The World's First Trillionaire

[dre]

They should be replaced by better jobs if economics works at all...

Your subjective judgement of "better" doesnt really matter, what matters is that we have a big middle class, and a productive economy. And the economics of globalism are already breaking down... sure we can buy a DVD player for 20 dollars but the cost of essentials like real food, gas, oil, college tuition, and healthcare are growing rapidly and will cause a crisis before long. They already have for some families.

Will the changes happening in the world today result in a better economy overall ? Yes. Will the benefits be spread ? Yes... but we don't know how or when.

Thats a statement of pure faith. All of the countries on trade defecit end of all this globalism have massive structural economic problems in the mid to long term. They are awash in debt, and we are starting to see dangerous levels of inflation in costs of the most important goods and services. They are also all seeing huge increases in income concentration which takes a direct toll on the political system itself.

[dre]

That's the idea behind free trade - competitive advantage and so on. It's pretty much accepted across the board, with the caveats that TimG points out.

Whenever someones argument is "its accepted!" you know they are on really shakey ground in terms of their ability to demonstrate any kind of point.

[Michael Hardner]

Your subjective judgement of "better" doesnt really matter,

Well, I'll take that criticism. Yes, I can't say that working as a doctor versus a farm labourer is 'better', I agree. But I will say that jobs that require more creativity, and less damaging physical labour will increase as technical progress continues.

what matters is that we have a big middle class, and a productive economy. And the economics of globalism are already breaking down... sure we can buy a DVD player for 20 dollars but the cost of essentials like real food, gas, oil, college tuition, and healthcare are growing rapidly and will cause a crisis before long. They already have for some families.

Food costs are lower in the long term, gas and oil go up but they're scarce resources, college tuition and healthcare are services - it's more complex for them.

Thats a statement of pure faith. All of the countries on trade defecit end of all this globalism have massive structural economic problems in the mid to long term. They are awash in debt, and we are starting to see dangerous levels of inflation in costs of the most important goods and services. They are also all seeing huge increases in income concentration which takes a direct toll on the political system itself.

No, not pure faith. It has happened consistently throughout history though as I said not right away. Inflation reduces the debt problem, right ? Income concentration itself isn't a problem, and if it is it's pretty easily fixable.

[Michael Hardner]

Whenever someones argument is "its accepted!" you know they are on really shakey ground in terms of their ability to demonstrate any kind of point.

No, I tend to believe orthodoxy in most cases since it's right in most cases.

[dre]

No, I tend to believe orthodoxy in most cases since it's right in most cases.

There is no orthodoxy in this case. Theres a huge debate about whether the long term consequences of various free trade agreements with be a good thing for the west and mixed results so far.

Have wages increased faster after the period between 1975 to now than they did before? Nope.

Has standard of life increased faster than it did before? Nope.

What has increased is debt, and concentration of wealth.

Income concentration itself isn't a problem

This statement is so incredibly ignorant of the history of such arrangements. Relative egalitarianism is the bedrock that democracy is built on. Its great to have rich people! Its even better if everyone else believes they CAN become rich. Its harmful, and dangerous for a small subset of society to marshal an extremely large portion of wealth and political power.

[Argus]

That's good, because working in manufacturing is known as a mundane and physically damaging way to make a living.

Before I left my fabric covered box, I had a conversation with two different young women. One described working where she did "soul destroyng". Another, in a different area, different floor, different boss and job said that her brain dies a little bit more every day.

And these are well-paid jobs most people would consider to be really good, working for the government, unionzed, good benefits, etc. Now compare this to a job I once had doing data entry in a modern sweatshop. Then examine the most common job today, which is, I believe, a retail clerk.

Edited July 11, 2014 by Argus

[kimmy]

Many of those people currently pouring double-doubles are intelligent, ambitious and well educated as well as being hardworking.

I'm referring of course to the TFW crew.

We sneer at those in menial jobs, but many in that group know that Tim Hortons and living in Canada is a beginning to a new and better life, not a dead end.

