mick "I went to school and I read books, I havent ruined my sons life"

'Most economic fallacies derive from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another' Milton Friedman

There will always be 'median' earners, and there will always be 50% of the population above that average and 50% of the population below. As the capitalist pie gets bigger the median is supposed to moves upwards and drag everyone along with it.

The biggest problem we face now is that the pie is getting bigger but it's not dragging the median higher, people at the top are taking most of the growth. The single biggest reason that this is happening is because the top are doing ever more highly skilled jobs whereas the low skill jobs for the bottom are becoming less and less necessary (or plainly, economically productive) and so you have more people competing, dragging the wages lower. Tesco will have completely done away with check out clerks in a generation, with maybe 1/10th of the staff remaining to manage customer services - Google cars will get rid of cab drivers - Tube drivers are already living on borrowed time, Tube counter staff are causing strikes... - Amazon is trialling delivery drones to replace delivery men! - I work in an office of about 30 staff which quite literally does about 90% of the work that my old office of 100 staff used to do only 4 years ago, the efficiencies have been made by mathematical 'quant' models built into market feeds that I have built - etc, etc. as 'futurist' Kevin Kelly put's it "You’ll be paid in the future based on how well you work with robots." http://www.wired.com/gadgetlab/2012/12/ff-robots-will-take-our-jobs/all/

Now we have all these Toby types running about spouting figures showing how the rich are getting richer - and they confuse causation with effect. They don't try to understand why the problem is actually happening, they just boil themselves into a rage and shout "GREEDY ****S ARE DOING IT!" - which doesn't actually understand or solve the problem. Their solutions to the problems are economically ******ed ("TAKE IT OFF THE RICH AND GIVE IT TO THE POOR" Robert Mugabe style) - rather than trying actual pragmatic solutions that would work, like trying to invest in education and training and actually telling people that they are not exploited, they just have skills that are less and less useful in a changing world and so they need to acquire new skills. There may even be lots of other solutions, and I'm not saying I have them all, but for instance they could force companies into paying for training programs or set up new mandatory training centres for the unemployed (rather than send them to work in Poundland learning **** all new skills - again the problem is not as Tories assume that people are work shy, it's that the market has no need for them!).

I'm painfully aware that some new smart kid could come along and knock me off whatever perch I've put myself on - in my last post I wrote how I'm paranoid about going broke, so no, I'm not at all smug about my position. I'm also a little threatened by government, as the scenario I mentioned above unfolds populism will demand that the government fixes the problem, and even if I play my cards completely right and hedge my position, there is always the chance that a government will come after my rainy day fund to try bail itself out of it's own **** position.

 

ST.

 

Reading that Wired article - I came across this rather Lefty argument posted in the comments, which I don't necessarily agree will work in the short term (capitalism is still the driving force in progress, and if we tax the balls out of it too early then we kill the momentum) - but I respect that it's actually trying to find a solution to the correct problem... not pitching a tent up outside Wall Street claiming the world is not fair.

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Most the article is very good. But the big problem we face is totally missing from the discussion. the "pays more" part of step 6 is DEAD WRONG. Technology growth creates wealth inequity, it does not allow for the fair sharing of wealth. This is a problem we must solve as a society - but it's easy to solve, once people realize it's a problem.


Our current economic system is based on Labor and Capital. That is, people have two ways to gain a share of the wealth produced by the every expanding automated economy. The first is Labor. People are given a body at birth, and our society guarantees only they can own it (once we choose to outlaw slavery). A human body is a machine, that has a value in the economy. Human bodies have remained highly valuable asset since the beginning of our race, so to be given full control over a human body, was a huge free "gift" we each got at birth. We could sell it into the economy, for our entire life - or for as long as we wanted to sell it. A human body at birth might on average by wroth around 2 million dollars if you talk about working for 40 years at an average rate of $50K a year. That's a "gift" we get for free at birth.


The second way to get a share of the wealth is by Capital This means money. Or in other terms, it means we make money by gaining ownership of assets. The more asses you control the larger the share of the total economy you get. This means land, oil wells, intellectual property, factories, software, databases and information.


Our total economy grows exponentially. It will keep expanding exponentially, due to advances in technology, and automation. As a society, our GNP keeps going up, and will keep going up exponentially for a very long time. As a society, we are not only getting richer, we are getting richer faster, than any time in the past, and that (void minor ups and down like the recent recession), and there is no end in sight for that trend.


But who gets that wealth? How is the growing wealth shared across the population?


