Make Progress, Not Work – Econ Chronicles – Learn Liberty
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Make Progress, Not Work – Econ Chronicles – Learn Liberty

December 13, 2019


Especially during a recession, we almost automatically
think that anything that saves jobs is good and anything that destroys jobs is bad. But
what would our world look like if we took this idea seriously? Two hundred years ago,
virtually everyone was a farmer. In those days, virtually everyone had to be a farmer
just to feed the population. People often went hungry, nonetheless. Over time, though, people invented new and
better ways to put food on the table: better seeds, better plows, better fertilizer, better
energy sources. A farmer with a tractor was able to produce far more food than a farmer
with a horse. A horse has about one horsepower. As food production went up, the fraction of
people with farm jobs quickly fell. Would it have been a good idea to ban the
tractor to save those jobs? In hindsight, the idea seems silly. If government held back
progress, we’d still be hungry, and we’d still be farmers. When people are losing their jobs,
we almost always see disaster. Humans suffer from what I call make-work bias:
the tendency to judge economic performance not by production, but by employment. Time
really is money a lot of money. If a superfluous worker earns $30,000 a year to sit quietly
at his desk, the world is roughly $30,000 poorer. Why? Because the worker could have
been doing something productive instead. Doing something productive instead sounds
awfully vague, especially if you just lost your job. But the last two centuries of progress
show that this isn’t just hand waving. New ideas have totally changed our economy and
our labor market. The result is the unbelievably advanced civilization we see all around us.
Think about the jobs people around you are doing. How many of these jobs could you even
explain to George Washington? If progress is hard to explain after it happens,
it’s nearly impossible to chart before it happens. When tractors are replacing horses,
who is going to have the foresight to say, The unemployed will now go build an advanced
industrial economy! How about the foresight to say, Let’s prepare the world for the Internet’s
arrival a century from now! The main thing we really know about progress is that progress
is coming unless we stop it. Modern democracies rarely actually ban new
technologies to save jobs. But many regulations inspired by make-work bias try to protect
workers’ jobs, even if the workers aren’t producing much. Most European countries have
intricate regulations that make it very costly to lay off or fire workers. In the United
States, worker lawsuits serve a similar function. One big downside of laws that protect workers’
jobs is that they make employers more reluctant to hire in the first place. You’re less likely
to give a worker a chance if you know you’ll be stuck with him even if he disappoints you. But there’s an even deeper problem with laws
protecting workers’ jobs. Suppose the law had no unintended side effects. Everyone who
wants a job for life, gets a job for life. What happens when demand for a worker’s skills
dries up? What happens when new technology makes a job obsolete? A lot of workers will
keep drawing a paycheck to produce little or nothing of value. And our whole society
will be poorer as a result. It’s tempting to say, It’s a stagnant society,
but at least it’s a secure society. But it’s not even that. In the long run, stagnation
is deadly. When disasters hit, rich societies have the spare resources to cushion the blow.
Rich societies have the flexibility to adapt. The best social insurance is to make more
progress not to make more work.

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  1. Says the tenyer professor who will keep his job for life. That is a lot of talk coming from a guy who gets a pay check. Not saying he isn't right just saying that I want a job and can't get one, recession over my ass.

  2. I had this exact argument with my brother yesterday. I couldn't explain exactly what jobs would be filled by the people laid off b technology, so he wasn't convinced that I was right.

  3. Great video, and an excellent argument for ephemeralization, a word created by the late Buckminster Fuller to mean doing more with less, versus say conservation which means doing the same with less. One great example of ephemeralization is the replacement of thousands of tons of cable laid along the seabed between continents for communications with a half ton satellite.

  4. Horses actually have about 30 horse power.

    The horsepower measurement of automobiles includes the weight of the vehicle itself when determining how much it can pull, but the measurement for horses does not.

  5. Too bad only business owners benefit from increased productivity. Productivity rises and rises and wages stay flat.

  6. Your position has a fatal flaw. Your argument makes the assumption that all progress/Increase of production is necessarily good. A few example would be nuclear power, some medicines and computers. The negative element of these items are outweighting the positive over time. Granted, society was partially unaware at the time.

