In the Future Everything Will Be A Coffee Shop
blog.speculist.com
blog.speculist.com
The nice thing about "in the future" kind of statements is that they are impossible to disprove - especially when it is not specified how far in the future we are talking about. However, I think we are a long way from having gasoline delivered to your door and I always need to pop out for eggs, bread and milk. I also might need a hair cut in the future. Clothes are unlikely to be optional. My wife and I like to go to the movies. The kids like all kinds of shops...
Sure, the internet is affecting retail sales and education. To what extent is very difficult to predict but it is unlikely to be as drastic as the OP suggests.
We don't just keep jobs because we need them. We also keep them because we need the distribution of wealth that they make possible --without a way to ensure that, everything collapses. There can't be a billionaire without millions of wage slaves.
Has this ever happened? Has anyone at any wealth level ever simply stopped making money because he was upset about taxes? I hear a lot of small-time sole proprieters talk about it, but I've never heard reliable reports of it actually happening.
A quick summary is that yes, people probably do choose not to do certain kinds of work when taxes are too high, but not in the way that Bill O'Reilly tends to advertise it - it's unlikely that someone is going to quit a high-paying job because their marginal tax rate went up a point. However, if you're undertaking an endeavor with a 5% chance of success, and a 30x tax-free payout in case of success (relative to a safe option), your expected payout is 1.5x with no taxes; 1.35x with a 10% tax rate; and 0.9x with a 40% tax rate. Whether or not you'd take the risk in the first two cases varies from person to person, but in the latter scenario, most people wouldn't bother; you'd have better expectancy at a roulette table.
Still a bit different from the classic "going galt," though.
Yes, it happened to Ronald Reagan. When the top tax rate was 90% (he was an actor at the time), he chose to make only two movies/year. He saw little point in making more movies since he wouldn't get paid for it.
http://toomuchonline.org/the-tax-that-turned-ronald-reagan-r...
Meanwhile, a true artist, would make movies no matter what the top tax rate was, because he had the urge to. Artists have worked for nothing for ages, in order to create.
People would still have every incentive to work to improve their lot in life; most people on HN probably have the capability to quit their jobs and live off of welfare checks, but it's not exactly a great lifestyle, even if it doesn't require any work. In fact, people might have more incentive than they do now to try out new, interesting work; knowing that if everything blows up they won't screw up their lives and the lives of their families is a great asset.
Overall, I imagine society would progress tremendously if everyone were able to get an education and do creative work while being guaranteed the basics of life, even if that results in some freeloaders surviving on the dole.
Most first rate economies already have fairly extensive welfare systems in place, and you do not see people begging to get fired from their jobs so that they can get unemployment. Most people have at least some ambition to increase their social and economic status and that won't change.
Those who are self-motiviated, and those who aren't. Or rather, there's a continuum. Most people aren't that self-motivated so they mostly do nothing.
Those who are, will continue to contribute to society regardless if they got paid or not.
A society can have totally different ways of compensating someone.
http://en.wikipedia.org/wiki/Agrarian_Justice
The US Social Security administration keeps a full text of the pamphlet online:
This, this right here is exactly the kind of puritan thinking I find infuriating.
Seriously, leisure as a terminal negative term in your utility function?! Never mind the people who are going to use the time to learn, to create art and share it, to spend time with their families -- if we don't shackle people to their counters and desks, they'll be rioting in the streets!
How much theft/violence do you think is driven by need, by looking for a way to get by? If anything, I would expect violence and theft to go down.
Art and study could certainly be more heavily subsidized, though. But I would count those as types of work.
Except for where there can. Economic productivity is nowhere close to decoupling from population mass yet, but when it does, you won't need low or semi-skilled workers.
There is a careful calculus happening at every level comparing the productivity of a human versus machines (and other humans). To deny that competitive spirit, à la Greece or Italia, builds systematic inefficiencies into the economy.
At a certain point there won't be a place in the world for unskilled humans - they will be un-differentiable from a defective tool.
TL;DR This may be a problem, but will be un-avoidable. Social structures, demographics, or both will have to adapt to new realities of productivity.
The paper concludes that in the short-run, rising productivity decreases inflation, increases the current account balance, increases GDP, and increases unemployment (and real wages) as aggregate supply increases without a commensurate increase in aggregate demand. The system starts equilibrating as people internalise the higher productivity into their investment assumptions.
We could see falling rates on student loans coupled with rising returns on education (note: not just college education, as the OP pointed out) as increasing the incentive to invest in one's education. Given that our culture creates barriers to education the older one gets it seems like we will have a wasted generation of un-skilled workers who will just need to be worked through the system (being a cold, pragmatic macroeconomist here). Being civil to those people without incurring undue cost to the system will be the challenge.
