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The Internet's Network Efficiencies Are Destroying the Middle Class 674

Hugh Pickens DOT Com writes "Joe Nocera writes in an op-ed piece in the NYT that the same network efficiencies that have given companies their great advantages are becoming the instrument of our ruin. In the financial services industry, it led to the financial crisis. In the case of a company like Wal-Mart, the adoption of technology to manage its supply chain at first reaped great benefits, but over time it cost competitors and suppliers hundreds of thousands of jobs, thus gradually impoverishing its own customer base. Jaron Lanier says that the digital economy has done as much as any single thing to hollow out the middle class. Take Kodak and Instagram. At its height, 'Kodak employed more than 140,000 people.' Kodak made plenty of mistakes, but look at what is replacing it: 'When Instagram was sold to Facebook for a billion dollars in 2012, it employed only 13 people.' Networks need a great number of people to participate in them to generate significant value says Lanier but when they have them, only a small number of people get paid. This has the net effect of centralizing wealth and limiting overall economic growth. It is Lanier's radical idea that people should get paid whenever their information is used. He envisions a different kind of digital economy, in which creators of content — whether a blog post or a Facebook photograph — would receive micropayments whenever that content was used. 'If Google and Facebook were smart,' says Lanier, 'they would want to enrich their own customers.' So far, he adds, Silicon Valley has made 'the stupid choice' — to grow their businesses at the expense of their own customers. Lanier's message is that it can't last. And it won't." The micropayments for content idea sounds familiar.
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The Internet's Network Efficiencies Are Destroying the Middle Class

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  • by Luthair ( 847766 ) on Tuesday January 07, 2014 @10:27AM (#45887083)
    Kodak was replaced by a whole slew of companies that make components for digital cameras, cell phones, picture hosting, digital frames, etc.
  • Here We Go Again (Score:1, Insightful)

    by Anonymous Coward on Tuesday January 07, 2014 @10:28AM (#45887089)

    It's the Internet's fault! It took ur jerbs! It is wrecking the middle class. The Internet cause the financial crisis, not unmitigated greed and stupidity.

    Give me a fucking break. How did this half-wit get published by the NY times?

  • by cbeaudry ( 706335 ) on Tuesday January 07, 2014 @10:32AM (#45887137)

    This guy is a moron.

    He's completely ignoring all the new jobs in the last 10-15 years that have been created over the years:

    - Build and maintain networks
    - Building data centres (construction)
    - Network management and services (ISPs, etc...)
    - IT support (hundreds of thousands of jobs and probably millions, small consultant companies and mom and pop shops)
    - Research has tremendously increase

    Seriously, his story is almost the same as "Robotics and Automation" is stealing all our jobs. But then they forgot the support industry for these new technologies.

    Things change, its the way of things, people need to adapt and go back to school... or become salesmen :)

  • by Anonymous Coward on Tuesday January 07, 2014 @10:35AM (#45887155)

    and these also talk to this...

    You can not create economic scarcity where there is none today. Not without adding some sort of value to it. It is why many websites have failed when they decide to put up a paywall. People are used to 'free' as in 0 dollar cost (usually some sort of time cost). When you start to charge for it people may just decide it was not even worth free.

    If you go thru with this plan all you will do is end up hurting everyone.

  • which rich people?

    silicon valley elite, sure

    plutocrat class based on manipulating rules?

    does not apply

  • by Jason Levine ( 196982 ) on Tuesday January 07, 2014 @10:35AM (#45887167) Homepage

    Here I thought the financial crisis was caused by lenders approving loans they knew people wouldn't be able to pay off and then packaging those loans together and pawning them off on other people and so on through the pyramid until the entire scheme inevitably collapsed. Nope. It wasn't greed on the part of the bankers and lenders. It was the Internet! Technology is to blame. And do you know who's behind technology? Scientists! Yup, if we'd all go back to being completely ignorant and subservient to the rich folks who tell us what to think then everything would go back to those wonderful days when everyone was happy.


    Wait... who put these extra-strength rose colored glasses on my face?

  • by 93 Escort Wagon ( 326346 ) on Tuesday January 07, 2014 @10:38AM (#45887191)

    I stopped reading the summary right there - that was one of the dumbest things I've seen claimed in a long, long time.

    Maybe network efficiencies caused Hurricane Sandy to hit New York, too...

