Robots providing better shareholder value than CdM

[Berkut]

He doesn't have to be the first person to believe something to be right about it...

Except that people have been predicting similar economic apocalyptic outcomes since the early 1800s and none of them have been right...

Lots of people have predicted lots of "similar economic outcomes" about all kinds of things and have been right.

But I am not sure what your point is here.

Are you arguing that the theoretical idea that at some point the value of human labor in the overall production of goods and services will eventually extremely low as a ratio of the total resources necessary to produce those goods and services?

That seems tautologically obvious to me, in that the advance of technology and automation has seen a incredible rise in efficiency around almost all the resources needed to produce things, including  human labor. At some point surely it is the case that overall human labor will become largely irrelevant on the macro scale for the production of goods. I mean, if that were not true, then why have spent the last couple hundred of years successfully investing in productivity advances?

Alternatively, you could be arguing that the above is true in theory, but it just isn't happening yet. But I don't understand that argument either, since the basis of this discussion is the observation that it is in fact happening right now, and that is based on measurable critiera.

Just because this isn't a new idea (how could it be, it is kind of obvious really) doesn't mean it is wrong.

Right now the world largely operates on a model that human being work to produce things, and are in turn compensated with the things they need to survive and thrive in return for the things their labor produces. This has been true in one fashion or another throughout all human history, whether it be being compensated by getting the things they actually produce, or some more advanced system where they get paid and then exchange that pay for the things they want.

But the fundamental system has not really changed.

What has changed are the variables of how much the human labor is worth compared to the things that labor produces. That has been declining consistently of course, but it used to be the case that human never really produced as much as they wanted to consume, so we made up the declining value of labor by simply making more stuff for people to get, and that has mostly worked out. But over the last 50 years we have seen an explosive growth in productivity from a labor perspective. US manufacturing efficiency as a function of labor is something like 100 times what is was at the end of WW2.

But just because that system has worked for a long time doesn't mean it can always work, and it is trivial to show that at some point it can no longer work. Your argument is like someone arguing that since we've never run out oil throughout all human history, even though people have argued that we are going to some day, we cannot ever run out of oil, and observations that Oh Shit, We Are Running Out Of Oil can be dismissed, even if they are based on clear facts, like, we are running out of oil.

You can argue that perhaps it isn't anything to worry about yet (although the current economic crisis seems to argue against that), but I cannot see how you can make a credible argument that this is simply something that we should not even worry about, ever.

I, personally, will stress very emphatically to my children that they need to be very aware of this as they decide how they want to support themselves, and make sure they do something that can put them into that shrinking fraction of the labor force that still has something worth selling.

[crazy canuck]

I was responding to Ide's prediction that either there would have to be a world wide communist order or Billions of people would have to be killed in his glorious fantasy of class warfare.   Such apocalyptic predictions have been made before and all have been wrong.  The best known person to make such a prediction (although not the first) was Marx who thought that industrialization would inevitably progress to the point where the ownership of the means of production (ownership of industry) would concentrate into an increasingly smaller elite and the proletariate's labour would have increasingly little value which would force a transition to a communist society (Ide's fantasy).

50 years or so before Marx, Ricardo made a similar prediction only he lived before the industrial revolution and so his prediction involved the plight of tenant farmers who had to pay increasingly high rents to an increasingly affluent land owning class.  He predicted that as the trend inevitably continued the system must necessarily collapse on itself.

Both of course were wrong because neither could have anticipated the changes in society that would undermine the underlying assumptions in their theory.  Ricardo could not have anticipated the decline of agriculture as the primary source of wealth in society and the technological changes that would usher in new forms of wealth creation.  Marx was wrong about a lot of things but one of them was he did not forsee the wages of workers increasing.

Your prediction suffers from the same problem as Ricardo.  You assume that as the value of labour for present purposes is reduced that other uses for labour will not take their place.   You are right about one thing.  Your idea is not new.  It has been around since at least the early 1800s.  But it has always been proved wrong even though the idea seemed obvious in the context of historical snap shot in which it is presented.

But think of just a few examples within your own life time.  Thirty years ago who would have thought so many jobs would have been created by something called an "internet".

By the way, you should pick up Piketty's book.  This is one of the concepts he discusses at some length.

[Ed Anger]

I don't think his book comes in DVD form for Ide.

B

[Valmy]

The bottom line is is that robots will soon allow us all live wealthy lives devoted to creativity and the maximization of human potential instead of toiling away at menial tasks like beasts of burden. 

Then synthetic life will rebel and kill us all necessitating the creation of reapers to preserve organic live in the form of giant cybernetic space dreadnoughts.  Much melodrama and many plot holes will follow.

[Eddie Teach]

I just wish I could be there to see it.

[Berkut]

Actually, thirty years ago I predicted that lots of jobs would be created by advanced technology. It isn't a difficult prediction to make.

But I also predicted that a lot more jobs would simply go away due to advanced technology, and that was correct as well. That also was not a difficult prediction to make.

