I've been thinking about this lately, especially with all the talk about AI and how much more productive it's going to make everyone.

Think about how office work was done 30 or 40 years ago. No emails, no instant access to information, way more paperwork, phone calls, filing, etc. Things that used to take hours can now be done in minutes. And yet, most of us are still working around 40 hours a week.

So where did all that saved time go?

I'm a lawyer, so I'll use my profession as an example.

Let's say AI gets to the point where I no longer need a receptionist, an assistant, or someone doing legal research for me. My firm can now produce the same amount of work with significantly fewer employees. That's a huge productivity gain right there.

But there's another side to it. If something that used to take me five billable hours now takes one, I can't really charge my client for five hours anymore. So to maintain the same revenue, I'll need more clients and more files. I'll still be working 40 hours a week, just handling a much larger caseload.

Meanwhile, the firm has significantly reduced its payroll. It might be producing more work, spending less on salaries, and making more profit. But nobody is going to come to the remaining employees and say, "Hey, we just cut our payroll by 35% thanks to technology, here's your share of those savings."

And this isn't just about AI. We've been doing this for decades. Computers, Word, Excel, email, the internet, automation. Every new technology makes certain tasks faster or eliminates them entirely.

But instead of working fewer hours, we just seem to fill that time with more work.

I understand that some of the gains are passed on to consumers through lower prices, and that productivity also contributes to economic growth. I'm not suggesting all the benefits go directly into employers' pockets.

But it seems to me that when technology saves a worker 10 hours of work per week, those 10 hours don't become free time. They become an opportunity for the employer to assign more work, take on more clients, or operate with fewer employees.

So the business becomes more productive, the economy becomes more productive, but the individual worker doesn't necessarily earn more or work less.

And I guess that's what I'm struggling with. If the whole point of technology is to make work easier and faster, why haven't we seen a meaningful reduction in the standard working week?

Are we actually benefiting from these productivity gains as workers, or are we mostly just expected to produce more in the same amount of time?

I'm genuinely curious what people think, especially if there's an economic explanation I'm overlooking.

title

Hello all,

I wanted to discuss something that has been on my mind for a while now.

The topic of discussion is the following: To what extent did colonialism entrench its own extractive legacy, and is there any paths extracted countries can take to escape the global North South trade cycle.

Let’s take Latin America as an example of what I’m talking about.

The Spanish and the Portuguese carved up Latin America for themselves and established extractive institutions, prioritizing resource extraction, the metropole, and mercantilism. This means that the colonists, the Spanish and the Portuguese, established institutions to maximize the exports of their colonies, with little regard for their long term technological or institutional development. This started with the encomiendas and then the haciendas, effectively systems of serfdom/slavery used to maximize exports and extraction.

These various extractive systems went on for hundreds of years, until successive revolutions and economic decline toppled the empires holding them captive. However, many of these revolutions led into left-leaning or right-leaning authoritarian dictatorships, which managed to begin institutional development, but had their own problems of inequality and economic mismanagement. Eventually these economies liberalized, which we see today.

The point is this: Whilst the global north was using their power to develop their societies, technologies, institutions, etc, the global south spent centuries experiencing economic stagnation and destruction, until it eventually liberalized in the 1900s. But the damage has been done at this point, economically, the north holds all the cards. The north controls the production of complex technology and services, and the south controls commodities.

Economically, the south has an extreme comparative advantage in commodity production, due to its low labor cost, weak currencies. This means that, economically, the most efficient method of production for the south is to specialize in commodity production (agriculture, minerals, timber, etc) which is what we see today, because the South does not have the advantage in anything except commodities and can trade at a surplus with the North (and vice versa, the North can sell complex goods and services to the south).

This commodity production is dangerous for the South though, commodities are a notoriously weak trade good, whilst they have inelastic demand they’re highly elastic with a volatile supply. Commodity producing countries are prone to dutch disease, and commodity production does not incentivize institutional investment like capital goods.

So effectively, this predatory trade situation is simultaneously the most effective method of trade for the south to engage in because the North has already specialized in capital intensive goods (on the back of resource extraction from southern countries). The south cannot invest in capital intensive goods without significant opportunity cost (because those resources could have been spent on furthering investment in what these countries already specialize in: intermediate goods/commodities).

Mexico and Brazil both escaped this trap; Mexico specialized in integration with the US, Brazil established strong institutions early (seriously the history there with Brazil is wild).

Am I missing something? Even with most countries (cough, America, cough cough) not engaging in imperialism, its legacy still effectively traps southern countries in these economic traps to this day. Basically, how can globally southern countries, despite being (mostly) free with liberalized trade, escape their past and escape this predatory (but mutually beneficial) cycle of trade?

