Technology Is Not Just Disruptive, It’s Disastrously Deflationary

costsCharles Hugh Smith – While AI (artificial intelligence) garners the headlines, the next wave of disruptive technologies extend far beyond AI: as the chart of technologies rapidly being adopted shows, this wave includes new materials and processes as well as the “usual suspects” of machine learning, natural language processing, data mining and so on.

While many voices seek to assure us these technologies won’t displace human workers, the reality is cutting labor inputs is the core driver. What few pundits seem to understand (perhaps because they’ve never experienced a truly competitive market?) is that the rush to incorporate these technologies into existing enterprises is deflationary not just to prices but to profits.

Reducing labor inputs and improving productivity of capital and the remaining labor force is not going to generate profits if competitors can access the same tools and processes. The race isn’t to maximize profits, it’s to survive the inevitable deflationary spiral in prices as competitors are forced to pass along cost savings to customers to retain market share. Continue reading

How to mentally prepare yourself for childbirth

child birthIt’s meant to be the happiest time of your life, but few women would disagree that childbirth can also be one of the most dreaded. Your hormones can be all over the place, and let’s not get started on the pain.

Unfortunately, today’s article is not going to cure the above. Instead, we have penned the following post based on how you can mentally prepare for the thought of going through labor. It’s not going to be easy, but if you can arm yourself with the following tips you might get a little rest bite and things might run a bit more smoothly (at least, in your head).

Be proactive with your emotions

It sounds ridiculous, but preparing yourself for a roller-coaster of emotions can be one of the best courses of action that you take. After all, this is the period where your hormones are going to be all over the place, as well as the excitement and anxiousness about your upcoming new-born. Continue reading

239 Years Ago, Adam Smith Predicted Fury Of Seattle Business At CEO Who Pays Workers Well

adam smith
Dan Price, CEO

Jon Schwarz – Dan Price, the CEO of a small Seattle credit card processing company called Gravity Payments, announced several months ago that over the next three years he’ll gradually raise the minimum salary there to $70,000.

How did his counterparts at other businesses react? Let’s get a prediction from Adam Smith, who wrote this 239 years ago in the most famous book about economics ever published, The Wealth of Nations:

Masters are always and everywhere in a sort of tacit, but constant and uniform, combination, not to raise the wages of labour above their actual rate. To violate this combination is everywhere a most unpopular action, and a sort of reproach to a master among his neighbours and equals.

Was Adam Smith right? As a recent New York Times story demonstrates, he called it precisely:

Brian Canlis, a co-owner of his family-named restaurant, is [a client of Gravity Payments]. He said he was fond of Mr. Price, but was more discomfited by his actions. …

The pay raise at Gravity, Mr. Canlis told Mr. Price, “makes it harder for the rest of us.”

Mr. Price winced. “It pains me to hear Brian Canlis say that,” he said later. “The last thing I would ever want to do is make a client feel uncomfortable.” …

Leah Brajcich, who oversees sales at Gravity, fielded complaints from several customers who accused her boss of communist or socialist sympathies that would drive up their own employees’ wages …

As for other business leaders in Mr. Price’s social circle, they were split on whether he was a brilliant strategist or simply nuts. As much as they respected him, they were also disturbed. “I worry how that’s going to impact other businesses,” said Steve Duffield, the chief executive of the DACO Corporation, who met Mr. Price through the Entrepreneurs’ Organization in Seattle. …

Roger Reynolds, a co-owner of a wealth management company, said his discussion of the pay plan with Mr. Price got heated. “My wife and I got so frustrated with him at a cocktail party, we literally left,” said Mr. Reynolds …

One of the most peculiar aspects of U.S. politics is that Adam Smith and The Wealth of Nations are vociferously celebrated by conservatives. Here’s what one loyal Reaganite said at a memorial after Reagan’s death in 2004:

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