The end of capitalism has begun [+1]
You only find this new economy if you look hard for it. In Greece, when a grassroots NGO mapped the country’s food co-ops, alternative producers, parallel currencies and local exchange systems they found more than 70 substantive projects and hundreds of smaller initiatives ranging from squats to carpools to free kindergartens. To mainstream economics such things seem barely to qualify as economic activity – but that’s the point. They exist because they trade, however haltingly and inefficiently, in the currency of postcapitalism: free time, networked activity and free stuff. It seems a meagre and unofficial and even dangerous thing from which to craft an entire alternative to a global system, but so did money and credit in the age of Edward III.
New forms of ownership, new forms of lending, new legal contracts: a whole business subculture has emerged over the past 10 years, which the media has dubbed the “sharing economy”. Buzzwords such as the “commons” and “peer-production” are thrown around, but few have bothered to ask what this development means for capitalism itself.
I believe it offers an escape route – but only if these micro-level projects are nurtured, promoted and protected by a fundamental change in what governments do. And this must be driven by a change in our thinking – about technology, ownership and work. So that, when we create the elements of the new system, we can say to ourselves, and to others: “This is no longer simply my survival mechanism, my bolt hole from the neoliberal world; this is a new way of living in the process of formation.”
Paul Mason: The end of capitalism has begun
My rather depressing conclusion concerns spiralling obstacles to durable social movements exercising a sustained influence over political and social life, though not necessarily to protest, politicisation or critique. As the project progresses, I want to explore two tendencies towards digitally facilitated suppression: the ‘hard’ strand, the openly authoritarian mechanisms through which digital technology is used repressively and how they might diffuse, as well as the ‘soft’ strand, the increasingly designed informational environment and the cognitive costs involved in escaping it, as well as their implications for collective action.
I situate these in terms of post-democracy and the political economy of the second machine age: crudely, I’m suggesting that the interests of elites in defensive repression, in the face of growing structural underemployment and unemployment driven by automation, creates a risk that ‘soft’ repression (already a problem) comes to be conjoined with ‘hard’ repression, with a post-democratic political climate likely to render popular restraints upon this drift ineffective. This is compounded by a political context in which the war on terrorism is giving way to the war on extremism, normalising repressive measures against those whose ‘ideology’ (let alone their actions) put them outside the political mainstream. Underlying this analysis are some much more specific arguments about ‘distracted people’ and ‘fragile movements’ which I won’t summarise here, as well as an argument I want to develop of where a trend to vertical integration is likely to lead the tech sector and how this might further incline the culture within it in a way susceptible to acquiescing to some rather extreme measures.
Mark Carrigan: » Imagining post-capitalism and techno-fascism
I will explain my vision of a world without gatekeepers where information is available on demand for free to anyone and everyone – after you pay me 17 pounds (or 13 pounds if you take advantage of this limited time offer)Report
Notice that all if this talk about “postcapitalism” is largely in the service of columnists and academics selling their books and speaking engagements in publications that exist to sell ad space?
In the postcapitalist world, even your anticapitalism is appropriately branded.Report
There is that, but the main takeaway for me was when all of the examples are given of Greece, where the offical economy is in shambles, those are all economic activitys. Just on a very small scale. No post capitalism, just capitalism.
Its almost as if this …thing… just happens, as people go about their lives and come in contact with each other.Report
Yes. I tend to stay out of these conversations for the simple reason that no one seems to be able to provide a meaningful definition of capitalism within which to have the debate over whether it is good or bad, beginning or ending, unfortunate or inevitable.
As far as I am concerned, capitalism is the private ownership of the means of production. And it’s a good thing. If people want to present a case for why collective ownership is better, I’m all ears. Mostly, I don’t see that. Mostly I see the sort of ideas presented here or the “compassion, empathy and respect” themes of the SPUSA.Report
Yes, it’s dumb to point to examples of entrepreneurialism as evidence that capitalism is dying. But if you take it as a sloppy way of saying “The economy is changing in ways most people never expected and are unprepared for”, well, that’s quite true.Report
Not if they’re fucking going on about Greece, for god’s sake!
For the LOVE of GOD, not GREECE.
Greece has always had high entrepreneurship rates, and it hasn’t helped them one jot — what economists look for when they look for potential in a society is NEW entrepreneurs, new ideas, people willing to put faith in pushing a new idea.Report
Though conceding I am a non-expert on these matters, I will say that what is offered in that first quote in no way seems inconsistent with “capitalism” as I understand it.Report
It’s not, unless you happen to be operating under a definition of capitalism that just uses the word as a synonym for “everything I don’t like about the current political economy.” Which, as with socialism, happens a lot.Report
Stop being such a monarchist, @j-r . Your unique brand of communism and constant appeals to astrology are exactly why you are such a survivalist.
Hey, this is fun! With the right context and tone, you can make anything into a pejorative.Report
“Stop being such a monarchist, @j r . Your unique brand of communism and constant appeals to astrology are exactly why you are such a survivalist.”
Best sentance ever!Report
@aaron-david
Is squating a good example of Capitalism? Free kindergartens also don’t sound like Capitalism to me.Report
If they’re getting access to these things by trading free time etc. then it’s capitalism.Report
The defining characteristic of capitalism is the private ownership of capital. Trading labor for resources happens under other economic systems as well.Report
Hmm you have a point there.Report
Certainly charity is something that happens in capitalist economies. It’s not clear how these free kindergartens are funded, since the claim is, in line with The Guardian’s usual standards, sourced only to an unspecified “grassroots NGO.”Report
Who is offering the Kindergarten? Who is paying for it? Nothing is free.Report
@j-r The power of neoliberalism to neutralize and commodify is truly astounding. It seems that there is no idea that it can’t include in its economic model.Report
That’s what I was thinking. Even if these were signs of a genuine anti-capitalist tendency, it would only be a matter of time (and a very short time, at that) before it was simply subsumed.Report
@roland-dodds and @chris
Neutralized, commodified and consumed by what?
If the answer is neoliberalism and/or capitalism, then what exactly are they?Report
I don’t mean anything concrete, and I admit to speaking loosely. I just mean that they will be pulled into existing economic and political structures without changing those much, if at all.Report
I am not opposed to speaking loosely. What I’m looking for, though, is some sense of causality. You say pulled, but I don’t see a lot of people being pulled into anything. Most people seem to be jumping in with both feet.Report
Yeah, pulled is speaking even more loosely. I do not doubt that the people who start these sort of Greek ventures will embrace the first opportunity to make money off of them. The “pull” is more the “pull” of fate.
There is a huge, dynamic, deeply entrenched system of economic and political power that isn’t going to be changed in any significant way by free kindergarten or communal gardens and bartering in Greece. It’s much more likely that those things will be monetized. For example, if there’s a barter market, someone will come up with an app that makes money off of the barter trades. And to the extent that they are never monetized, they’ll remain outside or merely supplementary to that system.Report
I think it’s a mistake to treat those systems of economic and political power as endogenous. They evolved from what came before, just like what it now evolves into what will be.
