Worst case, either the "accepted" standard of living declines until it can be achieved on half of per capita GDP, or (more likely IMO),
something like half or so of the population remains adequately employed, in which case we only need to provide "acceptable" living for the remainder... which means we only need to be able to support half the population on half of GDP, which really ought to be possible.
This only stops being true if we automate the system so far that skilled human labor becomes irrelevant, in which case we might as well declare the Singularity and call it a day, see below.
The Duchess of Zeon wrote: The reason we can't just keep increasing taxes is that the Laffer curve actually applies above 48% of total income being taxed (there was a Stanford study), so we'll depress economic productivity once we exceed that cutoff by high enough that the depression in desire to work equals out to the increased revenue, we will receive no further revenue increases from further taxation. So somewhere between 48 - 60% of individual income is the maximum government tax take, from which we have to supply retirees and unemployed youth. Once the combined requirements of retirees and unemployed youth as well as healthcare and all other government functions exceed about 50% of GDP, the system breaks down.
I would be very much surprised to see it get that bad. Life expectancy for retirees is still only 15-20 years (assuming they retire at 65), and Social Security pensions are much smaller than normal income.
The only ways we get the outcome you describe are if health care costs increase totally unabated for a few more decades, or if we hit Greco-Spanish levels of youth unemployment
permanently. In the first case, political pressure will force changes in Medicare long before it forces the government to tax at 50% of GDP. In the second case, it makes so much more sense to FIRST put all those unemployed youth back to work, and only THEN worry about whether or not we need to put septuagenarians back to work.
I can imagine a society where your projection comes true and it is necessary for all able-bodied 70-year-olds to remain in the workforce. But we'd have to exhaust so many other options first that predicting it
now seems... overspecific. Sort of like predicting a USA run by an overtly communist dictatorship; it could happen but probably only after at least three other iterations of the US government had risen and fallen first, making it spectacularly unlikely in our lifetime.
Junghalli wrote:Mind you, I'm not convinced we're getting to the "endless high employment because of technology" point yet, IIRC people have been predicting that for a long time and it hasn't been happening for a long time. But I'm just going with it as an assumption here, as this strikes me as a discussion worth having.
Well, automation has already squeezed almost all the human labor out of agriculture and manufacturing in the US. And it's beginning to overtake service white collar jobs, as is outsourcing. Unemployed factory workers were able to find jobs in service and clerical work and so on, but where will the unemployed service sector people work?
Unless we invent whole new sectors of the economy
and find a reason to pay them, we get high unemployment out of that. I don't know what we'd do. In a command economy it would be easy but it would be essentially state-mandated makework. Under capitalism...? [shrugs]
The Duchess of Zeon wrote: In short, benefits demand increases and efficiency gains collectively lead to capitalism becoming unviable beyond a certain point, so you have to eliminate capitalism entirely and replace it with something else, or you have to redistribute capital and thus the tax base across a broader spectrum of society. Forced inefficiency is a way to do this.
I still think it very likely that the superrich will need enough skilled people to maintain the automated factories that they
have to pay them enough to keep the system running. That doesn't stop being a factor until we figure out how to automate engineering and IT work. At which point we might as well just declare the Singularity and call it a day, as I said above.
Because when the automatic economy can design, build, and maintain itself without human input, it doesn't need its own owners to run any more than it needs engineers or assembly line workers; you could just walk in and appropriate the whole thing and it would
still work.
This would make redistribution of wealth
easier to achieve, not harder, because the means of production are now self-organizing and you remove the problem that killed 20th century communism. If the factories are smart enough to feed and maintain themselves, you have no further need of the sentient owner-class to run them for you, so you don't need to design a bureaucracy to
replace that owner-class.
Stas Bush could probably talk your ear off about this.
Broomstick wrote:Simon_Jester wrote:I'd much rather have 65-year-olds unemployed and 25-year-olds working, than have it the other way around.
The problem is that the way the system is currently structured, or likely to be structured, that leaves 65 year olds in grinding poverty in all too many cases.
I agree; that's half my point. The way the system is structured is
perverse; it forces retirees to keep working, displacing the labor of the most vigorous part of the population, delaying their entry into the workforce, making it difficult for them to start families and raise the next generation.
Or to clarify what I was talking about, it makes more sense to have
grandparents not working and
newlyweds working, than to do it the other way around. The longer we keep the system running the other way round, the worse the long term consequences will become.