Night of the Living ComCap Debate....

[Berzerker]

Kid -

Since we're on the subject of productivity improvements and consumer spending, consumer spending is independent of productivity improvements.

Did consumer spending go up or down with productivity improvements in computers? The aggregate went up, but individual consumers spent less than early buyers. Reducing the cost of a product thru a production gain does affect consumer spending.

There is no tendecy for new consumer goods and services to be introduced to the market at the same time as the productivity improvements to clear the labor market. That is the cause of depressions.

The Great Depression was caused by monetary policy - government.

In the case of the automobile it created productivity gains and increased consumer spending.

And increased employment (which refutes your position). But didn't you just contradict yourself? You said consumer spending was independent of productivity improvements, now you're saying a productivity gain was met by increased consumer spending.

Unfortunately Henry Ford began building more cars than could be afforded or desired in the market. That's when capitalism takes a big hit, a period where no new spending is occuring and productivity gains are cutting into employment.

The productivity gain created the employment in the first place. That's like saying a production gain killed jobs because it created 10 jobs only to lose 3 of those jobs due to cutbacks in demand.

[Kidlicious]

Originally posted by Berzerker
Kid -
Did consumer spending go up or down with productivity improvements in computers?

The productivity gains in producing the computers has weakened demand in the production of computers (job loss). Productivity gains in the auto industry are still occuring and also contributing to job loss. Also a factor is that the market is saturated now. That's why the prices are so low. They start off at a high price to see who will pay. Then as they saturate the market they bring the prices down.

Originally posted by Berzerker
Reducing the cost of a product thru a production gain does affect consumer spending.

On goods they already have?

Originally posted by Berzerker
The Great Depression was caused by monetary policy - government.

Nonsense, I'm giving you the cause here. Monetary policy can't cause long run cycle like that. It's just used to fine tune the economy.

Originally posted by Berzerker
But didn't you just contradict yourself? You said consumer spending was independent of productivity improvements, now you're saying a productivity gain was met by increased consumer spending.

Look closer. That's no contradiction.

Originally posted by Berzerker
That's like saying a production gain killed jobs because it created 10 jobs only to lose 3 of those jobs due to cutbacks in demand.

Productivity gains do not create any jobs at all.

[Berzerker]

Kid -

The productivity gains in producing the computers has weakened demand in the production of computers (job loss).

You mean there are fewer people making computers than, say, 15 or 20 years ago?

Productivity gains in the auto industry are still occuring and also contributing to job loss. Also a factor is that the market is saturated now. That's why the prices are so low. They start off at a high price to see who will pay. Then as they saturate the market they bring the prices down.

Kid, you aren't listening. Those jobs that are lost WERE CREATED by the production gain along with many more. You're still arguing that a production gain causes unemployment if at some point in time after the gain, the economy loses some of the jobs that were created by the gain. What if this job loss never occured because the marketeers were more savvy about saturation? The net job creation would still be positive...

On goods they already have?

No, on goods they would buy if a production gain lowered the cost of the product. And then businesses would have to increase employment to match the growing demand resulting from the production gain.

Nonsense, I'm giving you the cause here. Monetary policy can't cause long run cycle like that. It's just used to fine tune the economy.

What caused the financial collapse of the USSR? That was quite a depression, wouldn't you say? It's funny, the Federal Reserve was created shortly before the Depression to "fine tune" the economy. The Fed had a loose fiscal policy during the Roaring Twenties and then tightened money by a 1/3 (that's what some of the econo types at apolyton say anyway). Then there were all those countries manipulating the value of their currency to gain marketshare - monetary policy.

Look closer. That's no contradiction.

I did, still looks like a contradiction.

Productivity gains do not create any jobs at all.

Repeating your position as a "rebuttal" won't cut it.

[Berzerker]

Kid -

You're confused about what a productivity gain actually is. A productivity gain requires less labor by definition. Freed up labor is not the same as job creation.

It is if that freed up labor finds work at new jobs created by the productivity gain. Look at all the jobs that now exist because someone invented the automobile.

