The economic uncertainty of the future is based on the patterns of the past. There is a very good reason for this thinking. All societies and cultures are consumerist. That is, they consume resources as a matter of living. Hunter-gatherers consume what nature bestows and what they may manage to supplement in the way of crudely planted crops and hunting. The agrarian societies and cultures consume what grains they grow and animals they domesticate. Societies that herd domesticated animals will trade for consumables they cannot grow due to the need to follow pasturage as it comes in season. And industrial societies will consume not only foodstuffs they grow but import as well. But this consumption included the consumption of manufactured goods and the resources needed to manufacture such goods. Services are also consumed on a greater scale. A small farm community will need only one or two butchers at the most while a large city needs the large meat packing plant. Consumption is the economic motive for all societies.
In that hunter-gatherer society individual labor leads to individual consumption. You eat what you gather each day. Animal protein may come several times a week, depending on migration of the hunted animals. The only specialist may be the group leaders for hunting and the spiritual leaders who keep the culture intact. With the agrarian society, specialist may be blacksmiths, masons, and woodworkers. Again, there need for leaders, both political and spiritual exist and are filled with only a few individuals. Depending of the advancement of the agricultural knowledge and technology, the society may be able to support a protective force of specialists, warriors who do not participate in agriculture or other crafts. In the industrial societies specialized labor is a fact of economic life. But there is also the general labor that needs individuals. The one thing that comes about when societies become agrarian and industrial is the need for some exchange medium in the trade of goods and services. Money is that result, that thing of future value. But why future value? One may barter food but food has a eat by date. Apples will not stay redible forever. Wheat rots in the bushel basket after a period of storage. Money, that unit of exchange usually has a very long shelf life.
Thus the future value of money makes it a tradable commodity along with wheat, corn, and beef. It can buy next year’s wheat or corn or beef. Skills used in the manufacture of goods and the providing of services are like money in that they tend to be long lived. Sometimes that useful life comes to an end for the majority of individuals possession some set of skills. There are few clost weavers and almost no thread spinners left, machines have taken over those jobs and often do a better job or producing the thread or cloth needed for clothing. Of course when a skill set is elevated to an artistic craft, then there is money to be made from acquiring such skills. These are speciality crafts or work. We no longer have the great numbers of blacksmiths due to lack of the great number of horses that were one employed in the past. But there continues a need for blacksmiths to service the existing number of horses. Much ofthe work of the old blacksmith has been converted to industrial machine production and metal replacement. Blacksmiths worked in iron as steel requires much higher heat and is less amenable to anvil and hammer.
Machines reduced the need for vast pools of unskilled or semiskilled labor. When only a hundred and fifty years ago ditches were still dug by hand labor, one could find employment as a ditch digger. True, the pay wasn’t much but neither was the skill needed. One only needs enough brawn to get the job done. Once excavation machinery came of age the common muscled ditch digger was no longer needed on such a vast scale. He might become a general laborer with a few more skills added to his repertoire. But even the general laborer was doomed to almost extinction. If one has ever watch the reality television show “Dirty Jobs” one comes to understand that not every job can be automated. However, that lease a great many individuals who have minimal job skills without work. Even hamburger flipping can be done, and is, by robots. Fast food orders are input by customers directly into kiosks and use their debit or credit cards to pay for their order. Assembly lines and robots deliver the finished cooked meal at the counter. Minimum wage jobs are becoming fewer as the wage goes up. But it is not only the minimum wage jobs that are being replaced by computers. Engineers, computer software coders, laboratory technicians, and so many more highly skilled individuals can and will be replaced by computers and robots. But there is a flaw to this business, one unseen by those who herald these changes as great advancement, for they are not great advancements.
The change from hunter-gatherer societies involved the use of technology, an improvement in thinking and doing. Population pressures forced more groups into land less suitable for gathering or foodstuffs and less suitable for hunting small game. Improvements in agriculture were needed to grow more crops per acre to feed more people and more individuals needed to expend more labor in order to survive. Changes in hunting had to occur and the adoption of domestication of grazing animals had to occur. Where it only took a couple of hours to sate one’s appetite it now took all day. Improvements in technology came slowly at first., but as they came specialization began and new skills were learns and taught to the next generation. Technology and labor specialization did two things, increase one’s muscle power and decrease the amount of time investment. This allowed the growth of a leisure class, the leaders, both political and spiritual. And it created a need for a warrior class. Children and the aged were supported according to the current resources of the society. In years of famine the aged went first followed by many children and then by the weaker adults. There was no shortage of work and idlers were not tolerated. Those who did not work did not eat. Consider how that might work today.
