One Nation States Vs Global Corporations

[easy2012]

Well I think we can both agree that-in a competitive market- wages are a cost to be eliminated if at all possible- so it's not unfair to point out that the reduction or elimination of wages is a goal of any well run enterprise.

No. Cost should be eliminated if possible, but if a unit labour cost is lower than unit technology cost, then labour is the right choice.

I sympathise with your view that the world of 90% automation is just over the horizon and those who don't own the technologies and land will be left to drink rain water and eat wild berries but that fear is unwarranted within a meaning time-scale (and who knows what the world would be like in 200 years, it might have been fried by Global Warming).

We can also agree-I think- that customers with money to spend are a vital requirement for anyone trying to sell anything- so maximising customer spend is also a goal of any well run enterprise.

Again no - the point is to maximise profit, not customer spend. There are some customers that spend a lot, but cost even more to serve.

So we can accurately say that any well run enterprise will attempt to lower the total wages it pays while at the same time attempt to maximise it's sales by expanding it's customer base.

And this will be the same for all enterprises in the global economy- all will be attempting to cut wages and increase sales.

So taken in aggregate the objectives of every well run enterprise on the planet will be to reduce it's wage costs and maximise it's sales.

Addressed above.

Can you spot the problem here? If my wages are your profits then to cut one is to cut the other.

Yes, but when your very reasonably sounding theory doesn't match real world realities - then you must consider that your theory is incomplete - perhaps as GardualCringe has pointed the other dynamics at work here.

The last time agriculture was automated we consumed even more food and become fatter; The last time computer took over typist job - we consumed even more computers; Perhaps the end game of self maintaining, self upgrading automatons will exist one day - it is not something I would vaguely worry about at this time.

Perhaps you should like to try to convince yourself with a few real life examples of your more efficiency = less wages = less consumption

theory.

[easy2012]

You have a very narrow definition of failure, rather like equating death with your football team losing at the weekend.

Failure could mean in a very limited context, such as the loss of a specific company or industry, a temporary reduction in revenue, or a trade deficit (remember that a state consists of many different organisations and businesses, the failure of one, does not mean the failure of all). Provided that a specific nation state can over time make reforms, it needn't result in abject failure of the state in the sense of Syria and Somalia, having said that legislators do like to kid themselves.

I should also mention, reform can work in favour of both businesses and workers, if a state favours employers over workers too heavily, movement of people could mean that a country could struggle for man power as people emmigrate to a jurasdiction that legislates better conditions for emloyees

Thanks for mentioning Argentina, although I'm not sure how it backs your critique, which before interventionist Peronism was one of the richest nations in the world, and which is locked in decline (in addition to Syria and the former USSR) by a poweful elite that will not allow change, and are the very regimes that I describe as sclerotic, corrupt, and self serving.

Indeed.

During the industrial evolution, lots of great things were achieved from inter-nation competitions where the German/Prussian reformed to catch up with the Great Britain; and before that the Great Britain reformed to neutralised the French threat. Many technologies break through occurred during the cold war, and before that WW1/2.

China in the 14th century fell into significantly decline because it thought it was the only country that matters in the world - but of course history told us that the arrogance was misplaced.

[alexw]

You have a very narrow definition of failure, rather like equating death with your football team losing at the weekend.

Failure could mean in a very limited context, such as the loss of a specific company or industry, a temporary reduction in revenue, or a trade deficit (remember that a state consists of many different organisations and businesses, the failure of one, does not mean the failure of all). Provided that a specific nation state can over time make reforms, it needn't result in abject failure of the state in the sense of Syria and Somalia, having said that legislators do like to kid themselves.

I should also mention, reform can work in favour of both businesses and workers, if a state favours employers over workers too heavily, movement of people could mean that a country could struggle for man power as people emmigrate to a jurasdiction that legislates better conditions for emloyees

Thanks for mentioning Argentina, although I'm not sure how it backs your critique, which before interventionist Peronism was one of the richest nations in the world, and which is locked in decline (in addition to Syria and the former USSR) by a poweful elite that will not allow change, and are the very regimes that I describe as sclerotic, corrupt, and self serving.

No we are talking about the capitalistic model and applying it to nation state governments, and your statement that this is why tax competition among other things, is supposedly a good thing. For the capitalistic model to work there must be the possibility of failure. Isn't that what every right wing poster here has said about the banks? Or are you now saying capitalism can work perfectly fine without it, and so its ok that we bailed out the banks?

