Topic: Rise of the Robots -- Paul Krugman (Read 2640 times)

http://www.youtube.com/watch?v=kYIfeZcXA9U

TEDxVienna - Federico Pistono - Robots Will Steal Your Job, but That's OK

http://www.youtube.com/watch?v=Ie5zO-mF31M (Potentially NSFW...ironically?)

Workers of the world...Relax!

Ok, I think we are talking about 2 different things here 1) how capital would be distributed across the population & 2) how the economy would work (which I was addressing before).  

I did not first realise your emphasis/concern on nr.1 (I read a little too quick).  Like you said in your own post, if the market forces would drive a strong positive feedback loop of capital gaining more capital, and lack thereof leading to ever more poverty then either A) a lot of poverty will exist or B) there will be sufficient offsetting measures for wealth redistribution (like taxes etc.).  It will just be a more extreme form of the thug of war that has allways existed somewhat between rich and poorer people I guess, one group believing it is unfair that their property is being taken from them, the other group believing it is unfair that they have little property and little possibility to escape from this position. (remember I am talking about an extreme future scenario in which lack of available work would deny a poor person the ability to gain capital for himself, I am not talking about the present situation in which savers and taxpayer money is being funneled to wall street banks...).

Now if there was some sort of good resolution, everybody could have their own robots, and nobody would have to worry about a thing :-), tadaa: singularity-like utopia.  (provided population growth is halted, and everybody's needs could be provided for sustainably).
This is all pretty pie in the sky though, who knows how it would play out...

If this comes to pass you ARE the government. This is an instant autocracy, and maybe even a theocracy if you are into people worshiping you. Set the rules for the sustainment of the people that you like.

Take a slightly less extreme case and you end up in an oligarchy.

Take a messy, fractious bunch of folks arguing amongst themselves (like we actually have today) and play it forward to this level of technology, and we will have a messy fractious set of possible solutions being played out including some interesting communist and socialist experiments as well as markets with regulated competition, and likely at least a few oddballs or free-zones, especially if we go interplanetary.

There are many solutions to this problem, and I'm sure some of them are beyond imagination today.

Just because you have a machine that can make any material object does not mean an end to labor, it will not invent NEW things, create the BEST music, the most AUTHENTIC hobby/folk crafts, the most time consuming work of art, the joy of time with family, experiences in nature, trendsetting, communication, politics, travel and cultural exchange, historical, theoretical, or practical science, or any number of undertakings that define the human condition. As we have seen, a rising standard of living increases the desire for luxuries, inventing new ones will be a lucrative job in itself. Just because nobody is having to slave away in a sweatshop (at least in the neighborhood of earth...) does not mean the end of labor, simply the end of manufacturing as we know it.

You can make robots and satisfy your own needs, but others can not since they are not smart enough to make robots, what can they do? To replace their brain?

A single top of the line Virtex 7 retails for about $30k (or about $6-9k in duties per chip) so it sounds like it would really pay to stay domestic somewhere in the lower range of the chip-cost scale. Good info, thanks!

(yes I know that there is a big markup, discounts and optimizations to be had, but you can only go so far)

I still don't see the problem.  Why do you insist on the need for people to buy your stuff in this hypothetical scenario?  Trading is a solution to satisfy your own needs (and do so more efficiently), it is not a goal in itself.


Because personal computers only became mainstream since Bill Gates and Steve Jobs were retards? 

That is the problem, if you could not sell your stuff, the only thing you can do is reduce the production. Already since 100 years ago, social welfare system has been taken great steps in creating those consumptions to digest the excessive production power

Of course there will be jobs for software and robot design, but that kind of job is mostly outsmart majority of people's IQ, so it won't solve the whole problem

Just saw in the other post that most of the BTC developers and miners' IQ are well above average, that is the reason BTC won't go mainstream

People may lose their jobs in the short term, but in the long term, people are freed from doing menial tasks and are given the opportunity to do more productive work. This process has been going on for a few 100 of years and it has worked out quite well so far.


It will diminish the relative value of manual labor. This is the problem with Krugman's brain fart -- He seems to equate unskilled manual labor and skilled labor. He is wrong. There will always be an increasing need for skilled labor. Somebody has to design the robots, and somebody has to come up with better designs. Capital doesn't just organize itself. Somebody has to figure out how to utilize the capital and somebody has to come up with more efficient ways to utilize capital.

If this were ancient Egypt, Krugman would have declared that the inventions of levers and pulleys meant the end of civilization. Imagine all those laborers being put out work! What would people do?

Yes, I've seen it. The architect of the garden and grounds is the same guy that designed several public parks in my city, and the similarities are notable.  Again, his bedroom was wallpapered in gold.  Actual gold, not gold colored paper; but actually gilded paper.  The gold in that room was worth about  a million dollars alone.  To attempt to build something like Biltmore today would destroy America's most richest men today, even considering that many of the construction techniques used in Biltmore were invented there, and that he literally founded an air conditioning company that still exists. (the name of which escapes me at the moment).

Bang on, me too. I guess Krugman is open to rethinking his opinions.

