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Offline cheryl j

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Is Hawking right about Capitalism
« on: 01/03/2016 07:19:55 »
http://www.huffingtonpost.com/entry/stephen-hawking-capitalism-robots_us_5616c20ce4b0dbb8000d9f15

In a Reddit "ask Me Anything" Q&A, a reader asked Hawking whether robots would eventually replace most workers and what he thought the consequences would be. He responded "If machines produce everything we need, the outcome will depend on how things are distributed. Everyone can enjoy a life of luxurious leisure if the machine-produced wealth is shared, or most people can end up miserably poor if the machine-owners successfully lobby against wealth redistribution. So far, the trend seems to be toward the second option, with technology driving ever-increasing inequality."

This does seem to be the direction things are going. The push for an increase in minimum wage results in threats/plans to automate more services. With or without an increase, I don't doubt that I will walk into a fast food restaurant in the near future and find the cashier replaced by a touch screen for ordering.

When I first started working in a lab in the 80s, literally half my day was spent transcribing numbers on to reports manually, phoning results to doctors, and other clerical tasks, all of which have been replaced by computers. The testing as well became faster, more efficient, and more automated, even in microbiology. But even though advances in technology vastly increased my output, it didn't increase my wages, or decrease my hours of work. I'm sure this was true in other fields as well.

Society seems unlikely to abandon the Puritan work ethic any time soon and will be loath to pay idle citizens for doing little or nothing indefinitely. Will a large segment of the population be forced to suck it up and accept their post industrial peasant status?

Or do you see some other means for individuals to access and utilize technology, either to be self sufficient or in some sort of underground/barter economic system?
« Last Edit: 08/03/2016 08:15:34 by cheryl j »


 

Offline alancalverd

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Re: Is Hawking right about Capitalism
« Reply #1 on: 01/03/2016 08:24:30 »
You make some good points.

In the 1950s the general rule was that women did not work outside the home and men were concerned that automation would make them redundant. The advent of central heating, washing machines, supermarkets, etc., meant that housework itself would shrink into insignficance, and we'd all be spending our time going to the beach in private helicopters.

Instead of which the working week has hardly changed, the workforce has almost doubled, and we now have to work to 65 or 70 to get the pension we used to receive at 60.   

What went wrong?
 

Offline cheryl j

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Re: Is Hawking right about Capitalism
« Reply #2 on: 08/03/2016 07:37:03 »
Well, part of what went wrong, at least in my own case, is that I didn't own the technology I was using in my employment. And to some extent, the technology was so good, it diminished the value of my skills and knowledge. I no longer needed to understand as much about microbiology to push the buttons on the instruments.

When farming was industrialized, farmers owned the tractors and machinery that made them more productive.  They might have been in debt to banks to buy it, and food got cheaper -never the less, I'd still argue that farming was more profitable and less arduous in 1950 than it was in 1905. There was a period of time in which technology was empowering for the people operating it. The same might be true for manufacturing, but only because collective bargaining and unions essentially forced capitalists to share the wealth.

Unions almost seem antiquated now, and often disparaged in politics. But the only options I see in solving Hawking's capitalist problem is a return to collective bargaining or government enforcement of higher minimum wages ( or the more radical universal basic income) or some as yet unknown means in which individuals use technology apart from large corporate structures to sustain themselves or trade services. In a way, you do see this popping up in small ways, like uber drivers or other website businesses. But would it be enough to sustain a large middle class or are we doomed to increasing economic disparity and an eventual society of nobles and peasants?

 I also wonder how all of this might affect crime in the future. The US already incarcerates increasing numbers of its population -why? In a nation that is not torn by internal war where order has completely broken down, why would people be more violent or larcenous than in the past?
« Last Edit: 08/03/2016 08:25:16 by cheryl j »
 

Offline saspinski

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Re: Is Hawking right about Capitalism
« Reply #3 on: 08/03/2016 20:52:11 »
In a world where machines produce everything we need, they (machines)  play a role similar to the slaves before the emancipation. That time, everyone had a slave if could afford to buy one.
I think the equivalent of having a slave in that imaginary world, is to have a portfolio of stocks. The bills are paid through the dividends of the stocks of the Companies that make the goods or services.
But it will never happen in my opinion. The show business and sports for example, we would pay to see machines playing football?
 

