Labor Day 2012: The Future Of Work

Tyler Durden's picture




 

Submitted by Charles Hugh Smith from Of Two Minds

Labor Day 2012: The Future of Work

Technology and the Web are destroying far more jobs than they create. We will need to develop a "Third Way" based on community rather than the Market or the State to adapt to this reality.

What better day to ponder the future of work than Labor Day? Long-time correspondent Robert Z. recently shared an essay on just this topic entitled Understanding the 'New' Economy.

The underlying political and financial assumption of the Status Quo is that technology will ultimately create more jobs than it destroys. Bob's insightful essay disputes that assumption:

Over the past 15 years, the global economy has experienced structural changes to a degree not seen in nearly 150 years. Put simply, the Industrial Revolution of the 1800s has given way to a post-industrial economy. In this post-industrial economy, technology has now evolved to the point where it destroys more jobs than it creates.

 

Still, most people are Luddites to some extent. Human nature is to resist dramatic change, either actively or passively, until we have no other choice. If you don’t believe that, just listen to our presidential candidates.

 

Both Mitt Romney and Barack Obama will give us happy talk about maintaining entitlement benefits (e.g., Medicare and Medicaid) that cannot possibly be sustained. They will talk about energy self-sufficiency. They will talk about creating jobs. They will tell us that we can somehow ‘grow’ our way out of our economic distress. But neither candidate will admit that technology now destroys more jobs than it creates, because to do so would be to commit political suicide. The fact is that none of the happy talk will ever come true. Instead, the Federal Government, with the tacit approval of both major political parties, continues to run trillion-dollar-plus deficits year after year in a futile attempt to spend our way out of our economic problems and to sustain an economic model that cannot be sustained.

 

Those who believe that bringing manufacturing back to the US will also bring back jobs are trying to fight a war that has already been fought and lost. Why? The answer is technology. It’s actually a fairly simple process now to bring production of many items back to the US, simply because of automation and robotics. A factory filled with robots can operate 24 hours a day, 7 days a week, 52 weeks a year, so long as the raw material inputs keep flowing into the factory. Robots don’t take breaks, don’t make mistakes, don’t call in sick, don’t take vacations, don’t require expensive health insurance, and don’t receive paychecks. A fully automated robotic manufacturing facility might require only 100 workers, while a traditional assembly line facility might utilize 3,000 workers. That’s a huge difference in the number of jobs. The simple fact is that most of the lost manufacturing jobs are never coming back.

 

What about all the marketing, administrative, accounting, and IT jobs that we think can’t be outsourced or automated? Well, retail enterprises now tailor any number of special offers directly to individual customers by mining data from reward programs. That doesn’t take an expensive ad budget or a huge marketing department, since it’s all automated. Have you ever noticed that most of the advertising you see while you surf the Web is tailored to things you might be interested in buying? That’s all automated – huge numbers of marketing professionals are just not needed.

 

In the accounting world, ‘lean accounting’ attempts to streamline accounting processes and eliminate accounting inefficiencies. A byproduct of ‘lean accounting’ is often greater use of technology and a significant reduction in the number of accountants and accounting clerks. In the IT (Information Technology) sector, computer algorithms for high-frequency stock trading (HFT) have become so complex that specialized software now writes new HFT programs and algorithms. That reduces job opportunities for programmers. The net result of all these examples is not job creation. It’s job destruction.

 

How about government jobs and government-related jobs? Well, think about the US defense budget. It’s a huge example. We surely do not need as many tanks and fighter jets as we used to, now that we have remote-controlled drones to do many of the jobs required. And with the availability of these drones, we might not need as many aircraft carriers, ships, or military personnel either.

 

What about the Post Office? Do we really need daily mail service in an electronic world?

 

The point is that as we let go of old methodologies, whether in the private sector or in government, huge numbers of jobs simply disappear. As a society, we need to admit that ‘free-market’ capitalism is not going to bring back these lost jobs. Thanks to technology, society is capable of meeting basic human needs (food, clothing, shelter, transportation) with far fewer workers percentage-wise than were needed in the past. But as a society, we also need to admit that socialistic solutions won’t work either, simply because human nature is to take care of ourselves and our families first. Once we have provided for ourselves and our families, very few of us are both willing and able to provide for every stranger that might knock on our door seeking assistance.

