Robots and industrialization in developing countries [pdf]
unctad.org
unctad.org
I stood up, and went to the door, and opened it, and there was only a grey blankness. Then I woke up.
Optimizing compilers come to mind ;)
The problem is we've seen that people struggle to let go of old ideals, for instance climate change deniers, because they're reluctant to let go of their lifestyle despite all evidence that it's not sustainable. Unfortunately, the more you fight it the harder the fall will be.
This also makes Trumps promise to bring manufacturing back to the US quite interesting, because the labor cost is too expensive in places like China and they are loosing the manufacturing jobs themselves, just to automation.
The only way to reverse the tide would be for large subsidies on US based manufacturing, and tariffs on imports, i.e. a protected economy, which has never worked in the past.
In fact manufacturing IS returning to the US, Foxconn has been building US factories as have other large contract manufacturers, it makes sense from a supply chain perspective. But the return of manufacturing does not equate to a return in manufacturing jobs, those jobs are gone and will never return. And many, many more jobs will be lost within the coming years.
The voting in of Trump shows how conservative and not forward-looking the US is. Vast swaths of the South are hell-bent on keeping things the way they are (for better or worse).
The US has also been one of the "lower" OECD countries for a decade or two in a lot of measures [1].
I won't be surprised if it's one of the last OECD countries to have a strong manufacturing sector, requiring humans to do a lot of work that in other countries has been replaced. Other countries will figure out how to rethink economies, happiness, purpose, etc, and the US will just keep doing what it's always done.
I think there will be tens of millions in OECD countries living with basic income (or something in a similar vein) with tens of millions in the US are still laboring at work.
[1] The US is at or very near the worst among OECD countries in: infant mortality, child poverty, child health and safety, life expectancy at birth, healthy life expectancy, rate of obesity, disability-adjusted life years, doctors per 1000 people, deaths from treatable conditions, rate of mental health disorders, rate of drug abuse, rate of prescription drug use, incarceration rate, rate of assaults, rate of homicides, income inequality, wealth inequality, and economic mobility.
But maybe they're right, the US has the benefit of being a huge country with most of the resources it needs to survive within its borders, perhaps you tear up trade agreements and start a policy of being more reclusive to protect your industries and employment.
I see one huge advantage that the US has in a global world though, and that is (at least for now) it is by far the dominant player in the web space. Countries like Russia and China have their own services that are playing catch up on their US counterparts, but they are still well behind for the most part. In any future imaginable the web, or a successor is going to continue to be the biggest part of our lives and therefore the worlds money will continue to flow into the US.
Despite what I just said, I too worry about the US. There seems to be a deep seated suspicion of anything socialist and most of the solutions to a massively automated society seem to be socialist ones (i.e. a universal basic income, or the government regulating businesses to provide for the common good).
You'd hope that if it came to that scenario the US would follow suit and provide for its citizens that cannot work. But there is precedent for the opposite, the world went through a similar scenario in the 30's with the great depression. Most countries in the OECD came out of that decade with comprehensive social welfare systems, the US did not.
I wasn't trying to judge, or to say my comments are pointing out things are inherently good or bad, just that I think that's how things are.
Who knows, maybe in 50-100 years tons of OECD countries will have homeless millions out of work, while the US is more-or-less similar to today...?
We can say that people are backwards looking but we don't really understand their circumstances. Unfortunately a lot of hurt is going to come and a lot of people are not going to be happy. Expect a continued wave of conservatism, because change is scary.
Reality check: the Internet economy (all of it, not just the web) contributes ~5% to US GDP [1].
https://www.statista.com/statistics/250703/forecast-of-inter...
I would also not be so quick to dismiss especially China's web companies. It's a different world on the other side of the Great Firewall.
This is also shows there are problems boiling under the surface of growth. World is now becoming more and more like it was in middle age where a handful of kings commanded absolute power over their subjects. AI fulled highly optimized corporations could be the new kings of this world and they will command their subjects to work to death or perhaps they will just organize online gladiator games just for fun.
Most of the world's population is at risk of becoming useless unless world wakes up now to put the right safe guards.
It's not like the countries higher than the US in the measures you list don't have jobs and manufacturing and so on, they just tend to have stronger social safety nets and sane healthcare systems.
You will have replies saying "never heard of a jacquard loom lol?!" And "new categories of jobs, idiot!", and "it's always been fine before!".
It wasn't fine before. I recently pointed out that living conditions for the average Victorian nose-dived as available labour exceeded demand due to automation. It wasn't a magical instant orderly transition.
Perhaps we should seek to avoid the same mistakes - I know that that's a radical and divisive idea but there it is.
This mandates either universal basic income or a meat-grinder war. We went for (2) last time - and afterwards even women could get jobs!
I can't see it, but that's the point.
The problem is that previous revolutions like the industrial revolution were fueled by an increase in the extraction of raw materials from the earth which fueled growth.
Now I see us as having the perfect storm with multiple attacks on our way of life which previous revolutions hdidn't have. We have a massive acceleration of automation and artificial intelligence, coupled with dwindling natural resources, and catastrophic climate change. We don't have the resources to keep our way of life going, and we don't have the resources to have another huge leap forwards economically (unless we start mining asteroids at scale, or something like that).
It could be that this is the peak of humanity, or it could be that the peak is yet to come. But this is no doubt the peak in the way of life that we've been building since the late 1700s.
We are probably closer to self replicating factories than AGI. It's just a matter of organizing industrial processes and automating them.
Companies should desire UBI in order to keep the product demand strong. The larger UBI is, the more money in the pot. The only problem is how to obtain UBI.
I think it will need to be a form of redistribution, where value is taken from where it accumulates and moved to where it is lacking. It will probably be a combination of taxation and issuing money.
Companies will share the benefits of automation with the population by this mechanism, and get to compete for the yearly BHI that is flowing from the population to their coffers.
I think we're more likely to see something akin to corporate sponsorship of a consumer class - rather than the consumers being given money to spend, they are given goods and services either free or heavily reduced directly by corporations, either subsidised by the state via tax or directly provided via regulatory requirement (unlikely this would be entirely voluntary). This weeks food is bought to you by Purdue and Country Kitchen Buffet. Your new jacket is bought to you by Walmart.
From this, you also end up with a secondary barter economy - people trading their free crap for less common crap.
This way you achieve subsidence for the masses, maintain consumer capitalism, and rather than there being envy and anger at people getting "money for nothing", they are instead seen as a subclass of "lazy unworthy poor in their rightful place". The corporates accept it because it builds brand loyalty, grows a new generation of consumers, keeps people just upwardly mobile enough in a world where the majority live by trading crap to keep them mollified and in the hamster wheel. Maybe one day I can own a robotic forge! Then I'll be rich!
There may be places where monetary UBI exists, but I don't think it'll be a majority system. A simulacra of an economy will do just fine as long as it keeps power concentrated.
The problem is you can't rely on companies to do the right thing, it has to be something that comes from the government.
For existing Factories, the trend is to slap Automation on the cheap bits. And leave the harder bits to Meat.