  7. 'Baron Charles Dupin, said to be the torch of learning among the peerage in the science of economics, accuses the railroads of injuring navigation; and it is certainly natural for a swifter conveyance to lessen the use of a comparatively less efficient one. But railroads can harm shipping only by taking away its business; they can take away its business only by doing the job of transportation more cheaply; and they can transport goods more cheaply only by lowering the ratio of the effort applied to the result obtained, since this is precisely what constitutes low cost. Thus, when Baron Dupin deplores this diminution in the labor employed to obtain a given result, he is following the doctrine of Sisyphism. Logically, since he prefers the ship to the train, he ought to prefer the wagon to the ship, the packsaddle to the wagon, and the basket to every other known means of transport, for it is the one that demands the most labor for the least result.' – Frédéric Bastiat, 'Economic Sophisms'

  8. I would be hesitant to use the word progress, because it's too close too progressive. I would rather use the word advance.

  9. Serious question: Does "good for society" equal "good for everyone?" Hypothetically speaking, farmer John loses his job to an automated process. Society as a whole benefits since they still have the same output from the automated process, without the cost of paying John. But John is (at least right this moment) worse off. He has no job, less self-worth, and in his desperation becomes more likely to turn to crime to put food on the table. So what is the solution? Is the answer a steadily increasing welfare state, a-la Vonnegut's Player Piano?

  10. I think just about everyone would agree that it's good to make real progress, but people get protectionist when they see transition/retooling costs. Advancement could cause people to start over at the bottom of the totem pole in a new line of work, right? Then they'd have to bear the costs of retraining and acquiring years of work experience before they're once again skilled, productive workers. When you throw in all kinds of what-ifs in regard to a person's circumstances, such as age, health, obligations, wealth, etc., the displacement from advancement might be excruciating. I'd love to know what Caplan has to say about this. I'd appreciate any other commenter's thoughts as well.

  11. You can tell how better our "ways of growing food, fertilizing, seeds, and energy sources" are by how 'healthy' our population is. We are sooo advanced, just look at our belt lines.
     

  12. “The problem of our day is an inner deadening, an increasing deployed defense against the stresses of living in an overbuilt industrialized civilization saturated by intrusive advertising and media, unregulated toxic chemicals, unhealthy food, parasitic business practices, time-stressed living, and (in the United States) a heart-warping culture of perpetual war and relentlessly mindless political propaganda. No wonder so many of us disconnect, feel nothing, and resort to medication or other addictions, inflicting violence upon ourselves in an attempt to temporarily drown our external hostilities.” -Linda Buzzell and Craig Chalquist

    I'd say this quote says that a good portion of our stresses come from so-called progress. Does money equal progress? Do 'things' equal progress? 

  13. Luddites may have faded out early in the 1800's, but their anti-advancement, machine-smashing mindset is still very much alive and well today.

  14. A man with a job for life, fully funded by the taxpaying public, and yet producing almost nothing of value, lecturing us on the dangers of giving people who produce nothing of value publicly funded jobs for life.  Ah, that's rich.

  15. if you are the boss, productivity is always better than work. but it's not the same if you are the worker. when a work is lost due to higher productivity, the money gained doesn't go to the worker, it goes to the boss. that's the problem. we are not a socialist community, we do not distribute wealth equally.

  16. I was at the store the other day and was amazed at the size, scope, and variety found in the frozen food aisle.  You can buy literally a score of precooked meals, place them in the nuker, heat it for five or so minutes, and boom: you have yourself a relatively nutritious, fairly tasty, and very speedy warm meal to satiate your hunger.  I understand that fresh food is better and more important, but the way that technology has made the way we eat so efficient is captivating.

  17. The make-work bias is why a basic income scheme for every citizen, funded through the capture of economic rent, would be a very good idea. It would decouple work from income, by allowing for a minimum standard of living whether or not work is available, and hence reduce the resistance to job losses. Workers losing their jobs that face nothing but pitiful and degrading welfare systems (if anything) will be more resistant to changes in the labor force that improve the economy as a whole and promote progress than workers who upon losing their jobs, may still live comfortably until they retrain for a new job, or even start their own business in a growing sector of the economy.

