In light of my posts on robots, driverless vehicles, and automation, readers keep asking: where will the jobs come from?
I do not know, nor does anyone else. But does that mean jobs won’t come?
Is technology destroying jobs for the first time?
Daniel Lacalle on the Hedgeye blog offers this bold claim: Face It, Technology Does Not Destroy Jobs.
If you read some newspapers and politicians’ comments, it seems that technology companies are a threat and robots will take your job . The idea is interesting and has populated hundreds of pages of science fiction books that feed on a dystopic view of the future where humans are only an annecdote.
It’s an interesting idea, there’s only one problem. It is a fallacy.
The idea that technology will destroy jobs starts with exaggerated estimates – as always – with the objective of presenting a world in which there must be an intervention – fiscal, of course – from governments, in order to save you from a future that has always been wrongly predicted … But this time it’s different.
The empirical evidence of more than 140 years is that technology creates more jobs than it destroys and that there is nothing to fear of artificial intelligence. Randstad studies show that technology will create more than 1.25 million jobs in Spain alone over the next five years.
Evidence shows us that if technology really destroyed jobs, there would be no work today for anyone. The technological revolution we have seen in the past 30 years has been unparalleled and exponential, and there are more jobs, better salaries.
The best example is the German region of Baviera, one of the parts of the world with a higher degree of technification and robotization, and with a 2.6% unemployment. An all-time low. The same can be said about South Korea, and the world in general.
When I started to work in 1991, they told us that machines would take our jobs. Today, there is a lower unemployment and the workforce has grown massively. Today, they tell us the same thing. If 47% of jobs are going to disappear in 20 years, many more will be created.
Most of the jobs we know today did not exist ten years ago. Technology does not destroy employment, what it does is free capital from obsolete sectors to new sectors and, thereby, improve the quality of life of all and, in addition, create many more direct and indirect employment.
TECHNOLOGY ONLY DESTROYS JOBS WE DO NOT WANT ANYWAY
In fact, technology only destroys the jobs we do not want anyway. What society, all of us, must do is to create the conditions for us to be prepared for the new world.
TECHNOLOGY DOES NOT DESTROY JOBS, POLITICIANS DO.
What does not work, nor has it ever worked, is to try to put barriers to technology, penalize the efficient, try to stop progress, with the objective of perpetuating obsolete sectors under the excuse of “employment”. It neither defends the existing jobs nor solves the problem.
If politicians want to defend the job, why not ban tractors and put the whole world to work in fields, like Pol Pot?. You may say this is an exaggeration, but this nonsense is the same fallacy as placing barriers to technology to perpetuate obsolete jobs.
Interestingly, those same people who “predicted” the end of oil, water scarcity, massive food shortages, the end of pensions, hyperinflation, and slavery to machines, all wrong, are the ones who say “this time is different “, today.
Let us be clear. All that is sought by promoting scaremongering estimates is to find an excuse to increase your tax burden. If politicians really cared about employment, they would be giving tax breaks to technology companies and start-ups to train workers on high-added value jobs and helping them adapt to change, not squandering funds in useless subsidies. Less basic income and more basic knowledge.
THE PROBLEM IS NOT ARTIFICIAL INTELLIGENCE, BUT NATURAL STUPIDITY.
The tax assault on technology companies is not a coincidence. It seeks to perpetuate obsolete industrial conglomerates, which in Europe have turned into covert social security systems. It seeks to prevent change instead of seeing high-tech companies as guarantors and leaders of the change, that create jobs and improve our quality of life of all.
Rather the aim is to have citizens as hostage clients, addicted to Huxley’s Soma of State subsidies via welfare. It is more comfortable to subsidize idle capacity than promote progress.
Instead of making it possible for technology companies to grow and develop in Europe, politicians seem to prefer to subsidize low-added value sectors that generate sub-employment … and if a company buys a machine, a bureaucrat will decide how many jobs it is supplanting, only to pass the tax bill. Can you imagine if the hat manufacturers would have succeeded when they went on strike against Ford’s evil new automobile? Today, we would have all paid much more for cars and, above all, the hat industry would have succumbed anyway. Because putting barriers to progress is useless, and very expensive.
What politicians and those who make flawed 50-year predictions know is that the probability that technology and the democratization of information will generate more prosperity, employment and well-being for all is almost 100 percent.
What they also know is that it jeopardizes a rent-seeking revenue system that feeds many cronyist networks.
Technology does not destroy jobs. Politicians do. Never bet against human ingenuity.
Major Agreement
I agree with every point except for the notion “technology only destroys jobs we do not want anyway”. People who lose jobs most often want them dearly.
Donald Trump won the election on the notion China and Mexico stole our manufacturing job. Nope, automation took those jobs.
But this happens in every cycle. Phone operators lost their job, buggy whip manufacturers lost their jobs. The internet destroyed many jobs but it created more jobs than it took away.
Fast Path to Job Destruction
The fast path to job destruction is to get government involved.
- Regulations destroy jobs
- Minimum wages hikes destroy jobs
- Free handouts destroy jobs
- Tax hikes destroy jobs
The fastest way to destroy jobs would be to give everyone a minimum guaranteed “living wage”.
Too many people would be content to do nothing. Taxes would have to go up to support the freeloaders.
New Jobs From Where?
So where will the new jobs come from? I don’t know.
But I do know that millions of truck drivers will soon lose their jobs, and those are jobs the drivers want.
Technology always creates painful disruptions. But the correct approach is to do nothing.
Technology has always created jobs even if we do not know what that technology will be.
The problem is government and the Fed, not technology. The government is hell-bent on policies that destroy jobs and the Fed is hell-bent on producing inflation in a technological price deflation world.
Blame the Fed and governments, not technology, for alleged “living wage” problems.
Related Articles
- Bill Gates Embraces “Tax Robots” Socialist Idiocy: Four Questions for Gates
- Tax Overhaul: Where Art Thou? Republican Divisions Widening, Mish Suggestion
- Historical Perspective on CPI Deflations: How Damaging are They?
My Challenge to Keynesians “Prove Rising Prices Provide an Overall Economic Benefit” has gone unanswered.
Mike “Mish” Shedlock
Odd. If the measures of productivity are correct (it is improving) then we should deduce something is reducing cost, much of which is, purportedly, labor. Labor rate arbitrage (outsourcing) doesn’t account for productivity as measured so one would think technology does, in fact, impact the demand for actual labor. Obviously, there are other reasons more people are employed in spite of the improved productivity of existing job functions.
LikeLike
Mish,
Thanks for this article.
I hear you highlight governments as the problem. I would like to suggest something else – fear/uncertainty. I read your words “So where will the new jobs come from? I don’t know.” as prophetic – and the unknown/uncertainty scares most people.
I remember reading a book on some technology automation with a dialogue (paraphrased):
Person A: That backhoe is stealing our jobs. Imagine how many of us could be employed with shovels to dig that same hole.
Person B: Yeah and the shovel is stealing even more jobs – imagine how many of us could be employed spoons to dig that same hole.
In my opinion over time humanity has overcome many obstacles using new approaches (think ‘changing from nomadic to civilized’ or ‘moving cargo with trains’) and there always seems to be something to be done if people imagine and figure out what to do. Yet, with change there is fear that the future will leave one with inability to provide, and it is potent fear. For me this fear of uncertainty is a true enemy of progress.
LikeLiked by 3 people
Nate,
That analogy was made by Milton Friedman when he was visiting India
LikeLiked by 1 person
If Milton Friedman said the same thing – then I feel like I am in good company 😀
LikeLike
Necessity is the mother of invention, and without it (and term limits) we are destined for 3rd world stagnation and corruption.
