Why Violence Against Tech Firms May Only Be Beginning
realcleartechnology.com
realcleartechnology.com
Some personal anecdote: when the company I work for opened a huge chocolate factory in a very small and poor city, and had to hire employees from outside that area, the citizens complained (and still do) that rent and groceries price are very high. People hide their badges when going outside of the factory to avoid any hostilities.
This has nothing to do with technology.
For instance, Luddite's first paragraph in wikipedia:
> The Luddites were 19th-century English textile artisans who protested against newly developed labour-saving machinery from 1811 to 1817. The stocking frames, spinning frames and power looms introduced during ^^the Industrial Revolution threatened to replace the artisans with less-skilled, low-wage labourers, leaving them without work.^^
Emphasis mine.
What we're seeing is another revolution. A technological/economical revolution that potentially threatens to replace most workers in general with automated machines on an unprecedented scale. I feel like their is a concern here, and that some people within the aggressive group would most likely identify with this concern.
Links regarding this potential revolution: http://www.economist.com/news/briefing/21594264-previous-tec... http://www.smartplanet.com/blog/bulletin/half-of-all-us-jobs...
I don't know what will be the case, whether we create new employment for people like in our history, or not, because we're treading in new territory. But regardless of what direction we take, ignoring the masses in terms of basic needs will be met with violence, death, loss of growth...
Another important factor to include regarding new technologies and industries are that normal people create them. This requires economic freedom to do, and stifling future generations with mandatory credentials and debt is not the most efficient way of doing this.
It's a repeat of the 1920s. Advances in the early 20th-century caused agricultural prices to fall precipitously in the 1920s. This seems like a good thing (more food, cheaper) but it caused rural poverty (circa 1925) which tend spread to the towns (1927) and industry (1928) and finance (1929) and the cities (1930). Then came the Great Depression.
This required FDR to save capitalism by (unthinkable before 1930) regulating it within an inch of its life. We still have agricultural subsidies and price controls. We learned that poverty isn't (as conservative thought held) some moral medicine that makes people better. It's a cancer that devours a society.
What happened to food production in the 1920s is happening to almost all human labor.
Prosperity, badly managed, turns to disaster quickly. Why? Because most people in society (especially at the top) are more interested in doing the same damn thing, more cheaply, than in exploring or doing more. Success in human organizations and "the vision thing" are negatively correlated. You need the latter to prevent the changes of technical prosperity from (paradoxically?) hurting most people.
Europe is, socially, further along in the adaptation than we are. It has its own host of problems, some shared with us, but we're at least starting to see what a more future-proof society looks like. European societies respond by increasing vacation (12-16 weeks will probably be the norm by 2050) and education while American societies seem to default to necrotic poverty.
I'm not a historian, and I don't entirely disagree with your premise, but I think you're overstating how laissez-faire America was before 1920. Regulating food prices (as well as various other parts of the economy) certainly predates the Great Depression.
Examples:
http://en.wikipedia.org/wiki/National_bank#United_States
http://en.wikipedia.org/wiki/Tariffs_in_United_States_histor...
http://en.wikipedia.org/wiki/United_States_Food_Administrati...
A carpeted dwelling was the pinnacle of opulence until machines and synthetic fibers made plywood+carpet cheaper than hardwood floors. Once that happened, after a brief carpet opulence arm race going all the way to shag, carpet was for low class people and hardwood floors were the new thing.
In this new revolution you are talking, people will just literally start wearing printed coats made of solved auditable captchas, to prove how important they are and how much labor they can command and put to waste.
There will be plenty of jobs for a while to come. The revolution will be dampened by zero-sum status wars. By the time domination over machine overtakes domination over man as a primary status signal, there won't be any humans left anyway.
Some industries can survive being automated, most cannot.
GDP juicing inflation is on a collision course with technology. Moore's law or not, science and technology advance by making things cheaper at an exponential scale - computational power, DNA sequencing, etc. As business now becomes closely integrated to science and technology now deflationary forces are being harnessed.
I suppose there are three views on fighting poverty. Reality likely is a mix of the last two. One sees billions of people consuming at a first-world level. Obviously impossible. The second sees the worlds population decreased dramatically. That is somewhere between disturbing and terrifying. The third involves a massive deflation in the cost of living by providing goods and services extremely cheaply (and I would also add sustainably.)
That third path will be a major shock to those in the first world who believed their skill sets made them members of the world's 1%.
Link to an article that compares them in detail: http://unqualified-reservations.blogspot.ca/2008/10/misesian...
