Friday, September 19, 2014
33

King Ludd is Still Dead

CAMBRIDGE – Since the dawn of the industrial age, a recurrent fear has been that technological change will spawn mass unemployment. Neoclassical economists predicted that this would not happen, because people would find other jobs, albeit possibly after a long period of painful adjustment. By and large, that prediction has proven to be correct.

Two hundred years of breathtaking innovation since the dawn of the industrial age have produced rising living standards for ordinary people in much of the world, with no sharply rising trend for unemployment. Yes, there have been many problems, notably bouts of staggering inequality and increasingly horrific wars. On balance, however, throughout much of the world, people live longer, work much fewer hours, and lead generally healthier lives.

But there is no denying that technological change nowadays has accelerated, potentially leading to deeper and more profound dislocations. In a much-cited 1983 article, the great economist Wassily Leontief worried that the pace of modern technological change is so rapid that many workers, unable to adjust, will simply become obsolete, like horses after the rise of the automobile. Are millions of workers headed for the glue factory?

As Asian wages rise, factory managers are already looking for opportunities to replace employees with robots, even in China. As the advent of cheap smartphones fuels a boom in Internet access, online purchases will eliminate a vast number of retail jobs. Back-of-the-envelope calculations suggest that, worldwide, technological change could easily lead to the loss of 5-10 million jobs each year. Fortunately, until now, market economies have proved stunningly flexible in absorbing the impact of these changes.

A peculiar but perhaps instructive example comes from the world of professional chess. Back in the 1970’s and 1980’s, many feared that players would become obsolete if and when computers could play chess better than humans. Finally, in 1997, the IBM computer Deep Blue defeated world chess champion Gary Kasparov in a short match. Soon, potential chess sponsors began to balk at paying millions of dollars to host championship matches between humans. Isn’t the computer world champion, they asked?

Today, the top few players still earn a very good living, but less than at the peak. Meanwhile, in real (inflation-adjusted) terms, second-tier players earn much less money from tournaments and exhibitions than they did in the 1970’s.

Nevertheless, a curious thing has happened: far more people make a living as professional chess players today than ever before. Thanks partly to the availability of computer programs and online matches, there has been a mini-boom in chess interest among young people in many countries.

Many parents see chess as an attractive alternative to mindless video games. A few countries, such as Armenia and Moldova, have actually legislated the teaching of chess in schools. As a result, thousands of players nowadays earn surprisingly good incomes teaching chess to children, whereas in the days before Deep Blue, only a few hundred players could truly make a living as professionals.

In many US cities, for example, good chess teachers earn upwards of $100-$150 per hour. Yesterday’s unemployed chess bum can bring in a six-figure income if he or she is willing to take on enough work. In fact, this is one example where technology might actually have contributed to equalizing incomes. Second-tier chess players who are good teachers often earn as much as top tournament players – or more.

Of course, the factors governing the market for chess incomes are complex, and I have vastly over-simplified the situation. But the basic point is that the market has a way of transforming jobs and opportunities in ways that no one can predict.

Technological change is not all upside, and transitions can be painful. An unemployed autoworker in Detroit may be fully capable of retraining to become a hospital technician. Yet, after years of taking pride in his work, he could be very reluctant to make the switch.

I know a chess grandmaster who, 20 years ago, prided himself on his success at winning money in tournaments. He vowed that he would never end up teaching children “how horsey moves” (the reference is to the knight, also called the horse). But now he does exactly that, earning more from teaching “how horsey moves” than he ever did as a competitive chess player. Still, it beats being sent to the knacker.

Of course, this time technological change could be different, and one should be careful in extrapolating the experience of the last two centuries to the next two. For one thing, mankind will be confronted with more complex economic and moral questions as technology accelerates. Still, even as technological change accelerates, nothing suggests a massive upward shift in unemployment over the next few decades.

Of course, some increase in unemployment as a result of more rapid technological change is certainly likely, especially in places like Europe, where a plethora of rigidities inhibit smooth adjustment. For now, however, the high unemployment of the past several years should be mainly attributed to the financial crisis, and should ultimately retreat toward historical benchmark levels. Humans are not horsies.

Read more from our "The Future of Work" Focal Point.

