Robots Will Steal You Job–How To Survive Economic Collapse

On October 10, 2912, Federico Pistono of Ethical Technology writes on the Institute for Ethics & Emerging Technologies Web site:

You are about to become obsolete. You think that you are special, unique, and that whatever it is that you are doing is impossible to replace. You are wrong.

As we speak, millions of algorithms created by computer scientists are frantically running on servers all over the world with one sole purpose: do whatever we used to do, but better. These algorithms are intelligent computer programs, permeating the substrateof our society. They make financial decisions, they predict the weather, they suggest which countries will wage war next. Soon, there will be little left for us to do: machines will take over.

Does that sound like a futuristic fantasy? Maybe so. This argument is proposed by a growing, yet still fringe, community of thinkers, scientists and academics, who see the advancement of technology as a
disruptive force which will soon transform our entire socio-economic system, forever. According to them, the displacement of labour by machines and computer intelligence will increase dramatically over the next decades. Such changes will be so drastic and quick that the market will not be able to abide in creating new opportunities for workers who lost their job, making unemployment not just part of a cycle, but structural in nature and chronically irreversible. It will be the end of work as we now it.

Most economists discard such arguments. Many of them don’t even address the issue in the first place. And those who do claim that the market always finds a way. As old jobs are replaced by machines, new jobs are created. Thanks to the ingenuity of the human mind and the need for growth, markets always find a way, especially in the ever-connected and globalized mass-market we live in today.

With increasing punditry, scholars such as Federico Pistono and others are writing about the impact of the Second Industrial Revolution where tectonic shifts in the technologies of production are destroying and degrading jobs due to the shift from labor worker input to the non-human factor––human-intelligent machines, superautomation, robotics, digital computer operations, etc.

The question that requires an answer is now timely before us. It was first posed by binary economist Louis Kelso in the 1950s but has never been thoroughly discussed on the national stage. Nor has there been the proper education of our citizenry that addresses what economic justice is and what ownership is. Therefore, by ignoring such issues of economic justice and ownership, our leaders are ignoring the concentration of power through ownership of productive capital, with the result of denying the 99 percenters equal opportunity to become capital owners. The question, as posed by Kelso is: “how are all individuals to be adequately productive when a tiny minority (capital workers) produce a major share and the vast majority (labor workers), a minor share of total goods and service,” and thus, “how do we get from a world in which the most productive factor—physical capital—is owned by a handful of people, to a world where the same factor is owned by a majority—and ultimately 100 percent—of the consumers, while respecting all the constitutional rights of present capital owners?”

Solutions are to be found in the platform of the Capital Homestead Act. Support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm

http://ieet.org/index.php/IEET/more/pistono20120211

Why America Needs A Manufacturing Renaissance

On October 30, 2012, willy Shih and Gary Pisano write on The Huffington Post:

Both President Obama and his Republican challenger, Mitt Romney, have named jobs, and specifically manufacturing jobs, as a priority. But it is unclear whether either candidate appreciates the key reason to preserve and grow manufacturing in America: by manufacturing here, we preserve our ability to innovate here.

 

http://www.huffingtonpost.com/willy-shih/manufacturing-jobs_b_2039798.html

THE Absent Conversation: Who Should Own America?

On October 29, 2012, The Huffington Post published my article on economic democracy.

As the president, Senate and Congressional elections in the United States near the Nov. 6 ballot date, it is evident that none of the candidates speak of a vision for a future system of economic democracy based on equality of opportunity for every person to become an owner of productive capital. This is particularly of importance for the person elected to the presidency, as the President of the United States has the national stage at his or her disposal to espouse targeted leadership. As you read this article, the intent is to query “Who should own America?” going forward.

Why the focus on “productive capital?” Physical capital is non-human “things” owned by people used to produce products and services (productive land, resources, structures, infrastructure, tools, machines, super-automation, robotics, digital computerized processing and operations, etc. and certain intangibles that have the characteristics of property such as patents and trade names). Real physical capital isn’t money; it is measured in money (financial capital), but it is really producing power and earning power through ownership of the non-human factor of production. In the law, property is the bundle of rights that determines one’s relationship to things.

The reality which is ignored in our political discussions and even by conventional economists and the media is that productive capital is increasingly the source of the world’s economic growth and, therefore, should become the source of added property ownership incomes for all. The ownership of productive capital is the source of wealth and income for the richest Americans — not a job.

