America's Jobless Future?(theatlantic.com)
theatlantic.com
America's Jobless Future?
http://www.theatlantic.com/doc/print/201003/jobless-america-future
77 comments
A key point you are missing is that unless Uscan machines require fewer people to support then they are not cheaper than the people they replace. Automation tends to replace 1000 jobs with 100 jobs which pay more per person but less in aggregate. The general rule is (New Jobs) * (Pay) < (Lost Jobs) * (Pay) with the difference split between the consumers and the owners of the company.
Now society should become more productive, but many of the workers are going to fall into more general and less useful professions. EX: We don't need vary many farmers today, yet we produce far more food than ever. IMO, this suggests the introduction of basic welfare state funded by the increased prosperity. But we can also just waste the extra productivity with a huge military, increased litigation, and a truly massive prison system.
Now society should become more productive, but many of the workers are going to fall into more general and less useful professions. EX: We don't need vary many farmers today, yet we produce far more food than ever. IMO, this suggests the introduction of basic welfare state funded by the increased prosperity. But we can also just waste the extra productivity with a huge military, increased litigation, and a truly massive prison system.
Good point, but don't ignore the opportunity created on a continuous basis because of these "Uscan machine" scenarios.
The extra value created here can be traded for things that would have previously been unattainable, which in turn grows other industries and markets. A good example is the relatively recently materialized cell phone industry, which was viewed as a luxury not but 15 years ago, and is now practically ubiquitous. This has added $40-$100/mo to the average functional adults expenditures. While it may have replaced the $50/mo spent on the home phone line, you're replacing that with $40-$100/mo for each person in the home. Mobile phones increase our productivity by saving time and nowadays allow us to make more informed decisions on the spot.
This example continues because there was a fundamental shift in the type of labor employed by these mobile phone companies. In the early days of the industry, specialized salespeople pulled large salaries selling expensive phones and highly trained technical people answered technical support calls. Now that costs have dropped massively and reliability has drastically improved, these people have been replaced by relatively low wage employees (customer service reps and salespeople), and opportunity has opened at the "bottom."
I do agree that we waste a ridiculous amount of our capital on societal "overhead" that could otherwise be put to good use.
The extra value created here can be traded for things that would have previously been unattainable, which in turn grows other industries and markets. A good example is the relatively recently materialized cell phone industry, which was viewed as a luxury not but 15 years ago, and is now practically ubiquitous. This has added $40-$100/mo to the average functional adults expenditures. While it may have replaced the $50/mo spent on the home phone line, you're replacing that with $40-$100/mo for each person in the home. Mobile phones increase our productivity by saving time and nowadays allow us to make more informed decisions on the spot.
This example continues because there was a fundamental shift in the type of labor employed by these mobile phone companies. In the early days of the industry, specialized salespeople pulled large salaries selling expensive phones and highly trained technical people answered technical support calls. Now that costs have dropped massively and reliability has drastically improved, these people have been replaced by relatively low wage employees (customer service reps and salespeople), and opportunity has opened at the "bottom."
I do agree that we waste a ridiculous amount of our capital on societal "overhead" that could otherwise be put to good use.
Mobile phone infrastructure costs less to deploy than landlines. It's true that high end handsets are more expensive, but for many people they are also replacing a camera, PDA, MP3 player, USB stick, and Gameboy. It's also true that we have been employing about the same number of people for a long time, but much of this is simply people reducing their labor rate until people will employ them again.
I like many people on HN are at the extreme edge of the bell curve and can easily find work. My point is simply that the need for a highly skilled workforce seems to be shrinking. Starbucks could probably replace 1/2 their workforce with automation and produce better coffee. They don't do this for several reasons, but mostly because there is such little demand for their workers.
I like many people on HN are at the extreme edge of the bell curve and can easily find work. My point is simply that the need for a highly skilled workforce seems to be shrinking. Starbucks could probably replace 1/2 their workforce with automation and produce better coffee. They don't do this for several reasons, but mostly because there is such little demand for their workers.
"IMO, this suggests the introduction of basic welfare state funded by the increased prosperity. But we can also just waste the extra productivity with a huge military, increased litigation, and a truly massive prison system."
I'd suggest education would be a preferable alternative to either of those.
I'd suggest education would be a preferable alternative to either of those.
Food, Shelter, Education, and Medicine all fall under the heading of welfare. A well funded library system is often the first piece of a welfare state. Like health care education can be a great boon to society in moderation or a great drag in excess, but just because it can be useful does not mean it's not welfare.
That's the theory. In the actual world, unumployment keeps a pressure on salaries that increases the difference between rich and poor (which leads to problems with consumption and credits...), capital saved by the share holders isn't properly reinvested in real economy (financial investments in companies are algebraically negative...).
In other words, automation and technology are tools in human's hands, and we still have to fight for our material/educationnal/environmental/human desires.
In other words, automation and technology are tools in human's hands, and we still have to fight for our material/educationnal/environmental/human desires.
fast forward: there is one person who is producing all our food and one person who is producing all out clothing. they trade with each other and the rest of the people have nothing to offer in return for food.
Surely the person who produces food wants more out of life than just producing food?
That's the way it's worked out in the real world. About 1% of the population produces all our food. And that frees the rest of us up to make movies. And write novels. And organize the world's information. And allow people to live 30 miles from their jobs. And let them cross the country or travel the world on a whim. And live in climate-controlled boxes with nice furniture.
That's also the long-term solution to unemployment. Eventually, somebody figures out something else that the rest of the population would like to have, and puts all of those out-of-work workers to work doing it. The computer industry didn't even exist 50 years ago. The automobile and household appliance industries didn't exist 50 years before that. The oil, railroad, middle management, engineering, and office worker industries didn't exist 50 years before that. These have all been born out of workers being freed up from previous shrinking industries (eg. manufacturing, domestic servants, farming, textiles) and put to use in new emerging ones.