There is a reason that barter markets develop currency. It’s the same reason that artisan workshops become factories and tribal councils become parliaments. My ultimate problem is the idea that these increasingly central and often exploitative forms of organization arise because of one group’s desire for control and profit. Kind of. But they arise because of everyone else’s desire for order and the output of increased productive capacity.
We’re not living in the King Leopold’s Congo. No one comes along and forces us to work or get our hands chopped off. That’s the distinction between mercantilism and capitalism. Capitalism evolved because in a modern economy, it’s much more efficient to bring people into the system and make them consumers rather than working them to death and underpaying them for their labor. It also happens to be more just for the simple reason that you can always opt out of being a consumer.Report
If we all opted out of being a customer, the economy would collapse quite quickly. I suspect the government would not be too pleased with this state of affairs, and might take preemptive measures.Report
I merely meant to suggest that nothing in the linked article implied any sort of substantial change, in part because there’s no reason why the current (again, dynamic) system can’t simply subsume things that are different, but small.
Mercantilism became capitalism because of radical, large-scale changes to the way things are made, moved, etc., all of which made the old system less efficient than one build on wage labor and capital. A kindergarten in Greece is not a sign of such a radical, much less large-scale change.Report
No, but I’m not really talking about the kindergarten. I’m talking about the “subsumed by capitalism” thing. People who want to keep things in that pre-capitalist mindset can, but many choose not to. Most choose to turn a micro business into a small business and a small business into a medium-sized business and on and on until they can’t grow anymore.
I’m all for removing the artificial political barriers that force more people in that direction than might otherwise, but even then markets will form and lots of people will choose to exchange things. Calling it commodification is just an unnecessarily pejorative term for people willingly choosing to bring things to the market.Report
Commodification is standardization, ain’t it?
I don’t see how that’s too terrible… better to know what you’re getting, at least for recipes and suchnot.
Who really wants a non commodity screwdriver anyway?Report
You’re right, Kim. The use of the term commodification as a pejorative is very odd. Assigning a monetary value to things is no more of an imposition than weighing things. Everything has a mass, whether you recognize it or not. Likewise, everything has exchange value. In most cases (most, not all) it is up to you as to whether to exchange or not (at least in the current reality of the developed world).Report
I do buy stuff that is above the highest commodity grade, occasionally (Trader Joe’s had some lovely green olives near Christmas). But the only way I’m able to really say, “wow, this is good!” is by understanding the basic commodity index. It’s a measurement and a standardization.
I can see how you wouldn’t want to treat video games that way — they’re intellectual property. People could rightly be furious that TV shows (reality tv, specifically) are being commoditized.
But it’s not something to rail against, in a general sense. You really don’t need a “This is Jimmy’s Washing Machine” [and I love my washingmachine robot, but it’s still a commodity]Report
For a contrary view from a very smart person who agrees with you on probably most things, here is Scott Alexander’s Meditations on MolochReport
“I broke my back lifting Moloch to heaven and all I got was this lousy Disneyland with no children”
Ouch.Report
The sharing economy is primarily the result of technology lowering transaction costs. It’s not post-capitalism, but technology helping capitalism work better.Report
So, um, what do you predict about the future based on free money?Report
In one sense of course capitalism is evolving into some new form. Our concepts of ownership and how we trade with each other has been evolving forever, even people from a century ago would find some aspects of our economy strange.
Part of the problem is, outside of a narrow economist definition, what constitutes capitalism is as slippery as what constitutes socialism. So people exchanging goods and services differently is either a variation of capitalism, or the end of it.Report
In terms of substantive problems facing the economy, I’d probably rate things like “improved productivity” on the list. Improved productivity is awesome, but we’re edging closer to the point wherein it becomes something of a two-edged sword.
The talk of the death of American manufacturing is both accurate and totally false — we make TONS of stuff. We just don’t need nearly as many people. Which is pretty sweet.
But what happens when you get to the point that, between automation and computer support, we’re quite capable of making everything we can consume using only a fraction of the population’s labor? If, say, half of everyone working can produce more “stuff” (goods, services, etc) than the full population can use…..
How’s that gonna work? Because that other, useless half, is half the market for all that “stuff”. If they can’t afford it, well — you don’t need to employ that full 50%. You’re over-producing.
I’m sure, eventually, it’ll sort itself out. The transition period is likely to be ugly. I’d be paying more attention to that than the “death of capitalism”. Because among other things, car makers seem pretty certain that self-driving cars are gonna be here sooner rather than later. Uber’s a nice, disruptive company now — but give it 10 years, and Uber’s gonna ask themselves “Why are we employing drivers again?”.Report
I concur that the transition period is going to ugly. I suspect that one reason UBI is a political non-starter is because the simple psychology of “get a job” is strong and the economics and sociology of not having jobs for everyone is really hard and something most people don’t want to think about.
We still have very low unemployment but it is also clear that many people from factory workers to educated professionals might be in a permanent state of under or unemployment.Report
I ask this question often: when was it not ugly? And if you try to answer that question you are invariably going to realize that the answer is not so much about when, but for whom.
And when you answer the who question, that leads to the next question, which is: why are those people so special as to expect anything different?Report
@j-r
Are you a social Darwinist? I always get the feeling that you can make these statements and ones about how Americans are wrong or spoiled for thinking they have a right to a certain lifestyle because you have not faced economic or career decline. In short, you are winning and it is just tough for them. Go try at playing the game and all that.
I wonder if your attitude would be the same if you graduated during the recession or you were an out of work steelworker or consulting with very little stability.Report
I honestly don’t know what you mean by social darwinist. What I am is someone who just spent the last week in Rwanda (along with lots of time in the developing world over the past decade), which tends to lend a little perspective.
Here’s the thing: there is the way that you want the world to be and the way that the world is. If you want to have a chance at affecting the former, then you really need to understand the latter. Wishing things were different, don’t make it so.
So, I’ll ask again: when was life not in some respect ugly for the majority of Americans (forget about the rest of the world for a second)? When you’re faced with a bubble followed by a crash, I guess it’s natural to blame the crash for your diminished circumstances and ignore the bubble that led you to believe that you were better off than you really were. But that don’t mean it’s the right answer.Report
This comes close to blaming the victim. Most people are unaware when a bubble occurs and are powerless to do anything about it even if they know one exists. While some people do act rashly in a bubble, it would be foolish if people did not take some advantage of it if they could do so carefully.Report
In what meaningful sense is the average middle class American a victim? A victim of what? And who is the perpetrator?
Again, I asked a simple question: when was it something other than ugly and for whom? The fact that you guys won’t answer that question is telling.Report
The average middle class American is a bagholder, not a victim.
Do you understand the difference?
The rich make money on the way up, and on the way down.Report
jr, I don’t know if the middle class American is a victim. To say that for decades the economy is/was largely stable and less ugly because the means of productions were layered, self stabilizing and ever growing.
It produced expectations that diverged from self owner operations and normalized a dependence on a ‘type’ of job market, that is, in the end, not conducive to self ownership, and more dependent on plugging in to the layers.
