STOCK MARKET WATCH -- Wednesday, 18 March 2015

[Demeter]

10. Robert Reich: In Our Horrifying Future, Very Few People Will Have Work or Make Money

http://www.alternet.org/robert-reich-our-horrifying-future-very-few-people-will-have-work-or-make-money?akid=12899.227380.Ldi7Bd&rd=1&src=newsletter1033412&t=4



...Imagine a small box – let’s call it an “iEverything” – capable of producing everything you could possibly desire, a modern day Aladdin’s lamp. You simply tell it what you want, and – presto – the object of your desire arrives at your feet. The iEverything also does whatever you want. It gives you a massage, fetches you your slippers, does your laundry and folds and irons it. The iEverything will be the best machine ever invented. The only problem is no one will be able to buy it. That’s because no one will have any means of earning money, since the iEverything will do it all. This is obviously fanciful, but when more and more can be done by fewer and fewer people, the profits go to an ever-smaller circle of executives and owner-investors.

One of the young founders of WhatsApp, CEO Jan Koum, had a 45 percent equity stake in the company when Facebook purchased it, which yielded him $6.8 billion. Cofounder Brian Acton got $3 billion for his 20 percent stake. Each of the early employees reportedly had a 1 percent stake, which presumably netted them $160 million each. Meanwhile, the rest of us will be left providing the only things technology can’t provide – person-to-person attention, human touch, and care. But these sorts of person-to-person jobs pay very little. That means most of us will have less and less money to buy the dazzling array of products and services spawned by blockbuster technologies – because those same technologies will be supplanting our jobs and driving down our pay.

We need a new economic model.

The economic model that dominated most of the twentieth century was mass production by the many, for mass consumption by the many. Workers were consumers; consumers were workers. As paychecks rose, people had more money to buy all the things they and others produced — like Kodak cameras. That resulted in more jobs and even higher pay. That virtuous cycle is now falling apart. A future of almost unlimited production by a handful, for consumption by whoever can afford it, is a recipe for economic and social collapse. Our underlying problem won’t be the number of jobs. It will be – it already is — the allocation of income and wealth.

What to do?

“Redistribution” has become a bad word. But the economy toward which we’re hurtling — in which more and more is generated by fewer and fewer people who reap almost all the rewards, leaving the rest of us without enough purchasing power – can’t function. It may be that a redistribution of income and wealth from the rich owners of breakthrough technologies to the rest of us becomes the only means of making the future economy work.

NOT ONLY IS THIS ECONOMIC MODEL UNSUSTAINABLE (MONEY DOESN'T CYCLE THROUGH, IT JUST PILES UP IN HOARDS)

THE TECHNOLOGY THAT PRODUCES IT IS UNSUSTAINABLE, AS WELL.

IF THE MAGIC MACHINE BREAKS, WHO FIXES IT? OR DOES IT GO TO A LANDFILL, FURTHER REDUCING THE RAW MATERIAL STOCKS TO BUILD REPLACEMENTS, WHILE POLLUTING THE ENVIRONMENT WITH MORE INDESTRUCTIBLE, NON-RECYCLABLE TRASH?