 

As a nation, we must at some point address any number of major economic issues, including the massive overhang of debt (public and private) that cannot possibly be repaid and demands for future entitlement payments that cannot possibly be met. As a society, we ought to admit that we cannot borrow our way to prosperity. Unless interest rates are zero forever and creditors are willing to forego scheduled repayments forever, borrowing our way to prosperity is a mathematical impossibility.

 

One point is certain. Even if we find the political will to deal with the mathematics of our economic problems, we will never find long-term solutions to our economic issues until we recognize the profound economic changes wrought by technological advances. This is especially true with respect to our traditional view of a job and a paycheck. While it is true that new opportunities will always exist, these opportunities may not be as plentiful as the jobs of the past once were. And these opportunities will generally require more advanced skills than many of the jobs of the past. Technology has fundamentally changed the nature of paying work, and it is also one of the major economic issues of our time.

 

About the author:

Bob Z., of Vancouver, Washington, is a Corporate Finance executive who retired in 2007 from an upper management position with a Fortune 500 corporation.

Thank you, Bob, for your forthright appraisal of technology and jobs. The decline in labor's share of the GDP (gross domestic product) is sobering:

Here are some other points to consider:

1. The build-out of a new technology creates a large but temporary number of jobs. This has been the case for some time: the construction of the railroads created a jobs boom that soon disappeared in a financial bust as rail was over-built and profits were non-existent for many of the extraneous or duplicate lines.

Telephony and telecom followed similar arcs, and did the build-out of the Internet infrastructure.

2. Technology maturation leads to diminishing return on labor as incremental advances in productivity are capital-intensive. Semiconductor manufacturing is a good example; fabrication facilities (fabs) cost upwards of $2 billion each even as the number of workers need to operate the fab declines. Profit margins on many high-technology products are razor-thin, flat-screen displays being a prime example, and diminishing margins further pressure labor costs.

3. Software is leading the next-generation industrial revolution, automating many tasks that were considered "safe" from automation. As Bob pointed out, this includes securities trading and accounting. (I would add tax preparation for the majority of tax situations.) Can the law, academia and government remain immune? Unlikely.

4. Although few dare contemplate this, the low-hanging fruit of technology may have already been plucked. Take healthcare as an example: antibiotics and vaccines virtually eliminated many diseases at a very low cost per dose (though some diseases are coming back due to unvaccinated host populations and bacterial adaptation).

Antibiotics are "one size fits all" technologies: they act basically the same on every target bacteria and in every host. Compare that universality to the spectrum of individual responses to cancer treatments and other medications: one size does not fit all, and many of the most profitable drugs of the past few decades treated symptoms, not the underlying illness.

It is increasingly clear that there is no "magic pill" that kills all cancers, or even specific cancers in all patients. Lifestyle diseases such as diabetes appear impervious to "magic bullet" cures, as the causal factors of the disease are complex. The same can be said of diseases of aging and environmental factors.

In other words, the notion that tens of billions of dollars in high-tech research will yield "one size fits all" low-cost treatments of complex diseases has been shown to be problematic, and very possibly a fantasy.

5. The Internet is destroying vast income streams that once supported tens of thousands of jobs in industries from finance to music. Craigslist has gutted the once-immense income stream from newspapers, and web-based marketing has shredded print-media advert page counts. Global competition and pressure to maintain profits and margins relentlessly drive enterprises to slash payrolls.

6. As I have discussed here many times over the years, the rising costs of taxes, benefits and regulations have squeezed small businesses. In response, many small companies rely on automation and software to perform tasks that until recently required a human worker.

Those small businesses that cannot prosper via technology are going under, and the risks posed by ever-higher costs have raised entry barriers to starting a small business. These trends are visible in this chart:

The array of web-based tools available to entrepreneurs now is astonishing. Why take on the risks of hiring people when you can do the work yourself with low-cost web tools and software? For many small enterprises, that is the only way to survive.

Advanced societies face a dilemma that cannot be solved by more debt or more technology: how to distribute not just the output of the economy, but the work and responsibility so that everyone has an opportunity to contribute and earn their keep.

Those who have plowed through my books know that I see community as the only viable way forward. Many aspects of human life cannot be turned into a "market opportunity," nor can they be taken over by the insolvent central-planning Central State. Paying people to stay home and rot is not a solution, but neither is paying people more than they produce in competitive markets. There is a "Third Way," but we've lost the skills and infrastructure required. Of the three elements of civil society, the Market and the State have crowded out Community. We either re-discover the labor-value of community or we devolve further into a potentially "death spiral" social and financial instability.

