Unemployment

[Spider]

I guess one of the reasons many here started their own business is to never have to face the possibility of being laid off. Although, not having enough customers can feel like the same thing. Which is better - being made redundent by a single manager, or being made redundent by one's entire market?!!

But the majority of income earners still earn their incomes from working for someone else. News report state that unemployment is still at a fairly high rate of just under 10% average for the US as a whole. The banking crisis - economic crisis, has the country on tender-hooks, displayed now by low (and lower) consumer confidence.

Plus which, there is talk of under-employment (short-time) and 'no-longer-looking' being added to measured unemployment, to give a "real unemployment" of appriox. 15% or higher. I see so-called 'real unemployment' as being surplus workforce. Add to all this loss of employment income due to the banking/economic downturn, we have the tremendous gains in productivity that have been achieved over recent years.

It seems to me that not enough money was being earned by the super-efficient workers to be able to purchase all the stuff they were able to produce. Thus, the huge amounts of "stuff" that the world has been able to produce could only be dispersed (ie. sold) to people by those people and their governments buying the "stuff" on credit. Now that the credit bubble has been burst, and people are beginning to save again, with fewer workers earning wages, there is now not enough money to consume all that these super-efficient workers can produce.

Question: Have we reached a limit to the amount of "stuff" that we want to acquire?

I think where I'm going with this is that if one person can produce what 100 people produced years ago, what will the redundent 99 people do to get enough money to live on? Sure, new industries will absorb them, new products will be produced by them for them to buy, but have we reached a limit to the amount of stuff that we want to own?

It's all very nice to think that one person can do the work of 100 people, but how will the 99 survive, if we have reached a limit? Can they be paid to sit around the swimming pool all day? Because they will need to be paid something with which to buy food and shelter and all the other niceties of modern life.

And how will this affect your small business particularly, and small business in general?

[billbenson]

Spider, one thing to consider is there is a high rate of product obsolesce right now. You don't keep a TV for 10 years anymore. Microsoft is constantly forcing people that need computers to upgrade.

Think about this. A lot of america has high bandwidth service being delivered to the door at the same time as the TV's have HD available, at the same time as companies like NetFlix are offering streaming video so you get the movie to watch when you want with no shipping and its cheap, while your ISP is giving you a bunch of movies, VoIP phones...

Pretty sure that sentence was bad grammar, but anyway...

I come from the hi tech industry so I focus on those things, but retail is dramatically changing, they say that secretaries are one of the jobs that will disappear.




Question: Have we reached a limit to the amount of "stuff" that we want to acquire?

I say no. Industry will be forced to change and prices are low enough that the employed can afford a lot of new toy that didn't exist even a year ago.

What the unemployed, semi skilled workers, and those skilled in obsolete areas are going to do? Thats a different question.

[huggytree]

i think your Over thinking this whole thing....people were living beyond their means...wanting more and more stuff...now there paying all that stuff off and some are saving their money instead of spending.

it will come back, but i dont think it will be as good as it was..it could be like this for 10 years or 2....im only hoping it doesnt get worse..i can survive and thrive where things are now...

[vangogh]

Have we reached a limit to the amount of "stuff" that we want to acquire?

I doubt we'll ever reach a limit. As Harold mentioned products are built not to last forever. There wear out or new ones come along that are better. Both lead to us buying more.

Last year I bought a new phone. Next year I'll probably buy another. I buy a new laptop every 3 years. Looking around my home I don't see too many things I won't eventually buy a newer model.

huggy also makes a good point. You have to consider where we are now economically. People were buying more than they could afford for years and now they can't. In time they'll find a way to buy again.


if one person can produce what 100 people produced years ago, what will the redundent 99 people do to get enough money to live on

You have to consider all the new industries that have started in that time. An easy one to look at is energy. Wind energy for one has been growing and it's going to need people as it grows. People leaving one industry will move to another. The internet has opened tons of jobs opportunities in the last 15 years and will open up many new ones in the coming years.

We haven't reached the point where as a planet we can supply the demand of everyone. That means there is more to produce and more jobs to be had. To me it's about things changing. There are almost always growing pains with change. As far as the high unemployment it's gone past 10% previously in my lifetime and it won't surprise me if it does again somewhere down the line.

[Spider]

I doubt we'll ever reach a limit. As Harold mentioned products are built not to last forever. There wear out or new ones come along that are better. Both lead to us buying more. Last year I bought a new phone. Next year I'll probably buy another. I buy a new laptop every 3 years. Looking around my home I don't see too many things I won't eventually buy a newer model...I see all that as maintenance purchases, not growth. How many cellphones does one person need? And 87% of the US (I think I saw that stat somethwere) have a cellphone already.



...huggy also makes a good point. You have to consider where we are now economically. People were buying more than they could afford for years and now they can't. In time they'll find a way to buy again...This is my point. We were buying more and more but with debt. We (personally and government) were/are living beyond our means. This is currently being corrected - personally, at least - with buying less. But industry is feeling the effects and people are losing their jobs. Because more goods and services are not required so fewer employees are needed. The only alternative to living within one's means is to live beyond one's means - and that leads to disaster, as we have just witnessed.



...You have to consider all the new industries that have started in that time. An easy one to look at is energy. Wind energy for one has been growing and it's going to need people as it grows. People leaving one industry will move to another. The internet has opened tons of jobs opportunities in the last 15 years and will open up many new ones in the coming years...I agree, but because of continuing improvements in efficiency, fewer employees are needed in the new industry for a similar output, than were laid off from the old industry.


...We haven't reached the point where as a planet we can supply the demand of everyone. That means there is more to produce and more jobs to be had...Agreed, again. But the places in the world that have substantial unsatisfied needs and desires also have high unemployment. The people in those places will provide the manpower to produce the goods and services their fellow compatriates need and want. That does nothing for the mounting surplus workforce in America and other advanced countries.



...To me it's about things changing. There are almost always growing pains with change. As far as the high unemployment it's gone past 10% previously in my lifetime and it won't surprise me if it does again somewhere down the line.I don't see 10% unemployment a particularly nasty figure (unless you happen to be unemployed, I suppose) but my point is that we were able to satisfy the unnatural demand (living beyond our means) only by going into debt. Scaling back production to match a reduced demand puts more people out of work. More efficiency lowers costs and puts even more people out of work.

This was the fundamental basis of the social unrest caused by people fighting against the industrial revolution 300 years ago - referred to as Luddites. But then the common people had so little, the Luddites were proven wrong. The same situation is playing out today, only the general population does not have the same level of needs and unfulfilled desires, nor the easy availability of new jobs with which to satisfy those needs.

Sure, there are needs, but today's needs are counter-productive. Who doesn't want more time to spend with family and friends, more time to relax on the beach, more time to have a hobby. We don't need more "stuff" - we need more time. Unless we can find some way to spread the wealth created by robots and computers, so that we can earn money from sitting by the pool, we will not grow our way out of the present doldrums as we have in the past.

[vangogh]

I see all that as maintenance purchases, not growth.

I didn't take your question as having to be a about growth as in owning more than one of something we currently own now. If I'm willing to buy a new cell phone every couple of years to replace the one I currently own then someone is going to be producing that cell phone for me. There's still a business model there for the company.


We were buying more and more but with debt. We (personally and government) were/are living beyond our means. This is currently being corrected

It's being corrected now in a way that people are buying less. I would think that would change once people have made that correction. I think the downward trend in purchasing is temporary.


fewer employees are needed in the new industry for a similar output, than were laid off from the old industry.

Perhaps, but that would leave more people free to create and develop even more industries. Obviously not everyone who finds themselves out of work is going to lead a new industry. You don't need everyone doing that though. You need a few people to lead the industry.


Scaling back production to match a reduced demand puts more people out of work. More efficiency lowers costs and puts even more people out of work.

That's where we are now. First demand scales back, production is cut, and employees are let go. Companies become more efficient and as demand picks up they don't need to hire people back right away. If we assume demand continues to grow then companies while more efficient still end up needing to hire back people in some capacity, which leads to more money for people, which usually leads to more demand for products.

The question then is will demand increase. I don't see any reason why it won't. Look around. People always want more than they have. Maybe not everyone, but most. If our basic needs aren't met then we'll have a clear demand for basic needs. If basic needs are met, we'll want luxury items. Throughout history people have always wanted more, whether more is more quantity or more quality, we want more. Why should that change now? If anything the recent past only shows people want more even when they can't afford it.

[Patrysha]

I think the view that we can't or won't make it out is a bit pessimistic. As Van Gogh mentioned, human nature has shown itself to be very resilient throughout history. Sometimes I think we as a society have too much time to think and navel gaze and worry about things that we have no control over.

[Spider]

I think the view that we can't or won't make it out is a bit pessimistic. As Van Gogh mentioned, human nature has shown itself to be very resilient throughout history. Sometimes I think we as a society have too much time to think and navel gaze and worry about things that we have no control over.I don't think trying to plan for the future is being pessimistic - on the contrary: it takes a certain amount of optimism to even contemplate a future. I opened this thread with the question, "And how will this affect your small business particularly, and small business in general?" (No-one answered that, but that's because no-one seems to accept my hypothesis!)

I think we have an inaccurate view of history. Improvement in position and living standards occurred very, very slowly. It wasn't until the 1700s, with the advent of the Industrial revolution that growth and improvements became a feature of civilisation. Since then, we have grown our way into prosperity. During all of those 300 years, there was considerable unemployment, poverty and distress, which became less and less until we could not keep the improvements going without living beyond our means.

I am really interested in how business will change over the coming decades because of this course of history. It's not that history has changed - it's because, as I see it, history has run its course and we are on the brink of a totally new world.

And no-one seems to recognize it. We are entering a new era totally blind. I just want to be prepared for the coming changes.

[Dan Furman]

Question: Have we reached a limit to the amount of "stuff" that we want to acquire?

I think where I'm going with this is that if one person can produce what 100 people produced years ago, what will the redundent 99 people do to get enough money to live on? Sure, new industries will absorb them, new products will be produced by them for them to buy, but have we reached a limit to the amount of stuff that we want to own?

It's all very nice to think that one person can do the work of 100 people, but how will the 99 survive, if we have reached a limit? Can they be paid to sit around the swimming pool all day? Because they will need to be paid something with which to buy food and shelter and all the other niceties of modern life.

And how will this affect your small business particularly, and small business in general?

This fits verymuch with my "the whole 'middle class' thing is an illusion" line of thinking.

I think, in the future, most people will be somewhat "poor".

[billbenson]

This fits verymuch with my "the whole 'middle class' thing is an illusion" line of thinking.

I think, in the future, most people will be somewhat "poor".

Contributing to that is the cost and availability of advanced education when there is a trend to only give the good jobs to the people with advanced education.

[vangogh]

Dan I knew you were going to find your way into this thread. By the way didn't we have this or a similar discussion not too long ago.


I opened this thread with the question, "And how will this affect your small business particularly, and small business in general?" (No-one answered

Sorry, I didn't mean to avoid the question. I just focused on other points you started with.

With my business particularly I don't think about the economy in general. If things are going well or not so well, to me my focus is on the specifics of my business. Regardless of the economy I'm always looking to improve my business. I seek new sources of revenue so I'm less dependent on any one source.

Again I don't think the current situation with the economy will continue forever. We've lived through good and bad economies and until proven otherwise I don't see the current economy as anything other than one of the usual dips that happens. It's worse than many we've experienced, but it still seems a natural correction to me.

As far as small business in general I think there have been changed happening for years now, which will continue. It's more to do with the possibilities of the internet though. The internet opens up more possibilities for the work at home type. Look at many of us. Companies can now exist in virtual offices. Instead of turning to the person in the next cubicle you hop on instant messenger or whatever form of communication works for you.

When the economy is bad as it is now, I do think that drives more people into working for themselves or into virtual offices. I got started in the last big downturn after all the .coms went under. I'd wanted to go into business for myself for years anyway, but the timing was right after being let go from the company I was working for.

I don't believe that we're becoming so efficient that there won't be jobs for people or that people won't need more stuff. Compare the efficiency of workers over the years. There are periods in history where efficiency grew a lot faster than it has in recent years.

[Spider]

This fits verymuch with my "the whole 'middle class' thing is an illusion" line of thinking.
I think, in the future, most people will be somewhat "poor".Accepting that as true, what changes are you planning for your business to accommodate this future?



Contributing to that is the cost and availability of advanced education when there is a trend to only give the good jobs to the people with advanced education.Well, to whom else would you give the good jobs? Good jobs require good education. But if there are fewer jobs to be had, the under-educated unemployed must have some source of income on which to survive - or crime will proliferate unmercifully! How will you conduct your business in this scenario?



... I don't think the current situation with the economy will continue forever. We've lived through good and bad economies and until proven otherwise I don't see the current economy as anything other than one of the usual dips that happens. It's worse than many we've experienced, but it still seems a natural correction to me...Sounds to me like wishful thinking. I wish I could see a concrete underpinning to your optimism.

For my part, I see a serious problem brewing, that things will not - cannot - return to how they were, and this is a fantastic opportunity for those who are prepared to think through the situation and help develop a brand new way forward.

[vangogh]

Why is it wishful thinking? I could just as easily say your thinking is simply being pessimistic. I'm basing my thinking on historical context. Look through recorded history and you see ups and downs in the economy. Give me a reason why the current situation is any different than all those that have come and gone and I'll rethink things.

Everything you said in your opening post could also have been said about the previous downturns in the economy. What are you saying that's different about this specific downturn? You mentioned the majority of income earners earning their money working for someone else. When was the last time that wasn't true?

Unemployment is a little over 10%. It's been over 10% before as well. As far as production being more efficient now than then, that's pretty much how it's always going to work. We learn to do things better and quicker. Production will be more efficient 100 years from now than it is now. People will use the extra time to create new things and new industries. They'll create things we probably can't even imagine now. Would someone have anticipated computers or the internet 100 years ago?

