This Time, Many Jobs May Be Gone For Good
Americans have a lover’s faith in technology. And no wonder: for much of American history, technological innovation has lifted millions out of poverty, giving birth to new industries that require vast armies of workers.
True, many businesses have fallen by the wayside in the process, but those job losses were usually compensated by the opportunities created by new industries. The buggy whip business was devastated by the automobile, but car companies required many times more workers than the buggy shops, so this “creative destruction” was a net positive for the economy. Railways, the telephone, refrigeration, and air travel are only some of the technological advances that drove median household incomes and national GDP steadily upward for generations.
In his penetrating new book The Great Stagnation, economist Tyler Cowen warns that this may have been a temporary and anomalous phenomenon. Cowen calls the period from roughly the early 19th to the mid-20th centuries the era of “low hanging fruit.” According to Cowen, technological advances in this period were relatively easy to produce and exploit, resulting in a staggering explosion of living standards.
But by around 1970, most of this low hanging fruit had been plucked and growth rates began to slow. Indeed, growth rates are “lower today than before 1973, no matter what exact numbers you settle on for the absolute living standard.” Cowen sees this fact directly tied to the innovation plateau that was reached around the same time: “The United States produced more patents in 1966 (54,600) than in 1993 (53,200),” he notes. “Meaningful innovation has become harder, and so we must spend more money to accomplish real innovations, which means a lower and declining rate of return on technology.”
What’s worse, our few recent innovations tend to be job destroyers. The Internet, for example, has decimated whole sectors of the economy (try finding a travel agent these days), and created very few new jobs: Cowen notes that Google employs a mere 20,000; the increasingly ubiquitous Twitter only 300. Facebook has millions of users, but only about 1,700 workers.
This digital depressant trickles all the way down to old fashioned companies. McDonald’s recently announced it will do away with cashiers in many of its European restaurants, replacing them with touch-screen ordering systems. This innovation may (or may not) make ordering your Big Mac a faster experience, but it will definitely eliminate countless opportunities for young and low-skilled workers.
This is the great paradox of our modern economy. We possess more things that give us more pleasure and comfort than ever before, but those things, by and large, were invented a long time ago. Their economic potential has long since maxed out.
What you say about historical trends may very well be true, the low hanging fruit is gone, but it should never be forgotten that this is the era when terrorists were not subjected to “enhanced interrogation” even if it meant saving the lives of our countrymen,terrorists who were killed were given a “proper” funeral in accordance with the enemy’s traditions so as not to offend them, caribou in the arctic were not disturbed merely for the oil that could have made American lives better, that we used already exhausted finances to provide a mediocre health care system for a population that didn’t want to be responsible for its own needs, and we showed tolerance and understanding for a religion that sought to destroy Western Civilization, America and our only real friend Israel, whom we refused to support.
Oh well, there are fabulous ruins in Rome and Athens; maybe someday in the future people will come to Washington D.C. to see fabulous ruins of government buildings of another once great republic.
I agree. The decline of will is a real component of our sissy-like cultural inventions of late, and of greater impact than some hypothetical decline in the technological potential. For instance, our president is pathologically afraid of saying anything potentially offensive to our enemies, but refuses to allow new drilling technologies (such horizontal drilling and hydraulic cracking) to exploit our vast untapped underground resources in Utah and Colorado.
I’ve been telling my friends, those few who will still listen to me, that the deliberate destruction of our industrial base would have far reaching consequences. Here they are. Even the Italians are smart enough to know they need factories making things to sell and export.
I have been blogging about this topic for a long time…
True and the Italians also have one of the West’s best underground economies to avoid their government. Soon enough I suspect we will do the same in an attempt to keep a couple of nickels in our pockets rather than send all of them to D.C.
I agree with you, Glenn. Manufacturing is key to remaining viable economically.
Overall, I agree with the article’s appraissal of where we actually are. But, I think it reasons from our current status as a nation to draw some conclusions about technological innovation that I think are unwarranted.
Essentially, I think the article misses two possibilities where industry is a meaningful component of the job base:
1) The Supply Side. If industrial and manufacturing jobs still existed, then many of these “not-so-low-hanging” technologies like the internet et al would, I think, yield a far more profound effect on our lifestyles. Imagine being a manufacturer and having your advertising budget slashed to 10% of its former size; prices would plummet and output would soar as overhead shrank under such a Hudson-esque scenario.
2) The Demand Side. First, if outputs are going up as described in point 1, then demand for labor rises as well, meaning higher employment, higher wages, more aggregate demand in consumer markets, higher and healthier GDP, a lower trade deficit, etc. Second, even if my Hudson scenario didn’t take place, and the employment landscape remained relatively unaffected by new marketing efficiencies, then with a sound wage base, these new efficiencies would still raise consumers’ standards of living by reducing the marginal costs of products they already buy. When your Big Mac gets cheaper, more of your money that was tied up in Big Macs can go to savings, or investments, or a new washer and dryer, etc.
During the Second World War, American industry was able to stop what it was doing and re-tool almost overnight to produce the arms and materiel to equip our military as well as those of the allied nations to win the war (GM made airplanes, Maytag made tanks and machine guns, etc.)
Today, if there were a crisis, could we do that?! We have lost a huge portion of our industrial manufacturing capacity and the institutions to train people for skilled trades (welders, carpenters, machinists, etc.). Much of this as a result of the over-regulation of industry and the crushing influence of unions driving our businesses off-shore.
Thank you, big government.
Could you imagine boy Geitner leading America through any crisis? Hell, forget about Obama.
Excellent article.
When the machines do all of the work for us, how will we distribute the wealth? I recall in the 70′s watching a back-hoe dig a foundation for a house. One man, one machine, one afternoon. Previously, it would have taken maybe five men five full days to do that job. Granted, diggers aren’t rocket scientists, but there was a time when people of limited intellect could still be proud to earn an honest living by the strength of their backs. Fast-forward 40 years, and we see that they are all wards of the state (not necessarily by choice). With no economic opportunities, they naturally vote for a state that provides more goodies.
We must become less “efficient,” not more. That’s heresy. The efficiencies of scale went off the charts of reality. We need to break the gigantic concentrations of economic power, private and public, into much smaller units. Yes, they’d be a little less efficient that way, but smaller less-efficient units would provide much more employment for all our citizens.
We are far into a system in which a tiny handful control all the economic and political power. Freedom never survives large centralized governments that determine the distribution of income.
Part of what you’re observing has been brought on by minimum wage laws and political activists. There is no way a company can avoid eliminating, outsourcing, computerizing, or mechanizing jobs when there are influential knuckleheads who think every job should provide a “living wage”.
There is no way a company can avoid eliminating, outsourcing, computerizing, or mechanizing jobs when there are influential knuckleheads who think every job should provide a “living wage”.
Amen! We have gradually suffered through a Liberal redefinition of the “living wage” (or “poverty” level). It used to refer to what it takes to survive. Now, the poverty level is defined as “not having what rich people have”!
The minimum wage is part of the problem. Another source of trouble is the mindset that every kid has to go to college. It’s only fair, after all!!!! No matter how good or bad your grades are, you must be GIVEN the opportunity to advance yourself! Bull! Some kids aspire to a high standard and some don’t. They make their own decisions as to where they belong in the workplace.
Working “classes” are a part of the natural economic structure. When you try to make everyone equal, you undermine the system. When “not working” becomes one of the options, why would you be surprised that many prefer that option?
What you suggest is a lower standard of living for Americans. If, as you apparently suppose, we are incapable of competing in the world economy with our present standard of living, then our standard will lower itself one way or the other. But I would hardly embrace it. We must struggle to reform our educational system so our children are trained to compete in an interconnected world. We still have (an increasingly diminishing) shot at remaining economically dominant. Let’s try not to blow it.
It’s not that we’re advocating ‘lower standards of living’, but a more realistic view of what living wages should be. Does someone who works a cashier at a grocery store really earn an upper-middle-class lifestyle with two cars, cable, a couple of XBoxes, etc.? Many, many people think that they do – so long as they’re the cashier.
‘large centralized governments that determine the distribution of income’ eventually fail often in bloody carnage.
Capn Rusty,
I think you are on the right track re: your comments about concentrations of economic power. I will posit that “too big to fail” organization (any extremely large organization) are not a result of the workings of a free market. Layers of Bureaucracy are the result and can only exist in an environment of governmental largess. Taxes, regulation, the selective application of antitrust laws cause organizations to grow beyond there free market size. The level of of friction and inefficiency increase at ever accelerating rates as the organization grows beyond its natural size.
