Luddites have been getting a bad rap for 200 years but turns out they were right
qz.com
qz.com
In actuality, what happens is as expenses decrease through automation, either capital is bid up or prices are reduced so that the profit margin (net income over revenue) is in line with the amount of risk, along with other things. So, true, a market economy does not "kick some of that money down to the workers", but rather spreads the benefits and lower costs to everyone through lower prices or higher quality.
Were all the benefits of automation going to the bottom line of the business owners, you would see a steady increase in corporate profit margin [0]. Right now they're near historic highs but that is only very recent and the trend is not in line with the trend of automation in the US. Furthermore, if you look at the top 1%, much of their income came from wages and self-employment business income:
> The richest 1% earn roughly half their income from wages and salaries, a quarter from self-employment and business income, and the remainder from interest, dividends, capital gains and rent. According to an analysis of tax returns by Jon Bakija of Williams College and two others, 16% of the top 1% were in medical professions and 8% were lawyers: shares that have changed little between 1979 and 2005, the latest year the authors examined (see chart). The most striking shift has been the growth of financial occupations, from just under 8% of the wealthy in 1979 to 13.9% in 2005. Their representation within the top 0.1% is even more pronounced: 18%, up from 11% in 1979. [1]
[0] https://si.wsj.net/public/resources/images/ON-BL063_StWise_G...
This [1] report indicates that falling wage share is ubiquitous among developed countries.
[1] https://www.oecd.org/g20/topics/employment-and-social-policy...
It's no coincidence that "corporation" was something that only became viable on that time.
Really, you got a very selective symptom, got a positive result, and are just dismissing it. Why?
> The richest 1% earn roughly half their income from wages and salaries
That's only because 1% is too big a number. Square it and look again.
Sure. Not exactly 0.01% but you can look at Forbes 400 and where they got their wealth and any trends.
> This year, we gave each member of The Forbes 400 a score on a scale from 1 to 10 -- a 1 indicating the fortune was completely inherited, while a 10 was for a Horatio Alger-esque journey. We also did the analysis for every 10 years going back to 1984. Looking at the numbers over time, the data lead us to an interesting insight: in 1984, less than half of people on The Forbes 400 were self-made; today, 69% of the 400 created their own fortunes.[0]
[0] https://www.forbes.com/sites/afontevecchia/2014/10/02/the-ne...
They make it sound like some triumph of the American dream, when it's at best a humble change. After 3 decades of what has been a huge change in economy, moving to the "information economy" and the "digital age", and with all the celebrated tech moguls being added to the world's richest people, there's only ~20-25% more self-made rather than inherited fortunes. As if the digital age just impacted/disrupted 1/4 of the established wealth.
Meanwhile, the part they've missed, is that the American dream is not about getting to the "Forbes Top 400", but in general to moving up from poor/working class/lower middle class, and this has been problematic for decades, with increasingly less people making more than their parents.
It is still a winner takes all environment.
A notion that have been rejected in mainstream economics since the 50's.
My key takeaway is that, often automation can drive prices down, which increases demand, which in turn increases employment. This counterbalancing effect can eventually increase total employment, although the new jobs may go to different people.
AI replacing services is a bit different than robots replacing workers in manufacturing, in my view, because often the entire job is not replaced. It can have the effect of allowing the human to focus on (currently) non-automated portions of the job. Accounting is ripe for automation, for example, but I predict it will be a good thing for most accountants. Well, predictions are dangerous, but, there, I've said it.
As far as manual labor is concerned, it seems to me that ship has sailed.
A society with automation will always be richer than one without it. The fight against automation is really baffling me. People are actively fighting against progress. Automation eliminates boring stupid jobs and replaces them with great, interesting ones. I am extremely happy to live in a country that embraces science & technology.
At which point, you need to fix the system - either make it so that jobs aren't necessary to get the gains (i.e. the money), or create "jobs" that aren't strictly necessary, or, if you cannot fix the system, rip it down with violent revolution and make sure the replacement system isn't broken in the same way as the predecessor.
Basically, it's outrage against a double-abstraction suckerpunch - either there's too much work or there's not enough work, you can't have both.
I think many Americans agree with the bloodshed of the American revolution.
So far, labour force participation rates in developed economies is still in the same 60%-70% band that it's ranged in since women joined the workforce en masse in the 60s.
I'm not saying it's impossible, just that we're not in any better a position to judge than 19th century people were. These things are pretty hard to predict. Ultimately "AI" is not unique economically (short of Kurzweil-esque machine consciousness). The industrial revolution massively reduced labour needed to produce spoons or cars but actually increased employment rates in manufacturing. It was trade that reduced manufacturing employment rates. The communications revolution replaced the need for secretaries, typists, errand boys and many other clerical roles. There might be more people employed in "administration" today than at any point in history^. The relationship between labour saving technology and the demand for labour is complex, difficult to speculate about.
^The administration boom (pointed out by David Graeber) is baffling to me. I'd love to hear some theories on it.
We know from the past that new jobs are created in activities for what there are not machines able to do it. We are running out of things inside that category. It's not so bad an idea to stop and think about what could happen when we arrive there.
"short of Kurzweil-esque machine consciousness"
I have never received a dime for being conscious, but I have been paid for making inferences that machines can't do. That they can't do yet.
We have two competing sentiments - that workers are exploited by capitalists for the value they provide via their labor, and that the overall efficiency of an economy is dependent on people working in their own self interest.
I think the problem we face is not how best to redistribute wealth, but how to align these two sentiments instead of creating an adversarial relationship between labor and entrepreneur.
And I think Marx was right - workers should own the means of production. However, the historical methods to achieve this have been overwhelmingly inefficient and usually enforced at the point of a gun. That's a mistake.
