What if we need less money and lower wages are actually fine?

Edit: Do the people down-voting this actually think technology doesn't provide consumer surplus and deflation? Or do you have a problem with my question?

Technology and globalization have impacted food a lot. Education, and housing? Not nearly as much. Healthcare is more complicated, and I'm not an expert, so I'll refrain from speculating there.

One might argue globalization has hurt people, but so far, technology seems to be making just about everything it touches cheaper for everyone.

[1] https://www.ers.usda.gov/data-products/chart-gallery/gallery...

In the future, if you could provide a source for your argument, it could give more substantive discussion.

I just wanted to expose something commonly left out of these discussions, which is that technology is generally deflationary. More technology in the areas of healthcare, education, and housing might be the solution, not the problem.

> so far, technology seems to be making just about everything it touches cheaper for everyone.

You say this, but only provide a source for 1 out of 4 key indicators of cost of living. Can you provide the same evidence towards housing, healthcare and education becoming significantly cheaper as a % of a budget of an average household?

Otherwise that statement is just incorrect.

Bullshit. Technology brings down the cost of living by making the supply side more efficient. What goes up is the cost of the way you'd like to live as you have more options to choose from.

Obviously there's disruptions along the way (ex: automobiles lessen demand for horse breeders) but when capitalism closes a door it opens a window (ex: mechanics).

The "efficiency" increases in recent years have more often than not been various ways of cutting labor costs. It doesn't matter if things are cheaper in a nominal sense if your ability to earn a living is eroded.

I suggest you go do some basic math on the cost of producing consumer staples like rice, beans, milk, and meat. Technology has brought down the cost of all of them.

Similarly, efficiency gains in MPG and durability improvements have lowered the price of owning and maintaining a vehicle. Uber, Lyft, and other ride sharing apps have lowered the price of it even further to remove the capital outlay.

> The "efficiency" increases in recent years have more often than not been various ways of cutting labor costs.

Which is bad because why exactly? Is the purpose of the corporate sector to produce goods and services or to provide a place for people to go?

> It doesn't matter if things are cheaper in a nominal sense if your ability to earn a living is eroded.

Sure it is. That's the definition of makes things more efficient: being able to be produced more cheaply

I specifically cite transportation costs in my prior comment. Housing is also cheap if you don't live in (expensive) cities. There's an abundance of housing in the suburbs and if you're willing to share a place with others (like everybody seems to take for granted in the city) it's insanely cheap.

Education and health are interesting beasts. On the one hand technology has brought the cost of education to near zero through remote learning and internet courses. There's more knowledge available at a person's fingertips than at any point in history and the cost is cheaper than ever. The cost of a formal higher education has gone up but I don't think that's driven by technology. It's from the availability of "easy money" for student loans. Healthcare (in the USA) is uniformly fucked and needs to be scrapped and rebuilt though government programs like Medicaid do cover the people your describe (poverty line).

The increasing polarization of the economy is also spatial: the remaining good jobs are congregating in fewer and fewer metropolises where the cost of living is skyrocketing.

For example: Apple sells an iPhone for about $750. This phone contains the equivalent of (roughly) $3,000 of disparate technology from the 1990s, including a cell phone, camera, tape recorder, etc. Not only does it contain all of that for less money, all of that is better quality than what was available for that $3,000 back in the 1990s.

That is deflation and consumer surplus in action. The consumer can spend a fraction of what they would've in 1990 for a better product.

Another example: Apps on the App Store. Everyone expects everything for free because there is so much competition enabled by technology. The marginal cost is roughly zero, so most apps are free. If most of the gains were being kept by the producer, apps would cost a lot of money.

Down vote for trolls and other destructive posts, not just because you have a problem or disagreement with what's expressed. OP is legitimately trying to contribute to the conversation.

Just to play devil's advocate: what if you define progress as "that stuff" that will increase the general well-being of the greatest number of people over the next 20 years? With that definition, does technology-powered automation still count as progress?

[1] https://techcrunch.com/2016/12/05/hackernews-calls-for-polit...

From what I've seen, contrary opinions that are well expressed are rewarded (even if controversial - I've got a few that ultimately got more up votes than down, but it was a ride). Contrary opinions that, well, presume a fight? Not so much.

Instead of claiming that we can't have that discussion, why not try to have that discussion?

Your question is loaded because it assumes that ownership of such machines is the best solution for those made unemployed by them - I think this is probably flawed, because management is a different skill set than direct contribution.

The problem is that the worker's skills have lost value. They need new skills - management skills for owning the machines, or different skills that haven't been automated yet.

Or maybe a refinement on their existing skills. My understanding of Japanese factories is that it's commonplace to have one of the fabrication lines done by people - the thinking goes: "If you do not know how to do it better, how can you make machines do it better?". I also remember a story of, I think it was GE, getting their designers, engineers, and assemblers (the people literally putting the pieces together) all together to improve the design. The assemblers noted a particularly difficult step, and in making that step easier, the engineers removed a number of parts. Everything got better.

