Robots Will Create 'Permanently Unemployable Underclass'

[don]

Re: Greenspan the Un-Rand

[clouds of smoke and sounds of bubbling water]

FT: Dude..cough, cough. That's reactionary bullsh!t.

W: What do you mean?

FT: Cough, cough. [exhales cloud of smoke] Cough...Man, there's never really been a true socialist country; not like Marx envisioned. The Russians got it all wrong, man...cough.

W: Ah yes, no true Scotsman

It's taken centuries for the purest expression of capitalism - the inevitable monopoly stage - to arrive in force. Placed in that time frame socialism as the dominate political economy has hardly begun. Stillborn it may remain. I have more faith in ongoing change, not any future 'perfect, final' system, certainly not an End to History. Of course time being what it is, it may seem like the final stage to all of us. Further concentration, endless stagnation.

[dcarrigg]

Re: Robots vs secretaries

DC, this kind of question is too vague. They need to talk about what kind of jobs are in more or less demand. There might be lots of demand for "robot polishers" and machine vision engineers, and none for switch board operators, assembly line workers, etc.

At my 10 year high school reunion (1989) not a single person worked on an assembly line. (That is about 200 people from a lower middle class town and not a single one working on an assembly line)

No doubt, PS. But the way it looks to me, that's because you had the reunion in the wrong country, not because technology made them obsolete...

Check the tags on the stuff around your house. It's no mystery where the assembly line jobs went. And they didn't disappear to rural Chinese village enterprises because they had the best robots...

[Woodsman]

Re: Greenspan the Un-Rand

Do you actually believe Alan Greenspan was implementing Rand's ideas through those policies and that saying otherwise is some kind of logical fallacy? Or are you just saying that because you think it scores you some kind of points on the internet?

When a priest molests a child and someone claims that they aren't following the teachings of Jesus Christ, do you scoff and say "Ah, I see. No true Scotsman"?

Anyone who knows Rand's ideas and Greenspan's policies can see they are clearly at odds.

Interesting analogy, priesthood/Rand/molestation. Anyway, it was curiously reminiscent of talk I used to hear from the fellow travelers back in school. It went something like this:

[clouds of smoke and sounds of bubbling water]

FT: Dude..cough, cough. That's reactionary bullsh!t.

W: What do you mean?

FT: Cough, cough. [exhales cloud of smoke] Cough...Man, there's never really been a true socialist country; not like Marx envisioned. The Russians got it all wrong, man...cough.

W: Ah yes, no true Scotsman

As for Internet Points, is that like Green Stamps or airlines miles I can exchange for stuff? Where do I sign up?

Greenspan Admits Errors to Hostile House Panel

Returning to Capitol Hill amid a financial crisis rooted in mortgage lending, Mr. Greenspan said he had been wrong to think banks' ability to assess risk and their self-interest would protect them from excesses. But the former Fed chairman, who kept short-term interest rates at 1% for a year earlier this decade, said no one could have predicted the collapse of the housing boom and the financial disaster that followed....

Lawmakers read back quotations from recent years in which Mr. Greenspan said there's "no evidence" home prices would collapse and "the worst may well be over."

"The 82-year-old Mr. Greenspan said he made "a mistake" in his hands-off regulatory philosophy, which many now blame in part for sparking the global economic troubles. He quoted something he had written in March: "Those of us who have looked to the self-interest of lending institutions to protect shareholder's equity (myself especially) are in a state of shocked disbelief.

He conceded that he has "found a flaw" in his ideology and said he was "distressed by that." Yet Mr. Greenspan maintained that no regulator was smart enough to foresee the "once-in-a-century credit tsunami."

[Polish_Silver]

Re: Robots Will Create 'Permanently Unemployable Underclass'

I agree with the point someone made that currently off-shoring is having a bigger impact than automation on employment. But, I'm wondering what the employment picture would look like now if we had all of the "extra" people we lost in WWI and WWII? There were 77 million deaths in those two wars that happened at the tail end of the move from farms to cities. The WWII die off was 2.5 % of the world population.

A war or epidemic does little to change the picture. More people would mean more workers and more consumption. What changes the picture is the number of people needed to serve the consumption, or the distribution of types of work relative
to the numbers of people available to do them. Both automation and trade affect these things.

[DSpencer]

Re: Greenspan the Un-Rand

Ah, I see. No true Scotsman.

Do you actually believe Alan Greenspan was implementing Rand's ideas through those policies and that saying otherwise is some kind of logical fallacy? Or are you just saying that because you think it scores you some kind of points on the internet?