So you'll put in a machine or computer that reduces work by 33% and remove 1 of the 2 workers on that task. That one worker now needs to pickup that new slack. And now for less money than his retiring coworkers and building a weaker retirement with a worse pension plan.
Not every plant is Tesla on the cutting edge of automation. Lots are barely getting by and can't afford Automation.
They make more Monkeys every day.
Just he neglected to mention that they'll not be done by people.
But you should watch that in contrast with one of his newest videos, "The Rules for Rulers" https://www.youtube.com/watch?v=rStL7niR7gs
> The more the wealth of a nation comes from the productive citizens of the nation, the more the power gets spread out, and the more the ruler must maintain the quality of life for those citizens. The less, the less.
> Now if a stable democracy becomes very poor, or if a resource that dwarfs the productivity of the citizens is found, the odds of this gamble change, and make it more possible for a small group to seize power.
Art is a log scale when it comes to compensation - and many of the best paid are dead.
The issue is not job loss, its job replacement with worse paying service sector jobs which act as a barrier to upward social movement (because lower pay means less access to various positive network effects)
Relative to stuff we place higher utility on than art, because opportunity cost. But as the price of that stuff approaches zero due to mass automation of production so does the opportunity cost of art.
For instance, they won't allow automation of this kind on their ground. As Ned Ludd would have it, they will keep the machines out and the humans in.
Suddenly their production is much costlier that what the robot-running neighbors produce. They can't export it (nobody would buy), but they can still locally consume it. But for that they need to limit the imports of the same thing to keep the prices up.
As the list of robot-produced goods grows, more and more import restrictions are added, and things cheaply available abroad become dear and inaccessible in the country.
I don't think a democratic government with a policy like that will last too long.
It looks more interesting to think how to distribute the ownership, a share in a huge robotic factory so that it is not easily falls under control of a single person or a small group. It might be an interesting game-theoretic problem.
Popular wisdom seems to look at China / Mexico manufacturing as supported by low labor costs, but in reality they're more and more supported by capital-intensive automation (enabled by the systems engineering expertise at running the low-labor cost plants originally).
Truly communist institutions, e.g. some monasteries, just abolish the notion of propery. They need unusually and highly motivated people to operate, though, that are few and fail to be mass-produced.
These places are utterly undemocratic, though, being monarchies with few limitations. This is because it takes a rather small clique to control the oil wells and pipes that produce, say, 80% of the national budget. Once they are in power, other citizens have little to do to limit their power. The next guy to depose them is tempted (and usually yields to the temptation) to build the next version of the same regime. The countries that buy the oil (or gold, or whatever the single key product is) don't care about democracy in these countries; they care about stability of their supplies, and thus stability of the regime in the country.
Now replace oil wells with robotic factories plus a few key power stations. If all of this requires a small amount of people to operate, and is as easy to physically control as oil wells, you might have the same situation. 90% of population are suddenly irrelevant, living on a whim of the small group of rulers who control 80-90% of GDP.
Democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.
I think you're absolutely right that Trump supporters' motivation seems to be "I work my ass off and don't have anything to show for it" (born out of wage stagnation in real terms). But the question would still be "Then why didn't they simply support a candidate that promised welfare increases?"
Part of the answer is that Clinton didn't lean on redistribution as her narrative to the degree Sanders did, probably to prevent Republican attacks. The optimist in me also likes to think that there is something in the American zeitgeist about work earning rewards. Which I think is confounded by two modern trends: free trade / automomation depressing or eliminating low and middle wage jobs, and a growing realization of wealth disparity and work effort disparity (e.g. myself making many multiples more than someone breaking their back building infrastructure).
End result being someone comparing their work effort to what he or she sees on TV, then comparing their rewards to what he or she sees on TV. And feeling depressed and angry as a result.
A very old idea from the ancient greeks. I completely agree with this theory. Sadly, I'm often treated like a conspiracy theorist when I tell people about it.
The idea is simple, there are seven stages of governance for people.
1. Monarchy, 2. Kingship, 3. Tyranny, 4. Aristocracy, 5. Oligarchy, 6. Democracy, and 7. Ochlocracy
The cycle just endlessly repeats itself through time.
Next year we will spent around 25% on refugees. I wonder when the point of an emergency budget arrives.
http://www.spiegel.de/international/germany/budget-battle-be...
http://www.reuters.com/article/us-europe-migrants-germany-co...
http://www.zeit.de/wirtschaft/2016-02/fluechtlinge-haushalt-...
interestingly, German sources like Zeit estimates / writes about 50 billion for 2017, while all English sources low ball here. (or don´t cite the source) Zeit is a pretty well known source.
As we both know, projects and estimations are are hard! Very hard! So I guess it will be around 60 billion :)
Tax revenue plans around 230 to 300 billion. Hence the 25% and my guess that they will announce soon or later an emergency budget to cut costs (we have a law, basically saying: we must go to our black 0, at all costs) Cutting costs hits the usual targets (I guess):
https://www.iwkoeln.de/en/iw-news/beitrag/german-budget-why-...
http://www.dw.com/en/sch%C3%A4uble-clings-to-black-zero-feti...
Social services Infrastructure School and education
etc.
Interesting times are ahead :)
What a problem is that germans arw too expensive. Back when germany invited the turkish people they at least admitted they wanted cheap labor.
Now they are just lying. Or completely ignoring that in ten or twenty years those people will be useless and sit at home because a ton of those jobs will be automated.
http://www.latimes.com/world/europe/la-fg-germany-refugees-d...
https://www.theguardian.com/news/datablog/2016/jan/06/refuge...
However, I am not sure it is likely that western democracies with diverse economies can regress to sufficiently concentrated ownership of production to facilitate a dictatorial regime. In the case of the US, 0.1% of 350 million is still 350,000, so there are a lot of highly motivated rich people who would like to avoid losing in a winner takes all dictatorship. A government that supports the rule of law, property rights etc. is a necessary 'evil' if you are one of the 0.1% who might lose out in the dictator scenario, as that rule of law is all that prevents the 0.1% from turning into <0.0001%. I think it is easy to facilitate dictatorship in an undeveloped, poor economy, but less so in a diverse, developed economy, even one with significant wealth inequality. The more diverse the economy, the more keys to power.
There is some interesting (and somewhat relevant) commentary on historical thought about paying for government in Mark Blyth's talk at google[1], which contains the following conclusions:
-Democracy is Asset Insurance for the Rich
-Redistribution and Debt is Reinsurance for Democracy
-Austerity is Anorexia for the Economy
His comments on Brazil in the Q&A after the talk are also relevant.
1) Individuals have their own robots. For example, everybody gets their own automated hydroponic garden, enough to provide them with sufficient calories.
2) A dictatorship seizes control of the automation and lets the people starve.
I think it's very unlikely that we'll have a welfare-capitalist society where major corporations own mass automation, where the government taxes the corporation so highly that government can pay for everyone else to survive.
Taxing mass automation to pay for basic income is just too fragile. If the people themselves aren't providing wealth through productive labor, then at some point, somebody will try to starve them instead of feeding them, and they'll succeed.
