More From Tim O'Reilly about the 'WTF?!' Economy (Videos)

More From Tim O'Reilly about the 'WTF?!' Economy (Video) On August 12 we ran two videos of Tim O'Reilly talking with Slashdot's Tim Lord about changes in how we work, what jobs we do, and who profits from advances in labor-saving technology. Tim (O'Reilly, that is) had written an article titled, The WTF Economy, which contained this paragraph:

"What do on-demand services, AI, and the $15 minimum wage movement have in common? They are telling us, loud and clear, that we’re in for massive changes in work, business, and the economy."

We're seeing a shift from cabs to Uber, but what about the big shift when human drivers get replaced by artificial intelligence? Ditto airplane pilots, burger flippers, and some physicians. WTF? Exactly. Once again we have a main video and a second one available only in Flash (sorry about that), along with a text transcript that covers both videos. Good thought-provoking material, even if you think you're so special that no machine could possibly replace you.

Comments

How is this new?

[Anonymous Coward]

I mean, we've had Day Laborers waiting at lumberyards for decades, and apparently, it was a thing 2000 years ago when Christ was a corporal. What about Uber makes this any different?

Re:How is this new?

[Anonymous Coward]

Christ was a corporal? What regiment did he serve in?

Re:How is this new?

[Anonymous Coward]

God's army, of course.

Re:How is this new?

[Anonymous Coward]

All organizations are an imaginary construct, so why not an imaginary army for an imaginary being?

the $15 minimum wage...

[Anonymous Coward]

is being pushed through by the federal reserve in order to cause inflation so they have a defensible reason to finally raise interest rates.

Re:the $15 minimum wage...

[mark-t]

The $15 minimum wage will contribute minimally to inflation, because the amount of money represented by all of the low wage earners combined is actually still a relatively small percentage of the overall economy.

It will certainly have a modest effect on inflation, but not anywhere near the effect that detractors frequently attribute to it.

Re:the $15 minimum wage...

[Anonymous Coward]

Walmart is the largest employer in America. If you double the minimum wage there will be consequences.

Re:the $15 minimum wage...

[mark-t]

I don't think you realize just how paltry all of those worker's wages are to the overall economy.... there is an absolutely *ENORMOUS* gap between the high income and low income earners, and even despite the vastly larger number of low income earners, they still collectively contribute to only a very tiny percentage of the overall economy.

Think "Pareto Principle".

Re: the $15 minimum wage...

[Anonymous Coward]

Pretty sure you're mistaking wealth for income.

Re:the $15 minimum wage...

[Anonymous Coward]

It's not a matter of their percentage of the total GDP. The question is what is their percentage of total consumer spending? The top earners only spend a tiny fraction of their money on consumer goods.

Re:the $15 minimum wage...

[mark-t]

The wealthy may only spend a tiny fraction of their money on consumer goods, but that is only because they have more money in the first place.... Over 70% of the GDP is accounted for by consumer spending, and the bottom 80% earners controlled only 5% of all financial wealth in the USA in 2013.

Re: the $15 minimum wage...

[mark-t]

There is a direct correlation between income and consumer spending, which accounts for 70% of the GDP. The lowest 80% of all wage earners control only 5% of that figure, while only 20% of all wage earners contribute to 95% of all consumer spending.

Re: the $15 minimum wage...

[U2xhc2hkb3QgU3Vja3M]

Indeed. Once you've paid your rent, electricity, Internet connection and bought food, if you have any left then you can add basic services phone and television. Nobody who lives on minimum wage or close to it is spending enough to make any difference.

Re:the $15 minimum wage...

[HiThere]

The best possible result would be WalMart going bankrupt. They are a drain on all levels of government from city through federal. And they aren't too good for the private economy, either. They pay their people so little that if they worked full time they would qualify for general assistance and food stamps. But they won't let them work full time, because that might give them some rights.

Re: the $15 minimum wage...

[mark-t]

Which is why raising minimum wage by some amount does not result in a correspondingly large increase in inflation... it contributes some, but historically the effects of raising minimum wage have always been extremely minor, and is entirely outweighed by the fact that the people whose wages were increased tend to be able to afford a better standard of living.

Re:the $15 minimum wage...

[Anonymous Coward]

"Controlling wealth" is not the same as consumer spending. A guy with a billion dollar trust fund still only needs one iPhone.

Re:the $15 minimum wage...

[mark-t]

Consumer spending accounts for 70% of the GDP, the less wealthy spend a greater percentage of their income on necessities. The top 20% spend more than 10 times as much on consumer goods as the bottom 80% combined.

Re: the $15 minimum wage...