Businesses, whether small or large, or sole proprietors, partnerships, or business corporations are formed to provide products and services at a profit. Their success or failure is dependent on whether or not there are “customers with money.”

Unfortunately, politicians, economists and the media focus on job creation as the only way to create “customers with money” and provide a source of income for peoples’ livelihood. Yet the demand for people (labor workers who contribute manual, intellectual, creative and entrepreneurial work) is being made less necessary as productive capital is increasingly the source of the world’s economic growth. What should we conclude from this assessment of reality? Well, simply that if both labor and productive capital are interdependent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all.

The role of physical capital is to do ever more of the work, which produces income to the business owners. Full employment is not an objective of businesses. Companies strive to keep labor input and other costs at a minimum in order to maximize profit. Private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical capital’s ever increasing role.

The function of research and technology is to invent tools to reduce toil, enable otherwise impossible production, create new highly automated industries, and significantly change the way in which products and services are produced from labor intensive to capital intensive — the core function of technological innovation and invention. Technological change makes tools, machines, structures, and processes ever more productive while leaving human productiveness largely unchanged (our human abilities are limited by physical strength and brain power — and relatively constant).

It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being.

What we really need in this 2012 presidential election year is a national discussion on the topic of the importance of productive capital ownership and how we can expand the base of private productive capital ownership simultaneously with the creation of new productive capital formation, with the aim of building long-term financial security for all Americans through accumulating a viable income-producing capital estate.

If we are to significantly expand the population of “customers with money” and significantly grow the economy, then the ownership of productive capital must be spread more broadly and simultaneously with the growth, without taking anything away from the 1 to 10 percent of the people who now own 50 to 90 percent of the wealth controlled by businesses. Thus, productive capital income would be distributed more broadly and the demand for products and services would be distributed more broadly from the earnings of capital and result in the sustentation of consumer demand, which will promote economic growth. That also means that society can profitably employ unused productive capacity and invest in more productive capacity to service the demands of a growth economy.

Unfortunately, ever since the 1946 passage of the Full Employment Act, economists and politicians formulating national economic policy have beguiled us into believing that economic power is democratically distributed if we have full employment — thus the political focus on job creation and redistribution of wealth rather than on full production and broader productive capital ownership accumulation resulting from ownership creation. This is manifested in the misguided belief that labor work is the only way to participate in production and earn income.

Thus, when politicians advocate taxpayer money spending to stimulate industry development, there needs to be a conscious policy to broaden private, individual ownership in the companies benefiting from the stimulus — not just argue the justification for taxation redistribution and further national debt based on how many jobs would result. We also need to incentivize business corporations to pay out all their profits as taxable personal incomes to avoid paying corporate income taxes and to finance their growth by issuing new full dividend payout shares for broad-based citizen ownership.

To accomplish this we must ensure that future economic growth be financed to create new owners of expanding existing and future businesses to ensure that the consumer populous is able to get the money to buy the products and services produced as a result of substituting “machines” for people.

But how can we accomplish this goal of creating new owners of future productive capital investment simultaneously with the growth of the economy?

The solution requires that the Federal Reserve stop monetizing unproductive debt, including bailouts of banks “too big to fail” and Wall Street derivatives speculators, and begin creating an asset-backed currency that could enable every man, woman and child to establish a Capital Homestead Account or “CHA” (a super-IRA or asset tax-shelter for citizens) at their local bank to acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income. Policies need to insert American citizens into the low or no-interest investment money loop to enable non- and undercapitalized Americans, including the working class and poor, to build wealth and become “customers with money.” That’s what the Capital Homestead Act addresses.

The “Capital Homesteading” concept is the direction America needs to take to build an OWNERSHIP CULTURE and ensure a balance between production and consumption.

For specifics please visit the Capital Homestead Act.
Own or be owned!

http://www.huffingtonpost.com/gary-reber/who-should-own-america_b_2040592.html

Martin Feldstein, Top Reagan Adviser: Elderly Facing Poverty Crisis

On October 24, 2012, Bonnie Kavoussi writes on The Huffington Post:

Martin Feldstein, a former top economic adviser to President Ronald Reagan, said too many elderly Americans are trapped in poverty.

