"Most people are in arrested development and cannot use logic." Jacob.
"Competition and capitalism are hated to-day because of their tendency to destroy poverty and privilege." William Hutt
"America is unique in that our economy is totally dependent on global charity." Peter Schiff

Tuesday, September 20, 2011

About them Auto Plants

This is a continuation of the previous article. My good friend was bemoaning [correctly] the current state of affairs, but in my humble opinion, had things misdiagnosed. We are up to his fifth assertion.

5. Modern auto plants use automation to such an extent that there are almost no people there. Clearly, they are not interested in people, or in giving them jobs.

1. For a free market to succeed, meaning make everyone wealthier, there is no need for anyone to be interested in people, or in giving them jobs. All you need is greedy people, and a check on these people commiting fraud or violence. Thus, the only way they can make money is by giving people what they want. If they are good at giving people what they want, they will find it profitable to hire workers to churn out what the people want. This is how jobs have always been created throughout history.

In fact, how else can someone have a job? If the worker is not making a profit for his employer, how can that job last? A clear instance of trying to create unprofitable jobs is the current US economy. The federal, state, and local govts "created" jobs that did not pay for themselves through profits, and drove themselves into bankruptcy. Exactly where we are now.   

People are sorry to see all these govt jobs go, but the reality is they were all parasitic jobs and we are all [but for the parasites who held the jobs] better off without them.

2. On a moral level, it is certainly immoral to expect Mr A. to provide a job for Mr B. What right do we have to place such a burden on Mr A? Why do we not reverse things and say Mr B. has a responsibility to provide a job for Mr A?

3. The auto plants resorted to animation because the govt has made it unprofitable hire people. Ask any small businessman what his main concern is these days, and he will tell you that he wants to avoid hiring anyone if possible. This is particularly true in the auto industry, where unions have been allowed to run riot and leech money from the workers and the owners alike. [GM has admitted it is making its Volt at a cost that makes it unprofitable]. Add to that the minimum wage law, and is it any wonder that auto plants are automated?

4. Ever since the Luddites, some people have feared technology and automation. While those who will lose their jobs to automation may have some justification for this fear, the rest of the world only gains by automation. Because the automation was introduced to reduce the costs of production, meaning that the final product will be cheaper for us all.

As for the fear that machines will someday make everything and we will all be unemployed, are we really all that pathetic that we have no useful skills whatsoever? The idea is absurd.

Summing it all up, we are certainly in a mess now. Sadly, very few people have any clue what the mess we are in really is, how we got there, and how to get out of it. For example, some say the nature of our mess is "lack of aggregate demand" [Keynesians]. Others say it is not enough paper money in circulation [Monetarists and MMTers]. Still others say it's some inherent flaw in the free market, which is predicated on exploitation of the worker [Marxists]. The latest nonsense asserts that we are all drowning in debt because money in the USA is "created" as debt [Whatever they are called]. Many think that the problem is Capitalism Gone Wild [Statists and fascists, but I repeat myself].

Well guys, become one of the enlightened. Smiling Dave has written almost a hundred articles for your enjoyment and education, all based on rock solid Austrian Economics. Read them, think on them, chuckle at their gentle sarcasm, ask questions.

And to you, my good friend who I hope is reading this, good to be chatting with you again through this medium. Just like old times. 


  1. "As for the fear that machines will someday make everything and we will all be unemployed, are we really all that pathetic that we have no useful skills whatsoever? The idea is absurd."
    This is very weak argument. I would use something like unlimited needs of humans create unlimited job opportunities (on unhampered market) instead.

  2. Much like old times. Reading your post made me realize I had been experiencing cerebral atrophy, which is another symptom of the current societal system.
    [..We are certainly in a mess.] I am glad we can agree on that. My question is "What will be triggered as 'things' get worse, and who will be involved?". Global Revolution 3.0 is what I have called it, but whether it is peasants with torches and pitchforks, AI and social media, or divine intervention, something is brewing.
    I have no reason to think "we" are doomed unless consideration is made to astronomical events.
    My original assertion was that a company's primary objective is to make profits for its stockholders and it has no obligation to the general populous, society or environment.
    If you need an example of what can happen, read Sweet $1.9Bn deal.

    Thanks Smiling Dave, you have stirred me to write and, more importantly, think some more.

  3. What will be triggered etc?
    Your guess is probably better than mine. You've heard about the flash mobs in various cities in the US? I expect that to spread. And whatever is happening in Greece and other European places will probably happen here, only more violently, since the govt here will over-react, I imagine, using live ammo and not, say, water hoses.

    Dave, about that Florida deal. Note that the govt has its paw print all over that thing. Of course given that you can make more money paying off some party leader than by actually doing something useful, that is what will happen. And of course given the party's legal protection of the company that is what will happen. In other words, the root problem is govt, not companies.

    Why do I not see something on your blog like "a politician's primary objective is to make profits for his pals and has no obligation to the general populous, society or environment"?

    BTW, why should there be funding for Dixie County projects? If there was money to be made with those projects, wouldn't some private agent want to do it?

    Look at Solyndra, a perfect example. The company was unable to get any private money source to give them a dime. The politicians in their wisdom thought they knew better. They were willing to risk, not their money, but ours, on Solyndra. Result: bankrupt in 2 years, 500 million dollars down the drain.

  4. It is Man who is behind both Companies and Govt. therein lies the root cause. We are collectively to blame for our problems, but do not seem to accept any responsibility.

    Clearly there is a disparity between what politicians do and what they say. The ends justify the means is not a reasonable excuse.

    I only reported the meetings, until they depressed and angered me. Man's inhumanity to Man.

    As you say, that $500M is somewhere (probably up something rather than down, else that would be trickle down (which also does not work)), and as you say Solyndra is a perfect example of all the above and more.

    BUT the idea behind Solyndra IS what we should be seeking (IMHO), at least it could be part of the solution.

  5. This commenting system is crap. I can't even reply to your specific comment Smiling Dave. And there is no threaded view ;)
    I think your argument is weak becuse employment does not necessarily require presence of useful skills.

  6. By useful I mean skill that is not commonly shared by everyone else. For example to me cleaning jobs do not require useful skills. Computer programming does.

  7. To Dave Ryman's comment, which I quote:
    "BUT the idea behind Solyndra IS what we should be seeking (IMHO), at least it could be part of the solution."

    That may be, but who is Obama to use my money [at gunpoint] for what he thinks we should be seeking? If anyone thinks we should be seeking Product XYZ, let him use his own cash and go seek it.

    To Anonymous who wrote: I think your argument is weak becuse employment does not necessarily require presence of useful skills.

    Not sure what you mean. If I have a useful skill, by definition I can produce something people want. So someone will hire me to produce it, or I will make it myself.

  8. To Anonymous:
    OK, let's summarize. If useful means something not commonly shared, then perhaps it's weak to say we all have useful skills.

    But I meant by useful skill "able to produce something someone wants, whether commonly shared or not". I think that with such a definition, I am close to your argument of unlimited needs etc.