When a priest molests a child and someone claims that they aren't following the teachings of Jesus Christ, do you scoff and say "Ah, I see. No true Scotsman"?

Anyone who knows Rand's ideas and Greenspan's policies can see they are clearly at odds.

[Woodsman]

Re: Greenspan the Un-Rand

Unfortunately, Greenspan's policy decisions had precious little to do with Rand's ideas.

If they had, there would be no buying of
T bonds by printing money, no bank bailouts, peso bailouts, LTCM bailouts , manipulating interest rates, funding deficit budgets, etc.

Ah, I see. No true Scotsman.

[sutro]

Re: Robots Will Create 'Permanently Unemployable Underclass'

The Bright New Future

http://www.ibtimes.co.uk/robots-will...rclass-1460177
You say there will be jobs maintaining the robots? Sure 100 robots taken care by 1 maintenance robot.
Programing? Sure
Building parts and circuits? Suuurrrreeee.

Well we can still flip hamburgers, can't we ? Nope, it appears to be doable by robots as we speak,
http://singularityhub.com/2013/01/22...gers-per-hour/

I agree with the point someone made that currently off-shoring is having a bigger impact than automation on employment. But, I'm wondering what the employment picture would look like now if we had all of the "extra" people we lost in WWI and WWII? There were 77 million deaths in those two wars that happened at the tail end of the move from farms to cities. The WWII die off was 2.5 % of the world population.

[Polish_Silver]

Greenspan the Un-Rand

Unfortunately, Greenspan's policy decisions had precious little to do with Rand's ideas.

If they had, there would be no buying of
T bonds by printing money, no bank bailouts, peso bailouts, LTCM bailouts , manipulating interest rates, funding deficit budgets, etc.

[Polish_Silver]

Re: Robots vs secretaries

DC, this kind of question is too vague. They need to talk about what kind of jobs are in more or less demand. There might be lots of demand for "robot polishers" and machine vision engineers, and none for switch board operators, assembly line workers, etc.

At my 10 year high school reunion (1989) not a single person worked on an assembly line. (That is about 200 people from a lower middle class town and not a single one working on an assembly line)

[metalman]

Re: Robots Will Create 'Permanently Unemployable Underclass'

old argument is old...

First Series, Chapter 20

Human vs. Mechanical Labor and Domestic vs. Foreign Labor

I.20.1

Destroying machinery and interdicting the entry of foreign goods are alike in being both founded on the same doctrine.I.20.2

Those who at the same time applaud the appearance of a great invention and nevertheless advocate protectionism are most inconsistent.I.20.3

What is their objection to free trade? They charge it with encouraging foreigners who are more skillful than we are, or who live under more advantageous economic conditions than we do, to produce things that, in the absence of free trade, we should produce ourselves. In short, they accuse it of injuring domestic labor.I.20.4

But then, should they not, for the same reason object to machinery of every kind, since, in enabling us to accomplish, by means of physical instruments, what, in their absence, we should have to do with our bare hands, it necessarily hurts human labor?I.20.5

In effect, is not the foreign worker who lives under more advantageous economic conditions than the French worker a veritable economic machinethat crushes him by its competition? And, in like manner, is not a machine that performs a particular operation at lower cost than a certain number of workers a veritable foreign competitor that hamstrings them by its rivalry?I.20.6

If, therefore, it is expedient to protect domestic labor from the competition of foreign labor, it is no less expedient to protect human laborfrom the competition of mechanical labor.I.20.7

Therefore, whoever supports the protectionist system, should, in all consistency, not stop at interdicting the entry of foreign products; he should also outlaw the products of the shuttle and the plow.I.20.8

And that is why I much prefer the logic of those who, in denouncing theinvasion of foreign goods, have at least the courage to denounce also theoverproduction due to the inventive power of the human mind.I.20.9

Such a one is M. de Saint-Chamans. "One of the strongest arguments against free trade and the excessive use of machinery," he says, "is that many workingmen are deprived of employment, either by foreign competition, which depresses manufacturing, or by the machines that take the place of men in the workshops."78*I.20.10

M. de Saint-Chamans has grasped perfectly the analogy—or, rather, the identity—that exists between imports and machines; that is why he outlaws both of them. It is indeed a pleasure to deal with those who are consistent in their reasoning, for even when they are in error, they boldly carry their argument to its logical conclusion.I.20.11

But just see the difficulty that is waiting for them!I.20.12

If it is true, a priori, that the domain of invention and that of laborcannot expand save at each other's expense, then it must be in the places where there are the most machines—in Lancashire, for example—that one should expect to find the fewest workers. And if, on the contrary, it is proved that in fact machinery and manual labor coexist to a greater degree among rich nations than among savages, the conclusion is inevitable that these two types of production are not mutually exclusive.I.20.13