Slothfulness is a human trait that has plagued man forever. Govt has also been forever trying to replace human ingenuity to institutionalize their own sloth.
Proverbs 6:6 – Go to the ant, thou sluggard; consider her ways, and be wise:
Proverbs 19:15 – Slothfulness casteth into a deep sleep; and an idle soul shall suffer hunger.
LikeLike
Technology has created new jobs over the centuries. true enough. But what about when we can finally make robots that can mimic human actions like walking, talking, seeing, lifting, typing, grasping etc. Then hypothetically any ‘new’ job can in short order be automated again.
Besides as opposed to earlier centuries, we have more people (population rise) with fewer deaths caused by man-made mass calamities like war (post WW2). Hence the need for literally more jobs.
As a percentage of working population the new jobs are still way too few. The primary occupations globally are still stone age jobs like agriculture, transportation, food related (cooking, serving), sanitation, and dare i say even prostitution?
So any automation that causes mass layoffs in these age old professions are not going to be easily offset by new jobs
For example in India, despite being seen as a prime offshore location for IT related jobs, the industry employs a mere 10-12 million people (direct ~3mm and rest indirect) out of a total population of >1.2 billion
and all the rosy estimates for doubling these numbers by 2020 are now being revised as fewer and fewer jobs are being added in IT. The so called boom trend is now reversing.
So I think its only till we get a robot that can, to a large extent, mimic human actions accurately enough. After that I expect that we will see massive automation without a similar increase in new types of jobs regardless of what innovations can take place
LikeLike
If it costs $X to dig a hole and performed by one person operating a backhoe then theoretically he should receive the same amount of money as would hundreds using shovels or perhaps thousands using spoons. That’s increased productivity and simultaneously increased per capita disposable income which increases the living standard. The displaced “shovelors” and “spooners” will eventually be working at yet-to-be determined jobs.
LikeLike
Technology does cut jobs in the short run – that’s the whole point. In the long run it frees people to do other things, though what those things are, we will have to wait to find out. One risk is that politicians, through things like minimum wage increases, regulations, and mandates, may destroy those jobs before they were ever created, a new problem that never existed before in history. Thus, in this case the future may deviate from the past.
Technology also increases the standard of living. For a humorous and interesting juxtaposition, compare the opening fifteen minutes of “The God’s Must be Crazy”.
LikeLike
Anyone knowledgeable about the history of the Industrial and Agricultural Revolutions (a very small number of people these days) knows that they did not come without serious hardships to the laboring classes. Large numbers of agricultural and craft workers were driven into severe poverty and often endured starvation. In order to survive, men worked in coal mines, clay pits and other extremely hazardous occupations.Many died. Women and children as young as 6 worked in mills or were forced into prostitution. Cities became charnel houses, with London’s death rate at more than 6% in the early 19th century. The popular Chartist movement, which ultimately succeeded in many of its objectives, was one of the responses to this situation. Other countries in Europe were horrified by the treatment of the landless in England.
All this doesn’t mean that there was an alternative to the Industrial Revolution, but it does mean that there was severe societal stress caused by mass elimination of traditional jobs, which culminated in many countries with communist, anarchist or socialist revolutionary movements.
LikeLiked by 3 people
Pyrrhus
very good comments
there are many lessons studying a bit of history
LikeLike
Well, governments of the World killed several hundred million people in the 20th century. Hardly anyone is bothered by that.
But working in a coal mine so that your family can survive – oh, the horror! Beats working in the gulag.
LikeLiked by 1 person
True but then those who survived, and their descendants, enjoyed better diet, transportation, medicine, educational prospects etc and massively increased longevity. Whereas their pre-modern ancestors suffered regular (practically generational) famine-pestilences that wiped out 20% of the population without any appreciable change in living conditions. Life before mass urbanisation was socially stable but hardly bucolic. Not even for the wealthy. ‘Nasty, brutish and short’ would be a fair characterisation until the 17th and 18th centuries. Capital concentration and dispersal through efficient capital markets really are the engine of progress.
And Technology will not end work. In fact, it will just increase it through redefining it. ie People will inevitably stare at screens more and not less.
LikeLiked by 1 person
And those that survive this tech revolution will be on the top of the heap as well. This is all part of creative destruction that eventually destroys far more than it creates. It should be painfully obvious who profits from this revolution and it is not “the people” unless you consider big screen TVs and smart phones “prosperity”. Prosperity used to mean the wealth of independence, being servant of no man. Now it is simply convenience.
LikeLike
the lacalle article is naïve and superficial with bold claims but no facts.
just look at the history post 2000.
yes jobs were created but the large mass at the lower end of the income distribution – a lot of low end service jobs
so mish governments should idly sit by and oversee major employment disruption? – no structural adjustment assistance ?
this is how revolutions start….
LikeLiked by 1 person
Cost of government in the US is about one-half of the work year, corporations are government created entities that rip off workers, and ‘Defense’ wastes about 900 billion a year.
Fix those and maybe the working poor will stop being poor.
LikeLike
Pasquale,
To extrapolate what has happened in the last ten years when the article essentially explains that the changes we see today were present since the start of the Industrial Revolution case in point Luddites, does not make sense.
As to having the government provide jobs that are productive I beg to differ.
If corporations are so evil then start an industry to supplant them and pay your workers a “living wage’ Whatever that means.
Defense wastes 900 billion a year. Good point! But doesn’t the government run defense?
Corporations are always depicted as these greedy bastards out to screw you out of your last dollar. You really think that politicians are any better?
Minimal government with low barriers to entry is not the perfect system but it is the best.
LikeLiked by 2 people
the point was understood
the issue I had was the” hand waving” away the very important issues of resulting income distribution and potentially major consequences for taxation if labour’s income share falls significantly.
additionally major employment disruption results in regional and political polarisation and creates issues of sustainability of insitutions and societal stability.
any suggestion of less government in this kind of world is wishful thinking.
LikeLiked by 1 person
The dream of less govt is more realistic than the good intentions of govt. The key to reducing prosperity-killing govt is short term-limits, which can be imposed by voting out every incumbent, every election. The good intentions of govt leads to Hell because they require more govt that consumes productivity and produces nothing but power that gets progressively corrupted.
There is no doubt that govt will try to protect their jobs, perks, power, and sloth by imposing more taxes, fees, and rules that reduce our freedoms. Since freedom is the key to prosperity, we are headed in the absolute wrong direction – a direction that leads off a govt debt cliff. The freedom to share ideas and the free-flow of capital to fund those ideas is the root of properity, but it’s antithetical to govt.
The irony is that so many people want govt to prevent change, and govt needs to oppress people to keep from changing/reforming.
LikeLike
Crazy!. Already our politicians are out of their depth due to the complexity of modern life. Yet you suggest we start afresh every election. with newbies having no experience? If you aim tor disaster that’s a sure fire solution. Politicians need instructing and just putting ones hand up is clearly insufficient today.
LikeLike
ok.
i’ll play.
how about 3D printing making everything
which would be too expensive if robots made it
while humans remain hooked to their VR dream?
there’s a movie in there, somewhere.
LikeLike
Aloha friends…one can speculate till the ‘cows come home’…lololol Two SIMPLE Facts Need to be Kept in mind…1) Jobs taken by or turned over to Robots and/or Further Automation,,,will produce Few if Any…Parallel Job Situations..correct? So,Where do THOSE Displaced Workers GO>>? 2) Robots…Nether Spend…Consume..nor Save. It will Indeed be a VERY interesting World-Wide Future for a Great many Working Class people,thanks for reading,aloha
LikeLiked by 1 person
“Too many people would be content to do nothing. ”
I’ll drink to that. It’s called retirement and it’s supposed to come at the end of a life of productive work.
