Skip to main content

View Diary: Crumbs much too small for the other Whos' mouses (199 comments)

Comment Preferences

  •  Um, Krugman might not agree (2+ / 0-)
    Recommended by:
    stormicats, TexasTom

    He recently wrote several very interesting blog posts on the promise/threat of automation.

    See this one in particular (and the ones surrounding it). He revives a 1932 mathematical model to show that technological improvements in productivity can in some cases lead to declining wages, which is pretty much what we've seen (wages as a share of total income are in a steepening downward trend).

    In the postwar decades, wages tracked increasing productivity almost exactly, leading to a doubling of incomes and a generation of shared prosperity. Since then (starting in the mid-70s), productivity has continued to climb, but wages have gone up only slightly (nominally 20%, but when adjusted for things like hours worked, only about 5%). Meanwhile, incomes at the top end (the people who own the robots) have tripled.

    Krugman admits that he himself was blindsided by this owners-and-their-robots-vs-workers conflict, but has proclaimed it a crucial issue in need of much more attention.

    What is valued is practiced. What is not valued is not practiced. -- Plato

    by RobLewis on Sun Dec 16, 2012 at 09:12:18 AM PST

    [ Parent ]

    •  Krugman's arguments carry greater weight... (2+ / 0-)
      Recommended by:
      RobLewis, Mokurai

      ...because this is an issue that he has reconsidered and is changing his views on.  Historically, he didn't believe that automation led to increased inequality, but is now finding evidence that has forced him to consider the possibility that it is one of the drivers in increasing inequality.

      That said, I think that there's a regulatory issue in play here, too.  Appropriate regulation in terms of standard working hours, overtime rules, and minimum wage could do much to spread the benefits of automation more widely.  Consider these possible outcomes from automating a factory:
      1.  More output from the same number of people (increased profits for owners, nothing for the workers).
      2.  The same output from fewer people (increased profits for owners, nothing for the workers).
      3.  The same output from fewer people, who get more pay as a result of increased productivity (increased profits for owners, some works come out ahead while others lose)
      4.  The same output from the same number of people, who are now working fewer hours (workers get more leisure time)
      To some degree, laws and regulation can dictate how the actual outcome balances between these three possibilities.

      Political Compass: -6.75, -3.08

      by TexasTom on Sun Dec 16, 2012 at 09:26:27 AM PST

      [ Parent ]

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site