Here we are, subject to the limitations of a government corrupted market — hardly “free” in the classical liberal sense — and we lose sight of how far and how fast a truly free market can elevate us, all of us. There are no more low hanging fruit, because we’ve been digging ourselves deeper into a trench below the tree of liberty, and now it’s too far up to reach to grasp true opportunity. Get the government off our backs, and watch us flourish.
Sorry, missed your comment before posting mine below.
You hit it out of the park.
“Cowen calls the period from roughly the early 19th to the mid-20th centuries the era of “low hanging fruit.” ”
This amounts to being the same idiotic idea promulgated at the end of the 1800′s–by the then head of the US Patent Office–that everything that could be invented had. We get rid of the disincentives to be entrepreneurial, industrious, and creative, and we will be laughing at Cowen’s book on our way to the bank.
Only too true. Right now we waste human potential like mad, due for the most part not to the nature of the universe but to human nature–the bad kind. There are countless inventions that still have the potential to revolutionize the world AGAIN, but who wants to risk it all when a) the government will punish you for creating wealth and jobs, and b) general insecurity means anything one has is already at risk, making wagon-circling more popular. The mania for safety and security manifested in things like seatbelt laws and anti-smoking laws are anathema to a nation of innovators, i.e. a free people. It’s impossible to take away freedom from somebody who believes himself to be free, but if you convince him he’s not really free, then he’s not. With so many people believing themselves unfree, all the inventions in the world won’t spur growth, because the primary motivating factor will be avoiding loss, rather than increasing wealth. Just look at any manager or director or vp in any corporation you like, and chances are you’ll see a guy or gal terrified of losing money, not greedy to increase profits via innovation. Trying something new means a possibility of loss, so instead of bold trailblazers we have a herd of groupthinkers chasing fads like teenyboppers chasing Elvis or the Beatles.
Herd mentality doesn’t belong in America. But we’ve got it big time.
That is not the only problem with this analysis. The notion that autos provided more jobs than buggies may or may not be true, but it is fundamentally wrong-headed to regard it as important. Exactly how many jobs does the author think the world needs? The real achievement of the Industrial Revolution was eliminating vast numbers of jobs in agriculture. The task of feeding everyone went from the job of 80% of the population to less than 5%. This freed up the others to do other things, like build cars. A “job” is a requirement for a human to produce a good. Increasing “productivity” necessaily means reducing the number of jobs for a given output. Thus all economic progress eliminates jobs.
The problem we have now is that more and more of the gains in productivity are being wasted by government. Henry Ford’s workers built cars because that was how they could earn a living, having lost their agricultural jobs to increased productivity in the agricultural sector. But displaced workers now find new “jobs” supplied by the government sector, like “Climate Scientist” or “Land Use Planner”. This enables them to continue to claim a share of what the economy produces, but it seldom adds to what is produced. Government produces very little of value, yet soaks up an ever larger share of our societal surplus.
Something that Obama should pay attention to is the demise of the book industry. As the “computer” generation gets older (those kids born and raised on PCs and Apples), more and more of them are going to use digital formats rather than paper books. The Kindle and the Nook, not to mention the PCs that are already out there, are rapidly making e-books the norm rather than the exception. If more and more people use e-books, fewer and fewer paper books will be manufactured.
Does anybody out there know what that would mean to a huge undustry in this country? Book publishing hires literally millions of people in this country. From the people who cut down the trees for the paper, to the people who make the paper, to the printers and print shops who print on the paper, to the binderies who make the books, and to the trucking companies that deliver the books (mostly union people, I might add), this industry employs A LOT of people.
So where do they all go if paper books just disappear? True, you will have a few people making their living disigning digital books, but everybody else will lose their jobs. We don’t even make the computers in this country that will put these books out of business because they are made overseas. In short, you will see the destruction of an entire industry and no prospects for jobs for these people. True, some “how-to” books may still be printed, but those may also go away once our computers become bigger or more portable than they even are now.
So what do we tell the people who are replaced by these computers? It was nice while it lasted? I don’t know, but you’d better start thinking fast. The Kindle alone is begnning to make new paper books obsolete. Soon, we may lose yet another industry to technology and these jobs may be lost forever. Not a great position for any politician to be in.
..you hit on the problem. but it is the inverse of what you said.
the government should stay out of commerce. (other then ensure there is no fraud in the market place)
as much as I don’t want books made of paper to disappear I don’t think the government should even think to be involved. this is an example of how we get trapped ..there is always some special interest, enough to get everyone under the yolk of the government.
we should be making our own steel, drilling our own oil etc. but we have accepted dumping from slave states like China.
Remember, we are converting from a simple incandescent light bulb to a multiple component highly technical mercury laden flourescent bulb with nearly fifty individual parts, all welded, glued and soldered together. Each of these parts demands mining, drilling, driving, flying, other shipping, painting, etc etc……millions of jobs have been created to replace a simple light bulb. Too d a m n bad all those jobs are in China.
Never buy “survival guides” on kindle [counterintuitive in cases of emergency].
What is going to happen to libraries (and librarians?) We recently toured the Clemson Campus (which is gorgeous, btw). As we toured the library, I wondered how much students actually use it any more. Won’t it become more and more obsolete with each new Freshman Class? Do libraries become nothing more than book museums in ten years?
I’m the man. I spent 35 years as an Operations/VP/Manager in my own and working for other national publishing companies.They are going away.
I get my news from the web. I no longer read the NYT, although part of that is their incessant move to the left. Books, newspapers, magazines, etc. are all going electronic.
Geez, how I loved the smell of the fresh ink on newsprint. WOW, no more ink, there goes some more jobs.
The list is endless of the number of people affected by the loss of paper publishing.
Well at least for the time being we will need printed labels for pickle jars and the like. Hurray for Pickles.
Interesting point. Better closing comment, We need to keep government out of the business of maintaining employment levels.
“The lesson? Historical trends rarely follow a straight trajectory. More often, they plateau, and then reverse.”
Unfortunately, Mr. Patterson failed to complete the above sentence. After trend plateau, and then reverse.., they start over again. Has happened every time it has been tried. For every breathless optimist, convinced that the “good times” can go on indefinitely, their is a corresponding Malthusian convinced we are near or at our apex and the only way forward is down. Fortunately for the rest of us, they are both wrong.
Isn’t it pretty to think that if we could reduce the size of government that all the rest of these problems would go away? Would people start buying newspapers again? People have not quite figured out how to create industries via the internet to replace those which have been lost, but one can at least see the potential, even if the five guys who dug the holes for five days, or drove the trucks which delivered the newspapers each day are all looking for works, as are the guys who drove the logs to the mill to make the paper and many of the people who wrote the columns and news that went into the paper. Oh well.
Our success is also what has hurt us. Workers, whether unionized or not want to make more money, get their piece of the American Dream, and when times are good, they get at least a piece of it. At the moment, the government serves as the stop-gap provider for all those who are unemployed.
One has to hope that we can outwait China’s current dominance until their workers succeed in getting more money and consuming more stuff. It is difficult for me to conceive how we could do this without government “help,” which is not to say that the government is not a bumbling, stumbling giant, but it is OUR giant. (Now there is a thought for PJMers to chew on).
The government gives ME more of a voice to stand against other huge corporate forces out there. I think that it needs to tax a little more and spend a little less, just so that it won’t go bankrupt. No, the government is not very efficient, but without it, we would be back to bread riots. I wish Ryan and Boehner luck in coming up with something that makes government more efficient, but they are going to bump into bi-partisan bludgeons when and if there are real cuts to Medicare etc. At times, the right and left combine to weaken us, rather than strengthen us, until each are forced to give up something in order to achieve something. The left must give up some spending and the right must accept more taxation. That is the common sense formula; now apply it.
This is like appreciating your kidnappers for feeding you. The government cannot provide you anything without taking much more of it from someone else, skimming and wasting most of it, and then giving you the small piece that is left. The people they took it from were the most productive among us, the job creators, the builders, the true providers. The real things (jobs, opportunity and progress) were stolen from them by the government so that you could be bought off with the morsel left over after they take theirs for creating nothing. Your support was cheap for those who bought you, while being very expensive to the ones who paid for it, including yourself. You are being played.