LikeLiked by 1 person
The fact that govt was SUPPOSED to protect our Social Security is proof that not even saving for retirement is reliable. Before they are done destroying society, govt will bail-in your savings and retirement accts, and replace productive assets with treasuries that will become worthless. If career politicians are not rooted out through short term-limits, retirement will not be leisurely.
LikeLike
Why would the government bail in your savings? For one thing it is illegal. They could bail in your bonds but not your savings. That’s not likely to change. If treasuries become worthless, it’s game over. The crash is on!.Hang on to your hats, a wild deadly ride to extinction is under way! Our industrial dynasty is finished.
LikeLike
I bought a UAV (drone). I’m learning how to properly fly it. I have completed the FAA process for having a commercial certification, meaning I can (legally) be paid for flying it.
Not sure what exactly I’m going to do to make money with it at this point. I really bought it because I like to take landscape pictures and often times have to do a lot of cropping to get rid of the “ground clutter.” Now I can just fly up a few feet and get the shot I want. But because the darn things are still pretty pricey I want to see if I can get it to pay for itself. And besides, I already know much of my job will be automated away or at least made so simple they won’t pay me as much as today to do it.
The really interesting thing is, now that I see what it can do, the possible uses just keep coming. Like earlier this week I was out on my nightly run, wondering what I look like while running. I could get someone to ride alongside me in a car with a video camera, or I could just put the UAV in “follow me” mode and let it orbit me as I run. If it wasn’t so windy today I was going to give it a try. Now maybe not everyone wants to film themselves running, but I’ll bet there’s a sports medicine doctor or coach who might be interested in filming clients to show them their stride, especially in varying terrain and at different points in their workouts (I know I run very differently on a treadmill than outside on the street). And just about any movement sport could use UAVs in a similar way. Yes, a coach could learn how to operate a UAV and get certified, insured, and maintain the thing, but much easier to outsource it to someone willing to do all that instead.
Of course, now that the FAA has put out guidelines for flying the door’s open for big businesses to get involved. Already there are power companies, pipeline operators, radio tower inspectors and building inspectors using UAVs to do their work. For the most part UAVs are another tool in their toolbox but as use cases increase there will be plenty of work for independent pilots too.
LikeLiked by 1 person
Check into photographing peoples’ homes from the air, especially farms. There is a small industry using planes to photograph farms and sell to owners to hang a nice 2’x3′ framed picture on their wall for a hundred or a few dollars. I don’t know the finances but it seems a drone would make it much easier to get into. I grew up in the country and so know this is a thing. Might be worth checking out if you’re looking for business iddas.
LikeLike
The problem is not that technology destroys jobs. The real problem is that technology destroys people’s livelihoods. Yes the jobs destroyed by technology will be replace by better paying jobs that will be taken by other people. That, however, means nothing to the person whose job was destroyed. One may think “we’ll retrain them”, “help them re-invent themselves”. That’s complete none sense (and history shows us that). Let’s say 1000 coal miners lose their jobs because of natural gas (fracking) for example. Lets now assume they have been in the coal industry for 10 to 20 years (so they are in their 40s and 50s). Lets now say they all get retrained in computer programming because is hot these days. I bet you doughnuts to dollars that almost none of them would be hired by the computer industry. Those workers for all intent and purpose have become obsolete (just like a 10 year old PC even if you load windows 10 in it) and will be discarded. Most of them will have either to depend on others or take a job with much much lower pay. That of course is the real problem that Lacalle avoids to address (you too Mish)
LikeLiked by 2 people
First, jobs or occupations used to provide meaning to people’s lives beyond simply money. Being good at something used to create pride and a sense of self worth, something that handouts and meaningless positions doing nothing will NEVER provide.
Secondly, the contention that because it has always worked out somehow can be projected indefinitely into the future, is BULLSHIT. It is the same screed we hear about the stock market, that repeatedly destroys peoples lives through its “corrections” and inflation that continually robs the financially responsible, and has NEVER gone out of control destroying its host economy…EVA.
Thirdly, we have NEVER seen this level of debt and financial bullshit in history that is being used as malinvestment to create technologies that NO economy can absorb, while encumbering it with unimaginable debt that relies on working people…producers, to repay while having NO jobs with which to do so.
This is the destruction of society for the sake of corporate profits, while creating public conveniences that remove any meaning from life and allow us an indifference to our demise.
Nature never has before and never will tolerate useless eaters, and neither will our corporate owners once the technology that WE paid for provides them all they need for a luxurious life with no participation from us, whatsoever.
LikeLike
Your “Fast path to Job Destruction” is a dreadful and ignorant piece. Regulations make jobs and workplaces safe. It’s a government’s job. Minimum wages must be enough for a living wage. As Rooseveldt said if you can’t pay a living wage the job is not viable. Free handouts have consequences which can balance out any detractions. A UBI [universal basic income] will feed the economy, grow the economy and pay for itself. It will destress unemployment. It will make everyone a contributor to the economy. It will not stop anyone willing to work from getting a job and a job they want to do. It will not put the disabled and sick and unsuitable through the wringer. Taxes, yes they cost jobs but they are not relevant to the federal government which deletes them anyway. The Fed has no need for your tax.
LikeLike
Economists tend to rely on trends that don’t take into consideration complex correlations. To say that technology has not historically caused job numbers to decline without looking at the real source of growth and jobs (ENERGY) is to only tell half the story or spin propaganda perhaps. Robots are not just better hand tools they are additional workers. If you increase the supply of workers without increasing opportunity you get lower wages and under employment. Socialism may try to compensate but you can’t get more for less.
LikeLiked by 2 people
You get more opportunity with more freedom – freedom to share ideas without govt snooping, and freedom for capital to flow to those ideas without fear of govt confiscation.
Socialism around the world is collapsing, causing govt to dig in their heels. When the govt bond bubble pops, and the collapse spreads from Europe to Japan, and finally to the US, the only question that will remain is what do we want to emerge after the reset?
LikeLike
Socialism is alive and well. It got a huge boost with the GFC bailout, saving all the ill gotten profits from destruction. Yes the 0.1% are big fans of socialism. It benefits them enormously.
LikeLike
It’s the key to a growing economy in 2017.
Socialize the risk, privatize the reward. Find a way to do that and there is no end in sight to the “growth” that can be achieved.
LikeLike
technology can surely be economically disruptive. in the cases of the industrial revolution it both destroyed and created opportunity. over the long term there clearly was economic growth.
LikeLiked by 1 person
LikeLiked by 2 people
And, in another bit of shocking news: Some old geezer somewhere says the modern world is a scary place, and that things were better the way they were before…
LikeLiked by 1 person
The key is actually learning from history, instead of repeating the same mistakes again and again.
LikeLike
The benefits of technology create demand. An example, in 1984 it cost $2000 to fly return London to Sydney on an average wage of $25K. Today, the same trip costs $1800.00 on an average wage of $70K
Technological improvements in composite materials (lighter and stronger) and engine efficiency have put many aircraft maintenance staff out of work.
The benefits have been a massive increase in demand for travel and transport services, aircraft construction plus many supporting services such as accommodation and hospitality.
30 years ago, travelling by air across a continent to watch a football match on a Saturday night was un-thinkable.
LikeLiked by 1 person
+1
LikeLike
And 30 years ago the owner of the radio station I worked at wanted to hear the Penn State football game. He was on vacation in Great Britain at the time. So he called in to the station and was put on hold for 2 hours (the station audio was piped through the phone system as hold music). Overseas phone calls, even in the 1990s, were about a dollar a minute. Now I routinely listen to Internet radio stations from Europe for free.