Demand must be stimulated, and eventually more and more new products and services must be introduced to suck up the ever increasing surplus of labor 'freed up' by the productivity gains.

Demand doesn't need stimulation, people consume because that's our nature. But that's how an economy expands, a productivity gain comes along reducing employment in one area while creating new areas to fill.

[Kidlicious]

Originally posted by Berzerker
Kid -
You mean there are fewer people making computers than, say, 15 or 20 years ago?

Maybe, maybe it's closer to 10 years. The point is that as time goes by there will be job losses.

Originally posted by Berzerker
Kid, you aren't listening. Those jobs that are lost WERE CREATED by the production gain along with many more.

I'm listening, but you're not making any connections.

Originally posted by Berzerker
You're still arguing that a production gain causes unemployment if at some point in time after the gain, the economy loses some of the jobs that were created by the gain.

Continuing productivity gains cause continuing job loss. That's what I'm saying.

Originally posted by Berzerker
What if this job loss never occured because the marketeers were more savvy about saturation? The net job creation would still be positive...

They lower their price because they want to make profit. If they didn't they would lose sales.

Originally posted by Berzerker
No, on goods they would buy if a production gain lowered the cost of the product. And then businesses would have to increase employment to match the growing demand resulting from the production gain.

The Law of Diminishing Utility refutes what you are saying. At some point you would have to pay consumers to take the products, because they would get negative utility.

Originally posted by Berzerker
It's funny, the Federal Reserve was created shortly before the Depression to "fine tune" the economy. The Fed had a loose fiscal policy during the Roaring Twenties and then tightened money by a 1/3 (that's what some of the econo types at apolyton say anyway). Then there were all those countries manipulating the value of their currency to gain marketshare - monetary policy.

Prices were falling and the market was becoming saturated regardless of the monetary policy. At best the Fed could have delayed the enevitable. There is no way they could have prevented deflation.

[Kidlicious]

Originally posted by Berzerker
Demand doesn't need stimulation, people consume because that's our nature.

Why don't you eat 20 candy bars a day? You must have the money to do it. People don't just consume more because it's our nature. It's a utility decision and our utility for consuming more goods and services diminishes as we consume more.

[Ogie Oglethorpe]

Originally posted by Kidicious


I have? I thought I was getting pissed off and rude. But atleast I know I was pissing off some of you guys.

Well at least then I know I'm doing my job. If it pisses you off you (at least subconsciously) know who is winning. Lol...

[Ogie Oglethorpe]

Originally posted by Kidicious
I'm I right in assuming that you guys think that new technologies that create productivity gains require more labor to produce the same goods?

No Kid it opens up new avenues and new otherwise existing markets that would not have been.

You naturally assume that productivity mean simply layoffs. What it really means is a better opportunity for product/service distribution and hence allows subsequent industries/markets to feed off of it.

Of course I'll assume the standard pessimistic arguement from you indicating that at some point the innovation and implementation of innovation will dry up and we'll simply reap layoffs and no new market creation.

[Velociryx]

Looks like Kid's trying to claim the job losses caused by innovation without acknowledging all the job creation that goes hand in hand with that.

Can't say I blame him for turning a blind eye to it tho, since it TOTALLY destroys his position, but :: shrug ::

Anyway, sorry I haven't been active the last little bit....been exploiting my friends and moving heavy stuff all day....

-=Vel=-

[Kidlicious]

Originally posted by Ogie Oglethorpe
Well at least then I know I'm doing my job. If it pisses you off you (at least subconsciously) know who is winning. Lol...

No, what pisses me off is all the defensiveness about a system that chews people up and spits them out. People die and lose their economic livelihood every year, because of capitalism, and what I see is the winners who only have an argument that it benefits them, and they just turn a blind eye on the suffering and death.

What pisses you off is that I'm saying that the American Dream is just a pipe dream.

[Kidlicious]

Originally posted by Velociryx
Looks like Kid's trying to claim the job losses caused by innovation without acknowledging all the job creation that goes hand in hand with that.

