So if I invest money into a manufacturing process and build an automated factory that can do with 100 people what used to take 500 people, and then I therefore lower costs to all the people buying things from me...that's now bad? And I get to pay an extra special wealth tax for my trouble?
Yes. You built an automated factory by accruing profits originally from workers. That profit either needs to be given back to the workers by compensation or taxation.
You specifically didn't do much. Your workers did. If they make you rich and lose their jobs in the process, you pay them back.
Mean productivity has increased while median wages have stayed flat. What people think is a story about wages decoupling from productivity is actually a story about the variation of productivity among workers getting higher.
You can tell this is true because labor's share of income (vs capital's share) has remained fairly constant. It's the distribution of this share between different workers that has changed.
Do you have any examples of these jobs that are now more vs less productive? I'd say the average Starbucks / fast food worker are significantly more productive while making less comparatively.
Labor's share of income vs capital's has not remained constant. Not even close.
The graph in your link is reproduced almost exactly in the link I shared (as chart 1). It doesn't take into account non wage income and a few other things.
Yes, or you will have no one to buy this things from you when everyone will automate everything, then most people would have no job.
System works now because some of the money goes to middle and lower classes, not all is accumulated on the top. If you accumulate all the wealth in the top without any mechanism of distributing it in lower classes then whole system will collapse and you (as someone on top) will probably end up like in other revolutions in human history, hanging up from the tree.
This is an interesting question. In general, if you leave a huge chunk of your population in miserable conditions, at some point they will say, with legitimate reason, that the current system is fucked up, and with no way to remedy that, will not obey the laws any more. e.g. the French and Russian revolutions, as well as Communist Chinese one, were caused by the huge tax burden being placed on the poor while the wealthy often paid very little, or used their political influence to get tax breaks, which left the state broke and unable to raise revenue. A weak state + unhappy populace == revolution. This is why the Chinese government is very concerned with keeping economic growth high. This is why India has 0% tax on farmers/agricultural goods (so the State can't be held responsible for their misery).
This is why Republican/Libertarian efforts to eliminate or reduce Government is so fucking scary. Of course there are legitimate reasons to be concerned with limiting govt. overreach. But the Govt. is a required political social entity and we've gotta keep going. Whats baffling to me is that so many wealthy people don't get this. If the Government goes away, their wealth is gonna get torched/taken.
Anyways to answer your question: I don't know what the proportion would be, but likely indicators would be... unemployment level and uninsured rates. People with no healthcare and no jobs/money === desperate people whose survival instincts will kick in.
Isn't the anarcho capitalist theory that they can hire their own private security to protect their wealth? I imagine it would be like multiple Mafias running things.
It's generally held that government is a local monopoly on violence. Anarchy is in these terms an unstable local minimum, and the first two thugs who agree not to plunder each other's pockets have started the cycle of government again. Generally I think corporations and (other) criminal organizations rely fairly heavily on the existence of some state, even a nominal one. Criminal activity when you are the law is simply bad governance. Either way, you can't construct a society based on a logical contradiction.
> Only the case if all goods are the result of automated factories, which isn't true.
And which physical goods production can't be automated? Probably 99% can. There are first farms that are already fully automated, so whole chain along with transportation can be automated in future. You have any examples of whole industries that can't be automated? Because I can't think of any that can't, it's only matter of getting cheap technology to do that.
> And if it were, you wouldn't need anyone to buy anything - whatever you might want can be made by your factories
This is false, you don't have infinite amount of resources and for sure you don't have enough money and space to build factories for "whatever you might want".
I disagree. The aviation industry is pretty far ahead of the game in terms of automation - you book and check in online these days, much of a pilots work is automated, baggage handling is semi automated, yet the industry still needs loads of staff. You can automate 90% of a job, but in the end there is some stuff its just easier to get a human to do, or more to oversee.
But in any case - A hand-made item? Which apparently adds worth..
> have any examples of whole industries that can't be automated?
depends what you mean - at what technology level?
Can modelling be automated? maybe. Can barista-ing be automated? Maybe. Can programming? To some degree..
> you don't have infinite amount of resources
luckily, most needs are finite.
> you don't have enough money and space to build factories
The premise is everything you want being automated. If space/land is not automated, that breaks the premise. So there is something you'd pay people to obtain - land rights. A short transfer of all land to the elites later, and you have enough space for anything.
