Should we return to Keynesian economics?

>>1955669
Economy is a meme anon.

>>1955673

Then you're probably okay with moving to Greece or South Africa?

>>1955669
Because economy became mundial and very capitalistic

So if you have a capital it s a very nice time for you

And if you are born in the wrong place you will have to find a way to get capital or you work and live a simple life.

The gap is due to productivity coming from machines. No sensible policy will close the gap. You can only deploy UBI or "remove" excessive population.

>>1955701

How does automation explain that the divide began exactly in 1973-1979? That's when Keynesianism was abandoned.

Also, automation existed well before 1979. Industrial accumulation of capital began far earlier, and it led to wage increases.

>>1955669
could it just be a diminishing returns situation,
There's convergence to an equilibrium or max productivity state. our capacity for productivity is finite so the rate at which we can increase it slows over time.

>>1955704
>That's when Keynesianism was abandoned
That could have been just a spark.

Also machines were dumb back then and needed operators. Now that's not the case.

>>1955716

Your argument is interesting, and I indeed believe automation to be the second cause if wage stagnation.

But what's still contradicting it is the rapid industrial expansion in low-wage countries, such as China. If infustrial production relied mostly on machines, that wouldn't be the case.

>>1955723
Interesting. Do you have a similar productivity vs compensation chart for China?

>>1955710
But productivity isn't slowing over time. Only wages have slowed while productivity kept rising.

Are you dumb?

>>1955735
yes I am. didnt read properly

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>>1955669
Maybe we just need more unions?

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>>1955752
#2

Anyone wanna guess the correlation?

>>1955752
>>1955755
Fuck unions. Employee owned businesses are better idea.

>>1955762
I feel like if big business is allowed to lobby the government we should probably be making use of unions to counter it

>>1955752
>>1955755

Have you considered that the types of jobs that are more conducive to unionization have dropped and this itself lowered middle class shares of income?

>>1955766
>they fuck us so let's fuck them back
I don't think this type of thinking will get us far.

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>>1955766
>making use of unions to counter it

>>1955771
Seemed to work better than what we have now

>>1955773
reeeee
but seriously manufacturing isn't the only industry

>>1955773

but that doesn't really prove your point against unions, since

a.) unionization rates declined at the same rate and
b.) service unions are a thing too

>>1955775
My argument is that some jobs are more conducive and easier to unionize in than others.

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>>1955704
The main cause of the divide is social security as the top 10% get most of their money from capital gains which as substantially higher returns than social security benefits.

>>1955779
>My argument is that some jobs are more conducive and easier to unionize in than others.
but are they really?
If i'm not mistaken the only unions which really survived the huge move against them were basically federal government unions, which suggests that it wasn't to do with the type of job, but something else which caused the decline.

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>>1955777

Incidence of contract work is rising as well.

>>1955792
Unions are best for jobs people hold for a very long time, hence why they were popular for manufacturing. In industries that have high turnover rates no employee wants to pay union fees because they don't expect to work there long. If you talk to any newly hired union member you'll notice their immediate complaint is how much seniority matters in the union and how much their fee goes to the union.

>>1955784

Social security has no effect on wages

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Also I can't find a graph with a longer timeframe, but healthcare is an industry where unionization is particularly hard because healthcare professionals cannot threaten to strike like traditional unions. This is primarily because striking may lead to people not getting adequate care. Basically my entire point is that you're comparing our current economy to our past economy as if they're the same, when they're completely different.

>>1955809
>taxes have no effect on wages
Did you even read the image?

>>1955808
Fair point, but haven't euro countries managed to maintain high union participation/collective bargaining on wages despite a similar move to the service type jobs?

>There are nine countries at the top of the table – with collective bargaining coverage of around 80% or more – and they can be divided into two main groups.
>There are three countries – Sweden, Finland and Denmark – where high collective bargaining coverage goes with high union density. Unions in effect have the strength to require that their members’ terms and conditions should be negotiated, although in Finland agreements are normally considered binding for all employees in the industry concerned.

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>>1955819
Yeah, the Scandinavian countries do have a high rate of unionization I give you that. I think ultimately unionization is a red herring for income inequality. The main reason for inequality is that capital gains have been very lucrative for investors. If the rest of the 90% were allowed to invest their money instead of paying taxes towards social security, they along with their families would have gotten a slice of that economic growth the top 10% tapped into.

