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Comment by ergest | Hacker News Reader

According to the article, when computers start doing the work of people, the need for people often increases. I simply cannot take anymore the doom and gloom of the supposed AI revolution and how it will make us all jobless.

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You should visit some manufacturing plants. Ask them how many people used to work there and how many do now.

Companies have a social responsibility to the communities they profit from.

If the entire plant is automated, how is that profiting from the community?

More likely the community is profiting from the company in terms of tax revenue and business fees.

That's laughable. Companies will usually do whatever it takes to pay as little as possible in taxes, evade regulations from environmental to labor, and attempt to get away with it by putting on a big show as "job creators" - meaning that if other people, little people, are brought here to spend money and pay their taxes, then the town should be downright grateful that the company is there to give people work.

I know it sounds hyperbolic but I have talked to local business leaders and they do indeed see themselves this way.

It's only a little bit hyperbolic.

If a facility isn't providing jobs to local residents, there's no leverage to get sweetheart deals on local taxes.

This is at its core a problem of elasticity of demand. Most factories are only tooled to produce a certain output, and business inputs are constrained more by their contract terms and raw material prices than they are by labor bottlenecks. As a result, the company is effectively moving from one bottleneck (labor) to another (resource constraints or market demand).

Compare this to labor-intensive industries like law software engineering. Increasing the marginal productivity of labor while there is sufficient demand for increased output generates that required output, until it reaches its new equilibrium. In these cases where there is substantially more work to be done than there is time to do it, and there's sufficient market demand to handle additional output (thinking especially with software engineering), then increases to productivity will generate increased demand without appreciably changing per-hour market-clearing wages.

I was at the bmw plant in munich and they said the plant was 98% automated. The guy said they did need someone to go around and change the welding tips every 8 hours.

Because fewer people are involved, they can generally make the products to a more predictable standard ("quality") and cheaper. Lets say the item the plant made with all those people used to cost $10 for consumers to buy, but the efficiency improvement from the manufacturing plant now means that it costs $5 for consumers to buy.

All over the town/country/world, people who used to part with $10 now only part with $5. They now have an additional $5 to spend in their community. The manufacturing plant has enabled many others to have their money go further - how is that a bad thing?

Which fool drops their prices like that :-)

Consumers should now pay $9.99 and we keep $4.99 profit in our community of billionaires

:-)

> Which fool drops their prices like that :-)

Anyone who has competition, be they direct or reasonable alternatives.

That's not how it works :). If the productivity doubles, the product will still cost $10, but the company will happily pocket that $5 improvement - and no, they won't raise the salaries of their workers, because why would they? There's zero reason to. Also note that "efficiency improvement from the manufacturing plant" usually means a) automating a part of the production process, and b) firing the workers who are no longer needed.

So now you have a product that's still $10, but some of the people in the community don't have a job anymore, so they can't buy it.

Of course, then a competitor shows up, driving the product price down to $4.50. The original company has to adjust, so it fires some more people and cuts down the paychecks for the rest.

The end result is: the product is cheaper, but the community is poorer, and some of its members don't have a job anymore.

But hey, isn't this the whole point of optimizing business through competition? Isn't the goal to make more with less resources and less people?

That is exactly how it works, unless there is a monopoly and no alternatives. You've forgotten all the people and communities benefiting from the lower prices, who (normally) vastly outnumber the factory workers. And the same factory workers benefit from the lower pricing in what they buy made by others too.

Yes the goal really is to improve productivity. If you want to do as much as possible locally with many people, then try subsistence farming. It has only been ~200 years since ~98% of people in the US worked in agriculture - now down to ~2%. Yet vastly more food is made and it is cheaper.

Trade and specialisation/productivity are what has driven prosperity and quality of life. It is very tempting to see all this as a zero sum game (ie the level stays the same and gains match losses). But in reality it is a rising tide lifting all boats (ie gains outpace losses).

There are temporary blips while change happens. To an individual life, that can be serious, and a humane caring society will address it through various means of support and opportunity. By far the stupidest way of providing support is requiring commercial enterprises to provide jobs and work to do that they don't require, increases their prices and helps their competitors, with no societal benefit. Note that this approach has been tried numerous times - it results in a stagnant economy, slow or negative prosperity, and doesn't really help.

Hang on, why would you drop your prices when your margin just increased? Why let "the community" keep their extra $5 and not pocket it yourself instead?

Financially speaking: what's the incentive?

Unless you are a monopoly, one of your competitors will drop their prices since they too will be looking for improvements. As Bezos says "your margin is my opportunity".

Say you have an idea of what the demand curve looks like. For the sake of argument, let it be (100-p), so 100 people would want it for free, and none would want it at $100.

If your marginal cost is $50, to maximise profit you'd set the price equal to $75 and make $625 net.

If your marginal cost is $40, you'd set the price at $70 to maximise profit and make $900 net.

You should visit some farms. Back in the 1800's agriculture was 80%+ of jobs. With the end of slavery and the evolution of machinery that number dropped to <2%.

Where was the economic implosion when automation took over agriculture?

Some believe that reduction of farm labor was the underlying cause of the great depression.

Whether or not it did, you don't see a lot of people complaining they're no longer working on a farm. And we've replaced all of those jobs with arguably better and safer ones.

