Thursday, July 28, 2011
Solar Power is Fastest Growing Industry in US
There is are a couple of unfortunate wrinkles in what would otherwise be true:
If you don't have money, it scarcely matters what the price of goods is. You are still fucked. For virtually everybody this impecunious, having money = having a job, not selling some bonds or re-allocating your portfolio in the direction of a higher-dividend asset assortment. Given the er... not exactly small... number of people who have fallen off this particular bus(with the additional fun that periods of joblessness do wonders for one's future prospects of being re-hired...) "jobs" as something close to an end in itself does represent a net gain for a substantial number of people.
Secondly, you say that "Ideally you would want a world where you have unlimited energy that required no money (ie jobs). This is true If and Only If the gains from increased efficiency are allocated in a manner that gives you a slice of the expanding pie. If, however, the pie is expanding; but your share of it is shrinking even faster(because whatever you do is an "inefficiency", you are quickly sliding toward point #1.
Empirically, a great many people have reason to be concerned, and to have no particular room to hope that even steady encheapening of goods will allow them to do better than tread water, since labor is definitely one of the goods being encheapened. As this [investorvillage.com] cheery little J.P. Morgan report notes, in a discussion of the improvement of corporate margins: "There are a lot of moving parts in the margin equation, but as shown in the second chart, reductions in wages and benefits explain the majority of the net improvement in margins. This trend has continued; as we have shown several times over the last two years, US labor compensation is now at a 50-year low relative to both company sales and US GDP (see EoTM April 26, 2011)."
Improvements in efficiency do you absolutely no good if somebody with more market power than you have is capturing them. This would appear to be the case. Under such conditions, the people with less market power(ie. about the bottom 95%) don't have a rational interest in efficiency; because they won't capture the gains from it. While(from the perspective of people's actual state of knowledge) the fascination with "jobs" might be largely sentimental populism, it is arguably not economically irrational. If essentially all gains from efficiency(which includes reduction in human resources costs) are being captured by people who aren't you, it is very much in your interest to demand greater inefficiency and attempt to roll back the reduction in demand for you.
Only in a society where everybody has a boat is the fact that the 'rising tide lifts all boats' a comforting one. If a substantial portion of the population is stuck in the mud, the rising tide is not a welcome development...
Labels: economics, indifferent corporations, politics, renewable energy, USA