Saturday, April 27, 2013

In the Future, When Robots do All Our Work, What of Capitalism?


There's been a lot of concern lately about our current economic system and its wealth inequality, lack of jobs, and environmental impact. And many (12345... ) think that new robots and advanced software (AI) will soon exacerbate job availability and wealth inequality. Futurists are envisioning some drastic changes to our capitalistic system as the only solution: much greater wealth re-distribution, possibly including a basic living wage for all,  living in a world without economic growth, or even efforts to slow down technology advancements. As someone for whom Ayn Rand resonates deeply, my default belief is that laissez faire capitalism, individual ownership, and the hopefully rapid growth associated with those systems is our best bet long term, even for the poorest among us. But I don't have very compelling answers for many of the troubling questions that the future will soon raise--namely, who will pay us when robots take all our jobs? Are we destined to social chaos if we don't change our system in the future? To a more ... socialist one?

From "The End of Labor: How to Protect Workers from the Rise of Robots", credit Reuters

Income Inequality Trends

One statistic many site as cause for concern is growing income inequality, which can be seen by a stagnent household median income* even as GDP continues to rise. The middle income earners in this country are making the same or less than they did in 1987 in inflation adjusted dollars. The growth in GDP is only due to the highest earners. The top quintile makes over 50% of income (H2).





data from: US Census Bureau table H5 and US Dept of Labor GDP per Capita


*The trend in median household income since 1967 is probably influenced more by changes in households than by income disparity. For instance, there were more dual earner households (table H-11, all races) than single earner households in 1980, but in 2011 there were more single earner ones, which pushes the household income down. The opposite of this probably happened from 1967 to 1980 as more women joined the work force.  Household income also does not account for subsidized housing, food stamps, or free / subsidized medical care, which would push median income higher. CPI calculations have also changed over the years, but I believe the above chart takes those into account. I don't know if there are really any good long term statistics you can use to compare income without non-income related factors that have a greater influence than income itself. It's a shame the census only collected household data rather than individual data.  The author of the Great Stagnation does not think changes in household are responsible for the decline.


Real Growth by Quintile, from dshort's analysis of census historical data
In terms of wealth, in 2009, the bottom 4/5 of america actually lost wealth since 1983 ($62,900 down from $65,300), although most of this drop was due to housing prices dropping so low, so it's probably recovered somewhat. The top 20% held 81.3% of all wealth in 1983, and in 2010 hold 88.9% (Table 2, wolff). Again, since housing prices account for a large chunk of middle class wealth, the 2010 numbers are probably a bit worse than 2013 ones.

But overall, the basic story is that the top 5th of households are doing better, while the bottom 4/5s are doing worse. And if we look at the very top,
"the CEO-to-worker compensation ratio was 18.3-to-1 in 1965, peaked at 411.3-to-1 in 2000, and sits at 209.4-to-1 in 2011." CEO pay and the top 1%
To toss in one stat that doesn't make the rich look so horrible, the top quintile paid 67.9% of the total federal tax burden (including social security) in 2009, up from 55.3% in 1979. (The Distribution of Household Income and Federal Taxes, 2008 and 2009.)

Jobs

In March, the US economy added 88k jobs, a horrible followup to February's 268k. The unemployment rate is now 7.7%, which is much better than the 10% we had in 2009, but may be a result of a record low participation rate (63.3%), not seen since 1979 when fewer women were working.


Although retirees may play a part, many think young people are just giving up on the search. Worse, many of new jobs are lower wage ones. From the National Employment Law Project:
"Lower-wage occupations were 21 percent of recession losses, but 58 percent of recovery growth. Mid-wage occupations were 60 percent of recession losses, but only 22 percent of recovery growth."
 The report highlights that low and high-end jobs are recovering, but middle-end jobs are still at a loss.
 "(food services, retail, and employment services) added 1.7 million jobs over the past two
years, fully 43 percent of net employment growth."
National Employment Law Project
One more chart before moving on... the S&P 500 (biggest 500 companies in ) is reaching news highs everyday.

S&P 500 Recovering just fine... from InfoMine.
It seems the relationship between GDP and employment isn't a very good law (Okun) anymore, at least for the middle class.

