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Why A Citizens Income Cannot Solve The Job Automation Problem.

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If you accept the idea that at some point technology will eat a lot more jobs than it creates- a view I subscribe to- then it's tempting to think that the solution to the resulting unemployment would be to simply tax the profits of those who are automating the jobs and give that money to people whose jobs are being automated.

In this way economic demand can be sustained and Capitalism can be saved from itself.

But this neat solution overlooks a major implication of the process of automation itself- one that is quite counterintuitive. The argument for all kinds of labour saving technology is that it's more efficient and therefore-by implication- must be value enhancing.

But the notion of 'value' here is more slippery than it first appears. From a purely instrumental perspective a spade has more value than a spoon if you want to dig a trench- but if that spade is made of stainless steel and that spoon is made of solid gold which of them now has the most value?

So we must at the very least subdivide our notion of value into two different ideas- there is a form of value that can be called instrumental and a form of value that could be called economic- and the two do not always map onto each other in a seamless way.

So when we say that automation is a good thing because it adds value to the production process by making that process more efficient it does not automatically follow that the value added instrumentally will always translate into more value economically. And the reason for this is due to the margin compression that occurs when things get easier and cheaper to make.

Ask most people if more efficient production would lead to higher profits and they would probably say of course- it seems self evident that the more quickly and cheaply you could produce something the more money you would make as a result. And this would be true if you were the only one making and selling that thing. But if you have competitors it's likely that a price war would ensue as they sought to capture market share by leveraging their cheaper costs by undercutting your prices- and you would have no choice but to respond in kind.

This leads to an unexpected outcome- despite sacking your expensive workers and replacing them with cheaper machines your profits have not increased- in fact they may have gone down as the cost barriers to entry may have reduced creating new sources of competition.

So the counterintuitive conclusion seems to be that while automation may indeed add value on an instrumental level it can simultaneously erode value on an economic level- put more crudely- the more cheap and easy it is to make a thing the less economic value that thing will generate for it's producer- assuming that the market for that thing is finite and so subject to oversupply.

This being the case it's clear that the idea that we share the profits of a highly automated economy out to allow people displaced by technology to pay their mortgage or energy costs is flawed because the profits of that highly automated economy will be far less than expected due to the compression of margins. And while the products of that highly automated economy would be cheaper to buy, things like housing or energy consumption would initially remain expensive- at least until the entire thing collapsed under the weight of increasingly unpayable debt as incomes failed to match debt servicing obligations leading to a banking meltdown.

This is where the 'let them eat IPods' argument fails- it does not help me that I can buy a sophisticated hand held computer for peanuts if I still can't afford somewhere to live or the energy to heat it.

The paradox of a transition to a highly automated society would be an abundance of cheap consumer goods on the one hand combined with a poverty of basic necessities on the other- the latter being in some sense the consequence of the former. The very technology that makes our toys so cheap destroys the economic basis upon which our society in it's current form depends. Every unemployed homeless man could maybe afford a mobile phone but there would be little in the way of profit for the company that produced that phone and no way to tax that company enough to provide that man with a roof over his head or the means to heat it.

Edited by wonderpup

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If you accept the idea that at some point technology will eat a lot more jobs than it creates- a view I subscribe to- then it's tempting to think that the solution to the resulting unemployment would be to simply tax the profits of those who are automating the jobs and give that money to people whose jobs are being automated.

In this way economic demand can be sustained and Capitalism can be saved from itself.

But this neat solution overlooks a major implication of the process of automation itself- one that is quite counterintuitive. The argument for all kinds of labour saving technology is that it's more efficient and therefore-by implication- must be value enhancing.

But the notion of 'value' here is more slippery than it first appears. From a purely instrumental perspective a spade has more value than a spoon if you want to dig a trench- but if that spade is made of stainless steel and that spoon is made of solid gold which of them now has the most value?

So we must at the very least subdivide our notion of value into two different ideas- there is a form of value that can be called instrumental and a form of value that could be called economic- and the two do not always map onto each other in a seamless way.

