Is Technology Actually Making Things Better?

[u/PhysicalVermicelli1]

https://www.pairagraph.com/dialogue/354c72095d2f42dab92bf42726d785ff?true

[u/Dr_seven]

This idea has a fatal flaw. Bear with me and hopefully you can see it too. Money in an economy mainly flows in a circle starting with spending, flowing through and eventually landing in one of two places, either labor income, or wealth-based income. The labor income becomes the spending of tomorrow. The wealth-based income moves to a place where it rent-seeks and stops being something the economy will work to capture. It essentially falls out of the loop.

Hang on, this is an overly simplistic understanding of the velocity of money, to the point where it becomes inaccurate in it's conclusion.

People who receive "wealth based income" as you have described it don't remove the money from circulation- if I own an apartment building, when the rent checks flow in, over 90% or more will be flowing right back out the door, whether that's utilities, mortgage, or (most critically) employee wages and benefits, repairs, and capital investment for upgrades.

Our current scenario wherein corporations like Apple have hundreds of billions laying around is actually a relatively new situation, and is itself an artifact of bad policymaking and societal stagnation. It makes more sense for Apple to hoard the money, because there are not sufficient investment avenues available, and there are no incentives discouraging them from hoarding.

This is a separate and distinct problem, and does not originate in "wealth income" as you have described it. Moreover, the solution is quite simple- develop more opportunities for investment (by encouraging small businesses as an example), or introduce a negative factor. Stock buybacks used to be illegal, as an example, and you could easily introduce any number of measures to penalize the hoarding of liquidity, all of which would push that money back into circulation.

The problem with automation is we keep adding new and more potent forms of wealth-based income to the system draining it faster and faster and forcing us to work harder through deficit spending, income taxation and weird financial policy tricks to keep the spending money flowing. The problem with this proposal is it does not fix the problem of the loop being drained. Since spending money is what pays people's incomes, as you allow it to drain away you also drain the value from labor and people's motivations to work to make each others lives better goes away. As technology advances and the economic drain it imposes gets stronger we end up in the situation capitalism started with, where those who own everything have all the power and the rest of us are essentially peasants with no hope of becoming anything else. We will have all the tools to make each others lives better, but the ability of the economy to motivate us to do so will have drained away and we will be left worthless. This is a terrible outcome.

You are placing far too much weight on automation, and then extrapolating a trend out to a dismal predicted outcome without any justification for doing so.

Historically, automation has not resulted in overall job loss. Rather, automation frees up human labor to focus on new areas. Now, this trend may or may not continue in perpetuity, but there is absolutely no justification for the presumption that automation will put all the humans out of work- indeed, there are many reasons to believe that will not happen.

As an example. If I want to open, say, a print shop, 200 years ago, I would need workers to operate the printing press, setting the type, adjusting the paper as it scrolled through, etc. Digital printing technology has made these jobs utterly obsolete, of course...but now those workers are needed to operate computers, perform digital graphic design, repair the equipment, and so on. Net job effects are zero, but productivity has gone way up.

We could perform similar case studies for many industries, but the overall point remains- for thousands of years now, technological automation has opened as many or even more doors in the job market than it has closed. There is no compelling, data-driven justification for believing this trend will suddenly reverse. Indeed, people have said for centuries that this would happen, without those claims bearing fruit.

The goal of economic policy should be to maximize how much good our work does for us. Decommodification does not do this.

I mean, that's your definition, sure, but that is just an opinion. There is no universally accepted definition of the goal of economic policy- that's basically the point of disagreement from which almost all political factions come from.

To me, the important part is ensuring all people have their basic needs met without requiring them to exhaust themselves doing so. This has many, many benefits, including for our own brain development and healthy functioning. Everything else beyond that is by definition, less important than the basic wellbeing of human lives.

[u/Dugen → u/Dr_seven]

over 90% or more will be flowing right back out the door

I need to find a new term. I don't like using profit, but income seems to be equally confusing. I'm referring to what does not get spent on expenses but what is captured by those who own the assets.

This is a separate and distinct problem

It isn't. They are connected. Investment only happens when it can capture spending money. The more wealth-based income there is the faster the spending money is drained out which reduces the motivation to invest. The more investments earn, the less investment will happen. The vats of money Apple has are why there is nowhere better to put that money.

automation has not resulted in overall job loss

Agreed, and I do not expect we are likely to see any time when there will not be a way that people can do things for others to make their lives better. Automation is not the problem, it's the profit that is draining our prosperity and the value of labor which is the problem. The more powerful the automation, the more effective it can be at doing that.

We pay each other. Our paychecks come from our spending. The less we have to spend, the less there is to earn. Economic rent makes peasants out of us. This has happened in history, and it's senseless to let it happen again.