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Mon, 09/03/2012 - 14:18 | 2758158 Debugas
Debugas's picture

you are right about the problems but you are wrong with your solutions.

the real solution is more equal redistribution of capital

Mon, 09/03/2012 - 22:36 | 2759272 StychoKiller
StychoKiller's picture

Sure, hand a 9-year old kid a circular saw and expect a rocking chair in return...check yer premises.

Mon, 09/03/2012 - 14:43 | 2758220 FreedomGuy
FreedomGuy's picture

Your research lacks rigor and is obviously myopic. You probably researched places that only agree with your point of view. Let me help a little even though I am sure you don't want it.

First, libertarianism is not primarily about economics although they are inseperable. It is about liberty. It is not about "How to make everyone rich". That is never going to happen. Never. Not under your plan, either. You cannot solve poverty and that is the snipe you chase. You can only minimize it.  Libertarianism is about liberty, first! Surprised? We ask ourselves important simple questions like, "Do you own yourself and your labor?" and my new favorite, "Is your purpose on earth to be ruled by others?" (Maybe my original?) Your answer to both of those...if you are honest is, "No, and yes."

Second, there is no evidence your ideas work. In fact, if you have actually done your research all countries who try forms of what you suggest fail. Always and everywhere. The problem is your ideas go against human nature. The end result of your ideas as you poo poo libertarians is that freedom is bad for us and we need someone to control us. Let us hope those who control us for our own good are angels. All the bad people are in the private sector so let's filter them and get the good people in power...real power to do what you like. I personally like do gooder statists like Corzine, Blagovich, Spitzer, etc. They show us the way and how good people end up at the top of the power pyramid.

Third, there are no sycophantic libertarians. This shows you really don't know any. Getting libertarians together is like herding cats. Everyone actually thinks for themselves which is dangerous for the state and makes us very difficult to organize for any meaningful and long lasting political purposes. By nature we do not like government or want anything from it except our freedom. You want "stuff". Actually, you really want other people's stuff to assuage your own conscience. Go and dedicate your own life to curing poverty and give all you have to the poor as so many religious people have done. You are free to do that...for now. You statists always want others to do it while you park your yatchs in the lowest tax states. Better, yet, go work in a sugar plantation in Cuba where they have resolved income inequality.

Last, I will ask you my favorite two collectivist questions. These are serious questions for you to answer. One, "How many regulations on people, corporations, private businesses, etc. till all evil is abolished?" Two, "At what tax rate (you want higher) will all social ills, including the poverty you care about be eliminated?"

For anyone who is thinking for themselves and reading this you instinctively know the answers to these two questions. Here are the corollary questions you will like better. One, "How many regulations do we need till we are stifled, strangled and thoroughly miserable?" Two, "How high can taxes go till we are all impoverished and unwilling to work?" Those numbers we know better and we are probably very close to the limit.

So, collectivists always find big problems with freedom and how it needs to be curbed for our common benefit. Libertarians see more historical problems with government and how it needs to be curbed for our very survival. Take your pick of the two. Make your choice.

Mon, 09/03/2012 - 15:24 | 2758324 AnAnonymous
AnAnonymous's picture

Good laughters.

What so? Yes, 'Americans' run a business of extorting the weak, farming the poor.

'Americans' could not care less than the poor, the weak are not organized. On the very contrary, disorganization is something valued by extorters and farmers.

And while libertarians (aka insecure 'American' middle class) wonder if their purpose is to be ruled, other 'Americans' know their destiny is to rule over others.

And in 'Americanism', it means dilution of responsibility as the consent of the governed allows.

Mon, 09/03/2012 - 15:31 | 2758338 akak
akak's picture

The babblings of a newborn child make more sense than your idiotic and bigoted ramblings, you hypocritical, American-hating Chinese troll.

Shut the fuck up.

Mon, 09/03/2012 - 15:42 | 2758399 AnAnonymous
AnAnonymous's picture

Again, 'Americans' are not required to understand reports about 'Americanism'.

'Americanism' does not depend on the reports to be 'Americanism'

And that is a good thing: 'Americans' are duplicitous by nature and keep claiming they cant understand what 'Americanism' is.

Their denial is dismissed by their actions though as 'Americanism' is as 'American' do.

Mon, 09/03/2012 - 15:53 | 2758442 akak
akak's picture

Hypocrisy and bigotry are as hypocrisy and bigotry do.

And you are the undisputed master of both.

Now shut the fuck up.