[1] http://www.treasury.gov.au/documents/239/PDF/paper07.pdf
You don't need workers to have productivity, but you need people not being rich to have riches. And those people need to be fed, clothed, etc. And they also need money, to be able to buy things and services, else you cannot sell them.
So, you either turn into a Star Trek/socialism scheme, where social wealth is shared, and rich men are those that take more share by power alone --like kings of time old--, or you have a problem or keeping people occupied.
If you define rich to mean "I have way more than I will ever need" then there is ultimately no reason that everyone can't be rich. It just takes a while to get there.
Personally I'd prefer the latter. Eliminating poverty makes everyone better off.
The problem I described is multi-faceted, and I might not have made a good job at it, or some people might not have understood me (judging from the knee-jerk downvotes).
One issue is societal wealth. As a society, everybody can be "rich" in the sense you describe, but I already addressed that in the part where I write about the "Star Trek/socialism scheme, where social wealth is shared". I am fine with that kind of a society. I just don't see that this is what we are currently approaching with automation, etc, but rather huge poor masses and an middle class in decline.
So, my other argument was about what is actually happening, i.e. the continuation of the current model + automation. And what I said, is that if you believe --as many do--, that corporations, enterpreneurs, buying and selling stuff, in essence a market economy is crucial, then you need poorer people with jobs, ie. you need consumers. You cannot have a market economy AND everyone being rich in the "I have more than you" sense, and you cannot have a market economy AND the great masses out of work due to automation.
So, my argument is, automation is ultimately non compatible with a market economy. You get either sharing for everybody (i.e no market economy), or a collapse in buying power / sales (i.e a poor market economy).
(A final point, re everyone being rich in the "I have enough" sense: beyond the basics, "needs" are themselves a social construct. To a caveman, or a 17th century peasant, a man working at McDonalds with a house, tv, food, internet, bathroom, modern medicine, etc, seems as "more that he will ever need". To his contemporaries, not so much).
Can you support claim with some facts?
Note that in our current society, it is easily possible to be both richer than the 1970's middle class (in absolute terms) and live a life of leisure. We apply the label "poor" to people who do this, but that's just an arbitrary label.
...beyond the basics, "needs" are themselves a social construct.
Yes, this is the game played by most people who complain about the "middle class in decline" or "increasing poverty". They increase the definition of "middle class" more rapidly than the living standards of the middle class actually increased, and then whine when reality hasn't met their artificial benchmark.
> Can you support claim with some facts?*
Well, but how about just looking around you? Because arguing for obvious facts gets tiresome after a while.
http://www.dailyfinance.com/2010/10/17/disturbing-statistics...
http://finance.yahoo.com/tech-ticker/the-u.s.-middle-class-i...
http://www.businessinsider.com/22-statistics-that-prove-the-...
http://theeconomiccollapseblog.com/archives/30-statistics-th...
Yes, this is the game played by most people who complain about the "middle class in decline" or "increasing poverty". They increase the definition of "middle class" more rapidly than the living standards of the middle class actually increased, and then whine when reality hasn't met their artificial benchmark.
It's not a game --it's how society works. Definitions change according to the social reality. Would you consider YOURSELF middle class if you only had access to what a '50's middle class family had? A 1920's one?
The majority of your links focused solely on relative measures, not absolute ones (i.e., the incomes of the poor grew more slowly than the rich).
Want to try again?
Would you consider YOURSELF middle class if you only had access to what a '50's middle class family had? A 1920's one?
Hmm, ok, I'll choose my own arbitrary definition of middle class - it involves flying cars, robots and spaceships. No one meets my definition in the present era. In contrast, 20 years ago, when I defined "middle class" as stone knives and bear skins, everyone in the US was middle class.
Oh no, we are all so poor, something must be done!
You need people not being rich to have riches
Echoing another point made in this thread, but wealth differentials doesn't mean you need to have poor people. The least well off person in a society may not have everything they want - most people don't and probably should not, if we want aspiration and ambition to have a place in the future - but they'll have their basic human rights fulfilled (a roster that gains mass with economic development).
The "material and energy intensity of consumption, per capita, has increased exponentially over the past centuries" EXACTLY because of the creation first and constant availability of "an army of low-wage consumers".
People were taught to hold jobs in the way we do now, and they were taught to consume, in the way we do now. The vast masses of the people not only consumed much less, but made their own everything, from clothes and shoes, to vegetables and housing. Like an Amish community.
A decline in the middle class, e.g by migration of their jobs abroad, translate to a decline in economy, unless you can create new jobs at the same rate, which currently we can't, and the economy took a hit.
Echoing another point made in this thread, but wealth differentials doesn't mean you need to have poor people.
No, but a market economy needs people poor enough to have to work and at the same time rich enough to be able to spend money on things.
