It’s not a paradox, just good old fashioned robbery.
This reads like a lazily written article to me. The em dashes don’t increase my enthusiasm. Just in the opening I noticed:
Consumer spending as a share of US GDP moved from roughly 61% in 1980 to about 68% today. technology is not meaningfully expanding the total amount humans consume
Of course, real GDP per capita more than doubled in this time period which means consumer spending also doubled (more since it increased by 7pp). Is most of this billionaire yachts? I have no clue, but if you want to convince me you should try to not claim total amounts when you mean relative amounts.
A physical bookstore in 2000 took in $100 from a book sale and distributed it roughly like this: about 60% went to labor (store staff, publisher employees, authors), 30% went to capital (owner profit, rent), and 10% covered other costs. The money circulated locally through wages.
Amazon today takes in that same $100. The distribution looks fundamentally different: warehouse and tech labor receives roughly 25%, Amazon’s infrastructure and profit captures around 55%, and the remainder flows to publishers and authors. Labor’s share of that transaction dropped by more than half.
… unless you count the publisher and authors like you did for the 2000s data, in which case it decreased from 60% to 45%. And that’s persumably not counting the manufacturing of server farms, refinement of minerals, purchase of the actual reading tablet. Amazon has high margins but not 55% margins.
The labor share of US GDP fell from approximately 64% in 1980 to around 58% today — a 6-percentage-point shift. Applied to a $28 trillion economy, that gap represents roughly $1.7 trillion per year that once flowed to workers but now flows to capital.
Once again, since the GDP per capita has doubled the labor dollars per person has actually increased. The label for the $1.7 trillion is similarly misleading, those dollars never “once flowed to workers”, they just would have if the economy had grown without any changes to its composition.
If I were the author of the article, perhaps I would say that since 1980, real median wages have only grown by about 20% which seems very slight given the technological improvements made in that time. But how much of that 20% increase would have been possible without technological improvement, and how much has the quality of the things people spend their money on grown in that time? No clue, that’s beyond the thinking budget I have for this article.
I can confirm - it is slop.
“real GDP per capita more than doubled in this time period which means consumer spending also doubled”
GDP measures a lot of things that are not consumer spending.
That’s true. My point was that the article is claiming that since the share of GDP which is consumer spending decreased, total consumer spending also decreased. But since GDP per capita increased at the same time, the actual total consumer spending per person increased (the 7 percentage point decrease does not outweigh the doubling of real GDP per capita). This could be misleading in its own right, with the richest spending more and the median spending less even in total numbers, but the article doesn’t claim that. It claims that total spending has gone down, which is just not true.
ah, duh, yeah - the share shrunk but the pie grew so it’s still a bit more cake
Giving you an upvote for using three metaphors in a sentence that small. Impressive!
thank you, I am giving you a smiley face back: :)
Who owns the means of production that make industris more efficient? Bingo.
I swear it‘s like people don‘t even know who or what Karl Marx is.
They don’t. Schools teach that “Karl Marx didn’t want anyone to have any money, and to be owned by the state. They quickly ran out of food because no one was motivated to work.”
Why do you think guys who purchased “Truck Nuts” all screech on Twitter about “socialism is when you do all the work and they take all the profits” when that’s exactly what capitalism is and they are too dumb to notice? Why do you think the Tetris movie wasn’t really about Tetris but instead about “Soviets bad”?
Your comment only works for those who don’t live in ex-Soviet countries. Because it’s western rose-tinted glasses of how USSR just had problems, but was generally fine.
USSR wasn’t really communist though, was it? They tried and failed to make a communist state, no?
Marx’s view was that socialism would develop as an emergent phenomenon (a modern term, not one he used) to correct the contradictions of capitalism. But in both Russia and China, they tried to impose socialism on what were essentially feudal societies. The result was state capitalism, the industrial revolution imposed at gunpoint with no control of the means of production by the workers. And, as capitalist societies, both countries continued the imperialism and nationalism of their predecessor regimes.
And this isn’t an after-the-fact critique: contemporary socialists such as Rosa Luxembourg made these observations at the time.
Skipping a developmental stage doesn’t work.
There were a few years of war communism during, well, the Civil War, but due to all the hunger deaths it might not be what your usual USSR fan wants to think about.
No country has managed a transition to communism, all of them got turned into various types of authroritarian dictatorships. There is no known method for transitioning to communism and maintaining it.
Communism in its true form is unsustainable economically and defies basic human sociology and psychology.
Humans lived for 10s of thousands of years under communism. Capitalism was invented and within a couple of centuries the human race is commiting collective suicide with falling birth rates.
For family units but it quickly breaks down in larger groups and as complexity increases.