Having all production automated will result in falling prices, including the cost to automate something. This should result in a lot of competition, driving prices down even more. In this scenario, it is difficult to imagine someone having a monopoly on production for long, unless they are already a dictator.
Dictators tend to have to keep at least a portion of their population happy, otherwise they lose control. A large portion of the population with nothing to loose (as they are starving) tends to result in revolution. If the cost of production (or cost of imports) is close to 0, what motivation (beyond bond style villany) does a dictator have to make their population starve?
If everyone is out of work, no one has any money to pay for the products of the capital owners. What's the point of that?
The portion can be very small. It has to include the military, and it has to include the people involved in creating GDP, but if production is centralized (e.g. because the nation's resources are in digging stuff out of the ground), then the masses can be kept very poor.
Watch the "Rules for Rulers" video I linked above. Resource-rich dictators don't need to provide public education or adequate roads, say nothing of adequate food. "The people stay quiet, not because this is fine, or because they're scared, but because the cold truth is: starving, disconnected illiterates don't make good revolutionaries."
So can production be centralized in the face of mass automation? I think so. Look at farming. Seizing control of all of the farms in the 1880s would be a massive operation spanning the entire North American continent. Seizing control of today's Big Farming conglomerates would be relatively straightforward for a modern dictator.
Which is to say, we'll get through this if the automation is decentralized, but if it's like farming, where a few expensive machines make all of the food for hundreds of millions of people, then we're on a path to ruin.
I'm following the 3D-printing and makerspace movement because of this. It's imperative that blueprints for vital objects to be 3D-printed aren't locked up by copyrights.
This portion might end up being very small: i.e. a small, highly automated, robotic military, an automated surveillance/intelligence apparatus, and a few elites who own all the big corporations along with their top AI designers, weapons designers, etc. You could probably wipe out 99% of the population and still pull this off.
If a class of resource is cheap and abundant, evil dictators/1%ers don't really have much motivation to prevent people accessing those things, unless they feel it somehow undermines their control.
I also think there would be less motivation to become a dictator if you didn't have to fight everyone else for limited resources.
It would also be much harder for the warlord type to motivate others around them to do their bidding if those others are well fed/clothed/housed.
The typo just triggered the tritism in my head: a person with nothing to lose has a lot to loose.
I've always held that the people on HN are more of builders than profit maximizeds. As a result you don't hear or encounter people who think in a different manner.
In particular you don't hear people say "why should my factories/effort/investment go to subsidize people who do nothing." Or a variety of similar arguments which have different starting assumptions.
Essentially the BI+automation arguments largely depend on a milk of human kindness in a world where the incentives for a large number of people and nations is not so aligned.
People will always make choices on the margin and the betterment of humanity usually comes a distant last to personal welfare. To balance this out means a huge number of taxes/laws/incentives to prevent that outcome.
You guys (Americans) are going to be fighting over your basic assumptions of society (capitalist with caveats vs "socialists" with caveats) very soon.
But all of this assumes that automation happens and takes away jobs. it likely won't, it will most likely replace well Paying jobs with less well paying jobs.
At this point economists will talk about retraining people but that's bs - there physical limits to how fast neurons can be retrained and that's if you don't have any other time demands/financial issues/health issues/aptitude issues.
No no no no. Souvereign investment is not income constrained, taxation does not even need to enter the picture.
Do you pay for the air you breath? Does the government tax corporations to provide a basic air income for people to ensure that everyone gets their fair share of air? No. Why not?
The reason you don't pay for the air you breath is because air is so immensely plentiful, so easy to get, so impossible for anyone from stopping you from getting, that of course it doesn't cost anything.
Imagine if things like food were the same.
What if in the future all food's patented? What if due to climate change the traditional stocks don't grow, or due to regulation you can't grow it. Maybe actual cows are illegal, but you can vat-grow beef-like food.
This is why having open-source, affordably licensed technology is imperative. Affordable for some people might mean free, which makes certain licenses absolutely paramount.
If we can build our own robots, design our own food, we're no longer wage slaves. If we can't, if we must feed into some system that extracts heavy taxes from all of us, the opposite is true.
This is why I don't care about using proprietary software. So long as I have options which aren't proprietary I'm content, and if those options are threatened it's worth defending them. This is different from trying to destroy proprietary software.
We don't want jobs; we want lots of things (and services), very cheaply. Jobs are the traditional way we were getting them. If there's another way of getting them, that will be fine.
One thing I learned from Julian Simon: things always get better. One thing I learned from Christianity: people love to predict the end of the world.
I didn't watch the entire second video; when he started explaining how the taxes are lower in a democracy compared to a dictatorship I just got annoyed.
We already have a job market where a significant number of people have become permanently unemployable because their competences are not wanted.
Now imagine mass unemployment not only in blue collar work but also in white collar work due to automation. If unemployed white collar workers cannot get jobs and blue collar workers cannot migrate to white collar jobs because both job types are replaced by automation and AI, where will they get an income?
[I agree that "it's owned by someone" can be a problem more than "there's not enough land". Unfortunately, that's politics so I have no quick solution.]
As for what happens to the poor in future generations, it depends on bringing out the best in those with the power to choose. I don't think the alternative is helpful to entertain at this point. The only question is whether we can mature as a race to share without force, or whether balance will be made using force (government coercion, etc...). It's a question about how much faith we have in the human race to grow up quickly.
Meanwhile the argument ignores the not so far away reality where automation is available to the people who already have resources and jobs today, leaving even more people who currently have little without jobs and automation.
A job is not a right today, it is a responsibility. Our society assumes that everyone, or at least a large majority of all that can, has a job. How do we prepare for a future where the majority cannot get a job?
The most promising answer currently seems to be Basic Income. Though that leaves me asking too. How will we convince people and corporations that have to give up more of their income and accept taxing their property, to redistribute all resources to a huge mass of people that have not money, nor influence? It seems very easy as long as it isn't your own money. Paying taxes, few say that they enjoy that.
In a feudal structure, the lord guides the violence that asserts the control. If you are just talking about machinery, it's going to be awful tough for a small group to continuously resist the forces of millions that move against them. They might build machines of violence, but it is not so likely that they will be able to stop others from building them too (in which case we need a political solution, force won't decide the issue)
But that's where it's going, it's a positive feedback process. The L shaped wealth curve. Are you advocating a different system of laws, not based on private property and business?
The west has sufficient capital and social infrastructure to get by even without a preemptive socioeconomic changes the developing world doesn't have the luxury.
The girls that work in sweatshops in Bangladesh won't be able to retrain or become master crafters selling overpriced crap on Etsy because you'll going to be buying clothes from a dispensary that would 3D print or weave the clothes in minutes to fit your size and specifications perfectly, while people in the west can.
Truck drivers will likely to find other things to do since there will be sufficient capital to pay for jobs, newer generations would have jobs that don't exist yet, heck as long as the west keeps generating wealth the "self employed neohipster economy" can continue growing, we have youtube stars that make millions each year, and there aren't as few of them as you think, you can make a pretty good money from selling bamboo sticks on Etsy, and when everyone will have a 3D printer, weaver and CNC milling machine in their home or at the local 7/11 people would be able to sell their designs on the printer's template store.
