In case you haven't heard, the software giant Google has debuted a new fully automated, driver-less car. Not only are the prototypes fully functional, they have also already logged a combined 140,000 miles of unassisted driving on U.S. roads. Google itself estimates that the system may be ready for full-scale production in eight years, before the decade is even out.
An eight-year period may seem overly optimistic, but it actually makes a lot of sense in context of computer systems. An observed phenomenon known as 'Moore's Law' states that the processing power of a standard desktop computer roughly doubles every two years, for the same cost. If Moore's law remains constant, then by 2020, the standard desktop should have the processing power of somewhere between the mind of a monkey and of a human - in other words, more than enough power to navigate traffic with the right software.
What does this mean for the economy? On the one hand, it will mean more efficient roads, lower costs of transportation, and cheaper costs of goods. On the other hand, there are an estimated 3.5 million truck drivers currently employed in the U.S., and this field is one of few which offers prospects of a middle-class income without a college degree. On top of this, consider the hundreds of thousands of bus, taxi and limousine drivers - and that similar technology will likely be simultaneously be rolled out for shipping, rail, forklift, crane operations, etc (indeed, to small degrees it already has).
You might remember how a few years ago, a GPS unit or a smart-phone were extravagant luxuries, but now are so common as to be unremarkable. There is no reason to believe that driver-less car technology will not be adopted with similar speed. Unlike smart phones, however, automated driving will cause massive and simultaneous layoffs.
If this were only happening in the transportation sector, I would not argue that it constitutes a paradigm shift in economics. This trend is however driven by computing speed, which is applicable to the great majority of fields and sectors. In other words, job destruction is and will be happening more rapidly than job creation in the majority of economic fields. The Google Car is a case in point - reportedly, only 15 engineers are responsible for the creation of its working prototypes, while it may someday soon make 15 million or more jobs obsolete around the world.
In the twentieth century, increased production by capitalists required increased labor forces, and increased payrolls, which created an automatic feed-back loop where more production led to more economic demand, and so on. Computer technology, and to a lesser degree other advances, are breaking this feedback loop.
This is presenting us with an entirely new economic paradigm, where production of goods is only loosely linked to human labor, and it is presenting us with two divergent paths as a species.
The first path is where 20th century economic paradigms remain in place long after their practical obsolescence, and consumption of goods remains rigidly connected to production or ownership. In this world, there are fewer and fewer decent jobs available except to a technocratic elite, and corporate cyborg-like entities compete with one another to enrich a shrinking ownership class to the exclusion of the growing underclass. If you look, you can see evidence of this taking place all around you.
In the second path, productivity gains are partially socialized while markets remain free - in other words, a portion of the increased productivity made possible by the new technologies is redistributed into a guaranteed national income, or welfare which is available to all, permanently, regardless of ability or even desire to find employment. In this world, work becomes wholly a choice, as subsistence is possible and even guaranteed regardless, but markets remain free and wealth accumulation is otherwise uninhibited, except through nominal (and possibly decreasing) tax rates. A musician for example could choose to charge at his concerts and become wealthier (or afford better equipment), or play for free and subsist happily on his guaranteed income. A capitalist could accumulate major holdings of industry, become world famous, accumulate toys and properties, be a player in the advancements in the latest fields, and he could also rest assured knowing that even if all his investments go bankrupt tomorrow, he can still live a full and comfortable life without the charity of others.
In any case, it is doubtful that millions of truck drivers unemployed en masse will take it lying down, or be content with a few months of unemployment checks and little prospects beyond that. Which direction society takes is likely to depend heavily on politics. Democratic nations (in the sense of nations which implement the desires of the majority as polivy, as distinguished from nations with mere formalities like elections) will tend toward the second path, while nations where money decides policy will tend towards the first, and the morass of third-worldism.
In neither case will there be top down, Soviet style control of the economy - in both cases markets will be free, on the one hand free to command humans, and on the other hand free to serve humanity. But one thing which is clear is that 20th Century paradigms will not work for understanding 21st Century economic crises, and these crises will not be resolved until the economically-minded stop looking towards long-dead theorists of long dead economic systems, and start looking at the object in front of their face they are typing into.
