Paul Krugman vaguely implies that productivity is the cause of stagnant wage growth, in that robots are taking over former 'good' jobs. 20 years ago he railed against those kind of theories, but now he notes that for this theory:
Big bad ideas like socialism never die. The desire to expropriate the rich and make all businessmen kowtow to government really drives people like Krugman, and the class struggle paradigm, where the captains of industry are parasites and the proles are Job-like in their devotion and suffering, is very attractive to these people. A recent Gallup poll found 53% of Democrats had 'favorable' views on socialism, and Peter Schiff found many Democrats who favored a ban on corporate profits.
It has echoes of old-fashioned Marxism — which shouldn’t be a reason to ignore facts, but too often is.His insinuation is we are ignoring the rise of the robot elite because of anti-Marxist ideology. I'm an anti-Marxist ideologue because I think Marxism is wrong: it's based on false assumption about value (ignores the marginal revolution) and the omnipresence and importance of class war, and doesn't work empirically (socialism starting in the most productive states, the falling rate of profit, lower wages over time, an increase in the breadth of recessions).
Big bad ideas like socialism never die. The desire to expropriate the rich and make all businessmen kowtow to government really drives people like Krugman, and the class struggle paradigm, where the captains of industry are parasites and the proles are Job-like in their devotion and suffering, is very attractive to these people. A recent Gallup poll found 53% of Democrats had 'favorable' views on socialism, and Peter Schiff found many Democrats who favored a ban on corporate profits.
15 comments:
Your work in finance is good, but when you indulge in these little political rants, you sound like a college sophomore.
People like Peter Thiel and Ken Rogoff are able to discuss the substance of the issue without copy+pasting from John Birch Society tracts.
How about this:
Convert the entire welfare state into a citizens royalty payment. A trust fund all citizens get at 21. It could be funded by any number of overriding royalty interests that could be created for the purpose and as such, would represent a new form of private property and not a government program.
After this is done the "government administered" welfare (social security, health care programs, welfare, etc) can be eliminated. Citizens become shareholders in America's increasing productivity. Disgenic breeding incentives would not only be eliminated, but actually reversed.
I like your comments on pretty much any issue to include this one. Krugman is a hack.
It has always fascinated me how infantile objections to marxist critique are. Here the implication is that mere association with the John Birch Society (which, insofar as it is anti-totalarian, anti-fascist, anti-collectviist, originalist, and support small government actually has much to recommend it) should act as a stinging rebuke.
You evil (libertarians, old right, whatever) are always spreading (libertarian, old right, whatever) beliefs. Shocking, that. I suppose what we are to take away from this is that you are a child unless you read more articles in the Financial Times.
It is the authority that resorts to this logic that then attempts to credibly wield the insult "sophomore."
This sort of thing makes me want to repeatedly ask: "What color is the sky in your world?" Perhaps the answer is "Financial Times Pink"?
Robin Hanson has a fun paper discussing the impact of machine intelligence on growth and total employment: http://hanson.gmu.edu/aigrow.pdf
No marxism needed.
The Marxist presumption is that people should not be free to make their own choices - to use robots instead of workers, for example. There is no arguing with such an attitude because its message is clear: people have no rights that are not subject to the decisions of the appropriate committee. Krugman good; Stalin better.
At what point was a command economy ever proposed? The point of the post is to highlight the fact that labor share of income has fallen, and propose some potential explanations. You skipped over what the post was actually talking about and launched into the problems with Marxism. There's a huge difference between being driven by a desire to expropriate the rich and pointing out that society has agreed to a base level of social insurance, and if we want to pay for it it may be easier to tax people that actually have money.
From a libertarian perspective you are obviously free to disagree with the idea of social insurance, but the fact of the matter is we live in a democracy and the majority of the public want it. From then the question is just how best to provide such insurance at a reasonable cost.
As a side note, I do think it's interesting that you yourself have pointed out in the past that many of the super-wealthy may be receiving income much higher than their marginal product. This conversation always turns to entrepreneurs, but most of the super rich are executives running other people's companies and lucky active managers. I think about the effects of taxing such people not from a fairness perspective, but from an efficiency one. If a lot of these guys are getting paid more than they are worth, and the people we really want to incentivize, true entrepreneurs, potentially have other motivations, it is possible there is a low efficiency costs for bumping up taxes on the higher end. Plus we are talking about a few marginal percentage points, not whole scale European style socialism.
If robots are crowding out human labor and getting so much more done for less why is government so big, crappy and expensive?
The Midwest Marxism Conference was held last month here in Chicago and it was full of teachers, including the No 2 guy from the Chicago Teachers Union. See details here: http://www.wirepoints.com/just-how-far-out-in-left-field-do-some-chicago-teachers-play/
I never thought I would live to see this in America.
If robots are crowding out human labor and getting so much more done for less why is government so big, crappy and expensive?
Probably perception bias.
The federal government has a fairly simple budget, from a big-picture viewpoint:
20% military spending
20% Social Security
20% Medicare/Medicaid
13% safety net welfare programs
7% retiree/veteran benefits
6% interest payments
3% infrastructure
2% education
2% science
5% other
Very little of this has to do with robots. I don't think size, quality, and cost are relevant here, it's all about priorities.
Anon writes:
From a libertarian perspective you are obviously free to disagree with the idea of social insurance, but the fact of the matter is we live in a democracy and the majority of the public want it. From then the question is just how best to provide such insurance at a reasonable cost.
No. 51 percent have no right to enslave 49 percent. That is the comment of a thug. Our constitution was supposed to prevent it but you thugs have, so far, won. Stay tuned thug.
Our Constitution was supposed to prevent slavery? Someone needs a history lesson.
Yes, reflexive Communism is revolting ; so is reflexive Feudalism.
Keep compressing civil organization to the center and avoid both extremes at all costs.
If you think robots are not a problem you better read this:
http://t.co/LVJe1jGP
This has nothing to do about socialism. You are misisng the point. It is the robots that are enforcing socialism by creating demand for higher taxes. Obviously, you did not understand Krugman or he did not come through well.
Whatever direction you choose for the axis "marxism vs capitalism", 50% of points will fall on the "wrong" side; what great insights can be gained from this, like that 50% of ideas are good ones we should pursue! Even more fun is the current approach of using curves... which all reminds me of the unsurpassed quote from our lady ayn: "A concept is a mental integration of two or more units which are isolated according to a specific characteristic(s) and united by a specific definition.".
Damn, boys, we're soon in 2013, not 1867, and you still have learnt nothing from history?
But yeah, when people dont even understand Monopoly...
But yeah, it'll all soon be pointless, once humans are rendered fully obsolete.
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