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Sun Dec 9, 2012, 12:39 PM

Paul Krugman rediscovers Marxism--what's next? Fire? The wheel?

http://krugman.blogs.nytimes.com/2012/12/08/rise-of-the-robots/



Rise of the Robots

<snip>

Robots mean that labor costs donít matter much, so you might as well locate in advanced countries with large markets and good infrastructure (which may soon not include us, but thatís another issue). On the other hand, itís not good news for workers!

This is an old concern in economics; itís ďcapital-biased technological changeĒ, which tends to shift the distribution of income away from workers to the owners of capital.

<snip>

But the college premium hasnít risen for a while. What has happened, on the other hand, is a notable shift in income away from labor:



<snip>

I think our eyes have been averted from the capital/labor dimension of inequality, for several reasons. It didnít seem crucial back in the 1990s, and not enough people (me included!) have looked up to notice that things have changed. It has echoes of old-fashioned Marxism ó which shouldnít be a reason to ignore facts, but too often is. And it has really uncomfortable implications.



Gee, you think?

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Reply Paul Krugman rediscovers Marxism--what's next? Fire? The wheel? (Original post)
Starry Messenger Dec 2012 OP
The Magistrate Dec 2012 #1
Starry Messenger Dec 2012 #3
leftstreet Dec 2012 #2
Starry Messenger Dec 2012 #4
1-Old-Man Dec 2012 #5
Starry Messenger Dec 2012 #6
nadinbrzezinski Dec 2012 #7
DireStrike Dec 2012 #14
nadinbrzezinski Dec 2012 #32
DireStrike Dec 2012 #43
nadinbrzezinski Dec 2012 #44
DireStrike Dec 2012 #50
nadinbrzezinski Dec 2012 #51
DireStrike Dec 2012 #58
tama Dec 2012 #74
limpyhobbler Dec 2012 #8
byeya Dec 2012 #10
Starry Messenger Dec 2012 #11
byeya Dec 2012 #15
Starry Messenger Dec 2012 #16
byeya Dec 2012 #17
pbrower2a Dec 2012 #30
socialist_n_TN Dec 2012 #68
TBF Dec 2012 #54
Starry Messenger Dec 2012 #59
entanglement Dec 2012 #47
Egalitarian Thug Dec 2012 #45
byeya Dec 2012 #9
Starry Messenger Dec 2012 #13
gulliver Dec 2012 #12
byeya Dec 2012 #18
Starry Messenger Dec 2012 #19
byeya Dec 2012 #20
Starry Messenger Dec 2012 #24
tama Dec 2012 #75
entanglement Dec 2012 #48
xchrom Dec 2012 #21
FarCenter Dec 2012 #22
byeya Dec 2012 #23
FarCenter Dec 2012 #25
limpyhobbler Dec 2012 #28
pampango Dec 2012 #33
HiPointDem Dec 2012 #35
pampango Dec 2012 #36
HiPointDem Dec 2012 #38
Spike89 Dec 2012 #52
HiPointDem Dec 2012 #53
Spike89 Dec 2012 #55
HiPointDem Dec 2012 #56
Spike89 Dec 2012 #57
HiPointDem Dec 2012 #62
Spike89 Dec 2012 #63
HiPointDem Dec 2012 #64
Spike89 Dec 2012 #65
HiPointDem Dec 2012 #66
Spike89 Dec 2012 #67
HiPointDem Dec 2012 #71
tama Dec 2012 #77
HiPointDem Dec 2012 #78
joshcryer Dec 2012 #70
tama Dec 2012 #76
NoOneMan Dec 2012 #26
JackRiddler Dec 2012 #27
NoOneMan Dec 2012 #29
tama Dec 2012 #79
On the Road Dec 2012 #31
HiPointDem Dec 2012 #34
Egalitarian Thug Dec 2012 #37
Starry Messenger Dec 2012 #39
coalition_unwilling Dec 2012 #40
Egalitarian Thug Dec 2012 #41
Hissyspit Dec 2012 #42
mmonk Dec 2012 #46
nadinbrzezinski Dec 2012 #49
white_wolf Dec 2012 #61
socialist_n_TN Dec 2012 #60
joshcryer Dec 2012 #69
white_wolf Dec 2012 #72
joshcryer Dec 2012 #73

Response to Starry Messenger (Original post)

Sun Dec 9, 2012, 12:48 PM

1. Indeed, Ma'am: The Flash Of the Obvious Is Blinding....

Marx analyzed what is very well. A poor eschatologist, perhaps, but an excellent taxonimist....