"Boy, that's a lot of truckers and taxi drivers that are going to go on to do more productive things than before."
I'm sure, just like the unemployed factory workers from the 70's and 80's who used to be able to support a family on one income, and who now have even better jobs...
QUICK! DESTROY ALL MACHINES!!!
"I'm sure, just like the unemployed factory workers from the 70's and 80's who used to be able to support a family on one income, and who now have even better jobs..."
So what bearing does being unemployed in the seventies and eighties have on being currently employed at Wal-mart? First, you're already saying that they are better off than being unemployed, so good. Second, you're assuming that the situations are the same today, and that there may not be any political reasons that people have to work for less, let alone the blatant lack of consideration for whether or not someone that worked at a factory thirty years ago is still in the kind of shape to work at one today. Maybe they don't mind a job where they just stand, say "hi" and bag some groceries? You, my good sir, have strong legs, because you are able to make logical leaps that span chasms.
"The greatest failing of the human race is its failure to understand the exponential function."
~ Physicist Dr. Albert Bartlett
("The greatest failure of the human race is its failure at finding failing methods of redundancy fail-checking. Also, y=x^n. And I'm not even a damn physicist, Al."
The exponential function is best illustrated by a parable of a a Chinese Sage
("Best"? This sounds arbitrary already. Hey, why not start with the function itself? That's a standard used to illustrate things. You know, so we understand them?)
who does a great favor for an Emperor. The Emperor invites the Sage over for a game of chess and asks what he can do in return as thanks. The Sage replies that he has only one request - a chessboard with one grain of rice on the first square, two on the second, four on the fourth, doubling on each square for the entire board. The Emperor assents, thinking it will be a small amount of rice. Were the Sage's request to be fulfilled, however, the amount of rice required would bury the entire Earth to a depth of several miles.
(That's...it? That's how you "best" describe the function? With ONE parameter? All you described was y=x^2. That is AN exponential function. Not THE. Maybe Dr. Al was right...)
Computer speed is growing at an exponential rate - doubling every two years.
(Okay. Following so far. Probably better than you, but go on.)
Today a new desktop might have the brain power of a mouse
(Yeah, it might...or you could be completely wrong about that. I can see you know computers as well as you know math. You should see the size of the computer that is a map of a mouse's brain. This is no desktop. But I'm just nit-picking. Really this has nothing to do with your argument, if you even have one. I have doubts on that subject.)
- in ten years at most it will have the processing power of the mind of a monkey.
(This forces me to ask...how do you know that? I mean, we're making better computers daily, but you can't just throw around "at most" willy-nilly. That's asinine. "God will return to end the world in three years, at most." That's what you just did. That is your logic. Barring that silliness, which again speaks nothing of any argument you think you are making, how do you correlate a ten-year gap from rat to monkey as being exponential. I mean, we're not just going to build these brains and not make use of them until we have recreated machine versions of the human brain. There is a lot you can do with a machine that can understand complex commands like "roll over". And we'll need capital generated by those inventions if we wish to progress. Hey, I'm gonna make a bet with myself that whatever you have to offer in the following...whatever...will actually destroy the system with which such machines would come about. Let's find out.)
In twenty years at most it will have the processing power of a human.
(I...yeah, just "see above" or something.)
Currently we are seeing jobs disappear which can be done by "mouse power" computers - this is why unemployment is growing all around the world,
(You know, I made popcorn the other day. This is why my muffler fell off. I seriously wonder if sometimes you go out onto the streets, say something, and the person you are talking too swells up into an enormous "?". Computers are the reason we have unemployment? What the hell are the programmers doing? Making the stuff whilst STARVING? Computers are a high-demand field. No...no, this is too much. You, sir, have gone too far. Unemployed factory worker (or at least unemployed thirty years ago, when the plant closed)? Must have been those computers, which are now, apparently, running those closed factories. And no one is employed at the factories today. I mean, come on! Who, anywhere, is putting things together or operating the machinery that does so? No, my iPad single-handedly saved GM by allowing them to fire EVERYONE. The bailout was just for fun. Really. It was my iPad. You suckers, thinking that "computers" isn't the reason for every problem we have...God, I can't even do this with a straight face. I mean, do you think that someone just walks into a room, sets down a PC, turns it on, and points at it, shouting "Do stuff!" and it happens? SOFTWARE...IS...CODED...BY...PEOPLE.)
simultaneously. These jobs tend to be "middle skill" jobs.
