Many "bullshit jobs" in finance exist only because of legal quirks, and could be eliminated by minor regulatory changes. Finance has about 5% of US jobs. Manufacturing has 7%. We need to get finance down and manufacturing up.
It would be straightforward to downsize the insurance industry. Insurance is complicated because insurance companies want it complicated so they don't have to compete on price. Much to the annoyance of the insurance industry, Medicare supplement policies are limited to 10 standard options, A through N. (There used to be more). So comparing companies means looking at a table of prices vs standard forms. If that was extended to other types of policies, the insurance industry's marketing operations would be much smaller.
Finance could be downsized by imposing a Tobin tax on financial transactions. One takes effect on January 1, 2016 in the European Union. It's 0.1% on most transactions, and 0.01% on derivatives transactions. That's enough to kill the high frequency trading industry and downsize derivatives trading by 90%, based on Sweden's experience.
The excess labor can be reassigned to more productive jobs in the lower levels.
> The excess labor can be reassigned to more productive jobs in the lower levels.
I know this is going to sound crazy, but can't we just provide housing, cheap renewable-based power, electrified self-driving mobility (those tiny Google self-driving cars), and inexpensive healthy food to those who can't work because jobs don't exist for them anymore? We already do some of this for the elderly with social security; I simply argue for going the "full monty".
I understand this future is still awhile away. When trucks switch over to autopilot, I think that'll be the big experiment. You'll have millions of people and nowhere for them to go in the economy. I also understand this might create a huge "moral hazard" with not enough people wanting to work; how would that be any different than us currently pushing people out in favor of automation with increasing the minimum wage? (Disclaimer: I am in favor of increasing the minimum wage, as it is woefully behind compared to inflation and CPI)
Find jobs, automate, split productivity/wealth/income between automators and society (currently "consumer excess"), repeat.
The US used to have a more generous welfare and housing program. In the 1950s and 1960s, the US built huge housing projects in big cities. The result was a huge population, mostly black, with nothing to do. Riots, concentrated crime, and several generations of welfare kids resulted.
So we cover the basic needs of those people. What are they going to do with their time? My guess is they'll look for ways to entertain themselves, and particularly inexpensive, mass-produced ways because they can't afford much besides their basic needs.
unfortunately we do this already in the USA..remember the 1990s and 2000s high crime rates and subsequent fall of crime? Most of that was economic based crime and those who did it got a free food and bed ride in prisons.
A lot of "bullshit" jobs also exist because of low interest rates. As unemployment due to automation increases, the central banks lower interest rates (lower rates are used to increase employment). So when all this free money floats around it allows companies to invent jobs that really don't need to exist.
As soon as rates are allowed to increase, as has happened a couple times over the last 15 years, unemployment will sky rocket harsh and we will see the results of automation.
For now, however, the tide is in and the naked are hidden.
> It's 0.1% on most transactions, and 0.01% on derivatives transactions. That's enough to kill the high frequency trading industry and downsize derivatives trading by 90%, based on Sweden's experience.
Most HFT transactions already experience this level of fee overhead. This will not cause HFT to go away, it will cause it to pass on more costs to the consumers of HFT. That is, every financial transaction will be more expensive.
This may have the effect of concentrating HFT even more than it already is as the regulatory burden favors bigger players.
There is nothing inherently wrong with that and I think the natural economics of HFT is already well on its way to creating natural monopolies in that industry, but a Tobin style tax will NOT cause HFT to cease to exist (nor do I think that is a desirable outcome).
It would be straightforward to downsize the insurance industry. Insurance is complicated because insurance companies want it complicated so they don't have to compete on price. Much to the annoyance of the insurance industry, Medicare supplement policies are limited to 10 standard options, A through N. (There used to be more). So comparing companies means looking at a table of prices vs standard forms. If that was extended to other types of policies, the insurance industry's marketing operations would be much smaller.
Finance could be downsized by imposing a Tobin tax on financial transactions. One takes effect on January 1, 2016 in the European Union. It's 0.1% on most transactions, and 0.01% on derivatives transactions. That's enough to kill the high frequency trading industry and downsize derivatives trading by 90%, based on Sweden's experience.
The excess labor can be reassigned to more productive jobs in the lower levels.