Atleast Berzerker is trying to explain the connection that you are claiming between productivity gains and consumer spending. You just blindly believe in it and expect everyone else too. Some of us do question things we read you know.

[Velociryx]

Ahhh, but the thing that Berserker is trying to make you understand is so blindingly obvious that it ought not require explanation at all.

It's perfectly reasonable to question stuff, but your argument goes well beyond that. While you gleefully point to the job loss that new technology creates, you blissfully ignore all the new jobs that it creates (jobs that historically have far, far outstripped the number of jobs they destroy--unless you'd care to attempt to argue that there are fewer total jobs in today's economy than there were fifty years ago.

As for defending a system that chews people up and spits them out, are you actually trying to argue that communism is any better?

Yes, I suppose if you choose not to look at all the purges, the death squads, the depressingly long lines to get even basic goods and services....take all that away, and sure! Communism is lots better!

It's also lots better on paper, but that's the rub....we don't live "on paper."

Too tired to type more....having hauled heavy $hit all day, my back is killing me. Gonna pop a couple Doan's (made in factories where the workers were exploited, of course), and relax with the heating pad (also brought to me by slave labor )

'nite.

-=Vel=-

[Kidlicious]

Originally posted by Velociryx
While you gleefully point to the job loss that new technology creates, you blissfully ignore all the new jobs that it creates (jobs that historically have far, far outstripped the number of jobs they destroy--unless you'd care to attempt to argue that there are fewer total jobs in today's economy than there were fifty years ago.

BY DEFINITION PRODUCTIVITY IMPROVEMENTS DO NOT CREATE JOBS!

[Sava]

BY DEFINITION PRODUCTIVITY IMPROVEMENTS DO NOT CREATE JOBS!

Correct. They free up the labor pool in order to expand industry.

[Berzerker]

Kid -

Why don't you eat 20 candy bars a day?

Because I factor in other aspects of life, like health, to moderate my desire to consume.

People don't just consume more because it's our nature.

You've said nothing to refute me, you're just repeating your argument again. And please don't try to change what I said, you're adding the word "more" in there when all I said was that consumption is natural; hell, it's hardwired... we can't survive without consuming.

It's a utility decision and our utility for consuming more goods and services diminishes as we consume more.

And this means consuming is not natural?

Maybe, maybe it's closer to 10 years. The point is that as time goes by there will be job losses.

Kid, the very notion that there are fewer people making computers today than 20, 15, or 10 years ago is ludicrous. But feel free to offer up some statistics to prove your argument. And you're still arguing that job creation from a productivity gain should be ignored and we should only focus on job loss.
If I invent a way to reduce the cost and labor to make a car, you want to look only at the potential lost jobs of car makers and ignore the jobs created by the demand for my invention.
You're so wedded to your argument you barely acknowledged that the invention of the automobile MAY have resulted in more jobs even though jobs making horse buggies were lost...

Continuing productivity gains cause continuing job loss. That's what I'm saying.

We know what you're saying, we are merely pointing out that productivity gains can and usually do create jobs in new areas of the economy. You acknowledged this with the automobile example, so why continue with the same argument refuted by that example?

They lower their price because they want to make profit. If they didn't they would lose sales.

You didn't answer my question...again...

The Law of Diminishing Utility refutes what you are saying.

Feel free to state that law and explain how it refutes what I'm saying. Your response is basicly this, "the law, blah blah blah refutes your position".

At some point you would have to pay consumers to take the products, because they would get negative utility.

What does this have to do with the fact that a productivity gain that results in lower prices on computers will spur consumption of computers leading to more jobs making computers? Please stick to what we are debating until the current issue is resolved before jumping ship.

Prices were falling and the market was becoming saturated regardless of the monetary policy. At best the Fed could have delayed the enevitable. There is no way they could have prevented deflation.

Sorry, but making predictions about what might have happened and ignoring what did happen isn't convincing. The depression was caused by monetary policy here in the US, and abroad where trading partners were trying to devalue their currencies to attract marketshare... The tariff war sure didn't help either, but that too was the government meddling in the economy.