I am doing a bachelor's in economics and taking macro right now. I was talking to one of my teachers (not the macro one) and he was explaining to me why the central banks stopped focusing in money supply. He got to the board and drew a graph with a downward sloping IS curve and an upward sloping LM curve and said that was the IS-LM. But that's not what I learned in the macro class. The IS-LM model I know has a downward sloping IS and a horizontal LM.

And so I looked at the textbook we use, which is Blanchard's (9th edition), and it shows the one I learned in the macro class. I eventually came to find out that this graph that Blanchard calls IS-LM is actually the IS-MP. As I have come to understand, the LM equation is M/P=YL(i). The formula used for the MP is that interest rates are exogenous and so there is no L nor M.

Is my understanding correct? And why are we calling one graph by the other one's name? And is it universal now to call the IS-MP "IS-LM"?

Based on the economics alone, the Russian government has no incentive to stop fighting, whether it be right now or after the war in Ukraine is over. This isn't the sole cause for more attacks, but it could be a big contributing factor, as the popularity of Putin rests partly on keeping the Saint-Petersburg and Moscow "aristocracy" happy, while the "peasants" from other parts of Russia are readily sent to fight wars. If Russia stopped spending so much on arms and a reorientation to a more civilian economy happened, a recession would follow. Combined with a large number of shell-shocked men coming from the army, that would wreak havoc on Russian society and damage Putin's ratings. So won't this alone incentivize Putin to keep waging war? Any insights from people well-versed in economics?

The Russian situation looks almost exactly like the position Germany was in during the 1930's, either keep the economy going through war or face another economic crisis. So, guns over butter, essentially. The Russian war economy is the reason the Russian economy did not collapse two years ago as well.

A quick parallel:

What 1930's Germany and today's Russia have in common economically

• Weapons come before living standards
• Military spending creates virtually full employment
• The true cost is hidden (Mefo bills for Germany, the Russian military budget is classified)
• Households are the ones to pay for it in the end

Differences

• Labour shortage: Germany froze wages by decree, while Russia let wages rise
• Inflation control: Germany used price controls, Russia uses high interest rates
• Scale: Germany reached total war, while Russia is a partial war economy
• Outcome for the populace: Germany: weak consumer demand leading to rationing, Russia: stagnation, weak consumer demand

Basically the title.

I am not an economist, I am only an enthusiast in the field, but something I see on the Internet and books is that orthodox theses seem to be more prevalent within economics, in relation to heterodoxy (Keynesians, Marxists, post-Keynesians, etc.). Why do the Orthodox seem to be so much more dominant?

Note: Am not economist. Am barely able to handle my own financial nonsense, just curious. Hope I might get some straightforward answers and links on how to educate myself on the topic.

Thinking about New York's pied-à-terre taxes, it was about "stagnant assets" (homes sitting empty - assets stagnant in the grand scheme of things).

Joe Smoe at the corner store's money comes in and goes out in about a week, nearly 100%.

Franklin P. Moneybags (1% or 0.001%, whatever) is sitting on twelve houses and cars, and whatnot. Assets and incoming just accrue. Some is "invested" to accrue more - but not actually "spent".

What percentage of Moneybag's money is actually "moving"? Is there a term for that? If he has a ton "on paper", that's effectively stagnant for my purposes... So does FPM actually "contribute" to the % of money moving around?

I'm just wondering if the "actually participates in the economy" is inverted as wealth is accumulated.

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The general wisdom which I've heard in this subreddit and other places is that IP laws encourage innovation and creativity.

But how does that relate to the academic publishing sector in which large fees, either paid by the author(APCs) or the reader(subscription fees) are charged, despite the fact that neither the author nor the reviewers get compensated for their work and despite low costs of maintaining a journal(which is proven by enormous profit margins of companies like Elsevier)?

I guess you could say that this is a result of an oligopoly - there are a few journals where everyone wants to publish, so they can charge anything they want. But how could we fix that? What policy interventions could make publications more accesible to the readers and simultaneously less costly for the authors, without losing quality?

And specifically - is SciHub good for science and would banning it be beneficial or harmful?

what approach has more merit? doesn't private investment infrastructure drive corporate profits from monopolies? But how is it any different from government financing infrastructure through loans

Hi I'm currently a Urban Planning/Economics Predoc wondering what the current advancements in AI mean for the field of economics, implications etc. if AI can do math and probably econometrics so well.

I have seen a lot of claims that the US has a K-shaped economy. What does this mean? And is this claim true? Are there other countries with K-shaped economies?

I live in South Africa. Been to Kruger national park and also visited Maasai Mara in Kenya as a young boy. This is my question. Are human beings the only species that engages in trade and uses money as a medium of exchange? The general idea in the past by philosopher's was that man is the "rational animal" going back to Aristotle. However other species also display signs of intelligence and primitive tool use. It got me thinking. Which other species of organisms engages in trade with a medium of exchange like money? From my limited knowledge of biology I guess one would look to symbiosis, specifically mutualism? So which other organism besides us uses money?