  • by davidannis ( 939047 ) on Tuesday January 07, 2014 @10:40AM (#45887213) Homepage
    even if the problem was not oversimplified. The problem is less that productivity increased but more that political power is more concentrated. I get micropayments for some of my content now, using Google's adsense. It's not enough to buy a cup of coffee a day and I've worked at it. Fundamentally, the problem is how society is structured and the balance between the power of labor and capital. We've seen other great revolutions in productivity from the agricultural to the industrial revolutions. When society distributes those gains more equitably, civilization flourishes and standards of living go up.
  • by Anonymous Coward on Tuesday January 07, 2014 @10:41AM (#45887221)

    I think you might be missing the point. He's saying that the new information/digital economy requires less people to run it and is therefore reducing the overall number of jobs.

    Whether he chose Instagram/Kodak as an example or any of a variety others doesn't really matter. His point isn't wrong. Though I think the micro-payments that he's pushing sound like permanent DRM and something out of Stallman's "Right to Read" story.

  • by i kan reed ( 749298 ) on Tuesday January 07, 2014 @10:43AM (#45887239) Homepage Journal

    Because "divert blame from the upper class" has become a lucrative job with lots of cash coming in.

  • by gmclapp ( 2834681 ) on Tuesday January 07, 2014 @10:45AM (#45887247)
    The reason you could only have black was because at the time of the assembly line's advent, the only 'fast-drying' paint available was black. When GM came along, different colors had been developed to meet the demand. Which Ford also used.

  • by Ralph Spoilsport ( 673134 ) on Tuesday January 07, 2014 @10:50AM (#45887293) Journal
    Marx barked about this back in the 19th century. This is not news. The most expensive part of a business is labour. If profit is the most important thing, then labour must be squeezed. So, if online profits are the most important thing, then online labour at no cost is perfect. Lanier is wrong - this is not a call to micropayments, this is a call to (a non-soviet form of) socialism, a socialism of organised networks based on telekommunist principles of contribution and guaranteed wages in a socialised economy.
  • by TWX ( 665546 ) on Tuesday January 07, 2014 @10:53AM (#45887329)
    Unfortunately there's way too much neglect in the industry right now. I drive around the city that I live in and more than half of the pedestals are cracked open, with plastic bags wrapped over the distribution blocks to keep water off of them. The cable and phone companies are neglecting their infrastructure and given the number of years that this has been a problem, they don't seem interested in hiring the staff or paying for the materials to fix these problems correctly.

    As far as data centers, network management, and the like, the industry has headed toward ever smaller and more powerful machines, virtualization, and equipment that needs less knowledge to support it. Autoprogramming switches, that sort of thing. It's also becoming more prevalent to outsource instead of having staff on-hand, so that's not exactly helping to push us toward full employment either.

    In short, it's all screwed up.
  • by Applehu Akbar ( 2968043 ) on Tuesday January 07, 2014 @10:53AM (#45887337)
    Also because "blame technology for its inherent evil" is the default reaction to technological change of the academic handwringer class from which our journalists and columnists are drawn.
  • by Anonymous Coward on Tuesday January 07, 2014 @10:54AM (#45887341)

    Took the words out of my mouth. Automation is change and change can be very harsh. One thing about change is that it's futile to try and prevent it or hope that it won't happen. Technology at its core displaces technologies before it. Either go with the flow and learn to take advantage of it or get swept up in it's aftermath - a tough pill to swallow for some but a harsh reality.

  • by multisync ( 218450 ) on Tuesday January 07, 2014 @11:02AM (#45887431) Journal

    Not only that, Lanier seems to be confused about who Facebook's customer is. Hint: it's not the user.

  • by bravecanadian ( 638315 ) on Tuesday January 07, 2014 @11:03AM (#45887455)

    I think it is only one of the methods.

    We might have finally reached the tipping point where there will be no new sector for all the displaced workers to migrate to.

    Agriculture > Industry > Knowledge workers.. each shift seems to have required progressively less workers which is why we now have the Service sector. ie. crap jobs where people are treated like disposal items.

    With the price of automation falling and the playing field internationally being so unfair to manual labour in most developed countries.. how can there continue to be a middle class? I don't see it.

    Where are displaced people supposed to find jobs now when every industry has become more and more efficient with technology while using less and less people?

  • by trackedvehicle ( 1972844 ) on Tuesday January 07, 2014 @11:09AM (#45887523)

    I decided to log-in and repost my answer as non-AC:

    In both cases (digital economy/Internet and robotization) the net result is increased productivity and a smaller workforce. It is true that some new jobs are created, but they are fewer than the ones replaced.

    The only solution, really, is some sort of socialist system, with higher taxes for the high-earners so that everyone has a fair share of the increased productivity. And with bigger strides in robotization, this will be mandatory, or else we'll have revolts and heads will literally roll, which would be unpleasant.

