“No alternative growth engine materialized to combat underemployment.”
March 9, 2020 8:30 AM Subscribe
“ When the growth engine of industrialization sputters—due to the replication of technical capacities, international redundancy and fierce competition for markets—there has been no replacement for it as a source of rapid growth. Instead of workers reallocating from low-productivity jobs to high-productivity ones, the reverse of this process takes place, as workers pool increasingly in low-productivity jobs in the service sector. As countries have deindustrialized, they have also seen a massive build-up of financialized capital, chasing returns to the ownership of relatively liquid assets, rather than investment in new fixed capital. In spite of the high degree of overcapacity in industry, there is nowhere more profitable in the real economy for capital to invest itself. ” AARON BENANAV- Automation And The Future Of Work Part 2 ( New Left Review)
Long as we're measuring growth in terms of dollars moved around, and not in terms of humans liberated from drudgery, automation will always be the enemy of the worker.
posted by mhoye at 10:04 AM on March 9, 2020 [7 favorites]
posted by mhoye at 10:04 AM on March 9, 2020 [7 favorites]
It seems to me that what this paper is suggesting is that the biggest source of our economic woes is the centralization of control of too many resources in the hands of too few people. It's essentially capitalism's own version of Soviet-style bureaucracy. Except, instead of too much power being vested in the hands of a small number of hand-selected bureaucratic managers and functionaries, we've centralized control in the hands of too few billionaires, who keep making the same relatively uncreative investment decisions. In effect, we are suffering from limited cognitive capacity for resource allocation.
If instead of holding billions as cash (as companies like Apple do) or investing it in the same relatively small number of stocks, that money were redistributed, it would suddenly find itself in the hands of millions of "economic decision makers", whose spontaneous activity would fuel economic growth.
You often hear these kind of arguments from the left presented in terms of "velocity of money". But it's also a "wisdom of crowds" arguments. Right now we're suffering from too much power and control in too few hands. And aside from the moral problems with that, it's actually making our economy far less dynamic than it could be.
posted by macross city flaneur at 1:42 PM on March 9, 2020 [6 favorites]
If instead of holding billions as cash (as companies like Apple do) or investing it in the same relatively small number of stocks, that money were redistributed, it would suddenly find itself in the hands of millions of "economic decision makers", whose spontaneous activity would fuel economic growth.
You often hear these kind of arguments from the left presented in terms of "velocity of money". But it's also a "wisdom of crowds" arguments. Right now we're suffering from too much power and control in too few hands. And aside from the moral problems with that, it's actually making our economy far less dynamic than it could be.
posted by macross city flaneur at 1:42 PM on March 9, 2020 [6 favorites]
I found the first article interesting. If I understood it correctly, focusing on continuing productivity growth takes our focus away from the stalling of production growth; each person who's making stuff is making more stuff, but there are less and less people making stuff, so it's a wash.
I'd be interested if anyone cares to summarize the paywalled part 2.
I recently finished Braudel's "Civilization and Capitalism" trilogy, and one of the arguments he makes is that capitalism has always chased the most profitable enterprises, but the most profitable enterprises have rarely been industrial enterprises, with some major exceptions during the Industrial Revolution and after. He wondered if we're going to go back to the pattern of the last millennium rather than that of the last century, with the highest levels of financial capital generally avoiding industry as too risky for the often meager returns.
posted by clawsoon at 3:10 PM on March 9, 2020 [1 favorite]
I'd be interested if anyone cares to summarize the paywalled part 2.
I recently finished Braudel's "Civilization and Capitalism" trilogy, and one of the arguments he makes is that capitalism has always chased the most profitable enterprises, but the most profitable enterprises have rarely been industrial enterprises, with some major exceptions during the Industrial Revolution and after. He wondered if we're going to go back to the pattern of the last millennium rather than that of the last century, with the highest levels of financial capital generally avoiding industry as too risky for the often meager returns.
posted by clawsoon at 3:10 PM on March 9, 2020 [1 favorite]
It's not clear to me that what the author calls "industrial overcapacity" isn't just automation by another name. I'd also be interested in a summary of the second part, because this seems very fixated on economic/manufacturing growth as the cause (and solution?) to all problems, and yet it is becoming increasingly clear that for environmental reasons perhaps manufacturing output shouldn't grow. I think seeing the proposed solutions would clarify the argument here.
posted by Pyry at 1:06 AM on March 10, 2020 [1 favorite]
posted by Pyry at 1:06 AM on March 10, 2020 [1 favorite]
Pyry: It's not clear to me that what the author calls "industrial overcapacity" isn't just automation by another name.
