The division of labour (specialisation of tasks) results in productivity gains.
Cameron's view:
Technology determines the division of labour and is the primary determinant of productivity gains. This requires capital investment, so capital investment is actually the key determinant of productivity. The entrepreneur who invests is the inferred beneficiary of the surplus productivity benefits.
My take on this:
One hundred years ago, a philosopher, Kropotkin, postulated that the ownership of technology by a ruling class allows the subjugation of labourers because of the need for bureaucratic coordination if the work is specialised, thus leading to entrenched inequality. Each technology is the result of generations of accumulated knowledge, and by right, ought to be available freely to all. Releasing technology to the masses could therefore spur revolution by allowing decentralised, local mutual collaboration, freeing labour from the domination of the ruling class.
If we consider this from today's perspective, the previous gains in productivity required expensive machinery and capital wealth. By contrast, the cumulative tools and knowledge of scientists, programmers, engineers, lawyers and academics are now freely available at our fingertips.
If we want to shed the shackles of inequality and are brave enough to imagine a better future for our children, it might be worth embracing these tools of the future while re-examining the wisdom of the past.
“There is also a big question about the incentives to invest in new capital equipment and experiment with new technologies.” No. No there isn’t. Private capital has traditionally been reluctant to invest in industrial capitalism, preferring, as in the nbr today, to invest in economic deadweight like watercares monopoly debt, or second hand residential mortgages.
As Adam Smith makes clear in the (memory holed) books 4 & 5 of the wealth of nations - the sovereign should invest in that which the nation needs and that the individual cannot afford.
The sovereign. With sovereign debt/public credit/public issue, or windfall taxes, whatever you like. But the sovereign should ensure that the nation has what it needs. Through the virtuous and prudent use of its sovereign tools.
Instead? We are run by banksters. That’s not how capitalism works. That’s how racketeering and oligarchy works
Too often we view humans and machines as substitutes rather than complements. The first industrial revolution demonstrates this clearly.
Britain experienced widespread de-skilling as high-skill textile artisans were replaced by factories employing illiterate villagers working alongside machines. This required advances in both machinery and management techniques to coordinate the entire system.
Essentially, human capital was substituted with physical capital, which improves faster due to Wright's law. These factories demanded substantial investments in both physical capital and management techniques—fixed costs requiring significant thresholds to overcome.
Two factors enabled this breakthrough. England was late feudal Europe's most centralized government, creating a nationally integrated market. Second, innovations in law and finance—limited liability companies and tradeable stock shares borrowed from the Dutch Republic—enabled large-scale investments at relatively low capital costs.
Steam engines utilizing Britain's coal resources massively increased machine capability. Steam powered railways and marine shipping, further expanding markets through reduced transportation costs.
Though I'm uncertain how advanced steam technology was when Adam Smith wrote The Wealth of Nations.
So if I understand correctly:
Adam Smith:
The division of labour (specialisation of tasks) results in productivity gains.
Cameron's view:
Technology determines the division of labour and is the primary determinant of productivity gains. This requires capital investment, so capital investment is actually the key determinant of productivity. The entrepreneur who invests is the inferred beneficiary of the surplus productivity benefits.
My take on this:
One hundred years ago, a philosopher, Kropotkin, postulated that the ownership of technology by a ruling class allows the subjugation of labourers because of the need for bureaucratic coordination if the work is specialised, thus leading to entrenched inequality. Each technology is the result of generations of accumulated knowledge, and by right, ought to be available freely to all. Releasing technology to the masses could therefore spur revolution by allowing decentralised, local mutual collaboration, freeing labour from the domination of the ruling class.
If we consider this from today's perspective, the previous gains in productivity required expensive machinery and capital wealth. By contrast, the cumulative tools and knowledge of scientists, programmers, engineers, lawyers and academics are now freely available at our fingertips.
If we want to shed the shackles of inequality and are brave enough to imagine a better future for our children, it might be worth embracing these tools of the future while re-examining the wisdom of the past.
Looks like I'll have to read some translations of Kropotkin now!
Well. You can draw a distinction between the landlord and the capitalist. I do.
A fellow Georgist I see.
“There is also a big question about the incentives to invest in new capital equipment and experiment with new technologies.” No. No there isn’t. Private capital has traditionally been reluctant to invest in industrial capitalism, preferring, as in the nbr today, to invest in economic deadweight like watercares monopoly debt, or second hand residential mortgages.
As Adam Smith makes clear in the (memory holed) books 4 & 5 of the wealth of nations - the sovereign should invest in that which the nation needs and that the individual cannot afford.
The sovereign. With sovereign debt/public credit/public issue, or windfall taxes, whatever you like. But the sovereign should ensure that the nation has what it needs. Through the virtuous and prudent use of its sovereign tools.
Instead? We are run by banksters. That’s not how capitalism works. That’s how racketeering and oligarchy works
# On Humans and Machines as Complements
Too often we view humans and machines as substitutes rather than complements. The first industrial revolution demonstrates this clearly.
Britain experienced widespread de-skilling as high-skill textile artisans were replaced by factories employing illiterate villagers working alongside machines. This required advances in both machinery and management techniques to coordinate the entire system.
Essentially, human capital was substituted with physical capital, which improves faster due to Wright's law. These factories demanded substantial investments in both physical capital and management techniques—fixed costs requiring significant thresholds to overcome.
Two factors enabled this breakthrough. England was late feudal Europe's most centralized government, creating a nationally integrated market. Second, innovations in law and finance—limited liability companies and tradeable stock shares borrowed from the Dutch Republic—enabled large-scale investments at relatively low capital costs.
Steam engines utilizing Britain's coal resources massively increased machine capability. Steam powered railways and marine shipping, further expanding markets through reduced transportation costs.
Though I'm uncertain how advanced steam technology was when Adam Smith wrote The Wealth of Nations.
Steam was a dream At that time.