  • Re:Whinging (Score:5, Insightful)

    by Chrisq ( 894406 ) on Tuesday January 07, 2014 @11:14AM (#45887585)

    I'm sick of explaining to the kids that I cannot afford a PS4 for their Christmas because travel costs to work are going up and tax allowances being reduced, at the same time that kids of a single mother who works in Tesco's part time can easily afford it - and then tell us how a charity is giving them a holiday in Benidorm in the summer. I'll be lucky if we can afford a week in Southend-on-sea.

    This sounds to me like you have chosen to live in the suburbs, too far from work. It sounds like you could afford a PS4 and more if you did one or more of the following things: Find a job closer to home. (perhaps, Tesco.) Moved house closer to work. Got on the dole , like the Tesco part-timer you facetiously cited.

    Partly true - tough my job moved further from me. Moving has a very high fixed cost (stamp duty on buying a new house, estate agents fees, solicitor's fees, and the actual move). With the workplace in a more expensive area moving would probably never save me money, and certainly the payback time would be many years. not to mention kids are settled in school.

    You're right though, from a percentage aspect and a total volume aspect, the middle class is providing the greatest tax revenue. The extremely wealthy individual is paying a lower percentage than yourself, but they are also paying many orders of magitude more actual pounds than you ever will. And, lest you forget, the middle class are also the largest consumers of said tax revenue. Roads for you to get from the burbs to work, public transport, police, fire brigade... the middle class majority consume the majority of these services. If you look at it objectively, the current system is "largely" fair.

    It doesn't make you feel any better, but it does sound like you are avoiding some very logical decisions that could change your circumstance, but you choose not to.

    Though as a group they are the largest beneficiaries individually they are not. The lower paid get many benefits, and you only have to hear about how much some of the ultra-rich get for "set aside land", grants for maintaining their "buildings of historical interest", and schemes like the Duke of Northumbaland's "Alnwick garden charity" that gets grants and lottery money to improve the land - that will revert to his personal ownership after 20 years.

  • by MightyYar ( 622222 ) on Tuesday January 07, 2014 @11:18AM (#45887627)

    they waited too long to go digital, and they screwed it up when they did go mainstream digital.

    They didn't wait too long - they were one of the first, if not the first, to go digital. Their cameras were also good sellers. What Kodak couldn't cope with was the change in culture needed to go from the insanely high-margin consumables business to the insanely low-margin commodity camera business. The Kodak of the 1980s would never even want to be a Nikon or Canon.

    Anyway, Eastman Kodak didn't really go away. The chemicals division is still cranking out chemicals, having been spun off in 1993 and still sits in the Fortune 500. Much of the valuable business was sold to other companies. Even the old films parent company still exists, though only in the commercial world, and it has over $4 billion in revenue.

  • by Joce640k ( 829181 ) on Tuesday January 07, 2014 @11:21AM (#45887653) Homepage

    I think you might be missing the point. He's saying that the new information/digital economy requires less people to run it and is therefore reducing the overall number of jobs.

    Whether he chose Instagram/Kodak as an example or any of a variety others doesn't really matter. His point isn't wrong. Though I think the micro-payments that he's pushing sound like permanent DRM and something out of Stallman's "Right to Read" story.

    The counterpoint is that the cost/ease of photography has dropped almost to zero (it was also an incredibly polluting industry that we're better off without...)

    Yes, 140,000 people had to find a different job but the overall productivity and cost of living improved for the other 7 billion living on the planet.

    Mr. Joe Nocera should be made to walk everywhere and not use any electricity for month or two before he's allowed anywhere near a modern word processor again.

  • by Above ( 100351 ) on Tuesday January 07, 2014 @11:23AM (#45887683)

    Actually I think if you look at the number of jobs created in those industries, and a realistic picture of the number of jobs they replaced in other industries the numbers are still significantly negative.

    Let me use one simple example of the old way, compared to the new way, looking only at jobs in America. 20 years ago a product built in China would be shipped here on a boat. A team of 20 or so long shore man would unload the boat. 200 truck drivers would take the goods to an importers warehouse, employing another 200 to sort them. 5 customs inspectors would go over everything on the boat and make sure it passed muster. Another 200 drivers would set out across America to middle man warehouses. Each of those 200 warehouses would employ another 200 people to unload the trucks, break down boxes, sort, pick, and build new bundles, and send them to mom and pop stores in their area. Each mom and pop store would then employ 10-20 people to stay operating.

    The new way is that your iPhone is ordered online by a computer run by a fraction of personafter all a sysadmin these days can take care of a few thousand machines. It is made in China and put on a FedEx plane. A team of 3 pilots brings it to the US. 1 customs inspector spot checks a few things match the computer generated invoice. Perhaps a hundred folks at the FedEx shipping center help sort that package. Another 3 pilots take it to the destination city, where 1 loader puts it on a truck for 1 driver to drop off at your door.