Oh wait, not any more.

It should be pointed out that areas with low unemployment will still be allowed to bring in TFWs. Minister Kenney's announced reforms stated that explicitly. So whiners crying that it's "an attack on Alberta" can give it a rest, because hard-hit areas of Alberta will be exempted.

As well, it should be pointed out that there's no express or implied promise of future citizen made to TFWs. It simply isn't so. That was made abundantly clear during recent coverage that unearthed emails from agencies to employers reminding employers that they had no obligation to support citizen applications, and that the threat of sending them home was an effective tool for commanding obedience from TFWs.

I think it's hilarious that Restaurants Canada is crying about how onerous it is to prove they've made efforts to hire Canadians, when they've been claiming (falsely) that their members only turn to TFWs after efforts to recruit Canadians have failed.

I don't sneer at those in menial jobs. Like many others, my first job was a McJob. I've been there, I know what it's like, and I don't sneer at people working those jobs. You know who does sneer at people working those jobs? Their employers.

-k

[kimmy]

Modern-day productivity has freed women from menial labour to pursue education and employment.

I'm pretty sure the distinction you're looking for is that women have been freed from unpaid labor to work at paid labor. Because most work that women are doing out side the home is still menial.

-k

[kimmy]

Well, the minority of the population that had such benefits may be worse off. But the rest of the people and the economy as whole benefit because they can buy better quality manufactured goods at a lower cost thanks to competition. Are you really arguing that the economy would have been better off if we never let Japanese auto makers into the market despite the fact that they broke up the cosy union cartel ?

There has to be some kind of balance.

Society is better off because of the better products and services that technology brings us.

Society is worse off when fewer people can afford to access those things.

Soviet era Moscow would be an example of one extreme: everybody can afford to buy everything that's available... but there's nothing available for them to buy. What would the other extreme look like? A world where only the elite benefit from technological advances, while an ever-increasing poor underclass has no access to this technology and lack of class mobility means they won't in the future and neither will their kids. We've seen it in movies like Elysium, but is it possible that our society could eventually reach such a state too? We have social programs that are supposed to prevent that from happening and to prevent a permanent underclass from occurring. Public school and public funding for advanced education are supposed to help preserve class mobility. Do they do a good job? I'm not sure. It does seem like the programs that are supposed to protect the underclass and preserve class mobility are constantly under attack.

What worries me about the future is this: for the overwhelming majority of us, labor is the only means we have to ensure our survival, but technological advances in productivity reduce the value of labor and the benefits of these advances flow only to those who have capital.

-k

[TimG]

There has to be some kind of balance.

I am not arguing against balance - but balance has to start with agreement about what the theory says is generally best and then justify cases where reality makes it necessary to ignore the theory.

Society is worse off when fewer people can afford to access those things.

Society is global now. The number of people with reduced purchasing power in rich countries is dwarfed by the number of people in poor countries with much higher purchasing power. The artificial barriers that allowed all the wealth to be confined to the population of rich countries are gone and they could not/should not come back. This means nostalgia for the 50s and 60s is not helpful.

We've seen it in movies like Elysium, but is it possible that our society could eventually reach such a state too? We have social programs that are supposed to prevent that from happening and to prevent a permanent underclass from occurring.

We have had a permanent underclass for millennia. The only difference is we recently used national borders to keep the underclass confined to certain countries. Before that slavery/cast systems were used to create a structural barrier between the "underclass" and the "privileged". If anything today's global society is doing a much better job of spreading the wealth than any prior society.

For better or for worse, technology is the only way to improve the livelihood of the underclass.

Public school and public funding for advanced education are supposed to help preserve class mobility. Do they do a good job? I'm not sure. It does seem like the programs that are supposed to protect the underclass and preserve class mobility are constantly under attack.

You really need to separate the needs of the "underclass" from the needs of the union cartel that benefit from government monopoly on the funding for these services. It should be possible to support quality education for anyone without having to support "jobs for life" and "taxpayer guaranteed pensions" for the people hired to provide the service. Edited July 16, 2014 by TimG

[TimG]

technological advances in productivity reduce the value of labor and the benefits of these advances flow only to those who have capital.

