Greater Depression?

February 19, 2012 5:43 PM

Joseph E. Stiglitz "argues that the U.S. is now facing and must manage a similar shift in the 'real' economy, from industry to service, or risk a tragic replay of 80 years ago."
posted by beukeboom (133 comments total)

This is exactly why we should go to Mars or at least the moon. We can't get our shit together to even fix our infrastructure, so we might as fine some digs to mess around with.

Yes, yes, it'll be terribly expensive and difficult, but hell, that's what Americans do, the hard stuff when there's an easier way. Let's get on with it.
posted by Brandon Blatcher at 5:51 PM on February 19, 2012 [11 favorites]

I read today - somewhere: no cite, sorry - that 6 out of 7 jobs in the USA are in the service industry today. If this is accurate, hasn't this shift already happened?
posted by kozad at 5:53 PM on February 19, 2012 [4 favorites]

The people who think we can all do jobs that don't involve actually creating anything are hilarious and should probably be kept as far away from anything involving responsibility as possible.

I mean, look at this shit: "Re-examining the cause of the Great Depression—the revolution in agriculture that threw millions out of work" Look at that! Who but a person looking to provide excuses for the shitscum finance bankers who caused both the Great Depression and the shit we're wading through now would say such a thing? And why would you listen to such a person?
posted by Pope Guilty at 5:54 PM on February 19, 2012 [46 favorites]

I mean, look at this shit: "Re-examining the cause of the Great Depression—the revolution in agriculture that threw millions out of work" Look at that! Who but a person looking to provide excuses for the shitscum finance bankers who caused both the Great Depression and the shit we're wading through now would say such a thing?

Apparently someone who thinks financial system reform needs to be coupled with forward-looking public sector investment. Where are you going with this?
posted by planet at 6:00 PM on February 19, 2012 [12 favorites]

hey, it's the 1990's again. government subsidized call center jobs for everyone!
posted by ennui.bz at 6:00 PM on February 19, 2012 [2 favorites]

I don't think he has excused the bankers:

The second conclusion is this: If we expect to maintain any semblance of “normality,” we must fix the financial system. As noted, the implosion of the financial sector may not have been the underlying cause of our current crisis—but it has made it worse, and it’s an obstacle to long-term recovery. Small and medium-size companies, especially new ones, are disproportionately the source of job creation in any economy, and they have been especially hard-hit. What’s needed is to get banks out of the dangerous business of speculating and back into the boring business of lending. But we have not fixed the financial system. Rather, we have poured money into the banks, without restrictions, without conditions, and without a vision of the kind of banking system we want and need. We have, in a phrase, confused ends with means. A banking system is supposed to serve society, not the other way around.

I would blame inflated healthcare costs as well.
posted by Brian B. at 6:03 PM on February 19, 2012 [4 favorites]

Stiglitz suggests, "We have to transition out of manufacturing and into services that people want—into productive activities that increase living standards, not those that increase risk and inequality."

But he doesn't actually name what those services are (other than nebulous things like "education" and "healthcare") nor does he outline exactly how an entire economy is going to be based on services when nothing is actually created.

I'm all for reshaping our economy away from black-magic banking practices and voodoo financial instruments, but I fail to see any real solutions in this article. Only the suggestion that we need to invest in new forms of energy production. It's an idea I can get behind, but it alone isn't going to fix the problems.
posted by hippybear at 6:03 PM on February 19, 2012 [5 favorites]

Apparently someone who thinks financial system reform needs to be coupled with forward-looking public sector investment. Where are you going with this?

And where the fuck does the wealth actually come from, if everybody's doing service-sector job? Who harvests the crops? Who builds the goods?

"Transitioning out of manufacturing" is something that we can only have silly little fantasies about because we've managed to get the rest of the world to do our manufacturing for us. But you've got to have a source of wealth somewhere, and the instant the rest of the world decides they'd rather keep their wealth than give it to us, our fantasies of shitty service industry jobs for all go bye-bye.

We have got to make things. We have got to produce wealth. Our efforts to pretend that this is not so are fucking killing us.
posted by Pope Guilty at 6:06 PM on February 19, 2012 [47 favorites]

Service is another word for communication, not slavery.
posted by Samuel Farrow at 6:08 PM on February 19, 2012 [1 favorite]

Oh, I remember this during the 1990s. We didn't need vocational schools anymore and manufacturing training is for scrubs! Liberal arts degrees and college for everyone and you're guaranteed to get a job!

At least the music will be good if we're going full 90s retro.
posted by Ghostride The Whip at 6:09 PM on February 19, 2012 [16 favorites]

I read today - somewhere: no cite, sorry - that 6 out of 7 jobs in the USA are in the service industry today. If this is accurate, hasn't this shift already happened?

Every time you say this, a policy wonk dies.

http://www.bls.gov/news.release/empsit.t17.htm

130 million non-farm employees on payroll. 18 million involved in goods producing industries, which is agrictulture, mining, construction, and manufacturing. Open to suggestions for a better measure (missing contractors, no idea how many farm workers, etc).
posted by kithrater at 6:11 PM on February 19, 2012 [7 favorites]

I stopped reading when the author suggested that advances in agriculture causes the great depression. That's just nonsense.
posted by humanfont at 6:11 PM on February 19, 2012 [4 favorites]

IANA economist, but it appears that Stiglitz is rehashing the "restructuring" argument, that the Great Recession is the result of a fundamental restructuring of employment. Krugman addressed this argument a couple days ago. Though I'm sure he will address this particular column directly in the days to come, as it seems to be a unique formulation.
posted by mek at 6:14 PM on February 19, 2012 [2 favorites]

This is exactly why we should go to Mars or at least the moon. We can't get our shit together to even fix our infrastructure, so we might as fine some digs to mess around with.

Yes, yes, it'll be terribly expensive and difficult, but hell, that's what Americans do, the hard stuff when there's an easier way. Let's get on with it.

That will solve nothing.

Manufacturing is going to chase low wages around the globe. Where cost of living is low, wages are low. As more jobs move into an area, wage competition occurs. Then the jobs go there. Japan to China to Malaysia, to the Middle East, finally to Africa.

You cannot beat this curve. First guy to point it out was Marx.
posted by Ironmouth at 6:16 PM on February 19, 2012 [35 favorites]

Here we go: Employment by major industry sector. Uses Census data to determine how many "workers" there are as opposed to people on payroll and finds another 13 million workers, 9 million of whom are non-agricultural self employed and family workers.
posted by kithrater at 6:20 PM on February 19, 2012

the instant the rest of the world decides they'd rather keep their wealth than give it to us, our fantasies of shitty service industry jobs for all go bye-bye.

We will still have military manufacturing and soldiering is a service job when you think about it.
posted by furiousxgeorge at 6:20 PM on February 19, 2012 [2 favorites]

IANA economist, but it appears that Stiglitz is rehashing the "restructuring" argument, that the Great Recession is the result of a fundamental restructuring of employment. Krugman addressed this argument a couple days ago. Though I'm sure he will address this particular column directly in the days to come, as it seems to be a unique formulation.

More like the recession comes first and stresses the old way to breaking point.

1870's are a better example--the so-called Second Industrial Revolution.
posted by Ironmouth at 6:20 PM on February 19, 2012

You cannot beat this curve. First guy to point it out was Marx.

Of course you can. As soon as energy for transport becomes prohibitively expensive you'll see a renaissance of setting up production closer to markets and having to concentrate more on the local economies.

Some goods will be luxuries in areas without access to necessary resources to create them, some goods will be cheap and plentiful.

It'll be like the 17th and 18th centuries all over again when people paid princely sums to John Company for goods shipped from far off locations.
posted by Talez at 6:22 PM on February 19, 2012 [6 favorites]

Yes this guy is a former Clinton economic advisor and Nobel winning economist; but seriously the idea that the revolution in agriculture caused the depression is nuts. There was a big labor market shift, but that mostly happened when all the farm boys wet off to fight in the war. Commodities prices for farm good fell, but only because our agriculture exports to the UL and Germany collapsed in the wake of the 1930 tarrif bill. When this was combined with overly tight monetary policy farmers were unable to repay their debts. The transition of the labor force from farming to manufacturing was not causative.
posted by humanfont at 6:25 PM on February 19, 2012 [1 favorite]

Pope Guilty writes "We have got to make things. We have got to produce wealth. Our efforts to pretend that this is not so are fucking killing us."

I hear Foxconn is hiring.
posted by bardic at 6:27 PM on February 19, 2012

I get this guy's argument, that the depression, and the dust bowl, and the war forced a lot of people to finally give up the parcels of dirt where they were superflous economically, and migrate to cities where they could be of more use to the national bottom line. Somehow, some way, this is supposed to extrapolate to our current condition, except that instead of migrating away form superfluous farm labor and into factory work, we should be investing and migrating away from superflous industrial labor and into service work, whatever that is.

Oh, actually, he gives a few examples of the kind of industries that means: financial, real estate, healthcare, and education. As mentioned in the article, the first two are dead ends, milked dry already by the legions of greedy and not particularly bright hucksters that we're currently licking our lips at the prospect of tarring and feathering. So, what's left? Doctors, nurses, and teachers are wonderful things, and we need them. But do we really think we can all get by on "turn your head and cough" or "now, johnny"? At some point, somebody has to make or build something. We can't, as my Dad likes to say have a "country of barbers" with everyone cutting the next guy's hair.

So, yes, we do need infrastructure and education spending. We need to spend that money on the right things, like public transportation rather than ever-wider insterstates, and recruiting top-notch public schools teachers rather than pouring grant dollars into hogswallop like rewarding underperforming schools with shiny new computers and lump sum capital-only grant dollars. One major reason that the stimuli bills didn't work is that they were rats' nests of special interest back-scratching. Another is that they were short-term oriented, whereas areas like public healthcare, public transportation, and public education, are chronically undervalued and as a result underfunded. Injections of money into broken systems doesn't make things better. No matter how many potholes get filled on Woodward, Detroit will still be a shambles. Likewise, no matter how many data projectors and glass basketball backboards are put in a failing school district, the attrocious class sizes and lack of qualified teachers will mean continued, institutionally-supported ignorance for the students they are supposed to educate.

What we need more than all of this well-intentioned but fundamentally broken spending, is to disentangle ourselves from the global system that is set up to seperate us, our States, and our cities, from the capital and jobs we need to keep our middle class a going concern. Huge, hardened-steel tariffs combined with cheap, accessible, job retraining are the only way I see to do this.