The "internet" did not result in any kind of net increase in jobs, quite the opposite in fact. You can't say "See, look at Amazon.com! They employ 120,000 people! Yeah internet for creating jobs" without noting that the reason Amazon sells stuff cheaply is because they put a vastly larger number of people in traditional retail OUT of work.

I am not arguing that this is a bad thing - but I am arguing that it is A thing, and we should be thinking about it, and not simply rely on "Oh, it it has always worked out before! So it will always work out in the future". For one, that is simply not true - it has NOT always worked out before, and there are plenty of examples of wars and suffering as a result of shifting economic realities. Arguing that those previous examples on a more local scale can somehow simply not apply on a global scale makes no rational sense, especially given the obvious reality of globalization, which is in fact new.

The world is changing, and in a manner that is not unprecedented in the process, but is, I think, unprecedented in the scale.

It is easy, IMO, to step back and think about human history over the very long run and see that always continuing increases in per person/per labor hour productivity cannot simply just go on forever - at some point human labor just becomes to cheap to matter for the masses. At some point, there simply isn't enough work to be done compared to the number of people there are - the amount of work needed per person always goes down, the amount of people is always going up.

Of course as labor becomes cheaper, maybe we find other uses for it that are not currently viable. But that doesn't strike me as a very pleasant alternative, and we are still looking at those people who are trying to make a life on their very low value labor. This has always been true of course, those without useful skills struggle, but there is a difference between 20% of the population not having useful skills and 50% of the population not having useful skills. Or 70%. Or 90%. And that number can go nowhere but up, and has gone nowhere but up since we hit the point where we had enough resources to pretty much educate everyone to the extent of their ability.

So what next? I am skeptical that the basic capitalist system can handle this issue. I don't think that means we revert back to some other already failed system, that is no solution.

[derspiess]

The bottom line is is that robots will soon allow us all live wealthy lives devoted to creativity and the maximization of human potential instead of toiling away at menial tasks like beasts of burden. 

Then synthetic life will rebel and kill us all necessitating the creation of reapers to preserve organic live in the form of giant cybernetic space dreadnoughts.  Much melodrama and many plot holes will follow.

Well, now there's company that offers coverage against the unfortunate event of a robot attack: Old Glory Insurance.

[crazy canuck]

I don't think his book comes in DVD form for Ide.

B

And so we will enjoy his fantasies of class warfare for years to come.

[crazy canuck]

So what next? I am skeptical that the basic capitalist system can handle this issue.

The other part you are missing, and which is a large part of Piketty's book, is that one cannot separate economics from politics.  There is no such thing as a "basic capitalist system".  All modern economic systems are influenced by the policies enacted by governments.

I don't think that means we revert back to some other already failed system, that is no solution

Who is suggesting that?

[The Minsky Moment]

But just because that system has worked for a long time doesn't mean it can always work, and it is trivial to show that at some point it can no longer work. Your argument is like someone arguing that since we've never run out oil throughout all human history, even though people have argued that we are going to some day, we cannot ever run out of oil, and observations that Oh Shit, We Are Running Out Of Oil can be dismissed, even if they are based on clear facts, like, we are running out of oil.

That is a pretty bad example, both because:
The core prediction of peak oil theory - that US production was doomed to steady decline - turned out to be spectacularly wrong for exactly the reason its critics said it was wrong

and more importantly

Oil is a physical commodity and thus there is an actual finite quantity of it - so that at some point we could theoretically "run out" (although in reality that would not happen just like we never "ran out" of wood or peat  and will not run out of coal).  Human desires on the other hand are not a bounded commodity.  There is no necessary limit to them. 

As long as: (1) human beings response to satiation of certain wants by developing other wants, and (2) some proportion of human labor is required for the efficient production and distribution of goods or services that human beings want, then the conditions for the perpetuation of traditional systems of production and distribution are satisfied.  So for the transformation you are talking about to occur, either (1) or (2) must cease to hold.

As to (1), a lot of very smart people have predicted satiation of want.  Marx did.  Keynes did as well, and you all know how much I respect him.  But the last 80 years have not been kind to that prediction.  of course, it is possible that human desire could be abated.  But if that were to happen , it could only be as a consequence of a massive change in cultural and social arrangements.  It is not a technological parameter and it certainly is not analogous to fixed stocks of commodities because human desires are neither fixed nor a commodity.

As to (2) I suppose it is theoretically possible as  technological matter that automotons could be developed that could perform every single creative, administrative and strategic function performed by every human being and that some future human society could agree to delegate all those functions to their robots.  But that is still very far off.

[The Minsky Moment]

The world is changing, and in a manner that is not unprecedented in the process, but is, I think, unprecedented in the scale.

The scale is very much precedented.

In fact, the debate on innovation and growth today is centered around Robert Gordon's thesis that productivity gains from innovation are slowing and can be expected to be at a permantently lower level.  The reasoning is that the biggest, lowest hanging fruit of innovation has already been picked and what is left is just incremental improvement.  I.e. the movement from a world where the fastest form of communication is by very costly post riders to one where communications can be made cheaply and instanteously by telegraph and telephone is much more significant than the technological development of how to monetize ad revenue from "tweets".  Where as before we went from clipper ships to jet aircraft, now we are figuring out ways for the same jets to use less fuel and stick TV's on the back of the seats.

