Came across this video through one of my social media lists. Apparently from a conference on technological unemployment.
From where I sit it seems like human capital keeps dropping in value. What sort of livelihood might be available to most folks when the bottom pretty much falls out?
We have often heard about how tech will increase quality of life and leisure. So far this is not bearing out. Everyone I know is working longer for less. It's tough to be optimistic about what crumbs might trickle down given our current schemes of economy and governance.
This is a more complicated economic problem than most people understand and/or are willing to address. The basic complaint goes like this: "I have a job involving lots of training, yet technology threatens to perform my job better than I can. Therefore, I will starve." This misses the technological solutions to problems as well as the fundamental economics of labor. Something few people consider is that 95% of any given job can be done by any given person... but the 5% of the job that can't is filled with peril and dire consequences (as well as towering opportunities for artistry and mastery). It stands to reason that 95% of any job, then, can be automated... but that supervision is necessary to cover the remaining 5%. That 95% number is straight from the department of made-up statistics, but technology has always turned laborers into supervisors. And yes: take the 95% number and theoretically you can reduce your workforce from 20 to one. But are you going to pay him 20x what he used to make? Now take those 19 people who you laid off in the name of productivity. You're producing just as much stuff as you used to - but for who? Assume every industry everywhere cut their workforce by 95%. If 95% of the population is unemployed and destitute, how are they going to buy your widgets? Jobs don't disappear, jobs change. "Tailor" went from "great job" to "shit job" to great job in 100 years. All clothes used to be hand-made; now just the "bespoke" shit is. McDonald's uses unskilled labor because it's cheaper than robots but Umami and their ilk use skilled labor because you can make a better burger if you know what you're doing, and you can charge for it. You just can't sell as many. Longer than what and for less of what? Because I had a job before the Internet or cell phones and I'm here to tell ya - a lot more work got done. You're right - you had less hours in the office and once you were free, you were legit free. But the foibles of the workplace experience aren't directly correlated with technological advancement. Technology changes everything. For every job it eliminates it creates one somewhere else. Is your job safe? No, of course not. But your continued employment has always been predicated on your ability to perform and your ability to adapt. Hasn't that always been true?From where I sit it seems like human capital keeps dropping in value. What sort of livelihood might be available to most folks when the bottom pretty much falls out?
We have often heard about how tech will increase quality of life and leisure. So far this is not bearing out. Everyone I know is working longer for less.
Great discussion. What I come to hubski.com for. It has always been true. But at the rate which change is now progressing, I wonder if that adaptation and reeducation can keep up for the multitudes. And if the new jobs will provide a living wage. And yes, a huge number of people unemployed/underemployed disrupts the economy. But I wonder if a lot of businesses now can even afford to look beyond the profits of the next couple quarters. As I understand it, most of the job growth in the US is taking place in low-wage occupations. This may relate more or less to the tech issue. As you point out, corporate policies may be contingent on other factors.
Thomas Piketty wrote a 900-page powerpoint that pretty exhaustively proves that capitalism concentrates wealth. The conservatives dismiss his arguments out-of-hand because they're ethically bound to do so... I've yet to see a substantive counterpoint to his basic discoveries. Simply put, capitalism becomes feudalism unless you add a heapin' helpin' of socialism. Piketty's argument is to allow capitalist markets with socialist regulation. So there's your low-wage growth, and there's your wealth concentration. It's definitely related to technology, but it's been related to technology since the Bronze Age. The middle class is an aberration of socialist thinking, really; we have to fight to keep it alive. Your argument, then, is that we aren't fighting for it. I'm not worried, believe it or not. Poor people buy commodities and commodities are low profit margin. Middle-class people buy luxuries... you don't need an iPhone, but if you make over $40k a year you can justify it. There will never be enough truly stinking rich people to support the economy, and no matter how many poor people there are, they can't support the high-profit-margin shit like designer shoes and tiramisu. So it comes down to what makes "middle class." There's a likelihood that "middle class" makes less money 50 years from now than they did 50 years ago. Is the quality of life going to be worse, though? 1998 is calling: I was talking with my wife last night about footie pajamas. She had them and loved them; my mother despised them so I was only grudgingly allowed to have a pair. To get them we had to look them up in the JC Penney catalog, call a 1800 number, send in a check, wait a week, then drive 60 miles to a store to pick them up. Now? Now I can have virtually every consumer product I could want at my doorstep within 48 hours. That's in my lifetime - I've gone from rotary phones to LTE Facetime in a moving car. What sort of unimaginable luxury would Skype be to someone in 1977? Make no mistake - you will be made supernumerary. And make no mistake - you will have to compete with your peers for jobs. But the market needs buyers and sellers and market forces set prices. When mass production is cheap, craftsmanship becomes expensive and craftsmen become artisans. When labor is unnecessary, laborers become managers - imagine what a dandy the average forklift operator would be to longshoremen at the turn of the century. Don't worry about the corporations. They can't look beyond the profits of the next couple quarters. They have a legal obligation to shareholders and a stock that doesn't produce is a stock that gets punished. Believe it or not, the market is going to keep right on solving this one.
