[p2p-research] Fwd: More on the Supply and Demand Curve

[Paul D. Fernhout]

Stan Rhodes wrote:
> Paul, a quick reply: the assertion that "a specific key assumption of
> macroeconomics [is] (infinite demand for consumer goods and services)" is
> incorrect.  You may find it a worthwhile exercise to challenge your
> assumptions using the existing literature out there.  Also, no one really
> practices what's known as "classical economics" anymore, although it's not
> always easy to know what good economists DO practice, because it often
> defies easy labeling.

OK.

> Demand curves are for a specific commodity, and are created using data
> (known as a demand schedule). They do not assume infinite anything.

OK.

Any specific pointers to stuff on finite demand as it relates to employment 
from a macroeconomic perspective would be appreciated.

> Aggregate demand and aggregate supply models also depend on data, with many
> factors affecting the aggregate demand curve (consumer confidence, money
> supply, wealth, etc).  Again, nothing infinite applies.

OK. Then why is the curve typically drawn not touching the X axis?

> I realize you were not intentionally creating a strawman, but wanting to
> think through economic issues.  

Thanks. Yes, I really want to understand this, and contribute to our 
collective understanding of it. If I am wrong, I am wrong. But I'd like to 
see exactly where and how I am wrong, so I can learn from that. :-)

> Macroeconomics tries to use aggregate
> indicators to model economies, but the complexity presents an incredible
> challenge.  We're in the midst of coalescing economic theory right now, as
> behavioral and experimental economics smash into previous syntheses like the
> "New-Keynesian" school.

OK.

> Empirical economists seem to know that macro is generally a big fuzzy area.
> While many people profess a particular belief in a particular policy, when
> gently pressed on the empirical basis for models, they seem to admit a lot
> of simplifications and assumptions.  Those with reasonable approaches that
> admit these flaws don't receive much public exposure.

OK. I can believe that.

But it may be useful to press those assumptions, to bring them out in the 
open, and show when they are wrong, and how alternatives like peer 
production (or a basic income or a gift economy or something else) may make 
more sense given different assumptions. And it is doing a lot of that. I'm 
just trying to press on this one point.

Maybe I won't succeed at that. But someone else might.

But it seems to me that much of any economic research will be handwaved away 
as meaningless unless we can point to exactly what conventional assumptions 
are problematical when made by economists promoting other approaches (like 
globalization or increasing competition or lowering wages or busting unions 
and so on).

Alternatively, irrefutable widespread success on the ground will obviously 
will have more impact that theory (usually how theories change :-), but that 
may be hard to achieve when the ideologically driven hierarchy is fighting 
against the change (so, this is not so much like an astrophysics theory, 
although even then, unorthodox astronomers get denied telescope time).
   http://en.wikipedia.org/wiki/Halton_Arp

Still, it is the belief in the conventional assumptions and theory and 
related ideology that justifies so many repressive scarcity oriented 
policies at the government level. For example, organic farmers have trouble 
thriving in a market dominated by conventional agriculture that is receiving 
all sorts of government subsidies, and those subsidies to conventional 
agriculture are driven by all sorts of economic assumptions which various 
interest groups then use to sway the politics. By itself, theory is not 
enough, of course. But a plausible theory or plausible assumption can be the 
gathering point for the political push for change.

> I've never read Marshall Brain's book, but if he presents conclusions from
> some thought-experiment, the assumptions in that experiment should be judged
> independently.  

He says stuff like this (from 2003):
   http://www.marshallbrain.com/robotic-nation.htm
"""
The "Jobless Recovery" that we are currently experiencing in the U.S. is big 
news. See for example The Mystery of the 'jobless recovery': "Consider these 
facts: Employment growth at the moment is the lowest for any recovery since 
the government started keeping such statistics in 1939. The labor force 
shrank in July as discouraged workers stopped seeking employment. The number 
of people employed has fallen by more than 1 million since the "recovery" 
began in the fall of 2001." [ref] The Washington Post notes that we are now 
witnessing, "the longest hiring downturn since the Depression". [ref] The 
article also notes, "The vast majority of the 2.7 million job losses since 
the 2001 recession began were the result of permanent changes in the U.S. 
economy and are not coming back." There is no mystery -- the jobless 
recovery is exactly what you would expect in a robotic nation. When 
automation and robots eliminate jobs, they are gone for good. The economy 
then has to invent new jobs. But it is much harder to do that now because 
robots can quickly fill the new jobs that get invented. See the FAQ for 
additional information.
"""

 > The "automation means unemployment" theory has no empirical
> support. 

