It's very simple to describe, but rather challenging for us to solve. The situation is that local comparative advantage has been eroded by outsourcing, and the demand for human labor (both local and remote) has been eroded by automation. Now, this has been happening for hundreds of years, and the luddites are rightly laughed at today for trying to stop the progress by breaking the machines. But they do have a point -- if the net effect on the labor markets is that the workers will be in a race to the bottom, then who really wins?
Of course, we can tax the capital just enough to subsidize the consumption activities of the population, making a permanent welfare state for everyone. This will release people from the effects of market discipline which may otherwise very well ruin the lives of many people and towns who are out of work in the new economy -- as happened in the Great Depression. But is this really the solution? Research has shown that crime goes up in disenfranchised neighborhoods where people hardly help each other. On the other hand, crime goes down when everyone is locked away at home on their computer and independent of everyone else. The situation we will have is somewhere in between, being out with smartphones and google glasses, iWatches and other things, interacting with each other, but mostly contributing as consumers and not producers. It's a scary world where most people will be the equivalent of poets or other liberal arts majors -- trying to find a meaning for their existence, ever more plugged into the collective hive, which provides for them.
Humanity is doing this to itself. I wonder if we will ever become the Borg :-P
Of course, we can tax the capital just enough to subsidize the consumption activities of the population, making a permanent welfare state for everyone. This will release people from the effects of market discipline which may otherwise very well ruin the lives of many people and towns who are out of work in the new economy -- as happened in the Great Depression. But is this really the solution? Research has shown that crime goes up in disenfranchised neighborhoods where people hardly help each other. On the other hand, crime goes down when everyone is locked away at home on their computer and independent of everyone else. The situation we will have is somewhere in between, being out with smartphones and google glasses, iWatches and other things, interacting with each other, but mostly contributing as consumers and not producers. It's a scary world where most people will be the equivalent of poets or other liberal arts majors -- trying to find a meaning for their existence, ever more plugged into the collective hive, which provides for them.
Humanity is doing this to itself. I wonder if we will ever become the Borg :-P