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Blue Model Blues
The Disruption Proceeds
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  • Andrew Allison

    It appears to me than what’s being discussed in this post is not the “blue economy” but an aspect of the broadly based disintermediation being brought about by information technology. Although the truckers were once an example of unions holding the country to ransom (a blue phenomenon), this disintermediation threatens all brokerage business, whether trucking, stock brokerage, travel agencies, real estate, etc. Does TAI consider brokerage to be “blue”?

  • Anthony

    The Blue Model (Fordist) lament becomes overwrought as U.S. generally facilitated Model’s development post WWII. Subsequently, unmet economic challenges (globalization) post 1970 reveal dated methods of our economic model (U.S. model not Blue Model). That is starting around 1970, the United States and the world begins to be buffeted by three global changes: “the technological revolution of computers, the Internet, and mobile telephony ushered in by the digital electronic age; the history-changing rise of Asia within the world economy; and the newly emerging global ecological crises;” These three changes as well as innovations inferred in essay are the causes of massive and ongoing shifts of incomes, jobs, and investments. If Fordist Model (Blue) can be indicted then we indict our (U.S.) readiness to ignore fast moving economic challenges that induces essay’s theme.

    Above that, our current generation faces novel challenges to sync economic reshaping to its people needs – harnessing the new globalization. For me, its not about Silicon Valley or Blue Model demise but U.S policies regarding education, infrastructure, science, and technology going forward to enable our human capital (U.S. populace) to be competitive long-term. Silicon Valley and its venture capitalists will be just fine

  • Jim__L

    We need to balance Disruptive technologies with Expansive technologies.

    Disruptive technologies are when 10 guys provide a product or service at 1/10th the going price, and put 10,000 guys out of work. (And rake in 100x the amount the 10,000 guys used to take in.)

    Expansive technologies are technologies that make possible jobs that weren’t possible before — which may or may not lead to 10 guys getting filthy rich (in fact the patent and copyright implications are, it probably won’t), but it also involves 10,000 guys making a living doing what they couldn’t make a living doing before.

    Disruptive technologies are self-incentivizing — you can always find 10 guys who want to rake in 100x what middle class Joes do. However, the business cases for Expansive technologies are a bit more speculative. They involve someone else getting rich, by nature. That sort of altruism exists various places (often in Silicon Valley), but the incentives aren’t as clear.

    If a country has rising unemployment (or too-low labor force participation rates), that country should recognize that
    its interest lies in cultivating Expansive technologies, not Disruptive
    ones.

    By the way, government policies can also be Expansive — deregulation, cheap energy, liberal land use laws, low taxes. Unfortunately, our current government isn’t all that interested in that.

  • wigwag

    I’m not sure that truck drivers will earn less money under a new system than they do under the current system. In New York City, at least, Uber drivers make more money than taxi drivers even though Uber fares are frequently lower. Uber is so desperate to sign up additional drivers to support their surging popularity that they now offer health insurance ay affordable rates to their drivers. How many New York City cab drivers have health insurance?

    To be fair though; regulation of the trucking industry is far more important than regulation of the taxi industry. Driving enormous vehicles at breakneck speed down our nation’s interstates takes skill and experience or all of our lives are put in danger. We want appropriate regulation of the trucking industry; we don’t need it when it comes to short trips around our city streets.

    • Jim__L

      Trucks typically have governors on their accelerators, limiting their speed, and there are a whole slew of regulations (logging, limits on time spent driving, etc) that truckers already have to follow. I would be very surprised if these could not be imposed on Uber-ized trucking.

    • f1b0nacc1

      Interesting to see how the growing automation of trucks (which will hit the long-haul truckers on the highways….those most heavily impacted by regulations or the lack thereof) will impact all of this.

  • FriendlyGoat

    1) Just as part of the argument about Uber and Lyft has centered on who will be carrying the insurance and at what limits, we could imagine the insurance factors might be a bigger deal with trucks and loads.

    2) Unlike Uber/Lyft drivers where just about anybody with a car can get in, not everyone has a CDL or a tractor and trailers.

    3) The third from last paragraph has an interesting sentence which is this: “Still, it will strike many people that Silicon Valley venture capitalists are getting richer and that middle-class Teamsters are having their middle class standards of living threatened.”

    It’s not only union drivers. There are a lot of truckers who are not union and who, as owner-operators, have been increasingly squeezed for decades. There are also a lot of people who work in the middle-man brokerage business who are neither union people nor fat cats.
    They are simply day-to-day matchmakers of trucks, drivers and loads.

    We don’t stop the march of efficiency, and it’s often futile to try. But when you see the market value of Uber itself go to the moon, creating billionaires while cabbies get displaced, there really IS a question about whether money should shoot upward at the expense of people who are just trying to make an honest living. Sounds like the investors in the startups of Trucker Path and Convoy are counting on exactly that. Should the rest of us always celebrate that?