Offline cheryl j

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Re: Is Hawking right about Capitalism
« Reply #4 on: 09/03/2016 08:22:49 »
That's an interesting point, and one I hadn't thought of even though I have mutual funds myself. Still, you need money to invest and enough to resist the temptation of not cashing it in when times are tough.
When I moved to a rural area, I was surprised by the extent of an under ground economy - people using cash to avoid taxes, or trading services - you fix my car, I'll fix your roof or let you cut trees on my property for firewood.  But bartering doesn't allow people to save or "store" wealth. If you're cash poor the only way to store wealth  is in things like machinery or land, which is what rural people traditionally do.

Bit coin never took off but I often wonder if an underground currency won't develop if large numbers of people are shut out of the economic system and simple bartering is not sufficient to store wealth. But  I doubt people would maintain any confidence in unofficial currency that has no inherent value. I once read a story about drug dealers using Tide laundry detergent as a form of currency.
« Last Edit: 09/03/2016 08:36:02 by cheryl j »
 

Offline alancalverd

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Re: Is Hawking right about Capitalism
« Reply #5 on: 09/03/2016 17:02:44 »
There have been several local currencies, all with the same efffect - to provide a portable token of work. One of the best known in the UK was the Stroud Pound. It seems that a babysitting circle had half-hour tokens that you could acquire and distribute among the members, and new members had to earn a few hours before they could spend any. One day a woman found she had taken the wrong purse to the butcher's shop, but the butcher was in need of a babysitter so he swapped meat for tokens. As the meat also had a cash value, this established an exchange rate and small shopkeepers, carpenters and suchlike, were happy to join in the scheme because it was apparently beyond the reach of the taxman....It came to a sticky end, but only after several years.

An old friend was a family doctor in a semi-rural practice. He never charged farmers for his services, and rarely bought food.
 

Offline Jolly

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Re: Is Hawking right about Capitalism
« Reply #6 on: 10/03/2016 01:30:37 »
http://www.huffingtonpost.com/entry/stephen-hawking-capitalism-robots_us_5616c20ce4b0dbb8000d9f15

In a Reddit "ask Me Anything" Q&A, a reader asked Hawking whether robots would eventually replace most workers and what he thought the consequences would be. He responded "If machines produce everything we need, the outcome will depend on how things are distributed. Everyone can enjoy a life of luxurious leisure if the machine-produced wealth is shared, or most people can end up miserably poor if the machine-owners successfully lobby against wealth redistribution. So far, the trend seems to be toward the second option, with technology driving ever-increasing inequality."

This does seem to be the direction things are going. The push for an increase in minimum wage results in threats/plans to automate more services. With or without an increase, I don't doubt that I will walk into a fast food restaurant in the near future and find the cashier replaced by a touch screen for ordering.

Highly debatable, you need consumers for an ecconmoy to function. As wages stop and stagnate the only way people can consume as they were or increase consuming is through debt, but as we are seeing debt without a real ecconomy supporting and reducing it, it can only increase- but not forever. Debt has taken the place of wages over the last 20-30 years as manufacturing ect has been eliminated, from ecconomies like Britians.

And rather than allowing an ajustment which should have happened in 2008, all the private debts of banks got put onto the public. Germany actually paid off the whole of Greece debt, what once Greece owned to banks and other private institutions, now Greece owes to the people of Germany. Bizzarly historically it was always the debtor that was bailed out, today it's the creditors. Meaning all the debts get continued yet the creditors have no risks with Creditors getting paid double. How can you free up money when all debts are still continuing? It really makes you wonder, it's actually like they did the worst thing they could do, looked for the worse solution possible; with the knock on effect that governments all now burdened with the cost of all of these bank failures, introduce austerity.

Madness, and a madness that's not changed and is getting worse, the bond appocolipse is comming, housing bubbles gonna blow, all the fake paper gold is not gonna keep real the gold price suppresed that much longer.   

When I first started working in a lab in the 80s, literally half my day was spent transcribing numbers on to reports manually, phoning results to doctors, and other clerical tasks, all of which have been replaced by computers. The testing as well became faster, more efficient, and more automated, even in microbiology. But even though advances in technology vastly increased my output, it didn't increase my wages, or decrease my hours of work. I'm sure this was true in other fields as well.