Just like smartphones enabled everyone with even basic programming skills to make a decent income from selling apps, like youtube and other sites enabled people to make money by generating content, automation including on-demand manufacturing will generate new opportunities.
But these opportunities will likely to be limited to the already privileged just like every other opportunity beforehand, the developing world always gets the scraps of the table.
I'd be curious what percentage of YouTube channels are actually profitable. Sure, there are probably a lot of people making millions, but I bet there are even more failures out there.
Self employment probably won't work for everyone.
https://socialblade.com/ and other similar sites have pretty good estimates, even if you lower the income of pretty much every full time production channel by 10 it's still more than enough to live on.
This is literally "If you work hard you will be rewarded." Unfortunately, that's ideology rather than fact.
If you want any chance at all then you have to put in the work.
For every Lindsey Sterling there's thousands of people playing violin, badly, in their sweatpants with a Mt. Dew in the background.
1) there's the illustration of people ignoring a world Class violinist playing on the subway when dressed as a busker
2) there's a lot of superlative, good and very good art out there today. It means art is cheap.
3) art like sports has a log distribution of wealth and success. Only a very small minority of people will make money out of it, and a handful of people will make good money out of it. Even if you work extremely hard and constantly.
Take a look at the number of profiles of people on deviant art and the quality of work being put out, and then the prices and amount of money made.
It's the same for music.
I hate to see this brought up over and over. There is a great contextual difference between a concert hall and a subway station. People go to the concert hall to hear music. People go to the subway to get to work. It is not that they don't recognise the quality of the music; they are simply not paying attention to the music at all. Even if they do notice the music and notice that it is unusually good, they are still not all that likely to stop. They have a train to catch and things to do. Why is it surprising that people would ignore a busker in the subway no matter how good they are?
You could be a world class painter at the pinnacle of your style, and it guarantees nothing. If you are unlucky or competing with people more topical/niche than you, it won't matter in the least if you are technically better but they can out market/sell you.
Not always true. Past a certain level of wealth you can make money by doing pretty much nothing, e.g. paying other people to invest your money in safe investments on the stock market.
Do people still fail, sure, do most of them fail maybe, but again for what reason?
Same can be said for anything e.g. opening a coffee shop, if you expect to be in the green after 3 months you probably haven't done your research properly.
You can still fail for many reasons, but at the minimum you need to have a plan and see it through and most people do manage to make a living out of it since a lot of people are self employed and aren't on the street.
The top 0.1% of the world richest, that 7 million people, that´s a lot of people ...
Seriously you make money on youtube by having an extra-large volume of views, and that by definition is going to be a vast minority of the content on youtube.
> Just like smartphones enabled everyone with even basic programming skills to make a decent income from selling apps
Not everyone. Same thing, the vast majority of app developer don´t make any money.
Anyway, why talk about an hypothetical future, why not look at the current world. Since people are currently employed in traditional job and the competition is lower, artists must make an absolute killing, right ? Photographer, Singer, Actor, Music player, Painter, ... surely we must have noticed a massive increase in wealth in those fields and that´s the reason there are so few people going into STEM ?
I am also seeing more-than-decent incomes in the esports community. People making thousands of dollars a month playing, or commenting, video games.
I think people are starting to discover that the way to get an income is to do something other people enjoy.
I think some types of road transport jobs will defy automation for far longer than others. Consider for example a removalist – driving a truck from A to B is far easier to automate than loading and unloading furniture and household effects. By contrast, moving goods between warehouses could be fully automated, since the loading dock at each end could be purpose built to support robotic loading/unloading.
So, you call a service that auto-drives a big container over to you, puts it in your driveway, and leaves. You load your furniture into the big container or hire "loaders" to come do it for you. You call the service, and an automated truck comes, picks up the box, drives it to its destination, puts it in the new driveway, and leaves. You unload it yourself or hire someone, and when it's empty, another automated truck comes by and gets the container.
For urban destinations (no driveways), you call the truck and have loaders/unloaders waiting. For driveways that are blocked by cars or whatever, the truck calls home and a remote operator makes some choices, but he won't have to stay with the truck on the road, so he can manage a whole fleet and doesn't do any loading or unloading.
The loading and unloading? Yes, some humans will have to do it for a long time. The road transport? You can automate that part separately.
The mainstay of developed countries are the service industries, but already we've lost bank tellers, checkout operators, petrol station concierges, etc. to automation. Next in line will be couriers, truck drivers, taxi drivers, etc. Eventually most jobs will be lost. As a developer, if I'm lucky enough to have a job in the future, it will be writing specifications for code that will be automatically generated.
We aren't going to replace all of those jobs with hand crafted jewelry.
The question is - are the new jobs as well paying as the jobs which are lost.
I really love economics, but you've got to realize that while microeconomics is extremely rigorous and everyone should know some of it, macroeconomics involves a great deal of ideological assumptions and hand-waving, and doesn't have a good theory of technological disruption any more than it has a really good theory of oligopoly.
When people say small businesses matter they are looked at weirdly but that is true because a business even if it directly employs a single person indirectly employees many others.
50 years ago some one in data entry would say the same thing as you, I would be lucky if I'll be just writing specifications for what tables this data needs to go into, and you know how we call these people today? Developers....
New jobs are created all the time, 8 out of 10 people don't grow their food, we don't have a village blacksmith and people aren't walking around with long sticks knocking on windows to wake you up in the morning to go to work.
Yes there will be quite a few changes in the next 20-50 years but this gloom and doom is ridiculous.
In any of these companies we don't have hundreds of creative jobs, there are a hand full of writing, presenting, editing jobs, etc. Most work is in marketing, admin, and support. Service jobs which can be automated with some oversight.
What made you think this scenario is doom and gloom? I'm looking forwards to working a 3 day weeks as a software specification writer to supplement my universal basic income, while I sit next to a cabin by a remote lake using my SpaceX internet service.
The fact that I can get Nike shoes made at on the 3D printer at the local corner shop won't affect me, it will affect the people in Bangladesh and the Philippines that used to make my overpriced shoes.
In fact it might even give my next door art major neighbour a new job opportunity because I might just adore their new leopard print digital camo design they came up with and they'll get 15$ when I print my new pair of shoes.
And besides my neighbour I might also give 28$ to that new hot YC startup that does a 3D print scan of your body, performs a gate analysis on your walk or run, and then produces a specific sole profile unique to your body and gate.
The problem with this is as I stated that this effectively cuts out the rest of the world from the west because we don't need them anymore, if they aren't our food basket or our clothing and gadget factory then they effectively have no interactions with us.
And please don't confuse this as some statement of superiority or support for some isolationist costs it's just harsh reality that many people wouldn't even know Bangladesh exists if they didn't had to read the washing label on their jeans once in awhile.
We turn into a bunch of artisans and crafters, your neighbor is a fashion designer. I'm curious as to what you do in this scenario?
If most people truly don't know where Bangledesh is, then one positive side effect fore free time could be more education. :)
One of the privileges of living in the west is that as harsh as it may sound we don't live to feed or clothe ourselves like people in many other parts of the world do, sure if you lose your job you can't pay rent, but you have considerably better means of adaption.