Maybe he's talking about lack of demand because poor people don't have enough money to buy current industrial output? A Keynesian general glut? A whole bunch of stuff being produced that would be useful to people, but most people can't use it?
I think seeing the proposed solutions would clarify the argument here.
Agreed.
posted by clawsoon at 10:37 AM on March 10, 2020
Maybe he's talking about lack of demand because poor people don't have enough money to buy current industrial output? A Keynesian general glut? A whole bunch of stuff being produced that would be useful to people, but most people can't use it?
I think seeing the proposed solutions would clarify the argument here.
Agreed.
posted by clawsoon at 10:37 AM on March 10, 2020
The world is abuzz with talk of automation.
The world has been "abuzz" re automation for almost a century now. As soon as we had machines that could make or move machine parts, production companies decided they needed to get rid of those pesky workers who got in the way of their profits.
machines remain comically incapable of opening doors or, alas, folding laundry. Robotic security guards are toppling into mall fountains. Computerized digital assistants can answer questions and translate documents, but not well enough to do the job without human intervention; the same is true of self-driving cars.
Errr... I grew up with supermarkets that had doors that opened just fine without human intervention. I suspect laundry is not a matter of lack of robot talent, but expense: "Fold Laundry" is not one task, but dozens, that get applied to textiles of different sizes and shapes. All the other issues are not "oh look machines can't do this thing that people do" but "companies are failing to design robots/AIs that work well in the limits of their tech, and instead are trying to get them to do tasks that humans think are one job."
we find ourselves ‘at an inflection point—a bend in the curve where many technologies that used to be found only in science fiction are becoming everyday reality.’
I can't keep reading. Did these people miss the invention of the microwave oven? Cellphones? Roombas?
Do they get around to saying anything new, or is this the same "oh noes tech is killing all the jobs" hand-wringing that's been going on since the invention of the vacuum cleaner?
(I mean, I get it; we have new worries now. But the problem isn't "tech is stealing jobs"; it's "businesses are not required to consider the needs of the communities that pay them, and the gov't is allowing corporations to siphon wealth out of communities and into the hands of a tiny number of people.")
posted by ErisLordFreedom at 3:11 PM on March 10, 2020
The world has been "abuzz" re automation for almost a century now. As soon as we had machines that could make or move machine parts, production companies decided they needed to get rid of those pesky workers who got in the way of their profits.
machines remain comically incapable of opening doors or, alas, folding laundry. Robotic security guards are toppling into mall fountains. Computerized digital assistants can answer questions and translate documents, but not well enough to do the job without human intervention; the same is true of self-driving cars.
Errr... I grew up with supermarkets that had doors that opened just fine without human intervention. I suspect laundry is not a matter of lack of robot talent, but expense: "Fold Laundry" is not one task, but dozens, that get applied to textiles of different sizes and shapes. All the other issues are not "oh look machines can't do this thing that people do" but "companies are failing to design robots/AIs that work well in the limits of their tech, and instead are trying to get them to do tasks that humans think are one job."
we find ourselves ‘at an inflection point—a bend in the curve where many technologies that used to be found only in science fiction are becoming everyday reality.’
I can't keep reading. Did these people miss the invention of the microwave oven? Cellphones? Roombas?
Do they get around to saying anything new, or is this the same "oh noes tech is killing all the jobs" hand-wringing that's been going on since the invention of the vacuum cleaner?
(I mean, I get it; we have new worries now. But the problem isn't "tech is stealing jobs"; it's "businesses are not required to consider the needs of the communities that pay them, and the gov't is allowing corporations to siphon wealth out of communities and into the hands of a tiny number of people.")
posted by ErisLordFreedom at 3:11 PM on March 10, 2020
I recently finished Braudel's "Civilization and Capitalism" trilogy...
