I in past heard Dr. Williams discuss his parable about the bulldozer. Came across this article and it seems quite appropriate with the growing movement on the left to confiscate more and more capital out of the private markets and attack the "rich", the successful, so they can fund their own political power. Dr. Williams explains the folly of this thinkng. For you reading and please comment. Laborers to bulldozers to prosperity Some time ago on the radio, I heard my favorite living economist, Walter E. Williams, explain the necessity for individual capital accumulation as a means for lifting society out of poverty. With his permission, I will expand on his Parable of the Bulldozer. Williams' basic question was "Why does a worker building a road with a bulldozer earn far more than a worker building the same road using a shovel and wheelbarrow?" The answer, of course, is that the worker's productivity is magnified by the capital investment of the bulldozer. One worker with a bulldozer can do the work of 100 or more men using shovels and wheelbarrows. No matter how much the employer of the 100 manual laborers might like his employees, or how strong a union they might have, he could not pay them all what the bulldozer operator earns and remain competitive. It is possible to pay the operator his higher salary only because of the capital he controls. But the benefits of using that bulldozer go far beyond that individual worker's higher salary. He is paid more than the manual workers, but he is not paid as much as all of them combined. Indeed, he is probably paid no more than five or so of them. The wages of the others, who are no longer needed, can be used to amortize the bulldozer and to buy more of them, and, most importantly, to lower the cost of building roads. Societies that use bulldozers can afford more roads, dams and other construction involving moving earth. This infrastructure generates opportunity for other economic growth, in time employing those displaced workers in better-paying jobs doing something less life-draining than moving dirt with shovels. In short, societies that use bulldozers are more prosperous than those that use manual labor, and that, of course, is equally true of drill presses, lathes, computers and other capital investments that multiply human productivity...... Do to posting limits rest is here https://www.pilotonline.com/opinion/columns/article_ee2f036a-e999-5447-b6b2-73d77a6ed5a9.html
Yep, GDP growth is driven by population growth and increased productivity. Increased productivity requires innovation and capital investment. Of course, most people only think about the positives of productivity growth, i.e., I can buy more stuff for less money. The negative: Everyone has to do more with less. Imagine a 3.5% annual productivity growth. That means productivity has doubled over 20 year. For the average worker, this means they have to be three times as productive when they end their career, compared to when they started it. In other words, the bulldozer driver who paved a mile of road per day when they were 25, now has to pave three miles of road when they retire. There is no such thing as a free lunch. Second, let's apply the bulldozer analogy to fast food. Why have 10 workers in a fast food restaurant flip burgers when a machine can do it much more efficient and without needing days off and benefits? That's where the fast food industry is heading. The only thing that has slowed this innovation is cheap minimum wage that hasn't kept up with inflation, so it was cheaper for the companies to hire low cost labor than to invest in the machines. The downside: If more and more menial jobs are lost to automation, where will people find work? The answer is not "maintaining the machines". If that were the case, the machines wouldn't save costs in the first place. The number of workers maintaining the machines will be small. Most likely, work will have to be found in non-essential product generation and services. We'll see what the future holds and if it is the paradise that universal prosperity promises. My guess is that it won't be.
It does beg the question- what are the other 95 guys who arent needed to build the road supposed to do for income? At a certain point of automation (or maybe we can call it 'labor efficiency'), we have more workers than work. And no, I dont support forcing the bulldozer operator to support the shovel guys he replaced. That defeats the purpose of the bulldozer. But the question remains...
Dr. Williams addresses that further in the article did you read it. What happened to all telephone operators when mechanical the electronic switching was introduced? Funny how the free market slays finds a use for that labor. With all the automation we have Harbin the last few decades the new jobs report shows we have more than double the open jobs than job seekers. The key is to leave that capital in the free market and government get out of the way.
The free market always has found a use for that labor. But its not reasonable to expect that it always will. Thats why I said 'at a certain point.' We havn't reached that point yet (and we won't for a good long while unless robotics and AI are substantially more advanced than we know of [which isn't impossible...]), but thats only because of technological limitations. Eventually robots will be able to do everything we can (with the possible exception of art) and at some point soon after that there will be enough of them to actually do everything. Its possible that then we'll all have our own robots to provide for us... but given the tendency for more and more wealth/resource to continue to be consolidated into the hands of fewer and fewer people, I don't think its something we can just count on, and when robots can do all labor, its possible most of us will be left with literally nothing of value with which to leverage our own prosperity, because ultimately, the only resource we really start with is labor. I'm just saying we should start thinking about that now. In the infamous words of deranged psychopath Klaus Schwab- "Not everyone can be a robot polisher." He's evil ...but he's also correct.
Well we always have. Don't need NEAR the agricultural workers we once did, at one time made up in 1800 it made up 74% of the workforce by 1960 it made up a mere 8%. Blacksmiths or stable workers mostly gone. and imagine how many all those bulldozers and huge land movers we HAVE in operation put out of business ALREADY. I friend on Facebook post a picture of her daughter and the trophy the school robotics team just won. My response to here was "Having called on and worked with all sorts of manufacturing throughout my career I can tell you robotics and automation are the career's of the future. Manufacturers are begging for qualified people to design, build and maintain robotics. I urge all young people to seriously consider getting their electronic/hydraulic/PLC (programmed logic controller) education and write your ticket! And the state/industry partnerships will just about pay for it."