[Anonymous Coward]

That was before the serious money grab by those at the top. Now? There will be a disastrous affect on the economy.

Re: the $15 minimum wage...

[mark-t]

Not even slightly.... The number of people may be very large, but the amount of money they control and spend is still very small compared to overall consumer spending. The top 20% income earners account for 95% of the economy. Even doubling minimum wage wouldn't impact that number in any appreciable way because of the enormous income disparity between the rich and the poor.

Re: the $15 minimum wage...

[Anonymous Coward]

A/C "Pretty sure you're mistaking wealth for income."

Pretty sure they're incestuously related.

WTF?

[o_ferguson]

WTF is this doing on slashdot?

"Only in flash" -- WTF?

[Anonymous Coward]

You are offering a flash file to a bunch of paranoid neckbeards? Do you even know who your audience is?

Re:"Only in flash" -- WTF?

[Spy Handler]

I'm seeing two rectangular divs with F in them (Flashblock extension at work). Just out of curiosity, I went to slashdot on my iphone, and it plays an html5 version of the video. So it's not a case of slashdot workers being so incompetent that they're unable to use html5, it's more like they decided to keep playing flash video for desktop users (for backward compatibility for people with old browsers) while serving up html5 for mobile users.

Re:"Only in flash" -- WTF?

[U2xhc2hkb3QgU3Vja3M]

I see an HTML5 video just fine on my desktop system. Flash has been deleted from my system years ago. So basically, it's probably the Flash detection routines that are faulty.

Still pushing videos, eh?

[X0563511]

I keep coming back to see if you've stopped shooting yourself in the foot.

It appears that you have not.

Sharing

[phantomfive]

WTF economy is a better name than "sharing economy."
"Sharing economy" is an attempt to hide what it actually is.

bring it on

[rubycodez]

Automation has kept me employed for decades, someone has to design, build, configure and maintain the automata

Re:bring it on

[Anonymous Coward]

For now... then there will be automata that brings you new automata.

Re:bring it on

[rubycodez]

so one possibliity is the end game could be we all become artists, explorers, philosophers, scientists, students, and gamers with our all needs met by machines. hmmm, sounds like some religions view of paradise.

The only obstacle is removal of power and money grubbing scum types. Well maybe that's what has to happen

Re:bring it on

[lgw]

For now... then there will be automata that brings you new automata.

While that may happen, it's "Singularity complete". If it every does, we'll all have utopia, or we'll all be dead, but either way employment won't be a problem.

Better development tools and automation has only increased the number of working devs over the years: the lower the cost of automating any given thing, the more new things that can now be automated. Given there are probably 100x as many devs working now worldwide as when I started as an assembly-language programmer, I'm comfortable with this trend.

Re:bring it on

[Anonymous Coward]

Surely money grubbing scum types are artists in their own right - it's all culture. I suppose by this stage the concept of money may have become as vague as the concept of art.

Re:bring it on

[Anonymous Coward]

I am reminded of the novel "Look to Windward", in a post-scarcity society when something that is actually scare pops up again (in this case tickets to an exclusive concert event) suddenly people are re-inventing money and scalping and such.

Re: bring it on

[Anonymous Coward]

That's right , some ONE.

Unfortunately, when people get displaced by automation, most of them get booted down the socioeconomic ladder. And for the first time in history, automation is affecting all professions and work.
Retraining doesn't work because we find out, the jobs just are' there - there are not enough to absorb the displaced workers from automation and off-shoring.

New industries are not labor intensive or even new companies in the Internet age. With 30,000 people, Amazon does what would take a million people working at mom and pop book stores.

It would be nice if all of us could be doctors and engineers and lawyers, but the fact is that most of start off as high on the economic food chain as we can. And when we get kicked out, it's down hill from there. And considering how picky employers are these days, many times it means economic ruin.

Retraining is nothing but a fairy tale told by policy makers. Going back to school just means you are unemployed and buried in student loans

We are headed for some serious social unrest. Remember that as you gloat over your good fortune.

Re:bring it on

[U2xhc2hkb3QgU3Vja3M]

When you started as an assembly-language programmer, you and your peers knew WTF you were doing, down to how the CPU and peripherals works.

Look at the current trend of not bothering to learn even Javascript and start a new Website by including JQuery "just because" and you know it's not a good trend. Adding incompetent idiots to your field is not a good thing. Imagine doctors who couldn't operate if the Internet went down and their access to WebMD was cut. You wouldn't call them doctors and yet we have tons of so-called "programmers" who couldn't understand opcodes and registers because they would not be able to grasp the concept of no operating system and no libraries.

