
posted by anotherpanacea at 1:30 PM on February 28, 2011

There's a difference between noting that the data frequently depends on household surveys and saying it's being falsified.

Who said anything about it being falsified? That seems just a little too paranoid. No, the second link was to a discussion about the unreliability or outright unavailability of much of the data measured by the development goals project from many poorer countries. Interesting you would jump to the conclusion I meant to suggest some kind of fraud. Deliberate fraud hadn't even occurred to me in this case. Should it?

So if you're weaker, politically, than your father was, it's because there are more people trying to reach a decision, and a lot of them weren't even getting heard when your father was flexing his (and probably his wife's) political might.

And yet, that hasn't stopped the relative political power of the wealthy from increasing all the while, and I've seen that with my own two eyes.
posted by saulgoodman at 1:50 PM on February 28, 2011

You should read the link you pulled off google and apparently posted without reading. It doesn't say what you think it says.
posted by anotherpanacea at 1:53 PM on February 28, 2011

Thorstein Veblen called from 1899: he wants his Theory of the Leisure Class back.

That's classic false consciousness class warfare nonsense.

Suggesting that anyone who disagrees with the Marxist evaluation of their class membership and economic interest is deluded is a fallacious and rather offensive argument, good only for deflection or derailing an opponent whose view has become difficult to refute. I've lost a great deal of respect for Marxist theory and its adherents over the years, because it's really little different from the religious zealot's claim that 'if you read my holy book and had my faith, then you'd agree with my beliefs.' Technically this is true, but it does not follow that the person's beliefs have any validity.

We're all in it together, and we shouldn't ignore declines in anyone's standards of living on the basis of improvements somewhere else. You're implicitly viewing this in terms of one group being pitted against another here.

How is his perspective any different from your view that 'we're all in it together' against a wealthy elite, whose standard of living would presumably decline somewhat if their wealth were confiscated or taxed more heavily? I'm actually in favor of raising marginal tax rates (though not as much as some people), but your argument here seems to rest on the notion that all wealth must be the fruits of exploitation and is therefore illegitimate anyway, or something similar.
posted by anigbrowl at 1:59 PM on February 28, 2011 [1 favorite]

You should read the link you pulled off google and apparently posted without reading. It doesn't say what you think it says.'

I didn't "pull the link off Google"; I just linked to a Google search for those search terms because there's so much criticism of the Millennium Development Project it didn't seem worthwhile to focus on only a couple of the criticisms. You know, I'm sure other people out there who pay attention to this kind of stuff have heard the criticisms by now--they've gotten mainstream media attention, so I don't know why you're pretending there's some controversy about my remark that the project has been broadly criticized for various reasons.

I don't even care about Marxist theory, anigbrowl. I'm not even a Marxist. But the particular Marxist formulation of false consciousness succinctly captures for me what anotherpanacea's comment was really meant to suggest: gains in the developing world excuse losses elsewhere. It's us against them, only they deserve to win. And I can only imagine how sheltered anyone who honestly thinks the economic declines in the US haven't really been felt or aren't really all that serious must be, because there are far more ordinary people than I'm comfortable with seriously discussing the possibility of revolution in the US these days, and I'm not even one of the elites who stands to lose a lot in such an exchange.
posted by saulgoodman at 2:11 PM on February 28, 2011

Nonsensical. Some economic losses and inequalities in the US are due to increased competition in the global economy, not all. For those which are, it's not a question of being deserving or not: if people are purchasing more products from competitors of the US than they used to, it's because those products meet their needs better than products made in the US.

Nor is it a question of winning. If one finds oneself out of work or out of business because nobody wishes to buy what one makes, then it is necessary to make or sell something else. And this is true of global competition or technological change; it's almost always going to be disruptive in the short term, resulting in what economists call 'structural unemployment.' But an increase in economic growth leads to a bigger market over the long term because it increases overall demand, even though the quantity demanded of individual products or services may decline.