You are not being paid in terms of output. Althought its a werid situation, "this computer increases my output and makes my job easier, you should pay me more" 

Society seems unlikely to abandon the Puritan work ethic any time soon and will be loath to pay idle citizens for doing little or nothing indefinitely. Will a large segment of the population be forced to suck it up and accept their post industrial peasant status?

Arnt they already? Have they not always been?

Or do you see some other means for individuals to access and utilize technology, either to be self sufficient or in some sort of underground/barter economic system?

Already happening with Bitcoin and other technologies.
 

Offline cheryl j

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Re: Is Hawking right about Capitalism
« Reply #7 on: 13/03/2016 06:55:03 »

Highly debatable, you need consumers for an ecconmoy to function. As wages stop and stagnate the only way people can consume as they were or increase consuming is through debt, but as we are seeing debt without a real ecconomy supporting and reducing it, it can only increase- but not forever. Debt has taken the place of wages over the last 20-30 years as manufacturing ect has been eliminated, from ecconomies like Britians.

And rather than allowing an ajustment which should have happened in 2008, all the private debts of banks got put onto the public. Germany actually paid off the whole of Greece debt, what once Greece owned to banks and other private institutions, now Greece owes to the people of Germany. Bizzarly historically it was always the debtor that was bailed out, today it's the creditors. Meaning all the debts get continued yet the creditors have no risks with Creditors getting paid double. How can you free up money when all debts are still continuing? It really makes you wonder, it's actually like they did the worst thing they could do, looked for the worse solution possible; with the knock on effect that governments all now burdened with the cost of all of these bank failures, introduce austerity.

Madness, and a madness that's not changed and is getting worse, the bond appocolipse is comming, housing bubbles gonna blow, all the fake paper gold is not gonna keep real the gold price suppresed that much longer.   

Interesting points. I would agree that debt did take the place of wages in fueling the economy and  the perfect storm of near financial collapse in 2008. It's an interesting case study.

In the States, the debacle started with the housing bubble, and government initiatives to make home ownership more realizable for lower income people. These mortgages required a smaller down payment and some what looser restrictions, but that increase risk was supposed to be effectively monitored and managed by the financial institutions and the government - and they arguably could have been if it had stopped there.

 But events in foreign markets, and deregulation or lack of regulation and transparency of newly invented financial  products like derivatives,  credit default swaps, and Structured Investment Vehicles  were major factors which pretty much blew that all to hell.

Bubble bursts, even in things as big the housing markets, are inevitable, and shouldn’t result in horrible chain reactions and a systemic collapse if institutions aren’t over leveraged. The repeal of Glass-Steagall in the US removed the separation between depository banks and investment bank firms. The Glass-Steagall act prevented banks from using their federally insured deposits  to underwrite their riskier, non insured  investments. People argue whether Glass-Steagall repeal  specifically caused the crash,  but it is  what made  banks “ too big to fail”, requiring bailouts, when chickens came home to roost from other bad investments.

Credit default swaps, if I understand it, are a type of ‘ insurance’ on investments for a fee , which was meant to encourage investment  -not entirely a bad idea,  since the investor can’t lose his shirt, unless institutions can’t actually cover the  losses.  This is what sunk AIG. This allowed AIG to write $3 trillion in derivatives while reserving precisely zero dollars against future claims.

Risky investments aren’t necessarily bad if everyone knows they are risky, but not if there is irresponsible or outright fraudulent rating of risky ( and bank fee generating) subprime loans, bundled and sold as a securities to investors, devoid of any accompanying information about their source.  Add to this mix a shadow banking system, in which regulated banks  hide their riskier assets  by selling them to a kind of “virtual” bank, called an SIV. SIVs  allowed regulated banks to circumvent capital requirement regulations. 

The financial sector has increasingly become bets on bets on bets on bets, rather than the stock market most people picture, in which investors purchase shares in companies that make something – like Ipads or running shoes.  And when something bad happens (like it turns out those mortgages were sold to people who were likely to default  combined with  a deflating housing market making the house worth less than what was owed,) it causes a long chain reaction and a sudden scramble for capital, that may not even exist to cover losses and debts. What also happens as well in this sudden fire sale, is it’s often unclear who owes what to whom or what things are worth.