And the only way I know of to make any of this happen is to inflate our way out of all the debt, double-talked onto the balance sheets of the middle class by hucksters and thieves in the form of unconscionable loan officers and profiteering universities. Let the bastards that floated these loans take a bath, let their banks crumble, and let them take their money out of our political system. Even let them take their capital across the seas to the golden shores of China, where they can beg and plead to become houseboys for the totalitarian elite. Then, and possibly only then, can the rest of us get on with creating liberty and wealth for ourselves and the rest of the free world.
posted by LiteOpera at 6:37 PM on February 19, 2012 [20 favorites]

I think both Stiglitz and a lot of the discussion that's going on around employment and the economy now are ignoring the hints at a very unusual trend in economic history -- the continuing growth of productivity to the point that labor truly becomes alienated from value.

Productivity in manufacturing and agriculture generally continues to skyrocket -- the value that is created on a per capita basis in these industries means that, in relative terms, far fewer people need to work than used to. In the long term, what if this trend continues? What if enough value is created by such a small group of people in the economy that a majority of people don't even NEED to work to get by?

There is a certain strict line people tie between "doing something" and "getting something" -- a Calvinistic sense of "if you don't work, you don't eat" is deeply ingrained in US culture and politics. But what if that line continues to loosen? In Europe there are already plenty of people who do not have jobs, and their society continues to provide for them. This is not very sustainable (I'm talking on the scope of decades), but it hints at what may happen in our own lifetimes.

What if there is enough goods and services produced by a minority of people in the country, working no more than normal 40-hour weeks, to feed, house, clothe, and entertain everyone? I think that is increasingly becoming a plausible scenario, and not many people are talking about it, let alone even considering rethinking the central idea of "if you don't work you don't eat."
posted by chimaera at 6:42 PM on February 19, 2012 [30 favorites]

We have got to make things. We have got to produce wealth. Our efforts to pretend that this is not so are fucking killing us.

Where "we" and "us" are "the non-rich". The rich, of course, already have wealth being produced for them in China. That's what they mean by "job creators". They create manufacturing jobs (in China) and barista and carwash jobs (in the US).
posted by DU at 6:55 PM on February 19, 2012 [2 favorites]

What if enough value is created by such a small group of people in the economy that a majority of people don't even NEED to work to get by?

Two things occur:

1) This would require that those few who do get to work share their wealth, through taxes, with those who don't. And that this results in the equivalent of a decent middle-class existence for those who don't get to work. This will never, ever happen in America.

2) This would require that people stop having more than a single kid, or no kids. With the short-sighted and careless doubling of the population in the past generation, this also seems likely to never, ever happen.

In conclusion, we're fucked.
posted by maxwelton at 7:03 PM on February 19, 2012 [5 favorites]

"Transitioning out of manufacturing" is something that we can only have silly little fantasies about because we've managed to get the rest of the world to do our manufacturing for us. But you've got to have a source of wealth somewhere, and the instant the rest of the world decides they'd rather keep their wealth than give it to us, our fantasies of shitty service industry jobs for all go bye-bye.

We have got to make things.

Not so. America still, in fact, produces lots of stuff. Stiglitz is pointing out a real concern--that this production is taking place with far fewer workers than before, which has distributional effects:

The decline in manufacturing jobs has been dramatic—from about a third of the workforce 60 years ago to less than a tenth of it today. The pace has quickened markedly during the past decade. There are two reasons for the decline. One is greater productivity—the same dynamic that revolutionized agriculture and forced a majority of American farmers to look for work elsewhere. The other is globalization

However, this is a very different problem from not making things at all, which is not what is happening in the United States, despite how often it is claimed.
posted by dsfan at 7:19 PM on February 19, 2012 [11 favorites]

What if enough value is created by such a small group of people in the economy that a majority of people don't even NEED to work to get by?

There are some interesting reading here... though I don't think any of that would apply to the USA. The 'S' word is used, for example.

In Europe there are already plenty of people who do not have jobs, and their society continues to provide for them. This is not very sustainable (I'm talking on the scope of decades), but it hints at what may happen in our own lifetimes.

I suspect your aside about sustainability is a product of the same Calvinist orthodoxy that you seem to dismiss.
posted by pompomtom at 7:29 PM on February 19, 2012 [1 favorite]

We make plenty of stuff. We require less and less people to do it. A guy that was running a milling machine 20 years ago can now program a CNC machine to crank them out by the hundreds.

Even if humans in the US are needed for manufacturing less and less, there are still plenty of things to create. The design for the part, the program for the CNC machine, the expertise to make everything run smoothly.

We can't turn back the clock and sent everyone back to the plant. What we can do is provide the expertise, designs, specs and support for all the things that those millions of laborers are making.
posted by Ad hominem at 7:39 PM on February 19, 2012 [3 favorites]

And when the expertise is cheaper elsewhere?

It's not like factories or agricultural work that require lots of workers are obsolete, it's just that we outsource that work to other countries or immigrants. The same thing can happen to expertise.
posted by furiousxgeorge at 7:45 PM on February 19, 2012 [4 favorites]

"But the inability of the monetary expansion to counteract this current recession should forever lay to rest the idea that monetary policy was the prime culprit in the 1930s."

And There!!! There's the ONLY FUCKING economics Milton Friedman ever did AND IT'S FUCKING WRONG!!

Die Chicago School DIE!
posted by Trochanter at 7:52 PM on February 19, 2012 [16 favorites]

In order to make money you need to be cheaper or better. We cannot compete with the Chinese on cheaper because we have laws here. We need to be better. If you want a guaranteed money maker I can't give you one. We will have to compete. We need to produce better ideas, designs and products. Having millions of people to act as an army of unskilled labor won't help them here.
posted by Ad hominem at 8:00 PM on February 19, 2012

There is a certain strict line people tie between "doing something" and "getting something" -- a Calvinistic sense of "if you don't work, you don't eat" is deeply ingrained in US culture and politics. But what if that line continues to loosen?

It won't.

America is already probably at that point. We could refocus much of the trillions we spned on bombs and bank bailouts into building the largest, most robust cradle-to-grave social support society on Earth, and still have plenty left for plenty of bombs. But we don't, and we wont.

Too many people at the top have too much interest in keeping the pyramid going, and they're never going to share nicely when it's much cheaper to buy a 24/7 propaganda network and blame the young bucks with T-bone steaks for why everyone doesn't live like they do in a Upper East side condo.
posted by T.D. Strange at 8:02 PM on February 19, 2012 [2 favorites]

No, we need to insist anyone who plays economic ball with us plays by rules that are fair to their workers, too.

Outsourced slave wages are still slave wages.

If we can't get a level playing field, we don't play.

We don't need to. We have enough natural resources of our own we actually could for all practical purposes be an economic island unto ourselves.

What if enough value is created by such a small group of people in the economy that a majority of people don't even NEED to work to get by?

A better way to do it would be everyone working, but working much less often. Then you don't get that whole problem of resentment. As it is now, the ones who do the most work, get paid absolutely the least, and the people that get paid the really big bucks get paid primarily for having an active social life.
posted by saulgoodman at 8:06 PM on February 19, 2012 [12 favorites]

And Ad hominem, your comment is bullshit. Those missing manufacturing jobs aren't being done by robots. They're being done by people in Asia working for slave wages. Wake up!

We can easily compete with China if we have politicians that realize that a prosperous working class is what makes a healthy economy. And who realize that a slave's wage is just as immoral if you're paying it in Asia as it is if you pay it here.
posted by Trochanter at 8:10 PM on February 19, 2012 [3 favorites]

The people who think we can all do jobs that don't involve actually creating anything are hilarious and should probably be kept as far away from anything involving responsibility as possible.

This is true, one the one hand, but on the other, when I think of a sustainable society - something almost "post consumption" compared against the norms of today, it seems that bulk of it would be people working to make each other's lives easier, when we have less resources per person to work with, rather than quite so much of the workforce engaged in extracting and processing finite resources.

It messes with my ideas of wealth and productivity, but I think to transition to a sustainable economy, we'll have to move to an economy where standard of living is maintained by service work more than material goods.
posted by -harlequin- at 8:12 PM on February 19, 2012 [2 favorites]

In the past, when we were successful, we didn't accept this BS logic that we have to allow our businesses to sell out American interests in the interest of their own profits. We imposed tariffs if need be to support our own industries. We didn't balk at protectionism when it made sense and didn't go so far as to become unhealthy isolationism. China has had aggressively protectionist economic policies for decades now, and those policies have played a major role in its economic expansion. Why are we the only major country that's expected to compete with its hands tied? Because we are. No one demands that China stop its protectionist monetary or other economic policies.
posted by saulgoodman at 8:12 PM on February 19, 2012 [5 favorites]

Why are we the only major country that's expected to compete with its hands tied? Because we are. No one demands that China stop its protectionist monetary or other economic policies.

The USA is highly protectionist compared to many countries. Yeah, you can complain about Chinas protectionism, but bear in mind that a lot of countries have the same complaint about the USA, so it comes across as provincial to invoke "why are we the only..." sentiment.
posted by -harlequin- at 8:17 PM on February 19, 2012 [3 favorites]

Those missing manufacturing jobs aren't being done by robots.

Actually, they are being done by robots. A case in point is the Master Lock factory which is running at full capacity for the first time in over a decade. Obama visited it recently as an example of "bringing jobs back home". What he didn't highlight is how, even with the new hires, the factory is employing fewer people now due to automation than they had on board 30 years ago.

The missing manufacturing jobs ARE being done by robots. It's been an ongoing trend for 40 years now at least, and likely won't get any better. Robots don't get sick, don't demand pay hikes, don't go on strike if they're asked to work 24 hours in a row. Factory owners love them, and as technology continues to increase in power, robots will only take on more and more tasks, taking them away from humans who used to do them before.
posted by hippybear at 8:17 PM on February 19, 2012 [6 favorites]

That's one example, hippybear. Have you seen the videos of the Foxconn factories that are hand assembling all our iPods? The vast majority of our electronics are still hand assembled by low-wage workings in countries like China.
posted by saulgoodman at 8:19 PM on February 19, 2012 [3 favorites]

The manufacturing industry always likes to trot out these examples of highly-automated factories as examples of modern manufacturing for American public consumption. What they don't want you to see are videos like these: Behind Apple: A Tribute to the Workers at Foxconn
posted by saulgoodman at 8:22 PM on February 19, 2012 [2 favorites]

Currently it is cheapest to hire near-slave laborers in the third world. But, that is getting more difficult and pricier. the next best option is automation and robots.