Every time this topic come up, I link this video: and this associated conversation: the above should start at 34 minutes, if the link didn't work appropriately. If anything, I think the first video is a preface to the conversation in the second. maybe not "required listening" on this subject, but pretty close. The question isn't if, it's when, and anyone who says "never" is either uninformed, lying to themselves or lying to you. Then when just keeps getting closer all the time, as larger businesses are spending more and more RnD money on digital and physical automation. As soon as the transport industry picks up on automation, even if it was just for long distance hauling on interstates (separating out dense city driving just for the sake of argument), it would STILL put a million of people out of work. Think about it - not just the transport truck drivers, but also all of the hotels and motels that would have to shrink their staff or shut down due to less demand from those truck drivers, and restaurants, and gas stations, and all the other services that they use. what are these people going to do? we don't have 1 million new jobs to retrain these people for. I was speaking with my dad, who's an aircraft safety inspector, and according to him commercial airplanes have been mostly automated with two dudes to watch the machine work for more than a decade. The majority of problems on flights in the past few years have been caused when pilots have taken control of the plane, and not the other way around. We're already pretty much there, and we need to prepare for this shit now. It's basically the best argument for basic income anyone has ever made, imo.
I know that feel. an entire orchestra of 100 people can be replaced by one machine.
These arguments always use solid logical arguments but stop once they reach doomsday. Let's say everything is right, and machines can automate 60-70% of the workforce. With unemployment at those numbers, what will people be consuming? What will machines be producing if there are no consumers? What will the people be doing if there are no jobs? Will the masses roll over and give up on labor? Will they allow the world's finances to stagnate in the bank accounts of the machine owners while they live in total poverty? In a different vein, these arguments don't give a lot of credit to human beings. Is all that we want in life efficiency? Do we only care about simulations of reality? To say that machines can replace every single aspect of humanity is to say that we are nothing but biological machines. It is to say that there is nothing metaphysical in the connection between two people, that it's just two stock programs executing lines of code. If that's the case, if the world is so cold and logical, why do these people sing this song as a dirge? Shouldn't this be a holy hymn, that we are doing great works in the world by making a more efficient version of ourselves that will fulfill our mechanical niche better than we ever could? Would they be embracing that? If we are not special, as the speaker claims, then why does it matter if we are made obsolete? And that's the core of the problem with her argument - either we are not special and so she has no right to say we should seek refuge from this mechanical evolution, or she is saying we are special and that no matter how many jobs are made obsolete, there is something inherent in us that prevents us as individuals from being obsolete. That's my rant, at least.
The thing that is interesting about this argument is that it is the same argument that people have had since the rise of the Industrial Revolution 400 years ago. It crops up at least once a generation. Malthus thought that we were heading to a population crisis and advocated for what we now call eugenics to solve the "poor problem" of his time. At the time we was alive, there were fewer than a billion humans alive. As anyone who has worked on a big project can attest to, the first 90% of the work is easy and goes quickly. That last 10% to complete the work is full of unforeseen issues, problems, disasters and other bits of fun and excitement. I was told that 90% of your budget is spent in the last 10% of the job, and I guess this is a good rule of thumb to go by. As stated below, computers and machinery do some things much better than humans will ever be able to do. And there are some things that humans will always do better (language and interpreters for example are based as much on facial and body language as much as the words themselves). Computers are creating whole new industries that we are not able to see right now. 3D printing is going to destabilize whole industries and economies while creating millionaires who are able to look at this and say 'this solves a need that is not being met." Cars created a need for malls and big box stores, diesel engines made transporting cheaper and more reliable, computers have made just about everything cheaper, better, stronger. The worst case scenario that I see is that there will be a further decoupling (love that word!) of productivity and salary causing a drop in consumer demand due to less cash to spend on stuff. Land and real estate will continue to soar in cities as real physical goods are something that everyone understands and cannot really be created. But people can only pay $4000 a month for an apartment in San Francisco for so long before they go "Fuck everything about this, I'll go make 100K a year less and live in a house on 3 acres in Nashville." It is going to take time, but the adjustment is coming.Let's say everything is right, and machines can automate 60-70% of the workforce.
Back in the day, 1 out of 7 Americans were employed either directly or indirectly with keeping horses alive. Horse trainers, blacksmiths, the guys who scraped the horse poop off the street, the guys who delivered hay, breeders etc. If that number is 1 out of 7000 now I'd be shocked it was that high. Did those jobs go away all the sudden? of course not. The video of San Francisco in 1906 before the quake... this is 20+ years after internal combustion engines began to show up on the streets. The old jobs will become rare and new jobs and skills will replace them. Like any transition it is going to be interesting living though it.
I don't think automation is the problem, it's the assumption that everyone needs a job in order to earn the means to live. That people have to waste their limited time on drudgery is a problem, and the solution is technology to automate the drudgery. That we expect people to find some drudgery to do is a problem, and the solution is political. One solution to the latter is to try to oppose automation, but ask the Luddites how well that will work. Basic income is another, and the jury's still out on that one.