But our kidnappers are US! If you accept America as a place with TWO parties and somewhat different ideologies, then you have to work with that; therefore my admonitions. If you beleeeve that we are going to return to some older time (people were rioting for bread in Boston in 1713)or have a revolution, that is something else; but if you want to work with what we have and are likely to get, be smart.
The deeper question is whether we are dealing with a slavery question, where all compromise just put off the final conflagration, or a lesser question, which can be managed with compromise, economic policy, etc. I go with the latter, because I am conservative, not radical, in my analysis of our current situation. Many here are radical and believe that major upheaval is necessary. Do either of us really KNOW? Nope. I am used to working within (and being paid by) the part of the system which I can manage. I ignore or by-pass the rest of what I can.
Rush et. al. makes a fortune not by-passing this stuff, but lifting it in all of its bloody shirt glory every day. Millions respond, “Amen, brother!” but we all vote in the same elections, pay the same taxes, line up in the same lines. I know that you guys are my countrymen with a certain point of view. One would hope that you know that I am your countryman, but with a different point of view.
Where we meet, is some mealy-mouthed center, where things actually get done. I can deal with that center; can you?
Boston bread riots; 1713:
http://www.massmoments.org/moment.cfm?mid=148
D-White. “Centrist”.
“Where we meet, is some mealy-mouthed center, where things actually get done. I can deal with that center; can you?”
You can meet something there, if you wish. And get things done. Some may not want that. Paper or plastic?
In the “Center” of the “lefty” and “righty” butt is a butthole. Empty space.
Is that why you attempt to fill it with the Pick It Fence? D-White abhors… a…
There selling postcards of the hanging…
Back to your obsession with buttholes. To you that really IS at the center of everything. Not sure that I can help you with that, but I can help you with “there” vs “they’re.”
What’s the matter D-White, don’t you dig poetic imagery? In The Modern Tweedland of English Teachers, doesn’t Ginsburg rate over Homer? Get with it man, don’t be L7. Geez, gotta get a grant somehow. Maybe piss in a bottle with… No, too conventional.
Do you know the difference between But and Butt? Seems you’ve taken But as Butt. And everything not D-White Proper gets labeled an obsession. I guess this blanket way out could be D-Whited onto anything. Like, somebody wakes up every morning! Like obsession! Yes, you decide, ok, when The Ping Pong Tongue gets jammed, grunt-label obsession! Bam! Freedom from thought. Did you know Liz Taylor too?
Then this –
“Our success is also what has hurt us.” Are you serious? Knee jerk anyone? This is what is at the hearthole of Pick It Fence Butism. This notion has been peddled for so long now that reflexively regurgitating it by Nanny Like Heartholes has caused more job loss than the unionized public school system.
And the Red Pencil Neck appears and corrects. Thanks again, and remember don’t let your But Be Butt!
There… painting the passports brown
Well, Dwight, call it a plantation or a collective, slavery is slavery. And you Copperheads can have it.
Well, using your imagery, the greatest leap forward in Federal power was when the Republicans (sort of) abolished slavery on the plantations and defeated the Copperheads. The United States became less individual states and became a much more of a (gasp) central government.
Dwight…You said [“Isn’t it pretty to think that if we could reduce the size of government that all the rest of these problems would go away?”]
How can you not see the millions of avenues open to individual and national prosperity if, the government was once again at the constitutional intended size and authority? A small constitutional government is what led America on the journey to its once greatness ole chap! Even the democrats beloved Jack Kennedy was smart enough to know that ‘government’ should not be what the people and the nation relied upon for success and prosperity….and admonished according! Surely you’re as smart as that plug was and he was a devout socialist in heart. America’s once greatness came through the people…not the government!
Would that be the government of the people, by the people, and for the people? The people vote.
First, I claim no expertise in economics, just a lay person’s opinion. It’s not that the government creates the wealth (what was it, bootlegging that did that for JFK’s old man?)but it has grown, apparently because of the NEED for it. You see the limits to Federal Government as set out in the Constitution as the almost magical key to our prosperity, whereas, I think that it was that and a lot of other things, many of which have changed.
There is something that you feel in your bones or “know” that I don’t feel or “know.” The “educated” consumer-employee in an increasingly service oriented economy is probably more government oriented that you can imagine, and certainly more so than you feel is right.
Every event which now threatens us seems to INCREASE our need for government response. The government is supposed to DO something about it. Politicians of the left and right spend their lives and fortunes trying to convince us that they can DO something to help us. The government has become much more the ground of our being (gulp) and it is difficult to see what would change that.
There may well be some natural law balancing point, where (at least when we are not in wartime) government should not exceed x% of the GNP, or bad things happen.
You say, get back to the old time religion, whereas I guess that I say, make sure that the new religion is as smart as it can be (as in solve for x.)
What the hell D-White. Wow, one can just scroll down a bit and, voila! Wisdom of the ages!
“Politicians of the left and right spend their lives and fortunes trying to convince us that they can DO something to help us.”
That should read –
“Politicians of the left and right spend your life and fortune bullshitting you so that they can help themselves.”
There, their, they’re, D-White, just put yourself in the good hands of Barney Frank, and have another gin. Look! The telescreen is displaying a man with a long beard with a white turban on his damaged head!
The beauty parlor’s fill with sailors
The circus is in town
Dwight ole buddy, lets see if we can simplify a couple of things.
When the U.S. eventually became the worlds leading processors and manufacter of goods we reigned supreme on all fronts and all levels. We not only evolved into the leading producer, our propertity led us to become the leading (purchaser/paying) consumers of the world.
Now, assuming you can agree with that comment, what part of that equasion has changed? We make less goods, export less goods and do not enjoy the same levels of national prosperity? If you can agree with the latter, what caused this? Unionized and government regulated non competitiveness? If you can agree that the latter is significantly true, then how much is government regulated by departments and agencies of the government that connot be supported as constitutionally valid?
Our nation cannot survive as a predominate consumer, credit, and service oriented economy! To survive economically we, as a nation MUST be a nation who produces predominately domestic manufactured goods….. along with services and consumerism. When you disturb a part of that equasion you’re in BIG trouble….just as we are today. The government, abusing the constitution, has brought us to this point of national demise!
“Now, assuming you can agree with that comment, what part of that equasion has changed? We make less goods, export less goods and do not enjoy the same levels of national prosperity? If you can agree with the latter, what caused this? Unionized and government regulated non competitiveness? If you can agree that the latter is significantly true, then how much is government regulated by departments and agencies of the government that connot be supported as constitutionally valid?”
When profits are being made by companies and their stockholders, the workers want their share too. The inconvenience and loss of profits in work stoppages lead companies to somewhat acquiesce to worker demands. When this happens over and over, the salaries, standard of living, and general desires of our workers raises the cost of production here way above similar costs in countries with much lower standards of living. That is pretty basic. These workers, and one would assume that there are more workers than CEO’s and stockholders can vote. Consumers and workers both appreciate safer products and workplaces. It costs more money to dispose of wastes safely. Seems like a natural progression to me, born of success.
Is your position: “look workers, it would be nice if you had a safe workplace, but we are not going to mandate it because the Constitution does not (or should not…permit it, except for your favorite, the Commerce clause.”? Ditto for consumer products.
Hi D-White.
Must it always be adversarial? Maybe it’s that way in the unionized world of tweedism. Where teachers are at war with all, and teach that concept to all who past through, by force, Tweedom. That one must look on others as potential threats.
It seems you’ve never held a job where people actually work towards their own selfish ends, which means that one must work with others towards their success, otherwise they end up in the “center” of the… butt… alone and dead. The notion of rulers and ruled is basic Animal Farm. You simply can’t force production and creativity on a competitive level out of people any longer. Top performance requires freedom and trust.
People can handle freedom, it’s just that the D-Whites of the world crave control to the degree that they will gladly surrender their (they’re) freedom in drips and drops so as to at least have the “right” to determine that someone else may not have too much of that terrible demon – success. There is no evil in success, only those who wish redefine it for their own unearned ends to power are evil.
Wake up. Join those who will build a better world by reason rather than envy. At some point one must move forward from 19th century logic and realize that so much of that old thought has been an utter failure.
The previous Mr. President was correct. People want freedom from a coercive State. The cynical Ping Pong Tongues couldn’t handle the potential loss of their ephemeral power. Now they stand exposed, and proceed from self created weakness. Look at the current Mr. President. He would rather play the old safe game than come out with his leash removed.
