pointing out the wonders of productivity:
But what about productivity? Doesn't it force prices to fall? Sure, productivity allows firms to sell for less, but if higher productivity led to deflation, prices would have fallen for all of human history. Productivity growth isn't a problem - it's a miracle. If it weren't for productivity growth, we'd all have the standard of living of mule drivers and wood cutters.Kenneth Campbell wonders what happens to the checkers and baggers when self-scanning takes hold. Ehrlich, the esteemed undersecretary assumes full employment.
A more productive worker earns more in the marketplace and in turn spends more. And spending more keeps prices stable, if not rising.
But if laying off checkers and baggers counts as productivity improvement, shouldn't the nominal prices at the market be adjusted upward to take into account that the customer is now doing the work?
A very large amount of what used to be paid labor has been shifted onto the customer, pumping your own gas being the easiest example. And there have been studies showing that prices do NOT go down when the work is shifted onto the customer as "productivity" cuts the vendor's costs. (I recall a study comparing gasoline prices in NJ and Penna, the former outlawing self-pumping.)
And the assumption that a drop in costs equals a drop in prices is buried deep in our textbooks but is fatuous.
Gene Coyle
Kenneth Campbell wrote:
Sabri wrote:Today, I went to Home Depot to buy some halogen lamps. After I picked up the lamps, I proceeded to the check out area and came across this automated cashier there: You scan your own items, swipe your credit card and all.What will happen to the human cashiers if one of these days these automated ones replace them?Seth wrote in reply:The Home Depot example you mention is striking. I noticed it a month or so ago in Sacramento. We are seeing the rise of dead labor (machinery) and the demise of living labor (people).I first saw this last Yule season, at the Loblaws (Ontario grocery chain) at a downtown Toronto "superstore." Big open area to scan. The store designers placed it in full view of the main entrance/exit. My kids (under 10) were with me -- they gave it a thumbs up. They got to scan and bag the items. As we were doing it, there were many perplexed folks arriving/exiting -- and looking on. I would hear them whispering to each other, trying to figure it out. Then, inevitably, realizing it was "self scanning." In terms of what will happen to the human element of ringing in and bagging... I suppose it will replicate what bank machines did to bank tellers. Reduce their number. I don't see that as bad, of itself. But, in the context of a world in which that saving of mundane human labor is usually squandered into unemployment insurance stints, desperation, and other wastes of life and energy... it won't help anybody in this lifetime. But nothing wrong with losing the cashiers and bagboys of the nation. They can't be relocated to Indonesia. Ken. -- It is a principle that shines impartially on the just and the unjust that once you have a point of view all history will back you up. -- Van Wyck Brooks "America's Coming of Age," 1915
