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Guest Post: Inequality And The Decline Of Labor

Tyler Durden's picture


Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Inequality has many sources, but political and technological dynamics are key factors.

You may have seen this video on Wealth Inequality in America, which has gone viral. I have shown the same data for years in charts and discussed it at great length: Made in U.S.A.: Wealth Inequality (July 15, 2011).

The bottom 80% of American households held a mere 7% of these financial assets, while the top 1% held 42.7%, the top 5% holds 72% and the top 10% held fully 83%.

Here is a snapshot of total assets by category:

"Other assets" include Treasury and corporate bonds, favored holdings of pension funds and the wealthy due to their relative safety and guaranteed yield.

Here is a snapshot of stock ownership:

No surprise there: the top 1% owns roughly 40% of all stocks, and the top 10% own 81%.

Wealth comes from earned and unearned (rent, dividends, etc.) income and capital appreciation, so it's no surprise that the income of the wealthiest segment has also far outpaced the lower 95%:

I have long held that the greatest source of wealth inequality is political: those with great wealth have captured the for-sale machinery of governance, and "persuaded" the Central State to carve out quasi-monopolies and cartels that enable artificially high premiums. They also buy subsidies, exceptions and tax breaks for their income streams.

This is the result of a dominant Central State and an electoral process that lives and breathes cash and lobbying.

In other words, the primary source of wealth inequality is political corruption and an overly powerful centralized State that can grant monopolies and enforce cartels. For example, Attorney General Holder admits megabanks are ‘too big to jail’.

Setting aside the fact that the financial and political Elites are two sides of the same Aristocratic coin, we find an erosion of middle class jobs and wages.

Many observers (including myself) have noted that robotics and networked software are replacing both unskilled and skilled labor at a faster clip than technology is creating jobs. Some believe the rise of robots and software pose little threat to human labor, for example: The robot menace:


As technology improves, Mr Autor writes, a pattern emerges. Machines take over routine tasks like repeated number-crunching or the welding of car parts. Such jobs can be programmed into machines using detailed, specific instructions. Displaced human workers are then reassigned to do more improvisational or intuitive work. At airline check-in counters, say, computers are displacing employees from mundane tasks like printing boarding passes. That makes it easier for the humans to respond to unexpected problems like cancelled flights or changed itineraries.


A faster pace of "jobsolescence" could create a huge number of niches like that: human workers needed to facilitate the automation taking over many routine tasks.

This sort of article never gets around to acknowledging the obvious reality: that the number of airline employees "doing improvisational work" is considerably lower than the total number of employees that once did both improvisational work and the duties that have been replaced by networked machines and software.

In the lived-in world these analysts apparently avoid, costly human interactions in many settings are increasingly rare, and this elimination of waiting to interact with an employee is a great boon: print your boarding pass at home, no waiting.

In airports, the only human interaction required in most cases is Homeland Security. In retail settings, self-checkout elminates the need for all but a thin slice of "improvisational work."

Developing economies often have a great many people available for improvisational work, but their pay is very low, as improvisational work does not carry much of a premium when labor is in surplus.

Few commentators dare wonder if the entire model of distributing output via wages is broken. The implicit assumption is that there will always be an unmet demand for labor of all skill levels.

This assumption has two ideological flavors:

1. This demand for labor only comes alive when the price of labor is free-floating, i.e. price adjusts for supply and demand. In other words, if I won't pay $15 an hour for someone to mow my lawn, I might hire someone to do the work for $5 an hour. This is the free-market perspective.

2. Education is the key, as the higher the skills and knowledge base of workers, the more they are worth to potential employers. This is the progressive perspective.

To the degree these are ideological, they are unhelpful, as "believers" are blinded by their respective convictions to any concepts outside their circle of faith.

While it is true that the market will distribute labor and wages, a huge imbalance i.e. massive labor surplus, opens the door to exploitation by those with scarce cash to pay for labor.

As for education, I have often pointed out the fallacy in this assumption: training 100,000 people to become PhDs does not automatically create 100,000 jobs for them. Granting 100,000 advanced degrees in chemistry does not create jobs for these 100,000 newly minted chemists. The demand must be organic, i.e. employers see some way to generate $200,000 of value in the marketplace from paying one of these graduates $100,000. (Recall that the pay scales for advanced degrees are high, so the bar of value creation is also higher.)

There are saturation points to all high-skill labor categories. At some point, there is no need for more physicists, attorneys, etc. because there simply isn't enough demand for their skills.

So education is not some sort of blanket panacea to a systemic surplus of labor.

There are many forms of labor that have so little value or the value is diffused to the point that no one will pay to have the work done.

Consider building a free bikeway. Since there is no income stream generated by the bikeway, no enterprise will pay for the bikeway. The city labor contracts require paying workers $75,000 each (or more, once all benefits and pension costs are included), and the diffused benefits to the city often do not justify this major expense.

As a result, the bikeway never gets built. The same applies to picking up litter throughout town; it isn't cost-effective to pay people $75,000 to pick up litter, but since there is no incomes stream, then private enterprise can't do it, either. So nobody does it, other than prisoners (community service) or random unpaid volunteers.

In other words, there is a lot of work that could be done or needs to get done that is not cost-effective for either the public or private sector.

The ideal scenario in a State-dominated consumerist economy is the complete commoditization of labor, meaning people are wealthy enough to pay others to do everything for them. The ideal consumerist household earns about $200,000 a year (bare minimum) and pays others to: walk their dog, bathe their dog, clean their house, watch their kids, take their elderly parents down to the Seniors Center, teach their kids martial arts, piano, dancing, etc., tutor the kids when needed, maintain their house and prepare their meals.

In this scenario, there is always plenty of demand for a variety of skilled labor because the wage earners make so much money doing some high-skill job that they can afford to hire a veritable army of helpers and assistants to manage everyday living.

This is the fantasy scenario of all State-dominated consumerist economies because the high-earning household distributes virtually all its disposable income to downstream labor: the State gets to tax every wage and every transaction, and everyone earning a wage has money to spend on goods and services, keeping money velocity and tax revenues high.

There are two problems with this: one, only 5% of households make enough money to support the commodification of labor on this scale (The top 5% of households, three-quarters of whom had two income earners, had incomes of $166,200 or more: Affluence in the United States), and two, many Americans don't want jobs as domestics, dog-walkers, etc. Their expectations are far higher than what the labor market has to offer.

In other words, everyone wants to be in the top 5%, but the number of positions paying these wages is limited. Training 50% of the populace to perform the top 5% of jobs does not mean 50% of the populace will magically earn top 5% wages.

As a thought experiment, suppose we trained 50% of the workforce to be doctors, attorneys and PhDs in STEM (science, technology, engineering, math). Would the economy magically create jobs for 75 million doctors, lawyers and PhDs? Unfortunately, no. The number of positions requiring this level of training is limited by the demand, the money floating around to pay for these skills and the value created.

Let's return to the starting observation: Few commentators dare wonder if the entire model of distributing output via wages is broken. Those few who do dare wonder if there simply won't be enough paid work to go around have a conventional solution: the Central State should tax the remaining wage earners (and everyone's unearned income) and pay everyone without a job a guaranteed annual income.

In the State-dominated consumerist economy, this is the only possible conceptual solution, because it gives the State more power and distributes enough income to keep the consumer-based economy well-greased.

Is there no other model? I believe there is: an economy based on the forgotten decentralized, networked foundation of society, the community. In my recent books Why Things Are Falling Apart and What We Can Do About It and Resistance, Revolution, Liberation: A Model for Positive Change, I identify the three fundamental components of society: the State (government), the marketplace and the community, i.e. the non-State, non-marketplace functions of family, neighborhood, church, community group, fraternal organization, etc.