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Response to The Magistrate (Reply #1)

Sun Dec 9, 2012, 12:57 PM

3. This from a guy who once said--

"I say phooey. Sure, Marx wrote about economic upheavals; so did lots of people. What he never managed to do was offer either a comprehensible explanation of why such upheavals happen, or any suggestions about what to do about them (except abolish capitalism). By my reckoning, Karl Marx made about as much contribution to economics as Zeppo Marx made to comedy."--http://www.pkarchive.org/theory/keynes.html

Well, one reason we proles get pissy is that one side has all the money...do I get a Nobel Prize? I'm glad Mr. Krugman has decided to join us, even for a short while, here in realityville.

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Response to Starry Messenger (Original post)

Sun Dec 9, 2012, 12:54 PM

2. 'And it has really uncomfortable implications'

Gee, ya think?

DURec

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Response to leftstreet (Reply #2)

Sun Dec 9, 2012, 01:00 PM

4. I've been morbidly giggling about this article for days.

My other Marxist friends on FB didn't find it as hilariously tragi-comic as I did.

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Response to Starry Messenger (Original post)

Sun Dec 9, 2012, 01:13 PM

5. This little glitch (I refuse to call it a problem) is easily solved by a move to employee owned

It should be the target of Unions to become the home of employee owner organizations, or possibly even the goal of Unions to buy out the businesses where their worker's toil. It is my understanding that there is already a clear movement toward employee owned corporations in this country and of course in those cases the promise of the 50's becomes a possibility, that the workers will actually share in the efficiency improvements in their industries - by either increased pay (earnings) or increased leisure time.

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Response to 1-Old-Man (Reply #5)

Sun Dec 9, 2012, 01:17 PM

6. I don't know if it is easily solved?

If it was easy, wouldn't that have happened without corporations taking over our system of government and buying influence and votes in bulk? How do we get rid of those entities?

(I don't disagree that unions taking over industries is a good idea, I like it. I just think it will be a massive struggle--and it's not a glitch of capitalism that things have come to such a low state, it's a feature.)

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Response to 1-Old-Man (Reply #5)

Sun Dec 9, 2012, 01:21 PM

7. That is...drumroll...

Socialism, where workers control the means of production. It is a natural evolution under the dialectic in mature capitalist societies.

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Response to nadinbrzezinski (Reply #7)

Sun Dec 9, 2012, 03:39 PM

14. Not quite, you would still have competing enterprises and markets.

Production would still be for profit, not for need, and there is no guarantee of income or position in these enterprises. And it doesn't even touch the distribution side. What some call "market socialism", which is kind of incoherent when taken altogether.

But the contradictions between worker owned enterprise and capitalist statehood lead to either a socialist state, or a violent end to workers' power. Dialectically, anyway.

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Response to DireStrike (Reply #14)

Sun Dec 9, 2012, 09:46 PM

32. You should read Marx, just saying.






Competition is contemplated.

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Response to nadinbrzezinski (Reply #32)

Mon Dec 10, 2012, 01:20 PM

43. Any particular works/sections?

I've read a bit of Capital, and from what else I've heard indirectly it doesn't sound like Marx talked overmuch about the transition process.

As I understand his conception of competition, it would be more in the spirit of pure competitiveness, and not competition for material well being. I don't know of him talking about it in an economic sense.

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Response to DireStrike (Reply #43)

Mon Dec 10, 2012, 02:01 PM

44. Well, Das Kapital is a few volumes

Why most people get it indirectly. Where he talks of the dialectic.

The problem we have is that like Smith, they are bookends, most folks have never read them.

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Response to nadinbrzezinski (Reply #44)

Mon Dec 10, 2012, 05:17 PM

50. Honestly, Capital is too heavy for most people.

It's over a thousand pages, profoundly abstract, and translated from German.

I don't think it's fair to expect everyone to read it, but everyone should take a stab at it at least.

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Response to DireStrike (Reply #50)

Mon Dec 10, 2012, 05:25 PM

51. People won't take a stab at the Wealth

Which is much easier.

But both make the argument for living wages. This is not socialism, a living wage is capitalism at it's heart.

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Response to nadinbrzezinski (Reply #51)

Mon Dec 10, 2012, 07:30 PM

58. Marx agrees, as long as "living wage" means "exactly the cost of life and reproduction".

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Response to DireStrike (Reply #14)

Wed Dec 19, 2012, 03:27 PM

74. Socialism is not limited to Marxism, but a much wider concept

 

And 'market' and competition exists in every society in some form, whether governed by capital or gift economy. There are also tons of free software competing in the internet market, and the profit and benefit for those who make free software for the market comes in many forms beside money.