Interestingly enough the modern banking systems and fiat currencies actually address this issue reducing the value of capital (i.e. if money can be created from nothing then people don't need to get money from existing holders of capital if they need it). I realize that this has created a regulatory headache and requires that governments bail out private businesses from time to time but such hassles are price worth paying if means more people can access capital when they need it.

[Michael Hardner]

Before I left my fabric covered box, I had a conversation with two different young women. One described working where she did "soul destroyng". Another, in a different area, different floor, different boss and job said that her brain dies a little bit more every day.

Fabric box ? Okaaaay....

There are a lot of factors that make a job brain-numbing and soul-destroying. Lack of creativity and autonomy come to mind, and these things are also changing as time goes on, ie. there are fewer such jobs.

And these are well-paid jobs most people would consider to be really good, working for the government, unionzed, good benefits, etc. Now compare this to a job I once had doing data entry in a modern sweatshop. Then examine the most common job today, which is, I believe, a retail clerk.

Well-paid means squat, once you get used to the salary level. Retail clerk sounds better than either of these, because you can put something of yourself into it. Of course, there are people who enjoy just working with numbers too. They will have no trouble finding something.

[Argus]

There are a lot of factors that make a job brain-numbing and soul-destroying. Lack of creativity and autonomy come to mind, and these things are also changing as time goes on, ie. there are fewer such jobs.

Not in government there isn't. If there's one thing senior managers like it's having a policy and guidelines (which are absolute, by the way, allowing for no variation whatever) for every imaginable instance. There is no autonomy in an era where oversight has become almost a fetish, and there is no creativity allowed. Nothing is spontaneous. Months, if not years of committees and multiple meetings, position papers and multiple approval stages greet each and any attempt at improvement.

Edited July 16, 2014 by Argus

[Michael Hardner]

Not in government there isn't.

Ambiguous: Are you saying there aren't a lot of factors in government that make a job mind-numbing and soul-destroying ? Or that there are fewer such jobs in government ?

If there's one thing senior managers like it's having a policy and guidelines (which are absolute, by the way, allowing for no variation whatever) for every imaginable instance. There is no autonomy in an era where oversight has become almost a fetish, and there is no creativity allowed. Nothing is spontaneous. Months, if not years of committees and multiple meetings, position papers and multiple approval stages greet each and any attempt at improvement.

It must die.

[Argus]

Ambiguous: Are you saying there aren't a lot of factors in government that make a job mind-numbing and soul-destroying ? Or that there are fewer such jobs in government ?

It must die.

I'm saying that many of the jobs in government are extremely repetitive, ie, processing the same forms over and over and over again. Higher levels are stuck in the bureaucracy, where every attempt at change runs up against the massive red tape designed to cover the asses of senior management in case anything goes wrong.

"Well, we followed all the existing processes, did multiple consultations with all stakeholders, multiple studies over a period of years, and I have four hundred and eighty seven studies which all showed that we ought to buy a new pencil for the stock clerk, so I guess my butt is protected now. You can go ahead and buy that pencil!"

"He retired last week."

http://www.amazon.ca/Years-Loyal-Service-Fabric-Covered-Box-ebook/dp/B006LL4QF2

[overthere]

what has increased is debt

the most notable thing that has increased in this century is life expectancy.

Big upward trend and that is pretty much a global trend, despite a corresponding massive increase in population that needs to be fed and sheltered..

[WestCoastRunner]

I'm pretty sure the distinction you're looking for is that women have been freed from unpaid labor to work at paid labor. Because most work that women are doing out side the home is still menial.

-k

I think that many, many women would find great offense to your answer. Most work that women do outside of their home is because they want to get outside into the workforce away from the doldrums of raising children everyday with the same repetitive tasks and responsibilities.