That's the way it's worked out in the real world. About 1% of the population produces all our food. And that frees the rest of us up to make movies. And write novels. And organize the world's information. And allow people to live 30 miles from their jobs. And let them cross the country or travel the world on a whim. And live in climate-controlled boxes with nice furniture.
That's also the long-term solution to unemployment. Eventually, somebody figures out something else that the rest of the population would like to have, and puts all of those out-of-work workers to work doing it. The computer industry didn't even exist 50 years ago. The automobile and household appliance industries didn't exist 50 years before that. The oil, railroad, middle management, engineering, and office worker industries didn't exist 50 years before that. These have all been born out of workers being freed up from previous shrinking industries (eg. manufacturing, domestic servants, farming, textiles) and put to use in new emerging ones.
In this scenario, if there is only one person providing food, at that point it becomes economically viable for individuals and consumers alike to produce food, and fill that void.
You didn't include it in your comment, however it is important to note how much each producer is producing. With economies of scale, it is likely both producers create enough goods to exceed the demand of either consumer. Rationale being if "food producer" became efficient enough to put all other food producers out of business, they likely can feed more than just the clothing producer.
You didn't include it in your comment, however it is important to note how much each producer is producing. With economies of scale, it is likely both producers create enough goods to exceed the demand of either consumer. Rationale being if "food producer" became efficient enough to put all other food producers out of business, they likely can feed more than just the clothing producer.
They could feed everyone but why would they? The rest of the people have nothing to offer in return.
The reason why competing food manufacturing would be impossible to start in the era of absolute automation is that you need the machines to do that, in other words you need the capital. Who in their right mind would provide capital to manufacture food for people who have nothing to offer in return?
I'm stretching the argument here, but only to illustrate the problem that I see - automation satisfies needs and thus destroys jobs tied to satisfying those needs. I see only two ways out of this - create new needs (which we've been doing successfully so far) or exert the power of the state to take the products from producers (progressively heavier taxation).
The reason why competing food manufacturing would be impossible to start in the era of absolute automation is that you need the machines to do that, in other words you need the capital. Who in their right mind would provide capital to manufacture food for people who have nothing to offer in return?
I'm stretching the argument here, but only to illustrate the problem that I see - automation satisfies needs and thus destroys jobs tied to satisfying those needs. I see only two ways out of this - create new needs (which we've been doing successfully so far) or exert the power of the state to take the products from producers (progressively heavier taxation).
They could feed everyone but why would they? The rest of the people have nothing to offer in return.
You're implying that, in this (dis)utopian future, luxury goods don't exist?
Once you have those three things, you have an entire economy. Heck, arguably clothes are a luxury good, so all you need are food and luxury goods.
You're implying that, in this (dis)utopian future, luxury goods don't exist?
Once you have those three things, you have an entire economy. Heck, arguably clothes are a luxury good, so all you need are food and luxury goods.
In line with creating new needs, you may have noticed the recent increase in popularity of "organic" foods produced by less-automated farming techniques. Cost is not the only differentiator between competitors. Organic farmers can't always compete on cost, so they focus on other areas. There is a similar trend in clothing -- hand-made designer clothes carry benefits (status, quality, perfect fit) that compensate for their high price. To conclude, I appreciate the perspective offered by your extreme scenario, but I highly doubt that ubiquitous automation will result in the production monoculture you predict.
if there is only one person providing food, at that point it becomes economically viable for individuals and consumers alike to produce food
Not if companies own most of the arable land and IP on harvesting machinery.
Not if companies own most of the arable land and IP on harvesting machinery.
Not if companies own most of the arable land and IP on harvesting machinery.
Intellectual property laws are based on the concept that ideas and goods are scarce. If automation makes physical production as cost-free as digital production is now, then all IP laws (not just copyright and software patent laws) will have to be revised to accommodate the fundamental change in the nature and abundance of goods and ideas.
Plus, as they say, there's more than one way to skin a cat. Someone can design a harvester based on old technology, or a radically different design.
Intellectual property laws are based on the concept that ideas and goods are scarce. If automation makes physical production as cost-free as digital production is now, then all IP laws (not just copyright and software patent laws) will have to be revised to accommodate the fundamental change in the nature and abundance of goods and ideas.
Plus, as they say, there's more than one way to skin a cat. Someone can design a harvester based on old technology, or a radically different design.
If technology advances to the point where one person can make enough food or clothing for the world, then surely each person can manage to make their own food or clothing.
They would need resources, and they would have to compete for those resources with the dominating manufacturer. If you own resources, why would you give them to the person who has nothing to offer in return? You won't.
So it will be a group of people who own resources, one guy who makes food and one guy who makes clothing. These are the only people who will get to eat.
So it will be a group of people who own resources, one guy who makes food and one guy who makes clothing. These are the only people who will get to eat.
Food grows right out of the ground. Water falls from the sky. One person is not going to own all the land in the world, nor all the water. Even if someone did, he wouldn't be able to police it all to prevent other people from living on it and growing their own food.
If in this theory though one person was able to make all the worlds food, they would would in turn employ the people so they would have something to give back for the food, it would be in the single food producers interest to put as many people to work as possible.
There are only so many personal chefs, drivers massage therapists one person needs.
<sarcasm>As a result, all non-participants will die off, and those remaining will form a fully-functioning and harmonious society. The end result is the same: everyone who's left is happy.</sarcasm>
In America, you are either self-employed or you're not.
So-called "unemployment benefits" are taxed as income meaning you are actually self-employed while receiving them. It's a matter of perspective. Where does your income come from and how much is it?
I'm an optimist. I believe growth in the production and movement of goods and services (the economy) will come from millions of people acting in their own self-interest. A massive collection of interconnected garages, basements, home-offices, libraries, schools, etc. -- all making stuff.
Government can stimulate all it wants, but the heart and soul of our success has always come from individual initiative.