Bashar al-Assad The Reformer and Mr. President Hope and Change. They like the leash. And the lash. Do you too D-White?
I hear the train a comin’
It’s rolling round the bend
I do not see how your response changes my analysis of what has happened one iota. I described what HAPPENED. You are apparently blaming me and then embark on generalities on getting above envy, control, etc. Heady stuff, but not exactly grounded. Fill in the blanks, because so far, there is more space than substance.
D-White, you’re a metaphor, try that.
Hey, just got through rehearsing Stairway to Heaven last night, got a sneak peek, and guess what! Heaven is unionized and the teacher’s union works for the IMF. As unpaid interns.
Hell looks better every day. At least Mr. President plays basketball.
I bet there’s rich folk eatin’ in a fancy dining car
They’re prob’ly drinkin’ coffee and smokin’ big cigars
Well she’s buying her stairway to heaven. Give her a lecture on being more idealistic. Bought that album MANY, MANY moons ago before we all knew that Stairway was a classic.
Are we now clear that you are the idealist here and I am the practical one, but then…. you are young. It is (or WAS, for a righty) left jab-straight right-left hook, trying never to get too far off balance and still generating some power.
Is it finally sinking in that your D-White tweed cartoon really is directed toward…. some imagined individual? (Essentially a swing and a miss) but what the hell, musicians are supposed to be creative, as long as they can still hit at least a few of the right notes.
Music does have its magic, though. Somewhat to my surprise, I teared up yesterday at fifth graders, including one grandson singing, “What a Wonderful World.” Led to odd dreams.
There is no need for a Government that is larger then the constitutional limits. To Dwight’s comment about the Government not creating wealth: The government is much worse then you suggest, It destroys wealth with every thing it does. No question and no doubt there is nothing the government does that couldn’t be achieved in another fashion.
All part of the Plan. “To each, From each”. We REWARD our Friends and PUNISH our Enemies. Every Dictatorship has needed the Very Rich, and the Very Poor. They need the RICH, because they’re rich. They supply MONEY to the Dictator. (I know what you’re thinking: Why doesn’t the Dictator just TAKE all of their money?) Because, that’s one of those Daffy Duck Magic Tricks. It can only be done ONCE.
The Dictator needs the Very Poor, because their very numbers, will be enough to keep him in Power. He gives them just enough to get bye, and they support him for that. Like the Black Community, and the Democrat Party.
Obama is no different than Hugo Chavez. No different than Mugabe. He TAKES from the Productive People, so as to GIVE to HIS Supporters. Like MUGABE with the White Owned Farms. Ask the GM and Chrysler BOND HOLDERS. Ask SHELL OIL. Ask the COAL COMPANY, that had it’s already approved LEASE, torn up.
Better yet, ask the BLACK PANTHERS how they like being Hussein’s FRIENDS, and not his ENEMIES.
Yep. Everything is right on schedule. The Middle Class is heading for EXTINCTION. The RICH will do as they’re told. And the Poor will be ever grateful, for the SCRAPS that fall from HUSSEIN’S Table.
Welcome to Marxism 101.
Say Goodbye, to the Great Experiment, that was the United States of America.
HARTE MACHT FREI!
Can you translate your german please HARTE MACHT FREI! As close as I can come is Hard work will set you free, which doesn’t seem correct.
I don’t know if this is the same idea or not, but…”Arbeit Macht Frei” (Work Brings Freedom) was the sign over the gates of Auschwitz.
It was unbridled government that put Macdonalds cashiers out of work.
Idiotic market-killing minimum wage laws did it!
And how did we get enmeshed in the current cats’cradle of ordinances, regulations and laws? Exponential growth in laws, lawyers, committees, councils, NGOs, commissions, agencies and communitarian bullies.
If kids serve appreniceships and oldsters could stay active by working part time for their real market worth, the productivity enhancements of digital cashiers would not be attractive.
What are you going to do now? Put those thus unemployed into new councils and commisions to study automation in the fast food business, thereby creating more skeins in the net that’s strangling us?
Good comment. Oddly enough we are heading for disaster because it has been as of yet too difficult to communicate and make aware the majority of Americans about just what you said.
The Capitalists are not going to sell the rope to hang ourselves to the collectivists we are going to pay for them to educate our children to learn how to regulate us into submission. And then we will hang ourselves for being so stupid.
The less effort it takes to produce the necessities, the richer everybody gets unless corruption sets in which is the problem now.
If we didn’t have to fund $70,000 pensions & six-figure featherbed jobs for our political class, a lot of us wouldn’t be under much pressure to find full-time work.
I remember an article in Wired Magazine from the dot-com era in which the possibility of 0 percent employment was broached, and that it would be a good thing. It was right. It would be great to live in the Merry Old Land of Oz.
Good article. Yet I believe the problem is clear as J.J. Sefton (3) and others have indicated clearly. The great advantage of American society during that “low hanging fruit” period was order. Capital was free to operate in a vast country with many resources but the price of social order was low: America was filled with decent, orderly people. As liberal ideas took hold, as they have done in the UK and the rest of Europe, the price of social order increased.
Allow me to explain my simple theory: one sees taxes as the price of order. We pay taxes -in fact we create the State– to keep the bad tendencies and elements of society on check, defend against plunder from outside, and repair the results of natural entropy.
Liberal ideas tend to increase societal disorder by undermining religious piety, questioning patriotism, making a mockery of duty, and supporting “bleeding heart” policies that tempt otherwise productive citizens to stay home and freeload on the rest of society. Those ideas tend to increase real taxes and also produce myriads of hidden losses.
In my view Ronald Reagan proved that increasing order and fomenting a positive outlook betters society and promotes productive activities across the board.
America has been the first country to do many good and bad things in History. Why not being the first country to completely reject Liberalism? I am convinced that a “prodigal son” return to strong Judeo-Christian values and practice can turn this country around. In fact I think that the rejection of Liberalism and the embracing of traditional Conservative values in the U.S. can unleash the greatest era of prosperity mankind has ever known.
There are many technological advances waiting in the wings that do not happen because the country is mired in “enforced disorder” as a result of ridiculous regulatory laws. Regulations have created a crop of managers that know how to milk the state but do little to increase wealth (I called them MBA locusts.) We need more Henry Fords, more people with imagination and creative impulse and we need to give them reasonable freedom to operate and create wealth.
We are the only country when those miracles can happen but presently we are tied and gagged by the intellectual dwarfs of the Left.
Ross Perot was correct but he became a joke for nightly news and comedians just like the myth that Palin is not as sharp as Biden, the most lacking VP in our history. I travel around the USA and see the factories closed everywhere and they opted to save money in Mexico first and now China. There are places in Mexico that are not safe to go but the ivory tower corporate types don’t have to go there so what do they care. Their engineers are refusing to go there to so what do you do, fire the technologists that keep the MBA’s in bonuses? China was after Ross and that has been more devastating to the U.S. worker. Regulations, EPA, NLRB, OSHA, EEOC and the flavor of the day lawsuits cause apprehension in any business expansion plan which is why I think you don’t see jobs rushing back. There is also the corporate ego involved and I sat in one meeting where a company discussed moving back manufacturing because the quality from their China operations was causing distributors to go to the competition. The answer was; “We have to do better but in the mean time price will keep what we have left?” What?
Media outlets that don’t report the truth about regulations and unfair trade practices are clueless. On one hand they praise the government alleged leadership while they cut back on staffing because of a lack of advertising revenue. They are not smart enough to connect the dots that they support.
At the end of the 19th century, one of England’s leading physicists said that he felt sorry for the physicists of the 20th century, since everything in physics had been discovered. The “jobs” shortage in the US today is purely a result of boneheaded government policies: overregulation, tort law gone wild, a job-killing “health care” law, and a dual exchange rate that forces manufacturing jobs overseas. Correct the government policies, and the free market will create the jobs.
All this romance for a bygone era reminds me of the story of the two joggers who stopped to cool their feet in a stream.
Suddenly a charging bear comes crashing through the trees. One of the joggers stops to tie up his laces.
The other fellow yells back “what are you doing? Shoes wont help you outrun a bear.”
“Don’t have to” He shouts back “Just gotta outrun you”
We can do just fine in competition. Just need to keep the government from slowing us down.