I mean look, you own or have regular access to a computer; I know this since I see you write on MetaFilter every day or two. Computers have disrupted the market for many paper-based products and services, because they allow us to move and store data so cheaply. 20 or 30 years ago you would have had to type up your opinions on paper and mail them to the letters page of a newspaper or some journal, now you just surf to MeFi, type some stuff, and click a button to publish your view to a global audience. But somehow I feel sure that you're not spending money to buy typewriters, ribbons, or replacement parts to support the declining typewriter industry.

In fact, my guess is that you have never spent any money on products you didn't want or need to keep the typewriter industry alive, or to save any manufacturing jobs in that industry. You don't consider the people in the typewriter business to be economic enemies; it's just that you probably don't have any need for that kind of product nowadays. The people who make and sell computers didn't have any desire to ruin the lives of those in the typewriting industry either, they just happen to consider their product more useful than a typewriter and most of the buying public happens to agree. So many people who made a living from the demand for typewriters lost their jobs, but by now they've probably found other jobs doing something else...possibly involving the use of computers.

Should we ban or tax computers to revive the typewriter industry?
posted by anigbrowl at 2:49 PM on February 28, 2011 [1 favorite]

Ach. I'm not prepared nor invested enough for this argument right now; I don't have the time to clarify my points, and we are arguing past each other. I'm bowing out (to go eat dinner).
posted by saulgoodman at 3:23 PM on February 28, 2011

Cool. I call dibs on being the guy who decides what it is we're all trying to optimize, and how we're going to measure it.
posted by ZenMasterThis at 4:03 PM on February 28, 2011

OK, as long as I get to pre-emptively reject whatever your bankrupt ideology turns out to be.
posted by anigbrowl at 4:42 PM on February 28, 2011

OK, as long as I get to pre-emptively reject whatever your bankrupt ideology turns out to be.

Phew. Okay. Back from dinner.

Well, if that's what the discussion's about now (I just thought I was complaining about how economists of a certain stripe always like to pretend their metrics means precisely what they want them to mean to prove a given claim, and blithely disregard any evidence to the contrary). But if this is about ideology, I'll tell you mine: I believe in people power. Really. The grass roots. And I loathe the distorting effects of privilege. Your child does not deserve a virtually guaranteed more successful life than mine merely by accident of birth. And vice versa. I also believe that extremely disproportionately wealthy economic actors (whether individual or corporate) create economic distortion fields around themselves that corrupt and eventually destroy otherwise healthy markets. And I believe that most of the economic gains in the developing world have probably benefited corrupt plutocrats and their cronies more than ordinary people, due to the rampant abuses of political position that seem ubiquitous these days (and not just in the developing world). If that's a bankrupt ideology, then there you go. I guess I'll file whatever the moral equivalent of chapter 7 is.
posted by saulgoodman at 6:54 PM on February 28, 2011

Ah...that comment was in response to the immediately above it from ZenMasterThis, rather than a direct reply to your departure for dinner. Not to make you write to order, but I'd rather hear your answer to the typewriter question. As I said, I don't think economics questions are best served by questions of who's more deserving, not least because there is no central masterplan controlling the whole world economy.

So, do you support the typewriter industry, or not? And if not, why is it OK to blow off the economic consequences of change in that industry, but not in other contexts?
posted by anigbrowl at 7:19 PM on February 28, 2011

Should we ban or tax computers to revive the typewriter industry?

Ah, so--no, actually, probably not (although you'd probably be surprised how many programmer types like myself you run into who'll confess to having very mixed feelings about the social and economic impact these newfangled machines of ours are having), but we might have considered introducing them more gradually, or at least meaningfully helping people transition to working with them some how. But if we're just swapping one tool for another, where's the problem? I imagine you mean to suggest cases in which jobs are lost to new technology without replacement.