Actual industrial output is high in the U.S. we are making a lot of stuff, but mostly through improvements in efficiency and automation. Even if we maxed out current capacity it would only have a relatively small impact on our unemployment rate. Most growth is likely to be in further automation and the expertise that requires.

Our problem is not that we don't make things, it is that we believe the owners of the factory deserve all the benefit of what gets made inside and don't need to share with the rest of society.
posted by meinvt at 8:24 PM on February 19, 2012 [3 favorites]

Re: robots doing jobs, there was an interesting study comparing manufacturing in Australia and New Zealand - two countries that are almost identical in some ways, and very different in others.

Anyway, the comclusion, which rings true to me, is that a lot of robots is what allows a country to maintain high worker wages. Automation means high productivity per worker. If you don't automate, you get low productivity per worker, which means less revenue split among more people, which ensures low wages. America doesn't want to go down the low wages path.
posted by -harlequin- at 8:24 PM on February 19, 2012 [2 favorites]

I know people who've done liaison work with outsourcing centers, too, and they've confirmed that much, much more than most Americans realize is still done by hand in factories like those described in these videos.

People are cheaper than machines in most cases. There's no economic incentive to automate most manufacturing right now, because human labor in countries like China is still much, much cheaper.
posted by saulgoodman at 8:25 PM on February 19, 2012 [2 favorites]

That's one example, hippybear.

There are plenty of other examples. Have you ever watched How It's Made? The examples of manufacturing automation which previously all had to be done by people are legion. Ever seen those videos of welding robots assembling car frames? All those jobs used to be done by people.

There are plenty of things which people still do better than machines, but a lot of jobs have been lost to machines over the decades. That we've moved a lot of the most tedious jobs out of human hands might be a good thing, especially when one considers how low-paying many of those jobs were. But overall, automation is taking human jobs. The fact that they haven't automated many tasks in China yet only points to the surplus of workers and their low wages there. Once it becomes more economically practical to create and install machines to assemble our iPods than to pay people to do them, the Chinese will follow suit.

That is, unless there are strong worker protections and an investment in human involvement within their society which demands that people be employed rather than being displaced by machines. Of course, that's a concept which goes back 200 years to the Luddites, who were smashing automated looms they felt were displacing workers, and who were demanding that humans continue to receive work rather than machines.
posted by hippybear at 8:29 PM on February 19, 2012 [3 favorites]

And our shoes are still mostly assembled by hand, too.

As long as cheap outsourced labor is an option, automation will never be an economically viable alternative that's embraced on a large scale. Slaves just make more economic sense.
posted by saulgoodman at 8:29 PM on February 19, 2012 [1 favorite]

Yes, it's possible to make things by machine. But the vast majority of consumer goods are not made by machine, because it is cheaper per unit to outsource to poor countries with authoritarian regimes and repressive labor laws.
posted by saulgoodman at 8:30 PM on February 19, 2012 [1 favorite]

Ah, but not in the US, where we still have a strong manufacturing base, just not as much of that base is done by people anymore.
posted by hippybear at 8:33 PM on February 19, 2012

I don't think anyone is arguing that many things, particularly low cost consumer goods, are made abroad by hand. None of this changes the fact that U.S. Manufacturing is actually fairly strong as a sector, but it isn't bringing back jobs. Further, any attempt to bring that foreign manufacturing to the U.S. (which I'd support) would involve a great deal of automation, so would still mean relatively few manufacturing jobs.
posted by meinvt at 8:34 PM on February 19, 2012

Yes, it's possible to make things by machine. But the vast majority of consumer goods are not made by machine, because it is cheaper per unit to outsource to poor countries with authoritarian regimes and repressive labor laws.

They're being made by machine there too.
posted by Ironmouth at 8:35 PM on February 19, 2012

chimera asked the fundamental question: What if there is enough goods and services produced by a minority of people in the country, working no more than normal 40-hour weeks, to feed, house, clothe, and entertain everyone? I think that is increasingly becoming a plausible scenario, and not many people are talking about it, let alone even considering rethinking the central idea of "if you don't work you don't eat.

And T.D.Strange came up with an important, if partial answer: Too many people at the top have too much interest in keeping the pyramid going, and they're never going to share nicely when it's much cheaper to buy a 24/7 propaganda network and blame the young bucks with T-bone steaks for why everyone doesn't live like they do in a Upper East side condo.

Can the American people, or perhaps any people, manage "rethinking the central idea[s]" of their societies? Mr. Strange's answer is correct as far as it goes, but it still aims at current central ideas (rich/not rich) and slides around the question of "What are we to do with all the people who's production we don't need?" As maxwelton said: This would require that those few who do get to work share their wealth, through taxes, with those who don't. And that this results in the equivalent of a decent middle-class existence for those who don't get to work. This will never, ever happen in America.

So the operant question boils down to: why not?
posted by carping demon at 8:40 PM on February 19, 2012 [8 favorites]

As it is now, the ones who do the most work, get paid absolutely the least, and the people that get paid the really big bucks get paid primarily for having an active social life.

Incidentally, this is by and large untrue, even according to the EPI, hardly a right-wing group.
posted by dsfan at 8:40 PM on February 19, 2012

Those missing manufacturing jobs aren't being done by robots. They're being done by people in Asia working for slave wages. Wake up!

US Manufacturing Employment, 1970: 18,424,000
US GDP from Manufacturing, 1970: $680.9B (2005 dollars)

US Manufacturing Employment, 2010: 11,458,000
US GDP from Manufacturing, 2010: $1,763.4B (2005 dollars)

Employment: Bureau of Labor Statistics
GDP: United Nations Statistics Division, National Accounts Main Aggregates Database (.xls)
posted by strangely stunted trees at 8:42 PM on February 19, 2012 [14 favorites]

And where the fuck does the wealth actually come from, if everybody's doing service-sector job? Who harvests the crops? Who builds the goods?


Who is doing that work now?
posted by hamida2242 at 8:44 PM on February 19, 2012

Incidentally, this is by and large untrue,

Again with the quintiles. Screw the quintiles. Nobody's talking about the top freaking twenty percent.
posted by Trochanter at 8:45 PM on February 19, 2012 [2 favorites]

Once it becomes more economically practical to create and install machines to assemble our iPods than to pay people to do them, the Chinese will follow suit.

?

It's never going to be cheaper, as long as we allow political interests to suppress labor rights to the point that labor has no wage negotiating power. Wages in the US are shrinking--and the argument is we can only become competitive again if they continue to shrink. How is that going to create incentive for increased automation? What it's going to do is starve us until we get to the point where we're the ones willing to work for pennies a day again. Then it will be cheaper to give us the work than to automate it. Industry has no incentive to grow wages at all, in the absence of some pressure from labor. And indeed, wages are stagnant or declining throughout most of the world. Worldwide, wages aren't even keeping up with inflation. That provides no incentive whatsoever to automate everything; what it does encourage is more wage gouging and abusive labor practices.
posted by saulgoodman at 8:45 PM on February 19, 2012 [4 favorites]

So the operant question boils down to: why not?

Same reason we don't share more of our wealth with the Chinese workers. The haves are greedy and don't care about the have-nots.
posted by furiousxgeorge at 8:45 PM on February 19, 2012 [2 favorites]

Incidentally, this is by and large untrue, even according to the EPI, hardly a right-wing group.

Have you hung around with the executives in any modern services company much? How does daily two hour business lunches and multi-thousand dollar bar tabs at the governor's club every month not constitute socializing for a living?
posted by saulgoodman at 8:47 PM on February 19, 2012 [1 favorite]

Oh, I remember this during the 1990s. We didn't need vocational schools anymore and manufacturing training is for scrubs! Liberal arts degrees and college for everyone and you're guaranteed to get a job!

Who should get tracked to vocational school and who should get a managerial job sending emails for a living?
posted by hamida2242 at 8:49 PM on February 19, 2012

Who should get tracked to vocational school and who should get a managerial job sending emails for a living?

The Germans seem to have worked out how to determine this, and they don't seem to be doing too badly these days.
posted by hippybear at 8:52 PM on February 19, 2012 [1 favorite]

Again with the quintiles. Screw the quintiles. Nobody's talking about the top freaking twenty percent.

Come on, the post I was quoting:

As it is now, the ones who do the most work, get paid absolutely the least, and the people that get paid the really big bucks get paid primarily for having an active social life.

Have you hung around with the executives in any modern services company much? How does daily two hour business lunches and multi-thousand dollar bar tabs at the governor's club every month not constitute socializing for a living?

Yes, lots. Come on, are you seriously arguing that hours worked and income aren't seriously and positively correlated? I realize this thread has become ridiculous, where you are apparently arguing with a straight face that "No one demands that China stop its protectionist monetary or other economic policies" (Really? No one has complained about Chinese monetary policy before?), but are we even going to try to cite data here? This tells you nothing about what the ideal amount of redistribution in a society should be, by the way, but if you don't think big firm lawyers, bankers, doctors, and executives work, by and large, disproportionately high hours, you're just not correct.
posted by dsfan at 8:54 PM on February 19, 2012

Yes, lots. Come on, are you seriously arguing that hours worked and income aren't seriously and positively correlated?

Oh sure, when you can do your work over dinner at the governor's club, with a nice cocktail and pleasant conversation leading up to a multi-million dollar contract. Under those kinds of working conditions, who wouldn't work weekends?
posted by saulgoodman at 8:56 PM on February 19, 2012 [4 favorites]

How does daily two hour business lunches and multi-thousand dollar bar tabs at the governor's club every month not constitute socializing for a living?

Are they posting on the internet during business hours as well? Because if that isn't socializing on the clock I don't know what is.
posted by hamida2242 at 8:56 PM on February 19, 2012 [3 favorites]

Well, yeah, sometimes I'm sure they are. There are people who get paid handsomely to post on Facebook. But most people aren't going to get those jobs.
posted by saulgoodman at 8:58 PM on February 19, 2012

I suspect the 1% have people who do their internet posting for them.
posted by hippybear at 8:59 PM on February 19, 2012 [2 favorites]

There is a pearl of great price, and I'm certain if we could elect a committee to earmark its value, the Kingdom of Heaven could be purchased for all at a cut-rate. But you gotta be a shareholder to get in on this one-time offer, as these prices cannot be guaranteed. I believe there is a solution, especially if the greater majority of you all get on board with me today. Just need your credit card and the bulk of your flesh.
posted by eegphalanges at 9:05 PM on February 19, 2012

Same reason we don't share more of our wealth with the Chinese workers. The haves are greedy and don't care about the have-nots. They are not greedy by nature. They are greedy because of the society in which they were raised and live, part of which includes "if you don't work you don't eat". These are social, institutional problems. There are no economic answers to them.
posted by carping demon at 9:08 PM on February 19, 2012

(Really? No one has complained about Chinese monetary policy before?), but are we even going to try to cite data here? This tells you nothing about what the ideal amount of redistribution in a society should be, by the way, but if you don't think big firm lawyers, bankers, doctors, and executives work, by and large, disproportionately high hours, you're just not correct.