Some interesting quotes I found:



The recession came at a particularly bad time for banks due to a recent wave of deregulation.

the number of bank failures was rising steadily. Bank failures reached a post-depression high of 42 as the recession and high interest rates took their toll. By the end of the year, the Federal Deposit Insurance Corporation (FDIC) had spent $870 million to purchase bad loans in an effort to keep various banks afloat.

Congressional deregulation worsened the crisis...encouraged a boom in commercial real estate building projects...rapidly shifted away from traditional home mortgage financing and into new, high-risk investment activities

a combination of deficit spending and the lowering of interest rates slowly led to economic recovery.


All of the above is from the Wikipedia entry on the recession in early 80s (http://en.wikipedia.org/wiki/Early_1980s_recession). I realize the details aren't exactly the same (the amount of the bailout being one of them) and I'm only quoting part of the whole story, but isn't a lot of the above similar to what we've seen over the last year+?

It's not exactly the same, but what is fundamentally different? If there is something tell me and I'll be happy to listen and perhaps even change my mind.

[billbenson]

Quote:
Originally Posted by billbenson View Post
Contributing to that is the cost and availability of advanced education when there is a trend to only give the good jobs to the people with advanced education.



Well, to whom else would you give the good jobs? Good jobs require good education. But if there are fewer jobs to be had, the under-educated unemployed must have some source of income on which to survive - or crime will proliferate unmercifully! How will you conduct your business in this scenario?


I really don't have a direct problem because my day has come and gone and don't have kids. I still would like future generations to have a good place to live.

I don't buy the "fewer good jobs to be had" premise. What percentage of the workforce makes over $100k today? A pretty small percentage I suspect. I do feel that the skill or education level of the better paid workers will be required, thus dividing the highly skilled and semiskilled / non skilled further. Good education for all will be critical.

How will I conduct myself? I will continue to try to stay abreast of technologies and marketing as all this moves forward. It's not a good time for taking a sabbatical. Exactly what you are doing by posting discussion posts such as this. Looking for information I suspect.

The only thing I can do for other issues such as education is vote and support org's I trust. Problem is I can't think of a politician or .org I trust. Even the ones I might trust have to play the political game which puts us on a downward spiral.

[Spider]

Why is it wishful thinking? I could just as easily say your thinking is simply being pessimistic...You could, of course. I think I am applying (admittedly, general and unspecific) facts, while you (it seems to me) are applying the principle of what-happened-before-will-happen-again. Tony Robbins once said, "The past does not equal the future," and I think there are sufficient differences between the past and the present to suggest that the future will not be repeating itself, this time around.



... I'm basing my thinking on historical context. Look through recorded history and you see ups and downs in the economy. Give me a reason why the current situation is any different than all those that have come and gone...Now, it must be true that we are both looking at the same history, but clearly, we are seeing it differently and noticing a different set of facts. You are seeing a ups and downs in the economy, and I do, too. However, I see a continuing theme through those ups and downs. I think we would agree that history has displayed a long string of higher highs and higher lows so while there is some volatility there is a general rise to the standard of living, for everyone.

I know there is the common refrain that the rich get richer and the poor get poorer, but that hasn't been generally true in recent history (the past 300 years.) There might have been a growth in the disparity between the extremes but the poor have been getting richer, too, just not as fast as the rich. In support of Dan's remarks, in the past 50 years or so, the average has continued to rise but the mean has declined, so that the "middle class" are poorer now in many respects than than their parents were.

When I look at this same history, I see poverty being mitigated to a great extent. I see this happening through growth in the economy, less and less unemployment, and reduced costs due to innovation and efficiency, enabling more people to buy what they wanted and needed. It now seems to me that a great deal of material needs and wants have been satisfied. People in advanced countries, don't really have the vast needs they did a century ago. What they need now is more time. And - until someone invents "time-in-a-bottle" - this is going to remain unavailable, except to the unemployed.

And there the balance starts to crumble. If the poor have lots of time on their hands and not enough money to live on, and the rich want more time and have the money to buy it, if they could, it will take a whole new world and a whole new way of thinking to create a market in this very desirable commodity.

[Dan Furman]

Accepting that as true, what changes are you planning for your business to accommodate this future?


Nothing that I haven't been doing already.

I never based my business model on whether times were good or not, and I do not think I sell a luxury service / item that is easily discarded.

I base my business model on being very good at what I do, being able to "prove" it by my own site's writing, and then reaching people in an effective manner.

On that last note, I am starting to think my clear-writing site needs a reboot. Monitor resolution rises, and my site "looks" smaller. Plus, I think its run its course - it's getting to be time for a new look/feel.

But I likely would be thinking this way in good times or bad.

[Spider]

...But I likely would be thinking this way in good times or bad.I'm not really looking on times as being good or bad - they are what they are -- and the times, they are a-changing!

[vangogh]

You could, of course. I think I am applying (admittedly, general and unspecific) facts, while you (it seems to me) are applying the principle of what-happened-before-will-happen-again. Tony Robbins once said, "The past does not equal the future," and I think there are sufficient differences between the past and the present to suggest that the future will not be repeating itself, this time around.

True enough. I think you'd agree with me when I say neither of us knows for certain what will happen. We're both speculating some for the sake of debate. Kind of what makes it fun too.

I don't think I'm simply saying what happened before will happen again. More that I'm looking at history in order to understand how the overall system works. Naturally my reading of history is open to interpretation and if the system changes fundamentally then history may not apply at all. I guess I don't think things are changing as fundamentally as you do in regards to economic forces. I do think much is changing, but I think there's still quite a bit that remains the same.


I think we would agree that history has displayed a long string of higher highs and higher lows so while there is some volatility there is a general rise to the standard of living, for everyone.

Yep. I completely agree. There are ups and downs in the short term, but the overall growth has been positive. I think with the rich get richer and the poor get poorer, it's not meant as an absolute, but rather a relative comparison. Like you mentioned the disparity between rich and poor is getting wider.


When I look at this same history, I see poverty being mitigated to a great extent. I see this happening through growth in the economy, less and less unemployment, and reduced costs due to innovation and efficiency, enabling more people to buy what they wanted and needed. It now seems to me that a great deal of material needs and wants have been satisfied.

I agree with you up to a point here. I do agree that more and more material needs have been met, though we're still quite a way away from that being true for all. However I don't think our wants are finite. I think our nature always seeks more, better, new. Also we don't produce things to last forever so we end up buying them again and again.

If you look at our basic needs (food and water, shelter, clothing) they're only fulfilled for a limited time. Food and water are consistent needs, clothing wears out and needs to be replaced, and while shelter can probably last a lifetime, most of us live in several different homes over that lifetime. If you look at wants, they're never ending. We almost always want more, better, new. I don't see where demand will ever run out and I don't see supply outstripping demand. Supply is increasing through greater efficiency, but demand is also increasing.

[Spider]

...I don't see where demand will ever run out and I don't see supply outstripping demand. Supply is increasing through greater efficiency, but demand is also increasing.This, in fact, is my main concern. Placing ourselves in the 1950s and looking forward 60 years, your argument is perfectly sound, as we have witnessed. The next 60 years does not hold the same promise, I fear. Here's why---

Let us extrapolate from the past into the distant future (well, maybe not so distant, really) -- Let clothing stand as a descriptive example, and let us think on a global basis and ignore that most clothes sold in the US today are made overseas. Because this is a worldwide problem, not just an OEDC problem.

Fashions change, clothes wear out. There will always be a demand and the demand will grow. Let us say that 100 years ago, it took 100 clothing industry employees to provide and keep clothed 200 people and those 200 people had money from one source or another with which to buy those clothes. Everything is in balance.

Come forward to today. We have improvements in efficiency so that it now only takes 30 clothing industry employees to keep 200 people clothed (per my example.) But these 200 people buy more clothes today because fashion is more vibrant - let's say those 30 employees are 50 employees because of greater demand. But we are using polyesters and other manmade yarn which are more hardwearing than natural yarns so clothes last longer. Those 50 employees are really 40 employees because less clothes are purchased as a result of clothes lasting longer.

So we have a situation (grossly oversimplified but an example) where the people have more clothes in their closet but don't actually buy correspondingly more clothes over any given period. Because clothes are better made by machine than by hand and are longer-lasting.

At this point we have lost 60 of those original 100 employees. They are off working some other job - in an industry where similar changes are taking place. Because of the growth in business, industry and finances, the world is still in balance.

Looking forward, let us suppose that the clothing industry can continue to improve in efficiency and everything can be done my computers and robots, so that only 1 person is needed for every 200 people who want clothes. And suppose all other industries imrpove to the same level - 1 person can control enough machinery, robots, automatied deliver systems, driverless trains, etc. per 200 computer-buyers. And 1 person can control the computerized farms and food-production robots for every 200 people who eat. Etcetera!!!

Now, this isn't such a mad idea - I wonder how many people Amazon employs for every person who buys a book from them! I wonder how many people are employed in today's industrialized farms for every person who eats the food they produce!

But if every industry in place and not yet created can produce the goods people want and need, at such levels of efficiency, we will be facing a huge problem, that no amount of ingenuity and new unimagined products can accommodate.

Now, that will not happen overnight, but it is already happening. When you watch videos of cars being manufactured, it seems as if lumps of steel and plastics go in one door and an automobile is driven out the other door hardly touched by human hands. And look at the legacy costs those car companies have been facing. Two or three people being paid a pension of some sort for every one actually working.

What would those retired/laid off/guranteed people do if they didn't have that unproductive income from the company? Not find another job because jobs are not to be had. And not everyone can start their own business. You can't have more people running their own businesses than there are customers to buy from them!

This is not a pessimistic view, ulkess you think we cannot solve this looming problem. I think we can, so I am optimisitc about the future. I am just trying to figure out HOW we might solve it.

[vangogh]

I see where you're coming from and understand. My first thought is to ask why should the next 60 years be any different than the last 60 years? Between then and now efficiency has increased too. We could apply all your numbers to the last 60 years as well as the next 60. We certainly don't need as many employees today to clothe 200 people as we did 60 years ago.

What's missing for me is why the future you're describing is any different than the past.

One thing to keep in mind is the population of the world is growing. That means more people needing more clothing. That alone could create enough demand to counter improved efficiency.

I think you also have to consider new industries that will arise. Those new industries will absorb the people that would lose their jobs as another industry shrinks or becomes more efficient, requiring less employees.

Yes, I agree there's change ahead, but I think the overall system will find a balance. 100 employees are no longer needed to produce clothing for one company. One of those 100 decides to start a new clothing company and absorbs the 100 (or a different 100) employees who now need jobs again. Why can't many of the people who are no longer employees become employers?

It also stands to reason that as it becomes more efficient to produce clothing the price of clothing will drop. People won't need to work as much in order to afford new clothes. They work less because their company is more efficient, but they can afford to work less because they don't have to spend as much on their basic needs. That may sound like wishful thinking, but I'm looking at myself. I don't need to work that much to afford life's basic necessities. Much of the work I do is to be able to afford things beyond the basics.

[Patrysha]

Well here's the thing about your example Frederick...because it is so simplified it doesn't take into account all the variables.

Which, of course, it isn't meant to...but that's where so many possibilities for growth and differentiation are...

Take Polyester...yes, it lasts longer, but while it looks much nicer than it used to, it still doesn't breath, it can be expensive to wash (dry clean only for the most part) and it actually does not age very well (once it starts getting those shiny spots you can't exactly wear it in public even if you do hold onto it). Not to mention the flammability factor which makes it completely inappropriate for certain uses. Already there is a whole market who will not wear man-made fabrics.

I just think it's a huge stretch to think every industry is going to hit maximum efficiency...especially when there are several current trends that are bringing back inefficiencies because some people find they work better...

Like...going back to buying direct from local farms is a growing trend at the moment. The arguments are that it is more ethical (animals having a better standard of life before they're slaughtered), tastes better and is better for the environment than the more efficient factory farming practices.

Personally, I'm not completely convinced there is a looming problem to solve. And if there is, we'll find a way of dealing with it...adapting, tweaking and muddling our way through to the next crisis...

[vangogh]

hat's where so many possibilities for growth and differentiation are

That's how I see it too. We might not be able to predict which of those possibilities will pan out or even what they might be, but when I look at history it seems to me those possibilities do arise and some do pan out. That's no proof of course that it will happen now, but until proven otherwise I'll believe that it will happen.


Like...going back to buying direct from local farms is a growing trend at the moment.

That's a good point. It's a change that's happening in the opposite direction. Maybe similar things will happen in other industries as well. Efficiency isn't always the best thing. Sometimes slowing down to view the scenery is more enjoyable.

[Spider]

I see where you're coming from and understand. My first thought is to ask why should the next 60 years be any different than the last 60 years? Between then and now efficiency has increased too. We could apply all your numbers to the last 60 years as well as the next 60. We certainly don't need as many employees today to clothe 200 people as we did 60 years ago.
What's missing for me is why the future you're describing is any different than the past...The tendency most certainly is for the next 60 years to be the same, if not faster. Perhaps it will continue uninterrupted, as you suggest.

I am seeing a pattern interrupt, though. In the past, the circumstances were right for growth and improvement - more goods required more people with more money to buy them and people had more money as they filled the jobs to make other goods for other people. It was one humongous snowball called "the economy." But we began to run out of money. And we run out of money because of productivity improvements, where fewer workers are needed to produce the goods and service we want and thus less total wages enter the economy.

Our capacity to produce stuff and our skill in producing it with less and less labor meant that money was accumulating in fewer hands and the potential buyers of all the stuff had less money because their labor was no longer required to produce the stuff they were expected to buy. Purchases continued for a while but there wasn't the money in the economy to pay for it so it was acquired on credit. Debt increased until we had a systemic collapse (very near a total collapse of the world monetary system) in 2009.