Lately I’ve been watching a lot of YouTube channels on my Roku box. A quick scan of subscribed channels shows many “episodes” have views in the tens of thousands, a few might have hundreds of thousands, but almost none have millions of views. Some of the more popular channels proudly display their 100,000 subscribers plaques on the back wall of their sets. I guess these people are earning a living producing these shows. My guess is that they’re married or have some other income in addition, but my point is there’s a way to reach a few thousand people and still have a business, as opposed to the millions required to support the old TV framework. And last week Comcast announced they’ll be adding a YouTube “channel” to their X1 set top boxes, meaning those producers will now have access to every Comcast subscriber’s TVs.
I also listen to quite a few podcasts. Most have some form of in-program advertising, a few do not. Several ask for donations, and if I listen consistently I will pony up. While none of these people are millionaires I know for a fact that a few of them are using it for their sole means of income.
Maybe the point of the media explosion is that instead of everyone becoming a millionaire and having millions of fawning fans, they make a comfortable living and have a small but rabid fanbase. In that environment everyone doesn’t need to be super-polished and slick to get an audience. As long as they’re able to supply a need to the viewer they’ll be successful.
LikeLike
This supports my contention that entertainment, along with personal care, is the future of employment.
LikeLike
There are always winners with any change. The question should be, what is the score?
And WHO is winning and WHO is losing. Sure, lots of things are cheaper today, but if you were to look at only ONE factor to see where we stand, it would be DEBT, both public and private.
IF we are doing so great, IF technology is making life so affordable and “better”, then why the massive debt? Huh?
You can”t sell ANYTHING in this modern world without financing it. How many are putting their “affordable” airline tickets on their credit card compared to thirty years ago?
LikeLike
Yes, in the past it hasn’t been a problem. That doesn’t mean it won’t be in the future.
LikeLike
It neither means that it will be a problem in the future.
Since nobody knows, what right do you have to impose your opinion on others by means of government force?
LikeLike
Is it using government force to simply reform banking laws and government wealth transfers to what they once were?
LikeLike
I’m not sure to which banking laws and government wealth transfers you are referring.
Government is only transferring the loot they got. It doesn’t matter much to me whether those who get the loot are already wealthy or not; they will always be looters.
LikeLike
+10
LikeLike
You’re putting words in my mouth mate.
LikeLike
Your comment seemed to me to imply that technology may destroy jobs in the future and that “something” must be preemptively done. Maybe you meant something else. Anyway, I didn’t put any words in your mouth. I just asked a question to debate your premise.
There is no real way to predict whether technology will destroy jobs or not. My opinion is that it will destroy low value jobs and create jobs of higher value.
Since this is a matter of personal opinion, how would it be morally justifiable to impose some group’s opinion (even if it’s the majority inside a certain territory) on people who disagree?
LikeLike
There are two sides to technology,one is this wonderful new life we are enjoying, a cornucopia of abundance. The other side is the massive ability it gives to humans to destroy both themselve and their environment. Technology in itself is neither good nor bad, human behavior is the problem.Humans create their destiny but do not control it. Predicting the future is an act of fait an as such foolish.
LikeLike
Question: where is the energy coming from to power all of these robots and AI creations?
LikeLike
LikeLike
Get govt and the industries they protect out of the way and solutions will materialize. Thorium-based nuclear energy, which has already been proven, is just one example.
LikeLike
Archaeologists have documented that with the advent of agriculture and civilization people (on average) had much poorer health and nutrition. Of course, they also killed each other less often (true fact, see: War Before Civilization, Neeley). Cities were population sinks until sanitation and antibiotics were developed.
There are always trade-offs.
As far as lost jobs go, the loss of textile and garment factories has had a serious effect on small towns in the Southeast. Those jobs were not high wage, but they supported a lot of people. They could come back with tariffs, but won’t as they are not politically important, yet.
LikeLike
At the outset I agree with the premise that meddling by the Fed and government is the real problem. Does one really need them?
That said, the question you have to ask is will the new jobs, that will be created, improve your standard of living and also will there be enough of it to keep a lid on unemployment. How it will turn out is anybody’s guess.
Let us say a truck driver makes x and he loses his job and now finds a job that pays y (y<x), it means his standard of living has gone down if all other things remain the same and he is going to feel poorer. For a person to feel richer the cost of living has to go down faster than loss in pay from new job. It is not what you earn that counts, it is how much you have to spend to maintain your standard of living that counts.
But hypothetically if all products are manufactured by robots, how the hell do you find customers who can pay for the product? The demand destruction it can unleash is mind-boggling. Also will enough jobs be created is also a valid question here as it can cause social upheavals in the medium to long term.
Thus it is not only the number of new jobs that come up with the destruction (job destruction is multiples of job creation), but also what it pays and the cost of living that will define whether it is good or bad. That said, I also believe it would be foolish to stop progress. You make the situation worse in the process.
LikeLiked by 1 person
The cost of living for all the people who buy the product that the truck driver delivers has gone down as soon as the savings from replacing him with something cheaper accrue.
If all food is planted and harvested by machines, how the hell do you find customers who can pay for the product? If all books are printed by machines instead of hand copied, how the hell do you find customers who can pay for books? If all cloth is woven by machines instead of hand made on a loom, how the hell do you find people who can buy clothes?
LikeLike
Technological improvements have always led to a general improvement in the standard of living over time. However, the people who are immediately displaced by new technologies almost always suffer and actually experience a far lower standard of living than they had before. It can take generations for those people who are disrupted by a new technology to even recover the standard of living they had previously known. Just look at regions where entire industries died when the resource or good they relied on in a mono-economy went bust. Some of these regions remain basket cases hundreds of years after technology rendered them irrelevant.
Thus, while technology might be good for human kind in the aggregate it can be very harmful to the people who lose their jobs as a result and those losers almost never recover what they had lost.
LikeLiked by 1 person
The “collective” does not include individuals. As we see with our economists and financial planners today, our specific circumstances are best described in a graph or chart.
LikeLike
“technology will create more than 1.25 million jobs in Spain alone over the next five years”
Yeah sure and pigs will fly.
Mentioning Germany…there are 2 million officially unemployed people, older retired folks still need to work to be able to pay their bills, minimum wage is not enough to pay ones expenses and many people are on different kind of educational programs so they won’t be counted as unemployed. Real paradise.
I am not a leftist but I can see a clear path to a new revolution if this direction is not compensated somehow. Youth are unemployed, old people are suffering and those at work are exhausted.
The article is full of hot air IMHO.
LikeLike
Mish,
I’ve read in numerous of your post in which you challenge the notion that China and Mexico stole our manufacturing jobs, stating, “Nope, automation took those jobs.”
I agree automation most certainly is playing an increasing role in “stealing” jobs but this appears to be a more recent trend.
Perhaps I’m misunderstanding what you are referring to but I’m having difficulty comprehending how automation alone resulted in the loss of millions of manufacturing jobs in the US when initially as US manufacturers began outsourcing the production of their products to China and elsewhere in the late 1970’s eventually led to the loss of manufacturing jobs and the closure of thousands of factories in the US. This resulted in the transfer of factory worker jobs from high labor cost regions to cheaper workforce regions.
