Economic Transition

I think we're going through a Phase Change from Old Economy to New Economy. The Credit Crisis 2008 was just a trigger point for a bigger change, so a true "recovery" may take decades.

Consider:

  • We usually think of the Great Depression as being caused by Monetary and Tariff policy. But... Workers classified as laborers, other than farm or mine, peaked at 11.4 percent of the labor force in 1920 but were barely 6 percent by 1950 and less than 4 percent by 2000. Farmers and farm laborers fell from 33 percent of the labor force in 1910 to less than 15 percent by 1950 and only 1.2 percent in 2000. So the old jobs never "came back".
  • But those new Mass Production jobs peaked in 1950.
  • Likewise, the proportion of clerical workers peaked in 1980 as their work was automated.
  • The largest companies, traditionally the most elite/stable, have been shedding jobs for decades.
  • The biggest occupation group as of 2000 was "professional and technical", made up of mostly teachers and HealthCare workers. Both groups work in heavily regulated or near-monopoly industries, so their level of Agency is likely to continue to decline until/unless those industry structures changes significantly. In addition, Venture Capitalist Vinod Khosla believes that automation ("algorithms") will replace many people in both those fields.
  • Carlota Perez theorizes in Technological Revolutions And Financial Capital that this happens in every Technological Revolution: after the initial technology-driven Irruption phase, there's a finance-driven Frenzy phase, followed by a Turning Point that usually involves a Collapse and response to it, before moving on to a Synergy phase where the new technology really bears fruit for mass humanity (before a final Maturity phase).
    • Jan'2014: Albert Wenger does a good long-history telling of this story. That leaves us with two more critically important questions about the transition to the Information Age. First, do we need a catalytic event or can we get there without it? Past catalytic events were largely wars, revolutions and plagues. It would be good to avoid both of these. Second, what are you and I personally doing to help navigate the transition?

See

Guaranteed Annual Income as bridge?


Edited: |

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