Explanations for Inequality and Low Mid-Wage Job Numbers

There are many competing explanations for the increasing concentration of wealth in the hands of the richest and the lack of middle-skilled jobs, and some part of all of these is probably to blame.
  • Lack of Corporate Governance - board members compete with other companies to pay their CEOs more every year. This addresses CEO pay more than the general lack of mid-tier jobs.
  • Outsourcing of Jobs to China
  • Government policies, including historically low tax rates on the richest, weakened union support, deregulation, etc.
  • Not enough innovation, poor incentives for good innovation
  • Too much innovation (technology eliminating jobs)
  • Lack of education - workers can't adapt to new technology
While I don't claim to know which cause is more or less responsible for our current situation--many economist disagree, in fact--I do think that much of our future problems will be a result of technological innovation. This is the case made by McAfee, Brynjolfsson and Evans, and my primary inspiration for this entry.

A quick mention of the not-enough innovation arguments, one made by Cohen in The Great Stagnation:
the American economy has enjoyed lots of low-hanging fruit since at least the seventeenth century: free land; immigrant labor; and powerful new technologies. Yet during the last forty years, that low-hanging fruit started disappearing and we started pretending it was still there. We have failed to recognize that we are at a technological plateau and the trees are barer than we would like to think. That’s it. That is what has gone wrong.
He argues that the 1980-2010 period has been low on innovation, that other than the internet, there really haven't been any big new ideas. I think he looks at dropping median income and sites that as a result of insufficient innovation, but isn't innovation the ability to do more with fewer people? If we look at the Apple, Google, Facebook and Amazon, which employ a tiny 200,000 people, yet have a market capitalization of over $1 trillion, aren't those companies the epitome of innovation--being able to  generate so much money with so few people? Those are some productive employees!

As many of the reviewers of Cohen's book point out, there's no guarantee that innovation is positively related to employment, and I'm pretty sure most people would start out assuming the opposite--that ATMs and other innovation eliminate jobs.

Job Killing Technology of Today and the Near Future

In 1900, 43% of the workforce was employed in agriculture, while today less than 2% are in that field today. Over the last 100 years, our workforce successfully transformed from farmers to factory workers, and then to service workers today. Depending on exactly how you categorize jobs, over 80% of workers are in some sort of service job today, and less than 10% in manufacturing.

It's these service jobs and many "automatable" white collar analysis jobs that are in the cross hairs, if not already being replaced. And unlike past technology revolutions, this one is going to be too fast for us to adapt to, and its not going to create nearly as many jobs as it eliminates.

Robotics

If you look at a lot of the robotics research going on in universities, it's not on how to get an arm to move from point A to B faster, it's about how to interact with people more naturally.

Robots interacting effectively with people - from the Human Robot Interaction conference

One thing that humans still do better than robots is interacting with other humans. But as voice recognition gets better (Siri's already not bad, right?), and researchers from the above conference embed better emotional intelligence and human expression into the machines, that edge is disappearing.

Where this leads is a takeover of many service related jobs. Arby's is already experimenting with kiosks, how much longer until we only need one worker at a fast food restaurant, or none?


kiosks at Arby's save on labor
http://singularityhub.com/2013/01/22/robot-serves-up-340-hamburgers-per-hour/
In 10 years, automated retail may even included mobile robots that roll around to help you, and with their cloud-based super computer brains, are going to be a lot nicer and knowledgeable than the Carl's Jr machine in Idiocracy, or even your typical BestBuy employee.

The Carl's Jr fast food vending machine: "Your kids are starving. Carl's Jr. believes no child should go hungry. You are an unfit mother. Your children will be placed in the custody of Carl's Jr. Carl's Jr., fuck you, I'm eating."

Automated fast food "store" from Idiocracy - Carl's Jr

As of yesterday, it looks like retail is automating without the need for a friendly sales-bot. Hointer's store doesn't have any employees walking around, just pairs of designer jeans hanging. You scan a QR code on the jeans and go to a changing room where all your scans are waiting for you in a pile. Need a new size? Just tap the app again. You throw unwanted jeans in a discard slot, and they quickly disappear off your app. You slide your card at the checkout and get charged for the jeans in your app, no people necessary.

Hointer's automated designer jeans store.

Other store types aren't find behind--a company called AVT is already working on fully automated gas stations.

My roomba still can't move furniture, but that's not far off. The technology already exists to create the fully automated maid / butler from 1960's science fiction, it's just a little too expensive right now. A robot that can walk up and down your stairs can be leased for $100k / month, but with the availability of cheap 3D sensors (kinect), free voice recognition (siri / google), and cloud based systems, that price is going to drop rapidly.
How far off is the robotic butler we imagined in the 60's?
The guy that made Roomba has started a new company called Rethink Robotics that's making a $20k dollar robot for manufacturing that doesn't look too far off from our friend from the 1960s.



The neat thing about this robot is that anyone can train it to do a new task just by moving its arms around manually. Going back to what I said before about improvements in human-robot interaction--this robot doesn't require any programming (ie, white collar workers)--just plugging in.