This is just a marketing gimmick (in case of products that we have technology to produce also by machines) in the times we live in to make you pay more for a product.
> Why just physical goods?
Because you can automate production of almost all physical goods. A lot of services also, but to certain degree, simple tasks only, state space is just too big in case of more complex services for today technology.
> depends what you mean - at what technology level?
Can modelling be automated? maybe. Can barista-ing be automated? Maybe. Can programming? To some degree..
That's why I was not writing about services but physical goods because in case of services it hugely depends, some can't be automated with our current understanding of the world around us.
> luckily, most needs are finite.
This is false.
'The world has enough for everyone's need, but not enough for everyone's greed.' - Gandhi
You need to take humans into the equation. Make everything for free because it's automated and you will see 7 billion orders for Ferrari, Lamborghini etc. You have enough factories to make those in 10 years? 20 years? 100 years? Take physics into equation and amount of factories/transportation for all the resources and parts to make those products, just those products, what about other things? This will not scale on earth.
> So there is something you'd pay people to obtain - land rights.
Most people on earth do not own any land at all.
> A short transfer of all land to the elites later, and you have enough space for anything.
Read history, this would end like it always do, elites that would try that would be eliminated and replaced with new elites from proletariat. Remember that elites are protected by police and law only because other people allow that, not because this is something written in stone. Earth was already ruled by kings, they owned most of the lands, look how it ended.
as are entire industries. Human life is ultimately meaningless, so all human pursuits are too. Restricting this argument to utilitarian good begs the question - to what aim? Aesthetic good exist at the top of any manufacturing chain.
> Because you can automate production of almost all physical goods
But, wasn't the argument a "what if" scenario in which no-one could get jobs? So physical goods are all automated - just means jobs exist in other areas now.
> - Gandhi
I don't rate the guy, but it sounds like he's talking about the worlds current resources, not future resources.
> You have enough factories to make those in 10 years?
everything is automated, remember? So the factories are made by factory-factories...
> Read history
I don't buy this kind of prediction based on historical analysis.
> elites are protected by police
police have always been human - will this be true in the future?
> Earth was already ruled by kings, they owned most of the lands, look how it ended.
> You want to talk about philosophy ? Meaning of life?
No, since I just stated there is none.
I disagree this goes beyond the topic - If you want to disregard things as "meaningless", anything can ultimately be disregarded. Even basics (food shelter etc) serve no purpose that to preserve life - and what is the meaning in that? All human pursuit is meaningless, as such, all things are for their own sake. So, what are your assumptions about what does, and does not have worth?
> Amount of ignorance in this comment is staggering
ok. I don't care what he meant, because the fact he said it is meaningless. Why not argue for yourself than appealing to authority?
If I "don't get it", it's because you decided to communicate with a vague quote.
> I still see power, so who cares what they are called? Modern elites are far more powerful.
Ah, and another "who cares". You will always see in some form power because this is how world model looks like and how society works, the difference is type of power and it's influence on society, but to know that you would need to know history.
> "no one to buy this things from you when everyone will automate everything, then most people would have no job" --
Do you see difference between what you wrote in last comment which is "no-one could get jobs" and what I wrote which is "MOST PEOPLE would have no job" ?
Do you see the difference? "no-one" vs "most" - you see it? Or you "don't care" and it's "meaningless" ? Or there is no difference because it would mean you are wrong?
I need to waste my time to show things like that?
> since I said I didn't care for historical analysis
And another "I didn't care"..
> Historicism has is generally not seen as valuable or valid anymore; if you disagree the burden is on you to demonstrate otherwise.
> You claim I'm ignorant, then provide nothing more.
I don't need to really look far. Read this article from yesterday, it's historical analysis that proves your ignorance:
Based on this analysis you could predict exact effects of globalism that we see now in economy. But maybe it's also "meaningless" ? Because I am "appealing to another authority" ? Or you "don't care" ? Or because this would prove you are an ignorant.
"arrogance" ? Call it whatever you want, I call things how I see them, you can't stand raw critic about yourself? Then you have problems.
