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wonderpup

I Found An Odd Term In The Latest Edition Of The Economist Today.

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Yep- the Economist actually mentioned wages in their latest edition :o . And there was even an admission that wages have more or less stagnated in the west for the last decade apart from the top 1%- despite significant increases in worker productivity. :o:o:o

Ok- this idea is not exactly new to anyone on this forum- but to the writers of the Economist this was daring stuff.

So- are we reaching some kind of inflection point here I wonder? Hitherto the baseline assumption of virtually the entire economic and political establishment was that wages and productivity were inherently bound together- that increased productivity would-as night followed day- result in higher wages for the producers of that increased productivity.

What the Economist seems to be admitting in it's latest edition is the reality that this is no longer the case- that the new normal is that productivity can rise even as wages stagnate. And given that the Economist is the house rag of the Neo liberal clergy I think this is an interesting admission- and an indicator that the holy church of deregulated capitalism is perhaps beginning to have a crisis of faith.

I think the decoupling of wages from productivity was not foreseen- this was not supposed to happen. The core meme of the Neo Liberal case was that by deregulating the economy it would be set free to maximize it's productive potential to the benefit of all. But if the fruits of that maximized potential are not reaching most of the 99% then we have a market that operates not to the benefit of all, but to the benefit of a few- those best placed to capture the benefits of that increased productivity.

The solution to this problem- the Economist reassures us- is education and skills- we need to educate more people and equip more people with skills- and do this globally- on a mass scale.

Now I admit I am no economist- so I might be missing something here- but I'm fairly sure that if you increase the supply of something it's scarcity value tends to go down and not up. So I'm not sure why a magazine that goes under the name 'The Economist' seems to imagine that we can increase the scarcity value of skilled labor by engaging in the mass production of skilled labor- to me this would be like trying to increase the price of potatoes by growing lots more potatoes- surely the price of spuds would go down, not up?

If the problem is that labor has simply lost bargaining power in relation to capital due to a surplus of labor relative to the needs of productivity- how would massively adding to that surplus improve the situation?

I don't see how it could. So- to me- it now looks like the Neo Liberal project is caught in trap of it's own devising- it's weapon of choice- the expansion at all cost of productivity- seems to have blown up in it's face.

Once it becomes clear that increasing productivity does not now translate into higher wages for the great unwashed the entire thing unravels- and you are left with a system that does only one thing- transfers most of the worlds wealth to the 1%.

This is the truth that Milliband now seeks to exploit- while Cameron still aligns himself with the 'trickledown' paradigm- but is visibly being dragged to the left as the reality of wage stagnation begins to bite.

So what is the solution? Is it more free market- as the Neo Liberals insist? Or is something more radical required?

Edited by wonderpup

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I think we have to get rid of the 1%. I don't mean shoot them. Render them obsolete.

Edited by aSecureTenant

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I think we have to get rid of the 1%. I don't mean shoot them. Render them obsolete.

It is November the 5th...

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Has anyone thought of limiting technology so that more people can have jobs?

Technology doesn't have to have a negative effect, it should cause deflation in costs, but open up new opportunities for new products.

It is those that drive inflation becuase it benefits them that are the problem and pauperising the rest. Distribution is an issue, but those smae inflationary policies are driving the redistribution of wages too away from the majority to the small minority.

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I think the decoupling of wages from productivity was not foreseen- this was not supposed to happen.

Hmmm. Welcome to unfettered capitalism, sonny. There will be a large number of losers and a very small number of winners and according to the economics textbooks I read, that's not a design fault. The only thing standing between you and obsolescence is the state - effectively reigning in capitalism's excessive and destructive tendencies. I wish this were better understood in Conservative government who don't seem to regard their own ideal as ultimately flawed. It is flawed because when you are on the scrapheap, you can no longer afford the very goods and services you were designed to consume. It is unsustainable.

Communism is the logical opposite, where the state controls everything and the small number of winners are bureaucrats (instead of entrepreneurs). This was shown to have been a failure in the USSR because of the practical implications of such demand management - without computers of course. Communism is not synonymous with a jackboot state (which is how its main detractors describe communism). Communism has been shown to be reasonably successful when implemented on a micro scale (like a Kibbutz) but latter examples ultimately succumbed to easy credit in the 1980s which led to eventual destruction too.