If not, then give me the numerous examples of nation states failing and then becoming prosperous. If we are going to apply the capitalistic model then this needs to be able to happen.

Edited May 22, 2013 by alexw

[Traktion]

But you overlook the fact that in a capitalist system reducing wages and worker rights is a legitimate example of competitive practice- if I can compete with you by lowering wages and working conditions for my staff then I am compelled to do so- if only because if I don't you will and then you will have the competitive advantage.

So there is no logical inconsistency between the idea of competition between companies and a race to the bottom in wages and working conditions.

Where the real logical conundrum appears is in the inability of capitalism to adapt to the reality that wages and demand are the same thing- it persistently tries to eliminate the former while spending vast sums on advertising to stimulate the latter- seemingly unable to process the fact that should it manage to eliminate wages entirely it will also have eliminated demand.

Free market capitalism is the best system ever devised to create wealth- that is beyond question- but it does lead to a rather strange situation in which the entire creative potential of the human race is devoted to making itself redundant- as a species we are engaged in grand project to innovate and invent our way into a position where human labour will be replaced by technology and we will all be surplus to requirements.

So the 'race to the bottom' in wages and conditions is not some aberrant notion that's incompatible with free markets- it's the logical endpoint of the free market system that seeks to minimise cost to maximise profit- The paradox being that human beings are the source of both. We are the labour that drives up cost's of production- and the demand that creates the profits of that production-

The tragi-comedy of Capitalism is this paradox- the more efficient it becomes, the less demand there will be for it's products and services.

It's not so much a paradox, as opposing forces - one limits the other.

Everyone can't cut wages to zero, as clearly people will have no money to spend. Ergo, cutting wages to zero cannot happen, so any paradox is avoided.

Moreover, people aren't going to work unless it is worth their while. Job positions which offer wages so low that people have no incentive to provide labour, will not be filled. What would be the point?

Ofc, while violence is used to corral people into crap jobs, wages can certainly be squeezed harder than a free market would bear. That's nothing to do with free markets or capitalism though - it's to do with force being imposed on people.

[LuckyOne]

This whole race to the bottom idea sounds like a bit of an excuse for bad management and poor productivity to me. A specialised field but here are 3 aircraft that sell for almost the same amount of money.

The Swiss one, the American one and the Brazilian one.

In my opinion, the Swiss aircraft is the best of the three. They are all certified by the FAA and the EASA and other regulators.

If the race to the bottom argument held, the Swiss plane should be be much more expensive and the Brazilian plane to be much cheaper. If the Swiss can compete directly with the Brazilians in a completely global marketplace and deliver an arguably superior aircraft, surely wages, working conditions etc aren't really driving the ability to compete.

[the shaping machine]

If not, then give me the numerous examples of nation states failing and then becoming prosperous. If we are going to apply the capitalistic model then this needs to be able to happen.

Does Germany twice count? (first after Weimar, then post war).

[alexw]

Does Germany twice count? (first after Weimar, then post war).

So your shining examples of capitalistic processes applied to nation states, saw in the process the rise of a man who systematically murdered millions in the first case, and in the second a country reduced to rubble.

And you think somehow these are 'good' examples?

Don't these tell you something, i.e. that the idea of trying to apply capitalistic competition between nation states is bat-shit-crazy? That when nation states fail they more often than not go ruinously wrong, and thus trying to enforce that competition and the ability to fail that that implies, is also bat-shit-crazy?

This does not mean a bit of friendly rivalry between states is a bad thing, but that trying to go the whole hog is as I said bat-shit-crazy.....

[easy2012]

It's not so much a paradox, as opposing forces - one limits the other.

Everyone can't cut wages to zero, as clearly people will have no money to spend. Ergo, cutting wages to zero cannot happen, so any paradox is avoided.

Moreover, people aren't going to work unless it is worth their while. Job positions which offer wages so low that people have no incentive to provide labour, will not be filled. What would be the point?

Ofc, while violence is used to corral people into crap jobs, wages can certainly be squeezed harder than a free market would bear. That's nothing to do with free markets or capitalism though - it's to do with force being imposed on people.