If the world is to return to, or continue with, the former level of growth, so that we return to the former unemployment levels, and the former level of opportunity for people to better themselves, we must return to the former levels of debt accumilation.

The problem is, how can we return to our former glory without the debt accumulation, when it is the accumulation of debt that makes the growth possible?

Something fundamental must change.

[Spider]

...Personally, I'm not completely convinced there is a looming problem to solve. And if there is, we'll find a way of dealing with it...adapting, tweaking and muddling our way through to the next crisis...There is no doubt that the problem will be solved - no doubt at all. Everything is always in balance - either the good life is spread evenly over the population or it is better in some places than others, or it may be possible for one or two people to own everything while the other 6 billion...,998 people live in dire poverty.

I am of the school that says, I'd rather work at something to bring about a satisfactory solution than wait to see what providence has in store for me!

One of my favorite quotes is, "Why wait for the light at the end of the tunnel? Walk down in the dark and light the thing yourself!"

[vangogh]

Our capacity to produce stuff and our skill in producing it with less and less labor meant that money was accumulating in fewer hands and the potential buyers of all the stuff had less money because their labor was no longer required to produce the stuff they were expected to buy. Purchases continued for a while but there wasn't the money in the economy to pay for it so it was acquired on credit. Debt increased until we had a systemic collapse (very near a total collapse of the world monetary system) in 2009

I see what you're saying. The above quote clarified your argument for me. I think it did. Let me rephrase it to make sure. If I'm understanding right the difference you're seeing between the past to now and now to the future is how we purchase things. In the past we actually had money whereas now (or recently) we've been using credit. While we've been buying things we really don't have the same wealth we used to have, which is why you're suggesting we might not be able to grow.

Is that right or kind of right.

I'll have to think about that a little more before being able to respond to it, though I'll toss out a few initial thoughts.

Buying on credit is part of us moving more toward a cashless economy. I don't think we'll ever be completely cashless, at least not anytime in the near future. There's likely always going to be a black market that will need something along the lines of cash.

If we reduce wealth to a number on a credit report, a digital number that says what we can and can't buy, will it matter if some hold negative accounts? If they're still allowed to purchase is it important that 0 be the break even point? I'm not sure. Just tossing it out there.


If the world is to return to, or continue with, the former level of growth, so that we return to the former unemployment levels, and the former level of opportunity for people to better themselves, we must return to the former levels of debt accumilation.

Is this absolutely true. Cash itself isn't meaningful in and of itself, especially after it stopped being backed by gold. Cash is a symbol, it represents what we're able to purchase. So if we're in debt, but still hold the same purchasing power as if we had credit is there really a difference? What's the important part? That we have or don't have debt or that we have purchasing power?

Maybe what needs to happen is for a correction. Maybe it means for a time we can't have everything we want and we do without. Not a pleasant thought if it means a string of years like the Great Depression, but my argument is still that we'd survive. It would be another dip and a painful one, but we'd all come through on the other side.

[Spider]

...Is that right or kind of right.Yes!


...If we reduce wealth to a number on a credit report, a digital number that says what we can and can't buy, will it matter if some hold negative accounts? If they're still allowed to purchase is it important that 0 be the break even point? I'm not sure...That's the breakthrough I was hoping for. Great! Zero only has to be the breakeven point because that is what the present economic system is based on. If we stop using that as a base, a lot of possibilities open up....


...Cash itself isn't meaningful in and of itself, especially after it stopped being backed by gold. Cash is a symbol, it represents what we're able to purchase. So if we're in debt, but still hold the same purchasing power as if we had credit is there really a difference? What's the important part? That we have or don't have debt or that we have purchasing power? ...This is it, isn't it?! If we use money (cash or digital equivalent) only as a measuring devise, then you break the link between work to get money to buy stuff which requires work to produce it. Work - money - stuff - work - money.....

What will this do? It will totally allieviate poverty because everyone will have a certain amount of minimal buying power for which they will not have to work. Those who work will be freed from work they hate and will choose work they enjoy, making for a much happier population. The shortage of labor for miserable jobs will prompt development of robots to perform those undesirable tasks, while some enjoyable jobs, long-since lost to industrialization, will be returned to those who enjoy them (farming for example.)

People who produce are as dependent upon those who consume just as must as those who consume are dependent upon those who produce. So, why should one group get an advantage over the other, as in the present system?

The world can go on using up its resources, new materials and products will continue to be created. We might even say that money has outlived its usefulness.


...Maybe what needs to happen is for a correction...I don't see that. An economic correction would be the result of hanging onto an outdated system. The new system would be a totally new world with a totally new way of thinking.

The only trouble is, I think we just re-invented communism!!!

[vangogh]

I'm not sure we reinvented communism here. We're not talking about everyone having equal buying power regardless of how much they work or contribute. At least I'm not suggesting that.

Even with a cashless society I think buying power would still be tied to what you contribute back to the system. It would still be based on some measure of earning. It's just that the measurement would no longer be a physical piece of paper. It would be a number stored digitally somewhere.

[Spider]

The only reason I said that was we seemed to be headed towards a society where some people - many people - probably wouldn't have work to do to earn the money/data entry to buy the goods and services that could be provided so easily.

Taking an extreme example of super-high productivity. If everything anyone wanted or needed could be supplied by very few people, how do you provide the idle people with the money/digital points with which to buy the goods and services?

ie. Suppose 1,000 people could be supplied with everything they need by employing 10 people and a whole bunch of robots. The remaining 990 people wouldn't be able to buy the goods and services the 10 people + robots could provide because they have no jobs and thus no money/digital points with which to buy them. They would have to be given the money/digital points in order to buy the goods and services available. It couldn't be tied to "earning" or "work" because there is no work to do, it's all being done by robots. So it would have to be tied to "need." And that sound very communistic, to me.

Perhaps the capitalist philosophy could be retained by allowing everyone to have 5,000 points each month for doing nothing, and allowing the 10 workers to have 10,000 points (or whatever they have been able to negotiate with their employers, in true free market style.)

However you look at it, the base 5,000 points looks awfully like welfare, doesn't it?!

[vangogh]

I see your argument. However I don't know that the money/points/buying power (whatever we call it) wouldn't have to be tied to need. Keep in mind that if none of the 990 can afford to buy anything the 10 don't make any money. They also need the 990 to be able to buy.

I'd still think the buying power needs to be tied to something other than need. Say robots are doing the majority of the work producing products. I'm not convinced they'd be able to handle most services in the foreseeable future. That still leaves things like art and entertainment.

If you look at this as one super efficient industry then sure you're left with a lot of people not working in that industry, but that ignores all the other industries. Also if the industry is that efficient why would only 10 people be working in it. Couldn't the other 990 set up smaller production plants to produce for 100 or even 10. Say one person can produce enough X for 10 people. The other 9 are then doing the same thing in other industries.

I don't think we're going to reach a point any time soon where 10% of the population can produce enough for 100% of the population.

[Spider]

...I don't think we're going to reach a point any time soon where 10% of the population can produce enough for 100% of the population.Maybe not, but sooner than we might think. One of my favorite comics when a child was Dan Dare - the British equivalent of Flash Gordon. Total fiction, now everyday true! It is amazing to me that 2001: A Space Odyssey is from 1968 - 40 years ago - and it doesn't seem as if there's much in that movie that isn't commonplace today.

I am sure that a super-efficient economy will be here a lot sooner than we can imagine now. And I am sure many of the problems such an economy would generate are coming to light sooner than we want.

IOW, the future in all its glory is not here yet, but little bits of it are. More and more bits will be developed at a faster and faster pace. Perhaps the near meltdown of worldwide financial institutions was a warning that the future is just around the corner.

This conversation may prove to be something future historians will analyze to see how 2010 people anticipated the vast changes that were about to overtake the world! We might be famous for this, one day!!!!

[vangogh]

This conversation may prove to be something future historians will analyze to see how 2010 people anticipated the vast changes that were about to overtake the world! We might be famous for this, one day!!!!

We'll have to place this thread in the time capsule to be opened in 2060 :)

You may be right that one day we will be that efficient. I guess I think by that time we'll have new things to occupy our time and new things that will need us to either keep working or working because we want to.

Since you brought up science fiction think of Star Trek. In that universe most of the basic needs have been supplied. People have instant access to food and most any material thing. They still keep themselves occupied. They still manage to acquire things, though they tend not to place as much importance on material goods and place more importance on experiences and art.

Say we do manage to efficiently produce enough to meet our basic needs. That reduces the amount we need to work. We then decide to satisfy our wants beyond our basic needs and things continue. In time we can efficiently produce everything we want as well. Now we don't need to work at all. I don't think that means we'd all be sitting on our behind doing nothing. Some would of course, but I think most of us feel the need to be productive in some way. So we spend our time doing things we feel passionate about instead of doing things because we have to to earn money to buy things.

Granted I'm speculating, but I think there's something in our nature that will keep us going.

[Spider]

...Say we do manage to efficiently produce enough to meet our basic needs. That reduces the amount we need to work. We then decide to satisfy our wants beyond our basic needs and things continue. In time we can efficiently produce everything we want as well. Now we don't need to work at all. I don't think that means we'd all be sitting on our behind doing nothing. Some would of course, but I think most of us feel the need to be productive in some way. So we spend our time doing things we feel passionate about instead of doing things because we have to to earn money to buy things...But we still have to have money (or something) with which to buy the things we need. And this is the problem we have in today's terms.

In today's terms, if you don't have money you cannot get the things that keep you alive (except on welfare or charity) and you have to work to get that money. Sometime soon, we must come up with a system that provides to everyone what they need to live comfortably without the need for money and without the need that they work for it.

That is a tremendous change in basic societal thinking. Today's world, especially in the United States, is diamentrically opposed to such an idea. That is the problem.

[vangogh]

But we still have to have money (or something) with which to buy the things we need. And this is the problem we have in today's terms.

Why? In today's terms yes. That's how the system works. If we're imagining a future where we can produce enough to meet the world's needs and we're doing so in a mostly or even completely automated way, why would we need money to get those things?

I realize producing everything is one thing and distributing is another and somewhere in the process we likely have real people doing some work that they may not choose to do without some kind of compensation.

One thing I believe about human beings is that while we currently have to work in order to have money to buy things, we'd still work at something even if we didn't need the money. Some people wouldn't, but I think most people feel better when they're productive in some way. If we didn't need money I think we'd be productive in things of our choosing. We'd work at it, but it wouldn't feel like work. If your basic needs are met and you work for the pleasure instead of the need do you think you'd be willing to give away the fruits of your production?

I'm being idealistic I know, but I can imagine a future where our needs are met and yet we're still producing and growing because we want to.

[Spider]

I agree. In the future. It's the transition that will be the problem. How many people right now, complain about the government handouts, welfare, food stamps, whathaveyou, for people who are not working for it. In the current political debate we hear of people with health insurance balking at the idea of universal coverage. That's only in health care. We have "universal coverage" in education Kindergarten to High school, but don't want it, it seems, in medicine. Unemployment benefit is limited in scope.

All of those argument revolve around money, I acccept that, but how can this society transition from an earning-based society (using money as the measure) to a non-earning-based society (whether money or data points are used.)

It is the transition that will be a battleground for many years before we can even approach the ideal you just explained.

[vangogh]

Change isn't always easy for people. In fact it's usually somewhat painful for many. Sure there will be problems during a transitions, but isn't that going to be the case no matter what the transition.

I guess I have a mostly optimistic view of life and people in general. I know at times we suffer, but I think we're capable of pulling through and getting to the better way even if it does mean some pain and loss to get there.

[Spider]

There's no doubt we'll get through. The only "not get through" scenario is annihilation of the human race - and I don't see that happening. What I'm really interested in is the form the transition will take, and how we must position our businesses to accommodate the changes.

Going from an earning-based society to a non-earning-based society is beyond my comprehension at the moment. Currently, I run my business on an unstructured "those that can't afford it get it free and those that can afford it pay me" kind of basis. But I can afford to do that. Most people can't or are unwilling to do it. And I still need money to go to the supermarket to buy food.

I think my business is in transition from earning-based to non-earning-based but only one side of the equation is working right now! I'd like to devise some non-earning benefit with which I could acquire food, for example.

[Patrysha]

I'd like to devise some non-earning benefit with which I could acquire food, for example.

Well it's not non-earning, but if you could find a grocery store owner who wanted coaching...

[Spider]

Well it's not non-earning, but if you could find a grocery store owner who wanted coaching...IOW, barter. Nothing wrong with it except - as you recognize - it's not a non-earning equivalent for this example. Regarding a future that will provide large numbers of non-working population with a reasonable life, barter is a backward step rather than a forward step. It really doesn't take money out of the equation, it only replaces cash with cash-equivalent work. This only perpetuates the problem - there will be less and less productive "work" to do.

[Patrysha]

Yeah and that's a pretty huge paradigm shift to wrap my head around. I was raised on the earning model...everyone was.

We're raising our kids that way...with the expectation they will find something or someway that they will contribute in order to earn and live...they already do with chores and small jobs. It's how they earn their lunch money, video games and stupid Scholastic book orders.

(Not that the books are stupid, but they always want to order the books with the silly plastic premiums and doo-dads that break 10 minutes after they arrive...)

And unless they come up with some other way before then...that's what their children will learn too.

[Spider]

I do think before their children get involved the world will be well on the way towards a new paradigm. Not sure what that will be, though. I guess we'll know soon enough. I'm just trying to jump the gun!

[vangogh]

Assuming the transition will take shape as we've been describing, in the beginning we're just talking about moving more away from cash and toward electronic accounting of money. We're pretty much there as it is. As long as your business can handle credit and debit cards you probably don't need to do much more.

As far as the end game is concerned it's a good question how we get there. I can picture a time when our needs our met and we all work at things not for the money, but simply for the interest. Hard to see how we could go from where we are now to there though.