Your suggestion would be quite pure state socialism, I suppose, as it would mean that also banks would be owned by workers, ie. socialized/democratized.

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Response to Starry Messenger (Original post)

Sun Dec 9, 2012, 02:30 PM

8. Kind of like Christopher Columbus "discovering" America or something...

Better late than never.

We'll have to stay tuned to see if any policy recommendations flow from this discovery. I doubt he will really propose anything significantly different. But if this means he is going to be a stronger advocate of labor in his writings, that's a welcome development.

He's talking about people having their head in the sand in the 1990s but he was still doing the same thing 4 years ago and even 4 months ago. I read his book. He blames all the economic crises on gov't mismanagement of variables like fiscal and monetary policy, and currency policy. He doesn't really seem to express the idea that the cycle of crisis is fundamental feature of the system. I really still don't think he has changed his views on that. But maybe he is trying to open the door a crack for that conversation.

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Response to limpyhobbler (Reply #8)

Sun Dec 9, 2012, 02:37 PM

10. Krugs is happy to accept the boom and bust, wealth and misery, as long as Keynes is there

 

to salve the wounds of the disposessed a little and speed the recovery from the latest excesses of those who control the political economy.

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Response to limpyhobbler (Reply #8)

Sun Dec 9, 2012, 02:39 PM

11. I agree with you, I think this is probably a temporary wobble in his world-view.

He has too much invested in what he's already produced. It would be nice if he took a more pro-worker line, since he does have a megaphone. Some of his articles I enjoy, but he has a forest/trees problem.

This Op-ed came up in one of my news feeds and I was just stunned that he'd even said the M-word. Hello, the 19th century called! Thank you for catching up to what people have known for over a century!

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Response to Starry Messenger (Reply #11)

Sun Dec 9, 2012, 03:40 PM

15. Yes, he was stunned by the ignorance and wobbled but he's still all capitalism all the time but with

 

enough regulations and interventions to keep the poor from starving and to find shelter for the homeless.

As for his wanting an invigorated labor movement, I don't see it from him.

We need to remember that FDR considered John L Lewis the second most powerful man in the USA at one time to see how far the labor movement has fallen. Much was failure of leadership with Meany and others buying the USA's expansionist foreign policy at the expense of - say - the UAW's social vision and internationalism; and, part of it was the rank and file not attending meetings and being active in solidarity work.

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Response to byeya (Reply #15)

Sun Dec 9, 2012, 03:47 PM

16. I agree with all that--plus the Red Scare which was really aimed at killing labor.

Yeah, Krugman probably won't be leading the charge. I was surprised he even took notice of the problem. I don't know what it will take to give labor a shot in the arm. I was feeling optimistic about our future, then Michigan going right-to-work took the wind out of my sails.

And his larger point about robots replacing the labor force has an uneasy knell on that score too.

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Response to Starry Messenger (Reply #16)

Sun Dec 9, 2012, 04:05 PM

17. To regain clout, labor somehow(and will need many allies) needs to rid the nation of 14(b);

 

reinstitute the secondary boycott; somehow regain as normal, the union shop; and be able to get the message to Americans as effectively as the RW has gotten their scurrilious message out.
Maybe the backlash to the right-to-starve legislation in MI will help gain a linkup with the mal-used workers in WI and the energized teachers in Chicago.

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Response to Starry Messenger (Reply #16)

Sun Dec 9, 2012, 09:43 PM

30. If Rick Snyder signs...

If Governor Rick Snyder signs the Duty-to-Starve legislation, then many in Michigan may discover Marxism.

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Response to pbrower2a (Reply #30)

Tue Dec 11, 2012, 07:57 PM

68. We can only hope.........

Welcome to DU.

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Response to Starry Messenger (Reply #16)

Mon Dec 10, 2012, 06:33 PM

54. Krugman won't lead any charge -

but the fact that he's worried is good. It means they are all nervous.

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Response to TBF (Reply #54)

Mon Dec 10, 2012, 07:32 PM

59. Mwahaha!

I like your style!

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Response to byeya (Reply #15)

Mon Dec 10, 2012, 04:24 PM

47. The myth that all capitalism needs is a pinch of reform and a dash of regulation is very useful

for sections of the ruling class. It is a cruel delusion, and the evidence against it stares us in the face: In the US and across the Atlantic, every social gain made during the New Deal and during the Postwar years is under assault. A ferocious propaganda campaign is being waged to dismantle even the pitiful social safety nets that exist to enrich the already immeasurably wealthy. Ordinary people are being forced to pay for the crimes of the financiers who continue to operate with impunity five years after they engineered the Great Recession.

