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.
- 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. (alt: The estimated percentage of the labor force engaged in agriculture (pdf) fell from 41 percent in 1900 to 21.5 percent in 1930. Source adds: 16% in 1945.) So the old jobs never "came back". So that's (for farming): 41% in 1900, 33% in 1910, 21.5% in 1930, 16% in 1945.
- Sarah Taber counters Nope, it actually bounced back up in the Depression (1930-40) and then took it's real nosedive after that... Farmers mechanized bc the New Deal created special loan programs that finally put machines w/in financial reach for white landowners... Why did the New Deal have those loan programs? Because the Farm Bureau lobbied for them. Why? They wanted to get rid of tenants (vast majority of both white & Black farmers). Tenant farmers couldn't lobby against it bc so many of them were Black & couldn't vote. By design.
- 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?
- my macro recommendations at CreditCrisis2008
- Arnold Kling PSST, Tyler Cowen's Great Stagnation - 2011-03-29-KlingPsstEconomicActivityRecovery
- The last Economic Transition led to the Great Depression:
- 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.
- What compensated? See A 20th Century Economic Theory.
- "Coasean growth"? see
- Nathan Lewis on urban service economy: 2010-09-20-LewisSustainableServiceEconomy
- and earlier 2007-07-10-LewisNoGrowthEconomics (Steady State Economy)
- Job Creation vs Free Agent independence - 2011-07-20-JobCreationVsFreeAgent
- Lifestyle Design
Guaranteed Annual Income as bridge?
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