So-called "unemployment benefits" are taxed as income meaning you are actually self-employed while receiving them. It's a matter of perspective. Where does your income come from and how much is it?
I'm an optimist. I believe growth in the production and movement of goods and services (the economy) will come from millions of people acting in their own self-interest. A massive collection of interconnected garages, basements, home-offices, libraries, schools, etc. -- all making stuff.
Government can stimulate all it wants, but the heart and soul of our success has always come from individual initiative.
Don't forget the economic role of cheap liquid fuels at relatively stable prices. Those days are over, probably for good. Any economic recovery is vulnerable as long as rising GDP triggers severe oil price volatility.
Edit can the person who down-voted this please explain why?
Edit can the person who down-voted this please explain why?
Government can stimulate all it wants, but the heart and soul of our success has always come from individual initiative.
Agreed. It would seem then that it would make the most sense for government to focus on minimizing the overhead for formalizing those "individual initiatives" into businesses, rather than inefficiently allocate capital through stimulus (save all of the issues of how much of that stimulus capital is dissipated to essentially non-productive ends).
Agreed. It would seem then that it would make the most sense for government to focus on minimizing the overhead for formalizing those "individual initiatives" into businesses, rather than inefficiently allocate capital through stimulus (save all of the issues of how much of that stimulus capital is dissipated to essentially non-productive ends).
It seems to me that we have the resources and technology to solve a lot of problems for good, but a permanent (or even just "better") solution would get in the way of profit. (I saw the documentary "who killed the electric car" recently, which describes one instance of this.)
There was a discussion here on HN a few weeks back about automating and simplifying taxes http://news.ycombinator.com/item?id=1072955
Automating and simplifying certainly seems like the right thing to do - but lots of people would lose jobs. On the other hand, they would be free to do something more productive (in the larger sense, producing value instead of papering over the cracks) and certainly more interesting!
Why can't we just automate away the boring stuff, and just work less? I'd be interested to see if it were possible to open source more than software. (Open source organic farming, anyone?) I know, I know, this is utopian and unrealistic and probably plain silly.
I'm not trying to suggest that we should all go create a hippie commune and get rid of money, but not solving a problem right because of some legalese or pure profit just seems wrong to me!
Another thing that I find perplexing is that the depression doesn't only put people with automatable jobs out of work. My father is an extremely talented craftsman. He builds traditional log cabins, wooden boats, furniture, beautiful houses... Right now he is living in a van, and not-quite eeking out a living picking fruit. He sells a couple hundred lbs of fruit a few days a week. He also shoots deer every once in a while which provides protein.
He's this great resource, but hasn't had a job for well over 2 years. If he didn't have to worry about food, he'd work for the sheer pleasure of creating something useful and beautiful. The thing that confuses and frustrates me is that my father would be delighted to work for free provided that his needs were met (seriously! Food, a beautiful view, a sauna, and some poetry. Seems simple enough, right?)
He loves to build beautiful things, and certainly there are people who need houses (even small log cabins would be an upgrade for many). I don't know what the solution is (obviously). It just seems strange that legal tender or lack thereof could get in the way of creating real value.
There was a discussion here on HN a few weeks back about automating and simplifying taxes http://news.ycombinator.com/item?id=1072955
Automating and simplifying certainly seems like the right thing to do - but lots of people would lose jobs. On the other hand, they would be free to do something more productive (in the larger sense, producing value instead of papering over the cracks) and certainly more interesting!
Why can't we just automate away the boring stuff, and just work less? I'd be interested to see if it were possible to open source more than software. (Open source organic farming, anyone?) I know, I know, this is utopian and unrealistic and probably plain silly.
I'm not trying to suggest that we should all go create a hippie commune and get rid of money, but not solving a problem right because of some legalese or pure profit just seems wrong to me!
Another thing that I find perplexing is that the depression doesn't only put people with automatable jobs out of work. My father is an extremely talented craftsman. He builds traditional log cabins, wooden boats, furniture, beautiful houses... Right now he is living in a van, and not-quite eeking out a living picking fruit. He sells a couple hundred lbs of fruit a few days a week. He also shoots deer every once in a while which provides protein.
He's this great resource, but hasn't had a job for well over 2 years. If he didn't have to worry about food, he'd work for the sheer pleasure of creating something useful and beautiful. The thing that confuses and frustrates me is that my father would be delighted to work for free provided that his needs were met (seriously! Food, a beautiful view, a sauna, and some poetry. Seems simple enough, right?)
He loves to build beautiful things, and certainly there are people who need houses (even small log cabins would be an upgrade for many). I don't know what the solution is (obviously). It just seems strange that legal tender or lack thereof could get in the way of creating real value.
It's not about legal tender; that's just a way to exchange value. It's a brutal truth, but worth is defined by what resources people are willing to give up for something. If they are not willing to trade their resources for yours, you have NOT created real value, but destroyed it, by consuming resources that people would pay for and creating something they won't.
In the same vein, railing against profit is ridiculous; Profit is the difference between your inputs and your outputs. If you don't create a profit doing something, you are again destroying value. (It's perfectly legitimate to have a profit in non-monetary terms, though. In that case it's you who is making the decision to trade more resources for less, because the process or result has value to you; You decide on its worth, and pay the price.)
In the same vein, railing against profit is ridiculous; Profit is the difference between your inputs and your outputs. If you don't create a profit doing something, you are again destroying value. (It's perfectly legitimate to have a profit in non-monetary terms, though. In that case it's you who is making the decision to trade more resources for less, because the process or result has value to you; You decide on its worth, and pay the price.)
I'm not railing against profit in itself, I just find that sabotaging a good solution that would profit many people (but not you in the short term) is illogical.
I think it's really tragic what is happening to the youth in america. they have no power, no wealth, no experience, no education, no skills, no credit... nothing. People who are older have worked and gathered all the above and still, congress gives them more. More drugs to keep them living longer and sapping the system. Free health care. Social Security, reduced taxes in the form of mortgage credits, dividend and capital gains discounts...