I really don’t think it is as bleak as all that. We have always had creative destruction, but we need to keep the Government from stopping the process by always getting in the middle to tip the outcome to some favored group.
The collapse of housing prices is a great example. If all these billions being used to try and stop the housing market from correcting would get out of the way we would have a final drop in prices and the market would adjust. Millions of people who want a home but can’t afford one would find that for a 25% down payment they can get a home. The GDP that would be created by the effect of tens of millions of creative young people of all orientations buying and fixing up these properties would help jump start the economy in millions of ways.
My brother in law lives outside Fort Myers, FL homes in a low income but safe neighborhood. Homes there are selling for between $20,000 for ones coming out of forclosure and $50,000 for those that are in good shape. This is 45% less than six years ago but they are affordable and if we still had a functioning housing private mortage market in this country there would be millions of young people who have young kids putting 25% down and doing a 15 year long term mortgage for $400/month and beginning a life as an American producer. It is because the public can’t figure out the real nature of the problem that we are losing this battle. It is the Progressive/Liberals who are making the free market unable to function. Until we realize this and retake control of our country, we have no hope.
The answer was; “We have to do better but in the mean time price will keep what we have left?” What?
YES. I could share many anecdotes like that too. We need less lawyers and less MBA’s. I believe the speed of American decline has increase since the MBA programs started. How can someone learn how to hack it in the real world of business by listening to university professors. That is a sorry concept in my view. One only has to look at the great industrialists and financiers of the 20th century: many of them had very basic education or were self-educated.
It was the shining of the light of truth that caused the Soviet Union to collapse. It is a similar power that can free us from the millions of restrictions and regulations that are crippling us now. Think if we could get people en masse to understand who and how the enemy is killing the US economy. We only need to light up the duplicity with clear and open communication and these utopian Collectivists will be shown for the fools that they are. That of course is why they are terrified of the internet and spend billions on trolls and complicit news agencies to disrupt any real understanding. BUT EACH OF US CAN CHANGE THIS WITH OUR OWN ACTIONS,REGARDLESS OF OUR AGE OR OCCUPATION.
This is a quote from Vladimir Lenin who knew what he was doing, and it is the same as what his followers in the White House and Congress are doing right now.
“The bourgeoisie is many times stronger than we. To give it the weapon of freedom of the press is to ease the enemy’s cause, to help the class enemy. We do not desire to end in suicide, so we will not do this.”
The Press isn’t just complicit they are the enemy.
One of many truths that the elites don’t want you to realize is that the standard big commercial banks really don’t have any viable function any more. They used to be the collectors of deposits from the masses and then the financers of loans to small to medium American industry. The Government’s intervention in the interest rate market and the voracious needs for more and more capital to fund the growth of a centralized State Government ended the banks function back in the early 1990s. Money market funds collected most of the capital and Wall Street doled it out. The internet has taken that to yet another level with the reduction in the need for an distribution arm similar to the old brokerage networks and has even marginalized the functions of the big investment banking firms. The secret they don’t want you to notice is that for the fist time in over 150 years we really don’t need to be enslaved by these financial wizards anymore. Since money is only something they print on their presses to buy the US treasury bonds that the market won’t buy at the interest rate that the US Treasury insists on selling them for the entire concept of what is capital is coming into question. The key is that when there ceases to be trust in the value of the dollar or the magic of the money spinners the people and their natural creativity are returned to their rightful place of the real powers in the economy. It isn’t us who are obsolete it is our so called “betters” who are well aware of what I just said and are figuring out in their meetings just what they can do to put the genie back in the bottle before we all notice it isn’t just Barack the King who isn’t wearing any clothes. Figure out who they most despise and that is the leader who will focus the people’s strength to tear this corrupt structure down.
First, you have to understand what wealth is, because it isn’t money. Wealth is the ability to do things that you want to do. People prefer cars over horses; cars made us wealthy. People prefer to be able to see at night; electricity made us wealthy. People prefer television over playing checkers; television made us wealthy.
Only innovation makes us wealthier. Not assembling cars, not waiting on tables, not fixing toilets. Those are necessary activities, but they don’t make us wealthier.
The 20th century was extraordinarilly innovative. It made us far wealtheir than our ancestors could have even imagined: cars, radio, planes, medicine, television, birth control, labor-saving devices, the internet, mobile communications, agricultural productivity, computers, entertainment options. It was an explosion of creativity.
But I think it’s foolish to assume that humanity is done inventing.
There are two problems. The first is that we have a Ruling Class that seeks only to consolidate and institutionalize its own power. They HATE innovation because the innovators acquire incredible power. Thomas Edison, peasant, became more important than any aristocrat. Rulers far prefer to restrict that sort of thing to an occasional semi-noble Isaac Newton. It’s a power thing, and they want the serfs in their place. This, of course, is easily correctable. We just need to recognize it and keep the guillotines sharp.
The second problem is more troublesome. It was easy for farmers to become factory workers. They might not have enjoyed it, but they could do it. But now we are past the stage where a factory worker can become a telecommunictions engineer. Few can do it. And the jobs the factory worker can do, assembly type work, can be done far cheaper in developing countries. This is a real problem, and the results are evident in many of our cities. It’s not that the people don’t have sufficient wealth. Nobody starves in this country. No it’s not about wealth, it’s about people who aren’t contributing in a meaningful way. It’s very dangerous. It’s lethal. And don’t call me racist either. It’s not a black white thing. It’s a brain vs brawn thing.
Regarding the second problem, there is a solution. Again, it’s innovation. If we can remain innovative, the innovative elite will continue to create the products, services and IDEAS that the world will want to buy. That, in turn, will continue to enable a service economy (repairmen, waiters, day care workers, nurses, etc.) which are useful jobs that average people can do. But only if innovative genius and the infrastructure to enable it is repaired (capital formation, the ability to get rich, limited regulations, freedom, real universities not affirmative action credential mills). You know, the infrastructure the Ruling Class is doing everything in its power to destroy.
Well said and on point.
when today’s american socialist, crony capitalist, over-regulated bloated bovine of an economy gets labeled “free-market capitalism” no wonder the pessimism drips like an intravenous anesthetic
just look at all the innovations that have happened despite our current economic straightjacket
we have no idea what would happen if we actually unleashed and unburdened our economic potential except that individuals would be freer and the concentration of power would be dispersed
our technology would quickly be put to the test in channeling and expediting the resulting output of billions of people engaging trillions of voluntary exchanges every day
@proreason
you are correct about all but one thing…..we dont need to keep the guillotines sharp, we need to dull them through use, perhaps wear them out.
While most factually informed can certainly agree that there will not need the historical labor force of the past, going into the future, the author misses some of the most crucial points of act. For example. The author excludes the consolidations and centralizations of the nation’s largest core economies beginnings in the late 50′s going forward and the myriad of factors spawned from that, that has led to the systemic demise and labor demands.
Putting aside the labor unions afflictions to industry and labor, and addressing the lost innovation the author addresses. It used to be that there were many, many localized shops that were involved in manufacturing support, from machine shops to mechanics, to the end user, that contributed directly or indirectly to innovation. One example today, is that of the agri folks in central and western Canada. They’re forever taking mfg’d equipment and re-engineering it to work as required for their circumstance. They don’t waste time trying to work with the mfg anymore as it falls on deaf ears at the centralized (U.S. branded) corporate offices. Likewise, filling patents to advance a product or new product is today a nightmare largely created by the government and large consolidated corporations….leaving the little innovator out of the loop or totally screwing him if it is a critical advanced idea.
The ‘system’ of today, largely restricts an open field of innovation outside the consolidated giants of industry….including government supported granting to education institutions . Innovators by the thousands are ignored and discouraged…..not to mention the lacking means of funding to innovate and mfg on a private small scale….especially, new product innovation.
The labor union component is an entirely separate story of industrial economic horror.
The main determinant of standard of living is our collective productivity. Capitalism and free markets might not distribute that productivity to everyone’s liking, but it certainly maximizes it. The objective of any sub-population of the world is to be as productive as possible – but not necessarily to make everything they need and want. For example we can’t make steel as cheaply as China and they can’t produce certain foods as well as we can. We are both better off if we do what we do best and trade.
