Is increasing economic inequality inevitable without catastrophe?

musicprnt
Wed, 10 May 2017 17:43:35 +0000

@southfloridamom9:
What we are seeing is unprecedented, and no one is talking about it. When some talk about the rise of automation and AI taking away jobs (which is the cause already of major distruptions, for all people go on about jobs going to the third world, a lot more have been lost to automation) they make it seem like it is a ‘new industrial revolution’, but that isn’t true. The prior industrial revolutions did cause disruptions, craft builders lost their jobs when factories and mass production happened, other jobs were lost in the digital age but in many ways the technology and its distruptions created new jobs where machines and people worked side by side. If AI for example does what some are claiming, that it can take over a lot of white collar jobs (for example, intelligent systems that can recode themselves), or automate things like medicine, then it will be taking away jobs and not creating many…

There is a kind of battle, that a friend of mine called the battle between Gordon Gecko and Star Trek, ie if jobs disappear, including highly skilled white collar jobs, will we transition to a world where people can do what they want, not have to work, because in a sense everything is free and they can concentrate on what drives them, or are we heading into a world where those running things see this as an opportunity to make more and more money by eliminating jobs? You might answer that that isn’t practical, that those who have the Gordon Gecko view of things understand that they make money when people buy their goods or services, but has that, for example, stopped manufacturers like Nike and Apple from building products in low cost third world countries whose workers cannot even hope to afford the products they make? Yes, goods will get cheaper and cheaper as you have cheaper production, whether automation or cheap human labor, but what happens when you have goods that are cheap and no one can afford even those cheap prices? Take a look at what is happening to low end retailers, and it tells a story I think.

The mania around stock price has driven a lot of this IMO, when we talk about CEO salary for example, 90% of that is based on stock based compensation, and stock prices are driven higher when companies cut cost, and their largest cost is labor, pure and simple.