So when we say that automation is a good thing because it adds value to the production process by making that process more efficient it does not automatically follow that the value added instrumentally will always translate into more value economically. And the reason for this is due to the margin compression that occurs when things get easier and cheaper to make.

Ask most people if more efficient production would lead to higher profits and they would probably say of course- it seems self evident that the more quickly and cheaply you could produce something the more money you would make as a result. And this would be true if you were the only one making and selling that thing. But if you have competitors it's likely that a price war would ensue as they sought to capture market share by leveraging their cheaper costs by undercutting your prices- and you would have no choice but to respond in kind.

This leads to an unexpected outcome- despite sacking your expensive workers and replacing them with cheaper machines your profits have not increased- in fact they may have gone down as the barriers to entry for new competitors have created new competition.

So the counterintuitive conclusion seems to be that while automation may indeed add value on an instrumental level it can simultaneously erode value on an economic level- put more crudely- the more cheap and easy it is to make a thing the less economic value that thing will generate for it's producer- assuming that the market for that thing is finite and so subject to oversupply.

This being the case it's clear that the idea that we share the profits of a highly automated economy out to allow people displaced by technology to pay their mortgage or energy costs is flawed because the profits of that highly automated economy will be far less than expected due to the compression of margins. And while the products of that highly automated economy would be cheaper to buy, things like housing or energy consumption would initially remain expensive- at least until the entire thing collapsed under the weight of increasingly unpayable debt as incomes failed to match debt servicing obligations leading to a banking meltdown.

This is where the 'let them eat IPods' argument fails- it does not help me that I can buy a sophisticated hand held computer for peanuts if I still can't afford somewhere to live or the energy to heat it.

The paradox of a transition to a highly automated society would be an abundance of cheap consumer goods on the one hand combined with a poverty of basic necessities on the other- the latter being in some sense the consequence of the former. The very technology that makes our toys so cheap destroys the economic basis upon which our society in it's current form depends. Every unemployed homeless man could maybe afford a mobile phone but there would be little in the way of profit for the company that produced that phone and no way to tax that company enough to provide that man with a roof over his head or the means to heat it.

All forms of automation are tools whether a rock to crack a coconut, computers etc. Fundamentally the issue is little to do with capitalism or any other ism, so I think its not helpful to conflate and obfuscate the actual issue in that way.

Automation is no more or less a political issue than it has ever been.

More automation need not result in more consumer goods it could result in less. If we all had little iphone like widgets implanted in us one day then there would be even less need for tangible goods.

How does humanity make use of the untapped resources in the solar system without more automation?

There are questions like whether over time the energy consuming 'population' may include a larger quantity of machines, in relative or absolute terms. It is impossible to talk about whether automation advances this or that goal without having some essential grasp of what the goals might be in the first place.

The rich versus poor issue is not to my mind the primary part of this conundrum.

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I have been winding down, no longer working full time. my consumption has drastically changed. I do loads of upcycling (converting unwanted items into custom fitted projects to meet my exact needs). No need to feed the inner child when stressed or comfort eating as a direct result of the modern workplace. I have found many fantastic materials that help you carry out repairs (friendly plastic that melts in hot water but is pretty hard once set). So you need very little equipment to do some great things. Many retired people have built a support network helping each other out, which I now make use of. Its amazing, even within your own family group the dynamic changes. People visiting because they know they don't have to book. Come round help out in some way or the other way round. Quite a lot of my hobbies allow you to bring your own booze (dance events). So I will be starting this up again.

I have free time, my consumption has dropped. Personally I think a Citizen Income (idle hands) are the last thing the Corps and Government want!

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So when we say that automation is a good thing because it adds value to the production process by making that process more efficient it does not automatically follow that the value added instrumentally will always translate into more value economically. And the reason for this is due to the margin compression that occurs when things get easier and cheaper to make.

