Is New Technology Causing Our Financial Problems

[Byron]

I was looking at that American nerd fest and all the new goodies coming out.

Nobody but nobody questions how they are to be paid for.

Apparently over half the UK population own a smart phone. Probably, most of them don't really need one, it's just that they are so, well, er, smart.

yet at the same time, a huge number of families are just about underwater with their mortgages, nevertheless, you can bet your last penny that these new toys will be snapped up, leading to evermore financial misery.

Sooner or later, there will be a demand for higher wages to afford the toys, we are like children. We won't be able to have higher wages because we are no longer globally competitive thanks to our high prices for almost everything, but we expect to be able to buy them.

Stand by for tantrums

[TwoWolves]

Market forces create cheaper models.

[19 year mortgage 8itch]

I thought there was a word for people who blame the young's predicament on iPhones.

Boomer?

[200p]

Market forces create cheaper models.

But they dazzle us with "cool" brands so we still like paying £50 for Levis.

[cashinmattress]

It's not really the ownership of mobile phones that's the problem here.

To put it bluntly, there is no money in phone production; same goes for software, automotives, consumer electronics. It's the after service and credit facility that creates the dosh.

A complex muddle of subsidies, morally questionable manufacturing schemes, tax and state incentivisations, and marketing that creates 'profit' from what is essentially an unprofitable venture.

There is however plenty of money for old rope when you have 100% control of the media.

[Gone baby gone]

I was looking at that American nerd fest and all the new goodies coming out.

Nobody but nobody questions how they are to be paid for.

Apparently over half the UK population own a smart phone. Probably, most of them don't really need one, it's just that they are so, well, er, smart.

yet at the same time, a huge number of families are just about underwater with their mortgages, nevertheless, you can bet your last penny that these new toys will be snapped up, leading to evermore financial misery.

Sooner or later, there will be a demand for higher wages to afford the toys, we are like children. We won't be able to have higher wages because we are no longer globally competitive thanks to our high prices for almost everything, but we expect to be able to buy them.

Stand by for tantrums

Well, it was a nice theory... For the few minutes it lasted!

http://www.housepricecrash.co.uk/forum/index.php?showtopic=187711

[Bloo Loo]

is it possible to get a phone on contract that ISNT smart, these days?

If so this means that half the population are missing out on their free upgrades and helping the Telcos make even more money...or maybe they are aware and demand the non renewal discounts they are entited to.

[erat_forte]

I was looking at that American nerd fest and all the new goodies coming out.

Nobody but nobody questions how they are to be paid for.

Apparently over half the UK population own a smart phone. Probably, most of them don't really need one, it's just that they are so, well, er, smart.

yet at the same time, a huge number of families are just about underwater with their mortgages, nevertheless, you can bet your last penny that these new toys will be snapped up, leading to evermore financial misery.

Sooner or later, there will be a demand for higher wages to afford the toys, we are like children. We won't be able to have higher wages because we are no longer globally competitive thanks to our high prices for almost everything, but we expect to be able to buy them.

Stand by for tantrums

Yes if only new technology was banned, people could put the money into paying for their basic shelter, and then housing costs could go up and the economy would be saved and the recovery in full swing!

[deflation]

Plenty of SIM only contracts out there. I got a second-hand Sony Ericcson from a friend, which was hardly ever used, for £40. SIM only contract £7 a month (150 mins, 500 txts, 250 MB data), 12 month min.

I still have trouble explaining to people that their 'free' phone on an 18 month contract at £23 a month is actually costing them over £200 by the end of the contract.

Edited February 14, 2013 by deflation

[Byron]

Market forces create cheaper models.

So what?

If people are already cash strapped, even the cheapest 'extra' will cause a strain.

Remember, these are extra toys above what is already considered the norm.

[cybernoid]

Is New Technology Causing Our Financial Problems?

I guess it must be, we've only recently had new technology, all that old technology we had before is old isn't it. Good call.

[Byron]

Is New Technology Causing Our Financial Problems?

I guess it must be, we've only recently had new technology, all that old technology we had before is old isn't it. Good call.

You are not adressing the question.

The old tech has been replaced in some areas, but what I am talking about is not a new way of doing old things, but an expensive extra to do things that we never did before.

I am suggesting that family budgets cannot stretch further to buy stuff that never existed before, but does not replace anything they already have.

[alexw]

You are not adressing the question.

The old tech has been replaced in some areas, but what I am talking about is not a new way of doing old things, but an expensive extra to do things that we never did before.

I am suggesting that family budgets cannot stretch further to buy stuff that never existed before, but does not replace anything they already have.

Ok, so lets say noone buy's all this "stuff". We make everything last 2-3 years longer. We do this all across the west.

What do you think will happen to economic demand and the employment that it creates?

What do you think will happen to Toyota's and Ford's factories or intel's chip plants and all those they employ? And the european steel mill's producing the metal for those goods....and for... etc.... etc....

The real world says we can produce a lot more than we currently do. The money system says we can't.

Which is correct the real world, or our artificially created monetary system?

Which do we change, the real world to reflect the monetary system or the monetary system to reflect the real world?

Why are we doing the former and not the latter?

Edited February 14, 2013 by alexw

[Byron]

Which is correct the real world, or our artificially created monetary system?

Which do we change, the real world to reflect the monetary system or the monetary system to reflect the real world?

Why are we doing the former and not the latter?

Is it possible to have a monetary system that allows unbridled production?

[alexw]

Is it possible to have a monetary system that allows unbridled production?

I would not say unbridled but a monetary system that is more tuned to what our real world productive capacity is - yes.