Working outside the home allows for participation in the workforce, communicating with adults, contributing to the finances of the home, maintaining a sense of identity. Regardless if it is as a cashier at walmart, a waitress at the local pub. It really isn't up to you to judge whether women are doing menial work or work that fulfills their identity.

And for the most part, when I brought up technological advances for women, I was thinking about women in third world countries. With engineering and technology standards that we have become accustomed to, these women are forever grateful. No longer do they have to haul water, wash clothes by hand. They can run their own business, farm some land, sell their produce.

You see, I was not thinking about women who take these for granted. I was thinking about women who are striving to earn a few bucks to feed their children.

[WestCoastRunner]

Is that better? My mother used to spend half the day in the park chatting and munching cookies with the other mothers and children. Then she'd come home, tidy up a bit and prepare for whatever guests were coming over that night (lots of parties, cuz no real TV, computer, no video).

Most women are now in the workforce, and most of them are doing jobs they don't like. Is it better to stand out in the cold and take a long bus ride to work to be a retail store clerk or administrative assistant than to stay home with the kids and socialize with all those other stay at home moms? How many women today would vastly prefer staying home if they could afford to?

As I mentioned in an earlier post, you are generalizing about women in the workforce. Are most of them standing out in the cold waiting for a bus? Come on, let's move this conversation forward. Again, how do you know women don't like working as a retail store clerk or administrative assistant. Maybe they are working their way up the food chain to higher mangement levels. Isn't that where men got started? In the mailroom? Many, many women would prefer a career as well as a family. Do not assume most women want to stay home and bake cookies.

Edited July 17, 2014 by WestCoastRunner

[kimmy]

We have had a permanent underclass for millennia. The only difference is we recently used national borders to keep the underclass confined to certain countries. Before that slavery/cast systems were used to create a structural barrier between the "underclass" and the "privileged". If anything today's global society is doing a much better job of spreading the wealth than any prior society.

For better or for worse, technology is the only way to improve the livelihood of the underclass.

Well, when I said "our society" I hadn't been thinking of the whole planet as our society, but we can talk about that too.

On the specific issue we've been discussing-- the elimination of labor by technology-- the elimination of "artificial barriers" has allowed businesses to hire 3rd-world laborers to reduce costs. So we've got textile workers in Bangladesh who are earning a better living thanks to western outsourcing. But when someone comes up with a technological advance to further reduce labor costs, those jobs too will be gone and the former textile workers will be back in the same dire straits as their neighbors. Their increase in purchasing power has occurred because they are currently cheaper than machines. That won't be a permanent situation, especially if standards of living around the world increase. Technological improvements to productivity will make the Bangladeshi textile workers unneeded too eventually.

On the broader issue... no, technology is not the only way to improve the lives of the underclass. If we're talking about people in the 3rd world starving and suffering from disease and living in shoddy conditions, no, their problems won't be solved by technology. They're dying from diseases that have been easily curable for decades... they're becoming sick from sanitation problems that have been solved for centuries... amazing technology like electrical infrastructure and water and sewage infrastructure could greatly improve the lives of probably billions of people in the world, and the problem isn't that this technology doesn't exist, it's that people don't have access to it. Advances in agricultural technology have brought us to the point that we could feed everyone... but we don't, because there's no profit in it. We're at the point that we're turning corn and grain ethanol for cars instead of food for people, because people who have cars can pay more for ethanol than starving people can pay for food. The problems faced by this permanent global underclass don't exist because we don't have the technology to solve their problems, they exist because there is no economic incentive to solve their problems.

You really need to separate the needs of the "underclass" from the needs of the union cartel that benefit from government monopoly on the funding for these services. It should be possible to support quality education for anyone without having to support "jobs for life" and "taxpayer guaranteed pensions" for the people hired to provide the service.

Well, I agree that other workers don't have job security or big pensions the way that government workers do, so there's that. However, I don't believe that the increasing cost of advanced education or the decrease in support for public education can be blamed entirely on teachers unions.

