Magnifisyncopathological

Capitalism and jobs - the fundamentals

Why pay low wages here or abroad if you can get away with paying no wages? The number of jobs that have been sent abroad is relatively small compared to the number of jobs lost permanently through the application of new technology. Technology impacts on every phase of the economy, from heavy industry to the service sector. All are computerized, automated and in many cases dehumanized.

Technology continually improves. Billions are spent on research, both government and private. Today's technology makes new, qualitative breakthroughs. Each application of advanced technology at the point of production brings with it new layoffs.

Should this job elimination be accepted passively? Shouldn't it arouse the same passion and anger as exporting jobs? Shouldn't technology benefit the people, not profit-hungry corporations?

Technology - that's the real crisis facing the U.S. working class. That's why more and more millions join the ranks of the long-term and permanently unemployed.

Brink Lindsey:

According to data compiled by the U.S. Department of Labor's Bureau of Labor Statistics, total U.S. private-sector employment rose by 17.8 million during the decade from 1993 to 2002. To produce that healthy net increase, a breathtaking total of 327.7 million jobs were added, while 309.9 million jobs were lost. In other words, for every one new net private-sector job created during that period, 18.4 gross job additions had to offset 17.4 gross job losses.

[...]

The ongoing growth in total employment is frequently dismissed on the ground that most of the new positions being created are low-paying, deadend "McJobs." The facts, however, show otherwise.

Management and professional specialty jobs have grown rapidly during the recent era of globalization. Between 1983 and 2002, the total number of such positions climbed from 23.6 million to 42.5 million-an 80 percent increase. In other words, these challenging, high-paying positions have jumped from 23.4 percent of total employment to 31.1 percent.

[...]

Between 1980 and 2003, U.S. manufacturing output climbed a dizzying 93 percent.

It is true that manufacturing's share of gross domestic product has been gradually declining over time-from 27.0 percent in 1960 to 13.9 percent in 2002. The percentage of U.S. workers employed in manufacturing has likewise been falling-from 28.4 percent to 11.7 percent over the same period. The primary cause of these trends is the superior productivity of U.S. manufacturers. As shown in Figure 3, output per hour in the overall U.S. nonfarm business sector rose 50 percent between 1980 and 2002; by contrast, manufacturing output per hour shot up 103 percent. In other words, goods are getting cheaper and cheaper relative to services. Since this faster productivity growth has not been matched by a corresponding increase in demand for manufactured goods, the result is that Americans are spending relatively less on manufactures. Accordingly, manufacturing's shrinking share of the overall U.S. economy is actually a sign of American manufacturing prowess.

Exactly the same phenomenon has played out over a longer time period with respect to agriculture. In 1870, 47.6 percent of total U.S. employment was in agriculture; by 2002, the figure had fallen to 1.7 percent. In the future, manufacturing will in all likelihood continue down the path followed by agriculture: as strong productivity growth reduces the price of manufactured goods relative to services, manufacturing's share of the overall economy will continue to fall. People who bemoan this prospect don't recognize economic progress when they see it.

What jobs are typically done that would otherwise go to humans? It's the labor-intensive and repetitive work that gets eliminated over time, things like digging ditches, inserting Tab A into Slot A, or writing changes to the content of 782 webpages and leaving the other 218 alone. Technology takes over tasks that free up labor to do other jobs, jobs that require more of the human mind.

Humans seek to earn the greatest possible return on their investments of time and effort. Concurrently, we also want to minimize our dissatisfaction and pain. This means we attempt to reach a compromise with what we want and what we're willing to suffer to get it. This goes for all kinds of human action: riding bikes, eating out, finding a girlfriend, working a job, and running a company. Acting as if this self-interest is immoral and wrong only in the instance of employers firing workers when technology takes over is a hole in his argument. Technology gives us more power to satisfy our wishes in more inexpensive ways than ever before.

Mr. Barile would have more of a point if it could be proven that free economies don't create new kinds of jobs...but he nor anyone else could prove it. Free economies respond to the fickle and shifting demands of consumers and every economic actor is a consumer. The whole system is interlocked and flexible to new demands and desires. Technology makes much of that flexibility possible. If Mr. Barile was correct, the most capitalist countries would have ever-increasing unemployment that constantly slopes upward as technology advances. We'd have unemployment rates blowing past 20% and climbing faster than population growth. This is obviously not the case.

With unemployment, free markets aren't the problem:

• Assuming the government doesn't subsidize the lives of the unemployed with "unemployment insurance," thereby giving them less incentive to find work quickly;
• assuming the government doesn't price out ranges of jobs with minimum wage laws, thereby forcing companies to avoid hiring people to do work that rightly should be paid at lower wages;
• assuming the government doesn't burden businesses with wasteful paperwork and spaghetti tangle of regulatory hurdles, thereby diverting resources that could be spent on hiring new people;
• assuming the government doesn't eat into and steal employer savings through inflation and taxes, thereby reducing the available funds to pay for new employees;
• assuming the government doesn't eat into and steal employee business savings through inflation and taxes, thereby reducing the cushions entities create for themselves in case of financial emergency;
• and assuming the government doesn't use tariffs and duties to favor certain industries and companies over others, thereby increasing the difficulty in economic prediction and calculation and thus making it more risky to hire

Mr. Barile wants technology to benefit "the people" rather than "profit-hungry corporations." This kind of thinking is absurd for a number of reasons.

First of all, "profit-hungry corporations" are made up of "the people." People with families. People with friends. Brushing aside the individuals that make up a business in order to lay convenient blame at the feet of some monolithic threat isn't a valid argument.

Secondly, profit-starved corporations...CAN'T HIRE "THE PEOPLE."

Thirdly, technology wouldn't exist if it didn't benefit us. It would be a waste of resources if it didn't produce some benefit. Being able to publish my opinions in public through an easily accessible medium is a benefit, and it costs me less than $20 a month. None of it would be possible without technology...and that technology has more uses than just the one I'm engaged in. Less than ten years ago, I'd need to either purchase or contract a printing press to publish my opinion and those opinions wouldn't be nearly as available as they are now. I'd have to spend thousands of dollars to even begin the process, supporting the jobs of dozens of people while doing so.

But why do that when I can do it myself for a fraction of a fraction of the cost? Why have those people engaged in that market when the money spent in it can be used for other, more urgent needs? If I'm busy spending $5,000 on publishing, I can't spend $5,000 on other things.

It's instructive to examine the medium Mr. Barile is using to get his opinion out. In essence, he is contradicting his own stand by using technology. The Internet rendered a terrible blow to newspaper publishing. Automated and computerized newspaper publishing knocked the typewriter industry around. The typewriter industry dealt a blow to professional handwriting instructors. They in turn took jobs away from...you get the idea. If Mr. Barile really believed in what he's talking about, he'd be furious his ideas are being disseminated on such an efficient platform.

He'd demand they be distributed through more "humanized" means.

Like with teams of horses and buggies (assuming he doesn't want to protect the Walking Courier Association's jobs) carting thousands of pounds of hand-chopped (no chainsaws!) and hand-inked (no printers!) trees around cities, coordinated by long distance yellers (no telephones or fax machines!) and drawings made in the dirt (no dry-erase boards!).

The man is a Communist, so his point of view is to be expected. But read his sentiments and compare them to mainstream opinion. They aren't that far apart.

And that's the real danger.