See the above example as the beginning of a refutation. :-)

Certainly history up to the last decade or so often supports your point:
   http://en.wikipedia.org/wiki/Unemployment

Still, in the USA, some people say we are now at 15% to 20% unemployment by 
1970s standards. With no end in sight for rising unemployment. The economy 
may come back, but maybe not the jobs, as a "jobless recovery".

If about 2% of workers farm, and about 12% of workers manufacture, where is 
the room for growth in those types of jobs?

All we  have left for job growth is services. (Unless everyone takes reduced 
work-weeks, which is unlikely in the USA given the way benefits are structured.)

And *anything* that can be done from a desk or over the phone or through the 
internet can be off-shored now. And soon, it may be done more and more by a 
computer-based artificial intelligence. The fact that a lot of people in 
India speak English and are willing to work for low wages by US standards 
has been holding back some investment in AI in the USA, same as how illegal 
immigrants (often Mexicans) working for low wages has held back agricultural 
automation in the USA. But that is all changing, as computers are slowly 
starting to produce better results even cheaper that paying people below 
minimum wage.

In my opinion, and that of many other technologists who look at what 
robotics can do even just now, over the next two to three decades, there is 
no future for most US American jobs -- except maybe for some hands-on jobs 
that are the most difficult to automate like home-health care aids (and 
which often pay poorly), for some security functions that relate to humans 
being in charge of machines, and maybe a few other niche areas.

Try it. Name ten jobs that aren't easy to automate, and then we can think 
about how we could automate them or redesign the system so they were not 
needed. I'll suggest no one here could name ten paying jobs that are not 
conceivably automatable or could not be designed around in the near future, 
at least as far as replacing 90% of the current workers in that field.

For example, even most home health care aids could be replaced if people had 
a basic income and so could help neighbors and relatives more. Or most home 
care aids could be replaced by improved technology in various ways, whether 
better diapers or advanced robots:
   "Nursebot Says Sit Up and Eat Your Nice Jell-O "
   http://www.popsci.com/scitech/article/2009-06/machines-heal?page=

Japan is pushing the envelope on these health care robots in part through 
xenophobia; the USA instead brings in foreigners as cheap health care 
workers. In either case, there is pressure to keep those wages down. In 
fact, if the wages for many things in the USA like agricultural labor or 
meat packing had not been kept down by illegal immigration, those jobs might 
have been automated long ago.

Can anyone explain and cite references as to why the obvious statement that 
automation (and improved design) destroys jobs at this point in our society 
is not true? Yes, people can point to earlier cases where it was not true, 
but I am talking about the last decade or two, where we can clearly see 
saturation of demand and diminishing returns on increasing consumption, at 
least in the USA.

I'd suggest the case is more like that the USA is bulging at the seams from 
too many material goods and services. Is the USA like an obese Mr. Creosote 
about to blow up, as shown graphically in Monty Python's "The Meaning of 
Life"? :-)
   http://en.wikipedia.org/wiki/Mr_Creosote

Warning: this is an incredible gross video clip of Mr. Creosote, even if it 
may be an accurate assessment of the implications of the US economic 
system's logic of ever expanding production and consumption: :-)
   "Mr Creosote (Monty Python)"
   http://www.youtube.com/watch?v=BlK62rjQWLk

If anyone can cite sources as to why rising productivity through automation 
and improved design does not *eventually* destroy jobs and lead to mass 
unemployment in a global market, then we will probably be talking about 
infinite demand again. :-) Which is my point. It's basic mathematics. If 
productivity continues to rise, then there is less need for workers if 
demand is fixed (assuming a fixed population size). Only if you create 
demand for some new thing that does not replace some old thing will there be 
more jobs. But human attention is limited.