I don't waste my time to argue with ignorants that write things like "I don't care what he meant, because the fact he said it is meaningless" when they do not understand what someone else is writing to them or they don't have any anti-arguments. Your attitude to authority only shows how big your ego is. I know how this discussion will end, with more "I don't care" and "meaningless" instead of real arguments. I've seen it many times. So why I should waste my time on it? I have really better things to do than arguing with ignorants that claim history is irrelevant because they don't know it, at the same time they ate all the brains and write not to "appeal to authority".
You need to know past to understand present and plan for future.
You know why WWII happened? You know why World Trade Organization exist? You know why law is written the way it is? You need to know history to know that. But you probably know better and it's all "meaningless".
"Those who do not remember the past are condemned to repeat it." - that's why historical analysis is so important and that's why you are ignorant.
You will probably understand that I've just finished writing/reading in this thread for good and this was my last message to you. I've explained why.
Your posts would be a lot shorter if you stated what you thought, instead of speculating of what I think.
> And another "I didn't care"..
So? What's your point? I'm repeating myself because you don't seem to get it. "I don't care for historical analysis" means I don't value it. I won't start to value it, just because you keep claiming it has value.
> it's historical analysis that proves your ignorance
How? What do you mean by "proves"? Can you show me the parts proving the Stanford paragraph wrong?
> But maybe it's also "meaningless"
again, why not spend more time describing it's meaning, than speculating on what I think.
> Because I am "appealing to another authority" ?
Yes,feel like it, that you are appealing to the Guardian. You point to an entire article as proof. I pointed to a specific paragraph, instead of quoting the whole thing which I believe characterises my opinion well. If you disagree, please state what you disagree with.
> I call things how I see them
You don't have to say anything that pops into you mind, if there are no reasons for them that you can think of. If you have reasons, provide those instead.
> can't stand raw critic about yourself? Then you have problems
It's called personal attack/ad-hom, and it's generally considered bad form. No one like nonconstructive criticism, especially that motivated by spite.
> when they do not understand what someone else is writing to them
I don't care because the burden to provide an argument is on you. The burden is not on me to read the works of Gandi to find one, when you brought it up.
> Your attitude to authority only shows how big your ego is
What does this mean? Is Gandi an "authority"?
> I know how this discussion will end, with more "I don't care" and "meaningless" instead of real arguments.
The argument is it doesn't matter what Gandi says, if the meaning isn't communicated. This is a nuanced argument. Some of the things you've written here suggest to me that English isn't your first language, so maybe you are not fully understanding what I write?
> ignorants that claim history is irrelevant because they don't know it
I never claimed that "history is irrelevant because [I] don't know it".
> You know why law is written the way it is? You need to know history to know that.
Laws are written by individuals, often motivated by specific events. Specific events can be correlated with events preceding them. But these kind of stories are less useful in predicting the future, which is what Historicism is.
> "Those who do not remember the past are condemned to repeat it." - that's why historical analysis is so important and that's why you are ignorant.
Are quotes proof too? You know quotes aren't even consistent?
In some ways, yes, it actually is bad. Depends on your perspective.
As a very simple example, imagine that you were able to fully automate, such that you required zero workers. Imagine further that all other businesses did the same.
If literally all imaginable human work was 100% automated then the cost of goods and services compared to today would be tiny. The poorest member of that society would live like a king from our present day world.
The problem is, the plebians would not be able to get a job to pay for the goods/services no matter how cheap they may become.
If you had robots making everything you could possibly want, why would you bother selling any of it to people who don't have any land, natural resources, or rare skills? They wouldn't have anything you want.
Why bother selling it at all? You could just give away the things for free. The marginal cost of an item is just the energy needed to produce it. With robots building solar panels or something like that, those costs are negligible.
If you can even automate giving things away without worrying about people hacking/stealing/vandalizing your robots, then wouldn't it also be likely for you to spend all your resources on combat robots to take resources/land from other robot owners instead of wasting them on people that aren't giving you anything you want?
Those are all current resources. The general currency is "energy" and "materials", and even materials are based on the energy in creating them (I don't think REEs are that rare, but they are hard to process).
There is no research to even suggest that we are going to be able to synthesize one type of matter to another arbitrary type without expending an absurd amount of energy, making it useless to do.
The idea that you could do something like that is even more outlandish than having robots that could automate everything a human could.