    A steady flow of income would ensure that more people have sufficient resources to start a business, and have sufficient resources to ride out the early stages of a small business where profits are low and costs are high. A basic income would also mean that unavoidable failure is not catastrophic; a person with a failed business could still support themselves and, when ready, give business another go, using the lessons they have learned from their mistakes. A basic income would not only make labor force transition easier, but increase the demand for labor as well (from small business), maintaining plentiful work and high wages in the face of structural economic change.

    However, a basic income funded by taxes on production (eg. income taxes, sales taxes, company taxes) would be a bad idea. Implement charges on the holding of land, the holding of money, the emission of pollution, and the extraction of natural resources, and use the funds to COMPLETELY ELIMINATE income taxes, sales taxes, company taxes and all other taxes on production and hard work. Once the economy has grown sufficiently to massively increase the revenue gained from the alternative income sources based on economic rent that I have listed previously, this surplus may be distributed to every citizen, to increase the welfare of each individual without impinging on the liberty on any other individual.

  18. The ultimate goal is to reach a point where unemployment is 100%, but yet we're all still fed and happy. That's a utopia, that will only be possible if we can push technology far enough to make it so. Until then, we need the most productive and efficient jobs to get there. It's easy to get 0% unemployment. It's hard to do so in a way that benefits society. 

  19. Ah yes, another age old strawman of Technological Unemployment proffered up by the Austrian School of Economics from ignoring the statistical reality that we're entering into another point in our era yet again where automation will be replacing people in mass.

  20. i really dislike this attitude in America about the "takers" because that makes this even worse, in stead of putting someone on welfare or paying for their cost of living. "no way, they can't just sit around and do nothing, they need to work!!! leaches!!" 
    so instead we pay them to do meaningless and often wasteful tasks to make them seem important. take the military as an example, people are building tanks that not even the pentagon wants, so that these tanks can sit in the California desert, rusting and rotting. id much rather be paying them to do nothing and stop wasting the resources, or paying them to do something constructive at the least, give them job training or something, pay them to clean the streets and pick up trash. even paying someone 15$ an hour to pick up trash is better then paying them to create a giant scrap yard. 

  21. Don't worry all you naysayers out there.  It will soon be illegal,  to express opinions like this.  Any comments to the contrary of the government position will be electronically tagged, and the person behind them will be investigated for thought crime..  Or at least audited…..
    Maybe its best.  After all, people who watch and subscribe to this and other channels like this are clearly climate change deniers, one percentiles, waging a war on women, hate gays, and likely have a tinge of racism in their comments.  Best to have the gov keep an eye on them.  Sheesh…..

  22. Completely correct, I do not see how people do not understand this, coming from the UK where legislation is massive.

  23. The world's problems at its root stem from humans being, greedy, jelaous, doubtful, fearful, weak, and cowardly. So long as these issues are not addressed the problems will stick.

  24. Collectively, it's valid. However for one individual who lost his job, he doesn't give a crap about about how iPads have changed peoples lives. Excess labor<——Hint,hint

  25. On a macro scale, it's valid. However one individual who lost his job doesn't give a crap about the tractor feeds the town faster. What really drives this bias is self-interest.

  26. As a psychologist I understand bias and your arguments are examples of your own self serving bias for purely libertarian economics. 

  27. This is so naive and shallow, it is difficult to take seriously.This is tilting at windmills instead of at real enemies.It is the same attitude as that of a general who boasts that he won the battle and ignores the fact that thousands of soldiers died.

  28. Actually when the tractor comes to mind… why didnt more people just start farms instead we could all be farmers still and export the excess food ROFL

  29. Well, if you define progress as maximising income and ease for a minority and it doesn't matter how many people get hurt in achieving this progress, then let's kill off all those who are not economically contributing and not likely to, then you are accepting Hitler's definition; and if you define ethics as what the population can be persuaded to accept however harsh, then again it is obvious that you are promoting NAZI views and disguising it as intellectual economics. The problem for any decent society is how to promote and encourage progress that is of social benefit and shares the economic benefits across all society. "Ill fares the land to fidden evils prey, where wealth accumulates, and men decay."