It's really pathetic.
Until the younger generation combines their voting power (if they'll start voting at all), they will not be listened to and will continue to suffer. With even 10% pooled voting power, they can control the outcome of nearly every election in the nation, local and national.
If all people aged 18 to 35 vote for the same person, that person will win. If a person caters to that demographic and listens to them and makes the future of America and the world better for them then it will be better also for the older generation.
But the older generation votes and the younger generation does not.
It's really pathetic.
Until the younger generation combines their voting power (if they'll start voting at all), they will not be listened to and will continue to suffer. With even 10% pooled voting power, they can control the outcome of nearly every election in the nation, local and national.
If all people aged 18 to 35 vote for the same person, that person will win. If a person caters to that demographic and listens to them and makes the future of America and the world better for them then it will be better also for the older generation.
But the older generation votes and the younger generation does not.
There's an arugment in favor of elite brand-name degrees, presumeably over state universities, or vocational degrees:
"The research of Till Von Wachter, the economist at Columbia University, suggests that not all people graduating into a recession see their life chances dimmed: those with degrees from elite universities catch up fairly quickly to where they otherwise would have been if they’d graduated in better times; it’s the masses beneath them that are left behind. Princeton’s 2009 graduating class found more jobs in financial services than in any other industry. According to Princeton’s career-services director, Beverly Hamilton-Chandler, campus visits and hiring by the big investment banks have been down, but that decline has been partly offset by an uptick in recruiting by hedge funds and boutique financial firms."
"The research of Till Von Wachter, the economist at Columbia University, suggests that not all people graduating into a recession see their life chances dimmed: those with degrees from elite universities catch up fairly quickly to where they otherwise would have been if they’d graduated in better times; it’s the masses beneath them that are left behind. Princeton’s 2009 graduating class found more jobs in financial services than in any other industry. According to Princeton’s career-services director, Beverly Hamilton-Chandler, campus visits and hiring by the big investment banks have been down, but that decline has been partly offset by an uptick in recruiting by hedge funds and boutique financial firms."
I read the book "New Ideas from Dead Economists" when I was in college. It's a great read. One of the recurring themes is how economists seem to always predict gloom and doom.
100 years ago they were predicting that the world would starve to death because of the industrial revolution. "All the people are moving off the farms, who will grow food to feed us? We will all starve to death. More and more babies are being born. The sky is falling!!!" They did not count on technology increasing food production and making it more efficient. Today, food is so plentiful and convenient that we're all too fat.
To hell with economists and meteorologists too. Both groups attempt to predict the unpredictable. Why believe anything they say... ever?
To hell with economists and meteorologists too. Both groups attempt to predict the unpredictable. Why believe anything they say... ever?
I think that we should also have a look at the quality of food. While the quantity of available food has increased and you can find cheap food, it's quality has decreased dramatically.
Another scenario of the automation vs jobs is, very unstable economy job-wise, for long terms. many many people would experience large periods of unemployment , a constant need to shift jobs and professions , and all the psycho-social negatives that come with this.
This might become a basic nature of the economy as automation becomes more rapid. some might even say it's already happening.
I think we would need to optimize economies for well being , instead of GDP to solve this.
This might become a basic nature of the economy as automation becomes more rapid. some might even say it's already happening.
I think we would need to optimize economies for well being , instead of GDP to solve this.
I'm going to go out on a limb here. This is the inherent weakness of the capitalist system. Eventually productivity outstrips need. The process is kinda backwards but that seems to be the truth. In my world, a manager lays people off to save money. Then they realize work isn't getting done because they have less people. So they use automation to fill the gaps. Those jobs don't come back.
Tired old statistic: in the 1700s, 90% of American workers worked on farms. But because of automation, today only 2% of workers do and we are better off for it. We spend a smaller percentage of our resources on producing the food we eat and can put those resources to other uses. Also, it is not true that 88% of people are unemployed.
Yes but during the industrial revolution we had a lot of unmet need. Now, we are much better off. I'm not convince there is enough need to justify keeping everyone employed.
Just to be clear, the entire history of humankind is evidence against your theory. You are guessing that something will happen that has never happened before.
That's not as bad as it sounds. Every event has to happen for a first time. But you should realize that you are making a very extreme claim based on nothing more than speculation.
That's not as bad as it sounds. Every event has to happen for a first time. But you should realize that you are making a very extreme claim based on nothing more than speculation.
I'm quite probably wrong and I'm also playing devils advocate poorly. What I'm trying to say is we already have almost everything we need. While I can point to many aspects of my life that could be improved upon, I can't point to many where the improvement would result in more and better jobs.
I assume you've been downvoted because there's a somewhat reflexive faith here that new classes of jobs will always be created to fill those that have been taken over by increased automation/productivity. That may be true, but for anyone who believes that, I recommend at least taking a look at the arguments Marshall Brain presents in his"Robotic Nation." One of his conclusions is that -- unlike with previous revolutions where new classes of jobs appeared to replace the ones that were destroyed (industrial for agricultural, for example) -- no new class of jobs appears to be on the horizon that is also not automatable.
I am down-voting him because, after two centuries of automation, the unemployment rate still hovers between 5 and 10 percent. In short, his ideas have no basis in reality and he makes no attempt to justify them. It is simple internet pop economics, and the world has too much of it. Not down-voting people like this is what leads to politicians getting away with ignorant demagoguery on economic subjects and a population too ill-informed to call them out on it.
Sure, when the singularity comes things may be different. But if that is his case, then he should make the argument. The parent comment is just noise.
Sure, when the singularity comes things may be different. But if that is his case, then he should make the argument. The parent comment is just noise.
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I can't recommend the book "Economics in One Lesson" highly enough. It answers this question.