And again, it's easy to work "disproportionately high hours" when the kinds of activities that count as work include those that allow a person to run up two to three thousand dollar bar tabs on the company tab. And don't tell me that doesn't happen, because I know it does.
posted by saulgoodman at 9:09 PM on February 19, 2012

The design for the part, the program for the CNC machine, the expertise to make everything run smoothly

Part design: one-off (if well paid) job which can be done anywhere... Germany has lots of skilled engineers
CNC program: subcontract that shit, the Russians and Indians have hungry programmers
Make everything run smoothly: a small clique of highly paid managers can do this, and really it only needs to show profit this quarter for the stock options and bonuses.
Running the machine: race to the bottom, it is so high tech that any moron can do it, especially if we break the machinists union

Doesn't seem to me like a model for job creation OR equitable wealth generation in North America.
posted by Meatbomb at 9:10 PM on February 19, 2012 [2 favorites]

They are not greedy by nature. They are greedy because of the society in which they were raised and live, part of which includes "if you don't work you don't eat". These are social, institutional problems.

Another part of that culture includes teachings like, "it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God."

Living with American style wealth is greedy, we don't need to be taught otherwise, hasn't stopped us yet.
posted by furiousxgeorge at 9:16 PM on February 19, 2012

The haves are greedy and don't care about the have-nots.

They are not greedy by nature. They are greedy because of the society in which they were raised and live, part of which includes "if you don't work you don't eat".

That doesn't really cover people like Mitt Romney, who earned over $20million in 2010, none of which came from wages. He did earn about $375,000 in speaking fees in a year, a figure which he says "isn't very much", although it alone would put him in the 1% of incomes even without his earnings from not doing any work. In fact, Romney has joked recently that he's unemployed.

So yeah, if you don't work, you don't eat... unless you happen to have a fuckton of money which can make another fuckton of money for you every year without you having to lift a finger... in which case, you eat, and eat, and eat, and never work.
posted by hippybear at 9:17 PM on February 19, 2012 [1 favorite]

(I'm only using Romney as an example because he's made his finances public recently. I'd have picked another subject if similar information were available about them and as easily located online.)
posted by hippybear at 9:18 PM on February 19, 2012

And again, it's easy to work "disproportionately high hours" when the kinds of activities that count as work include those that allow a person to run up two to three thousand dollar bar tabs on the company tab. And don't tell me that doesn't happen, because I know it does.

Of course it happens, lord knows I've been a part of some expensive dinners. Look, this is a little tangential to Stiglitz's article, and I apologize if I am contributing to a derail. But, and trying to keep my anonymity while still being useful, I went to a good (top 5) business school. Many of my peers now work in banking, consulting, and I know quite a few others who did law. And it is just absolutely, positively ridiculous to argue that even within the top, say, 5%, there isn't a definitely positive correlation between hours worked and income. The hardest working--private equity and banking, mostly--work 80+ hour weeks. You do not do this by running up bar tabs for 40+ hours. Those who did consulting make somewhat less, but still work 60+ hours a week. And those who did "industry" made still less, but had semi-normal work/life balance. Again, there is just not that much socializing going on here. And these are the people who are generally likely to rise to the top of a corporate ladder. I again stress that this really tells you nothing about ideal income redistribution, but it is simply absurd to suggest that on average, people with high incomes do not actually work more hours than normal.
posted by dsfan at 9:27 PM on February 19, 2012 [1 favorite]

Part design: one-off (if well paid) job which can be done anywhere... Germany has lots of skilled engineers
CNC program: subcontract that shit, the Russians and Indians have hungry programmers
Make everything run smoothly: a small clique of highly paid managers can do this, and really it only needs to show profit this quarter for the stock options and bonuses.
Running the machine: race to the bottom, it is so high tech that any moron can do it, especially if we break the machinists union

Doesn't seem to me like a model for job creation OR equitable wealth generation in North America.

Look at Symantec. They're a perfect case study for this shit. Econ students of the future are going to study them as to why the whole outsourcing craze is so fucking stupid.

As of April 1, 2011, we employed more than 18,600 people worldwide, approximately 46 percent of whom reside in the U.S.

Only 46 percent of Symantec's workforce is in the US.

"But Talez", I hear you ask, "46 percent of the workforce still seems pretty great".

Well that doesn't include the departments outsourced to contractors (i.e. most of Symantec's IT being outsourced to EDS) which is then provided offshore.

The whole company is slowly being stripped down to a shell company which merely tries to herd the different cats known as contractors and outsourcing agencies into a semi-usable product.
posted by Talez at 9:29 PM on February 19, 2012 [2 favorites]

And BTW, in case it's not clear, I don't mean to suggest for a second that every executive everywhere is doing nothing but socializing all day. I've also known executives who were hands-on and actually very competent as managers. But that's unfortunately not always the norm. And by and large, most executives tend to be people who like to socialize and who get to do many professional activities that are essentially social in nature (charming new clients, leveraging personal relationships to win new business, networking, etc.). In some cases, these jobs literally involve more wining and dining with other executives than what most of use would recognize as traditional work. Sure, it's necessary work, but to pretend it's comparable in the slightest to the kinds of long hours Chinese laborers, for instance, are putting in for pennies a day is insulting and laughable.
posted by saulgoodman at 9:30 PM on February 19, 2012 [7 favorites]

Sure, it's necessary work, but to pretend it's comparable in the slightest to the kinds of long hours Chinese laborers, for instance, are putting in for pennies a day is insulting and laughable.

Alright, last post for me, I feel like I'm monopolizing. I follow you better than before, I was more focused on within-developed country norms (since that was the focus of Stiglitz's article, about the distributional effects within America). I know rather less about Chinese working hours. I would say, though, be careful about what you think people are doing. I spent some time a while back working with a consulting firm (not what I do currently). The partners, naturally, spent a great deal of time socializing with the clients. I wouldn't blame the senior clients' underlings for thinking this was the dominant part of what they did, actually. They never saw the strings of work these guys would send out from when they got back from the dinners until 2 in the morning.

I share a good deal of Stiglitz's concerns, actually. I just don't think it helps matters to believe that the wealthy don't work hard. On average, this just does not appear to line up with either the data I see, or anecdotal experience.
posted by dsfan at 9:46 PM on February 19, 2012

Who should get tracked to vocational school and who should get a managerial job sending emails for a living?

I'm pretty sure most, if not all, of the Western democracies manage some sort of tracking system that works to a reasonable extent. Maybe we could, I dunno, do something like study what parts of those systems work and what parts don't work and come to some sort of conclusion?

But fine, I'll bite on this cleverly-baited trap so you can call me a bad person. Let's start with kids who actually want to learn a trade or pick up some vocational skills or even know the option exists, just for starters.
posted by Ghostride The Whip at 9:51 PM on February 19, 2012

Fair enough, dsfan, but managers also don't see, for instance, their employees up until 2 in the morning teaching themselves some new developer technology. And unpaid interns are out there working what are effectively full-time jobs for no pay at all just for the chance that they might be allowed access to a career one day.
posted by saulgoodman at 9:52 PM on February 19, 2012

I just don't think it helps matters to believe that the wealthy don't work hard.

I don't think that's what most people on this thread have been saying -- rather, that the income of the wealthy cannot possibly be proportional to how hard or how many hours they work because the wealthy don't have tens or hundreds of times as many hours in a week as someone making the median income.

The issue is that wealth (and influence, and popularity, and fame, and many other forms of power) has its own momentum that is non-linear. If you isolate for variables of people working in similar jobs in similar industries, relative income very believably correlates positively with hours worked. But across income levels, you can't draw any sort of correlation because there is no linear way to map the income of a stock broker versus that of a Foxconn electrical engineer. Difficulty doesn't correlate, and hours don't correlate.
posted by chimaera at 9:55 PM on February 19, 2012 [4 favorites]

Sure, it's necessary work, but to pretend it's comparable in the slightest to the kinds of long hours Chinese laborers, for instance, are putting in for pennies a day is insulting and laughable.

For what its worth, Foxconn in China is up to 2500 RMB per month ($397). Assuming the worst case scenario of 31 days in a month that brings it up to at least $12.81 per day.

Wages in China have been rising steadily. If you want pennies per day workers you have to go to Indonesia or Bangladesh.
posted by Talez at 9:56 PM on February 19, 2012

That doesn't really cover people like Mitt Romney, who earned over $20million in 2010, none of which came from wages.

It does cover people like Mitt Romney. Mitt Romney's ease proceeds from a culture in which human endeavor was commoditized many generations ago. (Incidently, cultures that had camels didn't take part in that transformation.) The conditions that resulted in that commoditization are no longer with us, but our responses to the haves/have-nots problem are still rooted in the plight of the individual worker cast adrift in the early industrial revolution. "If you don't work, you don't eat" was actually a con engineered by the haves to provide them with enough have-nots to support them in comfort as that revolution progressed. Mitt Romney's is one of the last (hopefully) generations to benefit from that particular con. He was born into it, as we all were, whatever we've made of our lives since then. We should make a way out of it.
posted by carping demon at 10:05 PM on February 19, 2012

saulgoodman writes "We don't need to. We have enough natural resources of our own we actually could for all practical purposes be an economic island unto ourselves. "

This is pretty obviously not true even if you only consider oil.

Or tungsten.

Or Chromium.

Or Manganese,
posted by Mitheral at 10:10 PM on February 19, 2012 [1 favorite]

And where the fuck does the wealth actually come from, if everybody's doing service-sector job? Who harvests the crops? Who builds the goods?

Basically no one needs to harvest crops, though. It would be crazy to put our unemployed to work harvesting crops--that doesn't even make sense. The United States produces a ridiculous amount of food but employs relatively few people to do it. Manufacturing is going the same direction.
posted by planet at 10:30 PM on February 19, 2012 [2 favorites]

Basically no one needs to harvest crops, though. It would be crazy to put our unemployed to work harvesting crops--that doesn't even make sense.

Just ask apple growers in WA or farmers in AL who were looking for people to harvest crops this past fall but couldn't find the workers they needed.

