(01-02-2017, 10:51 AM)Warren Dew Wrote: Warren Dew
That's not how GDP works.  GDP is a measure of final goods and services; intermediate goods and services used to produce those final goods and services aren't counted.  When technological advances mean some of those intermediate goods and services are no longer needed and their cost can be saved, that in itself doesn't change GDP at all.

(01-02-2017, 03:12 PM)SomeGuy Wrote:

Quote:I took a look. You wrote:

The United States is number 7 on the list, and the top three countries all have manufacturing work forces that make up over 20% of their labor force, roughly double the United States' 12%.

The same source you used for these three countries also has the US with more than 20%.  But it is true than these these other countries all have large shares than the US.  Then again, they industrialized later and I believe all three run trade surpluses, which we do not as a matter of policy.

You're only interested in the automation bit?  Fair enough.

To that end, look at the sources most closely.  

(01-02-2017, 03:12 PM)SomeGuy Wrote: You're only interested in the automation bit?  Fair enough.

Quote:The subjective theory of value has been well-established for well over a hundred years.  No one would ever exchange anything if they did not value what they were getting more than what they actually had, which means both parties must value the commodities being exchanged as being worth either less or more than the actual price, with the parties having differing opinions on which is which.

Some Guy Wrote:Part of the problem was the total system participating in this K-wave was expanded by trade policy, which meant that much of the manufacturing income that would previously have gone to American laborers was instead sourced to factories overseas.  Consumers (and certain companies) benefited, but for many those benefits did not exceed the costs from lost income and investment.

(01-02-2017, 05:14 PM)Mikebert Wrote:

(01-02-2017, 10:51 AM)Warren Dew Wrote: That's not how GDP works.  GDP is a measure of final goods and services; intermediate goods and services used to produce those final goods and services aren't counted.  When technological advances mean some of those intermediate goods and services are no longer needed and their cost can be saved, that in itself doesn't change GDP at all.

The reduction in inputs does reduce the revenues of the source of the inputs, which reduces their employment and income.  This in turn negatively impacts aggregate demand, which feeds back in GDP.

Quote:I did and I see the 12% so I see where you got that.  But this is for manufacturing whereas the others are for industry.  I suspect the categories for the other three countries are more broadly defined (as there are fewer of them).  The GDP figures are for industry for all four and each shows the same number of categories.  So the GDP sector comparisons are more likely apples to apples than the labor comparisons.

Quote:But the people producing the free stuff need income, which has to come from somewhere. You cannot feed your family on subjective value.

Quote:There is also the issue that the information economy cluster of leading sectors is quite a bit smaller than its predecessor. Back in 2003 I estimated it at one-third the size. Evidence of this was the relatively slow growth in the 1980's and 1990's compared to previous growth booms.  And then the growth in the cycle leading up to 2007 was positively anemic.  Growth should have been very strong as high speed internet, B2B and internet II rolled out.

(01-02-2017, 07:44 PM)SomeGuy Wrote:

Quote:But the people producing the free stuff need income, which has to come from somewhere. You cannot feed your family on subjective value.

 What of the corporate spending on IT services, increased electrical consumption, routers, devices, infrastructure, etc.  You have already acknowledged that these things constitute the sort of spending on new demand that traditionally constitutes a K-wave, so why do you keep circling around to the advertising issue?

I'd be interested in reading and discussing the actual work you did on this, if you don't mind.

(01-02-2017, 07:20 PM)SomeGuy Wrote:

Quote:I did and I see the 12% so I see where you got that.  But this is for manufacturing whereas the others are for industry.  I suspect the categories for the other three countries are more broadly defined (as there are fewer of them).  The GDP figures are for industry for all four and each shows the same number of categories.  So the GDP sector comparisons are more likely apples to apples than the labor comparisons.

The point is well taken, but measuring by GDP doesn't speak to the issue of employment vis automation, which is what we are discussing.  Nonetheless, by any measure, their share of industry as a share of the labor force is at least as high of ours despite significantly higher levels of automation, showing that an increase in automation does not necessarily lead to a drop in the size or share of the labor force devoted to it, even in this day and age.

