Efficiency and jobs

[Spike89]

As is usually the case, we focus on the minor causes of our biggest problems and pretend the huge elephant in the room that is the big problem isn't real. Obviously outsourcing and insourcing (immigration and work visas) have an effect on our unemployment figures. However, it is far from true that "we don't make anything here any more" or that immigrants "have taken all our jobs." The elephant is efficiency, and not just people working harder (which I believe they are).

There is nothing new about the industrial revolution and increased productivity, but we've been approaching the tipping point for an economy based on labor. Pre-industrial economies were more based on agricultural assets, i.e., if you had good farm land, you could easily feed your people and extra resources could be used for war, art, and other "non-essential" human needs. Labor was of course a factor, but it wasn't until the industrial revolution that labor (and of course labor's partner/enemy, capital) became a huge part of a nation's economy. Early on, industrialization actually created a huge demand for labor (and capital).

The model took a while to hit a balance point. Early factories required lots and lots of cheap labor and couldn't really produce goods that the laborers could afford. As factories became more efficient (assembly lines, electricity, etc.) they could use less labor, paying a bit more, and producing less expensive goods. This is the period where Henry Ford could price his cars so that his workers could buy them. Workers were truly empowered--despite the "power" of factories of the early 20th century, they really ran on highly skilled labor and lots of it. We saw the rise in the U.S. and worldwide of very prominent labor movements.

By WWII, the balance was already shifting toward automation and overproduction. Consequently, labor began to diminish. Computers didn't cause the problems, but they sure added fuel to the fire. There are now too few workers required to produce the products to supply enough consumers to buy the products. The trend is obvious and is the overwhelming problem causing unemployment.

We need a new economy, one that devalues production, even necessities and instead emphasizes other things (what? How's it work? I don't know). Big capitalism and labor are doomed to become relics (of course there will always be capital and labor, but not enough to be termed capitalism). The future is almost certainly going to reward knowledge and artistic skills. A factory will never be able to predict what people will want/need, nor will they invent cures. Factories can clothe us cheaply, but they can't chose what colors or cuts will look best--and they'll never rival that hand-knitted sweater grandma made you.