Yap - the fundamental thing about trade is exchange of value, except in the case of survival (which relates to land) and so beyond that, no one will sell wages ( in general, charity shops do get zero wage labours) at zero and if the corporations are all fully automated - they don't have to sell to the mass anyway as they need nothing back from the mass (though we may have big problem with lots of starving mass but without land monopolies, they would have corporate, dumb the currencies and found ways to feed themselves anyway)

[Guest_GradualCringe_*]

So your shining examples of capitalistic processes applied to nation states, saw in the process the rise of a man who systematically murdered millions in the first case, and in the second a country reduced to rubble.

And you think somehow these are 'good' examples?

Don't these tell you something, i.e. that the idea of trying to apply capitalistic competition between nation states is bat-shit-crazy? That when nation states fail they more often than not go ruinously wrong, and thus trying to enforce that competition and the ability to fail that that implies, is also bat-shit-crazy?

This does not mean a bit of friendly rivalry between states is a bad thing, but that trying to go the whole hog is as I said bat-shit-crazy.....

No, this is your misconception.

You seem to have made the bizarre leap of logic that tax and trade competition are responsible for hyperinflation and two world wars!

What of larger jurasdictions and governments, that have united and held together numerous peoples in "harmony"?

Alexandrian Empire, fell to pieces 4th century BC during internal wars, after death of Alexander

The Roman Empire, destroyed 5th century after centuries of decline

The Mongol Empire, fell apart in civil during the 13th and 14th centuries

The Byzantine Empire, destroyed, 15th century after centuries of decline

The Ottoman Empire, dissolved 20th century after centuries of decline

The USSR, dissolved 20th century after decades of decline

There's no correlation for your assertion.

Neither do large nations and less competition ensure peace and co-operation.

Interestingly France (after the fall of 5 republics, a hyperinflation, and two emperors) and Germany (after 2 military dictators and a hyperinflation), and numerous wars within Europe, are still here and thriving, the large empires of the past now just make up the pages of history.

This does not mean a bit of friendly rivalry between states is a bad thing, but that trying to go the whole hog is bat shit crazy

I don't think you understand the difference between tax and trade competition, and agressive territorial land and resource grabs by power hungry dictators, or a deliberately misunderstanding such things to support you ever changing, tangental arguments.

To get back the argument back to Campervan Man's original concern, before you dragged the debate off into nowhere, i.e. that smaller nations will be at the mercy of corporations and are doomed to failure unless we all enter into conglomerate nationhood under a supra-national government, doesn't fit with observation, it is the smaller nations that are among the richest and most prosperous.

A plurality of small, competing nations are more healthy than a large sclerotic corrupt empire or conglomeration, it's also these sort of entities (given historical precedent) that fall into decline and go around picking fights.

Edited May 22, 2013 by GradualCringe

[alexw]

No, this is your misconception.

You seem to have made the bizarre leap of logic that tax and trade competition are responsible for hyperinflation and two world wars!

What of larger jurasdictions and governments, that have united and held together numerous peoples in "harmony"?

Alexandrian Empire, fell to pieces 4th century BC during internal wars, after death of Alexander

The Roman Empire, destroyed 5th century after centuries of decline

The Mongol Empire, fell apart in civil during the 13th and 14th centuries

The Byzantine Empire, destroyed, 15th century after centuries of decline

The Ottoman Empire, dissolved 20th century after centuries of decline

The USSR, dissolved 20th century after decades of decline

There's no correlation for your assertion.

Neither do large nations and less competition ensure peace and co-operation.

Interestingly France (after the fall of 5 republics, a hyperinflation, and two emperors) and Germany (after 2 military dictators and a hyperinflation), and numerous wars within Europe, are still here and thriving, the large empires of the past now just make up the pages of history.

I don't think you understand the difference between tax and trade competition, and agressive territorial land and resource grabs by power hungry dictators, or a deliberately misunderstanding such things to support you ever changing, tangental arguments.

To get back the argument back to Campervan Man's original concern, before you dragged the debate off into nowhere, i.e. that smaller nations will be at the mercy of corporations and are doomed to failure unless we all enter into conglomerate nationhood under a supra-national government, doesn't fit with observation, it is the smaller nations that are among the richest and most prosperous.

A plurality of small, competing nations are more healthy than a large sclerotic corrupt empire or conglomeration, it's also these sort of entities (given historical precedent) that fall into decline and go around picking fights.

I've never said any such thing.

