Stunning Progress in Technology Brings The Death of Unskilled Labor

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As part of the online web series Which Way Next, hosted by Singularity University, Vivek Wadhwa, VP of Academics and Innovation, sat down with Carl Bass, CEO at Autodesk, to explore some of the pivotal technologies coming online that promise to redefine the jobs available to humans in the 21st Century. Check out the video below:

During the discussion, Bass points out that we are now at a great inflection point in the automation of labor. Extraordinary breakthroughs in the areas of artificial intelligence, robotics, and digital manufacturing are all converging upon one another yielding a world full of technologies plucked right from the world of science fiction.

To date, the damage to the U.S. manufacturing industry caused by outsourcing was mainly an issue of cost. What the developed world might consider labor camp conditions is desirable work that is competed for overseas. In China for example, work that consists of highly repetitive tasks for 12 hours a day, 6 or 7 days a week pays only $200 per month in salary. Now the much bigger problem is that even these jobs are disappearing, not because of outsourcing but because of total automation by machine.

Autodesk CEO Carl Bass talks to Singularity University (SU) VP of Innovation & Academics Vivek Wadhwa and SU CEO Rob Nail

According to Bass, the notion that you can easily enjoy a middle class lifestyle with a high school education and a strong work ethic is just not true in today’s labor market, and may never be true again. The nature of work available to humans is fundamentally evolving, and doing so overnight.

Robotics as a technology is far from new, but is ready to displace hundreds of millions of employees around the globe. Canon recently announced plans to entirely phase out human labor in many of their factories over the next few years, while Amazon just doled out $775 million to acquire the robotics company Kiva, with plans to fully automate their warehouse operations. The next camera you buy could be fabricated by the hands of machines and delivered to your doorstep care of your friendly neighborhood delivery bot.

The turbo-charged growth in robotics is thanks in large part to progress in Artificial Intelligence, and these next generation AI’s are sure to gobble up jobs as well. Consumer AI’s like Apple’s Siri, still in her diapers, may reach adulthood much quicker than many realize. Algorithms have already replaced much of the trading floor work on Wall Street, and other algorithms are in development to do everything from grade essays, to diagnose illnesses. You may have seen Watson, the supercomputer designed by IBM, which manhandled the two best all-time Jeopardy contestants on the hit game show back in 2011. Watson should soon have a medical degree, and could be diagnosing patients at the doctor’s office within a year or less. Algorithms are now capable of doing even the subtlest of human tasks; like creating music. Researchers at the University of Bristol developed a mathematical formula that can predict the commercial success of pop songs, while a German engineering firm built a stringed instrument that uses AI to compose new music.

Carl Bass explains how Americans have weathered paradigm shifts in the past, evolving from a largely agrarian workforce to an urban industrial one. We struggle to envision the jobs of tomorrow, but they could come from fields like renewable energy and synthetic biology. The question no one seems to have the answer to, however, is what is to become of unskilled labor, and those hundreds of millions whose jobs are never coming back?

Aaron Frank
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Aaron Frank

Aaron is a writer and speaker at Singularity University and serves as Principal Faculty. His articles have appeared online in Wired UK and Vice’s Motherboard.
Aaron Frank
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Discussion — 76 Responses

  • Catarina July 6, 2012 on 4:19 am

    Not only are millions of unskilled jobs vanishing FAST but so are skilled jobs and, little by little, VERY skilled jobs. Watson’s victory is a taste of things to come because it shows how AI is taking the jobs of some of the most talented guys around. AI will take doctors’ jobs, lawyers’ jobs, engineers’ jobs, programmers’ jobs within 30 years, and soon artists will also find it hard to compete with the superior products of Ai artists. In other words ALL jobs are rapidly vanishing and therefore we need to create an economy that allows humans to live without working because there is nothing they will be able to do to earn money.

    • papacuppa Catarina July 6, 2012 on 8:07 am

      Agreed. The resource-based economy seems to be the talk of the town right now. I think it needs more debate. It needs to be tested on a small scale so we can evolve it to a point where we can reach a consensus.

      Or bureaucracy could of course delay any action and cause a whole lot of suffering before anything’s done…

      • digitalcole papacuppa July 6, 2012 on 9:13 am

        @Catarina & papacuppa

        I agree with both of you. We need leadership who’s willing to go out there and say that jobs as we know them are a thing of the past. This isn’t happening and I can only guess as to why.

        Knowing would be a lot better.

      • Khannea Suntzu papacuppa July 6, 2012 on 2:50 pm

        You might also label an RBE a “necessity driven economy” or a “logistically sustainable societal paradigm”. The main point to convey is that people must come first. Economy (or whatever) is less important than people.

        You can only marganalize a fairly small percentage before the while societal project becomes toxic.

      • Curt Welch papacuppa July 6, 2012 on 3:33 pm

        Resource based economy ideas are total nonsense (from what I understand of the ideas such as the Venus project – but I need to read more so I can understand the full plan to be sure).

        Our economy is creating great wealth, but due to technological unemployment, it’s failing to be a viable system for sharing the great wealth it’s creating. But there is a very simple fix to this. Money is not what’s wrong here. There is nothing wrong with capitalism. It’s not the evil force. It’s a tool, like all tools, that we can chose to use in the way that’s most appropriate for our social goals.

        Adam Smith’s invisible hand is far more powerful, and important, than those willing to throw it away realize.

        Most important however, is there is no need to throw it away. We can easily fix the sharing problem, without throwing it away.

        We do it with a very simple little trick. We tax the entire economy at a fixed percentage rate, and then we distribute all the proceeds, back to the people evenly. We give everyone a fixed dividend that creates what is know as a basic income guarantee.

        This implements the concepts those in the vinous project are dreaming of, without throwing away the wonder powers of Adam Smith’s invisible hand. We need the money based economy, as the system which automatically allocates all goods and services, to the places they do the most good. Capitalism does this in ways that can NEVER be equalized with any planned community. The economy IS the central planing technology we use to do the work.

        To give everyone an equal share of the economy, we would simply give everyone an equal share of money to spend. The money system still works great for allocating resources, but now, everyone gets a far share of everything produced, with no one being forced to accept whatever goods or services some central planing authority selected for them. One guy might want a car. The next guy might rather walk everywhere, and use his money to buy a larger home. A third person might like to travel full time, and not even own a home, or a car. A forth person might want to donate most of their share of the common wealth to medical research, in hopes they will get to live longer. What we want the system to produce for us should remain a personal choice, not a choice made by some central planing system. So we maintain a money based economy to do the nearly impossible task of balancing the use of all resources, across all the various desires, of billions of people.

        We can do this when the government owns some natural resources, by making the economy lease the resources form the people, and then distributing the money to the people. When done this way, it’s known as a citizens dividend, and we have at least one example where this is already done today in Alaska for the state owned oil reserves.

        But without the government taking over ownership of currently private resources, the government can implement the same thing just by taxation. But instead of using the tax money to fund government services, it’s just given back to the people equally. This is called a basic income guarantee. How much forced “sharing” of the resource we want to implement, is controlled by the tax rates we set. It’s needs to be started now to offset the damages to society already at play. One beauty of the approach, is that it’s fully compatible with today’s capitalism. It breaks nothing – it just forces the system to share more of the wealth, instead of allowing it to continue to further concentrate into the hands of the 1%. Tough in time (post singularity) it would replace all current forms of welfare, it would start out very small, acting only to create economic stimulus and personal security. As the economy grows though technological improvements, the tax rates could be increased, and the distributions raised.

        People would still work as much as they want, and the more money they make the better. But the basic income would always be there acting to boost income and to act as a social safety net for those having problems finding “good” work.

        As basic income tax levels are raised, other social services would be cut back. Minimum wage would be lowered, helping to spur low end job creating – so people can work, and be a productive member of society, even if their wages from work are not enough to support them. Having a real job, and being able to contribute to society is emotionally important to people. How much they make, is not so important, as long as in the end, with the combination of your wages and the basic income, you have enough to live comfortably.

        Having people contributing to society will remain important, Even when the machines are doing all the heavy lifting and heavy thinking for us.

        Imagine for example, in a society where everyone wants to work, but making “enough” to live, is no longer the reason for working. People are no longer forced to do the jobs they must do to pay the rent, they can do the jobs they want to do the most instead. If you want a job as an educator to help people learn, you no longer have to worry about if the “career” will pay enough to give you a fair share of all the wealth of society. You will get a living “wage” from the basic income, and then you choose above that, how much you want to work for money, vs working for fun. People can still get very rich in the system, and the ones that choose that path in life, and end up making billions of dollars for themselves, will be the ones that help support everyone else. But most people, can just choose to do what they like the most, vs what they must do to survive.

        Such “socialism” will reduce people’s productivity. But that’s just the point. In an age of growing technological unemployment, it’s not the people that need to be productive to keep an economy strong. It’s the machines that must be productive. And the machines WILL be productive, because we design them to be that way.

        So, the solution to all this, implement a basic income by taxing, and start sharing more of the wealth today. Don’t throw out the money system, because it would be like throwing out the baby with the bathwater. the machines will need a money system to allocate their work, and to serve us. We will tell them what we “want” by how we spend our money. Don’t throw out the very technology that makes us so strong today – our capitalism, just because people don’t grasp how easy it is to fix our current wealth sharing problems.

        • Panpiper Curt Welch July 6, 2012 on 4:14 pm

          Yea, what Curt said. 😉

        • Kevin Estes Curt Welch July 6, 2012 on 4:22 pm

          Catarina and Curt have laid out what I believe will occur. Unemployment will undercut the stability of society at all levels. So after an utterly miserable transition period, some system like what Curt describes will come about.

        • Gorgand Grandor Curt Welch July 7, 2012 on 2:19 am

          This reflects my thoughts nicely. Maintain capitalism and free enterprise, but extend welfare to everyone as a basic necessity.

          If robots are the ones who are mostly doing the jobs, then the government will need to pay a lot more people in order to allow them to survive, but people who want more could aim to become technicians or owners of their own robot factory, and have an incentive to help the thing along and the increases in productivity will be able to be bought by the people using the welfare system.

        • Kristof Curt Welch July 7, 2012 on 2:48 am

          My thoughts are perhaps beyond near term tech but….

          I agree with a great deal of what you have stated, but the one aspect I have difficulty with is what happens when the cost of living becomes so low that money isn’t required at all?

          Once replicators become capable enough the only thing that will ever need to be purchased will be the raw materials required to produce new goods (which also has the potentially to be completely free) and information will be the only thing of value… that is information which isn’t freely available online.

