George Jetson is a Moocher

The Jetson’s was an early 60’s vision of the future that suggested a society freed from the yoke of long hours spent at tough jobs.  It is not a society without stress or problems or else there would be no reason to watch the show.  Regardless of any dramatic tension the show might have created, many a fool has simply salivated at the vision of a Jetson’s future.  The Jetson’s came out in 1962 and was set in 2062, so we are exactly the mid-point on our journey to the future and the big message at year’s end is that we need to raise the eligibility age for Medicare, pay out less in Social Security, and to have everyone make sacrifices, since there aren’t enough resources to pay for nice things anymore.  The question of how technological advances could lead to the misery of the middle and lower classes was addressed brilliantly by Paul Krugman last week.

One of the easiest tricks for creating a blog post is to cut and paste a Paul Krugman column into a post and then kick back like George Jetson.

george-smoking

The real slick-types break their post in two and surround it with their own chatter.  With practice a blogger can generate a couple of posts a week, on the fly.  Sure enough, every Monday and Friday, when Krugman’s columns appear, one notices the cut, paste and surround technique everywhere on the blogs.  It may be justified since the New York Times slapped a paywall on its digital content, and not everyone has access to Krugman.  It is also justified because Krugman says a lot of important things at a paper that can’t be ignored.  Still, it is best for a high integrity blog like the one you’re reading right now, to use Krugman sparingly.  That way you can make the point when a very special Krugman column comes along like last week’s, titled, “Robots and Robber Barons,” which follows:

The American economy is still, by most measures, deeply depressed. But corporate profits are at a record high. How is that possible? It’s simple: profits have surged as a share of national income, while wages and other labor compensation are down. The pie isn’t growing the way it should — but capital is doing fine by grabbing an ever-larger slice, at labor’s expense.

Wait — are we really back to talking about capital versus labor? Isn’t that an old-fashioned, almost Marxist sort of discussion, out of date in our modern information economy? Well, that’s what many people thought; for the past generation discussions of inequality have focused overwhelmingly not on capital versus labor but on distributional issues between workers, either on the gap between more- and less-educated workers or on the soaring incomes of a handful of superstars in finance and other fields. But that may be yesterday’s story.

More specifically, while it’s true that the finance guys are still making out like bandits — in part because, as we now know, some of them actually are bandits — the wage gap between workers with a college education and those without, which grew a lot in the 1980s and early 1990s, hasn’t changed much since then. Indeed, recent college graduates had stagnant incomes even before the financial crisis struck. Increasingly, profits have been rising at the expense of workers in general, including workers with the skills that were supposed to lead to success in today’s economy.

Why is this happening? As best as I can tell, there are two plausible explanations, both of which could be true to some extent. One is that technology has taken a turn that places labor at a disadvantage; the other is that we’re looking at the effects of a sharp increase in monopoly power. Think of these two stories as emphasizing robots on one side, robber barons on the other.

About the robots: there’s no question that in some high-profile industries, technology is displacing workers of all, or almost all, kinds. For example, one of the reasons some high-technology manufacturing has lately been moving back to the United States is that these days the most valuable piece of a computer, the motherboard, is basically made by robots, so cheap Asian labor is no longer a reason to produce them abroad.

In a recent book, “Race Against the Machine,” M.I.T.’s Erik Brynjolfsson and Andrew McAfee argue that similar stories are playing out in many fields, including services like translation and legal research. What’s striking about their examples is that many of the jobs being displaced are high-skill and high-wage; the downside of technology isn’t limited to menial workers.

Still, can innovation and progress really hurt large numbers of workers, maybe even workers in general? I often encounter assertions that this can’t happen. But the truth is that it can, and serious economists have been aware of this possibility for almost two centuries. The early-19th-century economist David Ricardo is best known for the theory of comparative advantage, which makes the case for free trade; but the same 1817 book in which he presented that theory also included a chapter on how the new, capital-intensive technologies of the Industrial Revolution could actually make workers worse off, at least for a while — which modern scholarship suggests may indeed have happened for several decades.

