[michaelochurch]

It's unclear whether the slowdown in US/EU real GDP growth is (a) dysfunction of capitalism, due to what you described, or (b) a "cooling" effect as global inequality of nations (as it should) mean-reverts. The good news is that global GDP growth is quite high: about 4% per year and accelerating (faster than exponential, for now). Obviously, there are severe sustainability concerns (such as the need to move away from planet-baking carbon fuels) that must be addressed. But, if we can address those environmental constraints, the global picture is actually pretty positive.

Worth investigation, however, is what happened in the U.S. in the 1920s. We got really good at agriculture, quickly (i.e. over the course of a few decades). We did a bad job of distributing the wealth generated by that. Commodity prices plummeted as the 1920s wore on. By 1925, there was an epidemic of rural poverty, but those were boom times for the urban rich, so it wasn't called a "depression". In 1927, the economy grew volatile and by 1928 large companies were starting to sweat. The "official" start of the Great Depression was Oct. 1929, and by 1933, the U.S. economy had imploded and the stock market was down almost 90% from its highs.

In the late 1920s, prevailing conservative thought was that poverty was a sort of "moral medicine", because the suffering washed away sin. (It was the same backward, moralistic thinking as was behind Prohibition.) The Depression proved that it's a cancer that spreads relentlessly. If the farmers get poor, the factory workers selling to farmers get poor, and those who have money become risk-averse and hoard it (causing asset crashes) and over time almost everyone ends up losing.

What happened to agricultural commodities in the 1920s is happening to nearly all human labor now. And that's pretty terrifying.

[sadfnjksdf]

I always like reading historical analysis, but have a few questions:

> We did a bad job of distributing the wealth generated by that.

I'm not sure what you mean here. Do you mean that those that profited did not reinvest in stocks that may have helped companies grow and provide jobs? Or, that the government did not tax enough to pay its own staff and overhead and then redistribute via programs that do not necessarily target the areas that really need it? Or that they should have given that money to churches and other charities to distribute?

The reason I ask is that there are few pure redistribution models. The closest are some churches and charities, but they typically still have some overhead deducted. The next best can be stock investment, as, depending on the companies, that money is in large part repaid in the form of raises or new jobs. The least efficient is ofter government, because accountability is limited to the % wasted in the process of providing services, unlike capitalism where competition provides accountability; if you do poorly, you don't survive, unless a government bails you out.

> What happened to agricultural commodities in the 1920s is happening to nearly all human labor now. And that's pretty terrifying.

Could you expand on that and provide some references?

[pchristensen]

In 1920: agriculture was 27% of labor force: http://www.agclassroom.org/gan/timeline/farmers_land.htm

Now, 2-3%. One in 4 people had their profession superseded. A lot of that slack was taken up by industry (and war and death), but that took 20-30 years to catch up.

Is there a pool of work for people to absorb 25% of the present labor force? Most of the emerging technologies I see are labor-saving, not labor consuming.

Two possibilities for big labor demand in the next few decades: - healthcare and assistance for the elderly - removing development restrictions in booming cities, unleashing an epic (or Chinese-level) building boom

Both have fundamental political foundations and won't be solved solely by technology.

[sadfnjksdf]

> removing development restrictions in booming cities, unleashing an epic (or Chinese-level) building boom

Which would be interesting because it is debatable whether we have the resources for that.

On one hand, we have people like Tim Worstall of Forbes claiming that we will never run out of metals that would be used in a building boom, because innovation reduces and replaces use of existing metals, e.g. modern day pennies use steel and a copper coating:

http://www.forbes.com/sites/timworstall/2011/10/15/when-are-...

Although, I think Tim takes a lot of liberty with his assessments, like his recent wild speculation that humanity could never populate another star system because it would take too many people to preserve our culture: http://www.forbes.com/sites/timworstall/2014/04/07/perhaps-c...

On the other hand, in http://en.wikipedia.org/wiki/Iron_ore#Available_iron_ore_res... it states that Lester Brown of the Worldwatch Institute has suggested iron ore could run out within 64 years based on an extremely conservative extrapolation of 2% growth per year, and so if there were a boom, innovation to replace use of iron ore as a structural component would be required.