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getting use to the new economic normal?

Discussions about the economic and financial ramifications of PEAK OIL

Re: getting use to the new economic normal?

Unread postby Loki » Sat 14 Sep 2013, 19:41:33

$this->bbcode_second_pass_quote('phaster', '
')over the weekend on 60 minutes there was a segment on "robotics" and how its now possible for small mom/pop shops to buy a robot which according to the segment can work about 3 years for about $3 per hour

in other words many mfg jobs are now being brought back to the USA because of advances in robot mfg technology, so in effect those low skill workers in china who displaced low skill US workers are now going to have to compete w/ robots

like it or not this world is going to change between the have and the have nots!


Automation is an important topic, too much neglected by peak oilers. I once thought that economic decline would reduce companies' ability to make capital investments in automation, but the Great Recession has clearly falsified that hypothesis. If anything automation has accelerated, “improving” labor productivity figures are regularly trumpeted by the chattering classes, but the role this plays in the jobless recovery is obvious.

We're hurtling towards a two tier society in the US. I've tended to focus too much on globalization to explain this, but I'm beginning to think automation has been a far more important factor in the decline of the American middle class.

This has important implications for one's personal strategy for dealing with the Long Emergency. If you're working a job that can be automated, you need to find something else to do, pronto.

I found the following sources to be useful summations of the problem. The first is a TED talk by Andrew McAfee of MIT, who recently wrote a book on how automation is outpacing job creation. The second is an extended AP article on the role of automation during the Great Recession.

Andrew McAfee: What will future jobs look like?

AP IMPACT: Recession, tech kill middle-class jobs
$this->bbcode_second_pass_quote('', 'F')ive years after the start of the Great Recession, the toll is terrifyingly clear: Millions of middle-class jobs have been lost in developed countries the world over.
And the situation is even worse than it appears.
Most of the jobs will never return, and millions more are likely to vanish as well, say experts who study the labor market. What's more, these jobs aren't just being lost to China and other developing countries, and they aren't just factory work. Increasingly, jobs are disappearing in the service sector, home to two-thirds of all workers.
They're being obliterated by technology.
Year after year, the software that runs computers and an array of other machines and devices becomes more sophisticated and powerful and capable of doing more efficiently tasks that humans have always done. For decades, science fiction warned of a future when we would be architects of our own obsolescence, replaced by our machines; an Associated Press analysis finds that the future has arrived.
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Re: getting use to the new economic normal?

Unread postby americandream » Sun 15 Sep 2013, 00:03:43

$this->bbcode_second_pass_quote('Loki', '')$this->bbcode_second_pass_quote('phaster', '
')over the weekend on 60 minutes there was a segment on "robotics" and how its now possible for small mom/pop shops to buy a robot which according to the segment can work about 3 years for about $3 per hour

in other words many mfg jobs are now being brought back to the USA because of advances in robot mfg technology, so in effect those low skill workers in china who displaced low skill US workers are now going to have to compete w/ robots

like it or not this world is going to change between the have and the have nots!


Automation is an important topic, too much neglected by peak oilers. I once thought that economic decline would reduce companies' ability to make capital investments in automation, but the Great Recession has clearly falsified that hypothesis. If anything automation has accelerated, “improving” labor productivity figures are regularly trumpeted by the chattering classes, but the role this plays in the jobless recovery is obvious.

We're hurtling towards a two tier society in the US. I've tended to focus too much on globalization to explain this, but I'm beginning to think automation has been a far more important factor in the decline of the American middle class.

This has important implications for one's personal strategy for dealing with the Long Emergency. If you're working a job that can be automated, you need to find something else to do, pronto.

I found the following sources to be useful summations of the problem. The first is a TED talk by Andrew McAfee of MIT, who recently wrote a book on how automation is outpacing job creation. The second is an extended AP article on the role of automation during the Great Recession.

Andrew McAfee: What will future jobs look like?

AP IMPACT: Recession, tech kill middle-class jobs
$this->bbcode_second_pass_quote('', 'F')ive years after the start of the Great Recession, the toll is terrifyingly clear: Millions of middle-class jobs have been lost in developed countries the world over.
And the situation is even worse than it appears.
Most of the jobs will never return, and millions more are likely to vanish as well, say experts who study the labor market. What's more, these jobs aren't just being lost to China and other developing countries, and they aren't just factory work. Increasingly, jobs are disappearing in the service sector, home to two-thirds of all workers.
They're being obliterated by technology.
Year after year, the software that runs computers and an array of other machines and devices becomes more sophisticated and powerful and capable of doing more efficiently tasks that humans have always done. For decades, science fiction warned of a future when we would be architects of our own obsolescence, replaced by our machines; an Associated Press analysis finds that the future has arrived.


