A large number of workers with Zero Marginal Product can be a sign of an economy in transition -- that is, a sign that people are employed in positions where they may have been productive in the past, but changes in the overall environment have rendered them obsolete.
This does not mean they're incapable of doing valuable work. It just means they haven't yet finished the transition from whatever no-value-added position they were in to a value-added position.
Though, I should say, that masks another contingency with possibly the same effect.
We have an economy which is predicated on cheap energy. As such it's frequently cheaper to produce goods by comparitively inefficient automated processes due to the reduction in manpower required, or to produce goods at distance from their end user as the reduction of labour costs from a remote supplier outweights the transportation costs.
It seems plausible that an energy scarce world could reverse the economics of both situations. It would have enough other consequences that I'm not at all suggesting it as some sort of worker's utopia, but greater employment may be an interesting side-effect.
Do you define the usefulness of a piece of work as "fulfills a percieved need for the individual paying for it" or as "brings added value to our society"?
In the former case - every employee is doing useful work. The latter definition is way more restrictive.
The latter. Useful means that it provides value that somehow improves the human condition. Everything from food to fuel to art to architecture is that. Random junk on the net is not.
A central fallacy of present-day economics is the assumption that all economic activity is of equal value. GDP is a good example: A million dollars spent on healthcare increases GDP by a million. A million dollars spent on war increases GDP by a million. A million dollars spent on rubber dog crap increases GDP by a million. But these transactions are not of equal value.
I personally think that economic central planners and GDP growth targets are a major underlying cause of all this useless make-work. I call it the gerbil wheel economy.
Run, gerbil, run! Gotta make the opaque meaningless numbers bigger!
You can see it very clearly in very centrally planned economies that worship GDP growth, like China. They have entire abandoned cities-- things built for nobody, just to make opaque numbers bigger.
> A million dollars spent on healthcare increases GDP by a million. A million dollars spent on war increases GDP by a million. A million dollars spent on rubber dog crap increases GDP by a million. But these transactions are not of equal value.
Actually, they are. The folks who spent a million dollars on rubber dog crap could have spent it on something else but they spent it on rubber dog crap. That million dollars is the value of that rubber dog crap.
Rubber dog crap is a bad example; how about orthodontics? There most of the value is in increasing your "prettiness rank", but there is a positional externality in that you necessarily decrease someone else's rank.
A lot of orthodontics is fixing things so someone can chew correctly, reducing pain etc. I'll assume that you didn't mean those folks....
Maybe you meant cosmetic dentistry, but even there, should we forever brand someone who didn't take care of their teeth earlier in life? What about folks who were given tetracycline when they were kids (which permanently stains their teeth)?
Maybe there's a good example in dentistry, but let's see one.
As to your "positional" argument, how are you separating out the "bad" positional change from "her teeth kept us from seeing his superior skills"? Or, is the latter also bad?
If there's value to people in looking at beautiful artwork, isn't there value in looking at (more) beautiful people? Improvement of one's appearance isn't entirely relative to others. There are absolute gains.
You don't think that raising the overall self-esteem of a population has a net positive effect on their society's condition?
I mean yes you could argue that it might contribute to a class divide, but I think orthodontic treatment is much more affordable for the middle class than it was 20 years ago.
Are you sure? The millionaire rubber dog crap inventor just died and gave everything he had to malaria vaccines.
My point isn't that all dollars spent are equal, but that the world is so complicated that it is not easy to make a snap judgement about where the next big difference will come from.
In my humble opinion the Global Situation roughly is:
-> 80 % Survival mode, Struggling to meet ends (The so-called 3rd World, mostly)
-> 15 % Semi-Ok, Hired hands in private and governmental institutions of various size (in-debted wage slaves, mostly)
-> 5 % Ok, successful business owners, top managers, political leaders, rich and super-rich (various business sizes, amounts, market caps, etc... imagine any metric indicating financial and social success)
If this picture is mostly right => Perhaps, the really useless work isn't something which is rightly measured as the global number of humans busy with it.
I believe your estimates are overly optimistic. Then again, if you look at just the US, there is a huge gap between how people think wealth is distributed and reality.
The distribution is only going to get worse. I don't see the 0.1% at the top suddenly growing altruistic -- nor do I think any sort of political disruption can change this tendency in the long term. Such disruptions now seem to, more often than not, result in more assets being secured by those of means.
Whatever illusions of a democratic and fair society the 1900s instilled in us are just that: illusions. I predict that within my lifetime western society will indeed continue a trend towards the sci-fi predicions of the privately owned corporate state. To a large degree, this is already reality.
If he was being paid $28,000, he had to be producing at least $28,000 worth of value to AOL. In trying to be neutral, the articles the AOL farmer wrote had to of be of some value to produce that return (the actual required return is probably some percentage higher than the $28k)-- eyes were reading the content and there was some demand for that content.
The ultimate issue should lie with the mechanisms used to drive that $28k+%return in value. If that mechanism is the Google organic funnel -> AdSense revenues, and if your demand is for quality content, isn't Google more of the problem than AOL? AOL is trying to survive and compete in a landscape where bad articles written on the cheap produce a higher aggregate value than quality articles written by authors who command a higher wage.
YOu're characterising value differently. I think the point being made is that the practical value of the articles is usually negligible - few who read them will get anything out of them. They're successful only because they game the existing system - essentially parasitic articles.
I'd agree, but isn't it somewhat unrealistic to expect companies to operate altruistically in a market where you have to dumb down writing in order to maximize profit on a large scale?
I wouldn't want to operate a business the way AOL does or the way Demand Media does, but if there is such a huge area of Google and search engines available for gaming, it's going to be gamed. There is too much incentive for some entity not to step in and profit.
Right, but nobody (well, probably a few people...) is asking human nature to change, much as we might find it distressing. I'd instead advocating changing the rules of the system to encourage actual value as opposed to the parasitic value generated by these articles.
(getting on a soapbox here) I think it's easy to forget that we don't use the capitalist system because it is somehow morally right and pure - it's because so far as we know, it's what works best to motivate people to generate real value for humanity as a whole. If the system stops working, then you tweak it - which is why we have regulation on things like monopolies, for example. In this case, google has changed the system for us, and for that I'm very glad - incentives are now more aligned with producing quality content that's actually useful to someone.
Institutions are not strictly rational. It's not hard to find cases where people have been payed 6+ months without actually doing anything other than showing up and reading a book.
