Creative Destruction and dislocation

[El_Machinae]

I think 99% of the trick is to convince people that all jobs are temporary, and that they should be aggressively preparing for Plan B. Once they're ready to implement Plan B, then they can start to relax.

Oh, and if you're an innovator, keep an eye on what segment of society will experience a loss of income due to a societal shift, and then figure out how to hire them.

 

[Mise]

I think 99% of the trick is to convince people that all jobs are temporary, and that they should be aggressively preparing for Plan B. Once they're ready to implement Plan B, then they can start to relax.

That's a pretty good idea.

I like Cutlass's posts as well. Actually this whole thread's really good...

 

[El_Machinae]

Thanks.

I lived in a one-industry town for a couple of years (about 10 years ago), and I knew it was temporary. Everyone was afraid of layoffs. I got my Plan B together as fast as I could, and then enjoyed the income when it lasted. 10 years later, the industry has really been 'down cycled' and I have quite a few old friends who're struggling in poverty. I just couldn't understand it, but it's given me perspective. I think we should realise that all jobs are blessings and could be lost with very little warning.

 

[potatokiosk]

Doesn't it? The correlation between inflation and unemployment can be changed (I think) if productivity growth is raised. If I am right, then it would be a mistake to let concerns about wage growth and low unemployment affect public policy.

I don't think the correlation will ever be eliminated, we could only attempt to lower the natural rate of unemployment.

Whether an increase in productivity leads to less unemployment depends on if real wages also increase. If wages increase as well then employing people doesn't become more profitable and employers won't become more likely to do it. In my opinion, there are two ways the natural rate of unemployment can fall: either workers are paid a smaller percentage of what their work is worth or the wealthy lower their expectations of profit. The first is undesirable and I'm not aware of any way the second could be achieved so I think we should simply accept the current level of natural unemployment.

The costs of high unemployment exceed the benefits. We need that firmly drummed into the minds of the people who make economic policy.

I agree that limiting unemployment should be a higher priority.

 

[Cutlass]

If the rate of productivity increases faster than real wages, then both employer and employee are better off. Most other schemes make one better off at the expense of the other. That's unsustainable in both directions.

 

[potatokiosk]

Yeah, I guess you're right. A person's level of absolute wealth is more important than relative wealth.

 

[Cutlass]

I wish more people could be convinced of that. Economic policy as pushed by conservative Republicans in the US is focused on maximizing the relative wealth of the top at the expense of the absolute wealth.

 

[potatokiosk]

I think most Republicans honestly believe that their policies are what's best for the country's overall prosperity.

 

[Cutlass]

Some may. But that's really besides the point. And it's really hard to believe that the Republicans, who ran up some $7trillion in debt in the last 8 years alone for no reason other than that they refused to balance the budget if doing so might annoy the rich really give a damn about what happens to the rest of the country.

 

[potatokiosk]

And to think that only 8 years ago one of the country's main economic "problems" was deciding what to do with a budget surplus...

 

[Cutlass]

What I believe, is that the Republicans have a sort of Tory-aristocrat disease: The rich are better. They deserve to be left alone. They'll do such great things for us, but only so long as we don't ask them to.

The problem with that is that if we keep giving them more and more and more and more and more and more and more and more and more and more and more then eventually there is nothing left for the rest of us. That's what trickle down economics is. And don't make the mistake of thinking that Reaganomics or supply side economics are anything other than trickle down in reality.

The problems with that are, first, that if the rich are given everything they ask for, they have no reason to earn any of it. So they don't. Second, the only thing they have to put effort into is stopping any of their wealth from "trickling down". Third, business people only invest in the reasonable expectation of being able to sell at a profit what they are investing to produce. If consumers don't have more money, there is no incentive for investment.

Personally I think the Republicans have channeled Marie Antoinette long enough, and if they don't knock it off, they can share her fate.

 

[Godwynn]

What I believe, is that the Republicans have a sort of Tory-aristocrat disease: The rich are better. They deserve to be left alone. They'll do such great things for us, but only so long as we don't ask them to.

This reminds me of a George Carlin quote:

Conservatives say if you don't give the rich more money, they will lose their incentive to invest. As for the poor, they tell us they've lost all incentive because we've given them too much money.

 

[Whomp]

That wasn't really what Schumpeter argued. Yes, he was smart enough to understand the weaknesses of capitalism, but he wasn't a socialist by any measure. He did not argue that capitalism would necessarily fail - he warned that it could fail (basically accepting much of Marx's analysis), but painted capitalism as positively as he could - the whole idea of "creative destruction", the glorification of "entrepreneurs"... he was engaging in political advocacy for capitalism.