Full text here: http://jim.com/econ/
I think it should be required reading for everyone during high school. This chapter is relevant:
"The Curse of Machinery" - http://jim.com/econ/chap07p1.html
Long story very short? We'll be okay. It's been a worry for a long time, and it's always been false. But the chapter of the book says it much better than me, and it's a short read. Actually, I'm going to submit this now as a separate submission. Really, highly recommended, very insightful stuff.
Edit: Submitted here if you'd like to discuss: http://news.ycombinator.com/item?id=1127345
Full text here: http://jim.com/econ/
I think it should be required reading for everyone during high school. This chapter is relevant:
"The Curse of Machinery" - http://jim.com/econ/chap07p1.html
Long story very short? We'll be okay. It's been a worry for a long time, and it's always been false. But the chapter of the book says it much better than me, and it's a short read. Actually, I'm going to submit this now as a separate submission. Really, highly recommended, very insightful stuff.
Edit: Submitted here if you'd like to discuss: http://news.ycombinator.com/item?id=1127345
It's been a worry for a long time, and it's always been false.
And therefore it will always be false?
And therefore it will always be false?
The "TL;DR" doesn't cover it, but in the chapter the previous commenter references, he does explain why it's a logical fallacy. At the risk of putting something incomplete and/or incorrect, TL;DR summary of the explanation of the fallacy is that the productivity saved by automation is always available to fuel further production.
Higher average productivity is great, but the problem America has at the moment is an ever-widening gap in income, and very little political will to do anything about it. An important passage in the article:
William Felkin, in his History of the Machine-Wrought Hosiery Manufactures (1867), tells us (though the statement seems implausible) that the larger part of the 50,000 English stocking knitters and their families did not fully emerge from the hunger and misery entailed by the introduction of the machine for the next forty years.
If this is true it is a big deal. Suppose you invent a device that will double economic output while putting half the population out of work. There's no question the device needs to be put to use, but something needs to be done about all these displaced people as well. Much of the surplus in productivity borne of your invention will need to be used to help those people switch to other work, allow them to retire early, etc. In other words you will be taxed heavily, something which is very hard to do these days in the States. So the American worker seems especially vulnerable to displacement by automation, and you get this scapegoating of machinery. If you don't like it, next time you hear some jerk on the radio bleating about high taxes and socialism, think about where that money might be going, and vote accordingly.
William Felkin, in his History of the Machine-Wrought Hosiery Manufactures (1867), tells us (though the statement seems implausible) that the larger part of the 50,000 English stocking knitters and their families did not fully emerge from the hunger and misery entailed by the introduction of the machine for the next forty years.
If this is true it is a big deal. Suppose you invent a device that will double economic output while putting half the population out of work. There's no question the device needs to be put to use, but something needs to be done about all these displaced people as well. Much of the surplus in productivity borne of your invention will need to be used to help those people switch to other work, allow them to retire early, etc. In other words you will be taxed heavily, something which is very hard to do these days in the States. So the American worker seems especially vulnerable to displacement by automation, and you get this scapegoating of machinery. If you don't like it, next time you hear some jerk on the radio bleating about high taxes and socialism, think about where that money might be going, and vote accordingly.
What about knowledge workers? They're a new class of workers. There is no AI good enough yet to replace a book author, a marketing manager, a lawyer etc. Will they ever be automatable? Probably. But who knows which new class will emerge after the knowledge workers..
Here's Marshall Brain's response:
The conventional wisdom says that the economy will create 50 million new jobs to absorb all the unemployed people, but that raises two important questions:
What will those new jobs be? They won't be in manufacturing -- robots will hold all the manufacturing jobs. They won't be in the service sector (where most new jobs are now) -- robots will work in all the restaurants and retail stores. They won't be in transportation -- robots will be driving everything. They won't be in security (robotic police, robotic firefighters), the military (robotic soldiers), entertainment (robotic actors), medicine (robotic doctors, nurses, pharmacists, counselors), construction (robotic construction workers), aviation (robotic pilots, robotic air traffic controllers), office work (robotic receptionists, call centers and managers), research (robotic scientists), education (robotic teachers and computer-based training), programming or engineering (outsourced to India at one-tenth the cost), farming (robotic agricultural machinery), etc. We are assuming that the economy is going to invent an entirely new category of employment that will absorb half of the working population.
Why isn't the economy creating those new jobs now? Today there are millions of unemployed people. There are also tens of millions of people who would gladly abandon their minimum wage jobs scrubbing toilets, flipping burgers, driving trucks and shelving inventory for something better. This imaginary new category of employment does not hinge on technology -- it is going to employ people, after all, in massive numbers -- it is going to employ half of today's working population. Why don't we see any evidence of this new category of jobs today?
I don't find some of his examples (robotic scientists?) particularly persuasive, but the idea that many low skilled jobs will be destroyed while few high skill jobs created... seems at least plausible to me. That this has never happened before isn't a particularly good argument why it couldn't happen in the future.
The conventional wisdom says that the economy will create 50 million new jobs to absorb all the unemployed people, but that raises two important questions:
What will those new jobs be? They won't be in manufacturing -- robots will hold all the manufacturing jobs. They won't be in the service sector (where most new jobs are now) -- robots will work in all the restaurants and retail stores. They won't be in transportation -- robots will be driving everything. They won't be in security (robotic police, robotic firefighters), the military (robotic soldiers), entertainment (robotic actors), medicine (robotic doctors, nurses, pharmacists, counselors), construction (robotic construction workers), aviation (robotic pilots, robotic air traffic controllers), office work (robotic receptionists, call centers and managers), research (robotic scientists), education (robotic teachers and computer-based training), programming or engineering (outsourced to India at one-tenth the cost), farming (robotic agricultural machinery), etc. We are assuming that the economy is going to invent an entirely new category of employment that will absorb half of the working population.
