fear of the future

[Josquius]

I've been thinking about the future a lot lately. Given the rather crappy state of the world at the moment and the lack of a light at the end of the tunnel I'm really getting all rather down on everything.
My current big fears for the future aren't the standard sci-fi stuff, I'm not screaming about nanomachines or genetic engineering physically destroying us all. My current concerns are rather more down to earth and based around the general screwed up state of the world economy and society.
So....Its pretty hard for me to put all this in words, but...I'm going to try, my big worry is for the future of the working class.

The working class has been on its knees for decades already.
Back in the day there was a solid place for the working class. Industry by its very nature required lots of people with little education putting in solid grunt work to extract resources and get things built. The proles outnumbered management many times and everything was quite sensible (if unfair, but then that needn't have been inherent to the point at hand, just the way things were).
With the coming of increased automation however....the need for such massed numbers of workers dropped off dramatically. To be able to compete against cheap foreign labour western factories had to become super automised.
These days you have a situation where in the UK IIRC we produce more cars than we ever have before...yet the auto industry employs only a fraction of the people it did back in the 60s.
This problem is been offset to some degree by the fairer system allowing more people to get an education. But there we get into the problem of jobs that don't actually produce anything. Its all well and good for a few countries to have a knowledge economy but as the rest of the world develops and with the internet especially...its just becoming harder and harder to rely on there being low level office jobs in the west.
My worry is...where does this leave the working class?
Already in Britain we've big problems with the non-working class, the children of Thatcher, kids born to parents who have never known work who were born to parents who have never known work, etc... they're just stuck in a cycle of hopelessness, benefits and general shittyness.
As automisation of factories increases and more of the world gets up to western standards of living...I can only see the permanently unemployed increasing as there just won't be enough jobs to go around.
Unemployment I see as a huge problem in the future. Had I the skill and time I would be tempted to write a novel about this.

Another thing I see happening in the future is manufacturing moving back to the west. This will occur due to A: the rest of the world becoming richer and no longer so cheap a manufacturing option and B: increasing fuel costs meaning it is better to pay a few times as much to produce something at home than to build it halfway around the world and have to ship it over.
Even with this factor though...automisation will mean there will only be jobs for a few. Manufacturing will never be the mass employer it once was. And having a nation of shop workers just won't work.

So yeah...where do you think we're going?
Is there any cure for society or are we doomed to have a unemployed underclass that continues to grow?- given future predictions for social security to get horribly expensive this problem becomes even more stark...

[Lettow77]

  There is hope, Tyr.

Renounce this defiled world and attain the pure land!

It starts with lots of fasting and tea, and it never truly ends.

[Martinus]

I don't think the world economy is in as crappy state as one would think. People are twitchy after the crisis and that leads to a general confidence breakdown, and we are facing a sovereign debt/public finances crisis, but the "fundamentals of the economy are strong", to quote.

As for the UK, I think you were being lied to when they told you you have a "knowledge based economy". Germany has a knowledge-based economy - it has people doing R&D and then producing stuff with that. You have/had a high flying capital markets economy, with an ancillary service industry to serve the world's financial elite. Now that capital markets have collapsed, that's gone too.

[Habsburg]

I'd call Germany an export based economy.

[Syt]

I'd call Germany an export based economy.

Yep, domestic consumption has been alternating between low and abysmal (and Germans are notoriously pessimistic as a people), so most economic growth is driven by exports, mostly to other EU members.

[Eddie Teach]

I think as production gets more and more efficient, governments are going to start providing more and more for mostly idle citizens. (And no, I don't think governments reducing programs that they've had to borrow to pay for is evidence against this).

[Martinus]

I'd call Germany an export based economy.

I think one has little to do with the other. Germany exports knowledge, Britain exports (exported) financial market services.

[The Brain]

I don't worry about this particular thing. My honest impression is that the forces that Luddites fight are not ultimately malignant.

[Zanza]

I don't think the world economy is in as crappy state as one would think. People are twitchy after the crisis and that leads to a general confidence breakdown, and we are facing a sovereign debt/public finances crisis, but the "fundamentals of the economy are strong", to quote.