All this is simply to say that many service jobs are in the crosshairs. The types of jobs that involve human interaction, changing and unstructured environments (like homes, retail environments, driving?), are not that far off from robot takeover.

What could be more unstructured than our roadways? Google's automated fleet of cars has already driven 140,000 miles with only one fender bender, and that was caused by another human driver. And on the easy end of the spectrum, a company called Kiva is already automating warehouses so that only a skeleton crew of humans are required. The orange carrier robots use advanced swarm AI to fetch all right shelves and avoid bumping into each other or other people.

Warehouse automation by kiva robots in a
Although many of these robots cost 10's of thousands of dollars, that price point is already very competitive against humans. A robot doesn't have to do a job cheaper than minimum wage, it has to do the job cheaper than minimum wage + health care benefits, and I'll go out on a limb and say health costs are going to eclipse salaries for low-wage earners in the near future.

It's interesting that the Bureau of Labor and Statistics thinks that service jobs will be the major employment growth source in the next 10 years.
The employment shift in the U.S. economy away from goods-producing in favor of service-providing industries is expected to continue. 
Bureau of Labor and Statistics 2010-2020 projections for job growth

Manufacturing is included under "Production" above, with a paltry 4% expected growth. Is that number really going to be positive? Manufacturing in the US has actually seen a bit of growth recently due to increasing productivity here (ie, more robots) and rising labor costs over seas. But in either place, those manufacturing jobs are probably short lived. Foxconn, the manufacturer of iPhones is planning on buying 1M robots in the next few years.

One of the investors (Steve Dickerson) in my current employers is working on new sewing technology startup. I was surprised to learn that sewing together clothes is one of the few things that roboticists haven't been able to automate quite yet, or at least cheaper than labor can do it ($1 / item offshore). Only just now are computers and algorithms starting to be fast enough to track the cloth in realtime.

The extraordinary power of computers that enables them to beat the best human chess players, track complex high speed cloth and drive cars is spreading to new domains every year. Anything remotely structured is a potential target, like reporting baseball games, which can largely be reduced to formulas.
Twenty-seven Colonials came to the plate and the Virginia pitcher vanquished them all, pitching a perfect game. He struck out 10 batters while recording his momentous feat.
Lawyers and Radiologist may be next, according to this economist article:
Radiologists, who can earn over $300,000 a year in America, after 13 years of college education and internship, are among the first to feel the heat. It is not just that the task of scanning tumour slides and X-ray pictures is being outsourced to Indian laboratories, where the job is done for a tenth of the cost. The real threat is that the latest automated pattern-recognition software can do much of the work for less than a hundredth of it.


Lawyers are in a similar boat now that smart algorithms can search case law, evaluate the issues at hand and summarise the results. Machines have already shown they can perform legal discovery for a fraction of the cost of human professionals—and do so with far greater thoroughness than lawyers and paralegals usually manage.
It seems like it's just a matter of time before cloud-based translation systems can match humans. Google has been learning from people using its translate system for years now, taking suggestions from people choosing between multiple translations.

Many have agreed with Mark Andreeson that software eating the world, that every company, and all the innovative ones are really software companies. Think of IBM and Dell, which are switching to services rather than hardware, and UPS and FedEx, which are logistics companies, and even Coca Cola, which is delivering OJ with advanced weather prediction algorithms.

And because of this, Mark thinks that software jobs are what we need to be training our population for:
Secondly, many people in the U.S. and around the world lack the education and skills required to participate in the great new companies coming out of the software revolution. This is a tragedy since every company I work with is absolutely starved for talent...it looks because many workers in existing industries will be stranded on the wrong side of software-based disruption and may never be able to work in their fields again. There's no way through this problem other than education, and we have a long way to go.
But are software jobs even that safe? IT is rapidly being outsourced, who is to say software jobs are safe? Just as robots take on ever more complex tasks, software does the same. Software engineers write in higher level languages every year, each requiring fewer lines of code than the last. In effect, we coders are working to eliminate our own jobs.

In a segment McAfee did for 60 minutes, he says:

"Amazon, Facebook, Google, and Amazon have a combined market capitalization of more than 900 billion dollars (as of today) yet employ fewer than 200,000 people, which is less than the number of net new jobs we’ll need to create every two months in America just to hold the unemployment rate steady."

One of the main points that McAfee makes is that it's not just that digital technology is eliminating jobs, but that it's doing so very fast, and getting faster, and that we simply won't be able to adapt like we did when machines started taking our farm jobs.