    That is supply chain efficiency. No inventory in warehouses, which means no warehouses. No middle men. No or limited retail stores. Handle the package a minimum number of times, don't let it sit around collecting dust and depreciating while tying up capital. It's all driven by computerized supply chain management.

    And this doesn't even address the issue that many of our goods are so cheap now as to be disposable, eliminating whole industries of repair. Remember when their used to be TV Repair Shops? Yeah, those all went away when a new TV became $200.

    So yes, there are millions of new jobs, but there's also no shortage of information suggesting that workers are more productive with technology, which means one new worker can do the job of more than one old-school worker. That's net negative for the job market. When we were at full employment that was good, freeing up some people to do new things, but now that we're at less than full employment it could quickly become a downward spiral as there are no new jobs, people go unemployed, lose skills, and stop contributing to the economy.

  • by rjstanford ( 69735 ) on Tuesday January 07, 2014 @11:30AM (#45887765) Homepage Journal

    Very true. With companies not "sharing the wealth" and favoring owners over employees in almost every case, this becomes a very real problem since most people are employees first and foremost (often only).

    There's plenty to go around, too - our country's GDP is booming. Its just that none of that wealth is being shared. Oddly enough, the pain when a recession comes is shared very quickly.

  • by MightyYar ( 622222 ) on Tuesday January 07, 2014 @11:31AM (#45887775)

    There are many problems, and we aren't going to work them all out on Slashdot :)

    One reason that people work at McDonald's with college degrees is that the traditional, elite "liberal arts" education is sold as a job-getter to non-elites. Sure, a wealthy man can find a job for his liberal-arts educated son. Good luck to the liberal-arts educated guy whose dad is a factory worker, or even in prison. For most people in the middle or lower classes, college should be used to develop an actual skill. A liberal-arts education is great, but it is a luxury unless one can be assured that they will attend graduate school.

    With the disappearance of factory jobs, we really are leaving our high-school graduates hanging out to dry. Good paying jobs require more skill now, and I think if we want to maintain a non-college track, we should seriously consider extending free pubilc education through associates-level courses.

    Massive numbers of factory jobs are gone. Probably forever. We can blame robots, China, or whatever but the reality is that they are gone. We need to be realistic about what the next generation of kids needs to have a shot at a middle class lifestyle.

  • by Koreantoast ( 527520 ) on Tuesday January 07, 2014 @11:34AM (#45887797)
    Completely agree: the economic impact of this shift cannot be overstated. This shift is what's driving the hollowing out of the middle class: all of those white collar, skilled jobs are being wiped out by greater efficiencies. True, it's probably employing a software programmer somewhere, but that is at the expense of thousands of paralegals and even lawyers. The brutal reality is this: the system rewards the small handful of top performers at the expense of thousands of rank and file / competent but mediocre folks underneath them. Society is going to have to figure out what to do with all these people, or there will be hell to pay.
  • by djdanlib ( 732853 ) on Tuesday January 07, 2014 @11:35AM (#45887807) Homepage

    I partially disagree. The point may or may not be good, that is irrelevant to the parent poster's gripe. If an author wants the audience to respect his point, his supporting writing needs to be good. If he gives me comparisons that bad, I have a hard time believing the rest of the message was any better thought out.

    Specifically, the issue is a comparison of a photography company that decided not to pursue digital for fear of cannibalizing paper and film, versus a company that made software which takes already-processed digital photographs and applies filters and shares the images. It's a very bad comparison of a source to a processor, like comparing a farmer to McDonald's, or a miner to an auto repair shop, or pizza & Mtn Dew to a programmer. There are a lot of large camera companies (mostly cell phone manufacturers) that I would call equivalent to a new Kodak, and that would have been a great comparison.

  • by the eric conspiracy ( 20178 ) on Tuesday January 07, 2014 @11:43AM (#45887881)

    Just write in railroad everywhere you see internet.

    It's pretty idiotic. The internet led to a massive economic boom in the 1990's. 10's of millions of new jobs created.

    What we are suffering from now is the aftermath of a debt collapse that has nothing to do with the internet.

  • by leonardluen ( 211265 ) on Tuesday January 07, 2014 @11:43AM (#45887885)

    I think part of the reason they tried to sweep digital under the rug was that they were always a film company, not a camera company. even you lament the loss of their film, not their cameras. Kodak was essentially trying to sell the disposable blades for the razors.