The 2008 crash, at least in America was about debt,  deregulation, and speculation. "There weren’t enough Americans with shitty credit taking out loans to satisfy investors’ appetite for the end product." Micheal Eismen - hedgeman fund manager. "Derivatives are still weapons of massive destruction and likely to cause trouble" -Warren Buffet.



« Last Edit: 13/03/2016 19:58:41 by cheryl j »
 

Offline cheryl j

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Re: Is Hawking right about Capitalism
« Reply #8 on: 13/03/2016 17:46:01 »
[

You are not being paid in terms of output. Althought its a werid situation, "this computer increases my output and makes my job easier, you should pay me more" 

I get that - the worker is just a hired gun, regardless of what levers he is pulling or how fast. There is no legal expectation that employer will share any of the benefits from increases of productivity from better technology - that's sort of the point here.  But taking the "tough sh1t" position  doesn't actually answer the question posed in the Reddit discussion, and it seems to be one a lot of politicians are ignoring. 

 

Offline cheryl j

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Re: Is Hawking right about Capitalism
« Reply #9 on: 13/03/2016 17:50:43 »
There have been several local currencies, all with the same efffect - to provide a portable token of work. One of the best known in the UK was the Stroud Pound. It seems that a babysitting circle had half-hour tokens that you could acquire and distribute among the members, and new members had to earn a few hours before they could spend any. One day a woman found she had taken the wrong purse to the butcher's shop, but the butcher was in need of a babysitter so he swapped meat for tokens. As the meat also had a cash value, this established an exchange rate and small shopkeepers, carpenters and suchlike, were happy to join in the scheme because it was apparently beyond the reach of the taxman....It came to a sticky end, but only after several years.

An old friend was a family doctor in a semi-rural practice. He never charged farmers for his services, and rarely bought food.

Canadian Tire money is almost an unofficial form of currency in Canada. It's paper money that a store found all over Canada gives out when you make a purchase. - they sell auto parts, hardware, out doors and sporting goods, some kitchen and cleaning stuff. But it holds its value, regardless of what the dollar does. It is sometimes collected and donated for charity - like if someone's house burns down.
 

Offline Jolly

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Re: Is Hawking right about Capitalism
« Reply #10 on: 13/03/2016 22:45:25 »

Highly debatable, you need consumers for an ecconmoy to function. As wages stop and stagnate the only way people can consume as they were or increase consuming is through debt, but as we are seeing debt without a real ecconomy supporting and reducing it, it can only increase- but not forever. Debt has taken the place of wages over the last 20-30 years as manufacturing ect has been eliminated, from ecconomies like Britians.

And rather than allowing an ajustment which should have happened in 2008, all the private debts of banks got put onto the public. Germany actually paid off the whole of Greece debt, what once Greece owned to banks and other private institutions, now Greece owes to the people of Germany. Bizzarly historically it was always the debtor that was bailed out, today it's the creditors. Meaning all the debts get continued yet the creditors have no risks with Creditors getting paid double. How can you free up money when all debts are still continuing? It really makes you wonder, it's actually like they did the worst thing they could do, looked for the worse solution possible; with the knock on effect that governments all now burdened with the cost of all of these bank failures, introduce austerity.

Madness, and a madness that's not changed and is getting worse, the bond appocolipse is comming, housing bubbles gonna blow, all the fake paper gold is not gonna keep real the gold price suppresed that much longer.   

Interesting points. I would agree that debt did take the place of wages in fueling the economy and  the perfect storm of near financial collapse in 2008. It's an interesting case study.

In the States, the debacle started with the housing bubble,

No it started with Regan and Thatcher, and with an agenda,

index=45& Thom Hartmann: Welcome to Democracyville, USA. youtube.com/watch?v=_-HLFSA76d4&index=45&


 and government initiatives to make home ownership more realizable for lower income people.

Liar loans were not a government initiative, they were banks giving loans to people they knew could not afford them, then putting these loans in boxes of loans with a few class A loans, then labeling the whole box class A loans and selling them on to other banks and institutions, then insuring the loans so they make money when the loans dont pay out- they get the money for the loans when they sell them on and the insurence money when they don't pay out- it's whose left holding the rubbish when it all blows up game? And they all were, accept Goldman sachs who still took government bail out money they didnt need- and just put it all the government money into bonus' and dividens. 

These mortgages required a smaller down payment and some what looser restrictions, but that increase risk was supposed to be effectively monitored and managed by the financial institutions and the government - and they arguably could have been if it had stopped there.