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  1. CommentedHassan Goreja

    if labor is replaced by machines, some of the freed labor will be absorbed in the same industry as higher level operators/ mechanics of those machines. At the same time, this will boost productivity and make it possible to produce more and have more production plants. Moreover, the rest of the freed labor moves to other industries. Other industries open up to absorb more labor. New industries and professions are created. I think that in recent times arts, entertainment, sports etc have started to absorb a lot of labor. Just imagine how the number of TV channels, movies produced, sports franchises have grown over the last decade or so. Cricket is a good example. Over the past 10 years, a number of super leagues have developed in India, South Africa, Australia, Bangladesh, Sri Lanka and now Pakistan. These tournaments and leagues have given jobs to thousands of players and thousands of associated staff who otherwise would have been looking for jobs in traditional sectors. Of course, this is a small impact but such leagues are proliferating in other sports as well. Arts and entertainment are also growing absorbing much of the freed labor.

  2. CommentedMichael Cohen

    It is not only the pace of change that keeps wages low.

    Since 1980 American productivity continued to grow while American wages stagnated. Up until then, there were limits on the ability of American companies to compete American workers against low paid foreign workers but no more.

    American workers are earning less not because the are less productive, but because there has been a change in the balance of power between workers. and management. Communication technology, automation and transportation have enabled management to export whole industries, intellectual property, capital and all from high wage countries to low wage countries.

    Given the willingness and ability of the Chinese to jail and kill those workers who dissent, we can expect that Chinese wages will put a ceiling on American wages for years to come.

    There is no limit to the greed of the rich in this country, so there is no limit to how hard they will push American workers or how little they will pay them.

  3. CommentedFrancisca Watson

    Ken, you avoid considering whether the computer-driven technological revolution is materially different than the technological changes that have sparked previous generations' fear.

    If it isn't, then your point may well be sustained.

    But if what computers (and their attendant telecommunications) can do does encroach significantly on the mental abilities of people, then your optimism is unjustifiable.

    At present, with multiple generations of researchers trying and failing to succeed at producing human levels of intelligent computer action even in highly-constrained fields of endeavor, humans still hold a strong upper hand.

    But the fight is far from over, and a clever punter would do well to hedge his bets that humans can always perform better than computers in all critical areas.

  4. CommentedWilliam Wallace

    I was expecting more. Broad statistics in gross employment levels mask the changing mix of jobs, including a major decline in semi-skilled and skilled positions that will not return and which offered income much higher than the viable alternatives. The broad statistic that shows this is that of income distribution, which unfortunately runs counter to the argument presented.

    I found the chess example wildly anecdotal and hardly representative of a trend.

      CommentedPaolo Magrassi

      Agree with W.W.
      Income distribution worldwide (from Uk to India, from Us to China) is more and more uneven and has been increasing substantially over the past 20 years, as globalization exploded exponentially. This, somehow, must mean that working conditions are not improving. Time will tell whether or not this is a transitory effect (as the author seems to suggest). For sure, though, the trend is only alluded to in passing in the article, while I believe it should be looked at more attentively.

  5. CommentedHal Horvath

    Playing chess costs far less than buying a car, therefore many people laid off from manufacturing cannot afford to purchase a car, but can afford to play chess.

  6. CommentedJitendra Desai

    Innovations don't happen to either create or destroy jobs.R & D is part of our evolution,jobs are part of our economy.As humans, we are likely to continue to evolve irrespective of the economical consequences for individuals or groups of individuals.Eg Mr Felix Bumgartner,recently did not jump from 130,000 feet to secure or destroy sky divers jobs.He jumped,because some one from us HAD to.

  7. CommentedSteven Leighton

    A chess teacher has about three hours a day in which she can teach. Just after school and before bedtime Monday to Thursday.
    Hardly 6 figures.

  8. Commentedphilip meguire

    The unemployment rate is a headline number that may panic or anesthetise voters and the party in power. Otherwise I don't care what the rate is.

    What matters is full-time equivalent jobs divided by the population between their 25th and 62nd birthdays. We don't know that number is because the BLS doesn't calculate it. I am sure it could be teased out of the CPS data.

    Here's what we do know. In 2000, there were 370 private sector FTEs per 1000 population, the all-time high. In 2011, there were 330. The public sector has not taken up the slack. The 2011 value was also the 1992 and 1987 value. While Bill Clinton was President, there was a major surge in private sector jobs. That surge has come undone. About one out of 12 private sector jobs is gone.

    This 2000-11 decline is the largest since the Depression and the unwinding of WWII. Between 1948 and 1961, this figure declined from 282 to 248, as young women gave up jobs to become full time mothers.

