[bsbechtel]

>Perhaps it's an inherent property of capitalism: some things always end up barely within reach of a lower class.

I wouldn't say that's true, we just need to figure out ways to produce those things cheaply enough (through automation, other technologies) that everyone can enjoy them. Take a look at agriculture in the US...even the poorest people here have access to (not very healthy) food whereas just under 100 years ago many were starving in the Great Depression. This is because agricultural technology has led us to an abundance of cheap food that everyone can afford at some level or another.

[unclebucknasty]

>we just need to figure out ways to produce those things cheaply enough (through automation, other technologies) that everyone can enjoy them

But, therein lies a paradox, right? I mean, when you seek to lower the cost of production through automation, technology, etc. you wind up displacing human workers, reducing labor demand, and putting downward pressure on wages. BTW, I'll add that lower wages are another significant way that companies reduce costs/prices.

The net result is that profits increase, which benefits a relative few rich, while the quality of life for many is reduced or stagnant at best.

In other words, this "race-to-the-bottom" walmart-ization of our economy seems to be, in large part, responsible for the income disparity we see today. Perhaps the poorest who would otherwise starve are benefited (even if through entitlements or aid which can now go further), and of course that's a very good thing. But, on balance, the world's wealth is accumulating to a very small number of people at an accelerating pace.

[kamaal]

>>But, therein lies a paradox, right? I mean, when you see..ay that companies reduce costs/prices.

There is hardly a paradox. Automation causes small term problems but great long term benefits. I won't go too far in history. But as early 1980's India saw massive protests and Nation wide bandhs to protest introduction of computers(and other automation) in the country. People just could not get themselves to accept that their jobs will be replaced by machines. But that event came to pass anyway. Many problems to people of that era in India, are even unknown to the youngsters in India now.

>>The net result is that profits increase, which benefits a relative few rich, while the quality of life for many is reduced or stagnant at best.

Again, I completely disagree. If you keep changing the definition of poor frequently then its nearly impossible to eradicate poverty ever. Poverty today is nothing like what it was even a century ago.

>> the world's wealth is accumulating to a very small number of people at an accelerating pace.

The world's wealth will always accumulate at places, professions and people which benefit from economies of scale. It doesn't matter which system of economics those people are in.

[kiba]

In other words, this "race-to-the-bottom" walmart-ization of our economy seems to be, in large part, responsible for the income disparity we see today.

It does the poor no good if they can't even afford the cheapest good.

[bsbechtel]

You guys are opening up a whole other can of worms getting into labor. We tend to think of labor as a cost of production and something to be minimized. Maybe we need to start thinking of labor as a (actually, the main) party responsible for creating the value the firm produces for society. Anytime value is created, it can go to 4 parties - the consumer (lower prices), the government (taxes), the shareholders (through profits), and the employees (labor wages). Maybe the reason our economy is so screwed up right now is because employees are getting a smaller and smaller share of the pie, not because technology is displacing jobs. If more people are out of work because of technology, great! That means we have more people who can go work on things like curing cancer and colonizing space :-)

[fennecfoxen]

> Maybe we need to start thinking of labor as a (actually, the main) party responsible for creating the value the firm produces for society.

Right. That's pretty much straight Marxist ideology. (I say this as a matter of fact, not as a matter of denigration per se.)

Idea for you.

It's a free country, relatively speaking. So if labor is truly primarily responsible for the value in something, perhaps you and a bunch of laborers should get together and start a business providing value to people, and paying lots of money to the labor. Assuming the labor is the primary thing that generates value, it should be easy - in fact, they can attract the best labor by paying more than they'd get in a regime which does not value their output.

If, however, you find that it is really hard to get started because it takes a lot of money to buy equipment (or to pay salaries of people programming vast troves of computer-code, which is more or less custom-manufactured capital)... if you find that it's hard to get started with labor alone, then you've effectively demonstrated that capital provides a significant part of the value.

Silicon Valley may provide a few interesting case studies for you if you wish not to do the exercise yourself at this time.

[unclebucknasty]

There is no need to test whether capital provides value, as it obviously does. Your parent was speaking to viewing labor as providing the primary value.

I noticed though, that your test's premise started as a means to challenging your parent's assertion that labor provided the primary value (i.e. you implied that capital provided the primary value). But, your test's conclusion was that capital provided only significant value, which no one is arguing. Apparently, you couldn't bring yourself to conclude that capital provided the primary value, perhaps because your test doesn't prove it.

But, I have an exercise for you. Imagine starting a company with very little capital, but plenty of labor (i.e. people willing to work for a share in future profits). Now, imagine starting a company with $1B and no labor.

In any case, regardless of which you deem technically "most" valuable, there is still the question of degree: that is, do the rewards accrue to the parties proportionate to their value?

