The Great Depression, Obsolescence, And You

“Around ’75 when the recession hit, club owners started going to disco because it was cheaper for them to just buy a sound system than it was to hire a band.” — Tommy Shaw

Artist Captures Recession Times...
I’m a radical libertarian and my Mom is a sort of old school liberal, so as you can imagine political conversations around the dinner table can end up being pretty exciting. It also means we occasionally email each other opinion pieces from whatever newspapers we read, usually that support our point of view but sometimes just that we think are generally interesting. For example, today she sent me a link to an opinion piece by Robert S. McElvaine about the Great Depression. He’s a history professor at Millsaps College who’s written a book on the subject, and his central idea seems to be government didn’t spend enough in the 1930′s.

The title of McElvaine’s piece is “Want to avoid another Depression? Try understanding the first one.” Given his prescription, however, I couldn’t help but think that perhaps he should follow his own advice. One of the problems with understanding the Depression is that too many on the left think that the U.S. had an entirely free market economy in 1929. That’s not the case — there were a number of big changes made in the 1910′s (institution of an income tax, start of the Federal Reserve System, etc.) that led to the bubble of the ’20s and the resulting downfall. And most of what federal decision makers did in the ’30s was ineffective or counterproductive, e.g., confiscate gold, raise tariff rates, or attempt Keynesianism.

Of course, this isn’t 1930, and what bedeviled them is not the same as what plagues us. I don’t have the stats to back this up, but I suspect as technology keeps accelerating, the market for unskilled and semi-skilled labor will just get softer and softer, no matter how much GDP rises or how well those who already own stuff may do.

For example, one of Google’s projects is to automate driving — institute a system where vehicles can safely drive themselves long distances without a human involved. They’re actually getting pretty close to succeeding at this, they’re doing test runs in Nevada and that sort of thing. So what? Well, driverless vehicles it will be good for some businesses, but at the cost of putting every long haul trucker and bus driver out of a job.

I think if one takes a twenty year view that this sort of thing is a big concern. Right now we have millions of people who simply aren’t good enough at anything other people actually need to make enough money to support themselves. I’m not blaming them, or calling them lazy, I’m just calling it like I see it. What happens when that number reaches 30% of the population? Even if you’re morally copacetic with saying “screw you” to unemployable people, if you try that with one third of your population it won’t end well for you. (Ask wealthy Venezuelans, because they did this and the result was a decade and counting of Hugo Chavez.)

So assuming my gloomy scenario is at all likely, is there anything to do about it? I’m not sure. I do know that stopping the advance of technology isn’t very practical, and wouldn’t be desirable if it were. Perhaps the best thing to do would be to make sure that entrepreneurship is integrated in every school curriculum one into which one can possible fit it. If employment as we’ve known it will only get more and more difficult to find, but there’s still affluence in the overall society, that’s a recipe for people to get into the mindset that there are ways they can take control of their own futures.

2 Comments

  1. Comment by Jeffrey Deutsch:

    Hello Steve,

    Excellent points about technology eliminating some people’s jobs…and about it being in the best interests of the rest of us to do something about it.

    You know what they say about change being the only constant. Modern technology is squaring that….

    Jeff Deutsch

  2. Comment by John Brady:

    We call it ‘disintermediation’ in marketing. in other words, Jetson, you’re FIRED!!!

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