Automation only works to a point given that the the essential element in the conversion of an inanimate commodity is the input of human labour surplus (the latent value that the human extraction of a commodities potential (both as labour and consumer of the end product) brings forth). All that automation does is mitigate that cost of labour. However there comes a point when that mitigation risks utterly destroying the accumulation process (via irreversible deflation which of course, is capitalism's achilles heel.)
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Re: getting use to the new economic normal?

Unread postby phaster » Sun 15 Sep 2013, 00:13:35

$this->bbcode_second_pass_quote('Loki', '')$this->bbcode_second_pass_quote('phaster', '
')over the weekend on 60 minutes there was a segment on "robotics" and how its now possible for small mom/pop shops to buy a robot which according to the segment can work about 3 years for about $3 per hour

in other words many mfg jobs are now being brought back to the USA because of advances in robot mfg technology, so in effect those low skill workers in china who displaced low skill US workers are now going to have to compete w/ robots

like it or not this world is going to change between the have and the have nots!


Automation is an important topic, too much neglected by peak oilers. I once thought that economic decline would reduce companies' ability to make capital investments in automation, but the Great Recession has clearly falsified that hypothesis. If anything automation has accelerated, “improving” labor productivity figures are regularly trumpeted by the chattering classes, but the role this plays in the jobless recovery is obvious.


after the genie bottle of knowledge is opened there is no turning back!

came to the conclusion back in my university days (late '80s and eary 90's), that global society was indeed living in an unprecedented era w/ basically unrealistic expectations.

the so-called middle class in the USA because conditioned to expect that each successive generation was going to do better (i.e. parents expected their kids to be more successful).

basically the reason for this thinking is after WW II all the war time mfg capacity was retooled for consumer products, and at the time since the US was the sole economic and military superpower which did not experience armed conflict and widespread destruction of infrastructure

IMHO the USSR was also a super power BUT only in the military sense! this is an important distinction, because from about 1945 till about the early 1970's the USA faced very little global competition in the economic arena (basically the USA was the only game in town making stuff and as such it dominated global markets)

but as other parts of the world rebuilt their infrastructure in the years after WW II and began production of consumer products, the USA lost that BIG economic advantage

now consider the effect of peak oil in the USA which happened about 1973, is it a coincidence that OPEC had such a devastating effect on the economy of the USA? i think not!!

also during this era in the USA from about 1945 till about late 1960's, the USA was the sole repository of scientific in a society w/ intact infrastructure and open consumer markets - after this time period, the USA lost that unique advantage

basically the work force/society in the USA after the early 1970's slowly lost the big advantages that were in place because of global destruction caused by WWII and also lost its advantage to dictate what happened in the global "liquid fuels" market

the fall in status of the USA as a superpower able to dictate its will, came about simply because the rest of the world was able to rebuild an start producing their own $hit and sell it on the open market

the other big trend, I noticed is the society w/in the USA began to worship at the alter of "low cost" consumerism and gave little thought to were the products were made or in general the quality of the product (hence the rise of wal mart the corp as an economic force)

this mantra of "low cost" consumerism is a religion that was exported by the USA to the rest of the world, and what is happening now to people in the global economy can be directly attributed to these basic trends

one thing I've noticed here in San Diego (aka enron by the sea), is the urban neighborhood I grew up in, is now experiencing a renaissance, where there is a revaluation of values away from "low cost" consumerism toward a "youthful" quality of life consumerism

in other words the neighborhood which once was a haven of sorts for the working class who could not afford life in the newer suburbs, is now an upscale hipster hood w/ restored older home(s) and
various farm to table pubs, restaurants, yoga studio(s) and ubiquitous young women walking their dogs in an "urban" environment

FWIW ya all might actually want to watch the actual "60 minutes" news segment

http://www.cbsnews.com/8301-18560_162-5 ... ob-growth/

from an economic standpoint I'm more fortunate than most and that is basically because I had parents who lived thur the great depression and WW II

the reason I was left a legacy of various material goods (i.e. real estate), is because my parents like most of that generation of global turmoil learned to save for the proverbial rainy day

also like many in that generation they lived way below their means and saved!

