Is Software Driving a Falling Demand For Brains? 622
Hugh Pickens writes writes "Paul Krugman writes in the NY Times that information technology seems to be reducing, not increasing, the demand for highly educated workers (reg. may be required), because a lot of what highly educated workers do could actually be replaced by sophisticated information processing. One good recent example is how software is replacing the teams of lawyers who used to do document research. 'From a legal staffing viewpoint, it means that a lot of people who used to be allocated to conduct document review are no longer able to be billed out,' says Bill Herr, a lawyer at a major chemical company who used to muster auditoriums of lawyers to read documents for weeks on end. 'People get bored, people get headaches. Computers don't.' If true this raises a number of interesting questions. 'One is whether emphasizing education — even aside from the fact that the big rise in inequality has taken place among the highly educated — is, in effect, fighting the last war,' writes Krugman. 'Another is how we [can] have a decent society if and when even highly educated workers can't command a middle-class income.' Remember the Luddites weren't the poorest of the poor, they were skilled artisans whose skills had suddenly been devalued by new technology."
Re:Surely it's a rising demand for brains (Score:2, Interesting)
If one team of programmers and a single IT professional for each law firm replaces a team of layers and paralegals at every law firm in the county, the increase in IT professionals will be orders of magnitude smaller than the decrease in legal professionals.
Also there is no reason that programming, and infrastructure maintenance would be guaranteed to be safe in the future. Most software today is applications of long solved problems and is developed in high level development environments that do most of the work (especially compared with the old "enter your machine code line by line using theses 8 switches" days). The logical conclusion of that tend will be most companies replacing their software developers with a development environment that allows the marketing department to enter a specification document and outputs a compliant program. Infrastructural maintenance is basically waiting for robot butler technology to be good enough that it can unplug and replug in hardware, but that can't be more than a handful of decades off.
It's called productivity. (Score:5, Interesting)
This author has a completely backward way at looking at things. Income is only half of the equation. What you can buy with that income is the other half. What things can you get with the work you do. Productivity increase is good because you can create more with less work. This means things get cheaper and you can earn less and live better. This is called deflation. The problem is the financial industry and politicians refuse to let deflation happen. They see it as an enemy that must be conquered. So they inflate the money supply and give that money to politicians to spend. So what ends up happening is productivity increases are given away and the citizens are never able to gain their benefit even though their income is lower.
I like to use StarTrek as an example. They have a replicator. Once you have a replicator you never HAVE to work again. Anything you want including another replicator can be made. Are the people all of a sudden poor? Technically yes since they no work for money. In fact they are flat broke. But are they living better? Of course.
Re:This is gonna be very rant like (Score:5, Interesting)
That is not true. The target is to have no unemployment, which means having natural unemployment. That includes people between jobs, etc. and is generally thought to be in the 3-5% area.
Good thing (Score:4, Interesting)
Re:This is gonna be very rant like (Score:4, Interesting)
Basic income would not be welfare, everyone gets basic income, regardless of whether they have an income or not. It's a guaranteed basic income that is there regardless, no means-testing. One of the benefits of such a program is that people can if they want to dedicate their lives to a hobby that isn't necessarily profitable, they can work part time if they want to and still have enough money to get by. It also makes it easier for people to start a business, there's always the basic income to fall back on even if the business is not profitable right away.
It's a pretty old concept and has been implemented on trial basis in a few places, with generally good results. http://en.wikipedia.org/wiki/Basic_income_guarantee [wikipedia.org]
Re:This is gonna be very rant like (Score:2, Interesting)
Isn't it an inconvenient truth that there has never been a purely socialist government on our planet? You know, one that wasn't marred either by partial capitalism or by one or more tyrannical nutjobs at the helm who are/were consumed with their desire to retain and increase their own power?
Pure socialism works just fine. For groups of a half dozen people. Maybe even up to a couple of dozen. At some point, it breaks down due to people finding ways around the rules to increase their own standing. The only way it doesn't break down is if you have a despot that punishes the people who break the rules.
Similarly, capitalism inherently breaks down as people find ways around the rules to increase their own standing, and the only way you can stop it is by punishing the winners. In the long run, the only real difference between the two systems has been the degree to which more heavily socialist societies have punished the winner.
The more important point is that most so-called "capitalist" countries employ socialism to some degree. Without enough socialism, you invariably get a widening divide between the lower and middle classes (much as we're seeing in the U.S. today). Any economic system will eventually be abused, and once the avenues for abuse are found, they must be closed. Otherwise, money (and thus power) becomes too concentrated. This eventually leads to a total societal collapse, with rampant unemployment, rapid inflation, and... hey, I'm describing the U.S. economy....
Similarly, without enough capitalism, so-called "socialist" countries eventually see enough discrepancy between members of the ruling party and the general population to cause the same thing to happen. This eventually leads to a violent uprising.
The key is in striking the right balance between allowing people to get ahead for hard work and preventing them from getting so far ahead that no one else can ever hope to catch up because they are bringing in more unearned income than most people could ever hope to bring in as earned income. There are lots of things that can be done in that area, but the things that seem most useful to me are:
Tax all corporate profits regardless of country. If you have a nexus in a given country, you should be required to pay that country's tax rate on all profits, regardless of where that money was earned.
This would, of course, result in lowered corporate tax rates on a larger sum of money, but it would level the playing field for multinational corporations, eliminating the usefulness of storing money in offshore accounts. It would also result in the ability to move money around freely without taxation, which would lead to more flexibility in corporate spending.
Tax earned and unearned income (including capital gains) equally.
This would eliminate one significant reason why the rich are getting richer while the poor are getting poorer in the United States. Right now, the rich make most of their money on capital gains, which are taxed at a lower rate, whereas the poor make most of their money through earned income, which is taxed at a higher rate.
Redefine the poverty line as the local minimum wage, and eliminate all taxation on money below that line. This means, among other things, that the working poor should not have to pay any taxes, including sales tax. This basically requires eliminating sales tax as a means of revenue and replacing it with an income tax. Property taxes should similarly be eliminated for a family's primary residence. You would then make up for the losses by raising the tax rate on income above that line.
By doing this, people are more easily able to achieve a baseline lifestyle. So long as that baseline is maintained sufficiently, this will help tremendously. More significantly, by replacing sales taxes (regressive) with income taxes (flat or progressive), it means that the wealthy pay their fair share.
The most significant take-away is
Re:This is gonna be very rant like (Score:4, Interesting)
Odd. The PDS (the followup-party of the former SED, the GDRs state party) has its biggest successes in the eastern parts of Germany, i.e. the places that were formerly ruled by the SED. They don't really play any meaningful role in the western parts, but in the East they really bring home a lot of victories. IIRC they are even in the ruling coalition of a province.