tag:blogger.com,1999:blog-23870293.post8619198770541557380..comments2022-11-30T02:22:02.074-05:00Comments on Antipasto*: Automation, Labor and Capitalstefanoqhttp://www.blogger.com/profile/03957519878567929614noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-23870293.post-42074588860973435802014-07-08T10:53:37.848-04:002014-07-08T10:53:37.848-04:00Here are some more thoughts on the subject excerpt...Here are some more thoughts on the subject excerpted from multiple emails I have received.<br /><br />The thesis is not that technology is a substitute for capital in the sense that capital is no longer important. It is as important as it has ever been. As is labor. His point is that because technology makes labor more productive or replace is, and because technology can be repurposed AFTER it has been developed and deployed, and because it and accumulates over time, it has become a FORM of labor AND capital. <br /><br />We know how technology can compete with labor and reduce wages for many kinds of work. He's pointing out that it can also reduce returns on capital. If you think about software, for example, especially open source, there are BILLIONS of dollars that can move as easily as cash around the world and be allocated to solve any problem.<br /><br />Capital accumulates. There is no shortage. There is clearly no shortage of labor either. Technology is also plentiful and software is portable and free. The problem is surplus capacity, ironically enough, and insufficient demand. Our problem is that labor, capital AND technology all need a place to go. So what the world needs now is ideas and entrepreneurs.<br /><br />This insight, although true, IMO, does not help solve the problem of demand, however. Capital does not move to fund ideas until there is perceived demand. And labor cannot earn income. Money does not flow. And this is why we have an economy with plenty of resources and no growth.stefanoqhttps://www.blogger.com/profile/03957519878567929614noreply@blogger.comtag:blogger.com,1999:blog-23870293.post-6596736110728374082014-07-08T10:42:35.105-04:002014-07-08T10:42:35.105-04:00This is a test comment.This is a test comment.stefanoqhttps://www.blogger.com/profile/03957519878567929614noreply@blogger.comtag:blogger.com,1999:blog-23870293.post-55888306143224438012014-07-05T10:26:48.894-04:002014-07-05T10:26:48.894-04:00The place to start is not by soothsaying but by do...The place to start is not by soothsaying but by doing what mskes a difference here and now. Julian Friedlandhttps://www.blogger.com/profile/14911205209835652943noreply@blogger.comtag:blogger.com,1999:blog-23870293.post-36896851874903549782014-07-02T20:18:54.405-04:002014-07-02T20:18:54.405-04:00Exactly, John. His point in this essay is about t...Exactly, John. His point in this essay is about the RELATIVE return on labor, capital or "idea capital" as you call it. However, he's also observing that the disequilibrium produced by the disruptive effects of automation is creating a more fundamental threat to capitalism: without DEMAND, there are no returns at all on labor, capital or ideas. <br /><br />This is not a new idea. In fact, the central concept of a business cycle is based on cycles of growth and collapse driven by fluctuation in demand. Surplus capacity is a PROBLEM for capitalism. Industrialists like Henry Ford -- who wanted to make returns on capital investments -- were very conscious that salaries they were paying their laborers were in fact creating a middle class and a market for their industrial output. Without those mass salaries, there would be no mass demand for their mass production. <br /><br /><a href="http://en.wikipedia.org/wiki/Joseph_Schumpeter" rel="nofollow">Schumpeter</a> described how capitalism has avoided the "crisis" of surplus capacity, repeatedly extending it's potential for growth, through war and a process of "creative destruction" we now know as entrepreneurial disruption. But he failed to see the importance of creating demand for the new output. We know that the engine of growth ends when the massive middle of our society experiences falling wages for 40 years, exhausts their savings and then capacity for debt. <br /><br />What will the next generation of idea capital, financial capital and labor do to create demand?<br /><br />This is the central thesis of Reich's new film, <a href="http://www.imdb.com/title/tt2215151/?ref_=fn_al_nm_1a" rel="nofollow">"Inequality for All"</a> as well.stefanoqhttps://www.blogger.com/profile/03957519878567929614noreply@blogger.comtag:blogger.com,1999:blog-23870293.post-63052792447191579432014-06-30T11:20:56.840-04:002014-06-30T11:20:56.840-04:00Idea capital.Idea capital.Anonymoushttps://www.blogger.com/profile/00484713185605537340noreply@blogger.com