    • Anthony

      “Should the rest of us celebrate that….” Generally, it is becoming increasingly difficult for American employees to procure jobs that pay them middle-class wages (“even when regularly employed, many workers do not earn enough to support themselves and their families in any comfort or security”). FG, to your statement I posit this: “the power of business does not stand before the public; it is enshrouded in a mystique of its own making. The agencies of the ruling class culture, namely the media, the schools, the politicians, and others associate the capitalist system with the symbols of patriotism, democracy, prosperity, and progress. Capitalism is treated as an inherent part of democracy, although, in truth, capitalism also flourishes under the most brutally repressive regimes…The private enterprise system, it is taught, creates equality of opportunity, rewards those who show ability and initiative, relegates the parasitic and slothful to the bottom of the ladder, provides a national prosperity that is the envy of other lands, and safeguards (though unspecified means) personal liberties and political freedom.” So at many levels, socialization into orthodoxy facilitates said celebration you reference.

      • FriendlyGoat

        I would be satisfied with the process if we applied adequate taxation to those who end up making great gains from taking truck-and-load matching to phone apps—-as per this example. But, increasingly we don’t tax that upward funneling of money at levels which compensate for what is taken from the jobs of lower-tier workers. Someday our citizens are going to notice this—-if they are not beginning to already.

        • Anthony

          FG, courage, bold action, and honest recognition of the stakes economically are steps to begin your cry for notice.

          • FriendlyGoat

            That’s another replay of the same reason we have elections every two years for Congress. There is always an opportunity to make progress, even if those have been wasted in the last 3 cycles.

          • Anthony

            You know FG I heard Bernie Sanders say something very similar 2 days ago (I got the bold and courageous from his comments) and he mentioned the imperative not to waste anymore cycles. He also mentioned his seven grandchildren.

          • FriendlyGoat

            Well, I didn’t copy if off Bernie, but I like Bernie.

          • Anthony

            My last comment before turning in: I’m not sure I know what I just watched on an economic station (CNBC). Moderators lost control of economic debate (if I can call it that) and I know our country has better.

          • FriendlyGoat

            I don’t have cable, so I’ll have to rely on the press reviews.

      • qet

        The quasi-Marxist text you quote overlooks that history has yet to produce an alternative form of social-economic organization to “capitalism” that has provided the same standard of living for the same number of people for the same length of time. All during the time that mysterious capitalists were busy enshrouding their power in a mystique, ordinary folks were making Boris Yeltsin envious at their local supermarket. I readily grant that the practice of capitalism does not and never has aligned completely with the model. A society such as ours of academy-informed intellectuals are constantly in consternation that the actual world they share with us does not operate according to the models they have so meticulously developed and published in peer-reviewed literature (I mean, if the truth cannot be found in peer-reviewed literature, where can it be found?). That Western democracies have found it necessary to alloy their capitalism with some degree of income redistribution in order to preserve the social order does not logically require that we abandon the ideal of capitalism, that we simply deny that it has many good elements that are worth striving for.

        And you are woefully behind the times with your banal remarks about what “agencies of the ruling class culture” do and don’t do. You will have noticed that an avowed socialist is making a serious run for the presidency and is being greeted enthusiastically by many tens of thousands of people across the country and in those very cultural agencies. He is certainly not “associating the capitalist system with the symbols of democracy and progress.” Quite the reverse. As the socialist Jesus, his way was prepared for him by many generations of Johns in our educational institutions preaching the good news of anti-capitalism. So your ultimate sentence is in fact correct–socialization into orthodoxy has facilitated many celebrations of Sanders and Hillary supporters across the land, just as it did Obama supporters before them.

        • Anthony

          You’ve lost me qet. Quote is from no quasi Marxist text and if it were what has that to do with author’s point of view. You may see it differently and that is your option. And (quoted comments are not adjusted to suit times) your reference to time and space again infers disposition. But, qet, we’ve traveled this ground and why tread over again – as FG given our engagement knows, this information is added as context. Beyond that I’m not clear what your point is.

          • qet

            The identity of the speaker/author is irrelevant; alleging a particular historical economic system (capitalism) to be the foundation of the standard suite of historical bourgeois values–patriotism, democracy, progress–is vulgar Marxism by definition, whether or not the speaker is an intentional Marxist. The text asserts that this connection–capitalism, i.e., free enterprise, with democracy and progress–is purely a matter of pedagogy, suggesting the speaker/author is criticizing the holding onto of capitalism as an ideal. You yourself appear to second that general argument in your last sentence. Thus my response. As for Sanders, his avoidance of the S-word is a matter of pure political expediency, as he himself as admitted: (From a July 2015 interview with Politico: ““I myself don’t use the word socialism,” he said in 1976 in the Vermont Cynic, a student publication at the University of Vermont, “because people have been brainwashed into thinking socialism automatically means slave-labor camps, dictatorship and lack of freedom of speech.” http://www.politico.com/story/2015/07/14-things-bernie-sanders-has-said-about-socialism-120265#ixzz3q4hmzdj6)). I will grant that because there is no universally accepted definition of “socialism,” anyone can advocate for economic arrangements historically associated with the concept while still claiming to be “not a socialist.” And as for the lateness of my reply, I only just today read this thread for the first time.