And this was exactly his goal: to convince those who read his work that capitalism, despite its failures, was positive and should be preserved. Beyond that, to paint socialism as a stagnant, bureaucratized, undesirable "end of history". He identified himself with socialist critiques to capitalism just in order to reach those disenchanted with capitalism, and spread his own political advocacy for capitalism there.

Whatever you think of Schumpeter, do not think that he was a socialist. Instead, he was kind of like an Ayn Rand with brains. Dangerous. That is why people like DeLong are getting interested in him now.

I never made the assertion he was a socialist. He's also rather far from Rand or von Mises who look to abolish the government.

However, Marx' predictions economic theories have not withstood the test of time. The labor theory of value and of surplus value never took place. His theories failed to emancipate the masses and instead they came from the bourgeoise. Lenin's father was a high-ranking education official and Lenin a lawyer. Hardly proles...

Schumpeter never accepted Marx' analysis. He believed entrepreneurial capitalists earn profits by forgoing current consumption, by taking risks, and by organizing production. Somehow, the immizeration of the working class never happened and the capitalist paid workers the correct wage.

Even Galbraith's saying that U.S. Steel, AT&T, and General Motors were companies of stability for a "planning system" becomes suspect. These companies are hardly what they once were and have either redefined theselves, AT&T, or may disappear, GM. If I recall, Microsoft was founded less than a decade after Galbraith wrote "The New Industrial State".

Schumpeter's view is closer to today than anything Marx or Galbraith have suggested. I think the second part of his equation is what remains to be seen. My guess is downturns like this is where we'll find whether the entrepreneur is crowded out. My guess is not...

 

[mrt144]

Whomp, where can I send you a bottle of wine? I picked up Schumpeter's Capitalism, Socialism and Democracy and have enjoyed it so far. Thank you!

 

[Whomp]

Whomp, where can I send you a bottle of wine? I picked up Schumpeter's Capitalism, Socialism and Democracy and have enjoyed it so far. Thank you!

Save it for the move to Greece.
I'll be interested to hear your thoughts. He has a good wit.

 

[Richard Cribb]

I never made the assertion he was a socialist. He's also rather far from Rand or von Mises who look to abolish the government.

It is new to me that Ayn Rand and Ludwig von Mises wanted to abolish the government. Can you please enlighten me on this?

However, Marx' predictions economic theories have not withstood the test of time. The labor theory of value and of surplus value never took place. His theories failed to emancipate the masses and instead they came from the bourgeoise. Lenin's father was a high-ranking education official and Lenin a lawyer. Hardly proles...

Where to start? The LTV is not a prediction.
I also hope that you are not so embedded in your entrepreneur mythology that you think that Lenin carried out the Russian revolution single-handedly.
In fact, the struggle organized labour fought, pretty much inspired by the ideas of people like Marx, did indeed lead to progress and emancipation for the masses. Just compare the situation in industrialized countries today and let's say 100 years ago.
I am just a bit curious, what works of Marx did you study?

Schumpeter never accepted Marx' analysis. He believed entrepreneurial capitalists earn profits by forgoing current consumption, by taking risks, and by organizing production. Somehow, the immizeration of the working class never happened and the capitalist paid workers the correct wage.

The immiseration of the working class did indeed happen, if you only keep in mind that it is talk about a relative immiseration. Again, what works of Marx did you study?
Except for that, I find myself in agreement with innonimatu regarding certain people's interest in Schumpeter..

PS: BTW, my thread is still open...

 

[Desmond Hawkins]

It is new to me that Ayn Rand and Ludwig von Mises wanted to abolish the government. Can you please enlighten me on this?

Yes, she views protecting the rich and their castles as the only service some how special enough for government to provide.

 

[pau17]

The immiseration of the working class did indeed happen, if you only keep in mind that it is talk about a relative immiseration. Again, what works of Marx did you study?
Except for that, I find myself in agreement with innonimatu regarding certain people's interest in Schumpeter..

PS: BTW, my thread is still open...

I can't find your thread, but what do you say against Weber's following attack?