-k

[Argus]

As I mentioned in an earlier post, you are generalizing about women in the workforce. Are most of them standing out in the cold waiting for a bus?

Yes, probably. Women have a stronger tendency to be working in lower paid service sector jobs, and would thus be more likely to be riding the bus.

Again, how do you know women don't like working as a retail store clerk or administrative assistant.

Not many people like these jobs for long, thus the high turnover rates.

Many, many women would prefer a career as well as a family. Do not assume most women want to stay home and bake cookies.

I'm generalizing, it's true, based on my friends, family and acquaintances. I never knew one mother that was happy to go back to work and leave her baby with daycare or whatever, and I don't know one (at least, who has children) who wouldn't rather spend much more time at home with them rather than at their largely unrewarding jobs (most men have largely unrewarding jobs too).

Edited July 17, 2014 by Argus

[TimG]

But when someone comes up with a technological advance to further reduce labor costs, those jobs too will be gone and the former textile workers will be back in the same dire straits as their neighbors.

If this was true then we would still all be living in squalor and dying young from infectious diseases.

The problems faced by this permanent global underclass don't exist because we don't have the technology to solve their problems, they exist because there is no economic incentive to solve their problems.

The 1 billion people who have moved out of poverty in the last 20 years would disagree with you. Problems like these cannot be solved overnight but a big part of the solution is improved productivity with technology that frees resources to buy yet more technology. Engineers, doctors and artists only exist because someone else grow the food that they need. This would not be possible without technology. The other part is a rules based civil society that allows private enterprise to grow (note that I did not say democracy but it helps).

However, I don't believe that the increasing cost of advanced education or the decrease in support for public education can be blamed entirely on teachers unions.

The resistance to tax increases comes from a belief that the government is not able to put new money to good use - it is not because of a belief that all programs funded with taxes are bad. Unions that suck up new money by increasing their already generous perks a big part of the problem but they are not the only part. You also need to separate the US system which has turned property owners into vested interests that stand to lose if the system is changed from the Canadian system where education is funded provincially. Edited July 17, 2014 by TimG

[kimmy]

Sorry, I forgot to respond to this bit earlier:

What worries me about the future is this: for the overwhelming majority of us, labor is the only means we have to ensure our survival, but technological advances in productivity reduce the value of labor and the benefits of these advances flow only to those who have capital.

Interestingly enough the modern banking systems and fiat currencies actually address this issue reducing the value of capital (i.e. if money can be created from nothing then people don't need to get money from existing holders of capital if they need it). I realize that this has created a regulatory headache and requires that governments bail out private businesses from time to time but such hassles are price worth paying if means more people can access capital when they need it.

There's nothing in our monetary system that "reduces the value of capital". And I'm not aware of any instance where the creation of M1 money is used to give people who need capital an alternative to borrowing from existing holders of capital.

(The relatively new idea of "Quantitative Easing" is an example of the opposite, however: the Federal Reserve is creating M1 money and giving it directly to financial institutions to stabilize them after their own risky lending blew up in their face. The government isn't going to create money for you unless you're already wealthy and powerful.)

If you don't have capital, the only way you can access it is from borrowing from those who do. Which is the primary reason why August's premise in starting this thread is so far off the mark.

August supposes that the world's first trillionaire will be the guy who comes up with a revolutionary idea that changes the way everybody lives. In reality, the world's first trillionaire will be a guy who already starts off with billions and uses them to get a piece of the action from every guy who comes along with a revolutionary idea. We've talked about that a number of times before, I believe. We see IPOs where "preferred investors" who are given the option to pre-purchase stock and flip it the same day end up making far more money in one afternoon than the people who spent years building a company. And we see the would-be entrepreneur giving up much or most of his creation to the venture-capitalists and angel-investors who have the capital he needs to build or hire. Even Mark Zuckerberg, the example everybody points to as proof that a little guy with a big idea can get rich, gave big chunks of Facebook to investors on the road to making it work.