This doesn’t have to be ugly, but the expectations, distortions, barriers have many folks not wanting to participate on any level.Report
@joe-sal
I will ask again: less ugly for whom?
The economy wasn’t less ugly for blacks in the South who were legally barred from large swaths of it or even blacks in the North who were kept out of many higher-paying, higher-skilled jobs, often through union rules.
The economy wasn’t less ugly for many women, who abain were barred from all manner of employment.
Was it even less ugly for most white Americans! In the 1960s there was still a great deal of rural poverty, as in no shoes, no electricity poverty, in this country.
And if certainly wasn’t less ugly for the millions of people trapped in grinding povery in the developed world.
There is a reason that I asked Saul the question above.Report
So it’s good when anyone wins, except the rich, who deserve to lose, because why?
Most people are idiots who can’t be bothered to read the news. If I asked you to name which financial instrument is currently “in vogue” and “bubbalicious” you couldn’t do it.
It is fair to guess that you couldn’t tell me what instrument was killed to create the new instrument, and that’s even with it being spelled out on this blog and in the papers to boot.Report
How was Rwanda?
I remember reports out of that area about how coffee producers would say that coffee was used to make bullets (presumably because that was what they traded it for — and they had no idea what coffee tasted like). Mighta been Burundi…Report
“Are you a social Darwinist?”
Is the other option “social Young Earth Creationist”?Report
FWIW, I don’t think there is anything remotely controversial or objectionable about what @j-r is saying or asking. In fact, I had much the same thought.
Change is almost inherently ugly. As society (or a society) moves towards something it is almost always moving away from something and almost always through something. It is not necessarily a zero-sum game but it is rare if not impossible for (a) society to continually add without loss. And for the “losers”, it will be tough. Certain people might find themselves losing more often than others while others might find themselves winning more often than others for all sorts of reasons, nefarious and otherwise. But the idea that societal changes have ALWAYS left some people worse off — even if only temporarily — seems as controversial as saying that the sun set yesterday evening: history makes clear that this is in fact what has always happened.Report
@morat20
You’re assuming some kind of universal satiation point – I don’t think there’s any evidence to suggest such a point exists. We already consume more than our ancestors could have dreamed was possible.Report
I gotta say one thing about economists. They are the most optimistic people I have ever encountered. Does anything cause you cynicism or doubt?Report
… then you haven’t met many economists.
Dr. Doom ought to ring a bell, Saul.
Is it Caturday yet?Report
I’m trying to see how this addresses James K’s point. Like, at all.
Like, I read James K’s point and I think “that’s a little dark and it’s a good point” and the response is about how optimistic he must be?Report
Depends on your perspective. Jaybird, you grew up evangelical (though you are not one now), so the notion that people’s wants are endless (or potentially endless) is a bit dark for you. Saul grew up in a lefty secular family. The prospect of endless wants, apart from its potential to create jobs for people who are displaced by productivity improvements, has neutral valence for him.Report
But in neither case is it *OPTIMISTIC*. I mean, I could see arguing that James K is a bad person for noticing such an inconvenient fact… but that he’s optimistic for noticing it?
I’m missing something.Report
Probably that potential for endless new jobs that Morat alluded to. At least that’s what I would guess, given the context of James’s own comment.Report
Well, I didn’t see Morat’s allusion to endless new jobs as much as an allusion to endless new companies… each of which with surprisingly few employees.
Maybe, someday, we’ll have a society filled with yoga instructors, dieticians, fashion consultants, massage therapists, and other jobs where the emphasis is on being physically present… but that seems awfully optimistic.Report
I’m just not sure I see how the economy is going to, you know, work if you get to the point where half or less of the able-bodied workforce is needed to pretty much produce everything needed. (Or half plus cheap labor overseas, etc).
I mean that’s half your workforce with no income. How are they gonna afford your stuff? If they can’t, who is?
That’s the end goal of productivity and automation improvements. Maybe we’ll never get there, and it’ll be a moot point.
But if we do get there, that’s going to be a real challenge. Niche jobs, or hobby jobs aren’t going to provide the necessary income — and there won’t be the demand if your real unemployment rate is hovering at 50%.
I’m sure, eventually, something will emerge. Some weird combination of working for love of the job (for those who want to), volunteerism or required volunteerism, and possibly some weird changes to the nature of money and how it’s viewed. (Which would all amount to the equivalent of a UBI, in today’s terms).
But it’s going to be weird, and a struggle, and I suspect the American view of “work if you want to eat” is going to make it tougher.
I heard that “Lazy bums should work!” crap from sitting Congressmen whose states had double-digit employment during the Great Recession, when companies were reporting hundreds of applications for a single job. “If you want to eat, work” is a great slogan — but falters when there are no jobs.Report
Well, if it is neutral except for this bit which provides an endless source of potential productive employment, then its optimistic.Report
@jaybird
My concerns are more along the lines of what Morat is saying.
There is an old and probably not true story about Walter Reuther going on a tour of a Ford factory in the 1950s and the manager is showing him all the new automations. At the end Walter Reuther asked who is going to buy the cars is all the production is automated.
We seem to be at a point in history where we are making and producing more and more stuff with fewer people. This is spreading to white-collar and professional work as well. My thoughts and concerns along the lines of what happens when and if there is not enough work for a good chunk of the population. Have we reached it already? Are the people with jobs and capital and cash just going to say tough luck to the people displaced by automation and computer software?
This goes back to when you talk about perception. Maybe absolute wealth does help society overall but the perception that it is all going to a small band is causing a lot of fraying. Who is consuming more? Are we looking whether anyone is consuming less?
Economists tend to jump up and down about the consuming more without understanding the perceptions. Even if former factory workers are still consuming more than their great-grandparents, they probably still suffered a decline in living standards while the bosses got wealthier. Yet economists just jump up and down about the consuming more than their great-grandparents without examining the thoughts that might come from going from being a factory foreman making 25 an hour to a Wal-Mart greeter making 8 an hour. All that stuff gets waved away.Report
The traditional answer to automation was that people will just consume more, thereby requiring more labor overall, and everything is terrific.
But I am not sure this works infinitely, and know for a fact it doesn’t work at all levels in all sectors.
All the post scarcity visions sort of sidestep the issue of who owns the technology that produces all the abundance.
When Capt. Picard asks for an “Earl Grey, hot”, does he slip in his debit card or something?
Who owns the machine and software of the replicator?
How are the raw materials extracted, refined, transported, and ultimately stocker into the replicator?
How are the property rights and contracts handled?
If we follow the same model as on our current military bases, a contemporary Capt. Picard on a base would go into a Hardee’s or privately contracted QuickeyMart and pay for the cup of tea.Report
I can promise you that someone in the Star Trek franchise came up with the answers to all of this.
Everyone else ignored him while quietly inching away from him.
What do you do with Morn was a great writer’s exercise though.Report
There doesn’t need to be a universal satiation point. I’d imagine it’s like an S curve. The inflection point is the problem.
