"The end of capitalism has begun"
Title taken from this ****ing awful, rambling Guardian article.I'm not entirely sure how to disagree with this article, because it's pretty much horse-****. What can you say to "the postcapitalist era has begun" besides "No, it hasn't you bat**** lunatic". He claims that postcapitalism has been made possible by three factors in information technology: Words can't express just how much of that is nonsense. This is why I stay away from mainstream media sources; this is why we shouldn't listen to non-economists on economics when they don't provide sources.
To take each point in turn: no, wages have not significantly decoupled from productivity. This phenomenon is largely overstated. This claim usually leads back to one EPI paper, which relies on a highly selective reading of the labour market which excludes almost half the work force and doesn't account for total compensation. When it comes to automation abolishing the need for human work? We'd probably need to reach a point where automated labour has an absolute advantage over human labour, which would probably require general intelligence. The biggest problem for automation in the coming decades will be unequally distributed gains as some groups of workers are made more productive while others are not. Until this point, automated labour is a complement to human labour, not a substitute.
Secondly, the idea that information is somehow hampering the economy's ability to form prices is just shockingly incorrect. Incomplete information is probably one of the main reasons prices don't perfectly reach the equilibrium.
Thirdly, since when was Wikipedia anti-capitalist? Claiming Wikipedia is an example of a company which hasn't responded to the market is just ignorant; there is huge demand for information and Wikipedia has provided it so effectively that it can essentially survive on a voluntary user fee. For some reason, however, he goes on to claim this:
Who knew? You apparently have to work for Goldman Sachs to get information.
And, of course, there's this little gem:
No, those aren't examples of why capitalism isn't sustainable over the long-run. It's pretty easy to demonstrate that an omniscient, benevolent social planner would choose to keep the market system which slight adjustments in pricing mechanisms rather than have another system, like a centrally planned economy, for instance. Claiming these things makes capitalism unworkable just shows a distinct lack of understanding when it comes to the economy in question.
•
Technology has reduced the need for work, and decoupled wages from productivity. I used to think that automation would indeed usher in an economy where humans wouldn't need to work, but I'm pretty convinced now--after reading labour economists like David Autor--that this is a long way off.
•
Information is corroding the markets ability to form prices.
•
Third, we’re seeing the spontaneous rise of collaborative production: goods, services and organisations are appearing that no longer respond to the dictates of the market and the managerial hierarchy. The biggest information product in the world – Wikipedia – is made by volunteers for free, abolishing the encyclopedia business and depriving the advertising industry of an estimated $3bn a year in revenue.
To take each point in turn: no, wages have not significantly decoupled from productivity. This phenomenon is largely overstated. This claim usually leads back to one EPI paper, which relies on a highly selective reading of the labour market which excludes almost half the work force and doesn't account for total compensation. When it comes to automation abolishing the need for human work? We'd probably need to reach a point where automated labour has an absolute advantage over human labour, which would probably require general intelligence. The biggest problem for automation in the coming decades will be unequally distributed gains as some groups of workers are made more productive while others are not. Until this point, automated labour is a complement to human labour, not a substitute.
Secondly, the idea that information is somehow hampering the economy's ability to form prices is just shockingly incorrect. Incomplete information is probably one of the main reasons prices don't perfectly reach the equilibrium.
Thirdly, since when was Wikipedia anti-capitalist? Claiming Wikipedia is an example of a company which hasn't responded to the market is just ignorant; there is huge demand for information and Wikipedia has provided it so effectively that it can essentially survive on a voluntary user fee. For some reason, however, he goes on to claim this:
Today, the thing that is corroding capitalism, barely rationalised by mainstream economics, is information. Most laws concerning information define the right of corporations to hoard it and the right of states to access it, irrespective of the human rights of citizens.
Who knew? You apparently have to work for Goldman Sachs to get information.
And, of course, there's this little gem:
The modern day external shocks are clear: energy depletion, climate change, ageing populations and migration. They are altering the dynamics of capitalism and making it unworkable in the long term.
