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:Citations?

[Maxo-Texas]

Actually... the industrial revolution resulted in a severe disruption for workers with many dying homeless, of starvation or exposure.

Then the generation AFTER them did okay and we simply forgot about those who literally died of effects of the industrial revolution.

This could be very similar. A generation of misery and then the one after that has different expectations and training.

The trend has been pretty ugly- lower share of societies benefits for most- higher share of societies benefits for the very few- often related more to their parents success (50%) than their own ability. I mean- a lot of the better jobs are practically inherited these days.

Software is the wrong villian here.

[complete loony]

It appears that the banking sector will do what they usually do—extract wealth and destroy jobs.

The most serious problem our economy faces is the mountain of private debt we have accumulated in the past 50 years. And the huge wealth imbalance this has caused.

The banking sector has successfully transformed most asset markets into heavily leveraged ponzi-like schemes. Each new entrant to the market pushing up prices with borrowed money, so that other people can cash out. This borrowed money caused asset prices to rise, giving the appearance of creating wealth. But debt levels end up rising faster. When the market runs out of greater fools, the bubble collapses, leaving the mountain of accumulated debt mostly intact.

While the bubble is rising, the economy begins to depend on the creation of new debt just to continue functioning. Once the debt gravy train slows down, it doesn't even need to stop, the flow of spending money in the economy dries up. Companies that were pretty much already insolvent go bust, others survive by tightening their belts. It is the workers losing their jobs that suffer the most for the problems that the financial sector created.

We can't repay the debts the financial sector lent out. The only question left is how we choose not to pay them.

We need a huge shift in how we create and manage money. We need to drastically shrink the parasitic financial sector, wipe out the loans that represent most of our money supply. And replace the money created with credit cards and home loans with government fiat currency, given directly to the people.

Managing the flow of money is essential to keeping people employed.

We need to make full time 32 hours a week or less

[Joe_Dragon]

We need to make full time 32 hours a week or less with forced ot pay maybe at 40 hours and X2 ot at 60+.

Wrong perpetrator

[msobkow]

The problem is not the technology itself.

The problem is the banks and corporations that siphon off billions by leaving prices artificially high instead of passing along the cost-savings of technology to consumers.

Seriously. What is Apple doing except sitting on billions it's siphoned off? It's not even paying it's fair share of taxes on that money! Or the big banks, who get levied huge fines for their outrageously illegal behaviour, but just bill the consumer for the expense and see none of their executive or board members put behind bars.

Unless and until we resolve those problems, technological advances will just be a convenient red-herring scapegoat for distracting us all from those real problems.

Re:Service Sector

[Pfhorrest]

Capitalism is not the 'temporary use of another class's capital.' It is a system where property is freely bought and sold.

You're conflating capitalism with a free market. They are not synonyms.

A free market is a system where property is freely bought and sold.

Capitalism is a system where the shape of the market is determined primarily by the prior distribution of capital; loosely put, where having wealth makes it easier to keep and obtain wealth, and lacking it makes it harder to keep or obtain it, automatically perpetuating that wealth disparity and leaving the less-wealthy perpetually subservient to the more-wealthy.

For a trivial example of a free market which is not capitalist, consider any market that deals exclusively in labor services, such as an virtual market online (without copyright interfering to create artificial scarcity) or a hypothetical post-scarcity market in the future; anywhere that capital is either freely and infinitely replicable or else just irrelevant. Because capital is not involved, the market is not shaped by capital distribution, and is thus not capitalist. But it can nevertheless still be a free market, with the prices of the services being traded determined entirely by voluntary agreement with no redistribution of profits or anything.

Less trivially, a real-world market, dealing with goods and services both, that had an even distribution of capital would not, at least initially, be capitalist, as nobody would have a capital advantage over anyone else to exploit. The open question is whether such non-capitalist freedom is sustainable, or whether we're forced to choose between either sacrificing freedom or accepting capitalism.

Free markets are the kind of thing that early liberals (what would now be called "libertarians") like Adam Smith and John Locke advocated.

Capitalism is something that was first identified and named by Marx, who in turn claimed that it was an inevitable consequence of free markets, a claim that the state socialists who followed in his wake accepted and spread further.

Even more distressingly though, their opponents in defense of free markets also tacitly accepted that claim (that free markets inevitably lead to capitalism), and just disagreed on which side of the resulting fork to choose: reject free markets to avoid capitalism, or embrace capitalism to preserve free markets.

Meanwhile, nobody noticed (and today most people can barely even conceive) the libertarian socialists who disagreed with Marx's claim that you can't have free markets without capitalism, who have been to this day discussing (not that anybody else is listening) possible ways to prevent capitalism without sacrificing the free market.

Just thought you'd like to know that when you say things like "[capitalism] is a system where property is freely bought and sold", you are tacitly buying into Marxist rhetoric.