          Blueprints will quickly become the new battle field over copy rights, quickly dwarfing any tiff that we’ve experienced over the music or movies.

          If I could create anything I wanted by simple destroying the previous things I ready have, including food, then why would I need money at all? And what purpose would corporations serve? If companies are just a series of ideas why wouldn’t individuals just freely share them with society since the kudos of sharing your thoughts would bring greater prestige than profit???

          • Curt Welch Kristof July 7, 2012 on 1:24 pm

            “what happens when the cost of living becomes so low that money isn’t required at all?”

            Won’t happen.

            We hoard and trade assets of limited supply. If any asset becomes effectively infinite, then we will no longer trade it. Air is one of our most valuable assets. But it has no value for trade, because it’s supply is effectively infinitely still. So we don’t trade it (yet), and so it has no monetary value in the market.

            If we have nanobots that can turn dirt, into gold, with no energy input, then the supply of gold will likely become so great, that we will stop trading it. It’s possible that this will happen to many things in the future.

            But it can’t happen to all of them. The purpose of the economy, is to automatically allocate limited assets to where they will do the most good. It’s an asset allocation tool used only for the assets that are in limited supply.

            As long as we have not cured death, time will remain a limited asset humans will need to trade and allocate. As long as we are stuck on the surface of the Earth, land will be limited asset, we will have to trade and allocate. The only energy we have, is the sun currently, and it’s output is finite and limited. Right now, all we have easy use of us the sun light that hits the earth. Later, we might build a Dyson sphere around the sun to use all the energy. But still, with all that energy to play with, it’s still limited, and will need to be traded – aka given a monetary value. Raw material will always be limited, and always need to be traded.

            So yes, some inventions, like nanobots that transform matter will change the nature of what we trade in the economy, but there will always be limits. You just have to learn to think big. If I can hit a “print” button and have my nanobots build me anything I want, wy not get it to build a full scale replica of the Titanic for the cruse ship party I’m planing for next weekend? I’ll I need, is 200 tons of matter to make the ship, and 5000 tons of garbage to make the ocean and iceberg for the party!

            Do you see what I’m getting at? We don’t have enough material on the earth for a billion people to do things that big every weekend. The raw scrap material we build from, will still be limited, and the right to use the 100 square miles of land for the night for our party will have to be “paid for” in the economy. So because matter and energy and time and space are all finite resources for us, we will always have to allocate them across all of us that want to use them, which means money, and an economy to do the allocations for us.

            What could happen, however, is that we all hook ourselves up to virtual reality machines, and escape the resource limitations of the universe. If we have enough technology to keep us alive in a VR machine until the end of the universe, and the VR is so powerful, it can create anything we can think of, then we might just go there, and at that point, have little need for money since nothing in that reality is limited.

            I think before we get there however, we will have to face the wirehead problem. But that’s a totally different issue for the future.

  • arpad July 6, 2012 on 9:52 am

    Cripes, you guys want to have a cool drink before you heads explode?

    While I don’t disagree with Mr. Bass’ overall thesis the exact form, timing and distribution of the advance of technology isn’t, and can’t be, predicted. It’s also a big, wide world out there and the history of that world is that increasing wealth means increasing opportunity for more people.

    While I suppose it’s possible that. were wealth to increase exponentially, opportunities would dry up that’s not the lesson of history. Just because we can’t see the path forward right now doesn’t mean there won’t be one and the uniform lesson of history is that opportunity won’t become a thing of the past.

    • Curt Welch arpad July 7, 2012 on 6:42 am

      OMG, is that what that sticky goo is all over my screen! I better go find a mirror! 🙂

      Yes, we can’t predict exactly what technology will show up when, and how it will effect the markets. Short terms ups and downs will happen and and hard to predict. But this discussing is not an attempt to predict the short term. It’s a discussion about long term trends, and there is much (but certainly not all) we can predict.

      Have you read books like Kurzweil’s Singularity? Or Race against the Machines? They both are very well written books that do a very good job of showing the long term statistical trends of progress we are riding.

      Not only do we know that machines will be smarter than man soon, we can nail the date fairly accurately just by estimating from past trends.

      This is creating a paradigm shift to the markets unlike anything we have ever had to face in the history of mankind. In 50,000 years of tool making, never before, have our tools become more capable in all dimensions, than us – they were always better than us in some small dimension – which is why we invented and used tools from the beginning. A rock is better than a hand for breaking nuts, etc. A bow and arrow is better than a rock for hunting animals.

      Until the industrial revolution and steam age, our rocks, and knives, and shovels, and axes were just tools that mostly amplified our mind and muscles. But come the steam age, we started to see real automation displacing human workers. As technology advanced from steam to internal combustion, to electricity humans (and horses) got taken totally out of the mussel market. We kept our jobs, only because we have brains which are very powerful control systems to regulate what the power was used for. Every motor, needed a human brain to control it.

      With the advent of electricity our control systems started to grow in sophistication, causing us to start turning over our jobs as motor controllers to the machines. Elevators that once needed a human to operate it, got advanced enough that the elevator operators all lost their jobs. Now, the consumer just told the elevator what he wanted (take me to the 6th floor), and the machine did all the work on it’s own.

      As our technology advances, the control systems become more and more advanced. They are pushing their way into more and more human control jobs every day. Offices in the early 1900 were full of clerks doing book keeping, secretaries doing dictation and typing, and filing, mail rooms boys running memos up and down the halls. Banks had lots of tellers to dispense cash to you. grocery stores had highly trained cashiers that knew how to add, calculate change, and knew the price of every item in the store by heart. Every gas station had guys pumping gas. Factories were full of thousands of workers doing repetitive tasks. 40% of the population still worked on farms in the 1900. Where are all those jobs today? Gone. All of these tasks, which we still had even after the industrial revolution, only because we had a brain, are gone, because machines got better than even a human brain, and doing all these tasks.

      These jobs are not coming back. To keep employed, people have to race against this advancing tide of machines. You can’t stop your education at high school anymore, because the simple brain jobs that high school grads once had, are all being replaced by the machines. You have to be better than the best machines, in order to get good work. You better be CEO quality material, or an AI engineer, or a rock star, if you want to get rich in the decades ahead of us.

      We don’t need to predict which invention will happen next. We only have to understand the trend, and that, is easy to understand.

      Not only is this progress happening and is the trend easy to see looking back over a few 100 years, it’s happening an exponential rate. This is s big point made in all these books. People don’t intuitively understand exponential growth. We understand steady linear growth. Exponential growth, is hard for us to grasp. These books have lots of good examples to demonstrate how we fail to grasp this. The bottom line however, is that exponential growth means the future gets here a lot faster than people expect it to.

      Not only is strong AI coming, it will be here soon, and it will be dead cheap soon – in about 30 years. At that point, machines will be taking over ALL jobs, not just farm workers, and the Secretariat, and elevator operators, but ALL jobs. 3#0 years, for society to get ready to cope with a paradigm change to society so large, that nothing like it has happened in the entire history of man.

      The invention of writing, or the printing press, or the telephone, or radio, or the computer, or the steam engine, all had major social and economic impacts on humans society. Society changed, whether people were ready for the change or not.

      All those past changes, are NOTHING compared to what’s about to happen. Most people haven’t looked at this close enough to grasp what’s coming. They think like you are thinking – that sure, technology puts people out of work, but there’s always something else for the people to find to do. That ability to stay ahead of the machines is about to end. We can’t keep beating the “thinking” machines, any more than the legend of John Henry could beat the steam driven drill. We will lose the race, and we know within a decade, when it will happen.

      The reason it’s so important to understand what’s coming in 30 years, is because the effects are already well at work changing society today. It’s why we are seeing this 1% protest movement today. Didn’t everyone think we had already resolved all that crap when we put the trade unions into place? And passed anti-trust laws? And child labor laws? Why is it coming back today, if we “fixed” all the “labor vs capital” issues 50 years ago? It’s because the title wave of change is still coming, and still growing stronger, and will smack us very hard in the face in 30 years, if we don’t understand what’s about to hit us now.

      Technological progress is overall, great. It makes our word very wealthy. I’m not knocking it. But the free markets are only fair to humans, when only humans are competing in the markets. Today, the machines are competing in the free markets along side us, and lots of people, like the legend of John Henry, are loosing the battle. Only a growing elite are able to stay ahead of the machines in the markets, and those guys, are getting super rich, by capturing the entire market for themselves. The machines we compete against, are their slaves – so when their slaves when, they get supper rich, which allows them to build and buy more slaves, which only secures their lead in the markets.

      Capitalism doesn’t “share well” with humans, once the machines become dominate competition in the markets. The better they get, the more people are getting screwed by not being able to find good paying work.

      The TRUE history of the world, when you look close enough, is telling a very different story about where we are headed, then the history you are thinking of, where Luddites bitched, but the world never fell apart. It will fall apart in 30 years, and it’s already coming apart at the seams today.

      You write: “Just because we can’t see the path forward right now doesn’t mean there won’t be one and the uniform lesson of history is that opportunity won’t become a thing of the past.”

      Some of us can, and do, see the path forward right now very clearly. It’s getting the rest of society to pay enough attention to the issues to them on board as well that is the hard part – the part that can cause heads to explode. 🙂

      The problem is NOT a LACK of opportunity. The problem is that the game is stacked, so that only a small elite will be able to end up on top, and the rest of humanity will starve, unless the elite are wiling to share – which typically they are not.

      We need to change the rules of the game to force a certain amount of sharing across all of humanity. What level of sharing is “right” will have to be debated and decided and tested.

      We certainly do massive amounts of sharing already with all our social programs. But the underlying error with almost all of them, is this invalid assumption that only humans are doing the “work” today, and if we let humans get lazy, by giving them free stuff, it will undermine our entire economy.

      If we give a little bit of free stuff to everyone, it won’t undermine anything. It will be a true rising tide that will in fact, lift all boats.

      But more important, is that people need to realize in the future we are walking into, it’s not the humans that need to be motivated, it’s only the machines that need to be motivated. Giving free stuff to humans, doesn’t kill the motivation of the machines that are doing all the work for us.

  • fernande2000 July 6, 2012 on 11:07 am

    y guess is that unskilled laborers will become so cheap that they will be employed in personal services. At least at the beginning. For instance, professionals will be able to hire a troop of “slaves” to serve them as princes. Also, prostitution will become one of the last niches where robots will replace unskilled labor. That profession will become widespread. Just my two cents.

    • Khannea Suntzu fernande2000 July 6, 2012 on 1:51 pm

      So in the end you have three choices –

      (a) serve as a whore, or an indentured serf to a spoiled rotten, contemptible autocrat?