As I wrote this I see Michel's post mentioning Roberto Verzola making a 
related point in January, which I can wonder if I saw back then and stuck in 
my unconscious mind somewhere:
http://blog.p2pfoundation.net/roberto-verzola-finite-demand-makes-relative-abundance-possible/2009/01/31

In reality, psychologically healthy people stop eating long before they 
explode like Mr. Creosote did. But, the argument that increasing 
productivity does not destroy jobs assumes we will all be Mr. Creosotes in 
some or all sectors of our lives forever -- and without exploding. Even if 
it is conventional wisdom, and even if the facts have seemingly upheld it so 
far taken across the entire economy even as agriculture and manufacturing 
have imploded, it would seem like an economic argument that goes against 
basic common sense would need some significant obvious easily verifiable 
justification?

Related google search:
   http://www.google.com/search?hl=en&q=automation+destroys+jobs

Example search result:
   "Automation a bigger deal than offshoring?"
http://news.cnet.com/Automation-a-bigger-deal-than-offshoring/2100-1022_3-5611742.html
"""
"Offpeopling" may be the latest turn of phrase to describe job trends, and 
it's the focus of a blog launched Friday.  Consultant Richard Samson argues 
that the replacement of human workers by technology is a bigger deal than 
the much-publicized offshore trend. And he's turned to the increasingly 
popular Web log, or blog, medium to share his views. Dubbed "Automatic 
Abundance," the blog is slated to provide alerts on topics such as tasks 
that are shifting to machines, income opportunities that are relatively safe 
from automation and emerging business ideas consistent with the trend. "It's 
happening every day, right before our eyes, but few notice," Samson said in 
a statement Friday. "A child born today will find very few of today's jobs 
in the want ads when graduating from college. Most work tasks done now by 
people will be done by smart technology within 20 or 30 years."
"""

Looks like the blog mentioned there has not been kept up to date:
   http://www.eranova.com/aa.html

But Marshall Brain's has:
   http://roboticnation.blogspot.com/
and at the top of it right now is a robot grape vine pruner:
  http://roboticnation.blogspot.com/2009/04/autonomous-grape-vine-pruner.html

Just think about the implications of that video. You see a vision system 
using stereo imaging to create a 3D model of arbitrary plant structures and 
deciding where to prune the vines. That is a real system working in a real 
field on real plants (even if it is still a new system, and may have issues).

Let's look at the history.

Job destruction has happened in US agriculture, over the past 200 years, 
going from about 80% of the workforce to 2% of the workforce (plus 
industrial support, which may be another 2%?).
   http://en.wikipedia.org/wiki/Agriculture_in_the_United_States

And that is even with now feeding most of the grain and soybean output to 
cattle and other animals, where it is wastefully transformed to animal 
protein at anywhere from a three-to-one to ten-to-one ratio. Otherwise US 
farmers by a recent estimate could feed over two billion people just by 
themselves. If meat consumption had not risen (along with a lot of ill 
health effects), we would need practically no farmers needed in the USA 
(less than 1%). As well as a lot less doctors. :-) Or, about two million 
farmers in the USA and elsewhere could be feeding seven billion vegetarians. 
So, obviously, food production is not an issue in today's society from a 
work point-of-view -- only food delivery and transformation and politics are 
problematical. And agricultural work for most of those vegetarian calories 
more and more means sitting in an air conditioned tractor listening to music 
while the tractor drives itself:
   "Cutting Alfalfa on GPS"
   http://www.youtube.com/watch?v=o-yR-XQ6GGs
   "Tractor Tunes™ UTV Stereo System "
   http://www.cabelas.com/prod-1/0056139523288a.shtml

Even Africa could feed the world by this standard:
"Africa alone could feed the world "
http://www.newscientist.com/article/mg20227143.100-africa-alone-could-feed-the-world.html?DCMP=OTC-rss&nsref=online-news

All those starving African children? Just a tragic result of the politics of 
a scarcity-focused word view, enforced using post-scarcity weapons 
technology, including promulgating mainstream economics through 
universities. People have long known you can grind up rock for fertilizer:
   http://remineralize.org/joomla/

