Inflation mystery. An Aha! moment for me.
#4
Hi,

(06-28-2011, 10:12 AM)kandrathe Wrote: ... the individuals skills gap in credentials needed versus those available is increasing. In other words, we need more highly skilled workers, and we're producing fewer of them.

At one end of the spectrum are the jobs that require so little knowledge and skill that anyone can do them. These tend to be minimum wage jobs. Typically, it is not worth the cost and effort to automate them.

At the opposite end of the spectrum are the jobs that require great amounts of ingenuity and creativity. Watsons aside, we are nowhere near replacing people with machines for these jobs.

The rest of the spectrum has either been automated out of existence or moved to where labor costs are so low that automation isn't worth it. As the labor costs internationally grow, automation becomes a more viable option.

For most animals, including humans until comparatively recently, survival is a full time occupation. The development of agriculture, the resulting permanent settlements, and thus civilization created free time and excess energy for humans. This excess time and energy was used to build monuments, fight wars, explore, write novels and poems, compose music and drama, etc. One might say that the increased productivity caused by the cooperation of civilization made us more civilized.

However, only a small minority of the population could take advantage of the full benefits of the increased productivity. There just wasn't enough goodies to go around. That has largely changed over the past few centuries. No longer is the royal court the only group with a varied diet (and that only because they moved from place to place like a swarm of locust, eating each place bare), but the variety of food available in the stores of the industrial nations puts the banquets of the Roman emperors to shame.

The point is that, so far, the full output of the human race has been needed, first to survive, then to meet the demands of the priest and royal castes, then to generate the luxuries everybody wanted. As more of the productive work is done by machines, only the extremes are left for people. It might be true that the number of jobs lost on the assembly lines are balanced by the number created in robotics and software engineering, but I wonder if the people displaced from the line by robots have the mental ability to design robots.

So far, every economic theory I've seen ignores the changes all around us and bases itself on a rapidly outmoded model of production. What happens to "an honest day's work for an honest day's pay" when there is no demand for the work? Who owns the profits of production when the producers are robots?

--Pete

How big was the aquarium in Noah's ark?

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RE: Inflation mystery. An Aha! moment for me. - by --Pete - 06-28-2011, 05:01 PM

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