Long Term flaw in the economy I don't hear addressedSubmitted by NoEndToTruth on Tue, 06/25/2013 - 02:23
There's a fundamental problem with the economy that I haven't heard addressed by anybody, perhaps because it is a bit academic. But I am wondering what y'all think about it (or maybe point me to some related reading).
The problem I see is that technology combined with a growing population is causing the value of human labor to decline (The demand for human labor overall is going down while the supply is going up).
Now I know all the arguments about better paying high skill jobs being created, and that's good. I also know that the more productive tech means lower costs for consumers which overall can raise the standard of living.
However, not everyone is suited to high skill or high tech jobs. There is simply a fairly large portion of the population that will never be able to offer a positive return on investment for their abilities, regardless of how much training/education is available to them. Or what little wage they earn will purchase so little that it's hardly worth doing. Even if you magically fixed every problem with the education system (which you obviously won't), it would still leave an ever growing portion of the population unable to "keep up". The more efficient robots, 3D printers, software, etc. gets, the less demand there is on the market for human labor overall (while supply continues to rise).
We produce more stuff by far than we did in the 50's (for example), yet everyone seems to need to work harder. Part of this is just cultural materialism, and of course interference by the gov't and the Fed, but part of it is also the impact of the lowering value of labor in general (as I see it).
I can imagine a more Utopian society where we all work less and less over time, and are contented with more modest lifestyles (which gradually improve with the ever improving tech), thus keeping a larger portion of the population relevant. But of course that's a fantasy. It's not efficient (at least in the short term) to have 2 people do a job that one person could do, and a lot of people would rather work longer hours in order to keep their pay higher anyway.
Is there a free market solution to this problem? Seems to me that even in the purest Ayn Randian world (I can use her name as an adjective right?) it would inevitably lead to revolt by the underclasses whose labors become worthless, but maybe I'm missing something. The only answer I can think of is "we'd have to hope the free market comes up with a solution", but I'm curious if anyone has more insight than that.