Granted, for food production to be sustainable, it would need to be done 
differently, but that really is not that much more labor intensive than 
twice what we do now or so. Sustainable agriculture is just less profitable 
in the short term, for the extra effort required to rebuild the soil or 
doing more knowledge intensive organic production or return sewage to the 
soil in an organic way (like the Chinese have done for 40 centuries). But, 
why should we not do agriculture in a more sustainable way if most people 
like to be around growing plants and most people were otherwise unemployed? 
There are a lot more people now who want to farm than can (because of the 
high price of buying a farm, and the undesirability of working for someone 
else for low wages competing against illegal immigrants and farm automation).

Job destruction has happened in US manufacturing over the past 50 years, 
going (in round numbers) from about 30% of the workforce to about 10% 
(granted, some of that was offshoring, otherwise it would be, guessing, 
15%). From a 2001 report (manufacturing is even lower now, and the figure of 
19% there is for more than manufacturing):
   http://www.bls.gov/opub/cwc/cm20030124ar02p1.htm
"Over the course of the 20th century, the composition of the labor force 
shifted from industries dominated by primary production occupations, such as 
farmers and foresters, to those dominated by professional, technical, and 
service workers. At the turn of the century, about 38 percent of the labor 
force worked on farms. By the end of the century, that figure was less than 
3 percent. Likewise, the percent who worked in goods-producing industries, 
such as mining, manufacturing, and construction, decreased from 31 to 19 
percent of the workforce. Service industries were the growth sector during 
the 20th century, jumping from 31 percent of all workers in 1900 to 78 
percent in 1999."

Even there, the fact that unemployment did not decrease more is mostly due 
to a huge increase in the number of consumer goods the average family has 
stared in houses twice the size of the 1950s, along with multiple large 
personal vehicle (cars, boats, snowmobiles), as well as massive exports to 
other countries as they rebuilt after WWII or they rebuilt (or built) after 
Colonialism. Still, digital fabrication is getting so cheap, it is becoming 
the next big hobby, with digital sewing machines, RepRap, CNC routers, and 
so on. And hand tools of all sorts are very cheap -- things with remarkable 
blades and long life motors and great balance, even cordless tools.

Ironically, the executives who only push paper around in corporations go 
home on weekend and putter about with tools in their workshops and gardens.

So, two examples of historic job destruction. Granted, service jobs have 
replaced those job losses. But what is the future of the service sector in 
the age of the internet? Service jobs are a place where peer-production 
shines -- either in a free information commons or in doing reciprocal 
physical things like cutting each other's hair, or doing other services that 
can be more easily bartered as they entail little per-transaction material 
costs.

The text below was written around 1991 by Juliet B. Schor:
   http://users.ipfw.edu/ruflethe/american.html
"Since 1948, productivity has failed to rise in only five years. The level 
of productivity of the U.S. worker has more than doubled.  In other words, 
we could now produce our 1948 standard of living (measured in terms of 
marketed goods and services) in less than half the time it took in that 
year. We actually could have chosen the four-hour day. Or a working year of 
six months. Or, every worker in the United Stares could now be taking every 
other year off from work-with pay.  Incredible as it may sound, this is just 
the simple arithmetic of productivity growth in operation. But between 1948 
and the present we did not use any of the productivity dividend to reduce 
hours. In the first two decades after 1948, productivity grew rapidly, at 
about 3 percent a year. During that period worktime did not fall 
appreciably. Annual hours per labor force participant fell only slightly. 
And on a per-capita (rather than a labor force) basis, they even rose a bit. 
Since then, productivity growth has been lower, but still positive, 
averaging just over 1 percent a year. Yet hours have risen steadily for two 
decades. In 1990, the average American owns and consumes more than twice as 
much as he or she did in 1948, but also has less free time. How did this 
happen?"