There are a LOT of crops which cannot be harvested by machine for various reasons.

It's literally "the jobs Americans aren't willing to do".

So, yeah, there's a lot of food which the unemployed could be put to work harvesting, but they aren't willing to put up with the migrant lifestyle or the backbreaking nature of the job in order to do it.
posted by hippybear at 10:35 PM on February 19, 2012

the fundamental question: What if there is enough goods and services produced by a minority of people in the country, working no more than normal 40-hour weeks, to feed, house, clothe, and entertain everyone?

The obvious minimal change is to reduce the standard work week to, say, 32 hours, isn't it? A 40-hour work week is already a lot less than a farmer would have to work pre-mechanization; there's nothing special about 40 hours.

Of course employers will always prefer to have fewer employees working longer hours— there's a fixed overhead per employee, training, space, equipment, benefits, etc. And if that gets more expensive in proportion to take-home pay (cough health insurance), employers will have more incentive to employ fewer people and work them harder. But it's probably easier to buck that trend than it is to figure out how to have a healthy society with a 50% unemployment rate.
posted by hattifattener at 10:42 PM on February 19, 2012 [3 favorites]

Mitheral, that article looks only at current production. Not at reserves. Right now, the majority (95%) of "rare earths" comes from China, because they have a very lax policy with regard to environmental impact from mining activities, so it's cheap to dig stuff out of the ground there. But the Chinese only have 36% of reserves.

That right there should cause some questions — if lots of other people have rare earths, why is nobody else mining or exporting them? It's because the Chinese have flooded the damn market, and nobody wants to compete with them. There's no point, since it's not like the things go bad sitting in the ground, and the outlook for them in the future looks really good. So why bother?

There are quite a lot of rare earths in the US. If you feel like downloading a 30MB PDF, the USGS has an exhaustive report on them. But the tl;dr version is that there are large deposits in both the mountain West and also on the East Coast, and the U.S. is #3 in the world in terms of proven reserves. (Possibly #2, depending on whether you consider the CIS a single entity or not.)

We could start producing them here tomorrow, if we wanted to eliminate all those pesky environmental regulations that the Chinese apparently just don't truck with. (But that would be dumb, so let's hope we don't.) Once the price rises to the point where we can economically mine our reserves in a way that's in keeping with our idea of how you should go about doing such things, we'll get on with it.

The Chinese are on track to be left with a whole bunch of toxic tailings ponds; one hopes that the hard currency they're getting today is worth it. Without their contribution, electronics requiring rare earths would certainly cost more, but that's generally the case when you move from a completely irresponsible production method to a more sustainable one.
posted by Kadin2048 at 10:59 PM on February 19, 2012 [6 favorites]

If we're going to look back to when cheaper foreign labor stole our manufacturing jobs, can we in Britain have back the heavy industry you took from us when the USA was cheaper than we were, please? Seems only fair.

Protectionism seems a good idea in the abstract. I'm not convinced in the reality. Maybe the US poor don't have so many jobs making shoes. But they can afford the cheap shoes made in China. So at least they don't have bare feet. We could artificially raise the price of shoes, and some men would benefit from the employment, but the population as a whole would suffer. It's a tax, in other words, on your population, distributed by the state to favored well-connected groups - labor or capital. Thanks to the RIAA and MPAA and SOPA, we now know exactly what that looks like: you want to buy this thing? Tough, you can't! The guys cosy with the state have decided that the "true price" is $X, even though you can get it for $X-Y, and they have the state's resources to back them up.

Finally, let's imagine that we do all start putting up tariff barriers. The Chinese need to export. The US needs to export. Who gets to sell to (say) India or another major market? If you're not competing on price or quality, because you've introduced politics into the system, well, then it's going to be Whoever India Fears or Whoever India Likes Most. And then we're into soldiers and tanks: "When goods cannot cross borders, armies will." - wars are often about access to markets.
posted by alasdair at 11:25 PM on February 19, 2012 [4 favorites]

The second chart lists reserves (though I suppose those could be proven reserves. Point being there are going to be significant mineral resources that the US isn't going to have at least in relation to how much they are using. And at any rate the US isn't anywhere near being self sufficient WRT oil and that isn't likely to change any time soon.
posted by Mitheral at 11:28 PM on February 19, 2012

We make plenty of stuff.

All you have to do is look at our gigantic trade deficit to know this isn't true. However much we manufacture, it is not enough. And enormous dollar holdings have built up overseas, which is yet another form of American debt; we will have to eventually either work to repatriate those dollars, by creating and shipping stuff that other countries want, or else repudiate the debt by destroying the currency.

Pope Guilty is right. All wealth is fundamentally energy, stuff, and knowledge. It's the Jello that we all eat. And service sector jobs mostly just move the Jello around the plate, consuming a little in the process. Some service jobs do make the productive sectors more efficient, but many (most?) do not...if we were all cutting each other's hair all day, we'd starve.

Focusing on moving existing Jello, instead of creating new, is short-term thinking. Yes, we look very busy, and the way the government measures economic output, well, they see the Jello moving around a lot, so the economy must be great! But there's less actual Jello to go around, and living standards steadily drop.

Sound familiar?
posted by Malor at 11:28 PM on February 19, 2012 [5 favorites]

but they aren't willing to put up with the migrant lifestyle or the backbreaking nature of the job in order to do it.

Oh, BS — they're not willing to put up with the nature of the job because the pay sucks, and they correctly realize that it's not worth it, and is the sort of job that only a very desperate person would do. But it's not like those are the most miserable or demanding jobs in existence (cf. confined space welding, oil rig roustabouts, etc.), or even the most miserable in America; they just happen to be "the jobs Americans won't do" because they exist in a minima where the misery is really high and the pay is really low. The fact that Americans by and large refuse to do them is a perfectly rational economic decision.

If strawberries can only be harvested by hand, then strawberries probably ought to be really goddamn expensive. Because labor-intensive products tend to be expensive when you're not exploiting the crap out of workers. (As they should be.) In the absence of a cheap supply of exploitable laborers, the wage of a strawberry-picker would rise until it found whatever it's worth to the average qualified person in the labor pool to pick strawberries. Which, if I had to bet, is probably up there with other really unpleasant, skilled, physically demanding jobs.


Anytime you see a product that's obviously very labor-intensive, whether it's hand-picked berries or hand-soldered iPads, being sold for a price that's far, far less than what you'd have to pay to get workers on the legitimate market in an industrialized country to do it, there's a good chance that exploitation is happening. Either overseas or right here.

And yes, if we weren't exploiting migrant laborers, strawberries would be expensive. We'd get over it, or subsidize them if we really needed cheap strawberries as a national priority. Either way would be better and more ethical than what happens today.
posted by Kadin2048 at 11:32 PM on February 19, 2012 [20 favorites]

Protectionism on a national scale is a proven failure. I think an interesting alternative is "personal trade barriers"... juche for the homestead. How much money would you really need if you could grow most of your food? Sew your own clothes? Barter for other necessities from your neighbors? This has the added benefit of reducing your income and thus your tax burden.

It is a model I hope to soon be exploring.
posted by Meatbomb at 11:49 PM on February 19, 2012

Wait. He is suggesting the US manage its economy?
posted by srboisvert at 11:54 PM on February 19, 2012

Alasdair- I have a theory that the decline of the U.S. working class resulted from the breakdown of the highly unionized U.S. auto industry. The idea is that the monopoly rents were bargained to a middle class that was geographically concentrated and large enough to jumpstart colleges, construction, etc. Anyways that's just my pet theory.
posted by The Ted at 12:06 AM on February 20, 2012

If workers have to accept a shift to low-pay work, I require the financial sector to similarly accept lower payments on current consumer debt.
posted by Thorzdad at 3:40 AM on February 20, 2012 [1 favorite]

I share a good deal of Stiglitz's concerns, actually. I just don't think it helps matters to believe that the wealthy don't work hard. On average, this just does not appear to line up with either the data I see, or anecdotal experience.

Sorry, I probably mention this in half of these economic threads, but there is a limit to the value of owner/manager roles, and we exceeded it decades ago. The top 25 hedge fund managers collectively earned 25 billion dollars, or an average of $500,000 an hour in 2009 if I remember correctly. Our CEOs are paid 350x our average worker, while the rate in places with much more manufacturing like Germany is 30-50x. Meanwhile, the top 1% tax rate dropped from 28% to 17% in the past 15-20 years, so what happens?

You push up the value of intrinsically worthless goods. What economic utility is provided by having more million dollar sports cars, or increasing the value of "rare" items like celebrity memorabilia or "priceless" works of art? I'd argue zero, and negative when compared to using those same dollars — even if mired in government bureaucracy — to build infrastructure and real investment in the future of our society. As income inequality is continually pushed up by organizations who are rated by their ability to screw American workers and American consumers, the problem only gets worse.

The probably isn't exactly that the rich don't work hard, it's that they don't spend their money with many good intentions.

I have some (very) tangential contact with some of the masters of the universe, and I've heard a few of their conversations. They aren't Einsteins. They're not curing cancer or feeding the hungry or trying to figure out how to create jobs. They want to make shitloads of money, period, and they could give a damn about how they do it or who loses when they win. Sometimes it is starting a new business with a new idea. But most of the truly wealthy make it by purposefully lowering American standards of living. This is also known as "improving efficiency" or "cutting the fat" which is code for firing competent workers and replacing them with off shored corporations while slashing benefits and gutting pensions.

It's claimed that this is "the market" making better informed decisions for our society, but that simply isn't true, unless you consider a society geared to please the whims of aristocracy some sort of progress.
posted by deanklear at 4:59 AM on February 20, 2012 [13 favorites]

With respect to hours worked: everyone works too many hours. God damn it, we compete with each other for the privilege of getting a good job for long hours and low comparative pay. I have a great job with good pay, but once you break it down by hours worked, my hourly wage does not seem so great anymore. For a lot of people the 40 hr work week is a theoretical thing, in reality it's 50-60 and sometimes more.
posted by Vindaloo at 5:22 AM on February 20, 2012 [4 favorites]

Look at Symantec. They're a perfect case study for this shit. Econ students of the future are going to study them as to why the whole outsourcing craze is so fucking stupid.

This is what I've never understood about the progressive manufacturing fetish. If outsourcing is indeed stupid in certain situations and in certain industries, we will find out soon enough. Either the companies that have outsourced will realize their mistake internally, and shift production back to their home markets, or some enterprising upstart will start making combination locks and antivirus software at home and clean the incumbent's clock. Why not just let this process happen? As it stands, are you confident that planners can really chart the course of economic geography better than the market participants themselves?

