A Question of Labor Scarcity

Cory Doctorow started the New Year with a very interesting piece on the “roboticization of the workforce”. The whole article is worth a read, but it brings up a disturbing question:

But here’s the thing that neither of these articles — or even Bruce’s acid observations — touches on: once technology creates abundance, what possibilities exist for distributing the fruits of that abundance such that the benefits are more evenly felt?

There are plenty of people who will suggest that collectivist economics and centralized redistribution are the answer. Given the last century of history, that’s not an option I like. Take a look at Doctorow’s nightmare scenario:

We’ve been talking about an increase in productivity producing an increase in leisure for a long time, but instead, the “winner take all” world of Brynjolfsson and McAfee often seems to produce a “winner” class that works itself into an early grave by running 100-hour work weeks at astounding payscales, and a much larger “loser” class that works itself into an early grave by working 100-hour weeks in shitty, marginal, grey-economy jobs, trying to stitch together something like an income.

This is bad. However, the nightmare scenario that evolves under socialism is invariably worse. Instead of a winner class created by skilled, high-value work, a winner class develops from people who successfully gain control of the redistribution machine. Giving power to those who covet it is rarely a good idea, but usually unavoidable. The United States was built with a system of government shaped by this insight. By and large, its citizens have profited from keeping checks and balances on power seekers, even as the power seekers have eroded them.

A class of power seekers in control of an economic redistribution machine that replaces labor markets would not be subject to checks and balances. By controlling what people have, they would have absolute, unchecked power. Worse, power seekers tend to be the least sensitive to the wants and needs of the people they control. Even worse, most power seekers see others as resources to be exploited for their benefit.

Terrifying, isn’t it? Surely, we can avoid this by making sure the right people are in charge. Nope, sorry. Eventually, those who want power will take over the redistribution machine. It’s a certainty. Those who seek power will overcome the will of the rest to keep them out. It’s the consistent thread in human history.

The real problem is that we’re approaching a point where the labor market as it’s structured will collide with the efficiency gains caused by technology. If most labor is not scarce enough to allow workers to earn enough to support themselves and their families, how does society respond? How do supporters of economic liberty respond? What new mechanisms can be devised that allow ordinary people to continue to participate freely in the markets for goods and services without the wealth earned from the labor market?

This is stuff supporters of economic liberty need to start thinking about now. Our opponents have a ready answer that people will be drawn to despite its historic failures. Without an alternative from us, tyranny of the default will result in actual tyranny.

  • MingoV

    Why would anyone give any credence to predictions made by Cory Doctorow, a writer who never studied history, economics, business, automation, or science?

  • http://thelibertypapers.org Quincy

    Regardless of your opinion of Doctorow, thinking about labor not being scarce while material goods are won’t hurt anyone, especially when you consider that people like Doctorow will be proposing socialism as an answer.

  • Joshua

    I have not read Cory Doctorow, yet. However, we have no idea what Mr. Doctorow has studied. We only know what is listed in his official record. From personal experience, I have found that many of the best insights I have come across are common people who developed their own interest.

  • http://thelibertypapers.org/ Brad Warbiany

    I don’t think labor scarcity is an issue due to productivity gains in technology. Labor scarcity (or surplus) is an issue due to *communication* gains in technology.

    25 years ago, it didn’t make sense for most US-based firms outside of extreme low-skill manufacturing to outsource, because the relative cost of communication and travel made it nearly impossible to manage the work being performed half a world away. So workers in Indiana might compete with workers in California, or in Georgia, or maybe even Ottawa or Mexico City, but not in China. Today, labor has become a truly global market, and it’s going to take decades for things to stabilize.

    And by “stabilize” I mean “wait for the rest of the world to become wealthy enough where we can compete with them”. It’s not going to be a fun wait.

  • http://pith-n-vinegar.blogspot.com/ Quincy

    Current-state and for the next decade or so, I totally agree with you that it’s communication technology.

    That said, I don’t think we’re *that* far off from a balance point on individual compensation. Our competitiveness problem comes mainly from our own tax and regulatory burdens causing increased overhead per production unit and the fact that the supply chains are now in Southeast Asia. For high-tech especially, there are some components only produced in Southeast Asia. To get them to the US, you either have to ship them or get someone in the country (or at least on the continent) to start making them.

