by Brent W. Hopkins
I have been thinking a lot about technology and the (specifically, American) “new economy.” You know, the economy that is described alongside terms like “Great Recession” and “jobless recovery.” The economy where Apple (a company that doesn’t actually manufacture anything directly) is described as the most valuable corporation in the world, with Google, Facebook, Microsoft and the like not far behind.
I’ve been thinking about the unfolding “knowledge economy,” which is largely enabled by a rapid and dramatic evolution of mass-produced personal computing devices. Desktop PCs, laptops, tablets, smartphones; these devices are changing the way we interact with people and the world. People are caught up in the exuberance of the moment, even as they struggle to come to grips with the new economic reality. The reality is that we the people, the majority are much poorer now than we even yet realize.
Not middle-class. Not even that peculiarly-stigmatized term “working-class,” but rather, underemployed, unemployed, in-debt, no credit, no prospects, poor.
Most industrial manufacturing jobs have departed the United States – possibly never to return. Foreign labor costs, environmental regulations, supply chains, etc. provide compelling reasons to move production out of the U.S. Instead of manufacturing jobs, we now have low-paying service jobs (even these are fewer in quantity than during the heyday of U.S. manufacturing) and a relative few, better-paying “knowledge economy” jobs.
It’s interesting that we have been flooded with foreign-made high-tech computing gadgets like the iPhone, iPad, Android phones, etc. at the same time that our earnings have plummeted. Every time the average American buys one, some of their money goes out of the American economy and overseas. Some of it comes back as purchases of American exports, but since we have a perennial trade deficit, most of the money does not come back.
It’s true that much of the money spent on gadgets goes to American corporations: for example, Apple. Fair enough, but where does that money really go? Does it go back into the American economy as wages paid to the masses? No, because there is no mass employment in America that pertains to gadgets. There is employment, yes, in the knowledge economy and the retail channel and so on. But these jobs are not jobs that the masses of Americans can work. They don’t add up to replace all the lost manufacturing jobs.
So, every time you buy a computer (smartphones and tablets are computers too) more money leaves the American economy. When does it come back? It doesn’t.
Corporations know this, but cannot escape the pressure to increase short-term profits. They have come up with clever ways to make the devices seem “cheaper” by selling them through wireless carriers with a service contract. Of course, they are not really cheaper – if anything, they are more expensive this way. The payments are just spread out over the term of the contract.
Corporations also spend an enormous amount of money on marketing (knowledge economy jobs – what else can they spend their money on at this point?) to convince people that they really need a new, expensive Macbook or PC or tablet pod whatever. The campaigns have been successful in prolonging the inevitable, but the writing is still on the wall: the era of expensive personal computers is near a compulsory end. It should have been over 20 years ago, but marketing taps into powerful psychological and emotional motivations. You need this, says the dealer to the junkie. Just one more hit.
But, you don’t need it. You really just don’t. You need to stop being a technology crackhead. You can’t afford to keep spending your money on the stuff. You need to spend your money on things that affect the real (American, local, the one you live in) economy.
Use what you have. If you buy new technology, don’t ever spend more than $100 on it. And I don’t mean, a smartphone that costs $100 plus $40 per month of data service plus $70 per month of voice service for two years. Because, that is really $2740 isn’t it. Don’t lie to yourself, that is what addicts do. If you are not employed in the knowledge economy, you really can not afford to spend $1420 of your yearly income on a gadget that has a negative resale value (factoring early-cancellation fees and obsolescence).
I suppose many people will think that a $100 upper limit for computer purchases is wishful thinking. It isn’t. Devices such as the Raspberry Pi are already available, new, for considerably less than $100. Not to mention, there are many perfectly good used devices available on eBay or even free for the taking if you ask around.
Of course, people will continue to buy expensive electronics like the MacBook. I’m just saying, you shouldn’t. You don’t need to, unless you happen to be one of the statistically few people who are part of the knowledge economy. Even then, you probably don’t really need to, except to impress your co-workers.
The majority simply can not afford the luxury of expensive electronics that retain negative value, even if retailers offer seemingly attractive pay-later schemes.