Seriously, the lifespan of a large company is puny - shorter than that of most human beings. We don't realize this because of survivorship bias. But the decisions of one company in 2012 are not permanent, and if we don't like one economic state of affairs, wait a few years and it will probably change.
posted by downing street memo at 5:34 AM on February 20, 2012 [1 favorite]

Our CEOs are paid 350x our average worker, while the rate in places with much more manufacturing like Germany is 30-50x. Meanwhile, the top 1% tax rate dropped from 28% to 17% in the past 15-20 years, so what happens?

One way to look at this explosion in CEO pay (and, more broadly, the explosion in pay for folks in managerial/"knowledge industry" jobs in general) is to say, what's going on that makes the value of these people higher? That's not "value" in a moral sense, I'm not trying to call people valiant job creators or anything, but a shift in resources towards the upper end of the income distribution is a feature of most (all?) modern Western economies in the last 20 years. Some have made this shift faster (the US), but if you look at the Gini coefficients for different countries you'll see that they're all on the rise.

There are too many "Masters of the Universe" for it to be some big conspiracy to take our money away. What else could be happening?

What economic utility is provided by having more million dollar sports cars, or increasing the value of "rare" items like celebrity memorabilia or "priceless" works of art? I'd argue zero

Due respect, but who are you to argue that? If people are buying these things, they necessarily have economic utility. Incidentally, you'd think someone that loves manufacturing so much would love million-dollar sports cars, which require vastly more man-hours per unit than cars made on assembly lines.
posted by downing street memo at 5:42 AM on February 20, 2012 [1 favorite]

Oh, I remember this during the 1990s. We didn't need vocational schools anymore and manufacturing training is for scrubs!

MY daughter entered middle school this year in a good school district. During parent orientation they apologized for some of the mess because they were renovating, getting rid of the kitchen rooms because home ec was being discontinued.

This in the age of Food Network and Cooking Chanel and Celebrity Chefs up the wazoo.

Judging form their absence, I'm assuming they got rid of shop and clothing some time ago. Perhaps the nineties.

Still not sure who "they" are, but, you know, eff 'em.

What economic utility is provided by having more million dollar sports cars?

Takes a lot of manpower (jobs) to make a million dollar sports car. Plus they are double plus cool. How can you put a price on that?

I mean really, talk about knowing the price of everything and value of nothing
posted by IndigoJones at 6:02 AM on February 20, 2012

And enormous dollar holdings have built up overseas, which is yet another form of American debt; we will have to eventually either work to repatriate those dollars, by creating and shipping stuff that other countries want, or else repudiate the debt by destroying the currency.

If you are saying that the dollar is likely to decline going forward, you won't get much disagreement from me, although I think calling this the destruction of the currency is a bit too far.

Let's look at a country that everyone loves for keeping a strong manufacturing core--Germany. They've dutifully run current account surpluses. Surely they aren't frittering around giving each other haircuts (how useless!), it's got to be manufacturing at the core of their GDP, right? Well, no, even there, manufacturing as a share of GDP has declined from 32% to 19% since 1970.

I've posted this data (Excel file opens) before, but the shift from manufacturing to services is an overwhelming trend across developed countries, whether they run trade deficits or surpluses. The share of GDP devoted to manufacturing from 1970 vs. 2010 for G7 countries is:

Canada 19.0% 10.6%
France 22.3% 10.5%
Germany 31.5% 18.7%
Italy 25.1% 15.0%
Japan 35.0% 19.9%
UK 28.7% 10.2%
US 24.3% 12.8%

You've got countries running deficits (US), countries running surpluses (Germany), countries that do both (Canada). All of them show the same move toward services.

I really think people should read the Stiglitz article carefully. We have been through a massive sectoral shift before, from agriculture to manufacturing. And it sucked for the people who were caught up in it, although in the long run their descendants (i.e. me) are better off that we aren't predominantly farmers. There is a very good reason Stiglitz is arguing for increased government expenditures in things like infrastructure and education and not for an industrial policy aimed at increasing manufacturing. It's simply reality that far fewer workers are going to be needed to produce as much physical stuff as we want to consume (even if we reduce the trade deficit and consume moderately less in the future), just as far fewer farmers can produce the food we want as was the case in 1900. Trying to pretend that this isn't the case will only prevent us from managing the transition with a minimum of pain for the workers involved.
posted by dsfan at 6:13 AM on February 20, 2012 [4 favorites]

if we were all cutting each other's hair all day, we'd starve.

P. S. this is a more telling sentence--pointing to food ("starve")--than you may think. If you told someone at the turn of the century that the percent of the workforce in agriculture was going to fall from 30% to less than 2% in the next century, I imagine the reaction would be quite similar: "if we were all making widgets for each other all day, we'd starve!" And yet...we didn't.

I'm not trying to argue that it won't be painful. But a hell of a lot of the comments on this post could have been made 100 years ago by replacing "manufacturing" with "agriculture" and "services" with "manufacturing." That parallel is the whole point of the article!
posted by dsfan at 6:24 AM on February 20, 2012 [2 favorites]

Due respect, but who are you to argue that? If people are buying these things, they necessarily have economic utility.

This is nonsensical. What's the economic utility of a Picasso costing 150 million instead of 50 million? How does that make our economy more efficient or create jobs versus spending 100 million on shared infrastructure?

Incidentally, you'd think someone that loves manufacturing so much would love million-dollar sports cars, which require vastly more man-hours per unit than cars made on assembly lines.

If you're telling me that a million dollar sports car creates the same amount of jobs as producing fifty $20,000 cars you may want to reconsider your position. I've got you beat in tire service alone, and the $20,000 cars actually get driven places to do things instead of sitting in a garage for ogling during dinner parties. Further down the line they are sold and resold to more consumers who also drive places and do things, while the sports car is reshuffled during estate sales to sit in more garages.

Subsidize electric car manufacturing and you're not only creating new technology and domestic manufacturing, you're increasing national defense by decreasing dependence on foreign resources, probably making lighter vehicles that are less stressful on road infrastructure, and reducing pollutants that cause expensive health problems in many of our cities. This could be mandated by government regulation, but it's drowned out by the raw idiocy of free market fundamentalists who'd rather fight another three trillion dollar war in Iraq to protect the "free" market.
posted by deanklear at 6:38 AM on February 20, 2012 [5 favorites]

I think Talez used to be a co-worker of mine...
posted by NiteMayr at 8:00 AM on February 20, 2012 [1 favorite]

1. Symantec exists purely because of the exclusive use of the wrong security model in the operating systems we all use. If we switched to a capability object model, they would be obsolete.

2. Manufacturing is going to continue to use less and less human labor. The only thing keeping most of the manual labor that does exist is the cost of replacing it with machines is currently higher than just paying people. The costs of automation continue to decline, however... so unskilled labor is almost finished.

3. The need to rip resources from the earth, build them into products designed to fail, then shove them out a pipeline to consumers, and ultimately to rot in landfills.... is a bit insane. It really needs to stop.

4. Additive manufacturing, and the ability to create one's own goods, which can be maintainable, durable, or recycle-able, is rapidly progressing. One can put a 3d printer in one's living room, without offending one's spouse (much). Try that with a forge, milling machine, printing press, etc.

5. Capitalism works well for motivating people, as long as it is well regulated. The rule of law is rapidly disintegrating, and needs to be re-asserted. If this can be done, then a national dividend should be paid to every citizen, along with health care. Taxes could then be flat rate without worrying about progressive/regressive, etc.

6. The bankers caused the Great Depression, and they are also the cause of this Greater Depression. The derivatives time bomb hasn't exploded yet... when it does, the dollar is dead.
posted by MikeWarot at 8:11 AM on February 20, 2012

hippybear: "But he doesn't actually name what those services are (other than nebulous things like "education" and "healthcare") nor does he outline exactly how an entire economy is going to be based on services when nothing is actually created."

Science. Geriatric care to cover the boomer generation. Medical & genetic research to extend everyone's life and wellbeing. Manufacturing. Superfund cleanup. Cyberbrain implants. Muralists. Movies. Videogames. Space travel. Historians. Software. Farming. And of course, blowjobs.

You don't base an economy on one thing. We base it on an evergrowing diversity of specializations and duties we wouldn't have imagined 20 years ago. "Personal geneticist" may well be the fastest growing job title in 2020, the way Webmaster was in 1998.
posted by pwnguin at 8:47 AM on February 20, 2012

So I read the article and I'm not impressed with his argument. I guess it's possibly because we would disagree on what repairing the banking and financial industry means. The fairytale version of capitalism that I remember being taught is that people who have money invest that money in ventures and equipment that are productive and make jobs for everyone else and that is why they are entitled to keep the profits that they make. This seems almost quaint and that's really the problem, as far as I can see. Fixing the banking system would involve making the primary function of banking investing money in productive ventures. I'm not really all that clear on what Mr. Stiglitz thinks that fixing the banking system entails.
posted by jefeweiss at 9:01 AM on February 20, 2012 [1 favorite]

Lots of talk in here about America not making things anymore. May I recommend a magazine story? Making It In America profiles a couple of people employed in modern American manufacturing and paints a picture of the future that surely awaits the manufacturing endeavor all over the world.

Executive take-away is: American manufacturing output, even in inflation-adjusted dollars, is at an all-time high, having absolutely skyrocketed in the last decade. American manufacturing employment has cratered during that same period and is now at long-term record lows. It's Player Piano come to life.

Unskilled workers in modern factories hope that the products they make remain low-volume, because if the volume gets large enough, replacing the unskilled workers with robots becomes economically justifiable.

The print version of the story includes a great photograph that I don't see on-line; it's a vast field full of machinery, rows upon rows of them as far as the eye can see. It's the Standard Motor Products factory floor banging out auto parts at full capacity.

There isn't a single person in sight.
posted by Western Infidels at 9:49 AM on February 20, 2012 [2 favorites]

hippybear: "I suspect the 1% have people who do their internet posting for them."

"Jeeves, tweet this for me: LOL CHEK OUT DIS CATZ ^_^"
posted by symbioid at 9:59 AM on February 20, 2012 [1 favorite]

> What if there is enough goods and services produced by a minority of people in the country,
> working no more than normal 40-hour weeks, to feed, house, clothe, and entertain
> everyone? I think that is increasingly becoming a plausible scenario, and not many people
> are talking about it,

I'd love to talk about that, at least until we find out exactly who it is who has to keep on working the normal 40 hours so that the rest don't have to. I'm prepared to be one of the Morlocks, on condition only that you Eloi are happy, beautiful, and delicious.