“I think it’s really shocking that we spend about $500 billion a year on Social Security, and yet we have many, many old people in poverty,” said Feldstein, a Harvard economist, at The Economist’s Buttonwood Gathering on Wednesday. “Something’s wrong with that system.”

Feldstein said that the Social Security system especially fails women who aren’t in the workforce. He said that young and middle-aged women who lose husbands to death or divorce and don’t have enough work experience get left out in the cold.

“If they don’t have an income history of their own, the Social Security system fails them,” he said.

 

http://www.huffingtonpost.com/2012/10/24/martin-feldstein-elderly-poverty_n_2012750.html?utm_hp_ref=business&ncid=edlinkusaolp00000009

Obama Has Released A 27-Point Plan For His Second Term

On October 24, 2012 Walter Hickey writes on Business Insider:

After failing to deliver a line by line economic plan, the Obama campaign stepped up to the plate this week and delivered a glossy memo with 27 points on how he would use a second term in office.

It’s called The New Economic Patriotism: A Plan For Jobs & Middle-Class Security and millions of copies have been printed and shipped off to swing states.

The plan is broken up into seven different parts, focusing on topics that include manufacturing, energy, small businesses, education, taxes and the deficit, healthcare, and Medicare and Social Security. While a lot of crucial details are still missing, it’s a start to understanding what another four years under Obama would like.

For voters who can’t get their hands on a copy, the salient points are  broken down.

Continue and click on the Business Insider site to see the plan covering 26 pages.

Read more: http://www.businessinsider.com/obamas-plan-second-term-economy-jobs-election-2012-10?op=1#ixzz2AGGARmED

 

 

http://www.businessinsider.com/obamas-plan-second-term-economy-jobs-election-2012-10

If Binary Economics Is So Great, How Come Governments Don't

The answer is that governments are stuck in Keynesian economic thinking. Economist John Maynard Keynes, whose Keynesian model is widely taught, falsely presumed that the only way to balance mass productive power with mass purchasing power is through a wage system––ignoring the possibility of democratizing future ownership of labor-displacing productive capital technologies and rising ownership incomes as a market-generated means of eliminating wage slavery, welfare slavery, debt slavery and charity slavery for the 99 percent of humanity. Binary economist Louis Kelso argued that the Keynesian model fails to recognize that “when capital workers replace labor workers as the major suppliers of goods and services, labor employment alone becomes inadequate because labor’s share of the income arising from production cannot provide the progressively better standard of living that technology is making possible. Labor produces subsistence at best. Capital can produce affluence. To enjoy affluence, all households must engage to an increasing extent in capital work”

http://just3rdway.blogspot.com/2012/10/if-binary-economics-is-so-great-how.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+TheJustThirdWay+%28The+Just+Third+Way%29

Recent Testimony From Workers At Zhengzhou Foxconn

Recent news has reported that the base monthly salary of official workers in Foxconn’s Zhengzhou factory has risen to 2,000 RMB ($312.5) beginning on August 1, whereas the salary used to be 1,800 RMB ($281.3). Since the beginning of July, Foxconn Zhengzhou has been assembling the iPhone 5.  Given the production demands associated with such an order, the workers still have excessive overtime hours every month, working 20 or more hours of overtime per week. Some workers will only get two or three days off per month; line and team leaders will only get one day off.

Moreover, there are also student-interns under 18 years old in the Zhengzhou factory. Such a situation, in fact, is prevalent in other Foxconn factories, such as those in Huai’an, Chongqing, and Taiyuan Foxconn. A line leader we interviewed told our investigator that there were 10 student-interns between the ages of 16 and 18 assigned to his production line.

The following is the original message he sent on September 10, 2012:

I passed by the female dorm building and saw a group of female students quarreling with their teacher. They were all young. I heard one student crying, “I want to go back to school. I don’t want to work here anymore! Why do you force us to work in this remote place!” The schools always send student workers in the afternoon, so even if the female students want to leave, it would be too late. Today is Teacher’s Day. I don’t want to say bad things about teachers, but I can’t help cursing them.

The following is a worker’s testimony about the status of their working conditions after Apple alleged Foxconn had improved its Chinese labor conditions:

“I am a current worker at Foxconn (Zhengzhou). In fact, all the reports of increasing wages and reducing working hours are deceptive.

