Krugman: Election’s over! I can think now

R.U.R. belong to U.S.? Paul Krugman’s Sunday column suggests two relatively unfamiliar explanations for both low employment and inequality: #1) Robots: It’s possible “technology has taken a turn that places labor at a disadvantage.” Automation raises productivity in the long run, but in the short run–which can be “several decades”–it can put large numbers out of work; #2) Monopoly power: Increasing concentration across the American economy “could be an important factor in stagnating demand for labor, as corporations use their growing monopoly power to raise prices without passing the gains on to their employees.”

Five Six reactions:

1) Is Krugman drifting back to the view that the income inequality trends are caused by technology, and not politics–and therefore may be impossible for liberals to stop? A technological “turn” sure sounds like something that even the fiscal cliff talks can’t control! … P.S.: This “nothing can really be done” posture was how Krugman ended the first edition of his book, The Age of Diminished Expectations. Then … something happened. Later editions emphasized less plausible, more Dem-friendly political explanations.

2) Hmm. Robots cause a decades-long rise in unemployment and/or lowering of wages. Monopolies cause an even longer-term decline in job creation, a decline that can’t be blamed on “insufficient consumer demand,” according to the authors of the article on which Krugman bases his column. Krugman’s spent a trillion pixels over recent years arguing that what ails the U.S. economy is, in fact, insufficient demand–a cyclical problem, not a structural one, a problem that can be cured by Keynesian stimulus, not long-run social adaptation.  “[S]tructural unemployment is a fake problem,” he’s declared. But both of his new explanations seem mighty structural, no?

3) The monopoly-stops-job-creation argument, as put forward by New America Foundationers Lynn and Longman, is less than compelling. Is the auto industry really more concentrated than it was in the 1950s? Than when GM controlled more than half of the market? How about the mainstream media? Fasion? How is the “pre-Christmas book battle between Amazon and Wal-Mart, in which the two giant conglomerates pushed down the prices of hardcover best sellers” an example of lack of competition? Needs fleshing out! You have to wonder if Krugman threw in Lynn and Longman’s ‘robber baron” theory in to dilute the heretical fatalistic implications of the robot theory–because concentration, unlike technology, is in theory more amenable to liberal redistributive control. (It’s also possible, of course, that concentration, and corporatism, is also an unstoppable product of genuine efficiencies of scale.)

4) If increased concentration lets “corporations use their growing monopoly power to raise prices” couldn’t that be, you know, inflationary? But Krugman’s spent another trillion pixels lecturing us about how inflation is not a threat. Discuss.

5) If robotics really promises long-term mass unemployment, is it time to dust off the eccentric visionary writings of Robert Theobald? If I remember right, Theobald predicted that in the future economy of abundance, there’d be no work to do. “Work” would in effect be obsolete–in any case, unavailable. He thought this justified a guaranteed income. I’ve spent a lot of my life fighting the guaranteed income idea–it seems to me people still have to work and we want people to still have to work. The alternative appears to be social decay–e.g. a non-working welfare culture. But eventually–when there’s a box in your living room you can command to make you anything you want–Theobald may be vindicated. Something for the back of the mind. … See also: Vonnegut, Kurt, Player Piano.

6) The subtext of Krugman’s useful column? “The election’s over. We can think again.”