In my occupation as an economist, I have acquired a nickname among my peers: They call me “Dr. Doom”. Anyone who has read this blog would probably feel that the nickname is a very appropriate one for me, but I actually earned it for a different reason. As part of my job, I am called upon to give periodic outlooks to various audiences on the state of the economy, and I was always among the ranks of the extreme pessimists back at the start of the Great Recession, when I predicted that it would be a long and severe one, and then again, at the beginning of the recovery, when I predicted that it would be long and painful. Now of course I wasn’t alone in making these predictions, and in fact the general outlook of most economists was rather bleak, but my relatively extreme pessimism, which has been rather relentless for the past six years, apparently set me apart in the eyes of my audiences. It probably didn’t help that I took an equally dim long-term view, contending that unless our society makes some fundamental changes – reining in the national debt, raising the educational standards of our next generation, and making significant investments in replacing and improving our aging infrastructure – we are heading down a path of inexorable decline, and even crisis. Again, I am certainly not the only one who has said such things, but apparently, to my audiences, mine has been one of the more shrill voices of warning.
I have sometimes joked that the Great Recession was caused by a number of large companies trying to make a lot of money without actually producing anything, and the weak recovery has been caused by manufacturers trying to produce things without using any people. This is hyperbole, of course, but as I look at the dismal state of employment – not just in the United States but also in parts of Europe and elsewhere in the world – I can’t help but think back to a remark supposedly once made by Henry Ford: that he liked to have a sizable, decently-paid workforce so that there would be people who could afford to buy his cars. Such a sentiment seems quaint these days.
Now as an economist, I would be ostracized by my peers if I suggested that we should resort to artificial means to create jobs, such as paying people to build pyramids, or to dig holes and then fill them up again. Still, as technology increasingly enables us to rely upon machinery to produce our most important goods and services, I can’t help but imagine a future world where everything is produced by machines – or at least all of the most important essentials, such as food, shelter, and home appliances. To take this thought experiment even further, imagine that all of these machines were owned by a single corporation, or even a single person. What would the rest of humanity have to do to procure these products? One scenario might be that the world would be regulated by a socialist government, in which the products were allocated to those who needed them. But would the owner of the machinery producing these tolerate such a system, and if so, why? It would seem that the balance of power would lie squarely in favor of this owner, particularly if the machines were the sole producers of weapons, in addition to the other vital goods and services. If not – if the owner were compelled to distribute everything for free by a government with the military capability to do so – then for all intents and purposes the production facilities would really be “owned” by that government.
So let us assume – either by ownership or by force – that these production facilities are controlled by a single entity: in fact a single person. The socialist regime would then only come about as a result of a sort of voluntary altruism on the part of that person, and the rest of the world would be comprised of an entire population on the dole. More likely, the procurement of vital goods would come at a price, and one that was set by him or her, on very monopolistic terms. And since nobody else would be contributing to the production of these things, the ability to pay this “price” would become problematic. The owner would literally have the lives of everyone else in his or her hands.
It reminds me of an episode from that classic television series, The Twilight Zone, in which a young boy has been endowed with god-like powers. The world has been reduced to a handful of persons – his immediate family and their neighbors – who have been terrorized into a craven submission, endeavoring to only say and do things that will not displease him, lest they meet the unpleasant fate of all of those others who ran afoul of him. Even if our ultimate capitalist is not quite so malevolent, his total power over others will compel them to find ways to offer something of “value” to him or her, in order to receive the necessaries of existence in return. Now this may simply involve – at least for the most part – benign forms of entertainment or personal service – but it is hard to imagine anything else that could be offered.
In some ways, this actually does seem to be the trajectory that we are on. In America, the proportion of manufacturing jobs has been steadily declining, while that of service jobs has increased, and a third type of employment, in which persons are compensated for thinking (e.g., as executives, consultants, accountants, engineers, and other professionals), has rapidly grown. We seem to be moving toward a two-tiered society, in which “cognitive” employment and more skilled service jobs are well compensated (although, as satirized in movies such as Office Space, even these jobs can devolve into degrading, poorly paid lackey positions), while lower-level service and unskilled manufacturing jobs receive very meager wages. And of course, our most successful entertainers – including professional athletes – are extremely well paid. Another form of “entertainer”, the drug dealer, has become a prominent figure in the underclass and the underground economy (and those who control the production of these drugs are often at the heads of powerful private empires in foreign countries), while the less successful members of this group make up the huge prison population that is now a part of the American social system. Other less successful and less powerful “entertainers”, such as strippers and prostitutes, lead lives that are only at one or two removes from those of prisoners and the destitute.
One of my vices is watching American court TV programs, and based on my viewing of these, I’ve come to the unhappy conclusion that a whole social milieu has developed among the ranks of the unemployed and underemployed, particularly among young men. One of the most common court cases involves a dispute between a young woman and a young man (usually an ex-boyfriend), in which she has given him a large sum of money, and contends that it was a loan, while he argues that it was a gift. Almost invariably, the young men involved in these cases have smirks on their faces, indicating a sense of pride in what they have done, as if separating naïve young women from their money has become a new sport among their peers. These “players”, who apparently have few avenues, or motivations (or both) to find productive employment, have resorted to this form of non-violent predation to demonstrate their intellectual prowess and social mastery over women. Meanwhile, the number of unwed mothers continues to skyrocket within these social classes, and it is often the government, rather than the fathers of these children, that provide the necessary additional support to care for the children.
Of course, it is dangerous to wax too nostalgic about the “good old days” when most people were engaged in genuinely productive activities. Primitive farm labor, grueling and often dangerous factory jobs in the industrial revolution, and the sweat shops that exist in developing nations today can hardly be regarded as the most ideal avenues for human beings to be producers of value. And while drug dealing, scamming, and dodging paternal responsibilities are certainly not ways that young men should be occupying themselves, is it worse than being enlisted to kill other people, in military service?
If the trajectory of the modern economy is moving us away from one involving producing things, in the conventional sense, then we must take a clear-eyed view of what exactly it is moving us toward. Will it continue to evolve into a two-tiered society, with thinkers, capitalists and successful entertainers at the top, and drug dealers, welfare recipients, scammers, and convicted felons at the bottom? Is this an inevitable trajectory? Or is a future economy possible in which everyone – or nearly everyone – can find avenues for providing something of value that will ensure a level of compensation commensurate with a dignified life? It admittedly sounds like a utopian hope, but for me, contemplating it at least gives me the strength to face the increasingly dystopian world that seems to be unfolding, even in “affluent” countries such as America