Capitalism and the Future of Nation States
Capitalism and the Future of Nation States
Ultimately, I realized that one thinker in particular could help us find answers to Stefano’s question [that nation states could disappear], notwithstanding the fact that he died in 1985: I’m thinking about Fernand Braudel, a well-known French historian, social scientist, and author of one notably thorough work on the history of capitalism, Civilization and Capitalism, 15th-18th Century...Erik Olin Wright, How to Be an Anticapitalist in the Twenty-First Century
2/ For Braudel, the economy can be subdivided into three categories. The first, which he calls “material life”, is made up of the infinite, informal transactions that form our daily lives. The second, the “market economy”, is where individuals conduct business, establishing a link between production and consumption. The third, finally, is “capitalism”. As Bill explains above, Braudel sees within capitalism an ensemble of processes that allow one to extricate oneself from the trivialities of commerce and pursue increasing returns to scale.[1,2,3] The market economy is the world of merchants, those who buy and sell while taking a small margin as items pass through their hands. Capitalism, on the other hand, is the world of the traders, financiers, and entrepreneurs who have understood that they can attenuate the rigorous competition in the market economy by “inserting” capital into the production process.
3/ For a long time, capitalism was at the margins of the economy. Its first iterations were what Braudel called the “faraway trade” (after the German word Fernhandel), for example that involving spices,[4,5] silk, precious metals. In these sectors, where the goal was trading rare, non-perishable goods, lengthening the routes of commerce weakened the competitive dynamics between various economic agents. Few organizations were effectively able to trade from one end of these long routes to the other. The reward thus wouldn’t go to the best merchants, those who were most skilled in the art of buying and selling. Rather it went to those organizations which could invest in a financial, informational, and logistical infrastructure that could operate at the largest scale and secure a long-term competitive advantage.
4/ Capitalism then started to spread throughout the economy. Technological progress allowed capitalists to arrive in all sectors, setting off a race for scale. Today, there are few markets where businesses are simply content to buy and sell. Almost all sectors, even those that do not require large amounts of capital, are dominated by capitalistic businesses that utilize assets to avoid the difficulties caused by perfect competition. And so the history of capitalism is that of capitalists evicting merchants from a growing number of sectors of the economy...
[T]he most prosperous countries were always those where capitalists benefited, according to Braudel, from a certain “goodwill” on the part of the state. Or, as Dani Rodrik puts it, “capitalists need the state more than the state needs them”... capitalists have to contribute to local development through consumption, investment, and redistribution. The state contributes to capitalists succeeding; capitalists, in turn, contribute to lifting up the local “material life” and “market economy”, thus strengthening the state.[6]
7/ Like all technological revolutions, that of computers and networks allowed capitalism to escape even further from the market economy by intensifying the race for increasing returns to scale. [N]ow that capitalism is driven by computing and networks and thus plays at an even larger scale, the resulting economic surplus is becoming more and more concentrated within just a few “economic worlds”, to use Braudel’s term (économie-monde). One economic world is centered on Silicon Valley;[7,8] another one is centered on China.[9,10] Today’s version of capitalism gives birth to even larger organizations and a greater geographic concentration of wealth.
8/ What about the future of nation states? Braudel reminds us that the center of our Western economic world has changed several times since the Middle Ages. Venice, Antwerp, Genoa, and Amsterdam were effectively city states. But then London and New York came along... Only a nation state could compensate for that fact with a navy able to master the sea, a vast colonial empire to grow cotton and tea, and the strength to negotiate favorable trade agreements with other nation states. You needed a nation state to support capitalist enterprises at the scale enabled by the Industrial Revolution. Sovereign entities had to scale up at the same pace as capitalist ones so that their mutually beneficial alliance could bear fruit...