The industrial revolution saw the mass production of a great many goods and the need for more services. Conspicuous consumption or the consumption of luxury goods and services had been limited to the few who owned, for the most part, the means of production. The idea that the leaders, both political and spiritual owned the land upon which foodstuffs were grown and cattle were grazed meant that the government owned the right to live. Serfdom was the order of the day. When serfdom ended government ownership of land didn’t. It had been subdivided into plots of local government control. And as government grew money became a factor. Its use was between the leaders and sub leaders, the serfs had no use of it, they paid in kind or barter. Once an individual could win his freedom from serfdom through some specialized labor he could become an owner of land and serfs. Once serfs were freed in general, then population movement could occur. New lands came under cultivation and new wealth was created. New crafts were made and money started to become the mover of goods and services. Economies grow because populations grow and in doing so become more complex. as populations grow they create a need for uniformity in social rules and in trade.
The industrial revolution, while bringing more of the good things at cheaper prices to many individuals also dislocated a great many individuals and families. Technology went from assisting the society to assisting those who owned it while disadvantaging those who did not. Spinners and weavers could not compete with machines and were thrown out of work. A few were employed to make, run, and repair the machines but the rest were left to fend for themselves. What does a forty year old man do when his skills are no longer needed in the market place? What’s more, it concentrates economic power. The few grow wealthy off the many. Technology does create employment but only for a few. the US population prior to 185 was ninety percent rural, farming was the main business. As industrialization came with the need to produce military equipment and machinery to produce more goods and services, the population shifted towards migration into the cities. By 1900 the population had shifted closed to an even split between urban and rural living. After World War Two less than a third of the population was rural. The closest this country ever came to full employment were those war years, after which unemployment would vary between 8 and 5 percent of the population as counted by the Bureau of Labor Statistics. The shadow unemployment numbers were larger since the BLS deliberately undercounted by administrative and congressional order. One is officially unemployed as long as one’s unemployment insurance payments last, after which you no longer count.
After the war population was still growing but not at the faster rates of the previous century. the size of the family had decreased. The war has increased the rate of savings per individual and household and the pent up demand for goods and services were met with more industrialization, more factories and businesses, and more higher education. And more technology for the researching and inventing. So many industries that had required skilled workers prior to the war saw changes in production that allowed the use of unskilled and semiskilled workers to product the same products. Division of labor had created processes that allowed for quicker production with the same quality. Tools and capital equipment were developed that could be used by the many to create surplus goods. and once too many goods were made the inventories grew to points where layoffs of workers were necessary. In some cases, new technology changed the demand and the supply side had to change in that same manner. Economies of scale became the order of the day. More machines, more assembly lines, and fewer workers, that is what made America great. Or did it?
Today we have arrived at that point where a great man workers are no longer needed. Corporations have relocated manufacturing to those countries of exceptional cheap labor. Even China, who had been the worlds greatest sweat shop now relocates a fair share of its manufacturing to other less developed countries. The idea is that technology is suppose to create all the new high wage jobs that our country could demand. Except even those jobs are either outsourced to foreign countries where the pay is far less or we import workers and pay them far less. The shadow unemployment rate is estimated to be about 20 to 25 percent. Obama says unemployment has fallen on his watch. Officially it has, but the BLS is seriously undercounting that group of Americans. Just because you ran out of unemployment insurance doesn’t mean you are no longer unemployed. And now we have robots to replace so many jobs. In China one manufacturing firm has two factories and both make the same product. The old factory employs about three hundred and fifty people, the second employs about thirty five people. Why the great difference? Robots have replaced over three hundred workers. And the savings are substantial considering the cost of the robots. So what are there three hundred people suppose to do for work? They were semi-skilled at best, what are they good for in the new technology world?
That brings us to the point of no return. We are a consumer society and the only way we can consume is through the earning of money to buy stuff. The economy only grows when: one, the population grows, and two, when we have more money to spend. If robots cook hamburgers who will buy them if no one has a job that creates income? Our welfare budgets are growing. We have government assistance to pay or help pay for housing, for medical care, for education, for all manner of stuff. Every day the Free Shit Army gathers more into its ranks and take more from government. But where does government get its money? From taxation and deficit spending or debt. There is no magic money tree in the government’s back yard. The worlds economy is a zero sum game. For years we robbed the Chinese workers to manufacture out stuff and sell it here at cheaper prices. Would iFan have bought an iPhone if it cost them two thousand dollars? If the first iPod had cost two thousand dollars because it was manufactures here would it have competed well against the other iPod like devices? And as we continue to look work against other countries, who will be left to buy stuff here? Where are these new high paying jobs? Solyndra was suppose to give us high paying jobs and low cost electric solar panels. Except they needs more and more government subsidies to manufacture and in the end they couldn’t compete against Chinese imports. Of course we haven’t paid for those subsidies yet, there are still part of the Federal debt. That is, future taxes uncollected at the moment.