I cannot understand how any thinking being can enjoy a moment's rest in the face of the following dilemma:I.20.14

Either man's inventions do not lessen his opportunities for employment, as the facts in general attest, since there are more of both among the English and the French than among the Hurons and the Cherokees; and, in that case, I am on the wrong track, though I know neither where nor when I lost my way. I should be committing the crime of treason to humanity if I were to introduce my mistake into the legislation of my country.I.20.15

Or else, the discoveries of the human mind do limit the opportunities for the employment of manual labor, as certain facts would seem to indicate, since every day I see some machine replacing twenty or a hundred workers; and then I am obliged to acknowledge the existence of a flagrant, eternal, and irremediable antithesis between man's intellectual and his physical capacities—between his progress and his well-being—and I am forced to conclude that the Creator should have endowed man either with reason or with physical strength, either with force of character or with brute force, but that He mocked him by endowing him at the same time with faculties that are mutually destructive.I.20.16

The problem is an urgent one. But do you know how we extricate ourselves from the dilemma? By means of this remarkable maxim:I.20.17

In political economy, there are no absolute principles.I.20.18

In plain and simple language, this means:I.20.19

"I do not know which is true and which is false; I have no idea what constitutes general good or evil. I do not trouble myself about such questions. The immediate effect of each law on my personal well-being is the only principle that I consent to recognize."I.20.20

There are no absolute principles! You might as well say there are no facts; for principles are only formulas that summarize a whole array of facts that have been fully established.I.20.21

Machines and imports certainly do have some effects. These effects may be either good or bad. On this point there may well be differences of opinion. But, whichever position one adopts, it is expressed by one of these two principles: Machinery is a good; or, machinery is an evil. Imports are beneficial; or, imports are injurious. But to say that there are no principles, is certainly to exhibit the lowest depth to which the human mind can descend; and I confess that I blush for my country when I hear so monstrous a heresy expressed in the presence of the members of the French legislature, with their approval, that is, in the presence and with the approval of the elite of our fellow citizens; and this in order to justify their imposing laws upon us in utter ignorance of their consequences.I.20.22

But, I may be reminded, all this does not constitute a refutation of thesophism. It still has to be proved that machines do not injure human labor,and that imports do not injure domestic labor.I.20.23

In a work of this kind, such demonstrations cannot be really exhaustive. My purpose is rather to state difficulties than to resolve them, and to stimulate reflection rather than to satisfy the thirst for knowledge. The mind never fully accepts any convictions that it does not owe to its own efforts. I shall try, nevertheless, to put the reader on the right track.I.20.24

The mistake made by the opponents of imports and machinery is in evaluating them according to their immediate and temporary effects instead of following them out to their general and ultimate consequences.I.20.25

The immediate effect of an ingenious machine is to make a certain quantity of manual labor superfluous for the attainment of a given result. But its action does not stop there. Precisely because this result is obtained with less effort, its product is made available to the public at a lower price; and the total savings thus realized by all purchasers enables them to satisfy other wants, that is, to encourage manual labor in general to exactly the same extent that it was saved in the particular branch of industry that was recently mechanized. The result is that the level of employment does not fall, even though the quantity of consumers' goods has increased.I.20.26

Let us give a concrete example of this whole chain of effects.I.20.27

Suppose that the French people buy ten million hats at fifteen francs each; this gives the hatmaking industry an income of 150 million francs. Someone invents a machine that permits the sale of hats at ten francs. The income of this industry is reduced to 100 million francs, provided that the demand for hats does not increase. But the other fifty million francs are certainly not for that reason withdrawn from the support of human labor.Since this sum has been saved by the purchasers of hats, it will enable them to satisfy other wants and consequently to spend an equivalent amount for goods and services of every kind. With these five francs saved, John will buy a pair of shoes; James, a book; Jerome, a piece of furniture, etc. Human labor, taken as a whole, will thus continue to be supported to the extent of 150 million francs; but this sum will provide the same number of hats as before, and, in addition, satisfy other needs and wants to the extent of the fifty million francs that the machine will have saved. These additional goods are the net gain that France will have derived from the invention. It is a gratuitous gift, a tribute that man's genius will have exacted from Nature. We do not deny that in the course of the transformation a certain amount of labor will have been displaced; but we cannot agree that it will have been destroyed or even lessened.I.20.28