Why isn't the economy creating those new jobs now? Today there are millions of unemployed people. There are also tens of millions of people who would gladly abandon their minimum wage jobs scrubbing toilets, flipping burgers, driving trucks and shelving inventory for something better. This imaginary new category of employment does not hinge on technology -- it is going to employ people, after all, in massive numbers -- it is going to employ half of today's working population. Why don't we see any evidence of this new category of jobs today?
I don't find some of his examples (robotic scientists?) particularly persuasive, but the idea that many low skilled jobs will be destroyed while few high skill jobs created... seems at least plausible to me. That this has never happened before isn't a particularly good argument why it couldn't happen in the future.
I fear that this argument is too sci-fi to be taken seriously by the overly literal personalities that tend to dominate HN, so let's make it clear: he's not actually saying that "robot scientists" are going to take over. Brain is performing a reductio ad absurdum -- he's taking the other side's argument to the extreme to demonstrate the
fundamental logical fallacies involved.
We don't need to wait for robot scientists to see the consequences of automation -- it's happening right now. Smaller numbers of skilled laborers are replacing larger numbers of unskilled laborers. To make the argumentative leap that this is a sustainable process, you have to prove that somehow, we will dramatically reduce the number of people who depend on unskilled labor to to make a living. I have yet to see a convincing proof that this is occurring. At best, we seem to keep shifting the kind of unskilled labor that we need, and paying less for it.
We don't need to wait for robot scientists to see the consequences of automation -- it's happening right now. Smaller numbers of skilled laborers are replacing larger numbers of unskilled laborers. To make the argumentative leap that this is a sustainable process, you have to prove that somehow, we will dramatically reduce the number of people who depend on unskilled labor to to make a living. I have yet to see a convincing proof that this is occurring. At best, we seem to keep shifting the kind of unskilled labor that we need, and paying less for it.
I do agree with your arguments, but regarding robotic scientists:
automation is pretty strong also in science.
combinatorial chemistry is used a lot in chemistry and chip fabrication r&d.
And there's even a robot called ADAM that does biology research: he raises hypotheses , plans and executes experiments , analyzes results , and decides how to continue. the whole research loop.
What I don't get is the difference of timelines in his argument. Considering all the fields where supposedly humans are to be replaced by robots we are talking about a point in time probably still a 100 years off. (And we just cannot say for sure that all those activities ever can be sufficiently performed by robots, probably until it happens.) So how are we supposed to know what kinds of jobs there will be in a 100 years time?
My (imaginary) farming and livestock-holding greatgrandfather probably didn't ever imagine someone could make a living out of Search Engine Optimization. Still, despite machines ploughing our fields, we still have jobs. So we probably will have jobs in 100 years time. We just have no idea which ones.
My (imaginary) farming and livestock-holding greatgrandfather probably didn't ever imagine someone could make a living out of Search Engine Optimization. Still, despite machines ploughing our fields, we still have jobs. So we probably will have jobs in 100 years time. We just have no idea which ones.
But the people laid off may found a great company afterwards. You look at the economy as a zero-sum game. But the pie is growing bigger nearly all the time.
As a thought experiment, isn't it possible that the pie (wealth) could grow larger but that the distribution of that wealth could be narrower due to technology and outsourcing of jobs? That may not be zero-sum, but it could certainly be problematic for wage earners.
The wealth distribution within a given first-world society is certainly changing, with bigger amounts of wealth going to the top 1% etc. That's mostly due to the fact that well educated and connected knowledge workers are able to utilize globalization to a greater extent than your regular mailman. But that's not necessarily for the worse. Even inflation-adjusted wage stagnation need not necessarily be bad, as you mostly can buy more with your money today (reduced prices for electronics, basic necessities etc.) than in the past.
Who makes the automation possible?
We do, for now, but for every one job created for a software/hardware engineer, several (probably low skill jobs) may be destroyed. Compare the total number of, say, cashiers to software developers.
> Compare the total number of, say, cashiers to software developers.
So, ATMS... would you replace them with human bank tellers? Would that be a net benefit to the economy?
So, ATMS... would you replace them with human bank tellers? Would that be a net benefit to the economy?
No, I mean, if it is indeed the case that the total number of jobs displaced by automation exceeds those generated by it, I have no particular take on how to handle it.
My point is that though automation "costs" jobs, it simultaneously reduces the cost of production (e.g. the production of financial transactions, here). Ultimately the benefit from more efficient production is a rising tide that lifts all ships. It would be hard to argue that reversing the industrial revolution and returning to cottage industries would be a net benefit, even though our current production levels would require 10-1000x as many jobs.
From a microeconomic perspective, the specialization of labor undoubtedly allows us to maximize production, yet from a macroeconomic perspective, I think you're right.
I know Marx is beyond dated, and that it's only permitted to speak of him using hushed tones in serious conversation, however, in Das Kapital one of his fundamental arguments was that the long-run problem Capitalism is destined to face and ultimately lose to will be the problem of over-production. Which sounds counter-intuitive, as how could over-production possibly be bad? His argument is interesting and worth studying for itself, even if it is mostly outdated.
I know Marx is beyond dated, and that it's only permitted to speak of him using hushed tones in serious conversation, however, in Das Kapital one of his fundamental arguments was that the long-run problem Capitalism is destined to face and ultimately lose to will be the problem of over-production. Which sounds counter-intuitive, as how could over-production possibly be bad? His argument is interesting and worth studying for itself, even if it is mostly outdated.
how could over-production possibly be bad?
Over-production results in a general glut. http://en.wikipedia.org/wiki/General_glut
Real demand is still present, but the lack of liquidity in a general glut artificially depresses demand. Fed chairman Ben Bernanke explains:
but the story that captivated Bernanke involved a town full of shoe factories that closed during the Depression, leaving the community so poor that its children went barefoot. "I kept asking, Why didn't they just open the factories and make the kids shoes?