      (b) starve

      (c) revolt and kill all spoiled rotten, contemptible autocrats and take all they own and redistribute it evenly?

      You know my expectations what will happen. They are an extrapolation of historical trends ever since Robin Hood.

    • Curt Welch fernande2000 July 6, 2012 on 2:42 pm

      We have minimum wage laws that doesn’t allow that to happen. When the value of their work drops blow the minimum wage, they simply lose their jobs because they are too expensive (at minimum wage) to hire.

      Minimum wage levels are already so low that no one can make a good living working a single minimum wage job. But if we raise minimum wage, it just displaces more workers, instead if giving them better paid work.

      If we lower it, they jobs are created, but they won’t pay enough for people to live on. Stealing or begging for a living will pay better.

      • Khannea Suntzu Curt Welch July 6, 2012 on 2:47 pm

        …. Or terrorism, organized crime, manufacturing Methamphetamine, plunder, smuggling people, prostitution, porn, etc.

        Or they live in their parents basement and become disillisioned stoners. Or the local equivalent.

        Or they become populist right wing conservative talk show hosts.

        Great way to cultivate a society.

        Basicly either people have means to live (which tends to mean money) or they turn to societal shit.

  • Khannea Suntzu July 6, 2012 on 1:49 pm

    The global macro-economic system has a choice – give meaningful jobs to everyone or give everyone a dignified basic income.

    If you do not you’ll get Guillotines. Simple as that. If marginalization gets even worse the marginalized will take what they need.

  • acm1234 July 6, 2012 on 2:26 pm

    I guess communism will rise again.

    • Kristof acm1234 July 7, 2012 on 1:21 pm

      The system of “government” that will need to be implemented in order to care for the masses will be far to the left of any type of government seen before. Perhaps we’ll move so far to the left that government won’t even be an appropriate term any longer. What happens when the tech exists that every need can be provided without effort.

      Via nano-manufacturing (star trek replicators) people will be able to provide all they want for themselves without government interaction, without companies, without money, without effort.

      Hopefully we will move beyond the need for a military, but the only need for government will be the really big things, infrastructure, and pushing the limits of knowledge with super sized science projects.

    • Curt Welch acm1234 July 12, 2012 on 6:15 pm

      Yeah but a far better one that has no central planing committee telling you want you can and can’t buy.

  • Curt Welch July 6, 2012 on 2:38 pm

    The article makes good points, but Carl Bass in the video doesn’t. He thinks there will be jobs somewhere. He, like most people, don’t understand what’s happening. They think the Luddites have been yelling for years, but yet new jobs keep getting created so they assume this trend will hold. It won’t. It isn’t. The more technology eats away at the job market with “smart” machines, the harder it becomes for a human to find new work.

    We currently use success in the economy as the metric for deciding how much wealth each member of society is entitled to. In theory, the harder, and “smarter” you work, the more wealth you will get.

    That just doesn’t work any more and it’s only going to get worse as we grow nearer to the singularity. Too many hard working people are getting screwed by this system due to the fact that getting access to the good paying jobs is growing harder and harder.

    • Ralph Buttigieg Curt Welch July 7, 2012 on 2:29 am

      G’day Curt,

      There is no direct relationship between wealth and work. If that was the case Mr Gates must be working 1000 hours a day. Wealth is about the creation of assets that produce goods and services for consumption. Either directly as a medieval lord would have or through cash. It has always been so. At one time that asset would have been land given by the king to his lords. Those lords then used serfs and slaves to work that land for the ultimate benefit of the lord and king. These days you are more likely to work in an asset called a company for the benefit of share holders but the principle is the same.

      What I expect to see over the coming decades is that individuals become far more concerned about creating there own wealth creating assets rather the bothering about jobs. If AIs, #D printing, robotics etc become mass market items then they will become our slaves and serfs. How much money would you need if goods and services can be provided cheaply by you?


      • Curt Welch Ralph Buttigieg July 7, 2012 on 10:36 am

        Yes, wealth is created by assets. Whoever owns and correctly manages the assets, own the wealth. When we are born, we are all given one valuable asset for “free”. We are given a human body to control for the rest of our lives. When humans were valuable assets in the economy, this was truly a great gift to be born with. It gave everyone an automatic seed investment to get them started. The more wisely people managed that asset, the better off they would be. The more they invested in that asset, to keep it healthy, to educate it, to train it to perform new skills, the better off the person would be in life. It was this gift of a human value, that gave everyone a “chance” to work hard and get ahead in life.

        But the machines are changing all the dynamics of the economy now. A human body is not the great asset it once was. It’s quickly becoming more of a liability than an asset because it needs constant care and feeding and doesn’t have the value it once had in the economy.

        So, when we talk about “getting a job” we are talking about levering this “free” asset we all are given at birth to produce an income stream for us. More and more people are finding this free asset to be a really bad investment they can’t escape from. 🙂

        So you are right, we have to turn to other assets to build our wealth. But that is where all the trouble comes into the system. If you don’t have seed money, you can’t play the game at all. That’s why in the game of monopoly, everyone is given “free” money at the start of the game. They also get $200 for “passing go”. Which represents a “free” income producing investment, everyone gets just for being willing to play the game.

        If we stop and look at our world at any point in time, we find it’s filled with valuable, but limited assets that are important to humans but which need to be shared. So we have chosen to assign ownership, and trade assets, so as to allocate the assets to the places they will do the most good.

        5000 years ago, the single most valuable asset on the planet, was a human body. If you had a healthy human body, you were “rich”. Everyone that was born healthy, was born with a fair share of the wealth of the planet, simply because they owned their own body (assuming they were not made a slave).

        If you owned 10 slaves, you were richer still!

        As time progressed, other assets became limited, and valuable, like land, and water, and tools. When there is so much land, that it is effectively infinite, then it has now value for trade. We don’t need to trade items that are infinite in supply. We only hoard, and trade items, that our limited supply. The only items that make it into the economy, are the items we trade, which means the items that are of limited supply.

        For 1000’s of years, human labor has always been in limited supply, and it’s always been highly valuable. Being born with a body, was all the wealth we needed to get started in life, and fairly compete with all the other humans for trade and ownership of the things of less value, like land.

        But today, when we look at all the valuable assets in the world, and we look at the value of single human body, we see we are really ripped off at birth compared to the past. And the more machines replace us in the economy, the more ripped off we become. A human body is no longer a fair share of the total wealth to be born with, and it’s only going to get worse.

        So now, when we are born, we are forced to play a game of asset building and hording. We must be good investors to make a living now. But investing is a winner take all game where most people lose, and only a small handful win big. Only the top performers out of the billions of people trying to play the game will win, with most the rest losing.

        That game, will NOT create a strong and peaceful, and happy society. So we have to decide what type of society we want to live in, an change the rules of the game, so as to create it.

        And the very simple, and minor rule change to offset the winner take all outcome of the current game, and to offset the fact that we are no longer born with a free valuable asset that will produce income for the rest of lives, we need to force the winners, to share a percentage of their wins, with everyone, equally. That rule change will fix the problems created by the growth of the machines in this game of life we play. That rule change will create a very strong, and peaceful, and happy society (compared to where we are today).

    • Khannea Suntzu Curt Welch July 7, 2012 on 2:41 am

      Those that win in the current system win because the current system rewards a special set of qualities. The current system is actually an atavism of competition/attrition based society (or nature itself) that existed for so long.

      Consequently those experience the nectar of winning can’t envision a system that does not reward winnitude. To them alternatives feel like a fly in the nectar, and a betrayal. They will resist change with all their might.

  • Kevin Estes July 7, 2012 on 3:34 am

    The need to make money and maintain property are two of the main reasons why we behave in a civilized manner. So perhaps instead of just handing out money, the government will provide a job to anyone who needs one

    • Ralph Buttigieg Kevin Estes July 7, 2012 on 4:26 am

      G’day Kevin,

      Who’s going to pay for these government jobs? And what will they be doing? What you describe is what happens know. The result is a class of people dependent of government money producing nothing of value and another group increasingly resentful of having to pay taxes.

      The solution I believe is to concentrate not on getting a job, but creating individual wealth. A change of mental attitude. Once that happens new technology is your friend not enemy.



    • Khannea Suntzu Kevin Estes July 7, 2012 on 6:12 am

      Digging ditches? Not interested. I’ll opt for the free money. I’d love doing something real, but I am not going to bother with useless labour. Besides the current government apparatus isn’t equipped to do this. We need a wholly new system.

      • acm1234 Khannea Suntzu July 7, 2012 on 2:57 pm

        Democratic communism

        • Khannea Suntzu acm1234 July 7, 2012 on 4:16 pm

          Communism is a historical atavism, as quaint and outdated as the Cathars or the Babylonians.

          We’ll need a new name for a new concept.

    • Curt Welch Kevin Estes July 7, 2012 on 10:04 am

      Within about 30 years, there will be no “jobs” for the government to hand out. The machines will do everything for us. Do you suggest the government put buttons on stop lights, so that they can pay someone to stand at the intersection, and switch the lights manually, instead of letting the computer do it? Hire people to be elevator operators again? Turn off the automatic phone call switching technology and put phone operators back to work routing all phone calls? Ban the use of computers for accounting so people can be employed adding numbers once again?

      That is what it will be like for all jobs in the very near future, and what it’s like for many people today who have already either lost their job to machines, or are forced to work minimum wage jobs because there are no other good jobs left that they are qualified for.

      For now, instead of just handing out money, the government certainly could create real jobs by funding projects. But the real projects, when bid for in the free market, would not solve the question of how the needy find work, when they don’t have the skills to build a bridge for the government.

      If we make up nonsense jobs (sit here for 8 hours and keep this seat warm and we will give you $50 at the end of the day), we aren’t really helping anything. The seat didn’t need to be kept warm. It would be better to just give the guy the $50 and let him do something he enjoys with his time.

      The problem we are facing is not a problem of wealth. The technology is making us, as a society, amazingly wealthy. The problem is in deciding who gets access to the wealth. It’s a problem of how we share the wealth we as a society have created. We used hard work by humans combined with a free market to allocated the resources to where they can do the most good, as the two prime tools for creating this wealth. And along with those tools for creating wealth, we have used a system of sharing, based on how much hard work each human contributed to the system. The were no absolutes on what a hour of hard work was “worth”. We just in effect, divided all the wealth produced, by all the people that put their hard work into the hat, and then distributed to rewards, based on how much you put in.