  • http://thelibertypapers.org/ Brad Warbiany

    There’s still a lot of people involved in high-tech production, and still dominated by mid-skill jobs, not high-skill or college-education jobs.

    While I agree that we have a lot of tax/regulatory problems here (including, as I’ve posted about before, the idiocy of a 35% tax on repatriated earnings), salary is still a big component. And will continue to be.

    But I think we’d agree on one point: there’s not a lot the US can do about salary differences. Where we should be making changes is to the tax/regulatory issues above and beyond salary differences that make some jobs which aren’t today competitive a lot more so.

    A lot of lefties want to enact trade barriers as the answer rather than reforming our own policies to become more competitive. But when the problem is that we’re shooting ourselves in the foot, we should simply stop, not point the gun outwards.

  • Seerak

    This is stuff supporters of economic liberty need to start thinking about now. Our opponents have a ready answer that people will be drawn to despite its historic failures. Without an alternative from us, tyranny of the default will result in actual tyranny.

    This is problematic on multiple levels.

    Doctorow, being a Leftist, will always arrive at that answer no matter what the “problem” is. It’s not merely that the logic of Leftist ideas always lead to that end-of-road, though that is true. It’s that Doctorow’s Leftism actually creates the problem he sees, to which he logically and inexorably proposes that one catch-all solution: government power (“We should…”) The “problem” he projects is not inherent in reality, but is an artifact of his ideas — and their prevalence in the culture.

    All dystopias written by people operating on Leftist premises, for example, *always* end up shaped like an inverted capital T: a society with a small ruling class and a massive underclass. That’s the scenario Doctorow projects here, as if it were new and original. The joke’s on them; that is precisely the sort of society at the end of the Leftist road — it is also their *utopia*, Plato’s Republic being the original archetype.

    This form of society is inevitable among people who operate on Leftist premises; it’s their end-of-road, it’s all they can conceive of, given their ideological equipment — and so the only “choice” there is, is to choose between who gets to sit on top of the upside-down T. It’s why fascism, National Socialism and communism all ended up as inverted T’s regardless of their professed goals.

    Witness George Orwell; he could see it so clearly, as we see in both “Animal Farm” and in “1984”, particularly in the Emmanuel Goldstein book-within-a-book… and yet he was *still* a socialist. That’s one tight trap.

    You need to know these things, because if you don’t, you’ll get caught in the same trap. Case in point, two things in this post.

    First: you make no distinction between economic (productive) power and political power in your use of “power-seeking” here. That’s a huge error; it obliterates the difference between giants of wealth production and mere warlords. In any scenario where one man has a sack of gold (economic power) and the other has a gun (political power), it should be bloody clear which one of those two is really the dangerous one — and which of those two will, in the long run, end up with both.

    The second, is in saying that advocates of liberty need to have “answers” to such challenges. That is in itself a Leftist premise — the idea that we need to be “leaders” who provide answers to the masses who demand them.

    That is false. In reality, this isn’t a “problem” that you need to worry about at all, as to the extent that it’s an artifact of Leftist thinking, it does not arise in the context of liberty; we don’t make that mess in the first place, so why should we have to clean it up?

    If you think that’s a tough sell, and would still like to address the “problem” in some manner, that’s easy too: challenge the “leaders” premise. Liberty does not ever provide “answers to problems”; it merely provides the optimum social conditions required so that men are free to devise and implement their own solutions, to compete with the solutions of others, and to adopt those of others whose solutions prove effective. Liberty solves problems organically, you might say.

    With all that said, does that mean that we won’t see what Doctorow foretells? Sadly, no; we may very well see it — because the culture at large is operating on many Leftist premises itself — in particular the notion that they need leaders, and need someone else to take care of their problems. The self-concept of being a cog in the system is dominant. As the middle class — a creation of capitalist liberty, and therefore dying with it — erodes, we’re drifting towards that inverted T I talked about. We’re not there yet; we’re shaped more like a Hershey’s Kiss at the moment.

    But you sure as hell don’t fight that by joining it — by sharing in the basic premises that logically drive it. You want real solutions? You start by identifying, questioning and fighting those premises at every opportunity.