Before technology wealth was mostly created by labor. We worked with our hands to make wealth, by gathering, and hunting. Our wealth was almost directly related to how much you worked. And with that, our wealth was fairly equally shared. And when someone was not wealthy, it was their choice - they choose not to work. You you choose to work, you can expect to have as much wealth as the next guy. Nobody that was trying to work, would end up 10 times less wealth than the next guy. Wealth, waw fairly evenly shared (ignoring problems of thief by the strong which dominated society for a long periods).


But the more technology we add the more opportunity arose for accumulating wealth by capital - by accumulating assets, by investing. With the industrial revolution, we transformed from an agrarian society to an urban industrial society. The big asset to accumulate when we were farmers, was land. Controlling land, was everything to controlling wealth.


But as technology advances, then other assets become valuable. Building and controlling factories became highly important. Whoever owned the best factories, owned the wealth.


As steel became important, owning iron ore mines became important. Then owning, and controlling coal mines. Forests. Then later, oil fields. Then factories. However owned all the steel mills dominated the steel industry. Then owning the railroads. As banking technology advanced, then owning the banks became important. The further technology advances, the more assets there are to create, and control, and the more wealth becomes produced by investments in these machines and resources and technologies and the less the wealth is being created by human labor.


In the 1800s, we saw the rise if the some of the richest men in history - the industrialists who learned to make wise investments in these new assets. Andrew Carnegie in steel.
John D. Rockefeller in Oil, J. P. Morgan in Banking. Wealth inequality grow huge in those days, due to Capital dominating Labor.


Human labor is valued based on skill, but is fairly well balanced compared to what happens with Capital - with making money by gaining control over assets. Asset control is always monopolistic. Those that do the best job of investing, make the most money, and then use that wealth, to buy control of even more assets. Capital wealth naturally creates inequality across society. Capital wealth always accumulates at the top. It always flows upward, and never downward.


As a society, we rejected this inequality created by the growing powers of capital wealth and we created many different laws to offset the effects of the growing power of Capital wealth creation, the inequity it naturally created. We made the trust laws, to prevent any organization from gaining a monopolies. We encouraged and legalized the creation of labor unions to allow labor to extort profits from Capital. We also added a never ending stream of welfare systems into the government to force additional wealth sharing across the society. With these changes, we brought inequality under control for about 50 years into the middle of the 20th century.


But as technology advances, the problem keeps getting worse. The number of technologies to invest in, keeps growing. Electronics. Plastics, Communications. Computers, Internet, Biochemistry. But wealth inequity was kept in check, by unions, and by ever expanding social problems, and social services provided by the government.


Though all this evolution of society, humans were still highly important machines in the system. Humans did, and continue to do all sorts of jobs, no machine can do. And because of that, humans has monopolies on those jobs, so labor, with the help of the extortion created by unions, maintained a good share of the wealth.


But come about the 1980's. all that started to shift. So much work was becoming automated, that labor started to loose it's power to extort profits from capital. Though there were still good jobs for humans, the education and skill levels of the good paying jobs, have increasingly become huge. No longer, were there plenty of good paying low education jobs. Since the 80's low income labor rates have stopped following GNP Growth Since the 80's Capital has been winning, and labor has been losing.


Relative to percent of GNP, labor rates are dropping, and there's no expected recovery. Being given a "free" body at birth, is no longer worth what it once was, and that trend is getting worse, with no expected end in sight.


The more we automated, the more the labor side of the equation vanishes from the economy. The reasons humans din't lose their jobs in the industrial revolution is because humans, as machines, had two valuable assets to sell. One was simple muscle power - we could haul crap, and dig ditches. The second thing we had to sell, we our mental power - our brain. With the industrial revolution, and the progress from steam, and gasoline, and electrify, human muscle power has become worthless. No one gets paid anymore, because they can lift heavy weights. All the heavy lifting, is done by our machines. But we kept employed, because we have a brain to sell as well.


Before the industrial revolution, the horse was very important in our economy. It did a lot of our heavy lifting. After the industrial revolution, the house all but lost it's job. The "working horse" has all by died out. That is because the horse, didn't have a brain to sell into the job market.


Our machines are now replacing our brain power in the workforce. We are well into the second industrial revolution, and in this one, we are losing our last job - the job of selling our brain, into the economy. As machines advance, more and more mental jobs are vanishing. Machines grow in "mental" power exponetially over time, but humans, aren't getting in smarter. Our intelligence is standing still by comparison.


Within about 30 to 40 years, machines will perform EVERY task, a human brain can now perform. There won't be a single task left for us to do IN THE WORK FORCE.