An economy in which surplus is distributed to decentralized communities rather than being concentrated in the Central State and its financial Elites, where the spoils are divided up according to bought-and-paid-for political favoritism, is perhaps the most efficient, practical, sustainable and fair distribution system possible in an era of structural labor surplus.

Most people have difficulty even conceptualizing this framework because they have internalized the dominance of the State. Community has withered to the point it has lost experiential meaning; it has ceased to exist in an economy where 50% of the populace receives a payment from the State. Community has been reduced to a myth that receives lip-service from politicos and others in the State's food chain.

When the current system of State-enforced inequality collapses, we will collectively have to re-establish the framework and meaning of community, one piece at a time.

Subscribers and major contributors will hear more about these topics in the weekly Musings Reports.

Part II Roundtable discussion with CHS, Gordon T. Long and Bill Laggner-- Central Banks: Perception of Omnipotence (27 Minutes, 43 Slides)


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Fri, 03/08/2013 - 11:48 | 3312200 falak pema
falak pema's picture

correction : decline of labour in FIRSTWORLD.

Thats what Reaganomics and NWO globalisation is all about; spread out the pain and thin out the gain! 

Its a big world out there! 

Fri, 03/08/2013 - 11:57 | 3312229 Divided States ...
Divided States of America's picture

And 95% of the 1% are Jews.

Fri, 03/08/2013 - 12:03 | 3312244 adr
adr's picture

and 99% of that 1% has never actually worked a day that required real labor in their lives.

Fri, 03/08/2013 - 12:16 | 3312314 hankwil74
hankwil74's picture

Because real labor = muscles and sweat


fake labor equals using your brain

"You use your brain to make money... what an idiot!"

Fri, 03/08/2013 - 12:21 | 3312339 Divided States ...
Divided States of America's picture



"You use your brain to STEAL money!"

Fri, 03/08/2013 - 12:23 | 3312343 adr
adr's picture

Using your brain counts as labor. Passing off the labor of other's brains as your own does not. Take one Steve Jobs for example.

If your CFO used his department to cook the books to increase EPS, with the end result of increasing the value of the shares you hold, you made money without labor or even a single neuron of brain power.

That is wealth without labor.

Fri, 03/08/2013 - 12:38 | 3312406 Acet
Acet's picture

Using your brain to come up with new and improved ways of skimming money off the work of your fellowman is not real work.

And yet, lots of sectors in our society, from law to finance, have become overwelmingly about that.

Fri, 03/08/2013 - 12:53 | 3312446 tickhound
tickhound's picture

Yup... Difficult for people to get through the very relevant, in its day, "by the sweat of your brow" mentality.


Labor is now just a cost.  The consumption end is subsidized.  Higher taxes are meaningless to a 'chosen' corporation or a multi-national in the face of higher profits.  These taxes only strengthen their position against smaller competitors or small business.

The truly SAD part is that all this breakthrough technology is being developed and guided toward simply REPLACING our labor and SUPPORTING ancient profit models. 

These models were created as OUR LABOR WAS NECESSARY.  We fetched pails of water FCS.  Value was placed on labor as we domesticated plants and animals and became more dependent on one another. 

The models were built to get the MOST out of our labor.  Profit was the incentive. 

A robot doesn't require incentive.  It is not a consumer.  It doesn't require laws governing "FAIRNESS."  It doesn't require the services, the protection...

It doesn't care about abundance or scarcity. 

IT DOESN'T DRIVE AN SUV 60 miles to work. 

The Models are broken. 

Ben is CHIEF MEDICINE MAN for an ANCIENT RELIGION that is IRRELEVANT outside of faith.

Fri, 03/08/2013 - 13:47 | 3312652 James_Cole
James_Cole's picture

"The models were built to get the MOST out of our labor."

Which model are you talking about, slavery? Penal? Cause' the only time in history when labour has been paid for value is when it organized. 

Fri, 03/08/2013 - 14:02 | 3312696 e-recep
e-recep's picture

when there was real growth middle class benefited from it, too. but real growth ended in year 1980 and things stagnated till year 2000. but the rich didn't want to stop there, so wealth transfer got first priority. we have had 13 years of rampant wealth transfer and it still goes on.

Fri, 03/08/2013 - 12:25 | 3312358 WTFx10
WTFx10's picture

Jews non Jews don't fuckin matter get rid of Nations\governments borrowing their currency from the private fucking Bankers. Arrest and confiscate their illegal wealth. Jail ,kill or put their criminal Asses to work. Nations do not need middle men skimming off the top I do not care what race or fucking religion. Its a fucking racket and they have had it all to themselves for to fucking long.

The USA has the biggest military the world has ever seen and they follow orders from a bunch of fucking criminals. Don't even call them Bankers, their just fucking thieves.


Fri, 03/08/2013 - 13:50 | 3312657 James_Cole
James_Cole's picture

Where is all this anti-Jew bullshit coming from anyway?? Been picking up steam lately. 

Fri, 03/08/2013 - 14:23 | 3312768 Anusocracy
Anusocracy's picture

Because people are slowly finding the source of the problem. This process of discovery has occurred in a number of countries over the past thousand years.

It's the beginning of a revolt against injustice and is long overdue.

Fri, 03/08/2013 - 15:26 | 3312976 secret_sam
secret_sam's picture

Simple minds need simple solutions.  If something is going wrong in someone's life, the easiest thing in the world is to look for someone to blame.

Jews have always been a popular target.

Fri, 03/08/2013 - 15:39 | 3313008 WTFx10
WTFx10's picture

What part of I DO NOT GIVE A FUCK IF THEY ARE JEWS OR NOT JEWS, A THIEF IS A THIEF! A GANGSTER IS A GANGSTER! ARREST all of them and we can sift through the nationalities and religions later if you want to sort the scum out in groups.


Fri, 03/08/2013 - 15:44 | 3313027 secret_sam
secret_sam's picture

You're sounding a bit emotional, son.  Obviously if you're not a Jewhater, my comment has nothing to do with you.  I was replying to James_Cole's question.

Fri, 03/08/2013 - 14:46 | 3312845 F22
F22's picture

I gave you a minus because of your ignorance.

Income for the top one percent is an AGI of $369K.

I've done more "real labor" than most Americans and the same is true for the majority of my partners and colleagues.  Bailing hay, milking cows and shoveling manure, building homes, cutting wood to heat our home, repairing and maintaining farm equipment.  I still work 60-80 hours a week and I have worked 100+ hours per week--if I didn't, I wouldn't make half the income that I make.  ----12 hours of work--that's a half-day.  Yes, I'm in the 1% and have worked long and hard to get here.  You shouldn't disparage those that you clearly know nothing about.

Sat, 03/09/2013 - 09:52 | 3314637 monad
monad's picture

If you're bailing hay and milking cows by hand, that's a hobby. If you're getting paid to do it by hand, its someone else's hobby and you're still spinning your wheels. If you're serious commercial, you aren't pasteurizing milk with a Bowie knife and a trench shovel, up hill in the snow 5 miles, both ways, waving a flag and kissing every girl along the way. Your arrogance belies your claimed outrage. The only thing your private property has to do with what's coming is that you're going to lose it all to the people you're defending. Pay attention: they are coming to kill us and take our shit. TBTF = monopoly = MNCs with the wealth of small nations and none of the liabilities, which they have offloaded onto the working people by coopting their - our - governments. Its about responsibility, you slave. I work hard too and I hate parasites. Pay attention or you'll just pay. You're spun.

Fri, 03/08/2013 - 12:04 | 3312241 Cult_of_Reason
Cult_of_Reason's picture

Infographics on the distribution of wealth in America, highlighting both the inequality and the difference between our perception of inequality and the actual numbers. The reality is often not what we think it is.

