Why the Meltdown Should Have Surprised No One | Peter Schiff

The 2009 Henry Hazlitt Memorial Lecture, presented by Peter Schiff. Recorded at the annual Austrian Scholars Conference, Ludwig von Mises Institute, 13 March 2009.

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[Ken Smith]

You seem to be missing the point. Humans don't do a lot of the design work any more. High level languages are increasing the level of abstraction. The digital filters that make Software Defined Radio go are designed by software. That software was designed in large part by the compiler that was used to compile that source code. We have massively increased productivity in the process but since fewer humans were needed, the median wage fell.

[Rob Mews]

And jump to the next square - who designed software, better machines? No! It was humans doing what they should be doing. Thinking, designing like intelligent beings always have done to be successful. Somewhere it was the wheel then two wheels, three wheels then four or more, then better bearings then better wheels. All improvements. At no point along the development line did intelligent design stop and say "that is enough". More demand is present for improved research and design.

[Ken Smith]

No, it is not flawed. I explained the reasons. We are way too energy inefficient to compete with machines once machines can do the job well. The minimum running cost I meant was for the humans. There is a much lower number for the machines. The process of designing a machine is becoming automated. Circuit design is well along on becoming automated. Software design is also heading that direction. The median wage has been falling. Supply and demand don't lie.

[Rob Mews]

Ken - the question of humans becoming too expensive is flawed for the reason that you cannot say that all humans are becoming too expensive since some are obviously not. Nothing has changed over human history. There always was a minimum running cost and it varies from industry to industry. Some industries require more workers no more so than research and development where humans are the ones making all of judgments, adjustments and developing new ideas. No machine ever developed itself.

[Ken Smith]

No I did not miss it. But I also noticed that the median age has been falling for decades. Supply and demand doesn't lie. People have been becoming less and less needed with time. As the median wage falls there is a floor. There is a minimum running cost for using a human to do something. We are massively energy inefficient. We require light and food and water. Even at wages of zero, it is becoming that humans would be too expensive.

[Rob Mews]

If that were the case then virtually nobody would be employed today since there has been so much effort put into improving machines, practices and and processes in every field over the past two hundred years that unemployment should be virtually 99%. You are miss thinking that jobs are eliminated by new inventions and some are temporarily but this frees up labor for new changed jobs. There is never going to be too few jobs only too inflexible wage demands and an unwillingness to learn.

[Ken Smith]

You are wrong about the main cause of unemployment. For many years we have be working very hard to replace expensive labor with much lower cost and more reliable machines. Now that we are well along in the process, we need fewer workers. The median wage has been falling for many years now. Supply and demand doesn't lie. We very simply don't need those workers. You seem to think that the free market economy owes everyone a job. It doesn't.

[Rob Mews]

What causes unemployment is government intervention into the economy by increasing the money supply (printing money including bonds and other like instruments). The other thing which does the same is intervention into the private economy by government which involves taxpayers money since they tend to get the pricing, quantities, backup and quality so wrong since they are inexperienced in the fields they are operating in.

The "austerity" you talk about is merely balanced accounting.

[Tony Malone]

Educate yourself

[possumsteak]

and you can't read. I did not say they implemented a free market system, I said they have been doing the kind of austerity and cuts that you guys preach about.

Free market is a dream just like communism, as long as humans are around it will never happen or work