[p2p-research] What's different about this economic downturn? -- the severe unemployment

[Paul D. Fernhout]

Michel Bauwens wrote:
> within capitalism, jobs are dependent on the demand side ... and the policy
> of neoliberalism has been to gut the popular demand side by focusing on the
> top 1-10% .. if you'd restore the part of labour, demand would be restored
> ...
> 
> overemployed is more difficult to gauge, certainly if you live in one of the
> East Asian countries which has chosen industrious development over
> industrial development, then you'd see that a typical westerner is doing the
> job of 3-4 people over here .. so it doesn't look much like overemployment
> seen from this side ... I would rather say most people are overworked, hence
> there is underemployment ..
> 
> overpricing is I guess a matter of global competition ... services are less
> subject to that than industrial products and the more complexity embedded in
> knowledge work, the more unique it becomes ...
> 
> there is another way to look at it: as we are able to be more and more
> productive and create more and more social wealth, many people could share
> more of humanity's wealth ... but this requires a different redistribution
> of human wealth ..
> 
> I do not give credence though to the automation argument of paul .. this has
> been a recurrent theme in every crisis, yet employment has been growing
> steadily, with woman entering the workforce etc... The simple reason is:
> human needs are evolving,and there is plenty of cultural work, environmental
> work, relational work that is very hard to automate, and even should not be
> automated ... (machine massage sucks, for example, because it doesn't give
> you the human relation that is part and parcel of such a service). There is
> enough 'work' for everybody, even given industrial automation,
> 
> but of course, a deeper question is whether we should continue to talk about
> 'work' at all ..

Michel-

I actually agree with you about the human side of all this. :-) I've always
maintained that, like in hunter/gatherer days, activities like raising
children, comforting the dying, taking care of the infirm, helping
neighbors, singing, dancing, sharing knowledge with others, exploring new
ideas, learning, contemplating nature and the cosmos and the infinite, and
many various ways of having fun can easily consume most of a person's day.
And further, that such activities *should* consume most of the day. :-)
   http://en.wikipedia.org/wiki/Original_affluent_society

The issue is exactly whether we should continue to talk about those sorts of
activities as "work" though. Or even as "consumption". :-) If you look at a
society like the Amish, much of which the USA pays for (entertainment, basic
education, basic medical treatment, even barn construction) they might
handle within their families and communities without money changing hands.
(There of course may be other things exchanged, whether respect or a sense
of obligation, but in a more personal peer-oriented way.)

As Ryan suggests, labor economies may have fundamental differences with 
material economies. But perhaps they have different social and ethical 
dimensions too.

To put in a few economic numbers, in the USA, agriculture has gone
from 90% of the paid labor force to only 2% over the last 200 years.
Manufacturing has gone from 30% to 12% over the last fifty years or so (with
increasing imports, granted, but that 12% still probably produces more than
that 30% did, given much productivity increase over that time by a factor of
three or four). So, where are all the jobs going to come from today if
agriculture has gone, and manufacturing is going? (And one difference is we
can see advanced robots in widescale use that for the first time are getting
*better* than humans at dexterous tasks, like they can operate on a heart
while it is still beating, either teleoperated or automatically.) Sure, we
need some millions of green energy jobs for the time being, but even then,
once everyone has windmills and solar panels, the things last for decades
with practically no maintenance, so there are not many long lasting jobs there.

So, what are people doing within the money economy? The bulk of the
remaining tasks are basically "service jobs". So, human activities I listed
above are, for the most part now becoming paid "services". So, the real
issue becomes, if agriculture and manufacturing are becoming to the point
where practically no one needs to do them, then why should most "service
jobs" be part of a market economy oriented around managing *material*
scarcity? Services in a healthy community are not usually scarce the way
manufactured goods used to be scarce. In the past, all these services,
including massage, were for the most part not done for money most of the
time. Sure there were wandering minstrels, traveling fortune tellers, and
the world's oldest profession, but often these were looked down on as
questionable paid "services" (all entertainment, really) and they were very
rarely career aspirations for most people. Most of these other services were
provided in a more peer-to-peer way, either as gifts or through some social
exchange.