No, those aren't examples of why capitalism isn't sustainable over the long-run. It's pretty easy to demonstrate that an omniscient, benevolent social planner would choose to keep the market system which slight adjustments in pricing mechanisms rather than have another system, like a centrally planned economy, for instance. Claiming these things makes capitalism unworkable just shows a distinct lack of understanding when it comes to the economy in question.
(edited 8 years ago)
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To be honest I just brush aside most of the far left radical articles because I feel they just live in another world. In response to your post, I agree.
Original post by Meta Cognition
Title taken from this ****ing awful, rambling Guardian article.I'm not entirely sure how to disagree with this article, because it's pretty much horse-****. What can you say to "the postcapitalist era has begun" besides "No, it hasn't you bat**** lunatic". He claims that postcapitalism has been made possible by three factors in information technology:
Words can't express just how much of that is nonsense. This is why I stay away from mainstream media sources; this is why we shouldn't listen to non-economists on economics when they don't provide sources.
To take each point in turn: no, wages have not significantly decoupled from productivity. This phenomenon is largely overstated. This claim usually leads back to one EPI paper, which relies on a highly selective reading of the labour market which excludes almost half the work force and doesn't account for total compensation. When it comes to automation abolishing the need for human work? We'd probably need to reach a point where automated labour has an absolute advantage over human labour, which would probably require general intelligence. The biggest problem for automation in the coming decades will be unequally distributed gains as some groups of workers are made more productive while others are not. Until this point, automated labour is a complement to human labour, not a substitute.
Secondly, the idea that information is somehow hampering the economy's ability to form prices is just shockingly incorrect. Incomplete information is probably one of the main reasons prices don't perfectly reach the equilibrium.
Thirdly, since when was Wikipedia anti-capitalist? Claiming Wikipedia is an example of a company which hasn't responded to the market is just ignorant; there is huge demand for information and Wikipedia has provided it so effectively that it can essentially survive on a voluntary user fee. For some reason, however, he goes on to claim this:
Who knew? You apparently have to work for Goldman Sachs to get information.
And, of course, there's this little gem:
No, those aren't examples of why capitalism isn't sustainable over the long-run. It's pretty easy to demonstrate that an omniscient, benevolent social planner would choose to keep the market system which slight adjustments in pricing mechanisms rather than have another system, like a centrally planned economy, for instance. Claiming these things makes capitalism unworkable just shows a distinct lack of understanding when it comes to the economy in question.
•
Technology has reduced the need for work, and decoupled wages from productivity. I used to think that automation would indeed usher in an economy where humans wouldn't need to work, but I'm pretty convinced now--after reading labour economists like David Autor--that this is a long way off.
•
Information is corroding the markets ability to form prices.
•
Third, we’re seeing the spontaneous rise of collaborative production: goods, services and organisations are appearing that no longer respond to the dictates of the market and the managerial hierarchy. The biggest information product in the world – Wikipedia – is made by volunteers for free, abolishing the encyclopedia business and depriving the advertising industry of an estimated $3bn a year in revenue.
Words can't express just how much of that is nonsense. This is why I stay away from mainstream media sources; this is why we shouldn't listen to non-economists on economics when they don't provide sources.
To take each point in turn: no, wages have not significantly decoupled from productivity. This phenomenon is largely overstated. This claim usually leads back to one EPI paper, which relies on a highly selective reading of the labour market which excludes almost half the work force and doesn't account for total compensation. When it comes to automation abolishing the need for human work? We'd probably need to reach a point where automated labour has an absolute advantage over human labour, which would probably require general intelligence. The biggest problem for automation in the coming decades will be unequally distributed gains as some groups of workers are made more productive while others are not. Until this point, automated labour is a complement to human labour, not a substitute.
Secondly, the idea that information is somehow hampering the economy's ability to form prices is just shockingly incorrect. Incomplete information is probably one of the main reasons prices don't perfectly reach the equilibrium.
Thirdly, since when was Wikipedia anti-capitalist? Claiming Wikipedia is an example of a company which hasn't responded to the market is just ignorant; there is huge demand for information and Wikipedia has provided it so effectively that it can essentially survive on a voluntary user fee. For some reason, however, he goes on to claim this:
Who knew? You apparently have to work for Goldman Sachs to get information.