To be fair, when they tried outside influences actively sabotaged the attempt.
Would you know whether or not democratic socialism is a good prospect in that regard? A flavor of which that remains capitalistic, but using worker coops instead of the top down monarchistic approach to institutional governance?
All of this is fairly obvious to someone not wearing a MAGA hat.
Productivity per person has increased since the 80’s, but wages have not followed - rather they have remained largely stagnant.
As such, the increased profits are instead going into an increasingly small amount of very rich people’s pockets
Wages have increased a huge amount from the 1980s
Your graph is deceiving because it starts at 20 and not 0 on the y axis. It shows a very modest increase in wage, there are much better charts out there that plot wage growth Vs productivity growth. This makes the theft all the more obvious.
This chart uses mean productivity and MEDIAN wages. You posted a chart meant to deceive.
Now compare wages vs inflation, and wages vs GDP. GDP of developed countries has climbed dramatically since the 80’s, while wage growth has slowed to a crawl relatively.
One must ask themself: where did all the money go?
One must ask themself: where did all the money go?
It sure looked like it chartered a private jet to Venice Italy to rent out entire city blocks and get married in utter opulence, to me.
I’m not OP, but to play devil’s advocate:
Wages have not raised as quickly as rent has raised, unfortunately. As per the U.S. Department of the Treasury (posted during the Biden administration):
This is inflation-adjusted, so it is comparable to your data. My point here is that while average wages have increased, average available spending money after paying for basic necessities has likely significantly decreased.
Yes, because the US doesn’t build housing
The problem isn’t available housing, it’s artificial price inflation. There is no regulation on how much landlords can charge, so they just keep raising the price. Plus, they turn their vacant properties into AirBNBs, or worse, their only intention with the property was to turn it into an expensive AirBNB to begin with.
Then how come in places like Austin, where they built housing the rents dropped?
A rigged system is not a paradox.
Didn’t read the article yet.
I have a good friend who is homeless and begs for money. He says his life is much better than the life of the richest people of just a few centuries ago.
That’s not even true, even when accounting for the advance in technology, because your friend is likely dirt poor.
There are still lots of people much better off financially than your friend who work to keep wages low, work benefits low, and prices high. A daydream about the past doesn’t matter, because his and 90% of people’s material conditions are shit, and this financial and class oppression is what matters, not what fancy technology we have that makes us think we’re “kings”.
Food is very cheap and available everywhere. Clothing is basically free, and clothes are now easily high quality.
his and 90% of people’s material conditions are shit
Other people is richer than you does not mean your conditions are bad.
The problem is capitalism
A statement without any meaning
Lol nope, it’s the direct result of an economic system that funnels wealth to the top
Inflation. You are putting your labor in and getting a money that your government can almost literally print for free in their basement. When you do it, it’s called counterfeit and you can be sent to jail for many years or killed. If they do it, it’s called inflation and is perfectly acceptable. STOP USING THEIR CURRENCY and your life WILL get better. Use Monero, Gold, or Silver. Since the government can’t print those things, they will retain their value.
Productivity means doing more relative to input. It is only a paradox to the those who know what it exactly means.
deleted by creator
That’s definitely true, but the cost of some things have greatly out paced that like housing or travel.
deleted by creator
Unless capitalists are forced to share their gains, they won’t.
The real reason is that monopolies or other forms of market power prevent competitive pricing, wages and rents.
stem/“skilled” labor isnt benefiting from improved tech, it all goes to ceos, and billionaire/millionaires. in order o prevent the works from uprising, they use various methods of propaganda to dissaude any confrontation.
This isn’t just a “technology redistributes value” story; it’s a market design and incentive problem. Platforms didn’t accidentally capture the gains; they were structurally positioned to own demand, data, and distribution.
Also, the “consumption ceiling” feels directionally right for physical goods, but less convincing for digital and AI-native categories, which can expand usage in ways that traditional economics underestimates.
Short review directly from this source for those, who don’t want to read the whole article:
The Core Problem, Simply Stated
Technology is making distribution dramatically more efficient.
But efficiency gains are being captured by whoever controls the bottleneck — the platform, the marketplace, the search engine — rather than distributed to the workers who enable production or the consumers who fund it.
Without wages, workers can’t consume. Without consumption, capital has nowhere productive to go. So it piles up in buybacks and data centers. GDP growth slows. And we wonder why a world of genuine technological marvels feels economically stagnant for most people.
That’s the paradox.
As AI accelerates the substitution of capital for labor, the dynamics described here are likely to intensify rather than resolve. The question isn’t whether the technology works — it clearly does. The question is whether the institutions and incentive structures around it will evolve fast enough to distribute what it creates.
That’s the harder problem. And it’s not a technology problem at all.