Meanwhile, in capitalist economies, joint ownership enterprises rose up and the cost of automation came down. Anyone can now buy a share of Apple stock for a day's wage[1], and carry around one of their super computers for a week's wage[2].
The real problem is one of culture. The Luddites had enough organization to mount frontal assaults on the textile mills that threatened them, so why couldn't they pool their resources and start their own mills?
Today, we encourage young people to take on loads of debt to go to college, ensuring they leave college subject to the whims of capitalists. The sentiment is right: it makes sense to encourage young people to carve out a living for themselves early in life. But the cultural method of achieving this makes no sense. It would make more sense to encourage young people to take minimum wage jobs when they turn 15 and investing every spare dime that they have - thus giving themselves a basic income early in life.
The article suggests minimum wages, public pension funds, and higher taxes on business is the answer. I think it's absurd to penalize the most efficient, most product parts of an economy for being more efficient and more productive.
If coercive redistribution is something we deem necessary as a society, then we should be redistributing ownership of our most profitable corporations to those who are least able to fend for themselves. An equity tax that takes shares of APPL from Tim Cook and gives them to people on food stamps.
That way, marginal increases in productivity are not disincentivized by tax policy, and laborers who now own the means of production are no longer exploited, but rather rewarded in tandem with the entrepreneur.
[0]https://news.ycombinator.com/user?id=padobson
It seems to me to nicely explain the rise in incomes for, ironically, the least "productive" professions such as Health care, professorship, etc relative to anything that can be automated for high productivity.
Over a significant length of time, it does the opposite. If one worker can do the job of 100, then demand for human workers will go down in that industry. For any "Amazon warehouse slave" who demands $15 an hour there will be plenty willing to take the job.
So long as the capitalist needs his workers, the workers can enjoy a nice lifestyle. Witness the Greatest Generation and their baby boomer children working for decades at the same company.
Compare to today - temp jobs, and very little loyalty. People moving in with their parents, unable to afford rent. What changed? Why is rent so high relative to wages?
Well because AVERAGE DEMAND FOR HUMAN LABOR has gone down in the marketplace. Products have gone down in price too (eg cellphones) but rent and food stay scarce. This explains Piketty and a lot more.
A lot of it is due to globalization (see David Harvey). This is, imho, a good thing for people around the world unless you are a super-nationalist. Poverty has been reduced around the world.
But the other is automation. And what's coming is going to hit developing countries very hard.
I don't disagree with the essence of your post, but there is an implication there that I heard frequently and I want to dispute: the idea that globalization is automatically good for the poor people of the world.
If you look to the data, the reduction in poverty is essentially due to China (and maybe India).
It's the management by China of globalization (whatever we think of its others sins) what have reduced poverty in the world.
Maybe globalization was necessary, but it was not sufficient.
Even if they did redistribute the new income to the whole country, it wouldn't bring back the weaving jobs. Those jobs are gone forever.
Separately, legislating low margins in an industry sounds like trouble.
With time something else changed¹, and tech became a good thing.
1 - My bet is on ubiquity. Capital became so common it started to lose the competition with labor, and all the low hanging fruits for automation were gone, so it couldn't compete on new ways.
Fewer people than ever are working mind-numbing, dangerous factory or agriculture jobs. That is a good thing.
Neither would the perpetuation of fake information and news on a global scale be possible.
For every bit of good the internet has done, it has also allowed bad things to occur too.
I'm not saying there is no good, but to say that it is only beneficial is a strong claim, I would argue it is more neutral.
Now your claim that is neutral is the strong one, but also one very easy to test: Don't use or consume anything made possible by technology, if your life isn't impacted in any way then you're correct... In this isolated, anecdotal case.
Is what OP said-that is subjective. How is our world, better? Is it truly better? Sure-I have benefited from use of computers, but many people have been killed from use of computers (drones, for example).
It is very possible that all of this technology eventually wipes out humanity, which would not be beneficial, would it? The claim that technology has made society better is a very strong one, which no argument was made as for why.
Your test isn't a proper test. Technology is neutral in the sense that all of the good it has brought, has also brought upon lots of bad. For every piece of technology used for good(missiles for space travel) there is an equivalent use that has done harm. (Cruise missiles, which have killed scores of people.)
I'm not debating that technology had impact-but to say it is all beneficial, is a huge stretch.
How far back would you go to claim that technology is not beneficial? Pre-industrial? Pre-agriculture? Pre-tool use? Technology made humans the most successful multicellular species we know.
What about the people killed after the atomic bomb killings? Technology is forced on everyone. Things we thought were convenient (cars, ships, the ICE, fossil fuels) may now plunge the planet into chaos and cause immense damage to our environment. Many people who have never had the choice of owning a car are now suffering from droughts and famine because of fossil fuel burning. It's naive to say technology isn't forced. It is, and always will be.
Again, easy for us to say in the west, especially the US. We've seen a lot of the good, but we too have seen the bad. It's typically neutral.
Technology is not universally beneficial. You can go back maybe to the first group of humans who used a fire to survive a cold spell but since then, there has been destructive and constructive technology.
I, for one, am not in the US, pal; I'm in a third world country riddled with conflict and crime. Stop the sad regionalism.
Your morality babble still doesn't change the fact that automation and technology have made us the most successful species. Even your ludicrous "for every good some bad has come" is false on its face. If it were true, the population would forever stay the same.
> Technology is not universally beneficial.
Again, nobody claimed it was, what was claimed was the net effect, and that has been positive.
I don't even know why I'm wasting my time having a discussion with someone who thinks technology isn't "good" (and you do think that, you think it's "neutral", not "good")... over the internet.
In other words: If it weren't for technology, you couldn't be whining about how awful it is from your iPhone, buddy.