      It’s that system of sharing which is failing us, now that machines are playing a significant role in the picture. The machines are putting hard work into the hat as well, but they don’t get the rewards, their owners get the rewards.

      This creates a winner take all game dynamic. It’s not fair for anyone except the winners. It’s exactly like the game of monopoly. Once you fall too far behind in the game, and have failed to secure enough assets, there is no hope for you to ever catch up and “win”. Your future in the “game” is doomed once you fall too far behind. But in real life, that means, if you are born in the wrong situation, you are doomed before you even start to play the game.

      Before the machines started changing the balance of everything, all humans were given a very valuable asset at birth. they were given their own human body, and mind. A healthy human body was always a highly valuable asset in the free market. So having a healthy human body was the seed money we gave to everyone to get them started in the game. This investment, would generate for them, a life time of income. And it was that income from that free investment, that everyone got to life off of, and got to try and leverage into a larger fortune though wise investments of their income from selling their body and mind (and working for a living)>

      But with the growth of machines, the value of a human body at birth is no longer a good stake to get you started in the game. It’s worth more if you educate it, which is why we provided free public education – to give people a better start in life, without having to work as a child, to pay for that education. But more and more, a free public education isn’t enough to get you a good job. An expensive college education is not even working very well any more.

      In 30 years, being born with the “free assets” of a human body to sell into the market will be completely worthless. The supply of humans with bodies to sell will flood the market, and there will be no jobs that pay enough to get a person a reasonable share of the huge wealth the machines will be creating by that point in time.

      If we want to put humans first in our society, then we must, give everyone, a free minimum guaranteed income stream, to replace the income they would have been able to get in days gone past, from having the asset of a human body.

      If we don’t do this, then a small elite will take control of all the valuable assets in the world, and let the everyone else starve and die, and they will of course go to war to protest this, and all hell will break lose.

      • digitalcole Curt Welch July 7, 2012 on 11:43 am

        I love your explanation of the “human body asset”.

      • Ralph Buttigieg Curt Welch July 7, 2012 on 2:15 pm

        G’day Curt,

        We already have a free income stream, its called the welfare state. It provides everyone with “free” money and commodities like education and health care. But nothing is free. Its paid by taxes on the productive. It results in resentment for both the taxed and the beneficiaries and is sending nations down a death spiral of debt. Forget it.

        Heres an alternative, people move away from being employees or welfare receipts into owners of income producing assets. They create wealth directly.

        I’m sure there are many ways this could be done . Here’s one possibility.

        You have an idea for a small business. You go to your PC and log on to a small business web site. Its run by a AI then comes with banking, accountanting, legal aid,business coaching etc. All available at a fraction of the old cost or even for free.

        It helps you write a business plan, then provides capital through loans and direct share funding. Provides necessarily support services and importantly business coaching. Currently most small business fail,after a few years (been there done that) but with regular AI mentoring chance of success would be much better. If the business fails you lose your share but the AI keeps the business idea and the work already done. That can be recycled to someone else.

        I’m sure there are other ways people can use the new technology to acquire assets but you first need to stop thinking of just getting a “job” you need to get rich.



        • Curt Welch Ralph Buttigieg July 12, 2012 on 6:06 pm

          @Ralph Buttigieg – I never got around to replying to you post of a few days ago…

          “Heres an alternative, people move away from being employees or welfare receipts into owners of income producing assets. They create wealth directly.”

          Yes, this has always been my position in so far as once “work” is dead, the only “job” left will be as owners – as investors. And for now, since jobs are being less and less secure, everyone that can, should try to build their wealth by wise investing.

          However, the big problem, is that we can’t build a strong society if investing is the only way to build wealth and gain an income to live off of. How does someone invest, when there are no jobs? How does someone born poor, gain wealth? Investing is a game of exponential growth. Someone that owns a million dollars of investments will always be way ahead in the game, than someone that owns $1000. How does the guy that only has $1000 to invest, every “catch up to” the guy that started out with a million? At a 5% annual investment return, the guy that started at $1000, ends up with $1628 after 10 years. The guy that started with a million, ends up with $1,628,000 dollars. So one guy gained $628 dollars in wealth, while the other gained $628,000, but yet, they both were making equally wise investments. They were both working just as hard to “get ahead” in society. The rich guy “contributed” more to society, only because he started the game “rich”.

          The guy that starts with $1000, falls further and further behind every day. He can’t catch up. The rest of society is getting super rich, and this guy is trying to just make his second $1000. Not only will the guy die poor, his children, and their children will for all times, be poor.

          After 100 years, the family of the guy that started with a million, will be worth 131 million. The family of the guy that started with $1000, will be worth only $131K. So even after 100 years, he’s only got around 1/10 of the other guy had 100 years previously.

          And that doesn’t factor in the fact everyone has to use this investment income to pay living expenses. The guy that started with $1000, is actually not making enough to buy food, so he either begs for food, so he can reinvest or he gains at an even slower rate due to the need to eat – which means he grows poorer and poorer even on a relative scale per time.

          Worse yet, the guy with lots of money, tends to have enough money to buy better investment advice, or to pay for better investment research – so he tends to find out about the better investment opportunities sooner, than the little guy, which gives them an even better return and more advantage over the little guy.

          And lets not talk about the power to corrupt the system to your advantage when you are super rich compared to the rest of society.

          A society built on the assumption that the only way to share wealth is by competing to see who is the best investor, is a highly unstable society. The rich get richer, and the poor get poorer. It would polarize society in the two classes of the super poor, and the super rich. There would be ZERO options for upward mobility in a society structured like that – other than though stealing. (but plenty of options for downward mobility to any rich guy that makes a bad investment).

          This is the problem we already see already see happening today. People are given a free investment “gift” in our current society at birth – a body that can be used to produce an income stream. With that “free gift” they get an income stream they can use to both live off of, and to invest, so that their wealth grows over time, and increases their income stream if they invest wisely.

          But the closer we get to the singularity, the less valuable a human “body” becomes – the less money it is able to generate for the average person. So with each advance in technology, we devalue the average worth of all these human-body assets, and we push everyone closer to the time, where playing the investment game will be the only way to survive. But if they don’t get enough “saved” fast enough before this game starts in earnest for everyone, they will fall behind, and never be able to catch up.

          Most people will fall behind, and become part of the supper poor class.

          We have the choice of building a society, that will become highly class polarized by wealth (Think of the future suggested by the popular Hunger Games books/movie – that’s exactly the path we are on today), or we can choose to address this issue, by setting up a system to share some percentage of all the investment wealth, with everyone, to create an income floor, which gives everyone free “chips” to play in this new future investment game, to replace what everyone currently gets – a free valuable body to use for a lifetime.

          “Here’s one possibility.
          You have an idea for a small business. You go to your PC and log on to a small business web site. Its run by a AI then comes with banking, accountanting, legal aid,business coaching etc. All available at a fraction of the old cost or even for free.”

          That’s basically what we have already today. The machines don’t talk to you to give you such advise, and we have to use Goggle and read web sites, but the effect is very similar. Lots of free advise, and various on-line companies waiting to help you launch a new business.

          What you don’t seem to realize, is that post singularity, no human will be able to do this work as well as a machine. How long does it take a human to research business opportunities? How long does it take to research the market, and develop a good business plan? Maybe a month for something simple. The AIs of the future will do that in 5 minutes! You ask the computer, “what about a business that does X?”. 24 hours later, the computer has analyzed 100 different variations of the idea, 100 other different variations of much better ideas, and come back to you with, “well, that idea sucks!”. Here’s the best version of it I could create, and the business will require a `1 million dollar investment, and will be estimated to return 2.4% average over the next 5 years. But these 20 other idea, they all return over 10% average over the next 5 years. So what do we tell the AI? We say: “go make as much money for us you can and report back to us what you are doing and how the businesses are doing”.

          If we don’t tweak how our society works, everyone will be playing that game, and some people, will be winning over the others, and the more one guy winds larger and larger control of resources, the more he is able to use that to leverage his advantage, and soon, he controls most the economy.

          “I’m sure there are other ways people can use the new technology to acquire assets but you first need to stop thinking of just getting a “job” you need to get rich.”

          That’s a job as well of course. 🙂 It’s called “being an investor”, or being an entrepreneur. It will be the only main job left for us in the not too distant future, and it’s one of the few really good paying jobs left today, assuming you are BETTER at than everyone else playing, because the game is not fair. It does not distribute wealth based on how hard you work, it distributes all the wealth, to the few guys that make it to the top 100 out of a billion. It’s a design for society that will guarantee large amounts of wealth inequality.

          Ant that is why we are seeing growing wealth inequity already. Increasingly, money today is made though investments instead of wages and salaries. And as the technology advances, wealth is increasing made by what you own, instead of what you do, and the more society drifts in that direction, the more wealth inequality we will see.

          • Ralph Buttigieg Curt Welch July 13, 2012 on 3:18 am


            Firstly let me repeat my definition of wealthy. “When assets produce enough cash flow that paid work becomes an optional extra.” I don’t care if there is a bunch of zillionares around. What I care about is my own wealth and that of my family. A society were the poor get rich and the rich get richer is a win win society . As long as ordinary people can see real continuing improvements in their lives society is stable.

            Theres plenty of money around for ordinary people , banks are full of it. I’m not sure were you got that 5% from. An investor can get far more then that let me assure you. Professional traders can conservatively average more then that a a *month* using leverage and do that whether the market is going up or down.

            Not that I’m really advocating that everyone becomes a trader. I am advocating if those machines are so great get some and use them for your own benefit!

            I’m so confident of this because I see it happening right now. Example. I like cooking Youtube videos. Two of my favorites are The One Pot Chef and Nicko’s Kitchen. They each produce 3 videos a week of about 5 minutes duration. They make enough income from the affiliate program that they have given up their old jobs! The ever growing automated library of videos produces a regular cash flow even if they take time off. Now, one was a baggage handler at Perth Airport the other worked in retail. Just the sort of unskilled jobs we are supposed to worry about.



            • Curt Welch Ralph Buttigieg July 13, 2012 on 11:40 am

              So why did you not address my main point?

              “A society were the poor get rich and the rich get richer is a win win”

              That society will be gone in 30 years if we don’t make any changes. It will no longer be possible for the poor to get rich. It’s already getting worse for them instead of better over the last 30 years since Reagan.

              You sometimes talk as if I personally need to stop thinking about jobs and think about investing, and that don’t understand the value of investing to get rich. I’ve been self employed for the past 25 years. I operate two businesses at the moment. Most of my income that has supported my family for the past 15 years came from a .com business I started in 95. I set up the machines, and they just make money for me every month. I work about 2 hours a week on the business at the moment and they are still just making money for me. I was part of small start up businesses before that. Very little of my 30 years of working has been an a normal job. I now how to make money other than by getting a job.