Essentially another rehashing of your "cheapness is bad" fallacy. The reasons you are wrong are firstly, that in any transaction "value" accrues to both the seller and the buyer - the cheaper something is the more value the buyer accrues which offsets the sellers loss of value. Secondly most sellers are also buyers (of components, raw materials, services etc) since very very few make something completely from natural resources they harvest themselves so sellers benefit from lower input costs when things are generally cheaper, the result is a net gain of "value" when things get cheaper.

Edited by goldbug9999

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Hang on though wonderpup. You're saying automation reduces profitability, but your ignoring that automation reduces the need for profit. If stuff (and I'm not just talking "toys" - food, shelter, basic needs) is cheaper to produce, then we need less money to acquire that stuff. Ultimately, in a theoretical 100% automated production scenario, profit would be zero I agree, but so would economic value - everything would be virtually free. That doesn't mean that those who control the means of production cannot make a profit, it means that money will no longer be a measure of human labour. I think you are falling foul of the inverse of the broken window fallacy - automation makes us all richer in the end, it's just that we need to redefine what "rich" actually means. It doesn't mean having loads of cash, it means having that which we desire with no need to labour for it. We've been undergoing the transition between paradigms for centuries now, but I'm confident the shift will happen as the value of that which we need to survive reaches zero. The question for me is whether we are prepared to accept a world where there is zero competition and hence no money.

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This is the same argument that luddites were making 200 years ago, they were wrong then and they are still wrong now.

If the cost of making widget A falls dramatically there may be less money and profit in it, but then people will use widget A to make widget B and so we still have economic growth.

The problem we have now is that high land prices are effectively reversing the industrial revolution.

If you want to make or sell anything in the UK you need the space & buildings to do it in.

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In wonderpup's ideal world we would all be out in the fields on our hands and knees ploughing the earth with our bare hands for 23 hours a day, occasionally looking up to catch rainwater in our open mouths. Enforcers would watch over the ploughers like hawks to make sure nobody picked up a sharp stick or stone to make the work easier. By eliminating all possibility of economic surplus or profit, Wonderpuppian society neatly avoided the problem of how to distribute it.

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I've seen automation creep in over the past twenty years and it is only going to increase. What is going to happen in the future is "Knowledge Workers won't be needed because of automation" that is a Microsoft quote btw! But jobs that cannot be automated will be very much career choices for a newer generation

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This is the same argument that luddites were making 200 years ago, they were wrong then and they are still wrong now.

If the cost of making widget A falls dramatically there may be less money and profit in it, but then people will use widget A to make widget B and so we still have economic growth.

The problem we have now is that high land prices are effectively reversing the industrial revolution.

If you want to make or sell anything in the UK you need the space & buildings to do it in.

+1, the whole automation argument is really just a side show.

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I have been winding down, no longer working full time. my consumption has drastically changed. I do loads of upcycling (converting unwanted items into custom fitted projects to meet my exact needs). No need to feed the inner child when stressed or comfort eating as a direct result of the modern workplace. I have found many fantastic materials that help you carry out repairs (friendly plastic that melts in hot water but is pretty hard once set). So you need very little equipment to do some great things. Many retired people have built a support network helping each other out, which I now make use of. Its amazing, even within your own family group the dynamic changes. People visiting because they know they don't have to book. Come round help out in some way or the other way round. Quite a lot of my hobbies allow you to bring your own booze (dance events). So I will be starting this up again.

I have free time, my consumption has dropped. Personally I think a Citizen Income (idle hands) are the last thing the Corps and Government want!

Good post.......you could liken automation to debt free....both allows people to own more of their own time.

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In wonderpup's ideal world we would all be out in the fields on our hands and knees ploughing the earth with our bare hands for 23 hours a day, occasionally looking up to catch rainwater in our open mouths. Enforcers would watch over the ploughers like hawks to make sure nobody picked up a sharp stick or stone to make the work easier. By eliminating all possibility of economic surplus or profit, Wonderpuppian society neatly avoided the problem of how to distribute it.