What I have said is that for capitalistic creative destruction to occur the entities involved must be able to fail so that from the ashes their replacements can arise.

But while this works with companies it categorically does not work with nations.

A nation fails and your likely to get a Pol Pot or Putin or failed state as opposed to a better replacement.

[Guest_GradualCringe_*]

I've never said any such thing.

What I have said is that for capitalistic creative destruction to occur the entities involved must be able to fail so that from the ashes their replacements can arise.

But while this works with companies it categorically does not work with nations.

A nation fails and your likely to get a Pol Pot or Putin or failed state as opposed to a better replacement.

I couldn't think of worse examples your could have used to support your argument.

Do you remember, or have studied what preceeded Russia? Ignoring almost the entire history of the 20th century doesn't really add weight to your assertions, even if it is amusing in its breath taking pig headedness to overlook the facts.

Pol Pot died a sick old man hiding in the jungle following a 5 year period in power following the unrest at the end of French colonisation in South East Asia. Have you studied the Vietnam War? and the Cambodian Civil War? And the preceeding French colonisation in that part of the world?

None of this had anything to do with tax and trade competition (as do all my other examples in my previous post and your previous posts). They are all former conglomerations of much large states, or colonies, artificially created by politicians, not through trade, common culture and values, but by dictators grabbing land and resources, which eventually failed because the various groups of people ultimately didn't wish to live under a single homogenised culture and set of laws.

You haven't provided a single relevant example to support your thesis, which as it is, is little more than a distraction from the original argument on this thread.

There is no evidence to show that supra-national governments ensure peace, stability (your examples could not more clearly illustrate this), and returning to the original argument, any resistance to regulatory capture by corporations. The European Commission and the US Senate operate as a giant corporate racket, the scale and nature of the bank bailouts remove any such doubt.

Edited May 23, 2013 by GradualCringe

[davidg]

AlexW, you lost the argument. Now give it a rest before you embarrass yourself further.

[wonderpup]

I think you are making several assumptions without reference to observation.

Invention and innovation were born out of a drive by human beings to create a surplus so as to avoid having to do tedious, time consuming and dangerous tasks out of necessity to survive i.e. do less work. New methods of production may well stagnate or reduce wages, but they also reduce the cost of everything else.

For example, I invent a fishing net, and can catch 10 times as a many fish as those using a piece string tied to a hook. With a better method of catching fish, I can feed myself, and with the time saved, catch fish for others too. The other people fishing by the old method can stop doing so, one person could plant trees for firewood and building materials, and another person could build and repair shelter. Without the invention, everyone would have had to continue to fish in order to survive, but struggle to provide shelter and warmth (the cost of trying to do so could result in not finding enough food. A better method of catching fish lowers the cost of doing these things), so whilst it may reduce the demand for hooks tied to string and fisherman, the supply of extra fish creates demand for additional shelter and warmth (supply drives demand, without supply there is nothing to exchange).

To say that wages are forever falling to support ever growing spending on advertising, and further that companies are able to continue to spend this money on ever decreasing returns from advertising, are bold claims, I'm assuming you have some numbers to support that? Effectively, you are saying that never ending price bubbles can develop without people ever stopping to question what's occurring, or choosing to eventually use their time and resources more productively.

It is overly simplistic, one dimensional, and erroneous, to assume that the only path to success for businesses within the market system, is to eventually pay their workers nothing. You are also assuming that the loss of one job, due to better efficiency, or automation, does not then realise a need for other positions of employment that were not practical, viable, or even imagined, before efficiency improvements and/or automation, that in turn help to create a better product or service.

Have you not considered that employers are also interested in finding competent employees that are able to adequately perform the role asked of them, earn adequately such that they are not incentivised to steal (years ago I was interviewed for an unskilled role where that point was specifically made by the employer with regard to remuneration), that are healthy, have adequte holiday and working conditions such that the productivity and quality of work does not fall due to ill health and/or exhaustion, or that employee absence due to sickness is not excessive (for small businesses absence is difficult to cover for, and expensive if temporary contractors are required)?

Workers also have bargaining power, given a choice of many thousands of employers, potential employess will try to pick a role that offers the best conditions. An employer offering the most autere condition for their workers is likely to struggle to employ people, or struggle to retain good workers, and of which there are large associated costs in terms of lost productivity, training and recruitment (it is certainly something I've experienced at several companies, where I've known managers and directors to struggle with high turnover of staff).