there is a quote attributed to einstein, something the effect that the greatest force in nature is compound interest

basically raised by two college educated parents, who sent me to parochial school where I was taught by the penguin (i.e old school nun who wore the garb), I ended up with a degree in physics and fully appreciate the concept of "compound interest"

now that my parents are gone, I am now the custodian of various real estate assets and I am exploring ways to purchase a gentleman's farm (in true doomer spirit)

a side note: I'm somewhat hopeful that values in society as a whole are being redirected away from from "low cost" self directed consumerism toward a "youthful" shared quality of life consumerism

what is happening to the global economy was inevitable because the simple economic fact of the matter is demand can't exceed supply for too long before a new social/economic equilibrium is reached! after all the we do live on a closed system (as seeming large as the planet earth might seem)

as harsh as it may seem, the lowering of wages/pensions for many workers is a "natural" event in that the economy itself can and should be thought of as an eco system that reacts violently if out of balance
Last edited by phaster on Sun 15 Sep 2013, 00:24:34, edited 1 time in total.
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Re: getting use to the new economic normal?

Unread postby americandream » Sun 15 Sep 2013, 00:18:57

The USA is still very much a super power, but a superpower based around its elite (England's bourgeosie sit at the top of the global pyramid of elite relations). The American working class are a mere extension of the global working class. Powerless and simply units of consumerism.
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Re: getting use to the new economic normal?

Unread postby phaster » Sun 15 Sep 2013, 02:05:55

$this->bbcode_second_pass_quote('americandream', 'T')he USA is still very much a super power, but a superpower based around its elite (England's bourgeosie sit at the top of the global pyramid of elite relations). The American working class are a mere extension of the global working class. Powerless and simply units of consumerism.


yes the USA is still a super power, but in absolute political, military and economic terms it is not as powerful as it was during the 1950's and 1960's

also consider back in the 1950's and early 1960's the economic economic elite where mostly western (i.e. american) and there was no such thing as a chinese billionaire or russian oligarch, even back then the middle east was a back water w/ only a few oil sheiks

now consider what's being built/happening: in the middle east there is the ultra modern city of dubai, and chinese billionaires/russian oligarchs have yachts that cruise to the USA

http://yachtpals.com/mega-yacht-a-9129

I'm suggesting that its not so simple to say nowadays the american bourgeosie/working class is only being exploited by rich american capitalist pigs

its a global market so regional bourgeosie/working class are having to compete w/ rich, better educated people from around the world

its basic human nature for many poor people from around the world, aspire to better made consumer goods and luxury items

sadly though in trying to aspire to better better made consumer goods and luxury items "they" ignore economic reality (which is akin to the Leo Tolstoy proveb "How Much Land Does a Man Need")

http://voices.yahoo.com/analysis-much-l ... 03060.html
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Re: getting use to the new economic normal?

Unread postby americandream » Sun 15 Sep 2013, 02:54:14

$this->bbcode_second_pass_quote('phaster', '')$this->bbcode_second_pass_quote('americandream', 'T')he USA is still very much a super power, but a superpower based around its elite (England's bourgeosie sit at the top of the global pyramid of elite relations). The American working class are a mere extension of the global working class. Powerless and simply units of consumerism.


yes the USA is still a super power, but in absolute political, military and economic terms it is not as powerful as it was during the 1950's and 1960's

also consider back in the 1950's and early 1960's the economic economic elite where mostly western (i.e. american) and there was no such thing as a chinese billionaire or russian oligarch, even back then the middle east was a back water w/ only a few oil sheiks

now consider what's being built/happening: in the middle east there is the ultra modern city of dubai, and chinese billionaires/russian oligarchs have yachts that cruise to the USA

http://yachtpals.com/mega-yacht-a-9129

I'm suggesting that its not so simple to say nowadays the american bourgeosie/working class is only being exploited by rich american capitalist pigs

its a global market so regional bourgeosie/working class are having to compete w/ rich, better educated people from around the world

its basic human nature for many poor people from around the world, aspire to better made consumer goods and luxury items

sadly though in trying to aspire to better better made consumer goods and luxury items "they" ignore economic reality (which is akin to the Leo Tolstoy proveb "How Much Land Does a Man Need")

http://voices.yahoo.com/analysis-much-l ... 03060.html


People get emotional when trying to objectively explain social economy as much of its explanation appears triumphalist at times. However, the current form of social economy is inherently Anglo_Saxon in character and consequently, has at its heart England and its militant child, America. When Roman culture held sway, Rome lay at the heart of that world. In Islam, the Arabian Peninsula lies at its heart.

That is not to say that the Muslim Malaysian billionaire is inconsequential. It simply illustrates that the cultural druivers for Islam are still largely drawn from the Arab world. The Muslim heart still beats to an Arab centric world. And in that world, it is largely the landed elite, not the peasant classes (remember Islam is still socio-econically feudal) around which that order revolves, with the Arab elite at the pinnacle.