It would be much better if social security mandated you invest your money rather than just hand it to the government. You need to think of this key fact, if you save up money every day and then die at age 50, your family inherits what you saved. If you pay social security taxes and die at age 50, your family gets nothing. Poorer people also live shorter lives as compared to richer people.

>>1955841
So take into account that graph, the bottom 50% of males die at 81 which means they gets access to social security income for 15 years. At 15k a year that's about 225k total. Now compare this to what they would have if they invested it all in the S&P500 >>1955784

Not only would they be able to pass along all of their saved wealth to their family if they died, dividends would be enough to live off until their death. Furthermore, unlike social security benefits this wealth can be passed on and both provide an income to their descendants and keep growing.

>>1955784
>>1955841

It's not that I believe social security to be completely irrelevant, but the proposal that it's responsible for wealth inequality is ridiculous.

Firstly, low-income households pay far less taxes than they receive back in services. Only high-income earners actually contribute to the system.
Secondly, poor households are labelled as poor exactly because they never have significant sums to invest. If they had, they wouldn't be poor in the first place. So recommending poor households to "invest more" is akin to suggesting that they should "just buy more money".

>>1955841
>It would be much better if social security mandated you invest your money rather than just hand it to the government. You need to think of this key fact, if you save up money every day and then die at age 50, your family inherits what you saved. If you pay social security taxes and die at age 50, your family gets nothing. Poorer people also live shorter lives as compared to richer people.
Yeah, I agree. But really even if it works out you'll just add to inflation and then what have you achieved?

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>>1955857
Again, did you read the image? I clearly stated that social security taxes which are mandatory for even the poorest of people would provide more bang for the buck if they were invested instead of given to the government. The top 10% tapped into investment income, that's why their incomes grew so much.

>So recommending poor households to "invest more"
If the government can take social security taxes from them, then that money can also be invested. Ideally, the government would force you to invest it.

>>1955859
In the end you still can pass down wealth to your progeny when you die as compared to the current system where you can't.

>>1955669
Technology caused this. Reintroducing Keynesianism would just reintroduce stagflation.

luddites and high time preference faggots on /biz/ wew

keynes would be proud

>>1955916
>Technology caused this

I am ready to believe you, but is there a surefire way to prove it?
Generally, over the course of history, technology has increased the wealth of people.

>>1955924

Stating that technology decreased the demand for labor isn't Luddism, since it doesn't contain the implication we should halt technological advance. Much rather, we should organize the economy in a way to fit both technology and humans.

>>1955929
whats that thing... you know... that the economy does...

allocation?

go ahead and organize how you want but being a luddite and restricting tech is how your economy gets fucked by someone who doesnt

>>1955940

No one here argues to restrict technological process.

>>1955916
>Technology caused this
Kek. Western europe apparently hasn't shared in the technological advances of the last 40 years then :')

>>1955948

Most of Europe struggles with high unemployment rates, they're the main topic of the French national elections. The total hours worked in Germany stayed the same, despite population rising and GDP doubling since 1990.

I believe that he may have a point.

>>1955944
may as well if you are gonna argue for keynesian economics

like going back to the stone age as far as im concerned

>>1955954
Still, I'd like to see a comparable chart for some euro countries (average real wages vs time for like 50 years)
Can't find one :/

>>1955958
http://data.worldbank.org/

>>1955962
Hmm.. Did find this though, from the UK, published 2014:
>Since 1975 average earnings for full-time employees have more than doubled after accounting
for inflation.

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>>1955967
pic related i guess

>>1955967
need to look through all the info before making a judgement. I think tho, uk is in a state of just barely surviving as a country

>>1955956

I started the thread with a question mark, so it's less of a proposal, more of an invitation for discussion.

During the Keynesian era, we didn't have the economic woes of today, which brought us Trump, Brexit, may bring us Le Pen ...

>>1955975

How so? The UK has problems, but there are far worse.

>>1955926
I don't have any real proof but anecdotally I work at a plant that has maybe 40 machine operators doing a job that employed thousands in the 60's. I honestly wish we could replace about 20 of those people and about half of our logistics team with machines because of how fucking retarded they are and they constantly try to hide their fuck ups and deflect how shit they are on to other people.

>>1955784
I get the argument, but what would happen from macro scale if the whole population were forced to invest rather than being taxed?

>>1956006

It would cause even lower interest rates and (even) worse return-on-investment ratios, as negative side effects.

