Monday, October 24, 2011

Efficiency Is Killing Our Jobs

Dyske Suematsu paper

The majority of wealth is now concentrated at the top of the social ladder. This is particularly true in the US, and the gap is widening every year. This, I believe, is because of efficiency, not China. Today the best ideas can efficiently and quickly propagate worldwide, and everyone can efficiently find them and buy them. This makes the owners of these ideas filthy rich, and those ideas that are not the best, can hardly survive. It’s not just transfer of information that is fast; wealth too is transferred very fast and efficiently.

Imagine in the future where we have something like Star Trek’s transporter which would allow us to serve freshly cooked meals to anyone around the world. The efficiency of such a device would probably kill local restaurants that are not the best. The efficiency of the kitchen equipment in the future would allow one chef to serve millions of diners a day. We would probably need just a few chefs per each cuisine in the whole world. The reason why many chefs still have their jobs is because the world isn’t that efficient yet. In other industries, many people have already lost their jobs because of the efficiency that invaded their fields [..].

Think of journalists. Many are losing their jobs. Newspapers are barely surviving. In the old days, for every news event, there were probably hundreds of journalists writing about the same story for their own local newspapers. Now, because of the efficiency of the Internet and search engines, a few journalists writing about it would suffice for the whole country [..].

Corporations are increasingly getting bigger (in terms of market caps), more global, and more powerful, yet they are getting smaller and smaller in terms of the number of people they employ, because they have mastered the art of efficiency [..].

We live in the age where we make a living by doing things more efficiently than others. We blame other countries like China for taking our jobs but we are all doing it ourselves. When you learn how to use computer programs like Excel, Word, and Photoshop, you are eliminating other people’s jobs. What used to require a team of people to produce, you now can do it all by yourself using these programs. In other words, you are profiting from the loss of other people’s jobs. That’s how we survive in today’s world. We struggle every day to avoid being the one whose job is eliminated by the efficiency of someone else.

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Great article. My only disagreement is later in the article author talks about a final set of machines which are the "means of production" , but these machines, software do not have to be owned by government in my view.

Since there is a widening income gap due to ultra-efficiency in production, government can simply give people for example 1K $ per month [1], which they can use, in a free market fashion, to select which products, or ideas they will buy. Production will become so easy, so cheap that this final piece of the transaction will be as easy as printing a page on your printer.

Why still pay? Because signals are needed so that the creator (producer?) of the product can know his / her creation is on demand or not. They must carry some kind of "badge" if that is so. What is earned does not have to be money exactly.. People answer questions on Stackoverflow sometimes simply to have more rights on the site, or carry some badge that says they answered bazillion questions (they are the top honcho) whatever.

Also personal ownership is still needed because that is how people take care of things. Noone cares about things they dont own.

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[1] Let us not forget, Milton Friedman (that bloodsucking neoliberal vampire!) suggested something similar decades ago. For rational people who think in systems, optimal routes, decrease, increase, gain, loss, it does not matter a system fits to some kind of idealistic description. It only matters that it works. Friedman's suggestion would make use of signals, and it would also provide a social service, which in turn, would most likely reduce crime, increase overall happiness which means more production, more creation.

[2] Let me plug another post of mine here: A New Form Of Currency

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