Ray Kurzweil predicts that the rapid and exponentially increasing power of technology will reach a singularity around 2040, when an AI superior to human intelligence will be created. He sites Moore's Law as evidence, as we begin to enter the much steeper portion of the curve, the 2nd half of the chess board.

Moore's Law,  number of transistors (and speed) doubles every 18 months.

Another quote from Race Against the Machine, highlighting the rapid advance in software and computing power:

Computer scientist Martin Grötschel analyzed the speed with which a standard optimization problem could be solved by computers over the period 1988-2003. He documented a 43 millionfold improvement, which he broke down into two factors: faster processors and better algorithms embedded in software. Processor speeds improved by a factor of 1,000, but these gains were dwarfed by the algorithms, which got 43,000 times better over the same period.


If that graph doesn't do it for you, consider that Apple reached 1 Million sales of iPads twice as fast as it did with the iPhone (less than 1 month). The first home model of microwave was introduced in 1967, and it wasn't until 1975 (9 years later) when one million units were sold.

Dissenters

Of course there are dissenters that think technology is still creating just as many jobs as it's destroying. For example, many people are able to outsource themselves on sites like eLance and ODesk. And McAfee points out that other platforms like Facebook and the iPhone have made it easier for individuals to create apps for the masses.

However, McAfee also points out that technology has a way of widening the gap between the "superstars" and everyone else.
"The next-best provider might be almost as good yet get only a tiny fraction of the revenue."
There's no need to tolerate a local singer when we can listen to the world's best via Spotify. Why would anyone buy anything but the cheapest price they can find on google? Is there really room for democratized jobs via the iPhone platform for everyone? How many individuals are actually making a living off their apps?

A professor from GaTech, Henrik Christensen, is also optimistic that new tech will create new jobs, and sites 3D printing, as well as new factories reopening in America that leverage automation. But overall, if we count China, there are fewer jobs than before we had that automation. Christensen also thinks education is the solution to get our workforce skilled enough to run the machines, but as I pointed out with Baxter above, robots are now being designed to work without highly skilled operators.


We Couldn't Image Programming Jobs in the 50's, We Won't Be Able to Imagine Future Jobs Now

In the 60's, the career of computer science did not exist, yet a good chunk of our working population are programmers these days. Who is to say that the future won't provide other professions? Perhaps creative ones? My only response to this is that it's unlikely that these future jobs, whatever they may be, will be ones that unskilled labor can do. When robots can pick and cook our food, sew our clothes, clean our houses, there may still be ample high skill jobs out there, but probably not enough low skilled ones.

Future Options

Fewer Working Hours, Sharing of Available Jobs, Slower or No GDP Growth

The Center for a New American Dream has a vision of what they call a plentitude economy where we all work fewer hours (mandated by government), and we produce a lot more of what we need at home with gardens, 3D printers, and community libraries of tools. By working fewer hours, we not only spread the available jobs around, we also limit GDP growth, which they believe is linked to environmental damage.

It's a very attractive idea--working 20 hours instead of 50 or 60, but why haven't we done this voluntarily already? Workers today are almost 4 times as productive as workers from the 1950s. In other words, you could work just 11 hours and enjoy the same fruits as someone working 40 hours in 1950. Rauch argues that american's are not even happier than citizens of other countries that have the productivity of US workers in the 1950s, so all our extra possetions are not getting us increased happiness.

One could definitely argue that the statistical productivity gains are not being shared equally given all the above information about inequality. You could also argue that health care and education costs have taken up a lot of those productivity gains, but my guess is that we're still substantially better off than in the 1950s. So why are we all still working so much? Why not work just 30 hours? Sure not many jobs right now are for 30 hours, but if enough people were wanted extra time over extra pay, employers would be forced to offer such arrangements.

Many people today of complain of not being able to make ends meet. Is that because we're all trying so hard to keep up with the Jones's, or because things really are so expensive? The poverty level is a measure of the minimum you need to survive (food, shelter, clothing), so with our increasing productivity, why has the percentage in poverty (poverty rate) stayed the same since the 70's? (14%ish).  Critics of the poverty rate say that it doesn't include a lot of non-cash things like food stamps, public shelters, and improved medical care (medicaid).

If our society's assessment of what it means to be in poverty is raising, that offers a partial explanation for why we still work so many hours. Our collective assessment of what we "need" is not based in any absolute terms, but rather relative to other people and what they have. If we aren't willing to voluntarily work fewer hours now, and be satisfied by 1970's level of possessions, the utopia vision of the plentitude economy certainly won't be accepted without the force of the government's gun. Increasing health technology (artificial organs) will also always lead to increasing basic health needs, whether or not you can see it in the Jones's yard.