Foxconn, the worlds largest contract electronics manufacturer, for example, (as of 2015) has an estimated workforce of 1.3 million employees.
https://en.m.wikipedia.org/wiki/Foxconn
Foxconn announced in July 2015 plans to “build up to 12 factories, and employ 1M in India”
http://www.cnbc.com/2015/07/14/apple-manufacturer-foxconn-to-build-12-factories-employ-1m-in-india.html
In terms of automation, in May 2016 Foxconn announced replacing “60,000 factory workers with robots.”
http://www.bbc.com/news/technology-36376966
This is only one overseas ‘contract manufacturing’ company involving only a percentage of electronic products not to mention the hundreds of other products that fall into the manufacturing category or the outsourcing of white collar work.
https://en.m.wikipedia.org/wiki/Outsourcing
According to a report on outsourcing by Working America, “Manufacturing employment collapsed from a high of 19.5 million workers in June 1979 to 11.5 workers in December 2009, a drop of 8 million workers over 30 years. Between August 2000 and February 2004, manufacturing jobs were lost for a stunning 43 consecutive months—the longest such stretch since the Great Depression.” Manufacturing plants have also declined sharply in the last decade, shrinking by more than 51,000 plants, or 12.5 percent, between 1998 and 2008.”
https://www.americanprogress.org/issues/economy/news/2012/07/09/11898/5-facts-about-overseas-outsourcing/
If I’ve misunderstood what you are talking about can you please clarify for me?
Thanks
LikeLiked by 1 person
I already have clarified
https://mishtalk.com/2017/02/06/disputing-trumps-alleged-catastrophe-of-nafta-with-pictures-whats-the-true-source-of-trade-imbalances/
LikeLike
The clarification is murky at best. The sideways movement in your chart when NAFTA was initiated does not mean anything, especially since the downtrend was never altered. Also, as my response below to your referenced article highlights, the root problem is not the Fed or a gold standard. At least in the current article you have finally acknowledged that govt is a root cause. I argue they are THE root cause because you could end the Fed tomorrow, and the problems caused by corrupt politicians would still hound us.
“Regardless of what you call money, politicians will always blow it up. Besides, not a single gold standard throughout history has ever survived, so what magic do you have in mind to turn politicians into saints?
The foundation of prosperity is trust, confidence, freedom, and the equal enforcement of the rule of law. Great society’s, with and without a gold standard, have collapsed because political corruption destroys this foundation in the quest to sustain the jobs, perks, power, and sloth of politicians.
It’s time to stop repeating the flaws of the past and move forward – starting with short term limits, balance budget ammendment, govt debt restructuring, and no interest on govt spending in the meantime.
Public hanging of politicians that undermine the Constitution wouldn’t be a bad idea either – and Trump should start with Rand Paul, who wants to exempt the healthcare industry from anti-trust laws – http://market-ticker.org/akcs-www?post=231812; and establishment hacks on both sides pushing the carbon tax, and the fraud of global warming – https://www.bloomberg.com/politics/articles/2017-02-08/prominent-republicans-begin-push-to-tax-carbon-cut-regulations.
How is a gold standard going to prevent this govt fraud and corruption?”
LikeLike
I agree Blacklisted – the clarification is murky – I originally read the commentary at the time when posted and it didn’t clarify the issue for me then anymore then it does now.
I think a persuasive argument can be made demonstrating that outsourcing to China, Mexico and elsewhere have contributed far more to massive US job loss then has automation, at least up to this point.
It seems GE CEO Jeff Immelt might agree:
“On June 26, 2009, Jeff Immelt, the CEO of General Electric, called for the United States to increase its manufacturing base employment to 20% of the workforce, commenting that the U.S. has outsourced too much and can no longer rely on consumer spending to drive demand.”
https://en.m.wikipedia.org/wiki/Outsourcing
LikeLike
There will always be jobs created but automation takes up the low education high skills good paying jobs. New jobs will require less skills and more knowledge. Thus the loss of high skill middle income jobs. Lower paying service jobs will be available. Thus more government income subsidies and an ever shrinking middle class.
LikeLike
This technology is so great: Only 94,708,000 Americans of working age are not in the work force as of June last year. The average family does not have enough cash on hand to afford a brake job on their car and each citizen owes $61,560 via national debt not counting their maxed out VISA, etc. If the food stamps were a soup line like in the ’30s, it would be obvious how many people are hurting. I would be remiss to say this was the fault of technology but do not try to tell me that we as a nation and family are a lot better off than 40 years ago. We did not live on the wrong side of the tracks in the thirties but the trains were mighty loud and the house shook a bit when they went by.
LikeLike
It’s not a coincidence that the decline in prosperity directly corresponds to the size of govt.
LikeLike
What do we do with all these people looking for work? Make the government employer of last resort? The gov’t can create work opportunities not available to the non government sector, such as infrastructure projects, so the private sector can do the construction but the government sorts out the planning etc.
LikeLike
There is a difference though when technology starts replacing brains and not just their capacity to undertake physical work.
Because now you’re replacing / iradictaing skilled repetitive work. That is to say it’s no longer just unskilled repetitive work that is going.
Hence whilst the normal distribution of intelligence is likely to remain constant over time, technology will move along (towards the centre. Beyond the centre?) of the bell curve.
What new technology requires a lot of labour?
LikeLike
Back before the early ’80’s, robots were commonly sold using the pitch that they would eliminate jobs and thereby make doing some function much cheaper. (Robots were called “electronic brains”, “electronic data processing systems”, or “computers” then. But, same thing.)
People fell for that sales pitch.
But by the early ’80’s that pitch had dried to become a dusty joke to all but the densest prospect.
Why?
It never worked out the way the sales guys promised.
Instead, the same number (or more) people put out a lot more product, or a higher quality product. Mostly the latter – so the change didn’t even show up in economic statistics. Stats measured “widgets” without taking account for a widget in one year being a very different thing from a widget from the past. This sort of mistake is still on display now.
And, yes, read some MishTalk comments to prove to yourself there are still people eager to fall for that old sales pitch. Don’t we all want to buy it?
LikeLike
Want a laugh?
Listen to Orlov discussing the Technosphere and freedom.
Some real nuggets in a very abstract discussion.
http://cluborlov.blogspot.co.uk/2017/03/interview-on-legalise-freedom.html
LikeLike
Behold – 3D printed houses!
LikeLike
Chart 17 on page 54 of this:
https://www.bls.gov/mlr/2006/03/art3full.pdf
shows the drop between 1910 and 1970 for farmers and farm laborers. They each started with 16-18% of the labor force and ended at 2%. Call them both together at around 5 percent of the total labor force lost per decade. Gone. Never coming back.
That’s for 6 decades in row, not some one time shot like, for instance, truck drivers.
And, speaking of drivers, scroll to the bottom of:
https://www.bls.gov/cps/cpsaat11.htm
and see there are roughly 4.5 million Driver/sales workers and truck drivers and bus and taxi drivers out of 150 million people today. So, call it 3% of the labor force.
If those driver jobs *all* go away in 10 years it would still be a blip compared to what happened in the past.
Now wind yourself back in 1910. Or 1850. Whatever. Can you, in your wildest dreams, imagine all those farmers losing their livelihood? In a couple generations. All of them. Their livelihood gone. And, unlike those futuristic machine drivers, these people have been doing their jobs, have *been* their jobs not for a measly few decades, but for several thousand years. The farm the work was the difference between living and starving for all that time. Can you even imagine these people doing anything else? They were *born* to farming, *bred* to farming.
What will these people do? Those farmers. Dirt poor they are. Dirt poor they shall always be.
Sure, future tech will affect more than drivers. But that’s an old story. The US has been a post-scarcity society for decades. Imagine machines will take all our jobs? Look around. They did long ago.