Industrial productivity has probably almost doubled again since 1991 between 
automation and improved designs, suggesting people could live a 1948 
standard of living on a two-hour work day for just the able-bodied adult 
males in the society. Granted, parenting and housekeeping still takes a lot 
of work, stuff not usually considered in economic figuring, but even that 
can be rethought, and sadly has, with TV and school and video games and the 
internet replacing a lot of parenting by parents and socialization by 
neighbors.

Why have we not seen massive unemployment then in manufacturing beyond the 
workforce dropping by about one half during that time period? Part of the 
reason is that advertisement, exports, and rising expectations have all 
propped up demand. But each have reached the point of diminishing returns, 
or even collapse, as people begin to embrace voluntary simplicity and a more 
conscious lifestyle, or simply just find they have enough stuff, and the 
bigger problem is getting rid of it.
   http://www.freecycle.org/

Economics professor Richard Wolff explains another aspect of that here, that 
real wages have not risen since the 1970s, with instead the money going to 
corporate profits which are then loaned to workers instead of given as pay:
   http://www.capitalismhitsthefan.com/
So, we've seen a rising debt burden and rising work hours to keep this 
economy going this long, and consumption is still falling behind production, 
thus the economic contraction now as capitalism hits the fan.

We have reached the end of what is reasonably possible on using advertising 
and other social pressures to increase consumption (even as it may still set 
preferences between two alternatives or shape attention in other ways). We 
are at the point where, for those with jobs, consuming more stuff has gone 
beyond the point of diminishing returns, where it has negative benefit, like 
with Mr. Creosote, displacing healthy human relationships and exercise and 
experiences in nature and "free time".

In the USA, as a society, we have become like Mr. Creosote, ready to explode 
from all the abundance of material stuff which we have consumed instead of 
having healthier social peer interactions. And for those without jobs, they 
often have too much stress from that situation to enjoy their free time, and 
they are stigmatized or have no access to social networks that often revolve 
around work or school.

Our economy and society is now collapsing under the social problem of all 
this. But at the same time, mainstream economists are oblivious to this 
problem it seems, just suggesting it will all fix itself and get back to the 
way it was with some new jobs, maybe with a little government stimulus to 
bridge the gap until the good times (for economists) come back. Granted, we 
have let our physical infrastructure go in the USA, and there is a need for 
producing more green energy, but even all that won't really change much of 
this in the long term. If the US was not spending so much on war and school 
and prisons, all to destroy abundance in practice whatever their stated 
goal, we might have seen this social crisis even sooner.

Many of the happiest countries have much less material goods than the USA,
equivalent in overall consumer goods more to a 1940s US lifestyle.
   http://www.thehappinessshow.com/HappiestCountries.htm

So, it would seem the USA has long passed the point of diminishing returns.

Or from:
   http://travel.yahoo.com/p-interests-27761674
"According to a 2005 editorial, published in the British Medical Journal and 
written by Dr. Tony Delamothe, research done in Mexico, Ghana, Sweden, the 
U.S. and the U.K. shows that individuals typically get richer during their 
lifetimes, but not happier. It is family, social and community networks that 
bring joy to one's life, according to Delamothe."

So, as the rest of the world increases production and wealth, and the US 
gradually exports less (already we see that with the failure of the US 
automotive industry), and other countries like China also eventually export 
less, we will see the entire notion of industrial jobs change. Some graphics 
on the global situation and predictions of rising global abundance:
   http://www.ted.com/talks/hans_rosling_reveals_new_insights_on_poverty.html

OK, so agricultural jobs are gone. Manufacturing jobs are going. What does 
that leave? Service jobs. But informational jobs want to be peer production 
in a free commons. What is really left as "jobs"? Almost all the new 
"service" jobs in the USA don't pay well, have poor working conditions, and 
have no benefits (stuff like waitressing), and the ones that are better tend 
to be working for government involved in what Jane Jacobs called 
"transactions of decline".
   http://www.zompist.com/jacobs.html

Here is a list I put together last year. Consider who could pay for goods 
and services based on job income in thirty years, if robotics continues to 
develop just at the current rate over the last thirty years.