 But events in foreign markets, and deregulation or lack of regulation and transparency of newly invented financial  products like derivatives,  credit default swaps, and Structured Investment Vehicles  were major factors which pretty much blew that all to hell.

These complicated financial packages were just con games to steal.


Bubble bursts, even in things as big the housing markets, are inevitable, and shouldn’t result in horrible chain reactions and a systemic collapse if institutions aren’t over leveraged. The repeal of Glass-Steagall in the US removed the separation between depository banks and investment bank firms. The Glass-Steagall act prevented banks from using their federally insured deposits  to underwrite their riskier, non insured  investments. People argue whether Glass-Steagall repeal  specifically caused the crash,  but it is  what made  banks “ too big to fail”, requiring bailouts, when chickens came home to roost from other bad investments.

That is a way to look at it, it's the banks that call themsleves too big to fail- its not a capitalist idea, the very notion that any company is too big to fail goes against everything that capitalism and a free market is meant to be about. Democracy has a bigger part to play in this, these companies are too big to fail, not for capitalists reasons but for reasons of power, under the new definition of democracy people vote by shopping, and they vote for the companies, the more market share a company has the more power, access to inteligence information ect ect, so if these companies fail, their power goes with them and they are incharge- Reagan and Thather gave them what was once held by Government. A weekening of democracy a transfere of the power of the people to business. So ofcourse if these are the companies in power under the new structure, they become the structure- the death of history.




Credit default swaps, if I understand it, are a type of ‘ insurance’ on investments for a fee

They are insurences, but not on investments rather on Credits or better said debts- they insure a debt someone has to the creditor, the creditor pays a part of the interest they get on a loan to the insurence company, and the insurence company will pay the creditor the whole debt if the debtor fails to pay. Interestingly if the insurence company has AAA rating, then all the debts they insure become AAA, as even if the debtor has a B rating, the loan is insured by a AAA insurer. and there all loans covered by AAA insurers become AAA loans :D
 
And ofcourse loans started defaulting on mass in 2008 and AIG had insured much of it.


, which was meant to encourage investment  -not entirely a bad idea,  since the investor can’t lose his shirt, unless institutions can’t actually cover the  losses.  This is what sunk AIG. This allowed AIG to write $3 trillion in derivatives while reserving precisely zero dollars against future claims.

Risky investments aren’t necessarily bad if everyone knows they are risky, but not if there is irresponsible or outright fraudulent rating of risky ( and bank fee generating) subprime loans, bundled and sold as a securities to investors, devoid of any accompanying information about their source.  Add to this mix a shadow banking system, in which regulated banks  hide their riskier assets  by selling them to a kind of “virtual” bank, called an SIV. SIVs  allowed regulated banks to circumvent capital requirement regulations. 

The financial sector has increasingly become bets on bets on bets on bets, rather than the stock market most people picture,

The strock market is all about gambling always has been, there is some trade on comodities and stocks but most of the stock market is people gambling on prices going up and down.

youtube.com/watch?v=7EjdC0pjo1A Billy Ray Valentine learns commodities


 in which investors purchase shares in companies that make something – like Ipads or running shoes.  And when something bad happens (like it turns out those mortgages were sold to people who were likely to default  combined with  a deflating housing market making the house worth less than what was owed,) it causes a long chain reaction and a sudden scramble for capital, that may not even exist to cover losses and debts. What also happens as well in this sudden fire sale, is it’s often unclear who owes what to whom or what things are worth.

The 2008 crash, at least in America was about debt,  deregulation, and speculation. "There weren’t enough Americans with shitty credit taking out loans to satisfy investors’ appetite for the end product." Micheal Eismen - hedgeman fund manager. "Derivatives are still weapons of massive destruction and likely to cause trouble" -Warren Buffet.


There were no people left to exploit, and yet no bankers have been prosicuted. There are less regulations, the banks have pretty much carried on the same as before, and today the situation is worse than it was back in 2008.

Important to underdstand that as the tax payers have taken all this bad debt, and governments are now runnings austerity programs, democracy as we new it is weaker and weaker, and corporate power is bigger and bigger.
 
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Re: Is Hawking right about Capitalism
« Reply #10 on: 13/03/2016 22:45:25 »

 

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