:lol::lol::lol:

PolPot comes in mind. We will make you free even if we have to kill everybody ...

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The paradox of a transition to a highly automated society would be an abundance of cheap consumer goods on the one hand combined with a poverty of basic necessities on the other

fwir, housing in NYC is very expensive but the streets are lined with appliances.

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fwir, housing in NYC is very expensive but the streets are lined with appliances.

Masses of cheap stuff to put in a home, but said home is unobtainable.....that is why storage companies are doing so well.....save it for the brighter day at great cost. ;)

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Essentially another rehashing of your "cheapness is bad" fallacy. The reasons you are wrong are firstly, that in any transaction "value" accrues to both the seller and the buyer - the cheaper something is the more value the buyer accrues which offsets the sellers loss of value. Secondly most sellers are also buyers (of components, raw materials, services etc) since very very few make something completely from natural resources they harvest themselves so sellers benefit from lower input costs when things are generally cheaper, the result is a net gain of "value" when things get cheaper.

I'm not saying cheapness is bad in itself- I'm just pointing out that cheapness= low profit margins. So the notion that automation will lead to hugely profitable companies who can be taxed to provide citizens income for all the displaced workers is a flawed idea.

Contrary to most people's expectations automation does not increase economic value, it destroys it. The only exception to this rule being those companies who have an effective monopoly position like Google or Facebook- in any competitive scenario more automated production leads to margin compression- exactly as one might expect in a competitive capitalist system.

After all is it not one of the claimed virtues of free market capitalism that it leads to more and cheaper stuff via the mechanism of competition between suppliers?

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All forms of automation are tools whether a rock to crack a coconut, computers etc. Fundamentally the issue is little to do with capitalism or any other ism, so I think its not helpful to conflate and obfuscate the actual issue in that way.

Automation is no more or less a political issue than it has ever been.

If you live in a capitalist system then the issue as to how that system may or may not adapt to new technology is a perfectly valid concern. I was specifically addressing one possible adaptation that is often touted which is the argument that an automated capitalism would produce enough surplus capital to offset technological unemployment via a tax funded citizens income.

My point being that one of the consequences of automation would be to erode the capital base from which that taxation is supposed to be drawn.

Taken to extreme the question might be this- if a thing cost almost nothing to make-say using some imagined replicator technology- what economic value would that thing have? The answer seems to be very little- unless you were the only one with access to that technology.

So the premise that a highly automated economy would produce a lot of taxable income for redistribution is undercut by the fact that such a highly automated economy would be engaged in a price war trending toward zero.

And it's worth pointing out that to man with no income any price above zero is still beyond his ability to pay-no matter how low that price may be.

So the question is this- if automation simultaneously eliminates employment and fails to provide the kinds of taxable profits required to fund a viable citizens income to replace lost wages- how does our current free market system adapt? How does it create the incomes required to maintain demand?

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Hang on though wonderpup. You're saying automation reduces profitability, but your ignoring that automation reduces the need for profit. If stuff (and I'm not just talking "toys" - food, shelter, basic needs) is cheaper to produce, then we need less money to acquire that stuff. Ultimately, in a theoretical 100% automated production scenario, profit would be zero I agree, but so would economic value - everything would be virtually free. That doesn't mean that those who control the means of production cannot make a profit, it means that money will no longer be a measure of human labour. I think you are falling foul of the inverse of the broken window fallacy - automation makes us all richer in the end, it's just that we need to redefine what "rich" actually means. It doesn't mean having loads of cash, it means having that which we desire with no need to labour for it. We've been undergoing the transition between paradigms for centuries now, but I'm confident the shift will happen as the value of that which we need to survive reaches zero. The question for me is whether we are prepared to accept a world where there is zero competition and hence no money.