Re:bring it on

[lgw]

As long as I stand out from those guys, I don't have a problem with it. We're not really competing with one another. Perhaps with the IoT craze we'll see an upswing in constrained environment programming again.

Re:bring it on

[rubycodez]

perhaps "cracking" would be more likely solution in such a future culture with scarcity of a concert's information

Re:bring it on

[Anonymous Coward]

That is much less likely, though, as those born to wealth and power are not likely to want to give it up to just anybody who didn't work hard for it like they did.

Re:bring it on

[rubycodez]

if they are born to it they didn't work for it

Re:bring it on

[Anonymous Coward]

What, exactly about the IoT is supposed to be constrained? As far as I can tell, the manufacturers just want to make sure EVERYTHING is phoning home on a regular schedule. Incorporate IPv6 with everything globally addressable and you have anything but "constrained".

Re:bring it on

[lgw]

There are IoT devices with less than 4k memory. There are IoT devices that need to do non-trivial things with less than 20k memory. That's constrained even by my oldschool standards.

I have a question.

[koan]

What's the motivation for replacing humans in various jobs with a robot?

Why are we doing this? The outcome is going to be terrible, so again.
What's the motivation?

Re:I have a question.

[Maxo-Texas]

Well, about 2000 chinese noodle chefs were replaced by robot noodle chefs for the same reason robots are used everywhere.

Robots were less expensive (even than chinese noodle chefs), could work double shifts every day, 7 days a week and on holidays. When sick, they could be replaced the same day with a new one. The robots were more accurate, made less mistakes, had no legal liablity (no cut fingers, etc.) and the investors got to keep more money.

It's the end game that doesn't work. When 25% of the population can't get work because anything they can do can be done better, cheaper, and longer by a robot (or automated process -- i.e. computerized receptionists) then the system breaks down.

By definition, half the people are less than average intelligence. And many high intelligence jobs are being and will be automated as well.
The return is enormous (replace one or more highly paid humans with a machine or program) so the incentive is high.

The robot designer above is an excellent example. Sure- she'll continue to have work. But that's 1 job created for 1,000 jobs destroyed.

When people can't trade their labor for value/goods/housing/food what do you think is going to happen?

Re:I have a question.

[losfromla]

Making us all unemployed and starved so the filthy rich can become ever so much more so.

Re:I have a question.

[Jeremi]

What's the motivation for replacing humans in various jobs with a robot?

To cut costs and/or improve quality.

The outcome is going to be terrible

Possibly. Then again, maybe not -- you've seen what the open Internet did for information (which is now easily available to most people at very low cost); perhaps robotics can do the same for goods and services.

"But what about all those people who will lose their menial jobs", you ask? They'll have to find some other way to make a living, is the answer. But with manufactured goods and services practically making themselves, that shouldn't be so difficult to do -- if nothing else, the government could put a tax on automation and use a portion of the wealth they generate to provide every citizen with a guaranteed stipend. People would then have time to learn more advanced skills that would make them employable again, or they could just become (effectively) retirees, and do things they enjoy rather than do menial work most of their lives. Either way, they wouldn't starve.

Of course that will require some political will, but that doesn't mean it can't happen. Our society has absorbed changes of similar magnitude before, it can probably do so again.

Re:I have a question.

[HiThere]

The way it did so before created a rather high mortality rate among those replaced. Is this a good outcome?

Re:I have a question.

[Anonymous Coward]

When people can't trade their labor for value/goods/housing/food what do you think is going to happen?

As far as as I know elites was aware of this problem at least from 50ties.
But what happens is perfectly clear. When billionaires could sustain production of goods , maintenance of their mansions and yachts with robot/AI power - mass extermination of unnecessary workforce (useless eaters,moochers etc) is most logical step. Good for planet too.

Re:I have a question.

[Anonymous Coward]

Have you been out on the street lately? There are a LOT of people out there that cannot be expected to learn anything more complicated than crossing that street.

Yes society has weathered substantial changes, are you willing to bet your life, your wife's, your kids', etc on the basis that you think it can "probably" do so again?

Who proof reads this stuff?

[Anonymous Coward]

The grammar in these sentences and paragraphs is so bad this whole interview is unreadable to someone who is a native English speaker. Either the person who transcribed this is not a native English speaker or they are completely illiterate. Get it together Dice your embarrassing yourself.

Re:Who proof reads this stuff?

[neminem]

> "Who proofreads this stuff?
The grammar in these sentences and paragraphs is so bad, this whole interview is unreadable to someone who is a native English speaker. Either the person who transcribed this is not a native English speaker, or they are completely illiterate. Get it together, Dice - you're embarrassing yourself."

