In the second half of the 21st century, labor norms will change dramatically and governments will play an even bigger role in economy. In the past, people’s material and economic lives are shaped by labor norms. In the 17th century, peasants pursued subsistence labor norms where they grew food for their own consumptions and their life styles were constricted by the nature. Then the commercial labor norms emerged and merchants tended to pay their labors subsistence wages to produce products for profit, which is then invested to expend production (PPT early America). As productivity increased, the conflict between labor and capital built up. Workers unionized and struck against large corporations asking for better working conditions, higher wages, and shorter working hours (Heilbroner 230). To combat depression, government tried to break up trusts (Heilbroner 215), increased taxes, invested in social welfare, and established minimum wages and maximum hours (Heilbroner 306), until the start of Reagan administration. Labor norms changes over time and government is expending even though conservative presidents like Reagan tried to contract government spending and regulation (Heilbroner 341).
In the second half of the 21st century, commercial labor norms will fail in many industries and robots will take over many jobs. There will be a few people who control the computer networks and “oversee” the production procedure. First, due to robots’ extremely high productivity, mass production will not be profitable. History proved that high productivity does not necessarily lead to prosperity in one field. For example, at the beginning of the 20th century, farmers could grow far more crops per person, thanks to increasing mechanization. However, farmers’ income dropped because the flood of output resulted in a drop in price (Heilbroner 288). Under Hoover’s administration, Henry A. Wallace thought it was necessary to destroy crops to increase food price. Second, robots will be highly customizable and mass production will not decrease cost, thus operators of the production line can produce moderate amount of products in response to the market’s need, which may eliminate one factor (overproduction) that causes depression, however there will be many challenges. To begin with, people need to be highly educated to get a job and fewer jobs will be available to semi-skilled workers (Heilbroner 369). Wealth may be concentrated and fail to be redistributed. Subsequently, people will have less money to spend, factories produce less products, and private investment will stagnate (Heilbroner 289). In 2050s, people will blame immigrants for taking jobs and ask governments and corporations for “good” jobs (high wages and short hours). 10 years later, people will accept the fact that robots have taken their jobs and ask governments for basic income. In this era, government will play bigger role in economy focus on supply side. Trickledown economics will not work since it will cause diminished purchasing power of middle and lower classes (Heilbroner 355). The only way to make the economy work is to give people basic income and increase spending on social welfare. To prevent monopoly, government will pass more strict law against merger and decrease the interest rates to encourage small business.
As people expect more from the government, government will gain more power. One government’s bold movement may result in complete economic halt. As average people may be able to enjoy their free money, spare time, pursue their interest and gain patronage. The economic system will be vulnerable since entrepreneurs will have little incentive to expend production under high tax rates. Need based production and high government spending may cause inflation.
There will be many challenges in 21st century. The one worries me the most is the unemployment caused by advanced technology while people still despise the idea of basic income and government spending on social welfare. Technology can cause real harm to economy when people and governments are not ready for it.
Bibliography
Heilbroner, R. (n.d.). In The economic transformation of America 3rd edition.
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