(Define your terms.)
Soon they will be "high skill" jobs.
(Define your terms. Damnit, make something of yourself! Then you might understand the problem with what you are saying. No, you won't. You won't, even if I explain it. I'm going to anyway. You see, if we say that X is highly skilled in A, and Y is highly skilled in B, it does not, in any way, follow that X could do B. X might have the skills to do B. We don't know. But his skill in A does not beget any talent at B. Therefore, if A becomes obsolete work, X might have to go on to do C, which might be nothing more than loading boxes onto a truck. A truck...DRIVEN BY A COMPUTER! OH MY GOD! OH THE INHUMANITY! 110101110101!)
Then they will be nearly all jobs
(These jobs are middle-skill jobs...these jobs are high-skill...then they will be nearly all jobs... Forgive me if I sound confused, but you basically just said "These jobs will become nearly all jobs." What the hell does that mean?)
- and the entire economy will be able to function with only a small percentage of the population doing any work.
(Economies don't function. They ARE. Did it ever occur to you that maybe people will just do a lot less work? Or that they will have to use their god-machines as surrogate workers for themselves? No, I know I'm going to have to explain that to you, so here we go. You have everyone with robots doing things for them, right? Now, obviously you can't just have the robots making things at random because A) they don't know what to make, so B) they will use up all the resources. That means they will not be able to make things to repair themselves or other things that break down, and we get to starve because we failed to take supply and demand into account. Now, what is the logical solution? Well, we don't let it devolve into the socialism that you don't even realize you are spouting. We say, "Hey, I don't have to work any more, but I want to buy another robot, and that guy over there is willing to sell me one or use one of his mining robots to dig up some materials and make me one...whatever...Hey, guy? What do I have to do in return?"
"Well, Billy, I'm using my robots for other purposes, but I need my self-driving cars washed. Since I don't want to allocate my own resources, would you mind allocating yours for an hour a day to clean my eighteen cars, which I can afford because they have become so widely available, and not because I am even very rich?")
If work is still required for income, this means only a small portion of humanity will survive as more than peasants.
(You still think voluntary exchange is peasantry? What exactly did you read by...like...ANY author whose works might be known by people on these forums? I'm going to guess you read the word "the" and then decided you were smarter than everyone else, so you quoted a scientist and said something about chess. Born journalist. And what's with the "jobs will become jobs" thing? You sound like the person who wrote that damn Zeitgeist "manifesto".)
Theories about corrupt governments and incompetent central banks can explain a crisis here or there,
(I like hearing people pretend they've learned someone else's point of view. You know, it's not a working theory if it doesn't always hold true. Guess what it has always done, by the way? And when I say "it", I don't mean some empty noun. I mean the theory that central banks can cause a crisis.)
but not a simultaneous, systemic world crisis.
(Why not? What is your answer to the theory that disproves it? Just saying, "No, that can't be right. Well, I mean it might be true in some cases..."? That is not a valid argument. That is musing.)
For that, systemic, causes have to be sought which are equally systemic and simultaneous.
(So...banks printing and manipulating billions of dollars simultaneously is not systemic? Or simultaneous? Wait, this is even worse...you're saying that COMPUTERS ENTERING INDUSTRY HAPPENED SIMULTANEOUSLY! Good lord...Hey, I invented the cure for cancer! Oh, look at that! We suddenly all have the cure! HOORAY!)
Before the industrial revolution, economics was extremely simple
(What is going to happen next is an attempt to elaborate, which will be marked by having the singular characteristic of NOT doing so.)
- however owned the most high quality land
(Question mark? Or did I just morph into one?)
and lorded over the most peasants was the richest - end of story.
(And here was me thinking there would be more to human history. Nothing better shows a man's ability to make an argument than when he states, emphatically, "End of story." Case closed. Hey, do you all remember that time before the American industrial revolution? When we were all peasants? You know? Without rights and freedoms? Paying tithes to wealthy land owners? Those were great times.)
Then industrial production came along, and a capitalist with a few factory buildings could become richer than Dukes and Counts and Princes.