You shouldn't have been downvoted. I was in a fully automated "lights out" factory producing PCs. Big trucks came up to the doors where the components (produced by robots in other factories) were unloaded by robots and passed from robot to robot until the entire machine was assembled. Once fully debugged, the entire factory was moved offshore to be owned by a group of the executives who would be able to sell to the company and hide all the income from taxation (the group included executives from "competing" companies to avoid any legal issues of "self-dealing".) So the billionaires made more billions by selling at high prices to our society while hiding their income.

I should add that they didn't automate boxing the computers, so that they could have a few people work each day doing boxing. We used low-cost humans (with degrees!) to box just to double check to make sure we were running the right products as scheduled for the factory. We could have automated that, too, but people are cheap. (Contrary to the beliefs of many, we more often stopped automation projects due to workers being too cheap to bother replacing, not because it was too hard to automate the job.)

I think it's different that a) we (you?) can build a robot factory to make stuff and b) we let them use it as a tax dodge

Fixing the tax system is a different problem, but no less complex - but cool factory.

Good point. From my perspective, the major problem with free trade is that it lets the billionaires move production offshore and avoid all taxes while hiding their obscene profits. (And they then import the products while laying-off US employees.)(And the guy who owned the factory, let's call him "Steve", made many billions offshore for which there is no US accounting at all.)

And it was a very cool factory - I had done automation projects, and some buddies of mine at the company were working on that project. As someone who had done robotic automation, it was truly amazing to watch and was probably the most state of the art at the time. We literally turned out the lights just to stand on the catwalk and watch the robots in the glow of the hundreds of LEDs on the electronics.

That's not free trades problem - that's this problem

Apple sells a million iPhones in Europe and now has a billion Euros in bank accounts in 23 countries. Which of the following statements is true:

Apple is a US company so USA should get the tax on that billion

Apple has the money in a German bank account so Germany gets to tax it first

Apple used sales people in Ireland to take the order on the phone, so Irish gov gets to tax it

Ten thousand iPhones were sold to Dutch citizens and shipped from France to NL. By a UK shipper. We all want a cut

It's a total fucking mess is what it is. In fact it reminds me of the BBC podcast Infinite Monkey Cage on race just now where the biologists just went "can we not use the word race, it is totally meaningless"

I suspect if you find a tax lawyer they have a similar view in "nation state" "soverignty" and "tax revenues"

I think the problem can be simplified. Apple and Steve hid the bulk of their wealth from all taxation (I have personal knowledge of this being true.) So figuring out what they are hiding and how they are hiding it is the first issue to solve. Once the numbers are clear, then it becomes possible to decide policy. The policy might be that if a company wants to sell in the US then it must employ in the US and pay taxes in the US or face sanctions (there are lots of ways to restrict sales and marketing of products. There are many channels and product lines.)

Datacenters are another example. Once they're built and turned on, my understanding is that they take maybe 35 permanent people to operate at the datacenter itself.

In the dozens of datacenters I've visited while working on projects for various clients, head counts are often far lower than 35.

In cases where the datacenter is being rented out to customers for colocation, the entire staff - which might be a dozen or less - is often working as glorified remote hands for an ops team located elsewhere.

I've also worked with a number of Fortune 1000s that have a sizable on-site datacenter footprint, but zero FTE resources dedicated to datacenter operations itself. Everything is divvied up among existing groups (facilities, IT ops, security, etc.), and occasional projects (structured cabling, rack and stack, etc.) are outsourced.

There's an old probably apocryphal story about Henry Ford III taking the head of the UAW on a tour of his new automated factory and asking "Think you'll be able to get these robots to pay union dues?" to which the UAW head replied "Think you'll be able to get them to buy cars?"

This hits on one of the most basic of economic principles which is often ignored. If the community becomes unemployed due to automation and is not reimbursed properly for the work done by the machine, then the community will not have the purchasing power to buy the goods produced by the machine. Thus rendering the machine useless.

True, but the real problem lies on the road from here to there. I.e. you could probably make half of the population totally unemployable while selling the output of robots to the other half. But will the first half just lie down and starve to death, or will they try to fight back? And, given the incentive structure of market economy, will we be able to get off this road altogether before reaching that point?

I work at a Manufacturing Plant - a Steelworks:

In the early 1980's there were 7000+ people directly employed here

Early 2000's about 2000

2011 (after a major restructure) about 900 people

That number is falling.

Our plant was largest employer in my town, now the University + tourism sector are the largest employers. At times I very much feel like I am working in a dead industry.

The drops in the 1980's were largely caused by automation and technological efficiency. That loss has already been felt. The losses nowadays are caused by shutting down/moth-balling successively more and more of our plant.

Competition from cheaper imports - particularly China is absolutely killing us. Unless you work in the industry it is difficult to comprehend the shear volume China produces. The market is hugely over-saturated.

All the advanced technology in the world can't compete with that. In 20-30+ years China will probably undergo a transformation of it's own as all the manufacturing moves to whatever the next big developing market is (Africa maybe??)

It's nice to say that companies have a social responsibility but at the end of the day they answer to their board and the shareholders. In fact they have a duty to act in the best interests of investors even if it goes against what would be best for their employees. That's the sad fact of capitalism.

"According to the article, when computers start doing the work of people, the need for people often increases."

For the Atlantic (or any given periodical), compare how many they employ now versus 10 years ago versus 20...

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