<div dir="ltr"><div><div><div><div><div>Thanks Eric.<br><br></div>It is also interesting to look at it from the point of perspective of control, property, of who controls what.<br><br></div>My feeling is that capital, and artificially scarce money as capital, is only a tool to transfer and concentrate property and control in the hands of a minority over time.<br><br></div>If , in the logic of concentrated power, humans are not any more needed , or only a small percentage of humans are needed to control other humans, or to maintain the priiledges of certain super wealthy in a competition with other super wealthy, and if less money is circulating, <br></div>it may not necessarily be a big problem for the super wealthy.    The issue I would speculate, is not if they loose billions or make billions, but rather how much control the super wealthy have in relation to others.<br><br></div><div>If a great part of the population ends up without money, the billions they already have can buy them much more power.<br><br></div><div>If it leads to a great deal of the population being even more alienated, it only poses a threat as soon as such populations get organized to generate alternative &quot;games&quot; of organization, and can disenfranchise themselves, eventually by using technology, too.       Yet there , once more, concentration of land, requirements for paying taxes in corporate currency, and so forth, reduce by so much the opportunities for disenfranchising.<br></div><div><br></div>We may indeed, as I noticed some articles speculating, be beyond capitalism already.<br></div><div class="gmail_extra"><br><div class="gmail_quote">On Mon, Nov 9, 2015 at 5:08 PM, Eric Hunting <span dir="ltr">&lt;<a href="mailto:erichunting@gmail.com" target="_blank">erichunting@gmail.com</a>&gt;</span> wrote:<br><blockquote class="gmail_quote" style="margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex">
  
    
  
  <div bgcolor="#FFFFFF" text="#000000">
    This is an argument I&#39;ve been making for many years myself. In the
    debate about automation and job destruction it is commonly
    overlooked that labor and capital are in the same boat when it comes
    to long-term impact because production capability itself is becoming
    a commodity. Machines aren&#39;t just getting smarter, they&#39;re getting
    smaller, more adaptive, progressively lower in minimum necessary
    production volumes, and cheaper. You can now initiate more kinds of
    production &#39;out of pocket&#39; than ever before. You can now
    competitively manufacture more things in the space of a four car
    garage than ever before. You can now approach a conventional
    middle-class standard of living based on entirely local and personal
    production and open source designs. Corporations are beginning to
    abandon the ownership of their own means to production in favor of
    job-shops because as that production capacity becomes more of a
    commodity the cost of money and the adaptability lost to
    amortization becomes the chief drag on market competitiveness. The
    volume of consumer goods produced in job shops went past that from
    traditional factories in the year 2000, and it never went back. The
    factory--and the traditional capital creating it--is already an
    anachronism. This brings us to the core premise of Post-Industrial
    futurism; that the paradigms of the Industrial Age are being eroded
    by the evolution of the very technologies on which they depend. This
    is the ultimate crisis of Capitalism; the eventual obsolescence of
    capital itself by the automation it cultivated as value shifts away
    from material goods and the means to make them and becomes
    virtualized, integral to design. The product has no value. The real
    value is in the &#39;spime&#39;. Already corporations are increasingly
    obsessed with litigation, intellectual property, whittling-away at
    the First Sale Doctrine, and limiting the rights and controlling the
    behavior of the consumer as means to maintain market share.<br>
    <br>
    The long-term evolution of production and distribution is a
    transition to localization, networking, production-on-demand,
    increasing reliance on management automation through quantitative
    analysis, increasing cost-transparency, and eventual integration
    into the infrastructure of the built habitat as a kind of municipal
    utility. The global economy will shift from trading in goods to
    trading in commodity refined materials and modular parts. As labor
    is factored out of production, cost of production becomes more
    transparent, market prices capitulate and fall except where they can
    leverage the value of exclusive design and designer prestige.