    Indeed their downfall was inept management, it was mostly wishful thinking on their part that they could just forget about digital. at least from their perspective printing was a very logical step from film. the printers needed a bunch of disposable items such as paper and ink, very much like film in a analog camera. what they failed to notice is that people were happy viewing their pictures on a screen and didn't need to have them printed out as much..

  • Baby steps - (Score:4, Insightful)

    by Darth Snowshoe ( 1434515 ) on Tuesday January 07, 2014 @11:47AM (#45887915)

    It would be an awesome first step if we could all just agree that the middle class (at least in America) is in decline from what it was one generation or two generations ago, and that that has several bad consequences, and that we should try to think of ways to reverse this trend.

    I think it would be reasonable to admit that it does look as though a lot of currently-existing good-paying jobs (and even notso good) are being automated away, and that we don't really have much sense of what jobs all those displaced workers might be doing a decade or two in the future. I can easily google up lots of examples of current attempts at automating away whole classes of workers - bus drivers, teachers, care-givers for seniors, farm workers, guards and night watchmen, legal and actuarial staff. Logically, if the costs per unit output were more for these automated methods, (once the design, support, IT etc was included) than for the labor-intensive solution, then no one would be pursuing them. I don't see anything in recent economic history that leads me to believe the higher profits yielded by these automated techniques will be shared with the remaining workers. I doubt that too many of the displaced bus drivers or farm workers are ever going to be retrained as robot maintainers (or whatever new jobs are created.)

    Most likely outcome: management is going to develop and use automation wherever it can, let go as many workers as the automation allows it to, and keep the profits. Productivity goes up, but the remaining workers don't get much in higher wages. Economic value (e.g. money, capital) continues to be concentrated at the top of the economic pyramid, where it is stockpiled and rendered useless.

  • by MarkvW ( 1037596 ) on Tuesday January 07, 2014 @11:56AM (#45887999)

    We're getting Wal-Marted to death, and the libertarians want to argue about Kodak.

    There's no convincing them. They'll be touting the virtues of the unrestrained free market right through the next depression.

  • by ErichTheRed ( 39327 ) on Tuesday January 07, 2014 @11:57AM (#45888001)

    I do worry about what's coming next for the middle class, and that's coming from someone who's firmly in the "knowledge worker" camp. The reality of this is that the traditional "corporate drone" job is rapidly being replaced by software automation or cheaper labor. Futurists who see a bright Star Trek-style utopia at the end of this change, in my opinion, are overlooking some very big problems:

    - The loss of safe, stable corporate employment is going to cause a huge shift in people's standard of living. There are millions of people who get up, get in their car, go to an office, take a stack of input work, perform some process on it, forward it to the output queue, and repeat this 5 days a week. I think most IT people can relate -- we support lots of people doing these jobs. All of that is going to disappear. Now you're going to have a chunk of the population who is suddenly unemployed, broke, and has no way to support itself to the same standard. Think about the office environment of the 60s vs. now -- no more secretary, no more typing pool, way fewer bookkeepers, way fewer middle managers. All those workers in the 60s made enough to buy houses, cars, vacations, etc. and keep the economy running. Now most people who want to consume are forced into debt.

    - There's no getting around the bell curve. It's impolite to say, but not everyone is or can be a knowledge worker. (I'm no genius either, so I'm not trying to be snobby or elitist.) We've already hollowed out the lower end of the curve by killing manufacturing jobs. Someone with an IQ of 98 is much better suited to performing a repetitive assembly line task with no independent thought. Those people used to be able to work in factories at a wage that at least allowed them a few nice things once in a while. Now, all those people are working minimum wage jobs or unemployed.

    - Right now, there is no appetite for ideas like providing everyone a subsidy. Unemployment insurance in the US is a joke and the idea of a universal income will never fly with those who have more than average.

    I definitely don't want to go back to a world without computers and automation, but I think we need to seriously consider the problems that complete automation of all routine tasks will create for society in general. The standard answer when anyone brings up concerns is that better, new jobs will get created. What will these be? I can't see a future form of employment that takes the full spectrum of people's abilities into account and makes everyone's lives better. When you can't even fall back on fast food, or driving a taxi, what's next??

  • by Clint Jaysiyel ( 2872249 ) on Tuesday January 07, 2014 @12:00PM (#45888027)
    Wrong. Flat tax is a bullshit idea that benefits the rich the most. Money's value to an individual is logarithmic, not linear. Taxing a billionaire 10% and a homeless man 10% is NOT fair, and it's simplistic to think it is.
  • by mlts ( 1038732 ) on Tuesday January 07, 2014 @12:02PM (#45888041)

    Correction: MBA-101.