    I have been quietly telling people for 30 years to buy stocks as a hedge against any eventual decline in the share of employee compensation in national income.

    Two kinds of people can change jobs and careers without high stress: those with people skills, and those who are numerate. Many men are deficient in both, and there's the tragic rub. Master school maths, learn some linear algebra and computer programming, learn Excel fairly well (ideally augmented with Visual Basic), and you should be able to remain employed until retirement in your 60s. People skills remain an art, not a formula.

  9. CommentedJohn Monroe

    Well argued, but I think this gets the problem backwards. Globalization is a threat to capital investment in technology, not to full employment. Globalization has led companies away from investment in technology, focusing activity instead on the easy path of lowering labor costs. This is a political problem, primarily, and not an economic one because it involves a choice concerning who will be employed (not merely "how many") and the consequences of setting loose rapid, ungoverned change on people.

  10. CommentedJoseph Concordia

    Kenneth: Your optimism regarding a return ultimately to the concept of 4%-5% being "full" employment is nice to hear. But I wonder if this is really possible. Is reality the status that we are structurally doomed to a higher unemployment rate? Is the problem just having more workers than are needed or ever will be needed again? Can this question be studied in a really quantitative and rational way? The chess examples are nice, but is that a representative picture? Certainly as industry grows and makes investments they will much more likely be in methods for labor efficiency rather than increases in labor intensive operations. Are we in a new paradigm where there is a need for a new way of defining labor and how it is compensated?

  11. CommentedJoseph Concordia

    Kenneth: Your optimism regarding a return ultimately to the concept of 4%-5% being "full" employment is nice to hear. But I wonder if this is really possible. Is reality the status that we are structurally doomed to a higher unemployment rate? Is the problem just having more workers than are needed or ever will be needed again? Can this question be studied in a really quantitative and rational way? The chess examples are nice, but is that a representative picture? Certainly as industry grows and makes investments they will much more likely be in methods for labor efficiency rather than increases in labor intensive operations. Are we in a new paradigm where there is a need for a new way of defining labor and how it is compensated?

  12. CommentedJoseph Concordia

    Kenneth: Your optimism regarding a return ultimately to the concept of 4%-5% being "full" employment is nice to hear. But I wonder if this is really possible. Is reality the status that we are structurally doomed to a higher unemployment rate? Is the problem just having more workers than are needed or ever will be needed again? Can this question be studied in a really quantitative and rational way? The chess examples are nice, but is that a representative picture? Certainly as industry grows and makes investments they will much more likely be in methods for labor efficiency rather than increases in labor intensive operations. Are we in a new paradigm where there is a need for a new way of defining labor and how it is compensated?

  13. CommentedJohn Brian Shannon

    Dr. Rogoff has outlined the present paradigm well and this statement succinctly describes the need for change in the way our economic order works; "...and the great economist Wassily Leontief worried that the pace of modern technological change is so rapid that many workers, unable to adjust, will simply become obsolete..."

    Workers do become obsolete and must then train for other jobs. Which is VERY inefficient. Not to mention lowering the quality of life for that worker and the family that worker supports.

    I believe it is in our best national interest to enable skilled workers to continue their career -- rather then having their careers ended by the economic whims of the local marketplace.

    Which is why economists everywhere should be proactively calling for the freedom of movement for skilled and semi-skilled labour to match local market demands all over the planet.

    For just one example, take the people who work in high steel, building skyscrapers. These are highly skilled workers and it would be a shame for them to become unemployed, or under-employed on account of local conditions.

    Such workers add to the knowledge base of a nation and for them to enter training programs to become bus drivers, painters, or insurance salesmen, is deplorable.

    But this is what is happening, and not just to the workers in high steel!

    Rather than list all of the skilled occupations here in this short comment, suffice to say that every or many skilled workers can be laid off as a national economy tanks. What then?

    Economists should be leading the charge, calling for an international treaty to guarantee and enhance the ability of skilled and semi-skilled labourers to go to where the work is, to live in that country with their immediate family until the project is completed, and then move on unhindered to the next project -- wherever it may be in the world.

    Most often, they would return to their home country when their own nations' economy rebounds and they are again in demand at home.

    Instead of staying in the U.S.A. and becoming bus drivers, or shopping mall security guards, they will still be in top form -- having kept all their skills sharp and having learned new techniques and practices from working in different jurisdictions around the planet. They will return with a sharp skill-set, positive experiences, more rounded-out and their quality of life will have been enhanced.