>If literally all imaginable human work was 100% automated then the cost of goods and services compared to today would be tiny
Well, that assumption is pretty general and doesn't account for natural resources/raw materials, energy inputs required for production, or other factors. It would also vary per sector, such that the statement is far from universally true.
>The poorest member of that society would live like a king from our present day world
But, regardless, there would be some cost for goods. How do you propose the now 100% unemployed population pay for anything, let alone "live like kings"?
The answer is that you would need to devise a method of wealth distribution that is orthogonal to capitalism. Say, for instance, a tax that subsidizes everyone else. That, of course, would not be capitalism.
The point is that wage labor is fundamental to capitalism. Somewhere between our present state and 100% automation, a capitalist system requires so much intervention that it breaks down.
I think taxing property ownership is the only natural conclusion i can draw from such an ultimate end-state. If you own any property, you pay a tax, and that tax is fed to those who do not own property, in such a way that they survive.
The cost would be low, but since nobody would have a job the prices would be astronomical. Multiply people's purchasing power by a million, great, but a million times zero is still zero.
>The poorest member of that society would live like a king from our present day world.
You forget things such as: meaningful work, respect from society, crime, cultural differences between the poor and the rich, interclass upward mobility (see any sociology textbook), intellectual stimulation.
Actually, I like the idea of work. But, at some point, we will have to "artificially" employ people or, of course, implement a UBI. But, even with the latter, we'll have to re-imagine our relationship to work and its role as a source of self-worth.
There's this idea that without work, we'd all just instantly self-actualize and write poetry or paint masterpieces. Not sure why we imagine this vs. the more likely reality that we'd instead sit around sharing cat memes, making heinous YouTube comments, and generally getting dumber.
I'm not sure if society is really ready for a post-work world.
Well, that "artificial" employment I mentioned would presumably be at least somewhat fulfilling--i.e. pretty much what you see today. By artificial, I didn't mean running in hamster wheels or digging holes. I meant more that we employ people for jobs that we could technically automate.
Of course, that's not ideal either. My main point was that a UBI (or not having to work) wouldn't be the instant panacea that some suggest, leading to a sudden heightening of the human race as we are collectively released to pursue our higher purposes.
It's not bad. If I had my way (and implementation weren't impractical), you would still pay a special tax, specifically balanced to cover for the unemployment benefits of the 400 workers you fired (or never hired in the first place).
Of course not all of them will be unemployed, so you only have to pay for 100 + (unemployment rate) × 400 people.
If the cost of your efficiency increase is not too high, you get to pocket the difference.
Unless your automation is as expensive as hundreds of workers, this will likely still be a large sum.
What if I don't build the actual factory. What if I just have the idea about how to improve the process and publish a paper about it. Then someone else actually builds the factory?
Then who pays the tax?
What if I invent a whole new product category that obsoletes a whole industry? Not a lot of people manufacturing typewriters anymore.
What if I invent a cheaper way to ship goods from China making it easier to shift manufacturing there? Who pays the tax then?
What if I'm an employee at the factory and I figure out a better way of doing things so that I can take on additional responsibility so when Bob (the guy next to me) retires we don't have to hire a replacement? Then do I pay?
And how long does this tax last? Forever? Are people still paying taxes for all the farmers we don't have to have anymore?
How confident are you that you can really write tax rules that make sense for the infinite number of scenarios via which productivity is enhanced in a modern economy?
I said myself that implementation wouldn't be practical, so this is more of a thought experiment. But in all these cases, I think the person who profits from the change should also bear the cost it has on others. So if you invent a way to increase productivity, there is no need to pay; but if your employer uses it to make their workers redundant, they should provide for their continued livelihood. Of course this doesn't really work when a different industry is obliterated (which is why this is impractical).
> And how long does this tax last? Forever? Are people still paying taxes for all the farmers we don't have to have anymore?
Assume for a moment that being a farmer were hereditary and they couldn't do anything else anyone would find of value. Then when you replace all of them by machines, you make huge profit, but also leave hundreds of people without income. In such a case, I think it only fair that the farmers and their descendants be provided for indefinitely.
That this tips the scale against automation is not exactly bad: if the farmers have to be provided for anyway, additionally maintaining machines to do work they could do just as well is a further cost that should be weighted against the benefits.