Well, if it comes to technologies whose sole purpose is eliminating good human jobs without replacing them, we might consider rules against adopting such technologies too quickly without providing some kind of meaningful assistance to displaced workers--we might even try encouraging some kind of counterbalancing political and economic force that looks out for worker's interests to form to act as a check on the profit-motivated impulse to immediately embrace any technological change that increases profits regardless of impact to the workforce. You know, some kind of conservative force in the market, that's supposed to put labor interests first. That's just one thing that might help, off the top of my head. Another alternative might be to deal realistically with the fact that we just might not need everyone to work some day because there's not enough profit in it for the boss man, and then we could work on figuring out some ways to tolerate and even accommodate the existence of nonworking classes that aren't extremely wealthy.
posted by saulgoodman at 8:05 PM on February 28, 2011

I am 'one of those programmer types' myself, as a matter of fact, so I'm highly aware of how computers can automate people out of a job; I've engineered myself out of a couple. It's hard for me to believe you're seriously suggesting rules against the speedy adoption of overly-useful technology. OK, it's off the top of your head, but it's pretty silly if you stop and think it over.
posted by anigbrowl at 11:14 PM on February 28, 2011

Isn't this just a rerun of bits of Samuelson (David), Rousseauian social contract and Marxist economics, coupled with a well chosen smidgin of fear for the future? Has the 'Net turned all HOTI (humans on the internet) -even those who weren't before-into undergraduate debaters?
posted by Iktik at 2:25 AM on March 1, 2011

against the speedy adoption of overly-useful technology. OK, it's off the top of your head, but it's pretty silly if you stop and think it over.

Not overly useful technology--overly job-destroying technology. If it's technology that does something new, great. If its technology that makes a service less error-prone, great. But if it's a technology that exists solely to eliminate human jobs, with no major material improvement in the quality of the goods or services, then there's a legitimate public interest in not adopting it too quickly.

Why is that silly? The only immediate benefits from such technologies are to corporate shareholders looking to increase profits--the workers laid off don't benefit, and the services to the public aren't necessarily any better for being automated (in fact, it's not uncommon for consumers to complain about automated services being markedly inferior). The argument tends to be that the products will become cheaper, but the full cost-savings are rarely passed on to the consumer (why cut the price enough to reflect the full cost savings of automation when cutting it just enough to beat your nearest competition will do?).

The public and the workforce have no social, moral or legal obligation to collude with interests that want to eliminate their jobs just to add a few points to their profits. The government is not supposed to serve only the interests of corporations and capital. I'm just not seeing at all how it's "silly" for working people to defend their own economic interests as vigorously as corporations do.
posted by saulgoodman at 7:26 AM on March 1, 2011

The post about everything?

it's about social calculation and coordination problems :P and altho nominally about "Tyler Cowen's theory that we are in an age of economic stagnation" it's more about the institutional 'low hanging fruit' -- first 'quality of life' link* -- that for sclerosis in the political economy remain unpicked and, more broadly, this may be because of how 'value' is measured (esp for public goods**), which i think requires a rethink, and how 'coordination technologies' might be utilized to bring that about; that's all!

There hasn't and will not be any seismic change in values

but what if the economics of discontent spreads? the revolution will be tweeted (and uploaded on youtube/discussed on mefi), as it were... cheap moralizing is like the currency of social networking now.

Isn't this just a rerun of bits of Samuelson (David), Rousseauian social contract and Marxist economics, coupled with a well chosen smidgin of fear for the future?

alas i guess i'm only aware of paul and more of a locke-ian (marxist economics discussed in the first footnoted link: "recent posts from Steve Randy Waldman and Ryan Avent that seemed to me to be walking up toward a Marx-style theory of overproduction, crisis, and the collapse of capitalism") but if i may even go libertarian -- i'm not, but there is an isomorphic strain -- for a moment milton friedman cited 'neighborhood effects' in capitalism and freedom as a justification for negative income taxes (redistribution ;) which is arguably becoming increasingly relevant in an 'experience economy'; it's inelegant i'd say, but a necessary stop gap under central banking, but if the monetary system could be decentralized...

re: typewriters, i guess the argument goes back to at least the horse & buggy, safety-nets, retraining and whether the gov't should act as an 'employer of last resort' (when there's work to be done). i kinda think it goes deeper, like from the health care perspective taking say dentists as an example they've been putting themselves 'out of business' for awhile now, but what if they were incentivized (paid) to lower visits beyond annual or semiannual maintenance? what if we all were, to generate social outcomes that were generally agreed upon to be desirable? wouldn't that make more sense?