Every metric of financial / social well-being indicates that workers have been on the losing end of the same capitalism that has enriched a tiny few at their expense. These are objective, verifiable facts. Krugman is more astute than his right-wing counterparts (or perhaps less willfully blind) and I suspect he realizes exactly what is going on.

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Response to Starry Messenger (Reply #11)

Mon Dec 10, 2012, 02:51 PM

45. He knows who butters his bread. Like all but the tiniest fringe of rich people, they don't

 

really want any changes in a system that has worked very well for them. That's why the Reich-wing has no effective opposition. There are no Kochs, Mellons, Coors, Waltons, etc. on our side.

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Response to Starry Messenger (Original post)

Sun Dec 9, 2012, 02:34 PM

9. Uncle Whiskers made a lot of mistakes but he got it right when it counted!

 

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Response to byeya (Reply #9)

Sun Dec 9, 2012, 03:12 PM

13. Seriously! lol

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Response to Starry Messenger (Original post)

Sun Dec 9, 2012, 02:47 PM

12. I think Krugman's point doesn't support Marxism at all.

He's saying that even though capital vs. labor is "has echoes of old-fashioned Marxism," that is no reason to leave it out of the discussion. Indeed, Krugman seems to be implying that Marxism sets back economics by tarnishing the factual importance of the capital/labor dimension. Marxism, in other words, has a reputation that causes facts to be ignored.

It's similar to Bush Junior's support of AIDS efforts in Africa. Just because Bush supported funding anti-AIDS efforts in Africa, that doesn't make them wrong. Nor, in any way, does it mean that Bushism in general was right.

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Response to Starry Messenger (Original post)

Sun Dec 9, 2012, 04:13 PM

18. In my opinion, making Marxism a forbidden word when used in a positive context, stems

 

from the Cold War and the deliberate use of scare tactics as agreed upon by Harriman, Churchill, Truman and their handlers in the post WW2 period.

You can't disregard Marx when the Laffer Curve is taken seriously and the Friedmanite Chicago School of Economics, with help from Hayak, gains serious attention and is implemented. Of course it failed, but our betters who run things won't let this near total failure stop them from ordering more. It didn't fail for them; they got rich at our expense.

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Response to byeya (Reply #18)

Sun Dec 9, 2012, 04:38 PM

19. That's how I feel too.

It's not like the ruling class is hiding their intentions--it's practically in letters of fire at this point.

I didn't start reading any Marx until around 2009. Once I did, much of it seemed like common sense and it was easy to see what he was talking about just from my observations and lived experiences as a working person. I guess people get worried that kind of thing could catch on.

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Response to Starry Messenger (Reply #19)

Sun Dec 9, 2012, 05:17 PM

20. I'm old. I have never seen the ruling class so brazen about their intent to grab all they can from

 

you and me and other workers and retirees. It used to be they'd keep a low profile but with the celeb crush the corporate media has, they've become front line.
I go back to the civil rights days when the few red unions were in the forefront and MLK was just asking to have the Africans Americans cut into the pie. MLK wised up and saw the Viet Nam war for what it was and what the imperialist intents of NATO were and changed his message. SNCC was a huge help to his consciousness but in the beginning, it was a few members of unions on the outs with the AFL-CIO and progressive African Americans until the beatings, murders, and general clampdown forged an alliance between the mainstream black fighters for justice, students, and the original left who were from all races and national origin mainly held together with the glue of union solidarity.
There were several stops along the way and several are regularly pointed out but I would like to mention the Greensboro sit-ins and the fight for equal access along the truck stops on Rte 40 in Maryland as being two that don't deserve to be forgotten.

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Response to byeya (Reply #20)

Sun Dec 9, 2012, 06:39 PM

24. Thank you for all of that byeya.

Great history. That's how it seemed to me too, though I'm a newcomer to struggles. Other veteran activists have said that this period is also the most brazen they've ever seen. It's like they are just coming to our houses to search the couches for loose coins.