However, in reality most people can learn to do other work, so automation can still end up a net positive, even when the needs of the displaced workers are taken into account.
I guess the problem will solve itself when workers will either employ themselves as revolutionaries and looters, or the beneficiaries of automation pay the equivalent of this tax to prevent this from happening.
Wow! Gotcha! Turns out modern economies are complex. Who knew?
But our economic system is literally grinding to a halt, which means it's not exactly perfect. I for one welcome suggestions, even if they're only slightly less imperfect.
There's a slight problem with the labor force such that if you let people select their own major, there are currently about twice as many state-U education major grads as there are K12 openings per year, at least in my state. This is why you can hire a newly graduated teacher for $17K/yr while still turning away all but the upper half of applicants.
Of course you could only fund the re-education of certain job fields, centrally controlled economy style, but that never worked well for the Soviets and you'd likely end up with political goals like flooding the programming market with really bad programmers who none the less work for $7.25/hr (or less) because of the "shortage". It might be possible to actually destroy economic sectors by flooding them with unqualified people. Would you go to the hospital if you knew the doctors were intentionally uneducated?
The problem with re education is it isn't likely to be any more successful in the long run than non-re education. Its the same people with the same brainpower operating off the same observed signals. If a quarter of the population was improperly educated the last time they went to school, the result of re-education is virtually certain to be a quarter of the population being differently improperly educated. Its sort of like handing out money to rebuild housing in flood plains, you know you're just going to be handing out more money to the same people in a couple years.
If we automate most of the manufacturing and other low skill jobs then you will be left with part of society that do not have predispositions/are not smart enough for creative/high skill jobs. And this accounts for a LOT of people. Education will not help in that, this are the people that couldn't get through education system in the first place, that's why they don't have any/low education.
A lot of service jobs are driven out by high cost of doing business; entrenched existing businesses are the source of re-election funding.
My neighbor bakes nice cookies. I have programmer money. You can guess whats supposed to happen here, but legally can't happen. Some education might help a little with WRT food safety, but it doesn't matter because the purpose of the government is to prevent her from going into the cookie baking business and compete with existing processed food factories.
The ultimate micro-brew isn't some multinational corporation spending lots of money on branding, but its the guy down the block. That of course is incredibly illegal, because the multinational corporation decides whats legal or illegal.
My wife's favorite hairdresser became unemployed due to the cost of health insurance; for awhile she cut hair at home on the side, but the .gov comes down heavy on that for obvious financial reasons.
Some sort of ideal world for lower IQ / lower functioning people would require better government. Rather than the government existing solely to protect Nabisco Inc sales, you'd have to refocus it entirely on safety and small business support services so my neighbor can sell cookies.
If my neighbor did all the homemade baked goods for my entire subdivision, I'm not entirely sure she's be poor, either. If she ran a 50% profit margin and everyone in my subdivision dropped $2/day for baked goods service (like she'd hand deliver you a hot loaf of bread every day?) that would be 6012500*0.50=$180K profit per year, not bad for an area where the median household income is a hair under $60K. Of course the purpose of the government it to annihilate small businesses in favor of large businesses.
Your examples are poorly chosen, but the general argument that government regulations exist to protect entrenched business interests is nonsense. Regulations exist for consumer protection, and regulatory compliance is highly unlikely to be the biggest barrier to entry in any business category.
They may have originally been created to protect consumers, but they've been manipulated and lobbied for so long that they now exist to protect entrenched business interests.
Repeating the argument does not make it more correct. If you're trying to contradict the idea that government regulations are not a large barrier to entry you might show some evidence, preferably in the form of a peer-reviewed study. Your study should also compare the externalized costs of not having said regulations. Even better would be to admit that you've been drawn into a ridiculous position and exit the conversation with as much grace as you can muster.
Samuel Johnson springs to mind, but if you'd like, substitute "contradict the argument of my previous post". I would prefer that phrasing, but I've often been disappointed at the tendency of people to take issue with small ambiguities or details at the expense of the actual argument.
No need for any ability to avoid it. You could replace nearly all federal taxation with a 50 basis point net asset value annual tax.
I for one would rather pay 0.5% of my book value than the vastly larger amount in income taxes I pay. And it's a small enough value I think even extremely thin margin businesses could probably afford it.