Mon, 09/03/2012 - 16:40 | 2758581 AnAnonymous
AnAnonymous's picture

Hypocrisy? On what ground? Chinese citizenism? Or to be said, fantasy...

Mon, 09/03/2012 - 15:39 | 2758382 TheFourthStooge-ing
TheFourthStooge-ing's picture

Retarded roadside crapping troll is retarded.

Mon, 09/03/2012 - 15:42 | 2758404 FreedomGuy
FreedomGuy's picture

I am glad you got a good laugh. Is there a point or rational argument somewhere in those ramblings? There is no truth to any point you make.  Will you tell us your personal choice about owning yourself versus the State owning you? Do you prefer being ruled or making your own choices? Would you like to rule and make choices for others?

Mon, 09/03/2012 - 16:41 | 2758584 AnAnonymous
AnAnonymous's picture

Rational argument? Not even.

Only straigthforward observations.

Here's another: you do not own yourself. You are yourself.

Mon, 09/03/2012 - 16:52 | 2758618 TheFourthStooge-ing
TheFourthStooge-ing's picture

AnAnonymous admitted:

Rational argument? Not even.

Finally a shred of truth leaks out. Of course, his paymasters at the Chinese Citizenism Ministry of Truth will not be pleased by this.

Mon, 09/03/2012 - 17:53 | 2758762 FreedomGuy
FreedomGuy's picture

You are not yourself if you do not own yourself. Slaves take the choices of masters. They and their lives are not their own. Their labor is owned by the master or the State. If you own your labor you can price it and trade it as you please. No one can take it without your permission.

Let me put it more simply for you, who makes the choices in your life, you or the State? If it is you and you captain your own ship then you are free. If the State makes your choices, restricts your choices or gives permission for your choices, then you are the property of the State and they have plans for your ship. You are an economic unit in their bigger plan for you and the country. That is why they call you, "the masses". You have no distinct identity or signficance. You are part of the collective.

Which do you prefer for yourself? Tell us?

Mon, 09/03/2012 - 20:22 | 2759037 daveedollar
daveedollar's picture

Whoa!  Great post FreedomGuy!

Mon, 09/03/2012 - 23:52 | 2759361 MeBizarro
MeBizarro's picture

So the only two possible solutions for society are extreme liberterianism or statist control of property or production?  What a ridiculous and bogus view of history and civilization. 

 

Mon, 09/03/2012 - 23:59 | 2759377 FreedomGuy
FreedomGuy's picture

Is it so ridiculous? How about I meet you halfway. Societies are always and constantly changing. They are always moving and going somewhere. Germany seemed to have more liberty after the Kaiser and none after the Fuhrer. Modern societies are never static, at least outside some aboriginal tribes perhaps. So, your choices are you are moving left to more statism (the West) or you are moving right toward liberty (the East). Being static in the middle is nearly impossible for very long. Would that appeal more to your sensibilities and extensive knowledge of history?

Mon, 09/03/2012 - 15:53 | 2758439 Cortez the Killer
Cortez the Killer's picture

Fuck the poor

100 overpaid union workers arent worth the patent on one assembly line robot

Mon, 09/03/2012 - 17:14 | 2758673 Slightly Insane
Slightly Insane's picture

You Sir, do nothing to support any of the assertions you have made.  Define for me what makes a person "poor".

I see that you have swallowed the Kool-Aide and have also taken the "ignorance" pill.  Poverty is a frame of mind.

Since the beginning of time, there has always been a stratafication in whatever economy exists.  I know of no poor "starving to death" today.  Even the folks that I know who are on "food stamps" have put themselves there by the unwise choices that they made earlier in life.  The only way for a person to get out of their shitty lot in life is through education, and application of that education.  The Government handing them foodstamps merely placates the recipient.  It does nothing to "change" their lot in life.  Minimum wage is definitely not the issue .... if that were the case we could raise the minimum wage to $100 per hour and the problem would be solved, right?  Increasing taxes removes capital, hence property from the individual (who earned it) and gives it to the "state" who now spends it on mostly unwise things.  If the problem could be solved by taxes, shit, raise them to 100% and see what that does.  You assume that the "state" who has neither the talent, nor the wisdom to properly deploy capital in an efficient manner would do a better job then the individual.  If that were the case, then the former Soviet Union would have been a world leader in everything under the son.   Once you remove "property rights", via taxation .... you will have removed the incentive to take risks, work hard, study hard, ecetera .... such that you will create a society of lazy people.  This bull about strengthening "unions" ... is just that.  You want the unions to have special privaledges afforded to no other entity?  Are you nuts?  And for your last point, raising regulations .... why not create 1000 new regulations a day, and make the first regulation that all businesses must comply with all new regulations or be forced to close.  Where would the jobs be then DUMMY.  What you are suggesting you idiot is full blown totalitarianism.  From the looks of it Communism.  I promise you that if you get your wish, I will lay my wealth on the table against yours that you will be one of the first "useful idiots" who gets put down.  The regime will have absolutely no use for stupid people .... as you will be a warm body consuming resources which are in short supply.  You will either be starved, or executed, as shills for communism are always the first ones consumed in the transformation.  Anyone with an IQ above 100 can understand the flaws of every single statement you had made,  without assistance.  In a totalitarian regime, anyone with an IQ below 100 is given the shittiest jobs there are, as long as they are needed.  The excess are eliminated.