[bsbechtel]

I actually run a painting company where we pay our employees roughly double the industry standard, and we're one of the (if not the) fastest growing painting companies in the state we are located. As owners, my business partner and I are investing every penny we can back into R&D and new technology to improve our efficiencies. Both provide value.

[unclebucknasty]

Good points. Of course, I'm going to quibble a little, else I wouldn't be replying!

>...our economy is so screwed up right now is because employees are getting a smaller and smaller share of the pie, not because technology is displacing jobs"

But, the two are related right? When tech displaces jobs, which it of course has, then there is lower demand for labor and the price of labor (wages) goes down. There are other forces as well, but all primarily stem from a drive to keep costs (and hence prices) down, while keeping profits up.

>If more people are out of work because of technology, great! That means we have more people who can go work on things like curing cancer and colonizing space :-)*

I know that was half tongue-in-cheek, but would that it worked that way! Alas, what we value economically versus what would benefit us as humans are too infrequently aligned. There will come a day though, when only a tiny fraction of the population will be "neccessary" to create what the world produces. It will be interesting to see how society realigns itself and evolves when so few people need to do traditional (economic) work.

[kamaal]

>>There will come a day though, when only a tiny fraction of the population will be "neccessary" to create what the world produces. It will be interesting to see how society realigns itself and evolves when so few people need to do traditional (economic) work.

We are already there, and we seem to be doing just fine. I guess only ~3% of US population today works in farms compared to >70% a century back. The only thing is work keeps changing. People have better things to work on. That has always been the trend since mankind even existed.

If the effort required to produce something goes down, prices too go down significantly.

[unclebucknasty]

>We are already there, and we seem to be doing just fine

We're not there yet.

>The only thing is work keeps changing. People have better things to work on.

By definition, as long as we have better things to work on (which are valued by our economy), then we haven't arrived at the point about which I'm speaking.

Technology is moving at an accelerated pace. What automation and tech can do is moving up the skill ladder and replacing more jobs than before. In addition, a globalized workforce/economy means we are reaching a scale that is giving us ever-increasing efficiency and per-worker productivity. This is why we are seeing the beginnings of a very stubborn structural unemployment and stagnant wages over the last couple of decades.

But, we are just starting. And at some point, a much smaller percentage of what we produce will require humans. When that happens, the "better things to work on" won't fit the current economy's definition of value that is worthy of compensation. That is, it won't go to the production of goods or services for which people are willing to pay.

[w1ntermute]

> That means we have more people who can go work on things like curing cancer and colonizing space

Labor isn't 1-for-1 substitutable. You can't take a 50 y/o manual laborer with a high school education who's been displaced by robots and just turn him into a cancer researcher or rocket scientist.

[bsbechtel]

It's not, but humans are dynamic beings who can learn new skills, not stagnant machines with one single function. 100 years ago half our population was illiterate, yet we overcame the displacement of thousands of farm workers due to technology. We will continue to do this throughout history again and again.

[w1ntermute]

> 100 years ago half our population was illiterate, yet we overcame the displacement of thousands of farm workers due to technology.

As new generations came of age. That doesn't solve the problem of all the middle-aged people who are now out of work because they have been obsoleted by computers. These are very real problems, politically, socially, and economically, in the short term.

[unclebucknasty]

I could read that two ways and I'm not sure which you intended.

1.) That no matter how cheap we make things, it does no good if the production of those goods causes some to be so much poorer (even down to zero) that they still cannot afford it.

If that's what you meant, then we are in agreement.

2.) That we need to make things cheaper however we can, so that the poorest can afford it.

If that was your point, then well, that's the paradox. Some are poor (or poorer) because of the measures taken to produce cheap goods.

I think you meant 1.) but wasn't sure.

[bsbechtel]

I meant there is still lots of technology to be developed that can make many goods much cheaper than they are today, and as they become cheaper due to technology, then more people will be able to afford those goods.

I wasn't really thinking too deeply on how the cost of labor affects the price of goods, but I tend to have the general attitude that if everyone in a firm (including management and the owners will accept 0 profits) wants to work for free to make their goods the cheapest on the market, then they are free to do so (and there is a reason you don't see this in our society...it doesn't last long). However, I think it's a crime, and a serious problem when shareholders and top management reap billions in profits off the backs of thousands of wage workers who earn $7.25/hr and then rely on government welfare programs to support themselves...that's basically the government subsidizing cheap labor for big corporations.

[saalweachter]

Well, sort of.

In the US, about 85% of households are "food secure". Non-capitalist sources -- eg, charities or government assistance -- close the gap for about 9% of households, and in the remaining 6% of households one or more people are missing meals.

I don't really think that's a success.

[JumpCrisscross]

Being able to complain about 94% food security is something of a social miracle, in the grand arc of history.