To be fair to first-worlders, there is also the idea that stability, peace, justice, and honesty pay big dividends. That is in contrast to chaos, war, corruption, and mistrust.
That is to say that even if living was essentially free and everyone was equally talented, places that have significant problems with political turmoil, crime, war, or corruption would still be comparatively worse-off.
EDIT: I'm not saying people who live in war-torn places deserve it. I am saying that giving them Star Trek replicators probably won't transform their communities into prosperous places.
You seem to think that political turmoil, crime, war, and corruption aren't things to which to inequality (both local and global) contributes, just things which produce inequality. That is something of an unusual position.
I do think poverty and inequality contribute to conflict, but I also think there will be obviously struggling people and communities even in a post-scarcity world... but due to other factors, probably things like tribalism, bigotry, politics, crime, and so on.
Sorry, couldn't help myself.
Downvoted. This isn't reddit.
The proposed condominium project which mobilized these activists is in fucking Berkeley where the poverty rate is 4 points lower than San Fransisco or Oakland (where 1 in 6 families live below the poverty line).
It wasn't about tech at all.
For a long time there were a broad range of groups. There were people involved in letter writing and politcal campaining at one end, and lab-raiding at the other end.
Some of the people raiding labs tried to exploit loopholes in English law to get hold of documents. If you have no i tent to permanently deprive the owner it isn't theft, so they would take documents, copy them, and return them. They lost that argument.
And then things got a bit more extreme.
Anti fur campaigners set "smoke bombs" in coats, with the intent to trigger sprinkler systems and cause water damage. The sprinkler systems didn't work and the shops burnt down.
Some people involved in animal industries faked bombs - someone involved in running a hunt claimed activists had set a bomb in his vehicle when he'd done it.
Then anti hunt activists dug up corpses for ransom.
Relevant to this thread is the amount of activity around Huntingdon Life Sciences. Activists used a variety of tactics such as campaigning outside suppliers to HLS. Those suppliers increased their prices or dropped out, which increased costs. Some activists campaigned outside the homes of people who worked at HLS or their suppliers.
While I support peaceful vigorous protest (and I hold a gently anti-vivisection viewpoint) I found a lot of the protesting really troubling.
There was talk of changing the law. I'm not sure if that worked or not. (I'd have thought that English police have plenty of tools to target such demonstrations).
Page 2: Goes right off the deep end. Speculating what will happen if we manage to get AI is the realm of science fiction. It's fair to pontificate on, but to try and tie it as the next stage from people getting angry over rising real estate prices is incredibly alarmist.
That may be part of the problem. For most people outside of the tech field, all this technology is just a magic black box that is producing outsized wealth. There isn't a sense that people are doing work to produce this stuff.
This is just the "nationalist" strain in American politics for the 21's century and techies are an easy target as we are passive and put up with shit.
If I where Google i would suggest to all the tech company's the they
1 shut down the shuttles
2 give every one a day off and suggest they use it for a mass lobby of the local politicians
Giving in to and placating the protesters isn't going to make them stop, it's just going to make them try for more, and potentially more outlandish, things.
You could also do a french solution and have all the shuttle drivers drive their buses into central Sf and shut traffic down.
The problem is that there really isn't a problem. Non-techies are angry that rent is getting higher and that the local government isn't going to loosen restrictions. From what I can tell the techies don't have a problem with the rent, because they can pay for it, or are moving to places they can pay for because they don't have some ridiculous attraction to a specific location.
It seems to me to be entirely one-sided, and the techies don't care, they'll just wait it out.
You would think that because of all the automation causing the low employment and the aggregation of wealth into only a small number of people's hands that prices would not go up because most people had less money to spend cause they're not working.
But in many places (Bay Area) it seems like a lot of people are benefiting from the tech boom, enough that they do drive up prices. But how can such a small percentage of the population (what percentage of the population in the Bay Area works in tech?) affect things so universally?
It seems like there might be enough benefit to the automation to go around but would require people to shift their skill sets?
With housing it's because they purchase it as an investment, not as a place to live in.
With treasuries earning almost nothing, reliable stores of wealth are few and far betwen. That makes housing popular.
It wouldn't be so bad if wealth inequality wasn't quite so extreme.
Prices are determined not by what most people can afford, but by what makes the most money for the seller.