What you suggest here is that Capitalism is gestating it's own obsolescence- which I think is true, but is a notion that many free market advocates find really annoying. To me it seems self evident that the endgame of the free market system is to extinguish itself by rendering the possibility of profit null and void. The ultimate form of creative destruction being the elimination of capitalism itself as an outmoded format.

But to many people the idea that technological progress destroys economic value is so counterintuitive that they instinctively reject it- which is quite strange given that the great virtue of capitalism is supposed to be it's ability to make things both cheaper and more abundant-which is just another way of saying less profitable.

If the ultimate endgame of the forces of creative destruction is a virtually frictionless productivity in which efficiency has been honed to such a high degree that output is virtually cost free then it seems inevitable that the products of such an output would have little economic value- if any- and we need not look to the far future to find an example of this dynamic- the decimation of the traditional music industry by digital technology is well documented and clearly demonstrates what happens to margins when your product can be replicated and distributed at near zero cost.

With the exception of a few big names who have retained some pricing power most musicians find it virtually impossible to make a living from selling their music alone and must rely instead on live performance to supplement their income.

If the value of Capitalism to society is in it's ability to drive down prices via competition/innovation then it's entirely consistent with this value to point out that the direction of travel is toward zero price products and therefore the eventual self extinction of Capitalism itself.

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I read something once which suggested that economic crises were basically down to blips in technological progress - and we had to wait for technologists/scientists to invent something new and appealing to get us consuming and out of the crisis. It has felt vaguely true for much of the last decade. The top of the range laptop from around ten years ago is still fairly useful today - it'll run Windows 7, you can get on the internet, use office etc. You couldn't say the same was true of the 90s laptops. I had a 286 one in the early 90s, virtually no utility by 1999.

Digital has, of course, destroyed much of the economic value of anything that can be digitised. Few of us buy newspapers, preferring to read online for free. Why buy DVDs when you can stream as much as you like via Netflix etc for a small fraction of the cost of one a few years back? In the digital space, we are all rich nowadays.

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I'm not saying cheapness is bad in itself- I'm just pointing out that cheapness= low profit margins. So the notion that automation will lead to hugely profitable companies who can be taxed to provide citizens income for all the displaced workers is a flawed idea.

Contrary to most people's expectations automation does not increase economic value, it destroys it. The only exception to this rule being those companies who have an effective monopoly position like Google or Facebook- in any competitive scenario more automated production leads to margin compression- exactly as one might expect in a competitive capitalist system.

After all is it not one of the claimed virtues of free market capitalism that it leads to more and cheaper stuff via the mechanism of competition between suppliers?

Which is why you're better off funding a CI from a land value tax which will have the benefit of keeping a lid on land costs. Tax the rent seekers until their noises bleed while reducing tax on actual productivity and you'll get more productivity and less rent seeking. If you deal with the rent seekers, and everything material is cheap through automation, then why would you need high profit margins?

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But to many people the idea that technological progress destroys economic value is so counterintuitive that they instinctively reject it- which is quite strange given that the great virtue of capitalism is supposed to be it's ability to make things both cheaper and more abundant-which is just another way of saying less profitable.

Its not counter intuitive, its b0ll0cks.

If the ultimate endgame of the forces of creative destruction is a virtually frictionless productivity in which efficiency has been honed to such a high degree that output is virtually cost free then it seems inevitable that the products of such an output would have little economic value-

You are essentially blinded by the notion that "economic value" is measured by the profit that a vendor can extract, when actually economic value is mainly the utility value to the buyer/user. Take email for example, naff all profit to be made providing email services these days but of absolutely vast utility to the general economy. An even more extreme example would be open source software. While its true that the ability of people to make profits directly from these things has been all but destroyed, the extreme utility of these things has created a huge numbers of ways of making money that would not be viable had these things not been available to leverage at or a near a zero price point.

if any- and we need not look to the far future to find an example of this dynamic- the decimation of the traditional music industry by digital technology is well documented and clearly demonstrates what happens to margins when your product can be replicated and distributed at near zero cost.