And today, the internet can provide more entertainment than most people 
need. In fact, preventing access to that entertainment is now considered 
another "service problem" to create jobs and eliminate job seekers:
"'Internet addict' killed at Chinese boot camp: 16-year old boy beaten to 
death by camp supervisors"
http://www.techradar.com/news/internet/-internet-addict-killed-at-chinese-boot-camp-622960

I'll admit that "healer" and "minister" were classic service professions
that many aspired to -- but sometimes those services protected themselves in
a guild-like way of keeping knowledge private, or other tricks of the trade.
And it was only in the last hundred years that your chances of living
generally went up when you saw a doctor, instead of down. :-( Handwashing
helped some with that:
   http://en.wikipedia.org/wiki/Ignaz_Semmelweis
"The First Clinic had an average maternal mortality rate due to puerperal
fever of about 10% (actual rates fluctuated wildly). ... Semmelweis
described desperate women begging on their knees not to be admitted to the
First Clinic. Some women even preferred to give birth in the streets,
pretending to have given sudden birth en route to the hospital (a practice
known as street births), which meant they would still qualify for the child
care benefits without having been admitted to the clinic. ..."

I guess as I see it, the free market has through the past few thousand years
been *mostly* about goods, not services, in terms of overall volume (I
include the "service" of shopkeeping and trading as essentially about
goods). There have been non-good related service offerings (apprenticeships,
for one example), but they have been at the edges (and even then, in many
case often related directly with things like repairing objects or learning
how to produce them). And even many of the highest prestige service
professions like lawyer and minister were generally related to maintaining a
pyramidal social order. So, maybe what has been unsaid by many economists
(maybe some do?) is that the transition to a "service economy", or
essentially, corporatizing basic human interactions (activities in the past
performed by friends, family, and neighbors), is *unhealthy* socially? And
maybe it would be better organized informally somehow, rather than through
exchanging ration units (dollars)? So, again, the need to be more p2p.

And even if one can make an argument for a highly structured health care
system or legal system (perhaps even with rationing), does that argument
really apply all the way through every helping profession or every personal
service?

John Taylor Gatto suggests compulsory schooling has been part of all that,
to destroy communities and make people more dependent on authorities to do
the organizing in a pyramidal way, or on a market dominated by large
organizations to supply services most people no longer have confidence they
can do for themselves. From:
   http://www.johntaylorgatto.com/chapters/16a.htm
"Try to see that an intricately subordinated industrial/commercial system
has only limited use for hundreds of millions of self-reliant, resourceful
readers and critical thinkers. In an egalitarian, entrepreneurially based
economy of confederated families like the one the Amish have or the
Mondragon folk in the Basque region of Spain, any number of self-reliant
people can be accommodated usefully, but not in a concentrated command-type
economy like our own. Where on earth would they fit?"

Some key issues in the ongoing economic transition back to a hunter/gatherer
lifestyle (but with technology) are:
* demand saturation;
* exponentially increasing automation and productivity;
* the end of a need for extrinsic guarding (given robot guards or no guards;
* improved peer relations;
* greater cooperation;
* decreasing corruption in government by better surveillance; and
* the ending of compulsory schooling (or at least its marginalization
through the internet which is full of useful information and ideas).

So, there may always be things to do and people to do them (like raising
children), but the point, is, will they be "jobs" and will "ration units"
play a major role in how such activities are organized?

=== Some more thoughts on why I believe that:

On the consumption side, I agree that consumption levels have risen and that
has forestalled "the end of work". That's why these trends have been slower
to play out:
   http://en.wikipedia.org/wiki/The_Triple_Revolution
Or as written about here in the 1990s:
   "The Overworked American"
   http://users.ipfw.edu/ruflethe/american.html

Still, I feel it likely demand in the USA for stuff and bigger houses has
been saturated in many ways. And there are counter trends to more stuff like
environmentalism and the "voluntary simplicity" movement too. And even if
increasing demand has somewhat further to go (many people in the USA and
abroad do live without decent housing and health care and many other things
we now accept as "basics"), improvements in productivity will balance
increasing demands, leading to a net job loss. These productivity
improvements come in several ways (US employers have squeezed their
employees with unpaid labor), but the best ways may be through automation
and better design, like with multi-functional appliances like the iPhone or
3D printers.