  30. You say that it isn't just handwaving.  But it is just that.  Certainly, we are better off if someone is able to do something productive rather than sit at a desk.  But we are no better off if we just keep telling him "sorry, no jobs," or worse, "you must be lazy if you can't find a job when no jobs are available."

    It's not that people want to keep any particular job around.  People are legitimately concerned about going hungry.  I will always be biased in favor of me being able to eat.  You can call something "progress" all you want.  But if the result is that I starve, I won't like it and I won't support it.

    My preferred solution would be to guarantee everyone a subsistence income, whether he can find a job or not.  If the jobs aren't there, the people shouldn't be starving.  The combination of people starving and food rotting away in silos is just unacceptable.  But the people who want slaves for workers will come up with excuses like "dependent on government."  It isn't that these people object to people being dependent.  They want people dependent on them — so they can pull the rug out from under them at any time.  It creates a slavery in all but name.

  31. Progress is great and all, but there wasn't as much people on the planet back then than there is now. And also no job means no bread on the table. No bread on the table means no progression.

  32. For n individuals who suffer from cyclical unemployment, why not use the net benefit of increased consumption from cheaper goods/services/efficiency gains (taxes) to incentivize training programs for employers to hire [such people] by lowering the cost of search/employment activities if labour laws are more laxed/lenient. 

  33. Even if 500 people go out of work, the fact that millions have gained better/advanced technology, is a fact of net economic benefit superior to the real wages of such workers. If we channel those taxes from those products/services of increased consumption to training programs for businesses in new fields, we can accelerate progress and avoid no/low-income individuals from lack of valuable skills.

  34. Instead of employment insurance, you can say, hey "business", if you hire this worker we will subsidize X$ of wages until he or she gains sufficient value of skills over 2 years thereby giving you an overall lower cost of operations and giving the person the skills needed to be more productive.

  35. While no doubt society may be $8,000 poorer due to this training program per person, it is more worthwhile than having the person get a $30,000 + salary while doing nothing productive / of use / valued skill. And this subsidy can decrease with increased proportion to skills / experience gain within an industry for a particular person, making the net benefit very worthwhile. 

  36. First the first 3 months, subsidies is equal to 40% of nominal wage rebated provided that the employer has hired such a person for a length of period. 
    For the next 3 months, subsidies is equal to 35% of nominal wage.
    For the next 6 months, subsidies is equal to 30% of nominal wage.
    For the next 6 months, subsidies is equal to 25% of nominal wage.
    For the last 6 months, subsidies is equal to 20% of nominal wage.

  37. The public sector is capable of creating more progress with less unemployment.  Let's fire the capitalists.

  38. This goes hand in hand with keeping prices elevated in order to sustain one company's, or an entire country's business. I just had a discussion with someone regarding plunging oil prices and how they were saying how "terrible" it was for the countries who rely on their exports of oil. It's a rather harsh reality but it's not about them, it's about the greater good and the benefit of everyone else if the buyers of oil can get it elsewhere cheaper. Not only will they save money on oil but they can use the money they save to buy other things. Keeping the price high does nothing but waste time, energy and valuable resources.

  39. The make-work bias results from the structure of employment itself: while a society will become richer overall with more innovations, each innovation disrupts current jobs. People relying on those jobs for income are, of course, going to be concerned or afraid. I think just about all reasonable people are in support of automation itself; what they disagree on is how to handle the side effects, and that's starting to become a widespread concern these days, with various solutions proposed. See CGP Grey's video 'Humans Need Not Apply' for information of how automation is going.

    So, you have people proposing basic income, negative income tax, letting the market sort things out, transition to socialism…and it gets heated because economics is hard.

  40. I don't think we should stem progress at all. I work in a supermarket and I'm so fucking tired of hearing people complain about self-serve.
    My problem is that humanity has never faced job replacement the likes of which it's about to face in the next 100 years. As AI improves, we draw nearer and nearer to simulating the human brain but in a way that doesn't get hungry or need sleep.
    What happens to a society in which 100% of jobs get replaced? No new job can come along that humans will excel at because anything humans can do, robots can do better and for free. What happens to that society?