You don’t need to get to Star Trek post-scarcity for the current economic model to collapse. You just need to get to the point where productivity gains have rendered enough of the labor pool surplus. Since the “labor pool” is also “the market for your goods” that turns into a nasty spiral.
There’s a few fairly labor intensive fields I don’t see automating anytime soon (agriculture is about as automated as it’s going to get for a good while), construction of some types (although those bridge building robots are a sign I might be wrong on that), and health care services to name the first three that come to mind — which are also, I might add, notoriously poor paying fields that attract a lot of immigrant labor for exactly that reason.Report
You have the causal direction mixed up. Immigrants don’t seek out these jobs because they prefer low pay. The jobs are low-paying because there’s a large supply of immigrants who can do those jobs but not much else.Report
How do you know I have the direction mixed up?Report
I know because the claim that immigrants are attracted to those jobs because of the low pay doesn’t make sense. All else being equal, people prefer high-paying jobs to low-paying jobs. But a lot of immigrants, due to things like poor English skills and/or low educational attainment, aren’t qualified for any better-paying jobs, so they tend to cluster in those jobs. This increase in supply drives the wages down.Report
It seems likely to me that there is causality running in multiple directions here.
When I lived in Deseret, there were some nearby wheat fields that had a heck of a time finding people to work them. It was low-skill work, but very unpleasant. The pay was extremely good for the skillset, on the order of $20/hr with lots of overtime opportunities, in a place where those kinds of wages are really hard to come by.
Now, whenever we talk about “labor shortages” around here the response is usually “That’s because the employers don’t pay enough!” And it’s true that if they offered $100/hr, they’d probably not have any trouble finding people (if they could make a profit and stay in business)*.
On the other hand, though, if they had unlimited access to immigrant labor, or just more access to it, I’m relatively certain that they wouldn’t have trouble. In fact, they wouldn’t have to pay $20/hr to begin with, most likely. The wage that they offered, much less the wage they would have needed to offer to be fully staffed, were among other things a product of the labor restrictions caused by the restrictions on immigration. Without those restrictions, we’d probably consider them crap-paying jobs that Americans won’t do.
It’s really, really hard for me to look at this situation and not believe that at least some of the causality runs in the direction Brandon suggests.
At the same time, for a lot of jobs, there is only so much they can pay in wages before it becomes unprofitable to even have the job, or to be in business. That wage for the wheat fields is evidently pretty high, for whatever reason. For a lot of other jobs, it’s lower. Either you have immigrants willing to do the job at the wage they can afford to pay, or it’s simply not done. This has implications for the minimum wage, too.
* – This comes up in IT as well. Companies claim they can’t find people. People say that they’re just not offering enough. Which is often true… but at least in part (and I suspect in good part) because their access to foreign labor is limited.Report
“Because that other, useless half, is half the market for all that “stuff”. If they can’t afford it–”
What’s all this about “can’t afford”, kemo sabe?Report
People without jobs have really restricted buying power. I don’t care how cheap your iPhone is, if you can’t find work it’s going to be out of your price range.Report
I mentioned before, there are twin narratives pushed by sometimes the same people, that “Everything is better today in every way!” and “Disaster is looming- stock up on guns now!” with regard to the economy.
On the first side of the equation, I notice how they always point to consumer electronics and garments, I-phones and tee shirts as being ridiculously cheap.
That is, two things most powerfully affected by new technology and global trade structures.
Land, not so much. I’m not seeing any memes about how my parents used to pay 25% of their aftertax income on rent, while I pay 10%. Or that how some marvelous new disruptive app is going to allow everyone to own their own house free and clear by age 30.
I’m not hearing anything about how secure our finances are, how free from the anxiety of layoffs and career death we all are.
Just I-phones and tee shirts all the time.Report
There is a reason for this. Compare your parents house to the average new house. Chances are the new house is bigger, both in overall footprint and in room size. And chances are the amenities/fixtures/appliances are much more high end. And if it’s not bigger, then it’s because it’s located in some high demand area that used to be much less hip.
And it’s the same with healthcare and education and most of the big ticket items. They cost more, cause you get more. Now, you can complain that what you’re getting isn’t worth the value and in many cases I’ll agree with you. However, it got this way, because we bid the prices up and we demanded these specific features.
It’s not that hard for the average person to own their homes free and clear in thirty years. Buy less house, in a neighborhood/part of the country that isn’t chic or big on amenities, and live frugally. Not everyone can afford that, but more people can afford it now than have ever lived before.Report
Actually, there’s a reason that the concept of “Starter home” is a thing. Most young people, if they can afford a home at all — buy an older one. They’re smaller, with more problems.
Mine was built in 1964 — about 10 years before the house I grew up in. It’s also about 300 sq feet smaller than my parent’s. (Who live about five miles away). We never traded up. New houses (or even houses build in the late 80s or early 90s) were too expensive and just as problematic.
And we’re about to pass peak occupancy (if the darn kid ever actually LEAVES) and I’m about 5 years off of paying the mortgage. So when that’s done, I’m adding about 400 sq feet (mostly to turn the tiny apartment kitchen into one two people can occupy at once), a new roof, and solar panels. I might do the last two this year.
And I’m in Texas, which never saw a mortgage boom and bust in the 2000s. Anecdotally, about half my home-owning peers (my rough age) had a starter home then traded up, and the rest own an older, smaller home like myself.Report
The reason houses have grown so large is due in part because the land under it has grown so expensive, compared to all other factors.
It doesn’t pencil to build a small house anymore, because technology has made the cost of construction cheaper, but not the land. So the option of buying a small house doesn’t exist, unless what you really mean is “Pay the same for a smaller sliver of land” in which case that just reinforces the point that land is more expensive.
The assertion that some mythical “We” have demanded this confers a legitimacy on the outcome that is unearned.
You are stealing a base here- you point to the outcome and assert that it must be what people prefer, because it is the outcome.
Small towns are emptying out because our economy needs manufacturing labor less, and service labor more, even while the value of labor declines.
So people cluster where the jobs are, even as the value of land escalates.Report
That sentence is meaningless. I’m not talking about myths. I’m talking about real estate. A house goes on the market, people make offers and the developers/previous owners take the most attractive offer. The price settles where the price settles. I don’t now what you’re talking about when you say legitimacy. What’s an illegitimate price?
I don’t read minds. I look at behavior. So, I’m going to be skeptical of some overly complicated story of why people are forced into bigger homes, closer to amenities, with granite and stainless steel and in the right school district. If you’re willing to drastically downgrade from you idea of a dream home (ie something closer to the sort of housing that people lived in 50 years ago), the household at the medium income level can absolutely find affordable housing, even in most large cities.Report
There is some actual commodification of housing — “this is the way we get the maximum happiness for the cheapest cost” on the builder’s part.
The “we” who gives this legitimacy is the stupidity of first time home buyers, who generally want shiny kitchens rather than reduced air circulation.
[The countervailing force is building codes, which enforce “hey, since we CAN build this right, let’s do it that way!”]Report
Why aren’t young people buying homes at the rates they used to?
