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'Robots Won't Just Take Our Jobs -- They'll Make the Rich Even Richer' (theguardian.com)
Robotics and artificial intelligence will continue to improve -- but without political change such as a tax, the outcome will range from bad to apocalyptic, writes technology and politics journalist Ben Tarnoff, citing experts and studies, for The Guardian. From the article, shared by six anonymous readers: Despite a steady stream of alarming headlines about clever computers gobbling up our jobs, the economic data suggests that automation isn't happening on a large scale. The bad news is that if it does, it will produce a level of inequality that will make present-day America look like an egalitarian utopia by comparison. The real threat posed by robots isn't that they will become evil and kill us all, which is what keeps Elon Musk up at night -- it's that they will amplify economic disparities to such an extreme that life will become, quite literally, unlivable for the vast majority. A robot tax may or may not be a useful policy tool for averting this scenario. But it's a good starting point for an important conversation. Mass automation presents a serious political problem -- one that demands a serious political solution. Automation isn't new. In the late 16th century, an English inventor developed a knitting machine known as the stocking frame. By hand, workers averaged 100 stitches per minute; with the stocking frame, they averaged 1,000. This is the basic pattern, repeated through centuries: as technology improves, it reduces the amount of labor required to produce a certain number of goods. So far, however, this phenomenon hasn't produced extreme unemployment. That's because automation can create jobs as well as destroy them. What's different this time is the possibility that technology will become so sophisticated that there won't be anything left for humans to do. What if your ATM could not only give you a hundred bucks, but sell you an adjustable-rate mortgage?
So asked the farmhand back two hundred years, who will drive those machines that mow your fields and harvest your potatoes? You cannot get rid of me!
True. we still need one person to drive that machine.
Instead of thousands harvesting by hand.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Yep. nothing new at all.
The scale has just changed to a point where it will break society. This started a while ago and we've muddled through (invented endless desk jobs type stuff) but it's starting to really not work anymore and widespread automation replacing unskilled laborers is only getting started. The next generation of robots are gonna be gnarly...
Boston Dynamics has shown where we're headed and it's very, very capable robots. After the darpa challenge door opening buffoonery it seemed a way off, but then that jumping wheeled robot showed up and it's terminator shit come to life.
Not only that but it gives our society a chance to ask some good questions. Such as, "Does work really matter?" and "Why must a person earn a living?". When for all practical purposes our base necessities are taken care of automatically, why should anyone labor?
I think that question is something a lot of the very wealthy, and mostly those who are newly wealthy, are afraid of asking. If not more than a little jealous of.
You forget wars in-between. Wars, collapse of empires and so on has equalizing and wealth distributing effect. Modern imperial wars will inevitably involve nukes, there won't be anything left to distribute afterwards.
Already covered in Marshall Brain's book "Manna".
The real problem is not the robots. It's the humans.
If you use robots to further your greed, then yes, the rich get richer. If you use robots to help out humanity, surprise! They help out humanity. (It should be noted that Manna actually has a form of Universal Basic Income which is used to manage resources).
Didn't you hear? Corporate taxes are eeeeeevil.
Actually, in many ways, they are. Corporate taxes are often seen as a way to make fat cats pay. But the opposite is true: corporate taxes tend to be regressive. If you tax a corporation, the money comes from some combination of shareholders, customers, and employees. The biggest shareholders are pension funds, holding the savings of middle class works. Big companies tend to make goods, while small companies provide services. So if you tax big companies, the tax burden is shifted to goods (disproportionately purchased by the poor) rather than services (disproportionately purchased by the rich). Corporate taxes also have pernicious side effects, such as pushing investment and jobs overseas.
If you want to target the rich, it is much better to make individual income taxes more progressive, rather than trying to do it indirectly by taxing corporations.
I don't see "the rich" becoming richer as a problem. If poor people are becoming poorer, in absolute terms, then we have a problem. I don't see that happening, however, since increased robotic productivity should normally (free of government interference) result in more abundant goods and services, raising the living standard for everyone. Sure, the rich will reap most of the gains, but that is because they own the robots.