This is also why it is bitterly ironic that Maggie Thatcher's dotage and funeral was paid for by the state which was an obsolete institution in her mantra. If she had truly lived by her own creed, she should have allowed herself to have been thrown on the scrapheap when she stopped being useful to the capitalist engine.

Unfettered capitalism has shown itself to be a busted flush and I am still gobsmacked that it is the Conservatives of all people advocating direct market intervention in a free market in the form of Help To Sell Help To Buy. It is fundamentally against all free market capitalism stands for.

I agree, except that I would shoot them.

That is basically how bloody revolutions begin of course. The only sensible solution is social democracy or regulated capitalism. Germany does this, Japan does this. The US doesn't, the UK doesn't. I see a pattern there.

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I have been working on a plan.

The 1% should be given a knighthood (to flatter their ego)

All their wealth should be taken off them

They should be given a credit card with a 10 million a year limit so they can rent what they like.

Yes I know it wouldn't work.

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Has anyone thought of limiting technology so that more people can have jobs?

That would count as productive economic innovation so would have to limit THAT and therefore you WOULD allow technology, all in the name of limiting technology, and then your head explodes

Edited by Si1

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Yep- the Economist actually mentioned wages in their latest edition :o . And there was even an admission that wages have more or less stagnated in the west for the last decade apart from the top 1%- despite significant increases in worker productivity. :o:o:o

Ok- this idea is not exactly new to anyone on this forum- but to the writers of the Economist this was daring stuff.

So- are we reaching some kind of inflection point here I wonder? Hitherto the baseline assumption of virtually the entire economic and political establishment was that wages and productivity were inherently bound together- that increased productivity would-as night followed day- result in higher wages for the producers of that increased productivity.

What the Economist seems to be admitting in it's latest edition is the reality that this is no longer the case- that the new normal is that productivity can rise even as wages stagnate. And given that the Economist is the house rag of the Neo liberal clergy I think this is an interesting admission- and an indicator that the holy church of deregulated capitalism is perhaps beginning to have a crisis of faith.

I think the decoupling of wages from productivity was not foreseen- this was not supposed to happen. The core meme of the Neo Liberal case was that by deregulating the economy it would be set free to maximize it's productive potential to the benefit of all. But if the fruits of that maximized potential are not reaching most of the 99% then we have a market that operates not to the benefit of all, but to the benefit of a few- those best placed to capture the benefits of that increased productivity.

The solution to this problem- the Economist reassures us- is education and skills- we need to educate more people and equip more people with skills- and do this globally- on a mass scale.

Now I admit I am no economist- so I might be missing something here- but I'm fairly sure that if you increase the supply of something it's scarcity value tends to go down and not up. So I'm not sure why a magazine that goes under the name 'The Economist' seems to imagine that we can increase the scarcity value of skilled labor by engaging in the mass production of skilled labor- to me this would be like trying to increase the price of potatoes by growing lots more potatoes- surely the price of spuds would go down, not up?

If the problem is that labor has simply lost bargaining power in relation to capital due to a surplus of labor relative to the needs of productivity- how would massively adding to that surplus improve the situation?

I don't see how it could. So- to me- it now looks like the Neo Liberal project is caught in trap of it's own devising- it's weapon of choice- the expansion at all cost of productivity- seems to have blown up in it's face.

Once it becomes clear that increasing productivity does not now translate into higher wages for the great unwashed the entire thing unravels- and you are left with a system that does only one thing- transfers most of the worlds wealth to the 1%.

This is the truth that Milliband now seeks to exploit- while Cameron still aligns himself with the 'trickledown' paradigm- but is visibly being dragged to the left as the reality of wage stagnation begins to bite.

So what is the solution? Is it more free market- as the Neo Liberals insist? Or is something more radical required?

You don't see the solution because your prejudices are as crippling as those of the Economist editorial staff.

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Teaching people skills won't help.