I guess we start with the situation where where producing more than we need. In other words supply outstrips demand which should drive prices down toward free. At some point prices get so low that there's no incentive to create more and maybe we see a controlled supply. Companies produce only as much as the market will bear and eventually produce more driving prices back down.

Perhaps the solution comes, dare I say, when government takes over production. When cost to produce is so low we pay out of our taxes. I'm sounding socialist aren't I, and getting back to your idea of how we're creating a new communism.

Assuming government taking over is what happens then as more industries can produce a supply that gets outstripped by demand more industries get taken over. At some point all our basic needs and maybe a few not so basic needs are met. Some people realize they don't need any more and so stop working as they have been and move to part time hobby businesses that they enjoy and so they can afford the taxes to get their basic needs met.

More and more people follow their example and in time most of us aren't working 9-5. We don't need to, because we don't have to work (at least beyond our tax obligation) and instead we work at what we want. We make enough money to pay the taxes for our basic needs and a little more to afford a few luxury items. Sooner or later these luxury items are also so efficient that supply outstrips demand…

[Spider]

That's pretty much how I'm seeing it, too. History won't allow us to call it socialism or communism, though - not without a whole lot of brain-washing (social re-education!) We'll have to find a new name, at least.

The weak link is what we are facing immediately -
I guess we start with the situation where [we are] producing more than we need. In other words supply outstrips demand which should drive prices down toward free. Presently, if that happens, companies stop producing it and go make something else on which they can earn a good profit. Have you tried to buy a simple transister radio without bells and whistles, lately? Does anyone make a simple cellphone that doesn't take messages, make appointments, do the dishes and make coffee!!!

The only example to dispute that, that I can think of, is the internet browser, but I think there are special circumstances there.

We need a new mindset that finds value in free, where making stuff so cheaply that everyone can have one at little cost and there is value of some sort in producing it.

We have the technical ability, but we lack the mental ability at the moment.

[vangogh]

I'll come back later and continue the specifics of the conversation. Right now I'm here for a hit and run link. While reading this morning I came across this post, Understanding Modern Debt Slavery (http://www.seobook.com/debt-slavery). It's about so much of what we've been talking about here I thought you might find it interesting to read.

I'll be back later to continue the discussion.

[Spider]

Frankly, I didn't find this blog post to relate overmuch to our conversation. Perhaps I missed the point. The basic thinking remained the same regarding the perceived social values.

We cannot go back. We cannot deal with the problems we have by reverting to how it was some time in the past. The genie is out of the bottle and it is impossible to put it back.

We are forced to plow ahead and face a new reality. We cannot provide for an ever-growing population by creating ever-more income-producing jobs, while a productivity and technal revolution continues.

Either we must stop - and even reverse - the productivity and technical gains we have made : which isn't going to happen.

Or, we must stop - and even reverse - the population from gowing : which isn't going to happen.

Or, we must find some way to pay people for not working.

[vangogh]

The post might be looking at it from a different angle, but I'm surprised you didn't see the connection to our conversation. A quote from 2nd paragraph


the truth of a debt based money system means that many people MUST fall behind and be impoverished by debt. How else do you explain most people having nothing saved for retirement going into our jobless recovery, while their children get to eat nearly 6 figures of debt just for being born?

Isn't that pretty much what we've been talking about? The whole idea of people buying based on debt? The thinking in the post may be different. No biggie. Just thought you might find it interesting.

I still don't see the problem being as bad as I think you do. Take overpopulation. I agree, we're not going to stop population growth. I see two solutions. One is we put more into space exploration and either find someplace new to live or figure out a way to turn Mars or the moon into a place where we can live. Either is going to cost a lot of money and put a lot of people to work. Growth in all related industries putting more wealth in the pockets of many of us.

The other possibility isn't quite so pleasant. We become so overpopulated that we can't provide for the world population. Many die as a result. Or perhaps our cities become so dense that some disease is able to rapidly spread wiping out a significant portion of the population. Or it could be a natural disaster. Who knows. None of that is pleasant to think about, but if enough of us are suddenly no more it also alleviates the financial problems we're talking about.


Or, we must find some way to pay people for not working

Do we? We're assuming people won't need to work because we're become efficient enough to provide basic needs without needing people working to provide those needs. If that's the case why do people need the same amount of money they do today. The majority of my expenses each month are on things I need to buy. Food, shelter, utilities. If I don't need to pay for these things I don't need to work or work much to afford the few things I want.

I'd still work to pay for those things I want, though it wouldn't take up as much of my time as it does now. I'd find myself with a lot more free time and a desire to fill that time. What would I do? I happen to really enjoy what I do for a living and would still be doing it, just not in the same way. I'd still be designing and developing websites and I'd still be writing. I'd still want to come here each day and chat with everyone.

In the end I'd likely be just as productive as I am now. I think most people would be the same. We might not all do exactly what we're doing now, but I think we would be doing something and being productive.

[Spider]

...Isn't that pretty much what we've been talking about? The whole idea of people buying based on debt? The thinking in the post may be different. No biggie. Just thought you might find it interesting...Yes, I found it interesting, and even more interesting is the difference with which you an I are seeing the subject of our discussion. To me the point raised by the article was how the operators of the financial system were using the system to impoverish the users of the system with debt. I see debt as a natural outcome of productivity overtaking demand and outgrowing a labor-based money earning system. The article didn't offer a solution and, as I saw it, remains trapped in the thinking associated with the problem -- whereas, I believe, a new way of thinking - a new paradigm - will surface.

Einstein is supposed to have said, a problem cannot be solved at the same level of thinking that caused it (or something like that.)

The space option remains a possibility for housing excess population. I do not see it solving the basic problem, though. And one may wonder how close we are to a pandemic plague wiping out whole communities. After the Black Death of the Middle Ages, Europe went into a period of relative prosperity, I believe.



...We're assuming people won't need to work because we're become efficient enough to provide basic needs without needing people working to provide those needs. If that's the case why do people need the same amount of money they do today.I would like to think the future working environment is going to be as nicely balanced as you portray. Maybe it will be. Certainly it will all work out in the end.

So, I come back to my main concern - the transition. I won't be around for "the future" of this, and likely you won't either. How are we going to get from here to there? Not "will we?" because certainly we will, but "How?" because that is all the time I have left to encounter. And the "How" will be the world in which we must position our businesses and our lives.

[vangogh]

Yes, I found it interesting, and even more interesting is the difference with which you an I are seeing the subject of our discussion.

True it does come at things from a different perspective. I'm glad you found it interesting in any case.


The space option remains a possibility for housing excess population. I do not see it solving the basic problem, though.

I was thinking efficiency would be reduced by this. Different planets, different materials and different means of production. Intellectually our technology would move with the people, but physically it might not.

Also if part of the problem stems from their being more people than necessary to run different industries then reducing the number of people per each industry should alleviate the problem.

Let's hope we don't need a plague to solve the problem.


the future working environment is going to be as nicely balanced as you portray

That's really the flaw in my argument. Assuming we reach a point where we all get to pick and choose to work on whatever we want, how balanced will our choices be? Will people voluntarily decide to be garbage collectors for example. Probably not, however, I'm optimistic enough to believe that those will be some of the things we're automating and the job itself won't be necessary for anyone to do.


I won't be around for "the future" of this, and likely you won't either.

C'mon, I fully expect that in 200 years you and I will still be logging into the forum and chatting back and forth. We might even still be in this thread keeping the conversation going. :)

[Spider]

To give you an example of the transition problem, consider GE.

I am currently slowly reading through "Jack - Straight From The Gut." This is a seemingly blow by blow account of how Jack Welch grew GE from a huge conglomerate in 1981 to a even huger conglomerate in 2001, as CEO.

Obviously, when Welch took over the CEO position, GE, like most other companies, was paper-driven, and the company was run by older guys from the old school of business. Now, like most businesses, they are computer-driven. Change of this magnitude for such a large corporation was not easy, and it is interesting to see how they did it, what they gained from it and what they contributed to the growth of the internet. The paradigm shift was clearly tremendous.

For us, of this 21st.century computer-world, looking back on the 1980s and 1990s, the change is now completely understandable. Looking at it from inside a company like GE, with 400,000 employees, $27 billion in revenue (1980 figures), and who knows how many owned businesses all over the world, going "computerized" must have looked like an impossible task. But it was doable - it didn't really take a new way of thinking.

However, "doing business over the internet" was something really new. Just because people were buying books over the internet, didn't mean buying and selling millions of dollars of machine parts, industrial chemicals, medical equipment, aircraft engines, etc. etc. was going to be as easy.

Jack Welch got on board with the internet in 1999 (sending his first e-mail in April) and by 2001, GE had $15 billion of online sales! Billion! Can you imagine how that turned their world on its head without the advantage of hindsight?!

But even then, the transition I am expecting for the world is much more complex and life-changing than that.

[vangogh]

I think the important thing is despite the old guard and in the face of change that was unprecedented, GE did change the paradigm. It may not have been a new way of thinking on one sense, but in others it was. Giving up paper? Impossible.

We won't know for years, but I expect there are companies now undergoing the same kinds of changes in line with what we've been talking about. We can't see it from our vantage point, but maybe 30 or 40 years from now we can look back and see what was going on now to affect where we will be then.


the transition I am expecting for the world is much more complex and life-changing than that.

Maybe it doesn't happen all at once. Maybe we have to go through several stages of change to get there.

I think the internet is a major change that we're only starting out in. It might seem old hat to us, but it's still very, very new. One thing that's been changing is we're seeing manufacturing jobs leave the US. However it's also now much easier for you or I to conceive a new product in out basement, for a relatively small amount of money have a prototype designed (there are computers than can take your input and "print" a working prototype) and then connect with manufacturing jobs in China say.

As the cost to produce becomes marginal it becomes the creative people with ideas who lead the next wave. That's where the US has to go in the next phase of the global economy. Instead of many of us working for a very few large companies we might be looking at few of us working for many small companies.

[Spider]

...We won't know for years, but I expect there are companies now undergoing the same kinds of changes in line with what we've been talking about. We can't see it from our vantage point, but maybe 30 or 40 years from now we can look back and see what was going on now to affect where we will be then...This is very true. So - you seem to be telling me - the transition is already taking place and I have to look around to see what it is. Without the benefit of hindsight, it might be rather difficult to sort out what is right change and what is misguided change, but that's no reason not to look and take notice.

I'm sure the changes are there to be seen. In the GE case, I was impressed how Jack Welch, boss-man of one of the largest corporations of all time, refers to using the likes of John Chambers (Cisco) and Scott McNally (Sun) as mentors. (No doubt, how GE was able to change so quickly.)



...As the cost to produce becomes marginal it becomes the creative people with ideas who lead the next wave. That's where the US has to go in the next phase of the global economy. Instead of many of us working for a very few large companies we might be looking at few of us working for many small companies.Ah! You expose and solution and the nub of the problem in a single post. What? - he continues to ask - do we do with all the unemployed people who have no means to earn their keep? You're not suggesting sending them to China to be factory workers there, are you? :D

[Patrysha]

What? - he continues to ask - do we do with all the unemployed people who have no means to earn their keep? You're not suggesting sending them to China to be factory workers there, are you? :D


Will we not have food production? Even if everything in the world was super duper efficient we'd still need food production workers...everywhere from the fields to the factories? I don't see us going back to producing our own anytime soon.

Will we not have food services? People are still going to want to go out to eat whether it be fast food or fancy restaurants.

Will we not still need clothes? Even if we optimize production there would still be stores to buy the clothes at and therefore still need staff for those stores.

Will we not still decorate our houses in our own individual styles? Again, we'll need stores for that...and possibly interior designers for those that can't put colors and textures together in any way that is actually practical and pleasing to the eye.

Will we not need people to pump gas for our vehicles (or at least take the cash when we pump our own...or if it isn't gas, whatever it is we need to make vehicles run if it's not electricity)?

Will we not need technicians to keep our machines running?

Or workers to build and repair our transportation systems? I don't see transporters ready to beam me up anytime soon...so we'll still need roads and bridges and airplanes and trains and trucks...

Or people to drive the buses for community transport?

Or people to clean houses for those of us who are too lazy or disinterested in things like scrubbing bathrooms, shoveling snow and mowing the lawn...

Or people to care for our children (daycare, preschool)? Or teach our children (schoolteachers)?

Will we be rid of lawyers and judges and politicians too?

I don't know Frederick, I just can't envision a change that huge that would turn so many jobs obsolete.

[Spider]

...I don't know Frederick, I just can't envision a change that huge that would turn so many jobs obsolete.Then you have nothing to worry about - until it happens. Because I believe it will happen, and, in fact, has already begun to happen.

Disney already operates driverless trains to move thousand - millions? - of people around their "communities." And the military already uses pilot-less planes.

There is hardly any of our food that does not fall under the category of "processed food," and that will grow, I believe. Pretty girls with a white pinny and a three-legged stool no longer milk our cows. So much of our fast food is mechanized and I have no doubt that the counter-staff will be replaced as soon as a more economical model is devised. And how much of your fancy meal in a fancy restaurant is, even now, pre-prepared, individually packaged and frozen in a factory, only to be microwaved back to life before being served by clip-on bow-tied waiters with a clip-on smile?!! So many of them are so mechanical now, they may as well be automatons!

Gasoline for the car? I can remember the days when you were forbidden to pump your own gas and had to wait for an attendant. Now most gas pumps around here accept credit cards at the pump, so you don't even need a person to pay!

Etcetera, etcetera!

Now, it's true, in the super-efficient world I can envision, there will still be some jobs, but unemployment will become an increasing problem that will call for a totally different way of thinking than the earning-centered world we now occupy.

[Patrysha]

Then you have nothing to worry about - until it happens

I figure I have nothing to worry about either way. I'm adaptable and flexible and am not completely caught up in the same wavelength as many people in the world are. I gain new skills quickly and am quick to take advantage of opportunity when I can identify it. And I hope that I am teaching my children to do the same and that they will pass it on to the next generation.


