Economic warfare: Insights from Mançur Olson — Mark Harrison

Economic warfare was widely used in WWII. When one country blockaded another’s supply of essential goods or bombed the industries producing them, why did the adversary’s economy fail to collapse? This column, part of the Vox debate on the economics of WWII, reviews Mançur Olson’s insights, which arose from the elementary economic concept of substitution. He concluded that there are no essential goods; there are only essential uses, which can generally be supplied in many ways.

Also a reason that economic sanctions are not working as expected?

VOX.EU
Economic warfare: Insights from Mançur Olson
Mark Harrison is Professor of Economics at the University of Warwick and a Research Fellow of Warwick’s Centre on Competitive Advantage in the Global Economy and the Centre for Russian and East European Studies, University of Birmingham

(ht Naked Capitalism)

Branko Milanovic — No one would be unemployed and no one would hold a job

Several days ago Steven Hill presented at the Graduate Center CUNY in New York his new book “Raw Deal: How the ‘Uber Economy’ and Runaway Capitalism Are Screwing American Workers”. It discusses (according to Steven’s presentation; I have not read the book yet) the decline of trade unions, the future of jobs and robotics. It struck me that there are (In his presentation as well as in most of what we read), when it comes to the future of work, two narratives that often seem contradictory. There is a narrative of job-automatization and robotics whereby most of our jobs end up taken by the robots. Then there is a narrative of people working more and more hours as work intrudes into their leisure time: instead of taking it easy throughout the day as the first narrative implies, we would use our “free” time to rent apartments we own or drive our cars as taxis. According to the first narrative, we are in danger of having too much leisure time; according to the second, of having none.

Let’s consider the two scenarios in turn, and separately.…

But perhaps it may be better to think of the two scenarios as just one scenario that would combine lots of labor substitution with heavy segmentation of tasks (and much more intense labor discipline made possible thanks to automation). In that case, jobs to which we have become accustomed would cease to exist: lots of today’s functions will be automated, and for many others, “amateurs”, not professionals, would do them.… 

Global Inequality
No one would be unemployed and no one would hold a job
Branko Milanovic | Visiting Presidential Professor at City University of New York Graduate Center and senior scholar at the Luxembourg Income Study (LIS), and formerly lead economist in the World Bank's research department and senior associate at Carnegie Endowment for International Peace

Chris Dillow — Technical change as collective action problem

Can capitalism handle technology as technology renders more and more labor economically inefficient and therefore expendable. What happens with demand?

Quite predictably, unprofitable firms will cease to exists. Many of these are those that service less prosperous levels of society and competition turns to more prosperous levels. Presently, the upper forty percent of a developed economy account for a large percentage of sales. 

It is therefore possible that firms would focus production on this segment and write the rest off, letting the fend for themselves. Governments would be left to pick up the slack with welfare programs if at all.

This would be a reversion to the status quo ante from most of history after the emergence of surplus societies in which the ruling elite owned or controlled most of the wealth and resources. It is also the status quo in the Third World in the present.

Stumbling and Mumbling
Technical change as collective action problem
Chris Dillow | Investors Chronicle

McKinsey — Are you ready for the resource revolution?

Meeting increasing global demand requires dramatically improving resource productivity. Yet technological advances mean companies have an extraordinary opportunity not only to meet that challenge but to spark the next industrial revolution as well....

The resource revolution represents the biggest business opportunity in a century. However, success requires new approaches to management. Companies that try to stick to the old “2 percent solution” (just improve performance by 2 percent annually and you will be fine) are going to become obsolete quickly. Businesses that can deliver dramatic resource-productivity improvements at scale will become the great companies of the 21st century.

Substitution, optimization, virtualization.
McKinsey Quarterly

Are you ready for the resource revolution?

Stefan Heck, consulting professor at Stanford University’s Precourt Institute for Energy, and Matt Rogers, a McKinsey director in the San Francisco office