Mon, 09/03/2012 - 17:29 | 2758719 Whiner
Whiner's picture

Is that you MDB or did someone hi-jack your moniker? You started off with too much emotion for a fake, statist troll. The you lapsed trite. Get back in that gov-speak, phony positive monotone. I'll give you one more chance, the I'm junking you.

Mon, 09/03/2012 - 18:00 | 2758772 Atomizer
Atomizer's picture

 

 

Me: [Rings Bell] Ding, ding, ding. MillionDollarBonus_ comes running from the thickets.

MillionDollarBonus_: meow

Me: Your no longer able to roam the property.

MillionDollarBonus_: meow??

Me: That’s right you four legged fuck. We Just received notice from the Government. I have been instructed to feed you only Purina® Cat Chow® Indoor Formula. Apparently, the neighbors have been complaining over your sudden hairball discharge on their property grounds.

MillionDollarBonus_: meow???

Me: I have been slapped with a fee. The Government has mandated me to enroll you into compulsive hairball therapy treatment classes.

MillionDollarBonus_: meow????

Me: My dear friend, you either control yourself or find that your hairball dependent illness is going to be ended with a lake, bag, bricks and twisty tie..

MillionDollarBonus_: meow??????

Tue, 09/04/2012 - 17:12 | 2761877 whartman
whartman's picture

@MillionDollarBonus:

"I’m serious about solving the problem of poverty, and I know the only way to do it is by

  1. Increasing the minimum wage
  2. Increasing taxes
  3. Giving more legislative privileges to unions
  4. Increasing the number of regulations on businesses"

Increasing the minimum wage results, always and everywhere, in increased poverty.  It removes the "bottom steps from the ladder", preventing those with minimal skills from being offered a job.  Ultimately, a business cannot pay its employees more than the value of the products produced, minus other (non-labor) expenses such as materials, rent, etc.  So raising the minimum wage cannot raise people's pay, overall, beyond the value of their efforts.  It forces businesses to automate more and pay a smaller number of more skilled workers.

Increasing taxes takes money from employers which could be used for wages, thus decreasing payments to employees.  It transfers the money to the government, which in practice hires fewer people for the same amount of money (it overpay them relative to private businesses).  This reduces total employment, thus increasing poverty.

Giving more legislative privileges to unions increases the pay of union members, which increases the poverty of those who are not union members by increasing the costs of the products and services produced by union members.

Increasing the number of business regulations increases business costs, which reduces payroll, which increases poverty.

So your "way of life" is a perfect plan to increase poverty.

Mon, 09/03/2012 - 13:27 | 2758001 goldfish1
goldfish1's picture

Advanced societies face a dilemma that cannot be solved by more debt or more technology: how to distribute not just the output of the economy, but the work and responsibility so that everyone has an opportunity to contribute and earn their keep.

Great in theory. Enter the schmucks...Rothschilds, Rockefellers, etal...

95% tax seems low.

Mon, 09/03/2012 - 14:25 | 2758173 Things that go bump
Things that go bump's picture

Check out what happened to those considered useless eaters under the Nazi regime.  The Jews weren't the only ones summarily disposed of, you know.  They emptied their state-run asylums and rid themselves of the disabled and insane and mentally retarded and old. They rounded up Gypsies and gays and drunken derelicts and anyone else they considered undesirable.  Ezekiel Emmanual (Rham's brother), actually used that exact term, useless eaters, and applied it to Alzheimer's patients (he feels they should be disposed of rather then allowed to eat up a disproportunate amount of resources).  It is an apt term, of course, and I can certainly see the logic of such actions, as none of my immediate relations currently carry that diagnosis, but we have been down that road before and it that leads to the ovens and the death camps.  If you can't find work (and there really isn't much work to go around and many jobs are just make-work), and aren't a productive member of society, or are nearing the end of your productive life, you are superfluous and I think you can bet that a bureaucrat somewhere is considering the many advantages that would accrue to the state in the case of your untimely demise. I am also sure that, as always, there are many who would be happy to carry out such things.  