Overall, I don't think stopping the growth in our GDP, standard of living, and health is in any way a solution to what lack of jobs we will face in the future. Our ever-increasing productivity has saved more from hunger and illness than any other institution.

S.T.E.M. and S.T.E.A.M. (More Education)

Many politicians are currently looking to increase education in science and technology, to prepare our workforce for future jobs. But when robots replace a factory of seamstresses, that factory doesn't need an equal number of engineers. In addition to the obvious fact that many in our population don't have the desire or ability to learn everything needed to be a scientist or engineer, there won't necessarily be a job waiting for them even if we could turn every student into an engineer. Many countries in the middle east have plenty of young, highly educated people that can't find work. Having a more educated society is surely a good thing, but it's not clear to me that even if we could raise our college educated percentage above 30%, that those people would necessarily have jobs.

Many people think the next transition in our labor force is going to be towards creative jobs, especially if machines will take over anything remotely formulaic. Richard Florida thinks over 25% of our workforce is already operating in a new "creative class," which includes typical artists, but also engineers and scientists dreaming up new inventions. The solution, therefore, is to bring creativity, or Art, back into the Science Technology Engineering and Mathematics training being pushed so hard, making the acronym STEAM. Maybe this isn't a bad idea, as we probably have at least a 20-30 year edge on being more creative than the machines. But I somehow can't invision a society where the majority of people have something creative worth paying for. What percentage of youtube producers make enough to live off of? The internet helps us find and reward the most creative, and ignore the rest.

More and better education is a great idea, especially if we're going to keep allowing everyone to vote.  But is it a magic cure for a lack of jobs? In the future, the unemployment rate will be determined by Supply vs Demand, and if humans, regardless of education, don't have anything to offer that a machine can't provide cheaper, the humans won't have jobs.

Working Collaboratively with the Machines

McAfee and his co-author disappointingly offer little in the way of solutions to the doomsday jobs dearth they write about in Race Against the Machine. In addition to recommending more education, their solution is to learn to work with machines.

I do think human and machine collaboration will produce some exciting results in the next 10-20 years. Consider visiting a doctor who uses a computer to assist in the diagnosis of your conditions. The computer program could have real-time data on the latest procedures and their outcome percentages, and also bring up best-practices for the doctor to follow. At the same time, the doctor would be there to filter the computer's recommendations, and decide whether you're being honest about your symptoms. Think of it as the doctor's office version of robot-assisted surgery, which is already a very successful type of collaboration.


McAfee writes,
while computers win at routine processing, repetitive arithmetic, and error-free consistency and are quickly getting better at complex communication and pattern matching, they lack intuition and creativity and are lost when asked to work even a little outside a predefined domain.

Now that computers can easily beat the best human chess champions, competitions have moved to collaborative teams of humans and computers. In one example McAfee sites, a team of amateur chess players and computers beat a team of Grand Masters and computers, because the amateurs had better processes for working with their machines. Better collaboration beat better raw skill and computation power.

I view this is an exciting next chapter as we learn to integrate wearable computers into our lives, or even embed them in our bodies. Maybe wearable machines will make our low-skilled laborers high-skilled in the near term. Augmented Reality can be used to show a worker exactly what steps to take during a mechanical repair (or maybe plumbing). But at some point, C-3PO will displace even the augmented human capabilities.

BMW's Augmented Reality Glasses highlight engine parts to show how to perform repairs. Video.

We're all a Small Business

As mentioned before, some of this technology has a democratizing effect, allowing micro-businesses to compete against giants. With software-as-a-service, small businesses can buy small portions of sales and back-end support from salesforce.com, or legal advice from legalzoom, or super computer time from amazon's cloud services. There's no need to hire a full time professional. And with eBay and etzy, it's easy to advertise and sell to the entire globe. With 3D printers, we may even be able to print much of what we need at home, too, without having to cut $20k tooling for a prototype, or just a hair brush.

The economist writes of a 3rd Industrial Revolution where manufacturing jobs come back to the US.

But what will we all be able to offer that a larger company with more resources couldn't do better? The Long Tail describes selling to many micro niches, rather one type of car for everyone, so individual producers may have an edge on figuring out what local niches around them might be. But I think large companies will get much better at making giant custom-order manufacturing pipelines that can adapt faster than any small-time producers.

Stopping or Choosing Not to Use Technology

The Luddites were not alone in fearing what technology could do to their jobs, and trying to destroy the machines that are taking them.


In modern times, Ted Kaczynski (the Unabomber), made a similar attempt, although I'm not sure he was as worried about jobs or the overall happiness of a technology-based society.