    This contributes more to the national knowledge base than allowing these people to drift into other employment during local economic slowdowns.

    Economists should not be leading from behind on this, but should research and arrive at a common position and then present it to politicians and the UN, in order to facilitate change for the better -- change that will benefit all nations. If economists don't impart this knowledge, then who will?

    Freedom of skilled labour to move where the work is, equals a more efficient world economy, better quality of life for those workers and their families and additional knowledge available to the national skilled labour knowledge base.

    John Brian Shannon
    http://jbsnews.wordpress.com


  14. CommentedPrasanna Srinivasan

    Excellent points made, Dr Rogoff. The glitch is 1. that the structural adjustment normally exceeds the time period of a serving politician in a democracy. This results in protectionist tendences (e g US calls on preventing outsourcing of services and manufacturing). 2. The income gaps between those who adapt to the new technology and those who don't are stark. Investing in education for oneself becomes critical for long term financial survival.

  15. CommentedLeonel Chaves

    Last year while walking to work in NYC, I walked in a brand new CVS to buy coconut water. The first thing I realized is that it was completely empty I could not even see an employee. All the registers were self checkout,and then it dawned on me that this was our future.

    The new google automobile technology will render limo drivers obsolete or will everyone's car become a taxi? That's where we are headed.

    Whether its good or bad I can see both sides, but the negatives are glaring.

  16. CommentedCharles Zigmund

    One wonders if any of the other soft social sciences declare laws as readily as economics. For a discipline with such a poor predictive record and disagreements among its major practitioners more suited to religion than science, this hubris in declaring laws is remarkable. Though we may be approaching a time when machines can do most everything that needs to be done except for little pockets here and there, the eminent scholar pulls a small example from the world of chess to generalize his way out of the worst recession since the 1930s. Any little example will do when one of the hoariest, most barancle-encrusted and sacrosanct laws is questioned. Listen, McDonalds workers in Europe who may soon be superannuated by machines that both cook and sell, teaching chess is your way out and up.

  17. CommentedJorge Simao

    Machines, IT, robotics, AI, and teach in general, allows tasks that can be formalized (in a computer algorithm) to replace a complete class of human workers -- which can be many millions of people world-wide. While some would still find employment helping to provided the knowledge to build the the machine in the first place, say a few thousand, the remaining million become unemployed. So the way for tentative employment is to keep inventing professions that are not (yet) "computable". However, human brains are not that plastic, specially after a certain age, so a complete generation can become unemployed. The only "sure" profession is to be a innovator per se --- if there is such a thing. But yet a worker can hardly be an innovator in more than one or a few things -- say to start its own company with its innovative idea(s). Buy because of market dynamics and conservative character, need for investment, and practical oligopolies even the innovator can be in troubles most of the time. So, to summarize, humans are not "horsies" they are (potential) "genies", but only a few have the chance or luck to transform that in returned income. So HighTech means really growing unemployment. Ths only way I can see if for "kids/youths" to stay longer in school/university taking PhD, post-doc, and post-post-docs until the get a genie idea that make bucks. But, you is going to pay for the kids longer educations. Capitalism wants sure returns, the state is getting bankrupt, and the kids parents being poorly payed by capitalist structures and highly taxed by states, can not really afford it too. Still waiting to give some credit to economy theory to fix any real world problem...:o)

  18. CommentedTom Walker

    Rogoff: "Kind Ludd is Still Dead"
    Ludd: "Emperor Rogoff is Still Naked"

    http://ecologicalheadstand.blogspot.com/2012/10/ned-ludd-emperor-rogoff-is-still-naked.html

  19. CommentedCharles St Pierre

    Hey! Professor Rogoff: Check out this post from Martin Ford, over at econfuture/ Future Economics and Technology.

    http://econfuture.wordpress.com/2012/10/01/fast-food-robotics-an-update/

    King Ludd rises from his coffin!? What alternative future for the burger flipper? It's the elimination of the low end jobs that will provide the real problem, because these workers have limited alternatives, alternatives which will also likely be eliminated.

    Check out the comments there, too.

  20. CommentedJared Harris

    Rogoff's implicit assumption here is that we can't innovate away the demand for human chess teachers -- and there's no basis for this assumption. Also I note again that the whole argument *isn't* an economic one, but a social one (and in this case also a technical one).