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Response to Starry Messenger (Reply #19)

Wed Dec 19, 2012, 03:34 PM

75. Is MF for "Mutual Fund" or...?

 

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Response to byeya (Reply #18)

Mon Dec 10, 2012, 04:29 PM

48. You can add to that the collosal betrayal of socialism by Stalin n/t

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Response to Starry Messenger (Original post)

Sun Dec 9, 2012, 05:34 PM

21. Du rec. Nt

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Response to Starry Messenger (Original post)

Sun Dec 9, 2012, 06:03 PM

22. Since manufacturing is a small percent of workforce, automated manufacturing has a modest effect

The big change will be the automation of the service economy.

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Response to FarCenter (Reply #22)

Sun Dec 9, 2012, 06:34 PM

23. We're already living with that to a certain extent. Make a phone call and you get

 

a variety of options and maybe a chance to talk with someone. Order a refill of your prescription by pushing the buttons on your telephone.
And then to get you to make deposits at the ATM machine at your ban k, you get charged a small fee if you involve a teller in the lobby. The telephone company here charges you if you pay at the office instead of online or through the mail.

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Response to byeya (Reply #23)

Sun Dec 9, 2012, 06:46 PM

25. My favorite example is the self-service gas station

Everything related to a specific sale is either done by the customer or is automated.

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Response to FarCenter (Reply #25)

Sun Dec 9, 2012, 09:17 PM

28. That and the automated check out lines at the grocery store.

Each one of those things probably replaced about 3 or 4 cashiers I bet.

I can't stand 'em.

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Response to FarCenter (Reply #22)

Mon Dec 10, 2012, 02:58 AM

33. Good point. First agriculture employed most workers in the US, then manufacturing.

Since both agriculture and manufacturing have been mechanized/automated the service sector/government is the largest sector of employment.

In the future our food will be grown by a tiny percentage and the stuff we use will be made by a small percentage, which will leave us essentially providing specialized services to each other. That is hard to imagine, but 200 years ago it was probably hard to imagine an economy where 90% of the people did not work on a farm.

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Response to pampango (Reply #33)

Mon Dec 10, 2012, 03:07 AM

35. or maybe it will leave 10% providing specialized services and most of the rest as a dispossessed

 

proletariat without secure work of any kind, let alone benefits.

it's easy to imagine, as it's the situation in a lot of places.

in fact, 30% of the workforce is already there. we don't live in the utopian future, we live *now* & generations can live and die 'sacrificing' for the great transition that's supposedly coming. now is the only life we have; why are some burned in sacrifice so that the high priests can wear peacock feathers?

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Response to HiPointDem (Reply #35)

Mon Dec 10, 2012, 03:46 AM

36. Not sure of your point. If manufacturing does not provide 10%, 20%, 30% of the jobs, we are doomed?

Or if agriculture does not provide a certain percentage (1%, 5%, 20%) of jobs our fate is the same?

Obviously there is nothing inherently worthless or humiliating about providing services to one another. By 'specialized' I don't mean that we all have to be lawyers or engineers. We can all 'specialize' in something whether it is driving a nail or a bus, fixing a leaky pipe or roof. You don't have to go to school for 20 years just do something enough to be good at it.

What we need to do for each other is provide a safety net, progressive taxation, health care, strong unions and good labor laws. Without those, 30% manufacturing jobs won't help. With them 10% manufacturing jobs will work just fine.

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Response to pampango (Reply #36)

Mon Dec 10, 2012, 03:52 AM

38. lawn-mowing is a service. it doesn't provide an income that can support a family, generally

 

speaking.

what i'm saying is that your future of everyone providing services to each other can easily be a future of economic insecurity and fear for all but a narrow slice of the population -- as it is in much of the world.

children salvaging materials from a dump or breaking bricks can be part of a 'service economy.'

There 's no reason to think that the transition to a service economy means anything but a worsening of the general picture at present, which is a picture of increasing concentration of wealth and income for the last 40 years.

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Response to HiPointDem (Reply #38)

Mon Dec 10, 2012, 06:06 PM

52. The two are only casually related

Being an entertainer is a service. It can provide an income that can support 100s of families, generally speaking.

The move away from aquarian life to the factories/cities was a tremendous shift that did cause economic uncertainty, but ultimately gave rise to the middle class. Not because the work was harder or intrinsically more valuable, but because of a complex evolution of social and economic (and more than a few legislative) factors.

Sitting at a desk all day was something that didn't pay all that well once--it was reserved for men who "couldn't work" and women. But many of us make a decent living doing exactly that now. Musicians and other entertainers were barely compensated and tolerated more than beggars, they now do pretty well.

