Something puzzling

What is happening? I am becoming more and more puzzled by all the contradictory information about the economy. Of course I am not alone in this. But I would like to understand.

I read Paul Krugman who tells us (in his Rise of the Robots and subsequent posts) that we won't be in work very soon, that technology will render lots of people obsolete. The oligarchs (and I do not mean the Russian ones) will make all the gains, the rest will have less and less. I suspect he may be right.

At the moment I am in the translation business, which is becoming increasingly technology dominated. This is having a marked effect on pricing, and on the number of actual human translators required. For now CAT (Computer Assisted Translation) software or machine translation as far as I can see is just very sophisticated word processing, but soon, perhaps sooner than we think, there will be programmes capable of producing very acceptable translations. The only humans will be required for very specific subjects perhaps, and doing a bit of revision or review.

Perhaps this is just another example of an industrial revolution, or creative destruction as expounded by Schumpeter?

Then, Paul Mason refers to André Gorz in one of his tweets.

I am reminded of a passage in a book about André Gorz (André Gorz un penseur pour le XXIe siècle - La Découverte 2009) I am reading just now, which describes the development of service industries in present day capitalist economies, where large numbers of people are employed in industries catering for the needs of people who would rather pay for someone to do something rather than do it themselves ('emplois de serviteurs' or jobs for servants). To function, this model needs an increasingly unequal society.

This, along with the monetarisation of all human activity, and all of nature, characterises the current economy.

People talk of acceptable austerity (this is the sort I know):

"There is what I would call an acceptable austerity – live in smaller home, buy only used cars (or just walk or bicycle), never eat out, never go to movies, never take away from home vacations – that sort of thing.

And then there is what I would call an unacceptable austerity – homelessness with all it real dangers, no money to buy food – that sort of thing." Comment by Allan Marks on a post by Krugman

and unacceptable:

"You're absolutely correct about unacceptable austerity, and something like 10-million Americans (including whole families) have fallen into that zone: Homeless, no money to buy food, relying on an ER if they get sick. For a book I am writing about middle class homelessness, I've spoken with countless people who, until recently, were living a middle class life. Then circumstances beyond their control piled up and they were out on the street." Comment by Charley James on a post by Paul Krugman

Yet the media trumpet the highest number of people at work in the UK, ever. The USA still has less than 10% of the workforce unemployed. This does not account for the large number of workers who can only get part-time work, or who have become 'self-employed' or who have given up looking for work.

Despite the financial crisis and the subsequent recession, unemployment here has not become an overt disaster as in Greece or Spain.

The reason is simple apparently. Instead of investing in more efficient equipment or developing new markets, industry in general has decided to hang on to its softer more biological equipment (=people) to do the work, which avoids the need for costly investment.

This in turn boosts profits, and bonuses. This in turn means that a larger and larger portion of wealth is concentrated in fewer hands, creating the inequality needed for the service economy to thrive, and so on.

Where will all this lead? Answers on a postcard, please...