Have you not also considered the opinion of consumers? Negativity publicity concerncing treatment of workers could well result in a consumer boycott of a company's products. Take for example the treament of the Bryant and May "Match Girls", in addition to the strike, one of the biggest pressures on the company to offer better conditions to their workers was to avoid bad press.

In terms of historical precendent, capitalism (as we know it) as well as automation have been around for around 200 years or so. How can you ignore that quality of life for the masses has steadily improved since then, but at the same time assert that wages can be driven as low as businesses would like them to be?

Before the industrial revolution the lives of the masses were grim, most would have been subsistence farmers tending a small strip of land, their overriding concern and raison d'etre being a decent harvest and where they might find their next meal (take a trip to Buckinghamshire, in some fields you can still see "ridge and furrow" strip patterns within certain fields where peasants would have toiled with plough and ox. Counties were divided into "hundreds" because it was supposed that area of land could only support 100 households).

If your thesis were true, the process of creating new means of production should have driven workers into slavery long ago and we should find ourselves toiling for even less than these people would have expected, at the behest of industrialists making products for no practical purpose perhaps other than for the people to stare at in wonder.

Paradoxically, you are saying that work should exist to create the burden of more work, othewise humans beings become redundant, and at the same time will have to do more work anyway to maintain the same quality of life.

The problem with your arguments is that they describe the past- but may not describe the future. The mistake is to assume that the current symbiosis between labour and capital is supported and nurtured by the free market system- this is not the case. What capital wants is to eliminate labour completely- not because capitalists are evil but simply because labour is a cost- and to capital all costs represent a barrier to be removed.

And it's important to note that Capital has no choice but to eliminate as many jobs as it can because the logic of competition demands it- if you employ more people than you need then some competitor will kill you on price.

So when I assert that a core objective of capitalism is make everyone unemployed this is not a radical idea- it's simply to state the obvious reality of the free market system- wages are a cost of doing business and like all other costs they will be eliminated if possible.

You are right to point out that in the past Capital has employed lots of people and that this in turn led to rising living standards for those people- but there is no reason to assume this happy arrangement must or will continue.

What I find strange is that people who argue strongly in favour of the virtues of the free market system also seem to believe that labour is the one commodity that will somehow escape the impact of market forces.

To me it seems obvious that as technology improves the need for human labour will decline- which will in turn reduce the market value of that labour as the supply of unemployed workers goes up- the resulting slowdown of demand will then stimulate more application of labour saving technology-leading to further job losses- as companies compete for a share of dwindling demand.

So the more Capitalism succeeds the more it fails- and like a body accruing mass as it approaches the speed of light- the closer Capital comes to it's dream of labour free production, the more the effort and expense required to achieve each new sale increases.

Edited May 23, 2013 by wonderpup

[wonderpup]

Yes, but when your very reasonably sounding theory doesn't match real world realities - then you must consider that your theory is incomplete - perhaps as GardualCringe has pointed the other dynamics at work here.

The only theory I am citing here is that of free market capitalism. It's not in doubt that the free market wants to eliminate as many jobs as it can as fast as it can- any business that failed to do this would be undercut by those who did.

So the only remaining question is what degree of automation would be required to destabilize the system. And the answer-I think- is less than many imagine.

The point about automation of work is that it not only impacts on those directly affected- it also impacts on everyone else- so if you still have a job but see many other people losing theirs and finding it hard to get new ones this would very likely cause you to become more cautious in your spending.

So the demand destruction created by automation would not be limited to those losing their jobs- it would be far more pervasive as those still in work pulled back their spending and started saving instead- leading to a further erosion of demand.

So long before automation reached 'critical mass' it's impact on the economy could be considerable.

[wonderpup]

It's not so much a paradox, as opposing forces - one limits the other.

Everyone can't cut wages to zero, as clearly people will have no money to spend. Ergo, cutting wages to zero cannot happen, so any paradox is avoided.

Moreover, people aren't going to work unless it is worth their while. Job positions which offer wages so low that people have no incentive to provide labour, will not be filled. What would be the point?

Ofc, while violence is used to corral people into crap jobs, wages can certainly be squeezed harder than a free market would bear. That's nothing to do with free markets or capitalism though - it's to do with force being imposed on people.