    In the MBA course, one is taught that workers are fungible. However, there is one of many problems with that line of reasoning... when morale hits the skids in a company, internal security issues start manifesting themselves, which wouldn't have appeared otherwise, and it might be that the cost of hiring consultants and whipcrackers to bolster internal security is a lot more than just paying a competitive wage and being sparing with the pink slips.

  • be prepared (Score:5, Insightful)

    by PopeRatzo ( 965947 ) on Tuesday January 07, 2014 @12:03PM (#45888055) Journal

    If you want to replace people with "efficiencies" then be prepared for, and learn to live with, a larger welfare state.

    You only need so many greeters at Wal-Mart. Only so many domestic workers. Further, there is a limit to how much a domestic worker will be paid. Remember, in the England of "Upstairs/Downstairs" the domestic workers were forced to wear different bonnets to church so they wouldn't be mistaken for proper ladies. Rich people don't want poor people to live as well as they do.

    We just might be reaching a point where there just aren't enough new things for people to do to make a living. So, we can either accept that we will have to have a larger, more equitable and robust welfare state, or start being willing to embrace some very ugly solutions like mass population reduction. And except for the most ardent neo-libertarians, people usually aren't comfortable with forced population reductions.

    The thing you CAN'T have when people are being put out of work by efficiencies is an expectation that people work longer hours for less pay and higher productivity.

    Here we are, in the 21st century, and people are working longer hours. I don't think technology was supposed to result in people working harder, and more people at the bottom. Technology wasn't supposed to result in less economic and social mobility. Technology wasn't supposed to result in a lowering of standards of living and greater economic uncertainty.

    You want that increased efficiency? Then be prepared for people working fewer hours for more pay. For two or three people doing jobs that were once done by one person. And for a much stronger social safety net.

  • Not so simple... (Score:2, Insightful)

    by MaWeiTao ( 908546 ) on Tuesday January 07, 2014 @12:10PM (#45888113)

    The problems we're experiencing aren't a consequence of technology, they're a consequence of society. People at all levels are becoming increasingly self-centered and the labor force has become marginalized. I see it all the time; people live in big homes and drive expensive cars, but they skimp on tips at a restaurant. Companies can't afford a few extra employees but can splurge and the latest gadgets and generous salaries for management. Everyone cries poverty when it comes time to actually pay someone.

    Not that this self-centered mentality doesn't affect all income strata. Work ethic in this country leaves a lot to be desired and there are a whole lot of people out there expecting a lot for nothing. But those people at the bottom aren't the ones necessarily making the biggest impact on society. I do think, however, that there's a distinct tendency to want to offload responsibility on someone else. It's always the other guy's fault, especially if that guy is higher up the chain.

    So the tendency is to blame corporate executives. But I remain convinced that the single biggest problem is the middle management. There are legions of these incompetents enjoying inflated salaries managing everything corporate America does. They're the ones always spending to the limits of their incomes, who's sole existence is defined by protecting their own jobs at all costs. They stifle innovation because they don't want to rock the boat. When it comes time to evaluate performance however, they always take the easy route by cutting spending. And cutting spending never means identifying true inefficiencies, it means laying someone off.

    This is not to discount the impact of culture which continues to perpetuate the mentality that you can amass a fortune with minimal investment and a tiny, often outsourced workforce. That doesn't hold true for a lot of companies, but it doesn't keep people from trying.

    I keep seeing two often repeating arguments here that irk me:

    The first is that buying expensive is inherently better. Often times the expensive stuff is made in the same sweatshops as the crap at Walmart. The difference being that you're paying extra for somewhat better materials and a bit more quality control. But really, the main thing you're paying for is an inflated marketing budget. Then at the other extreme you're paying some hipster in Brooklyn to produce something in the most inefficient manner possible. There is a reasonable middle ground in manufacturing, but it's becoming increasingly rare in this country. Often times when you're paying for "made in the USA" all you're paying for is low-grade assembly. All the important components is still manufactured overseas.

    The second annoyance is that a more socialist system is a panacea. Europe is suffering most of the problems we are. And China, for all it's talk of communism is even more exploitative of it's own people than Americans could ever dream of being. You haven't seen income inequality until you've been in China.

  • by ShanghaiBill ( 739463 ) on Tuesday January 07, 2014 @12:27PM (#45888277)

    a photography company that decided not to pursue digital for fear of cannibalizing paper and film

    This is not really accurate. Kodak knew that digital was coming, and did try to transition. But it didn't matter. Digital photography just inherently needs way, way fewer workers to support it. Even if Kodak had controlled 100% of the new digital industry, they still would have had to shed employees. But, other than the lens, digital and film photography are completely different technologies, so Kodak had no significant advantages. They didn't fail because they were dumb or lacked foresight, but simply because there were no good options.