Ted Kaczynski, anti-technologist and Unabomber

I don't think book burning or laws against technology are the way to protect our jobs. But the idea of paying people even when machines could do a cheaper job is certainly not out of the realm of reality. Look at New Jersey and their full-service gas stations. Right now, the state has refineries in its borders, and lower gasoline taxes than other states, so the residents pay less than neighboring states and don't complain, but surely that won't last. Why not pay some people to dig holes and others to refill them?

New Jersey gas station attendant where it's illegal to pump your own gas.
Most of the people thinking and writing about the dangers of technology are more concerned about the end-game: human existence, or being ruled by robots.  Bill Joy, chief scientist of Sun Microsystems in 2000, who wrote in Wired "Why the Future Won't Need Us," fears either being ruled by the robots or the small elite that owns and controls the robots.

Ray Kurzweil recommends in relinquishing portions of technology, or at least abiding by ethical rules in its development.
nanotechnologists agree to relinquish the development of physical entities that can self-replicate in a natural environment. Another is a ban on self-replicating physical entities that contain their own codes for self-replication
I don't think the idea is necessarily attainable, but I'm sure some will propose limiting certain technology advances just to preserve human jobs, as well as our survival.

Wealth Redistribution, Slave Robots, Figuring out What to Do with all that Free Time?

My first reaction to fears of robots taking over all our jobs is surprise: isn't this a good thing, when we no longer have to do boring or dangerous jobs, and robots clean our houses and serve us fancy drinks? Aren't robots the key to entering a post-scarcity world, where everything we need is free?

The problem, as explained at the top, and described by Bill Joy, is that are current trajectory isn't going towards a society where we all have robot slaves, it's going towards a society for a tiny ruling elite control the robots, and no one else has jobs or food to eat.

Many think America is already a plutocracy, where the rich rule. Alternate.org sites the concentration of wealth, offshore bank accounts, and lack of consequences for big corporations in the recent crisis as signs that rich are already kings. Will the rise of robots and AI exacerbate this trend?

An interesting counter argument to this eventuality is that those elite robot army owners won't have any customers.


Quote from Henry Ford factory:
AN APOCRYPHAL tale is told about Henry Ford II showing Walter Reuther, the veteran leader of the United Automobile Workers, around a newly automated car plant. “Walter, how are you going to get those robots to pay your union dues,” gibed the boss of Ford Motor Company. Without skipping a beat, Reuther replied, “Henry, how are you going to get them to buy your cars?”

Henry Ford famously paid his workers significantly above the minimum wage so that they could afford to buy the cars they produced (and maybe to get the best talent). In a temporarily banned TED lecture, "Rich People Don't Create Jobs," venture capitalist Nick Hanauer challenges the idea that lowering taxes on the rich will create jobs. He points out that while he makes hundreds or thousands more than the average American, he still only buys a few pairs of pants a year. He wants to increase taxes on the rich so that the middle class has more money to spend, which will then cause employers to hire more.

Collectively, if a few elite own giant robot companies, and nobody has jobs, and our current levels of wealth redistribution are maintained, who will have money to buy anything?

This leads into a more general question of why high levels inequality are bad. As long as the bottom rung is OK, why does it matter if others make thousands of times more money? McAfee argues in a blog post that this eventually leads to political instability, and in its current state, contradicts one of the central promises of the American economy--no matter where you start, if you work hard, and are smart, you can make it. But this hasn't been the case recently in America, as the economist writes:
Using one-generation measures of social mobility—how much a father’s relative income influences that of his adult son—America does half as well as Nordic countries, and about the same as Britain and Italy, Europe’s least-mobile places.
In other words, how rich your parents are may matter more than your hard work in America. How long can this country survive without good middle class jobs and the promise that hard work will enable anyone to climb the success ladder?

If it turns out that technology continues to concentrate wealth in the hands of the few, and doesn't democratize earning power like some think, I see no other solution than wealth redistribution through the government. Jon Evans sees Jobs as the distributor of society's rewards as a technical debt we will need to lose to maintain political stability in the future. In the "End of Labor: How to Protect Workers from The Rise of Robots," Noah considers giving everyone a diversified portfolio of equity (a share of the capital) when they turn 18. I'm a strong believer in Ayn Rand's worldview, that wealth redistribution is immoral, but I'm not sure what other choice the elites will have besides voluntarily sharing wealth or having the government redistribute it if there really aren't any jobs for the masses.

Addendum, what will we all do in this jobless world?


As a small addendum, if we really make it to a society where we all have Star Trek replicators that give us every material need at command, what will we all do? A neat idea is a reputation-based economy, where reputation is what we earn and is our incentive for doing good works. People would get a payment in the form of a Klout score for writing in wikipedia...

