I feel his article leaves out some fundamental political aspects of the situation like I brought together in "Beyond a Jobless Recovery: A heterodox perspective on 21st century economics"). His article of course assumes consumer demand is infinite (despite Maslow's hierarchy of needs suggesting people more to more low-cost self-actualization activities over time). It assumes that the business benefits of employing a human will always outweigh the costs for many jobs (despite strikes, lawsuits, quality, illness, turnover). It assumes humans will always have special advantages over AIs and robots. It ignores whether some aspects of the economy (like long pipelines to become a professor) are really needed or are just protectionism. It ignores the social impact of rich/poor divides on working conditions and the operation of a capitalist economy itself. It ignores the value to the worker of the intrinsic nature of the work (i.e. some people may just be less happy in service jobs compared to agriculture or manufacturing). It ignores deeper issues of rethinking work as play (like Bob Black wrote about). It also ignores (incidentally, in relation to humans vs. robots) that "comparative advantage" only applies theoretically when you have "full employment". The article jumps between proving some points with numbers and then making other points as "strong hunches" or by quoting suggestions about technological unemployment from fifty years ago (quoting Herbert Simon). His prescription is of course mostly just more "education" — which is nice job security for a professor.:-) But, within those sorts of limits, it's an excellent article which makes many good points, especially about the dynamics of economic networks as different parts of them are automated. The article has many interesting facts and figures. His points on how jobs are a mix of tasks which different near-term prospects for automation is excellent. And his point about human jobs changing as people work together with automation is well made. So, his article provides a good base for further study and/or rebuttal of the mainstream position. His article could be a good starting point for anyone writing an economic simulation, to see what really happens to economic networks based on distributing the right to consume based on perceived contribution to production as such networks undergo severe stress from automation.
Paul Fernhout writes: Mark Bittman wrote an op-ed in the New York Times suggesting a basic income as a solution to increasing automation leading to job loss. He concludes: "We have achieved a level of social equality barely imagined by progressives 50 years ago, but economic equality has gotten much worse. No one knows what the world will look like in 50 years, but if we resign ourselves to dystopia — in which capital has full control, as it nearly does now — we'll surely have one. Let's resolve to build something better. In the long run we know that we'll make the transition from capitalism to some less destructive and hopefully more just system. Why not begin that transition now? If there is going to be a global market that will further enrich capitalists, there must be guarantees that the rest of the population can at least afford housing and food. And things can be even better than that: We'll have the robots work for us."
Paul Fernhout writes: An article in the Harvard Business Review by William H. Davidow and Michael S. Malone suggests: "The "Second Economy" (the term used by economist Brian Arthur to describe the portion of the economy where computers transact business only with other computers) is upon us. It is, quite simply, the virtual economy, and one of its main byproducts is the replacement of workers with intelligent machines powered by sophisticated code.... This is why we will soon be looking at hordes of citizens of zero economic value. Figuring out how to deal with the impacts of this development will be the greatest challenge facing free market economies in this century.... Ultimately, we need a new, individualized, cultural, approach to the meaning of work and the purpose of life. Otherwise, people will find a solution — human beings always do — but it may not be the one for which we began this technological revolution."
This follows the recent Slashdot discussion of "Economists Say Newest AI Technology Destroys More Jobs Than It Creates" citing a NY Times article and other previous discussions like Humans Need Not Apply. What is most interesting to me about this HBR article is not the article itself so much as the fact that concerns about the economic implications of robotics, AI, and automation are now making it into the Harvard Business Review. These issues have been otherwise discussed by alternative economists for decades, such as in the Triple Revolution Memorandum from 1964 — even as those projections have been slow to play out, with automation's initial effect being more to hold down wages and concentrate wealth rather than to displace most workers. However, they may be reaching the point where these effects have become hard to deny despite going against mainstream theory which assumes infinite demand and broad distribution of purchasing power via wages.
