Wha, Wha, Wow!

A brilliant response to Tyler Cowen's Great Stagnation argument. I hope our leaders are reading these things - I suspect they aren't.

He even addresses my great question - on the issue that we no longer need labor --

For the most part, Tyrone pointed out, technological progress is labor displacing. It simultaneously creates valuable new techniques for reconfiguring real resources while diminishing the number of people who are required to participate in those transformations, and who can therefore trade their participation for spending power. There is a myth among neoliberal economists that labor markets have always “adjusted” sua sponte: that when laborers were displaced from farms, “higher value” factories arose to employ them; that when the factories were downsized and offshored, a more pleasant, higher-value service economy came to be; etc. That narrative is wrong, he told me. At best it is criminally incomplete. With each technological change, new social institutions had to arise to sustain dispersed purchasing power despite a reduction of numbers and bargaining power of workers in old industries. Displaced workers ultimately did find new work, but only because the new social institutions “artificially” created buyers for all the things displaced workers reinvented themselves to sell. Without this institutional innovation, Tyrone tells me, something like the Great Depression would have been the new normal. Historically, institutions that have arisen to sustain purchasing power despite increasingly labor-efficient core production include direct government transfers and expenditures, labor unions, monetary policy interventions, financial bubbles and financial fraud.

His point -- we create fake stuff to sell and trade to keep people busy. Sounds like 1984. Sounds like Brazil. Sounds like Facebook. Is it possible modern life is just playing a real life monopoly game?