Investment bank ex-employee here. I'm pleasantly surprised that Hacker News front-page has finally landed an article on the history of modern macroeconomics whose author knows what he's talking about instead of masking their ignorance with popular voodoo buzzwords like "Ron Paul" and "Bitcoins".<p>Ironically but predictably, very few karma points are given. I'm happy to find this little gold nugget and the intellectual satisfaction that comes with reading it.
"On the one hand, technology has made us all much more productive ... on the other, jobs have evaporated."<p>"Most of us are working harder, for less money and with no job security."<p>My econ classes taught me that increased productivity causes short-term pain for displaced workers, but results in long-term higher standards of living for everyone.<p>That relationship seems to have broken down. What if the internet destroys more jobs than it creates?<p>Is it really "post-scarcity economics"? Or is it the effect of digital networks and rising inequality?<p>Jaron Lanier argues in "Who Owns the Future" that digital networks make the economy work differently. Now the benefits of higher productivity get hoovered up the elite few, leaving most people worse off.<p>Lanier argues that there has always been inequality, but the internet enables a winner-take-all economy that keeps productivity gains from trickling down to ordinary people.<p>I'd love to see a mathematical model that quantifies jobs and salaries lost to "disruptive" new entrants, and how many jobs at what compensation levels are created in their wake.
"There is a long history of exaggerated concern, rightly derided by economists, with the replacement and hence displacement of workers by machines."<p>- Judge Posner<p><a href="http://www.becker-posner-blog.com/2013/03/automation-and-employment-posner.html" rel="nofollow">http://www.becker-posner-blog.com/2013/03/automation-and-emp...</a><p>To be fair, the tone is stronger than his ultimate argument. He goes on to outline four or five examples where the short term effects could be pretty devastating.<p>It's important to note that in the long run, labor markets reach an equilibrium, adapting to any current technological capabilities.<p>Then again, it's also important to note that in the long run, we're all dead.
Can anyone with more economic insight than myself comment on how increased automation leading to higher unemployment (ie, self-driving car) might change the recommendations?
Are we back to the Basic Income? Seems to be an increasingly relevant proposal.
I once wrote a very ranty essay on the same topic: <a href="http://kmkeen.com/post-scarcity/" rel="nofollow">http://kmkeen.com/post-scarcity/</a><p>It needs some work yet and is not terribly well written. But it goes along well with the original post, providing things for we (as individuals) to do that don't require massive policy changes that the article suggests.
Good luck getting any of that done in America with the current house of representatives. It is currently politically impossible to get anything done at all in Washington. Our current congress can't even vote on simple stuff like raising the debt ceiling.