It's not correct to say that wages cannot fall to zero. If you are replaced by a machine then your wages fall to zero.

The paradox cannot be avoided because in a system based on competition between agents those agents must compete. So no matter how many agents are involved all are subject to the same competitive forces- one of the virtues of the free market system is it's scalability- it works just as well on a global level as it does in the village square.

So the same competitive forces that led to you being replaced by a machine will apply everywhere on every level.

The point is that there are no brakes- and those low wage jobs that no one will want to do will be automated or will not get done- since there will be no market for the products or services at the price demanded.

Unemployment is not a pathology of the free market- it's a core objective of the free market- it wants to employ as few people as possible while maintaining or increasing profitability.

Edited May 23, 2013 by wonderpup

[scepticus]

But while this works with companies it categorically does not work with nations.

It does, but over much longer timescales. Cities are similar - almost immortal.

In fact cities tend to outlast nation states and companies.

In terms of how long things live, humans are at the bottom*, companies next, then nation states/empires, then cities.

* ignoring the rest of the animal/plant kingdom.

If we believe in "creative destruction" as a process we ought to imagine it acting over various timescales and scales, on different kinds of entities.

[scepticus]

It's not correct to say that wages cannot fall to zero. If you are replaced by a machine then your wages fall to zero.

Empirically that is not correct. Even destitutes get some income from charity and theft and whatever is left lying around and discarded by the rest.

[scepticus]

My idea is that exchange rates should be set by arrangement against a central index so that deficit countries can devalue until they balance their trade. (it doesn't need to balance against any particular country, just as a whole, and if everyone does that, the whole thing balances out equitably). of course the issue of currency zones is a matter for fiscal authorities.

They already are. Its just the time constant of relaxation has gotten to be a lot longer than you have patience for.

Its reasonable to expect imbalances (which I'd prefer to term as non equilibrium situations) can persist for longer when the scale of the overall system with various positive and negative feedbacks increases but the scale of the observer (me and you) has not changed.

[easy2012]

The only theory I am citing here is that of free market capitalism. It's not in doubt that the free market wants to eliminate as many jobs as it can as fast as it can- any business that failed to do this would be undercut by those who did.

Can we just clarify this as it is not possible to proceed without agreement on this.

You previously proposed a theory that as manufacturing / service processes becomes more efficient, then demand of the said good and services will fall as workers displaced from those services/process will have no money to buy those goods/services. Is this correct or incorrect ?

Further free market capitalism doesn't want to eliminate as many jobs as fast as it can. Sure that it wants to remove net cost/net burden but I really don't see private hospital fire their doctors as fast as they can, or banks firing their sales people as fast as they can or Google firing their engineers etc. When human is more productive then machine, the free market capitalism wants to the valuable human resource to perform the job.

What happened in the past and continue to happen is that when an area becomes more efficient, the surplus labour (and in recent time, educated labour) get redeployed into other areas. When gene sequencing becomes more efficient, the scientist got time to look deeper into the working of the genes as opposed to be staring at the gene sequencer all day etc. This is a dynamic that you continue to refuse to take into account - new (educated, skilled) jobs are created as old jobs were destroyed.

Your machine makes machine, machine maintains machine and machine designs machine end game is so far out of the horizon that it really doesn't concern me (or most sensible people).

So the only remaining question is what degree of automation would be required to destabilize the system. And the answer-I think- is less than many imagine.

The point about automation of work is that it not only impacts on those directly affected- it also impacts on everyone else- so if you still have a job but see many other people losing theirs and finding it hard to get new ones this would very likely cause you to become more cautious in your spending.

So the demand destruction created by automation would not be limited to those losing their jobs- it would be far more pervasive as those still in work pulled back their spending and started saving instead- leading to a further erosion of demand.

So long before automation reached 'critical mass' it's impact on the economy could be considerable.

Edited May 24, 2013 by easy2012

[campervanman]

Can we just clarify this as it is not possible to proceed without agreement on this.

You previously proposed a theory that as manufacturing / service processes becomes more efficient, then demand of the said good and services will fall as workers displaced from those services/process will have no money to buy those goods/services. Is this correct or incorrect ?

Further free market capitalism doesn't want to eliminate as many jobs as fast as it can. Sure that it wants to remove net cost/net burden but I really don't see private hospital fire their doctors as fast as they can, or banks firing their sales people as fast as they can or Google firing their engineers etc. When human is more productive then machine, the free market capitalism wants to the valuable human resource to perform the job.

