China’s Troubling Robot Revolution
nytimes.com
nytimes.com
> The reality, however, is that China has struggled to create enough white-collar jobs for its soaring population of college graduates. In mid-2013, the Chinese government revealed that only about half of the country’s current crop of college graduates had been able to find jobs, while more than 20 percent of the previous year’s graduates remained unemployed.
Are those the two groups of jobs you meant? I don't see the distinction between them...
Just like how in the US, the problems faced by liberal arts majors struggling to find work is going to be quite different from that of factory workers who lost their jobs when the production moved overseas.
First, it doesn't factor in the expansion of higher education in the last 20 years. I don't have the statistics at hand, so I will just use my hometown as an example. Exactly 20 years ago, ~120 high school students from my hometown were enrolled into colleges (including both 4- and 3-years colleges). This year, approximately ~1400 will enter colleges this fall semester. That is more than 10 times. Note the total number of people of ~18 years old hasn't been increased. On the contrary, I think it is decreased, as a result of one-child policy.
Second, I think it has become common that countries, including USA, have been struggling to create enough white-collar jobs. I have both current and ex- colleagues who graduated from Ivy Leagues and are/working in customer service, support, marketing associates, etc. What they majored in colleges, like English, Classics, Psychology, etc. really doesn't help them much on looking for their first or second jobs. It is similar in China, but I wouldn't say it is worse or better there.
No economy is truly a zero sum game and China is no different. In 2 generations - even if there are some troubled waters in between - these factory workers' children will be white collar workers or even managers of American white collar workers ;)
Post-war Japan was a miserable place with mass starvation, homelessness and unemployment, today it is the third largest GDP in the world with first world standard of living. There was even a bubble complete with massive foreign investment (remember what the building in Die Hard was called?) with a 95% drop in property prices in between then and now. China is currently where Japan was in the 1960s, and back then it looked pretty much the same.
They've been in recently for over a decade - probably close to 20 years now. As in, their economy has been going backwards, and shrinking.
That, and they also have deep-seated structural problems (e.g. aging population, incredibly high-saving rates with little spending - might be "good" for individuals, but not good for the overall economy is everybody does it/)
This is what's in your average PRC citizen's mind, not what the rate of growth will be in 2040...
That's hardly an apples to apples comparison.
I don't know if China necessarily aspires to follow Japan's trajectory - perhaps the rise, but certainly not the fall. Still, we'll see how things land.
Both countries started from nothing, had an enormous increase in foreign direct investment (including several bubbles) which led them to pull themselves upwards at GDP growth rates of around 10% per annum for long enough to make a noticeable difference in the standard of living.
Both countries are run by centralised governments with a mandarin-style meritocratic civil service pulling the strings (in Japan the keiretsu system with the MOF on top, in China the Party), and setting financial policy including invisible taxation mechanisms on the population (setting the rate on domestic deposits in China, continuous yen devaluation, tariffs and keiretsu consumer goods price-setting in Japan). The difference is that China waited until Deng Xiao Ping before changing policy and accepting growth as a path to prosperity, Japan started earlier and had a smaller population.
Inspiration-wise, I'd say Lee Kuan Yew had more to do with the philosophy and strategy of what Deng Xiao Ping set in motion than any imitation of the Japanese system.
It's the tipping point where humans, more often than not, no longer provide value. I can't help but feel we are VERY close.
Now, in the grand scheme of things, auto manufacturing is a relatively small industry in terms of labor force. What happens when this transition happens to the logistics industry, which is one of the top employers globally? Can we adapt quickly enough if land (including farming), sea, and possibly air are all automated within a decade? I'm not sure.
This whole automation revolution has really just begun to highlight the old problem that many people don't own any of the things that generate the fabulous, effort-free wealth. But now instead of people missing out on the dream of 3-day-work-weeks they were promised fifty years ago and having to work just as hard as before, they have no work at all. The body/mind they expected to be able to rent out has literally no value as an asset.
Agreed. I wonder if the concept of job makes sense anymore.
The world is changing and we're still debating if our youth should get less education and benefits or if we should let in more immigrant so we can compete on labor prices on the global market. That's so short sighted!
That train left long ago, and it was pointless to try to board anyway. If the ruling elite would stop for a second being such assholes toward anyone, treating everybody not up the chain as 'resources', maybe they could focus to be competitive in the world of tomorrow.
Most unskilled/unqualified job will just vanish overnight at some point in the near future, and then what? we're still under-educating our youths. industrial automation, robotics and artificial-x will be the field that will drive innovation in the next 20 years.
if your country is still not pushing for them to be in the curriculum of everyone, prepare to be facing loads unemployment problems down the road. avoidable problems, dare I say.