              80% of the population however don’t know how to do this stuff, and maybe 50% of them wouldn’t be any good at it even if they tried or we tried to educate them. Most wouldn’t be able to compete with the best of the best in the industry they were trying to compete against.

              I’m not talking about how to advise someone to survive today. I’m talking about what we are headed for as we approach the singularity. Our current social norms need to change. The sooner the better.

              It seems like you are in Australia. Good for you. Much better than the US on the issues of providing social support for people so they can get ahead. In the US are social normal is closer to, “if they can’t make enough money, just throw them in jail”. 🙂

    • acm1234 Kevin Estes July 7, 2012 on 7:41 pm

      But what are those jobs? And what happens when everbody has a government job how are u going to pay anyone accept in a equal wat?

      • Kevin Estes acm1234 July 7, 2012 on 11:09 pm

        The presumption is, we are going to have to face a situation where we have 8 billion people in the world, but it only takes a million or so, to provide the needs and comforts for all 8 billion. Wealth, in the form of goods and services is created by 21st century technology,not human labor. So the sellers have mountains of goods and services, but there are no buyers because there are no jobs. What are our options in that scenario? One: Let a class war take the human population down to half a billion. Two: Pay everyone a dole with money from the 21st century technology. Three; Use that money pay people to do something. (write a book, lead a discussion group,run an art gallery, anything. So that they do not devolve into brain dead fools who don’t know how to do anything but consume.

        • digitalcole Kevin Estes July 8, 2012 on 5:03 pm

          Perhaps compulsory higher education would be enacted making it a law that each person needs to have a degree in (lets say) three fields of study?

          • Khannea Suntzu digitalcole July 8, 2012 on 6:31 pm

            What if my highest value is active pursuit laziness?

  • tyler durden July 7, 2012 on 7:32 am

    Automation will kill the job market, for sure. Slowly but inexorably. It’s pointless to try to imagine new jobs or try to update our skills so as to outsmart machines.
    But what people generally overlook is that in a society like the one depicted in “I Robot”, the governent or the central bank can simply print money (or better, they can give anyone a Smart Card with monthly payments in electronic money). There would be NO inflation whatsoever in such a scenario. Inflation would instead occur in a job based society, like ours still is : the govt prints money > everyone stops working > production plummets > money chases up fewer goods > people lose confidence in the currency and start to frantically buying things > inflation skyrockets. In an automated economy, the 2nd step would not take place, preventing the inflation from materialising.
    We need to phase in this system simply, which corresponds to the Minimum Income idea even Milton Friedman toyed with. Tech gurus don’t see this exit strategy because they bought into the “inflation monster” argument every economist always reminds you of, in the same way as economists don’t talk about automation because they have been blinded by the Luddite fallacy. It’s time to get rid of these two dogmas if we want to make some progress.

    • Curt Welch tyler durden July 7, 2012 on 1:05 pm

      You don’t understand inflation and it’s cause. The government can’t just print money exactly because it will cause inflation.

      To understand inflation, you need to first forget about money, and understand economics without money. Economics without money, is just free trade of valuable assets.

      First, we need to understand what makes an asset valuable. It’s first, due to the fact that it’s important to our innate goals. We have innate goals to eat, protect our body, reproduce, etc. We have our innate needs. That’s where it all starts. Then, to satisfies our needs, we make use of the things around us, the assets.

      Many assets we need to meet our needs are so abundant, that we can consider them effectively infinite. Like air. It’s one of the most import assets we have. Without air, we die a painful death in minutes. We can last for days without water, and weeks without food, but air, 5 minutes and we are dead. Despite the fact that it’s the most important asset on the planet to us, it has no value IN THE ECONOMY, because it’s supply is effectively infinite. I can bottle water, and bottle air, and attempt to sell them on the street corner. People will trade me things of value for the water, but will not trade me things of value for the air. They will laugh at me instead. 🙂

      So, the only assets that become part of the economy, are assets that 1) have a use for meeting our innate needs, and 2), are supply limited – we can’t have as many of them as we would like to have.

      So what determines the value of these assets? It starts, again, with our needs and how our brains work. Our brain are value calculating machines, that learn the value of stuff through experience. It assigns relative values all calculated from low level innate needs. So value starts, in how the brain works.

      But it becomes exposed externally, in our actions. When we compete with other humans over limited resources, we attempt to acquire and hoard the resources we need. But once get get past the “strong man takes what he wants” society, and move on to agreeing to social contracts of ownership and trade, we have created an economy.

      In that economy, we balance our hoard of assets to maximize our brain’s estimation of our current wealth. We see someone else has an apple we want, and they see we have a orange they want, and we decide the apple is more valuable to us than our orange, and for them, the inverse is true, having the orange is more valuable to them than the apple, so we trade. And in so doing, we have changed the make up of our personal collection of assets. We have both increased our own brain’s intrinsic measure of the worth of our collection of stuff. We have both raised the value of our personal stash, by making the trade.

      We trade, because it creates value. It creates value, by allocating these limited resources, to the places that will do the most good for all of us. We created added value out of thin air, just by trading. Sometimes that happens because we had different fundamental values, one of us likes apples more and the other likes oranges more. Sometimes it’s because we have the same values, but we just needed to improve allocation. We both like having one apple and one orange, but before we “improved” the allocation, one had two apples, and the other had two oranges.

      It’s all about, allocating _LIMITED_ resources, to where they will do the most good.

      Human labor is just another resources that needs to be allocated. Do we spend an hour of the resource planting more apple trees, or do we spend an hour planting more orange trees? Or do I trade an hour of my labor, for some good someone else has? Again, it’s all about allocating limited reosurces to where they will do the most good, for THE PEOPLE that our the foundation of what is valueable to each of them.

      The free market and and free trade is very valuable, because it automatically gets the limited resources, to the places they can do the most good, without any requirements of central planing. It only requires local planing by the agents that make the individual trade decisions.

      So what is a value of an orange in this trade system? It has some intrinsic value to each human, which we have no direct access to (we would have to tap into the brain to try and answer that question). But externally, it’s value becomes a relative measure. In a large competitive market, apples take on a value relative to oranges. One orange might worth 3 apples. But that relative value is something the market “calculates” due to the combination of intrinsic human desire in the market (demand), and of the supply in the market. The “price” or apples, as measured in oranges, is an optimization point the market will approach on it’s own. The market “calculates” the value without any single individual, needing to “know” what all the forces in the market are doing.

      “prices” are just market balance points.

      If the market balances at the point of 1 orange for 3 apples, and we dump twice as many apples onto the market, the supply of apples has gone up, and the demand will in turn drop, which causes the market to reach a new balance point. The new point might be 1 orange for 2 apples.

      Supply and demand, sets the _RELATIVE_ value of items that are traded. And the ONLY items that have any value are all, are the ones that are in LIMITED supply. Any item that has infinite supply, has zero value, and can not be traded for anything of value.

      Apples and oranges have a very short life span, so their value only lasts for a short period (until they are eaten or spoil). We can switch the example to gold and silver, which have a very long life span, but which both have value because there is a limited supply, and because their is demand for them.

      If every day, we have a secret gold mine, and we dump another 100 lbs of gold into the market, the market will keep adjusting it’s relative value of items, with the value of gold dropping as the supply rises. If our gold mind is HUGE (million square miles of gold), we will reach a point where we have dumped so much gold into the market, that it becomes basically worthless. There’s so much gold piled up everywhere, it’s getting in the way, and people have to pay to get it carried off to the dump it’s so worthless. We have killed the demand, by making the supply huge.

      Now lets talk about money.

      Money is just a fake commodity we agree by social contract, to trade in the market with all the other things we have been traded. Unlike apples, and oranges, and gold and silver, the only intrinsic value of money to us, is in our ability to trade it for things we want.

      But, like all items we choose to trade, it only has value, if it IS a LIMITED commodity.

      When we trade apples for dollars, the ratio of the trade, is set exactly the same way, as the ratio of apples to oranges. It’s set by supply and demand in the market. When many people trade the same items, the “market price” optimizes towards and average of all the individual supply and demand factors.

      We know whey we want apples. And why we might trade some of our apples for oranges (so we get to eat apples and oranges instead of just apples – something of intrinsic value to most of us). But why would we trade an apple for a dollar bill? What is the intrinsic value of the bill for us? It has value as trading tool which works better than our apples. With only apples to trade, I can’t trade with the guy that has gold, unless the guy wants apples. The beauty of the dollar, is that everyone is willing to trade for it. So by trading some of my apples for dollars, I have more power to trade in the market, than if I only have apples. Buy How much money do I want? Well, should I trade all my apples for dollars? No, because I can’t eat the dollars, and I might need to eat later. So I trade so as to balance the things I own to maximize my needs. Dollars are a great trading tool, but they don’t keep me warm, or feed me, so I need to have other assets like food, and shelter, instead of having my balance of assets all in dollars.

      So, like all assets we have a limited demand for dollars, vs apples, vs gold, vs a house, vs a car, vs an apple tree, etc. There is a demand n the market, for dollar bills, and that demand, mixed with the current supply is what sets the ratio of what an apple is worth, relate to a dollar.

      So what happens if we increase the number of dollars in the market from 1000, to 2000? Let say we just give the money out to all the traders split evenly.

      All the traders already had their own personal balance of assets that worked best for their needs. They might have 10 dollars, and 10 apples, and with that 10 dollars, they know they can buy 10 more apples any time they want them. So they had their assets balanced, so they had 10 apples in real apples, and 10 apples worth of money. Now, they all have more dollars than they need (based on current market trade rations), so they start to dump their extra dollars into the market, and increase their personal supplies of applies, and oranges while reducing the dollars. But this sudden rise in the demand for apples and oranges across the board drives the ratio up so that the price of all these items, in terms of dollars goes up. And then suddenly, now that the price of apples goes up, people feel they need more dollars in their portfolio than they did before, to they stop trying to buy apples, and they might even decide to sell some of their apples back into the market at the new higher price. And the new price of everything stabilizes at the new balance point.

      After all the trading is done, what do we find? We find everyone has gone right back to where they were before the money was dumped into the market. Their desire was to have half their “apple asset” in real apples, and half in dollars. When we dumped the extra dollars into the market, everyone started to trade to try and find the new balance point. But by the time all the trading was done, they were in fact, back at the old balance point of half their apples in real apples, and half their apples in dollars they can change for apples. But now, the new market price for an apple is $2 per apple, instead of one dollar.

