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Thursday, January 14, 2016

A Call For Corporate Taxation and a Required National Wage

An economist warns that "advances in technology and automation are set to wipe out up to half of all jobs in the developed world."

RBS WarnsSell Everything

A small bit from the article:

RBS economists have urged investors to sell everything except high-quality bonds, warning of a “fairly cataclysmic year ahead.”

If that isn't a call for a national, base wage to all citizens, I don't know what is.

Also reason why all corporations should pay a minimum tax and not be able to deduct their way out of paying any taxes or, worse, get a rebate or, worse yet, offshore profits or be able to.

Another good, related article:

The current rout in oil prices has obvious implications for the giant oil firms and all the ancillary businesses — equipment suppliers, drill-rig operators, shipping companies, caterers, and so on — that depend on them for their existence. It also threatens a profound shift in the geopolitical fortunes of the major energy-producing countries. Many of them, including Nigeria, Saudi Arabia, Russia, and Venezuela, are already experiencing economic and political turmoil as a result. (Think of this, for instance, as a boon for the terrorist group Boko Haram as Nigeria shudders under the weight of those falling prices.) The longer such price levels persist, the more devastating the consequences are likely to be.

If anything like or near these "worst case scenarios" take place, governments and corporations the world over may HAVE to give and require a minimum payout to their citizens, just to keep the economic world spinning.

Here's a perfect example and it's from a current article.

Chinese factory replaces 90% of humans 

with robots

A nation of more than 1.4 billion people and the companies, the corporations replaced, as the headline shows, the vast majority of the employees with machines.

If corporations and nations don't give a minimum payout to their citizens, who will be able to buy the  products that keep this whole merry go round turning?


Sevesteen said...

This sort of doom and gloom scenario has been going on for hundreds of years, at least back to automatic looms. You can see the specific people who lose jobs. What you don't see is that everyone has to work a tiny bit less to afford the same standard of living--but in total far outweighing the loss of the few. Do a search for "seen and unseen frederic bastiat".

At what point in history were things significantly better for all than they are now, including women and minorities?

Mo Rage said...

But we both, all know that the development of a loom or a cotton gin or Ford's production assembly line wasn't obliterating jobs. It didn't take people out of the work force, it merely made the work easier.

This is completely, totally, utterly different in that it replaces the worker, the workers completely. Workers aren't needed at all. The Chinese factory link I posted is one of the best examples. This doesn't just make the work easier for us. It puts us out of jobs. Your assumption of similarity is way off.

In the last 50 or so years things were significantly better than they are now because we had Unions and living wages and the middle class could and did grow mightily. It's now shrinking and greatly for all the opposite reasons. That is, we have fewer people in Unions and we have wages that aren't true, living wages and they aren't keeping up with costs and the rise of costs.

Sevesteen said...

Automatic looms and assembly lines did take many people out of the workforce, reducing the amount of labor needed by orders of magnitude. It put many people out of work entirely. Robot factories will still require some labor, at minimum skilled maintenance workers--this is likely to be a similar reduction in the amount of human labor needed, and result in a similar increase in human living standards. An hour's labor will buy much more goods, and society can afford to support even more people who aren't directly productive--more artists, musicians, more people who shouldn't have to work, and more people who just don't want to.

...and what's the difference to an American if a Chinese factory is staffed by Chinese workers or robot workers?

It is just about impossible to compare prices from 50 years ago to now because products are so much better. A base Honda Civic has more power than a base 1965 Mustang, and the upgraded Civic engine more than the V8 Mustang, in a lighter, more reliable and better equipped car that will last more than twice as long. (both made by American workers of mostly US parts) Look at all the things a smartphone replaces--the camera is better than almost anything you could get in 65, the long distance is cheaper even before adjusting for inflation--and not counting all the included features that weren't even invented yet like VCR, GPS, video phone and internet.

You think that most people including minorities were better off in 1965? Today of all days you say that minorities had it better then? Even the average white man had a much worse standard of living, no way were minorities or most women better off than now even just financially. Even in just the US, or even just in the developed world. When you look at extreme poverty levels worldwide, there's an even bigger improvement.

You mentioned "Better Angels of Our Nature" in a post a while back, you should read it. According to Pinker, we are much better off in almost every way even if the news concentrates on disaster.

Mo Rage said...