Disney already operates driverless trains to move thousand - millions? - of people around their "communities." And the military already uses pilot-less planes.

And yet both Disney and the military still have tons of employees. And the machinery still needs tech support/mechanics to ensure everything runs smoothly. While no pilot may be in the pilot's seat, the planes are not completely flying themselves without human input yet.


There is hardly any of our food that does not fall under the category of "processed food," and that will grow, I believe. Pretty girls with a white pinny and a three-legged stool no longer milk our cows. So much of our fast food is mechanized and I have no doubt that the counter-staff will be replaced as soon as a more economical model is devised.

Depends on what you put in your shopping cart...non-processed foods will never go out of style without a fight.


And how much of your fancy meal in a fancy restaurant is, even now, pre-prepared, individually packaged and frozen in a factory, only to be microwaved back to life before being served by clip-on bow-tied waiters with a clip-on smile?!! So many of them are so mechanical now, they may as well be automatons!

Even the mid priced restaurants I worked at did not have this level of mechanization. I don't know where you're eating, but I personally would not knowingly eat in a restaurant that had such practices and while I never wore a clip on tie, sometimes when dealing with the public, you have to adapt a clip-on smile or you might wind up sitting in a cell on assault charges.


Gasoline for the car? I can remember the days when you were forbidden to pump your own gas and had to wait for an attendant. Now most gas pumps around here accept credit cards at the pump, so you don't even need a person to pay!

Ahh, but some people choose to go to places that do pump and do go inside and deal with payment there. Some people don't see paying at the pump as a convenience that they want to take advantage of.


Now, it's true, in the super-efficient world I can envision, there will still be some jobs, but unemployment will become an increasing problem that will call for a totally different way of thinking than the earning-centered world we now occupy.

Only time will tell...

[Spider]

I figure I have nothing to worry about either way. I'm adaptable and flexible and am not completely caught up in the same wavelength as many people in the world are. I gain new skills quickly and am quick to take advantage of opportunity when I can identify it. And I hope that I am teaching my children to do the same and that they will pass it on to the next generation. ..Excellent response. A little myopic, though. What if you are the only family employed, with income, on your street. What if you are one of a hundred people in a city of tens of thousands unemployed, unpaid, and starving? How comfortable will you feel then? And how soon, do you think, honesty and ethical beliefs will prevent the unemployed from breaking into your home to steel your food to feed their family?



...And yet both Disney and the military still have tons of employees. And the machinery still needs tech support/mechanics to ensure everything runs smoothly. While no pilot may be in the pilot's seat, the planes are not completely flying themselves without human input yet...Yet! Disney's PeopleMovers don't have a person for every train sitting in a remote control room. It's run by computer with a few (I have no idea how many) people *monitoring* the system, not driving the trains, even remotely.

As for the remainder of employees, I wonder how many employees Disney has at a theme park per visitor today, compared to years past. Judging by the monotone, the lady who says,"Please step away from the doors" isn't real and I suspect it's not even a recording of a real person.



...Depends on what you put in your shopping cart...non-processed foods will never go out of style without a fight. ..What is not processed to some degree, even today? Vegetables grown in partially depleted soil with much artifical fertilizer, picked, likely by harvesting machines, washed (we hope) automatically, outer leaves stripped off (to make a better presentation in supermarket lights) by machine, stuffed by machine into plastic bags....

What else appears to be unprocessed? Raw steak in the butcher's display? Factory-farmed cows, fed a wholly unnatural diet by automated feeder machines, never seeing the light of day, slaughtered by rote? Some fruit might be truly unprocessed but the "natural" orange juices are, I suspect, far from natural.


Sure, what I describe may only exist in pockets, today. There may still be a whole lot of wholesomeness in the food supply, in the job market, and in the way most people live their lives. However, the change has started to take place. To what extent it will continue depends entirely on how society manages the steady climb in unemployment that I forsee.

And that is the bit I am trying to focus on.

[Patrysha]

Excellent response. A little myopic, though. What if you are the only family employed, with income, on your street. What if you are one of a hundred people in a city of tens of thousands unemployed, unpaid, and starving? How comfortable will you feel then? And how soon, do you think, honesty and ethical beliefs will prevent the unemployed from breaking into your home to steel your food to feed their family?

I would have to have faith that leaders like me and the others who can figure out how to make a living in the seeming abyss that is created out of all this uber-productivity will have sorted out ways to deal with the challenges. It's not as if you anticipate this calamity to develop overnight, right? Do you think the people with means will simply lose their compassion and empathy?

More later gotta switch computers over to my nighttime puter.

[vangogh]

What? - he continues to ask - do we do with all the unemployed people who have no means to earn their keep?

I think I've offered several ideas about the unemployed throughout this thread. There will probably always be some unemployed. Seems like a certain amount isn't entirely unhealthy as people move from job to job, etc. I'm also not convinced that we're heading into a time where the majority will be unemployed. We're currently experiencing high unemployment, but I think that's more a refection of things that have happened recently than a sign we're headed to much more.

I apologize if I misstate this, but I believe you're thinking about the unemployment numbers comes from the idea of us becoming much more efficient. What takes 100 people to produce now maybe takes 10 people to produce say 20 years from now. So the question is what do those 90 people do.

Why should we believe there won't be new industries or growing industries that will be able to supply jobs for most if not all of those people. Consider Google, Microsoft, and Apple. Three rather large companies who employ a number of people. None of them could have existed 50 years ago, because what they do didn't exist then. There was no internet or personal computers or smart phones, etc. 50 years from now there will be companies that can't exist today, because the technology doesn't exist yet.

Why can't many of the unemployed people decide to start their own businesses. Let's assume we can produce enough to supply the world's basic needs. I don't think that implies we'll also be able to produce enough to supply the world's wants. Human nature always wants more. If we somehow manage to produce so efficiently to supply our wants, human being will find new things to want. We've been doing that since the dawn of time and I see no reason that will change in the future.

However let's say we've automated all processes to the point where all our needs and wants are filled. Why would we need jobs then? If we're that efficient is there any reason to think we'll have to pay for any of these things? The whole idea of becoming more efficient means supply is outstripping demand and price comes down. Taken to the logical conclusion, price becomes $0. Now that may not happen for a very long time (if truly ever), but I don't see the issue of unemployment growing any faster. I think the two would be tied together.

More efficiency leads lower prices and less worker hours needed, however lower prices also mean people need to work less to afford the things they need and want. Is there any reason why these can't balance out?

[Patrysha]

Yet! Disney's PeopleMovers don't have a person for every train sitting in a remote control room. It's run by computer with a few (I have no idea how many) people *monitoring* the system, not driving the trains, even remotely.

As for the remainder of employees, I wonder how many employees Disney has at a theme park per visitor today, compared to years past. Judging by the monotone, the lady who says,"Please step away from the doors" isn't real and I suspect it's not even a recording of a real person.

Well, I'm sorry there is no flipping way on Earth to recreate the experience of meeting a real life Mickey Mouse in Disneyland...or for girls that are into that sort of thing...the Disney Princesses. They will never be able to replace those if Disneyland exists. Of course, it could cease to exist one day...but I thank God I'll be long gone by then...

I would be really surprised if Disney doesn't employ more people year after year. Jobs may be eliminated in certain things, but you can't get robots to clean the park or the aforementioned characters...

Plus between the media empire and the park attractions there are plenty of jobs to be had at Disney and it's subsidiaries. They are monstrous in scope really.

And they attract the very best because who does not want to work at Disney?



What is not processed to some degree, even today? Vegetables grown in partially depleted soil with much artifical fertilizer, picked, likely by harvesting machines, washed (we hope) automatically, outer leaves stripped off (to make a better presentation in supermarket lights) by machine, stuffed by machine into plastic bags....

What else appears to be unprocessed? Raw steak in the butcher's display? Factory-farmed cows, fed a wholly unnatural diet by automated feeder machines, never seeing the light of day, slaughtered by rote? Some fruit might be truly unprocessed but the "natural" orange juices are, I suspect, far from natural.


Sure, what I describe may only exist in pockets, today. There may still be a whole lot of wholesomeness in the food supply, in the job market, and in the way most people live their lives. However, the change has started to take place. To what extent it will continue depends entirely on how society manages the steady climb in unemployment that I forsee.

You are acting as if there are not alternatives and choices. If you (or I) don't like what's available, we make different choices...the farmer's market, u-pick farms and orchards, buying meat on the hoof. You choose to bake bread (some families I know go as far as to grind it too, but I can't see myself going that hard core unless I really had to).

More soon have to go cook dinner now

[Spider]

Yes, I agree, Patrysha - we will have sorted it out, because, yes, it will not happen overnight. I want to know about that sorting out and be part of it rather than to find out in retrospect how others sorted it out.

This will only be a calamity if we as a society fail to sort it out. Even as a last resort, a calamity will be the sorting out, won't it. So the problem will be solved, one way or another.

VG, yes, you have offered ideas about unemployment, and as I read it you are proposing that unemployment won't happen on the scale I anticipate. Thus, your ideas don't offer a solution: only that a solution will not be necessary because I am overstating the problem. (Correct me if I am wrong about your thinking.)

Both of you seem to think I'm taking an overly pessimistic view, whereas I feel I am taking a positive and proactive approach. I believe we are facing a problem. I believe this problem requires a solution and I believe we will find a solution.

I just want to get ahead of the game and be part of the solution. (On the argument that if one is not part of the solution, one is part of the problem.)

You bring up Google, VG. Google has 20,000 employees. Google has lots of things going but let's just consider search. 20,000 Google employees allow the world to search stuff in seconds that took ages only a few years ago. The worldwide manpower those 20,000 Google employees save must be enormous when you think of how many manhours would have been necessary to collect, compile, sort and analyze the data they can today, because of Google. IOW, Google hasn't absorbed surplus labor from other productivity gains by being a new industry: they have contributed to a labor surplus by making search so much more efficient. I wonder how many reference librarians have lost their jobs in recent years - how many paralegals are not employed looking through dusty law books researching a case - how many economists are not hired because each economist today can research more statistics more efficiently - how many engineers are similarly not employed because Google made the engineers more efficient.... and so on, reaching into every corner of human endeavor.

I am ignoring the small alternatives, Patrysha, because they do not contribute to the major trends. Sure, there are alternatives but how many farmer's markets are there around the country, do you think, delivering anything like the quantity of food Kroger supplies. How many loaves of bread are home-baked every day compared to how many loaves of Wonder Bread are baked every day? (And it's still a very processed food, whether you buy it or bake it yourself.)

All the progressive achievements are wonderful. I just do not see them continuing forever without some distortions in the way people will live. Yes, maybe they will continue forever but the distortions are also just as inevitable.

[Patrysha]

I want to know about that sorting out and be part of it rather than to find out in retrospect how others sorted it out.

How can you sort out what does not yet exist? We haven't figured out any of the existing problems...why expend energy on working out theory when we have a whole world full of existing pitfalls out there to deal with. Why worry about the unemployed of tomorrow...when we have people living through it and trying to scrape by today. No offense to future generations and all, but I don't truly owe them anything...if I can leave a legacy I will, but there are much more immediate needs in people that already exist to worry about.


This will only be a calamity if we as a society fail to sort it out. Even as a last resort, a calamity will be the sorting out, won't it. So the problem will be solved, one way or another.

I don't believe there is any calamity outside of total annihilation that can destroy the human spirit.



Both of you seem to think I'm taking an overly pessimistic view, whereas I feel I am taking a positive and proactive approach. I believe we are facing a problem. I believe this problem requires a solution and I believe we will find a solution.

How is it positive to think of civilization going downhill because we've figured out somehow how to produce everything the world wants and needs with barely a fraction of the population being required to do any work at all to keep the entire planet running?? Leaving the rest of the world starving and unable to provide for themselves. In what realm could that be a positive view that we as a people would let it get that far...if we could help it.



I am ignoring the small alternatives, Patrysha, because they do not contribute to the major trends. Sure, there are alternatives but how many farmer's markets are there around the country, do you think, delivering anything like the quantity of food Kroger supplies. How many loaves of bread are home-baked every day compared to how many loaves of Wonder Bread are baked every day? (And it's still a very processed food, whether you buy it or bake it yourself.)

Ah, so if it's not going to make a huge impact, don't bother? Is history not built on small alternatives, brilliant accidents and cosmic mishaps? If enough people turn away from your Krogers and start going back to smaller sources...which tends to be better for everyone from a financial down to nutritional down to environmental sense...not everything forward thinking has to be forward moving.


All the progressive achievements are wonderful. I just do not see them continuing forever without some distortions in the way people will live. Yes, maybe they will continue forever but the distortions are also just as inevitable.

Um hmm...so the fact that civilization has over the long haul shown some sense of improvement in every way imaginable since the beginning of recorded time...with the exception of some very key areas that never seem to improve (or at least haven't yet...I personally don't think they ever will be solved...poverty, mental illness, addictions, criminals, abuse...) Like I think I said earlier...enough issues right now to deal with without worrying about tomorrows and those that belong to the next generation.

Or do you think the world has time to head it off? So that it never does get as bad as you currently imagine. How would you know?

[vangogh]

you are proposing that unemployment won't happen on the scale I anticipate. Thus, your ideas don't offer a solution: only that a solution will not be necessary because I am overstating the problem

Yes and no. I don't think the problem will be as big as you say. I do think things will change. Maybe problem isn't the right word from my thinking. It's more than things will change and some of that change will not be kind to many people. However I think there will be a certain natural progression or evolution (not sure those are the right words) and I think there will also be conscious thought in overcoming the situation.


Google has 20,000 employees. Google has lots of things going but let's just consider search. 20,000 Google employees allow the world to search stuff in seconds that took ages only a few years ago.

There were search engines before Google. Google finds things quicker, but we're talking seconds quicker. I don't think it took ages before. What Google mainly did was improve the quality of the results. I also don't think the previous companies employed as many people as Google.

