Tuesday, February 25, 2014

Why this is one very, very, very, scary chart!

This is a chart of real GDP (total output of goods and services) divided by the Civilian Labor Force. We know that the labor force has been declining and is at, like, a 40 year low. Despite that, however, the output of our economy has never been higher.
















What this implies is that fewer and fewer people are reaping or participating in the wealth thrown off by our economy.

Soon we will have robots doing most of the work. And then what? On the one hand you will have even greater efficiencies (robots don't tire, need to be paid, take vacations, etc) and, therefore, even more wealth being produced.

On the other hand you will have lots and lots less people reaping the benefits. So, are they left to starve? Live in the streets? Go without medical care? Walk around naked, without transportation, electricity, heat?

This is not just a looming crisis for the United States, it's a looming crisis for mankind. The only way to avoid this is for people to be guaranteed minimum levels of income with which to consume some of this output. Otherwise, there will be human misery and chaos everywhere. The world will look like Mel Gibson's post apocolyptic movie, Mad Max.

16 comments:

Matt Franko said...

Mike check out the new Matt Damon movie "Elysium" as a sci-fi take on the scenario you describe.... pretty entertaining... i hope not prophetic...

rsp,

Matt Franko said...

here's the trailer:

https://www.youtube.com/watch?v=QILNSgou5BY

Jodie Foster plays the "Ice Queen"... good performances all around...

rsp,

Tyler Healey said...

The maximum weekly unemployment benefit amount is $235.00 in Mississippi.

Jure Jordan said...

There are three movies that have a subject of capitalist distribution with advanced technology and automatization.
There are Hunger Games, Elysium and In Time. All three are about the need of division and limited recources of earth as an excuse to majority sharing scarce resources while minority is perverted with abundance and seclusion from the rest of it.
Even tough there is no limit to good life for everyone, automatization makes abundance possible for everyone to enjoy but still there is division and high walls to keep majority out of acces to substinance.

I think that best one is In Time with Justin Timberlake. I like it the best since in this movie there is no money but living time is currency. Everyone gets only 25 years of life since earth has limited resources and they have to earn every minute past that. On the other side behing 12 walls are centered people with milions of years of life. They live decadent and pointless lives, but it seems that misery of others give them the food to live, nothing else.

All three are also about division but more about of lack of resources as an excuse and a trouble they go to to prevent the sharring the abundance. Isn't that going aroud too as an excuse?

http://www.youtube.com/watch?v=fdadZ_KrZVw

Anonymous said...

I've posted this video series before but nobody seems to get it.

Clonal said...

Mike couple your graph with this graph

Clonal said...

Actually, here is a direct comparison - Median Real hourly wages to GDP/person in the labor force Base 1975 (roughly the peak of hourly wages)

Ryan Harris said...

Trade has improved productivity. Woohoo. But can someone remind me why regular people are supposed to get excited about free trade? I know we all are going to get super rich from increased productivity... but well, from the charts, you get rich, I get screwed and I'm supposed to support it, without question and not demand anything in return? Right. I'm just closed minded, protectionist, xenophobic. Or as Krugman says, I'm just muddled and confused about trade.

Not anymore, I want a piece of it, or I'm going to keep ringing every politician and giving money to every single one that blocks the trade agreement until I get something out of it. I don't give a crap about how in an ideal world everyone could theoretically be employed by government and then we could import what the world is willing to sell us in exchange for our fiat. That isn't the world we live in.

They don't want our fiat, they want our assets. The government isn't hiring. And I lose, so I'm going to stand in the way and make you poorer until I get something out of it, otherwise, No. We've more than half the population that doesn't want the stupid TPP, and we can stop it dead in it's tracks despite all the goofy harvardites that think its the best thing since sliced bread for the 'economy'. Give me a JG or BIG and I'll give you TPP. Otherwise, nah, don't need it. Pretty soon, we can take it the otherway and start rolling back trade, creating capital controls, all sorts of nightmares to impede the game until we get what we want. That is how the game should be played. Not this thing where we are told we are 'protectionist,' so what, big deal, I don't care about any of it, except what do I get? That is how a democracy, should work, to fix the system.

Tom Hickey said...

That's why we don't have democracy but a republic in which representative can be bought. The Founding Fathers set it up that way on purpose. That's how republics are supposed to work, and some great republics have been turned into empires but none into participatory popular democracy for fear of giving actual power to the rabble.

Ryan Harris said...
This comment has been removed by the author.
Bob said...

I've posted this video series before but nobody seems to get it.

Its conclusion is absurd. Food production and distribution will continue in the absence of profit, which was the case for most of human history. The threats to agriculture are not economic or financial.

The guy behind these videos is a crank.

Matt Franko said...

Septeus,

Cant humans modify the flora thru agriculture/feedstocks so that the "invading" flora cannot encroach on what we eat?

iow the dinosaurs didnt farm? humans farm so we work to make sure we have always enough food...

We subject the land to us and only let grow what we eat.... so we should be able to avoid the plight of the dinosaurs depicted here...

rsp,

Bob said...

One threat to agriculture is the practice of monoculture and the limited varieties of plants used to produce food. The importance of biodiversity has long been recognized, fortunately.

https://en.wikipedia.org/wiki/Seedbank

Anonymous said...


Quote" Its conclusion is absurd. Food production and distribution will continue in the absence of profit, which was the case for most of human history. The threats to agriculture are not economic or financial.

The guy behind these videos is a crank."

I agree that the guy is a crank unless he happens to be right.

If you think that profit isn't the basis most agriculture today then I'm afraid this is a pointless discussion. Most modern agriculture is held together due to public spending and subsidizing which our glorious leaders seem to be intent on cutting to nothing.

The point is the ecological pyramid is overturned. I haven't seen anyone make an argument as to why he is wrong. His prediction of falling labor participation versus productivity is coming true as Mike Norman noted in this post.

You seem we will just go back into pre-capitalist non-profit driven in the event of a hyperdeflation. That conclusion is the absurd one.

The only debate is whether the decline is slow or fast. There is no debate that about density dependent population collapse. It is well established science.

Anonymous said...


Quote: "Cant humans modify the flora thru agriculture/feedstocks so that the "invading" flora cannot encroach on what we eat?

iow the dinosaurs didnt farm? humans farm so we work to make sure we have always enough food...

We subject the land to us and only let grow what we eat.... so we should be able to avoid the plight of the dinosaurs depicted here..."

Yes we have technical ability but we only act in the capitalist system on the basis of consumer demand which our glorious leaders seem intent on sucking out the system.

That's the point. Austerity creating demand collapse until the on-demand food production system of physically breaks down.

I have faith that our glorious leaders will figure out a way to make this unlikely scenario likely given their general inability to figure out simple fiat.

Call It Murphy's Law.

Bob said...

Agriculture will continue regardless of the economic system that is in place. Food will be subsidized or rationed, and production will be planned on the basis of need instead of profit.

The ecological pyramid is a consequence of energy use. There is no indication that energy supplies will drop precipitously as predicted by the peak oil crowd.

We are headed for a transition, and once again the cranks and doomsayers are making predictions that will not come true. The rise of the internet has only exacerbated the spread of this type of paranoia.

There is no consensus on the cause(s) of mass extinctions. There is geological evidence of catastrophic events in Earth's past, and attempts at estimating their effect.