Automation won't decrease the total amount of jobs, but I'm worried about inequality.
- Man, Uber just perfected self driving cars and closed my account with them, what am I gonna do now? - I hear prostition is still around.
- Shit, some kid in Senegal just released a database server that can create a sensible schema from an excel sheet, even creating translation layers between the insanity the end user put in and the sensible internal representation! There are no DBA jobs left in the world, what am I gonna do? - I heard those rich actors in Hollywood have acquired a taste for their own "best boys" with strong "grip"...
Greeters, for example, can't be replaced by machines. The economy has been shifting in this direction for decades.
[0]http://www.theguardian.com/sustainable-business/2015/mar/18/...
http://www.theguardian.com/politics/2008/oct/21/creditcrunch...
"A similar movement is going on before our own eyes. Modern bourgeois society, with its relations of production, of exchange and of property, a society that has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells. For many a decade past the history of industry and commerce is but the history of the revolt of modern productive forces against modern conditions of production, against the property relations that are the conditions for the existence of the bourgeois and of its rule. It is enough to mention the commercial crises that by their periodical return put the existence of the entire bourgeois society on its trial, each time more threateningly. In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity — the epidemic of over-production. Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed; and why? Because there is too much civilisation, too much means of subsistence, too much industry, too much commerce. The productive forces at the disposal of society no longer tend to further the development of the conditions of bourgeois property; on the contrary, they have become too powerful for these conditions, by which they are fettered, and so soon as they overcome these fetters, they bring disorder into the whole of bourgeois society, endanger the existence of bourgeois property. The conditions of bourgeois society are too narrow to comprise the wealth created by them. And how does the bourgeoisie get over these crises? On the one hand by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones. That is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented.
The weapons with which the bourgeoisie felled feudalism to the ground are now turned against the bourgeoisie itself.
But not only has the bourgeoisie forged the weapons that bring death to itself; it has also called into existence the men who are to wield those weapons — the modern working class — the proletarians.
In proportion as the bourgeoisie, i.e., capital, is developed, in the same proportion is the proletariat, the modern working class, developed — a class of labourers, who live only so long as they find work, and who find work only so long as their labour increases capital. These labourers, who must sell themselves piecemeal, are a commodity, like every other article of commerce, and are consequently exposed to all the vicissitudes of competition, to all the fluctuations of the market. "
[1] https://www.marxists.org/archive/marx/works/1848/communist-m...
if you think i'm joking, unfortunately no. had lived in socialist country and i can still see the damage on people 20 years after we switched to democracy. people went to jail if they refused to work. if they spoke against the regime, things might got worse. economy-wise - our neighbor Austria after WWII borrowed from us money to rebuild itself. after 40 years of socialism, when curtain fell, they were light years and more ahead of us, in everything, thank you central planning. i felt like a poor beggar coming there first time.
Sorry if my reaction offended anyone, i'm just too allergic of anything reeking of socialism. nothing beats first hand experience
Thanks for your comment.
They violated the principles they claimed to be built on from day one.
They are going to hit this economic obstacle on a massive scale first --before the jobs even get to migrate to the interior where there are masses of impoverished and underemployed or underproductive workers.
Japan has not been able to age out of this problem, that's to say they have not figured a way to transfer the wealth generated by automation into the general population, so you get older people doing redundant jobs or menial jobs. In other words there isn't an "automation fund" which diverts wealth to the underemployed and those whose jobs have become redundant an unnecessary.
So perhaps the solution is something akin to the Alaska Permanent Fund fund; however, instead of being funded by mineral wealth, gets funded by wealth generated through (hw) automation and efficiencies brought on by software. This fund then gets redistributed based on a combination of need as well as a per-capita flat rate.
As a reasonable proxy for that kind of wealth generation, you can just tax income.
Nope. In China loans go bad all the time and the government prints up some money to buy and resell the debt at a discount and things keep moving right along. They have a different system In China. This is so hard for anybody in America to get since economics is taught as if it's the physical structure of the world when it's really just a game with a bunch of rules that structure the society in a certain way.
The idea of having the workers own the means of production is hardly new, it's just not very popular in the West. Not surprising that the NYTimes missed mentioning that entirely. It would be deliciously ironic if socialist China was the nation that would show the rest of the world how to deal with pervasive automation socially and economically.
How do you prevent them from getting bought out?
I also would probably not invest if I were in their position.
We have a better way of socializing wealth. It's called the public stock market. Workers can buy shares of any corporation on it, not just their own, and they are protected by regulations.