(Can...is...there's...huh? Weren't factories those things that were built and fueled the industrial revolution? Or did Harry the Magic Capitalist just buy them from...I guess god, or the Easter bunny...because suddenly industry was happening? And which Dukes and Counts? I mean, there were probably some well-to-do princes in Asia that lived in palaces. Or are you acknowledging that the same prince might not be as well off because he has less capital goods to choose from? Nevermind. You don't even know what that means.)
The paradigm had changed,
(How? That's not a rhetorical question. I would like you to answer it. And since you're likely to go off on a tangent involving sorcery or something, I'll ask again, in clear terms: How has the paradigm changed?)
and the fundamental economic laws had changed too.
(Fundamental laws don't change. If they do, we have to examine the merits of the law, and possibly throw it out if it cannot be reconciled. So, putting that aside...How? How had the fundamental economic laws changed? Were we no longer seeking to satsify our wants? Economic circumstances changed, certainly. More people ate better. What changed, fundamentally, about economics? Besides the types of bullshit people suggested?)
Medieval treatises on economics became obsolete,
(Maybe they were just bad to begin with? I can't really see any way in which the ideas in Human Action don't apply during the Medieval period. And what is your timeline? Since when was pre-industrial earth Medieval?)
but not because Medieval people did not understand economics,
(Yeah, things usually become obsolete because they are obsolete, not because people don't understand them. In fact, a lot of things become obsolete when people BEGIN to understand them.)
but because Medieval economic systems no longer existed,
("I will pay you for things." "NO! WE'RE NOT DOING THAT ANY MORE!")
just as even a perfectly accurate treatise on techniques Medieval warfare would be hardly applicable on a battlefield today, even if it perfectly grasped the issues of its time.
(That's the difference between warfare strategy with bows and strategy when you have sub-machine guns and missiles. There is no correlating economic difference. "Behold! With this new super-money, we will only have to show it to you and you will be rich! Gone are the days in which resources are an issue! Everyone buy everything! Oh, and don't forget that according to the new laws of economics, merely discussing the economy increases your happiness and gets rid of foot rashes! Thank god for the new logic!")
We're in the midst of a paradigm change,
(In what? And where?)
and the people who cling to old economic treatises will cause destruction comparable to generals relying on calvary charges against machine guns.
(I agree. We totally need to ditch the policies of currency-debasing. Oh, check out this graph below. It's great. The writer really wanted to show how smart and right he was, so he included a graph. It's just the exponential function. Somehow, looking at this, the writer sees how everything will be automated, which, according to the graph, directly correlates with unemployment. No, I'm just kidding. It just shows that y equals x times itself n times. It's a graph of a function. It explains the function quite well. Far better than any story about China. Parabolas are so much more efficient than parables.)
You, sir, are a hero to children everywhere. It took me several paragraphs to say what you did in one jpg edit.
the funny thing about this thread is that ravochol's responses appear to automated as well.
But robots operate on logical principles. Mostly boolean.
I really did laugh out loud at communeofone :P
"Without our feudal economic system, we'd be dead!"
So many posts to reply to, so little response...
Sorry from bringing up real world evidence and and then finding theories that explain it and make further predictions, I forgot that praxeology does the reverse...
There's a word for theories that can't be falsified by evidence - "superstition."
"Praxeological statements cannot be subjected to any empirical assessment whether it is falsificationist or verificationist."
- Murray Rothbard
“Faith must trample under foot all reason, sense, and understanding.”
And I tell you exactly WHY it's about to happen too!
No, because they could do more productive things than bale straw, and weave flaxen hose.
The image would make more sense if it had been, say, some king or noble.
But you're welcome to try again.
And couldn't you at least put in the effort to make a comic-style word bubble? I mean, for someone who's complaining about automation taking away your opportunity to work, you're awfully lazy.
Technology causes jobs to be obsolete. Labor costs go down. Along with labor costs going down, consumer prices go down and profits go up. As a result, businesses are able to hire more labor. Thus, real wages go up.
I, personally, a lowly McDonald's grillcrew member, wouldn't mind having more coworkers, a higher real wage, and a car that drives itself (not to mention cheaper and quicker shipping from Amazon!).
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