The point is that we won't be relegated to mowing each other's lawns, but if we are, then we'll pay people enough to do so. It has been a reality for the last three centuries at least that the amount of labor required to "earn" sustenance has been declining at a remarkable rate. When everyone is starving, farmers are in demand. When the necessities (food and shelter) are available and relatively easy to obtain, the value of service rises.

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Response to Spike89 (Reply #52)

Mon Dec 10, 2012, 06:15 PM

53. no, most entertainers make nowhere near enough to support 100 families. most entertainers

 

don't even make enough to support 1 family.

don't confuse the 1% with the average working entertainer.

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Response to HiPointDem (Reply #53)

Mon Dec 10, 2012, 06:36 PM

55. You are right, it was hyperbole, but the point is jobs change

I certainly don't know what people will do for a living in 100 years (hell, in 40 years). I am just as certain that it won't be working in classic factories for the most part. In just the last 40 years we've seen the number of cars produced explode, while at the same time the number of people required on the lines has drastically fallen off. Many goods are produced in virtual "black box" factories where raw materials are automatically fed in and finished goods roll out with very little human labor required. We are well into Vonnegut's Player Piano scenario. We left the farms in the 1800s, we'll leave the factories in the 2100s.

Of course some people still farm, and some people will always be in manufacturing. What we value and pay each other for will change. How painful and disruptive that shift away from the factories is will be determined by our society and government response. Pretending it isn't going to happen will only make the process worse.

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Response to Spike89 (Reply #55)

Mon Dec 10, 2012, 06:39 PM

56. yes, jobs change. that fact is basically irrelevant to the direction of the distribution of wealth

 

& income & the majority of people's ability to survive &/or thrive.

i'm not 'pretending' anything; you don't seem to grasp the point.

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Response to HiPointDem (Reply #56)

Mon Dec 10, 2012, 07:11 PM

57. No, actually I agree. only casually related

I don't think it (labor vs. service) has any bearing on wealth distribution. I think wealth inequity is a function of society allowing it and government policies (again, back ultimately to us). We can have an equitable economy based on service, or it could be much worse than it is currently, but it is up to us.

Sorry if you thought I was saying you in particular are pretending anything.

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Response to Spike89 (Reply #57)

Mon Dec 10, 2012, 11:32 PM

62. i think the mix of production v. service actually does matter, though. production produces new

 

value. services typically don't. economically speaking.

i.e. a new house or factory or car = new 'wealth' that can be traded. a newly-cut lawn doesn't have a tradeable value.

in other words, an economy won't continue to function if it consists of people exchanging lawn mowing for counseling for house painting etc.

there has to be production to maintain & increase the store of wealth. if all the production is located out of area, the people have nothing to exchange for that 'real' wealth and become increasingly impoverished. they have to produce their own wealth as well as their own services. a service economy depends on a productive base.

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Response to HiPointDem (Reply #62)

Tue Dec 11, 2012, 02:33 PM

63. Ah, that is where we differ

The value of "things" does shift as do the nature of jobs. Once, not really long ago, a farmer could make a living wage on a relatively small piece of land because food had a very high value relative to other things. Mechanized farming, fertilizer/pesticides, and efficient storage/shipping pretty much made food a commodity that most could easily afford. This gave rise to the whole concept of disposable income--buying things that technically were not neccessities. Cars, even dining room tables, and a host of other things, some very useful, some purely decorative/fun were in demand and factories churned them out and paid wages to workers who had money to spend on things. Things had value and people traded their labor in exchange for things.

We're already well in the service industry. We think oftentimes that we're still buying "things" but increasingly we're really buying service. Many of the biggest businesses in the world only make things as a means to sell service. Microsoft, Apple, Amazon, Comcast, AT&T, and Verizon all have business models based more on services they can deliver than products they produce.

Mowing lawns will probably never be the road to riches, but the landscaping industry is much larger than it was 50 years ago, and it is entirely possible that subscribing to a landscape service could be firmly middle class in a decade or two.

As for the entire concept of "building wealth"--well, that is a pretty abstract concept. What is valuable and counts as wealth has for most of our history had nothing to do with manufacturing. Livestock, harvest yields, land and resources were the main true measures of national wealth for millennium. Only in the past few centuries has manufacturing capacity been a factor in measuring wealth.

Ideas and processes (services) will be predominately how we measure (and create) wealth in the future.

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Response to Spike89 (Reply #63)

Tue Dec 11, 2012, 03:31 PM

64. You're not understanding me. I'm talking about international trade. You can't trade lawnmowing

 

for lawnmowers, or for steel.

and exported services currently don't cover that bill either.