Let's look at the other part of your question - incentives for building the automation. It seems like the R&D incentive comes from the end-user value, so let's skip to that - I want an automated machine for a number of reasons: Quality consistency, up time, wage cost reduction, safety. Eventually, all of these do boil down to "profit", but the routes taken are important. QC means you can sell more and/or charge more; but you could make more and charge less in ways that make more or less profit.

I don't think I can answer your question, because I don't know why you think that the incentives for building them would be removed; and in my head, the first blocker for the recently unemployed to own such machines is wanting to run a business. I don't think most people want that.

I don't think it can even be answered with that assumption included. Let's say you have a cobbler, who makes shoes. He recently lost his job to the burgomeister's new Elfbot 4000, that can make the same quality of shoe, but turns out 2 dozen pairs in a single night.

The Elfbot 4k runs all week on a single saucer of milk, without sleeping. The cobbler has to eat 2000 kcal every day, and sleep 8h every night. It is completely obvious that the cobbler can no longer compete in the shoe market with the Elfbot. The value of the cobbler's one marketable skill has been devastated by automation. So the cobbler cannot raise enough money from selling shoes to buy the Elfbot. No matter how hard the cobbler works, his productive output cannot reach a level high enough to equal the value of the Elfbot.

So the cobbler would have to get the money from somewhere else. But the burgomeister is the richest man in town, and the only one with enough money to lend out. Why would he give a loan to the cobbler, to buy the robot, whose production would be used to pay off the loan, when he could just sell the production and get the money without that source of default risk?

So the cobbler could also just steal the Elfbot. But if Elfbots could just be stolen willy-nilly, no one would bother keeping one. The burgomeister would obviously have to defend his property against one-man robberies.

That leaves a torch-and-pitchfork rebellion. After that happens, no one bothers bringing new machines to the village, because they don't want to lose their property.

Or the cobbler could study the machine, and build his own, if it can be done cheaply enough. Unfortunately for him, the burgomeister has a patent, which equates copying with theft.

The only way for the cobbler to own an Elfbot is if he is the first to build one. And that just puts all the other cobblers in his shoes for the above scenarios.

The displaced workers just can't get the capital in a capitalist society through the use of their obsoleted skill, and the capital is not created as quickly or as easily in a non-capitalist society. They would have to acquire a different marketable skill to be able to afford one, but once they have that skill, they no longer have any specific connection to or need for that particular machine. If the cobbler becomes an expert in specialty candle marketing, and makes a pile of cash, he no longer has any need to own the Elfbot. He could buy the Dribbler Deluxe instead.

I really like your summation that "can't get the capital in a capitalist society through the use of their obsoleted skill".

Arguably, the benefit of the cobbler could be a) highly custom small batch work, b) expertise to maintain the Elfbot, and c) a thinking mind behind the task. Elfbot will not improve by itself, the cobbler would.

The human labor requirement has been slashed and burned for shoe-making, and the 99% of ex-cobblers that can't find work reprogramming and servicing Elfbots are busted back down to the pool of unskilled laborers.

The modern economy is increasingly asking unskilled laborers to retrain themselves to a different category of skilled labor at their own expense. Those categories of skilled labor may not even stay viable long enough to pay off the (re-)education loans, so those people may even be in exactly the same situation ten years later, except instead of just being broke, they will be broke, still in debt, and unable to borrow more for additional retraining.

In the IP space, we have an example working perfectly with the communist maxim "from each according to their ability, to each according to their need": Open Source Software.

Is it really necessary that the means of production be owned by the labor put out of work? Or is the real problem not inequality (which has some very nice incentivizing benefits) but desperation at the lower end of the economic scale which lead to extortion like transactions? And if that is the case, is a full scale distribution of wealth necessary or can we have the best of both worlds by redistributing just enough wealth to guarantee that everyone has their survival needs taken care of?

Technology is a tool. Effects depend on who handles it / with which incentives. It can naturally facilitate wrongdoing (intended or not) but it also can – and it would be irresponsible not to use it – to counter said wrongdoings.

No, the technology label is not sufficient. It isn't an immunity necklace. It doesn't mean inevitability. I say this as an engineer.

Civilisation is at a crossroad: continue building a high-tech society which makes humans irrelevant according to the current social/philosophical/moral norms (1) OR go back to the Dark Ages and let the powerful run the show (2).

If we want to continue with (1), we also have to quickly redefine the whole meaning of society, citizen, work, job, leadership, democracy, etc. This has to be done fast and it has to be done globally.

This will be very hard to do.

That's a good thing: http://www.paulgraham.com/inequality.html

"Decreasing economic inequality means taking money from the rich. Since risk and reward are equivalent, decreasing potential rewards automatically decreases people's appetite for risk. Startups are intrinsically risky. Without the prospect of rewards proportionate to the risk, founders will not invest their time in a startup. Founders are irreplaceable. So eliminating economic inequality means eliminating startups."