          • Anthony

            Per my reply to you at The Federalist, my position remains. If you need to support capitalism fine but no one I know is making argument against. Read carefully response at The Federalist. As we conclude, appreciate distinction existing between real disputes and verbal disputes as verbal disputes often look like ordinary “factual” disputes but in reality they aren’t – also, use some of that verbal energy to assist capitalism’s next generation of American students (who according to NAEP scores have slipped in both math and reading). Thanks.

          • qet

            I hope I can one day find a way to get you down from your mountain-top so we can dispute at the same altitude.

          • Anthony

            OK, got it (I am not troubled by your viewpoint). All the while remembering…trading on vanity, personal attack, fear, susceptibility to…

          • qet

            I object to your repetition of “personal attack” when describing my statements. You can speculate on vanity and fear all you like, but I don’t believe you’ll find me anywhere attacking anyone personally. Unless attacked personally first. Then, I don’t mind using a little fire (but it is always a very little).

          • Anthony

            Use another word (ignorance or your choice) but modifiers use to highlight trend; as to your personal use, euphemisms may unconsciously mask personal labeling (attack). But if you claim you’re without attribution, I take you at your word. I trust we’re done.

    • qet

      I agree with the gist of your third point, FG, and have made the same basic point myself many times here and on a couple of other sites I frequent. The TAI writers never seem to come to grips with the paradox living in the heart of the dogma they espouse, a paradox evident in this sentence: “But from a larger ethical standpoint, it is questionable whether the trucking companies and the Teamster members have the right to preserve their standards of living at the cost of what is essentially a tax on everybody else. The tax from preserving inefficiencies in the trucking industry is in effect a hidden sales tax, and like all such taxes it is regressive—the poor get hit hardest when the price of goods is artificially high.”

      Now, I have known many truckers, and their standard of living is uniformly modest. To hold truckers’ social-economic status up as some sort of ethical quandary is not just absurd, it is bad faith (in my estimation). TAI seems not to have made any attempt to balance its equation here: on one side, you have truckers-as-costs, the preservation of which, according to the model (which I comment on in reply to Anthony below), adds to the woes of poor people; on the other side, however, by eliminating these costs, you are now adding to the nation’s stock of poor people, likely more than offsetting the benefits from reducing the price of a bag of potato chips from $1.99 to $1.49. But this is what happens when your dogma is based only on the marginal cost to the marginal person. Pareto optimality would be a much better standard in this case.

      • FriendlyGoat

        Thanks. Agree completely. And you said it in a better expanded way. Of course we all want low prices, but there are a couple of hundred million people in this country who need to earn a reasonable (reasonable) living, and they can’t all just write software code while we impoverish everything else.

  • IAmAndrew

    Also worth mentioning, though not in the Uber mold, is uShip, an Austin startup that seems to want to be the eBay of shipping services.

  • Kevin

    The trucking industry feels there is a massive shortage of drivers with valid CDL’s – they generally will hire anyonevwitha value CDL who an fog a mirror. With such a tight labor market I suspect t trucker’s wages will hold up in the short term. It’s the margins of trucking firms that will make the hit. Or so I’d guess.

  • Ed The Oregonite

    As respect for government regulation and law wains, it’s only a matter of time before ‘gray market’ practices proliferate. Trucking/Shipping is ripe for this. Most people don’t really care who moves their household stuff from Los Angeles to Phoenix…they just want it done efficiently (on-time, no damage, no surprise extra charges). The trucking industry often shows little regard for this unless you are a high volume client.

    California is a great place to see how the gray-market economy works. The more they over-regulate, the more powerful the gray-market becomes.

  • conservativechick

    Creative destruction is a necessary process in a free economy. It inevitably leads to a better standard of living for all.

    • D . G.

      Right, not in a system that is dominated by technology it leaves nothing but human destruction in its path, look at all the unemployed and un-needed people now, soon it will be you and whatever job you do and then what? no work, no roof or food and guess who is left in the land of the living??? The rich an well off and all their machines to to the work for them. Great advances eh, they will be the downfall of mankind….

      • conservativechick

        The “central planners” in every age say that, but we in the United States have literally the highest standard of living ever known to human kind. And it’s because we have basically free markets. It works.

      • Douglas

        What you fail to realize is that these technologies that eliminate jobs in one area also create them in other areas. The key is to make sure that the State not stifle this creativity by putting too many regulations in the way of this process. When it is too hard to create a business, taxes are too high and the cost of regulatory compliance is too high, the creative pace is restricted. Clear unnecessary burdens out of the way and the new jobs will appear to replace those eliminated.

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