    &#39;Brand&#39; manufacturers will increasingly take on the aspect of
    ateliers--design studios. The next Apple will be composed of a
    relative handful of people whose chief jobs are design, development,
    and the management of spimes with all production owned by someone
    else and local to the consumer. The next Ford or Toyota will
    assemble cars on demand at the dealership--maybe generic
    dealerships. (an overlooked impact of electric cars and the electric
    power train is their ability to radically drive the number of
    components in a car down. Tomorrow&#39;s car might have less than 100
    parts and go together like a desktop PC!) <br>
    <br>
    So Capital is running out of things to do, the paradigm or money is
    failing, and the model Westphalian state is running out of people to
    tax, while, now evolved to accommodate Industrial Age paradigms,
    having no other mechanism to define, capture, and collectivize
    surplus social productivity to do anything with. (are you going to
    conscript labor off the street to make fighter jets?) The state and
    the monetary system have been very closely wedded through the
    Industrial Age, premised on a concept of extracting and
    collectivizing monetary capital as societal debt to gift to elites
    to create the means of production, and now their common paradigms
    are breaking-down. To continue to exist government will have to
    devise a new basis of economics--a new paradigm by which to define
    resource collectivization and a rationalization for it--or (more
    likely) a new economy will emerge stigmergically by the logic
    intrinsic to the underlying technology and the compulsion of people
    to make things work day-to-day. This is why, when I talk about basic
    income myself, I talk about two forms of it. An &#39;institutional&#39;
    basic income--that is disbursed as money and administered by some
    kind of bureaucratic institution--and an &#39;integral&#39; basic income
    that&#39;s built into the &#39;firmware&#39; of the infrastructure of the built
    habitat and disbursed as on-demand access to goods based on a
    systemic quantitative analysis of demand. Long-term, we are likely
    to evolve toward that integral form as local communities are
    compelled to take on increasing responsibility for keeping daily
    life going as the state increasingly fails them and people discover
    the at-hand means/technology to do that in their now local
    production capacity. <br>
    <br>
    All these things add up to a picture of a very different lifestyle
    in the future that I don&#39;t think we communicate too well right now.
    This is why I&#39;ve been very interested in the notion of using the
    approach of Living Museums in a future context to illustrate future
    lifestyle and am working on projects like the Open House documentary
    to showcase open source living. <br>
    <br>
    <br>
    <div>On 11/9/15 4:52 AM,
      <a href="mailto:p2p-foundation-request@lists.ourproject.org" target="_blank">p2p-foundation-request@lists.ourproject.org</a> wrote:<br>
    </div>
    <blockquote type="cite"><br>
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        <div dir="ltr"><br>
          <div class="gmail_quote">---------- Forwarded message
            ----------<br>
            From: <b class="gmail_sendername">Chris Quigley</b> <span dir="ltr">&lt;<a href="mailto:cmqesquire@gmail.com" target="_blank">cmqesquire@gmail.com</a>&gt;</span><br>
            Date: Mon, Nov 9, 2015 at 6:33 PM<br>
            Subject: Fwd: Excellent Art By Charles Smith<br>
            To: Michel Bauwens &lt;<a href="mailto:michel@p2pfoundation.net" target="_blank">michel@p2pfoundation.net</a>&gt;<br>
            <br>
            <br>
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                                          <div class="gmail_quote">Michel,<br>
                                            <br>
                                            <br>
                                            <div dir="ltr">Thought this
                                              might be of interest.
                                              <div><br>
                                              </div>
                                              <div>Kind regards,</div>
                                              <div><br>
                                              </div>
                                              <div>Christopher</div>
                                              <div><br>
                                              </div>
                                              <div>---------------------------------------------------------------------------------------------</div>
                                              <div><img src="http://www.oftwominds.com/CHSbanner2d.png" style="color:rgb(64,64,64);font-family:Verdana" border="0"><span style="color:rgb(64,64,64);font-family:Verdana"></span>
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                                                          <div>
                                                          <div align="center"><b><a href="http://www.oftwominds.com/musings-sample.html" target="_blank">Musings</a>     <a href="http://www.oftwominds.com/CHS-books.html" target="_blank">My Books</a>     <a href="http://www.oftwominds.com/archives.html" target="_blank">Archives</a>     <a href="http://www.oftwominds.com/books.html" target="_blank">Books/Films</a></b></div>
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                                                      <br>
                                                      <a href="http://www.oftwominds.com/blognov15/automation-profits11-15.html" target="_blank"><b>Automation
                                                          Doesn&#39;t Just
                                                          Destroy
                                                          Jobs--It
                                                          Destroys
                                                          Profits, Too</b></a>
                                                      <p><i>November 9,
                                                          2015</i></p>
                                                      <p><i>The idea
                                                          that taxing
                                                          the owners of
                                                          robots and
                                                          software will
                                                          fund
                                                          guaranteed
                                                          incomes for
                                                          all is not
                                                          anchored in
                                                          reality.</i></p>
                                                      <p><b>Automation
                                                          is upending
                                                          the global
                                                          order by
                                                          eliminating
                                                          human labor on
                                                          an
                                                          unprecedented
                                                          scale--and the
                                                          status quo has
                                                          no
                                                          reality-based
                                                          solution to
                                                          this wholesale
                                                          loss of jobs.</b></p>
                                                      <p>Two recent
                                                        articles
                                                        highlighted the
                                                        profound
                                                        consequences of
                                                        advances in
                                                        robotics and AI
                                                        (artificial
                                                        intelligence) on
                                                        employment: <a href="http://www.mckinsey.com//Insights/Business_Technology/Four_fundamentals_of_workplace_automation" target="_blank">four fundamentals of workplace automation</a> and <a href="http://www.telegraph.co.uk/finance/economics/11978542/Robots-may-shatter-the-global-economic-order-within-a-decade.html" target="_blank">Robots may shatter the global economic order within a
                                                          decade</a> as
                                                        the pace of
                                                        automation
                                                        innovation has
                                                        gone from linear