Are you suggesting that they just don’t want to?
That they prefer to rent longer, for some mysterious reason?
This is what I mean by base stealing- you are assuming that the trend towards larger houses is a consumer desire for more house and less land, when it is a reaction to land prices going up far in excess of construction cost.
For any piece of land, there is a minimum density which pencils out, and anything less than that simply doesn’t. Thats why you never see a single family home constructed on a property that pencils out as an apartment, and why you won’t see a 1500 sf house constructed when the land value demands 2000 sf.
The percentage of cost of granite counters and stainless steel ranges is almost nothing within the overall house price. The price of land drives the house price more than any other factor.Report
When is “used to?” Rates of home ownership peaked prior to the housing collapse, but even now, they are higher than they were prior to the 1980s.
Exactly which periods are you trying to compare?Report
I’m thinking of how easy it was for people under 35 to buy a first home compared to now.
The Census tells us that the rate of new home buying for those people is at the lowest recorded level since they started tracking it.
This single data point stems from a variety of factors, but it ends up that it is very difficult for young people to buy houses now, compared to the WWII veterans in the 50s, or the Boomers in the 60s and 70s.
No one is suggesting otherwise, which is why I note that whenever people extoll globalism, they leave out this inconvenient fact and focus on consumer gadgets.
Also, people leave out the loss of defined pensions in favor of 401Ks which now mean that people approaching retirement now are in a more precarious position than someone in 1970 who had a pension.
Also, they leave out the rapid churn and wild erratic swings of the job market, where unlike in the 50’s and 60’s, the prospect of working for the same company for a few decades is nearly impossible.
Its true that by some measures, globalism has made our lives better- but in other, much more important ways, we live with more risk and instability than our parents.Report
You’re the only one mentioning consumer gadgets in this conversation. I referenced the increase in the rates of home ownership. People are also forming families and having kids later. Think that may have something to do with buying houses later?
We can have a conversation about pensions, but then we need to look at the accounting and the demographics behind why defined benefit pensions are going away. And the short answer is that we were never as wealthy as we thought we were.
That tells me something about who you are and who your parents were, because that certainly ain’t true for me.
No one wants to answer the question: for whom was it so easy to buy a home under the age of 35?Report
Apparently a lot of people because more of them were doing it.
Do you really believe that twenty and thirty somethings can more easily afford to buy houses than 20, 40 years ago?
Does anyone else here believe that, or witness it happening?
Does anyone believe the Gen Xers and Millenials enjoy a more secure job market and retirement than previous generations?Report
@chip-daniels
At this point, I really cannot tell if you’re being obtuse or purposefully evasive. Why are we talking about what people believe? Why not just go look at the facts instead.
Go look at the rates of home ownership for yourself: https://research.stlouisfed.org/fred2/series/RHORUSQ156N. The trend over the last fifty years is increasing, with noticeable downturns in the early 80s (which probably has something to do with the Fed’s inflation fighting and mortgage rates jumping into the 20s) and just as the housing bubble was coming to a head.
You are putting an awful lot of meaning on the rate of home ownership among 20 and 30 somethings, especially since you haven’t offered any data, instead talking mostly about perceptions.
And again, you are completely glossing over the question of what segment of the population was better off in the 50s or 60s or 70s or whenever.Report
Did you read the link I posted?
Homeownership for the under 35 set peaked around 1970 and has declined since.
What makes it important is that the political and economic changes since around 1970 have resulted in the post Boomer generations inhabiting a world where the primary form of financial security, a house, is harder to attain, while their income generator of jobs is more erratic and unpredictable.Report
@chip-daniels
How many times have you responded and completely ignored the “for whom” question?Report
You mean which sociopathic economic segments?
The benefits of the New Deal and postwar expansion were felt most by the white middle class.
Why do you ask?Report
Exactly, now ask yourself what sort of political and economic structures and conditions had to exist, both domestically and globally, to ensure that a certain segment of white males could have access to a near-lifetime guarantee of relatively remunerative employment, generous retirement benefits, and subsidized housing purchases.
And then ask why I ought to be lamenting that this is changing?Report
So the economic fortunes of black Gen X ers and Millenials is better than it was in 1970?
Are they buying houses at a higher rate than their parents? Do they have more economic security, greater job security?
Really, aside from the “cheap tee shirts and Iphones” type of argument, who is asserting that the overall economic picture for the post Boomer generation is superior?Report
If one goes to the census site and look at the data tables, the high point of ownership for under 35 over the entire available data series was during the Bush administration, with about a 42% ownership rate.Report
Chip,
Around here Millenials do. Around here steel LEFT, and so did the people.Report
We’re yada yadaing a lot when we compare young people buying houses in the 1950s to young people buying houses today.Report
How bout the 70s, when the modern structure of globalism gathered speed?Report
Real estate in America changes every 10 years or so, and not cyclically, so it’s really hard to compare any given decade with any other on a single, or even just a few, numeric measurements.
First the frontier closed. Then streetcar suburbs started. Mass production of automobiles kicked off. Immigration was radically curtailed for the first time. A Great Depression that wasn’t actually great for anyone, maybe the Kennedys , then the largest war in human history (which was a mixed bag for the Kennedys). Automobile suburbs kicked off, with legal overt racism. Then they continued with sub rosa racism after Rosa changed the world. Cities emptied out. Fewer babies were born than ever had been born. Inflation was up. Interest rates were way up. Crime increased. Cities emptied out more. Immigration started up again. Babies started being born again. Crime went down. People started to move back to cities. Some cities, not so much. People still moved to automobile suburbs increasingly distant from the metroplex centers. Real estate bubble popped. Interest rates went way way down. Streetcars are trying to make a comeback.Report
Chip,
Go read what dailykos wrote about Big Auto’s pensions. “Pay you with phantom money” isn’t actually stability unless you’re a fool.Report
Chip
You really don’t know much about housing and how it was built in cities, do you?
Where I live we have large houses, but that’s because there used to be at least double the number of occupants per house. Mama Dad Grandma, Granpa, maybe an uncle, plus some kids.
The option of buying a smaller house always exists. They’re called forever homes, and you build them to your spec. They’re outrageously expensive, but you get what you pay for.Report
Small towns are emptying out because our economy needs manufacturing labor less…
At the risk of this turning into another of Mike’s “two Americas” rants…
Now, if you replace “small towns” with “small cities east of the Great Plains” I’d agree with you about cause. But from the Great Plains west, small towns aren’t dying because of manufacturing losses, and small cities that aren’t a part of a major metro area are almost nonexistent.
Here, look at this prism map [1]. (Each prism is a Census-designated county or county-equivalent, volume of the prism represents population [2], so height represents density, height truncated in order to focus on the smaller cities, color basically arbitrary and mostly for enhanced visibility.) East of the Mississippi River, there’s a whole “forest” of small to medium cities, and lots of them are in trouble. From the Mississippi to the Great Plains the number drops off significantly. The GP don’t have any cities other than a couple in Texas with economies based on oil and gas, and west of the GP there’s the big metro areas separated by a whole lot of nothin’. Manufacturing in the West never moved out of the big metro areas.