As to possible solutions, there is a mention in the HBR article of using government planning by creating public works like infrastructure investments to help address the issue. There is no mention in the article of expanding the "basic income" of Social Security currently only received by older people in the USA, expanding the gift economy as represented by GNU/Linux, or improving local subsistence production using, say, 3D printing and gardening robots like Dewey of "Silent Running". So, it seems like the mainstream economics profession is starting to accept the emerging reality of this increasingly urgent issue, but is still struggling to think outside an exchange-oriented box for socioeconomic solutions. A few years ago, I collected dozens of possible good and bad solutions related to this issue. Like Davidow and Malone, I'd agree that the particular mix we end up will be a reflection of our culture. Personally, I feel that if we are heading for a technological "singularity" of some sort, we would be better off improving various aspects of our society first, since our trajectory going out of any singularity may have a lot to do with our trajectory going into it.
Paul Fernhout writes: Nick Hanauer's a billionaire who made his fortune as one of the original investors in Amazon. He suggests President Obama should restore US overtime regulations to the 1970s to boost the economy (quoted by PBS NewsHour): "In 1975, more than 65 percent of salaried American workers earned time-and-a-half pay for every hour worked over 40 hours a week. Not because capitalists back then were more generous, but because it was the law. It still is the law, except that the value of the threshold for overtime pay--the salary level at which employers are required to pay overtime--has been allowed to erode to less than the poverty line for a family of four today. Only workers earning an annual income of under $23,660 qualify for mandatory overtime. You know many people like that? Probably not. By 2013, just 11 percent of salaried workers qualified for overtime pay, according to a report published by the Economic Policy Institute. And so business owners like me have been able to make the other 89 percent of you work unlimited overtime hours for no additional pay at all.
The Obama administration could, on its own, go even further. Many millions of Americans are currently exempt from the overtime rules--teachers, federal employees, doctors, computer professionals, etc.--and corporate leaders are lobbying hard to expand "computer professional" to mean just about anybody who uses a computer. Which is almost everybody. But were the Labor Department instead to narrow these exemptions, millions more Americans would receive the overtime pay they deserve. Why, you might ask, are so many workers exempted from overtime? That's a fair question. To be truthful, I have no earthly idea why. What I can tell you is that these exemptions work out very well for your employers....
In the information economy of the 21st century, it is not capital accumulation that creates growth and prosperity, but, rather, the virtuous cycle of innovation and demand. The more innovators and entrepreneurs we have converting ideas into products and services, the higher our standard of living, and the more people who can afford to consume these products and services, the greater the incentive to innovate. Thus, the key to growth and prosperity is to fully include as many Americans as possible in our economy, both as innovators and consumers.
In plain English, the real economy is you: Raise wages, and one increases demand. Increase demand and one increases jobs, wages and innovation. The real economy is simply the interplay between consumers and businesses. On the other hand, as we've learned from the past 40 years of slow growth and record stock buybacks, not even an infinite supply of capital can persuade a CEO to hire more workers absent demand for the products and services they produce.
The twisted irony is, when you work more hours for less pay, you hurt not only yourself, you hurt the real economy by depressing wages, increasing unemployment and reducing demand and innovation. Ironically, when you earn less, and unemployment is high, it even hurts capitalists like me...."
If overtime pay is generally good for the economy, should most IT professionals really be exempt from overtime regulations?
Paul Fernhout writes: Caroline Murray reports for the Sacandaga Express: "Just this year, the Broadalbin-Perth Central School District completed Phase 1 of a plan to install high-tech security cameras in every school across the district. For the first time, high school and middle school students started off the school year with security cameras pointed at them from every direction, including hallways, staircases, and public rooms, such as the cafeteria and gymnasium. For some veteran students, the cameras feel a bit invasive. "It is like '1984' with big brother," senior Hunter Horne said while walking down the hallway.... Superintendent Stephen Tomlinson said safety is the driving force behind the technology, however, admitted student behavior also plays a role in utilizing the equipment. Tomlinson said students have rights, and he wants to respect their privacy, but their rights change when students step foot on school grounds.... Tomlinson said he already notices the culture has changed in the high school. He believes the amount of bullying and vandalism in the hallway is greatly reduced already. Gennett said faculty and teachers have peace of mind now, knowing the entire school is under surveillance. "It would be very difficult to find a location in our buildings where you can hide, or you can go, and intentionally do something that is not acceptable in our buildings," Tomlinson said. Some of the administrators view the security cameras as entertaining. Seniors Smith and Horne said certain staff members will call-out students over the loud speaker, and tell them to take off their hats."