Note: The specific relationship that they find is that startup creation is associated with home prices. This makes sense in the US, as home prices are a good proxy for middle class wealth. Here's a quick not fully vetted interpretation of this finding: When the middle class is relatively rich, they start businesses. When it is relatively poor, they don't. The aspirational income inequality that Graham posits doesn't immediately jump out when looking at year by year new startup numbers on a graph. I'm currently analyzing these numbers, but it's pretty clear that they don't support Graham's assumptions.

Note 2: The FRBoSF analysis isn't perfect for answering this question, but at least it's a good start, unlike the pure logic approach (despite the easy availability of good longitudinal Census data on the subject) that Graham published.

Note 3: The Graham essay is an essay on income inequality that came out before the atomic bomb that Picketty dropped on the subject. It really shouldn't be dragged out now because the research landscape on the field has been completely changed since it was written.

Final Note: I know that every time the word startup is used on HN, it spurs a 'No True Scotsman' debate about what qualities invalidate a new business from the label startup. Not remotely important. The FRBoSF article notes that new businesses have faster job growth than older businesses and that's the larger subject in question. Trying to throw companies out only serves to move the conversation from fact based to conjecture based by throwing out a perfectly good source of facts relevant to the matter.

[1] http://www.census.gov/ces/dataproducts/bds/

He addresses this line of logic in a separate essay: http://paulgraham.com/wealth.html

"A surprising number of people retain from childhood the idea that there is a fixed amount of wealth in the world. There is, in any normal family, a fixed amount of money at any moment. But that's not the same thing.

When wealth is talked about in this context, it is often described as a pie. "You can't make the pie larger," say politicians. When you're talking about the amount of money in one family's bank account, or the amount available to a government from one year's tax revenue, this is true. If one person gets more, someone else has to get less.

I can remember believing, as a child, that if a few rich people had all the money, it left less for everyone else. Many people seem to continue to believe something like this well into adulthood. This fallacy is usually there in the background when you hear someone talking about how x percent of the population have y percent of the wealth. If you plan to start a startup, then whether you realize it or not, you're planning to disprove the Pie Fallacy."

First, you should stop quoting pg's essays as though they were infallible sources of truth. It's not helping your argument. I like some of his essays; others are misleading or dead wrong (for example: http://idlewords.com/2005/04/dabblers_and_blowhards.htm). Empirical evidence always beats philosophical pondering; shawn-furyan provided data that pg was wrong, and you did nothing but post another data-free essay.

Second, you should stop assuming your ideological opponents are idiots who don't understand simple concepts like growth of wealth. We do; of course it is possible to "grow the pie". But since the 1970's, the majority of GDP growth has translated to income gains only for the top decile. And in such a regime, why should everyone else bother to grow the pie? What income inequality has done is create people who make a rational, and perfectly valid, calculation that "growth" is pointless and not worth fighting for, since they won't see any of it.

you should stop assuming your ideological opponents are idiots who don't understand simple concepts

This is a personal attack, though. Please don't do that.

He doesn't, and it's not a line of logic, it's an interpretation of the evidence. Graham didn't even look at the evidence, and came to a conclusion that becomes very hard to support once you've had a glance at a chart of the available evidence (i.e. deep analysis isn't required to recognize that his proposed mechanism is flawed).

Also, you should really heed my 3rd note. You cannot speak effectively on income inequality without having read Picketty. It is by far the most significant treatment on the subject. It goes far beyond my simple counterpuntal analysis here to bat down a poorly thought out and completely unresearched pure logical argument. At least read a couple informed reviews of Picketty. I seem to recall FT, the Economists, Mankiew and Krugman having worthwhile, messy and conflicting thoughts after it was published. Graham just is not a useful resource on income inequality.

To address your point: Yes, Macro 101 makes it clear that trade multiplies wealth, thus wealth is non-static. The Graham argument you cite is incredibly elementary, and he is not the source to be citing on the topic. That particular question is miles more elementary than any discussion of the impacts of income inequality on macroeconomic factors. Bringing it up when talking about Income Inequality is kind of like citing a clunky explanation of Newton's 2nd law of motion in a discussion about time dilation effects of supersonic flight (which relies on non-Newtonian physics). To wit, analysis of Income inequality requires going beyond the overly simplistic macroeconomic models that have led Economists to mispredict the effects of income inequality for so long. Macro 101 is not useful here. The current evidence in the field is conter-intuitive and difficult to reconcile for expert economists.

Also, again, Graham's essay is very outdated and has, to be charitable, been surpassed by more careful and thorough resources on the topic.

Who decides that?

Also see my other reply.

No; that essay might argue that inequality is a necessary side-effect or condition of startups, but that is not the same as arguing it is a "good thing".

For comparison: pollution might be a necessary result of the industrial revolution, and perhaps a cost we pay gladly; but that doesn't mean pollution is good. If we could get industry without pollution, we would.

(Of course, Facebook has had such a ridiculously large effect on the world that argument is probably hard to win, but it illustrates what I'm trying to say)

More broadly, when a society won't let people become as rich as the market will let them, founders will tend to move elsewhere.