[1] Couldn’t resist, since I got an early version of some software running so I could draw my own maps, and pulled together the population and area data.
[2] Too many of this type of map are drawn with height representing population. That really screws up things in the West, with its enormous counties. Eg, Southern California plus Las Vegas plus Phoenix look like a 150M people urban nightmare.Report
How are you defining “small city”?Report
Loosely?
For the sake of argument, say 30K to 100K. Much below that and it’s a big town, not a city (eg, North Platte, Nebraska at 24K may be many things, but city is not one of them). Medium city from there up to 500K, big city beyond that. Talking the city proper, not the metro area.Report
The city/metro question is tough. In some places city limits are pretty arbitrary, and in some places “metro area” covers an awful lot of ground.
In any event, I think you have to include all but one of the Montana 6.5. You also have Idaho’s secondary cities that would mostly count (save Moscow). So there are some!Report
Oh, absolutely. Now, apply the rest of Chip’s original description, which I was taking exception to: “emptying out because our economy needs manufacturing labor less”. Montana’s 6.5 seem to be doing fine, aside from boom-and-bust metal prices, and all of Idaho’s seem to be growing spectacularly.Report
“I notice how they always point to consumer electronics and garments, I-phones and tee shirts as being ridiculously cheap.”
Aheh. Or, maybe, “everything that humans have ever written or made into a song or a TV show accessible from basically anywhere, plus clothing, is now affordable even to people who don’t and haven’t ever had a job.”
You’re looking at this as some meaningless fluff, something not worth considering an achievement, compared to the onerous crushing burden of not being able to buy a (big, new, nice) house (in a trendy expensive area of the country) (with a short-term mortgage) (and remodel right away) (and also buy a car) (and maybe a second car) (and bike to work).
Which is, y’know, kind of a privileged viewpoint. You don’t care about clothes being cheap because you’ve never had to price-shop for them. You don’t care about information access being cheap because it’s always been given to you for free, as a byproduct of your studies or your work.Report
So are you saying that only privileged yuppies want to own their own home, while po’ folk are happy with cheap consumer electronics and don’t care about housing?Report
:rolleyes: I guess if you reduce the entire Internet and the ability of smartphones to use it anywhere down to “cheap consumer electronics”, then yeah, I think people are generally happy with “cheap consumer electronics”.Report
“I don’t care how cheap your iPhone is, if you can’t find work it’s going to be out of your price range.”
You’ve got this very old-fashioned notion that someone needs to have a job before they deserve to get something like a smartphone.
Oh, but you didn’t say DESERVE, you said AFFORD? Hey, I just showed you how you can get a smartphone for free, with service on a pay-as-you-need-it plan, which seems pretty damn affordable. You’re the one who’s insisting that no we absolutely must must MUST HAVE A JOB before we can expect to get something nice like a smartphone.Report
The contortions you’re going through to avoid my point are weird. “Look! Free smartphone!” does not, in any way, address what I’ve said.
And you’ve spouted enough economics here to understand the point that if half the population doesn’t have an income, the economy is screwed.Report
“if half the population doesn’t have an income, the economy is screwed.”
…you think.
What if life is cheap enough that half the population can live on the dole?Report
So you’re assuming a UBI, then?
And then again: How does it get PAID for? If half the population is on the dole because there are no jobs, who is paying to support them?
And do you think they’re going to be heavy consumers?
And how’s that going to stop the spiral, as jobs continue to get automated away?
Your solution works in a post-scarcity world — where production is basically “free” and thus you’re limited to a very handful of truly scare things (like real estate). But in a near-scarcity world, it doesn’t work at all.
Be they ever so productive, be the iPhones ever so cheap, half the population can’t pay enough in taxes to keep the economy moving along — not under the modern system.Report
“How does it get PAID for? If half the population is on the dole because there are no jobs, who is paying to support them?”
The same people who are paying now. In 2011 the highest quintile of earners paid more than four times as much per-capita as the fourth quintile, and more than double the rest of the quintiles put together. Presumably our inequality-sodden times have only made the differences worse since then.
“Your solution works in a post-scarcity world ”
What if the reason we aren’t in that world is that we’ve decided not to be?
What if we decided differently?
Why is the world made better by forcing people to flip burgers for twenty years just to maintain a fig leaf of “work for your wage” demanded by vestigal Puritan ideology?Report
So you’re thinking we’ll end up with such extreme wealth inequality that a tiny fraction has, literally, all the money? And thus dole out just enough to keep the non-money having from starving? Or rioting?
Hmm. I don’t think that’s sustainable. One reason I think the transition will be troublesome. It’ll involve breaking our currently held views on how economies “must” work, because clearly our current economy won’t work. (I don’t, however, pretend I know what will work. Or how it will change. Only that it’s increasingly clear that a transition to another state is going to happen, and it looks unlikely that our current setup will be sustainable in the new regime).Report
“you’re thinking we’ll end up with such extreme wealth inequality that a tiny fraction has, literally, all the money?”
How else is it going to end up?
How is it different from what we’ve got now?
“It’ll involve breaking our currently held views on how economies “must” work, because clearly our current economy won’t work.”
It’s amusing how you say this, and when I say “maybe what’ll happen is that stuff will get so cheap that the first levels of Maslow’s Heirarchy can be achieved via the dole, and our biggest problem will be social ennui rather than basic needs being met”, you reply that I’m being unrealistic.Report
World will crash and burn first, sad to say. Free money is nearing an end (just look at the middle east).
Missing entire aspects of the problem isn’t being unrealistic, it’s being shortsighted.Report
Hmm. I don’t think that’s sustainable.
For it to be sustainable (and it is sustainable in theory), it would require something like Soma and some serious birth control options.
But it is sustainable in theory.
In practice? Well, in practice anything that isn’t sustainable will end.Report
Well, the problem is it IS sustainable — and it’s not.
Clearly, if a fraction of the humans alive can produce all the goods, services, and luxuries we desire (or at least two of the three, and a good chunk of the third), then it’s sustainable. As long as that tiny fraction works, everyone gets their “stuff”. There’s plenty of stuff to go around. And considering productivity will continue to increase — and even when it doesn’t and resumes more modest increases, automation will remove humans while keeping productivity level. So you’ll still have excess “stuff” while employing fewer and fewer humans.
So it works in the sense of “produces more than enough stuff”.
It doesn’t work in the sense of “capitalism as understood and practiced today”. Because “stuff” that people can’t afford (because they have no income) is stuff that might as well not exist. And increasingly making more and more “stuff” while fewer and fewer people can afford it is exactly like having “not enough stuff”.
One of them will have to give, and I’d bet money it’s the latter. No business is going to embrace lower productivity and higher labor costs “for the good of society”.
That’s not to say you won’t have capitalism or a free market. Just that, I think, what comes out the back end will look a lot different. (Lots of people have created lots of works of fictions speculating on how it might look, but…I think it’s one of those things we discover through the painful process of doing).