As capitalism evolves into a global culture, the roots for an entirely new social-economy will take hold. It will be hybrid (culturally) in character, but it will NOT be capitalism.
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Re: getting use to the new economic normal?

Unread postby americandream » Sun 15 Sep 2013, 03:36:58

For example, Syria is a good contemporary example of cultural dominion by a particular segment of the global elite.
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Re: getting use to the new economic normal?

Unread postby radon1 » Sun 15 Sep 2013, 04:56:48

$this->bbcode_second_pass_quote('Loki', '
')Automation is an important topic, too much neglected by peak oilers. I once thought that economic decline would reduce companies' ability to make capital investments in automation, but the Great Recession has clearly falsified that hypothesis. If anything automation has accelerated, “improving” labor productivity figures are regularly trumpeted by the chattering classes, but the role this plays in the jobless recovery is obvious.


The notion that people compete against the robots is red herring to a great extent. The real competition is still against the cheaper labor in China and elsewhere - where these robots are produced. Even though the automation does produce a net surplus on the labor market. At times of expansion such a surplus would be accommodated by a new industry or absorbed by the state bureaucracy in its various forms, public or private. But at times where the limits are reached and expansion, either external or internal, is no longer possible, the things may indeed turn tough on the unlucky.
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Re: getting use to the new economic normal?

Unread postby radon1 » Sun 15 Sep 2013, 05:01:03

$this->bbcode_second_pass_quote('phaster', '
')
IMHO the USSR was also a super power BUT only in the military sense!
USSR was a "super power" in every possible sense but it was definitely poorer than USA, for objective reasons.
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Re: getting use to the new economic normal?

Unread postby ralfy » Sun 15 Sep 2013, 05:48:40

From what I remember, the energy costs and return requirements for the U.S. are significantly high, e.g., food has to travel thousands of miles to reach dinner tables, and trucks have to operate 24/7 allowing towns and cities to stock only around two weeks' or so worth of food, medicine, and fuel. Also, we need to look at arable land and water availability, and not necessarily land availability.

With that, it is likely that in the long run all regions will be affected by the loss of cheap energy and will adjust accordingly. That will mean populations situated near places where arable land and water are available, and then engage in localization. Whatever gas or oil is available will be used for transporting medicine and other needs that cannot be obtained locally, if not transport necessary raw materials from other areas by ship.

Finally, if armed groups such as military forces take control of resources, they will probably do so for their own benefit and for their immediate families. And as resources and energy become increasingly scarce, they may, like armed civilians, start turning on each other.
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Re: getting use to the new economic normal?

Unread postby dolanbaker » Sun 15 Sep 2013, 06:12:29

It seems to me that the economic world is reverting to a pre-industrial status quo, one where you have a small elite followed by a relatively small professional class, tradesmen and then the rest(workers)!

Before the industrial revolution, most people were on a subsistence level of income that covered their basic essentials and nothing else (today that's classed as poverty). Industrialisation brought most of these people into a situation where they had to earn more to remain in the workforce as they now had to buy stuff rather than be almost self sufficient in their previous lives. Chinese workers are experiencing this right now in the same way as English workers did 200 years ago.

During the second half of the 20th century werkers were in great demand and were able to obtain a much larger larger share of the cake which in turn bumped of the share to the tradesmen & professionals, this trend has now stopped and has been in reverse ever since globalisation took hold in the 1990s
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Re: getting use to the new economic normal?

Unread postby americandream » Sun 15 Sep 2013, 07:43:47

$this->bbcode_second_pass_quote('radon1', '')$this->bbcode_second_pass_quote('phaster', '
')
IMHO the USSR was also a super power BUT only in the military sense!
USSR was a "super power" in every possible sense but it was definitely poorer than USA, for objective reasons.


Correct. Closed loop modernity based on a communal allocation of the commons (revolutionary socialism) will by definition be "poorer" than open loop modernity (capitalism (which includes bourgeoisie socialism)), based as capitalism is on infinite growth with a hierarchical allocation of the commons.)
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Re: getting use to the new economic normal?

Unread postby americandream » Sun 15 Sep 2013, 07:47:15

$this->bbcode_second_pass_quote('dolanbaker', 'I')t seems to me that the economic world is reverting to a pre-industrial status quo, one where you have a small elite followed by a relatively small professional class, tradesmen and then the rest(workers)!

Before the industrial revolution, most people were on a subsistence level of income that covered their basic essentials and nothing else (today that's classed as poverty). Industrialisation brought most of these people into a situation where they had to earn more to remain in the workforce as they now had to buy stuff rather than be almost self sufficient in their previous lives. Chinese workers are experiencing this right now in the same way as English workers did 200 years ago.