Were you adding all those mistakes to your post ironically/to prove some point? Anyway, fixed. :p

Basic Income

[Anonymous Coward]

I favor some sort of basic income thing, but within reason. Think $500/month/adult

Re:Basic Income

[HiThere]

There's a problem here. The most likely first response is the cost of a place to live going up over $250/month. Those who have the power to set prices are likely to see that as just an opportunity to increase prices.

OK, some places already have rent control. In those places it's just the price at turnover that will increase. Which, of course, will be a great incentive to coerce turnover.

FWIW, I *am* in favor of a basic income, but it's not a straightforwards problem, and simple answers won't work. I think the first step needs to be a reform of the tax law so that the tax is a simple linear tax (y = mx + b) where m is the tax rate, x is the income, and b is the -1 * "basic income". y, of course, is the tax owed, and can be negative. And x, income, has NO exemptions. If you want to support some selected group, do it outside the tax law. (OTOH, losing money, say on the stock market, *is* a negative income, resulting as much negative tax as earning the same amount would have resulted in a positive tax.) There are problems here with, among many other things, interfaces to foreign tax laws. Algorithms without corner cases are rare.

Re:Basic Income

[Anonymous Coward]

When most of the jobs go away, and as housing costs almost half of that every week, what do you think will happen?

Re:Basic Income

[The Rizz]

There's a problem here. The most likely first response is the cost of a place to live going up over $250/month. Those who have the power to set prices are likely to see that as just an opportunity to increase prices.

The problem with this logic is twofold.

First, you can't simply increase rent because people are making more money; people remember for years what they think the cost of things should be, and are reluctant to pay more than that, and will shop around for a better deal. So, while company A decides to raise prices, Company B decides not to do so, and gets more business because of this and still results in an increase in profits (due to a sale rate closer to capacity).

Secondly, an increase in price in one area of an industry, especially the budget options, causes a ripple effect increasing the prices of everything in an industry. While this may cause a short-term price increase, factors will return it to a lower equilibrium. If you do a 20-50% increase in rent for budget apartments (which could only happen with a cartel controlling almost all apartments in a city), it will start to increase everything else in the housing market. If budget apartments suddenly cost as much as midrange, then why would you rent budget? This leads to an increase in midrange rental, increasing prices there, so more people go expensive or buy a house/condo. This causes people to leave the rental market, so suddenly you have empty budget apartments all over the place. To rent those out again, the prices will have to start to come down.

Re:Basic Income

[HiThere]

You must have always had lots of disposable income. And never lived where housing was tight. Where I live it's quite often that when I would look for an apartment, I'd check a new listing, and by the time I got out to look at it, someone else would already have taken it. II'd analogize it to a parking space, but if you don't live where housing is tight, that probably wouldn't make sense either.

And as for buying instead of renting...you need a lot of cash and a stable residence for that to be a viable option. I'd think that you were too old to know better, but I'm already retired, so I'm going to guess that you bought a house 30 years ago. Either that or you live in a small town distant from any metropolitan area. (I'd guess that you were still living at home and had never had to find a place to live, but the tone of your comment indicates someone older.)

Re:Basic Income

[Anonymous Coward]

My landlord does raise rent any time he sees fit to. In addition, bringing the min. wage to 15.00 brings highschool dropouts up to just below what college graduates are getting around here (in upstate NY). Do the rest of us get a 30% increase in pay as well?

WTS a degree... you have to take the 80,000 in debt that goes with it though.

WTF with tech media

[Anonymous Coward]

WTF UBER vs. the taxi cos: Most taxis have a capital investment (in dispatch stations, cars, etc...). Uber is JUST an middleman

WTF Airbnb vs Hotels: Hotels have a capital investment (BUILDINGS, service staff, furniture, etc...). Airbnb is JUST an middleman

WTF Kickstarter vs. Advertisers: really kickstarter is more an ad machine than maker outlet. Kickstarter is JUST an middleman--then again Ad men are middle men too.

The question is WTF with the silicon valley funding world of excessive and their cheearleaders pushing their wares (like Tim). We are in a weird bubble in a actually good, reasonable tech economy... but it's still a bubble.

The RTTB Economy!

[Anonymous Coward]

We're seeing the Race To The Bottom (RTTB) economy. What happens when it's no longer possible to meet living expenses on the money you make freelancing? What's going to happen when Uber drivers need to replace their automobiles they bought when they had regular jobs, or their parents bought, but no one has made enough money to buy a car for a decade or two? What about paying for car insurance, inspections, tags, and all the other fees out of the pittance people make with Uber? This stuff is sustainable as long as we coast along on the momentum of the Old Economy and use up its money, but what then?