Now if you go back before Google then you could say what Google does in seconds used to take hours or weeks or even longer. A lot less of us were searching then. I don't know that less people are working on the problem of searching now than before. What I see is the internet making information so much more accessible that companies like Google could form and employ thousands of people.

Prior to internet search I guess we would have walked into the local library and used the card catalog or asked the librarian for help. Have the number of librarians significantly dropped since the internet and search engines came along. I have no idea, but I doubt it. I assume all those same card catalogs are still there too.

I wouldn't say we lost jobs in this case. I think there's been a net gain.

We could extend this beyond Google. How many of us here work from home? How many of us would have been able to do that before the internet? Even if able, how many realistically would be working from home? My job didn't exist 20 years ago. It barely existed 15 years ago.

A door closes and a window opens. The last job I held working for someone else let me go. IBM bought the company I worked for and here in Boulder the software we worked on was a duplication of software IBM already had. In a sense we became redundant as the combined companies became more efficient. A few months later I started in business for myself and here I am.

Overall things became more efficient and jobs were lost. A door closed. I didn't stay unemployed. Things like the internet made it possible for me to start a business and I did. A window opened.

[Spider]

...why expend energy on working out theory when we have a whole world full of existing pitfalls out there to deal with. Why worry about the unemployed of tomorrow...when we have people living through it and trying to scrape by today. No offense to future generations and all, but I don't truly owe them anything...if I can leave a legacy I will, but there are much more immediate needs in people that already exist to worry about. ..A very commendable approach, Patrysha. I was taking a more selfish view - I was looking for the business opportunities that change always presents, and I have to determine what I think those changes will be before I can benefit from them.



...How is it positive to think of civilization going downhill because we've figured out somehow how to produce everything the world wants and needs with barely a fraction of the population being required to do any work at all to keep the entire planet running?? Leaving the rest of the world starving and unable to provide for themselves. In what realm could that be a positive view that we as a people would let it get that far...if we could help it...I haven't said I think civilization is going downhill. I do not believe it is. Change is not downhill, in my book. As you say, we as a people would not let it get as far as mass starvation. (Even though there is already plenty of mass starvation in the world today that "we as a people" are doing little about.) For us to prevent it on an even grander scale, we will have to change the way we do many things. These are the changes I am trying to discover. (This conversation is part of that discovery process - and I thank you all for it.)



...Ah, so if it's not going to make a huge impact, don't bother? Is history not built on small alternatives, brilliant accidents and cosmic mishaps? If enough people turn away from your Krogers and start going back to smaller sources...which tends to be better for everyone from a financial down to nutritional down to environmental sense...not everything forward thinking has to be forward moving. ..History certainly is built on small alternatives - small alternatives that are grown large enough to make an impact on society. IOW, they are scalable. (Henry Ford's production line is a classic example.) While the family farm is a nice idea and beneficial in so many ways, I do not think they are scalable. A scalable family farm turns into a factory farm in due course, which is what we have now. If we waved a magic wand and totally removed all the factory farms and converted all the land to family farms, there would not be sufficient food produced to feed 75% of the country. That's why factory farms exist.

However, I do accept your notion that the society-movers of tomorrow are small alternatives today. It's a matter of deciding which small alternatives are scalable enough to have an impact. I don't think family farms is one of them, but I'd be interested in hearing what other small alternatives of today you think could become big alternatives in the future.



...Um hmm...so the fact that civilization has over the long haul shown some sense of improvement in every way imaginable since the beginning of recorded time...with the exception of some very key areas that never seem to improve (or at least haven't yet...I personally don't think they ever will be solved...poverty, mental illness, addictions, criminals, abuse...) Like I think I said earlier...enough issues right now to deal with without worrying about tomorrows and those that belong to the next generation.
..Or do you think the world has time to head it off? So that it never does get as bad as you currently imagine. How would you know?Absolutely, the world has time to head it off. At any given moment, there is a trend. Many trends. There always have been. People react to those trends - perpetuating the ones they like, mitigating the ones they don't like. Anything that is happening now will change in one or other of those directions.

[Spider]

...Overall things became more efficient and jobs were lost. A door closed. I didn't stay unemployed. Things like the internet made it possible for me to start a business and I did. A window opened.Yes, I can see that, and accept it as a general principle. I just cannot wrap my mind around the idea that it balances out and even increases workload to accommodate a growing population.

I see, from the 1700s on, farming and industry become gradually and persistently more efficient. Over that same period people, on a grand scale, moved from the country to the cities. Poverty gradually and persistently reduced. Unemployment reduced. Sickness reduced and longevity was increased. It was a marvelous period in human development.

By the end of the 20th.century, the population move from rural to urban has more or less ended, poverty in North America has pretty well been eliminated (there may be some poverty on our terms but none in world terms.) Unemployment is down to maintenance levels. Sicknness has been reduced measurably and life expectancy improved considerably. Where do we go from here?

The latter years of the 1900s saw western societies continue these trends only by accumulating debt. Now that the debt bubble has burst, I think the world is due for a major change. because we do not have the space for continued improvement. We are at a pinnacle in so many areas. When you reach the top of the mountain, the only way forward is down the other side -- unless you change your midset and figure out how to fly.


BTW, I was referring to Google to have it stand for all search engines, for compuerized search in general.

[vangogh]

BTW, I was referring to Google to have it stand for all search engines, for compuerized search in general.

I think I realized that, but after I posted. Apologies if what I was saying didn't really apply to what you were saying.


The latter years of the 1900s saw western societies continue these trends only by accumulating debt

I guess I don't see this as the status quo for our times. Clearly we have been debt financing our lives for many years now and that bubble appears to be bursting. Think of it on very small scale for a moment. An individual or family who borrows way too much against their credit cards. That person or family can get out of debt. Maybe they file for bankruptcy to get a fresh start or they sell off as much as they can to pay off debt or they get better jobs and work more to pay it off.

The problem the person or family has is mainly one of living above their means. They resolve that by either increasing their means or getting their expenses back in line with their means. Probably some of both. It may not be easy, but it can be done.

I don't see any reason why that can't scale. Yes many people have been living beyond their means for a number of years now, but I don't see why they can't change and get back to living within their means. They may not want to, but that's another matter.

[Spider]

...I don't see any reason why that can't scale. Yes many people have been living beyond their means for a number of years now, but I don't see why they can't change and get back to living within their means. They may not want to, but that's another matter.I believe it can scale - and there is the problem writ large.

Everybody (let's say) is consuming more than they earn and paying for it with increasing debt. To correct the situation they "get back to living within their means." Which means they consume less, which means less people are employed making less things to be consumed.

It seems to me, VG, you are suggesting the solution (or part of the solution) is for people to work more, make more, start their own businesses = more businesses making more stuff and more services, and so earn more to pay off the debt. And, at the same time, suggesting the other part of the solution is people spending less, buying fewer goods and services, saving more, paying down their debt.

I see these two parts of your solution conflicting. Don't you?

[vangogh]

I don't think they have to conflict. People can work more and buy less at the same time. If they're paying off debt then someone is making more money and that person can spend more to achieve an overall balance in things.

Not everyone is in debt. If people owe money they have to owe it someone. Overall there's still the same amount of money. It's just in the hands of different people. The people with the money will still buy.

[Spider]

Sorry. I'm not seeing your reasoning. If all the debt was between people, I might see it differently, but most of the money is owed to banks, I think. Personal debt is owed to banks, by and large. Business debt is owed to banks. Banks owe each other.

If I owed you $1,000 and paid you back - thus reducing my debt, and reducing the nation's total personal debt - you could spend it on more goods and services and it would go round. But, if I owe $1,000 to a bank and pay it back, their business is to lend it to someone else, so the nation's total personal debt is not reduced. This second borrower would buy goods and services so the money goes round again, but the debt repayment hasn't improved the overall situation one bit.

The point remains, if everyone is reducing debt everyone is spending less on goods and services, and that requires less employees. Okay, not everyone is reducing debt - some are increasing their debt load. But if there is a net reduction overall in the total personal debt in the country, there is a corresponding overall net reduction in people empoloyed. In addition to the loss of employees due to continually improving productivity.

No?

[vangogh]

So what you're saying is real people don't work at banks or that banks don't do anything with the money they hold. Banks are for profit businesses and real people working at the banks make money when the bank makes money.

Also what banks generally do with the money their holding is invest in back into the economy. If people started paying back debt to banks that money will flow through the economy.

Banks also tend to lend money to people the think can pay it back. True some won't, but assuming the bank knows what it's doing the net result will be more profit for the bank. In down economic times they also tend to be more selective about who they lend money to. So they'd be receiving money from high risk people (those of us who haven't been paying them back) and lend it to low risk people.


if everyone is reducing debt everyone is spending less on goods and services

Not necessarily true since the people reducing debt could be doing so by earning more. They could still be buying exactly what they were buying before they were paying down debt. But lets assume they are buying less. It's still only the people paying down debt that would be buying less. The people they're paying the debt to would have more money to spend. Even if they payee is a bank or corporate entity they would have more money and likely spend it in some way.

[Spider]

Those are good points, VG. My gut isn't going along with you, though. If the overall expansion of debt in the economy caused the economy to expand to the point of overheating, then I cannot shake off the notion that an overall reduction of debt must cause the opposite to happen.

And I'm still left with the feeling that long term structual changes are developing at this time. What if I'm wrong? What if I'm right?

[vangogh]

Yeah, we both have to go on our gut a lot in this discussion, since we're dealing with so many unknowns. This is definitely something of a speculative conversation. That's part of the fun though.

You may be right about what the reduction of debt will ultimately do. My gut tells me that we'll ultimately be fine. I may not know exactly how things will shake out and what we'll do to overcome any problems, but I have a lot of faith in humanity to get it right when it has to.


I'm still left with the feeling that long term structual changes are developing at this time

You may very well be right. I simply think we'll figure out how to deal with those structural changes. I tend to think we'll deal with them in an evolutionary way where we slowly adapt. If we have to we'll make more radical changes to get it right.

[Spider]

..My gut tells me that we'll ultimately be fine. I may not know exactly how things will shake out and what we'll do to overcome any problems, but I have a lot of faith in humanity to get it right when it has to...We are in absolute agreement on this. It is the "how things will shake out" that I want to discover without waiting for it to happen. The world has only three kinds of people - those that make things happen, those that have things happen to them, and those that ask, "What happened?" I like to be in the first group!

We have pretty much exhausted this first part of the conversation. Let's proceed to the next part - the Happeniing. What seemingly unimportant stuff is happening today that could have a major impact on the future?

Try this on for size -- Jesse Schell: When games invade real life | Video on TED.com (http://www.ted.com/talks/jesse_schell_when_games_invade_real_life.html)

What do you think?

[vangogh]

Interesting video. Games (competition really) is a great motivator.

The issue of what will have a major impact on the future is going to be a harder one to pin down since we probably won't know what going on today is having the impact until after we've seen the impact. However I think I've mentioned a few things going on today throughout this thread that I think might contribute to the future impact.

It's not seemingly unimportant, but I think the internet changes many things. While it's hard now to imagine it not being there, the internet is still in its infancy and I'd expect a lot more to change in the not too distant future.

Years ago you finished school, took a job with a big company, and worked there for as long as you could before retiring on a pension. I think that's been changing for quite some time. More people go into business for themselves through the internet setting up virtual stores and services. And virtual offices for that matter. The virtual concept really redefines how we work. I could for example be part of a company in China while working here in Colorado. That breaks the geographical restrictions around work.

Technology in general changes things all the time. Think of all the things that are part of your daily life that didn't exist 20 or 30 years ago. This weekend another debuted (the iPad) that may end up changing the game. Regardless of the specific success or lack of success of the iPad I full expect tablet like computing devices to be commonplace in a few years. We'll be carrying around tablets in addition to smart phones. Computing and business will become more mobile opening up more business ideas.

We're seeing manufacturing jobs leave the U.S. because it's cheaper to manufacture elsewhere. Automation will make it cheaper still and result in mostly automated production of a lot of things with a few people to manage the automation and make sure it keeps working. That leaves a lot of people to find something else to do. That also leads to production and startup costs decreasing considerably. There have been several articles recently about how anyone can now think up an idea in their basement and with very little capital have a prototype designed and developed and then have production started.

Those people looking for stuff to do now have much easier means of starting their own companies. I think what you'll see as manufacturing jobs become scarcer is that creativity and business acumen become more important. We'll need to develop new skills and learn new things.

[Spider]

...Those people looking for stuff to do now have much easier means of starting their own companies. I think what you'll see as manufacturing jobs become scarcer is that creativity and business acumen become more important. We'll need to develop new skills and learn new things.I agree that we *need* to develop new skills and learn new things, but will we? Will a significant portion of the metropolitan countries' populations develop fast enough to stay ahead of starvation?

It's all very well to say people will start their own businesses, but you have to have customers. Even today, most micro-businesses are single person operations barely making a living wage. No problem now, because they are mostly supplemental to someone in the family with a "regular job." But what happens when those regular jobs dry up and and more of those displaced employees start their own businesses. Could we arrive at a point where there are more small private single person busineses than there are customers for them?

The earning-based economy will continue to let us down as long as efficiency continues to improve and as cost "savings" turn into deflation.

I wonder if a game-based economy can help. What if the points earned for cleaning your teeth every morning (which reduces the overal costs of dental care - see the video noted above) could be traded for food at the supermarket? Right now I can buy groceries on my credit card, even if I pay off said credit card bill in full immediately, and earn points that can be traded for airtravel. How soon will it be before I can use points to buy groceries that I earned from my airtravel?

