Futurists and economists often spend a lot of time contemplating the systems and hardware of the world unfolding around us. The promises of the information age, quantum computing, Industry 4.0, and many other well laid plans are expounded on at great length by enthusiasts with imagination. Yet in all of this, there is something usually missing, something incredibly important:
How is the world that is coming going to work for people? How will it help us all have a better life?
We can see fractures already. Economic systems which bring prosperity do so at a large cost in nature and workers. Families are under strain from changing times, yes, but largely due to demands for more and more work at greater distances. Automation takes away much of that work, bringing more misery than comfort. And the prophesy of abundance is a chimera.
Correcting this is what People’s Economics is all about.
Call it the “Fourth Industrial Revolution” or the more hip “Industry 4.0” if you like. What matters most is that industry, or the process of making things, is changing in ways that seem fundamental and permanent. The world is moving on to a new era which, difficult as times like this can be to understand, appears to be rather well defined and describable.
If you do a deep dive into Industry 4.0, however, there is still something missing. It’s the “why” of the process which seems to be at least assumed, if not elusive. Not just why it is happening, but why it is being driven now and why it is expected to cast aside Industry 3.0.
What’s missing in the increasing chatter of Industry 4.0 appears to be the fundamental force behind it, which is the decline of what we might call “capitalism” in favor of a purely market centered, low overhead “marketism” approach.
Inflation is certainly surging, it remains to be seen how much of a problem that is. What we do know is that some regions of the nation, particularly cities where businesses have embraced technology, are surging ahead quickly. Some a bit too quickly.
In a nation already divided, the success of some cities is only accelerating the divide. If they become too successful their high cost may ultimately slow growth. But for now, the benefits of the recovery are heavily centered on a few places.
The stock market is high. What gets a market feelin’ good and oblivious to everything around it is a powerful drug, one that has the ability to cloud judgement like nothing else. The opium of markets is OPM, or Other People’s Money.
Where the stock market should be feeling blue and dealing with the realities of a world unraveling with trade wars and debt, it’s taken another course. It’s decided to just get high the best way it can. In that state of euphoria none of that other stuff matters, and everything is good. We have plenty of OPM to go around.
Right now, the stock market has a serious OPM crisis that very few people are talking about.
The basis of any capitalist or free market system is risk analysis. Every investment, whether in time or capital or short-term inventory is made based on the potential reward for success and the potential risk of failure. Because these events happen in the future, confidence or anxiety often play a large role in the process.
Generally speaking, it’s all about the availability of the critical resource being invested. People with nothing left to lose often put their time into a project because their time is all they have. Capital markets flush with cash are often looking for places that will give them a big return. Yet in all of these cases, emotions eventually become important.
Lately, nerves are raw. Investment? You gotta be kidding.
A busy day calls for a repeat. This piece from two years ago demands a revisit in light of the potential for inflation now that we are approaching full employment and wages are indeed rising.
Is technology a net creator or destroyer of jobs? The question is as old as the Industrial Revolution, when workers in mills found themselves put out of work by large industrial looms. In France, they threw their shoes (sabots) into the weaving machines to destroy them – the origin of the term “sabotage”. The protests didn’t stop the machines, however, and the workers had to find something else to do in an ever-changing economy where machines did more and more work.
Today, the pace of technological change is faster than ever, with new gadgets coming into our lives constantly. Automation is also transforming our lives, with new robots and artificial intelligence replacing workers constantly. Are today’s productivity gains tomorrow’s unemployment? Increasingly those who study technology in our lives and the popular media are coming to the conclusion that yes, workers are net losers in the race against tech. And this is not a partisan issue.
It’s become popular in the politics of many nations to re-think free trade and globalism. Many people believe that something has gone terribly wrong and, for many reasons, politicians typically point to foreigners or a faceless “global order” as the problem.
This belief is not limited to the US by any means. It ranges from a sense of discomfort to a belief in “fair trade, not free trade” to outright sneering at “globalists”. Is there something wrong in the global order?
The short answer is yes, but the long answer is incredibly long and, interestingly enough, green on the back.