On 2010-04-23, Ed Huntress wrote:
FWIW, ca. 1963 - 1970 or so, there was an expected answer to this problem
you identify, which, for forward thinkers in economics, was apparent even
then. Trend lines in automation were already making the logical conclusion
quite clear. (This was a central subject in Policy Science at the time, and
the academic analysis and thinking on this was what I was studying.)

The assumptions were that the work week would be shortened to four days;
eventually less. More people would be required to fill a certain number of
man-hours of work. Education would take up many of the remaining hours for
individuals, as technical developments would require an increasingly
well-educated work force.

I am not sure if I agree with this.

1. If it is cheaper to replace a man with a computer if the man works
5 days a week, making that man work just 4 days a week makes replacing
him with a computer even more economically attractive (since a
computer/machine can work 7 days a week and even nights).

2. Education is a good, useful thing. The question is, can a person
who can be replaced with a computer, become so much more intelligent
and knowledgeable that he can finally get a job that cannot be done by
a computer.

I am sure that, as always in economics, education will have some
marginal effect, but I would expect it to not have a large effect.

Capital would be under pressure except for truly entrepreneurial
opportunities; dividends would be reduced because more profit would
return to workers. The gap between returns on capital invested in
mature industries and the rates of return possible for new
enterprise would keep innovation well-funded and expansive.

I cannot see how this logically follows from anything you said.

It was a vision that was similar to European social democracy. It
went to hell in the US for a variety of reasons, and globalization
has given capital the upper hand, basically undercutting the social
democracy model in the US. (It remains effective in Germany,
however, which beats our pants off to this day in balance of trade.)

I cannot make any meaningful comments about Germany.

So now we're basically stranded with a neoliberal model that's just
taken it in the shorts. Also known as the Washington Consensus, it's
in ill repute around the world. Several European countries are
taking a fresh look at Germany's flavor of social democracy, which
is going to cause a lot of turmoil in international trade and
finance if major trading countries adopt conflicting models.


I do not think that the remedies that you outlined, would do us any
good and therefore I disagree with the above paragraph.

i