The False God of Productivity, The Red Queen of Profits and Fewer Jobs (A Potential for Social Collapse): More MBA Follies

This is offered both as another example of an MBA fallacy and as a response-in-agreement to a recent article in The Daily Beast that discussed the notion of how might the emphasis in the market place on increased productivity lead to fewer jobs ((Robert Shapiro. 'Robotic Technologies Could Aggravate the U.S. Problem of Slow Jobs Growth’. July 19, 2013). Mr. Shapiro poses a fundamental problem with 19th century industrial capitalism that was bound to eventually require our attention: in the headlong pursuit of maximizing profit by reducing labor costs among other factors, where is the boundary to how many people can be laid off before the system collapses? He notices that since 1981, recoveries from boom-busts have been slower and slower which he sees as a sign of technology-displaced, unrecoverable jobs:

In the four years, since the Great Recession of 2008–09 ended, private employment has risen at an annual rate of 1.4 percent. That’s 61 percent below the rate of job creation following the deep downturn of 1981–82, after which jobs rose at an annual rate of 3.6 percent. A similar disparity is evident between job creation in the first four years of the two most recent expansions that followed more moderate recessions. The 0.7 percent annual rate of job growth over the first four years of the 2002–07 expansion was 68 percent less than the 2.2 percent annual job gains seen in the first four years of the 1991–2000 expansion. Something has clearly changed.

Clue - the goal of productivity is 100% efficiency, 0% wasted resources and NO (human) LABOR COST (100% productivity is a theoretical limit). These objectives, especially the last, are built into profit-focused capitalism where the overall, effective goal (realized or not) is the elimination of labor cost which, believe it or not, translates to the elimination of human labor. This is an absurd idea but our current, 19th century industrial capitalist view of people as a faceless labor pool might soon lead to machines doing all the work... and no-one has a job.

An economic system needs consumers to buy product and consumers need money to perform their necessary function which is to shop. This is an interdependent system which existed for 1000’s of years before industrial capitalism. But this system might be in the process of breaking down. Why? Because basically this equation exists because of the fundamental difference between machines and humans - machines don’t eat, wear clothes, sleep, drive cars, prefer tastes, etc. - all those things which define the need for, and essence of, an economic market. Writing people out of this simple equation destroys the whole system. (Sorry, Mr Romney.)

SO, WHAT DOES ONE DO WITH ALL THOSE JOBLESS PEOPLE who don’t have money to buy products? The classic capitalist was not concerned and assumed the overall system had enough vacant jobs in another city, county, state or country to take care of his laid off labor while ‘he’ sprinted blindly toward more profit. But if this previously-assumed, always ready, labor sponge might be ending (saturated), what is to be done with redundant humans displaced by higher productivity? How does one regard and sustain humanity - unless the plan is to eliminate people which is an idea that hopefully no one takes seriously? Or, if it is in planning, it (depopulation) will be implemented with a smile or on a time scale of generations.

One solution to runaway capitalism (free-market style)is ‘managed’ capitalism whose first, or at least parallel goal with GDP, is to preserve society through sustained employment achieved by de-prioritizing profit, or rather redefining profit to include social utilization (preserve jobs), or maybe even to reduce human population by natural attrition such as people having one child instead of two or three - either by choice as the result of natural economic forces or by national policy (e.g., China). But then we'll face religious plus economic boundaries which is a deeply sensitive subject deserving a separate blog post. But, as for ‘managed capitalism’, nearly every industrialized country has such a system in some form, and even America has it although disguised in various ways to avoid upsetting fundamentalist orthodoxy of both religious and economic factions.

Absent a serious approach to looking for alternative paradigms to the classic 19th century industrial capitalism model for our and the global economy, we might at least pay attention to helping workers cope with the growing stress of working under increasing productivity pressure and increasing uncertainty about job security. And there is such a movement, the ‘Third Metric’concept championed by several thinkers including Arianna Huffington who is committing the weight of her online assets to conferences and other support venues to promulgate worker education in ways to combat stress. The Third Metric ‘way’ chooses to untangle the worker from the faceless pressures imposed by corporate life and survival through meditative techniques such as the currently faddish ‘mindfulness’ method (which is actually very ancient and a pillar of Buddha’s '8-fold Way’). This approach is helping many workers, largely women right now, but will hopefully lead to a national discussion about evolving new paradigms for redefining corporate profitability, social utility (contribution to social stability) overall success.