What about robber barons? We don’t talk much about monopoly power these days; antitrust enforcement largely collapsed during the Reagan years and has never really recovered. Yet Barry Lynn and Phillip Longman of the New America Foundation argue, persuasively in my view, that increasing business concentration could be an important factor in stagnating demand for labor, as corporations use their growing monopoly power to raise prices without passing the gains on to their employees.

I don’t know how much of the devaluation of labor either technology or monopoly explains, in part because there has been so little discussion of what’s going on. I think it’s fair to say that the shift of income from labor to capital has not yet made it into our national discourse.

Yet that shift is happening — and it has major implications. For example, there is a big, lavishly financed push to reduce corporate tax rates; is this really what we want to be doing at a time when profits are surging at workers’ expense? Or what about the push to reduce or eliminate inheritance taxes; if we’re moving back to a world in which financial capital, not skill or education, determines income, do we really want to make it even easier to inherit wealth?

As I said, this is a discussion that has barely begun — but it’s time to get started, before the robots and the robber barons turn our society into something unrecognizable.

Finally, a great explanation for what is happening.  The advances in technology must be acknowledged.  Closed factories are never going to reopen with more than a few humans working in them.  This might not be cause for concern if we weren’t ruled by sociopathic monopolists with no interest in helping the rest of us figure out how to exist in a laborless society.  There was a great scene in Dr. Strangelove about the abandonment of society by a ruling class.

1

From the movie:

Dr. Strangelove: I would not rule out the chance to preserve a nucleus of human specimens. It would be quite easy…heh, heh…at the bottom of ah…some of our deeper mineshafts. Radioactivity would never penetrate a mine some thousands of feet deep, and in a matter of weeks, sufficient improvements in drilling space could easily be provided.

Muffley: How long would you have to stay down there?

Dr. Strangelove: …I would think that uh, possibly uh…one hundred years…It would not be difficult Mein Fuehrer! Nuclear reactors could, heh…I’m sorry, Mr. President. Nuclear reactors could provide power almost indefinitely. Greenhouses could maintain plant life. Animals could be bred and slaughtered. A quick survey would have to be made of all the available mine sites in the country, but I would guess that dwelling space for several hundred thousands of our people could easily be provided.

Muffley: Well, I, I would hate to have to decide…who stays up and…who goes down.

Dr. Strangelove: Well, that would not be necessary, Mr. President. It could easily be accomplished with a computer. And a computer could be set and programmed to accept factors from youth, health, sexual fertility, intelligence, and a cross-section of necessary skills. Of course, it would be absolutely vital that our top government and military men be included to foster and impart the required principles of leadership and tradition. Naturally, they would breed prodigiously, eh? There would be much time, and little to do. Ha, ha. But ah, with the proper breeding techniques and a ratio of say, ten females to each male, I would guess that they could then work their way back to the present Gross National Product within say, twenty years.

Muffley: Wouldn’t this nucleus of survivors be so grief-stricken and anguished that they’d, well, envy the dead and not want to go on living?

Dr. Strangelove: When they go down into the mine, everyone would still be alive. There would be no shocking memories, and the prevailing emotion will be one of nostalgia for those left behind, combined with a spirit of bold curiosity for the adventure ahead! [involuntarily gives the Nazi salute and forces it down with his other hand]Ahhh!

Turgidson: Doctor, you mentioned the ratio of ten women to each man. Now, wouldn’t that necessitate the abandonment of the so-called monogamous sexual relationship, I mean, as far as men were concerned?

Dr. Strangelove: Regrettably, yes. But it is, you know, a sacrifice required for the future of the human race. I hasten to add that since each man will be required to do prodigious…service along these lines, the women will have to be selected for their sexual characteristics which will have to be of a highly stimulating nature.

Russian Ambassador: I must confess, you have an astonishingly good idea there, Doctor.

