Surviving Post-Scarcity

I’ve been reading the “Beyond Scarcity” series on FTAlphaville recently, and it’s made some very interesting points. The posts argue that the current economic environment is deflationary with regard to goods. I think that is true, and one of the reasons is because of technology. Firstly technology is constantly making everything more efficient and because of global competition this is both reducing the production costs and making goods cheaper. Secondly technology is causing structural unemployment, which means less people have money to spend and there is less money flowing around the economy. Other factors causing deflation are the tight monetary conditions, the aging population, and potentially the effects of quantitative easing.

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Rewiring the Brain

There is an absolutely awesome bit of Neal Stephenson’s book Reamde, that goes like this: The brain “was sort of like the electrical system of Mogadishu. A whole lot was going on in Mogadishu that required copper wire for conveyance of power and information, but there was only so much copper to go around, and so what wasn’t being actively used tended to get pulled down by militias and taken crosstown to beef up some power-hungry warlord’s private, improvised power network. As with copper in Mogadishu, so with neurons in the brain. The brains of people who did unbelievably boring shit for a living showed dark patches in the zones responsible for job-related processes, since all those almost-never-exercised neurons got pulled down and trucked somewhere else and used to beef up the circuits used to keep track of NCAA tournament brackets and celebrity makeovers.”

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Race Against The Machine

I just finished reading the Kindle book Race Against The Machine, a book I thoroughly recommend. This was the driver of the NPR article I blogged about recently.
The book is mostly oriented towards the US, although the issues they discuss seem to be prevalent across all major economies. The authors make the case that technological improvements are severely impacting every job market except those for highly-skilled individuals.

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Of Gaps and Grass-Eaters

Are the American people obsolete? Salon argues that because of globalisation and technology there is now a increased separation between capital and labour. The activities that generate wealth have both been outsourced to cheaper shores, and become more efficient because of technology. As a consequence the social contract in Western society between rich and poor – the rich provide the capital while the poor provide the labour – is breaking down. The rich still have capital, but they can now move the production of goods to the East, creating a shortage of jobs in the West.

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