> let alone even considering rethinking the central idea of "if you don't work you don't eat."
> posted by chimaera at 9:42 PM on February 19 [23 favorites +] [!]

"If you don't work, I eat you" sounds fair.
posted by jfuller at 10:03 AM on February 20, 2012 [1 favorite]

the dollar is dead.

The Dollar becomes dead when it can no longer be used for settling trades.

The mortal blow is when the 'rest of the world' stops using it. Rigour Mortise sets in when the US Citizens stop.
posted by rough ashlar at 10:06 AM on February 20, 2012

If the dollar is dead, there is no market to trade in. The dollar curling up and dying would be a symptom of total currency failure world wide.

Color me skeptical on that prognosis.

On the other hand, I don't understand how finance can consume a greater portion of the profits under the flag of efficiency. That's just contradictory.
posted by dglynn at 10:10 AM on February 20, 2012

We have got to make things. We have got to produce wealth. Our efforts to pretend that this is not so are fucking killing us. -- Pope Guilty

The problem is the idea that 'stuff' is 'wealth'. You can create "stuff" but if no one wants to buy it, how is it "wealth"? You actually end up destroying wealth this way, because you spend money to create something, and if no one wants it the labor used to create it goes to waste.

The housing bubble is a perfect example. We "made stuff", in this case houses. But no one wanted to buy them, the demand was illusory created by deranged financial markets.

But the greater problem is, there's only a finite amount of 'stuff' people want, over the entire world.

Look at it this way, in the 1930s something like 30% of the people working worked in agriculture. Historically, the number has probably been 90% over human history, since we (mostly) became agrarian. Now the number is 2%.

So we can produce all the food we need to eat with only 2% working. But if productivity in manufacturing continues to increase, can't the same thing happen there? With 2% of the population working to produce the stuff people need and another 2% working on the stuff people want. So what's left for the 96%?

The argument is "we can't just all provide services to eachother" but what you're missing that the statement "We can't just all make stuff for eachother" is no different. The economy is just "people doing stuff for eachother". Agriculture is a service, that provides food for people to eat. Manufacturing is a service that provides stuff people want. What's the difference?

What I think is that ultimately we are going to have a society where no one really needs to work. A job will be a luxury. Right now we are having a preview of that where, with this high unemployment people are desperate to find jobs.

I think the challenge of the future is, rather then getting everyone a job at McDonalds, we accept the fact that only a few people are going to have to actually work, and everything that used to be done by hand will be done by robot.

We make plenty of stuff. We require less and less people to do it. A guy that was running a milling machine 20 years ago can now program a CNC machine to crank them out by the hundreds.

Even if humans in the US are needed for manufacturing less and less, there are still plenty of things to create. The design for the part, the program for the CNC machine, the expertise to make everything run smoothly. -- Ad hominem

The problem is that while someone with a highschool diploma could run the original machine, but it takes someone with the knowledge of a college educated engineer to program it. So you end up with a society where only the smartest can have 'real' jobs. That's kind of a problem, with the way our society is currently structured.

_{The manufacturing industry always likes to trot out these examples of highly-automated factories as examples of modern manufacturing for American public consumption. What they don't want you to see are videos like these: Behind Apple: A Tribute to the Workers at Foxconn
...
Yes, it's possible to make things by machine. But the vast majority of consumer goods are not made by machine, because it is cheaper per unit to outsource to poor countries with authoritarian regimes and repressive labor laws.--saulgoodman}

Dude for real. Chinese workers do not produce things in the United States . When you're looking at statistics for stuff manufactured in the United States the only thing that matters is the stuff manufactured in the United States . Chinese workers are have no impact on that statistic

Look, dollar for dollar the country that manufactures the most stuff is the United States We make more stuff then China. In 2007 we produced 1.8 trillion dollars worth of stuff, while the Chinese produced $1.1 trillion. China is the top exporter, but look, China just passed Germany a couple years ago. Is Germany a country where stuff is made by thousands of low-paid employees? Obviously not. People were fixating on China while Germany was still number one.

Germany and Japan combined export more then China. But Germany and Japan aren't, combined, bastions of low paid workers.

I don't understand how people keep missing that point. When we are talking about stuff manufactured in America we are talking about stuff manufactured in America, by Americans, and, of course, American robots.

It's never going to be cheaper, as long as we allow political interests to suppress labor rights to the point that labor has no wage negotiating power. -- saulgoodman

Again, you're paying attention to China, but completely ignoring Germany and Japan, which combined manufacture more then China. Why? The reality is, it is possible to do things with machines rather then with low paid workers. Ultimately, there are others costs besides just labor, like shipping. It's easy to ship an iPod, but shipping a car is expensive. The result: Toyota and Honda make cars in the U.S. now. Shipping an MRI machine is even more expensive.

These are basic facts about the economy. The U.S produces a lot. Germany and Japan produce and export a lot. Labor in the U.S. has been replaced by robots. Shipping stuff from China isn't free.

We make plenty of stuff.

All you have to do is look at our gigantic trade deficit to know this isn't true. -- Malor

Dude really? All you have to do is look at the ACTUAL FACTUAL DATA to know it IS TRUE!!!!

What is it about economics that makes people feel like they can just live in their own fantasy world and use their own fantasy data!!!!?!?

$558.0 billion dollars But we Exported $2.1 trillion dollars. We imported $2.66 trillion. How could we have exported $2.1 trillion dollars worth of stuff if we didn't "make anything"!?

And here's the thing. In 2010 we imported 4,304,533,000 barrels of oil. Four billion barrels. The price of oil is about $100 a barrel right now, so oil actually accounts for about $450 billion of our trade deficit. 80-90%

The reality is our trade deficit isn't caused by us not 'making stuff' but rather by us burning a shitload of oil, so much so that we hit local peak oil in the 1970s, and now import hundreds of millions of tons of it. (one barrel weighs 138kg, fyi), and it accounts for almost all of our trade deficit.


But seriously people, these things are just facts

1) The U.S manufactures a tons of stuff.
2) The U.S. manufactures more stuff then any other country.
3) US manufacturing statistics relate only to stuff made in the U.S, not stuff made elsewhere
4) Germany and Japan also export lots of stuff, and combined export more then China.
5) Shipping isn't free.
6) Our trade deficit is caused by our oil consumption.

Obviously people have lots of different opinions about things but facts are facts.
posted by delmoi at 10:15 AM on February 20, 2012 [10 favorites]

Actually if the dollar did go down in value it would be good for our manufacturing base, as imports would become more expensive, and exports would become cheaper for other countries.
posted by delmoi at 10:16 AM on February 20, 2012

Well, you win the argument by vertical real estate alone, delmoi. I don't know if getting manufacturing back into the US is necessarily my goal, and I doubt you'll find a way to cite me saying "US manufacturing is disappearing." But not having the majority of our consumer goods made by slave labor is definitely a goal of mine.

Also, the resistance to the so-called service economy is basic human psychology: people like having something to show for their work. The demands of the global economy don't and won't change that, so to the extent the top-down insistence on shifting to "service" economy fails to account for human nature, it's bound to fail.

Also, most people hear "flipping burgers" when you say "service jobs." Granted, in your take on the theory (and maybe mine, if I had one), you might picture people raking in the big bucks designing more elegant, solar-powered flying cars, but most of us are grounded in the sobering reality that the burger flipping level service jobs are the only ones that seem to be proliferating at a significant pace to match the decline in middle class jobs, whether they be in manufacturing or teaching.
posted by saulgoodman at 10:27 AM on February 20, 2012

I'm not arguing with anyone named Stiglitz.
posted by snottydick at 10:35 AM on February 20, 2012

delmoi, I agree with most of what you're saying, but your export numbers are not per capita or GDP. Our per GDP exports place us almost dead last in the world.

Of course being in the top of that list might also mean the only thing you have is exploitable natural resources, but let's not paint a rosy picture of US manufacturing exports. Compared to our economy as a whole, it's a tiny number, and I'm fairly sure those numbers include for things like video games, movies, music, etc. It's not that those things aren't valuable, but when it comes to manufacturing things that require machinists, we have gutted our manufacturing capacity without a doubt.

Basing our economy on the export of elastic goods isn't a great idea. If the world economy does take a nosedive our farmland will be more valuable, but I'm not sure we're going to have the ability to harvest anything efficiently if China cuts their exports to us. At this point, we are dependent on their slave labor for our way of life. England was similarly dependent on the US in the late 19th Century, and they fell hard after we broke free.
posted by deanklear at 10:42 AM on February 20, 2012 [1 favorite]

The things we now call services have always been a huge part of the economy, and there have always been a large part of the population working in that sector. These people are called women. A farmer in 1812 didn't pop off to McD's for some food for all his workers. His wife and daughters made it, maybe with female employees. In the south, if he was rich enough, his slaves cooked the food. And so on, with a multitude of services, including the manufacturing of clothes, soap, beer, and a lot of other stuff.
"Making stuff", whether it be food or goods has always been part of the economy, not all of the economy. Maybe, if there is anything to this structural argument, the thing that is breaking down is our way of organizing the balance between stuff and services within the economy.
posted by mumimor at 11:09 AM on February 20, 2012 [2 favorites]

your export numbers are not per capita or GDP. Our per GDP exports place us almost dead last in the world.

That's not meaningless, but I think you are ignoring something extremely important--the United States is huge. The countries near the top of the export list are quite small. I mean, if we don't look at European countries on an individual basis, but rather the EU, the values are:

GDP (PPP): $15.39 trillion
Exports from EU: $1.791 trillion
Population: 503,824,373

The figures for the United States are:

GDP (PPP): $15.04 trillion
Exports: $1.511 trillion
Population: 313,847,465

So Europe exports $3550 per person, while the United States exports $4810 per person. As a percent of GDP, Europe is slightly more export-heavy, at 11.6% of GDP vs. 10.0% for the US.

Now, I'm not necessarily saying this is the "right" way to look at it vs. a country-by-country way being "wrong" (although, if we are talking about something tragic happening to the dollar, I think we should really look at the eurozone and not individual countries like Germany). But if your economic model suggests that breaking the US into 50 individual states would make things look massively different without any actual change in human activity, as would certainly be the case here, there is probably something not quite right.
posted by dsfan at 11:10 AM on February 20, 2012 [1 favorite]

One thing is for certain: the economy will keep going to the shitter while we argue about what colour the toilet paper should be.
posted by Vindaloo at 12:14 PM on February 20, 2012

the fundamental question: What if there is enough goods and services produced by a minority of people in the country, working no more than normal 40-hour weeks, to feed, house, clothe, and entertain everyone

There is enough. As has been pointed out above, only 2% of population is needed to produce food nowadays - a tenfold improvement (even more when considering history of agrarian society). Assuming similar improvement in other economic bases, 90% plus of us can stop working altogether. Or all of us can work on average a 4 hour week as opposed to 40 hour week.