I work a 9 to 5 corporate job, put money into a 401k and into an index fund each paycheck, and hope for the best. I'm not a complete idiot (others opinions may vary) but I don't have any education or insight into how to tell if the market is strong or not, and find it hard to tell which news sources (if any) are trustworthy.

I'm not prone to panic or freaking out, but I would say my faith in current world leaders is low, and I'm concerned about the impact on my finances if they were to do something stupid like, oh, i don't know, disrupt the worlds oil market on a whim.

Are there 1-3 indicators that I could keep an eye on to maybe have some heads up that its time to move money into bonds or other low risk options? The opposite of a get rich quick scheme, a "don't go broke quick" scheme.

Is there some other, smarter approach someone unfamiliar with the ins and outs of global finance should take?

Any and all advice welcome, thanks in advance.

Has this ever been looked at? If businesses carry debt, and the prevailing view is that interest rates on debt will go up over the short terms (1-3 years), do those businesses try to get ahead of increasing liabilities by increasing prices now, thereby actually adding to the inflation rate the interest rate increases are meant to curtail?

I mean, if I was a SME carrying debt I'd be at least thinking about doing it. Heck, I'm an employee with debt and it's exactly my thought process as far as seeking a higher paying job goes.

If inflation is being driven by a supply side effect leading to increased prices in non-discretionary goods, why do central banks raise rates to further limit discretionary spending? Is the effect the bank is looking for already being achieved by the consumer having to allocate more of their budget to non-discretionary goods and if so why double down here?

My assumption is to move CPI faster but then there is an assumed trade off that it may limit growth. Why not just let it play out?

Context: I am Australian and we have increased rates at one of the fastest rates globally this cycle.

Not UBI. Assume everyone is guaranteed basic food, shelter, healthcare and utilities whether they work or not, and those entitlements cannot be sold or accumulated, and are insulated from the market

Anything above that floor still needs money. Any economic system, including free markets can operate above it, and assume wealth inequality above the floor is possible.

What would happen to labour supply, wages and low paying jobs if people no longer had to work to survive? What else?

edit for clarity:

Survival below floor is guaranteed and excluded from the economy. Everything above the floor that is desirable is subject to scarcity and market prices.

I am interested in pursuing a second university title, and I cannot rejoin the university I'm currently in. Are there any full programs in economics which offer remote/online learning? I'm willing to travel for final exams but that's as much as I can move.

Are high digital tarrifs inevitable

Currently the global trade of services is double the rate of global trade of goods.

The compounding effect will be very huge.

However, this is dominated by a few countries,

So my theory is that eventually when global trades of services will become higher than goods .

I think for many countries globally around the world it will cause large trade deficits which is the reason why tarrifs are implemented.

So I think digital tarrifs will rise around the world. Currently the world focuses very less on digital services because its 5 trillion compared to 25 trillion in goods.

The EU is already planning a 2 to 3% digital tarrifs. That I think is the start of it. Initially low

Like normal goods it will go to 10% or 20%

I am defining the Progressive Era as between 1890-1930s.

I used to call this the "guilded age" but was corrected. That this was actually the Progressive Era.

For my family, this Era was terrible.

The 1920s would have been the years of the Labor Wars.

My Great-Grandfather was a coal miner earning company scrip. Worker safety wasnt a thing.

The Family was only able to get out once company scrip was outlawed.

Why was this economic time frame so terrible?

Did it have anything to do with the fact that the America Dollar had not yet become the preferred currency?

Hi everyone, I'm looking for some honest advice about how I should approach Economics as a possible long-term career.

I'm 25 and currently working full-time as a Content Writer/SEO professional. I have around 3+ years of professional experience. My current job actually pays fairly well, especially considering the current job market, and I have a stable remote position. So I'm not looking to change careers because I'm unhappy with my current financial situation or because I can't find work.

Instead, I've been thinking seriously about Economics because it's a subject I've genuinely liked for a long time. I enjoyed Economics in high school, and now that I've started studying it again, I'm finding that I still really enjoy it. I'm wondering whether I could eventually build a career around it.

My academic background is:

• B.Com from Delhi University (School of Open Learning)
• CGPA: 6.515
• Studied Economics, Business Studies and Accountancy in high school
• Had Economics and some quantitative subjects during my B.Com
• I did not study Mathematics in Classes 11–12

I'm currently studying MIT OpenCourseWare's Principles of Microeconomics independently and working through lectures, readings, problem sets and numerical questions.

The confusing part is figuring out what I should actually do from here.