One question not addressed in the article is whether forcing a child to submit to total one-way surveillance is a form of bullying or in some other way a vandalism of privacy or democracy? See also David Brin's "The Transparent Society" for another take on surveillance, where all the watchers are also watched.
Paul Fernhout writes: Just noticed this two-year old Atlantic article on how US Millennials (aka Generation Y) are not buying houses or cars as much as previous generations, but are buying smartphones instead and using those phones to get on-demand access to things like Zipcars or other "sharing economy" services. It says: "In 2010, adults between the ages of 21 and 34 bought just 27 percent of all new vehicles sold in America, down from the peak of 38 percent in 1985. Miles driven are down, too. Even the proportion of teenagers with a license fell, by 28 percent, between 1998 and 2008.... Just as car sales have plummeted among their age cohort, the share of young people getting their first mortgage between 2009 and 2011 is half what it was just 10 years ago, according to a Federal Reserve study.... Smartphones compete against cars for young people's big-ticket dollars, since the cost of a good phone and data plan can exceed $1,000 a year. But they also provide some of the same psychic benefits — opening new vistas and carrying us far from the physical space in which we reside.... If the Millennials are not quite a post-driving and post-owning generation, they'll almost certainly be a less-driving and less-owning generation. That could mean some tough adjustments for the economy over the next several years.... Education is the "obvious outlet for the money Millennials can spend," Perry Wong, the director of research at the Milken Institute, told us, noting that if young people invest less in physical things like houses, they'll have more to invest in themselves. "In the past, housing was the main vehicle for investment, but education is also a vehicle." In an ideas economy, up-to-date knowledge could be a more nimble and valuable asset than a house."
Of course, education via the internet or through FOSS educational simulations may not cost that much either. Also, we are also seeing the bubble on student loan borrowing nearing the bursting point, where more and more young people are deciding to bow out of the entire academic credentialing arms race given the uncertainty of a financial return on such an investment (as much as education via schools or other venues may have other non-financial benefits).
Paul Fernhout writes: ExtremeTech reports that "Andrea Rossi's E-Cat — the device that purports to use cold fusion to generate massive amounts of cheap, green energy — has been verified by third-party researchers, according to a new 54-page report. The researchers observed a small E-Cat over 32 days, where it produced net energy of 1.5 megawatt-hours, or "far more than can be obtained from any known chemical sources in the small reactor volume." The researchers were also allowed to analyze the fuel before and after the 32-day run, noting that the isotopes in the spent fuel could only have been obtained by "nuclear reactions"..."
Paul Fernhout writes: Lee Gomes at Technology Review wrote an article on the current limits of Google self-driving car technology: "Would you buy a self-driving car that couldn't drive itself in 99 percent of the country? Or that knew nearly nothing about parking, couldn't be taken out in snow or heavy rain, and would drive straight over a gaping pothole? If your answer is yes, then check out the Google Self-Driving Car, model year 2014. Google often leaves the impression that, as a Google executive once wrote, the cars can "drive anywhere a car can legally drive." However, that's true only if intricate preparations have been made beforehand, with the car's exact route, including driveways, extensively mapped. Data from multiple passes by a special sensor vehicle must later be pored over, meter by meter, by both computers and humans. It's vastly more effort than what's needed for Google Maps.... Maps have so far been prepared for only a few thousand miles of roadway, but achieving Google's vision will require maintaining a constantly updating map of the nation's millions of miles of roads and driveways. Urmson says Google's researchers "don't see any particular roadblocks" to accomplishing that. When a Google car sees a new permanent structure such as a light pole or sign that it wasn't expecting it sends an alert and some data to a team at Google in charge of maintaining the map.... Among other unsolved problems, Google has yet to drive in snow, and Urmson says safety concerns preclude testing during heavy rains. Nor has it tackled big, open parking lots or multilevel garages.... Pedestrians are detected simply as moving, column-shaped blurs of pixels — meaning, Urmson agrees, that the car wouldn't be able to spot a police officer at the side of the road frantically waving for traffic to stop...."