The problem comes when the GDP of individual economies – like Greece and like our own – becomes dominated by the costs of government, entitlements and health care. You can’t trade those with anyone and in the end we are all dividing a shrinking pie. When seen in this light, pumping trillions of “stimulus” dollars into the pockets of public service projects and workers seems exactly the wrong thing to do. That was money that – if left in the private sector – might have produced something that someone inside or outside our economy may actually have needed or wanted.
Very well said.
The lesson? Historical trends rarely follow a straight trajectory. More often, they plateau, and then reverse. Behold the final mission of the Space Shuttle. Soon, for the first time since the 1960s, the United States will be Earthbound, and the jobs required to devise, build, and man such crafts — like a lot of jobs — will be gone, perhaps forever.
Nonsense. In the 50 years of US manned spaceflight, we’ve experienced periods totaling over 14 years where we had no national means of launching humans into space. The longest was from the end of the Apollo program in 1975 till the first Shuttle flight in 1981. Even since 1981, we had two multiyear periods where there were no flights following the Challenger and Columbia accidents.
Even more to the point, there are several companies actively working on building the next generation of manned spacecraft. Most of these are commercial rather than NASA projects. The list includes Lockheed-Martin’s Orion capsule (NASA project), Boeing’s CST-100 (commercial), SpaceX’s Dragon (commercial), Blue Orion’s project (commercial) and the Dream Catcher (commercial). There is actually more manned space development taking place in the US now than at any time in our history, it just isn’t all big government Soviet-style projects like Apollo and the Shuttle.
“our few recent innovations tend to be job destroyers”…a very high % of innovations of the past 300 years have been job destroyers, in one sense or another:
–the Jacquard loom destroyed the jobs of “draw boys” previously required for patterned materials; the power loom and power spinning equipment pretty much destroyed the hand-spinning and hand-weaving trades
–pattern-following lathes destroyed the jobs of those making musket stocks, decorative woodwork, etc; more recently, NC/CNC machine tools have done the same in metalworking
–teleprinters replaces thousands of skilled Morse operators; automatic telephone dialing equipment greatly cut the need for phone operators
–automatic elevators destroyed something like 500,000 jobs previously held by human elevator operators
…yet somehow, the mass technological unemployment many feared never came to pass. Unless now is the time–but it’s not obvious to me why it would be that different this time, if you just look at technology and economics and ignore politics and culture.
“…yet somehow, the mass technological unemployment many feared never came to pass. Unless now is the time–but it’s not obvious to me why it would be that different this time, if you just look at technology and economics and ignore politics and culture.”
That’s just it – our politics and culture, stepped in entitlement mentality, doesn’t seem able to perpetuate technology.
Nonetheless; when I started in IT in the late 70′s, all the systems were mainframes where half the people just kept the monsters running. Bringing a PC to work in the pre-IBM PC days could get you fired. By 2000, it was all HP9000′s and a handful of administrators keep it all running in a broom closet!
Now most business IT is geared towards gathering marketing and sales hype data.
How many of our ‘yutes love technological toys, but have no clue how they work? Just how far are all those liberal arts grads (well over 80% now) going to push the technology?
“Cowen notes that Google employs a mere 20,000; the increasingly ubiquitous Twitter only 300. Facebook has millions of users, but only about 1,700 workers.” This is a rather blinkered perspective. Google can’t run without its servers, its networking infrastructure, and the power that runs it all. And their customers can’t access their services without their own computers. All of that generates jobs and economic activity. But as sawdust writes, “Too damn bad all those jobs are in China.” Well, not all of them are in China, but too many of them are overseas.
There’s another issue however related to innovation, and that’s how little beyond personal computers and the internet has been “breakthrough” rather than incremental improvement. We’re still flying jets much like those in the 1960s, only incrementally better. Heck, I flew in a 747 in 1971, and we’re still using them! US trains are no faster today than they were 100 years ago (though Asian and European trains are at least “bullets”). The Space Shuttle is based on 1970s technology, while *all* rockets still utilize chemical burning for propulsion. And we’ve got nothing to replace it. Where’s the advances?
Maybe we’re just less imaginative than our predecessors. Maybe in our modern over-regulated, high labor cost, societies mitigate against major risk taking. Maybe we’ve so shifted from discretionary investment to consumption we can’t afford what we once did. Heck, the country that built the great dams, bridges and the frickin’ Panama Canal can’t afford to build a tunnel between NJ and NY! Or maybe we already understand the physical world so well that major leaps are simply too costly – the (SST) Concorde syndrome writ large. All food for thought.
This is why America needs a space program (and an ocean one for that matter), even if it is privately financed. There are still frontiers to be conquered. We just don’t have anybody in leadership at the moment who has the vision to see it.
It is difficult to take anyone seriously who claims the “internet” didn’t create many jobs…and who cites two technology companies as an example. Ask yourself, how many “internet” employees did McDonald’s have 20years ago, and how many today? Unsubscribing now at such moronic idiocy.
The premise of your comment totally misses the relevent point!
With the advent of computer/computorized technology, it creates 8:2 jobs in service and not manufacturing….producing goods that must be the core of a successful economy.
Labor unions and government regulatory excesses have driven America’s manufacturing to foreign shores, being replaced by services industries and unsustainable ‘bubble ecomnomies’ that collapse as did the ‘dot-com and housing’ bubble economies.
The heavy and manufacturing industries that remain, require less manpower to fullfil their cyclical supply and demand, plain and simple. In ‘good times’ those industries tend to ‘bloat’ labor and sometimes expansion investment for the good of the nation…which always comes back to bite them through labor demands and government regulations.
There are plenty of jobs in America…but not the ‘jobs’ that most Americans will do because, they somehow have come to think they’re to good to do those jobs.
Decades old ideological philosophies have America on the road of economic failure and the consequences cannot be turnned around anytime in the next many decades thus, there is going to be ‘real’ unemployment problems and economic crisis far out into the future.
Any innovation enhances productivity, and thereby allows consumption spending, and investment, to be redirected to other job creating areas.
I think the stagnation, and lack of innovation and job creation, is caused not by some inherent property of innovation, like his low hanging fruit theory, but by the stiffling effects of big gov. Remember that the start of the stagnation the author cites, the 60′s, is also when the leftists really took over the country, and the effects of big gov regulation really started being felt.
In other words, our innovation and growth stagnated because we abandoned free market capitalism.
I think the entire premise of this article is false. It seems to every generation that everything possible has been invented, i.e., the “low-hanging fruit” has been picked. There were calls to abolish the Patent Office in the late nineteenth century for just that reason.
Who could possibly have imagined television back then?
Cowan’s piece seems rather Malthusian. It’s disappointing, really, as I rather enjoy reading his stuff otherwise.
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“Government is not reason; it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.” George Washington
This article is terrible for a number of reasons.
Innovation isn’t spontaneous. Ideas are built on previous ideas. For example, computers led to networks which led to the Internet which led to Facebook. Currently we have a patent system so arcane and restrictive the phrase “patent troll” exists in our lexicon. Unscrupulous people are using the patent system to extort money from other people whose ideas may be vaguely similar to their own.
And how can future generations build on the current ideas if they aren’t properly educated? I find it interesting that there is no reference to the failure of the public education system in this country and how that might affect innovation. If you are unaware of the ideas that came before you, you are highly unlikely to be able to capitalize upon them.
This thesis is absurd.
We are inventing more things, faster than ever before. The past innovations “destroyed jobs” — and made society wealthier and created new jobs, different jobs, to replace those that had gone before. This is nothing but the song of the Luddites.
HOWEVER…
For that process of creative destruction to work, it is necessary to ALLOW the new jobs and new industries to be created. And THAT, not some illusory “low hanging fruit”, is what has been changing over the last generation or two. The regulatory burden on new industries has climbed ever higher.
Right now, in laboratories around the U.S. people are working on fusion power, cheap space travel, synthetic fuel from algae, sensors for automated medical diagnosis, and so on, and on, and on.
And if we lived in a free country, sooner than you think, some of those would be part of our everyday lives. The decision to decline is a CHOICE — not a fate.
Those low skill factory jobs are disappearing, even in China, because machines can do more, cheaper, better and faster than any human. As a society, we have more.
What we have is a surplus of low-skilled labor and a shortage of brains. I’m betting we augment our way out of that as well, unless our government stops that as well. Put nothing past our political class – overly restrictive copyrights and patents can kill innovation.
+1 pennypincher
A small constitutional government is what led America on the journey to its once greatness ole chap!