And, of course, there's this little gem:
No, those aren't examples of why capitalism isn't sustainable over the long-run. It's pretty easy to demonstrate that an omniscient, benevolent social planner would choose to keep the market system which slight adjustments in pricing mechanisms rather than have another system, like a centrally planned economy, for instance. Claiming these things makes capitalism unworkable just shows a distinct lack of understanding when it comes to the economy in question.
Yes, it is rather silly.
Original post by cacra
Also, it is wise just to ignore Guardian Comment articles.
Hell no. That's my Saturday night entertainment.
Original post by Meta Cognition
Words can't express just how much of that is nonsense. This is why I stay away from mainstream media sources; this is why we shouldn't listen to non-economists on economics when they don't provide sources.
His new book, which this seems to be an advertisement for, would probably be a better bet if you want sources, as you quite rightly do.
Original post by viddy9
His new book, which this seems to be an advertisement for, would probably be a better bet if you want sources, as you quite rightly do.
I'm not even sure I want to read it, in all honesty.
If his book is just an extended argument for the propositions in the articles, it probably won't be any better given the sheer wrongness with which he conducted it.
In general good points, but in some areas I am not sure your view is totally accurate.
This is correct. Even after that point, humans will still need to make the decisions and we may reach a point where everyone is his own factory manager - 3d printer, designing software and materials-aware AI in tow. At this point we transcend the economies to scale economy, especially if we develop fusion power, meaning energy is free and so efficiency doesn't matter.
There is the point that algorithms are depriving markets of liquidity by trading with no "slack" left, causing extreme instability. However this is not the same as what he said.
A lot of information is insider traded. The average floor trader knows very little compared to GS. Further, big companies have leverage in policy decisions and sometimes help write government policies. In general, the best traders are those who work at big firms and are well connected to governments. Everyone else is looking in from the outside, to a higher or lower degree.
That is what has happened though. The Keynesians have stamped out free markets and implemented controlled markets. The result is that we truly don't know what prices are, with QE pushing stock prices through the roof, for example. Other price controls like the minimum wage cause distortions that ripple throughout the economy. Once one price is fixed, all other prices have to be fixed to result in no externalities (communism) or externalities are created (unemployment). Eventually things become progressively more communistic due to political pressure from the unemployed. Look at how the New Deal progressed throughout the world and eventually led to stagflation. The neoliberals have loosened some controls but their regulations are stifling a hell of a lot of small businesses. They have reduced outright intervention but, after the Volcker years, they have replaced this with Central Bank regulation and other types of social-engineering red-tape, with disastrous effects. As a result the economy has corporatised and government power has inevitably become far more influenced by lobbyists of now much larger corporations.
In general though, you are correct, I am just more Austrian than you. His central point, that we are heading to some sort of selfless utopia, goes hand in hand with his belief that human nature can be changed and so technology is enabling the Marxist paradise. Obviously silly.
Original post by Meta Cognition
Title taken from this ****ing awful, rambling Guardian article.I'm not entirely sure how to disagree with this article, because it's pretty much horse-****. What can you say to "the postcapitalist era has begun" besides "No, it hasn't you bat**** lunatic". He claims that postcapitalism has been made possible by three factors in information technology: Words can't express just how much of that is nonsense. This is why I stay away from mainstream media sources; this is why we shouldn't listen to non-economists on economics when they don't provide sources.
To take each point in turn: no, wages have not significantly decoupled from productivity. This phenomenon is largely overstated. This claim usually leads back to one EPI paper, which relies on a highly selective reading of the labour market which excludes almost half the work force and doesn't account for total compensation. When it comes to automation abolishing the need for human work? We'd probably need to reach a point where automated labour has an absolute advantage over human labour, which would probably require general intelligence. The biggest problem for automation in the coming decades will be unequally distributed gains as some groups of workers are made more productive while others are not. Until this point, automated labour is a complement to human labour, not a substitute.