Anything we _want_ we will have machines to do it for us. Nothing we want, will be done by other humans for us. This is expectged to happen around 2050.


When we get to that point, the labor component of the economy will be totally 100% dead. Humans will not be able to find a job, selling they "body"into the economy.


At that point wealth will be made, and distributed across our population, by Capital. It will be distributed, based no who owns the machines, and the resources, and by nothing else. But capital wealth, doesn't get shared. capital wealth accumulates into the hands of the few. They use their wealth, to dominate all others. A few super rich, will own all the automated factories, all the natural resources (land, trees, mines), all the patents for all the technology. They will sell luxury items to each other, because the poor will no longer have any way to climb the social ladder. With no ability to find a job, no ability to buy land, no ability to do anything, but live off the garbage of the super rich. the super rich will herd the worthless poor into camps, and let them die by the millions - because the super rich no longer has any use for the poor.


This is the path we are already on. Labor has lost the battle and wealth sharing has less and less to do with how hard someone works. Every day, working hard is become more of a joke. If you want want a share of that huge welath we as a society is creating, you must get into the investing game. And the more we automate, the more this becomes true. Wealth is now created, by gaining control over resources. Google is getting rich by gaining control other information. Information is the new "oil" and they are getting supper rich learning to control it.


The labor component of our economic was the tool by which we both balanced the wealth of our society, and, gave people that leg up they needed to climb the Capital wealth ladder - to allow them to accumulate assets, like a home, and car, and stocks.


But the labor component is quickly becoming history, and any sense of "fairness" in society, is crumbling with it. The Occupy movements are not just a side effect of a rescission, they are the systems reaction to the death of labor and the death of any sense of fair sharing of wealth, and power in society.


The solution, which so many reject out of hand, is simple. We force wealth sharing. We force, capital to share a percentage of the wealth, with the people. We tax the entire economy and distribute a percentage of the GNP wealth, to everyone in society equally, to create a Basic Income Guarantee. This will be our replacement for the loss of our labor component of society, and the solution, to the huge inequality, Capital alone would create, if we did not keep it in check this way.


In the end, there will only be two jobs for humans. One, is investing. The other, is telling the machines what we want - aka, to be consumers. But in time, all investment decisions, will be made by the machines. No human will be smart enough, to make investment decisions as wise as what our machine advisers will make for us. We will be investment morons compared to them.


So, in the end, there really is little point in investing either. So we will be left with only one job - telling the machines what we want. That is, humans will become full time CONSUMERS, and the machines will do all the producing, and inventing, and investing for us.


All humans at that point will be retired. There will be no real work for humans at all. We will spend all our time shopping, traveling, playing, studying, raising children, traveling, planing big social events, playing games. We will have more stuff to do, then we have ever had in the past, but no on will be "working" for a living. We will just receive a fixed amount of money to "spend" every month, and we tell the machines what we want, by how we spend our fixed allotments.


But before we get there, we must fix this underlying problem of the loss of Labor, and the growth of Capital, and the growing wealth inequality it is creating, and will continue to create. We mus to this, by creating a Basic Income Guarantee. We tax the system, and distributed cash to everyone. At first, it must start small, but then, over time, as Labor looses more ground, and Capital gains ground, it must grow. Most our current social services, welfare, and entitlement, should all be reformed, and replaced, by the Basic Income Guarantee Minimum wage laws will be eliminated as the BIG grows. Food Stamps, government unemployment insurance, welfare, even social security, should in time, be eliminated, and replaced by a BIG. The BIG becomes the tool, that replaces the 2 million dollar free "gift" we used to get, just by being born, with a human body, we could sell into the job market. As the value of our body declines due to automation, the value of the BIG we receive, will increase, to offset that loss.


This needed to start back in the 70's or 80's when labor first started to lose serious ground to capital It's needed even worse today. It will be needed even more, tomorrow. The longer we wait to implement it, the worse inequality will grow, and the more problems we will face as a society. If we don't implement it, the Occupy movement will become out right militant, and transform into a revolution.


We are all going to lose our ability to work for a living, and that's ok, because no one wants to ****ing work anyway, and in a highly automated society, no one will need to work, so get over it, and lets move on to retiring the human race from the work force and replacing every last human job with machines.


This is not a race against the machines - it's a race to the global retirement of mankind from the work force. It's a race to utopia. So lets start all working to get there as quickly as we can, so we can them, stop working, and plan the first 1000 year retirement party that will start on that day we finish the last job!