With the exception of a few big names who have retained some pricing power most musicians find it virtually impossible to make a living from selling their music alone and must rely instead on live performance to supplement their income.

These examples don't stand up to scrutiny and indeed to an extent actually prove the opposite of your stance.

The music "industry" has taken a hit but the key is in the word industry. The powers of the middle men to extract profits from ancillary activities like distribution, the "industry" as it were, has indeed been massively eroded in favour of artists gaining more direct access to money making avenues. There has never been much money in music for all but the elite but there are now actually more ways for the small guy to make a few quid than there were.

Also music is not the pre-eminent form of entertainment that it once was, the games industry for example dwarfs the music industry for revenue. The games industry has adapted and capitalised much more on the digital delivery channels than music has and has massively benefited from the lowered cost of production of games (if you compare like functionality with like and not say GTA V with space invaders). Direct access to buyers without needing a publisher has generated large sums of money for indie developers. Startups now have direct access to investors.

The general trend is to cut out middle men, in your myopic world this equates to "destruction of value" when actually its the opposite - it erodes the ability to extract profit without adding utility, which ultimately benefits everyone, because the utility is the wealth, not the profits.

Edited by goldbug9999

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Yes, yes and yes, I already know that it works in practice. What I want to know is...Does it work in theory?

Men want to get laid. Women want to get laid by men worth laying.

Man does something worth more than...meh...man gets laid.

Hugh Hefner got laid more than Albert Einstein. Which one does Richard Dawkins say is a genius?

Try figure out a WORKABLE future proof benefits system that does not involve some form of CI.

We are all in this together. Call me Dave.

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You are essentially blinded by the notion that "economic value" is measured by the profit that a vendor can extract, when actually economic value is mainly the utility value to the buyer/user. Take email for example, naff all profit to be made providing email services these days but of absolutely vast utility to the general economy. An even more extreme example would be open source software. While its true that the ability of people to make profits directly from these things has been all but destroyed, the extreme utility of these things has created a huge numbers of ways of making money that would not be viable had these things not been available to leverage at or a near a zero price point.

Economic value is measured by the profit a vendor can extract- how else could you measure it? In a capitalist system profit matters. It's nice that we have all this utility in the form of cost free software and it's true that for some people it has no doubt created profit making opportunities- but viewed macroscopically the trend is toward a destruction of profit making opportunities.

Even innovations like open source software ultimately erode profit by eroding the barrier to entry in many areas, leading to a plethora of 'busy fools' all equipped with the latest high tech tools but unable to make a decent living due in part to the sheer number of other people who also have access to the same high tech tools. The demand for a good or service does not automatically increase just because there are more people now equipped to supply that good or service.

This is similar to the flawed the idea that everyone having a degree will lead to everyone having a well paid middle class job - increasing the supply of degree educated people does not automatically increase the number of jobs that require degree educated people- it may simply erode the economic value of holding a degree.

In a system in which scarcity= economic value any technological innovation that creates abundance at low cost must inevitably erode economic value, especially if that technology is not sector specific but can be applied across a very wide range of commercial activity.

So it's possible to make the argument that utility value and economic value are not always complementary but can be antagonistic- at least in the sense that the more utility a given technology has the more likely it is to result in the erosion of economic value somewhere in the system. The automation verses human labour debate is ultimately about the declining economic value of human labour when it is in competition with the increasing utility value of machines.

The music "industry" has taken a hit but the key is in the word industry. The powers of the middle men to extract profits from ancillary activities like distribution, the "industry" as it were, has indeed been massively eroded in favour of artists gaining more direct access to money making avenues. There has never been much money in music for all but the elite but there are now actually more ways for the small guy to make a few quid than there were.

Ok- but look what has happened here- a large and highly profitable global business had been replaced by mostly small guys making a few quid, most of whom cannot make a living from their work. What is this if not a clear example of how technological innovation can destroy a certain kind of economic value?