Thank you Bernanke!

Fri, 03/08/2013 - 11:55 | 3312220 Super Broccoli
Super Broccoli's picture

nah nah nah that was before, benny's working on it now and every american is getting a faboulous job. some would say it's part time and they're right but it's only because workers wants some time out to be able to consume consume consume all they earned on their enormous paycheck


Bernanke knows what he's doing folks, Obama is a great leader and the son of god (which explains why Kim Dot Sung whatever NK leader is getting nervous at the moment :=) and the economy is booming, we'll soon have huuuuuuge trade surplusses

Sun, 03/10/2013 - 03:33 | 3316470 bigyimmy007
bigyimmy007's picture


Fri, 03/08/2013 - 11:57 | 3312225 Skyprince
Skyprince's picture

A voice of reason in the wilderness.  Bring it on!


Fri, 03/08/2013 - 12:02 | 3312238 Burr's 2nd Shot
Burr's 2nd Shot's picture

A wise man once said, "You'll work hard with a gun in your back for a bowl of rice a day." Prophetic, really.

Fri, 03/08/2013 - 12:05 | 3312253 insanelysane
insanelysane's picture

I would respectfully disagree.  The infrastructure is crumbling in the US yet the government pays people to be unemployed instead of paying them to rebuild the infrastructure.  Why?  Because the majority of the unemployed will vote out the politicians if they are forced to work for a check.

Fri, 03/08/2013 - 12:14 | 3312306 adr
adr's picture

Would you want to drive over a bridge built by the people that have been paid not to work for 30 years?

Fri, 03/08/2013 - 12:41 | 3312416 three chord sloth
three chord sloth's picture

Then don't put 'em to work on the 1% of roads that are bridges, overpasses, tunnels, and/or otherwise dangerous. Put 'em to work on the 99% that is a flat slab of tar and gravel plopped on level ground.

Fri, 03/08/2013 - 12:53 | 3312444 DOT
DOT's picture

Spots wont turn to stripes, and the entitlements are many. I think we would see a huge increase in disability claims. "Hey! Boss I think I stubbed my toe."

Fri, 03/08/2013 - 15:11 | 3312915 Anusocracy
Anusocracy's picture

Privatize the roads.

We have the former Soviet Union's road bureaucracy and we've ended up with their roads.


"Everything government touches turns to crap."  Ringo Starr

Fri, 03/08/2013 - 12:53 | 3312445 secret_sam
secret_sam's picture

       the government pays people to be unemployed instead of paying them to rebuild the infrastructure.  Why?  Because the majority of the unemployed will vote out the politicians if they are forced to work for a check.

Glossing over the skills issue, the reason government doesn't pay the unemployed to build infrastructure is because folks like you in the construction industry would call it socialism and say it's "stealing their jobs."

Fri, 03/08/2013 - 15:49 | 3313039 smartstrike
smartstrike's picture

Excellent point! Can you imagine the outcry if USPS tried to take on UPS and FedEX?

Fri, 03/08/2013 - 16:09 | 3313087 secret_sam
secret_sam's picture

I'm sensing sarcasm, but you obviously don't have a lot of familiarity with all the labor disputes that have occurred every time some state governor puts another prison chain-gang online and stops paying $18.22/hr (or whatever) to those guys in the orange vests.

There are lots of strange corrupting influences on ALL the business models that started competing with government services.  When you're out of highschool, you may start learning about them.

Fri, 03/08/2013 - 18:07 | 3313473 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

When a single union is the only source for labor for a single job, it is a monopoly on labor. There are no free market principles for real wage price discovery in that case. I'm not saying there shouldn't be any unions but there should an open system for labor which means jobs in a company where the employer chooses from labor being in a particular union, non union, or some competing union. I believe in that scenario the best of the labor pool will go to the best union or work outside and in turn will get a better deal. 

Fri, 03/08/2013 - 18:54 | 3313594 secret_sam
secret_sam's picture

     When a single union is the only source for labor for a single job, it is a monopoly on labor.

I understand what you're getting at in the academic/fantasy-world sense, but there's never been a union that's monopolized a given source of labor, so that's not terribly relevant.

The point is: politicians have to get elected.  Voters (and the more important folks in the process, the campaign financiers) have COMPETING INTERESTS.  So whatever you may think is some kind of "obvious" solution to whatever political or economic problem you're bitching about is going to be fiercely opposed by some other citizens.

It's not likely that you'll find an example of a case where your side is 100% completely correct and the other side is 100% completely wrong.

It's to be expected that folks are going to think they're always right, but I always find it amusing when I encounter the mind closed so tightly that it cannot even consider the POSSIBILITY that there's another side to the issue.

Fri, 03/08/2013 - 13:52 | 3312661 Marco
Marco's picture

So the extra unemployment over the last few years was because of a laziness epidemic?

Fri, 03/08/2013 - 12:11 | 3312285 Ignatius
Ignatius's picture

Banks and corporations -- 'by hook and and by crook' --  will eventually and by their nature and design, soak up every bit of excess value in whatever territory they operate.  We will be left with the super rich controlling deep capital pools and the rest battling one another for the few prized positions in the pyramid.  The rest will be nothing but serfs scraping crumbs together when and where they can.

The bureaucracy of it will be oppressive to the many, as it already is for the few with an intact intellect to notice.  Don't be overly judgmental for those who can't as yet see this as we have a culture and schooling system that throttles independent intellectual development by design.

Those that currently hold these reigns of power will not give them up voluntarily, they never have.

Resets are a fact of history needed now as much as ever.  All we really have is each other whom we are trained to despise with machine like regularity.

Fri, 03/08/2013 - 12:13 | 3312298 adr
adr's picture

I wouldn't want to be rich. Most of the time when that scenario unfolds the rich try to kill each other and the poor try to kill the rich.

Sun, 03/10/2013 - 03:45 | 3316479 bigyimmy007
bigyimmy007's picture


You could also include government in that group as well.

Fri, 03/08/2013 - 12:11 | 3312289 Tum
Tum's picture

Bernanke says, "You're welcome!"

Fri, 03/08/2013 - 12:12 | 3312290 adr
adr's picture

I work hard to create products people want to buy so I can get paid. Now that practically nobody has any extra cash to buy products they want to buy, I can't get orders for my products so I can get paid.

One other reason why I can't get orders is because the people I can sell to want to pay less than the price I pay to actually produce the products, so even if I could sell the products, I would actually lose money doing so. So how am I supposed to get paid?

Do you have an answer for that Krugman? Huh?

I guess the government could just print money and give it to the people, so they could have money to buy the things they want and then I could get orders and get paid. But, if the government is just printing money to give to the people, why would I actually work to get paid when I could just get paid by taking money directly from the government.

So instead of working hard and actually producing product for a living. I'll just take money from the government and produce nothing along with everyone else, yet somehow everything I want will still be produced for me to buy. PARADISE!!!!

And that is how easy it is to completely destroy the Keynesian fallacy.

Fri, 03/08/2013 - 12:19 | 3312331 shovelhead
shovelhead's picture

Sounds like your business could use a dose of Krugman 'lightning'.

Fri, 03/08/2013 - 12:26 | 3312362 adr
adr's picture

We do have $11 million in inventory sitting in a warehouse. Hmmm. I heard Dominion's gas lines have a habit of failing lately.

Fri, 03/08/2013 - 14:35 | 3312814 Bob Sacamano
Bob Sacamano's picture

"So how am I supposed to get paid?"  

Produce a product people are willing to pay for (vs a product they are not willing to pay for).   Everyone wants to pay less, but the trick is to produce something people are willing to pay for.  Back to the drawing board.