      The only effect dumping all that money onto the market had, was to change the value of a dollar, relative to every other item it’s traded with.

      That’s inflation. It has no real effect on the relative value of apples and oranges, or on the assets people hold. It only changes the units of measure of the currency.

      So lets recap.

      For the market to work, all items traded must be of a limited supply. With out that, they have no value, and they are not traded. The only purpose of the market, is to maximize the value, TO HUMANS, of the limited resources that have an intrinsic value to humans. It’s a process of automatic asset allocation across the population, by free trade.

      Money is just a “fake” commodity we trade along with everything else. It has value, only as a trading tool. People don’t want money. We want the things money can buy. So we only hold enough of it to give us the trading power we need.

      To take on a value in the market, there must be finite and FIXED supply of money. The value it takes on, relative to all the other goods and services traded, is a function of the demand for money. When we change the supply of money, the demand adjusts according to the current supply and demand curve defined by the market.

      Every time the government “prints” new money, and puts it into circulation, it created inflation of goods, and deflation to the value of the money.

      This happens no matter whether humans are doing the work, or machines are doing the work.

      Lets assume all work done by machines, producing a constant overproduction output.

      I own half the machines, you own the other half. Neither of us “work”. We just own the machines. I ask my machines for oranges, and it has none, but your machines do, they own all the orange trees, so my machines buy the oranges from your machines. My machines need cash, to do business with your machines. Your machines need cash to do business with my machines. But when I ask for oranges, I like it better if I my machine hands me an orange instantly, instead of telling me “wait a minute, I have to go to the market and buy one for you!”. SO my machine decides it’s wise to keep a stash of oranges on hand in order to best serve me. But it must deplete it’s cash to do that, and with less cash, it’s odds of being able to respond to my request to buy a new boat is reduced. It might have to sell the stash of oranges to have enough cash to buy the boat I want.

      So, the machines, in their attempt to best serve my needs, attempts to calculate the optimal balance between having cash on hand, and having other supplies on hand, like oranges.

      Your machines are doing the same for you. And they trade with each other when then need to. This creates a market, and a demand for cash, and causes the value of everything to stabilize at some point, based on our current demand and the current supplies of everything.

      If the government keeps printing money, and giving it to both of us, all that it will do, is cause constant inflation. BUT, other than the constant inflation, it is doing something else good.

      The fact that it’s an automated economy, does not stop the inflation as you suggested, because the inflation was not caused by how much we worked, or now many products there were to buy.

      If you instruct your robots to invest in things that create long term value, instead of investing in things that give you short term pleasure, and I do the opposite, I use my wealth to create lavish dinners, and parties, and vacations, and you invest your wealth into building better robots, and buying land, and mineral rights, you will grow in wealth, while I will decline. If the government keeps printing money, and giving equal amounts to both of us, it will in effect, cause some of your value, to pass to me. So it will create some amount of wealth sharing, at the same time it’s creating huge amounts of inflation.

      If we do nothing but consume value, and don’t invest in assets that produce value, then total value of the production system declines, instead of grows. To keep it growing, we must invest some of our assets, in the production of long term value.

      In a free market, we are motivated to make those investments, because a little loss of money today, can produce a huge gain in money tomorrow. But if we are not allowed to reap the reward of the investment, then we will not choose to invest.

      If everyone is given a constant income of free money, and that’s all the money they have to spend, and they have no option to invest it, and then reap the rewards of a wise investment, then no one will invest instead of consuming. They will just spend all their money on junk that makes them happy.

      To keep society growing, we need to invest. We could try to turn the job of investing over to the government, but that has issues of corruption and inefficiency. So I think it’s far better, to motivate people to invest by continuing to allow them to reap the rewards.

      But some people will always be better investors than others. Some by skill, some just by dumb luck.

      What the government can do, without creating infinite inflation, is to just force everyone to share their rewards to give everyone a fair minimum share of all the wealth produced by the investing. People are motivated to invest some of their “free” money, which is good for everyone when the investment turns out to be a good one, but they don’t need to. They can be free to use the money any way they want. When people make money from their investments they get to keep part of it, and part of it goes to the community. Society will have to decide what level of forced sharing they believe is best. But it means that everyone wins some when people make good investments, but the guy that invested wisely, wins the most.

      This should be done in my view, by taxing all income at a flat rate. Corporate income (profits), personal wage income, and investment income (capital gains). It should all be taxed at the same rate so as not to motivate the shifting of wealth distribution from one path to another for tax reasons. Then distribute the funds to everyone equally as a basic income. There would be no need for a progressive income tax, because the simple act of giving the money back to everyone, makes it an automatic progressive tax in effect. You get $10K a year for doing nothing. If you get a job or make investments that produces $10K, and you pay a 10% tax, then you keep 9,000, so you total income is $17K. You come out ahead in the system (like a negative income tax). But once you make $100k then you get to keep $90K, and your total income is $100K. So that would make $100K the break even point where you paying into the system as much as you were getting out. If you make a million, you pay 100K in taxes, and only get 10K back, but you get to keep $900K. The really big winners in the system, would be the ones supporting all the little guys, but everyone that made any income would also be adding their 10% tax support to the system.

      It’s not “free” money crated by a printing press. It’s true wealth the government is talking from one place, and moving to another to offset the fact that making money by investing is a winner take all game. It’s just turns it into a winner takes a lot, but is forced to share with everyone game.

      And yes, the Luddite fallacy I agree with. People don’t understand that the machines are stealing the natural “wealth” we used to be born with, when we were born owning a human body to sell into the markets. We are now born with far less value, and can only hope someone gives us money, or we are lucky enough to make some really wise and lucky investments with the little we do have.

  • Ralph Buttigieg July 7, 2012 on 4:14 pm

    I’m rather amused that the solution most come up with include Marxism, an failed ideology thats produced dictatorships, poverty and mass death or some form of the welfare state. A failing program thats drowning nations in debt. All these are a response to the Industrial Revolution. What is being discussed is very different.



  • digitalcole July 7, 2012 on 4:51 pm

    I think these are some very intelligent comments and thoughts however, we are somewhat preaching to the choir. How do we move this conversation to other forum where like-minded individuals are more sparsely populated?

    I’ll mention for example because I find it necessary to see “how the other half lives.” Conversations there seem to be completely preoccupied with ending Obamacare the economy and fighting the stem of socialism. Many of the ideas here point precariously towards some sort of economical “evening” of the playing table. It’s not hard to think of what the first words out of a more conservative minded mouth will be. SOCIALISM IS EVIL!

    Does anyone here have a plan on how to confront and overcome this mindset?

    I’m very interested in hearing anyone’s thoughts on this.

    • Curt Welch digitalcole July 7, 2012 on 6:52 pm

      Yes, excellent point. That is the $64,000 dollar question. The second they grasp you are talking about wealth redistribution they play the socialism-is-evil card, and the discussion is over. They literally can’t hear anything you say after that.

      Part of the problem here is much like the global warming debate. Macro economics is complex. Not many people understand it. It’s too complex of a subject to be reduced down a a few moral platitudes so anyone that doesn’t care to invest the mental energy to understand it, has no chance of every seeing the social value of such a system.

      Basic income is also probably the single hardest political “nut” I can think of to crack. To implement it in any form, you have to take money away from someone, and then distribute it over the entire population. No matter where the money comes from, the amount you distribute to everyone will always be trivial in size compared to what you take away. You try to take 1 trillion dollars away from the richest and most powerful people and organizations in the country, and you then hand out $250 dollars a month, to everyone. Sure, everyone likes the idea of getting an extra $250 dollars a month, but for 70% of the population, it’s not enough to get really excited about. They make $2500 a month or more, so $250 extra is a nice bonus, but it’s only that to them – a little bonus. It’s nothing they feel so justified about that they will take to the streets to demand action. Most will think something along the lines of: “I’d love to have the money, but I’d be embarrassed to try and argue I deserve it!”. So they keep quiet, and say nothing.

      So we have one very rich and powerful group saying “not over my dead body are you going to pass this legislation”, and on the other side, is dead silence. No politician can turn that into a passing vote for new legislation.

      I honestly think we have only two options here. Option one, is ride out the disaster, watching life get worse and worse for the entire world for decades, until it gets so bad, people will agree to try anything, and then implement it – assuming we still have a functioning society and government and economy left to implement it.

      Option two, is to get a few of the richest people in the country to get on board with the idea, and turn it into their personal crusade. They would need to put their money where their mouth is, such as by volunteering to donate a billion dollars to start a basic income fund to be managed by the government so that income from the fund could only be used to distribute basic income payments to the entire population. Donations to the fund could be received from anyone willing to donate to the cause. People could set up automatic payments to donate $25 a month to the cause, to show their support. If contributions were tax deductible, that would help motivate contributions.

      Doing it as a voluntary contribution, means that it’s an investment in the health of the country. What better cause to support than your country as a whole with the benefit of the money helping those that need it the most! And it’s a fund that will actually send money back to you, your kids, and their kids, for the rest of time.

      It’s a BIG idea! (Basic Income Guarantee).

      In a country like the US, I think that’s the only way to make it happen, if we want it to happen before things get really bad for people.

      I don’t think we have a hope of getting enough people to understand the need for such a system before things fall apart unless we can just do it this way, and show them what it does for the economy. Even if the only payment people get at first, is a $50 dollar distribution once a year from the fund, they will quickly get used to the idea that they have a legitimate right to receive this money from their society, and that will get people on board with the idea. It creates a slippery slop of the good kind to make it happen.

      Kickstarter BIG project! 50 billion dollars in funding needed by December! 🙂 (someone send the announcement to Buffet and Gates…).

      • tyler durden Curt Welch July 8, 2012 on 2:41 am

        Curt, my reply was sent by mistake to Ralph. Btw he explained me that we shouldn’t worry, so we might as well stop debating and feel relieved….

      • digitalcole Curt Welch July 8, 2012 on 10:29 am

        “I honestly think we have only two options here. Option one, is ride out the disaster, watching life get worse and worse for the entire world for decades, until it gets so bad, people will agree to try anything, and then implement it – assuming we still have a functioning society and government and economy left to implement it.”

        Yes, I see the beginnings of this happening now as mass unemployment refuses to go down. I think most of my fear is in realizing that we’re already in a partial abundance society. Anything that can be converted from atoms to bytes will be and anything in byte form can be gotten for free somewhere on the web. Yet, there is a cost for free and it comes in the form of joblessness. That wouldn’t be a problem except we still need to pay for food, housing, cloths, water, energy and sanitation. We can survive without another photo sharing app but we can’t survive without these six necessities of life.