                                                        to parabolic
                                                        (via Mish).</p>
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                                                      <p><b>The status
                                                          quo
                                                          apologists/punditry
                                                          have offered
                                                          two
                                                          magical-thinking
                                                          solutions to
                                                          the sweeping
                                                          destruction of
                                                          jobs across
                                                          the entire
                                                          spectrum of
                                                          paid work</b>:</p>
                                                      <p>1. Tax the
                                                        robots (or
                                                        owners of
                                                        robots) and use
                                                        the revenues to
                                                        pay a guaranteed
                                                        income to
                                                        everyone who is
                                                        unemployed or
                                                        underemployed.</p>
                                                      <p>2. Let the
                                                        price of labor
                                                        fall to the
                                                        point that
                                                        everyone has a
                                                        job of some
                                                        sort, even if
                                                        the pay is
                                                        minimal.</p>
                                                      <p>Neither one is
                                                        remotely
                                                        practical, for
                                                        reasons I will
                                                        explain today
                                                        and tomorrow.</p>
                                                      <p><b>Today, let&#39;s
                                                          examine the
                                                          misguided
                                                          fantasy that
                                                          automation/robotics
                                                          will generate
                                                          enormous
                                                          profits for
                                                          the owners of
                                                          robots.</b> Here&#39;s
                                                        the problem in a
                                                        nutshell:</p>
                                                      <p><b>As
                                                          automation
                                                          eats jobs, it
                                                          also eats
                                                          profits, since
                                                          automation
                                                          turns labor,
                                                          goods and
                                                          services into
                                                          commodities.</b> When

                                                        something is
                                                        commoditized,
                                                        the price drops
                                                        because the
                                                        goods and
                                                        services are
                                                        interchangeable
                                                        and can be
                                                        produced almost
                                                        anywhere.</p>
                                                      <p>Owners must
                                                        move
                                                        commoditized
                                                        production to
                                                        low-tax regions
                                                        if they want to
                                                        retain any
                                                        profit at all.</p>
                                                      <p><b>Big profits
                                                          flow from
                                                          scarcity, i.e.
                                                          when demand
                                                          exceeds
                                                          supply.</b> If
                                                        supply exceeds
                                                        demand, prices
                                                        fall and profits
                                                        vanish.</p>
                                                      <p>(Monopoly is a
                                                        state-enforced
                                                        scarcity. In our
                                                        state-cartel
                                                        economy, there
                                                        are many
                                                        monopolies or
                                                        quasi-monopolies.
                                                        While
                                                        eliminating
                                                        these would
                                                        lower costs,
                                                        that wouldn&#39;t
                                                        reverse the
                                                        wholesale
                                                        destruction of
                                                        jobs and
                                                        profits--it
                                                        would only speed
                                                        the process up.)</p>
                                                      <p><b>The other
                                                          problem the
                                                          &quot;tax the
                                                          robots and
                                                          everything
                                                          will be
                                                          funded&quot; crowd
                                                          overlooks is
                                                          the falling
                                                          cost of
                                                          software and
                                                          robots lowers
                                                          the barriers
                                                          to competition</b>:
                                                        nothing destroys
                                                        profits like
                                                        wave after wave
                                                        of hungry
                                                        competitors
                                                        entering a
                                                        field.</p>
                                                      <p>The cost of
                                                        automation and
                                                        robotics is
                                                        falling
                                                        dramatically.