If we are willing to have 1900 standard of living.

Or let's double or triple that figure. 15 hour work week to have, say 1950's standard of living. Have all the food you want, warm and safe home, a few luxury items. Much much better standard than most humans for the majority of our history.

Are we willing to do that? Are you?
To trade that iPod, car, closet full of clothes, cable TV with 300 channels, 3000 sq ft house, and other knick-knacks for a simple life?

Because frankly until we can stop and say to ourselves that we have enough, there is no end to the rat race. There is no end to feed our "need".
posted by 7life at 12:21 PM on February 20, 2012 [2 favorites]

@delmoi

> 2) The U.S. manufactures more stuff then any other country.
This is not so surprising. To have this normalized (e.g. per head) would tell more.

> 3) US manufacturing statistics relate only to stuff made in the U.S, not stuff made elsewhere
I am not sure about this. How to you measure "manufacturing"? In parts of the USSR it was measured in "tons", this lead to increasing the weight of tractors to increase "total output". Lets assume we measure the manufacturing in inflation adjusted dollars, it is still a hard call.
Example: Germany sells an AUDI car for US$ 45k to the US. Did Germany have "manufacturing" worth of 45k? The seats may have been made in the Czech Republic, the engine assembled in Hungary, the steel made in India etc.

> 4) Germany and Japan also export lots of stuff, and combined export more then China.
Yes. And what do they get for it? Lehman Brothers certificates and Greek Government debt.

> 5) Shipping isn't free.
It is very cheap. 1 kg airfreight costs US$ 1 (wholesale)

> Obviously people have lots of different opinions about things but facts are facts.
Yes, facts that are presented in a very biased way.
posted by yoyo_nyc at 12:57 PM on February 20, 2012 [1 favorite]

Protectionism on a national scale is a proven failure.

Some EU countries have a 20% sales tax ("value added tax"). This could be done in the US, it could even be higher. Income from this tax could go into health insurance and social security. Advantages? The sales tax will always be there, no matter where the item is produced (China vs. US). Paying health care from such a tax would basically take the costs for health care out of US manufacturing and US labor and at the same time also put these costs into foreign manufactured goods.
posted by yoyo_nyc at 1:22 PM on February 20, 2012

The fact that US manufacturing output is high is essentially meaningless if there aren't any jobs attached to it. Efficiency means fuck-all if there isn't enough broad-based disposable income to support the economy.

If the "answer" doesn't include jobs, or enough income redistribution to replace jobs, then it isn't the answer.
posted by Benny Andajetz at 2:01 PM on February 20, 2012 [2 favorites]

Are we willing to do that? Are you?
To trade that iPod, car, closet full of clothes, cable TV with 300 channels, 3000 sq ft house, and other knick-knacks for a simple life?

Because frankly until we can stop and say to ourselves that we have enough, there is no end to the rat race. There is no end to feed our "need".


You're right, but the quotation marks around the word "need" suggest that you may not be convinced of the reality of the "need." Insofar as that "need" is manufactured, then "saying to ourselves that we have enough" will be ineffective, since large vested interests (e.g. Mr. Romney and his cohorts) depend upon our behaving as though our "needs" are endless. We have to do more than tell ourselves, we have to tell each other. There will be more to it, of course, but we can begin with this.
posted by carping demon at 3:52 PM on February 20, 2012 [1 favorite]

We "made stuff", in this case houses. But no one wanted to buy them, the demand was illusory created by deranged financial markets.

Seems like everybody wanted to buy them. So much so that everybody stopped looking at the numbers justifying the purchase price. We can argue who's fault that was, but the demand was not illusory, only the logic behind the price.

Which may be what you meant, but it didn't come out that way.
posted by IndigoJones at 4:56 PM on February 20, 2012

US Manufacturing Employment, 1970: 18,424,000
US GDP from Manufacturing, 1970: $680.9B (2005 dollars)

US Manufacturing Employment, 2010: 11,458,000
US GDP from Manufacturing, 2010: $1,763.4B (2005 dollars)

Employment: Bureau of Labor Statistics
GDP: United Nations Statistics Division, National Accounts Main Aggregates Database (.xls)

So what? Are you telling me that every bloody thing sold at Wal-Mart has a "Made in China", or a "Made in Bangladesh" or a "Made in Malaysia" sticker on it is because China, Bangladesh and Malaysia are kicking our ass in robotics!? You're being duped!
posted by Trochanter at 5:46 PM on February 20, 2012 [2 favorites]

Who am I being duped by, the BLS or the UN? The fact is, over the past 40 years, while manufacturing employment in the US has steadily declined, the value of the goods being manufactured here has nearly tripled. It's not just robotics that's responsible for that by any means - there have also been major advances in logistics and manufacturing process design as well.

The fact remains, however, and no matter how many exclamation points you use you cannot refute it, that the value of goods manufactured here has actually massively increased, it's just the number of people provided with jobs in doing so that has collapsed. It's not a good thing at all, but it presents a totally different set of social and economic challenges then we would face if we really didn't manufacture anything in the US anymore.

Most of that shit in Walmart wouldn't have been made in the US 1970 either, incidentally - it just would have been Japan or Taiwan or South Korea rather than China, Bangladesh or Malaysia.
posted by strangely stunted trees at 6:33 PM on February 20, 2012 [3 favorites]

Having more people produce less stuff increases the bottom line of productivity.

The problem with these conversations, even when they focus on Economics, are most commentators still need to catch up to Heidegger's question concerning technology which was written some 50 years ago.
posted by Shit Parade at 6:50 PM on February 20, 2012 [2 favorites]

Some of those goods would have been made in those other countries by companies and entrepreneurs native to those countries, not by American firms exploiting slave waged foreign labour.

I'm sick of this "Derp! I'm a hard headed realist. Herp! Gotta face facts. Look! I'm a futurist." garbage.

Percentage of GDP from manufacturing 1987:20.3
Percentage of GDP from manufacturing 1993:18.4
Percentage of GDP from manufacturing 1997:17.3
Percentage of GDP from manufacturing 2003:14.6
Percentage of GDP from manufacturing 2005:14.4
posted by Trochanter at 6:55 PM on February 20, 2012 [1 favorite]

Most of that shit in Walmart wouldn't have been made in the US 1970 either, incidentally

I do remember some 20-ish years ago when Wal-Mart's main marketing campaign was "Made In USA", with them striving to stock their shelves with as many US-made products as possible, even go so far as to feature companies which Wal-Mart somehow called into existence because they found a great product which was made overseas but they wanted a version made in the US so they worked hard to find someone who would make it for their stores.

It was a great campaign, and effective with me while it lasted.
posted by hippybear at 7:01 PM on February 20, 2012

That's hilarious, hippybear.
posted by Trochanter at 7:12 PM on February 20, 2012

You know who else is losing manufacturing jobs? China.

The big picture: "....Some 22 million manufacturing jobs were lost globally between 1995 and 2002 as industrial output soared 30 percent."

During that time period China lost 16 million manufacturing jobs.
posted by storybored at 8:01 PM on February 20, 2012 [3 favorites]

Western Infidels: "May I recommend a magazine story? Making It In America profiles a couple of people employed in modern American manufacturing and paints a picture of the future that surely awaits the manufacturing endeavor all over the world."

Just listened to an interview with the author, Adam Davidson, perhaps best known on Mefi for his reporting on NPR's Planet Money. Just read the article and I have to say it's a lot more interesting and less "Made in the USA" marketing fluff than I expected.

One question that comes up in the interview, is whether skilled machinists actually use calculus on the job. As a programmer myself, I'm not quite clear on what you'd use it for on CNC machines. Not saying it isn't handy, but I'd sure like to know what it's used for.
posted by pwnguin at 8:07 AM on February 21, 2012

The simple life without consumer electronics and a car sounds like torture. If I wanted to eat beans and live in a studio apartment I'd still be in grad school. It is fun to take a break from the rat race for a few days, but it gets really really boring quickly. Also a lot of people work making apps and computer programs for those gadgets.
posted by humanfont at 9:57 AM on February 21, 2012

Is This the End of Market Democracy?

Here are some of the issues that are making some politicians and political thinkers uneasy:

Are large segments of the American workforce — millions of people — at a structural disadvantage in the face of global competition, technological advance and ever more sophisticated forms of automation? Is this situation permanent?

Will the share of profits from improving corporate productivity flowing to capital and to high-earning C.E.O.s continue to grow, while the income of wage earners stagnates and their share of profits declines?

Has the surging wealth and income of the top one percent and of the top 0.1 percent reached a tipping point at which the political leverage of the very affluent decisively outweighs the influence of the electorate at large?

Is it possible that in the United States and Europe, democratic free market capitalism is no longer capable of providing broadly shared benefits to a solid majority of workers?

(previously)

fwiw...
The Bifurcated Society
Better Living in the 21st Century
The End of Work: The Decline of the Global Labor Force and the Dawn of the Post-Market Era (A critique of a neo-futurist's vision of the decline of work)
The Age of Social Transformation

more...
The 2012 Economic Report of the President
Beyond Industrialization
PUBLIC GOODS MINI-BONANZA
The world's hunger for public goods
State Socialism versus State Capitalism
The Nation-State Reborn
What is Governance?

also btw:

• Opaque and stinky logorrhea - "We have to create alternative means of overcoming coordination problems associated with the pace and scale of investment activity, while hopefully expanding the menu of investment options and improving the quality of investment decisions. As utopian as it sounds, I think we can work around compromised banking systems and gradually render them obsolete with a combination of 'crowdfunding', social insurance, and a shift of government support away from opaque debt guarantees and towards undiversified equity. But that's a project still before us."
• Restraining unit labor costs is a right-wing conspiracy - "If suppressing returns to capital would be improper, why on Earth do we tolerate a central bank that opposes returns to labor? There is an orthodox answer to this question. Wages, it is said, are sticky, while returns to capital are highly flexible... but at a macro level our experience is opposite... In aggregate, labor has proven very flexible in its demands while the rentier class has been quite rigid."

posted by kliuless at 9:09 PM on February 21, 2012 [2 favorites]