Yes, automatic looms and assembly lines did take SOME few people out of the work process but many, many more were added to the work force, I say again.

This current situation TAKES PEOPLE OUT OF THE WORKFORCE ENTIRELY. That was the reason for the post and that was the reason for the links, proving it, showing it.

And what's happened to musicians and artists---like photographers--in our modern economy? Instead of more being able to make a living, technology has reduced what they are paid. I could forward you plenty of articles showing that and connect you with plenty of artists who can't make a living---and not because they're not talented.

You read extremely poorly.

You take out of statements what you want to read instead of what the person is sayig or putting down.

I never once said or suggested or came close to suggesting that minorities were better off in 1965. Not once.

But the fact is and history shows that after WWII up until Ronald Reagan's presidency, the middle class in our nation grew and the middle class got stronger and healthier. You would no doubt dispute that. Somehow. Because apparently it's your opinion. It seems. Clearly.

"The average white man..." did not "...have a much worse standard of living..." Certainly there was poverty but many more people were able to have homes and families and live on one wage, one salary, the father's, the breadwinner's. Were you not here in the United States at that time?

We are much better off in the world and in a lot of ways, yes, agreed. But in the United States, the middle class has shrunk, may more have been knocked down economically and many more are living on less. And for a lot, for a great deal of people, they are living on a lot less. And it's not all their own fault.

Sevesteen said...

479 hours to make a shirt before modern machinery, not counting the time to raise the sheep or grow the cotton. Since almost anyone in the US can buy a shirt with less than 4.7 hours work it's clear that 99% of that work has been eliminated. We have already had a 90% reduction in the labor needed to make electronics...over and over again in my lifetime.

It isn't that we need 2 people working to support a family, it's that modern technology makes it POSSIBLE for women to work outside the home. It lets them maintain skills, so they are not forced to rely on their husband. A family can still live on a single middle class income, as long as they are willing to live at a 60's single income lifestyle. They may have to give up many modern conveniences like microwaves, dishwashers, convenience food, air conditioning, cable TV, multiple TV's, computers, internet, etc. The non-salaried adults will have to do much more work, mending clothing and hand me downs, cooking from scratch, hand washing dishes, line drying clothing, ironing, etc.

I read very well, and more importantly I can tell the difference between clickbait sensationalism and actual important facts. I understand at least some of the deeper meanings, and I also know when I'm over my head.

Lowering the amount of labor needed to produce goods will always benefit consumers more than it harms labor--but once again referring to Bastiat's Seen and Unseen, it is easier to see the few laborers affected than the diffuse but larger benefits to consumers. You're still under the old notion that wealth is fixed, and only the division matters. For hundreds of years at least, most wealth is created by human effort and intelligence. When a series of advances in technology removes more than 99% of the labor in making a shirt or a computer that's a huge benefit to everyone who wears shirts or uses computers, and it creates wealth.

Many whites were better off financially when racism was more prevalent--people were willing to pay white men more at the expense of minorities. If you are going to make claims and calculations on the middle class, it is immoral to NOT count how many more minorities were allowed to join the middle class. You didn't suggest that minorities were better ignored their advances towards the middle class entirely.

Mo Rage said...

Eliminating jobs and so, eliminating paychecks, cannot be good for demand or, ultimately, business, let alone those households. Having robots to replace humans and so, eliminating wide swaths of employment can no way be good for societies and in now way compares to making work easier as the start of the Industrial age did.

And you only think you know when you're in over your head. It's obvious you're quite convinced.

Sevesteen said...

In some ways I am over my head here in understanding your logic. To me manufacturing efficiency will reduce jobs, but will reduce consumer prices even faster. You seem to think that inefficiency is a good thing, and somehow prices would remain the same. Are you aware of how cheap smartphones are in China? That will trickle down to Americans, and even more important that will make internet access affordable to millions in underdeveloped areas.

Where should we stop progress towards a post-scarcity society? Should we go back to clothing of hand spun cloth?

Mo Rage said...

It's much more than just "manufacturing efficiency."

Report Suggests Nearly Half of U.S. Jobs Are Vulnerable to Computerization

A World Without Work - The Atlantic

It's not as much stopping progress, as my original article states. It's about guaranteeing a wage so 1) people can eat and have housing, etc. but also 2) there is still demand in the economy so the whole thing works.