Might a game-based economy save the human race? At this point, money (from somewhere - earnings, presumably) is needed in the equation, but this could become less and less with time. Perhaps, one day soon, I could earn enough points on my airflight to New York to see the Yankees play for free, and earn enough points for attending the game to pay for the hotel, and earn enough points at the hotel to get a free computer that I could auction at eBay for points to pay my week's groceries when I get home from New York! If my health insurance company would give me enough points for cleaning my teeth, running 5 miles a day for a week, and eating McHealthy's salads for lunch every day, to fly to New York, I might live quite happily without any income whatsoever! In this scenario, I could work for someone without pay for the pure joy of it, provided they paid my health insurance!

[billbenson]

An example of technology creating jobs. I really doubt its the only one:

Today, most precious metals etc come from China for use in semiconductors etc. It is estimated, according to an article I read the other day, that China will arrive at a point within 5 to 10 years where they will no longer export these precious metals because they will need them for their own use. They won't have excess inventory to sell.

The good part is we have lots of these minerals and metals. Typically in unused areas in the plains states (not under manhattan). The bad part is a facility to refine it contains thousands of holding tanks and takes about 10 years to build.

I mention this, because it is an example of technology creating lots of jobs, most of which are blue collar sorts of jobs.

Don't be so sure automation doesn't create jobs. You may just not know what they are...

[vangogh]

t's all very well to say people will start their own businesses…

I see that as one possibility, which would help employ some to many people, not necessarily everyone.

Like Bill I think technology also creates new jobs for people. Again look at the internet. How many internet related jobs are there currently? A generation ago none of them did.

It's not hard to see where we'll need more jobs in the energy sector. Wind, solar, etc are industries in their infancy that will need employees. Yes those employees will need to learn new skills. Early on some will voluntarily learn those skills for any number of reasons. In time the rest will learn (whether energy or some other industry) out of necessity. Is someone close to retirement age going to learn a new trade? Probably not. Most everyone else will, especially if they have to.

And like Bill said you don't always know what jobs technology will create. In the late 19th century could people have imagined that some would be working for an airline? Very doubtful. Maybe if we fast forward 20 or 30 years we'll be building a colony on the moon, which I'm sure would ultimately employ a lot of people. Will that happen? Who knows. I believe something will.


Might a game-based economy save the human race?

I think that's a very interesting idea. I mentioned a few pages back that I can envision the Star Trek scenario where everyone's needs are met and people aren't working for money. They do what they do because it's what they want to do. Harder to see is the transition to get there. I think the idea of moving away from money and more toward credits or points could be done.

Turning it into a game somehow is intriguing in itself. Games bring out the competitiveness in people and that competitiveness can drive production. Your health example is a good one. If you know eating healthier or brushing your teeth more means more "money" or points in your account, then you're more likely to eat better and brush your teeth. It's logical to think your health insurance company would charge less points and the country as a whole would need less points for a sustainable health care system.

Money is simply the object we agree to use as the intermediary in trades. At one time we used gold and silver, then coins of gold and silver and other minerals, then just the other minerals and paper. Moving to something like virtual credits or points is a natural step. As long as we can all agree on the value of that virtual money the system can work.

[Spider]

...Moving to something like virtual credits or points is a natural step. As long as we can all agree on the value of that virtual money the system can work.Why I am leaning towards this concept is because I don't think we do need to agree on the value of these points.

If you work for a $1,000 a week and create something that your client earns $10,000 a week from, what is the value of your time? You may be happy with $1,000 because your expenses are low, but a married person with a spouse and 10 kids to feed may well need more than $1,000 a week. So are we actually agreeing today on the "value of our earnings"? The Bank of America CEO earned $24 million last year (or something similar) - do we agree on the value of his work?

More to the point is the value the point-giver places on certain actions - the insurance company may value you brushing your teeth every day as 5 points, but the toothpaste manufaturer might give 10 points if you use their product.

I am beginning to think the beauty of a points system like this is that everyone issuing the currency (points) gets to determine what each element of *their* currency is worth. At the same time, the points-recipients gets to place their own value on each point they receive.

Actually, I am a total non-gamer. Never have been interested in collecting coupons, points, free auto service for every four services, free carwash for similar usage. I "hide" every Mafia Wars and Farmville posts, etc. on Facebook and nevery indulge in Fantasy Football and the like. I don't even bother with the points I have accumulated on my credit cards and only notice with mild interest as points expired are replaced by new points accumulated!

But I am beginning to see possibilities in this points/gaming system that can fuel business in the near future.

I guess that video has had quite an impact on me.

[vangogh]

I don't think we do need to agree on the value of these points

Are you thinking then that transactions would each be bartered in a sense with credits or game points as the exchange? What I meant was that somewhere the system has to define what a credit is worth. Say to start 1 credit = $1. Just some starting point so we know what a credit is worth. After that the market would take over.

I think we'd still need to define what a credit is worth (similar to how it's determined what a $1 is worth) and then people can still charge whatever they want for services or products and people could decide whether or not their effort in earning a credit is worth what things cost.

[Spider]

I think to barter every transaction using points would be too cumbersome and too time-consuming, just as it would if we used today's money, but using points as a pricing medium, as we do with money, would be doable.

There is already a disconnect between the actual value and real value of any given amount of money. What does it really mean, even today, that $1 is worth $1? Or a point is worth $1? Or a bag of potatoes is worth a $1? A dollar is a purely arbitrary value of exchange and we can see that even in our our circumstances - at the beginning of the month (read, short of funds) a dollar has far more value than at the end of the month (read: on payday.) The more money you have the less value each denomination has. Since the days of the gold standard, there has been no "real" value to the currency, only perceived value - and of course the established "value" of gold was also an arbitrary number.

I think as game points come to be used to buy stuff so the asset value of each individual will become less important and the "rich - poor" comparisons will wain. Leading, in turn, to a very different appreciation of life's purpose.

[vangogh]

using points as a pricing medium, as we do with money, would be doable.

That's what I meant by needing to agree to the value of points. We'd need to agree on their value the same we we agree today on the value of money. Money itself is just paper or coin that's hardly worth what it represents unless we all agree it's worth what it represents.

There would still be disagreements about the actual value of a game point (remember when a movie only cost 2 credits? Now they're charging 50. When I was your age a meal only cost 10 credits.), but we'd have to agree to the system in general, much like we do today with money.

[Spider]

I'm not sure I understand what you mean by "agreeing on the value." Of money or points.

Do we really agree on the value of money if the value can vary depending on how much you already have and on your own fluctuating financial situation. ($1 means a lot more to a pauper than it would to a billonaire, and $1 would be more valuable to you when you are broke than when you have just been paid.) I think we accept (or reject) what $1 can be exchanged for at any given moment. If acceptance is what you mean by agreeing, then we are on the same page.

Perhaps we might see labels in shop windows, "Mens' shoes - $175, or 100,000 airline miles, or 3,000 Visa points," as we gradually transition away from money towards earned points. That would be especially easy to do online, of course.

[vangogh]

I'd say we currently agree on the the value of money. You don't walk into one supermarket and see a carton of milk selling for $1 and then walk into another store and see that same carton of milk selling for $1,000. The second store could sell the milk for $1.75, but that's still similarly priced as the first store.

If we're using credits or game points there still has to be some kind of agreement about what a single credit or point can buy. Otherwise you have one store selling a carton of milk for a credit or two and the next one selling a carton for tens of thousands of credits.


Perhaps we might see labels in shop windows, "Mens' shoes - $175, or 100,000 airline miles, or 3,000 Visa points," as we gradually transition away from money towards earned points. That would be especially easy to do online, of course.

Something like that could happen, though it would be setting a value on the credits and points. After a sign like that you'd know what an airline mile or visa point is worth. However I'd add that I don't think a full scale change like this could come about by different companies offering up their own kind of points. You would need a central authority like the government to set up one system of points that everyone else uses.

[Spider]

...You would need a central authority like the government to set up one system of points that everyone else uses.
Huh! In America?

Where will you be sitting at the next Tea party?!!!

[vangogh]

Doesn't the government do that right now with money? They print paper money and mint coins and decide how much goes into circulation and how much goes out of circulation. It's not like we run to the store with GE dollars and Ford dollars and Verizon dollars that may or may not be accepted at all stores or be worth the same at all stores. Individual companies aren't creating their own currency that translates anywhere outside their own businesses.

There has to be something backing the whole thing and being there to arbitrate disputes, etc. None of that has to be the government, but it seems a likely choice given history.

[Spider]

I'd say we currently agree on the the value of money. You don't walk into one supermarket and see a carton of milk selling for $1 and then walk into another store and see that same carton of milk selling for $1,000. The second store could sell the milk for $1.75, but that's still similarly priced as the first store....From one perspective, yes, there appears to be a semblance of agreement as to "the value" of a dollar. But is there agreement, really?

Remember, I am looking for a new concept of value, here. Because I don't think we can continue living this earnings-based life with which we have become so familiar, as has been discussed throughout. Your example displays a considerable disagreement, too. Your example shows one store valuing a dollar at 1,890 mL of milk (0.5 USgallon) while the other store values a dollar at 1,080 mL of milk (0.286 USgallon).That's quite a difference in the value of $1 in these two stores.

And as we can charge whatever we like, in this free economy, for things we wish to sell, it doesn't seem as if the government has much control over the value of money, at all!

[vangogh]

All true. My thoughts on value wasn't meant to mean we all needed to agree on the price of everything or that an entity like the government would be setting prices. All I meant was that something needs to back the whole system and probably needs to be the sole source for creating currency. If each business gets to create it's own currency we're really back at the barter system since the currency likely wouldn't transfer from one business to the next.

However as I'm typing that last statement it's not inconceivable that companies could get together and issue currency (credits/points) that work across all companies in the network. Maybe GM offers credits that could also be used to make purchases with Wal-Mart and United Airlines. If that happens you might find your new credits work with enough different companies to make them valuable, though it would probably lock us in to buying from one network of companies. We might then also see currency exchange between company network currency. 1 GM dollar ends up being worth 0.85 Ford dollars and there's a free market from converting from one to another.

[Spider]

...However as I'm typing that last statement it's not inconceivable that companies could get together and issue currency (credits/points) that work across all companies in the network. Maybe GM offers credits that could also be used to make purchases with Wal-Mart and United Airlines. ...That's already happening. I can buy groceries at any supermarket or convenience store, gasoline of any brand, tools and lumber from Lowes or Home Depot, pay a hotel, buy clothes and just about any purchase on any of several credit cards that I possess, and use the points so earned to fly on any airline, stay at a huge variety of hotels, and rent just about any type of car I want.

That is happening now.

[vangogh]

And there are other cards that will give you different kind of points that you could use for things other than travel related.

The credit you're using to buy is still backed by the U.S. financial system so there is still a central source backing the value. The airlines and the credit card companies have clearly add a new wrinkle into the system with points.

Just to be difficult and stoke the conversation a bit, how do you think the value of those points play out. For example even though you get free points for air travel, you generally don't get the same value as if you spent money. Your choice in flights and seats is more limited when using points. The points may seem to have the same value at first glance, but do they? And how would that work across the board if a system was set up where businesses used points, but didn't offer exactly the same thing in exchange for those points as they would in an exchange with money or credit?

[Spider]

...Just to be difficult and stoke the conversation a bit, how do you think the value of those points play out. For example even though you get free points for air travel, you generally don't get the same value as if you spent money. Your choice in flights and seats is more limited when using points. The points may seem to have the same value at first glance, but do they? And how would that work across the board if a system was set up where businesses used points, but didn't offer exactly the same thing in exchange for those points as they would in an exchange with money or credit?I have no idea how they work value-wise at this time. I've never used them and see them as more time-wasting than valuable, although the airline miles do seem to have substance. And I saw a program on TV (or a news report, or something) of two "self-made experts" being challenged to see how far they could carry grocery coupons clipped from magazines and downloaded free online, and they both did remarkebly well - like one person going home with $100's worth of groceries + $20 'cashback' in her pocket. and the other one did virtually the same although his was in the form of $140's worth of groceries that cost him $20.

But I'm not looking at this as a way to get rid of money. You seem to think it will be a long time before that happens and I think you're right. If the points become currency, whether backed or controlled by government or not, there's no change in the system. I'm seeing the points/rewards/coupons as a method to move us away from an earnings-based society, not necessarily moving us away from money.

As long as we stay stuck in a system that values work as a means to aquiring the "tokens" (money, coupons, reward points, etc.) needed to buy food, shelter and clothes, we will SUFFER from improved efficiencies and advanced manufacturing, instead of benefitting from them.

We must have a system that values something else with which we can aquire the essentials other than work. Now, I know you believe that there will be enough work to go round, but I do not see that. I think that there will be less and less work as we become more and more efficient. The thing I think we have most of is time. It is true that many will claim not to have enough time to do all that they need to do. There are others that have more time than they want because they are unemployed. I think this group will increase over time leading to greater poverty in times of great abundance.

That situation will be very destructive for society, and a new system will come about - just as society's value system shifted in the past from land to factories to productive capacity to information. I'm looking for the next step in this progression.

[vangogh]

As long as we stay stuck in a system that values work as a means to aquiring the "tokens" (money, coupons, reward points, etc.) needed to buy food, shelter and clothes, we will SUFFER from improved efficiencies and advanced manufacturing, instead of benefitting from them.

Why? First is work the only thing the system values? I'd argue it's not the work at all, but rather the finished product. Take a Hollywood movie. Does it's financial success have to do with the work that went into it? I think it depends more on whether or not people like the movie. And naturally how much it cost to make the movie.

Also what if people are spending their time "working" at things they enjoy instead of working at things just to earn a paycheck. Are those people "working" at what they enjoy really working? I think as we become more efficient there will be less of the jobs people have to do for the paycheck, but that also frees up time for people to do what they want to do instead of doing things because they have to.

And if we're so efficient as a whole we shouldn't need to make as much money as individuals. Efficiency will drive prices down.

[Spider]

We're still on the same roundabout, VG, and you had expressed the desire to move forward. To move forward, we need to accept—

1. that you believe our technological advances will make more work for people to do and thus earn money to support themselves;

2. that this "work" will be more enjoyable than past work; and

3. that efficiency will drive prices down, meaning that people will need less money that they do now.