And hey if automation is such a threat to the skilled and educated labor force that all of a sudden all these highly paid developers are out of a job we might get more and better teachers.
As for the Nike thing, we might cut out the middleman but honestly more likely they'll evolve to be a service provider so your local shoe store will have a specialized 3D printer developed by Nike or Asics.
You'll still need people to develop the tools, you still need people to do research into new materials and production techniques, you still need advertisers and managers, a lot of hard and soft skills jobs aren't going anywhere they just are moved to a different place in the supply chain.
Ah, you're going to supplement your future income stream that doesn't exist yet. Good luck with that.
Last time i researched this issue, i came to the conclusion there are only about a few thousand youtubers, globally , are making a living.
LOL no. If I had a few billions of capital to deploy I could put a lot more people out of work in the US within a few years. This is great from a consumer point of view (personally I often prefer using a machine to having to deal with a person) but it's pretty terrible from an macroeconomic standpoint because you have an ever-shrinking pool of people earning money relative to the size of the population as a whole.
*Conditions apply, nothing is free.
Clearly, without the introduction of a major tax on robots as capital equipment, robot-based manufacturing cannot boost the fiscal revenues needed to finance both social transfers, to support workers made redundant by robots, and minimum wages, to stem a decline in the living standards of low- skilled and medium-skilled workers.
If robots do the work AND there is a functioning market, this will have two effects:
- substitution of low-skilled labor
- cheaper prices across the board
People most often forget the second item and ask for transfers as if people were automatically entitled because socialism. But they will get their share via the second item.
Also, work is infinite because human needs are infinite. Maybe servants in households become more popular again, who knows? If work weren't infinite we would all be unemployed already, according to the theories of 19th century economists. Yet here we are, working, and repeating the same mistake.
Another argument is that in the worst case we can just destroy all robots (and factories and wheels while we're at it), let's find out if we're better off after that or worse.
Finally, the current economic mainstream calls out "deflation" as the biggest threat to the economy, yet it is deflation that will increase real wages automagically. Of course, highly indebted entities (such as your government) will want you to believe otherwise so they claim that everything grinds to a halt if we just have negative inflation for a few months. Also, Central Banks would lose their justification if deflation is discovered to be not as bad as claimed.
PS: Planned obsolecence for example is a direct result of limited wants.
There is also improvements you might want to have like
- a faster computer - a bigger apartment
Now I know these options are not on the table today because you can get along without them but I doubt that if the price was low enough that you'd skip them.
But if indeed none of this convinces you, let me know your profession - my bet would be you are a well-earning Zen monk :)
Please comment below and say "I promise I will never want more time or more money, neither today nor in the future" if this is untrue.
EDIT: I used human needs before but I'm not sure this is entirely synonymous to human wants
A faster computer, ehh possibly. I am kind of annoyed they have are not getting dramatically better all the time. But, automation is not producing new things, it's producing old things more quickly. Apple does not make a faster iPad than the one I am using so at best I would have spent less not gotten a faster machine.
Which is the real issue. There is plenty of stuff I want but the problem is it does not exist.
In the short term putting a floor on incomes is going to hurt a lot of people. Increasing minimum wage can be viewed as a way to make it illegal to hire humans over robots. I don't know current prices, but a Knightscope robot was supposed to work out at or below minimum wage. Low interest rates are a double blow because you can finance a six figure robot at a very attractive rate.
In the West I see policies being driven by inflation targets along with an attempt to build a high-income well educated workforce (this is the really, really nice way of saying things.) I see only the briefest hints of this outlook changing.
There are going to be transition periods. Everything I have read doesn't do a good job at this. Policies in stage one could be very destructive at stage two, and vice versa. The demographics of the human population also must be strongly considered. A lot of countries have inverted pyramids. The current standard of living will not be sustainable without either a lot of immigration or mass scale automation.
The long term goals should, #1 be humans surviving as a species and #2 having an extremely high standard of sustainable living. Neither is remotely guaranteed.
My prediction is that we will be forced into a situation where we have millions unemployed and needing universal basic income because they were educated to be employed in a system that suddenly lost its ability to accept any risk to people....which coincided with the technological ability to automate their jobs away.
The fact that people get hurt will eliminate their ability to be a viable means of production in many industries.
Finland's economy looks to be about a decade behind. I wonder what it'll be like when things change quickly.
The horse business people got fucked.
Owners tried not to be evil and kept a lot of employees. People who used to do more intense manual work, were now standing around watching the new marvelous German-engineered printer do its magic. Some of the positions were almost made up just give workers a chance to stay longer.
At some point they offered people money to quit. Some took that option, including father-in-law. Not sure what happened to others.
Basic income is a good idea. I am behind it. But people like my father-in-law would be against taking it. They'd need to do some work, to feel like they are useful and they are earning a paycheck. I think the idea has to be promoted carefully so it doesn't seem like a handout or redistribution of wealth. Not exactly sure what the solution would look like.
Have a skeleton organization that basically just works as a dispatcher and collector of time sheets. You still only get paid for work done.
At some point the idea is that companies who automate and don't keep the people because, well that's what makes them more money, will win or out-compete those who don't.
Maybe basic income can be used to incentivize people to learn more -- learn to program, social help (learn to help others, provide care for elderly), learn to manage and maintain robots, maybe find a way to strengthen the community (we'll pay you, but if you help build or maintain the local school you get paid more...?)
We will have to invent make-work things for folks to do I guess. And call it work.
If all of our basic material needs are fulfilled, and we only take what we need, it would be an interesting and rewarding ride.
That's the optimist side of me speaking. It could go the other way too if we humans want to keep fighting and arguing over resources and power. I hope that we could learn to get past that if everyone has what they need.
I think about the change my 94 year old grandmother has seen in her lifetime. The technologies and types of jobs we have now compared to her early days are mind blowing. The rate of change today seems orders of magnitude faster and keeps accelerating.
Bring on the robots.
Your todo list is very sensible and, in my opinion, very doable. Other than a couple items, I do it now. I would like to be optimistic and say that in the future with more automation that many more could live as well as I do.
There is however no limit to human wants.
Secondly, no investment manager would be fulfilling his fiduciary duty if he didn't warn you that past performance does not guarantee future results. Just because the industrial revolution eventually ended up producing a different sort of job to employ all of humanity doesn't mean changes currently afoot will do the same.
1. Speed matters. Going from 100% to 2% over a century is one thing, doing it in 5 years is another. Which isn't to say that it'll necessary be that fast, just that if it is (and there are some reasons to think it will be) that it will have serious consequences for human welfare.
2. People like to point at the industrial and digital revolutions as examples to say "hey look, you can enhance productivity without killing jobs - the jobs just move around". And that's fine, they're excellent examples of that phenomenon. However, two prior examples is not exactly overwhelming evidence, and there are at least a couple real reasons to think that 'this time is different'. Specifically, that AI is getting really good at mimicking humans for particular tasks. We certainly don't have general AI yet, but what we do have can get really good at a whole lot of low-skill, low-education jobs, and a few high-skill high-education ones too.
