Archive for March, 2017


Treasury Secretary Steve Mnuchin may not be worried. Nor, it seems, are other members of the economic and political elite. But the rest of us are—or we should be.

As regular readers of this blog know (cf. all these posts), the robots are here and they’re rapidly replacing workers, thus leading to less employment, downward pressure on wages, and even more inequality.

The latest evidence comes from the work of Daron Acemoglu and Pascual Restrepo, who argue, using a model in which robots compete against human labor in the production of different tasks, that in the United States robots have reduced both employment and wages during recent decades (from 1993 to 2007). That conclusion holds even accounting for the fact that some areas of the economy may grow (thus increasing employment for some workers) when the use of robots raises productivity and reduces costs in other industries.


Even though U.S. employers have been introducing industrial robots at a pace that is less than in Europe, their use in American workplaces has in fact grown (between 1993 and 2007, the stock of robots in the United States increased fourfold, amounting to one new industrial robot for every thousand workers). And, once the direct and indirect effects are estimated, robots are responsible for up to 670,000 lost manufacturing jobs. And that number will rise, because industrial robots are expected to quadruple by 2025.

Actually, the effects have likely been even more dramatic, because Acemoglu and Restrepo take into account only three forces shaping the labor market: the displacement effect (because robots displace workers and reduce the demand for labor), the price-productivity effect (as automation lowers the costs of production in an industry, that industry expands), and the scale-productivity effect (the reduction of costs results in an expansion of total output).

What they’re missing is the effect on the value of labor power. As I explained last year, when productivity increases lower the prices of commodities workers consume, the value capitalists need to pay to get access to workers’ ability to work also goes down. As a result, even if workers’ real wages go up, the rate of exploitation can rise. Workers spend less of the day working for themselves and more for their employers. Capitalists, in other words, are able to extract more relative surplus-value.

And more surplus-value means more income for all those who share in the booty: CEOs, members of the 1 percent, and so on.

That’s why the increasing use of industrial robots, which under other circumstances we might actually celebrate, within existing economic institutions represents a disaster—not for their employers (who, like Mnuchin, are not particularly worried), but for all the workers who have been or are likely to be displaced and even those who manage to hang onto their jobs.

Workers are the ones who are going to continue to suffer from the “large and robust negative effects of robots”—unless and until they have a say in how robots and the resulting surplus are utilized.


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Posted: 30 March 2017 in Uncategorized
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Apparently, there are lots of folks out there who also, every morning, wake up on the wrong side of capitalism.

That’s the only explanation I have for the fact that, as of yesterday, this blog reached an extraordinary milestone: it has received more than one million views.

I really don’t know what else to make of the number. I started this blog (at the suggestion of a couple of former students) back in 2009. I still call it “occasional” but, as regular readers know, it’s anything but. But I don’t have a particularly good handle on why so many people from so many “countries” (212, both official countries and territories, according to WordPress) have found their way to this blog.

I do get the occasional message from readers about how they or someone they’ve met find the information and analysis useful. That couldn’t please me more—to know that what I write here travels and serves a wide variety of people who are attempting, as that hoary German philosopher once wrote, to both interpret and change the world.

So, yes, the large number of views does seem to indicate that there are many people out there—students, professors, activists, and others—who are dissatisfied with business as usual, both with the uneven recovery from the latest crises of capitalism and with the blithe assertions by economic and political elites (and those who represent their interests in the academy and media) that there are no alternatives.

We, on the other hand, are guided by the idea that something is seriously wrong with contemporary economic and social institutions—and other worlds are indeed possible.

The readership as it turns out is even wider, as many of the posts that originally appear here are reposted on the Real-World Economics Review blogDemocracy at Work, Progress in Political Economy, and perhaps elsewhere. I want to thank all of them for their continued encouragement and support.

In all honesty, the major satisfaction I derive from this blog stems from the new kinds of research and writing it has allowed me to do—mostly concerning on-going events and commentary by others about what is going on in the world, especially (but not only) with respect to the economy and contemporary economists. My goal throughout has been to carry out (or at least point toward) a “ruthless criticism of everything existing,” a project to which many others around the world are also currently contributing.

For my part, I can’t say I’ve settled on the best way to conduct that critique and present it to readers. That’s why I’m always open to feedback and suggestions—about both topics and ways I can make this work more useful.

What I can say is I derive a great of pleasure from working on a daily basis on this blog (even if there were no readers)—and even more from the fact that so many people in the United States and around the world find it worthwhile to find the time to visit the blog and read what I write.

Perhaps someday we’ll all wake up from this nightmare, on the right side of capitalism—as it becomes a distant memory.


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It’s alive!

Posted: 29 March 2017 in Uncategorized
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Dissension in Republican ranks didn’t prevent Repeal and Replace. Poverty did.

Think about it: Medicaid now provides for the medical needs of one in five Americans. That’s 74 million people. Even more:

Medicaid now provides medical care to four out of 10 American children. It covers the costs of nearly half of all births in the United States. It pays for the care for two-thirds of people in nursing homes. And it provides for 10 million children and adults with physical or mental disabilities.

As the New York Times notes, Medicaid was a mere footnote when Lyndon B. Johnson signed the Social Security Amendments of 1965. Now, however, the U.S. economy has so impoverished the nation’s population that Medicaid has surpassed Medicare in the number of Americans it covers.

So many Americans rely on Medicaid it was politically impossible to garner enough support, from Democrats and at least some Republicans, to repeal Obamacare and replace it with a plan that gave tax breaks to the rich in exchange for decreasing health coverage for the growing ranks of the poor.

The problem, as it turns out, is not the health system. It’s the nation’s impoverishment.


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