The same is true of imports. Let us revert to our hypothesis.I.20.29

Let us say that France has been making ten million hats whose sales price was fifteen francs. Foreigners invade our market by supplying us with hats at ten francs. I maintain that opportunities for domestic labor will in no way be thereby lessened.I.20.30

For it will have to produce only to the extent of 100 million francs in order to pay for ten million hats at ten francs apiece.I.20.31

And then, each buyer will have available the five francs saved per hat, or, in all, fifty millions, which will pay for other commodities, that is to say, other kinds of labor.I.20.32

Therefore, the total of employment will remain what it was, and the additional commodities produced by the fifty millions saved on the hats will comprise the net profit from imports under a system of free trade.I.20.33

And people should not try to frighten us with a picture of the sufferings that, on this hypothesis, the displacement of labor would involve.I.20.34

For, if the restrictive measures had never been imposed, labor on its own initiative would have allocated itself in accordance with the law of supply and demand so as to achieve the highest ratio of result to effort, and no displacement would have occurred.I.20.35

If, on the contrary, restrictive measures have led to an artificial and unproductive allocation of labor, then they, and not free trade, are responsible for the inevitable displacement during the transition from a poor to a good allocation.I.20.36

At least let no one argue that, because an abuse cannot be suppressed without injuring those who profit from it, the fact that it has existed for a time gives it the right to last forever.

Economic Sophisms
First Series, Chapter 20
Human vs. Mechanical Labor and Domestic vs. Foreign Labor
Bastiat, Frédéric
(1801-1850)

[Woodsman]

Re: Robots Will Create 'Permanently Unemployable Underclass'

...essentially go full-bore, absolutely unfettered free-market to the maximum extent which is politically possible.

And then the alarm clock rings and we are overcome by the same depressing realization; just another Ayn Rand wet dream. But it seemed so real, this fevered vision of utopian feudalist capitalism. Oh hit the snooze; just five more minutes ... to dream ... again ... zzz ... zzzz ... zzzzz ...

[Ghent12]

Re: Robots Will Create 'Permanently Unemployable Underclass'

At the current rates of work/person we've got too many people for
the work needed, from burger flippers to environmental engineers.

We've gotten good at growing food and making stuff. It doesn't really
matter if it's automation or outsourcing or something else. Those
things aren't going to stop.

We can
1) Force growth. Make us want more stuff.
2) Reduce people. Have large wars. (Also provides short term employment.)
3) Change the work/person ratio. Reduce the work week.
4) Accept that some people are going to be long term unemployed.

I'd prefer 3 or 4. I'm not sure which is more practical.

There are a number of other options. The most obvious being to remove the safety traps (aka safety nets) which allow people to live fairly well while being long-term unemployed. Also, and more critically, we can collectively reduce or end the absolutely gigantic drain on wealth that political actors siphon off--essentially go full-bore, absolutely unfettered free-market to the maximum extent which is politically possible. Unlikely options, of course, and one of your options are already reality, but your options are poor choices and we are capable of better than that via multiple other avenues.

Specifically, option 1 is ridiculous. Demand for "stuff" is effectively infinite if the price point is low enough--produce more very cheaply, and more will be consumed.
Option 2 is absolutely ludicrous. If you enjoy things like a nice standard of living while not willing to execute the political power necessary to become your own dictator, you need a very large economy or access to one via trade. If you want things like more science, you need more scientists. If you want things like more stuff, you need more people making stuff (and buying stuff, which creates markets for a broader array of stuff).
Option 3 is a zero-sum game and a pointless shift.

[touchring]

Re: Robots Will Create 'Permanently Unemployable Underclass'

I've some doubts about this thread because I don't believe that automation is the only reason or even the primary reason for creating the "permanently unemployable". If you watch science fiction movies like Startrek, Starwars, Battlestar Galactica, Alien, there's still a lot of work that cannot be done by robots.

Other more important reasons that I can think of:

1. Discrimination by race/religion.
2. Expensive education.
3. Uncontrolled immigration/excessive population growth.
4. Misallocation of economic resources, e.g. too much into military.


http://www.cnbc.com/id/101938819

Japan firms hit by labor crunch, many see profits squeezed

Some 60 percent of Japanese firms are finding it increasingly difficult to secure sufficient workers, hit by a pervasive labor shortage that is pushing up hiring costs and starting to eat into profits, a Reuters poll showed.


Stemming from a rapidly ageing society where immigration is limited, the labor crunch has emerged amid an economic turnaround engineered by Prime Minister Shinzo Abe and threatens to drag on growth.


