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Polish_Silver
05-13-12, 04:15 PM
I think the FIRE economy is not the only problem. Perhaps not even the worst.
There are two other well known headwinds faced by nearly all developed nations:

1) Rising cost of energy (peak oil)
2) Slowing population growth/ageing population.

But I wonder if there may be another, much more intangible problem: a dearth of meaningful work.

During the 19th century, technology put physical power under the command of humans. The humans could get much more done without breaking thier backs. The health and standard of living grew slowly during this period. This trend continued well into the 20th century.

People consumed "more", such as air conditioning, electric lights, various appliances, more diverse
and higher quality food.

Recently, however, machines need less and less human direction. We are on the verge of self-driving cars, auto-piloted airplines, etc. None of these systems need be perfect to replace humans. They only need to work better, on average, than the humans in question. How many jobs driving taxi, piloting jets, etc will be obsolete?

The check-in kiosks at the airports replaced thousands of people with decent paying jobs. Check-in is much faster, and much less costly to the airlines. But what happened to all the people formerly employed?

Restaurants will soon offer ordering food by cell phone, doing away with waiters.

It seems to me that the only consumption that can increase are things like luxury consumption,
including organic food, education for fun, live music.

It also seems that the people providing this marginal consumption will not be well paid.

Is there any fundamental principle of economics that there will always be suitable work for the majority of people? And that there will be any degree of equity in the wages recieved?

If formal education has been more and more important to reach the median wage, what if the bar just gets too high for most people? High school, college, masters degree (in engineering?) ph. D.
This paradigm can only work for a fraction of the population.

Trade apprenticeship used to be the way for working class and middle class people. But is that still viable?

Polish_Silver
05-13-12, 07:59 PM
Another way of looking at employment is what is called "mis-match theory".

For the last 5 million years, humans evolved in highly egalitarian hunting societies.
Our physiology, emotions, and social behaviour are suited for these highly social and
cooperative societies. The varied diet was rich in vitamins, protein, and fiber.
Group Hunting was the typical activity for men, and this explains the popularity of team sports today.
Gathering was the typical activity for women, and explains why they like to shop. This also explains why we like dogs so much. Wolves were also at the top of the food chain and depend on group hunting.
The wolf pack is not "constant fighting" but highly cooperative.

But we hunted so well we over populated the earth and had to start farming. Now the economy is based on agricultural private property, with extended family as the social grouping. Because land is inherited father to son, women lost power and became an under class. A man can go without sex, but a woman could not go without food. There were substantial problems in this arrangement, such as malnutrition, infectious disease, and huge economic inequality. People were much less happy than in the hunting society. Still, most people could survive by doing agricultural work, even if they did not own land. The level of skill needed was not very high.

Eventually, agriculture became so efficient that some could produce enough food for all. Those who were not growing food could become literate, and knowledge began to grow more quickly, leading to the industrial revolution. This third phase was marked by increasing lifespan and health, and growing social equality. There was a variety of jobs ranging from unskilled to skilled, so almost everyone fit in. People moved to find highly paid specialized work, which eventually undermined the extended family, and then the nuclear family.

Now we are in a post-industrial phase. Human skilled workers have been replaced by machine automation. Engineers are still in demand, but what they do is replace human workers with robots.
(Robot is the Czech word for "worker").
There certainly is work to be done, buy only a few of us are adapted for it. We still want to be hunter gatherers, but there is no market for hunters. Many people work in parasitic professions like law, advertising, bureaucracy, and the FIRE economy. Advertising is a huge effort to stimulate consumption of un-necessary stuff. These activities divvy up the pie, but do not really make it bigger. The criminal class and resources dedicated to controlling crime are increasing.

The kinds of work available now are so different from hunter-gathering that people either can't do it or find it repugnant. Hence the term "mis-match theory". Our genetically programmed nature is mismatched to modern civilization. What portion of the population can do calculus? What portion really likes to be a waiter, clean floors, or take care of the chronically ill?

One radical solution would be to tax at very high rates and just divvy up the money.

I don't really like this solution because I am very pro-liberty and against state compulsion. But it seems a logical answer to the problem that all necessary work requires fewer and fewer workers to do it.

References:

Sex at Dawn (http://www.sexatdawn.com/) :
Book length treatment of these ideas, with emphasis on sexuality. Best book I have ever read, on any subject. It has some weaknesses, which you'll notice if you read the footnotes, but still, it is the best and most important book I have ever read.

The worst mistake (http://www.ditext.com/diamond/mistake.html)in the history of the Human Race

short article by Jared Diamond (guns, germs, and steel) explaining that life got much worse after the agricultural revolution. Data from skeletons, etc.

shiny!
05-24-12, 06:26 PM
You raise many good points. From a U.S.-centric POV, we became a post-industrial society by exporting our industry to developing nations moving towards industrialism. Peak Oil is going to change everything. I think we'll have a harder time downshifting our standard of living to a world of Peak Cheap Oil, and later Peak Oil, than will countries that have a lower standard of living to begin with.

I've wondered for a long time about how many skilled jobs are being replaced by machines... and wondered why this issue receives so little attention. Our K-12 educational system was developed during the manufacturing era to make docile factory workers who were conditioned to perform and stop performing at the ringing of the bell. Conditioned to conform, not innovate. Conditioned to defend the status quo, not rock it. It's the intellectual equivalent of foot binding. Products of this system are now in charge of our world.

Won't Peak Oil cause a shift back to local products and local production in order to conserve resources? If so, we might see a return to skilled labor, and to people once again having to work harder and longer hours to put food on their table. Longterm unemployment is already changing how we live. Multigenerational households are making a comeback, as adult kids can't afford to move out on their own.

We're in a major paradigm shift. What are the chances that policy makers A. see this, and B. respond in a timely and appropriate manner? Less than zero, IMO.

Redistribution of wealth doesn't work for so many reasons. I don't need to go into them here, because all you need to do is read history. It's so against human nature. We need to think deeper, higher, more radically.

My favorite book exploring ideas about wealth and property, government and anarchy, communism and capitalism... how no economic system can work if you fail to factor human nature into the equation, is Ursula K. LeGuin's The Dispossessed (http://www.amazon.com/The-Dispossessed-Ursula-K-Guin/dp/0061054887/ref=sr_1_1?ie=UTF8&qid=1337892635&sr=8-1). She asks the important question: Can we transcend our nature? If Fahrenheit 451 was real and I had to choose one book to memorize, this would most likely be it.