I agree with Ryan about overemployment and overpay. One big reason is, many
of these professions just make work for each other. Many professions have
long been "trafficking in drug users" and become addicted to the problems
they claim to solve. Example:
   "Trafficking in Drug Users: Professional Exchange Networks in the Control
of Deviance" by Jim Beniger
http://www.amazon.com/Trafficking-Drug-Users-Professional-Sociological/dp/0521276802
Or as above, beating teenagers to death to save them from the internet. :-(

Most countries get by better than the USA with less lawyers, teachers,
guards, judges, soldiers, and so on. So, a vast percentage of the US
population is involved in guarding functions. Two complementary guarding
examples are US police guarding against US citizens escaping the country by
using drugs, and US soldiers guarding foreign oil pipelines to make the
products the citizens are supposed to be buying instead of the drugs. (In
general I would discourage people from using drugs, of course; it is better
to fix our society so less people want to escape it, IMHO.)
Or in China, there are now people who guard against escaping the country 
through the internet.

Most key medical personnel are in artificially short supply with
artificially high rates of pay, limited only by the number of slots in
medical schools and the high cost of medical school tuition, much of which
just goes to other doctors as a sort of pyramid scheme. That could easily 
change with cheaper medical education through the internet and through 
simulations. Relative to paying a doctor US$400K a year as a professor, 
running would-be medical students through computer simulations is a lot 
cheaper. Sure, there needs to be hands on stuff -- but I'm talking 
elimintating most of the cost of learning to be a doctor eventually. This is 
only the beginning:
   "Trauma Center: Second Opinion [Wii]"
   http://www.youtube.com/watch?v=8rjGb382Xfc
Sure, that is unrealistic; but it shows the potential -- many people have 
networked game consoles in their home that could teach them much of modern 
medicine. Even more direct physical activities like surgery can be taught 
through force feedback robotics:
   "Butcher attempts simulator op"
   http://news.bbc.co.uk/2/hi/health/8050883.stm
"Using simulators to train surgeons makes them quicker and better, a Danish 
study has shown. The research, published in the British Medical Journal, 
comes after Sir Liam Donaldson, England's chief medical officer, called for 
more simulation training in the NHS. "

And robots are even filling in for patients:
   "Robot Patient Says "That Hurts""
   http://gizmodo.com/172552/robot-patient-says-that-hurts
"If you looked like this dude, you'd be saying "That hurts" as well. This is 
a robot pre-programmed with 8 different medical conditions. It has 24 
sensors under its soft, warmish silicone skin and can respond to proddings 
and pokings with vocal complaints. Designed as a teching aid, they've 
discovered that laying hands on a robot makes you more ready to handle 
squirmy, wet, and stinking human beings."

And even dentistry:
   "Japanese Dental Students Use a Robot Patient"
http://www.switched.com/2009/07/08/japanese-dental-students-use-a-robot-patient/
"No one likes going to the dentist, so imagine the discomfort of being a 
patient for a dentist-in-training. So, in order to avoid pain, damage, and 
deep dental trauma, BBC reports that a professor at the Nippon Dental 
University Hospital in Tokyo has developed an interesting solution. A 
sensor-laden, blinking and gurgling robot named Simroid acts as feedback, 
documenting and alerting the trainee when he or she has dug too deep or 
accidentally touched the robot inappropriately. The entire session is 
recorded to be later reviewed by professors or students."

Now, is that fun, or what? :-) A chance to realistically "play doctor" with 
few consequences. :-) And, imagine though, how much the spread of these 
physical simulators might improve general medical skills among peers. Sure, 
things can and will go wrong -- I'm mainly pointing to a general trend. And 
while these robot patients are expensive and rare now, in twenty years, 
there is no reason these things might cost very little. Five year olds might 
be playing dentist with real tools on grown-up sized robots. :-) My kid 
already did that with this:
   "Shrek 2 Rotten Root Canal Play-Doh Set"
   http://www.amazon.com/Shrek-Rotten-Root-Canal-Play-Doh/dp/B00015Q1IE
So, we'll see this improve... So, medical costs should drop as medical 
experience becomes widespread, the same way computer skills were once rare 
but now many people know how to do lots of computer basics and more advanced 
things.