Rather than being abandoned to nuclear annihilation by our general and politicians in 1964, it is now an abandonment by plutocrats of all the lower classes to a race against automation, computers, drones, robots, surveillance and corrupt politicians.  Once you understand that you are competing against a non-human owned by a soulless plutocrat, you start to understand your problems and once you understand your problems you at least have some hope of overcoming them.

Take the Wal-Mart employee who thinks they are in their position, because they failed to work as hard as the Koch Brothers.  It would be no surprise if this worker felt they were separated from relative economic security by their lack of hard work and their poor decisions.  Finding flaws in people to explain their position is something any conservative talk show host can do in their sleep.  Too often people misdirect their dissatisfaction against people who are just as screwed.  Krugman’s column concentrates the reader on the robots and the robber barons.

Somehow, some way the robots must be made to work for the masses and not just for monopolists.  Societies are in danger of their citizens losing a rational connection between what they do for a living and how they live.  In Greece, a large portion of the population doesn’t even work.  The populations are sold on austerity as if there is some equilibrium to be found by putting people out of work and cutting their support from society at the same time.  Are unemployed Greeks supposed to be figuring out how to beat a robot motherboard manufacturer in Taiwan?  Austerity is based on a set of assumptions that has been eclipsed by technology.  Furthermore, the fruits of austerity can only feed the robber barons.

It should not be a hopeless situation.  Society can work again, but there is so much junk-thinking that has to be defeated and discredited.  Krugman’s column helps to concentrate the reader on the type of thinking that will allow for positive thinking about what we need to do for humans to have dignified lives.

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2 thoughts on “George Jetson is a Moocher

  1. hamock myson

    “Once you understand that you are competing against a non-human owned by a soulless plutocrat, you start to understand your problems and once you understand your problems you at least have some hope of overcoming them.”

    this is clearly the best sentence of 2012 on this esteemed blog.
    nominated and seconded.
    i love it!

  2. armchair

    Check this post out:

    Robots Don’t Destroy Jobs; Rapacious Corporate Executives Do,

    at —- http://www.nakedcapitalism.com/2013/01/robots-dont-destroy-jobs-rapacious-corporate-executives-do.html

    Here are some quotes:

    “Profits without prosperity is now starting to get attention in the mainstream press. In his New York Times op-ed, “Robots and Robber Barons” (Dec. 9, 2012), Paul Krugman seeks to explain why, with corporate profits up, labor compensation is down. As part of the ongoing digital revolution, he argues, robots are throwing American workers out of their jobs. In addition, he claims that corporations are making high profits through price gouging, and are not sharing these gains with their employees.”

    “Krugman is on to something important that needs to become part of the national policy debate. But he is off target in blaming a combination of automation and monopolistic practices for the disconnect between profits and prosperity.”

    The blogger later says:

    “Automation entails huge upfront investments. Companies that invest in automation have to build organizations to ensure steady supplies of high-quality materials, improve and maintain machinery, and capture sufficiently large market shares to achieve economies of scale. These investments in the development and utilization of automated facilities create lots of high-value-added jobs, especially for companies that, because of their investments, can grow large by producing higher quality, lower costs products than the competition.”

    His big point is:

    “The problem lies in the ideology that corporations should be governed to “maximize shareholder value,” which became prevalent in boardrooms and business schools in the 1980s, and has become totally dominant since. In the name of shareholder value over the decade 2001-2010, the 500 corporations in the S&P 500 Index (representing about 75 percent of US stock-market capitalization) expended not only 40 percent of their profits on cash dividends – the normal mode of rewarding shareholders – but also another 54 percent on stock buybacks, the purpose of which is to give a manipulative boost to a company’s own stock price. Large established companies did hardly any buybacks in the early 1980s. Over the past decade, buybacks by S&P 500 companies totaled about $3 trillion, which has left scant corporate resources for investment in innovation and high-value-added job creation.”

    I am still for more convinced by Krugman.

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