•
Technology has reduced the need for work, and decoupled wages from productivity. I used to think that automation would indeed usher in an economy where humans wouldn't need to work, but I'm pretty convinced now--after reading labour economists like David Autor--that this is a long way off.
•
Information is corroding the markets ability to form prices.
•
Third, we’re seeing the spontaneous rise of collaborative production: goods, services and organisations are appearing that no longer respond to the dictates of the market and the managerial hierarchy. The biggest information product in the world – Wikipedia – is made by volunteers for free, abolishing the encyclopedia business and depriving the advertising industry of an estimated $3bn a year in revenue.
To take each point in turn: no, wages have not significantly decoupled from productivity. This phenomenon is largely overstated. This claim usually leads back to one EPI paper, which relies on a highly selective reading of the labour market which excludes almost half the work force and doesn't account for total compensation. When it comes to automation abolishing the need for human work? We'd probably need to reach a point where automated labour has an absolute advantage over human labour, which would probably require general intelligence. The biggest problem for automation in the coming decades will be unequally distributed gains as some groups of workers are made more productive while others are not. Until this point, automated labour is a complement to human labour, not a substitute.
This is correct. Even after that point, humans will still need to make the decisions and we may reach a point where everyone is his own factory manager - 3d printer, designing software and materials-aware AI in tow. At this point we transcend the economies to scale economy, especially if we develop fusion power, meaning energy is free and so efficiency doesn't matter.
Secondly, the idea that information is somehow hampering the economy's ability to form prices is just shockingly incorrect. Incomplete information is probably one of the main reasons prices don't perfectly reach the equilibrium.
There is the point that algorithms are depriving markets of liquidity by trading with no "slack" left, causing extreme instability. However this is not the same as what he said.
Thirdly, since when was Wikipedia anti-capitalist? Claiming Wikipedia is an example of a company which hasn't responded to the market is just ignorant; there is huge demand for information and Wikipedia has provided it so effectively that it can essentially survive on a voluntary user fee. For some reason, however, he goes on to claim this:
Who knew? You apparently have to work for Goldman Sachs to get information.
Who knew? You apparently have to work for Goldman Sachs to get information.
A lot of information is insider traded. The average floor trader knows very little compared to GS. Further, big companies have leverage in policy decisions and sometimes help write government policies. In general, the best traders are those who work at big firms and are well connected to governments. Everyone else is looking in from the outside, to a higher or lower degree.
And, of course, there's this little gem:
No, those aren't examples of why capitalism isn't sustainable over the long-run. It's pretty easy to demonstrate that an omniscient, benevolent social planner would choose to keep the market system which slight adjustments in pricing mechanisms rather than have another system, like a centrally planned economy, for instance. Claiming these things makes capitalism unworkable just shows a distinct lack of understanding when it comes to the economy in question.
No, those aren't examples of why capitalism isn't sustainable over the long-run. It's pretty easy to demonstrate that an omniscient, benevolent social planner would choose to keep the market system which slight adjustments in pricing mechanisms rather than have another system, like a centrally planned economy, for instance. Claiming these things makes capitalism unworkable just shows a distinct lack of understanding when it comes to the economy in question.
That is what has happened though. The Keynesians have stamped out free markets and implemented controlled markets. The result is that we truly don't know what prices are, with QE pushing stock prices through the roof, for example. Other price controls like the minimum wage cause distortions that ripple throughout the economy. Once one price is fixed, all other prices have to be fixed to result in no externalities (communism) or externalities are created (unemployment). Eventually things become progressively more communistic due to political pressure from the unemployed. Look at how the New Deal progressed throughout the world and eventually led to stagflation. The neoliberals have loosened some controls but their regulations are stifling a hell of a lot of small businesses. They have reduced outright intervention but, after the Volcker years, they have replaced this with Central Bank regulation and other types of social-engineering red-tape, with disastrous effects. As a result the economy has corporatised and government power has inevitably become far more influenced by lobbyists of now much larger corporations.
In general though, you are correct, I am just more Austrian than you. His central point, that we are heading to some sort of selfless utopia, goes hand in hand with his belief that human nature can be changed and so technology is enabling the Marxist paradise. Obviously silly.
