Although I’m late getting around to it, I’d like to follow the widespread New Year’s custom, among people lucky enough to get paid for blathering about their opinions, of taking a shot at some concrete predictions.
The free fall in employment seems to have pretty much stopped, with the possibility of even a little reduction in unemployment, if we manage to avoid the second leg of a double-dip in 2010. In a best case scenario, I still expect continued quiet declines in total employment as a percentage of the population, and in average work-weeks, that don’t really show up very well in the kinds of macroeconomic indicators you see in the newspaper every day.
My hope is that the growing surplus of industrial capacity and labor power will continue to be reflected in such quiet stagnation, and not in sudden or catastrophic mass unemployment.
I expect a long-term trend toward reindustrialization, as the model of using container ships to import stuff made on contract for Western TNCs in Chinese job shops becomes prohibitively expensive. But I also expect continued stagnation and idle capacity in what’s left of traditional mass-production industry. Put the two together, and you get exponential growth of flexible manufacturing networks made up of small shops and garage factories. Since the old model of enforcing “intellectual property” on industrial designs was only cost effective in an environment where a handful of giant manufacturers produced millions of the same goods and sold them through a handful of giant retailers, we can also expect the transaction costs of enforcing IP against hardware hackers to become prohibitive. And that’s not even taking into account the possibility that the old manufacturing companies wind up in an Argentina-style situation, where they’re too busy boarding up factories and fleeing creditors to worry about enforcing their patents.
It would be good, in a society where traditional full-time employment with benefits becomes increasingly marginalized, if artificial scarcities in benefits like healthcare were removed so that it would be easily affordable outside the traditional model of full-time employers as the primary institutional base for the social safety net.
It would also be good if some sort of job-sharing catches on, with or without public fanfare as an Official Trend, and gradually chips away at the average work week; this would be far preferable to a sharp dichotomy between the still-employed and a growing class of long-term unemployed. Over the next generation I expect we will gradually transition to a society in which a shrinking percentage of people have full-time jobs, and more and more are part-time workers living in extended families, cohousing, and other income-pooling arrangements.
At the same time, it would help for social safety net functions to be decoupled from the employer-based welfare state and gradually shift to primary social units like the income-pooling arrangements mentioned above. For example, membership in one of Tom Greco’s credit-clearing networks might entail a modest monthly payment (assessed as a percentage of one’s total transactions within the system) that would go toward sick benefits, unemployment and disability, old age pension, etc., so that those who became incapacitated would be able to obtain necessities from members of the network.
One of our most vital needs is to flush all forms of artificial scarcity and attendant price markup from the system, so that the reduced work hours and capital required to produce a comfortable standard of living also translate directly into a reduction in the number of hours of labor to buy that standard of living. A top priority for libertarians, toward this end, should be to make artificial property rights unenforceable (for example, by developing and promoting the technical means of circumventing copyright law, for organizing barter and credit-clearing systems in darknets that are opaque to the government, for evading regulatory restrictions on self-employment in the informal economy, etc.).
What’s needed, in sum, is 1) a “cramdown” or “mark to market” of most of the inflated asset values that impose high fixed costs on the average person, and 2) an end to the artificial scarcities that enable owners of fake property rights to prevent the benefits of increased productivity from being passed on to workers and consumers, so that it takes fewer hours of work to live comfortably.
If the full-time work week today were reduced to 32 hours in lieu of 10% (or 20%) unemployment, but the price of housing were allowed to fall to normal historic levels (i.e. 20% of the average monthly income, rather than 40-50%), and per capital healthcare expenditures were reduced to European or even Canadian levels, we’d all be a hell of a lot better off.