        “Option two, is to get a few of the richest people in the country to get on board with the idea, and turn it into their personal crusade.”

        I don’t see government jumping on the band wagon as they’re always late to the game. If this was the Titanic we’d have already sunk and they still wouldn’t have admitted to hitting the iceberg.

        Relying on benevolent benefactors to help jump start the necessary changes to our society does satisfy the anti-socialism argument as government isn’t involved. The question is can you get enough billionaires to sign on to make an actual difference. Perhaps if it was the new bread of billionaire, ones created by the tech boom and already has the mindset that we’re better as a collective than as a hierarchy of haves and have nots.

        This as one of the most complex puzzles the human race as ever tackled and our future rides on having the correct solution. It’s painful that I don’t see these conversations taking place at the upper echelons of our leadership.

    • acm1234 digitalcole July 7, 2012 on 7:38 pm

      You have to explain to them that we can not simpily keep on going in this direction. the world population is to large to keep on suppourting with our limeted recources and with fewer and fewer jobs who is going to help a future with about 8 billon poor people and 1 billon or less wealthy people? So the only way is to lower the world population wich would make money about useless because if we can support 7 billon people now, it will be easy to support 1 billon people.

    • Ralph Buttigieg digitalcole July 7, 2012 on 9:50 pm

      G’day digitalcole,

      Easy, don’t come up with socialist proposals, that may help.



    • digitalcole digitalcole July 8, 2012 on 10:43 am

      Some interesting comments, thank you everyone.

  • Ralph Buttigieg July 7, 2012 on 10:08 pm


    Here we can learn about:

    1) Advanced robotics and automation,
    2) 3-D printing
    3) Artificial intelligence.
    4) Radical health improvements and longevity
    5) Commercial Space and opening up the solar system..

    Yet people are concerned about:

    1) Limited resources
    2) Jobs made obsolete
    3)disparity in wealth

    Seems to me the advances would overcome those issues.

    Yet I’m told the solution to these supposed problems are Socialism and the Welfare State. Redundant and failed answers to 19 and 20th Century problems.

    I really think people are on the wrong track here. If theres any mindset that needs to change its some of the people here.



    • tyler durden Ralph Buttigieg July 8, 2012 on 2:29 am

      Curt, you got the wrong end of the stick. Let me clarify some points on inflation first:

      1.Inflation is essentially a (non linear) monetary phenomenon. It’s a continuous rise in the quantity of money, whose result is a continuous rise in the average level of EVERY price. This happened since the time of Diocletian and it’s happening now under Mugabe.
      2. In a barter economy there can be no inflation – you can have some prices rising, but not all of them.
      3. Inflation is also affected by the velocity of money and by how people spend the money – so you can have bubbles (inflation) in certain areas only, like the Nasdaq, real estate, commodities etc.
      4. Inflation gets out of control when people lose confidence in the (government printed) money and start hoarding real assets. At that point, inflation spikes exponentially.

      The above is what most economists agree upon. Notice that there is no Maxwell equation to predict the exact pattern of inflation, so any forecast should be cautious.

      Wealth is an abundance of goods, not an abundance of money. So what counts for more in this analysis it’s the ratio between quantity of money and quantity of goods.
      When we say that money rises/falls/is constant, we should always have in mind the denominator as well.

      Consider these 3 scenarios:
      a) If the quantity of money doubles and the quantity of goods is kept unaltered, we can reasonably assume that each good would end up costing the double, roughly speaking.

      b) If the quantity of money doubles and the quantity of goods doubles too, we can reasonably assume that prices won’t rise, so there will be no inflation.

      c) If the quantity of money is kept CONSTANT and the quantity of goods doubles, we can reasonably assume that prices will halve.

      We would have inflation only in the scenario a), the one you had in mind. I was thinking about c) instead. Maybe you have been misled by the notorious expression “printing money”.

      An automated (and basically jobless) economy can perfectly follow the c) model: a CONSTANT (rather than a growing) money supply coupled with a RISE in the quantity of goods due to automation. The result would be no inflation.

      The difference would be that people nowadays have to work to get their paychecks (suppose 3000$ a month). In the “IRobot economy” there will be no job to do, so people would get 3000$ a month in their bank account as Minimum Income/B.I.G.

      I agree that if they received 3000$ in January, 6000$ in February, 12000$ in March etc, they would end up in Zimbabwe, with skyrocketing prices… But I’m suggesting that they should have a limited and constant purchasing power, so things wouldn’t go out of control.

      Why do you think that prices should rise here? We have a stable quantity of money as before but it’s generated “effortlessly”, combined with more production (factories, offices, restaurants etc open 24/7), so it would produce no inflation. Most probably, deflation.

      I agree that during the transition towards this economy there will be lots of bumps down the road – especially because an IRobot economy is not around the corner, so phasing in the B.I.G. won’t be as simple as describing it when implemented – but we have to move into this direction. Your B.I.G. idea can be a starting point.

    • tyler durden Ralph Buttigieg July 8, 2012 on 2:38 am

      Ralph you have no idea on what’s going on, don’t you? The first of your 3 points lead to a jobless society. Do you think it’s something irrelevant for all of us?

      Given that you are on the right track instead, why don’t you enlighten us with your solutions? I’m all ears.

      • Ralph Buttigieg tyler durden July 8, 2012 on 3:22 am


        Tyler, I have given a detailed example of a better alternative already. Please look down the comments to my response to Curt. I have also just blogged about this matter here:



        • tyler durden Ralph Buttigieg July 8, 2012 on 4:42 am

          done. It’s an interesting perspective but it won’t solve the problem. Let me give you some reasons why:

          1. jobs are disappearing now because of increasing levels of automation. The AI is something decades away (to say the least), so it won’t help us in the meantime. You need to think about what should be done in the next years instead.

          2. even an AI support won’t turn any of us into a Steve Jobs, this is something that trascends any reasonable expectation.

          3. an AI would simply compound the problem, given that it could perfectly replace even the most qualified worker on earth (a doctor, an IT engineer, a physicist, a nanotech etc). Remember, you can’t be neither a low skills worker nor a high skilled worker anymore. Machines are better than you no matter what.

          I have given instead my suggestions in a reply to Curt, but – having read your other responses – I’m sure you will label them as “socialist”.

          As you know, Socialism means that the Government owns everything, so there is no private property, no free enterprise, no liberty etc. Instead, I’m worried about how to preserve freedom and high standards of living in a society where unemployment will be growing and XIXth or XXth century solutions won’t work.

          No offense taken I hope, but I would really suggest you to open your eyes and simply realize that technological evolution will be the greatest game changer in the history of mankind. You can read Martin Ford’s book (for free) about that if you’re still skeptical, he was really the first one to talk about the elephant in the room.

          • Ralph Buttigieg tyler durden July 8, 2012 on 5:08 am


            My response.

            1) I’m not just thinking but taking action. I’m in a service industry that I see will be phased out in a decade or so. My response is to not to get another job but to acquire assets that will provide me a passive income instead. Something I think everyone can do if they really want to.

            2) You don’t have to be a Steve Jobs to be wealthy. When your assets provide you enough income that paid employment is an optional extra, you are wealthy.

            3) Fantastic! I’ll take all those skills a 3D printer, some robots and other stuff and I’m off to colonise Mars!



            • tyler durden Ralph Buttigieg July 8, 2012 on 1:46 pm

              well, I would say that

              1. good luck. Jim Rogers has been lucky with his Quantum Fund, I wish you the same success. Even if I don’t see any passive income investment around (real estate, stock exchange, govt bonds were the magic wand but everything is falling apart as you see). But we can still win the lottery.
              2. again, that AI is decades away, whether it can help us or not.
              3. it’s a bit cold over there, maybe we could sell the Martians some SUV first, in order to trigger a global warming in Mars. Once the temperature it’s more pleasant, I guess you can go.

              • Ralph Buttigieg tyler durden July 9, 2012 on 5:15 am


                Firstly the current situation is one of economic opportunity. Traders can make money if the market goes up or down, in fact as declines can be more dramatic more money can be made in such cases. I’m in Australia and theres plenty of opportunity in real estate (have cash positive investments at the moment). I’m told even in the United States the fall in house prices means rental returns are good.

                The best thing is that there’s new very powerful internet tools that allow investors to take advantage of such opportunities.

                Automation allows everyone, even YOU, to create wealth. You just need to get over playing the victim and use the new technology for your benefit.

                • tyler durden Ralph Buttigieg July 9, 2012 on 9:21 am

                  hola Sir, I really like your optimism. Without it, we go nowhere. But please…trading will make us rich before automation can kill us? Seriously? Looks like a US commercial.

                  Check the market forecasts of Peter Schiff, Nassim Taleb, Jim Rogers, Nouriel Roubini, to name a few. Take a look at ZeroHedge. Then we can have a separate discussion about the great opportunities of financial markets.

                  In the meantime, let me give you a hint, so that you won’t play the victim later: stay away from real estate investment in your country. Mortgages in Australia account for 90% of the national GDP…a pretty dangerous figure. And GDP growth in Australia is driven by China buying your commodities.
                  When China stops doing it – because the US will stop buying Chinese products- the Aussie housing bubble will collapse.

                  And for the record, trading is like gambling; it’s a redistribution of wealth, not a creation of wealth. The Silicon Valley creates wealth, Vegas doesn’t.

                  But I wish you good luck with your straddles, scalping and shorting. I would short construction companies to start with.

          • arpad tyler durden July 8, 2012 on 12:50 pm

            1. No, jobs aren’t disappearing. Not net. Some jobs disappear and are replaced by others. That’s the way it’s always been so I’m not terribly impressed by claims that this time it’ll be different.

            2. It doesn’t have to be the same just as an airplane doesn’t have to turn us into Superman or a submarine into a fish. By providing support where we need it our faculties are freed for more remunerative tasks.

            3. Making a lot of assumptions about a technology not yet in evidence. You ought to consult some of the prognostication about the future of aircraft. Even in the 1930’s some predictions turned out to be ridiculously wrong.

            As to the benefits of socialism, there’s lots of history to draw upon there and it’s all dolefully consiste: the larger looms government in the economy the slower economic growth. Enough government intrusion and economic growth stops to be replaced by economic contraction.

            • tyler durden arpad July 9, 2012 on 9:38 am

              Arpad, your first point is really mind-blowing. The essence of the singularity concept is exactly “this time will be different”…

              The entire discussion should also exclude the AI which, as I said, will be the last nail in the coffin in some decades.