>>1956009
so basically a stagnation

is it not better to let the wealthy play they game, abolish tax havens and redistribute wealth via taxation?
In the long run, economy would grow faster, wouldn't it?

>>1956011

Yes, redistributing taxes from the very, very top to the bottom and middle is good for the economy overall.

But you can't tax your way to wealth. There has to be an increase in real wages, backed by a real increase in productivity.

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>>1955669
I M M I G R A T I O N
>I M M I G R A T I O N
I M M I G R A T I O N
>I M M I G R A T I O N
I M M I G R A T I O N
>I M M I G R A T I O N

Also women in the workforce. You got cucked, whitey.

>>1956039

Barely. It also affected Asian nations like Taiwan, South Korea and Japan.

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>>1955752
Same stagnation in wages happened in Western countries that had employee owned businesses and unions

>>1956070

The prospects for a blue-collar worker in Scandiavia are, nonetheless, far, far better than in the US.

>>1956070
>Same stagnation in wages happened in Western countries that had employee owned businesses and unions
Apparently it didn't happen in the UK though..
See:
>>1955974
>>1955967

>>1956076

I highly doubt this. There's a reason Brexit happened. There's lot of frustration about the UK economy.

https://www.theguardian.com/money/2016/jul/27/uk-joins-greece-at-bottom-of-wage-growth-league-tuc-oecd

>>1955669

>conveniently ignoring the hyperinflation of the 1970 - 1980s

>>1956083

It wasn't hyperinflation, since the inflation was ultimately tamed.
Since the 1980s, we have low and relatively stable rates of inflation, but that didn't help us much.

>>1956081
Well yeah it looks like no real recovery since 08 I can see why they'd be mad.

>>1955698
underrated post.

>>1956086
>what did Volcker do
>what is ageing poulation
>what is outsourcing

Looks like something was clearly already happening before the NYT's cutoff date of 1980

>>1956192
there was a divergence earlier, but at least then real wages were still growing.

>>1955926
Both are true. Technology does create and is creating more wealth in the aggregate for the people -- but it does not mean that it will be distributed evenly amongst the people.

>>1956301

Well, again, technology existed both before and after the Keynesian era, but the Keynesian era saw a broad and fair distribution of added value in the economy.

>>1956384
You call it Keynesianism, but how do you objectively measure the extent of keynesianism?

>inb4 tax rates

Since the 60s the welfare state has expanded, not contracted

>>1955755
>Anyone wanna guess the correlation?

Immigration?

>>1956775

My definition would be "extensive counter-cyclical policies, dominance of industry over finance, re-distributive tax policies, and, most importantly, artificial maintenance of (almost) full employment."

>>1955755
Inverse correlation

if you just illegalized unions and got rid of social welfare programs sticky wages wouldn't be a thing and monetarism would be objectively superior

>>1956920

Sticky wages aren't the problem anyways. If they were, places with deteriorating living standards, such as Italy or Spain, would've been back to full employment by now.

>>1956792

No, darn it. Places such as Japan also experience this phenomenon, despite declining population.

>>1955752
>>1955755
>what is zero conditional mean

>>1956223

I don't believe that the United Kingdom is different from other Western nations in a positive way, or else there wouldn't be Brexit, a far-left Labour party and other signs of discontent.

>>1955669
All you really need to do is purge neoliberalism. Most of the real wage growth in the 50-60s stemmed from labor being valuable. The degradation of tariffs and rise of market fundamentalism in the early 70s caused the the exploitation of labor, regulatory, and tax arbitrage we've seen to this day. Nothing is forcing companies hand at passing along the productivity gains to consumers or employees as market fundamentalism aslo allowed mass market consolidation across the board.

>>1958476

What differentiates "neoliberalism" from what was in place earlier? There are still countries with strong unions, such as Scandinavia.

>>1958482
Neoliberalism advocates no tariffs or protectionism, ever. It also advocates no capital controls of any kind, substantially less regulation (if any at all), and no government involvement in the economy, no matter what. Keynesianism advocates a mixed economy (which puts it instantly at odds with neoliberalism) and Bretton Woods also had substantial capital controls which helped prevent crises. Unions don't really pertain to the conversation, sorry.

>>1955669

I like how this graphic shifts the break to 1980 to avoid major economic events that took place in, say, 1971.

>>1958911

It started to go downhill after 1973, but only after 1980 the top wealth increased disproportionally