“The so-called ‘materialist conception of history’ in the older primitive, yet inspired, sense to be found in the Communist Manifesto turns today only the heads of laymen and dilettantes. Here we can still find the distinctive circumstance that their need for a causal explanation of a historical event is never satisfied until somehow or somewhere economic causes are shown (or seem) to be operative. If this is the case then they content themselves with the most threadbare hypothesis and the most general maxims, for their dogmatic need to locate economic ‘motives’, the ‘genuine’, sole ‘truth’ of ‘universal determination in the last instance’ is satisfied. This phenomenon is by no means unique. Almost all the sciences, from philology to biology, have at one time or other claimed to be the source not only of specialized economic knowledge but of ‘Weltanschauungen’ as well. Under the impression of the profound cultural significance of modern economic transformations and the special importance of the ‘labour question’ the ineradicably monistic tendency of all knowledge uncritical of itself naturally drives it along this path.” [from Objectivity in Social Science and Social Policy]

 

[Whomp]

It is new to me that Ayn Rand and Ludwig von Mises wanted to abolish the government. Can you please enlighten me on this?

Thanks for correcting me. Eliminate was the wrong word.

Where to start? The LTV is not a prediction.

His view of LTV as "social production" or "socially necessary" or "exploitation by capitalists" is what I meant by not standing the test of time.

I also hope that you are not so embedded in your entrepreneur mythology that you think that Lenin carried out the Russian revolution single-handedly.
In fact, the struggle organized labour fought, pretty much inspired by the ideas of people like Marx, did indeed lead to progress and emancipation for the masses. Just compare the situation in industrialized countries today and let's say 100 years ago.
I am just a bit curious, what works of Marx did you study?

When I mention Lenin I'm not talking about the lead up to the October Revolution which was very real. As history shows, these workers could not control the Party led by Lenin/Trotsky/Stalin. Leadership was firmly in the hands of professionals and not the masses. Maybe history would've proved different if a "commune council" was produced?

Anyhow, I've read Communist Manifesto multiple times and since it's such a short read will try reading it again this weekend. Though I have not read Das Kapital I've read Engels synopsis of Vol. 1.

PS: BTW, my thread is still open...

Thanks but the question I did ask you didn't have an answer for.

 

[Richard Cribb]

Yes, she views protecting the rich and their castles as the only service some how special enough for government to provide.

As does quite a lot of people, as far as I can see.
Just have a look at the cinservatve nannystate in my sig.

I can't find your thread, but what do you say against Weber's following attack?

I say that I will find my thread and provide an answer within a few days.

Thanks for correcting me. Eliminate was the wrong word.

Yep. Both Rand and the Pelerinites were not against government.

His view of LTV as "social production" or "socially necessary" or "exploitation by capitalists" is what I meant by not standing the test of time.

Can't agree with that at all.
LTV is still a valuable analysing tool, while exploitation is, as far as I can see, an inherent part of the capitalist mode of production. Just correlate the development of production increase and real wage development in your own country in recent year. And keep in mind that exploitation is not the same as immiseration.

When I mention Lenin I'm not talking about the lead up to the October Revolution which was very real. As history shows, these workers could not control the Party led by Lenin/Trotsky/Stalin. Leadership was firmly in the hands of professionals and not the masses. Maybe history would've proved different if a "commune council" was produced?

First of all, Lenin's ideas diverge from Marx on some important issues, so one can hardly critisize Marx for a few things that Lenin did or thought (And by this I am not saying that said actions or thoughts by Lenin were mistakes).
Indeed the whole idea that the backward Russia should pioneer socialism, would probably not have pleased Marx.
In such a situation,it should hardly surprise that it was elements from the former ruling class that stood by the helm, for a number of reasons.
However, it is relevant to consider that many of said professionals came from humble origins, as some of the leaders in the socialist countries, like for instance Stalin (easily the most brilliant individual in the entire Russian revolution - recommended reading here would be those two biographies about him by non-socialist Montefiore; highly interesting and entertaining works) or the man in my avatar.
Also speculating about communes in such a historical situation is not very rewarding in my opinion, apart from my distaste for contrafactual history in general, I think the Bolsheviks were the only group that could carry out and consolidate that revolution.

Anyhow, I've read Communist Manifesto multiple times and since it's such a short read will try reading it again this weekend. Though I have not read Das Kapital I've read Engels synopsis of Vol. 1.

TCM is a good read, but it should be supplied with some "heavier" material.
I must also, as one who have lectured in this sort of things, remind that Marx is one of those one doesn't read.
One studies him.

Thanks but the question I did ask you didn't have an answer for.

My apologies, I seem to remember I answered you once. Anyway I will look into it.
EDIT: Try muddling through this post:http://forums.civfanatics.com/showpost.php?p=7158003&postcount=102