[1stop]

Well sure if you limit your sample size to "The richest country in the world" then yeah you are doing great! 5 Stars! The world is perfect. Go Team America!

Meanwhile there are more people than the entire population of the US starving else where. I'd hazard the guess that that's worse than at any other time in history.

[seanmcdirmid]

> Meanwhile there are more people than the entire population of the US starving else where. I'd hazard the guess that that's worse than at any other time in history.

Considering that there are more people now than at any other time in history, this almost always a safe and lazy guess to make (that their are more people in situation X than at any other time in history).

[1stop]

Right, which is why I made it. But to use that as an excuse is to say: "An individual Human life is worth less now than before", which is at the very least controversial.

[seanmcdirmid]

As a fact, it's vacuous. No one was using it as an excuse.

[saalweachter]

Yeah, I'm not sure whether to say "only 85%[1]" or "a full 85%". Regardless, it's less than the 100% we should be aiming for.

[1] Side quibble: 94% is capitalism + socialism; capitalism alone is only giving you 85%, and that's if you don't count minimum wage as non-capitalist.

[mattmcknight]

charity isn't socialism.

"Socialism is an economic system characterised by social ownership of the means of production and co-operative management of the economy" - http://en.wikipedia.org/wiki/Socialism

[saalweachter]

"capitalism + redistribution of resources by the state", if you prefer. But I fear the American-English battle for the word "socialism" is lost.

While food banks are important, as nearly as I can tell most people aren't relying on private charity alone. (I wasn't able to find a number online, but the numbers I did find were that a boatload of people are relying on SNAP, and a huge fraction of the people on SNAP are also relying on food banks, and that number is roughly comparable to the number of people who visit food banks each year, so the number of people who visit food banks without relying on SNAP must be quite small.)

[pistle]

Which is good enough... let us be judged against hunter gatherers. We kick ass.

[old-gregg]

Very true, that's why I say "perhaps... some things". While technology may have worked well for food, I just don't see how this can be applied to housing, education, healthcare, legal expenses and taxes [1]: these tend to expand/shrink based on how much money you have and "pin" the poor to a certain "ceiling" of disposable income leading to the perpetual hand-to-mouth cycle despite encouraging growth of metrics like GDP/capita.

[1] This BTW may explain why new middle class in emerging economies tends to consist of real estate people, doctors, lawyers and (true in ex-USSR countries) government bureaucrats: they get to benefit from growing GDP first.

[bsbechtel]

I'd say you're just not thinking creatively enough. Manufactured homes significantly reduced the cost of owning a home, and just the other day I saw an article talking about 3D printing homes with concrete and how it could drive the cost down even further. The same goes for the other things you mentioned....flood the market with doctors and healthcare costs would go down, we just need med schools to accept more people instead of limiting their enrollment to drive up tuition fees because they want their school to be prestigious and 'the best'. The poorest people can and deserve access to the many goods the wealthy enjoy, we just haven't figured out the technology and economics in each of these areas yet to do it :-)

[kiba]

Manufactured homes significantly reduced the cost of owning a home, and just the other day I saw an article talking about 3D printing homes with concrete and how it could drive the cost down even further.

The problem is the cost of land, not the manufacturing of homes, per se.

[kamaal]

Its both actually. Land cost is largely addressed these days by large rising apartment housing complexes.

[bsbechtel]

That's a fair point.

[belorn]

> housing, education, healthcare, legal expenses and taxes

Interesting grouping, as each is more or less fully depended on government to limit supply and create scarcity. The only really exception looks to be housing.

Education is information, and information is only held limited thanks to copyright.

Health care seem to spend most of its money to pay for patents.

Legal expenses differ strongly between countries and different legal system. Some demand the loosing party to pay for both sides, some demand that both side pay their own costs, and lastly some ask government to provide/pay for legal aid. In system where looser pay (or government), there tend to be limits on how much a lawyer can demand.

[Domenic_S]

> even the poorest people here have access to (not very healthy) food

I saw just a story yesterday (?) on I think KPIX news of a family bringing in less than $1700 a month (living in San Jose mind you) and they filmed her going to the food bank. Her grocery bags were filled with fresh produce! I thought that was pretty neat.

Maybe staged for the cameras or a lucky break.

[wavefunction]

Food banks and their volunteers try to provide the healthiest food they can, but often-times are dependent on donations. I am lucky to volunteer with some folks at one and it's like Christmas morning for us when we've got fresh fruits and vegetables to handout to folks!

Most food banks are barely scraping by on whatever hard-work and good-will the volunteers and their community are able to muster.

I would prefer to see this family (probably working pretty hard right now) to make a living income, with their children seeing the rewards that their parent's hard work and discipline has brought them.

Maybe not spending $75,000 on artisanal strippers in one night, but a fulfilling life of self-agency.