  41. Alright here is the problem with this, we have no back ups if millions of people lose their jobs and are unable to find work because technology has entirely replaced them. What them? With out humans doing jobs what are we supposed to be doing? If productivity is the only good measure of an economy, wouldn't a 75% unemployment be a good thing if your production was up really far? My question is and keeps being what about that 75% of unemployable people? How does your economy fare if there is that much dead weight on the economy? I think we need to reinvent economics because it is no longer going to be about supply and demand in the traditional sense.

  42. Supply and demand. People will not be able to work and they will demand a supply of money. Democracy will be forced to comply and supply a basic income. The more people not able to find a job, or only qualifying for jobs he or she is unable to do or train for, or people only able to qualify for unpleasant (dehumanizing) jobs then these people will vote for (or worse, protest in favor of) a basic income. Enough people being left marginalized and desperate, the more the system will experience electoral pressure to implement basic income.

    So either the above hypothesis is correct (and it isn't) OR in a few decades all the developed world will offer a modest but humane basic income of some sort to all its citizens living in the respective country. In some countries this BI will be borderline inhumanely low and those countries will be dystopian. In some cases the basic incomes will be higher, but will come with barriers and bureaucracy. Immigrants will not (immediately) get a basic income and will find themselves a poor underclass in their country of choice, but countries will close migrations treaties offering citizens of associated treaty countries a basic income.

    The developing world will not be able to generate a basic income and will turn to a dystopian hell. There will be no work for anyone in developing countries and all land to grow food will be extremely bad soil, very dry with climate change and over-exploited. People will try to migrate but there will be gruesome migrations barriers, in many case lethal ones.

    Lots of people will say they stand for freedom, but they will in fact me propertists – they will do what they can to defend their property and demand the state defend their property. Their will be a constant tug of war in politics between propertists and freestuffists, but the freestuffists will be massively in the majority in most countries and will use technologies and apps to organize themselves in protest, unions, anon cells, radical progressive parties, lobbies, trolls, vandals and – in some cases – terrorists. Propertists will claim to be about freedom (their freedom and the freedom to do with their property as they please and to make sure nobody else can touch their stuff) and will become steadily more desperate and downright mean. They will lie and claim there is plenty of work and opportunity, but it will be just political rhetoric (i.e. lying) because they hate people taking their stuff because people need stuff to survive.

    At some point this system will evolve to a completely new synthesis between propertism and freestuffism, probably somewhere 2050-ish.

  43. One thing to note is that the importance of inventions seems to be declining, and the technological sophistication must increase constantly simply for the invention to have an impact. Compare an iPhone to a 19th century invention like a car. The iPhone clearly has more advanced technology; but the car made more of a difference to people, and to history. Even when it comes to medical invention- most amazing new treatments make only a small dent in the general life expectancy, compared to antibiotics or modern understanding of germs which added many years.
    Many new inventions on the market seem to fill wants rather than needs. Either that, or they create their own needs like a cellphone. These observations may not directly answer what the video is saying, but they are something to think about.

  44. Well sometimes the government needs to step up on its research IMO. Heres what new technology will hold:

    1.) Moving 3D printers – Instead of 3D printers being fixed in place, they will move around to print things in 3D allowing large objects like houses to be printed anywhere. The 3D printers will also print other 3D printers causing exponential increase in objects and houses this will demonitize construction.

    2.) Said moving 3D printers will create windmills and lenses to demonitize energy

    3.) Remote-controlled robots: Good brain computer interfaces will allow people to control computers and robots remotely very well. This allows people to live in somewheer cheap like Vietnam while working in the US. This will make labor much much cheaper.

    4.) AI will take over jobs like lifting things, health checkups, education, since exponential increases in computer vision, language decoding

    5.) The government may need to impose a 20 hour work week hmm

  45. I heard this story from some video:

    An American businessman goes to communist China. A governor in china takes the American to a desert area where many people are digging dirt with shovels, and tells the American "we are building a new underground system here". The businessman asks "why not use tractors to dig instead of people? You will finish the work way faster if you did" to which the governor replies "we are creating jobs for people". Then the businessman says " if it is jobs you want to make, take away their shovels, and give them spoons"

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