Tag: economics

Strikes are irrational

There is no commonly accepted economic theory of strikes. The main obstacle is that if one has a theory which predicts when a strike will occur and what the outcome will be, the parties can agree to this outcome in advance, and so avoid the costs of a strike. strikes are apparently not Pareto optimal, since a strike means that the pie shrinks as the employer and the workers argue over how it should be divided. If the parties are rational, it is difficult to see why they would fail to negotiate a Pareto optimal outcome. Hicks suggested 2 possible explanations for strikes: either the union is trying to maintain a “reputation for toughness”, or there is private information on at least 1 side of the bargaining table

the best outcome is for GM to die quickly.

Job Automation

By 2030, what kinds of capabilities will computers have; how well will those capabilities prepare them to do jobs currently done by humans; and what proportion of the workforce might be displaced or rendered unemployable? The results are rather scary. After looking at trends in machine vision, speech, reasoning, and movement, and estimating how important these are for doing various kinds of work, the author estimates that displacement rates could be over 80% in some fields– sales, administrative support, food preparation, and personal care. These are also the sectors that employ the largest number of people. The safest fields for humans? Law (6%), medicine (10%), science (10%), and engineering (11%)– fields which currently employ the smallest number of people.

ha! the sectors of the economy that are just adding transaction cost but not creating anything will be replaced by computers by > 80%. invest in warm bodies at your own peril.