From Brad DeLong:
"My friend and coauthor Larry Summers touched on this a year and a bit ago when he was here giving the Wildavski lecture. He was talking about the extraordinary decline in American labor force participation even among prime-aged males--that a surprisingly large chunk of our male population is now in the position where there is nothing that people can think of for them to do that is useful enough to cover the costs of making sure that they actually do it correctly, and don’t break the stuff and subtract value when they are supposed to be adding to it (emphasis mine - FDC).I think the DeLong isn't actually being pessimistic enough.
That is a problem that human societies have never faced before. Larry thinks it may be that we are starting to see the thin edge of the technological wedge in male labor force participation trends over the last 30 years--which I point out is not matched at all by female labor force participation trends. Women were even very briefly at a premium on the job market in the last recession--even given the extraordinary extra share of childcare and household production labor that they do.
It’s plain that the next time there is a recession, there will be more females than males working outside the home again. It's a worry. It’s a scary worry for our grandsons and great-grandsons, and perhaps for our great-great-great-granddaughers as well..."
In the short run, sure, we're worried about things like the Lesser Depression, offshoring, and income inequality. And I'm not saying that those aren't anything to worry about.
But they are, most of them, issues of political choices and our failure to restrain our oligarchy from pushing us towards a new Gilded Age.
What this DeLong rumination dredges up is my worry that we are looking at something much more fundamental and, for those of us in the industrialized world, more worrisome.
For the greater portion of human history you needed human muscle and brainpower to make things and make them work, from stone tools to combines, from atlatls to digital computers. Just having people, smart people, people who knew how to do things, was considered part of a tribe's or a nation's "wealth"; it was even called things like "human resources" when we got around to thinking of it in modern industrial terms.
But I think we're seeing not just a change in politico-economic philosophy - though the transfer of wealth to the very wealthy IS a change, and you know how I feel about that. But this isn't about relative wealth, but absolute wealth.
What I think we're seeing is a genuine shift in how human society works; we can now produce everything from foodstuffs to finished products with fewer - much fewer - humans that it took to produce those things a generation ago.
So human brain and muscle is no longer a straightforward "resource" anymore. As DeLong's friend points out; in many industries the cost of employing humans exceeds the benefit.
But...what are those people to do?
And...if they can't find anything - or, more to the point, anything that will allow them to be anything more than a menial laborer, a geriatric ass-wiper or the equivalent of a squeegee man - what the hell fo we do with them?
And lurking behind the arras is the intractable problem of what happens to a society that gets too small.
A larger one attacks and absorbs it; simply stated, in war quantity does have a quality all its own. A high birth-rate society has the capability to accept enough casualties to overwhelm a low-birth-rate society that is much higher on the technological ladder...
Mind you, the United States is in the unique position of being defended by two oceans. Much of the rest of the industrialized world doesn't have this problem, so any attempt to adjust to this imbalance by reducing the sheer number of people to match up with the actual work available puts them in danger of external threat.
So. I won't kid you; I see this as a very difficult long-term problem. Rebellions and social disasters aren't often engineered by hopeless peons and downtrodden serfs. They're fomented by people who see opportunities denied them, or, even worse, see themselves losing what hopes and possessions they once had.
The real downside of a New Gilded Age is not just that you would have new millions of match girls and breaker boys, but the combination that those boys and girls would be children of a vanished middle class...
...and that an AK-47 is ridiculously simple to operate.
I really fear that my children's century is going to be a very, very turbulent one.
11 comments:
There are plenty of things to do (and it doesn't have to be "useful", whatever that means).
Look at tourists, athletes, singers and derivative traders for people who are engaged in activities of limited "usefulness". Then we can talk about bureaucrats and politicians.
The mechanism is also clear: involuntary transfer of wealth from those "with" to those "without".
The gilded age lead directly to communist revolution.
Interesting post, Chief. If meaningful work becomes the sole province of machines, then what do the elites do with displaced workers? Entertain them with drugs, sex, spectator sports or digital pastimes to dull the impulse to be of value? Or simply disregard the unemployed, as witness the recent cuts in food stamps? In that case we will have more of what 19th century Londoners called “crawlers”— the lowest, most desperate category of street people.
Robotization now focuses on physical work – welding, industrial trucks, and the like. But artificial intelligence may replace professionals. For example, IBM’s Watson does a much better job of diagnosing lung cancer than doctors, who are wrong 50% of the time and who, by one account, would have to devote 160 hours per week to reading medical journals to keep current with their profession.
On the other hand, the promises of machine enthusiasts have never really panned out. We do not have flying automobiles, nor has nuclear power made electricity too cheap to meter. Digital electronics has actually increased working hours and paper consumption. Add to this climate change, ever increasing energy prices, and looming phosphate and fresh water shortages, and it appears that humans will be living by “the sweat of their faces” for a long time to come.
Ael, Paul: I think the problem is that what's shrinking is the pool of "work that can be done without tremendous creative/individual genius and/or specialized technical knowledge that pays a living wage"; the basic grunt work of growing, building and fixing things. It's not that this sort of work doesn't need people...it's just that with mechanical and digital technology it requires MUCH fewer people.
So you're left with a relatively small technologic-focused labor force and a large pool of "crawlers" (or menial workers for things that literally CAN'T be done by machines or computers; wiping asses, mopping floors, making sandwiches, diapering babies, pruning bushes)...
In essence, Ael, yes; you're re-created the social structure of the Gilded Age.
And that worries the hell out of me, because the Gilded Age wasn't a very good time to be alive unless you were pretty well gilded.
I am not worried.
There is lots of things to do (eg. tourism, no special skills needed).