The reason is because the community didn't have anything to offer the factory owners. The factory owners know that the community doesn't have money to pay for shoes, but on the other hand the community would have money if these factories paid them instead of closing the factories.
These problems would go away if anyone could own a factory and have access to the materials, which many people above have said. However, this goes against the tenets of a capitalist free market: where someone is free to own much of the resources/land/factories/IP, which sets the barrier to entry beyond what most people can pay.
Over-production results in a general glut. http://en.wikipedia.org/wiki/General_glut
Real demand is still present, but the lack of liquidity in a general glut artificially depresses demand. Fed chairman Ben Bernanke explains:
but the story that captivated Bernanke involved a town full of shoe factories that closed during the Depression, leaving the community so poor that its children went barefoot. "I kept asking, Why didn't they just open the factories and make the kids shoes?
The reason is because the community didn't have anything to offer the factory owners. The factory owners know that the community doesn't have money to pay for shoes, but on the other hand the community would have money if these factories paid them instead of closing the factories.
These problems would go away if anyone could own a factory and have access to the materials, which many people above have said. However, this goes against the tenets of a capitalist free market: where someone is free to own much of the resources/land/factories/IP, which sets the barrier to entry beyond what most people can pay.
free to own much of the resources/land/factories/IP
One of these things doesn't belong.
One of these things doesn't belong.
The reason America is jobless is because everyone is in debt. People (talking majority) spend more then they make. They take out 3 year financing on toasters (exaggerated but sadly not much). To be in debt is a way of life. People buy things on credit long before they have the money to pay it off. Thats why America is in a recession and jobs are closing.
If people (again majority) had common sense as most on HN seem to have then America would be fine.
The second major reason IMO that America is going to be jobless is because the overhead cost of everything is far to high, especially in government. It takes so many people to sign off for anything that it will end up costing way more then it should. Take a look at large government states vs small government states and tell me which is doing better. (ie Cali vs Texas) Cali has to raise taxes to pay for all the overhead which causes business owners to pay more which causes them to not hire more people.. Pretty easy to see what needs to happen.
If people (again majority) had common sense as most on HN seem to have then America would be fine.
The second major reason IMO that America is going to be jobless is because the overhead cost of everything is far to high, especially in government. It takes so many people to sign off for anything that it will end up costing way more then it should. Take a look at large government states vs small government states and tell me which is doing better. (ie Cali vs Texas) Cali has to raise taxes to pay for all the overhead which causes business owners to pay more which causes them to not hire more people.. Pretty easy to see what needs to happen.
To be in debt is a way of life. People buy things on credit long before they have the money to pay it off.
Like, say, houses? Or a college education?
The problem isn't debt, per se - it's reaching a level of debt that can't be easily serviced by future earnings. Debt/credit is useful to invest in assets that return benefits to you over the period of paying the debt off. The ability to make these investments are a cornerstone of why the West has been so successful over the past 3-400 years.
Like, say, houses? Or a college education?
The problem isn't debt, per se - it's reaching a level of debt that can't be easily serviced by future earnings. Debt/credit is useful to invest in assets that return benefits to you over the period of paying the debt off. The ability to make these investments are a cornerstone of why the West has been so successful over the past 3-400 years.
I meant smaller things then houses or and eduction. Things such as TVs, PCs, Ovens, ect. Items that are not as expensive as college or a house but are in the under $3k range.
I agree that some debt it unavoidable and did not mean to come across that ALL debt is bad and should be avoided because well some of it cannot (ie the house). However buying many of these sub 3k items that are not needed then paying them off over 3 years is crazy. Thats more what I was getting at.
I agree that some debt it unavoidable and did not mean to come across that ALL debt is bad and should be avoided because well some of it cannot (ie the house). However buying many of these sub 3k items that are not needed then paying them off over 3 years is crazy. Thats more what I was getting at.
In that case, you're mostly right, but I think the "using credit to buy assets" point is worth reiterating. Books, training courses, tools, etc, are usually under $3K but could be a "good" use of credit. If someone without much disposable income has the opportunity to take credit to become, say, an MCSE to find a better job, that seems a reasonable use of credit.
In terms of needless consumer goods that return little value, however, right on. The problem, then, is you either have to ruin credit for everyone (good or bad) or you need to find a way to reduce "bad" borrowing.. which is seemingly next to impossible.
In terms of needless consumer goods that return little value, however, right on. The problem, then, is you either have to ruin credit for everyone (good or bad) or you need to find a way to reduce "bad" borrowing.. which is seemingly next to impossible.
I would love to disagree with you on this (my opinions on economics stray pretty far from normal). I believe precisely the reason America is so successful is because of debt.
A worker who does not work a day never gains that day of work back. Debt allows workers to perform their tasks fully allocated as there is always work available, whether or not work has already been done in return for them.
Ie if there was no debt, everyone would have to wait for a task to be finished before they could perform a service in return, causing lost work that can never be made up for.
The only time this system falls flat is if everyone decides they need services all at once, which historically is not common.
A worker who does not work a day never gains that day of work back. Debt allows workers to perform their tasks fully allocated as there is always work available, whether or not work has already been done in return for them.
Ie if there was no debt, everyone would have to wait for a task to be finished before they could perform a service in return, causing lost work that can never be made up for.
The only time this system falls flat is if everyone decides they need services all at once, which historically is not common.
I'm over 3/4 of the way though the article and it just keeps getting more depressing. Somebody please hide all the sharp objects!
I've felt for a while that high unemployment (20-30%) is the normal state of affairs. 20% of folks should probably be engaged in some sort of sustenance living. It wouldn't really have to be that bad, like digging in dumpsters or anything, but just living in a commune, farming, and building their own debt-free shelter.
I've felt for a while that high unemployment (20-30%) is the normal state of affairs. 20% of folks should probably be engaged in some sort of sustenance living. It wouldn't really have to be that bad, like digging in dumpsters or anything, but just living in a commune, farming, and building their own debt-free shelter.