Fri, 03/08/2013 - 17:46 | 3313387 Parrotile
Parrotile's picture

You got anything in mind??

R&D COSTS, and costs A LOT, no matter the Industry. In some Industries (Pharmaceuticals, Medical Devices), the R&D costs are literally jaw-dropping. Add the "Regulatory" and other Government Interference costs, and you soon find that innovation ain't quite as great as it's cracked up to be.

That's why everyone "who's Smart" copies, or produces fake products.

Or buy your way in to the MIC - plenty of Govt. cheese to produce costly and ineffective weapon systems

Fri, 03/08/2013 - 14:53 | 3312868 spooz
spooz's picture

The way I see a citizens dividend (print money and give it to the people instead of propping up the banks) working, it would first be used to pay off debt, and would, if anything, provide only a meager lifestyle.  There would still be plenty of incentive to earn more for those who want the nice home, car, entertainment, vacations, etc.

Fri, 03/08/2013 - 12:13 | 3312297 cabtrom
cabtrom's picture

If 5 dollars could still buy 5 or 6 gallons of gas I'd walk a fucking dog for a Job.

Fri, 03/08/2013 - 12:42 | 3312419 Acet
Acet's picture

Interestingly, here's a comment I posted earlier today that dovetails with this:


Fri, 03/08/2013 - 12:59 | 3312464 DOT
DOT's picture

You're hired ! your pay will be $ .12 per hour payable bi-weekly.

Fri, 03/08/2013 - 12:14 | 3312305 shovelhead
shovelhead's picture

I made 150k last year as an online dominatrix to the 1%.

Find out how @ Madame 'Slappy'

Fri, 03/08/2013 - 12:17 | 3312321 adr
adr's picture

You probably could have made a lot more cash if you agreed to be gangraped in a public bar by members of the San Francisco 1%.

You get a safe word, but if you use it, you won't get paid.

Fri, 03/08/2013 - 12:23 | 3312350 shovelhead
shovelhead's picture

That was the year before...

Pink sock forced a career change.

Fri, 03/08/2013 - 12:15 | 3312307 Kreditanstalt
Kreditanstalt's picture

This is above all a productivity crisis.  There simply isn't the need for labour enough to go around.  Not everyone can make enough to sustain the standard of living that people have come to expect...

Standards of living will and must FALL.

Fri, 03/08/2013 - 12:23 | 3312345 Ignatius
Ignatius's picture

Irony of 'progress', no?

The problem of overproduction has been understood for more than 100 years.

And the problem seems to be how this progress is shared out.

Fri, 03/08/2013 - 12:31 | 3312381 Mrmojorisin515
Mrmojorisin515's picture

right, if using debt is taking demand from the future and using it in the present, then logic would dictate that the population would also increase in the present.  We have too many people and not enough demand for them, gotta love the illusion that debt creates. That's why we'll liquidate debt and people in the coming years.  The worse part is that most of these people have no idea why they this will happen, and those that pull the strings we'll never pay for any of the cost

Fri, 03/08/2013 - 14:52 | 3312867 Bob Sacamano
Bob Sacamano's picture

Spot on.

"There simply isn't the need for labour enough to go around."   To which I would wage levels one likes and has grown accustom.

The relatively less developed countries have labor that is more hungry than the developed world who insist on retirement benefits, health care benefits, weeks of paid vacation, etc etc. 

Compared to 20 years ago, the productivity in the undeveloped world has grown even more than the developed world productivity (relatively from where they were 20 years ago).  

On top of the productivity gains and exploding global labor force, you had debt financed consumption for the last 40 years which is unsustainable in most of the developed world -- another headwind for standards of living. 

All this while the masses in the US cry out for more social programs to have government take care of them -- entitled victims all.  

Fri, 03/08/2013 - 12:16 | 3312313 DOT
DOT's picture

As Law of Physics might say, you gotta be up with your tribe. Community is an intentional thing and it is a local phenonmenum. "National" and "International" communities are mis-nomers. Centralization of wealth on a global scale is the result of the modern "mommy" State. Eat your peas.

Fri, 03/08/2013 - 13:10 | 3312500 MachoMan
MachoMan's picture

Yes and no.  The author presumes that people will somehow work within a "community" just for the sake of doing so, ignoring that economies of scale and core competencies can put goods and services on the community's plate cheaper than local actors...  I think we have our answer with the fate of mom and pop shops...

There are some items that localization will undoubtedly be able to provide better quality and cheaper (presuming constant or increasing energy prices), e.g. crops.  However, there are a great many goods that localization will not remotely be able to compete with...  the argument really boils down to nationalism on a local scale...  which fails rudimentary game theory.

Fri, 03/08/2013 - 13:26 | 3312559 MeBizarro
MeBizarro's picture

It works as long as the paper-mache supply chains systems don't go to hell and the cost of diesel doesn't tip the scales in the overall cost of production enough.   A return to more local system production is inevitable this century whether it happens through a large enough war that disrupts trade and throws the supply-chains systems to hell or the increasing cost of diesel. 

Fri, 03/08/2013 - 14:40 | 3312829 MachoMan
MachoMan's picture

True, although I think the distinction is largely between needs and wants...  for discretionary consumer items, I'm not sure a supply chain disruption really matters because many of those items will not be able to be purchased by J6P anyway...  needs can be met through localization (including your own garden, etc.)...  so, I think we will return to a more local system of production...  just for some things and not others.  But certainly moreso local than present.

With that said, it still doesn't change the inherent hard coding of humans to jump at the first cheap goods that appear post supply disruption...  loyalty lasts only so long as the environment demands.

Fri, 03/08/2013 - 18:16 | 3313501 Totentänzerlied
Totentänzerlied's picture

Whither the massive centralized state with its tentacles in every aspect of existence?

You cannot support the current or current-trend population without subsidized factory farming and ubiquitous cheap energy-dense foodstuffs, "service-sector" jobs, enormous centralized bureaucracies, etc.

How much of our population is currently employed in the production of agricultural products? Is it even 5%? That won't last. But individuals can't produce enough, for myriad reasons, to offset significant decreases in the (output of the) current system. Not without significant depopulation and a return to an aggressively agrarian existence. Which would not be able to sustain large metropolitan areas, or communities in non-arable and/or non-"ranchable" areas.

There are uncountably many things which will need to change. Why assume this change will be even remotely peaceful or easy?


Fri, 03/08/2013 - 19:11 | 3313641 Totentänzerlied
Totentänzerlied's picture

Supply chains relying on fossil fuels will break. Virtually no one will be able to afford the necessary increases in retail prices to cover the rise in fuel/production/distribution costs. Supply chains that are not profitable will not last long. Supply lines will break. 

Now tell me, how many communities, however you care to define that term, have actually prepared for a scenario in which they will be significantly, if not solely, responsible for the sustenance of their members, and fuel costs are prohibitive or worse, and supply lines are sporadically functional at best. Tick tock, the clock is ticking ... 

No argument from me that it can't be done, the question is, will it be done, in an orderly manner?

CHS thinks we will peacefully if stressfully muddle through and chart a course which blends local communitarianism with decidely non-local centralized statism. It has never happened before and frankly defies belief even in the most homogeneous of societies.

Fri, 03/08/2013 - 17:33 | 3313340 Totentänzerlied
Totentänzerlied's picture

If your community is "intentional" it's a mere simulacrum of the real thing. Real communities are organic entities held together by the culture which evolves alongside them. Humanist types have never met a thing that didn't need to be controlled and perfected, usually by unelected bourgeois theorists such as themselves having neither relevant expertise or experience. The hubris is mind-boggling.