Having said that, I think that we should tax the machines. We are building a cage for ourselves with machines empowering organizations to monitor and control us better. Like China making a rating for every citizen. Organizations aren't people and they use people to perpetuate themselves - those people who have other ideas (like "enviroentalism" or "concern for the elderly") have to acquiesce to the corporation's interests first. And with machines, the corporations will pursue profits ahead of loyalty to workers.
My point is, we should use our democratic governments to tax the corporations for benefiting from automation, and redistribute the money to the population as unconditional basic income. As machines replace people I won't need those taxi drivers and mcdonalds workers to do anything for me. I want them to have a check coming so they can educate themselves or just go consume things they need.
It would also be nice if countries would quit being in the mindset that every generation must be more numerous than the last - social security will be taken care of by increased automation, while overpopulation is not something you can take care of that easily.
Want everyone to be richer and better off? Have less kids.
I think you have nailed the critical dynamic as well as any can.
I mean from this, current world, that is not only, but also thanx to US command-and-conquer approach burning, and that fire will hurt many of us for generations to come? Some iterative, realistic steps please, that could be voted through on various parts of this planet, by populations with vastly different mentality than yours (and mine).
> I want them to have a check coming so they can educate themselves or just go consume things they need.
How do you know that McDonald workers want just this and don't have higher aspirations? And btw I am not aware of any country that has McDonald franchise open that people are dying from hunger on streets, there are always options for survival. In many of those, people can reach practically all human knowledge with a tap on screen of a phone. What if they want a brand new ferrari and feel like they really need it? or "only" BMW? who will decide what is good or not? YOU??
Many doomsday stories here don't reflect fuildity of our existence - things really don't change overnight, more like over generation. politicians have a lot of power, and last time i checked they still got voted by humans. so for example why don't you consider this slight possibility, that when situation will come worse, something will change in our system and we won't continue same direction blindly? I for one have +- confidence that, with some oscilations, will move in proper direction, whatever that will be.
I say start supplementing them all with a basic income financed by an automation tax. The more automation, the more companies benefiting from it are taxed. They still get to keep 60% of the savings from automation but the other 40% would be taxed, say. The key is redistributing it to EVERYONE. At first it would be very small but it would be help cushion demand shocks in the economy.
We just need this wealth redistribution scheme in place. Have a formula. And on a related note I would have the nation be run by polling, not democracy. Representative democracy is super corrupt and political drama is wasteful. Direct democracy is bad because those who bother to vote can get one over on those who don't. Instead, the government should do randomized polling of the population and report the results, which would be verifiable by independent polling organizations. In fact we could just have publicly accountable polling organizations which make all their results available publicly. Several of these polling organizations would be enough basis for the government bureacrats (eventually replaced by mostly computers) to take the opinion of the public in various issues and just implement them.
How much redistribution should we have? Do polling every year. How much carbon tax? Polling etc. That is a real participatory democracy without the stupid waste of time going to a polling booth. If you want me to vote, GIVE ME AN APP as an option. If it's secure enough for my finances in a bank it's secure enough for my vote in an election. But better yet just do the work for us and POLL the public on what they want.
If you say represenative democracy is able to accomplish more and polls would just vascillate wildly between different positions, then I think you're too married to the current ideology. You can still have the executive branch take a firm direction every few years, or months. That and everything else can be changeable by polls instead of a legislative branch. Polls are better than referendums.
One legitimate fear is that polls can be falsified. That's why we need many independent organizations doing the pollin. Better than one organization doing the vote.
This is a good idea in theory, and indeed I've often wondered why unions don't actively invest in the market and use their voting rights to ensure themselves a seat on the board - but my radical idea about the future of unions is another topic.
The problems with the stock market approach are twofold. First, if workers are not paid very much then the extra income they derive from stock ownership, even in the aggregate, is unlikely to make them competitive with existing forces of capital, unless the labor force owns 50% of the company, and even then individual workers are easier to buy out. Second, everyone in the markets faces a principal-agent problem where management involved in the day-to-day running of the company exerts far more power than shareholders because management can shape how shareholders perceive the company and which information they receive, such that it is very easy for managers to get shareholders to do what they want. Sometimes managers go overboard and become subject to criminal charges when they are too blatantly corrupt. In the US that just gets fines and maybe a short stint in jail; in China people can be given the death sentence for corruption, and yet it still occurs, notwithstanding the ongoing anti-corruption campaigns of Xi Jinping's administration.
My point here is not about China in particular, but to suggest that the mere existence of capital markets is by itself insufficient to make capitalist structures responsive to the public interest.
The obvious conclusion is that there should be less education in China.