Why doesn’t technology make us all better off?

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We Americans long enjoyed the world’s highest material standard of living, and we were told that was because of the superior productivity of American industry.  That sounds like common sense.  If you want more, you need to produce more.  Obviously.

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Click to enlarge.

But about 30 or so years ago, this changed.  Our productivity continued to increase, but our wages and salaries didn’t increase along with it.

Why?

Some say that the problem is technology.   Automation means that fewer wage-earners are needed, and our work had less value.   So naturally there are fewer jobs, and employers generally don’t have to pay as much to find people to take these jobs.

Fewer wage earners are needed.  Needed by whom?  Our work has less value.  Value to whom?

They are less needed, and of less value, to the corporate boards and wealthy stockholders who own the technology.  Or, to put it another way:  Capitalists, not workers, own the means of production.

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Click to enlarge.

It’s true that the average factory worker or retail clerk did not personally create the technological innovations that made it possible for them to do more with the same amount of work.  But neither did the average corporate executive or corporate stockholder.

If technology is owned and controlled by a small financial elite, then the applications of technology will be such to benefit that elite.

It is possible that, in acting in their own interest, the elite will do things that are good for society as a whole.  It also is possible that they will do things that are bad for society as a whole.

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Click to enlarge.

When that happens, we the people need to understand that their power and ownership is not based on divine right or impersonal economic laws.   It is the result of corporate structures and legal rights established by law, and laws can be changed.

Some radical thinkers, such as Stanley Aronowitz, David Graeber, Richard D. Wolff and Gar Alperovitz, are reviving the idea of worker ownership and public ownership of the means of production, which is not the same thing as government ownership.

More moderate reformers think it is just necessary to change the balance of power within society.

The important thing, as I see it, is to stop letting priorities be determined by the “job creators,” the ones who own the machinery, the research laboratories and the so-called intellectual property.   The question is not whether they need us.  The question is whether we need them.

LINKS

Of Flying Cars and the Declining Rate of Profit by David Graeber for The Baffler.

Why Wages Won’t Rise by Robert Reich.

The Great Decoupling of the U.S. Economy by Andrew McAfee on his blog.

Global lessons on inclusive growth by Jason Furman for Policy Network.

The Most Important Economic Chart by Atif Mian and Amir Sufi for House of Debt.

The wedges between productivity and median compensation growth by Lawrence Mishel for the Economic Policy Institute.

 

 

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2 Responses to “Why doesn’t technology make us all better off?”

  1. tiffany267 Says:

    I’m quite ignorant on economics. But I just don’t understand the issue here.

    Most people even earning a minimum wage today are living far more comfortably today than they could have 50 years ago, thanks to both consumer and industrial technology that they may or may not have contributed to. Much of this technological and “quality-of-life” enrichment, which can lead to other forms of enrichment, are thanks to capitalism. I can think of no better example than the computer I am using, which only became a consumer item transforming the entire world after some weirdos toying in a garage made it. This was not the result of a social program designed to level the playing field or provide services that supposedly companies are too selfish to provide. It was simply the product of some individuals with commitment and vision, who consequently became rich and helped many others became rich as well. Even though I have never worked for Microsoft or Apple, my life is much more prosperous, productive, and happy than it could have been without Bill Gates, Steve Wosniak, et al.

    Even if I did work at Microsoft and for some reason felt slighted that corporate leaders earn more than I did, it would be highly misplaced anger considering that Microsoft (1) gives me a job that wouldn’t have existed otherwise and (2) gives me a pretty competitive position in terms of perks and benefits. Most of the big companies I can think of are known for ridiculously pampering their employees (to compete for the best).

    http://www.businessinsider.com/companies-with-awesome-perks-payscale-2013-1?op=1

    https://tiffany267.wordpress.com/2014/09/10/employers-may-lose-tax-breaks-to-feed-employees/

    I just don’t see how creating jobs and wealth for employees as well as creating the resources that help others live successfully can be blamed for the economic problems we suffer today.

    Of course, there are people who feel that workers should be a bigger part of a company’s success. There is a natural foods co-operative store near me. Employees earn good money there compared to nearby grocery stores. Of course, the costs there are generally higher than ones for comparable products at their competitors, which means that there isn’t the same opportunity for growth and advancement as long as employees stay at the co-op, whereas an employee at XYZ corporation has opportunities for all sorts of career moves, often ones that take them from manual labor to powerful marketing jobs, etc. I’m not saying it’s a bad job or a bad business model! But I don’t know that co-ops with worker ownership are going to do anything for overall economic success.

    This comment turned out much longer than I thought it would, so I’m going to turn myself off before I rant any longer 🙂 Just a few thoughts in response…

    Like

    • philebersole Says:

      Americans today are better off than people in poor countries such as Bangladesh, and better off than people of my grandparents’ generation.

      My father’s father was a poor farmer whose life consisted mostly of hard manual labor from dawn till night, who washed with water drawn from a well, whose house was lit by a kerosine lamp and whose meals were cooked on a coal-fired stove.

      My mother’s father was a lawyer of humble origins who as a boy would walk 20 miles in order to hear an interesting lecture.

      I’m better off than either of them, through no particular merit of my own, because of the inventiveness and work of generations of Americans who came before me.

      I can’t say, however, that I’m better off than the generations coming after me. I think people who came of age during the past 20 or 30 years have a much harder time than I ever did.

      I never, for example, had any problem finding a job I was qualified to do. I have many younger friends (and, to me, somebody in their 50s is a “younger friend”) with just as much ability, just as many qualifications and at least as good a work ethic as I had, who are barely able to survive economically.

      Why is this?

      One commonly accepted answer is that this is because of the evolution of technology. There is a popular book (which I haven’t read) by Kevin Kelly called WHAT TECHNOLOGY WANTS.

      Technology doesn’t have agency. Technology doesn’t “want” anything. Machines aren’t sentient. Sometimes available technology offers an easy way to do things which is not the best way, but nobody is compelled to follow that path.

      I think that, to the extent our problems are due to technology, it is because technology and technological research are controlled by militarists and oligarchs with different priorities from the public.

      Like

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