Let me put it simply. The point of the last 5,000 years of civilization was the elimination of tribes in the general anthropological sense. If from your upbringing you can't pick out every member of your tribe (between 100 and 1,500 individuals) in a crowd, you have no tribe. And that was the goal of all centralized states from the get-go.

Intentional communities aren't a bad idea, but the majority will fail in all the ways a real community succeeds. Because people in real communities were raised in those communities and don't have the incredible luxury of living any other way. Tribes are not voluntary, the very acknowledgment of voluntariness in human relations is the undoing of all traditional human bonds, like it or not. Modern westerners such as ourselves really cannot fathom such a thing.

Laws of Physics wears his humanist pedigree on his sleeve, but his ignorance of humanity is equally obvious.

Fri, 03/08/2013 - 19:01 | 3313615 secret_sam
secret_sam's picture

     Humanist types have never met a thing that didn't need to be controlled and perfected,

Where'd you get that idea?

Fri, 03/08/2013 - 19:18 | 3313643 Totentänzerlied
Totentänzerlied's picture

Ever heard of a little thing called science and technology?

"Man is the measure of all things"?

Scientific Socialism?

The Enlightenment?

The White Man's Burden?



Rational Self Interest?

They're all part of the same ideoligical tradition, humanism - placing humans at both the center and the top of all things. It's the legacy of Western history.

Fri, 03/08/2013 - 19:44 | 3313714 secret_sam
secret_sam's picture you hate science and technology 'cause it's all been engineered by those "humanist types"?

There are plenty of "humanist types" who go into the arts, a discipline which has nothing to do with control or perfection of natural forces. 

The drive to exploit and control the environment isn't a function of humanism per se--it's more a dominionist perspective.  I suspect you're conflating the Romantic tradition with humanism.  Unless you're just name dropping above, you should instantly recognize what I'm referring to.

Fri, 03/08/2013 - 12:16 | 3312315 monad
monad's picture

Its working perfectly. Thats what its supposed to do, sheople.

Fri, 03/08/2013 - 12:18 | 3312324 cabtrom
cabtrom's picture

Let me control the worlds energy and I care not who writes the laws.

Fri, 03/08/2013 - 12:20 | 3312335 CurrencySpider
CurrencySpider's picture

There will be no revolution until the citizens see the inequality of public employment vs private employment. Is there any reason why a Nassau County, NY Police officers earns $180,000 - $220,000 nearing retirement with 50% salary after 20 years service? A Nassau County, NY school superintendent earns upwards of $400,000. Most Nassau County workers earn more than surgeons. We have surgeons in office now yet no revolution. Divide and Conquer prevents Revolution.

Fri, 03/08/2013 - 12:31 | 3312384 adr
adr's picture

Since most of the residents of Nassau depend on the government to keep stock prices elevated so they can afford to pay the Nassau property taxes, they probably won't revolt.


Fri, 03/08/2013 - 13:16 | 3312512 spooz
spooz's picture

Right.  You cherry pick a few numbers and try to make the argument that we should be paying the few laborers that are still making a living wage even less.  FYI, the average police salary is $55,000 a year, hardly excessive. The average school superintendent makes about $170,000. If your particular community has a problem with excessive pay, it does not represent the rest of the country.

A Rutgers study finds no difference in private and public pay when everything is considered:

"The data analysis in this paper, however, indicate that public employees, both state and local government, are not overpaid. Comparisons controlling for education, experience, hours of work, organizational size, gender, race, ethnicity and disability, reveal no significant overpayment but a slight undercompensation of public employees when compared to private employee compensation costs on a per hour basis. On average, full-time state and local employees are undercompensated by 3.7%, in comparison to otherwise similar private-sector workers. The public employee compensation penalty is smaller for local government employees (1.8%) than state government workers (7.6%)."

The only dividing and conquering I see is YOU trying to pit one group of laborers against the other.

Fri, 03/08/2013 - 13:42 | 3312637 CurrencySpider
CurrencySpider's picture

There is no cherry picking here. $55,000 isn't even starting salary in Nassau County unless maybe for a part-time secretary. Patrolmen in Nassau start in the $70,000's and quickly move to $130,000 after 5 years. Top out at 200,000 and retire with 50% pay FOR LIFE.

NYC patrolmen start at $40,000 and move to $95,000 at the five-year mark. With overtime and longevity, a NYC street cop can earn $125,000 per year nearing retirement. Detectives in NYC earn upwards of 150,000 with 50% pay FOR LIFE.

Please do compare to the Private Sector, Rutgers.



Fri, 03/08/2013 - 14:08 | 3312719 secret_sam
secret_sam's picture

My question would be...should cops be well-paid?

The pension-stuffing issue is completely unrelated to the payscale for the job.  Obviously there's no reason someone's saved-up sickdays should result in massive pension boosts, but I think it would take a really unusual perspective to try to argue that cops (in general) are overpaid because they're gummit employees.

Fri, 03/08/2013 - 14:11 | 3312729 spooz
spooz's picture

Do you even understand the concept of cherrypicking?  As in taking a single county and extrapolating its data for the rest of the US?  The Rutgers study looks at the whole country, not just YOUR neck of the woods.

Fri, 03/08/2013 - 15:44 | 3313024 CurrencySpider
CurrencySpider's picture

Not my neck of the woods. I live in NJ where it is an even larger issue.

The Rutgers study was a small flawed study. It did not not use the proper methods and sample size. Did you just rely on the abstract? That is indeed cherry picking.

Paying government employees as surgeons is not going to solve our fiscal mess.


Fri, 03/08/2013 - 16:11 | 3313092 spooz
spooz's picture

Academic citations for these perceived flaws in the study, please, or any other support for your "proper methods" and "sample size" criticism?

  I DID read the study, including the section "What Is Compared", and it used the Integrated Public Use Microdata Set. Do you have a problem with the data set or is there something else you object to? Or are you just floundering to protect your preconceived "facts"?


Fri, 03/08/2013 - 16:56 | 3313230 Boxed Merlot
Boxed Merlot's picture

Do you even understand the concept of cherrypicking?...


I think I understand the idea of "Cherrypicking" and here in Stockton, CA. the PD union had the city agree to 3% per year at 90% last year service which allowed county fair duty for senior officers @1.5-+2X reg pay to figure into "retirement" pay.  Pretty sweet deal when you figure in the incentives offered to get over 50s to make room for new hires.

The funny thing is, top positions in the force are charged with the task to make sure their underlings take full advantage of every financial entitlement available or they're not "doing their job".

Fri, 03/08/2013 - 18:07 | 3313475 spooz
spooz's picture

So, you have a local problem.  The Rutgers study takes the LOCAL part out and looks at the whole country.  Or do you need to see the list of counties that counter your anecdotal account?

Fri, 03/08/2013 - 20:55 | 3313868 Boxed Merlot
Boxed Merlot's picture

"do you need to see the list of counties that counter..."?


Not at all, I just suspect that despite Stockton's need to seek bankruptcy protection, we are not unique.  Hey, "I'm just doing my job".

Look, man, the train's are running on time, what more could you want? 

Fri, 03/08/2013 - 22:41 | 3314056 spooz
spooz's picture

Regardless of what your gut instincts tell you, there Rutgers study uses a widely used data set that proves that though Stockton may not be unique, it also is not representative of the rest of the country.

Sat, 03/09/2013 - 03:18 | 3314359 Boxed Merlot
Boxed Merlot's picture

...not representative of the rest of the country...


I think the point is it's indicative of the direction the rest of the country is headed.  If it is just a localized problem, it, and the other (few though they are?) localities with similar dictates are, were and will continue to be responsible for eating away at the healthy portions of the "rest of the country" that have yet to adopt the policies these organizations are designed to promote. 