Sevesteen said...

If goods can be made with less work, then less work is needed to purchase goods. If goods can be made with almost no work, then almost no work is required to earn the money to purchase them. Why wouldn't that be true?

My job didn't exist 50 years ago. My grandfather was a watchmaker--common and necessary until the 70's, but 99% gone now, a luxury.

So on one end we have hand-spun clothing, 1000 hours in labor to make one outfit, where for most people almost every waking hour was needed for basic survival. On the other are the theoretical factories without workers, able to produce goods for almost no cost.

What is wrong with this analysis? If we should stop at some point along this path, what point and why?

Mo Rage said...

It isn't just that goods can be made with "less work." Not at all. Not remotely. It's that goods are made with far fewer people.

And it's worse than that.

It's that all kinds of jobs that required people, including service jobs, are being done my machines.

I keep answering your question but you keep ignoring the answer.

This isn't the old, 100 year problem of making work easier. This is replacing humans in huge scale. This is replacing hundreds of thousands and even millions of people in their work.

That means these hundreds of thousands and millions of people don't get a paycheck, obviously.

So they take no money or, at a hopeful best, take far, far less money home.

Who buys goods if they don't have enough money?

The answer, of course, is no one. This kills demand. This kills demand for goods.

As my original posting said, it isn't that we necessarily stop "along this path." It's that we do something different with our own structures, economically. If we displace enough people, and it looks as though we will, even are displacing many, it is very, very likely there will have to be some minimum amount of income---money---given to individuals first, to exist but second, to just support our business, economic structures so they exist, so the entire system works and functions and continues to exist. Did you even see the bold blue letters linking to a story about the Chinese wiping out 90% of jobs?

It seems clear you only like to either deny or just not get my point because I thought and wrote and hold it. The stubborn, repeated insistence on not getting it is tedious, honestly. So be it. At least you're polite enough.

Mo Rage said...

I get what you're saying here, I really do. It's just that this technology is now taking us to millions and millions, eventually, being unemployed. It's replacing workers completely, not opening other avenues of work.

That said, it would be great if you were correct, admittedly. Our government would likely need to get involved it training and retraining unless industries did it themselves.

Sevesteen said...

Manufactured clothing didn't open other avenues of work...that was up to the people involved. It seems obvious to me that not requiring 400+ hours to make a shirt is a good thing, continuing that trend is a good thing, and I don't see any reason robot factories isn't the same sort of thing. I'm near certain that labor is the biggest cost for most goods if you go back far enough--Iron ore in the ground gets value added by labor, steel gets more value added by more labor to become a camshaft, etc. I'm also guessing that a "zero labor" chinese factory is an exaggeration, that the factory is only a bit less staffed than others--much of the human labor is still happening, just somewhere else. Instead of plastic resin they bring cases made in a different factory.

Money isn't wealth. If we just start giving money away (guaranteed wage for example)that isn't backed up by value of some sort (actual labor), it will merely dilute the value of money--see Venezuela, Zimbabwe, etc. What I truly believe and hope we are moving towards is a society where goods are so cheap that basic living expenses are trivial. "Can you imagine? Back in 2016 it took a lot of people 50 hours to earn enough for a good smartphone".

Mo Rage said...

No, money certainly isn't wealth and I neither said nor suggested anything close to that and what I'm talking about here, a minimum amount given to each citizen, would come nowhere close to anything like wealth.

Your thought is a nice one but, corporations being corporations and humans being humans, flaws and all, there is always the greed factor. Corporations must always have their profits and the way Capitalism runs in the US today, those at the top must always, it seems, get their huge, obscene, really, salaries. What this boils down to is, what you're calling for just isn't going to happen. It would be great if it would and did but it's just not to be. It would be just as likely for intelligent, non-greedy, functioning Communism to break out as Karl Marx described and envisioned. It's not to be.

No, the only way this will work, for people to be able to live and have a home and be able to prop up demand for goods in our society is a standard amount paid out to each citizen.

I say that's the only way this will work but really, the way people are, I see it all collapsing first as far more likely. Not next year or in the next 5 or 10 but nearly inevitably. We humans just aren't that bright.

And the Chinese factory wasn't a "zero labor" factory. You apparently didn't even read the headline, let alone the article. It said 90% of the work was done by computers and machines.