---
*notice he didn't mention finance (just health care and education), which is also "government-like" given its quasi-socialist gov't guarantee/subsidy of TBTF moral hazard and central (bank) 'planning'; as brad delong sez, arguably the most important price -- the price of money -- isn't set by the market, but by a technocratic fed!
**where pricing is absent (impossible?), and services that exhibit increasing returns to scale/network effects/externalities; what if the constraint is 'marginal willingness to pay'?
***cf. Making Peace in the US-China Trade War - if only we could have more paid vacation (we could ;) on The Way Forward™!
posted by kliuless at 9:00 AM on March 1, 2011

Argh, my eyes...kliuless, please try editing your posts instead of just endlessly expanding them. They're excellently sourced but somewhat shallow and incoherent.

But if it's a technology that exists solely to eliminate human jobs, with no major material improvement in the quality of the goods or services, then there's a legitimate public interest in not adopting it too quickly.

And who makes that determination - the people whose jobs may be at risk? This is essentially the Luddite position.

Why is that silly? The only immediate benefits from such technologies are to corporate shareholders looking to increase profits--the workers laid off don't benefit, and the services to the public aren't necessarily any better for being automated (in fact, it's not uncommon for consumers to complain about automated services being markedly inferior). The argument tends to be that the products will become cheaper, but the full cost-savings are rarely passed on to the consumer (why cut the price enough to reflect the full cost savings of automation when cutting it just enough to beat your nearest competition will do?).

This is no different from saying that a technology should be held back to protect firms whose business will suffer if their competitors adopt it, or suppliers whose business will suffer if the technology reduces the raw materials required to produce a finished good. The utility of technology is to expand capabilities by reducing costs. To demand its use be forbidden in order to protect existing interests is pure rent-seeking, and ignores the fact that people in other countries who do not feel that way will go ahead and implement the technology and gain the resulting economic advantage.

I remember living in the UK when it was hard to buy modems, because the phone company (a very recently privatised firm that still operated like a state monopoly in many respects) didn't want people to use third-party telecom equipment, only the modems that they themselves sold - at much higher prices, frequently up to double that charged by competitors. Asked why they should be paid much more money for 'approved' devices that didn't offer any extra functionality, they claimed that foreign modems might electrocute telephone line workers. I fail to see how your position is any less absurd. Employees are no more assured of a job than a company is assured of a demand for the goods or services that it sells. Keeping new technology back from the market does nothing but prevent the creation of jobs involving the use of technology, in favor of inefficiently allocating capital and limiting the size of the economy as a whole. To think otherwise is to hold back the entire economy and invite one's international competitors to drink one's milkshake.

Please, buy a book on economics or take a course in it at the community college, and work your way through the homework problems. Your reasoning here is so asinine as to be embarrassing. You know perfectly well that your computer saves you a cartload of money and that the widespread use of computers has lead to the destruction of vast numbers of jobs (although in turn, it has created many others); you rationalize this by citing how useful it is to you. But if someone wants to use some other kind of technology whose utility is not apparent to you, why they're filthy capitalist job-stealers! You do realize that things like automated phone systems are just computers with a telecom interface card installed, and a fairly simple software suite to construct menu trees and record and play back digital audio, yes? It's not some kind of uniquely corporate Klingon technology, it's just existing technology adapted to a different purpose. Attempts to regulate the basic human activity of adapting existing tools to do something new are doomed to failure, and wasteful of education, resources, and effort.
posted by anigbrowl at 10:35 AM on March 1, 2011

anigbrowl: attempting to paper over honest, thoughtful differences of opinion by slandering those who disagree with you with charges of ignorance really doesn't help your case, and I would hope even you recognize deep down that as a rhetorical tactic, it's beneath you.