(edited 8 years ago)
Original post by Meta Cognition
Title taken from this ****ing awful, rambling Guardian article.I'm not entirely sure how to disagree with this article, because it's pretty much horse-****. What can you say to "the postcapitalist era has begun" besides "No, it hasn't you bat**** lunatic". He claims that postcapitalism has been made possible by three factors in information technology: Words can't express just how much of that is nonsense. This is why I stay away from mainstream media sources; this is why we shouldn't listen to non-economists on economics when they don't provide sources.
To take each point in turn: no, wages have not significantly decoupled from productivity. This phenomenon is largely overstated. This claim usually leads back to one EPI paper, which relies on a highly selective reading of the labour market which excludes almost half the work force and doesn't account for total compensation. When it comes to automation abolishing the need for human work? We'd probably need to reach a point where automated labour has an absolute advantage over human labour, which would probably require general intelligence. The biggest problem for automation in the coming decades will be unequally distributed gains as some groups of workers are made more productive while others are not. Until this point, automated labour is a complement to human labour, not a substitute.
Secondly, the idea that information is somehow hampering the economy's ability to form prices is just shockingly incorrect. Incomplete information is probably one of the main reasons prices don't perfectly reach the equilibrium.
Thirdly, since when was Wikipedia anti-capitalist? Claiming Wikipedia is an example of a company which hasn't responded to the market is just ignorant; there is huge demand for information and Wikipedia has provided it so effectively that it can essentially survive on a voluntary user fee. For some reason, however, he goes on to claim this:
Who knew? You apparently have to work for Goldman Sachs to get information.
And, of course, there's this little gem:
No, those aren't examples of why capitalism isn't sustainable over the long-run. It's pretty easy to demonstrate that an omniscient, benevolent social planner would choose to keep the market system which slight adjustments in pricing mechanisms rather than have another system, like a centrally planned economy, for instance. Claiming these things makes capitalism unworkable just shows a distinct lack of understanding when it comes to the economy in question.
•
Technology has reduced the need for work, and decoupled wages from productivity. I used to think that automation would indeed usher in an economy where humans wouldn't need to work, but I'm pretty convinced now--after reading labour economists like David Autor--that this is a long way off.
•
Information is corroding the markets ability to form prices.
•
Third, we’re seeing the spontaneous rise of collaborative production: goods, services and organisations are appearing that no longer respond to the dictates of the market and the managerial hierarchy. The biggest information product in the world – Wikipedia – is made by volunteers for free, abolishing the encyclopedia business and depriving the advertising industry of an estimated $3bn a year in revenue.
To take each point in turn: no, wages have not significantly decoupled from productivity. This phenomenon is largely overstated. This claim usually leads back to one EPI paper, which relies on a highly selective reading of the labour market which excludes almost half the work force and doesn't account for total compensation. When it comes to automation abolishing the need for human work? We'd probably need to reach a point where automated labour has an absolute advantage over human labour, which would probably require general intelligence. The biggest problem for automation in the coming decades will be unequally distributed gains as some groups of workers are made more productive while others are not. Until this point, automated labour is a complement to human labour, not a substitute.
Secondly, the idea that information is somehow hampering the economy's ability to form prices is just shockingly incorrect. Incomplete information is probably one of the main reasons prices don't perfectly reach the equilibrium.
Thirdly, since when was Wikipedia anti-capitalist? Claiming Wikipedia is an example of a company which hasn't responded to the market is just ignorant; there is huge demand for information and Wikipedia has provided it so effectively that it can essentially survive on a voluntary user fee. For some reason, however, he goes on to claim this:
Who knew? You apparently have to work for Goldman Sachs to get information.
And, of course, there's this little gem:
No, those aren't examples of why capitalism isn't sustainable over the long-run. It's pretty easy to demonstrate that an omniscient, benevolent social planner would choose to keep the market system which slight adjustments in pricing mechanisms rather than have another system, like a centrally planned economy, for instance. Claiming these things makes capitalism unworkable just shows a distinct lack of understanding when it comes to the economy in question.