After all, the monetary system we have now is an abstract & artificial man-made creation, existing as it does in its current incarnation only because this is the way we have made it. If you look into our past there has been an incredible amount of variation in it - from tally sticks, to the gold standard, to silver only coinage. It can be changed again.

Edited February 14, 2013 by alexw

[OnlyMe]

I would not say unbridled but a monetary system that is more tuned to what our real world productive capacity is - yes.

After all, the monetary system we have now is an abstract & artificial man-made creation, existing as it does in its current incarnation only because this is the way we have made it. If you look into our past there has been an incredible amount of variation in it - from tally sticks, to the gold standard, to silver only coinage. It can be changed again.

I think you are right to comine the argument with monetary policy, economics and systemic mismanagementof the economy.

The prmary driving force behind the use of technology is to drive down costs, increase effiiency and produce more. Meanhwhile the economic wizards are heell bent on doing the reverse.

The result will be technolog wins, the actions of the economic fraudsters will be ousted, but by the time this happens they will have successfully destroyed whatever parts of the economy they have managed to infest.

Next round will concentrate on admin, finance, except further up the ranks, though the middle ranks and encroaching on senior level acivities.

Edited February 14, 2013 by OnlyMe

[R K]

I blame the wheel.

[goldbug9999]

The ever expending money supply is essentially a way for gevernments and the banking system to steal the results of increased productivity for themselves. The proles remain largely ignorant and uncaring of this theft so long as productivity inreases moreorless offset the theft.

[Hail the Tripod]

I was looking at that American nerd fest and all the new goodies coming out.

Nobody but nobody questions how they are to be paid for.

Apparently over half the UK population own a smart phone. Probably, most of them don't really need one, it's just that they are so, well, er, smart.

yet at the same time, a huge number of families are just about underwater with their mortgages, nevertheless, you can bet your last penny that these new toys will be snapped up, leading to evermore financial misery.

Sooner or later, there will be a demand for higher wages to afford the toys, we are like children. We won't be able to have higher wages because we are no longer globally competitive thanks to our high prices for almost everything, but we expect to be able to buy them.

Stand by for tantrums

So backwards it's funny.

Technology is making everything cheaper in terms of man hours required to create them. This is an awesome thing! Food can now be provided for a family at a comparatively minor number of work hours, relative to pre-industrial times. Labour then is devoted to other things, and on and on until necessities are covered easily and labour can be devoted to pure self-indulgence.

How you then allocate those productivity gains within the population is the eternal problem. It is how the benefit of the productivity gains are allocated, and how the finite land resources are allocated that is causing the financial misery you observe. The very financial misery that technology has allowed us a vision of escaping. The opportunity to escape financial misery is provided by technology, politics is what prevents you realising that opportunity. The issue you identify is rooted entirely in our political/legal arrangements.

[goldbug9999]

So backwards it's funny.

Technology is making everything cheaper in terms of man hours required to create them. This is an awesome thing!

It is, especially for the banks who effectively steal most of the proceeds of this increased productivity through fractional reserve lending.

[goldbug9999]

It is, especially for the banks who effectively steal most of the proceeds of this increased productivity through fractional reserve lending.

oh .. and the rest is stolen via rentier activities :angry:

[Byron]

So backwards it's funny.

Technology is making everything cheaper in terms of man hours required to create them. This is an awesome thing! Food can now be provided for a family at a comparatively minor number of work hours, relative to pre-industrial times. Labour then is devoted to other things, and on and on until necessities are covered easily and labour can be devoted to pure self-indulgence.

How you then allocate those productivity gains within the population is the eternal problem. It is how the benefit of the productivity gains are allocated, and how the finite land resources are allocated that is causing the financial misery you observe. The very financial misery that technology has allowed us a vision of escaping. The opportunity to escape financial misery is provided by technology, politics is what prevents you realising that opportunity. The issue you identify is rooted entirely in our political/legal arrangements.

I enjoyed your vision of a high tech future.

Just not too sure that it is accurate.

Certainly, technology has come a long way even in my lifetime.

My Mother used to wash clothes by hand with a blue bag, wring them out in a mangle etc. etc. But she was always there for me and my Sisters.

We had a good life.

My daughter has to work all the hours God made and put her child in day care.

We have only been able to afford the extra toys of the past 25 years by women going to work. Children lose out.

Now, because we were so greedy, our grand children will have to pay our debts.

BUT, we are no happier because of our extra toys which we expect our grand children to pay for.

[cybernoid]

You are not adressing the question.

Ok.

No it isn't. Don't be so fking stupid.

[zugzwang]

I blame the wheel.

No! It was the axle of evil that put him up to no good.

[wonderpup]

Technology is making everything cheaper in terms of man hours required to create them.

Which is another way of saying that the economic value of those things is trending toward zero. Which creates the problem of how to extract enough profit to make a living.

I love technology but in economic terms it's now destroying more value than it adds. Meanwhile fixed costs such as energy and (therefore) food increase.

The paradox of value is that it's to be found in the inefficiency of the production process- this is often why the 'hand made' artefact attracts a higher price than the mass produced . People will pay more not only despite the inefficient manual processes used, but often because those processes are used.

An artefact that could created simply by a 'magic box' that reassembled the atomic structure of mud into any known substance or form would be worth very little indeed-perhaps measured by the energy required to assemble it? How much would you pay for something that could be made in ten seconds out of nothing but mud? Not very much I suspect.

So the answer to the OP's question in it's widest sense is yes. I would argue that Technology may well be a major cause of our financial problems in the sense that it's a deflationary force that is exacerbating the deflationary collapse of the credit based money system.

The real source of economic value is human labour- and the more we eliminate the human input the less economic value the resulting output will have. The products of our automated factories may be flawless and wonderful things- but their ability to generate profit will diminish in proportion to the dwindling number of people required to create them.