LikeLike
I’d think it would really help to see the statistics of all presented graphs from 2000 to today and see if the trend changes and correlates to automation. Maybe someone can present more macroeconomic research on the impact of robots. “Robot at Work” {Georg Graetz, 2015] did a study to 2007. He conclude that robots within manufacturing raised the annual growth of labor productivity and GDP by 0.36 (1993) and 0.37 percentage points(2007). I believe a trend analysts over the years to current years will provide a more useful representation of the conversation of influence keys to employment. I’d love other to share what they have found.
However, according to Bureau of Labor Statistics (“BOLS”) shows that after this period productivity started to slow. BOLS defined labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked of all persons, including employees, proprietors, and unpaid family workers [Bureau of Labor Statistics].
Year Annual
1990 64.720
1991 65.917
1992 68.750
1993 68.847
1994 69.492
1995 69.979
1996 71.861
1997 73.042
1998 75.268
1999 77.730
2000 80.288
2001 82.480
2002 86.055
2003 89.219
2004 91.987
2005 93.875
2006 94.738
2007 96.270
2008 96.966
2009 100.000
2010 103.282
2011 103.406
2012 104.343
2013 104.675
2014 105.501
2015 106.467
2016 106.679
Another issue of similar nature for correlation analyses is more recent preliminary assessment studies (upto 2015) that are counter-intuitive as link between deflation and growth do not suggest a clear negative relationship between the two.
LikeLike
The squirrel looks ahead to winter and saves some acorns for the extreme. Some acorns he plants for the unknowable future. In so doing, he provides for possible future supplies as well as highways of escape to lands distant and full of hope.
LikeLike
Not one mention of the government-privileged usury cartel, the banks, Mish? The means by which so much technology has been unjustly financed? The means by which so many people have been disemployed with what is, in essence, the PUBLIC’s CREDIT but for private gain?
Automation and technology are good but let’s finance them ethically. And no, that does not include needlessly expensive fiat (i.e. a gold standard) anymore than proper government spending includes buying $700 hammers.
When are you going to seriously take on government privileges for the banks, Mish? Or can you even conceive how?
LikeLike
The even bigger govt privilege is for the healthcare industrial complex, which makes more political donations (bribes) than the banksters and military industrial complex. There is a reason you never hear about enforcing EXISTING anti-trust laws on the healthcare industry or tort reform, which would be the biggest solution for lower costs.
LikeLike
It is just extraordinary that the USA cannot make a universal healthcare system, so common to other nations, so expensive for the US. If Trump wanted just one legacy it would ideally be getting a universal healthcare system up and running.
LikeLike
That is to great a discussion on a simple forum like this. But it is simply politically impossible to fix the American healthcare system.
LikeLike
Humans are a resource unlike any other, because of their adaptability. The inclusion of robots increases the total pool of resources. While robots are particularly good at repetitive jobs, their ability to adapt is limited. We will all benefit from the growth of the resource pool, and those humans that adapt the quickest will benefit the most.
LikeLiked by 1 person
” those humans that adapt the quickest will benefit the most.”
I would replace humans with countries, which includes govts. Humans without freedom are limited. Countries that maximize freedom and the equal enforement of the rule of law will have the greatest opportunities, which is why the new financial capital of the world will migrate from NYC to Singapore, HK, or some other place in the East.
Never mind – human can adapt by moving East.
LikeLike
Mish:
I know you’re not a fan of a UBI, however, I am not either if “living wage” is enough for people to be comfortable in their indolence.
A UBI set at the poverty level is a different story. While enough to survive, no one would voluntarily stay at that level, if they have the opportunity to improve their situation without loss of any portion of the UBI.
I agree it’s important to get incentives right, but in a world of rapid change, it’s also important to smooth transitions for a more dynamic workforce.
LikeLike
Much of this technology creates new jobs is built the false assumption that economic growth has no limits. If you believe that I have a few bridges in various cities to sell you. Yes, the great Milton Friedman said that economics was not a zero sum game. He was wrong in a very big way for he never saw the balance sheet. It is a zero sum game and always will be. But, But, the industrial revolution made Britain great again and then America. Well, yes, but what did it do for those countries who had the raw resources the industrial revolution needed? Few individuals realize that the woolen mills increased the need for wool, as supplied by sheep. Ah, sheep herders were needed in an increasing supply. Except they weren’t. Enclosure of the commons and farm land under cultivation reduced the need for agricultural labors. Not all of those laborers got a new job in the woolen mills. Raising wool was more productive for the land owners than raising crops. Why is this not taught in business schools?
Productivity comes from either increased spending or reduced labor costs or both. When we reduce the cost of labor by elimination of labor hours we reduce employment. There is not magic increase in labor need elsewhere. Reducing low skilled labor means that those with marginal labor skills will be priced out of the market. Doesn’t matter whether they were high paid union auto workers or low paid McDonald’s order takers. To be sure, there will be individuals from both groups who may have significant better skills to off but could find no offers in the market place.
Just as pollution is a cost that in the past was never factored into the balance sheet until enough notice was paid, so the cost of technology is seldom factored into that same balance sheet. You know, segregation in this country created higher employment because the black community had to create a parallel economy and duplicate services. The end of segregation started the collapse of the black economy yet our economic text books never mention that economic occurrence. the point is that we pay an economic price for a good many of our social actions (technology being one of those actions) without understanding the results of such actions.
Mish, you are a fool. Technology does destroy jobs. Yes, corporations offshored labor intensive jobs to low wage countries. Yes, automation destroyed many of the remaining jobs. And for those who cite Foxcom, careful what you wish for. They are offshoring jobs from China to lower wage countries while increasing automation in other factories and reducing employment by 80%. So what happened to those jobs that were not offshored? Eliminated by 80%. Where to those eliminated workers find employment? Your guess is as good as mind. And what happened to those jobs in the service sector that supplied services to those employees whose jobs were eliminated? Reduced employment. You talk about the big picture but you ignore all the millions of details as if they don’t matter. Then you can’t understand why your big picture turns out to be distorted.
So let me give you a mental exercise. You are in a group of hunter gathers who have decided that the natural food supply is running out. You and your group decide to become agricultural, so you plan out your community farm. Technological idea number on is to use on big stick instead of a number of much smaller sticks to plow the rows for crops. The big stick takes twelve men to pull it at the sufficient depth to make the sowing of grain viable. But then someone finds a pair of oxen and replaced the twelve men. Oh, they are still needed for the harvest and a few other chores but these twelve men are at best semi employed. So maybe they start to learn other skills such as carpentry and iron working and such. Now they are specialized and can make a living providing these skills and the appropriate wares (houses, horse shoes, nails, plates, etc – consumer goods). But unless the farm community grows the market will soon absorb their services and wares to a point where their services and wares are no longer needed. Consumer societies/economies need an increasing population to sustain the growth of consumption. It is that simple and yet I have read plenty of material that says the opposite without offering any proof of concept. Ultimately all technology is based on a growing customer/consumer population. Yet you believe differently. Well, prove me wrong. That will take a lot of detailed thinking, by the way.
Notice that I have not touched on morality or social norms, all that is irrelevant. Economics is ultimately about consumption. Capital formation is about consumption because it is the means towards the satisfaction of wants and needs in a marketplace. Even hunter gathers are consumers and their marketplace is nature. And when nature fails to provide for their wants and needs they have to go without. The failing of nature may be attributed lack of morality or disobedience to authority or angry gods. Humans love to rationalize away any fault within themselves. But that won’t change the economy for the hunter gathers. Only the forces of nature such as rainfall distribution, average mean sunlight, changing temperature extremes, etc. But nature is not technology nor can it be manipulated as such. On the other hand, we live and die by technology and while we believe we have control over it, don’t be too certain.