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Response to HiPointDem (Reply #64)

Tue Dec 11, 2012, 05:14 PM

65. Actually, they do cover the bills

We actually buy the crap they make in China with "wealth" we built by designing the crap they build in China. It is the countries, like China, that are already beginning to get hit hard by the reality of 21st Century manufacturing. Manufacturing still generates some wealth, but it has been steadily decreasing and has already been surpassed in many areas by the value of ideas.

Once, it was pretty hard to turn fiber into cloth and then into clothing. There was lots of wealth to be created from the process. It is easy now, there are machines that can churn out yardage by the ton. The "wealth" is almost entirely generated by the design (ironically, even designing the machines and software that weave cotton into cloth generates more wealth than the actual manufacture).

The point is that manufacturing is becoming a minor part of the wealth equation. You can buy lawnmowers by trading blueprints for better lawnmowers, you can even trade software (a classic service) that will run an automated lawnmower for the actual lawnmower.

This is now. In a few decades it will be laughable to think that the physical making of something was once the center of the economy.

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Response to Spike89 (Reply #65)

Tue Dec 11, 2012, 05:26 PM

66. service exports weren't covering hard goods imports last time i checked the trade figures.

 

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Response to HiPointDem (Reply #66)

Tue Dec 11, 2012, 06:45 PM

67. Because we don't track it correctly

Apple is a perfect example. Which company generates more wealth from an iBook, Foxcomm or Apple? The answer is easy--Apple generates nearly all the wealth, but they don't actually manufacture it. When Apple brings it over here to sell it at say $1000, that $1,000 is entered into the import/export equation.

That is absolutely wrong--Apple maybe sent $300 to Foxconn and got $1000 in wealth back--in real world terms, that single transaction should be considered a positive $700 in the trade balance and of that $700 all of it is service. However, our old way of measuring this considers the transaction to be for hard goods, but it isn't really.

The same basic economic model happens with shoes, clothes, you name it. We've been farming out the manufacturing process because it is NOT where the wealth creation happens any more. The wealth creation happens when Nike convinces people all over the world that $5 worth the materials is worth $100 when they design (service industry) the shoe--the whole world knows Nike doesn't actually make the shoe--and they don't care.

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Response to Spike89 (Reply #67)

Tue Dec 11, 2012, 10:28 PM

71. wtf are you talking about? we track the *cash flow* & that's what matters.

 

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Response to HiPointDem (Reply #35)

Wed Dec 19, 2012, 03:45 PM

77. Socialism means most fundamentally

 

liberation from "work" aka wage slavery. The biggest hoax is to get working class to love their chains and demand for more "jobs". Sure there are and will be lots of necessary things to do, but getting what needs to be done done can be organized by many ways better than this insanity.

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Response to tama (Reply #77)

Wed Dec 19, 2012, 03:52 PM

78. i will be happy to cheer on the reduction of work hours when it appears it's going to come with

 

the same slice of the pie. that's no where on the horizon at present -- it's here, but with a steadily shrinking plate of pie.

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Response to FarCenter (Reply #22)

Tue Dec 11, 2012, 08:08 PM

70. That's already happened to a huge extent, look at McDonalds.

They used to have people flipping burgers all day now they have this cooking system that automatically cooks everything. All the employees have to do is put the various products together, which is relatively easy to do. Once robots do that...

PS I'm going to make a cooking robot.

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Response to FarCenter (Reply #22)

Wed Dec 19, 2012, 03:40 PM

76. Fossile capitalism

 

which is based on system using more and more fossile energy to grow the real economy (energy slaves per capita) so that financial sector growth can be said to have some meaning...

Which means capitalism as we know it is now in the process of collapsing.

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Response to Starry Messenger (Original post)

Sun Dec 9, 2012, 07:31 PM

26. So he will discover Climate Change and become an Anarcho Primitivist

 

Last edited Sun Dec 9, 2012, 09:29 PM - Edit history (1)

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Response to NoOneMan (Reply #26)

Sun Dec 9, 2012, 09:15 PM

27. Hey now, the anarchs may be primitivists, but they're not monkeys.

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Response to JackRiddler (Reply #27)

Sun Dec 9, 2012, 09:29 PM

29. haha. whoops

 

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Response to JackRiddler (Reply #27)

Wed Dec 19, 2012, 03:54 PM

79. Yes we are

 

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Response to Starry Messenger (Original post)

Sun Dec 9, 2012, 09:46 PM

31. Actually, I Thought Everyone Had Been Complaining About

high executive salaries. Krugman is talking about a different thing.