As for the UK, I think you were being lied to when they told you you have a "knowledge based economy". Germany has a knowledge-based economy - it has people doing R&D and then producing stuff with that. You have/had a high flying capital markets economy, with an ancillary service industry to serve the world's financial elite. Now that capital markets have collapsed, that's gone too.

I don't think that dichotomy works. Britain is innovative in financial sector products, Germany is innovative in industrial sector products. Both are based on human capital and thus knowledge. So I'd say both are knowledge-based economies, just with a little bit different focus.

And even then, it's not like there aren't very innovative British industrial companies such as Rolls-Royce, BAE etc. and while Deutsche Bank's investment arm is in London, Allianz, Munich Re etc. are worldwide leaders in insurance so I guess they come up with financial service innovations occasionally too. Britain's and Germany's economies aren't that different.

The problem that tyr mentions, namely that there aren't good, steady jobs for less qualified people exists here just as it exists in Britain. You need to educate people, whether it is in some technical job or in some office job. Building human capital should be the foremost task of our states. That's much more important for the continued well-being than fixing social systems etc.

[Zanza]

Yep, domestic consumption has been alternating between low and abysmal (and Germans are notoriously pessimistic as a people), so most economic growth is driven by exports, mostly to other EU members.

I think it is both an effect of a general skepticism of the future as well as Germany aging fast and people realizing that their pensions will not be enough to sustain their lifestyle so they save a lot. Of course that's a vicious circle. As the domestic market isn't very active, investment there becomes unattractive and thus more capital is sent abroad, paid for by exports. That in turn saps Germany of capital to invest into its economy.

[Gaijin de Moscu]

I don't think all's so bad, but it does feel crappy.

In the corporate life, the level of fear is amazing. Constant cost-cutting, and top management doesn't seem to know quite where to go.

Weak managers are in a state of constant panic, yelling at subordinates and giving good licks to the asses above.

Never been so bad in my 16 years of corporate America. But it's just a patch of time, things will be good, eventually.

[Neil]

Gaijin's got it.  The panic-based art of investing has pretty much taken over management, and now there's very little strategy or thought going into management decisions in many companies.  It's all panic and reaction.

[Sheilbh]

As for the UK, I think you were being lied to when they told you you have a "knowledge based economy". Germany has a knowledge-based economy - it has people doing R&D and then producing stuff with that. You have/had a high flying capital markets economy, with an ancillary service industry to serve the world's financial elite. Now that capital markets have collapsed, that's gone too.

This isn't true.  The UK has other knowledge based sectors like Autonomy up in Cambridge or BAE in Bristol and the capital markets economy hasn't collapsed - London's still doing relatively well.  The trouble is we've got areas of the country that are fine and recovering such as London, the South, Edinburgh and so on and they're generally sustained by a knowledge based service economy. 

Then there are areas of the country, such as Liverpool, and other old industrial centres who've never really recovered from the recession of the early 80s. 

I do wonder if our willingness to allow foreign companies to take over British business is part of it.  Robert Peston's been mentioning it a few times recently but we do seem far more blase about it than other countries and I'm not sure if it is always to our benefit.

[Martinus]

I do wonder if our willingness to allow foreign companies to take over British business is part of it.  Robert Peston's been mentioning it a few times recently but we do seem far more blase about it than other countries and I'm not sure if it is always to our benefit.

It seems a rather populist line to take. What do you meaning by "willingness" here? It's not like WTO and EU rules allow you much leeway here. Not to mention, it's a bit bizarre to take that stance, seeing how you have been profiteering on international capital markets for so long.

[Martinus]

I don't think all's so bad, but it does feel crappy.

In the corporate life, the level of fear is amazing. Constant cost-cutting, and top management doesn't seem to know quite where to go.

Weak managers are in a state of constant panic, yelling at subordinates and giving good licks to the asses above.

Never been so bad in my 16 years of corporate America. But it's just a patch of time, things will be good, eventually.

We have been doing pretty well, as we managed to secure a bunch of big projects for the rest of the year, but yeah, a lot of colleagues/competitors seem to be panicking. I think people are still traumatized by the Lehman Brothers crisis and fear it might be returning. The result is silliness.