My personal guess is a somewhat changing view of the nature of “money” (and the associated economics of it) and “work”. Which will be especially hard for Americans in general, given our particular cultural touchstones and myths. (Puritan work ethics, “by the bootstraps” sense of self-worth, etc).Report
““stuff” that people can’t afford (because they have no income) is stuff that might as well not exist.”
You know, you keep saying this, and I keep telling you that it’s based on a false assumption about how much things cost and how that changes over time.
Here’s an ad for a VCR that gives the price as $1389.88.
I can, today, buy a Blu-Ray player for fifty dollars.
It is simply not true that things will be impossible to afford unless you have a high-paying job.Report
Water, bucko. Water’s the key. How much do you expect water to cost when you need to run it 500 miles to get it to the people?
Life-giving things will be impossible to afford, a lot of places, unless you have a high-paying job.Report
Whatever it costs in LA right now? Where most of their water is piped un from hundreds of miles away?Report
Hard to use gravity when you don’t have hills.
Also, LA is relatively wealthy.Report
Really expensive water — desalinated sea water plus the infrastructure to move it to where it’s needed — should run no more than $1,000 per year per family. Sewage is extra.
However, San Diegans are doing such a good job of conserving that the Poseidon plant, built at great expense, is now not needed. oops.
Water use tracks growth until, suddenly, it doesn’t. Make a big fuss about wasting and people will reduce their usage so substantially that rate structures are thrown into disarray.Report
You mean make LAWS about wasting water. Dude.
And I’m on the East Coast, talking about East Coast issues. Not about Cali today (topic of conversation is Miami, case you’re wondering).
A thousand a year is a hell of a competitive advantage, ain’t it?
(Note: I assume a thousand a year is just for the first desalinization plant. We can triple that with the expected increase in horrid hurricanes, right?)Report
Miami is unsustainable. In 50 years’ time or sooner it’ll be largely abandoned. The only question is how many billions the (federal / state / local) taxpayers will be required to fork over in aquifer protection, desal, flood barriers and the like before people just give up and start heading out.Report
Yeah, this is true.
Knowing state and federal corruption, the answer is a lot.Report
Most of Florida, actually.Report
I’ve wondered myself how insurance companies and long term investment holdings are dealing with coastal cities risk projections.Report
Very very quietly stopping issuing insurance to the poor shmucks on the gulf coast.
NOAA has the storm surge projections, but NC is busy writing laws so that their housing values needn’t take them into account.
Miami housing values are still skyrocketing, though. There is always a Greater Fool, no?Report
It’s too bad that people can’t relocate or be relocated from one geographical location to another.Report
Laws, am i right?Report
sure they can, but first you have to make it so the banks don’t lose their shirt when all that formerly valuable real estate becomes worthless.Report
I’m talking about people having a job at all.
Which I’ve used “can’t work”, “doesn’t have a job”, “job-less”, “no jobs” and variants of that the entire time.
I realize you apparently want to argue that we’re just richer than ever before even as incomes are flat, but that wasn’t even tangential to the point I was making.
It’s not even relevant. The cheapness of electronics does a man with no money and no income no good.Report
“The cheapness of electronics does a man with no money and no income no good.”
“don’t have a job” and “don’t have money” are not identical.Report
One becomes the other swiftly enough if there are no jobs.
You seem eager to quibble, rather than address the main point. I can’t fathom why — it’s all hypothetical future stuff, based on a simple premise: Automation and productivity could (I think “will”) eventually become sufficient as to render a good chunk, even a majority or more, of the population unnecessary while still producing sufficient goods or services to service the entire population.
If you think they’ll just up their consumption, go for it. It just pushes that point down the road a bit (unless you think it’s possible for people to consume infinitely).
At that point, you run into a significant problem: How do you keep an economy moving if a good chunk (even a majority or more) have no jobs, no income, and no prospect for either? Who will the highly productive, automated businesses sell to?Report
I’m taking Density’s point to be that even the poorest Americans have the power to consume goods and services at a level higher than overwhelming majority of human beings who have ever lived and are living now.
What that means in the grand scheme, I don’t know. It does, however, have the simple virtue of being true.Report
That’s all well and good, but entirely besides the point.
Consumption is bounded, and cannot be infinite. Productivity increases and automation, if they continue even remotely on trend, will basically mean we can hit peak consumption (where limiting factors will be resources, not labor) without full employment — and then employment will fall from there as productivity and automation improve.
That kicks the economy in the nuts, because it’s sort of predicated on a good chunk of the populace being employed and thus having money to spend.Report
An appetite that cannot be sated needs a term, then.
To use, oh, game consoles as an example: do we have enough used PS2s to make sure that every household that does not have a game system can have a PS2?
I don’t know.
Do we have enough used PS2s to make sure that every household that wants a PS2 can have a PS2? Easily. How do I know this? Because the PS4 is the current big thing and the PS2 sucks with sucky games and it doesn’t do HD and you can’t really do multiplayer except for split screen. Everybody who wants a PS2 has one (there might be fewer than 100 people who want one but don’t have one… effectively a negligible amount in a country of 300,000,000).
Well, what about the PS4? Within our lifetimes, we will be able to say that everyone who wants a PS4 has one. (Well, maybe there will be 100 people who want one but don’t have one but, again, that’ll be a negligible number.) By “within our lifetimes”, I mean “a couple of years into PS6 being the big thing.” Sound be somewhere around 2028ish?
Consumption is bounded. Appetite is not.Report
You and Density are both ignoring the core of the problem — if producing “more” requires “fewer workers”, and this is an across the board phenomenon, then clearly meeting today’s needs might require, say, 15% less workers.
That’s 15% of the population (assuming no population growth) out of the workforce, assuming full employment. No jobs for them. No income for them.
But hey, with all that cheaper stuff, people will want say — 4 times as much. (Because it’s 25% of the price). But automation gets more efficient with volume, so if you increase productivity four-fold across the board — you might only employ 20% more people. let’s be optimistic — 50% increase to headcount.
You’ve still got 7% with literally no jobs.
And each improvement in automation makes it worse. More and more people permanently shut out of work. Which means no matter how much they want to consume, they can’t — because they have no income, no money, and thus no method of consuming.
As a concrete, specific example: Say Google perfects the self-driving car tomorrow. Within a few years, that’s 200,000 or so jobs (just taxi’s and limos, not counting Uber) people out of a job. That’s not even counting their infrastructure (mechanics, dispatchers, etc) who would see massive cutbacks as well.
There are still taxis, limos, busses, and such — there just aren’t any drivers.
That’s 200,000 people with no income. They can’t hail a taxi, even if they wanted to with all their heart. They are 200,00 people who are not creating demand for taxis. Because they don’t have a job, and soon they won’t have any money because “cheaper” don’t mean “free”.
Sure, those 200,000 people can find another job. Unless you’re seeing such cuts everywhere.
Self-driving cars won’t signal the a huge problem. The fact that we no longer need humans to drive cars? That form of technological change is going to remove jobs all across the board. Not “change” them. The job will still be done — just not by humans.