If you don't have capital, and you need it, you can get it either by borrowing it from existing holders of capital, or by selling something to existing holders of capital. You, me, Mark Zuckerberg, all have to find ways of getting capital from those who have it.

-k

[TimG]

There's nothing in our monetary system that "reduces the value of capital". And I'm not aware of any instance where the creation of M1 money is used to give people who need capital an alternative to borrowing from existing holders of capital.

Anyone who gets a mortgage is borrowing money created by the banks. They are not borrowing from existing holders of capital. Same thing with credit cards. Banks charge you interest because when you go and spend the money loaned someone will get and come back to the bank and demand interest on this newly created money.

The money supply can only expand because banks create money from nothing. With a commodity based currency the only way to access capital is borrowing it from current holders. This means extremely high interest rates or rapid inflation in the cost of the commodity. Bitcoin is a good example: to replace the transactions in CDN$ each BitCoin would have to be worth $100,000 which would turn the original holders of bitcoin into extremely wealthy people.

Edited July 20, 2014 by TimG

[kimmy]

If this was true then we would still all be living in squalor and dying young from infectious diseases.

We didn't get access to better medical services because some factory found a way of replacing workers with machines that can spit out more widgets per hour. Nor did we as a group decide that the poorest among us should receive assistance and their kids should receive education because of technological boosts to productivity.

You might tell me that those things couldn't have happened without the economic benefits resulting from greater productivity, and perhaps this is true. But that's only half the equation. The other half is a collective decision that some of our economic success gets channeled back into public medicine and public education and social programs.

The 1 billion people who have moved out of poverty in the last 20 years would disagree with you. Problems like these cannot be solved overnight but a big part of the solution is improved productivity with technology that frees resources to buy yet more technology. Engineers, doctors and artists only exist because someone else grow the food that they need. This would not be possible without technology. The other part is a rules based civil society that allows private enterprise to grow (note that I did not say democracy but it helps).

We have all the technology and productivity we need to produce vastly more food than we already do, and the reason we don't is that there's no money in it. Like I said before, we're turning grain and corn into fuel for cars because it's more lucrative than selling to some would-be doctor or engineer in a third world country.

It's not a lack of productivity that's the obstacle, it's the lack of an economic incentive. That isn't going to change regardless of how many farm-hands or factory workers get replaced by machines. Just the opposite: the less that unskilled workers are needed, the less money they will have, and the less economic incentive there will be to fulfill their needs.

The resistance to tax increases comes from a belief that the government is not able to put new money to good use - it is not because of a belief that all programs funded with taxes are bad. Unions that suck up new money by increasing their already generous perks a big part of the problem but they are not the only part. You also need to separate the US system which has turned property owners into vested interests that stand to lose if the system is changed from the Canadian system where education is funded provincially.

Resistance to tax increases comes from peoples' belief that they already pay more than they can afford. It's not a referendum on social programs, public education, or any other particular policy.

-k

[kimmy]

Anyone who gets a mortgage is borrowing money created by the banks. They are not borrowing from existing holders of capital. Same thing with credit cards. Banks charge you interest because when you go and spend the money loaned someone will get and come back to the bank and demand interest on this newly created money.

The money supply can only expand because banks create money from nothing. With a commodity based currency the only way to access capital is borrowing it from current holders. This means extremely high interest rates or rapid inflation in the cost of the commodity. Bitcoin is a good example: to replace the transactions in CDN$ each BitCoin would have to be worth $100,000 which would turn the original holders of bitcoin into extremely wealthy people.

I know how the fractional reserve system works. And the only part of the system that the phrase "creating money from nothing" accurately describes is the part where the central bank issues cash and bonds. The rest is just an abstraction that facilitates and simplifies the process which is, as it has always been, people who need money trying to borrow it from the people who have it.

The value of labor is shrinking, and the power of having capital is only growing as our financial system becomes more and more tailor to meet the interests of the most powerful financial entities. The economy is growing, but most peoples' income is stagnant and the only people seeing real gains are those at the very top.

-k