George Rebane

The American workforce is in crisis, and no one wants to talk about the real nature of that crisis.  Perhaps the established news outlets and commentators consider the issue too hot to handle; then again, maybe very few see the problem.  Today, this is often where the itinerant blogger enters unannounced, and shouts his vision to an audience uncertain, and most likely unbelieving.

The un-debated national problem is that a large and growing fraction of our adults of working age can no longer sell their labor at wages that will support their current lifestyle.  Today’s recession may be seen as a blessing that hides this reality for another year or two.  We are assured by the media and government pundits that all the jobs and more will return when the recession is over, but they most certainly will not return through the same companies that are now using the financial crisis to permanently pare back the unproductive labor component of their businesses.  In this series of posts I will attempt to make the case for the dimension, causes, and direction of this national crisis as I believe it will unfold.

Let’s start the whole thing off with the bottom line.  Automation fueled by radical advances in cheap machine intelligence, robotics, and globalization (that makes available equally or better trained workers) is relegating the overpriced American worker to the hinterlands of human capital.  The short form is that the natural dispersion of human intelligence (recall that half the people have two-digit IQs) combined with a catastrophic educational system has produced an exploding population of under-qualified workers, the larger fraction of whom are simply untrainable to compete in the global job markets of which the United States is now but a part.  And that same educational system continues undeterred on its well-worn path.

The intellectual requirements and skill levels for getting and keeping the fulfilling, meaningful jobs (FMJs) in the private sector are increasing with every passing month.  A good part of the fulfillment component is a good wage which supports a minimum quality of life.  Admittedly QoL is a subjective and perceived outcome from earning a living.  But the American minimum QoL is a bar that has been set ever higher since the end of WW2 – a chicken in every pot and two cars in every garage, or whatever.

As machines and cheaper labor displace American workers from their FMJs, certain obvious instabilities will begin to strain the country’s social fabric.  The inevitable populist demagogues rise to promise the displaced and lowly paid a brighter future primarily through the redistribution of wealth.  The Peter/Paul Principle (‘The politician who promises to rob Peter and pay Paul always has the whole-hearted support of Paul.’) guarantees their continued election to power, and supports their subsequent policies to remake the economy into one that is more ‘fair and just’.

The early ‘solution’ for creating jobs is to increase taxes on those who pay, and print money to ‘revive/stimulate the economy’ thereby absorbing the free-market unemployables into a swelling public sector and managed markets with mandated jobs that no free enterprise would consider adding on their own.  But the baby factories and immigration channels still continue operating at full tilt.  And in spite of their high dropout rates, the education monopoly goes on graduating young people whose employment hopes in the large are based on achieving positions directly funded by the government or charitable foundations/trusts.  In one way or another, a large fraction of both dropouts and graduates thus become wards of the state.  And as we shall shortly see, much of this in itself may not be bad.

Having said all this, there is no reason to believe that the country’s GDP cannot keep growing at or near its historical pace.  Sufficient concentration of wealth in the future will assure that risky investments will continue to be made to yield more and more technology, methods, and machines that will generate the necessary wealth while redeploying and/or displacing workers.  The sticking point here is that wealth then becomes more and more concentrated in the hands of those able to make and manage the machines.  The socialist solution and current populist goal is to claw back (today’s term of art) such inequitable rewards from those who can, and redistribute them to those who can’t or won’t.  The problem with ‘claw back’ is its implication that something was initially taken from those who can’t, which in a more just world must now be returned to them.

However, the bigger problem is that those who can tolerate the risk and create that wealth will no longer want to do it, or at least be able to continue doing it at a rate that keeps the GDP growing apace with the population.  The socialists of the past could not conceive of such a demonstrated result, and today’s socialists are equally convinced that they can just do one thing – redistribute the wealth without affecting its level or rate of generation.

At this point let’s not fool ourselves.  Within the scenario I have painted, there is no alternative to implementing the unearned redistribution of wealth in the attempt to create believable FMJs by the millions.  There are really only two alternatives here – we either create FMJs or we will be firing them from behind street barricades – it’s either fulfilling, meaningful jobs or full metal jackets.  And the latter is not an acceptable alternative.

So here we stand at a crossroad that few see and fewer recognize.  The socialist promises us a solution guaranteed to return universal misery and suffering, and the capitalist doesn’t have a clue while busy building better products and services that require fewer and smarter people to deliver them.  And the millions of unemployed or soon-to-be stand there, not sure what is happening, but waiting hopefully for a sunrise that will never come.

This is the pre-Singularity world in which we find ourselves.   As the level of technology continues to accelerate, its effects on the semi-literate and innumerate American workforce will become more pronounced.  Given the financial condition of our country and the EU, there are several possible alternative futures, almost none of them benevolent to us or our children.  I believe that the socialist ideology is in eternal stasis, and will not provide the enlightened solution required for maintaining QoL in the next decades.

Our hope lies with those free men and women who can generate wealth, and with those who still have it and are willing to risk some of it.  Historically, it is from within those ranks that the creative and enlightened ideas have come, and should come again to solve this epochal crisis.  In the run-up to the Singularity, it is the wealth generating class that must come up with and implement a redistribution scheme that will not paralyze the generation of wealth and advancement of humankind.  This may sound like anathema to the dyed-in-the-wool capitalist, but as I will argue in future posts, there is no acceptable alternative.  Until the free-market capitalists can devise the wholesale creation of fulfilling, meaningful jobs, they or we (for I am one of them) will continue making the rope with which we will be first bound and then hanged.  And pay attention fellow capitalist, the cords are already enthusiastically being fashioned for our ankles and wrists.