The New Economy, Revisited

A Funny Thing Happened on the Way to the Forum.  I forgot the main reason I sat down to write about "The New Economy."  The main reason is that the New Economy is a “structural change” in the economy, it is not just another down-swing of another “business cycle.”

Huh?  What you talkin’ about?

Many if not most economists are so wrapped up in Economic Theory that they see the recent Recession as just another recession, just another Bust following another Boom.  This strait jacket of Economic Theory forces them to see everything as business cycles and keeps them from seeing the obvious: that this recession – the jobless recovery part of it – is not the result of a cyclical Surplus in Supply or a Deficit in Demand (I capped these 4 words because they alliterate!), it is rather the result of a new economy that needs fewer and fewer workers.  I am not talking about Globalization or the out-sourcing of jobs to China and India, etc. which will continue to savage American jobs.  I am only talking about the Technology piece of the New Economy – computers and artificial intelligence and robotics – performing work that was previously performed only by human beings.

Are you – are we – ready for this “New Economy,” this Brave New World?

The answer is clearly NO, as only sci-fi writers are even talking about this kind of future, yet it is inevitable and it will arrive sooner than any of us thinks – or wants.

No economist and no one in our nation’s capital is past thinking about getting to the next business cycle, no one is prepared for the real future, the future that doesn’t need US!  Not to work anyway!

Will it be a Paradise where no one NEEDS to work for a soulless multi-national corporation in order to live in a Heaven on Earth?  Or will it be Hell on Earth where more and more unemployed people go homeless and die on the streets?  There are a million scenarios to choose from, but they all include machines performing labor that is today performed by humans.

But the future scenario that wins is up to you to choose.

Or the future scenario that wins is up to someone else to choose.

But what future we live is up to you, whether you like it or not!  And that is why I write this blog.  To help ensure a bright future for your children and mine.

Here is another Wired article published in 2000, Why the future doesn't need us (by Bill Joy, “cofounder and chief scientist of Sun Microsystems, one of the most influential figures in computing: a pioneer of the Internet, godfather of Unix, architect of software systems such as Java and Jini”), that may scare the shit out of you worse than I have just done.  Enjoy!