And where will all those functionaries get jobs when we end drug prohibition? How does knocking down doors and killing the errant dog or child translate into private sector jobs?
===========
On another note: the 1930s were a function of GREAT advances in agricultural productivity.
Note: manufacturing is about the same % of the economy it has been for the last 60 years. What is different? Machines are doing the work.
BTW with CNC machines total retooling for war could happen faster than it did in the 1940s. If we needed it bad enough.
M. Simon….
["And where will all those functionaries get jobs when we end drug prohibition? How does knocking down doors and killing the errant dog or child translate into private sector jobs?"]
There are not easy answers to the consequences of decades of government ignorance and or intent that has brought this set of problems upon the nation. However, I can certainly assure you that creating government jobs as a means to buttress national employment is a losing philosophy.
["On another note: the 1930s were a function of GREAT advances in agricultural productivity."] Thats not a very definitive comment. Yes, tons of government legislation for agriculture was enacted that eventually brought both good and bad changes for agriculture. But, to say that the 1930′s was good times for agriculture is in error. Remember the Great Depression and the Dust Bowl? I do (though a young child) and we were depression dust bowl farmers and ranchers…Northwest Oklahoma!
["Note: manufacturing is about the same % of the economy it has been for the last 60 years. What is different? Machines are doing the work."]
Come on, I know you’re quite intelligent! Everybody always leaves out population/consumption/import/export data in their analysis I supose, because that data is never part of the populist rhetoric. Shouldn’t you be taking into consideration what the domestic national economy should/could be with our population and what we use to supply to the world, had we not unionized and regulated so much of our economy away to foreign nations? Your mfg/GDP ratio is irrelevent to those who analyze ALL the relative factors…..when considering we’ve ‘exported’ a huge amount of our historical economies/GDP to foreign lands.
["BTW with CNC machines total retooling for war could happen faster than it did in the 1940s. If we needed it bad enough."]
Maybe, maybe not! CNC sure doesn’t seem to be a huge factor in retooling aviation, sea vessels and automotive…. thus we continue to have all the cookie-cutter automobiles year after year. Fast is irrelevent when you can’t affort to retool!
Jobs may be gone for good? This is not a result of technology stagnating. It’s the result of the loss of freedom and capitalism. MacDonalds jobs are not being replaced by computers because people aren’t needed. They’re being replaced because laws in Europe make it too risky and expensive to hire people.
People will, if free, find innumerable ways to make a living. The solution to this problem is to destroy the over reaching power of centralized government.
The author has put the cart before the horse.
Touch screens at McDonalds. That’ll be great. How else can they keep their prices so low. Walmart supposedly hurt all these small businesses. Now anyone can afford a big screen. Technology makes goods more affordable so that money can be reinvested in new ideas.
The Space Shuttle is based on 1970s technology, while *all* rockets still utilize chemical burning for propulsion. And we’ve got nothing to replace it. Where’s the advances?
Polywell Fusion. If it works.
The 19th century was the century of mechanical invention, the century where Watts’ invention of the steam engine allowed us to leapfrog past the limitations of animal, wind, and water power that had been humanity’s sole assistance forever. Millions of jobs were lost in this process, never to return. Somehow we all got richer just the same. Note that the machines started extremely large and expensive, limited to a few, and ended up small and cheap and ubiquitous.
The 20th Century was the century of electrical and electronic invention, the century that started with the mastery of electricity and the incredible transformation that the fractional-horsepower electric motor made possible, and ended with the invention of the computer, and then the Internet. Millions of jobs were lost in this process, never to return. Somehow we all got richer just the same. Again the machines started out relatively large and expensive, and ended up so small as to be invisible and so cheap as to be throwaways.
The 21st Century will be the century of biological and biomechanical invention. I can’t see where it will lead, although there are fascinating headlines every day. But I’m pretty sure of this: millions of jobs will be lost in the process, never to return. Somehow we’ll all get richer just the same.
This article is such dreck. I cannot remember a more ignorant article. I’d have to go to HuffPo to find its like.
Google only employs 20K? Twitter only 300? So? How about all the offshoots of the tech industry? All the folks working from home? Entertainment programs for your computer? The revolutionized phone industry? The list goes on and on.
The fact is, manufacturing has changed in this country. The government got it really wrong, as usual. They classified the new industry as tech workers, when they are really virtual manufacturers. Do they include our tech sales, our subscriber services, like phone and Internet service and suchlike, in the total of balance of trade? I doubt it.
Internet service is as real as any manufactured good. Try running a business or government these days without it. Ha! Try running for office without Twitter and Facebook. You’ll get creamed… like McCain did. How many cellphones are out there now? Every kid has one. When I was a kid, there was the one landline in the house, if you had a phone. Remember party-lines? You know, when several families used the same phone number and everyone could listen in on your calls? Which country made these things? Oh, right… the USA.
Our virtual, digital, products are sold throughout the world. The Internet, servers, and transmission satellites are the transportation system. The innovations are done here. Cisco systems (the Internet itself). Microsoft, Google, Intel, Apple. The list of American companies producing the virtual products and the hardware systems for them goes on and on and on. Tech workers are simply virtual manufacturing workers, and the virtual goods pour forth at prodigious rates. No one even holds a candle to us.
These are living-wage jobs too. Let those countries with all their starving, ill-educated folks have the menial-labor manufacturing jobs.
Virtual-manufacturing? There’s an app for that!
May I repsectully remind you that there is a DEW platform that can ruin the premise of your comments. There is a newer generation that can/could destroy the entire national electrical infrastructure grid that would take years/decades to rebuild assuming we had the funds to do it.
Yes, you are correct, but it has not happened yet, and never will… as long as we are cognizant of the potential threat. This is the proper role of government, to defend us from threats within and without. And of course, the companies owning the infrastructure need to do their part. We will always need police. There are virtual police, too, and they have living-wage jobs.
The out-of-work, assuming that “their” jobs are permanently gone and that they are unable to take over “someone else’s job,” have three options:
1. Starve;
2. Become a leech on others, either through criminal activity or government dependency;
3. Become an entrepreneur, offering something new, or offering some old service in a better way.
All our efforts ought to be bent towards creating, through incentives and cultural expectations, people who will naturally gravitate toward option #3.
America is suffering a form of Dutch Disease. This starts whenever a nation enjoys a windfall of unearned wealth, e.g. oil in Iran, phosphate in Nauru, or gold in the Spanish Empire. Our windfall arose from the dollar’s status as the world’s reserve currency.
As citizens of a wealthy nation demand higher real wages and benefits, imported goods become cheaper than domestic manufacturing, and the nation’s industry declines. No problem, the government can simply spread the unearned wealth around. Spent on welfare, education, health care, housing, (and now high-speed rail and green energy), this free money creates millions of “service sector” jobs for a workforce that no longer produces tradable goods.
Then the oil fields run dry, or in our case, the world loses faith in the Almighty Dollar, and there’s no more easy money to subsidize those service jobs. We easily forgot how to make goods for export; it will be much harder to get those jobs back, short of conquering most of the world and forcing them to buy our products at gunpoint.
So well said and void of all the polulist reasoning and rhetoric. GOOD JOB!
The historical trend has always been that job-killing technology innovations make us richer, not poor, from the time the first cave man carved out a wheel so that he could carry more things by himself rather than requiring help from several friends. I suppose the writer is lamenting all the blacksmithing jobs lost to modern die casting and forging, all the porter jobs lost to modern roads, and, of course, all the scribes put out of work by the printing press.
Demand is infinite. Resources are finite. Labor is a resource, so all these job-killing innovations do is free up labor to satisfy even more of our demands. That’s a good thing, not a bad thing.
P.S. The USA has the highest manufacturing output in the world, and it’s higher today than it was in the 1970s. At least get your facts right.
I’m truly amazed that no one has mentioned the corrosive effects of mass immigration on whatever stagnation we’re suffering. Post #32 notes the stagnation beginning in the 1960s; well, it was the 1965 Immigration Act that opened the floodgates to the Third World.
Thanks to the foreigners (both legal and illegal) we have a labor glut which by definition results in lower wages. This hampers and retards innovation. For example, machines to harvest citrus fruits have been invented, but sit unused because it’s cheaper for the growers to import foreign slave labor. Deport the FSLs and those machines will be used and will improve over time, resulting in many more good-paying jobs. By contrast, Japan — which steadfastly and heroically refuses to open its borders — has solved its nursing shortage with robots, and the patients love them. Meanwhile, plenty of high-tech robotics jobs have been created.