Check out clerks?
   "Your supermarket cashier may not know a kiwano from a tamarillo, but
Veggie Vision does."
http://domino.watson.ibm.com/comm/wwwr_thinkresearch.nsf/pages/machine399.html

Cab drivers?
    http://en.wikipedia.org/wiki/DARPA_Grand_Challenge

Heart Surgeons?
    http://en.wikipedia.org/wiki/Intuitive_Surgical

Airline pilots?
    http://en.wikipedia.org/wiki/Autopilot

Nurses?
    "Robot nurse escorts and schmoozes the elderly"
http://www.thematuremarket.com/SeniorStrategic/Robot_nurse_escorts_schmoozesthe_elderly-5260-5.html

Entertainer?
    "AKIBA ROBOT FESTIVAL 2006: Actroid Female Robot"
    http://www.youtube.com/watch?v=WbFFs4DHWys

Athlete?
    http://www.robocup.org/

Migrant agricultural labor?
    "AgBo Agricultural Robot"
    http://www.used-robots.com/articles.php?tag=1790
    http://abe.illinois.edu/faculty/T_Grift/publications

Librarian?
    http://www.google.com/

Artist?
    "robot artist draws portraits"
    http://technabob.com/blog/2007/12/28/robot-artist-draws-who-it-sees/

Designer?
    "Evolutionary Design by Computers"
    http://www.cs.ucl.ac.uk/staff/P.Bentley/evdes.html

Miner?
    "Could Robots Replace Humans in Mines?"
    http://www.npr.org/templates/story/story.php?storyId=12637032

Writer? (Well, these need a little work. :-)
    "SCIgen - An Automatic CS Paper Generator"
    http://pdos.csail.mit.edu/scigen/
    "General Writing / Plot / Story Generators"
    http://www.eqretrofit.com/zmc/writing.html

If conventional economics continues to hold sway, there will be a massive 
push to continued automation because it will eventually be cheaper, as the 
prices of computing falls. But, there is already a problem from a jobs 
perspective. We're already shutting down automotive companies in part from 
having too many good cars in the USA. How many cars does a family need?

You'd be right to point out many of these automation attempts are works in 
progress. But it is pretty clear that for most jobs, it is not a matter of 
whether automation can do it, but *when* automation will be cheaper than 
people (or whether it will be socially acceptable). And even before the 
automation fully replaces people, it will let one person produce even more 
and even faster, as they either use a machine to amplify their abilities or 
supervise multiple machines doing most of the work. Thus, for example, we 
are seeing many US manufacturing firms grow without adding staff. For 
example, they might implement a Kiva system:
   "Warehouse Robots at Work"
   http://www.youtube.com/watch?v=lWsMdN7HMuA
One comment: "We have these where I work. I love them! They are amazing, oh, 
and we didn't lay people off either, it just boosted our efficiency. They 
really are neat to work with"

But how many very efficient mail order company fulfillment houses do we 
need? So, eventually, this means job loss in the less-efficient 
non-automated firms, which just go out of business destroying all the 
company's jobs. Plus, once you put in a Kiva system, why not start thinking 
about automating picking stuff out of bins and sticking it in shipping 
boxes? It's only a matter of time. It would save on air conditioning costs 
and then the facility could run twenty four hours a day.

If there are infinite jobs to produce infinite goods, this is not an issue, 
because infinity makes all things possible. There would be a job for every 
able-bodied person who wanted one if there was infinite demand (although 
many jobs might still entail boredom and the low wages of competing with 
machines in a race to the bottom). But if there are finite jobs producing 
finite goods, then automation (of both goods production and services) will 
mean widespread job loss eventually, once other trends, like rising global 
expectations supporting US exports, play out. And this also has implications 
for peer production, because peer production will need to compete against 
heavily automated production requiring a lot of capital up-front.

But, to be clear, I feel job loss is a good thing for our society -- as long 
as we make social changes to accommodate it (basic income, gift economy, 
peer production). I'm not against automation in that sense (although I might 
ask, how do we want to automate to have a secure and democratic and joyful 
society? Automation can produce alienation.)
   "Automation"
   http://www.history.com/encyclopedia.do?articleId=201866

For example, increasing abundance would mean our society can restructure 
jobs into more enjoyable forms as play or to be done at home as hobbies 
(aspects of peer production relate to this).