So, I guess the alternative is as long as Cheasapeak oil bestows its windfalls on a small private sector group in Oklahoma it will cancel out the anomoly that exists here?  Or is it more like the windfalls reaped by the Big 5 in the fall of 08 and continue to recieve at the hands of the fed are considered private sector compensation that balances out the excessive public trough diets our local calpers / calstr recipients and other similarly patterned public unionized programs garner?  Both excesses are harbingers of greed gone amuck with their foisted expenses borne by previously productive individuals weary of fighting these cancers.


Sat, 03/09/2013 - 11:20 | 3314754 spooz
spooz's picture

Got any data to support your "gut" feeling?  Because it seems to ME that Wisconsin and Michigan are creating quite a different trend than the one you're seeing.

As for your BIG OIL reference, apples and oranges, one has nothing to do with the other.

Sat, 03/09/2013 - 18:42 | 3315746 Boxed Merlot
Boxed Merlot's picture

Got any data to support your "gut" feeling?...


Big, (or small), oil may be an apple to orange comparison but the only data I could point to would be the 85B frn the fed's been cranking out per ~30 day cycle that has to show up on the other side of the ledger, and in this case in the accounts of public sector unionized agreements tied to stock market valuations designed to provide retirement income for those fortunate enough to benefit from the window of opportunity their benefactors took, take and have no inkling to rescind in the future, "legal" right to appropriate.

It doesn't make it right or just, imo, only a matter of forensic evaluation of the facts. The productive individuals among us will continue to feel they've been taken advantage of regardless of the fact of whether the fruit of their efforts go to the "public" or "private" sector criminals that set their indulgent desires above the good of the people they serve.



Fri, 03/08/2013 - 17:38 | 3313356 Totentänzerlied
Totentänzerlied's picture

"The only dividing and conquering I see is YOU trying to pit one group of laborers against the other."

And why not, when some laborers are given very special treatment indeed by their monopoly employer.

" both state and local government, are not overpaid. "

The fact that they are paid at all qualifies as "overpaid", the money is stolen, the work is economically counterproductive, and the waste is intrinsic.

You have been divided and conquered. This means some of your fellow citizens are now your enemies, and will fight to preserve their privilege. That's how democracy works. Grow up.

Fri, 03/08/2013 - 13:25 | 3312545 Kreditanstalt
Kreditanstalt's picture

Not only these big fat cats, but everyone...

I graduated from University in 1982.  Years later, via Facebook, I find that virtually all of my graduating classmates, plus those from High School, are government employees, work for government contractors or work in industries (like forestry) protected or granted monopoly status by government...

Teacher.  City employee.  Law professor.  Government newsletter editor.  Lawyer.  Literacy Teacher.  And on and on...

NO WONDER we have a productivity and economic growth (LACK of it!) crisis...!

Fri, 03/08/2013 - 15:14 | 3312940 spooz
spooz's picture

Right.  Productivity will explode if we just dismantle our country's education system.  Then the globalists will have an even better excuse for outsourcing the few remaining good jobs.  Its not enough that college is unaffordable, lets make the rest of the system an elitist playground and make sure the peasants have no chance of developing critical thinking skills and learn to accept their place as worker units on the global stage.

Fri, 03/08/2013 - 17:40 | 3313363 Totentänzerlied
Totentänzerlied's picture

" lets make the rest of the system an elitist playground and make sure the peasants have no chance of developing critical thinking skills and learn to accept their place as worker units on the global stage."

That's exactly what the education system has done, you fool. 

"Then the globalists will have an even better excuse for outsourcing the few remaining good jobs. "

The good jobs which, judged on the basis of their product or service, are infinitely overcompensated. We have no need of those.

Fri, 03/08/2013 - 18:05 | 3313455 spooz
spooz's picture

So, because the neolibs have dumbed down our educational system, its time to just end education altogether and let the lowlife sheeple become ignorant peasants that are easier to herd? Sounds like an even better way to control them if they are illiterate and unable to seek out the truth in the few places where it still can be found.

And just which jobs do you feel are so overcompensated?  I would argue financial wizards and CEOs are grossly overpaid compared to the average government worker.

Fri, 03/08/2013 - 14:03 | 3312700 Marco
Marco's picture

The Sherrif of Nottingham gets his dues ... but in the end he's just a flunky for TPTB.

Fri, 03/08/2013 - 17:48 | 3313399 Totentänzerlied
Totentänzerlied's picture

Greetings from Glorious Democratic-Socialist People's Republic of Nassau County, NY.

You don't know the half of it.

All I can say is, they're not nearly as corrupt as they could be.

Fri, 03/08/2013 - 12:27 | 3312365 John Law Lives
John Law Lives's picture

296,000 Americans Drop Out of Labor Force in February; 89M Not Working
March 8, 2013
By Elizabeth Harrington

More Americans reportedly dropped out of the labor force in February than the number of new jobs that were reportedly created in February.

February FUBAR.

Fri, 03/08/2013 - 12:32 | 3312389 adr
adr's picture

That leaves more jobs for the rest of us!!!!!

oh wait....

Fri, 03/08/2013 - 12:37 | 3312402 edifice
edifice's picture

They took aaar jaaabs... Oh, wait...

Fri, 03/08/2013 - 16:06 | 3313075 monad
monad's picture

They killed our children and replace them with theirs. Everything else is bullshit.

Fuck you Congress. 

Fri, 03/08/2013 - 16:45 | 3313071 monad
monad's picture

What??!! You mean to say that these numbers, which costs us so much, are deceptive bullshit? NOOOooooo

Fri, 03/08/2013 - 12:29 | 3312371 WoodMizer
WoodMizer's picture

Thanks Ben, The rich feel richer and the poor live poorer.

That wealth effect should really kick the economy back into overdrive; nevermind the effect of inflation.  As long as the sheeple believe Fed numbers they will blame their "wealthy" bosses and neighbors for their declining standard of living.

At least Obamacare has started to fix the unemployment number, 2 partime jobs to replace every fulltime position.  I wonder if the extra commuting will affect discretionary spending, given the new normal in oil prices?

Fri, 03/08/2013 - 14:11 | 3312726 Fedaykinx
Fedaykinx's picture

nice avatar

Fri, 03/08/2013 - 12:29 | 3312372 the grateful un...
the grateful unemployed's picture

at least someone is thinking about the jobless society. once labor finds its needs met, then workers are free to choose what is important, building a bike way or another equally important project. people have a natural inclination to make productive use of their time. [i am not saying that is a good or bad thing, just the way it is, we might be better off if they just sat  back and hugged the bong] you can imagine a technological revolution which produces solutions to the basic necessities [and not electronic gadgets] of food, shelter, and transportation, for no real cost. solve those three matters and the existing political social national and religious boundaries all disappear.

Fri, 03/08/2013 - 13:06 | 3312455 LFMayor
LFMayor's picture

So they're going to squat down and just shit out all that cement to build the bike path? 

Of course they brought their own shovels, which they hand-forged from cans they picked up during the beautification drive. 
What do they do for meals, or do some volunteer to grow the arugula?
Will the women pluck their legs so that the hair can be fashioned into homespun garments for all?

Your bong idea is the most credible, because it's like this, as ever:  Entropy wins.  Pot = Soma and the meek shall sit their worthless asses in front of the TV and get baked unless forced by the needs of survival to move about and forage.

Fri, 03/08/2013 - 17:51 | 3313411 Totentänzerlied
Totentänzerlied's picture

I have your solution. Cut the population by 75% in less than 10 years.

Any other problems you need solved?

Fri, 03/08/2013 - 17:55 | 3313424 Totentänzerlied
Totentänzerlied's picture

Thinking about a lack of jobs is silly. You should be thinking about a lack of deliverable energy. Charles is tilting at windmills again.