Mon, 09/03/2012 - 14:32 | 2758189 Things that go bump
Things that go bump's picture

What?  You dispute what I wrote or do you just not like that I pointed it out?  Once I get a designated number of down arrows does someone pay me a visit in the night and haul me away?  

Mon, 09/03/2012 - 14:40 | 2758212 centerline
centerline's picture

Green arrow from me.  Your statement above is mostly fact.  And those who don't learn from history.... well.  Let's just say it is easy to see how some things repeat.  Just takes enough time and the right conditions.

Mon, 09/03/2012 - 15:52 | 2758436 Anusocracy
Anusocracy's picture

I gave you a down arrow because that type of behavior is basic to ALL governments.

It just takes the right circumstances show it.

Mon, 09/03/2012 - 16:08 | 2758477 Things that go bump
Things that go bump's picture

Oh, yes, other governments, in other places, at other times, but no one wants to look too closely at the steps our government is taking right here and now and extrapolate to the logical conclusion.  

Mon, 09/03/2012 - 14:57 | 2758265 KK Tipton
KK Tipton's picture

"I think you can bet that a bureaucrat somewhere is considering the many advantages that would accrue to the state in the case of your untimely demise"

 

This sad deal is what happens when you equate "the state" with the people.
A bureaucrat type would be dumb enough to do this.
Or brainwashed/programmed enough.

Mon, 09/03/2012 - 16:05 | 2758481 Anusocracy
Anusocracy's picture

If I remember correctly, virtually all participants in the Milgram Experiments shocked the test subject to 300 volts, and about 65% went all the way to 450 volts.

If people weren't wired to be obedient to the State, the state may not exist and it certainly wouldn't be as deadly.

No pass for "the people".

 

 

Tue, 09/04/2012 - 00:42 | 2759418 wiebern
wiebern's picture

Although the shocks may be painful, there is no permanent tissue damage, ...

Mon, 09/03/2012 - 15:30 | 2758336 trilliontroll
trilliontroll's picture

I am also sure that, as always, there are many who would be happy to carry out such things. 

enemy at the gates : a group of german soldiers trying to carry out such things in stalingrad

with a russian ("subhuman being") sniper not willing to let them just be happy.

 

http://www.youtube.com/watch?v=VPnloP5QHVc&feature=related

Mon, 09/03/2012 - 15:37 | 2758376 Things that go bump
Things that go bump's picture

Take out the officers first, if you can.

Mon, 09/03/2012 - 21:20 | 2759148 FrankDrakman
FrankDrakman's picture

  If you can't find work (and there really isn't much work to go around and many jobs are just make-work), and aren't a productive member of society, or are nearing the end of your productive life, you are superfluous and I think you can bet that a bureaucrat somewhere is considering the many advantages that would accrue to the state in the case of your untimely demise.

Already happening. A doctor in Britain has devised a 'protocol' of a starvation diet for the terminally ill. In Canada, government boards calculate the cost of specific treatments vs. the 'benefit', and deny treatments as a result. "Death panels" are not some Republican myth; they are growing and thriving everywhere there is socialized medicine.

Libertarianism and free markets are messy, chaotic, and produce uneven results, but they have the desire for the life as their basis. Marxism may seem more orderly and more equal in result, but it produces less for all, and has death as its ultimate goal.

Tue, 09/04/2012 - 00:00 | 2759376 MeBizarro
MeBizarro's picture

How do you equate free markets with in anyway to the santctity of life?  You are making connections between economic concepts and moral ones that simply are spurious.

As for actual history, the reality of 'free markets = free society' is convulated and not necessarily true either?

Tue, 09/04/2012 - 00:32 | 2759406 Things that go bump
Things that go bump's picture

There is a difference in letting nature take its inevitable course without excessive resistance and loading children with Down's syndrome into the back of a panel truck, hooking the exhaust up to a hose, connecting it to an opening in the back of the truck and letting it run.  