                                                        This lowers the
                                                        cost of entry
                                                        for smaller,
                                                        hungrier, more
                                                        nimble
                                                        competitors, and
                                                        lowers the cost
                                                        of increasing
                                                        production. When
                                                        virtually any
                                                        small
                                                        manufacturer can
                                                        buy robots for
                                                        less than the
                                                        wages of a human
                                                        laborer, where&#39;s
                                                        the scarcity
                                                        necessary to
                                                        generate
                                                        profits?</p>
                                                      <p>The parts
                                                        needed to
                                                        assemble a $45
                                                        tablet are
                                                        dropping in
                                                        price, and the
                                                        profit margins
                                                        on those parts
                                                        is razor-thin
                                                        because they’re
                                                        commodities.
                                                        Software such as
                                                        the Android
                                                        operating system
                                                        is free, and
                                                        many of the
                                                        software
                                                        libraries needed
                                                        to assemble new
                                                        software are
                                                        also free.</p>
                                                      <p><b>Automation
                                                          increases
                                                          supply and
                                                          lowers costs.
                                                          Both are
                                                          deadly to
                                                          profits.</b></p>
                                                      <p><b>Here’s the
                                                          core problem
                                                          with the idea
                                                          that taxing
                                                          the owners of
                                                          robots and
                                                          software will
                                                          fund
                                                          guaranteed
                                                          incomes for
                                                          all:</b> the
                                                        more labor,
                                                        goods and
                                                        services are
                                                        automated/commoditized,
                                                        the lower the
                                                        profits.</p>
                                                      <p>The current
                                                        narrative
                                                        assumes more
                                                        wealth will be
                                                        created by the
                                                        digital
                                                        destruction of
                                                        industries and
                                                        jobs, but
                                                        real-world
                                                        examples suggest
                                                        the exact
                                                        opposite: the
                                                        music industry
                                                        has seen
                                                        revenues fall in
                                                        half as digital
                                                        technology ate
                                                        its way through
                                                        the sector.</p>
                                                      <p>A $14 billion
                                                        industry is now
                                                        a $7 billion
                                                        industry.
                                                        Profits and
                                                        payroll taxes
                                                        collected from
                                                        the industry
                                                        have plummeted.
                                                        So much for the
                                                        fantasy that
                                                        technology
                                                        always creates
                                                        more jobs than
                                                        it destroys.</p>
                                                      <p>As subscription
                                                        music services
                                                        replace sales of
                                                        songs and
                                                        albums, revenues
                                                        will continue to
                                                        decline even as
                                                        consumers have
                                                        greater access
                                                        to more
                                                        products. In
                                                        other words, the
                                                        destruction of
                                                        sales,
                                                        employment and
                                                        profits is far
                                                        from over.</p>
                                                      <p><b>Examples of
                                                          such radical
                                                          reductions in
                                                          paid labor
                                                          abound in
                                                          daily life.</b> To

                                                        take one small
                                                        example, our
                                                        refrigerator
                                                        recently failed.
                                                        The motor was
                                                        running but the
                                                        compartment
                                                        wasn’t being
                                                        cooled. Rather
                                                        than replace the
                                                        appliance for
                                                        hundreds of
                                                        dollars or hire
                                                        a high-cost
                                                        repair service,
                                                        I looked online,
                                                        diagnosed the
                                                        problem as a
                                                        faulty sensor,
                                                        watched a
                                                        tutorial on
                                                        YouTube (what I
                                                        call <i>YouTube
                                                          University</i>),
                                                        ordered a new
                                                        sensor for less
                                                        than $20 online
                                                        and completed
                                                        the repair at no
                                                        cost beyond a
                                                        half-hour of
                                                        labor, which
                                                        cost me nothing
                                                        in terms of cash
                                                        spent.</p>
                                                      <p>The profit
                                                        earned by
                                                        YouTube was
                                                        minimal, as was
                                                        the profit of
                                                        the firms that
                                                        manufactured the
                                                        sensor and
                                                        shipped it. The
                                                        sales and
                                                        profits that
                                                        were bypassed by
                                                        using
                                                        nearly-free
                                                        digital tools
                                                        were an order of
                                                        magnitude
                                                        higher.</p>
                                                      <p>I was recently
                                                        interviewed via
                                                        Skype by an
                                                        online
                                                        journalist with
                                                        millions of
                                                        views of his
                                                        YouTube channel.