  • I don't really believe we can or should tax our way out of the problem. Taxes can do many things but they are not the be all and end all solution to systemic problems. At some point is it not the case that adding more sumps is not the real answer to the boat taking on water.

    The thing is, corporations are government chartered. They recieve limited liability in exchange for meeting certain regulations, without which, they would have trouble existing and operating as they do today.

    Corperate structures account for far more of the economy than the government. Simply shuttling money up through them isn't the answer, you need to fix the corperate structures to not require as much central redistribution.

    Frankly, I think we need to look at funding models and how to create more independent companies that are not beholden to stock markets and venture capital. Companies built around the idea that profits are part of the means by which we do our job and put food on our tables, not the be all and end all target for their own sake.

    To use a simple example. A coffee shop should be opened and chartered to provide the community with excellent coffee and atmosphere for social gathering. Profits keep it in business, and keep the owner and workers able to do it, and able to live and enjoy these things like everyone else. It is entirely backwards to look at providing coffee as a means to profit.

  • by erroneus ( 253617 ) on Tuesday January 07, 2014 @12:35PM (#45888335) Homepage

    Oh we don't need to look any further than the constant concentration of wealth.

    The wealthy want more. Where can they get it? From the greatest consumers of all? No. Those are the poor. Of all the people who are famous for living beyond their means, it is the poor. Mostly, that's why they are poor. So that's not it.

    The middle class still believe the harder you work, the better you will be. That's an endless amount of drive. Surely they will continue being middle class even after they become poor. What's killing the middle class? Lack of working opportunities. Where are they going and why? We know these answers. What gets me are all these consumer oriented businesses who can't see they are destroying their customers and when they are gone, where will they turn?


  • by stenvar ( 2789879 ) on Tuesday January 07, 2014 @12:35PM (#45888341)

    Imagine we could make everything we make today with half as much work. What would happen? In a rational society, everybody could choose to work half as much, earn just as much, and enjoy the extra leisure time. Why isn't that happening? Simple: hiring two workers that each work less is a lot harder for companies than hiring a single "full time" worker: there are all sorts of costs and overheads associated with each new worker. Additionally, taxes and regulations mean that it is hard simply to exist as a part time worker, since there is a high "cost of entry" simply for existing as an independent human being in this society. The fault isn't with "rich people", it's with progressive social policies that are increasingly harmful.

    What you propose, a massive welfare state, isn't the answer to these problems; half the nation working "full time" while supporting an underclass of jobless is demeaning and wrong. The answer is to remove the obstacles and to allow people to live and work more flexibly.

  • by multisync ( 218450 ) on Tuesday January 07, 2014 @12:45PM (#45888461) Journal

    Company have multiple types of customers. Hint: Facebook's users ARE customers.

    Accepting for the moment that company (sic) have multiple types of customers, the most important "type" would be the one who is paying the bills. And that certainly isn't the user.

    Honestly, read a book or something. The idea that the consumers of online services are the product, not the customer, is neither new or particularly controversial. You could argue, and I suppose you are, that the user is paying for the services received by providing personal information in exchange for the service, but that would make them more like a supplier of raw material (their "likes," their social connections etc) that is then processed and re-sold to advertisers who use that information target ads at the users.

    The ultimate customer is the purchaser of those ads, regardless of whether you feel you received something of value in exchange for the information you provided.

    Just because they aren't buying anything doesn't mean they aren't customers. You have a lot to learn about business

    My business provides services to clients on behalf of other businesses. We work hard to ensure that the consumers of those services are happy and never forget how important they are to the viability of our business, but they are not customers, they are clients. Our customers are the businesses who pay us to provide those services to their customers, our clients.

    If you can provide examples of businesses that remained viable despite their customers not buying anything, then I will defer to your obviously superior business knowledge.

  • by mrchaotica ( 681592 ) * on Tuesday January 07, 2014 @01:23PM (#45888827)

    May I suggest that you go take a history lesson.... Kodak's big problem was that they didn't capitalise on their technology lead.

    ...because they didn't want to cannibalize their film sales, which is what the GP said.

  • by ewibble ( 1655195 ) on Tuesday January 07, 2014 @01:48PM (#45889155)

    Its not the internet's fault, it the economic systems fault, there is nothing wrong with 13 people to replacing 140,000 peoples jobs, I know its not exactly an accurate example, but if it is true its a good thing, isn't it? It is about still providing an environment in which those 140,000 people can live, be happy, and contribute to society. Our current economic system was set up in an environment where we needed to produce more just to get the basics of life. That has changed, now we seem to be producing more for the sake of consuming more.