(01-03-2017, 09:00 AM)Mikebert Wrote:

(01-02-2017, 07:20 PM)SomeGuy Wrote:

Quote:I did and I see the 12% so I see where you got that.  But this is for manufacturing whereas the others are for industry.  I suspect the categories for the other three countries are more broadly defined (as there are fewer of them).  The GDP figures are for industry for all four and each shows the same number of categories.  So the GDP sector comparisons are more likely apples to apples than the labor comparisons.

The point is well taken, but measuring by GDP doesn't speak to the issue of employment vis automation, which is what we are discussing.  Nonetheless, by any measure, their share of industry as a share of the labor force is at least as high of ours despite significantly higher levels of automation, showing that an increase in automation does not necessarily lead to a drop in the size or share of the labor force devoted to it, even in this day and age.

It doesn't show that.  To do that you would have to look at how employment and automation evolved over time in all four countries.  Industrialization began in the US earlier than any of these countries, also Japan and Germany received a set back in WW II, which likely results in the loss of a decade or two worth of development, making their starts effectively later than they actually were.  That is, where the US is could simply reflect that fact that the US is further along its development track.  To check this out you might look at Britain, who is further past the Industrial Revolution than are we.

Quote:Corporate spending ultimately must be paid for by revenue that comes from consumer spending.

Quote:If the new corporate spending is paid from with new consumer spending then it is part of a leading sector. If the corporate spending is paid for by savings then it doesn't act as a leading sector. This is because the growth is IT infrastructure is offset by shrinkage elsewhere in the economy. The advertising is simply an easy to identify example of this cost shifting.

Some of this spending does constitute a leading sector. For example online gaming requires good network infrastructure and a lot of hardware.  I paid a premium for my PC simply so I could play my favorite game at a reasonable pace. This is real leading sector stuff.  I'm sure we could think of many other examples.  

The only online material I have on this stuff is the two links I game above. The size concept is only in my fourth book.

https://www.amazon.com/Cycles-American-P...0595327214

I stopped looking into this stuff around 2004, as I was starting to shift into looking at this stuff from a political-economic pov as opposed to economic-political.

Quote:It doesn't show that.  To do that you would have to look at how employment and automation evolved over time in all four countries.  Industrialization began in the US earlier than any of these countries, also Japan and Germany received a set back in WW II, which likely results in the loss of a decade or two worth of development, making their starts effectively later than they actually were.  That is, where the US is could simply reflect that fact that the US is further along its development track.  To check this out you might look at Britain, who is further past the Industrial Revolution than are we.

Quote:Er ... uh ... "The Singularity" 'n stuff? ..... 

(01-03-2017, 02:07 PM)Mikebert Wrote: I first look at innovation wave/leading sector stuff in the 1990's.  Back then I saw the K-peaks in 1864, 1920 and 1981 and the period of strong growth afterward 4.7% (1866-73) 4.8% (1921-29) and 4.4% (1982-89) as the same points of time in the K-cycle.  These periods were followed by downturns and then a period of very strong growth afterward: 8.9% (1877-81) and 9.4% (1933-37). Both of these periods occurred during growth phase of cluster of leading sectors, or "new economy" as Harry Dent puts it. The previous growth phases ended in 1888 and 1937 for the industrial and mass-market economy, respectively and the current one was forecasted to end in 2007. Based on this concept I anticipated strong growth in the late 1990's, not as strong as in 1877-81 or 1933-37, since these were coming off economic lows, but still stronger than what was saw in the 1980's.  Didn't happen, growth over 1996-2000 was the same as in the 1980's.

This was all before generations. In 2000-1 I added the idea of generations to my thinking and concluded that the K-cycle was longer today than its historic 50-60 year length. Based on a correlation between the start of K-winter and the 4T in 1929, I took the apparent 2001 start of the 4T as evidence that K-winter began in 2000.  This makes the economic boom over the 1982-2000 bull market cycle equivalent to the 1861-81 and 1921-29 bull markets, for which growth averaged 4.9% and 4.8%, respectively.  Growth over the 1982-2000 bull averaged only 3.7%, a bit less but not way out of line.

