Rationalization of Animate and Inanimate labor costs

Ratios are great tools in helping developing intuition and insight on how thing/variables relate to one another. When we analyze ratios (ratio analysis), meaningful relationships between two or more items of interest, or variables, to inform and guide our decisions or for pure discovery without opinion or fear we are in effect rationalizing. As ratios get more complex they tend to be non-linear with the behavior of interest being the inter-reaction between the parts and not of any one part it self. Rationalizing is not conducive to centralized systems since, in part, it increases communication penetration (internet) within the system and helps dissolves (information diffusion processes) compartmentalization stratagems just as the Gutenberg press did to the 15th century power structure. Additionally, with this type of formulated information a determination can be made as to what’s the highest and best use of material, time, energy, etc.

Some familiar examples of ratios are miles/gallon (mpg), miles/hour (mph), price/gallon, Dow/gold, gold/silver, price/pound ($/lb), price/ounce ($/oz), surface/volume, price/hour (labor), price/KiloWatt-hr ($/Kwh), mass/volume (density), number of occurrences/time (frequency), circumference/diameter (pi), electrical voltage/current (resistance), etc. It’s intuitive when shopping at the grocery store to compare the $/oz of similar items of different brands to make a purchase decision. It’s also apparent that when they use different units of measurements ($/oz, $/lb, $/grams, $/liter, etc) a conversion factor must be applied to standardized the ratio or you might make a wrong decision, one that could harm your family. 

A familiar ratio from this web site is the historical long term value of a hard day’s human labor, around $2/day (1/10 oz Ag). There has been much analysis done here to provide an insightful association between the dollar, labor, and Ag. We might perhaps gain some insight to the downward labor participation rate tend if we were to further rationalize animate labor with inanimate/automated labor (human/machine). Since labor is work (force over time) and the world’s most prominent/widely distributed inanimate equivalent of animate labor is electricity, we might reason that associating them would further our investigation.   Here we leave out the actual development and implementation cost of the machine and just focus on the work which provides a frame work/stake in the ground/starting point for further refinement and investigation.   

One (back of the envelop) approach to link/associate labor with electricity is to associate the labor of peddling a stationary bike that is connected to an electrical generator, converting labor to electrical power. Without going into much detail we find a bicyclist can generate about 400 watts peddling a bike (check out your personal wattage produce next time your at the gym) and by keeping this up for an hour we have the electrical work equivalent of 400 watt-hours or .4Kwh for one hour of hard human labor. With a 8 hours work day we have a total approximation of:

3.2Kwh/day = human labor/day = $2/day = 1/10 oz Ag/day.

The average cost of electricity in the US is $.12/Kwh, Idaho being the lowest at $.08/Kwh and Hawaii being the highest at $.33/Kwh. The EU average is $.21/Kwh. Using the US average we get:

 $.38/day (electricity) < human labor/day = $2/day = ~$1.72/day (Ag)

Using Hawaii and Idaho costs we find 3.2Kwh/day = $1.05/day and $.26/day respectively. Electricity would need to cost $.62/Kwh to get you to $2/day, double the highest rate. Considering that the average US household consumes about 1000Kwh/month (1Mwh) or 33Kwh/day (check your electric bill) one could rationalize that the average household consumes the electricity equivalent of 10 human labors per day. 3.2Kwh is what a 1990s 45inch projection TV consumes in 7hrs, a large hot tub/spa for 19min, a 1500watt space heater for 2.1hrs or 1 Led 100watt equivalent light bulb (21watts) for 152hrs. 

A fast food worker makes 8hrs*$8.50/hrs = $68/day. How much electricity can that buy at the average US cost of $.12/kwh ……. 566Kwh or 176 equivalent human labor days or half a months household electrical cost. Through this very simple, not all encompassing, ratio analysis/rationalization it’s clear that human labor equivalent machines are feasible/desirable where appropriate (where no real underlying skill exist). In Addition to no wages for inanimate labor there is no payroll tax, employment tax, L&I tax, medical, 401K contribution, etc. Think of laundromats, arcades, etc. This is deflationary and cuts out a lot of middle men/no value added.

One can further the investigation/analysis/enlightenment by expanding the rationalization to heat energy (BTU) with the below. 

1Million BTU = 10 Therms natural gas = 7.4 gal kerosene = 11gal propane = 293Kwh 

Machines and the products of machines (tools, goods, services, other machines, etc) permeate our lives for the net good and provide true wealth. A solar power hot water heater and solar panel electric machines are inanimate wealth. We would no sooner go back to plowing fields yoked to animate people or beasts than we would wash cloths with rocks along a stream, inanimate labor will replace the animate just as the car did the horse (just more completely). History is littered with the displacement of animate labor to inanimate labor (job loss) as technology marches forward; this is not new although global interconnectivity and magnitude are. What is to become of the displaced animate labor in the low skill, manager, and information monopolist arena where machines are clearly better for the job? We all need real skills and intellect above that of the machine level/floor to move forward, i.e. innovation, critical thinking, to integrate, science, etc. 

Graduation to a more complete integrated machine/tool world should not imply a loss of self or of control. Ttransition generates uncertainty because although we have some personal experience and a generational tradition working with machines/tools we have never been able to so completely take the training wheels off as we can now with the advent of the microprocessor and miniaturization (more with less). As with most historic unknowns/uncertainties, our worst fears and nightmares are projected upon the technology during the transition period as can be seen in pop media, movies, politics, etc. That is not to say, technology flows are any different from new money flows in that it flows first to governments and selected large corporations (ins) that are predominantly Fear-Motivated when it comes to control and competition. This is something humanity must deal with. 

As a side note it’s interesting, in a larger trend/context way, that of all our Anglo-American “Fourth Turnings” only one other occurred concurrently with a major societal change.   The “Fourth Turnings” that occurred around the transition from the Agricultural society to the Industrial society (Industrial revolution) saw a major break with the predominate power structure of its time. Our entire American “Fourth Turnings” occurred under the Industrial organization of society which can be broadly characterized by large scale/mass (printing, education, employment, media, production, corporations, firms, government, etc) and magnitude (more with more, predominate force, might over mind). This current “Fourth Turnings” appears to be concurrent with a transition/revolution/graduation out of the industrial organization of society and into a new or becoming Information society which might be broadly characterized by miniaturization/micro (the opposite of large scale/mass) and efficiency (the opposite of magnitude, more with less, mind over might).

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