Also, I disagree that it's all that hard to make the distinction I proposed. All you have to do is ask two questions: Is the technology marketed to producers? Is it marketed as a substitute for human workers? Those are not especially difficult questions to answer in most cases. And such limits wouldn't even begin to constrain the vast majority of innovative technologies.

Computers, for instance, don't necessarily eliminate jobs, and never have. Only custom applications designed specifically to eliminate jobs necessarily do that.

And you simply can't ignore that economics don't play out in some perfect, theoretical vacuum. It's completely justifiable for people who have some interest in not seeing their jobs eliminated to bring their political and social clout to bear to protect their families. It's as much a moral imperative for individual workers to seek to protect their own jobs as it is for corporate executives to work to increase shareholder value, and under US law as explicitly conceived at the time of the nation's founding, neither of those interests should enjoy any greater degree of legal protection or political representation than the other, regardless of what economic theory might have to say about any of it.

You seem to be insisting that US political and social realities be yoked to your own preferred interpretation of economic theory in a way that looks very much like a perverse, hyper-capitalistic mirror image of centrally managed economic systems to me. Your notions of economic truth are and should remain no more binding on US society and its political systems than those of the opposite ideological extreme.
posted by saulgoodman at 12:10 PM on March 1, 2011

I don't think anigbrowl is argueing and idealogical position here-this is reality. Does it suck that otherwise productive humans are forced out of job because someone figured out a machine can do it better-you bet. I think this has been going on since at least someone figured out how to use fire to harden spears and suddenly hunters are more effective and less are needed. The world does not owe you a living.

Now that being said, currently it appears that there is a lack of good, living wage jobs available for lots of people who want to be and can be contributing members of society. Society has to work for everyone (who takes part in it as a contributing member) and right now a lot of people are being left behind in a way that is so much faster than anything in history. We are coming out of the world as shaped by the aftermath of two world engulfing wars. This profoundly shaped the oppurtunities of two generations and then the information age is just getting started. We are going to have displacements, winners and losers. The world is changing in profound ways that may only be precendated by the adoption of agriculture and large civilizations. Over half of the worlds people live in cities now, the birth rate is dropping so fast even conservative population growth rates are being missed, parts of the world with the oldest stable civilizations are changing (China, India). Where is this headed? I have no idea, but i don't think old models and measures are as useful as we think they are (especially as related to the past 50 years of the American experience).
posted by bartonlong at 1:02 PM on March 1, 2011

The world does not owe you a living.

The world does not owe corporations profits either. Nor does it owe investors returns on their investments. The world doesn't have to cater to any one set of economic interests, and it doesn't have to prefer efficiency and it doesn't have to make sense logically.

I think this has been going on since at least someone figured out how to use fire to harden spears and suddenly hunters are more effective and less are needed.

Sure, and that's why we first saw stonecutters unions appear back around that time, as well.
posted by saulgoodman at 1:17 PM on March 1, 2011

saulgoodman, I'm hardly slandering you by alleging that the position you're arguing from is inconsistent, or has been tried and rejected before.

Also, I disagree that it's all that hard to make the distinction I proposed. All you have to do is ask two questions: Is the technology marketed to producers? Is it marketed as a substitute for human workers?

There is not some unbridgeable chasm between consumers and producers. 'With our (thing), you can do (what you do) faster, cheaper, or more reliably' is a valid incentive to buy regardless of whether a technology is used for commercial ends or not. Virtually every technological is marketed as a substitute for something else. Word processor? An substitute for typewriters and paper. Correction fluid? A substitute for more highly skilled secretarial staff. Typists? A substitute for clerical staff with excellent handwriting. Printing? A substitute for skilled copyists and illuminators. Writing on parchment? A substitute for bards, poets, and other skilled memory workers.

Do you own a digital camera? then you are putting the manufacturers and developers of film out of a job. Have you ever purchased recorded music or movies? Then you have put stage performers and theater operators at a disadvantage. Pocket calculators have vastly devalued the skilled labor of arithmetic calculation. The telephone was once considered an inferior substitute for telegraph delivery boys. All of these can be enjoyed purely for consumption purposes, or in a context of production. If something is explicitly designed to improve production then we call it a tool.