So, what is the solution? Pretty straightforward, actually: own the robots! As luck would have it, we live in an age in which it has never been easier for anyone to invest in the future. This implies, of course, that people are smart enough to forego buying that luxury condo and partying away their paycheck in favor of planning for the day that that paycheck won't be there any more. I admit, I may be assuming too much about the average person's capacity for delayed gratification.
Might makes right irrelevant.
Turn up your sarcasm detector, it looks like you've got it set to negative gain.
First, the majority of Americans didn't even vote in the Trump-Clinton election, 580 million people live in North America, 420 million more in South America, just under 130 million Americans voted in the election, and, as you point out, only 45.9% of them voted for the Trumpinator - so, I read the 2016 election as a "thumbs up" from roughly 6% of the American population in favor of Trump's image and policies. I'd wager much more than 7% of Americans would have voted against him, given the chance.
I used to work in small companies, where response to government oversight seemed like a huge burden on top of whatever it was we were trying to do. Now I work in a larger corporation where well over half of our resources are devoted to satisfying government oversight requirements - entire departments full of people who do nothing else, and all the other departments spend significant amounts of their time serving the needs of the regulatory departments. Oversight is necessary, and I think with strong transparency requirements the burden could actually be lessened, but it's no joke that we're already employing a huge number of people who do nothing but document and audit how other people work.
If the AI/automation revolution actually happens then labor will no longer have any income on which to pay tax. For some time, productivity gains have accrued with capital and labor has gotten the short end of the stick. This is a bug in capitalism but we have largely worked around the bug through progressive taxes and inheritance taxes. However, if AI and automation replace all labor then capital no longer has a reason to keep labor around. Since the people with a lot of capital largely control the government don't expect any help from that quarter.
In the past automation has made people more efficient and enabled many new jobs to come into being. This time it's different, formerly automation replaced our muscles and we moved from manufacturing economies to service economies and let the automation largely do the manufacturing work. This time, the robots will be replacing our brains rather than our muscles and there won't be service jobs to switch to. More and more people will lose their jobs and be unable to find new ones while capital continues to increase their hold on the available money and power, creating a feedback loop where all capital ends up with a small portion of the population. Unless we do something now (while labor still has some power) we are unlikely to stop this from happening.
Enigma
One problem with your theory. The rich can't get richer if the masses can't afford to buy the shiny new toys being made by the robots.
You're still trying to think of money as an absolute. Money is a proxy for labor, and represents buying power.
What happens when you pay your workers the same wage and have them work the same hours, but you only employ 50% as many workers? You're making high-end induction stoves for $2,800 today and selling them for $3,200 (14% gross profits, and 9% net profits in your business). Suddenly, it costs you $1,400 to make that high-end induction stove; if your business keeps its 9% net operating profit, you can sell that machine at a 19% gross profit--$1,673.
Mind you, because that stove is only $1,673, the households which historically bought the $1,800 models can now buy your previously-$3,200 model in the same budget (although the $1,800 models will also be cheaper). Most likely, you'll move more product, so the net operating costs will diffuse--that is, your proportional main operating expenses ( total $135 per stove if you move X, and $112 per stove if you move X+20%, so you can keep your 9% net operating profit when moving 20% more stoves by selling them for only a 17% gross profit.
In the end, the mid-tier, $1,800 stoves become your standard sub-$1,000 stoves; people who would have bought $1,800 stoves before still buy them, but get what was a $3,200 stove last decade; and ... well, we're spending the same tier of income on something that used to represent upper-upper-end luxury; we're basically richer, in the same way that we'd be richer if we could each buy a private helicopter for $500 and fly wherever we want in the country for the cost of a Starbucks latte.
Technical progress makes the poor and middle-classes richer. The pie gets twice as big, everyone gets like 1.9x as much, and the rich get 2.1x as much, and people go, "Oh god, the wealth gap is growing! Rich get richer while the poor get poorer!" because their slice appears to be a smaller radius of the (now-enormous) pie than it was of the (then-anemic) one they had before. They all get fat off cheap calories when their great-grandparents were struggling to get barely enough food to survive, and they still bitch that they're poorer than the hard-working men of the 1820s.