Then we had the feds deliberately crushing the IT job market over the last decade by both encouraging the movement of those jobs offshore and importing foreigners with H-1B and L-1 visas. Not only did thousands of Americans lose these high-paying jobs, they were also forced to train their foreign replacements as a condition of getting any kind of severance package. Setting this situation to rights would require both deporting the foreign carpetbaggers and severely penalizing companies that send jobs offshore.
Necessity has always been, and always will be, the mother of invention. Where there’s an abundance of cheap labor, there’s no need to create labor-saving devices. The Romans supposedly knew about hydraulic power, but never used it for anything other than toys. The reason: a virtually unlimited supply of slaves to do the grunt work. The Immigration Act was essentially corporate America’s end run around the 13th Amendment, with the convenient (for the Democrats) side effect of polluting and dumbing down the culture.
Poorly researched, poorly analyzed argument presented in this article, that might otherwise just be called BS. Countless books have been written on the cycles of industrial and technological change, with the only constant being the accelerating rate of change. The writer should try using Google instead of using it as an example for lack of job growth.
The problem with mechanizing or robotics taking the place of people is who will buy the products. If the people aren’t working and making money they will not be able to purchase the products the robots are making.
Beyond the problem of the minimum wage pushing entry level jobs to automation, there is the problem of the over-education of Americans in the colleges and not enough in the trade schools.
America is short about half a million welders for project. Wherever you need welding done, be it for putting rebar in roads, bridges or buildings, or putting the steel skeleton together for new buildings, or for cutting out metals that have detriorated and threaten our physical infrastructure, it is the welders who now decide what gets done and doesn’t get done. We don’t have enough of them for all the projects necessary to keep our physical infrastructure (roads, bridges, buildings, sewers, water mains…) working. This is true not just for weldgers but across all the tradecrafts as well. While there may be ‘low hanging fruit’ that is easy to do, keeping that ‘low hanging fruit working’ should be something easy to do and well respected, and yet our culture has moved to respect intllectual works and not physical ones. The result is having over-educated young adults with no current job skills, and jobs that can pay more than a living wage but can support a family with only the time spent to learn a tradecraft to do them. Of course if you are deeply in debt, the idea of going further in debt to become an electrician, carpenter, bricklayer, construction worker, welder, etc. is problematical. And yet it is the post-graduate, not so young adult that are now going to trade schools to get skills that will actually get them a paying and steady job.
Don’t look at the Twitters and Facebooks of the world, look at your bridges, sewer lines, water mains, buildings that you live in, work in and play in… are THESE being kept up? Is our power generation system going to be around for much longer via transmission lines that were set up decades ago and never upgraded? I’m all for Polywell fusion and I hope it comes in a Mr. Fusion, home sized unit, because that is what will be needed… and we will still need water lines, sewer lines, roads, bridges and buildings to house the things.
I love CNC machining! Not just for metals but wood as well. You still need to know how to weld to make a structure more than the size of a handgun, and even at that size its a necessary for some work. Furniture is wonderful! You need to know how wood shifts in a structure to build a house, how to shore up a failing wall to replace the wood there, and then do the actual, manual work to do that replacement. Robotics is wonderful. Robbie hasn’t been invented yet, so its up to human hands, arms, eyes, brains, backs and legs to get this work done.
To paraphrase Jerry Pournelle – ‘I don’t care how much steel we can produce, the sky’s the limit. Do we have enough steel workers in America?’ That is the problem. Those lovely, technical jobs are done in high rises that need to be maintained. We are running out of maintenance crews and yet have massive unemployment… there is your ‘low hanging fruit’, and we must change as a society to respect and admire those doing hard, physical work to be able to retain our lovely ability to be creative and not shiver in darkness without water or sewer lines that work.
I agree with the above: Tyler Cowen is an ignorant fathead who thinks, because he understands the money behind everything, that he understands the things themselves.
We stand before a golden age that will transform us and the world and some people are unable to see it. They mistake the ebb and flow for permanent decline. This is the same mentality that drives Socialism. They cannot imagine how the world will change, they “see” a zero-sum game.
They are wrong.
I think this analysis is valid, but other factors are in play, such as the role of government. Liberals like to blame impersonal forces like this, rather than themselves for destroying the economy: job-killing taxes, regulations, unions–all drain private sector wealth and provide disincentives for economic activity. We’ve seen former Soviet republics, like Georgia and Estonia experience prosperity in a short period of time.
A big part of the problem is we have too many socialists and marxists masquerading as politicians. Too many of them do not hold to the tried and true concepts of private property and private enterprise for private profit. I don’t want to wax Randian here, but the moochers and looters are actually our Congressmen and Senators. And they have a compliant cheerleading media to assist them.
America is in decline. (See Rome, rise and fall of.)
Yawn…I mean…poppycock to these theories.
I caught on board the rise of the semiconductor cycle after graduating from college. When I came on board, the industry exploded and grew like there was no tomorrow. Then, in the early 2000′s, it started to stagnate: the cost to make chips dropped and the wages of workers was increasing. Gosh, what a dilemma. Nautally, businesses that are publically owned do whatever they can to appear profitable and began “outsourcing” to Asia. Mostly to China. They just graduated a bunch of enigneers! Wow! We can pay them $50 a month! We will make $$$$ and our stock will be fat and healthy.
Seemed like a great idea.
Until.
All that cost to send all your factories to China fall into the accounting shell games. You select a number of “reliable” (gullible) workers to travel overseas and “train” the newbies. It will be a great learning experience. Pay the expatriate 30% more than he normally works and boy will he jump.
Then…
The Chinese workers began jumping ship to work elsewhere. Why? Remember that $50 per month you were paying him? Well, someone else offered him $55 per month. And so on and so on and so on. Then, your facility begins to experience quality issues. Why? Because no one working for you has any loyalty to your company or gives a damn what your product is and who wants it. They are making $50 per month and probably cannot wait for someone to offer them the $55 per month they want to leave your roach infested craphole.
This is not true everywhere, but I saw a lot of it happening during my stint in the industry. I never did an expatriate package and watched a lot of people burn up in the process.
This article is meaningless.
Whenever I hear some stooge schlepping his/her book why the end of industry/america/europe/whitepeople/malthusianism/whateverdujour it makes me laugh.
Remember the douche who headed the USPTO and stated at the end of the 19th century that “everything that is to be invented has been invented”? Famous words.
No, what this fool missed is simple: we do not have the right people designing our factories. Yes, it is true.
We have created (well, Dems and some Reps) this mentality that you should be able to leave highschool (or drop out) and get a good-payin’ job at the factory.
Most of these mindless “jobs” are about the only thing unions can control because short of being replaced by a wind-up symbal smacking chimp, the level of primate needed to wait for a buzzer and push a button requires…oh well.
What we need to invest in is actually phasing humans out of the manual intensive steps encountered in manufacturing.
Yes, I am saying it: robots. Acutally, more automation.
As I said, I come from the semiconductor background, but in reality my background is in chemical process automation. I sought out ways to remove humans from touching the process. This is important because building chips is not an art, it is an engineered feat based off of scientific principles. Small deviations to recipes,etc, by even the most trained technician or PhD still results in large amounts of scrapped product. That cannot be sold. And when you spend lots of money making something that cannot be sold, it is called a loss. In shareholder terms it is called “lower than expected profits”.
My business replaces humans, one at a time, but with a twist: for each human we are replacing, we are actually keeping engineers (mechanical, electrical, chemical, software) and support structure (technicians, SG&A) employed to build the thing that replaces the human.
We automate a lot of production in this country. We can automate more. Yes, humans are still part of the program: those who tend/service/update/engineer the equipment. We have not hit the hurdle yet on what to automate.
When we begin automating our farms, illegal immigration will cease to exist.
When we automate our automobile and aerospace factories to the level we do our semiconductor fabs, unions will cease to exist.
When we build spacecraft in automated facilities, we will have transformed to the new man.
Anyone who states America is in a decline is either a fool, an idiot, or both.
If Robert Heinlein were still alive, he would roast this pathetic article to a crisp with a short, concise quote.
Oh wait, he already did!
“Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.
This is known as “bad luck.” — Lazarus Long, from Robert A. Heinlein’s “Time Enough for Love” (via Wikiquote)