A calculator. A map. A credit card. Your diary, newspaper, camera, computer, TV, music collection, alarm clock, telephone, & a compass, too — just 50 years ago, would people have believed that all of that & more would soon fit in a human hand? It may have been hard to imagine in 1967 but, if you are one of the growing number of humans who possess a smartphone, all of that stuff being in your pocket is just a part of your everyday reality, now. In so-called developed countries, most people would agree that 21st-century innovations, like smartphones, have had a positive effect on our lives — unless, of course, you ask someone who used to manufacture compasses or deliver newspapers for a living. As technology continues to develop at a mind-boggling speed, we must ask ourselves — how many printing-presses or news-stands will there be in 30 years? When will taxi-drivers & cashiers be replaced with self-driving cars & automated checkouts?
The most important question, however, is how will our current economic system respond when robot-immigrants from the internet steal all of our jobs?
Supply, Demand, & Markets
Even before we had the international stock-exchange & the internet, economics was a fairly complicated thing to study but the basic idea of supply & demand is still pretty important wherever there are markets. The concept of supply & demand is simple & straightforward but their impact is not always obvious — so, let’s run through the basics, first.
At a basic level, supply & demand explains why the price of gold & dirt are so different. Both are very useful — without dirt, for instance, we couldn’t grow food & gold has a lot of interesting properties, including its attractive appearance, its malleability, & how efficiently it conducts electricity. Of course, if prices were based on how useful things were, things like soil would cost more than gold & we’d all be filthy rich! Even though it’s less useful & doesn’t feed us, the price of gold is higher because its supply is much less than the amount people are willing to buy.
If the supply of something is just enough to meet demand, its price is close to the actual value. When supply drops lower than demand, it gets sold to those who pay the most & so the price will become higher but, if supply grows larger than demand, prices drop until more buyers are able to afford to buy the extra. In both cases, prices change until supply & demand are about the same, which is called equilibrium.
The Market Calls People “Labor”
& “Wages” are the Price of People
Just as gold, iron, & oil are measured with ounces, tons, & barrels, the market measures human beings using hours. Just as a barrel of oil has a standard price, an hour of a person’s time has a standard price called a wage — so, unless a person’s income comes from assets ( like stocks or a chests of pirate gold) you are literally a resource being sold on the market, from an economic perspective. This is a major problem because, when the supply of stuff like avocados or oil gets larger than demand, we all get cheap gas & a big heap of discounted fruit at the grocery store — but, when the people-supply grows, we get lower wages & the big heap of extra labor is called unemployment.
But the real problem is this — over time, demand for people’s work-hours will shrink & the supply will grow. Here’s why…
More Technology = Less Work
No one has ever shouted “Eureka! I’ve invented something that makes it harder to do stuff!” That’s because the point of technology, generally speaking, is to make things easier. For example, humans invented the technology of farming because farms create more food with less effort than hunting & gathering, which meant we didn’t need to work as much. We call this part of history the agricultural revolution and it triggered the dawn of human civilization because farming meant we had enough free-time to invent things like the wheel & art ( & also war & taxes ). Obviously, not all inventions were that great but, over the course of history, technology has clearly made work less difficult, less time-consuming, & more productive — so far…
This brings us to the heart of the problem. In the US, farmers worked about 275 hours to grow 100 bushels of wheat on 5 acres in 1830 — by the 1990s, less than 3 work-hours did the same on 3 acres. That’s about 92 times more food per-farmer from 2/3rds as much land. In 1930, it took 1 farmer to supply food for every 9.8 people — by 2010, a farmer was producing enough for 155 people! The good news is that food production has kept up with population growth but the bad news is many fewer farmers are needed now ( about 1/16th of how many we needed in 1930 ).
People Will Keep Inventing More Stuff
& That Stuff Will Steal Their Jobs
Agriculture is not the only industry that’s growing more efficient, of course, but pretty much every industry in human history. The scribes who used to copy books by hand became unnecessary when the printing press was invented and the rise of factories did the same thing to tailors, weavers, gem-cutters, & other craftspeople during the industrial revolution. Assuming no disasters wipe out a large chunk of the human population, there is no reason to think this trend will stop anytime soon. A 2013 study even suggests as much as 47% of all jobs in the US might be replaced with computers over the next few decades!
This situation is quite a puzzle for unions & workers’ organizations whose members’ livelihoods are on the chopping block. Stopping the use of new labor-saving technology is clearly pretty backwards but, without a backup plan, workers can’t just let robots waltz in & steal their jobs, either ( though, if we had to choose, we’d obviously rather have waltzing robots than non-waltzing ones ). In any case, the uncomfortable fact is that technology helped us create a staggering level of abundance but our economic system is taking the value of that abundance from the paychecks of everyone who doesn’t own the technology.
Which, by the way, is almost everyone.
The Status Quo Economy Cannot Work
In a Post-Scarcity Society
We need to throw away the idea that people need to work 40 or 50 hours to deserve food & shelter because that is now impossible. And it’s becoming impossible-er, by the minute — the number of necessary jobs has, is, & will continue to fall. Over time, new technologies will continue to improve our productivity and that means the natural demand for human work-hours must drop, dragging the natural price along with it. When that price falls below any possibility of profit, the supply of people will overflow what the market can possibly demand & the masses will either be given fair access to our abundant resources or they will seize that access by force.
This is not politics — this is cause & effect. Market economies were not designed to feel pity for investments that do not bring a profit, even if that investment is ourselves. The free-market says that, when a commodity cannot be profited from, businesses should cut their losses & re-invest — but this business is humanity & our commodities are our lives. How can we liquidate the hours that make up our days? Will we be allowed to write off our worthless afternoons as losses when we file for our tax-returns?
Tell me, which assets are more profitable than bread in the mouths of our children?
The Well-Being of the People
Must Be Taken Off the Market
The economic systems of today cannot withstand the onslaught of abundance — the world economy, as it exists today, will collapse & there is no way to save it. Just as we invented farming & the assembly line, we must now invent new economic technology that is capable of dealing with our current reality. The market has sometimes been a great tool to distribute resources & it has often been a very efficient one — but, at the end of the day, it is just a tool & a tool is only useful when it is useful to us.
We must adjust our economic ideas to this new reality — if we don’t, reality will adjust it for us. People’s lives & the things that sustain human lives are not an economic issue anymore and so they must be removed from the market. Until that happens, there will be constant social struggle. The masses will have no choice but to demand their governments force wages higher than the market value, which means cutting into the profits of the business class who, of course, will be using its wealth to resist. Sound familiar?
In the end, it is really just the limits of our imaginations that we struggle against but, when enough of us win, we will find that the mind of society will have changed, too.
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