Some restaurant chains and retailers such as home improvement firm Komeri Co have said they have been forced to rethink expansion plans, while others have actually shut stores. At the same time, a dearth of construction workers needed after the 2011 earthquake and tsunami and ahead of the 2020 Olympics has pushed up building costs for all sectors.


Read MoreAsian labor activists team up to press wage claims


But even firms that are not as badly affected are worrying about a jump in labor costs, the pressure of having to scramble to attract qualified employees and to retain the ones they have.


"The hiring situation has become very severe," Yoshiki Mori, vice president at retailing giant Aeon Co, said at an earnings briefing last month. He said Aeon is embarking on a range of initiatives to encourage part-timers to work more hours and is looking to employ more retirees and foreigners.


By sector, 80 percent of retail firms and 72 percent of companies in construction and real estate said they were finding it more difficult to secure enough workers, the Reuters Corporate Survey found. Among manufacturers, 70 percent of firms in the auto sector, which includes suppliers, said they are having more difficulty.


Read MoreJapan has fallen victim to the Keynesian scam


The survey, conducted from Aug. 4-18 by Nikkei Research for Reuters, polled 487 firms capitalized at more than 1 billion yen ($9.6 million) which responded on condition of anonymity. Around 270 firms answered questions on hiring.


Asked about the impact of the labor shortage on profits, 44 percent of firms said corporate earnings could be squeezed this financial year, with most of those firms predicting recurring profits could fall between 1 percent and 10 percent.


The remaining 56 percent said they did not expect any impact, with some respondents saying they were able to absorb costs as profits were growing.


"Even though labor costs are rising, this leads to a better life for employees and eventually to increased consumer spending. It is not all bad," wrote an executive at an electronics firm.


One third of respondents said they plan to hire more workers in the next financial year while around 60 percent said they expect the number to be flat.


But for firms unable to secure sufficient workers or pass on the extra costs to customers, the labor shortage will continue to be an intractable problem. Japan's working age population is expected to shrink by 13 million people by 2030 and talk of immigration reform garners little interest in the homogeneous country.


Read MoreJapan exports rise in July offering hope for economic growth


"From the perspective of 30 to 50 years, maybe there will be a chance to reverse this trend, just like France did, but in the next five to 10 years the trend may continue," said Shintaro Okuno, a partner at consultants Bain & Co Japan, who reviewed the results of the survey.


Japan's economy is expected to grow between 0.3 percent and 0.5 percent this financial year - down from an average 0.7 percent after a hike in the sales tax resulted in a sharp contraction during the April-June quarter.


With Japan keen to curb runaway government debt, Abe must soon decide whether that sales tax hike - from 5 percent to 8 percent - will be followed by another planned increase to 10 percent next year. The survey found that companies were largely resigned to the prospect, with more than half saying it is unavoidable, compared with about one fourth saying Abe should postpone or scrap it.

[Polish_Silver]

Re: Robots Will Create 'Permanently Unemployable Underclass'

The problem I see with number 3 is competition. I think this is the root of why technological progress rarely if ever results in fewer hours worked. If one person with a combine can do the work of 100 farmers, it would be fine to work 1/100th as much if he was the only one that had a combine and was happy making the same amount of money as before. Neither of those is the typical case though. Instead the price of food is lowered by increased supply and soon he has to work about as much as before to stay competitive.

If the USA mandates a 20/hour work week and no reduction in wages then every company's labor cost will roughly double to maintain the same output. Overnight those companies lose any ability to compete internationally. Locally based companies (like restaurants) will have to raise prices so that everyone effectively has a lower standard of living. They will have more leisure time, but will probably need second jobs to make up for the higher prices. Not to mention the first problem will crash the whole economy.

Long term isn't there way to reduce population that doesn't involve atrocities? What about tax breaks or even payment to people to not have children?

A shorter work week implies lower total salary. There is NO WAY around that. I think shorter hours (accompanied by lower salary) would be a good thing over all. However, we'd have to get health care down to an affordable level. It is bankrupting the country!

[lektrode]

Re: Robots vs secretaries

Originally Posted by don: To what degree is the robot scare a diversion from 40-years of saying Bye Bye to middle-class job offshoring?

If you ask me, that's everything. I pretty much spit it out here.

+2
after my 1st 10years in the labor market - spent nearly entirely in manufacturing - and by the mid80's deciding there wasnt much future in it - decided that my only REAL 'job security' was owning my tools and knowing how to use em - and so began my going on 30years as a 'freelancer' - that and discovering the answer to this under-appreciated question:

whats the difference between the self-employed and the UN-employed?
.
.
.
wait for it....
.
.
.
having a savings account and NO debt.

= the best question i ever learned (the hard way) the answer to...