How many of you are aware of the fact that we are inevitably heading torwards a situation where with the conqeust of automation: production will skyrocket, unemployment will stagnate(flatten at 60-85+% of population unemployed), and purchasing power will plummet(no money in majorities pockets to afford anything being produced by companies). — XanderTheGrey

People have been having this discussion as long as I've been around and I'm 65. I don't know the answer, but so far it hasn't happened. Although that's true, in the US at least people's standard of living hasn't improved much in the last 35 years.

Essentially a situation where we can produce things at nearly 0 cost, and yet no one hase enough money to make the wealthy significantly wealthier. — XanderTheGrey

The statistics in operation is powerlaw, not gaussian. The current economic system is predicated on free growth with no mean restricted wealth. That is why extreme inequality - the continual move away from gaussianity - is a natural consequence. The middle class, the middle ground, has already been hollowed out by neoliberalism and globalisation.

But here is the wrinkle.

As you point out, the rise of the minimum waged and sweat shop production means that the wheels should be falling off this "economic miracle". Consumer spending ought to be evaporating, collapsing the system.

But the wealthy financialised the world economy. It gave the 99 per cent an endless line of cheap debt. That allowed the transfer of even more real world assets to the rich in exchange for wages that go now to covering interest payments.

So the poor don't just not own much right now, they are left owing more than they could ever earn in any future. While for the rich, it works the other way around.

@apokrisis
I really need to learn more about this term "gaussian" when I say "Gaussian Curve"; I really don't know what the hell I'm talking about, I'm simply quoting Fresco.

You seem to have more solid knowladge of what I'm talking about than I do.

Could you reference me to information on these terms "gaussianity" and "powerlaw"? I had trouble finding any specific descriptions of the former in them in the past.

I didn't view the youtube clip, but having skimmed it, I think Jacque Fresco is either misusing the term, or I'm mishearing it.

A Gaussian curve is just the bell curve of a normal probability distribution. So like the variation in people's height or IQ, you have an average and then a scattering around that average.

A powerlaw probability distribution is different in having no actual average and therefore undamped variation over every scale. That is what human wealth now looks like.

We used to be clustered around an average - back when we were all hunter/gatherers. Then we were still all fairly average when 80 per cent were peasant farmers. Now you can be anything from the $2 a day income that is about half the world to the Bill Gates earning more than a small nation.

Fresco was describing something else really. The potential for job automation rising exponentially, the number of human workers being held constant, and because of that, individual purchasing power falling to zero.

So I would forget his use of the term Gaussian. He is really talking about the same things as me. The flipside of powerlaw or scalefree economics is that just as there is no top on how wealthy an individual can grow to be, so there is the reverse consequence that the number of those on "below average" incomes increases without sensible limit. You get exactly what we see - a world of mcjobs and zero hour contracts.

Another way of talking about this powerlaw thing is "fat tail" distributions. The fat tail says you get a lot more people stuck at the bottom of the scale as the price of letting the top end soar without limit. Think of novelists or musicians. One or two make it in ridiculous fashion. The vast majority will make less than bugger all.

It's not really important to the political discussion except we should not be surprised by the fact that extreme inequality is what the unfettered free market will produce. The expectation that the distribution of wealth ought to somehow arrive at some Bell curve normal level of inequality is naive. The system is set up already to produce the most extreme possible variety of inequality - one that doesn't even have an average somewhere safely in the middle for the majority.

So actually, it is relevant to the political discussion as the unfettered free market philosophy was always going to screw the majority.

The automation of jobs debate is then a new angle here. There is no reason why we can't both automate life and then manage to spread the wealth of that through society in deliberate fashion.

But I say that more in hope than expectation. Governments have become scelerotic and weak. No one dares any radical moves as the world economy feels too precariously balanced to truly question anything.

The automation of jobs debate is then a new angle here. There is no reason why we can't both automate life and then manage to spread the wealth of that through society in deliberate fashion. — apokrisis

And you are saying that this could not work with money? And that money would be pointless and obsolete? Or that we infact could if everyone was on the same page? I know that if I was super rich; I would invest ~80% of my monetary assets into "automating life" and raising the quality of life for everyone, given that a clearly sufficient percentage of the super rich vowed to do the very same. It shows the importance of upgrading our communication and culture, rather than just detaching all faith in the concept of money. With or without money; if we are not all(sufficent percentage of the world) on the same page, it will not work.

But I say that more in hope than expectation. Governments have become scelerotic and weak. No one dares any radical moves as the world economy feels too precariously balanced to truly question anything.

Right, I've heard Stuart Scott from UPSFI talk about our manic adherence to "neoclassical economics" in a press conference assesing the potential danger of The Arctic Mathane Emergancy Crisis. Is this essentially what you're refering to?(Our fear of any change requiring the discontinuation of "neoclassic economics")?

I'm reading on wikipedia to understand "gaussian curve" "power law" "fat tails" "heavy tails", ect. They are very hard for me to grasp, so far I can only say they seem to be mathematical terms, not just economic terms.

That is only true if you subscribe to the Marxist labour theory of value. The truth is that desirability assigns value and it is moderated and measured by money. If that is true, money will never disappear or their value diminished, or be replaced by a crypto currency, because the latter doesn't can fulfil the moderation function only partially.

Fundamentally all of those terms, Gaussian curve, power law, fat tails and heavy tails, describe shapes of curves. The curves they describe are models of various quantities. Say if you aggregated all the heights of the people in America, and recorded the heights and how frequent those heights are you get something that looks like the Gaussian curve. You can see this in this. (when focusing on a particular gender anyway) If you've read something that contains the 'mean' and 'variance' of the Gaussian curve; the mean gives you where the top of the big bump is - the maximum - and the variance gives you how thick the bump is.

Fat tails and heavy tails pretty much describe shapes like this income data from the UK. You can see that it looks 'much the same' as you go very far to the right on the graph. Fat tails and heavy tails as descriptors of a curve or histogram (bar chart of frequencies) describe that the extremes (being far to the right) don't decay very quickly in probability (more on this later)

These objects are called distributions, they are like tables when you can look up, say, a height, and see what proportion of people have that height. If you took all the heights, and looked at what proportion of people had those heights you can construct a graph of the distribution. The points on the graph have an x-coordinate of 'height' and a y-coordinate of 'how likely is this height?'. Putting all of these points together is called a distribution. Being a Gaussian curve, being a power law and having fat tails or heavy tails is a property of a distribution.

Distributions with fat tails, like power laws, decay a lot slower than Gaussian distributions. What does this mean? If you look at the income histogram I linked, you can see the curve being essentially flat (but not at the x-axis. at 0 height) from all income values past 98k. For the height distribution, you can see that the extreme values of height say being more than 3 meters tall are essentially zero. The difference between the mean (the central bump) of the male heights and 3 meters tall is a lot less than the difference between the mode (central bit, big bump) of income - the big bump is somwhere between 10k and 12k, the far right of the graph goes up to 140k with 'about the same' probability of being around 140k as being 102k. This 'slowly-vanishing (tending to zero) proportion' of people with massive incomes is essentially what it means to have fat tails. Power laws are, roughly speaking, a way to describe curves that have fat tails - like gaussian curves are ways to describe nicely centered and not-too-variable distributions like heights.