During the second half of the 20th century werkers were in great demand and were able to obtain a much larger larger share of the cake which in turn bumped of the share to the tradesmen & professionals, this trend has now stopped and has been in reverse ever since globalisation took hold in the 1990s


Infinite growth is reverting BACK to fixed value store? :|
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Re: getting use to the new economic normal?

Unread postby Pops » Sun 15 Sep 2013, 08:49:20

In the context of PO, isn't the question: are "robots" (machines) more energy efficient than humans?

That's the subtext here, declining fossil energy availability and increasing cost will eventually make the brute force solutions more expensive - hydrocarbon "assisted" ditch digging for example. But at some point will increasing FF costs and falling demand for middle class, semi-skilled workers replaced by software, combine to make ditch digging again a valid career path?

Or will the increasing efficiency of robots continue to replace people to the extent that the profits can be socialized instead of just the costs?

Really, those are the only 2 outcomes aren't they?
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Re: getting use to the new economic normal?

Unread postby americandream » Sun 15 Sep 2013, 08:59:43

$this->bbcode_second_pass_quote('Pops', 'I')n the context of PO, isn't the question: are "robots" (machines) more energy efficient than humans?

That's the subtext here, declining fossil energy availability and increasing cost will eventually make the brute force solutions more expensive - hydrocarbon "assisted" ditch digging for example. But at some point will increasing FF costs and falling demand for middle class, semi-skilled workers replaced by software, combine to make ditch digging again a valid career path?

Or will the increasing efficiency of robots continue to replace people to the extent that the profits can be socialized instead of just the costs?

Really, those are the only 2 outcomes aren't they?


Any socialisation requires a fiscal base which in turn requires a gainfully employed labour force. Automation has been another one of those tools (apart from the many others such as de-unionisation) with which to intimidate the workforce into accepting lower salaries and wages. But the capitalist is forever confronted with the conundrum of ensuring that there is a market for his goods whether manufactured by humans or robots.
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Re: getting use to the new economic normal?

Unread postby SeaGypsy » Sun 15 Sep 2013, 09:29:28

That's funny, the Marxist lecturing on the necessity of 'gainful employment' while paying his bills by playing the market :lol:
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Re: getting use to the new economic normal?

Unread postby SeaGypsy » Sun 15 Sep 2013, 10:24:02

Just a thought: so much moralizing rooted in work ethic, while none about the fact that the vast majority of essential work is already done by machines and reliant on oil (and other FF's). What is our average western energy slave count now?- Well over 100, I read a figure of 140+ 24/7 energy slaves for each American- so actually the vast majority of what people get, they get effectively free. Their 'work' is so often of no import to anything or so little it's laughable, and so often those taking the most of the pie (running the most energy slaves) are the very least essential to anyone's actual needs.

Whether at the right, left or middle of the spectrum politically, there seems to be a consensus in willful blindness to the fact of our values system created economic myths being largely nothing more than a social construct. We are already potentially capable of a near Utopic reality. The fact that a dirt farmer is often not better off in their personal finances than someone who literally does nothing, while someone who 'sells real estate' or designs/ administers contracts (or 'acts', does music or ball sports) can make megabucks- all give away the lie of how the system and our generally accepted collective beliefs manipulate our views of ourselves and each other, as well as how primitive we mostly still are in our thinking. The system is basically a giant scam. People should do themselves (and each other) a favor and see it for what it is.
Last edited by SeaGypsy on Sun 15 Sep 2013, 11:26:27, edited 1 time in total.
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Re: getting use to the new economic normal?

Unread postby ROCKMAN » Sun 15 Sep 2013, 10:45:04

SG - True that there are some "dirt farmers" not doing very well. But I've dealt with many Texas "dirt farmers" and scrub cattle ranchers in my leasing efforts and the vast majority are rather wealthy from those activities. In fact I can't think of one in the last 38 years that anyone would consider poor. And that's not counting the $billions they've received in oil/NG royalties. I do appreciate the romantic image of the struggling farmer. And there are farmers/ranchers that do lose their properties every year. But there are a lot of other BUSINESSES that go bankrupt every year.

Maybe Texas farmers/ranchers, just like all other Texans, are just that much talented than everyone else. LOL.
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Re: getting use to the new economic normal?

Unread postby SeaGypsy » Sun 15 Sep 2013, 10:58:24

Yes, but this completely misses my point Rock. Either you get what I'm on about or you don't. It's not about specific means of 'making a living' it's about what bullcrap it is that if people don't 'work' (be 'productive') they starve.
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