The Software Revolution

An anonymous reader writes: Y Combinator president Sam Altman writes about how the third great technological revolution — which he calls the software revolution — is affecting the world economy. He says, "It appears that the software revolution will do what technology usually does—create wealth but destroy jobs. Of course, we will probably find new things to do to satisfy limitless human demand. But we should stop pretending that the software revolution, by itself, is going to be good for median wages.

Trying to hold on to worthless jobs is a terrible but popular idea. Trying to find new jobs for billions of people is a good idea but obviously very hard because whatever the new jobs are, they will probably be so fundamentally different from anything that exists today that meaningful planning is almost impossible. ... The second major challenge of the software revolution is the concentration of power in small groups. ... I think the best strategy is to try to legislate sensible safeguards but work very hard to make sure the edge we get from technology on the good side is stronger than the edge that bad actors get."

Comments

Re: Software is the wrong villian here.

[Pfhorrest]

Christian law also prohibited usury for the longest time. (Until around the Protestant Reformation).

It's the reason Jews were villainized as greedy schemers: Christians (in Christian lands) were legally prohibited from lending at interest, but Jews (not being bound by Christian law) could, meaning that they were the only ones doing it, and getting all the flak for it.

Even then though, and still today in the Muslim world, there were complicated work-arounds involving a combination of an "interest-free" loan, insurance, and rental, which created in effect a loan at interest, and is part of why the Christian world eventually let up on prohibitions of usury, because it was effectively happening anyway despite the prohibition of it. The loophole there, as I see it, was failing to see that rent is precisely the same thing as lending at interest, or rather, that interest is a special case of rent: it's just rent on money.

In any case you're lending capital temporarily in exchange for a permanent transfer of even greater capital back to you, which causes the problem of wealth concentration, redistributing wealth from those who have less of it (and thus need to borrow it) to those who have more of it already (and thus can afford to lend it out), which has the secondary effect of requiring those with less of it to labor for those with more of it in order to continue borrowing to survive, in effect creating perpetual servitude of a working class to an owning class.

And when technological revolutions make labor less valuable, that kind of class division becomes unsustainable, and either the working class has to just die off, or take some capital for themselves by force —unless everyone can see the undesirability of either of those outcomes, and change the system somehow to let the capital flow back from the leisure class to the labor class, as it naturally would without such concentrating influences as rent and interest.

Re:Or how about no jobs?

[Dutch Gun]

"The market will find a way" is a reasonable truism, but I'm not convinced that people really know what it means. What many people misunderstand, I feel, is that the market is as viciously Darwinian as biological evolution is. That is, "the market will find a way" may bankrupt companies, or even entire industries, leaving many people out of work. It's not a promise of a positive outcome, but if given a chance, people *may* find new markets and opportunities for themselves. Note that, in fairness, there's no reasonable way to answer your question, because that's like trying to predict future inventions or trends - just like it would be impossible to predict what evolutionary trends would be successful until they're tried out.

Anyone who has any sort of understanding how cruel nature is can also understand why we can't leave *everything* to the tender mercies of the market, because it values profit and efficiency above everything else. That's fine, so long as we understand that capitalism is exclusively an economic system, and doesn't really concern itself with humanitarian or other non-economic issues.

As such, we have to put reasonable rules, limits, and restraints on the market, in order to make sure things we value aren't sacrificed on the alter of profit. The trick is to find the proper balance between over and under regulation. Over-regulate, and you quash innovation and genuine enterprising spirits that would otherwise generate wealth and prosperity. Or, you can simply price yourself entirely out of global markets that choose not to regulate as you do. Under-regulate, and you allow exploitation and shady practices to flourish, because cheaters have an inherent advantage against those who don't choose to cheat.

I think that many conservatives, having grown up in an era with fairly strict government regulation over most of industry, tend to see many areas of over-regulation that comes from the natural growth and spread of nearly any large bureaucracy like the government, and see what harm it causes in massive waste and inefficiency. This is especially true if you run your own business, or are involved in the running of a business. It's no real surprise that small business owners tend to be politically conservative. However, they probably haven't really seen first-hand what businesses would do without fairly strict governmental oversight, as has happened in the past here in the US, or still happens in other parts of the world.

Re:Free market without capitalism

[Pfhorrest]

The Wikipedia article on libertarian socialism gives a good overview itself and has an extensive external links section with further resources. One other topic that I find particularly lacking from that though is distributism, but it's got its own good article with further reading too. I should note however that there are a lot of different variant strains of thought in that general area of libertarian socialism, and that I personally don't agree entirely with any one of them; I think they've all got some nice ideas but also their own share of flaws. I just like the general approach and wish there would be more mainstream dialogue with these kinds of ideas.

My personal flavor is essentially the same as the usual right-libertarian concept of a propertarian free market (that is to say, a market where rights to private property ownership are recognized), minus contracts of rent (including interest) —possibly minus contracts in general (besides simple transfers of ownership), but I'm less certain on that point — because I believe rent and interest are what cause the runaway concentration of wealth that turns a free market capitalistic, and that without them there would be a natural tendency for wealth to flow from those with more to those with less (the natural cost of the leisure those with more wish to enjoy); and that rent and interest can be abolished as widespread economic instruments without the use of any kind of authoritarian force, simply by refraining from the current use of authoritarian force to enforce such contracts, leaving such arrangements legally unprotected and thus unsuitable for general use as economic instruments (but still strictly speaking legal for trustworthy partners to engage in themselves if they choose).