When the industrial revolution happened human jobs persisted because humans could use judgment and learn new things. It was too expensive to automate everything that could in principle be automated, because your processes might change tomorrow. New manufacturing tech is much better at reconfigurability, so that defense is likely out. New AI techniques are able to replicate human judgment in many scenarios now too. Not all of course, but many. If you eliminate all jobs that involve a human doing a particular physical task, you're not left with a whole lot for third world or low-education first-worlders to do.
Now, all that being said, would I be extremely surprised if automation came along and labor markets simply retooled around it and everything was fine? No, not really. But I wouldn't be surprised the other way either, and I think it's something we should take pretty seriously.
AI is different in what it can do and how that scale. Capture the "knowledge" once and it can be reproduced indefinitely. Again, that's very different.
1) Entrepreneurs and organizers who initiate new products, services, movements, or new styles of arts and interactions.
2) People experts--designers, entertainers, artists, experience enhancers, high-level service personnels, value-enhancing salespeople--who understand deep human needs and use their creativity, empathy, interpersonal skills, and technology to realize them. Routine "people jobs" that customers wouldn't pay more to interact with humans could be replaced by AI agents, in some cases in humaniod robotic bodies.
3) Well-rounded analysts who can communicate with clients and stakeholders and translate their needs into fairly high-level specifications for automation technology to perform. Low-level programming jobs will increasingly become more of a niche as software & platforms can adapt better through machine learning and upcoming AI advances. More and more software will be programmable, implicitly and explicitly, by end users.
4) Locomotion specialists--physical therapists, specialist nurses, dentists--who integrate theoretical knowledge and experience with their flexibility and dexterity. Robotics technology will take a good many decades before it can cost effectively compete with these experts. I think we may achieve human-level ability to think and solve problems flexibly before these people are challenged.
(Let me know if there are categories I miss.)
--
It seems to me categories 1) and 2) above may have the most openings for workers in the future. Education systems in most of the world are badly inadequate for preparing people for those jobs, however. The worst-fit systems are in developing countries where they are still heavily rooted in models for training 20th century industrial workers. Open-ended educational models like Montessori need to spread much more widely to prevent inequitable jobless future for the masses.
Note: Basic income is orthogonal to having respectable occupations and providing value to community. It is likely that human psychology has been shaped, culturally and even evolutionarily, in a way that people need a purpose and a valued occupation to live and feel well. (Perhaps the average number of working hours will be reduced to 3-4 hours per day and people will be free to pursue their hobbies and social activities.)
I was looking at education tech, and I think education is not a "solvable problem".
Retention and mastery Remain the two ends of the success spectrum.
But where a student lies on that spectrum depends on a lot of variables, several of which directly link to economic outcomes in the nation such as
1) nutrition levels of parent and grand parent (in particular female education)
2) nutrition availability
3) average household wealth
4) child labor (more importantly - the necessity for children to work to keep the family unit going)
5) country stability (no war is an obvious one)
6) teacher quality and school funding
These in turn impact very personal variables that determine how students codify information such as
1) student age (children vs an adult who needs to retrain while keeping a family afloat)
2) learning style
3) mastery of language of education, and mastery of the language of higher education (multi language societies have to Deal with this)
4) stress
5) health and health availability
6) freedom to study (if you are a girl child, or Of the wrong tribe/caste/color/religion)
And this doesn't account for many other variables such as people actively trying to teach you falsehoods or bad syllabi (sort of part of the education quality)
And this entire system does not exist in a vaccum - parents tend to push kids into education streams which improve job options, hence the demand for STEM.
Edit: damn autocorrect
Bottom line: There are a lot of opportunities to increase the number of people doing those kinds of jobs, if the middle class and the working class receive productivity dividends from automation (through economy or government subsidies).
In the developed world we don't seem to be going through much of a automation revolution at the moment - for example, U.S. productivity growth is actually fairly low right now[1].
[1] http://www.forbes.com/sites/timworstall/2016/05/09/donald-tr...
Well - the replaced already replaced a president, to replace those that replace them, in the short and long run. Now- if everybody loses his place in society's maze at this pace, then the unraveled community's will take up the mace and smash the enlightenment straight in the face. The Last AI to go may as well, be the UN-Report Writer in space.
"Anything that gives a human being meaning - as long as it chooses it voluntarily, is off limits to the machines." Hammer that in stone, put it up on Palo Alto Plaza.
The scape-goat hunt is in full progress, and once the Society runs out of scape-goats, they will start to bite into the financial protective shields of the transformation accelerators and propellers. He who runs out of propaganda money last, shall sit upon the crumbling hill - victorious?
Makes for a interesting Fermi Paradox solution- society self-medievialized and religious entrenched against progress and machinery until the cosmic dice ends it.
The sheer increase in wealth and quality of life that this will represent, at every stratum of society, is going to be immense.
Rural America is poor, not because it is not rich in natural capital and real estate, but because it suffers from a perpetual labor shortage. (14 percent of the U.S. rural are spread across 72 percent of the Nation's land area) Urbanization has a monopoly on talent at this point in time because of globalization and the wealth structure of internationalist neoliberal capitalism. (The Silicon Valley model)
Robotic labor will change that, especially given the strictness of UAV laws in the US and the UK today. They are practically legislating that drones must find profitability in low-value, low-population areas.
Fine. Challenge accepted.
To give another example of such labor shortages, 75% of the United Arab Emirates population is Chinese, Indian, Pakistani, and Filipino immigrants doing construction jobs. The other 2.3 million native UAE nationals can't possibly engage in all of the ancillary labor opportunities that Dubai money commands.
Wealthy nations are suffering from labor shortages all over the world and have been for decades. They've raced to solve these problems in the only way they know how: attracting the flow of post-colonials because of standards of living arbitrage. (Very often, people used to being so poor being treated like garbage in a wealthy nation is a significantly better prospect than staying home) In the EU, for example, they can no longer print their own currency, but each member state can still issue bonds. They are already engaging in socialist taxation regimes, so raising taxes to pay for the bonds is impossible. Therefore, you need to enrich your corporations by giving them access to cheap labor and pray you can tax them before they allocate their new found wealth in the Isle of Mann.
Unfortunately, this impulse isn't such a clean transition, as most of these old world nations (with old world money) have the political, institutional, and cultural reflex to give new blood two options: Comply with your role in our social pecking order 100% or be exiled/imprisoned/exterminated. Race riots, cultural flare-ups, demographic conflict, and other Huntingtonian events can easily be exploited and exacerbated by political opportunists, ultimately destabilizing the very social configuration that made your nation attractive to begin with. No matter what the well-wishers say, when it all goes belly up, civilizations always divide themselves along ethnic (the American definition) lines.
If we continue to refuse (as many have since the 1970s) addressing the labor shortage problem with our established institutions, people like me will be forced to address it technologically and your cherished institutions and the morality that they stand upon will be ground into the dirt upon its passing.
What would keep you from addressing it technologically even when it is addressed with your so-called established institutions?
- When tractors were widely available and cheap, did land-owners refuse to buy them, and kept hiring farm employees?