Fri, 03/08/2013 - 12:38 | 3312404 Bicycle Repairman
Bicycle Repairman's picture

"An economy in which surplus is distributed to decentralized communities rather than being concentrated in the Central State and its financial Elites, where the spoils are divided up according to <snip>bought-and-paid-for political favoritism </snip>  actual work performed, is perhaps the most efficient, practical, sustainable and fair distribution system possible in an era of structural labor surplus."


Fri, 03/08/2013 - 12:49 | 3312433 Shizzmoney
Shizzmoney's picture

I'm sick of hearing on labor costs, "But how can we compete?"

Fri, 03/08/2013 - 13:05 | 3312482 Critical Path
Critical Path's picture

You mean the "we have a labor shortage problem"?


I don't care if real wages continue to fall and labor is replaced by robotics and automation instead (thanks obamacare).  But then there must be an equivalent deflation in prices paid for goods and services. 

Fri, 03/08/2013 - 13:02 | 3312472 Stuck on Zero
Stuck on Zero's picture

One reason for the demise of labor is government red tape and regulation.  You cannot hire someone for $10/hour to do anything.  You have to add in insurance, liability, workplace rules, insurance, benefits, reporting, and loads of paperwork.  The overhead is enormous.  Some estimates are $20K of over head to bring someone aboard for a year. 


Fri, 03/08/2013 - 13:04 | 3312477 Marco
Marco's picture

It all sounds like hot air to me, I don't feel like reading all your links at the moment so would you answer me this to clarify where you stand?

When push comes to shove, who has more rights to natural resources ... the community or the land owner?

I find this question useful to distinguish classical liberals from (non-geo)libertarians/anarcho-capitalists/randians.

Fri, 03/08/2013 - 13:30 | 3312586 Marco
Marco's picture

Oops, didn't read carefully enough ...

"An economy in which surplus is distributed to decentralized communities rather than being concentrated in the Central State and its financial Elites"

So not entirely the magical thinking I thought it was.

Fri, 03/08/2013 - 18:00 | 3313444 Totentänzerlied
Totentänzerlied's picture

Charles's ideas about the state and communitarianism are indeed "magical".

Fri, 03/08/2013 - 13:03 | 3312479 slightlyskeptical
slightlyskeptical's picture

back in the 80's I went to disney world.  One one of the attractions, i think Space Mountain, they had a little thing about the future as you waited for the ride. Their future had productivity rising to the point where everything became cheaper and thus we could enjoy better lifestyles while working part time.

Guess I deserve what i get for listening to anything out of Disney.

Fri, 03/08/2013 - 13:06 | 3312491 Flakmeister
Flakmeister's picture

Sounds like "Star Trek".....


Fri, 03/08/2013 - 13:10 | 3312501 MeBizarro
MeBizarro's picture

People as if this was some kind of great mystery.  It's not.  Rural areas and farming aside, just go back to the U.S. Census and look at the large number of people in occupations in urban areas in the late 18th (1870s-1910s).  What you will find is that it was in occupations either as domestic servants or in occupations that supported those positions.  They weren't slaves or indentured servants but they weren't exactly much better off either.   Go back and look at the conditions they generally lived in especially in tenament buildings in any major city in the Midwest or NE and the general life span of people because there was a huge concerted effort by local gov't officials to really clean up cities by systemically getting rid of garbage & supplying clean water to people.   

The one thing that really changed this was the introduction of the 16th Amendment in 1913 and even in the 20s you still had large numbers of people employed as domestic servants or in occupations which supported it.  Where we are headed back to but most Americans won't go willingly and rightly so.    

Fri, 03/08/2013 - 13:35 | 3312609 MeBizarro
MeBizarro's picture

Funny how facts always get thumbed down on ZH. 

Fri, 03/08/2013 - 15:32 | 3312991 LFMayor
LFMayor's picture

brother, math is HARD

Fri, 03/08/2013 - 17:54 | 3313416 Totentänzerlied
Totentänzerlied's picture

" local gov't officials to really clean up cities by systemically getting rid of garbage & supplying clean water to people. "

Using whose money, and where did it come from, o pray tell?

Fri, 03/08/2013 - 13:11 | 3312503 Vidar
Vidar's picture

The problem is the State and its creation of cartels and monopolies. If individuals could open small businesses without having to worry about licensing, regulation, and taxation, the elimination of wage-paying jobs by robotics and other technological advancements would be a net benefit that allowed the former wage-earners to become entrepreneurs.

Fri, 03/08/2013 - 13:19 | 3312525 Kreditanstalt
Kreditanstalt's picture

Well said!  Who wants to risk capital in this climate, with these costs and regulation??

And on this topic, there is no such thing as "unearned income".

Not only sweat labour, but RISK should be rewarded!


Fri, 03/08/2013 - 13:28 | 3312574 spooz
spooz's picture

Should passing off your risk to muppets while making a mockery of Rule of Law get rewarded too? When unearned income is a sure thing because you game the system so well should that be rewarded?

And why should those who do nothing get such a big tax break over those who put in hours of labor?

Fri, 03/08/2013 - 13:34 | 3312603 MeBizarro
MeBizarro's picture

It is just a dopey comment supported by a commentator who often says foolish or innane things.

Fri, 03/08/2013 - 13:36 | 3312608 Kreditanstalt
Kreditanstalt's picture

BLAME GOVERNMENT!   They're the ones granting favours, distributing taxpayer money, bailing out failures, granting monopoly status, failing to prosecute...

And how can a tax break EVER be criticized??  Would you rather have risk takers EARNING their income or hand it over to the state so that your earnings can be "redistributed"??

Fri, 03/08/2013 - 13:38 | 3312621 MeBizarro
MeBizarro's picture

Yes that is a big part of the problem but you think that will change unlesss people organize around a singular issue or set of issues and exert pressure on politicians for a protracted time period?  That is generally the way change has occured in the US (bottom-up) and it has a pretty mixed track record. 

It still doesn't mean that the earlier statement VIDAR made is just foolish nonsense. 

Fri, 03/08/2013 - 13:40 | 3312632 MeBizarro
MeBizarro's picture

How can a tax break ever be criticized?!  Let's see.  Maybe because it means the gov't is showing favorable treatment to a particular industry or form of investment that encourages overinvestment and has several other deleterious effects.

Fri, 03/08/2013 - 13:43 | 3312641 Kreditanstalt
Kreditanstalt's picture

Taxation of all kinds is THEFT...


Fri, 03/08/2013 - 13:48 | 3312653 MeBizarro
MeBizarro's picture

Statement an imbecile makes because any kind of centralized society even at the tribal level has a form of taxation whether it is formal or more informal based upon an exchange of services/goods.

If you want to go off and live like Robinson Crusoe, good luck with that.  If it is in a colder climate, you won't make it through the winter. 

Fri, 03/08/2013 - 13:53 | 3312665 Kreditanstalt
Kreditanstalt's picture

Socialism and economic envy are alive and well...on ZH!

Fri, 03/08/2013 - 14:01 | 3312679 MeBizarro
MeBizarro's picture

Yeah taxation to support common goods and services that wouldn't be supported by private capital due to the risk, time-frame, low IRR, and the time-frame invovled makes me a 'socialist.'  Ugh. 

Fri, 03/08/2013 - 14:11 | 3312728 Kreditanstalt
Kreditanstalt's picture

Well, you DO advocate forcing innocent other people to pay (via mandatory taxation) for stuff that YOU think "we" need, don't you?

Fri, 03/08/2013 - 16:14 | 3313101 spooz
spooz's picture

"Innocent", when rule of law has been suspended to protect the Too Big To Jails and in return prop up the elite's wealth piles, is a debatable concept.