And one more quote from Voltaire:
"Work saves a man from three great evils: boredom, vice, and need.”

And... a 1965 NASA report advocating manned space flight: 
“Man is the lowest-cost, 150-pound, nonlinear, all-purpose computer system which can be mass-produced by unskilled labor.” 

14 comments:

  1. Your outlook on life is too dystopian for my taste. Your writing bleeds a hopeless depressed theme that I'm not digging. The creative sector will rise when people have to create new ways of getting money. There's also the creative act of integrating. It's not innovative but it'll do.

    The reason the service industry will rise, is because engineers will be degraded to technicians. Local scientists looking out for their country, if they're faithful, will continue with their R&D. Hobbyist and enthusiasts will turn to autodidactism and there will still be a market for meritocracy. Once you have enough respect and patents when it comes to innovating, the help will come.

    Unless class warfare escalates and in the future to save enough money to file a patent or battle law suits against a company who scraped your idea becomes too costly on top of well paid law enforcers then we might have to worry about it. Then again, with all the excess money most people will enjoy a welfare program of some sort.

    ReplyDelete
  2. "With all the excess money" ? Right now there are people that have more to their name than entire countries. And not just some 3rd world country.
    There are hundreds of possibly groundbreaking venues that are in dire need of financing, and there is a decent change of immense profit, yet they aren't much investors for them. People with money are busy maximalising their return and making more money. What makes you think they will just give the money away?

    Thats the whole point, the class warfare will escalate beyond any reason - right now percentages of people only able to get by on a day-to-day basis are huge. Will they sit ildly when they are literally starving to the tune of billions pouring into select few accounts?

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  3. Great article.

    Although I feel there wasn't enough attention given to the need in a total change / evolution in the system; moving away from a monetary based economy as a whole to something entirely different.

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  4. Zalewski, the nouveau rich tend go have a diffetent outlook on life then the generational rich. If countless of money is rounded up to create religious facilities another alternative to religious facilities will rise, just like they are right now. When people can't survive by themselves they turn to localism and the community. People don't isolate themselves. I don't know why people's outlook are so dystopian as if they forgot that that there are more options then becoming a Luddite.


    I'm a fan of futurology and thinking ahead but when it comes to this I know that the solutions to all of this are set in place.

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  5. Outsourcing comments to hacker news is esoteric but if you don't respond thanks for the article.

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  6. I had an HTML bug that was hiding a good chunk of the first part about inequality. Jayvan, I'm not sure I follow your comment. People will do creative jobs because they have nothing else to do? Who will pay the people turning to autodidactism?

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  7. I also use to believe Star Trek’s utopia was our most excellent future. Until someone at work let me a book called Forever Pleasure: A Utopian Novel. After finishing it I realized that it’s not just about inventing better machines, but also about inventing better humans. I now think we have to re-engineer ourselves as well. After which, we won’t need to work, just have fun like the book explains well.

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  8. Nice article.

    You have touched on what I believe are the most important points but we need a clearly understanding of the big picture forces at work.|

    Humans are just machines, and the only reason we work for each other, is because we are the best machines for the job. This has been true for thousands of years but our skills are being replaced by machines. And as this happens, we will no longer want humans working for us. We will not pay extra to get our food, just becuase it was farmed and prepared by a human, when we can get our food for 1/10th the cost, farmed and cooked by machines.

    The end of work for humans is near. And this is creating a major social shift that we can not look to the past to understand. We need to STOP looking to the past to understand what we need to do. The past offers no answers, for something like this which has never happened before.

    More important for today, than the fact of what is coming, is the damage it's doing to society as we approach this major change.

    Working for each other is the glue that holds our society today. We put up with each others differences, becuase we know that by working together, to do all the farming (for example), we all come out ahead. We all have enough food the survive the next winter.

    But as we replace humans with machines, the very glue that is holding our society together, is failing. A rich person that has machines acting as farmers, and cooks, and butlers, doesn't need to put up with the billions of poor humans on the planet he no longer has a need for. The more independent we become with the help of our machines, the less we will want to put up with our differences, and the more we will see a small elite, willing to sacrifice the "masses".

    We see this happening today in the form of growing inequality. For 30 years, in the US we have seen a steady march with the rich, deciding the poor are no longer important to take care of. The richter the elite becomes, the more their power corrupts them into becoming anti-social elitists who have rationalized the evil they want to do to the poor.

    This is basic human nature. We are all prone to acting in this way. When we get rich, (no matter how it happens) we all naturally start to believe we "deserve" the wealth, and anyone that is not wealthy, is "undeserving".

