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In The Postnormal Era More Productivity Doesn’t Lead To Prosperity

The postnormal is a period of social re-equilibration instigated by the chaotic risks posed by the postmodern.

This postnormal world we live in now is characterized by a number of principal differences from the earlier industrial eras, the modern and postmodern. In those days, increasing productivity — by the application of steam power, the harnessing of electricity and motors, and the rise of better ways to apply humans in work, like the assembly line and business processes — led to the transition away from manual to increasingly knowledge-based work. And as people were freed from being sources of brute power they could be equipped with new skills or learn a new trade, and get a new and perhaps better-paying job.

But today, things are different. People are being pushed out of middle-class jobs, but the companies aren’t hiring people with postmodern skills, aside for a small number of postnormal jobs for programmers and big data quants. The jobs opening up are low-paying service jobs, for baristas and home health-care aides.

Erik Brynjolfsson and Andy MacAfee have a terrifying chart, one that shows the growing gap between US productivity and employment:

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Note that this gap started around 2000, which is a good milestone for the start of the postnormal era. 

Asked about this chart by David Rotman (in How Technology Is Destroying JobsBrynjolfsson says,

We were lucky and steadily rising productivity raised all boats for much of the 20th century. Many people, especially economists, jumped to the conclusion that was just the way the world worked. I used to say that if we took care of productivity, everything else would take care of itself; it was the single most important economic statistic. But that’s no longer true. 

It’s one of the dirty secrets of economics: technology progress does grow the economy and create wealth, but there is no economic law that says everyone will benefit.

The core problem is that we are reaching the point of diminishing returns on postmodern Western neoliberal capitalism, which has — since conquering communism — operated as a kleptocracy, and completely avoided dealing with the earth as a shared commons. The growing inequality is inherent in that growing gap, where US productivity is not translating into general prosperity, and the margin is also not being applied to creating a more sustainable and just society.

For the individual, we are living in an enormously precarious time. More Americans are poor, members of many formerly middle class families are falling into lower class jobs with little prospect of regaining their postmodern standard of living, and even those fortunate enough to have the postnormal skills needed at present could find themselves sliding down the firepole once IBM’s Watson figures out how to program iPhone apps or write movie scripts.

There is one hope.  The postnormal is a period of social re-equilibration instigated by the chaotic risks posed by the postmodern. But instead of being whipsawed by oscillating risks of our incestuously complex economy — like the boom/bust financial system, and the latent danger in international economic competition — we could decrease risks by moving onto a new set of operating principles. In particular, retooling civilization to counter the rape of the earth and the looming threat of ecological collapse. This will require us to devise a sustainable economy, one that is not based on debt and growth. An enormous challenge, and one that could gainfully re-employ all the 200 million people currently out of work, worldwide.

I fear that we will have to hit some sort of bottom before that transformation happen. 

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