A deeper issue I wrote about in 2001 is whether such software and data will be FOSS or proprietary? As I wrote there: "We are about to see the emergence of companies licensing that publicly funded software and selling modified versions of such software as proprietary products. There will eventually be hundreds or thousands of paid automotive software engineers working on such software no matter how it is funded, because there will be great value in having such self-driving vehicles given the result of America's horrendous urban planning policies leaving the car as generally the most efficient means of transport in the suburb. The question is, will the results of the work be open for inspection and contribution by the public? Essentially, will those engineers and their employers be "owners" of the software, or will they instead be "stewards" of a larger free and open community development process?"
Paul Fernhout writes: This explanatory compilation video by CGP Grey called "Humans Need Not Apply" on structural unemployment caused by robotics and AI (and other automation) is like the imagery playing in my mind when I think about the topic based on previous videos and charts I've seen.
While I like the basic income idea, I also collect other approaches in an essay called Beyond A Jobless Recovery: A heterodox perspective on 21st century economics. Beyond a basic income for the exchange economy, those possible approaches include gift economy, subsistence production, planned economy, and more — including many unpleasant alternatives like expanding prisons or fighting wars as we are currently doing. Marshall Brain's writings like Robotic Nation and Manna have inspired my own work.
I made my own video version of the concept around 2010, as a parable called "The Richest Man in the World: A parable about structural unemployment and a basic income". At 1:02 in the video I made, there is a picture of a robot near a sign "Humans Need Not Apply". The text there is: "Soon everyone was out of work. The politicians and their supporters said the solution was to lower takes and cut social benefits to promote business investment. They tried that, but the robots still got all the jobs."
Paul Fernhout writes: MetaFIlter recently announce layoffs due to a decline in ad revenue that started with a mysterious 40% drop in traffic from Google on November 17, 2012, and which never recovered. Danny Sullivan at SearchEngineLand explores in detail how MetaFilter "serves as a poster child of problems with Google’s penalty process, despite all the advances Google has made over the years." Caitlin Dewey at the Washington Post puts it more bluntly: "That may be the most striking, prescient takeaway from the whole MetaFilter episode: the extent to which the modern Web does not incentivize quality."
Paul Fernhout writes: I just received an email from the LATimes they will apparently be discarding all previous user comments tomorrow as they transition to a new commenting system. They are giving about one day to "save your work". What does this example mean about trusting our content to third-parties, even ones that one might otherwise presume to be a "Newspaper of Public Record"?
The main text of the email: "Thank you for being a part of the latimes.com community. We're committed to providing a forum for meaningful discussion about the topics we cover and have upgraded our commenting system. As of Thursday, February 27, we are giving our readers better ways to connect and communicate, using improved tools to help keep debates spirited, but not mean-spirited. More details will be available at launch on latimes.com/readers. As we bid goodbye to our old system, past comments will not be carried over. If you'd like to save your work, we encourage you to do so before February 27. We look forward to hearing from you at latimes.com. Jimmy Orr, Managing Editor, Digital"
Paul Fernhout writes: According to Andy Borowitz: "Bill Gates's first day at work in the newly created role of technology adviser got off to a rocky start yesterday as the Microsoft founder struggled for hours to install the Windows 8.1 upgrade.... After failing to install the upgrade by lunchtime, Mr. Gates summoned the new Microsoft C.E.O. Satya Nadella, who attempted to help him with the installation, but with no success."
I've read before on Slashdot that Vista took the hate for buggy drivers after big changes from XP. After that all got sorted out, lots of people praised Windows 7. Might we see the same thing here with a more stable Windows 9?
Paul Fernhout writes: CNet wrote: "Hackers hit crowd-funding site Kickstarter and made off with user information, the site said Saturday. Though no credit card info was taken, the site said, attackers made off with usernames, e-mail addresses, mailing addresses, phone numbers, and encrypted passwords."