I have not read the article in question and so cannot really comment on that one. However, in general...
Well done! to The Guardian for standing up for, and defending, people's rights.
Original post by 41b
Not really; nobody is omnisciently tweaking the price system. If that were the case no negative externalities would exist at all, when they obviously do.
The Keynesians have stamped out free markets and implemented controlled markets.
Hmm, not really. I'm not entirely sure who you mean by the Keynesians, since most of the original Keynesian ideas have been shown as defunct and we've moved on since then. Current economic consensus (the New Neoclassical Synthesis) is broadly monetarist and New Classical, with a couple of relevant Keynesian ideas floating around where they're needed.
with QE pushing stock prices through the roof, for example.
It's incredibly difficult to determine the extent of quantitative easing's effect on the stock market, but nevertheless that's just par the course of monetary policy. Falling/rising interest rates and expansive/contractionary monetary growth will always occur, whether or not we have a central bank.
Obligatory "QE was necessary" comment, too. You only need look at the European Union prior to Draghi's commencement of QE to understand how liquidationism hurts an economy with an AD slump.
Other price controls like the minimum wage cause distortions that ripple throughout the economy.
I agree that the minimum wage is distortionary and should be abolished, or that so long as we have it should be empirically determined to have minimal effect on the labour market.
Once one price is fixed, all other prices have to be fixed to result in no externalities (communism) or externalities are created (unemployment).
Really not sure about this.
Look at how the New Deal progressed throughout the world and eventually led to stagflation.
The New Deal didn't lead to stagflation. Stagflation was caused by a combination of rising oil prices and a misperception of the long-run Phillips Curve on the part of the Fed.
New Deal was pretty crap for the most part though, we agree on that.
Original post by Vlad83
Well done! to The Guardian for standing up for, and defending, people's rights.
You're congratulating the Guardian for making blatantly false and ignorant propositions?
Original post by Meta Cognition
You're congratulating the Guardian for making blatantly false and ignorant propositions?
Nope I am not congratulating for that.
I meant - and said - "in general", their general attitude and approach.
Besides, with respect, who has determined that their propositions are "false" or "ignorant"(?).
Whatever they said, may have been their own analysis or view on things. Anyway, I doubt they are the only ones.
Original post by Vlad83
Besides, with respect, who has determined that their propositions are "false" or "ignorant"(?).
The evidence, and the economists who study it. . . Who else? Whatever their perspective is is irrelevant so long as it leads to false propositions.
Original post by Meta Cognition
The evidence, and the economists who study it. . . Who else? Whatever their perspective is is irrelevant so long as it leads to false propositions.
With respect, I doubt those people have actually Determined or established those propositions to be false.
In fact, there could well be evidence to various effects, or to support both perspectives or viewpoints.
And it is highly likely that indeed there is. As there often is.
A proposition is an opinion (just as the one to the contrary), an argument, not a claim of solidified established fact or reality. Everyone is entitled to a proposition / perspective.
Original post by Vlad83
No, they have, which is why I supplied sources which are utterly non-controversial. You're free to look at the papers and dispute the empirics, perhaps with some legitimate sources of your own, but you can't hand-wave it away because you doubt the conclusion.
The second one is especially false.
Original post by Meta Cognition
The government controls the price system. The central bank system inherently does it. Government policy decisions affect prices across the board. Add in things like carbon pricing and gender parity legislation and you have pretty much total distortion of the price system.
Hmm, not really. I'm not entirely sure who you mean by the Keynesians, since most of the original Keynesian ideas have been shown as defunct and we've moved on since then. Current economic consensus (the New Neoclassical Synthesis) is broadly monetarist and New Classical, with a couple of relevant Keynesian ideas floating around where they're needed.
You can call it whatever you like. I call it the regulatory liberal state and it has only become more controlling and less free-market, on average, as time has gone on.
It's incredibly difficult to determine the extent of quantitative easing's effect on the stock market, but nevertheless that's just par the course of monetary policy. Falling/rising interest rates and expansive/contractionary monetary growth will always occur, whether or not we have a central bank.