And worse yet, it’ll get more efficient. Your PS6 will use a fraction as many people to manufacture — and probably make them 4 times as fast. Each iteration will mean more efficient, swifter production — and less paid labor.
That’s the difference between buggy whip makers getting replaced and now — the job remains. The need to pay people to do it vanishes. And support jobs for THAT suffer the same problem.Report
The thing that I don’t like about this assumption is that it assumes that a job is something that you get from a large corporation.
The whole self-employed thing/small business thing seems non-existent.
The barriers to entry to create a small business kinda thing (e.g., needing 300 hours of training to wash hair or whatever it is) seems to me to be a way to ensure that it stays non-existent.
“There’s no way that every one of these people can get a job doing hair.”
“I’m not saying that every one of those people should get a job doing hair. I’m saying that one in, oh, 200ish should be able to do that. If we have things set up so that there are enough barriers to entry that only one in, oh, 500ish can navigate those waters, then we have a problem.”
Because if you go into one of those neighborhoods where somewhere north of 90% of people are officially unemployed, I think that you’ll find a surprising amount of “capitalism” going on anyway.Report
I don’t assume that at all. I’m just assuming that most things that “people want done” will get automated.
No matter how regulation free my personal foray into the wilds of the market is, eventually a robot is going to do it better, faster, and cheaper. Whether it’s economies or scale, or the fact that robots don’t sleep, whatever.
Uber drivers? Yeah, they’re gonna be replaced by self-driving cars. I’m not going to be able to undercut, out-bid, or out-service the fleet of robot vehicles.
The same thing that killed Mom and Pop stores is gonna kill practically any personal business I can cobble together. And the few things that automation, machine learning, and robotics CAN’T do — I’m going to be competing with 300+ million Americans for.
How many regulation-free hairdressers do you think a town needs?Report
How many regulation-free hairdressers do you think a town needs?
I thought I addressed this point in my comment.
It’s not just about hairdressers. It’s about barriers to entry to becoming a hairdresser.
It’s not about being regulation-free. It’s about not having regulations that prevent people from working if they want to work even if there is some mechanization making other work obsolete.Report
“Consumption is bounded, and cannot be infinite.”
Which is exactly what people thought about the smartphone market on January 8 2007.Report
If, say, half of everyone working can produce more “stuff” (goods, services, etc) than the full population can use…..
That’s not something that’s plausibly going to happen in the foreseeable future. National income in the US is about $50,000 per capita. The employment-population ratio is about 60%, so that’s about $83,000 per worker. Throw in some skew, and the median full-time worker makes about $50,000 per year. Growth has been pretty lackluster since 2000, and there are no obvious signs that it’s picking up. Demographic trends aren’t helping. At the current rate, we’re looking at a doubling in per-capita income every 40 years or so.
What do you think is the limit on what a person can reasonably consume? Keep in mind that people like services, too, not just goods.Report
Given the soaring income inequality problem (separate from this conversation), I suggest that “per-capita income” could be a misleading number. And “could” is generous. I might be reading this wrong but it looks like median household wage has remained flat for the last fifty years.
But for a more up-close example: How many people, do you think, earn their living as taxi drivers (Uber or otherwise) or warehouse workers in the US? All those jobs are within 20 years of going away due to self-driving cars.
I’ll be generous and say the staffing needs of the trucking industry will only be halved (you’ll still need someone to unload/load for right now). So that’s gonna get cut in half. Delivery trucks — Amazon is experimenting with drones, but I only give that a 30% chance of supplanting FedEx — but they’ll still probably cut labor in half.
That’s what, 5 or million jobs just gone — evaporated — due to one aspect of one upcoming productivity increase (self-driving cars). (That will not be the only major disruption self-driving cars would cause).Report
Just call it what it is, spontaneous commerce / trade. If the commerce is happening absent the directives of TPTB, it is spontaneous.Report
@oscar-gordon
TPTB? I think the big issue in the examples mentioned is what Mike says above. These are people reverting to allegedly older forms of economic acting because the official economy in their native countries is facing serious structural problems or is a long-term down cycle.
You squat when you can’t afford to pay rent and you find a property that seems abandoned. You form free kindergartens when you know people can’t pay and you have time because you are an unemployed teacher. I guess they give you food or the activity is enough to prevent you from despair and suicide.Report
@chip-daniels
I think the problem is baked into “capitalism” as a term – it was always just a term socialists used to mean “not socialism”, which makes is almost useless in a post-socialist environment.Report
Socialist writing tends to see things in terms of feudalism, capitalism, and socialism. Sometimes to get socialism they will deliberately argue that feudalism and capitalism are one and the same. Even fans and historians of capitalism have a hard time trying to define what capitalism is.Report
It strikes me that the first article may be confusing capitalism with corporatism.Report
What I always wonder, in these Glorious Paeans To The Postcapitalist Future, is why everyone wasn’t acting that way already. And it always seems to turn out that the answer is “acting that way is illegal and there are a large number of laws against it, but people have learned that there’s either some loophole that permits it or lax enforcement that lets you get away with it”.Report
That’s the main source of myopia with most of Mason’s Greek anecdotes. Mason wants governments to incubate and nuture these ‘new’ arrangements, when a good deal of the driving force around these arrangements is to avoid the State.Report
“by the emergence of a new kind of human being.”
O really? A new kind of human? Please.
“Second, information is corroding the market’s ability to form prices correctly. ” Oh dear. Info reducing the ability of market’s to operate. Someone talk to an economist! A new theory has arrived.
“The market destroyed the plan; individualism replaced collectivism and solidarity;” Shesh, it may not be the collectivism of 60s or what was expected to arrive, but there’s no doubt the west is much closer to socialism that it was ever to capitalism.Report
One of the problems with Greece was never “capitalism”, it was with “whatever the name we have for feeling like you ought to pay taxes is”.
For example, they had a Luxury Tax on swimming pools. Apparently, only 324 people paid this tax. When the gummint employed satellite photo technology to count swimming pools, there were apparently just shy of 17,000 swimming pools visible.
It’s easy to spin this as “the rich elite evading taxes” and, according to the article, there is a lot of that going on… but that explanation is just a little too pat.Report
In Greece it wasn’t just the rich evading taxes; it was basically near everyone.Report
Hard to call that a failure of capitalism, though.
Perhaps Schilling would make a joke about it being the logical end of capitalism.Report
Well no, Greece is a really bad example of, well, everything. I stumbled across an essay someplace, I can’t find it again, where it talked about the modern history of Greece and how there was only one single event (a British invasion of some sort) that caused them to stop printing drachmas and that outside that event their assorted governments -never- stopped (not for natural disasters, revolutions, Nazi occupation, nothing) printing money as fast as they could. Greece is a horrible example of anything but the dysfunction of Greece.Report
Finally, history will be made by well-schooled people that are tapped into the social networks of their age!Report
Tweeters of the world, unite!Report
Stop the world, I want to get off.Report
#illmeltwithyouReport