Automation can eliminate the need to have people working, but it cannot eliminate the need to have people spending --except if you move beyond a market economy.
edit: I did get my replacement iPhone 4gs at the Apple store, but I got my first iPhone 4gs line despite walking past the place several times a week.
PS: I expect something like a 30% reduction in retail store sales in the next 20 years, that may or may not be huge, but it is significant.
I have no numbers to back this up, so if anyone does I would be very interested in seeing it.
Universities aren't going away. At most, some programs may become "virtualized" but even then there's a lot of value add with college. They have specialized libraries and librarians to help you find information that may not be on the internet. They can afford expensive equipment and the people to take care of them. It's often useful just to be around people in your same program to talk about projects and learn from each other. It may not be $100k value add, but that just means college will get less expensive and possibly shrink, not that it will go away all together.
It's good to be able to concentrate alone, AND it's good to be able to collaborate in person.
We have GitHub (social coding!) and now MITx (social learning?) I like the idea. It's like the whole point of the Internet -- bringing people together -- has reached brick and mortar.
I'm going to hire the employee who i believe will work with me better, and who will produce a higher quality product. I don't care which school he/she went to.
I wonder if there are companies out there working on innovative ways to fill this space. After all, not _everything_ will be a coffee shop...right?
This could turn out to be true, i just hope that as paper books turn into history, we dont lose the quality associated with something going into print. The process of having enough confidence to "Print it" is pretty intense, and therefore the quality of a printed book v's any e-book or website will not match up without a significant amount of effort (which i suspect for business reasons wont get as much attention, because for business reasons you dont want to screw up a paper book)
Its an interesting concept, i think we're just not there yet. People like paper books, the only way they'll go away is if they become unaffordable or just stop being produced (in which case i'm starting a publishing company focusing on paper books!)
This is something by people in educational economics. While I think the author has a great point that we're looking to get workers who can get the job done, that isn't necessarily how businesses hire. The benefits from education don't just come in the form of increased human capital. Basically, you get bonus points for having the degree regardless of what it means to your human capital (there's a term for it that I can't come up with right now).
For a long time, we've heard of jobs that don't need a college degree, but that you won't get hired for without it. In fact, that's the reasoning behind getting a college degree in many majors where one doesn't have the intention of working in that area.
College is also a place where people get sorted into social groups according to smartness - social groupings that can continue well past college. After college, you meet friends of friends you had in college who also went to schools similar to your own and you get to build a network of people like you somewhat regardless of your success in life.
Finally, the appeal of letters is great. If you're "John Smith, BS", you will always be that. You will get the respect of being a college grad for the rest of your life. In a world where things seem in flux, items that we place undue weight on are comforting. Heck, the same can be said of going to a good school. If you went to Harvard, you will always have gone to Harvard - something very few people can say. No matter how much you fail at life in the future, you have proven that you're the top by having gone there.
Getting a certificate of completion from MITx isn't the same for many of these things. The fact that there aren't entrance requirements or limitations means that it isn't a certification that you're the top rung of society - just that you've learned some knowledge. Because it's so broadly available, it isn't sorting you into a social grouping. If universities are for knowledge transmission, the author is right - that these new offerings are wonderful. While maybe they should be for that purpose, I think that universities play a broader role in our society (I'm not saying it's a good or desirable role, just a role). They prove to others that I was accepted as not just someone they could transmit knowledge to, but a really smart person well above what would be needed to pass the courses. They connect me to other smart people who will become my social group as well as professional networking group. They make sure that no matter what I do in the future, I've proven that I'm one of the smart ones - one of the elite. My neighbor with a high-school diploma may make millions as a real-estate agent, but I'm a college grad! I can still feel proud (and maybe a little smug) because someone has certified that I'm part of the top of society - and no one has done that for him!
I believe it's called signaling.
Something akin to a formal book club with paid/volunteer instruction. I'm thinking about events like, "MyAwesomeEduStartup sponsors instructor [someone]'s coverage of [some MIT xCourse]."
It would definitely be cool as a community service or meetup event. I think it would be hard to get people to pay for this just yet, but maybe in the near future.
Google tried to challenge this model. This has nothing to do with whether people buy from brick and mortar stores or online.
I bought my phone online disentangled:
http://www.clove.co.uk/
http://www.virginmobile.com.au/shop
Actually it's the inverse. The student debt accumulated will make the college graduate more desperate to accept any wage offer, and more fearful of keeping the job once there.
People hiring love this kind of dependance.
There is also something to be said for a self-starter who drives himself through an online programme and comes out with a working understanding of a topic.
I only get to spend about 3 or 4 hours / week in cafes these days (I have an office job) but those are some of the best work hours I get. I wish I could transition full-time to coffeeshops, and if I get a startup going I might try it.