    Suppose consumer chess programs and online services develop excellent infinitely patient and extremely cheap chess teaching -- maybe a stretch today but likely inevitable tomorrow. Then how do the killers of King Ludd propose these current chess teachers retread themselves?

    More generally, as we gain the ability to replace *every* human skill with cheaper, better technical alternatives -- including Rogoff's ability to do his jobs -- what is the economic response? I submit that purely within economics, there is none that leads to a viable social system.

  21. CommentedJared Harris

    I'm not aware of any good *economic* theory of innovation -- especially if by "innovation" we mean "exogenous changes in total factor productivity" which I understand is the economic definition.

    So by focusing on innovation (and on exogenous changes in demand in the second half of the column) Rogoff addresses topics that are *outside* economic theory which focuses on equilibrium and efficient allocation, not fundamental change driven by social and institutional factors.

    We should be hearing from sociologists on this, not economists.

  22. CommentedTom Walker

    Ludd: Emperor Rogoff is Still Naked

    Kenneth Rogoff crowns his tapestry of platitudes with the following carbuncle: "Of course, some increase in unemployment as a result of more rapid technological change is certainly likely, especially in places like Europe, where a plethora of rigidities inhibit smooth adjustment."

    The "it's the rigidities, stupid, scam." Except there's no empirical support for that claim. No credible empirical support, that is. As Richard Freeman explained back in 2006 ("Labour market institutions without blinders: The debate over flexibility and labour market performance"), "In short, priors aside, the best summary of the data, what we really know, is that labour institutions reduce earnings inequality but that they have no clear relation to other aggregate outcomes, such as unemployment."

    "Why are supporters of the new orthodoxy so convinced that their analysis definitively convicts labour institutions while critics find inconclusive results in the same data?"

    "Adherents to the new orthodox view search the data for specifications/measures that support their priors, while barely noticing evidence that goes against them. If results are inconsistent with the priors, they assume that something is wrong with their empirical specification or measures, rather than question the validity of their case. If results fit their priors, they rarely look further to find weaknesses."

    For the direct criticism of the rigidity hypothesis see Howell, Baker, Glyn and Schmitt, "Are Protective Labor Market Institutions at the Root of Unemployment? A Critical Review of the Evidence"

      CommentedTom Walker

      Or, as my 'well-informed source' put it:

      "This stuff never goes away. There are always people willing to bring it back and pretend that the earlier exchange never happened.

      "It's not an honest profession."

  23. CommentedPatrick Lietz

    Perhaps we should start asking as to why we need innovation, and why technological progress has been defined as the be all end all of our current striving. We could then start to address the questions as to how it is that the pace of technological development is steadily increasing.

    Craig Dilworth explores these fundamental questions in his very impressive book "Too smart for our own good". His basic premise is that because of humankind's need to have more children than the replacement rate, we constantly bump against the carrying ability of our environment. Technology is the means by which we are able to increase our numbers and expand the boundaries with ever diminishing returns on investment.

    Tainter with his framework of the rise and fall of complex societies is blowing into an adjacent horn.

    The question is therefore not only if future technologies will replace more and more people in employment, but also for how long this relentless and vital push for innovation and new technologies can be sustained.

    Many economic, societal and technological indicators seem to suggest that we are very close to reach the end of the line in this development.

    Maybe the time has come to let go of dearly held notions that may not be as applicable anymore and start addessing the underlying causes and drivers.

  24. CommentedJonathan Lam

    Gamesmith94134: King Ludd is Still Dead

    “Human are not horsies.” How true it is if what we are facing with epoch of time that industrialization turned into the standard of living instead of a tool or methodology to production. Often, I get the chill from those economists extended his monetarism to gauge human livelihood. It was lovely when GDP grows, or how DJ jumps; instead, we numbed about how much Google is now. Did anyone cry over the Facebook? I think you would pay a price if it was not falling in pricing?

    As an earlier computer science student who made input with punch cards. I succumbed to the ages of advancement of computer science; but I understand the necessity of self-advancement in its science too in order to survive. Now, I enjoy going online and doing more than using my typewriter. I accepted the material pleasure as science advances as a part of human race history that bow and arrow are not part our survival in our daily lives anymore. What is the alternative on employment if human resource is not being credited to productivity? How does Robotics erase the human race? or we can turn into pygmies roaming the forest if King Ludd rules.