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Response to Starry Messenger (Original post)

Mon Dec 10, 2012, 03:03 AM

34. yes, paul, it has uncomfortable implications.

 

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Response to Starry Messenger (Original post)

Mon Dec 10, 2012, 03:51 AM

37. An 18th century economic system controlled by a 9th century class system ruling over

 

a populace with a 19th century mindset using 21st century technology.

What could possibly go wrong?

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Response to Egalitarian Thug (Reply #37)

Mon Dec 10, 2012, 03:59 AM

39. Ouch.

Perfectly stated.

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Response to Egalitarian Thug (Reply #37)

Mon Dec 10, 2012, 04:15 AM

40. 'A 9th century class system' - that would be Feudalism, yes? Or did

 

you mean '19th century class system' (which corresponds to the Industrial Revolution and the rise of the urban proletariat)?

Or am I missing something?

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Response to coalition_unwilling (Reply #40)

Mon Dec 10, 2012, 12:53 PM

41. No, I meant 9th century, but it is merely a convenient period from western European history.

 

It represents the foolish notion, that we still cling to, that it is right that certain people are entitled to rule simply because they are born into the group that rules.

Basically the idea goes back about 5,000 years, but that would require too much explanation and takes away from the point made.

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Response to Egalitarian Thug (Reply #37)

Mon Dec 10, 2012, 12:56 PM

42. +1

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Response to Starry Messenger (Original post)

Mon Dec 10, 2012, 03:01 PM

46. Do robots manufacture robots?

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Response to mmonk (Reply #46)

Mon Dec 10, 2012, 05:07 PM

49. Since you asked...yes

And that is what is so damn scary. We are approaching a point where raw material goes in, finished goods come out, with very little human interaction.

The science fiction automated factories of Battletech or Warhammer 40k (the best known, there are others) are becoming quite real.

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Response to nadinbrzezinski (Reply #49)

Mon Dec 10, 2012, 10:51 PM

61. The rational part of me is scared...

the inner nerd in me is excited at the prospect of new technology.

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Response to Starry Messenger (Original post)

Mon Dec 10, 2012, 10:41 PM

60. Yeah and Krugman isn't the only one. In the last few years.........

since the advent of this last capitalist crisis, a lot of "mainstream" economists have rediscovered Marx. Not that they're willing to say that he's right or anything. Yet. But they are at least acknowledging that in some ways Marx was correct. Of course, if they're reality based at all, they pretty much HAVE to admit that.

The thing that most people forget about Marx's analysis it that he analyzing in the "thought experiment" mode. IOW, he thought through what capitalism was going to wind up being and the motivations behind the decisions made by the capitalists because of the very rules of the game that was set up. Now does that mean that in the micro he foresaw everything that was going to happen in the realm of economics, politics, and social relations under capitalism? Nope, but it does mean that he saw where capitalism would wind up BECAUSE IT HAD TO! The rules of capitalism won't let it go anywhere else than where we are now and the direction we are headed. And the people today who are, in general, following the dictates of Marx MOST closely ARE THE CAPITALISTS THEMSELVES. Of course, they're doing so from the opposite side that Marx was coming from (Marxism for the elites rather than the working class), but they run capitalism exactly like Marx described it.

I see no reason the working class should not take his prescriptions for remedies at least as seriously as the ruling class takes his prescriptions for accumulation.

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Response to Starry Messenger (Original post)

Tue Dec 11, 2012, 08:06 PM

69. This is why I dropped economics in school. It doesn't allow you to see the patently obvious.

I mean, c'mon. It's so fucking obvious it's a joke.

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Response to joshcryer (Reply #69)

Tue Dec 11, 2012, 10:33 PM

72. Econ was a required gen ed course for me and it really made no sense.

I made a B+ in the class, but everything the professor said went against common sense. Economics seems to be set up to justify the bullshit decisions of CEOs. I'll never forget my professor's response to my comment about how Wal-Mart drives down wages and hurts the poor. "But it saves you money at the store which is a good thing because you just lost your job." I just stopped talking at that point, because I really couldn't figure out how a guy with a P.H.D. couldn't see the massive circular reasoning in that statement.

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Response to white_wolf (Reply #72)

Wed Dec 12, 2012, 12:34 AM

73. It was for me as well for some reason. I actually quit school entirely.

I am now free of student loans (actually, haven't had an outstanding student loan in years now, paid that crap off quick).

Here's why economics is wrong: the entire argument for classical capitalist economic classes is the Subjective Theory of Value.

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