Fri, 03/08/2013 - 13:20 | 3312529 MeBizarro
MeBizarro's picture

So small businesses shouldn't have to follow any regulations or licensure requirements or pay any taxes and somehow we should pass laws to prevent investment from technology that enhances productivity?

These kind of threads always generate a series of such stupid comments.

Fri, 03/08/2013 - 13:29 | 3312578 Kreditanstalt
Kreditanstalt's picture

"somehow we should pass laws to prevent investment from technology that enhances productivity"

He didn't say that...

Fri, 03/08/2013 - 13:33 | 3312598 MeBizarro
MeBizarro's picture

He said if we didn't have to worry about the eliminiaton of the job from increased automation or robotics.  It is a ridiculous comment and the only way to prevent that would be pass laws against it would have 0% chance of passing and rightly so. 

Fri, 03/08/2013 - 13:21 | 3312530 spooz
spooz's picture

And who has the capital to open a small business, considering that most people are spending everything they earn just to get by?  There has been an explosion of lawn care services in my suburb in the last few years, and the cost for mowing has gone down as the competition heated up.  I'm sure their costs have gone up at the same time. What kind of entrepreneurial oportunities do you think can soak up the excess labor?

Fri, 03/08/2013 - 13:28 | 3312570 Kreditanstalt
Kreditanstalt's picture

Funny you should note that.  Here on Vancouver Island too lately...  Lawn care, yard maintainance, tree trimming...endless numbers of these people.  Are they all employed?

Fri, 03/08/2013 - 13:38 | 3312612 Marco
Marco's picture

Are entrepeneurs able to conjure means of production, land, oil, steel etc out of thin air? That's the only real way they will be able to provide value in the end.

The world only needs so many product designers and robot engineers. Robots will do everything else cheaper eventually.

Fri, 03/08/2013 - 14:02 | 3312697 Tango in the Blight
Tango in the Blight's picture

Including designing better robots.

Fri, 03/08/2013 - 13:21 | 3312524 MeBizarro
MeBizarro's picture

Demise of labor is simple - the end of the Cold War in '91 went that the gentleman's agreement which held between labor and capital since WW2 were largely now null and void.  No coincidence that you saw the explosion of free trade agreements starting in the 1990s.   The framework for expanding the current system of 'free trade' had been laid under GATT in the 80s but the actual agreements themsevles couldn't take place with the actual Red Menace still looming.   

Hell, go back and look at the roots of NAFTA in Congress.  Almost as soon as the USSR feel apart in Aug., '91 after the failed coup by the Soviet hardliners, you saw the introduction of the NAFTA framework introduced in the spring of '92.  Funny how that timing worked out. 

Western labor organizing principles and practices are largely null and void in most parts of the world where development has moved to either due to the role of the state (e.g., China) or the impracticality of doing so (trying organizing a Western labor union in a Russian factory).

Fri, 03/08/2013 - 13:31 | 3312590 MeBizarro
MeBizarro's picture

What you are going to see is that the current US model of capitalism (which the British have practiced too) is a recipe for disaster.  Only reason the US has avoided the fate of the UK so far is that it has more natural resources and commodities, it has the reserve currency, and a military that can't win wars anymore but is still capable of delievering and projecting force anywhere on the globe in a fashion superior to its rivals. 

Fri, 03/08/2013 - 13:40 | 3312630 Kreditanstalt
Kreditanstalt's picture

The US and the UK - and the entire G-7 - are so very far removed from anything remotely resembling "free capitalism" that it beggars belief. 

We live in the most micro-managed, socialist, centrally-planned, rigged-and-fixed economy it is possible to imagine...

Fri, 03/08/2013 - 13:49 | 3312649 MeBizarro
MeBizarro's picture

You always echo the same kind of empty jargon about 'free-market capitalism' always placing the blame on nebulous central gov't while ignoring history, economics, technological advances, etc.  Its just plain ignorant.  Large gov't is often a problem but it does exercise a key role too in several capacities including protecting property rights, enforcment of the law and domestic defense, investment in activities that private capital won't puruse etc.

The world is a nuanced and complicated place that doens't jive with your monochrome 'free-market capitalism = good' and 'govt = bad' view. 

Fri, 03/08/2013 - 13:51 | 3312659 Kreditanstalt
Kreditanstalt's picture

When I have the ability to rent premises, to sell or produce whatever I want there without paying any government anything for the activity and entirely unmolested by anyone other than perhaps my landlord and my customers, THEN I will be free.

It's not about "capitalism".  It's about protection of the right to freely contract with one another.  It's about protection of private property - our earnings.  It's about ending the threat of government violence hanging over us.

It's more than simple economics.

Fri, 03/08/2013 - 14:00 | 3312681 MeBizarro
MeBizarro's picture

Since your utopian fantasy land doesn't current exist and hasn't ever existed, good luck with that endeavor. 

Fri, 03/08/2013 - 14:10 | 3312724 Kreditanstalt
Kreditanstalt's picture

And YOU have fun paying for other people's social programs, military spending, high salaries...!

Fri, 03/08/2013 - 14:12 | 3312734 Marco
Marco's picture

The government is your landlord (and vice versa).

Fri, 03/08/2013 - 15:41 | 3313017 secret_sam
secret_sam's picture

Freedom's a kind of personal concept.  I won't consider myself truly free until I can smack you in the mouth at my sole discretion without being subject to unwarranted reprisals from uninvolved third-parties.

It's not economics at ALL.

Fri, 03/08/2013 - 13:33 | 3312597 Spastica Rex
Spastica Rex's picture

Inequality is good, right?

Doesn't it show that the succesful people are being rewarded? Or am I just begging the question?

Logic is for pussies.


Fri, 03/08/2013 - 13:38 | 3312623 Kreditanstalt
Kreditanstalt's picture

Neither good nor bad, but an unavoidable fact of life.  Get over it.

Fri, 03/08/2013 - 15:11 | 3312932 Spastica Rex
Spastica Rex's picture

Fuck you.

Fri, 03/08/2013 - 15:48 | 3313035 spooz
spooz's picture

Capital is rewarded at the expense of people.  Productivity gains have all been going to capital since 1973:

The resulting inequality, which seems to be a feature of capitalism over the long term, will make us look like a third world country over time, as the elites take care of their own needs and let the underclass rot. The rise in  populism should be expected as the growing number of have nots demand change.  Probably anticipation of that is fueling the creeping police state. 

Both liberals and conservatives feel disenfranchised from a government that uses its powers to increase inequality. Bailing out the banksters and suspending rule of law for Too Bigs props up the wealthy at the expense of the rest.

Fri, 03/08/2013 - 15:54 | 3313050 Spastica Rex
Spastica Rex's picture

Serious, cogent - two things that I personally rarely achieve.


Fri, 03/08/2013 - 16:09 | 3313086 Cathartes Aura
Cathartes Aura's picture

sometimes a well placed "fuck you" is all one needs.

Fri, 03/08/2013 - 16:27 | 3313136 spooz
spooz's picture

Too often, too serious to pick up sarcasm

Fri, 03/08/2013 - 14:18 | 3312750 TheLastMan
TheLastMan's picture

Writer Karl M. of London observes in his book on capital,


 “The only part of the so-called national wealth that actually enters into the possessions of modern peoples is national debt”. 


“Hence, as a necessary consequence, the modern doctrine that a nation becomes the richer the more deeply it is in debt. Public credit becomes the credo of capital. And with the rise of national debt-making, want of faith in the debt takes the place of blasphemy against the Holy Ghost, which may not be forgiven.”


I don’t care for his solutions, but his observations may warrant merit.  That is, the ability to diagnose a disease is not equivalent to the ability to treat the disease.

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