    Again, I emphasize technology and economics are just tools to enhance growth, so we could have more to consume, or more to protect ourselves from misallocation of human resources that including the ones missed the pace of advanced technology. Technology and science are the bridge that we human races must come across to acquire productivity to compensate its population growth; and it would never be the destiny of it.

    May the Buddha bless you?

  25. CommentedProcyon Mukherjee

    Innovation taking away jobs as a storyline needs to be transformed into innovation as a means of creating jobs; innovation inhibiting activities and processes need to be aggressively reformed by the polity and the people.

    Unfortunately the polity and the people are working exactly in the opposite direction questioning innovation and especially technological innovation that could replace a human touch. Sometimes the focus of innovation is also wrongly withered away by the new institutions of finance capital or the more marauding influence of venture capital, where the purpose of innovation is not general progress of humankind but the instant monetization that such innovation could create in this world of bubbles.

    Any business proposition is based on innovation, whether it eliminates jobs of a certain kind is not the cause for concern, as long as there is a market mechanism that works that draws its buyers and sellers into an unknown partnership, where the greater good lies in the attainment of efficiency, which is essentially that no one can be made better off without the other being made worse off.
    Long live innovation.

    Procyon Mukherjee

  26. Commentedjames durante

    As usual, the economist gets it all wrong. Why? Because of the frame of reference. To illustrate, consider Ernst Junger. (Paraphrasing): "there is a world of difference between the old iconoclasts and church burners and the bombardier who uses the cathedral a a coordinate in the target field." It is not that the machine has taken over, it is that the concept of the machine--automation, efficiency, precision--has become the standard by which we judge meaning.

    In the face of technology, for the boss, the worker, the consumer, the communist, what meaning can "gelassenheit" or nirvana or "the form of the Good" or "God's will" or any myth or beuty or the redwood forest cathedral have? The answer is, precisely, none.

    The economist gets it all wrong because full employment, leisure, and material pleasures--all technological in their nature and orientation--are always already accepted as the horizon of meaning. How pathetic.

  27. CommentedKeshav Prasad Bhattarai

    Very good analysis. In my remote village years ago, when people made efforts to make a suspension bridge over a river – Sun Koshi joining Sindhuli and Ramechhap district in Nepal, some people opposed it claiming that it will snatch the employment of those boat people who were making their living by it. The boat that were made from a big trunk of a tree had been taking lives of dozens of people in every rainy season and sometimes even in dry season. Really, it were not boat people or fishermen who opposed bridge over the river but those people making their leaving by the limited options available to the boat people when there was no bridge. Bridge and bigger communication would also challenge their traditional power base founded on people’s ignorance and poverty. When people talked about making a road, there were people who said that when there are trucks to carry goods and things how would the porter (carrying consumer goods on their back) live? Even when people appealed to build a school there were people who resisted it -- stating that when they go to school who would come to work in their firms and homes.
    But time has never helped their cause. They never realized that opportunities that come with change far abounded the limited options available to the people – even to the people who opposed change and modern development activities.

  28. CommentedAly Kamadia

    Excellent article! I particularly enjoyed when you wrote "this time technological change could be different, and one should be careful in extrapolating the experience of the last two centuries to the next two." History doesn't simply just repeat itself all the time, and I think this is a great example of when it might not. - Kamadia.ca

  29. CommentedZsolt Hermann

    It might be shocking what I say but we are looking at this whole crisis, including growing unemployment totally wrong.
    This is not a negative event but a liberation from slavery.
    We took for granted, we got used to the notion that this mindless running ahead, this constant quantitative growth socio-economic model is the norm and there is no other way of life.
    We are all truly living in a nightmare state, a real life Matrix where we are brainwashed, programmed to start chasing after excessive, unneccesary and harmful goods immediately we can look at a television from the earliest age, and in the process we are forced to work 10-12 hours a day, take on enormous debt which will never be able to repay, and still we are left with a feeling that we have nothing.
    The article speaks of unprecedented living standard and if that is true why do we have increasing depression, drug and other substance use, aimless and increasingly violent youth, totally broken family model and education and we could continue the line for hours.
    Humanity is speeding in a breakneck speed in a dead end.
    We started exhausting all our natural and human potential and resources.
    The crisis even in its original meaning is "rebirth", a chance for a new beginning.
    According to certain figures if humanity returned to a natural, necessity and resource based lifestyle, which means a nice, comfortable, modern life adapted to the 21st century, 10-15% of the whole population would be capable of providing all we need for even a much larger world population. people could work 2-3 hours a day.
    And the rest?
    The rest would be spent of being "Human", in other words improving the human interrelationships that we broke through ruthless competition, valuing material pleasures over human norms and behaviour, trampling on everything from enemies to closest family.
    This is not simply to make ourselves feel better or on ethical, moral grounds: the other thing we learned through the crisis is how much each and every one of us have become interconnected and interdependent, humanity has become a single, unified organism within the vast natural living system.
    The responsibility of today's leaders is to prepare humanity for the transitional period, to make it swift and pleasant instead of going through wars, riots and incredible suffering.
    All of us need to know the reasons of the dead we are in, and the way we can climb out of it, and this way, with positive motivation and understanding people will cooperate instead of destroying.

