Our piece Putting Aside Pesticide Residue Levels And Climate Change: Will The City Of Light Be A Beacon For The West To Combat ISIS? We Can Never Prosper If Our Civilization Crumbles was followed by Pundit’s Mailbag – Thoughts On Global Warming and Wealth, which included letters from both Doug Stoiber and Deidre Smyrnos.
Now that piece has brought a response of its own:
Your article, ‘Thoughts on Global Warming and Wealth,’ linked to quite a collection of perspectives, including a discussion of the ISIS phenomenon and what, if anything, can be done to contain it.
The underlying question, I think, is the subtitle, ‘We can Never Prosper if our Civilization Crumbles.’ I feel this is both completely true, and a very elusive idea — the ambiguity being, what we understand by ‘our civilization’ appears to be quite different depending on who you talk to — for example, a Trump supporter vs a Sanders supporter?
It’s obvious that even within ‘our (geographic) civilization,’ there are big divisions, and different perceptions of how to keep it from crumbling into a pile of rubble.
At the same time, many, if not all people in different cultures around the world are seeing their respective civilizations crumbling. One of the most destabilizing forces being unemployment, closely associated with the erosion of a whole set of cultural values and social structures.
The culprit in this case may be the success of human beings in automating processes that were once done by hand. Although some argue that automation creates higher paying jobs, the main rationale behind automating is to cut labor costs, so each higher paid technician replaces many previously employed workers.
Associated with this displacement of labor is the bombardment of images of affluent lifestyles that are out of reach for increasing numbers of people, which can only breed a sense of hopelessness and, yes, anger.
I realize that when someone is shooting at you is not the best time to engage in philosophical debates about the nature of violence and the pros and cons of various responses. But if we’re all in the same frying pan, it’s a mistake to think that someone else in the frying pan is the primary cause of our discomfort.
— Bob Sanderson
Bob has been a frequent contributor to the Pundit with pieces that include the following:
So we appreciate Bob’s engagement on this important topic.
He makes four points:
1) It is easy to lament civilization’s collapse, but harder to define what civilization one is actually talking about.
2) That unemployment is a key factor is the destabilization of civilizations.
3) That automation is a key factor causing unemployment.
4) That modern technology, which places photos and video of affluent lifestyles in everyone’s hand, arouses hopelessness and frustration among people, making their situation even worse than it might have been in previous times.
Indeed, the anger of Islamic terrorists is, to no small extent, fueled by frustration that the decedent West is causing the collapse of their own civilization. But here in the US, Bob’s point is exactly the same as mine. When the Pundit’s great-grandparents arrived in this country, their children were thrown into public schools that had as an explicit goal the Americanization of these immigrants. They were expected to learn English, ideas were inculcated via “Civics and Citizenship” courses. The civilization had a set of norms that it believed were worth defending. The goal was a “melting pot” in which — well… E Pluribus Unum — out of many, one.
In time, the self-confidence with which this society interacted with the world dissipated. The ideal became not the melting pot, but the salad bowl — in which each group would maintain its own identity and values.
The consequences are vast. Although many like to attribute hostility to immigrants as a function of economics, in a democracy, an immigrant ultimately becomes one’s partner in governance. So, one doesn’t have to be prejudiced to believe one would like to avoid changes in government policy based on values that are alien to you.
Being without work is surely destabilizing. Indeed, one of the major problems in the US is that, though the official unemployment rate is low, the percentage of people in the work force has dropped substantially. In the year 2000, 67.3% of the working age population was, in fact, working. Today that percentage is around 62%, although some of this drop may be due to demographic changes. The male labor participation rate has declined particularly steeply, perhaps reflecting a decline in the availability of blue-collar work.
The country would be a different place if we had an extra 12 million people with full time jobs in America — which is roughly what this translates to.
But, of course, people are not keeling over from starvation all across the land. So how is it possible to have so many people not working?
All too often, the nature of a job is misunderstood. The assumption is that jobs are something that employers create, and the jobs either exist or not. But, in reality, there is a constant dance between those who would provide employment and those who accept employment — and a job is only created when the offer extended is accepted.
So, the fact that I might like to have a personal chauffer is nice, but if my offer is work in exchange for free rice and my table scraps, and no one accepts that offer, there is no job, even though I am offering employment.
So, even though the decline in manual-labor-focused jobs would, logically, seem to imply safer employment, disability rates have skyrocketed. Although nationally, a bit over 5% of the working age population is on disability — up from 2.5% in 1990 — in some troubled counties, about 20% of the working age population receives Social Security Disability benefits.
In other parts of the country, minimum wage increases establish that the community would rather see low skilled people unemployed or that low wage work is aesthetically unappealing and should be done elsewhere. A new Harvard study found, predictably, that raising minimum wages impacted high end restaurants less than low end restaurants. Key findings:
“a $1 increase in the minimum wage corresponds to a 4% to 6% reduction in the number of new restaurants opened.”
“a $1 increase in the minimum wage leads to an alarming 14% increase in the likelihood of closure for a 3.5-star restaurant (which is the median rating), but had no discernible impact for a top rated 5-star restaurant.
So the lower-ranked restaurants that cost less have a harder time surviving the increased labor costs of a higher minimum wage.”
The issue may not be that there is no work, but many people need both carrots and sticks to do something difficult — like work. We may be organizing society so that these do not exist or at least not to the extent necessary to create the jobs needed. How can we on one hand say that jobs are essential to our very civilization, but on the other hand set up all kinds of restrictions that prevent people from creating jobs and reduce the urgency for people to accept jobs?
Automation has the great drawback of removing very visible jobs. So, if we develop autonomous trucks, we won’t need truck drivers. The usual answer is that the process will create better jobs, say in developing the software needed to run the vehicles. There is, however, no particular reason to believe this is a one-to-one ratio. In fact, the reason it will be cheaper is precisely because it will not be a one-to-one ratio.
This is, however, the wrong way to think about the issue. It is really the work of Joseph Schumpeter and his well-known concept of “creative destruction” that should guide our thoughts.
Creative destruction refers to the incessant product and process innovation mechanism by which new production units replace outdated ones. It was coined by Joseph Schumpeter (1942), who considered it ‘the essential fact about capitalism’.
The idea is that the resources of a society, if held to their current use, will stratify that society and its economy. It is only through innovation and replacement that resources — land, capital, labor, etc. — are freed up to be redeployed in new ways. So when we liberate these resources, nobody can know what, ultimately, that resource will be used for — although John Kenneth Galbraith, in his classic, The Affluent Society, told us way back in 1958 that individuals had pretty much all they needed, and the future would be all communal goods. Turns out that consumers have managed to find needs for plenty of things that Professor Galbraith never imagined — anyone have an iPhone, an Internet connection, fly non-stop from London to Perth? There is little reason to doubt the infinite flexibility of consumer needs and desires.
We actually don’t know if allowing people to see things they can’t immediately have is a cause of motivation or despondency — maybe both in different people at different times. Envy is, however, one of the Seven Deadly Sins and it is probably a mistake to give into it.
When television was just starting, there were many earnest pieces about how this new tool would make it easy for people to learn Latin and Greek from the comfort of their homes. Didn’t work out, but maybe this time, with all the time freed up through automation, people will be able to study the Ten Commandments — especially that one that begins: Neither shall they covet…”
Many thanks to Bob Sanderson and Jonathan’s Sprouts for helping us think through this important issue.