All you need to do is make sure that enough people have enough money so that they can spend it around. (really rich people don't spend a lot of money - at least not in proportion to their income).
To make sure enough people have enough money, you get government to do sufficiently high wealth redistribution (i.e. taxation). The democratic system is ideal for something like this because of the one person, one vote idea.
Northern Europe is an example where this seems to work pretty well.
Agree that the northern Europeans seem to be handling this better than much of the rest of the industrialized world.
I think the problem is that people have defined themselves by what they do for...well, pretty much since there were people. And "tourism" - by which I assume you mean the sort of service jobs that some with tending to visitors (bed-making, toilet-cleaning, trail guiding, etc.) - is a pretty damn small niche. Tourism - and fast food, geriatric care, and bathroom attendant - isn't going to replace genuine work either as an income generator or a source of identity.
I'm not saying there CAN'T be a replacement for this sort of work. But I am saying that if there is I don't see it now; it's a sort of black swan, something that someone is going to have to invent...
Gandhi was the only politician I know of who had an answer for perpetual unemployment. His followers were instructed to make homespun clothes rather than purchase imported cloth from Manchester. Labor-intensive homespun became the uniform of the movement.
People are doing something of the same in the developing world using scrapped engine blocks as the foundation for lathes and milling machines, refilling printer ink cartridges and refurbishing bicycles and computers that Americans have thrown away. And on a nastier side, Syrian rebels are building weaponry, some of it quite sophisticated. One of their “technicals” pictured on the Internet uses a motorcycle brake to stabilize the machinegun barrel.
Poor people, at least those who are not overwhelmed by sickness or despair, make do.
I hope that Ael is right and the American middle class will survive on the model of northern Europe. But should the future be as dark as many of us fear, then it seems important to teach our grandchildren a trade, something practical that cannot be learned in a university.
No, the ultimate time-sop activity has already been defined and has been around forever. We are going to mill around and yack at each other. Sometimes we will even wave our arms.
The topics might change, the venues will change. But groups of human talking to each other is what we do when we don't have "real" work (and even when we do have "real" work if they can be combined.
We call this un-real work many things: school, church, politics, bureaucracy, parties, sales pitches, public meetings, dinner, opera, soccer games, bar games, court rooms, etc. etc.
It has infinite power to keep us entertained and "economic" value will inevitably flow to those who talk loudest and wave their arms the most.
Ael,
The Zen saying, “Talk does not boil the rice,” comes to mind. But if I read you correctly, your deeper point is that humans, being social creatures, will work out some collective accommodation with events. They almost surely will create an economy of some sort. Saving the middle class, which was artificially created during the boom years after WW2, will not be a priority.
The disruptive factors can be told like rosary beads – resource and energy scarcity, climate change with implications for the food supply, loss of imperial advantage, a slowing of scientific and technical advances (by some reckonings the last important medical breakthrough was sulfa drugs), the rise of AI and robotics, prohibitively expensive university fees, and all of this abetted by rightwing efforts to destroy what’s left of the New Deal. The American middle class collaborated with their demise by identifying with the elite. They voted for Reagan and stood by as mental patients were thrown out on the street and the manufacturing base of the country sold for scrap. In one sense, they’re getting what they dished out to others.
At the same time, loss of middle-class status is not the end of civilization. Assuming that social order is maintained, one can get by nicely without an IPod or an SUV.
As Paul notes, I stand in awe of the middle class which has colluded in its demise ... but no one ever said Americans were philosophical; industrious and frontiersmen, yes.
But as the brute frontier abated and industry has shrunk, what new productivity remains is largely roped off for the techno-savants, and it is their job to tie us into the umbilicus of a continual data feed and to call that a "good".
We -- not being terribly self-reflective -- obey, and sit at the terminal at work and return home to sit some more. Our multi-platformed "media" is our Soma, and in a wonderful synchronicity, tons of young males are enrapt by the light of the tube and will not suffer too much the lack of meaningful work or life.
I do not know how they will earn money -- probably as in the film, "Slackers", servicing someone's needs, or living off of their beleaguered parents. But what when the Baby Boomers die off -- what then?
And what of these superannuated bodies which will no doubt fail due to lack of sunlight and movement? Surely the medical caretaking industry is due for an explosion.
It will not be gerontology that is the concern, but some wicked hybrid Progeria which will afflict the masses, creating this new industry. Think Disney's WALL-E. The obese are using the moto-scooters discretionarily at WalMarts as we speak ...
There's always a new niche ... just like the bacteria, we mutate even within a generation, according to meta-genetics.
Ael: "No, the ultimate time-sop activity has already been defined and has been around forever. We are going to mill around and yack at each other. Sometimes we will even wave our arms."
That's not the point; the point is getting paid.
Yep; Barry cuts right to the point - it's about getting paid.
Or, more fundamentally, it's getting that rice to boil. And the yurt to shelter from the cold and rain.
Three or four hundred years ago this wouldn't have really been a problem. Most people lived pretty meagerly, when they did live - one of the reasons human population stayed so low was the immense losses from infant and kid mortality as well as the occasional random plague.
The reasons I don't see how you can re-create this is that you can't just put the middle-class genie back in the bottle. Human beings now have an expectation (where they actually have it) or aspiration (where they don't but with the miracle of electronics they can see and want it) of some degree of material security.
That's where I think our oligarchs are having such a disastrous failure of imagination. They honestly think that they can just turn back the clock to 1875 and the loyal serfs will fall into their appointed slums, tugging their forelocks.
It ain't gonna work like that.
But we've already gone WAY further down that road than I thought we would, and my fear is that we're going to go further before the explosion comes, so WHEN it comes it's going to be truly fugly.
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