LikeLike
Applying the lessons of history would allow us to ride the cycles of business, nature, civil umrest, wars, etc., which could reduce the amplitude of the cycles. Instead, govt tells us they can manipulate the cycles to justify their vote, and we keep repeating the same mistakes. You may appreciate the work done by Armstrong and his Soctaves model – https://www.armstrongeconomics.com.
LikeLike
Thank you Blacklisted for the comment and link. Much of the work on business cycles – see Burns, former chairman of the Fed, was aimed at “predicting” business cycles and thus “preventing” the large swings or any swings for that matter. The problem is one of trying to short cut the “system”. The assumption being that there is a system that has regularities or recursion and thus can be described much like an quadric equation. We plug in the numbers and the answer comes out. But an economy is not a “system”. This is the first mistake that all economists make. It is not a black box or a series of equations that lead to a mathematical model. It is the collective actions of millions of individuals and those actions may have tenuous links to other actions but only temporary links at best. Hence, there is little predictive power in modeling human activity when such activity is imprecise. I remember that BF Skinner once boasted that “if you tell me the reinforcement schedule I can predict the behavior”, found his boast to fall short of the mark. Human behavior is largely unpredictable as far as exactness. Do you eat your breakfast at the precise same time each morning and finish precisely at the same time each day? Maybe to the minute or five minute time spot, but never to the second. and you may decide to eat something different for breakfast and throw the schedule out the window. Even behavioral economics seeks this predictive power that never was. Then we have the problem of what constituted irrational behavior or choice? Ah, one man’s irrationality is not always as irrational as it may seem. It’s called individual variation. Blows the hell out of most “rational” economic theory. the best we can do is to tease patterns out of the data and act accordingly.
Meanwhile I shall visit the site you suggest and see I may gleen.
LikeLike
-The HedgeEye article throws out A LOT OF assumptions and doesn’t provide any figures/numbers to support those assumptions.
– Yes, technology DOES destroy jobs (& demand). Just look at the following example:
– Let’s assume there’s a company that has 100 employees that each earn $ 1000. Then those employees together can spend (100 * $ 1000=) $ 100,000. Then total demand is $ 100,000. This assumes they don’t go deeper into debt.
– That company now increases its productivity and starts to produce the same amount of products/stuff with with only 90 employees and those employees each still earn $ 1000. This means that that same 100 men (and women) now together earn (90 * $ 1000) $ 90,000 and now can spend only $ 90,000. So, total demand now has dropped by $ 10,000 and gone down to $ 90,000. It simply means that the enitre (US) economy sees demand drop by $10,000.
– And it’s that reduced demand that FORCES companies to lower their prices in order to save their turnover.
(Did I use here the words “Federal Reserve” or “government” in the story above ??)
– But increased productivity also hurts the (US) government. In the example above the company has 100 employees for which it must payroll taxes. When the amount of workers drops to 90 then the government will receive for 10 employees less payroll taxes.
– Can this demand be improved ? Yes, by going deeper into debt one can boost demand (for a while). Think: Steve Keen. Or when the population of a country/the US grows then that can also compensate for that reduction of demand.
LikeLike
What if govt and their Corp donors got out of the way and permitted productivity to lower prices/costs?
LikeLike
– What do you mean by “getting out of the way” ?
LikeLike
– It would reduce GDP of the US (or any other country). The government has been running Budget Deficits since say the late 1960s (except for a few years in the late 1990s). That means that that increased debt has created more demand.
LikeLike
Yes, without budget deficits the economy will not grow. Budget surpluses shrink the economy and give rise to recessions. The Bush recession in 1993 was a direct result of the Clinton surpluses a few years earlier.
LikeLike
Willy2
Your example is flawed for several reasons.
1. The reduction in cost is equaled by an increase in corporate profits by the same amount, or
2. The reduction in cost is equaled by a decrease in price, or
3. The laid off workers find alternative work paying about the same amount.
Regarding the US government, under scenario 1 above, there is no reduction in tax revenues, plus adding back in 3, tax revenues increase.
LikeLike
– #1: Agree. But are those increased profits shared with the employees as well (higher wages and/or benefits) ? I have seen too many examples where the answer is a resounding “No”.
– #2: Also flawed. I have seen too many examples where a company was forced to reduce its prices without being able to reduce costs by the same amount.
– #3: Sheer nonsense.
LikeLike
Before the power saw, it once took 20-30 guys to hand saw the lumber to build a house. After the power saw, it took only 3-4 guys to do the same job. Did the power saw steal jobs from people? Yes.
However, it’s not a zero sum game.
1) New jobs were created to build, sell, fix, and maintain power saws including sawblades, extension cords, safety gear, lockable toolboxes, etc. Not to mention, a greater demand for electricity, which created more jobs at the power company.
2) The cost of building declined. This allowed building to become for affordable to more people and businesses. Demand for building grew, and as a result, more construction jobs became available. In other words, the economic pie grew.
The only people who lost, were the people a) whose only skill
was hand sawing lumber, and b) who did not adapt or learn new skills.
I suppose we could ban power saws, and go back to hand sawing lumber. In the short run, some jobs may be gained. But in the long run, many more jobs will be lost.
LikeLiked by 1 person
…and we live in a global economy, where not everyone is stupid and unmotivated.
LikeLike
What if no saws were required?
http://www.zerohedge.com/news/2017-03-04/house-was-3d-printed-under-24-hours-cost-just-10000
LikeLike
Your argument is a bit weak. You know, agricultural machinery was being developed from the early 1820s on. The reapers, harvesters, combines, seed drills, pickers, and the like came into being on commercial basis by 1840. I will let you do a little research on the history of farm machinery. While much has been made that the civil war was fought to free the slaves, it wasn’t. Of course freeing the slaves made a good afterthought and kept the North in occupation of the moral high ground. But the fact being that technology was rapidly rendering slavery ineffective. It would become underproductive and inefficient due to the advance of the technology offered by agricultural implements. Some historians has postulated that by 1880 slavery would have been rendered uneconomic as a production method since the machinery would have superseded the slave labor model. Of course it is difficult to understand that slaves could be “unemployed” but none the less, such would have been the case. On the other hand, small scale farming would still retain the need for a good deal of hand labor since not all acreage lends itself to industrial farming methods.
But your assertion is that power saw technology rendered the hand sawing industry obsolete. Yes, but not straight away. The first power sawn were often water powered. later on they became steam powered. This later technology applied to the felling of trees in forests. The gasoline engine and later the electric motor would power saw mills. But the first saw mill did not instantly lower the price of lumber. It may have made the owner richer due to the enhance productivity but without that second non human powered sawmill there would be no competition and hence no incentive to reduce price in order to gain share. you see, your example is most uneconomical. It ignores supply and demand. Yes, such saw mills and chain saws did decrease the number of workers in the industry and did the constant deforestation (no trees left, no work) but that does not mean that men and women could easily find new work. Not a whole lot of schooling available for retraining. and the other factor is that as individuals lose their jobs, less income is spent on consumer goods meaning that the community as a whole takes a hit. Seems you failed to grasp that tidbit of information.
Yes, electric saws of all kinds facilitated the building of residential and commercial properties, made them cheaper as far as labor content. But that did not necessarily translate into cheaper dwellings since we know the price of land enters into the equation. And there were other variables you forgot to include with your example. Seems you really gave us a very simplistic example based more on ignorance than reason. There is no free lunch and many who rally around the standard of technology seem to believe that technology is a free lunch. Pardon me if I disagree. You are looking at technology with blinders on.