Mon, 09/03/2012 - 13:38 | 2758044 Gully Foyle
Gully Foyle's picture

taniquetil

Dude you have it so wrong. We need to TAX WEALTH. Anything you own is wealth, car,property, savings, so on. Tax it all at say a flat 5%.

That way the poor pay and the rich pay. Everyone pays. Because every possesion  which defines wealth is taxed no one escapes.

No loopholes, no deductions, just a straight tax on individual wealth.


Mon, 09/03/2012 - 14:02 | 2758104 Urban Redneck
Urban Redneck's picture

That is not a tax- it is a straight forward confiscation.  Taxation is added to activities/transactions as a gov ´cut´ of the action.  When you start allowing the State to take a piece of inaction then property rights are exposed as a myth. 

The rate of the tax and the target of the tax are red herrings, subject to the whims of those in power.   So unless YOU don`t mind paying 100% of what you think is yours, and being a financial slave of the State, then your notion is short-sighted. 

 

Mon, 09/03/2012 - 14:11 | 2758129 Gully Foyle
Gully Foyle's picture

Urban Redneck

All rights are a myth.

There was a little book titled Rape of the A.P.E ( American Protestant Ethic). It was humor.

The author pointed out you can't give the property you own to a foriegn country.

If we need to be taxed to pay for roads and such make it a fair and equal tax on wealth.

Not income, and no loopholes.

Everyone pays their share.

Price of admission to be a citizen.



Mon, 09/03/2012 - 14:45 | 2758225 Urban Redneck
Urban Redneck's picture

More like the price of admission to be a slave

One can bequeath property to a foreign State, it is done all the time, however, it is an ACTION which the State might natuarally want it cut of.

Getting back to my question- you then agree that YOU HAVE NO PROBLEM when your master, the State, decides that your share, and the price of your citizenship, is that your house, your car, your 401(k), the clothes off your back, and the gold fillings in your teeth, should be transferred to me since I can provide greater utility to the oligarchs, and the the price of my services...

 

Mon, 09/03/2012 - 15:46 | 2758415 Herd Redirectio...
Herd Redirection Committee's picture

Obviously world government has become synonymous with organized crime.  That needs to change, and God-willing, it will.

The question then is, how do the honest people clean up this mess?  The answer, as Gully Foyle has clearly stated, is to tax wealth.  Because the top 1% have amassed such a massive proportion of the planet's wealth there is no point in taxing income.  The annual income compared to the accumulated wealth is miniscule.  Wealth disparity is a bigger problem than even income disparity. 

The other route would be to take everyone ([that is a psychopathic billionaire oligarch) to court, but then its a very messy business involving shell companies, going through 150+ years worth of documents and records, a Judge deciding the amount that is 'taxed' or more appropriately, rightfully returned to society.  Because the majority of this wealth was acquired criminally, understand.  Lying, cheating, stealing.  Fraud.  Murder.  Monopoly.  Preferential Court Treatment.  Drug Smuggling (which they keep illegal to maintain profitability). Insider trading.  Usury.  And just plain old creating money out of thin air.

Mon, 09/03/2012 - 15:51 | 2758430 Herd Redirectio...
Herd Redirection Committee's picture

Also, how much tax the government earns is important (it determines the level of wealth distribution and in theory the operating budget of the gov't), but so is HOW THE GOVERNMENT SPENDS taxpayer money.

Does it all go to cronies?  Corporate subsidies?  No-bid contracts?  Companies you own long-term call options on?  Or is it being spent on providing basic nutrition, hygiene and education?

 

Mon, 09/03/2012 - 16:49 | 2758607 Anusocracy
Anusocracy's picture

Earns?????

It's stolen money, whatever its spent on.

Like the mafia giving money to a charity makes everything okay?

Mon, 09/03/2012 - 16:45 | 2758593 Anusocracy
Anusocracy's picture

The top 1% have gotten fabulously rich in a totally government run world.

That's what makes it possible.

Mon, 09/03/2012 - 16:51 | 2758614 Urban Redneck
Urban Redneck's picture

Short answer- transactional/transfer taxes are the only way.

My objection to wealth taxes isn`t just libertarian, it`s also mathematical.

1) The rich will always have other options, until you show up at their house in the middle of the night with torches and long knives, if you buy the "no loopholes" argument then you are on the outside with no window to look in and see how the game is played.