Comfortable high-tech subsistence farming is around the corner. Efficient local renewable energy, RepRap machines, domestic robots... it's going to be a very interesting century.
Farmers are the original pioneers of "renewable energy." Their main energy source is sunshine, converted directly to foodstuffs by some amazing works of generic engineering (a.k.a. "plants). Biofuels? Yeah, they've been burning corn and vegetable oils for decades. Robots? How about biological labor aids -- horses, herding dogs, chickens, etc.
Regardless, there's a reason you seldom hear "comfortable" and "subsistence farming" in the same sentence. Growing enough food to feed yourself is a full-time job, even with modern agricultural tech. Yeah, there could be a singularity-style event that makes traditional farming obsolete, but RepRaps and Roombas ain't it.
Regardless, there's a reason you seldom hear "comfortable" and "subsistence farming" in the same sentence. Growing enough food to feed yourself is a full-time job, even with modern agricultural tech. Yeah, there could be a singularity-style event that makes traditional farming obsolete, but RepRaps and Roombas ain't it.
Ultimately, innovation is what allows an economy to grow quickly and create new jobs as old ones obsolesce and disappear. Typically, one salutary side effect of recessions is that they eventually spur booms in innovation. Some laid-off employees become entrepreneurs, working on ideas that have been ignored by corporate bureaucracies, while sclerotic firms in declining industries fail, making way for nimbler enterprises. But according to the economist Edmund Phelps, the innovative potential of the U.S. economy looks limited today.
He had me until the end, where Edmund Phelps declares innovation in America is "limited". HAH. Watch our smoke, Ed!
He had me until the end, where Edmund Phelps declares innovation in America is "limited". HAH. Watch our smoke, Ed!
He's probably pulling from the brain-drain problem we've been having since schools started to go down the creek. Arguably, our environment is also hostile to newcomers many times, due to patently absurd patent laws and higher business taxes than many places (not all, mind you, just many).
Brain drain problem? What, all the entrepreneurs are moving to India and I didn't hear about it? ;-)
The US may be "hostile" to newcomers -- you're right, we do have stupid patent laws and some of the business taxes can seem ridiculous -- but then again, most countries have stupid patent laws (see the WIPO) and many many countries tax business at much more aggressive rates.
Even more importantly, if we're talking about technology: Silicon Valley has never been replicated full-scale. Yes, there are pockets. But what draws people to Northern California -- aside from the unique culture, natural beauty, and the weather -- is that there has been an innovation pow-wow going on since Hewlett and Packard took to the garage. People want in on that, especially if they're into innovation themselves.
There are more startups starting up right now, especially here in CA, than I've seen in years. Not all will innovate, but many will, and at least some of that innovation will stick and maybe even change the world.
No innovation? Really? Has this guy seen the frickin' iPod? Oh, and heard of Twitter? (Just to name some easy examples.)
The US may be "hostile" to newcomers -- you're right, we do have stupid patent laws and some of the business taxes can seem ridiculous -- but then again, most countries have stupid patent laws (see the WIPO) and many many countries tax business at much more aggressive rates.
Even more importantly, if we're talking about technology: Silicon Valley has never been replicated full-scale. Yes, there are pockets. But what draws people to Northern California -- aside from the unique culture, natural beauty, and the weather -- is that there has been an innovation pow-wow going on since Hewlett and Packard took to the garage. People want in on that, especially if they're into innovation themselves.
There are more startups starting up right now, especially here in CA, than I've seen in years. Not all will innovate, but many will, and at least some of that innovation will stick and maybe even change the world.
No innovation? Really? Has this guy seen the frickin' iPod? Oh, and heard of Twitter? (Just to name some easy examples.)
The startups recently are probably partly due to the decline, and the projected improvement. People with money can capitalize on cheap locations to do what they want, because the people who don't have money are gone.
And they're not all moving to one place, and of course there's evidence both ways, but smart people typically want to educate their kids well. Our schools have been slipping a lot for quite a while. Meanwhile, the rest of the world is catching up rapidly for the first time in who knows how long. How much you equate to coincidence and how much to causes A-ZZ varies by person, of course, but I really do think this is part of it.
And they're not all moving to one place, and of course there's evidence both ways, but smart people typically want to educate their kids well. Our schools have been slipping a lot for quite a while. Meanwhile, the rest of the world is catching up rapidly for the first time in who knows how long. How much you equate to coincidence and how much to causes A-ZZ varies by person, of course, but I really do think this is part of it.
> And they're not all moving to one place, and of course there's evidence both ways, but smart people typically want to educate their kids well. Our schools have been slipping a lot for quite a while.
What definition of "our" are we using?
Are Palo Alto's public schools slipping? Are the private schools in the valley slipping?
Or, are you talking about universities? How many countries have 4 schools that would be considered top 50 in the US? How about 10?
What definition of "our" are we using?
Are Palo Alto's public schools slipping? Are the private schools in the valley slipping?
Or, are you talking about universities? How many countries have 4 schools that would be considered top 50 in the US? How about 10?
The startups recently are probably partly due to the decline, and the projected improvement. People with money can capitalize on cheap locations to do what they want
Spot on. Also, they want to take advantage of the downturn -- history has shown that if you make a successful startup in a downturn, when the economy comes back, it brings the company with it. Google's an example.
Spot on. Also, they want to take advantage of the downturn -- history has shown that if you make a successful startup in a downturn, when the economy comes back, it brings the company with it. Google's an example.
With the money saved with the automated, the retailer may choose to cut prices, or reinvest in their business. If they cut prices, consumers now have money to invest in other industries, the demand spawning new positions. If they reinvest in their business, these positions, not previously open, will also be available.
If they simply take their savings, and pay it out to share holders / keep it in the bank, this allows more capital for investment.
The more steps that are automated, the more abundantly we will all live. It is a great thing in terms of material desires.