                                                        A decade ago
                                                        when he worked
                                                        in mainstream TV
                                                        journalism, an
                                                        interview
                                                        required costly,
                                                        time-consuming
                                                        travel (for the
                                                        crew or the
                                                        subject), a
                                                        sound engineer,
                                                        a camera
                                                        operator, the
                                                        talent
                                                        (interviewer),
                                                        editor and
                                                        managerial
                                                        review. These
                                                        six jobs have
                                                        been rolled into
                                                        one with digital
                                                        tools, and
                                                        travel has been
                                                        eliminated
                                                        entirely.</p>
                                                      <p>Some will argue
                                                        that the quality
                                                        of the video and
                                                        sound isn’t as
                                                        high, but the
                                                        quality of the
                                                        user experience
                                                        is ultimately
                                                        based on the
                                                        viewer’s
                                                        display, which
                                                        is increasingly
                                                        a phone or
                                                        tablet. So in
                                                        terms of
                                                        utility, value
                                                        and impact, the
                                                        product (i.e.
                                                        output) produced
                                                        by one person
                                                        replaces the
                                                        conventional
                                                        media product
                                                        that required
                                                        six people.</p>
                                                      <p>My own solo
                                                        digital content
                                                        business would
                                                        have required a
                                                        handful of
                                                        people (if not
                                                        more) only a
                                                        decade ago. With
                                                        digital tools
                                                        and services, it
                                                        now requires
                                                        just one person.
                                                        Those of us who
                                                        must work with
                                                        digital tools to
                                                        survive know
                                                        firsthand that
                                                        what once
                                                        required a
                                                        handful of
                                                        workers must now
                                                        be produced by
                                                        one person if we
                                                        hope to earn
                                                        even a
                                                        marginally
                                                        middle-class
                                                        income.</p>
                                                      <p>Multiply an
                                                        appliance that
                                                        doesn’t need to
                                                        be replaced and
                                                        a repair service
                                                        that doesn’t
                                                        need to be
                                                        hired, a
                                                        half-dozen
                                                        positions
                                                        replaced by one
                                                        part-time job, a
                                                        fully functional
                                                        commodity tablet
                                                        that costs 10%
                                                        of the
                                                        high-profit
                                                        brand and you
                                                        understand why
                                                        profits will
                                                        plummet as
                                                        software eats
                                                        the world.</p>
                                                      <p><b>These are
                                                          not
                                                          starry-eyed
                                                          examples based
                                                          on
                                                          projections;
                                                          these are
                                                          real-world
                                                          examples of
                                                          widely
                                                          available
                                                          digital
                                                          technologies
                                                          destroying
                                                          costs, sales
                                                          and profits on
                                                          a massive
                                                          scale.</b></p>
                                                      <p>Some observers
                                                        have suggested
                                                        taxing wealth
                                                        rather than
                                                        profits to fund
                                                        the super
                                                        welfare state
                                                        of <i>guaranteed
                                                          income for
                                                          all.</i> But
                                                        the value of
                                                        assets
                                                        ultimately rests
                                                        on their ability
                                                        to generate a
                                                        profit. As
                                                        profits fall,
                                                        wealth may be
                                                        more chimerical
                                                        than these
                                                        observers
                                                        believe.</p>
                                                      <p>Tomorrow we&#39;ll
                                                        look at the
                                                        rising costs of
                                                        human labor and
                                                        explore why this
                                                        trend will
                                                        persist even as
                                                        labor becomes
                                                        increasingly
                                                        surplus.</p>
                                                    </font></div>
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    </font></span></blockquote><span class="HOEnZb"><font color="#888888">
    <br>
    <pre cols="72">-- 
Eric Hunting
<a href="mailto:erichunting@gmail.com" target="_blank">erichunting@gmail.com</a></pre>
  
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