Plus, as with computers, technology gets easier to use. I'm not sure how 
good it really is, but you can now use a laser wand on teeth to see if they 
have cavities, and you can use a cup that fits over the tooth to treat small 
cavities with ozone, and then use a remineralizing mouth rinse. Even if 
ozone is not as good as conventional treatments (I don't know) it is likely 
easier for amateurs to do for peers.
   http://answers.yahoo.com/question/index?qid=20080131093057AAPGE9O

And once people *seriously* start rethinking dentistry and medicine from the 
point of view of how can it be deskilled, we may see even more innovations 
in such directions. Of course, the best way to do dentistry and doctoring is 
from prevention. Like better nutrition, fighting against advertising:
   http://www.honestfoodguide.org/

 From my own experience around technology firms, most technology work is
also unnecessary -- duplicating existing products, making proprietary
versions of things from scratch, competing instead of cooperating. Almost
all software is redundant (99.9% of it or more, and I say that as a
programmer. :-) And most software would be far better built on a flexible 
core (like Lisp or Smalltalk), now that saving machine cycles and memory are 
not such a big deal most of the time.

Choice is better up to a point; then it becomes a tyranny of
incompatibility and decisions.
"The Tyranny of Choice"
http://www.scientificamerican.com/article.cfm?id=0006AD38-D9FB-1055-973683414B7F0000
"""
Americans today choose among more options in more parts of life than has
ever been possible before. To an extent, the opportunity to choose enhances
our lives. It is only logical to think that if some choice is good, more is
better; people who care about having infinite options will benefit from
them, and those who do not can always just ignore the 273 versions of cereal
they have never tried. Yet recent research strongly suggests that,
psychologically, this assumption is wrong. Although some choice is
undoubtedly better than none, more is not always better than less.
   This evidence is consistent with large-scale social trends. Assessments
of well-being by various social scientists--among them, David G. Myers of
Hope College and Robert E. Lane of Yale University--reveal that increased
choice and increased affluence have, in fact, been accompanied by decreased
well-being in the U.S. and most other affluent societies. As the gross
domestic product more than doubled in the past 30 years, the proportion of
the population describing itself as "very happy" declined by about 5
percent, or by some 14 million people. In addition, more of us than ever are
clinically depressed. Of course, no one believes that a single factor
explains decreased well-being, but a number of findings indicate that the
explosion of choice plays an important role.
"""

Even the issues Andrew raises, whether US Americans are more productive than
others, is to some degree an issue of *competition*. If the firms were not
trying to outguess each other, the problems would not be so complex. And
without so much corruption related to privatizing profits and socializing
costs, the decisions would not be made so badly for the rest of us (example,
we would have moved to renewables decades ago over external cost issues).
Ultimately, while this is hard for even me to believe :-), the internet has
the potential to decrease government corruption in the long term (David
Brin's "The Transparent Society").

We are also not anywhere close to the amount of jobs we can eliminate with
just existing technology over the web (for example, ordering local groceries
or products to pick up at a local store, or have delivered by a self-driving
van). In general, self-driving vehicles will eliminate huge numbers of workers.

We could eliminate a whole huge set of government jobs by replacing "needs
based" support (which requires people to check eligibility and income) with
a basic income.

Advertising has created all sorts of "needs" like owning a snowmobile or
motorboat you might use a few days a year instead of renting one (or just
enjoying nature by snowshoeing or canoeing). Not all jobs may be easily
fully automated, but at the very least, automation lets a few people do more
production.