1. Wages are low. Though wages are seemingly increasing, they are actually decreasing. The monthly base salary is now [in July] 1,550 RMB ($242.2). After deducting for meal, accommodation, and social insurance fees of 420RMB ($65.9), 110 RMB ($17.2), and 180 RMB ($28.1), respectively, the average monthly income is now 2,100 RMB ($328.1). 
[In August, the factory raised the base salary of new workers to 1800 RMB ($284) and of veteran workers to 2000 RMB ($316),but we don’t yet know the total salary after overtime and deductions are accounted for.]

2. Management is abrasive. Management verbally abuse workers and reduce some workers’ overtime hours on purpose [so that they work less hours and get lower pay).

3. The rate of work is intense. We workers have to complete the work load of what before was 11 hours (or sometimes up to 14 hours)in only 10 hours.

4. The management of the dorms use room keys to check workers’ rooms, including personal lockers, at their own will without permission of the workers.

5. Unlawful deduction of wages. The break time of workers is used as time for work preparation. Also, workers are kept after work to have meetings in which workers are scolded by management, the occupied time also not being calculated into wages.

In August, the worker provided China Labor Watch with an update on iPhone 5 production:

We are now producing the iPhone 5. We 87 workers have to assemble 3,000 phones per day, and as our team leader told us, after the new iPhone goes public, we will need to assemble 6,500 phones per day. We are now working more than 10 hours a day. There are many student workers in our production line, all of whom are around 18 years old. They’ve been complaining and demanding to go back to school but are never allowed. 

 

 

http://www.chinalaborwatch.org/news/new-422.html

Corporations Are People. Evil People

In this graphic presentation posted on October 22, 2012 on The Big Picture blog at ritholtz.com the statement is made that:

Republican presidential candidate Mitt Romney recently reiterated an oft-heard pro-business line: “Corporations Are People.” This wasn’t just political rhetoric––the Supreme Court legally recognized corporations as persons in an 1886 ruling, citing the 14th Amerndment. So it then begs the question: if corporations are people, what sort of people are they?

This graphic presentation depicts “business corporations” as a bad element, and the record often substantiates the blame.

But as an organizational mechanism, the “business corporation” offers a tremendous opportunity to play a responsible and contributive role in societal development.

The problem is that the state charters and tax policy pertaining to business corporations provide no parameters to assure that business corporations are incentivized to reflect broadened ownership. Instead what typically occurs is that a very few individuals end up owning the stock of the business corporation and thus are entitled to the “profits” derived from the operation and the management of the underlying productive capital assets––all the things that are not people (labor) comprised such as productive land, resources, structures, machines, human-intelligent machines, robotics, superautomation and digital computerized operations, etc.

With power concentrated at the top of the business corporation, the owners control the operational direction of the company. But, for example, when ALL the employees are owners, dependent on their income from the company’s bottom line rather than through ordinary labor wages and benefits, the workers’ economic interests are more invested to see that their company succeeds. In this way, each person in the company is empowered as a labor worker and as a capital worker (owner) and inspired to work together as a team to make better operational decisions to serve and maximize value to their customers. This principle works as well when others, not directly employed, are participant owners. They actually become good customers of the products and services produced by the business corporations they own stock in.

In concentrated capital ownership terms, roughly 1 percent own 50 percent of the corporate wealth with 10 percent owning 90 percent. This leaves 90 percent of the people scrambling for the last 10 percent, with them dependent on their labor worker wages to purchase capital as in the secondary stock market. Thus, we have the great bulk of the people providing a mere 10 percent or less of the productive input. Contrast that to the less than 5 percent who own all the productive capital providing 90 percent or more of the productive input, and who initiate and oversee most of the technological advances that replace labor work with the productive capital they own. As a result, the trend has been to diminish the importance of employment with productive capital ownership concentrating faster than ever, while technological change makes capital ever more productive. But because this is not well understood, what we as a society have been doing is to continually shift the work burden from people labor to real capital while distributing the earning capacity of capital workers (via capital ownership of stock in corporations) to non-owners through artificial job creation and welfare, and because this is not enough to support the economy, through constantly expanding national debt. Such policies do not function effectively.

Alternatively, in a just growth economy comprised of business corporations competing with each other to produce marketable products and services, the ownership of productive capital would be spread more broadly as the economy grows, without taking any property interests away from the 1 to 10 percent who now own 50 to 90 percent of the corporate wealth. Instead, the ownership pie would desirably get much bigger and their percentage of the total ownership would decrease, as ownership gets broader and broader, also benefiting the traditionally disenfranchised poor and working and middle class. Thus, productive capital income would be distributed more broadly and the demand for products and services would be distributed more broadly from the earnings of capital and result in the sustentation of consumer demand, which will promote economic growth. That also means that society can profitably employ unused productive capacity that exists in the physical world and invest in more productive capacity to service the demands of a growth economy.