For the sake of moving forward, I will accept that this scenario is possible. I also think it is possible (and hope you think it is possible, too) that the opposite occurs —

4. that technological advances coupled with efficiencies will reduce the amount of work available for a growing world population, or at least does not grow fast enough for everyone to have jobs, which means they will not be able to earn money to support themselves; and

5. that the work available may be more enjoyable but will need ever-higher education that will not be available to all; and

6. prices will only decline to a point where it is not profitable enough to make it worth producing much that people need.

I propose that we accept that both are possble and that both are likely to occur - along with other scenarios - because this is a large world of diverse cultures and no single set of circumstances wil exist to make everywhere exactly the same.


Now, if we can accept that, what does the future hold?

It seems to me that what I have described above is what we have right now - some places full employment, some high unemployment; some people doing work they love, some doing work they hate; some living in poverty, some living in excess abundance; some educated, some not. And so on.

Seems we have just looked into the future and seen today!

So, does that mean the future will be much the same as it is today? That no change is to be anticipated?

[vangogh]

I definitely accept both sides of this as possible. Our discussion certainly has a lot of speculation on both sides and since we're talking about what might happen in the future it's hard to offer any real proof.


It seems to me that what I have described above is what we have right now - some places full employment, some high unemployment; some people doing work they love, some doing work they hate; some living in poverty, some living in excess abundance; some educated, some not. And so on.

Probably true of most any moment in history. What changes is the degree of the word "some" in each of the above.

As far as how things will look in the future I always think of the phrase "The more things change, the more they stay the same." That's not to say that 100 years from now everything will look exactly as it does now, but rather that while I'm sure many things will be different 100 years from now, there will also be many things that are still same.

Right now we use money as the exchange for good and services. We've been talking about the possibility of using credits or points as the exchange. That's something different, but also the same in the sense that something is being used as an acceptable exchange.

[Spider]

...Right now we use money as the exchange for good and services. We've been talking about the possibility of using credits or points as the exchange. That's something different, but also the same in the sense that something is being used as an acceptable exchange.That's very much the point, isn't it? In todays' way of thinking, there is an exchage - we exchange money for what we need. It wasn't always that way.

When we came down from the trees, we needed shelter so we just found a cave and took possession, or cut down some trees, built a structure, placed some palm fonds on top and called it home. We needed food so we dug up some roots, decided we wanted meat with our potatoes and went and killed something. We exchanged physical energy for what we needed. Physical energy was the basis of society.

Later, some people took possession of large tracks of land, along with the people who lived there. The more land they acquired, the more arostocratic they became and the concept of wealth was born. Land was wealth - the more land you owned the more wealthy you were. The basis of society was now land.

The common people were tied to the land and were "owned" by the landowner. These people exchanged their physical labor for permission to keep some of what they grew to feed their own families.

I don't think I need to take you step by step through history to see that, at every stage, the concept of wealth changed, the basis of society changed, and the common people continued to exchange their physical energy for what they needed to survive. Except that, lately, the exchange has not been direct - work for food and shelter - it has become indirect - work for money for food and shelter.

This worked because there was work to be done and this could be exchanged for money (or points) with which to buy food and shelter. The problem becomes - what happens when the labor of the the common people is no longer needed? How then will they acquire the food and shelter they need to survive?

I accept that you do not forsee that situation ever arising. I do. Indulge me for a moment and say how you think the world could be re-organized if computers and robots produce all that was needed and wanted. Explain how we might survive as a world society if there was mass unemployment on a grand scale - like 60% - 80% unemployment.

[vangogh]

Interesting walk through of the nature of the exchange.


I accept that you do not forsee that situation ever arising. I do. Indulge me for a moment and say how you think the world could be re-organized if computers and robots produce all that was needed and wanted. Explain how we might survive as a world society if there was mass unemployment on a grand scale - like 60% - 80% unemployment.

Assuming the cause of that high an unemployment rate is computers, robots, basically our own efficiency then I don't see the problem as you do. I think I've mentioned this a few times throughout this thread, but if our efficiency gets so great then we really won't need to keep acquiring wealth to "buy" things.

At the beginning of your post you talked about how wealth has changed over history. However when you're asking about the problem of mass unemployment you're going under the assumption that wealth is still money or credits or something similar. Why can't wealth be something different under those circumstances?

You seem to be implying that the problem is that with so many out of work who's going to pay to buy all the goods produced? At the same time you're describing a situation (super efficiency) that should drive prices down toward 0. So no one has any money, but no one really needs it either.

I think if we're that efficient it stands to reason that the average person would have access to some of that efficiency. We talked about this earlier in the thread. Why can't people like you and I under this efficient system get an idea and be able to easily turn that idea into a finished product. Maybe the new wealth is based on ideas or intelligence or something similar.

I don't see why it's not conceivable that we become so efficient that we can provide many or most or even all things produced for free to whoever wants them and if something like that happens people work not for money, but to feed their own curiosity or their own interest.

Can I tell you definitively what wealth will be in the future you describe? No, but I do see where wealth would change to solve the problem.

I also mentioned before the idea of humanity expanding beyond this planet. That alone should require more labor.

Let's pretend for a moment that wealth doesn't change. The situation is that the majority of all people are out of work and can't afford the basic necessities of life. Why would we assume those people will just sit at home and do nothing. I would think once conditions get past a certain point you'd see people taking up arms. Revolution against those who control the means of production? Quite possibly.

It's not so much that I can't ever see a situation with the grand unemployment you describe and it's not that I can tell you exactly what will happen if that occurs. It's that I have enough faith and confidence in humanity to solve the problem in some way. I might even suggest that the only way that kind of mass unemployment happens is if we've already solved the problem so that mass unemployment is no longer a problem.

Keep in mind too that under the current system those producing still need those that are buying. Mass unemployment wouldn't just be a problem to those that are out of work. It would be a big problem to those still working too. If no one can afford the products your making why are you continuing to make them. There's incentive in the system to not let unemployment get that large.

[Spider]

...At the beginning of your post you talked about how wealth has changed over history. However when you're asking about the problem of mass unemployment you're going under the assumption that wealth is still money or credits or something similar. Why can't wealth be something different under those circumstances? ...Well, I think I have argued that very point several times during this thread and elsewhere. Yes, the description of wealth will change. It was land, then it was factories, then it was productive capacity, but all these things were measured in numbers, principally monetary numbers. What could it be next? Whatever it is, I don't think it will be measured by monetary numbers.



...You seem to be implying that the problem is that with so many out of work who's going to pay to buy all the goods produced? At the same time you're describing a situation (super efficiency) that should drive prices down toward 0. So no one has any money, but no one really needs it either...As long as the wealth (whatever wealth is in the future) is measured in monetary numbers, at some point before the price/income reaches zero, the producer will stop producing because it would become unprofitable (non-wealth-producing) to continue providing the product. Then, no matter how essential it is, it won't be available because there is no point, other than philanthropy, in producing it. There I get to thoughts of a government that produces these essential goods and services that private enterprise does not produce — and it begins to look like socialism. So, I don't want to look down that street.



...It's not so much that I can't ever see a situation with the grand unemployment you describe and it's not that I can tell you exactly what will happen if that occurs. It's that I have enough faith and confidence in humanity to solve the problem in some way. I might even suggest that the only way that kind of mass unemployment happens is if we've already solved the problem so that mass unemployment is no longer a problem...I have that same faith. I'm not proposing the end of the world. I'm just trying to figure out how this might play out and what possible scenarios might develop.

This is totally a business enquiry. As I said in my first post -- how will this affect your small business particularly, and small business in general?

[vangogh]

I have that same faith. I'm not proposing the end of the world.

I know. I think you're generally an optimistic person. I hope I haven't implied anything different.


What could it be next? Whatever it is, I don't think it will be measured by monetary numbers.

One of the big questions we're trying to answer. I think it will always be measured in numbers, simply because numbers are how we measure things. No matter what ultimately becomes wealth we're going to look for a way to compare and that's going to lead to numbers most likely. As for what wealth will be…

I think it's going to be something along the lines of ideas, creativity, organization, and an entrepreneurial spirit. The means of production are getting less expensive and if we assume things push more and more towards automation then the average person will be able to afford the cost of production. If that's the case then those who can best understand the market and put their ideas in motion will be the ones that succeed. Someone in their basement in Iowa could launch a business while their products are made in China and their marketing department is located in Brazil, etc.


As long as the wealth (whatever wealth is in the future) is measured in monetary numbers, at some point before the price/income reaches zero, the producer will stop producing because it would become unprofitable (non-wealth-producing) to continue providing the product.

True. I was thinking that when I wrote my comment. Those who produce ultimately need those that buy, which is one reason I don't think things will get so far out of whack. At some point it's in the best interest of producers not to be more efficient, because they need some of their wealth to spread throughout the general economy.

I would argue that for some it's not only about profit. A business entity might be beholden to the bottom line, but people aren't. For example think of the starving artist who's seeking something on a spiritual level while basic subsistence needs aren't being met. Granted the starving artists isn't a business, but I think that spirit is in most of us. I can see where in time people will be producing things less for the profit and more for the desire to see their creations become reality.

I think human beings have an innate desire to be productive, to contribute to society. Maybe not all, but most. Think of all the people who are retired with more than enough money to live out their lives and enough to pass on to their children and who still work at something. It's that need to be productive, to feel useful.

Even if we're so efficient that prices drop to 0 and there's no profit, I think there's still something inside of us that will keep us producing. We won't produce everything, but most of what we'll stop producing are those things that are mostly irrelevant.

[Spider]

...Even if we're so efficient that prices drop to 0 and there's no profit, I think there's still something inside of us that will keep us producing. We won't produce everything, but most of what we'll stop producing are those things that are mostly irrelevant.Picking this up where we left off ---

We seem to have reached a point in our thiinking where wealth is not money, because things have become cheaper and cheaper due to ever-increasing automation and productivity, leading to zero profit. Wealth is now something else. Perhaps, at this point, it doesn't matter what wealth is because if it is not money, it's not business - and this whole thread is about future business.

I think the answer to my question -- How will this affect your small business particularly, and small business in general? -- seems to be -

1. Incomes will get less and less and may even reach zero. All human needs and even many "wants" will be available for free or very cheap. Satisfaction will be the driving force when seeking employment.

2. If all needs and many wants are free, and profits approach zero, this implies that capitalism wains and socialism becomes more appropriate.

3. "Being lazy" and "leaching off social services" will be old-fashioned phraseology and the people who live that sort of life will be regarded as model citizens. The oddballs will be those who MUST be productive, going around fixing things that aren't broken and making things that no-one wants. And those who go crazy not being able to live in this topsy-turvey world will serve their purpose by being patients for the extremely large group of (free) psychiatrists that are now available!

That won't happen overnight (if ever!) but if all those over-qualified engineers, etc. working at menial jobs is any guide, we seem to be heading that way. So many things are getting cheaper, average wages seem to be slipping lower, unemployment seems very resistant to being reduced, and I have never before heard of so many over-qualified people.

Perhaps the growth industry of the future is charitable organizations. Can you turn your business into a charity?

[vangogh]

I don't agree at all with the conclusions you seem to be drawing.

1. Incomes don't automatically go to zero, because the price of products moves toward zero. It doesn't take into account all the business models that don't rely on products for one. I'll for the most part accept this though. I've mentioned a few times here that if we don't need money to buy things then we also don't need an income and it would things other than money that would motivate us.

2. No such implication exists. The difference between capitalism and socialism comes down to private vs government controlled, not the amount of profits.

3. All I can say here is you have a very pessimistic view of human beings.

[Spider]

Oh! How would you summarize the discussion, then?

[vangogh]

I'm not sure if there's a need to summarize or how to since I think the conversation has a variety of threads we only partially explored. I'm not sure we've reached any kind of consensus either. I'll try to summarize though.

I think your basic premise has been that we're getting more and more efficient and in time may become so efficient that the cost to produce most anything is 0 or near 0. As a consequence companies won't need to hire or they'll let go those they have hired leading to massive unemployment.

We disagree though on whether or not this will happen and what the consequence of it will be should it happen.

I don't think the cost to produce for most things will approach 0, at least not any time soon. To me the current problems in the economy and the labor market are part of the usual up and down both have experienced for a long time. I do agree that the cost to produce some things will approach 0 and that for the people working in those industries it will likely mean more unemployment. However I think other existing industries and new ones we can guess at and some we can't anticipate will be able to absorb these unemployed people.

Assuming though, that things play out as you suggest I still don't see it as a problem. I see it as a change. if we assume costs, prices, profits approach or reach 0 then all that happens is money is no longer the motivating factor for producing. I contend that once you've managed to get past a certain point (meeting basic needs, being able to afford a few luxuries, etc) money isn't the motivating factor now even if it might appear that way.

A man like Bill Gates stopped working a long time ago specifically for the money. His motivation might have been to have more money than anyone else in the world, but in that case it's not the money that's the motivation, it's having more that's the motivation. It's the competition. You could replace money with something else and the motivation doesn't change.

He might also have been motivated to produce the best software, hardware, etc that his company could produce.

In the scenario you've described what disappears is the money. If we assume that money is the motivation I think something else will fill that space. Speaking for myself if I had all the money in the world I would still be doing what I'm doing. I design and build websites because I truly enjoy doing both and I enjoy constantly learning how to do each better. I enjoy the problems I have to solve. Money is tied to it, because currently we all need money to pay the bills and satisfy our basic needs and wants. If money was no longer necessary then I wouldn't attach the money making aspects to what I do, but I'd still be producing websites.

I think human beings are for the most part good by nature and have a need to be productive members of society. There will naturally be exceptions who will be lazy and leech off the rest of us. Most people won't be either. And if everything costs nothing to produce then is it really a problem if a few leech off society? It wouldn't affect how much the rest of us get.