To use a contrived example, imagine you are selling a product with no marginal cost to a population with very high inequality. This population consists of 50 people who can afford to pay $1 for your product, and 1 person who can afford to pay $100. How much do you, the seller, charge for your product? You can sell it to 50 people and make $50 profit, or one person and make $100 profit. Therefore you charge the higher price for the product, even though the population is overwhelmingly poor.
With a more realistic income-distribution, this same phenomena causes prices to be dictated more by mean incomes rather than median incomes. As society becomes more unequal and the gap between mean and median widens, you therefore can have prices increasing even as the vast majority of people get poorer.
(There's a traditional mechanism for dealing with this: price discrimination. In the contrived example above, the perfect solution would be to differentiate your product into a $1 product for poor people, and a $100 product for rich people; this results in the optimum utility for buyers and sellers alike. Unfortunately, this kind of price discrimination is becoming increasingly difficult in today's disintermediated world: the millionaires I know are as happy as anyone else to order off Amazon. So goods and services increasingly tend to have a single price, and that price is increasingly set by the mean.)
This is true for a single monopolistic market incumbent. On the other hand, if I (the upstart) want to make money, I'll charge $1. I don't care if I just cost you $100 and I only gained $50 in profit - my choices were either getting $50 (by selling at $1) or $0 (by selling at $100).
The real estate market is pretty competitive - it's not as if a small oligopoly owns all the land. So if rent is going up, you should be asking what what prevents upstarts from buying up a city block and building a gigantic low cost tower block to house everyone. (Hint: insane SF zoning regulations.)
Obviously basic market place principles play a role. Remaining parcels go up in value as the block becomes increasingly under single ownership and because other people are trying to do the same thing [2]- identifying prime parcels for redevelopment is easy for obvious parcels and there are lots of eyes looking for less obvious parcels.
[1] ok, sometimes you can get the government to condemn the block and turn it over to you in one fell swoop and that's probably the most cost effective in many places.
[2] The third to last parcel on a block remaining to be aggregated has often improved its location because of the aggregation process and hence commands a much higher price than paid for parcels already part of the aggregate.
Disney also used the political route to establish a private governmen, The Reedy Creek Improvement District.
Unfortunately the financialisation of the real estate industry makes this very difficult to achieve, as the wealthy will keep acquiring real estate as an investment long after their need for it as an actual place to live has been sated.
Solutions to this will almost certainly need to include all of the following:
1.) Liberalisation of zoning & development, as you suggest (see Germany for a good example of this).
2.) Ending tax breaks which reward the accumulation of real estate. Probably other measures to de-financialise the real estate sector somewhat, such as requiring significantly higher reserves for banks.
3.) A Universal Basic Income to provide automation-proof social support / monetary redistribution in the face of the end of wage labour.
Negligible problem. SF has a very low vacancy rate. Worry about it if it happens.
http://www.sfexaminer.com/sanfrancisco/san-francisco-vacancy...
As for (3), we are nowhere near the point where that is necessary. No developer should ever clean their own house unless labor is scarce. Yet strangely, we have people claiming they can't find work, and we also have high costs for domestic labor.
The real problem is that taxes and transfers drastically reduce the incentive for people to do low skill work: http://johnhcochrane.blogspot.co.uk/2012/11/taxes-and-cliffs...
Email me at erich@rollrandom.com if you'd prefer to answer privately.
But we're not talking about the vacancy rate of housing, we're talking about the availability of housing for those who aren't housing.
Besides, I live in London, where this issue is accutely non-theoretical.
> As for (3), we are nowhere near the point where that is necessary.
We have large-scale structural underemployment and unemployment; real median incomes have been falling for a generation and a half; and half the workforce will be automated out of existence with a decade. We are right there.
> The real problem is that taxes and transfers drastically reduce the incentive for people to do low skill work:
That's almost precisely wrong. It's not the provision of social transfers which disincentivises people from working: it's the withdrawal of social transfers which creates high marginal tax rates. Make the transfers universal and unconditional, and those disincentives are gone. (I favour a flat UBI funded by a flat income tax: equality for all).
And yet you still can't find a maid for $7.25/hour and companies continue outsourcing work because Americans are too expensive. That shouldn't be happening if humans were unnecessary, unless of course some other factor was inducing Americans not to work.
Income has fallen due to a shift in compensation from taxed wages to untaxed benefits and due to composition changes in the workforce.
http://research.stlouisfed.org/fred2/series/ECICOM http://www.chrisstucchio.com/blog/2011/immigrants_simpsons_p...
Make the transfers universal and unconditional, and those disincentives are gone...