> Unemployment is not positively correlated with automation at all.

Obviously, we can see a direct microeconomic correlation. You put in a robot 
welder, you don't need a human welder, and presumably, maintaining the robot 
takes a lot less effort than a human doing welding, otherwise it would be 
more expensive and not used.

The issue is, is there a macroeconomic correlation of automation and 
unemployment?

Please, if you could show that in the last ten years, it would be 
persuasive. But, I'd suggest, if you can, there will be other factors like 
globalization and wage disparities and rising expectations in other 
countries that make this true.

For an economy like the USA, looking just within the borders, I'd suggest 
this is just not true.

Even with exports, consider:
   http://en.wikipedia.org/wiki/Jobless_recovery
"""
The Current Population Survey [1] aggregate data is provided below to 
examine the United States long term employment creation by decade. [2] 
Population growth [3] is displayed for relevance to evaluate Employment 
Growth. [4]

1950's
Population Growth = 11,516,000
Employment Growth = 7,215,000 (62.65%)

1960's
Population Growth = 19,449,000
Employment Growth = 13,862,000 (71.27%)

1970's
Population Growth = 30,811,000
Employment Growth = 21,224,000 (68.88%)

1980's
Population Growth = 20,865,000
Employment Growth = 17,685,000 (84.76%)

1990's
Population Growth = 21,667,000
Employment Growth = 16,998,000 (78.45%)

2000's (to Mar. 2009)
Population Growth = 26,254,000
Employment Growth = 5,137,000 (19.57%)
"""

These figures suggest that we have reached the saturation point for goods 
and services in the USA, and so increasing productivity is seriously 
affecting employment. Granted, one has to consider trade issues. But the USA 
is still one of the top two exporters of goods. So, manufactured goods like 
toys from China can't explain all this difference (though it explains some).

By older standards of unemployment (like from the 1970s), the USA is now at 
15% to 20% unemployment:
http://minnesotabudgetbites.org/2009/05/29/u-s-unemployment-at-16-according-to-wider-measure/
"The U-6 unemployment measure counts the unemployed, underemployed and 
marginally attached workers. This more comprehensive measure puts national 
unemployment at 15.8% – significantly higher than the official unemployment 
rate."

>   When people are free to work on other projects because of automation, they
> work where automation isn't possible or economical.  

Such as where? Being an airline pilot? Being a heart surgeon? Being a 
warehouse forklift operator? Being a waitress? Being a home health care aid?
As I suggest above, all those can be automated and are being automated or 
being redesigned out of existence.

And the remaining "knowledge worker" jobs want to be peer production in open 
commons for the most efficiency. Otherwise, we are just creating artificial 
scarcities of information to prop up an obsolete scarcity-based economic model.

> There are many ways to
> crack this nut, so you may want to consider attempting to disprove Brain's
> claims, and see if such attempts bring additional insight.  I don't mean
> Devil's Advocate, but true investigative skepticism, rooted in uncommitted
> curiosity.

These are the facts, as I see it.
* US unemployment is approaching 15% to 20% by 1970s measurements.
* US health as a society is already failing from too much stuff (even as 
many in the USA still have too little, like no access to health care).
* Other countries like Greece are having riots related to youth 
unemployment, since older people hang onto jobs better than the young can 
get them (given the kind of things young people can do are often more easily 
automated).
* The trends point towards increasing automation and better design and thus 
increasing unemployment (short of war to destroy abundance).
* The economists you see in the mainstream media deny or spin all this.

You can't have abundance if demand is infinite, because abundance means 
having more than you need or even want. So, whether demand is finite (or at 
least grows more slowly than productivity) is a central issue in thinking 
about peer production, a basic income, a gift economy, or any other 
alternative. If you agree that demand is finite (even if large), then mass 
unemployment follows logically from rising productivity eventually -- we are 
only then discussing when demand saturation happens for most things. I'd 
suggest, in the USA, we are long past the point of diminishing returns for 
most people, and the world is rapidly catching up.

--Paul Fernhout
http://www.pdfernhout.net/