- Did they ask for established institutions to help them out, instead of buying a bunch of tractors, hiring a fraction of the previous number of employees for driving the tractors, and never having to look back?
- Are there farm owners out there who still long for the days established institutions solved their labor shortage problems so they don't have to buy tractors?
Have you seen CGPGrey's Humans Need Not Apply? (link: https://www.youtube.com/watch?v=7Pq-S557XQU)
A fantastic question. Socialist protectionism can absolutely drive the cost of human labor down well beyond competitive price points of even the most cheapest and sophisticated robotic labor. Cuba is a fantastic example of this. (Which I suspect will be the last place to embrace robotic labor) The Castro's have established strict price controls, which means doctors or janitors can get $6 a day while bread costs a few pennies. They have the material utopia... which sounds good, until you realize the Castro's offer their nation's labor at $20 an hour to Europe. With a 48 hour work week, the Castro's pocket $19.375 dollars PER WORKER PER HOUR while the worker takes home $0.625 per hour. They've established a familiar aristocracy under the name of actual, functional socialism. Never underestimate the power of political organization to drive human value to subslavery price points.
> When tractors were widely available and cheap, did land-owners refuse to buy them, and kept hiring farm employees?
> Did they ask for established institutions to help them out, instead of buying a bunch of tractors, hiring a fraction of the previous number of employees for driving the tractors, and never having to look back?
For tractors to be widely available and cheap, this implies a juxtaposition with a time in which pre-tractor farming was expensive. The industrial age ultimately rendered traditional slavery too expensive compared to the common laborer due to unique combination of clever agricultural engineering, the birth of modern financial capitalism, and robust land availability via new gains in military conquest. Be it a slave, an immigrant, or a vagabond, the final price points didn't significantly affect yield, thus, the real cost of slavery (maintenance, security, lobbying, administration, etc.) was exposed and was no longer competitive. America, a major cotton exporter, fought a bloody civil war to protect that exporter status against Egypt and India, so yes, institutional assistance to preserve the previously profitable model was absolutely involved in both the enrichment of successful labor practices and replacing it with something more GDP efficient.
This transition took place in a world where the first steam tractors in the 1870s weighed 30,000 pounds![1] The technical maintenance of these beasts was impossible for the average farmer. It wasn't until Ford and the gasoline revolution that tractors finally took off and were make cheap enough. By then, human organization was also in the midst of the electric light bulb, doubling human productivity, and the steel highrise, linearly scaling the productivity of a parcel of land. This massive surge of productive capacity, when paired with growth-oriented industrial capitalism, created a tremendous labor shortage. Peak tractor production didn't occur until 1951, well after America established itself as the world reserve currency. I'd be suspicious of using the tractor as a valid analog for artificial intelligence.
When productive capacity skyrocketed due to these three technological innovations, farm owners did hire more employees, as did the rest of the aggregate productive forces of society.
> Are there farm owners out there who still long for the days established institutions solved their labor shortage problems so they don't have to buy tractors?
I believe you call them “southerners” and they are solving their labor shortages with institutional mandates (via globalization and NAFTA) that allow immigrant labor to be cheaper than native labor.
> Have you seen CGPGrey's Humans Need Not Apply?
I have. I'm deeply familiar with Baxter and it's ability to augment FoxConn. Notice I said augment, not replace. It's response times are still too slow, and even if it got a CUDA-powered GPU neural network, China can always engage in protectionist legislation that render all technological advantages moot. CPGrey doesn't address the ability of the Cuba's and the China's of the world to socially absorb actual labor costs due of political paranoia. I recommend studying the tale of William Lee[2] to see just how far back the political fear of automation goes.
[1] https://eh.net/encyclopedia/economic-history-of-tractors-in-...
You make a nice mention of 'socialist protectionism'. Essentially what you described, looks like Cuba is a giant factory full of slaves instead of a country, and EU is its customer.
First of all, you had to pick the worst of the worst implementation of an economy (Cuba) to make your point. Does my question look like I was asking for a counter-example, no matter how horrible or remote? If that's the goal then I have an even better answer "Sadism would keep a farm owner from using technology to do farming". I hope it's clear that that's not the kind of answer I was looking for.
Not only that, I just checked 'Economy of Cuba' wikipedia page and it has to import 70-80% of its food. So your worst of the worst example is still not good enough to make manual-farming labor cost-effective.
Later, you use phrases like "unique combination of" and "clever" and what not. Really? Was the industrial revolution so unique and clever that something similar will never ever be repeated? Have you looked at the daily science and technology innovation news around yourself?
"response time are too slow" and even if not, back to "social protectionism".
Sorry I've completely lost you. I don't even know if you're saying whatever you're saying as a socialist or lassez-faire capitalist or what, so I could at least put your point of view in perspective. What I do know is that every passing day, my conviction keeps getting stronger that politicians and economists love to get lost in the word-soup of archaic ideas, and completely miss the mark that the technologists are making on the world one day after another.
The point was to show the lengths of insanity humanity can endure just to protect itself from automation, thus, answering your questions. Cuban food importing is due to it's economic distribution to allowing populations to grow well beyond what that island can naturally sustain. If anything, that's actually a sign of it's economic effectiveness to bypass resource shortages.
> Was the industrial revolution so unique and clever that something similar will never ever be repeated?
Yes. The mathematical formulations that powered that revolution are now known by the whole of humanity. Barring an apocalyptic calamity, the discovery of statistics that allowed for mastery of nature through chemistry and atomic theory and mastery of mankind through economics will never be repeated because our entire system has been designed to maximize the gains from that mathematical discovery. The next mathematical revolution, which I suspect will be Bayesian inference, will reveal new things about nature and human behavior, and our economic engines will tilt to maximize those discoveries.
> "response time are too slow" and even if not, back to "social protectionism".
Again, all of your questions were trying to draw absurd conclusions that somehow, only through technological prowess can every single problem of AI be resolved. I'm here to remind you that William Lee, and Cuba, and China, and Venezuela, and political protectionism are real reoccurring things that can completely crush any "technology always wins because Silicon Valley" hope you have.
That protectionism is what "refusing to address the labor shortage problem with our established institutions" actually looks like.
An alternate theory for why resources aren't being exploited is an aggregate demand shortfall. This would result in low capital utilization, low labor utilization and slow growth.
Which model better fits the facts in the world today: the one which supposes there's a labor shortage or the one that supposes a demand shortfall?
This is correct in theoretical economics. This is incorrect in actual economic practice only because theoretical economics has no game theory model for political advantages. In fact, the entire concept of these advantages are hand-waved away as "corruption". Labor shortage only justifies wage advantage among specialist workers. (Programmers, lawyers, accounts, and other symbol artisans) Labor shortage among common workers justifies cost crisis for the producer, forcing them to engage in political games via lobbyists to discover advantage for the cheapest worker and alter the laws to make that worker accessible. (The Ford model)
> An alternate theory for why resources aren't being exploited is an aggregate demand shortfall. This would result in low capital utilization, low labor utilization and slow growth.