  30. CommentedMATTHEW M

    So much more could have been done with this article:
    http://hyperionaletheia.com/2012/09/28/going-the-way-of-the-dinosaur/

    And our onward automation of the ALL has resulted in the loss of gainful, meaningful employment. (But what if that is truly a desirable outcome? What if that produces a new profound sense of what should be our priorities? A real new world ordering?) Globally, 2B are in search of work. Those jobs are not coming back. And more are on the road to extinction.

    The neuro oncologist performs surgeries, excising a brain tumor, at the computer screen, guiding a robotic arm. How long before modern medicine is simply a conveyor belt, with the patient passing from the diagnostic (MRI/CT) to the full robotic surgeon. Engineers are ever increasingly replaced by advanced CAD designs. Drones and new robotic land weaponry (Talon, SWORDS) are in the air and on the march. Foxxconn is shedding the humans, more advanced manufacturing robotics. Automated press 1, press 2, – Siri speaks.

    Will our legacy be that of our self maintaining, self programmable progeny…our new children…our machines?

    The End of Work, the End of Money rapidly approaches. Where the old can becomes the new. The new dawn, the new coming, certainly could be glorious. Or not.

    If global warming was taken seriously, profoundly, we would be rethinking everything from energy, to agriculture, how we build homes (micro units-habitats) to transportation, to education and beyond.

    Developing self-sustaining homesteads. Planting our own gardens. Systems of barter and exchange. A more egalitarian system of any needed monetization. A new humanism that we are all in this together.

    What type of education should we be teaching? Maybe teaching our sons how to grow things, or to fish? How to respect the chicken who lays the egg you will use for your nourishment?

    Where should “we” be migrating to? Perhaps moderate climates reducing our need for heat or air conditioning.

    What type of reorientation is necessary that focuses on the inputs, the consumption before it is consumed rather than the recycling? Where are the big thinkers that would question the need for a concept of recycling?

    Where are the big thinkers that can conceptualize a world where work has no relevance? No revered status, no definition of self-worth. Indeed, this too was the original sin, the original perversion. It never was intended so. The birth of Masters and Slaves.

    If we faced global warming in a profound way we may find that the old ways of life would become new. The problem is we have Masters that embrace a dystopian world of have and have nots. As an old economics professor once told me if you are the best poker layer and have the best poker hand, if you do not throw a few hands it is going to be an early evening.

    All masters do eventually become slaves.

    I would like to see one of these honored economists on these pages talk about how each individual's wealth in a country makes the country. The individual micro combustions of smaller transactions is what creates an overall collective roaring economic engine. In addition, everything from macro monetary policy to taxation to redistribution all depends on something to distribute at the great majority.

    If middle classes throughout the western world are being decimated meanwhile in China/India have really failed to take root (most still live in abject poverty) eventually the music stops.

    Where are these leading economists in developing a more rational model for global sustainability (micro green homes/agriculture) and what ever still needs are driven by monetization, a more egalitarian system of distribution?

  31. CommentedMarc Laventurier

    Gore Vidal once referred to the "dionysiac properties of airplane glue" but I suppose that faculties of economics situated downwind from the knackersmen need a different excuse for consistently forgetting to at least mention the Marxist notion of the withering away of wage slavery and even the state. Too busy performing peans to the market to ask what the point of this horserace is, and producing quite the surplus of manure (as I watch that jackass Bernenke's speech Piling it Deeper and Higher as he comments on the 'deflation boundary'.) My kingdom for a bank...

      CommentedMarc Laventurier

      Per the old joke, the above should of course read 'Piling it higher and Deeper.' And WFF 'N PROOF trumps chess.

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