And now we have ti idiots who claim we must have a living wage. What possible good do it do a man or woman who is unemployed and has few skills to sell to an employer to enact a “Living Wage”? If I as a business owner, can afford to hire nine individuals at $10 an hour, then I can only afford to hire six individuals at $15 an hour. Where is the benefit? Is this all we get for feeling morally superior? And if my needs as a business owner are nine people, how do I stay in business? Maybe I should invest in robots and replace eight individuals, keeping one at the new minimum wage to operate the robots. Stupidity, bringing wealth and happiness to so many. But the stakes are much higher than that. Whether one is a member of the poor in the ghetto called Baltimore or in the small communities of West Virginia, without employment one is trapped, a prisoner in an economic ghetto. And that translates into a life filled with crime. We might as well do carpet bombing of these areas because the people living there are almost useless to out current society. But worse yet, as the march of robots depletes the job market of human beings we might as well reduce our population even further. The end result is that as we employ more and more robots we reach a point in which the number of individuals with employment can no longer support either the robots or the poor. The lesson of communism, the ultimate form of socialism, is that when everyone works for the government, no one gets paid or can afford to live.
Now the final truth. If we were to confiscate all the wealth from the one percent in the world, hell, lets do it right and take the wealth from the 10 percent of the world we could not pay the world’s government debts tomorrow. First, no one is sitting of great piles of cash, as 99% of it is in assets and most of those assets couldn’t be converted into cash tomorrow and even if they could the economy would come to a complete halt. True, we can start taxing the rich and make them pay far more than they do now. But the amount collectable is miniscule, not that it should not be done. But if one does that, the taxes are eventually paid by the consumers, the rich simply pass that tax on as a cost of doing business. No, if you want to make a difference in the world then break up the concentration of economic wealth and political power. It’s also time to outlaw unions. I want to replace my water supply line from the meter at the curb to my house. It is an old galvanized metal line and has been corroding for the last sixty years. The city says I need a licensed master plumber to do the work or I must be the homesteaded owner. The plumber wants $7000 dollars as the minimum, some want as much as $15,000 o do the work. I can do the work for about $500. Something is wrong here. Your state or city has road work to be done by a contractor. the contractor must pay the prevailing wage for a bulldozer operator and often that hourly rate comes close to 70 or 80 dollars an hour. There isn’t that much skill needed to operate heavy equipment. I know, I done it. There is something wrong here. Public school teachers continue to make excessive amounts of wage and yet by overpaying these workers are children seem to get far less service for the money we spend. Something’s wrong here. The individuals who place the chairs on the stage for a classical orchestra in Carnegie Hall and almost every where else earn a minimum of $125,000 a year. No orchestra member can touch those chairs. Every night after each performance the chairs must be removed and every day before the performance they must be placed onstage. Union contract demands and in many cases those individuals on no skill other than carrying chairs to and from the stange can earn upwards of a quarter million dollars per year. Not one of the members of the orchestra approaches one hundred thousand dollars a year in income from the orchestra. One might be doing well to earn $25,000 to $35,000. Something is wrong here. Honda and Toyota can build automobiles with a labor cost of about $20 an hour, it may be a little higher now. The big three in Detroit can’t do it for less that $35 an hour and their quality is crap. Something is wrong here. That something is the modern union. What would happen if a union had to bid competitively for work? The road budget is X amount, materials are Y amount and labor is Z amount. The amount of work to be done is fixed, some number of miles or bridge A. The amount of time for completion is B and is fixed. There is no provision for cost overruns. The union can supply the number of men it estimates the job will need and pay them out of the contracted amount of money. If it underruns the budget it keeps the money. If it overruns the budget it makes up the amount out of its pocket. You see, the union mentality believes that their raises and benefits come out of the pockets of the owners. But is seldom does. Raise the labor rate for assembling an automobile and those who buy them pay for that raise, including the union members. Raise the wage for road construction and the taxpayers and consumers pay that increase. One can only hope it hits the union member hard.
We go back to the economy. It is a zero sum game. One group does not gain an advantage without affecting another group and often we may not understand who loses. But some group always does. Once we shift from the land of plenty, the hunter-gatherers societies, to the land of scarce resources, the modern societies.we start to face the limits of our economy. We become dependent on cooperation of others as our populations grow. And it is fair to say that this is really an ecological matter. When the deer over populate because of good rains that increase their foliage, then the wolves start to expand their populations that help bring the deer populations back into balance. When famine hits again, the deer are reduces and so is the wolf population. Out societies are way out of balance, its time to figure out how to bring them back into balance again.