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The way corporate profits and taxes are handled in the first place should be completely refactored.
100% of corporate profits should be paid as dividends, with automatic reinvestment of those dividends in the corporation (at a rate settable by each shareholder, defaulting to 100% reinvestment) in exchange for a greater share of the company (compared to those who opt not to reinvest).
Dividends are taxable, so the investors pay the tax, each at their own marginal tax rate (so small investors with meager incomes trying to save for retirement aren't taxed out the wazoo, but if some one individual personally owns vast swaths of the productive economy, they are).
Don't tax the corporation itself at all, because all of its profits are already being taxed at the shareholder level.
-Forrest Cameranesi, Geek of all Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
A basic income plus a flat income tax with no exceptions creates a centerward pressure toward the middle class. Tax everyone x% of all income no matter what, give everyone x% of the mean income as a tax credit, people who make the mean income see no difference, people who make below it get money, people who make above it pay for that.
-Forrest Cameranesi, Geek of all Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
How do goods get made?
Answer: Goods are made by the application of labor. If you have a method by which you slowly assemble a chair, you can make 1 chair per hour; thus, for us to buy those chairs, we must pay you a fraction of your labor time--if you work 40 hours per week, we must pay you 1/40th--in terms of a wage equal to that fraction of your living expense. Carry this out, and the money you must receive has to pay the wages involved in producing those things that you buy. That is the minimum.
If you find a way to do it in half the time, you make 2 chairs per hour, and you live at the standard of living produced by 80 times the price at which you sell a chair.
he assumed that if X amount of labor went into an object, then it's worth X (whatever X is in inflation adjusted dollars).
The chair isn't worth X; if you make 100 chairs for 10 hours of labor and someone immediately figures out how to do 100 chairs in 1 hour of labor, everyone buys his chairs and yours rot. That means...
if no one wants to buy that widget, then it's not worth three hours of labor.
It's not going to sell for three hours's worth of labor; it's going to sell for what people are willing to buy.
many objects are worth much more than the labor required to produce them.
No, many objects sell for much more than the labor required to produce them. Primarily, things which are quite expensive or for which most people do not have a need or desire have a very small demand market. This low demand means entering the supplier market is risky, and tends to lead to failure. As such, there is little competition; and the people buying your stuff tend to be quite well-funded, so hiking prices is actually viable.
Many luxury objects have entered the realm of cheap mass-production as technology marches on. When they do, the net margins of businesses producing them--that is, the labor required to produce plus the labor required to organize as the cost underlies the price--tend to shrink. Suppliers can enter the market readily due to the ability to produce cheaper than the next guy and a vast basis of consumers.
Goods do not have value. People have an imaginary valuation of a good: they envision, in their minds and as a property of their own beliefs, that a value is attributable to a good. The good does not have any such worth; it has a cost and a price.
That cost is labor--or the wage-labor as the price of labor times the amount of labor. Wage inequality essentially means my 1 hour of $20/hr work can induce another man to work 2 hours at $10/hr; and taxes, profits, and even savings generally tend to pay wages eventually, by infrastructure and government services, expansion and risk controls (business profits cover later losses), or delayed spending. Some money does vanish off into giant stockpiles, and is replaced by more debt issued into the economy.
The only thing that has to balance out, absolutely, is the labor exchange: all exchanged goods and services must equate, eventually, to all labor which has been invested in the exchange of those goods and services--including idle labor which was drawing a paycheck and accounted for in the price of goods and services exchanged. That's a physical law. You can't spend 100 hours making cars at a rate of 1 car per 50 hours and end up with 3 cars.
Yes, that means some of your money goes into idle workers, into goods produced and unsold and taken as a loss, and into all kinds of other horse shit that doesn't materialize as an addition of wealth. It happens.
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Maybe this is the endgame of human evolution. Instead of having 7 billion people, of whom 1% are rich (that's 70 million): perhaps you have a human population of 70 million rich people, and about 7 billion robots? Not so scary if you are one of the 1%. I just don't want to be around during the transition period.