It's the natural mechanism that balance demand and supply, and ensure we'll always have enough food for everyone. It's the natural incentive that draws more people to an area that is under-served (e.g. IT) and away from another that is over-served (e.g. farming). The examples may not be the best possible, but you get my point.
About deregulation: I agree it's not a single factor, but it's a pretty important one on the subject of "creating new jobs". I understand there are several other factors getting in the way of a competitive market, but monopolies aren't all created the same. The kind of monopoly that Facebook or Google have is not the same kind of a state-enforced monopoly which rules out competition by force of the law.
I understand how markets balance supply and demand and I consider the injustice of its methods to be a necessary evil for which I have no substitute. That wasn't my original complaint, however. Rephrased in terms of supply and demand, my complaint was that the market's insistence on weighting demand according to wealth made it inherently inept at addressing unweighted demand (i.e. the actual needs of the people). I have no trouble believing that the market will continue to meet wealth-weighted demand. I am much less certain that it will continue to meet unweighted demand. We've seen it fail before, but only in pockets. I fear that automation may eventually see it fail on a much wider scale.
> monopolies aren't all created the same. The kind of monopoly that Facebook or Google have is not the same kind of a state-enforced monopoly which rules out competition by force of the law.
We are in agreement then. Perhaps not on the relative magnitude of the various problems, but it's a start.
As long as human beings can use their muscles and brains in the time to change outcome of some events and as long as people vary in their ability to do so, I think jobs will always exist.
That term is meaningless. An Indian would be happy to get $12 per day when Americans complain about it being minimum wage.
If your point is that some people will earn significantly less that others then I think you are true but I dont see why that is a problem. The bottom 5% in USA today are living lives much better than middle class Americans of 1917. There will always be bottom 5% but what matters is how they compare with the bottom 5% of 100 years back. As long as that is positive I think thats a very good outcome.
Precision of the sort you seem to be after would come at the cost of inviting people to bicker over where exactly the line should be drawn, when the precise location of the line is completely irrelevant to the argument I was making.
> An Indian would be happy to get $12 per day when Americans complain about it being minimum wage.
Looks like you didn't need an invitation. Don't let me stop you. The rabbit hole of defining "good enough pay to survive and thrive" goes much deeper than conditioning on geography.
> If your point is that some people will earn significantly less that others then I think you are true but I dont see why that is a problem.
You're still just putting words in my mouth.
> There will always be bottom 5% but what matters is how they compare with the bottom 5% of 100 years back. As long as that is positive I think thats a very good outcome.
Quite right. The problem is that while the news is positive in aggregate, a large pocket of people have experienced a severe regression in the quality of their social contract, and we have good reason to fear that the phenomenon will spread. History counts in the market's favor, but past performance is no guarantee of future returns.
No, actually. The economic notion of value is subjective. Economic thought, despite popular perception, does not view value in purely monetary terms. Instead, value is seen as subjective: something is valuable because humans value it. Human desire is the very definition of what makes something valuable.
I don't deny that there is a notion of value apart from the economic one, in fact I would even go so far as to argue that the terms "economic value" (and "market value" etc) give markets entirely too much credit by suggesting that economic value and market value do a halfway decent job of approximating or approaching the philosophical notion of value, which is the term I'd ascribe to your definition and to general use of the word "value" without additional qualifiers.
http://www.efi.int/files/attachments/e45/meetings/31hanemann...
Yes, it is often defined in terms of money. That is because if you actually value something you would be willing (but not neccessarily able!) to pay for it.
But let's not get bogged down in an untractable argument over the meaning of words. My point really boils down to: economics does concern itself with value which is different than the market value. They study the cases where the market value will refect people's true perferences, and when it will not.
Problem 1: the economic notion of value is weighted by wealth, but the notion of "human desire" you discuss is not. Entertaining a king is valuable, in the economic sense, but feeding and housing a poor is not. It doesn't matter if there are plenty of things that people want to be done, it matters if there are plenty of things that people with money want to be done. If all the money flows into a few hands, the demands of the many do not count towards stimulating the economy, and the economy is not stimulated.
Problem 2: leverage. The economic value you create is an upper bound to what you earn, not a lower bound. The lower bound is determined by your next best option, which effectively, in light of correlated risk, means there is no lower bound. The service you provide may be critical to the functioning of society, but if you are easily replaced, well, you aren't going to earn very much. In other words, even if demand increases exponentially forever, and you play a critical role in satisfying that demand, the economy does not guarantee that you will be able to extract money for yourself out of the process. See: crowd of artists trying to pawn their wares off on the king. Also, farmers.
Problem 1 and problem 2 combined are what make the "capitalist dystopia" a plausible, stable, and terrifying state of affairs.
Problem 3: deregulation does not necessarily return markets to a pristine state of natural excellence. No such state exists. Quite the opposite, in many cases. Regulatory capture is a real problem, a big problem, but it's only one of many factors that lead to sclerotic, anti-competitive markets. I'm regularly floored by people's ability to talk about network effects, economies of scale, information asymmetries, moats, winner-takes-all games, and mergers/acquisitions with one breath -- all of which are non-regulatory market forces that suppress competition and innovation -- and then with the next breath assert that deregulation is the most straightforward way to spur innovation and competition. See: Enron, where deregulation of the energy markets led to artificial supply shutdown (the infamous rolling blackouts) in order to drive prices higher and profit. Listen to the recordings of the traders literally giggling as they order plants offline, and tell me again that deregulation is a cure-all. Sometimes more regulation leads to better functioning markets. Utilities are the canonical example.