Obligatory "QE was necessary" comment, too. You only need look at the European Union prior to Draghi's commencement of QE to understand how liquidationism hurts an economy with an AD slump.
Obligatory "QE was necessary" comment, too. You only need look at the European Union prior to Draghi's commencement of QE to understand how liquidationism hurts an economy with an AD slump.
?? Necessary for what? There is no evidence that moderate deflation leads to reduced economic growth. The only reason governments pursue pro-inflation policies is so that their national debt does not grow over time. Inflation hurts savers, deflation benefits consumers and is a sign of a generally healthy economy experiencing big efficiency gains, as you'd expect to be happening as a result of rapid automation and technologisation. Reversing this through inane Keynesian policies of pro-inflation is ridiculous.
I agree that the minimum wage is distortionary and should be abolished, or that so long as we have it should be empirically determined to have minimal effect on the labour market.
Really not sure about this.
Really not sure about this.
As soon as you fix one price, all interconnected prices are effected. Then those prices have to be fixed. Eventually every price has to be fixed. We are at the point today where almost every price is fixed, or regulated, in some way. That is partly because advanced products require product regulation (e.g. to prevent poisoning of consumers) but a huge part of it is also ideological (e.g. gender parity legislation or race parity legislation), and not tied to productivity. For example, women earn about the same as men in the youngest age group overall, despite working fewer hours and being equally or less productive. This is an ideological price fix, the result of which is men being disincentivised from formal employment and being incentivised to emigrate / self-employ and so pay a lower tax. Carbon prices are another good example, despite the anthropogenic global warming hypothesis unraveling over the last few years.
Keynesians are people who put ideology before reality. Neoclassicals might claim to be hugely different but a CB system allows a state to put ideology (unemployment minimising politics) before reality (employment may not be competitive). As such we are in the Neo-Keynesian era. Perhaps during the Volcker and early Greenspan years we followed a tight, reality based monetary policy but since then it has all been ideology, politics and largesse, and the continuing of state expansion.
The New Deal didn't lead to stagflation. Stagflation was caused by a combination of rising oil prices and a misperception of the long-run Phillips Curve on the part of the Fed.
It inherently did. Prices rose, and kept rising after the oil shocks, due to transfer payments creating inflation at the same time as unemployment. It's just that for the first time unemployment was high enough, and transfer payments were generous enough, for the effect to persist for so long. The oil shocks just compounded the problem.
(edited 8 years ago)
Original post by Meta Cognition
No, they have, which is why I supplied sources which are utterly non-controversial. You're free to look at the papers and dispute the empirics, perhaps with some legitimate sources of your own, but you can't hand-wave it away because you doubt the conclusion.
The second one is especially false.
The second one is especially false.
Many thanks for that.
But I doubt I would agree with you.
Utterly non-controversial?
With respect, even if one may wish something is non-controversial, that does not necessarily mean it is. It probably is not.
Original post by 41b
I normally make a point of not debating with Austrian Schoolers, due to sheer differences in methodology and the heterodox nature of the school. So I hope you'll forgive me if I don't feel like getting into your post, but I will make two claims.
I) The Austrian Business Cycle Theory is empirically defunct, and doesn't explain a single post-War recession, nor any recession prior that I'm currently aware of.
II) Never reason from a price change; deflation is not always and everywhere a sign of efficiency gains. It was in, say, the early 2000s when a productivity boom put downward pressure on prices. However, deflation during a slump is pretty much always a sign of deficient aggregate demand.
Original post by Vlad83
With respect, even if one may wish something is non-controversial, that does not necessarily mean it is. It probably is not.
. . . No, that isn't what's happening. You're here (with presumably little foreknowledge in economics) trying to tell me that solidly establish facts in economics are probably controversial and that I simply wish they were not. You have absolutely no basis for this assertion. You're welcome to try and show me, empirically, how forthcoming short-run changes in the labour market via technology is going to result in long-run unemployment; or you can try and show me how more information leads to less representative pricing. . .
Otherwise you have no basis for your claims.
