So, You Wanna Talk Technology…

Not all technological progress is beneficial from a standpoint of employment.

If you want to examine something just look at the United States in the first fifty years in the 20th century.

Most technology resulted in massive job losses that ultimately became a factor in the Great Depression. There was nowhere for the excess labor created by technology to go. In the end, that excess labor ended up in the US military fighting WW II or producing war materiel.

When WW II ended the country went right back into a recession that would have gone right back into the Great Depression had it not been for three specific factors:

  1. Europe (and Japan)–The manufacturing base of the world was in shambles with the manufacturing, resources processing and agricultural base destroyed, the infrastructure destroyed (better said “severely damaged”) and millions of workers killed or injured plus all governments heavily indebted.
  2. The Bretton Woods Agreement. It resulted in the US Dollar becoming the de facto international reserve currency and the de facto international currency of trade.
  3. No competition from other developing States.

Understand that this [the Bretton Woods Agreement] created an additional outlet for the excess US labor, making it easier to buy from the United States since all world trade took place in US Dollars.

The total lack of competition–globally–acted as bar preventing the creation of any more excess labor.

The current problems affecting the United States stem from several key factors:

1). The United States was sufficiently ahead technologically and economically to absorb the waves of competition coming out of Asia. First, it was the Taiwanese invasion of the 1960s, followed by the Japanese invasion of the 1970s, followed by the Pacific Rim invasion (mostly the Philippines and Thailand) of the 1980s, followed by the Korean invasion of the 1990s and now you have the Chinese invasion of this century.

The US is presently unable to cope with this large number of simultaneously developing States. You cannot compete on a global scale because the wages of American workers are up to 250x greater than the wages of foreign global workers. It is impossible to pay foreign global workers on par with American workers since that would create extreme income inequality between foreign global workers and foreign domestic workers, and we all know that income inequality is evil because Liberals say so. It would also create wage inflation resulting in political, economic and social strife, which will destabilize a country internally.

The US is going to have no other choice but to wait–for a very long time–while the natural flow, the natural order of things develops in accordance with the law of economics (which is basically the same as physics) until the wages of foreign global workers are on par with US global workers.

Wages in developing States double about every ten years, so sometime around the year 2040 the US should start to BECOME globally competitive, and by the period of 2050-2060, the United States will BE globally competitive.

2). No new technology. It was the transistor that created jobs. That was around 1948 or so but that technology was held closely by the military until it was released for civilian use in the mid-1960s. Then, you had the microchip in, oh, what, the 1970s or so, which created jobs as well. What has the United States done since then? Absolutely nothing. The only thing the United States has done is repackage microchips in various forms.

That is not creating new technology. It’s like the potato–scalloped potatoes, potatoes au gratin, skillet fried potatoes, French fries, oven-browned potatoes, hash browns, mashed potatoes, baked potatoes, twice-baked potatoes, potato chips–no matter what, they’re still potatoes.

The processes, machinery and equipment that’s been introduced has resulted in a net loss of jobs, man. This has happened before, man. Remember Henry Ford? He introduced the assembly line production method back in 1908 and everyone thought he was crazy. By the early 1920s everyone was using the assembly line production method and that increased production at the expense of employees who were then in great surplus in the US and that led to the recession and housing bust of 1925–and that actually marked the beginning of the Great Depression with severe recessions in 1928, which occurred again in 1930–and again in 1933–and again in 1937.

So, here we are in 2012, with surplus labor created by an inability to compete globally due to the high wage differential and the repackaging of microchips in various forms as machinery and equipment reducing the need for labor.

3). Government spending.

It shows that big government impedes GDP growth.

Just look at the regional transfers of capital in the United States during the recession of the 1970s and the early 1980s. Textiles left New England and moved to the Southeast; manufacturing left the Midwest and moved to the South and Southwest; and then you had technology shifting to the entire West Coast with Apple and Silicon Valley and so on.

Textiles never moved back to the New England area and manufacturing never moved back to the Midwest. In fact, they’ve all moved further out with textiles now in Mexico and other countries, manufacturing moving out and computer/microchip technology all shifting to Southeast Asia.

Rest assure computer/microchip/manufacturing will continue to move from Southeast Asia to Southwest Asia and then into North Africa and then sub-Saharan Africa.

I wish I didn’t have to say it but it doesn’t look all too bright for the US in the short-term [and long-term either].

One last thing I would like to expound on is the electrical grid, here, in the United States. It’s antiquated–and it will cost around $3.25 trillion to upgrade it.

Every main station, every sub-station and every switching station at the very least has to have of those pre-1990 components removed and upgraded; all of that high-power, high-tension transfer lines need to be re-wired, all of those transformers replaced/upgraded and all the lines re-run up the businesses and residences.

It ain’t a smart thing to add more power to a system that can barely handle the current load.

Which brings me to all of this “solar energy” thing.

Now, who really believes that government vis-a-vis public utility companies who gain revenues from the sale of electricity and for-profit energy companies who gain profits from the sale of electricity are going to allow people to put solar cells on their roofs and get free electricity?

Something ain’t right about that.

It would be predictably expected that corporate interests will create some law that will require solar cells to be leased so that they derive some profits and, of course, the government will be taxing those that use solar cells in some way to get revenues to pay off their pension plans.

Aside from that, it would be an economically thing to do–provided the cells were cheap enough, you’d increase disposable income for households and then, on a larger scale, one would free up all the capital that is used to build, repair and maintain residential power lines as well as the electricity itself to be used elsewhere in the economy.

That would most definitely lessen the amount of money that would be needed to upgrade the US electrical grid.

All-in-all, technology is an issue that affects labor, and technology, in addition to the fact that Americans cannot compete globally and that there’s rapid development of States (courtesy of BRIC) negatively impacts labor here in the United States.

Technology also allows kids to become involved in experiences, issues and matters that they are not prepared to deal with on an emotional or intellectual level. The kind of technology that kids are into also bars and inhibits interpersonal communication. This is one of the reasons why it’s best for kids who aspire to enroll in the many institutions of higher learning to not let the current popularization of science to spoil them and not let the current popularization of science motivate them to major in STEM because when they come to the realization of how stupid and pathetic they truly are, they’ll find themselves heavily burdened with debt.

But hey, they’ll always have their trusty smartphone by their side when times get rough for them….

Desmond

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