Or, a year later Bill is still unemployed—I hear that’s been happening a bit lately—and Alex and Dave have found other ways of competing that don’t require commoditizing their products and not taking any profits.
Does it look to you as if (e.g.) Microsoft, Apple and Google are taking minimal profits while their customers pocket all the benefits of their cleverness?
IIRC, the last three recessions have had largely-jobless recoveries, and the pattern of unemployment they’ve left behind them looks a whole lot like what you’d expect if people’s jobs are being taken away by technical progress without new opportunities arising to give a lot of those people new jobs. And I don’t see any sign that (e.g.) typical working hours are getting shorter to absorb all that surplus leisure.
At least in the US, the current long-run employment is caused by a severe ongoing recession that’s being exacerbated by massive deficit spending, increased regulation and tax hikes. None of this has anything to do with technology one way or the other. While it’s true that at some point you could have so much automation that you run out of jobs for people, we’re not remotely close to approaching that point yet. Instead we see a few % of current jobs become obsolete each decade, most of which are replaced by new jobs that didn’t exist before.
As for profit margins, my point was simply that degree of automation is irrelevant. Profit magins in a given industry are determined by a complex interplay between number of competitors, barriers to entry, regulation and dozens of other factors, none of which are much afected by the details of production. For instance, manufacturing has already seen 1-2 orders of magnitude increase in automation in the last 200 years but their profit margins generally don’t show it.
Finally, you won’t see people trading work hours for extra leisure unless their pay is already high enough that they’d prefer more free time to more money, which isn’t going to happen unless average incomes are at least an order of magnitude higher than they are now. Most people don’t start running out of things to spend money on until they have a mansion, several luxury cars and a few $100K of assorted toys, after all.
Microsoft does not meaningfully compete, Google doesn’t seem to be taking excess profits, and Apple’s mostly based on ripping off people who have too much money anyways. But look at the giants of a few decades ago—are GM and American Airlines known for excess profits today? Competing margins down takes time, but it does happen.
Or, a year later Bill is still unemployed—I hear that’s been happening a bit lately—and Alex and Dave have found other ways of competing that don’t require commoditizing their products and not taking any profits.
Does it look to you as if (e.g.) Microsoft, Apple and Google are taking minimal profits while their customers pocket all the benefits of their cleverness?
IIRC, the last three recessions have had largely-jobless recoveries, and the pattern of unemployment they’ve left behind them looks a whole lot like what you’d expect if people’s jobs are being taken away by technical progress without new opportunities arising to give a lot of those people new jobs. And I don’t see any sign that (e.g.) typical working hours are getting shorter to absorb all that surplus leisure.
At least in the US, the current long-run employment is caused by a severe ongoing recession that’s being exacerbated by massive deficit spending, increased regulation and tax hikes. None of this has anything to do with technology one way or the other. While it’s true that at some point you could have so much automation that you run out of jobs for people, we’re not remotely close to approaching that point yet. Instead we see a few % of current jobs become obsolete each decade, most of which are replaced by new jobs that didn’t exist before.
As for profit margins, my point was simply that degree of automation is irrelevant. Profit magins in a given industry are determined by a complex interplay between number of competitors, barriers to entry, regulation and dozens of other factors, none of which are much afected by the details of production. For instance, manufacturing has already seen 1-2 orders of magnitude increase in automation in the last 200 years but their profit margins generally don’t show it.
Finally, you won’t see people trading work hours for extra leisure unless their pay is already high enough that they’d prefer more free time to more money, which isn’t going to happen unless average incomes are at least an order of magnitude higher than they are now. Most people don’t start running out of things to spend money on until they have a mansion, several luxury cars and a few $100K of assorted toys, after all.
Microsoft does not meaningfully compete, Google doesn’t seem to be taking excess profits, and Apple’s mostly based on ripping off people who have too much money anyways. But look at the giants of a few decades ago—are GM and American Airlines known for excess profits today? Competing margins down takes time, but it does happen.