12-30-2016, 06:33 PM
Quote:It all comes down to the end consumer. GDP is essentially net sales of the economy. It is a small share of total sales, because much of a firms revenues comes from other firms and so serves and inputs into other company's cost structure. You entire firm is such an input, it is a cost entry in another company's books. You exist because they got ride of some other cost element.
Oh, absolutely. The rabbit hole goes even deeper. My firm is indeed essentially a replacement for work company's used to do themselves, but my firm in turn contracted out a lot of its work to other vendors, and I was hired to a newly created position precisely to bring some of that work back in house (I've reduced the main vendor's invoices by 40%, another 20% and I've justified my salary on a continuing basis. In your face, <vendor name withheld for legal reasons>!), as well as free up time that my coworker used to spend doing things "by hand" in Excel. It's classic Ronald Coase stuff.
Quote:A big chunk of tech is supported by advertising. As long as advertising remains a fixed percentage of GDP all this sort of tech is a zero sum game, jobs gains by tech workers are offset by job losses elsewhere. The only way that advertising-linked tech would be a growth center would be in advertising grew as a % of GDP. But in this case you would have the cost of the stuff being marketed go up with not actual increase in quality or utility. It would be artificial.
This is true, but only partially so. While those tech companies made their money by cannibalizing old media, they did so because they provided more value to the people paying than their competitors, and they do so because they provide more value to the consumers. Benefits can be externalized just as easily as costs.
The same can be said of the education industry, although in my wholly unbiased opinion the whole industry is ripe for disruption.
Quote:A similar thing has happened with finance. A certain amount of financial services are need to serve consumers. Most of it is for business and so in a cost input, as is what you and I do and the rest of the burden. Some of this is necessary and serves to enhance output, like the work of process improvement specialists (inventors, product/process entrepreneurs, scientists, engineers, designers etc) have done over the last century. Others are not. A level comes where further effort in finance is counterproductive as described here.
No argument here.
Quote:A similar effect (but to a lesser extent) is present in healthcare.
Still no argument. You covered this ably above.
Quote:Now, this is not some sort of conspiracy. It is not intentional, nor some sort of welfare for highly educated people. The same is true of the platform company. It is simply something that has happened. But the soaring costs of higher education and healthcare have been revealed as problems. The costs of excess financialization have become clear. Is further burden expansion is these areas going to be feasible? How long can this continue. This is what Dave is noticing. He's not completely right. You made an excellent point on how burden expansion has prevented much of the job loss so far. But he's not completely wrong either.
Sorry, had to fix that one bit. That's what that word is for.
I still find your use of the word "burden" to describe all of those activities as tedious. You've already addressed it, and I understand the reasoning then for using it up to a point, but you're missing the bit where these sorts of services (at least most of them, there is indeed a great deal of rent seeking going on as well) are meeting a demand for <what have you>. I do have a fair amount of bias towards goods-producing industries, but services are still perfectly normal economic transactions.
And no, Dave does not have a point, because he has been arguing for the inevitable replacement of ALL jobs within 30 years by machines and clever software programs. This claim has not been proven here, and I have very little faith that it will be, judging on what I've seen thus far.