Give a man a fish and he can feed himself for one day, give him a laptop and access to the internet and he can do any bloody-thing he wants to!

Technology has made us replaceable, not by technology, but by another human with the same technology. Gone are the days of a worker using his 20 years of experience to pressure for better wages, just sack him and replace him with a low skilled worker guided by technology.

I could do open heart surgery with the right youtube clip. B)

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Hitherto the baseline assumption of virtually the entire economic and political establishment was that wages and productivity were inherently bound together- that increased productivity would-as night followed day- result in higher wages for the producers of that increased productivity

No idea why you think anyone thought that

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....so to balance this driving of two sections of society further apart, there needs to be two separately running economies...bit like how London is wanting to split away from the rest of the country and you could say Scotland is also trying to do......let the have it alls deal with themselves in their own tight knit influential world and being they do not value the people that gave them what they have, let the rest form their own group to protect themselves and buy and sell and trade amongst themselves....numbers will win over power if it has to. ;)

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I think we have to get rid of the 1%. I don't mean shoot them. Render them obsolete.

The remaining 99% becomes the new 100%, with a new 1%. Unless you redistribute the obsolete's slice further down, the slices remain same size.

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The remaining 99% becomes the new 100%, with a new 1%. Unless you redistribute the obsolete's slice further down, the slices remain same size.

But it depends on the size of the gap between the 1% and 10% and the huge growing gap between the 11% and the rest.......in other words the difference in pay between the lowest paid workers and the top few who benefit from their hard work, paying themselves inflation busting pay rises every year and bonuses that would make a lesser man cry.......there is no measurement that justifies what is a recent growing trend....win and they win, fail they win......trickle down. lol.......trickle up to the top and stays there more like. ;)

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Because it was true.

productivity.png

when did Nixon close the gold window?

This is why trickle down doesn't work under a fist system. By the time the money reaches the bottom its already been devalued.

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Hmmm. Welcome to unfettered capitalism, sonny. There will be a large number of losers and a very small number of winners and according to the economics textbooks I read, that's not a design fault. The only thing standing between you and obsolescence is the state - effectively reigning in capitalism's excessive and destructive tendencies. I wish this were better understood in Conservative government who don't seem to regard their own ideal as ultimately flawed. It is flawed because when you are on the scrapheap, you can no longer afford the very goods and services you were designed to consume. It is unsustainable.

Communism is the logical opposite, where the state controls everything and the small number of winners are bureaucrats (instead of entrepreneurs). This was shown to have been a failure in the USSR because of the practical implications of such demand management - without computers of course. Communism is not synonymous with a jackboot state (which is how its main detractors describe communism). Communism has been shown to be reasonably successful when implemented on a micro scale (like a Kibbutz) but latter examples ultimately succumbed to easy credit in the 1980s which led to eventual destruction too.

This is also why it is bitterly ironic that Maggie Thatcher's dotage and funeral was paid for by the state which was an obsolete institution in her mantra. If she had truly lived by her own creed, she should have allowed herself to have been thrown on the scrapheap when she stopped being useful to the capitalist engine.

Unfettered capitalism has shown itself to be a busted flush and I am still gobsmacked that it is the Conservatives of all people advocating direct market intervention in a free market in the form of Help To Sell Help To Buy. It is fundamentally against all free market capitalism stands for.

That is basically how bloody revolutions begin of course. The only sensible solution is social democracy or regulated capitalism. Germany does this, Japan does this. The US doesn't, the UK doesn't. I see a pattern there.

Been thinking about starting a thread on this for a while. Specifically the rather odd relationship between 'classical liberalism' and 'conservatism'. Easier to resolve (though perhaps not reconciled) when you see them as components of the 'Right Wing'. The thing is we have a right wing party that calls itself the 'conservative' party, which seems to mean being rigidly conservative about implementing 'liberal' policies - when in the long run conservatism and liberalism are actually probably fatal to each-other.

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I agree, except that I would shoot them.

"first they came for the 1% but I didn`t care because I wasn`t one of those..."

As one of the 99% I wont lose a lot of sleep about it.

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