    As we get more an more efficient and it takes less and less people to produce items (e.g. imagine a robot could replace a person) the natural result in our current economic system to concentrate the wealth with fewer people (the robot manufacturer).

    We as a society need to rethink our goal as an economy, is our only goal to continually increase GDP, or is it to become a happier, healthier society. After a certain point they are not the same thing. How do we distribute wealth? I don't support just giving people an equal share, people work try hard should be rewarded, but to what level? The entire human race has contributed to the knowledge we now have, not just a few individuals. Is it fair that a few individuals can claim the rewards? I think we will loose a lot if remove the rest of the population from the people who are enabled to create/innovate, because they are reduced to just trying to survive, or don't survive at all.

    I don't blame the rich, they are just doing what comes naturally with the system, trying to make themselves richer, after all isn't that what we are told is the definition of success? I think that definition of success is wrong.

  • by Altus ( 1034 ) on Tuesday January 07, 2014 @02:04PM (#45889393) Homepage

    Actually, I think what you will find is that when things get like that the poor get really really pissed off and go around killing the rich.

    A hungry mob is an angry mob.

  • by Rob Y. ( 110975 ) on Tuesday January 07, 2014 @02:22PM (#45889605)

    I don't suppose any of them considered keeping the legroom, making a little less profit per ticket, and making it up by not flying half-empty...

    No, instead they just cancel your flight if it's half empty and make you wait a few hours to be crammed onto the next flight. But if they weren't able to do that - say, by law - you might have competition based on cheap prices for shitty service and tons of profit. There's a place for regulation of industry, and there's a reasonable balance between profit and the general good. Total protectionism is bad, but so is a wide open race to the bottom. Striking an appropriate balance is the hard work of government - much harder than ideological hard-lining.

  • by AlphaWolf_HK ( 692722 ) on Tuesday January 07, 2014 @03:02PM (#45890197)

    That isn't true at all, in fact quite the opposite. The information age has empowered customers over the last two decades, and marketing departments have to work with this fact (the exact words I've heard used are "more powerful customers," which are customers described as having easier access to competitors as well as doing research on the internet.)

    With a lot of the cheap stuff I buy, I've had so many of these companies follow up and ask me to write a review of their product, because it tends to be a lot harder to sell something with few reviews (or negative reviews) and that is a direct result of customer empowerment.

    And I don't know what all this talk about shit products is either - the quality of everything I buy these days is much better than before, and I pay less for it. I very rarely have to replace something because the old one broke, it's almost always because I wanted something new and improved instead. I own a lot of material goods that are very nice, ranging from my Nexus 4 to my 55" Sony TV, both of which I paid peanuts for relative to what stuff used to cost a long time ago, and it's much better than the stuff I bought back when. If this so called "race to the bottom" of yours was true, then my Nexus 4 would be something worse than the 90's brick phone, and my old big rear projection 55" HDTV that cost $3,800 back in 2001 would have better picture quality than the 55" $1,500 LED-LCD HDTV I have now - yet it doesn't, it looks like garbage in comparison.

    Personally I think these changes are working out great. I know you socialist types reject anything that isn't somehow "organic" or "wholesome" but I prefer working smart over working hard, and that's exactly what these changes are. Being able to avoid using somebody's services is a good thing because it frees up that labor resource to work on something else. On the down side you get frictional unemployment, but on the up side the economy grows. This is why today's poor are wealthier than ever, and food is cheaper than ever.

    In other words, who needs a middle class when the poor have a higher standard of living today than the middle class and even some of the wealthy of any period earlier than the 60's? The difference between middle class after all is just an arbitrary number on a spreadsheet that some government bureaucrat decided upon.

  • by Zynder ( 2773551 ) on Wednesday January 08, 2014 @01:40AM (#45895151)
    I think this may be the first time I have ever seen you post and I am thankful of it because you appear to be a sociopath. You want to blame the fact that we, as workers, have been replaced by the megacorps because we demand cheap shit. Did you ever stop to think we demand cheap shit because that very same megacorp is full of greedy bastards that won't pay us a livable wage? They make record profits quarter after quarter but that's our fault the CEO needed a half million a year salary with a Platinum Parachute (cause gold is for chumps) because we wanted dollar bars of pcb soap and some shitty lead-laced crackers? The company could have just as easily made that dollar soap here in the US but instead they outsourced that shit to China because it made their bonuses bigger. Your logic amazes me. You're right, it's never the fault of the folks who have the power, control, wealth, and means, no, it's us scummy bottom feeding peons who are to blame.

"Well, it don't make the sun shine, but at least it don't deepen the shit." -- Straiter Empy, in _Riddley_Walker_ by Russell Hoban