Don't get me wrong, I'm not arguing that this is even a bad thing, but it's impossible to deny the reality;

Since 2000, the amount of revenue created from selling or streaming music in America has been cut in half, from $14.3 billion to $7 billion- according to the music industries own figures and some sources argue that it's more like a 64% decline over the same period.

I suppose we could claim that for some reason people in the US lost interest in music in the last 15 years to the tune of $7 billion- but a more plausible explanation is that the growth of the web and digital technology more generally were so disruptive to the existing model that it's ability to create economic value was impaired by 50% over that period.

Also music is not the pre-eminent form of entertainment that it once was, the games industry for example dwarfs the music industry for revenue. The games industry has adapted and capitalised much more on the digital delivery channels than music has and has massively benefited from the lowered cost of production of games (if you compare like functionality with like and not say GTA V with space invaders). Direct access to buyers without needing a publisher has generated large sums of money for indie developers. Startups now have direct access to investors.

I think it remains to be seen if the games industry really can in the long run do any better than the music industry in defending it's ability to extract economic value . The fact that even the large industry players are being dragged into the 'Freemium' space much against their will seems quite ominous to me.

A business model in which you give away your core product for free runs the risk that you end up creating an expectation in your consumer's mind that all games content should be free- and it was this mindset in regard to music that drove the price point of music down. There is a critical concept in retail called 'anchoring' in which the price expectations of your customers are set on the basis of the first price information they see- so if you walk into a shop to buy shoes and the first pair you look at costs 150 quid this will set your expectations regarding what you might expect to pay for another pair of shoes in that same shop.

So what happens if the first pair of shoes you look at are free? How much would you expect-or be willing- to pay for another pair of shoes in that shop? Probably not very much.

So it's not clear to me that the trend toward free content in the games industry is a clever strategic device or the early stages of a profit meltdown such as was experienced by the music industry. Of all the free games on offer how many actually make a profit?

The general trend is to cut out middle men, in your myopic world this equates to "destruction of value" when actually its the opposite - it erodes the ability to extract profit without adding utility, which ultimately benefits everyone, because the utility is the wealth, not the profits.

Utility is not always wealth in the context of a capitalist system. For example suppose a new robot were to be introduced that was advanced enough to replace 50% of the workforce- the utility value of this device would be truly remarkable but it's impact on the wealth of those it replaced would be negative- they would be far worse off as a result of this utility than they were before.

So while in theory advances in utility benefit us all, in practice those benefits tend to be less evenly distributed. And from the viewpoint of someone whose job is taken by an improvement in the utility of a given technology the outcome is that of value destruction-in this case the value being destroyed is the value of their labour.

All economic value is a derivative of human labour in some way- either in the form of value added (a hand made basket) or in the form of wages saved ( a product made cheaply by robots) So we can have the paradox that by improving the utility value of non human inputs we can reduce the economic value of human ones.

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Even innovations like open source software ultimately erode profit by eroding the barrier to entry in many areas, leading to a plethora of 'busy fools' all equipped with the latest high tech tools but unable to make a decent living due in part to the sheer number of other people who also have access to the same high tech tools.

Wonderpup, it would really help you that instead of writing long pages of your crap you just isolate a few sentences you base your ideas on. And critically evaluate them.

Here you are correct that e.g. capitalist profit per average wage has been eroded by the capitalism and free market. E.g. how much a capitalist can charge for 1kg of rice per average wage.

But this has been happening for last 5000 years and it is actually a good thing. You miss that this is the main point we have this system in place and it provides great value to the society.

Sometime ago you would have to spend 80% of your time looking for food (80% of your everage income). Now you pay about £1 for 1kg of rice, what will keep you going for about 4 days. With robots the rice could be even cheaper. And still capitalists provide rice even with thinner and thinner profit margins per average income. Same with water utilities, internet connection and free email, cheap chinese smartphone for $30, etc ...

Edited by Damik

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  • The Prime Minister stated that there were three Brexit options available to the UK:   34 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


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