What is important to understand, and why the focus on JOB CREATION will continue to fall short in terms of providing REAL job opportunities in numbers that match the pool of people willing and able to work, is that technological change makes tools, machines, structures, and processes ever more productive while leaving human productiveness largely unchanged (our human abilities are limited by physical strength and brain power––and relatively constant). The result is that primary distribution through the free market economy, whose distributive principle is “to each according to his production,” delivers progressively more market-sourced income to productive capital owners and progressively less to workers who make their contribution through labor.

To blame business corporations for not creating jobs is not understanding the problem. The role of physical productive capital is to do ever more of the work, which produces income. The choice is either physical productive capital or labor workers willing to work for less. Full employment is not an objective of businesses. Companies strive to keep labor input and other costs at a minimum. Private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever increasing role. Over the past century there has been an ever-accelerating shift to productive capital––which reflects tectonic shifts in the technologies of production. The mixture of labor worker input and capital worker input has been rapidly changing at an exponential rate of increase for over 235 years. This will continue into the future of humankind.

What can we do? The main objective that we ALL need to embrace as Americans is the idea that EVERY American should have the equal opportunity to be productive in the society and earn a decent livable income. The focus needs to be on INCOME whether that is achieved through OWNERSHIP or JOB CREATION, or a combination.

To achieve this objective requires us to reevaluate our tax and central banking institutions, as well as, labor and welfare laws. We need to innovate in such ways that we lower the barriers to equal economic opportunity and create a level playing field based on anti-monopoly and anti-greed fairness and balance between production and consumption. In so doing, every citizen can begin to accumulate a viable capital estate without having to take away from those who now own by using the tax system to redistribute the income of capital owners. What the “haves” do lose moving forward is the productive capital ownership monopoly they enjoy under the present unjust system. A key descriptor of such innovation is to find the ways in which “have nots” can become “haves” without taking from the “haves.” Thus, the reform of the “system,” as binary economist Louis Kelso postulated, “must be structured so that eventually all citizens produce an expanding proportion of their income through their privately owned productive capital and simultaneously generate enough purchasing power to consume the economy’s output.”

There are solutions formulated to make it possible for “have nots” to become “haves” while respecting the free market and private property principles that the United States was founded on, and without taking from today’s “haves.” The plan is embodied in the Capital Homestead Act.

Support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm

The Capital Homestead Act is a comprehensive national economic strategy for empowering every American citizen, including the poorest of the poor, with the means to acquire, control and enjoy the fruits of productive corporate assets.

This long-range agenda involves major restructuring of our tax system and our Federal Reserve policies to lift unjust artificial barriers to more equitable distribution of future corporate capital and faster growth rates of private sector investment. It would shift primary national income maintenance policies from inflationary wage and unproductive income redistribution expedients to market-based ownership sharing and dividend incomes.

The Capital Homestead Act’s central focus is the democratization of capital (productive) credit. By universalizing citizen access to direct capital ownership through access to interest-free productive credit, it would close the power and opportunity gap between today’s haves and have-nots, without taking away property from today’s owners.

Please see my article “Democratic Capitalism And Binary Economics: Solutions For A Troubled Nation and Economy” at http://foreconomicjustice.com/11/economic-justice/ or follow me on Facebook at http://www.facebook.com/pages/For-Economic-Justice/347893098576250 and http://www.facebook.com/editorgary

Also follow the Center for Economic and Social Justice at www.cesj.org and http://capitalhomestead.org/ Join the OWN Team at http://capitalhomestead.org/group/the-on-team

Also see The Kelso Institute at http://www.kelsoinstitute.org/

Like the Just Third Way Group at http://www.facebook.com/groups/Justthirdway/

Support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm

Join the OWN Team to advocate OWNERSHIP CREATION at http://capitalhomestead.org/group/the-own-team The only commitment is to participate in the Weekly Action Point, which is usually just a Facebook post. Other activities are strictly voluntary!

http://www.ritholtz.com/blog/2012/10/corporations-are-people/