The world does not owe corporations profits either. Nor does it owe investors returns on their investments. The world doesn't have to cater to any one set of economic interests, and it doesn't have to prefer efficiency and it doesn't have to make sense logically.

Well, no. That's why investors worry about losses. And while corporations may lobby to have their interests protected, often they are simply staving off the inevitable. we have antitrust and consumer regulation precisely because we know people will put their interests as producers ahead of the public's interests as consumers. People are venal that way, and a corporation is nothing more than a grouping of people that are risking their money as opposed to their time (and may well be doing both in different contexts).

The world does, however, prefer efficiency, because of the pressure imposed by scarcity. If deliberate inefficiency is imposed in order to collect economic rents, then it means resources are being spent on something that could be more productively used elsewhere. This has nothing to do with capitalism, it's a matter of logistics. If you run a public healthcare system, then you have to weigh the salary paid to doctors against the number of nurses you could hire for the same amount. Should you spend more money on beds or bedpans? Sheets or sterile gauze?

(someone figured out how to use fire to harden spears and suddenly hunters are more effective and less are needed)
Sure, and that's why we first saw stonecutters unions appear back around that time, as well.

[citation needed]

Unions and workers do have a right to look out for their own interests, just as anybody running or sharing in the proceeds of a business does. But your argument that producers will always try to cut costs without passing on those savings to consumers only holds true in monopolistic situations. After all, competitors can respond to price changes with price changes or value additions of their own, driving prices towards an equilibrium - hence the continually improving bang for the buck of computer equipment. I very much doubt you would willingly purchase a significantly less reliable or more expensive hard disk just because you wanted to support the workers of a company which is doing less well because it sells an inferior product.

Maybe union would be more popular and more useful to their members if they placed a greater focus on providing training or on improving product development. It's strange to me that unions almost never purchase land or equipment and produce goods of their own in competition with other businesses, or leverage the expertise of their members to provide education and certification services to a broader market.
posted by anigbrowl at 4:40 PM on March 1, 2011

They're excellently sourced but somewhat shallow and incoherent.

what specifically do you think is shallow? and/or alternatively, what social theorists/theories do you consider deep? i'm genuinely curious! (i generally gather that you probably think umair haque is shallow -- what about SRW or, say, jeremy rifkin or like the last zeitgeist film? -- and know you almost certainly consider ken ono a deep thinker ;)
posted by kliuless at 5:38 AM on March 2, 2011

Zeitgeist is definitely shallow.

But on the other hand, these posts of yours aren't so much shallow as poorly organized and too dense. (Not shallow, deep!) It looks like a dump of your recent favorites from Google Reader. Since we read a lot of the same blogs, I tend to approve of the links themselves, but the presentation leaves a lot to be desired. Better to focus on one issue at a time, I'd say.

Also, I've had two occasions now where I've wanted to post a link but realized that you've included it in a massive link dump, where it was lost in the shuffle and not discussed. So I guess a different criticism is that you're hogging all the good articles! As saulgoodman would say, you're too efficient and putting the rest of us out of a job!

But these aren't really fatal criticisms. I'd appreciate it if you'd post fewer links per post, but I'm not the boss of you. You should keep doing what you do unless the mods tell you to stop.
posted by anotherpanacea at 1:09 PM on March 2, 2011

What anotherpanacea said. I'm not trying to knock individual writers, but if a three-paragraph post has 15 different links, there's too little glue holding the citations together, and it becomes hard to distinguish the comment or the FPP from a bunch of search results or an RSS feed, with tons of links strung together by only a few words referencing each one.

Same reason I don't want a pizza to have 15 different toppings, it's indigestible and I don't feel I'm giving any one part a completely fair shake. Thus, many interesting things don't get discussed at all because they're lost among too many others. Actually now that I count it, the last post had 19 links in it. Almost all of them look interesting, but reading them all in full becomes so time-consuming that I let it pass by instead. No offence, but less is definitely more sometimes.
posted by anigbrowl at 3:13 PM on March 2, 2011