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Robert Baratheon

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Not in places like China, India, etc. they are most certainly not. In those places (and dozens of other squalors around the world) there is a government which oppresses people and essentially locks them into menial labor for low pay.

It is not as though these countries do so by directly forcing wages down. Their economies are relatively poor because of past statism and (in the case of India) due to current statism: almost everyone is poorer.... they're poorer countries.

... when (if?) that is ever unlocked, and freedom comes to those people, then the price of manufactured goods will skyrocket.

No. In real terms, the price will fall, not rise.

And yes, your iPhone is in some sense the product of slave labor.

And yes, your iPhone is in some sense the product of slave labor.

Repeating a falsehood will not make it true.

Here my concern is that all of the progress we speak of doesn't create net-new jobs (which is somewhat contradictory if you think about it), they simply make life easier for everybody.

Why is this a concern. If people are allowed freedom, unemployment will mostly be people who are between jobs. The occasional recession will hit, see a spurt in unemployment, and then it will come back to steady state. There is no link between technology and the level of unemployment. Technology only changes the amount of output that the employed people can produce.

It's not that everybody will get richer, its that everybody can work less and still survive. That has different implications.

People can choose to earn more or to relax more. No new concerns are raised; to each his own.
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Last I checked, China is still quite totalitarian, and quite controlled. You cannot freely organize a labor union there, which for workers at that level is practically speaking the only way they can control anything about their existence.

 

That's slave labor in my book.

 

Anyhow, explain the logic that, when workers are free to demand a truly open, market-driven wage, which will necessarily be a lot higher, that we'll somehow pay less for that labor. I guess you're saying that if Foxconn workers were allowed organize, they'd make sure they were paid less with fewer benefits? I guess we're both just crystal-balling here, but my own prediction is the opposite. I think they'd quickly bring their wages up to near-US levels, and the price of the iPhone (et. al.) would skyrocket.

 

And yes, Foxconn, as in the makers of the iPhone, filled with workers suppressed by a totalitarian government. Ergo, slave labor. Not quite to the same degree as other forms of slave labor--and probably unavoidable in our modern world--but yes, slave labor in a sense.

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There is no link between technology and the level of unemployment. Technology only changes the amount of output that the employed people can produce.

 

 

This is an interesting aside.

 

I agree that, thus far, there has not been any data (that I know about anyhow) that establishes any link between technology and unemployment. Maybe it won't happen.

 

However, I worry about the second statement, because it doesn't add up: unless you assume dramatically increasing demand, then increased output will necessarily lead to lower real wages and/or unemployment. Technology can reduce demand if it makes things last longer or have longer-lasting effects (viz. a car that goes 200k miles or a computer that is still relevant after 15 years of use).

 

Put it another way, what is the LVM answer to this? :-)

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Technology can reduce demand if it makes things last longer or have longer-lasting effects (viz. a car that goes 200k miles or a computer that is still relevant after 15 years of use).

But demand for what? Granted, if I have a car or a computer that can last for a long(er) time, I'll buy fewer cars and fewer computers... but does that mean I won't find some other, new use for my money?

I don't know about anyone else, but I've never had a shortage of "things that I want to do with my money."

Perhaps increased technology or mechanization will result in fewer jobs overall in certain industries; maybe if cars run forever, fewer cars will be sold and thus fewer jobs in the auto industry will be available -- I think that's at least possible. But I would expect that the money people save on cars would then be diverted into other interests and other industries. Thus jobs lost in cars are jobs created elsewhere.

Besides which, instead of a person being able to afford a car alone over some given period of time (and by some given amount of labor), the savings on having to replace that car allow that person to be able to buy a car... and something else, in that same time, by that same labor. That is to say, it is an increase in wealth, which is exactly what we should expect from technological innovation. When we're able to create more wealth with less labor, we get wealthier.

Edited by DonAthos
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... unless you assume dramatically increasing demand,...

Demand is practically infinite. Possibly, millions of people will want to live like today's richest guy. And, while that might not be practical as a simple multiplication, they could well substitute the parts that create physical constraints.

Demand is only inhibited by imagination. I'd like to put thousands of miles of urban freeway underground, and add many thousands of miles more... driving out to the country should mean 100 mph all the way. You could come up with alternatives... just demand of a different type.

Kobe beef for the masses means we have to invent all those machines that massage the cows. Or maybe while Kobe beef is cheap, we'll be willing to spend a month's wages on a hand-knitted sweater.

Anyhow, this is all truly besides the point, because demand is not related to unemployment either. Take that!!

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Last I checked, China is still quite totalitarian, and quite controlled. You cannot freely organize a labor union there, which for workers at that level is practically speaking the only way they can control anything about their existence.

 

That's slave labor in my book.

Whatever that book is, put it down and pick up a dictionary. Slavery is a specific thing, and it's not "being denied the right to organize into a union". 

 

Also, using "practically speaking" is an admission that the statement that follows it is not true. If it was true, you wouldn't need to qualify it, you could just state it. Using this language, you might as well get it over with and just throw up a sign that says "I don't actually believe what I'm saying" while you speak.