Nope - diminishing marginal utility reduces it.
This has been borne out by experiment - BI reduces working hours by 10% or so. (As is common on this topic, fawning reporters don't cite primary sources. Argh.)
https://decorrespondent.nl/541/why-we-should-give-free-money...
Think about it: every time your neighbours develop their property (thus raising the market value of the area), your own land taxes would go up. If you're of the great majority of people whose income isn't riding the tech-boom train, then you'll soon be driven off your land by unpayable land-tax liabilities.
While the article claims that property taxes "penalize" people for developing their land, the fact is that people who develop their land must have money, and therefore have the ability to pay taxes. The same cannot necessarily be said for people who don't develop their land. Land taxes would penalize the latter severely.
Not owns, but controls: the city (and residents) of San Francisco are the ones making the critical decisions here, not the property owners. The property owners are playing rationally within the rules the city has set up.
If they want a different outcome, they can change these entirely man-made rules at any time with the stroke of a pen.
I don't think it was nkoren's intention to provide a complete model of the economy, but simply to illustrate how markets can underserve segments of the population.
Examples like this can often be "disproved", sometimes with ease, but that rather misses their purpose. A similar point was the topic of a recent xkcd: http://xkcd.com/1318
Housing prices are extremely inelastic. Reduce supply by a few percent, and prices will go up several times. I'd bet that if 2% of the housing in any major city disappeared, you'd see prices and rents go up 50%.
Most commodities have a short-term elasticity and a long-term elasticity. For example, supply problems with oil cause short-term oil shocks but in the long term, people adapt by driving more efficient cars, and more suppliers can come online. With housing, long-term adaptation doesn't happen because of all the NIMBY regulations, bought and paid-for by (no surprise) rich people.
Real estate is an area where a few rich people, buying second and third homes (remember inelasticity), fighting new development, and generally being dickheads, can cause massive pain.
Or
We could be plunged head first into a dark dystopian world where people eat each other's children and burn the remains to stay warm.
These two equally likely scenarios should be given the same amount of legitimacy.
http://nevertrustahippy.blogspot.co.uk/2014/01/believing-in-...
As Paul Evans says above
It's easy to cloak beliefs. Sloppy thinking results in dangerous allies. Simplifying to gain popularity can be disastrous. Scapegoating is always a mistake.
I expect this discontent to grow, but I don't think that most people have an issue with "tech firms". It's unfocused anger about economic stagnation and real estate malfeasance. I doubt the people being priced out of the Mission care strongly about PRISM. People are trying to direct this unfocused anger (which looks like it might be the nebula of a left-wing Tea Party) toward their own pet issues (surveillance) and it won't work that way in the long run. If this dog runs loose, it will go where it wants.
Having traveled pretty extensively about the country, I think technology has a huge problem with "placism", coupled with an unhealthy obsession with pedigree. There's no good reason for technology to be one of the industries where location matters most. It should be the other way. But Sand Hill Road VCs won't take you seriously if you're more than 50 miles away, companies like Google keep the best projects in the Valley office, and having gone to Stanford matters more than a 150+ IQ. (That's not to say that "having a 150+ IQ", alone, should mean that much. But it is self-evident that a noisy signal of intelligence should be taken less seriously than raw intelligence itself.) It's unhealthy for technology, it's bad for the Bay Area, and it's catastrophic for the rest of the country. Now we're seeing pushback against technology's location perversion coming not from the engineers, but from Bay Area locals who are entirely disinterested in technology's placist dynamics, and who don't have strong opinions of technology either way, any more than Parisians in 1793 gave a shit which province got its swamps drained and how such decisions derived from machinations in Versailles.
If there is a wave of violence in the U.S., it won't be "against tech firms" because tech is not a day-to-day problem for most angry Americans. (Besides, most cities would love to steal a few tech firms from San Francisco, whose people sense saturation and no longer want them.) It will be broader, less localized, and it will be, toward its end, very differently from what it was when it started. I don't think it's desirable, either; those sorts of processes are too nonlinear and volatile for anyone to hold blanket opinions either way.
One of these is a real problem, and the other we'll deal with when we get there, if we get there. Hard to imagine intelligent machines taking over the world in an energy-constrained future. They have to get smart soon enough to build nuclear power for themselves with our remaining fossil fuel stocks. Or just plug humans into batteries which somehow works...?
I think they had to tone it down or at least take a rest when that one doctor was finally gunned down in a church. I fully expect something along those lines to happen here.