Original post by Meta Cognition
Title taken from this ****ing awful, rambling Guardian article.I'm not entirely sure how to disagree with this article, because it's pretty much horse-****. What can you say to "the postcapitalist era has begun" besides "No, it hasn't you bat**** lunatic". He claims that postcapitalism has been made possible by three factors in information technology:Words can't express just how much of that is nonsense. This is why I stay away from mainstream media sources; this is why we shouldn't listen to non-economists on economics when they don't provide sources.
To take each point in turn: no, wages have not significantly decoupled from productivity. This phenomenon is largely overstated. This claim usually leads back to one EPI paper, which relies on a highly selective reading of the labour market which excludes almost half the work force and doesn't account for total compensation. When it comes to automation abolishing the need for human work? We'd probably need to reach a point where automated labour has an absolute advantage over human labour, which would probably require general intelligence. The biggest problem for automation in the coming decades will be unequally distributed gains as some groups of workers are made more productive while others are not. Until this point, automated labour is a complement to human labour, not a substitute.
Secondly, the idea that information is somehow hampering the economy's ability to form prices is just shockingly incorrect. Incomplete information is probably one of the main reasons prices don't perfectly reach the equilibrium.
Thirdly, since when was Wikipedia anti-capitalist? Claiming Wikipedia is an example of a company which hasn't responded to the market is just ignorant; there is huge demand for information and Wikipedia has provided it so effectively that it can essentially survive on a voluntary user fee. For some reason, however, he goes on to claim this:
Who knew? You apparently have to work for Goldman Sachs to get information.
And, of course, there's this little gem:
No, those aren't examples of why capitalism isn't sustainable over the long-run. It's pretty easy to demonstrate that an omniscient, benevolent social planner would choose to keep the market system which slight adjustments in pricing mechanisms rather than have another system, like a centrally planned economy, for instance. Claiming these things makes capitalism unworkable just shows a distinct lack of understanding when it comes to the economy in question.
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Technology has reduced the need for work, and decoupled wages from productivity. I used to think that automation would indeed usher in an economy where humans wouldn't need to work, but I'm pretty convinced now--after reading labour economists like David Autor--that this is a long way off.
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Information is corroding the markets ability to form prices.
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Third, we’re seeing the spontaneous rise of collaborative production: goods, services and organisations are appearing that no longer respond to the dictates of the market and the managerial hierarchy. The biggest information product in the world – Wikipedia – is made by volunteers for free, abolishing the encyclopedia business and depriving the advertising industry of an estimated $3bn a year in revenue.
To take each point in turn: no, wages have not significantly decoupled from productivity. This phenomenon is largely overstated. This claim usually leads back to one EPI paper, which relies on a highly selective reading of the labour market which excludes almost half the work force and doesn't account for total compensation. When it comes to automation abolishing the need for human work? We'd probably need to reach a point where automated labour has an absolute advantage over human labour, which would probably require general intelligence. The biggest problem for automation in the coming decades will be unequally distributed gains as some groups of workers are made more productive while others are not. Until this point, automated labour is a complement to human labour, not a substitute.
Secondly, the idea that information is somehow hampering the economy's ability to form prices is just shockingly incorrect. Incomplete information is probably one of the main reasons prices don't perfectly reach the equilibrium.
Thirdly, since when was Wikipedia anti-capitalist? Claiming Wikipedia is an example of a company which hasn't responded to the market is just ignorant; there is huge demand for information and Wikipedia has provided it so effectively that it can essentially survive on a voluntary user fee. For some reason, however, he goes on to claim this:
Who knew? You apparently have to work for Goldman Sachs to get information.
And, of course, there's this little gem:
No, those aren't examples of why capitalism isn't sustainable over the long-run. It's pretty easy to demonstrate that an omniscient, benevolent social planner would choose to keep the market system which slight adjustments in pricing mechanisms rather than have another system, like a centrally planned economy, for instance. Claiming these things makes capitalism unworkable just shows a distinct lack of understanding when it comes to the economy in question.
I skimmed it this morning. Gonna give it a full read tonight.
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