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Demand is practically infinite.

 

How can demand be infinite if supply is not infinite? Who is going to buy all of these goods if they don't get paid enough to do so, and/or they don't feel like working enough to do so?

 

In other words, infinite demand implies infinite desire to work in order to obtain desired products, right?

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How can demand be infinite if supply is not infinite? Who is going to buy all of these goods if they don't get paid enough to do so, and/or they don't feel like working enough to do so?

 

In other words, infinite demand implies infinite desire to work in order to obtain desired products, right?

Okay. To be precise: demand is not infinite; but, wants and desires are infinite. [Aside: "Demand" is a want/desire backed by a willingness and ability to exchange value for the desired value.] Demand is not related to unemployment, because unemployment is not the act of being idle, but the act of being idle backed by a willingness and ability to produce value. To the extent that people produce value, they transform desire into demand. It's Say's law.

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Okay. To be precise: demand is not infinite; but, wants and desires are infinite. [Aside: "Demand" is a want/desire backed by a willingness and ability to exchange value for the desired value.] Demand is not related to unemployment, because unemployment is not the act of being idle, but the act of being idle backed by a willingness and ability to produce value. To the extent that people produce value, they transform desire into demand. It's <a data-ipb="nomediaparse" data-cke-saved-href="http://en.wikipedia.org/wiki/Say" href="http://en.wikipedia.org/wiki/Say" s_law"="">Say's law.

 

Got it, so you don't define "unemployed" as, "not being employed". How silly of me.

 

That said, I still don't get it: if somebody does not desire to work, and they correspondingly do not desire to buy things, then surely that desire would have a direct effect on aggregate demand, no?

 

Put it another way, if technology gets to the point where we only need work for a few years of our life to buy ourselves a replicator, a permanent place to live, a computer, Internet connection, Roomba 2042, etc... then what? In such a society there's going to be vastly less demand for human labor, right? (And to be sure, I think a backward-looking example is probably available...).

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Got it, so you don't define "unemployed" as, "not being employed". How silly of me.

Do you know anything about how the BLS and every other economist computes unemployment? Did you think that my grandma, at 99 with one foot in the grave is counted as part of the 6 or 7% who are unemployed? Do you think my 2 year old nephew is also counted as unemployed?

If you want to use your own non-standard definitions, then provide fair notice of them.

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... then what? In such a society there's going to be vastly less demand for human labor, right?

By "labor" do you mean "all human effort and ingenuity of all kinds"? Or is it literally physical labor? Either way, the point you haven't addressed is that humans innovate. "Labor" of yesterday doesn't even apply to labor that has been innovated for tomorrow. Edited by JASKN
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Last I checked, China is still quite totalitarian, and quite controlled.

Depends on how you look at it.  Some aspects of their lives (such as procreation) sound like something directly out of 1984; in other areas they're actually given more autonomy than your average American.

 

http://en.wikipedia.org/wiki/Chinese_economic_reform

 

In particular you should devote some research to modern-day Hong Kong.

 

. . . when workers are free to demand a truly open, market-driven wage, which will necessarily be a lot higher. . .

 

Do you see anything in that assertion which you might want to clarify?

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Put it another way, if technology gets to the point where we only need work for a few years of our life to buy ourselves a replicator, a permanent place to live, a computer, Internet connection, Roomba 2042, etc... then what? In such a society there's going to be vastly less demand for human labor, right? (And to be sure, I think a backward-looking example is probably available...).

Frozen abstraction.  You're using goods and services A, B, C and D to connote all human desires, as such.  What others are attempting to point out is that human desire is essentially infinite.  You buy the Roomba 2042 and then you want the Roomba 2045, immediately followed by the 2049.  You can see an exact concretization of such behavior in the modern smartphone market.

And not only is such greed actual, it's moral as well; it has been one of the primary motivations behind innovation and improvement of any sort, throughout history.

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By "labor" do you mean "all human effort and ingenuity of all kinds"? Or is it literally physical labor? Either way, the point you haven't addressed is that humans innovate. "Labor" of yesterday doesn't even apply to labor that has been innovated for tomorrow.

 

Actually, that innovation is exactly my point. We are on the way to innovating our way to virtually eliminating labor (as defined as something somebody does that somebody else desires).

 

I'm pretty sure the human race works a lot less than it used to, no?

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Actually, that innovation is exactly my point. We are on the way to innovating our way to virtually eliminating labor (as defined as something somebody does that somebody else desires).

 

I'm pretty sure the human race works a lot less than it used to, no?

Henry Ford's Greenfield Village is not far from my abode. I've been there several times. There are a few homes there that are staged to illustrate aspects of life prior to the 1800's. One such home has a spinning wheel sitting at one end of a room. In front of the wheel is a groove in the floor.  

 

The individual explaining the lifestyle of the day pointed out that life in those times meant to get up and hit the floor running, so to speak. The groove is made by the process of using the spinning wheel to create thread from the wool sheered from the sheep. This was just one of the many chores required by a homestead to be prosperous. The groove in the floor is telling of just how often that span of space was crossed to provide 1 new set of clothing a year.

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