Some overlooked facts:
With automation comes lower prices and job losses and with job losses come less spending power, in a free market this is natural and not of much concern, as there will be a more flexible and innovative workforce, who can benefit from the lower prices.

The described problem is paradoxical if you are responsible for managing the economy and responsible for offsetting the benefits of automation with inflation.

This is a fact that is the key to resolving the problem as this mechanism is primarily responsible for creating monopolies in that  it concentrates the land that would naturally belong to everyone in the hands of a few. Inflating the money supply (causing price inflation) in turn puts pressure on inherited assets like land to be liquidated to create usable wealth causing land to move to the wealthy few.  The result is a land oligopoly and a rent tax on a growing population. This tax is then the cause of poverty as it is the inhibitor to the flexibility and ingenuity of the workforce that are the result of being displaced by automation.  (Now to be  subjected to rental slavery)

Automation is good for us all it isn't a problem but a benefit, who gets the benefit is the problem.  (The benefit to date has been used to offset inflation)

The problem is exacerbated by low interest rates that create capital for investment in automation at the expense of creating jobs for the majority, and then encourage consumption of economic benefits with borrowed money.

It's not that dramatic since it actually is a more gradual change towards decentralization.
There won't be all of a sudden a complete industrial production chain on your desk.
There still will be lots of work to do, and since products get more complex and complex there still will be plenty of jobs.

In integrated circuit and software design alone there is virtually limitless thirst for human resources, if nothing else most current jobs will be abstracted into those two categories. But it's a long way to get there.

I think you are thinking too much as an economist, which tends to cloud common sense :-) (just look at Krugman).
In the extreme case: if robots can produce everything and do all the work, and you own all the robots, why on earth would you want to sell anything to anybody?
The only reason you sell things to others is so you can have goods or services from them in return (or promises for such things in the future).  If all your needs are being fulfilled, where is the need to sell stuff?

 

   We can't say that we didn't see this one coming.

I toured a PCBA (PBC assembly) USA shop 2.5 years ago and even then the entire line is run by robots.  There is a guy who keeps the chips feeding into the pick-and-place machine and another at the end sitting at a computer the shows live snapshots of photos of the chips soldered onto the board.  The computer only shows a few snapshots per 10-20 boards -- the optical system can automatically determine the quality of the soldering for most pads.

Then there are maybe 10-20 "rework" stations where squint-eyed old retired ladies fix any issues with tiny solder irons.  I remember months ago that some people in these forums actually laughed at photo of a grandma holding up a BFL board but believe me that person was probably the best!

The CEO explained that the cost was about 4-5 times that of overseas and complained that the overhead wasn't the salaries but compliance with all the rules and regulations... but that is one single operator so maybe their mileage differs.

Personally, I've discovered in some forays into PCB assembly that one key cost factor is actually import taxes into China.  You have to pay 20-30% of the value of the the CHIPS just to import them into China to get them soldered onto a board and then sent right back out of the country!  So the boards that tend to be fabricated domestically are ones with very high value chips.  This observation is consistent with what I saw coming off the line during my tour.  While the consumer market is overrun with really cheap chips, $500-$2000 single chips certainly still exist in telecom applications.

So this guy seems way off the mark to me...

I am just concerned, with so many people lost their job to robots, how would the total consumption power of the society become?

Take an extreme case, if one person in a country own all the robot and these robot in turn make other robot to do all the work, then to whom could he sell his products? All the other people are jobless and without income, they live at social welfare level. His production will continuously shrink until it mets the demand from all the other people's consumption at lowest social welfare level, and those social welfare handouts are coming from his own production too (in tax form)

More abstractly, it is like: I made $100 worth of goods, sell them for $100 and paied $50 tax to government, and government give those $50 to other people to buy my $50 worth of goods, so half of the income I made is actually my own money which is paid to government as tax, I just earned my tax money back again and again

Or if your poverty level is still (in many ways) better than middle-class was in America for your grandfather or great-grandfather.



Ever taken the tour? My wife and I went last year. That place is insane. Something like 4 acres *under the roof*.

I have these nifty wooden shoes we can use!

It always has, and that is the primary reason that nations that surged during and after the industrial revolution and information age are rich societies today.  It matters very little that the lowest paying job in America is poverty level, if your poverty level is still (in many ways) better than middle class for the bottom third of the world.  The greatest wealth disparity that this country has ever faced, however, was during the Industrial Revolution, and we managed to do just fine throughout that.  The largest single family home in the US was built during this time period, by a child of one of the greatest industrial minds in history; for himself, his wife, his only daughter and roughly 50 of his house help.  His bedroom was literally wallpapered in gold.  Only a few generations later and most of that wealth had dispersed across many decendents, pushing most of them back into the middle class.

http://en.wikipedia.org/wiki/Biltmore_Estate

My god, I find myself largely agreeing with Paul Krugman, what has the world come to !!  :-)

Seems like a fair assessment that automation will diminish the relative value of labor versus capital, and will on average increase the difference between the haves and the have-nots (until/unless wealth redistribution takes place).  It should increase overall wealth though.

If you are going to copy and paste the entire article you could at least give a link to the source:
 - http://krugman.blogs.nytimes.com/2012/12/08/rise-of-the-robots/