LikeLike
Computers and robots are used to replace mindless work and improve productivity, so why don’t we hear about them replacing govt workers? It would facilitate lower taxes, and eliminate preferential treatment. Further progress could be obtained by making the remaining workers, and the elected officials coming off their short term limits, live within this same system. If you want to see healthcare cost fall like a rock, make govt employees participate in the same system as the rest of us. We would magically get tort reform and anti-trust laws enforced on the healthcare industrial complex overnight. Instead, we will see more protests and civil unrest from mindless sheeple begging for more of what ails us. Maybe this will be considered as part of a new way forward after the big reset.
LikeLike
Federal government employees get some portion of their health insurance paid for by their employer, just like most private corporate employees. Not sure your premise is correct.
We had tort reform put into the state constitution in Florida. Had no effect on health care pricing. In the healthcare market, prices are not related to costs. When you understand why that is, it will be eye opening as to what the real solutions will look like.
LikeLike
Technology only offers advantage to “productive” work. Technology would provide no efficiency gains to government employees as they do very little, and what would be considered productive has already been subbed out or relegated to automation. Government employees only work to perpetuate their own jobs, and those of their cohorts. They constitute a union in every meaningful way, and as unions so often have done, resist anything that would enhance their productivity…if productivity was ever part of their job description.
LikeLike
What destroys jobs?
What destroys jobs?
Not trade, and not automation, those things just shift jobs. But some actions do destroy jobs.
“The fast path to job destruction is to get government involved.
Regulations destroy jobs
Minimum wages hikes destroy jobs
Free handouts destroy jobs
Tax hikes destroy jobs
The fastest way to destroy jobs would be to give everyone a minimum guaranteed “living wage”.
Too many people would be content to do nothing. Taxes would have to go up to support the freeloaders.”
True. While I agree with this post, there is a minor quibble. Jobs are not the way humans have always or even generally redistributed wealth. they are the way we redistribute wealth in the industrial economy, but that is about to end, and it is unclear whether in the next socio-economic model jobs will feature prominently in redistributing wealth or even exist at all. Before the industrial age there were few jobs, and really no wage jobs at all. Why we seem to think we now need jobs to redistribute wealth is beyond me. I suspect it is just because everyone today has been undereducated in school, in this area both public, and private.
So, while I agree with Mish, I also believe that we could see the partial, or even the total elimination of jobs as the primary wealth redistribution tool in the economy. Don’t look to me to tell you what the next iteration of wealth distribution will be. Hell, I’m having trouble just staying out ahead of the idea that we might be in for a total socio-economic model change.
It is my position that one reason this socio-economic shift is so difficult is that it will require a complete change in the socio-economic model, and that is extremely difficult.
Some ideas: the gig economy, independent contractor economy could eliminate nearly all “wage jobs” turning everyone into an owner of their own business, even if that business were only their own labors. Also, wealth may be redistributed through asset ownership, particularly through accounts like IRAs, HSAs, etc. If so, Congress should make these as simple and streamlined as possible, and make them universal. Faster please.
If you have ideas, I would love to hear them.
Mark Sherman
LikeLike
We are being replaced by automation, by importation and illegal immigration, and it is being allowed BY US because we like the cheap shit, and because our banks are providing cheap credit to buy what we cannot earn, and redistribution of wealth from workers to those who cannot earn, and through government debt which is used to pay us to not work, to demand MOAR for LESS.
There is much debate about the legalization of some drugs, but we fail to understand we have been lulled into an addiction of debt and denial that has allowed us to ignore the truth of our circumstances. This delusion of prosperity fueled by debt is as destructive as any narcotic that numbs our pain or heightens our euphoria.
LikeLike
well said, your final paragraph. It’s all due to crash so there will be a helluva correction that we have ordained for ourselves. We live lies. We believe the lies and the superstitions everyday around us. There’s no time now for solutions even if we chose wisely [and who would recognise wisdom?]
LikeLike
The average person talks primarily about other people. The intellectual talks primarily about issues. The above average mind thinks about ideas, and the truly insightful individual is able to perceive how new ideas, if generally held and integrated into present paradigms, could actually and truly enable human progress.
LikeLike
Why did my post get deleted?
LikeLike
“The technological revolution we have seen in the past 30 years has been unparalleled and exponential, and there are more jobs, better salaries.”
Tell that to the 95 million Americans not working. Tell that to the shrinking American middle class.
“The idea that technology will destroy jobs starts with exaggerated estimates – as always – with the objective of presenting a world in which there must be an intervention – fiscal, of course – from governments”
Robotics and AI is not simply technology. It is not one man with a back hoe replacing 10 people with shovels, who simply go on to some other form of construction work or some other kind of work. At some point, robotics/AI will be able to do anything. Food will be able to be planted, harvested, processed, shipped, delivered, with no human intervention.
There would also be no cost, if everything was done by robotics/AI. Farm equipment designed and built by robots at no cost, etc.
I have never presented this as a future with government fiscal intervention in mind.
LikeLike
ZIRP enabled technology is a new element.
It is different this time and not in a good way.
If nothing ever recovers it’s capital cost before being scrapped do we make up for it in volume?
Is arithmetic obsolete?
LikeLike
“At some point, … will be able to do anything”
Which was a Karl Marx concern 170 years ago. And the same tune has played before and since. But, *this* time it’s different?
Well, it is interesting how some people don’t believe all these wonderful, labor-saving miracles will ever happen. So they figure the world is doomed. And others figure these miracles are a done deal. So their world is doomed.
LikeLike
Wish, I follow and read your blog frequently. I also agree with your views on technology. I agree that government usually creates issues and that their best interest does not coincide with the general publics. I also agree with you Mish, that people who do lose jobs usually want and need them dearly. I don’t agree with the premise that technology doesn’t destroy jobs. Technology most certainly destroys jobs. Lets take the industrial revolution as an example, it destroyed jobs, but created more new ones. The country started progressing to a more “service” oriented society and away from manual labor. I also agree that truck drivers will lose jobs in the next few years. Yet another example of jobs losses. The discussion here is more so on if technology will create more new jobs as it has done in the past. This is the first time that any technological advancement is replacing the human brain and intellect, so comparing it to other technological discoveries/advancements is not really an apples to apples comparison. Ultimately technology is deflationary. It drives the cost of goods and services down. Maybe this spurs more small business and provides for more decentralization in a variety of sectors? I do not know where the jobs will come from in the future either. I def don’t have the answers. If manual labor has been automated away, very minimal use in factories, for the last 100 years and now the human intellect is being automated away, then what else is remains? There isn’t one sector of the economy that isn’t at risk for having jobs being automated away. I will say this, the solution is not to fight the change. That never works.
LikeLike
Mish – not Wish. Apologies.
LikeLike
Much of the confusion in this discussion has to do with semantics. A “job” cannot be destroyed, because no such thing exists.
People talk about having a “job”, but what they really mean is that they have a position with a company and they are expected to fill various roles associated with that position. These roles are constantly changing, with changes in technology, experience, and demand for the product or service. Because functions are constantly changing, the individual must adapt or lose his position.
The addition of robots to the equation requires a step up in adaptation. Robots can exceed the skills of humans in only a limited range, which will constantly evolve, while humans must adapt by focusing on skills outside robots’ capabilities. This can be within the same organization or elsewhere. As long as the contribution by the human exceeds the all-in cost of employment, humans will always find work.
Attempts by government to force retention will backfire, by increasing the all-in costs of new hires.
LikeLike
McLuhan said it was a change from jobs to roles, if you want read his work. A role by definition is broader. The job represents something we do during an eight hour day, which is separate from who we are, when we leave that job and go home, while the role represents something we are at all times and in all places. The question is how do you run an economy based on roles rather than jobs? Entertainment is counter-irritant to the stress of work, so it no longer makes sense, and at the core of the media revenue is advertising. So the question is, advertising what?
LikeLike