2) The biggest existing stores of "wealth" are already offshore in vehicles (trusts and corporations) are not subject to US jurisdiction or taxation, and assuming the tax advisors actualy knew what they were doing- they will never be subject to US jurisdiction since they aren`t US owned.

3) Wealth taxes fuck and enslave the lower classes since the bulk of their wealth is in real estate (and a primary residence doesn`t create a revenue stream for the owner). So in a ZIRP environment, where does gramps come up with dough to pay the tax man, since Social Security barely covers food & utilities.  He can only earn so much as a wage slave greeter at Walmart before Uncle Sam starts reducing is SS checks.  I guess he can go hawk his hard-earned house to bankster with one of those reverse mortgages... 

4) Whereas an accredited investor (with 1,000,000 plus in liquidity) has access to a positive return on capital, which the poor guy doesn`t, even after paying the tax man, and without lifting a finger to actually "work".

5) So the rich still get richer but the poor now get much poorer much faster

 

FUCKING THE LITTLE GUYS AND GIRLS IN NUMBERS 

Very Rounded Numbers...
a 5% Wealth Tax (Assuming fair, equal, no loopholes, etc.)

Middle Class Median Working Family
Median Household Income 50,000
Tax (assuming iPads aren´t eaten) 2,000
Median Household Savings (MM&IRA) 50,000
Tax 2,500
Median Home Value (and probably underwater) 200,000
Tax 10,000

Total Federal Wealth Tax on the hypothetical median household 14,500
Comparable EFFECTIVE Federal Income Tax Rate 29%

vs current currupt system, that same median family is the 15% marginal bracket, with a 13% effective rate, before deductions and credits which reduce that rate (and if he is on the just below the median, then his net obligation should be about 0 under the current system)

Now consider a 99-weeker (who has not yet been evicted by the big mean bankers) over 99 weeks they have to pay their government tax master 25,000 for the priveledge of staying in their home, or face the prospect of an eviction and propery seizure by the State which has sovereign immunity and makes the banksters look downright warm and cuddly.

Mon, 09/03/2012 - 19:33 | 2758940 Poor Grogman
Poor Grogman's picture

No tax is the answer,
Unless you want the whole cycle to begin again you need to turn your mind toward finding ways to fund society that are not confiscatory and arbitrary.

Any new taxes from now on will be wasted on weapons and social security.

Governments are always and everywhere in need of more money, that is the nature of government.

The only answer is to starve the beast into submission, and keep it there.

That is one reason why the US Constitution specified gold and silver as the only money. It was a form of restraint on the government.

More taxes will only feed the beast and prolong the sheeples suffering...

Tue, 09/04/2012 - 00:04 | 2759379 MeBizarro
MeBizarro's picture

So there shouldn't be any taxes of any kind and there is no role at all for the state in any civil matters?  This blog seemingly attracts so many nitwits. 

Mon, 09/03/2012 - 14:23 | 2758174 Debugas
Debugas's picture

indeed taxing capital and not labour would help but the question remains - who will decide how to spend collected taxes and what for

Mon, 09/03/2012 - 16:36 | 2758570 seek
seek's picture

When you print fiat to cover expenses, taxing wealth is exactly what's occurring. They're already taxing wealth, probably upwards of 10% per annum based on a realistic CPI rather than the published fiction. And that's on top of income taxes, property taxes, and everything else -- federal, state, local and corporate taxes combined are about 35% of GDP, but this covers only 63% of spending.

The remaining 37% is borrowed (AKA printed by fed or stolen from future production) and in doing so devalues the wealth of everyone.

Thanks to the Laffer curve and Hauser limit, even adding direct wealth taxes will never fix this problem.

Everyone is already paying. The reason we have a world on the verge of a financial implosion is because there's literally nothing left to take, because the government and banking system are already skimming so much there's not enough left to be redistributed among the people, let alone earned (with taxes paid) by them.

We're just straight-up fucked until a system reset occurs and either spending collapses, a sizable portion of the population is killed, and/or the grift from government and finance is reduced.

 

Mon, 09/03/2012 - 16:37 | 2758573 Anusocracy
Anusocracy's picture

Make all interactions with government, including taxes, voluntary.

That way we'll see how many hunter-gatherers really want to support their fellow tribesmen.

Mon, 09/03/2012 - 13:57 | 2758094 CH1
CH1's picture

The only way to fix this is to tax the rich at 95%. How else can we be sure that they pay their fair share?

Yeah, but then we'll have to chain them to their desks, so they can't run away!

Go long shackles!

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