The current aggregate demand shortfall happened after 2008, in which the Fed absorbed all toxic mortgages and cut off the productive forces of the world to supply the American housing boon. The entire global economy was geared for that type of collective oil consumption, and when it became obvious Americans couldn't pay their mortgages, the jig was up. Yes, this resulted in slow growth for the PREVIOUS configuration of human interaction. (The Miltonian model) Every housing opportunity short was taken off of the books AND off of the market, depriving housing service labor wealth opportunities and consolidating them all into the Fed. Thus, the housing market was forced into an artificial labor shortage because of artificial inventory contraction. In exchange, the banks were given an asset swap, flooding them with liquidity, and they all sought profit opportunities overseas to pay themselves out of outright nationalization in exchange for their hard assets. Thus. the post-war American consumer role of first and last resort for world productivity was intentionally stifled by Federal Reserve intervention, resulting in time-specialized capital utilization, which cause low mass capital and mass labor utilization, finalizing in slow growth.
> Which model better fits the facts in the world today: the one which supposes there's a labor shortage or the one that supposes a demand shortfall?
Current demand shortfall is a byproduct of the factors I have mentioned above, and hardly a model worth extrapolating from unless you can eliminate the Federal Reserve's role in the matter. In a world in which there is no consumer of first and last resort, what is the alternative? China absorbs its own productive capacity? African consumption absorbs… what? Facebook's benevolence? You're left with an intentionally fractured world in which nations are forced to realign their entire political and social arrangements to maximize oil consumption from a dynamic list of competitors to stave off politically destabilizing labor shortages. This means that, if oil is deprived from your nation, you will absolutely experience a politically destabilizing labor shortage! You will not be able to mobilize your masses to chase global opportunity because you will be priced out of the game before you even start… unless you engage in socialistic configuration to absolutely control prices, and then you're just managing peak production limitations.
If my reasoning holds, then the question is thus: Is America experiencing an oil shortage?
If oil is cheap and it is not being consumed, then the profits to be had through its consumption are not high enough. If the oil is cheap and it is being consumed, then the profits to be had through its consumption are too low.
If the profits of oil consumption are not high enough, then what we are actually describing is a labor shortage because the human cost of living has deterred additional oil consumption. Thus, labor that does not have to shoulder such costs of living (robotic) CAN consume oil and achieve profits to sustain its own consumption.
So if oil is cheap and no one is buying it, it is because we have a labor shortage for that particular oil price point.
There is no magical land in the midwest where humans dare not tread that is a bountiful gold mine of productive capacity.
Demand for labor is not a reflection of "there is so much work to be done, if people are willing to do it for no pay" in the same way you cannot claim there is tremendous demand for mansions because most people do not live in them already. Demand comes from financial pressure on suppliers to generate supply. Be it labor, corn, or software. Real demand creates a business opportunity. All the examples you cited are just the exploitation of poor helpless masses for cheap labor to do work that would not be done if people could not be paid so little for it. Its the extra toaster cozy of the labor market, a thing you do not actually particularly want or need enough to create actual substantial demand, but something you will get on the cheap because its there and convenient.
There is no future in that. Economics cannot be powered by the utmost of human desperation and poverty. Well... it actually can, and was for much of the industrial revolution, but with our modern advent of human rights and treating workers like actual people rather than cost centers reverting to the use of the starving as disposable tools would hopefully be a bit repugnant to some.
People move from rural areas to urban ones because there is no demand for them where they came from. The land is utilized, and often constrained by freshwater access than actual square footage, but until crop prices rise enough to justify expensive pumping of freshwater to drier regions nothing will change there. So they have to go where even the slightest potential opportunity is, and that is what has driven people into cities for centuries.
Natural resources in demand requiring labor is can absolutely cause a labor shortage. But that's not the only way to achieve a labor shortage.
> Demand comes from financial pressure on suppliers to generate supply. Be it labor, corn, or software. Real demand creates a business opportunity.
Correct. Current configurations of labor determines what is and is not profitable. For centuries, horses and man were the most profitable configuration of labor. In my world, robots and AI are. How you configure labor determines the accessibility of demand, which determines venture opportunities in production.
> All the examples you cited are just the exploitation of poor helpless masses for cheap labor to do work that would not be done if people could not be paid so little for it.
My examples are of politically expedient labor doing work that politically inexpedient labor would do, highlighting the influence of political lobbyists in the consumption/demand model.
> Its the extra toaster cozy of the labor market, a thing you do not actually particularly want or need enough to create actual substantial demand, but something you will get on the cheap because its there and convenient.
I would argue this type of conspicuous demand is an artifact of technological slack, allowing producers to market and sell virtualized importance of their own goods. When paired with demand having excess wealth to expend, productive forces adapt accordingly. When technological slack is paired with lack of wealth expenditure, again, all this means is a labor shortage to drive the price points down. Having a robotic work force that can produce goods for pennies can allow those goods to be accessible to even the poorest, allowing them to depart with their wealth in exchange for the good. Thus, the reason the good is not consumed is because of its price point, which is caused by labor shortages. Robotic labor can soften the labor shortage price spike by simply allowing more labor that doesn't have human costs.
> There is no future in that. Economics cannot be powered by the utmost of human desperation and poverty.
Yes. However, the productive forces of economics can be decoupled from human desperation through robotic labor. That changes everything.
> People move from rural areas to urban ones because there is no demand for them where they came from.
There is no demand where they came from because they suffer from a labor shortage to provide the goods of their labors against urban economies of scale.
You're reply is a good one. Please continue.
Hasta la vista!
Usually the knee-jerk easy response to automation is universal basic income. And while I wish/want us to all have a UBI; those in the developing world will definitely be the last groups on the planet to receive one.
The future vision of the blockchain is the complete dismantling of all hierarchies and total autonomy at the individual level. So governments, organizations, VC, companies, jobs etc are replaced with DAOs and blockchain-based co-ops capable of the same or greater complexity and value-add without the hierarchy.
The big issue I'm facing, and I think the whole ecosystem is facing, is how do you transition the global economy to that future? It needs to be incremental but rapid, familiar but new, to exploit existing human incentives and status quo's while hiding all the unfamiliar crypto jargon behind the scenes such that anyone can immediately and intuitively adopt the new economic protocol.
We live in a world of such scale that it's nearly impossible to compete with the companies that are established.
As we loose jobs to multinationals and automation then something has to change in the way we structure our economies, because the income divide will grow as the rich (who earn wealth from owning) will not suffer as much as the middle class and poor (who earn money from working).
At the very least companies like Google, Amazon, Facebook, etc. Are going to have to start paying fair taxes in any jurisdiction that they operate in. The fact that technology will be cheaper and more accessible (see the SpaceX internet satellite constellation) and no one will have jobs in the developed or developing world, coupled with the fact that in general poorer countries seem to have more natural resources (that can be automated but still generate wealth for the house country), means that things might actually level between the developed and developing.
Of course the big companies will be based in the US and Europe, but unless you're giving every single person shares the money that they make will go to a few. In this admittedly doomsday scenario the money will actually drop because people won't be working to pay for services or buy products, but the scale will be such that they will still be highly profitable.
Expect revolutions before that day.