So, there are all sorts of reasons people in the USA are doing too much and
charging too much for it.
   http://www.whywork.org/rethinking/whywork/abolition.html

Even some of the highest paid professions like lawyers and medical
specialists are possible to eliminate by making information available
through the internet and by structuring the systems that are surrounding
those activities more. It's the same way as on the factory floor -- why
create a "smart" bin picking robot when you can just have the parts
delivered nicely organized in palettes where they have been put as they were
produced? Why lose the orientation of the part at one point, only to have to
pay to put it back somewhere else? There are several aspects of our society
where we let things get complex on the assumption a human is there to deal
with a problem, where it we change a system end-to-end, or systematize a
complex task into little parts, then there is less of a problem. So, if we
have less property crime, there is less need for lawyers to deal with it;
but also if the court processes are streamlined, there is less need for as
many lawyers.

Marshall Brain talks about this in Manna, with people wearing headsets that
tell them what to do, step by step:
   http://www.marshallbrain.com/manna2.htm
"""
   Then there were all the unemployed people. Between Manna improving
efficiency and forcing out the managers, plus overseas outsourcing taking
out white collar jobs, plus machines like the automated checkout lines and
burger flippers coming on line and so on, there were plenty of people who
were unemployed. Unemployed people went around all day applying to jobs. But
in a sense, that was pointless. All of the interconnected Manna systems knew
every single person in the job pool. Manna also knew the performance of
every single person who had ever worked in the system. You were in an
incredibly bad spot if you were unemployed.
   Then there were all the people being managed by Manna. They all made
minimum wage. If you were wearing a headset at work you were making minimum
wage and everyone knew it. And everyone knew that if you did not do what
Manna told you to do, as fast as Manna told you to do it, you would be
unemployed and making nothing.
   And then there was everyone else -- the doctors, lawyers, accountants,
office workers, executives, politicians. The executives and politicians made
a ton of money and they were never going to be wearing headsets. Joe Garcia
at Burger-G was making $100 million per year and flaunting it like a rock star.
   And Manna was starting to move in on some of the white collar work force.
The basic idea was to break every job down into a series of steps that Manna
could manage. No one had ever realized it before, but just about every job
had parts that could be subdivided out.
   HMOs and hospitals, for example, were starting to put headsets on the
doctors and surgeons. It helped lower malpractice problems by making sure
that the surgeon followed every step in a surgical procedure. The hospitals
could also hyper-specialize the surgeons. For example, one surgeon might do
nothing but open the chest for heart surgery. Another would do the arterial
grafts. Another would come in to inspect the work and close the patient back
up. What this then meant, over time, was that the HMO could train
technicians to do the opening and closing procedures at much lower cost.
Eventually, every part of the subdivided surgery could be performed by a
super-specialized technician. Manna kept every procedure on an exact track
that virtually eliminated errors. Manna would schedule 5 or 10 routine
surgeries at a time. Technicians would do everything, with one actual
surgeon overseeing things and handling any emergencies. They all wore
headsets, and Manna controlled every minute of their working lives.
   That same hyper-specialization approach could apply to lots of white
collar jobs. Lawyers, for example. You could take any routine legal problem
and subdivide it -- uncontested divorces, real estate transactions, most
standard contracts, and so on. It was surprising where you started to see
headsets popping up, and whenever you saw them you knew that the people were
locked in, that they were working every minute of every day and that wages
were falling.
"""

Anyway, that's all part of why I think, barring plague or war, we will see a 
jobless recovery, if not even more unemployment. This is the background 
trend; the economic bubbles and outsourcing magnify it in the USA, of 
course, but it would be happening regardless of them. Still, the rest of the 
world may be slower to see this. So, we'll see rising employment in various 
other countries for a time as they go up these curves. But, I'd suggest, 
those curves in other countries will happen a lot faster than in the USA. 
And what happens in China when 3D printers take off or robots became really 
cheap? Let's hope something good. :-)

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

> Michel
> 
> On Sat, Sep 5, 2009 at 8:38 PM, Ryan Lanham <rlanham1963 at gmail.com> wrote:
> 
>> For those watching for the end of capitalism...it is the loss of employment
>> that has people particularly spooked.  No one knows where future paying jobs
>> are coming from...several industries...e.g. academia, social networking,
>> manufacturing, traditional energy, banking, law, government, seem overpriced
>> and overemployed.
>>
>> http://www.ritholtz.com/blog/wp-content/uploads/2009/09/20090904.gif
>>
>> --
>> Ryan