I don’t think we should conclude that nation states will disappear:
Today’s capitalist organizations still need states to support their expansion—and since they’re larger than in the past thanks to computing and networks, the corresponding states need to be able to match that scale with more resources and superior strategic power. This is why we’re seeing wealth concentrating within very large and populated countries such as China and the US, with mid-size countries bound to become mere “intermediate” regions (Braudel’s word).[11,12]
This is Wright's last book; it continues a long and (unironically) proud tradition of socialists re-writing the Manifesto: start by saying why capitalism sucks, while admitting some of its virtues; then explain how it can be bettered; identify the existing social force(s) which will replace it; and talk about how those forces will undertake the revolution. Wright says sound things about how capitalism molds people into selfish jerks (or crushes them), is undemocratic and (for most) unfree, and offends basic notions of fairness...Nick Srnicek and Alex Williams, Inventing the Future: Postcapitalism and a World Without Work
He then sketches what he'd like to see instead, which is a market economy with lots of public provision, some collective ownership, and a lot of worker and consumer cooperatives. Fantasies of central planning are, rightly, not part of his socialist vision. (He does not touch on the delicate problem of how to coordinate the democratic decisions of the members of a cooperative with the democratic decisions of the wider socialist commonwealth when the two disagree [e.g., about whether or not to shut down an oil company], or how to delineate the right scale for the cooperatives [is the oil company one cooperative, or does each rig, refinery and gas station become its own cooperative?].) He also delineates different ways of attacking or at least trying to replace capitalism, ranging from frontal assaults by violent revolution to separatist utopian communities to temporary carnivals of defiance to quietly trying to build alternative institutions that can grow to take over the larger capitalist ecosystem, a sort of vision of socialism as algal bloom. (That is not his image.) The end of the book looks at what would be required for a "collective actor" to try to effect such a transformation --- and there it ends, with a promise that he was just about to say how the trick would be turned. We will never get to hear Wright's thoughts about how to solve that last riddle, because he died while the book was still incomplete...
To get there, their basic idea is to push for a "post-work world", one where people don't have to work to survive, because they're entitled to a more-than-subsistence basic income as a matter of right. They realize that making that work will require lots of politics and pushes for certain kinds of technological progress rather than others. This is the future they want --- to finally enter (in Marx's words) "the kingdom of freedom", where we will be able to get on with all the other problems, and possibilities, confronting us.posted by kliuless at 12:12 AM on March 11, 2020 [1 favorite]
As for getting there: like a long, long line of leftist intellectuals from the 1960s onwards, Srnicek and Williams are very taken with the idea, going back to Gramsci, that the key to achieving socialism is to first achieve ideological "hegemony". To put it crudely, this means trying to make your idea such broadly-diffused, widely-accepted, scarcely-noticed common notions that when madmen in authority channel voices from the air, they channel you... Part of this drive for hegemony is pushing for new ideas in economics --- desirable in itself, but they are sure in advance of what inquiry should find *.[13]
[...]
Shorter: Read Peter Frase's Four Futures instead.[14]
Socialism, Market Socialism[15]
"Political control of economic life is not the consummation of world history, the fulfilment of destiny, or the imposition of righteousness; it is a painful necessity." ---Ernest Gellner, The Rest of History (1996)posted by kliuless at 12:56 AM on March 11, 2020
[S]ocialism includes some notion that the economy should not just be under political control, but that that control should be exercised for the common good, and in the direction of eliminating destitution and minimizing inequalities. In the abstract, I think this is an excellent thing; but God and the Devil both are in the details, to which we socialists have, typically, given far less thought than they deserve, to the point, sometimes, of criminal folly.
"Market socialism" is a current of ideas, starting, it seems, with the Polish economist Oskar Lange, for how to make extensive use of markets without thereby creating gross economic and political inequality. Making rational economic decisions about really big, unavoidably political issues, like, say, education or public health is hard enough; there's no reason to add to the burden any more than it has to be, and markets are very good at letting us live our economic lives without thinking too hard about them. (As Whitehead said someplace, it's a profound mistake to believe that we should think about what we are doing.) On the other hand, modern states are powerful enough as things stand; to turn the economy wholly over to them is a bad idea. To combine markets with socialism seems like an elegant and feasible solution, at least technically, and it's one which I support; I've discussed the details elsewhere. (I don't think it has a chance in hell of being realized anytime soon; but part of being a hereditary leftists is an irresistable attraction to lost causes.)
« Older How Many Librarians Does It Take to Find a... | Spoiler: It's a multitude of issues Newer »
This thread has been archived and is closed to new comments
Part 2 requires a sign-in.
posted by No Robots at 9:13 AM on March 9, 2020