But that wasn't right.  We now think 2008 is a 4T start and I did confirm that 2008 was a 1929-equivalent economic event.  So this means the analog to 1921-29 is now 1982-2007 for which average growth was only 3.2% due to poor growth of 2.7% over the 2001-2007 expansion.  In other words during the growth phase of the information economy growth was strongest in the 1980's before the internet, when PCs and floppy disks were cutting edge. The addition of much more capable machines, capable hard drives, and the internet (which changed everything so said the stock market boosters in the nineties bubble) gave us slightly slower growth.  Then after 2000, broadband, B2B and social media, brought us even slower growth. Adding smart phones since 2007 and a lot more social media hasn't helped--growth over 2009-15 was even slower at 2.2%.  These leading sectors aren't powering growth like they used to.  If what you say is true about all this huge spending on IT infrastructure creating growth, then it would show up in the numbers.

(01-03-2017, 03:27 PM)SomeGuy Wrote: Mike,


Oh, and:

Four - Given this shift in manufacturing (even of the high-value added stuff like Iphones and computer chips that we were originally supposed to hold on to when this outsourcing thing got started) to East Asia, the extent to which IT/telecommunications has enabled the emergence of these sorts of global supply chains, the tremendous growth in China's IT sector, the general pattern of hegemons only holding on for one or at most two k-waves, you can make a substantial argument, as you begun to in your last post, that China may in fact be the locus of the next k-wave/future hegemony, and the chief beneficiary of the tail-end of this one.

Just something to consider.

(01-03-2017, 03:57 PM)Warren Dew Wrote:

(01-03-2017, 02:07 PM)Mikebert Wrote: I first look at innovation wave/leading sector stuff in the 1990's.  Back then I saw the K-peaks in 1864, 1920 and 1981 and the period of strong growth afterward 4.7% (1866-73) 4.8% (1921-29) and 4.4% (1982-89) as the same points of time in the K-cycle.  These periods were followed by downturns and then a period of very strong growth afterward: 8.9% (1877-81) and 9.4% (1933-37). Both of these periods occurred during growth phase of cluster of leading sectors, or "new economy" as Harry Dent puts it. The previous growth phases ended in 1888 and 1937 for the industrial and mass-market economy, respectively and the current one was forecasted to end in 2007. Based on this concept I anticipated strong growth in the late 1990's, not as strong as in 1877-81 or 1933-37, since these were coming off economic lows, but still stronger than what was saw in the 1980's.  Didn't happen, growth over 1996-2000 was the same as in the 1980's.

This was all before generations. In 2000-1 I added the idea of generations to my thinking and concluded that the K-cycle was longer today than its historic 50-60 year length. Based on a correlation between the start of K-winter and the 4T in 1929, I took the apparent 2001 start of the 4T as evidence that K-winter began in 2000.  This makes the economic boom over the 1982-2000 bull market cycle equivalent to the 1861-81 and 1921-29 bull markets, for which growth averaged 4.9% and 4.8%, respectively.  Growth over the 1982-2000 bull averaged only 3.7%, a bit less but not way out of line.

But that wasn't right.  We now think 2008 is a 4T start and I did confirm that 2008 was a 1929-equivalent economic event.  So this means the analog to 1921-29 is now 1982-2007 for which average growth was only 3.2% due to poor growth of 2.7% over the 2001-2007 expansion.  In other words during the growth phase of the information economy growth was strongest in the 1980's before the internet, when PCs and floppy disks were cutting edge. The addition of much more capable machines, capable hard drives, and the internet (which changed everything so said the stock market boosters in the nineties bubble) gave us slightly slower growth.  Then after 2000, broadband, B2B and social media, brought us even slower growth. Adding smart phones since 2007 and a lot more social media hasn't helped--growth over 2009-15 was even slower at 2.2%.  These leading sectors aren't powering growth like they used to.  If what you say is true about all this huge spending on IT infrastructure creating growth, then it would show up in the numbers.

Why do you think the k cycle and the generational cycle have to be aligned?

Quote:That was obvious in the 1990's. Who else had the potential?  But my analysis suggested China would not emerge a hegemon until mid-century.  Typically a new hegemon first reaches economic dominance (US in the 1880's) then financial dominance (US after 1914) and then finally hegemony (US in 1943).  Since China was not scheduled to overtake the US in GDP until the 2020's or so, I wouldn't except this to translate to hegemony until around 2060.  At this time I was operating with a 70 years cycle: 1918-1991 and 1992-2060.  Hence a second round of US hegemony.  I showed you all this already Jordan, so why are you rehashing it?

Quote:And why come back as an alias?  Why not use your old handle?