Amid the last election cycle, both Senator Sanders (D-VT) and President Trump made pledges to "bring the jobs home," and Senator Sanders pressed for a $15.00/hour minimum wage. I couldn't help but think, amid all the mudslinging that accompanies American elections these days, that everyone seemed to be missing something: labor productivity, as a measure in economic calculation, was going to drop rather dramatically as technology simply eliminated some jobs, and created new ones, and - as Catherine Austin Fitts and I have often discussed in our interviews - human productivity, in such seldom-measured areas as artistic creativity - which we both think will become increasingly monetized at a small entrepreneurial level simply out of sheer financial and economic necessity - is an important and overlooked area of economic modeling. And we both think it will become a crucially important factor in years to come.
The point was brought home to me during a recent trip to a large international retail chain. Making my few purchases, I wound my way to the checkout aisles, only to find none of the human aisles were open. Only a self-check-out aisle, with a dozen such self-check-out-lanes, was opened, being presided over by one human "cashier-technician", for want of a better expression. Admittedly, Mr. Trump appears to be sincere in his promise to re-shore jobs, and thus far at least some of these require skilled positions. But the vast amount of jobs in the USA as elsewhere consist of jobs not requiring much skill, and this will be a long-term problem that, as yet, and in my opinion, we've seen no deep long-term thought or planning being dedicated to, on either side of the political aisle. And that's a problem that is not going to go away, regardless of the good intentions of either side. Consider the implications of this very short article, with accompanying picture, from Zero Hedge:
A "Big Mac" ATM, place your order, insert money or card, out pops the Big Mac. In other words, even the current "storefront" operations, with their comparatively large overheads, are on the way out: why have a convenience store, when a couple of automated gas pumps(which we already have) and a couple of Pizza-Burger soft-drink dispensing ATMS will do the job? Why have Borders, with its expensive bookshelves, floor space, and overhead, when one can order the books from a big warehouse called Amazon, and fuel the coffers of Bezos who in turn fuels the coffers of all sorts of political agendas one might find objectionable? Just start your own ATM-internet of things business, and fatten your own coffers and contribute to your own political causes. (In other words, while at present all these developments favor the political left, ultimately, they will be profoundly leveling; technology will change the political culture as much as the economic and social one. This isn't something that just Senator Sanders has to address, it's something that Mr. Trump does as well).
This still does not address the fundamental economic and financial long-term planning that must be done if we are to manage this transition period with as few bumps as possible(and by manage I do not wish to imply that only centralized planned solutions are the direction to go). What is to be done with all the displaced cashiers and burger flippers? Obviously, a burger ATM will still have to be serviced: burgers and bills and coins will still need to be inserted, tills emptied and tallied, but one semi-skilled person can service several such machines. What about the rest? Government sponsored retraining programs? Student loans? That might have worked in the past, but as the German finance minister Wolfgang Schaueble has pointed out, the debt-growth model is over; there's no solution that is not a reform. And there's an almost complete lack of discussion of long term strategies and solutions, particularly at local and regional levels, which is where I personally think the discussion needs to be. The Washington or Brussels one-size-fits-all solution hasn't been working too well. San Bernardino or Knoxville or Magdeburg or Lyons know what's better for their localities far more than do think tanks and planners in Washington or Brussels. Adding more student loans to "retrain" a workforce for a quickly evolving situation does not seem to be very promising. As Catherine and I have discussed, one method, but surely not the only one, is going to be a massive expansion of human, rather than labor, productivity, the arts being a prime example of this, but there are other areas as well. To put all this as country simple as possible: technology is driving a decrease of labor productivity at a time when governments can no longer subsidize, through welfare and entitlement programs, what will be a burgeoning leisure class, for we're seeing the emergence of something else unprecedented in human history: that leisure class is expanding far beyond the bounds of the upper class. It is now spreading to engulf the lower classes and former labor class, which will be forced, I suspect, by sheer financial and economic necessity, to monetize other areas of creativity.
This is a case of "you tell me"... and it's a discussion we all need to start having among ourselves and our local and regional leaders, from Warsaw to San Diego to Manila and Perth.
See you on the flip side...