Everyone on HN says "People would just flee" but in the end almost all the value in the US is real assets i.e. you can't move a physical building overseas.
Except that -- as a practical matter
-- identifying all assets and assigning a dollar-amount to each one requires enormous overhead and intervention.
This is even more true when you consider the incentives people have for hiding assets and cheating the system, and their ability to do it over many years or even cooperatively.
That's one major benefit of the income tax option, that measurement is actually easier, even when you consider all of those non-wage incomes.
This is absolutely true, I was thinking you could certainly structure it differently than the annual tax system we have now, and certainly in similar property taxes there's an assessment problem.
I don't have any answers for those things, but it's an interesting thought experiment - what would such a thing look like for relatively easily valued assets vs very difficult to value assets, etc
Perhaps you could simply structure it as a transactional cost, but of course, that causes overhead on every transaction. Backdating would be ruinous and cause people a strong incentive to transact often which is probably perverse.
To be honest I just back of the enveloped it, taking into account the stated revenue for the entire federal government and the putative value of all real, physical or financial assets in the continental US. It would be somewhere in that order of magnitude for sure.
I think the larger question is the implication that (assuming we moved to a purely wealth tax), there's a minimum rate of return on wealth - this is already functionally true, but it sets an interesting floor to the return on investment for an asset.
I'm by no means a financial wizard, I'm sure there are huge flaws in the idea I can't see after an hour's thought, I was just playing with the idea, but it seems like it solves a lot of the problems inherent in income taxation - different entities (people, corporations, foreign investors, etc) being taxed at different rates, the relative spending ratios of various income brackets, etc.
It follows essentially a similar line of thought as the land value taxes, except of course applying to all assets.
Sitting on money isn't profitable either. Equity investment is a risk, and simply saving it is a loss (due to inflation). It's just that businesses don't _need_ to spend more on payroll to be successful, or they don't see the relationship of that investment to payoff vs. any other investment they could make. And to be fair, it _is_ rather fluffy. How many more dollars do you need to pay on a position to get 10x return? Can you even quantify that at the level of a single business? If you pay a lot, but have a shitty workplace culture, you may be just as unproductive as a place that pays less, but has a great culture.
Unfortunately dollars for employees doesn't necessarily translate to return as well as, say, hiring a process manager or automation engineer to try to eliminate the effects of a bad employee.
>> Unfortunately dollars for employees doesn't necessarily translate to return as well as, say, hiring a process manager or automation engineer to try to eliminate the effects of a bad employee.
Like I said, there are corner cases. But most businesses would rather fire an unproductive employee than keep them around just for tax breaks.
I wish. Getting bad apples fire at anything but a retail store or a McDonald is very nearly impossible. And since bad employees attract bad employees, a lot of companies find themselves in a position where they're hiring like crazy and productivity isn't going up. Often, they're oblivious to the root cause.
Seems like the cure is worse than the disease. In addition to incentivizing investments that create more jobs at the expense of those that create less (using robots, software, and all that), the government must now evaluate and track how many jobs all investment vehicles create.
Also, queue massive new industry that specializes in creative job accounting/number fixing in 3, 2, 1...
>> Seems like the cure is worse than the disease. In addition to incentivizing investments that create more jobs at the expense of those that create less
Here's the thing. There is still more money to be made by hiring fewer employees (because employee payroll cost > tax break).
Will it slow some things down? Sure. But it will also disincentivize the current slaughtering of humans.
>> Also, queue massive new industry that specializes in creative job accounting/number fixing in 3, 2, 1...
Oddly enough, Amazon is apparently the only major corporation utterly committed to spending every nickel it earns. Creating plenty of jobs in the process. Keeps the money moving.
Man oh man could you ever game a tax like that. Start a small company and hire your own family at minimum wage would be cheaper than just paying the tax.
That would introduce a ton of perverse incentives.
>> That would introduce a ton of perverse incentives.
That will also solve the unemployment problem and incentivize people to start small businesses. The family members will also have a choice between working minimum wage for their own business or seek a higher paying job, pushing wages higher and higher.
There are corner cases to it but the underlying reasoning is, if your investment is just lying around accruing wealth, it's bullshit wealth.