    Human labor, has always been the great social equalizer. We needed each other's labor, to make our own lives better. But as machines replace human labor, one small jobs at a time, we lose that great social equalizing force that holds our society together.

    I only see two options for where this leads. Either a small elite subset of the current human population gains power and control over all the natural resources, and creates a world for only a small population of elite, letting the masses starve and die in prisons and reservations for the poor, or, we decide we don't want our society to go that way, and we remember that the point of a human society, is to help all humans.

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  9. Continued:


    We can fix the fact that our "glue" is failing, by forced wealth sharing. Instead of using labor as the glue that holds society together, we can use consumption as the glue. That is, when every human has equal rights to consume the wealth of the world, that basic human right as a consumer, will be the new glue that holds society together.

    Machines will continue to do most the production work, but humans will be the consumers - and ultimately (when humans don't need to work at all), equal consumers. Everyone gets a fixed income, and by spending that income on the things we each want the most, we are in effect, acting as the boss of the machines, telling them what we want them to do for us. We all own equal rights, to tell the machines what to do for us.

    It's the same equality applied the right for an equal vote in the government, but this time, applied to the growing machine economy.

    It can be seen as a form of communism, but it's very different in the fact that it's still free market capitalism that decides on how the resources of the planet are allocated to the consumers. There is no central planning. There are no human "leaders" elected to "controL' the economy.

    When humans don't need to work, they don't need to be motivated to work either. As we get to this new future, we will retire from the job of being producers, and become full time consumers.

    We need to shift to this new future slowly, by starting with small amounts of wealth redistribution to maintain the power to consume across the entire population, while intentionally reducing the motivation to work - which means the jobs that are left, will be more fairly shared - with more people choosing on their own, to cut back their work hours, or to retire sooner, or to dedicate their time to volunteer work, or to their family.

    The superstars of the working world will still get super rich, and can become addicted to being workaholics. We still need, the superstars. But we must increase taxes, and share the wealth, so that everyone can still be a consumer, even if they aren't a superstar producer.

    Inequality in the workforce is on the rise, and will only continue to work. And that's ok. But we must not let equality fail on the side of consumption. To give people rights and power in society, even if they are not effective workers, we must given them money - we must pay them to be full time consumers.

    Many of the rich will always fight this. They have been corrupted by their success. And if we fail as a society, to fight this corruption, and return rights to the people, by income redistribution, the very glue that holds our society together will fail, and our society will fail.

    The solution is very simple in concept. We need to implement a Basic Income Guarantee for all citizens of the world. It will start off small, but will grow over time as more and more people are marginalized out of the work force by technology. We use the Basic Income guarantee as the simple offsetting solution, to the growing inequality being created by advances in technology.

    It's hard for people to grasp the importance of this, becuase we have existed in a society where our ability to work was the equalizing force we all born with. All our social norms and morals, revolved around the fact we were born with this equalizing power. But this power has been steadily failing as the power of the machines have been steadily rising. We need to give people back the power they are losing, by a Basic Income Guarantee.

    But before we can make this happen, we must get more people to understand how we are facing a change in society greater than anything we have faced in the past. Never in the past, haver our machines been so powerful, and soon, in just one more generation they will be better workers at all jobs, than all humans. We need to fix this now, while we still have enough social order to fix it.

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  10. "a small elite subset of the current human population gains power and control over all the natural resources, and creates a world for only a small population of elite"

    Just the right conditions to cultivate an inbred population with a narrow gene pool, and one way (luxury) trip to extinction :-)

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  11. There is one job/industry which can't be replaced by machines: pornography.

    The solution is clear, don't worry, there is hope...:))

    L

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    1. Yeah, I'm normally not so dogmatic, but you're definitely wrong about that! :) Why deal with a human when you can _already_ buy a robotic sex partner!

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  12. A lot of the inequality is driven by some form of privilege from government, like intellectual property and licensing which restricts entry to trades and provision of services to create artificial scarcity. Elimination of these special privileges will reduce the inequality and avoid the need for redistribution while at the same time reducing the size of government and the resources it consumes.

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  13. The solution is easy - democratisation of robotics.

    That can only be achieved by open source robotics software (collaboration of anyone that wants to collaborate writing and extending it) and hardware (cheap enough that anyone can afford it or easy enough for non-experts to assemble it).

    You won't need income redistribution when everyone has a robot/robots that produce food for them in their own garden, prepare that food, build their shelter, put up power collection sources on the property etc.

    Decentralisation and robot self sufficiency is the only answer as far as I can see.

    More at - everyrobotics.com

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