I don't totally buy the thesis but it does have a lot of backers and even itscritics aren't really saying we are experiencing an unprecedented acceleration of innovation, just that we are still on track as before.

[crazy canuck]

As an anecdote, one of the pressing issues for the economy here in BC, and nationally to some extent, is a signficant shortage of skilled labour.  Both because the boomers (the demographic in which most of our tradesmen are located) are retiring and because new industries and projects require a greater number then in decades past.   

[Berkut]

So what next? I am skeptical that the basic capitalist system can handle this issue.

The other part you are missing, and which is a large part of Piketty's book, is that one cannot separate economics from politics.  There is no such thing as a "basic capitalist system".  All modern economic systems are influenced by the policies enacted by governments.

Why would you assume I am missing it? Of course there is such a thing as a "basic capitalst system" - it is the system the world lives under right now. And yes, of course it is not a simply economic system, but involved politics, demographics, social norms, etc., etc.

This is the part where the argument starts with you telling me what I mean, rather than just accepting that I mean what *I* think I mean, and is blindingly obvious, isn't it?

I don't think that means we revert back to some other already failed system, that is no solution

Who is suggesting that?

Ide.

[Berkut]

The world is changing, and in a manner that is not unprecedented in the process, but is, I think, unprecedented in the scale.

The scale is very much precedented.

In fact, the debate on innovation and growth today is centered around Robert Gordon's thesis that productivity gains from innovation are slowing and can be expected to be at a permantently lower level.  The reasoning is that the biggest, lowest hanging fruit of innovation has already been picked and what is left is just incremental improvement.  I.e. the movement from a world where the fastest form of communication is by very costly post riders to one where communications can be made cheaply and instanteously by telegraph and telephone is much more significant than the technological development of how to monetize ad revenue from "tweets".  Where as before we went from clipper ships to jet aircraft, now we are figuring out ways for the same jets to use less fuel and stick TV's on the back of the seats.

I don't totally buy the thesis but it does have a lot of backers and even itscritics aren't really saying we are experiencing an unprecedented acceleration of innovation, just that we are still on track as before.

You aren't disagreeing with anything I said.

I am talking about the scale of productivity increases we have seen over the last 50-100 years. Is it slowing now? I guess it could be...although I am skeptical. Sure, in some ways it reaches a diminshing return, but there are other ways we find out new ways to be more efficient we hadn't even thought of before. The "end of innovation" is a much more oft-disproven meme. Excuse me while I go quit my job at the patent office, because everything has been invented already.

Really, my point actually aligns nicely with your observation in any case - we have in fact done something different if we've reached a point where in many cases increases in productivity have met up with physical limitations on further increases. But we seem to keep finding even better ways, and not just in physical improvements, but in process improvements.

Look at something like shipping - container ships dropped the cost of moving goods by an order of magnitude while at the same time putting hundreds of thousands of dock workers out of a job across the world. And we make those more and more efficient, with compuerized controls, automated ships that take a tiny fraction of the previous crew, etc., etc. I could certainly imagine that for some particular industry, you can reach a point where it cannot really get much better...but who can really say?

The point is that I *can* certainly imagine that there is a serious decline in the number of people required to build things, sell those things, and move those things around. I don't have to make that argument, the facts speak for themselves.

And I don't need to postulate a world where NOTHING is done by humans anymore, that is a complete strawman. Just a world where there simply isn't enough need for human labor to be able to use human labor as a reasonable way to allocate the output of societies production of goods. And if in fact this concern is real, then isn't what we are seeing right now exactly what we would expect to see? Stagnant or declining real world wages while total output continues to climb, and the wealth that comes as a result no longer is distributed to the human labor because the human labor simply is not necessary?

Of course, it isn't a sustainable model - it cannot go on that as a society we produce more and more stuff while fewer and fewer people can actually buy any of it.

[Iormlund]

Fortunately Communism will save us all!  I guess we all need to get training in building and repairing robots.

We desperately need competent roboticians. There seems to be a sort of mini-boom in the automotive industry going on right now and people with the right skills are ridiculously hard to find (ironic in a country with >25% unemployment).

With a bit of luck my employers will see that as an opportunity to pay to train me in the ways of robot-fu, but I'm not holding my breath.

In my current job I'm participating in the ultimate examples of automation. I'm overseeing the commissioning of a high-powered laser worth almost a million bucks. Other than engineers and maintenance folk, just one person is needed to load and unload parts. It can do in minutes a better job than what took a team of experienced welders hours.
My next project involves a press worth probably tens of millions (perhaps over a hundred), that again only one dude operates.

[favorable comment about STEM, negative comment about liberal arts]

Don't diss liberal arts. What do you think the guy loading and unloading the parts studied to be able to get his job?