What happened in the past and continue to happen is that when an area becomes more efficient, the surplus labour (and in recent time, educated labour) get redeployed into other areas. When gene sequencing becomes more efficient, the scientist got time to look deeper into the working of the genes as opposed to be staring at the gene sequencer all day etc. This is a dynamic that you continue to refuse to take into account - new (educated, skilled) jobs are created as old jobs were destroyed.

Your machine makes machine, machine maintains machine and machine designs machine end game is so far out of the horizon that it really doesn't concern me (or most sensible people).

What happened in the past and continue to happen is that when an area becomes more efficient, the surplus labour (and in recent time, educated labour) get redeployed into other areas.

That may have been true at certain points in the not so recent past but I would argue that it is not the case in recent times where technology has resulted in labour requirements being downsized at such a rapid rate that employment in replacement industries has failed to keep pace.

Additionally the problem is compounded by a disproportionate percentage of the financial benefits of technology being channelled into the hands of a small number of people instead of (as has happened throughout earlier times) being spread throughout economies via shorter working hours, higher salaries and better welfare provision.

[easy2012]

What happened in the past and continue to happen is that when an area becomes more efficient, the surplus labour (and in recent time, educated labour) get redeployed into other areas.

That may have been true at certain points in the not so recent past but I would argue that it is not the case in recent times where technology has resulted in labour requirements being downsized at such a rapid rate that employment in replacement industries has failed to keep pace.

Additionally the problem is compounded by a disproportionate percentage of the financial benefits of technology being channelled into the hands of a small number of people instead of (as has happened throughout earlier times) being spread throughout economies via shorter working hours, higher salaries and better welfare provision.

It is worth emphasizing the word educated/skilled.

There isn't much unemployment among US College graduate and advance degree holders at all - despite all these automation.

It is only the unskilled part of the labour market that has suffered.

However, for Wonderpop to sustain his theory, he needs to show that the job losses part a section of the labour force (the unskilled), is severe enough to outweigh the replacement of those jobs lost, and the higher spending power (and productivity) or the newly created skileld jobs. There is no evidence - probably not even a single example of that happening yet - may that be agriculture, computers, bio engineering, manufacturing etc.

[Traktion]

It's not correct to say that wages cannot fall to zero. If you are replaced by a machine then your wages fall to zero.

The paradox cannot be avoided because in a system based on competition between agents those agents must compete. So no matter how many agents are involved all are subject to the same competitive forces- one of the virtues of the free market system is it's scalability- it works just as well on a global level as it does in the village square.

...

Why would such machines even be switched on, if there was no one able to buy the goods they created?

There is no paradox here - if a market didn't exist (due to no one having income to spend) then the machines would remain turned off. This is perfectly logical.

[EUBanana]

There is no evidence to show that supra-national governments ensure peace, stability

And, indeed, there is plenty of evidence of the contrary.

Federal Republic of Yugoslavia

Austro-Hungarian Empire

USSR

Russian Empire

Holy Roman Empire

Northern Ireland

One might even argue Spain, vis a vis Catalans and Basques

European Union. Founded in 1993, it's had a whale of a time since then hasn't it!

[campervanman]

And, indeed, there is plenty of evidence of the contrary.

Federal Republic of Yugoslavia

Austro-Hungarian Empire

USSR

Russian Empire

Holy Roman Empire

Northern Ireland

One might even argue Spain, vis a vis Catalans and Basques

European Union. Founded in 1993, it's had a whale of a time since then hasn't it!

And 2 world wars, were they the result of Unions of states or of nationalism?

[Guest_GradualCringe_*]

And 2 world wars, were they the result of Unions of states or of nationalism?

Not great examples to support your argument, World War I occurred largely as a result of the Austro-Hungarian empire beginning to disintegrate i.e. as I said before, forcing people to live under a common culture of which they do not identify, or see benefit another cultural group unfavourably, start with war and unrest, and eventually lead to a great deal of unrest when it all falls to pieces (hence the assination of Arch Duke Franz Ferdinand and that which ensued).

The stupidity and vanity of politicians at the end of the World War I, went a long way to causing the second.

Empire building/dissolution have little to do with markets and trade, you can also be proud of your culture without going to war and murdering other people.