              Last but not least, you Gentlemen should try to leave the Capitalism/Socialism dichotomy behind you… otherwise, by thinking exactly like a computer (either it’s 0 or it’s 1) you would end up proving my point about how robots can easily replace us.

              • arpad tyler durden July 12, 2012 on 7:02 am

                Well Tyler, it’s clear something’s going to happen but if you carry notions about the singularity to their logical conclusion not only don’t we know what’s going to happen, we can’t. What comes after won’t, in the strictest sense, be human and we don’t really know what will come after, if anything.

                There seems this determination to cast the approaching discontinuity in terms of either utopia or dystopia and either pre-supposes the ability to both look past that discontinuity and to understand what comes after.

                Claiming, or implying, the ability to look past the singularity is so obviously nonsense that it hardly merits disdain.

                Look at the predictions of, oh, lots of futurists for times that have already passed and the failure of futurism is humorously obvious. And those predictions didn’t have to deal with a future such as that implied for the singularity. Most of those predictions were simply extrapolations of existing, in some cases everyday, technologies and look how ludicrously wrong the predictions turned out. The rhetorical question “where’s my flying car?” is an indication of popular contempt for failed predictions.

                Since the ability to credibly predict post-singularity existance is obviously nonsense if we’re going to engage in nonsense should it be nonsense of the wish-fulfillment variety or nonsense that has some grounding in history?

                If we’re going to engage in wish fulfillment then a choice between utopia and distopia is a reflection of personal bias since neither is the history of the human race beyond temporary or local boundries. If we manage to create a dystopia then there’s a lot of reasons to put an end to it and if we find ourselves in a utopia we seem to find ways to spoil that agreeable state of affairs.

                Since history’s about the only guide we’ve got, that free enterprise/socialism dichotomy isn’t going to go away.

                Unless you’re positing that in a post-singularity the concept of value will cease to exist then there will differing valuations placed on considerations of value and the resulting exchanges will either be coerced – socialist – or voluntary – free enterprise.

                Those considerations of value probably won’t be those we currently use since material want is clearly in the process being relegated to the past but will there be *something* that post-singularity beings value?

                I suppose it’s possible the answer’s “no” but if that’s what you’re proposing then you might as well stop making any predictions at all because we’re moving into a realm unexplored, and probably unexplorable, by use pre-singularity beings.

                If the answer’s “yes” then we’re faced with how those considerations of value might be exchanged, the free enterprise/socialism dichotomy remains in place since some post-singularity beings will tiresomely assert a right to those considerations of value that precludes voluntary exchange. If you’re just tired of all that crap and you see the singularity as an endless future of free cable and free pizza, for some folks it’s already here.

                • Curt Welch arpad July 12, 2012 on 2:44 pm

                  arpad says: “it’s clear something’s going to happen but if you carry notions about the singularity to their logical conclusion not only don’t we know what’s going to happen, we can’t. What comes after won’t, in the strictest sense, be human”

                  The closer we get to the singularity, the more clear it all becomes. And what’s clear, to me anyway, that the entire notion of “it won’t be human”, is totally wrong.

                  The singularity is not going to change humans. We will be the same humans after the singularity, that we are today.

                  The singularity is the point in time where Strong AI has been created. That means, we have mastered the ability to build machines that equals the control function abilities of the human brain. It’s the point that our machines, will be as smart as humans. Anything you can train a human to do, we will also be able to train the machines to do.

                  Machine ability grows exponentially. This means that when it does reach the point of being as advanced as the human brain, within a few years, it will be far MORE advanced than any human.

                  We don’t yet know how much this technology will cost when it first shows up. But it’s assumed that the very first machines that approximation human levels of learning will be big and expensive (like we see with deep blue and the Watson machines). But we know that not long after that, human level machines will be cheap, and super human machines will exist, and be expensive.

                  None of this implies human have changed. It only implies that our machines have reached the point of being as advanced as we are.

                  We also know a lot more about what makes humans special over our current machines. Humans have brains that are just strong generic learning machines that work in high dimension high bandwidth sensory environments. We fill figure out ow to build these machines soon, and when we are done, we won’t have anything magical at all – because humans in fact are not magical at all. We will just have good learning machines. Machines so good, that we can build them into any machine that needs to be controlled, be it a car, an oven with arms, a truck, etc, and have it act and learn, just as a human does.

                  So the singularity is not some “magic event”. It’s nothing more than the invention of learning machines that learn as fast, and as broadly as humans can.

                  We can predict very well what will happen when this technolgy shows up. Jobs won’t “go away”. They will be devalued to the point that the machines costs come down. If the robot that can cook costs $100,000, and runs on $1 dollars of electricity an hour, and needs $1000 dollars of maintenance a year on average to keep it functioning, and works 24 hours a day, 365 days a year without needing any time off, and we can train one machine to cook something new, and then transfer that learning to the 100 other machines in 5 minutes instead of training all 100 of them individually, we can look at what a corporation would be willing to pay a human to cook, when it has the option to buy this machine instead. Depending on interest rates at the time, and how fast a business would need to recoup its investment, we see this machine costs less than $10000 a year to operate 24x7x265. So if you wanted to use humans, to duplicate the 24x7x365 coverage, they could not justifying paying than $6 an hour. Ans since humans can’t learn new things with a 5 minute download, are more likely to spread germs to people when they cook, and need sick days, and health insurance that costs far more than the machine maintenance costs, then the per hour rate a corporation will be willing to pay a human instead of using the machines, will probably more like $3 an hour in this example.

                  But since minimum wage is $8 an hour, the corporation, by law could not hire the human at this rate, so the human job is GONE. Every restaurant is now using these new machines to do all the cooking.

                  This exact same formula is going to work out for every human job there is.

                  When McDonalds upgrades to machines, they will have to invest BILLIONS of dollars to update all their stores to these smart machines, not just to cook, but to do all the jobs that need to be done in the machine, including talking to customers to help with with the odd problems they have, like having a heart attack while in the store so the machine will be smart enough to know how to help the person, can call 911, etc.

                  The food produced by this 100% automated store, will not be dead cheap. These machines cost billions of dollars. They care cheaper than humans, but not by a lot. So how much cheaper would a hamburger be if McDonalds could hire people at 3$ an hour instead of $8? They would be cheaper, but not a lot. The cost of the food is still mostly the cost of capital infrastructure even today (building, land, taxes, a store full of machines, transpiration costs to get food from farm to market, energy costs to harvest and process food).

                  So at this point when all these low wage workers now employed at McDonald’s loose their jobs, we will not have created some age of abundance. Hamburgers still cost $2 each, but from farm to table, it was all made by lots of big expensive machines owned and operate by huge global corporations.

                  The little guy can’t buy these machines can compete easily, because there is still huge economy’s of scale to be leveraged in operating a global corporations – such as the ability to sign huge contracts with food suppliers and get lower rates on food than any little guy could who would have to buy them through middle men. Such as the ability to operate their own custom transportation fleet instead of contracting with trucking firms.

                  Humans, while they still have a monopoly on intelligence, can demand high wages. But the instant they lose that monopoly to a machine, will not be able to get paid any more than the machine is worth. And once the machine is below minimum wage, the human won’t have a job.

                  People have been loosing their jobs to machines for a few hundred years now. And though it is has been highly distributive for various groups of people over time, it’s not particularly disrupted society, because all normal human had brains good enough to be “better than the machines”, which means they just had to replace their old job which was a simple repetitive task, with a new more “mental” jobs.

                  But now that we are lots of truly smart machines taking mental work away from humans, it means each person that loses their “mental” job, has to find a new job that requires even more mental skills – more education, more innate mental ability, etc.

                  For an increasing part of society, this is getting harder and harder. Society is trying to adjust by sending more kids to college – but lots of them really don’t have what it takes to get a college degree. Not everyone has what it takes to be a highly educated professional, an entrepreneur, or investor. But we are quickly headed to the times that these high end jobs are the only good paying jobs left, and everything else is being devalued to minimum wage service jobs.

                  In time, the minimum wage service jobs will all be automated away, and fewer people even with the skills, will find paths into shrinking numbers of the high end jobs that are left.

                  A large bulk of society will become very poor, while a shrinking minority remains very rich.

                  None of this is the “magic” you imply will happen in the singularity and none of this is hard to predict. The closer we get to the singularity, the more obvious all this becomes. All the perceived ideas of “magic” were coming from people that don’t know what a human is, and what makes us “special”.

                  Down the road, after the singulariy, we will start to do more generic engineering, and modifying of our body, and change ;the very defintion of what a human is. The more we do that, the more complex it beocmes to predict how soicety will evolve.

                  But the singularity, is no more special than the invention of other technology, like the printing press, or the airplane.

                  But it’s transforming to society, in that it’s the point that machines become more capable than humans for ALL jobs, instead of just the many jobs they already outperform us on today.

  • Pam Uphoff July 8, 2012 on 1:10 pm

    I think _giving_ people money is a bad idea.

    Mind you, the government is going to be taxing the H*** out of the automated factories, as that will be the main source of money, and government never does without. But forget the “Everyone gets equal shares” that’s a utopian version of “from each according to his abilities and to each accord to his needs” and it always ends with a tyrant in control and a boot on your neck. And like as not, a whole bunch of people dead. Starting with the unproductive, anti-social “occupiers.”

    But the governemnt will tax, and the owners of the production will get rich.

    There will be some jobs that people do as well or better than computers. Art, music, writing, movies, stage plays. Creating designs for the automated machinery to manufacture. Fashions and paterns for the home fabricators to make. I suspect that doctors will work with increased automated assistence, but never be completely replaced.

    For the rest? Worker pools for low skilled jobs. Remote monitoring of robotic factories and robotic combines in the field. Assisting in classrooms, museums, child or senior activities. Answering surveys.

    Games of skill, arcades that reward with real money, all the way through gambling of all sorts. A bunch of lotteries with low prizes and good odds.

    Free schools all the way to post doc, with bonuses for good grades, good attendence, good behavior and manners.

    An uneven and perhaps uncomfortable way of distributing wealth, but _giving_ people stuff for doing nothing? No way. People _need_ to feel they’ve worked for it.

    • tyler durden Pam Uphoff July 9, 2012 on 8:57 am

      …none of these proposals holds water.

      * First of all, let’s get real: only a few people can live by becoming artists or musicians, automation or not. In addition,
      we already have algorithms that churn out even “artistic” products… so this field as well will be taken soon.

      * The remote monitoring of robotic factories will be done by a very tiny number of workers: in Australia, Rio Tinto already manages the excavation processes and driverless trains on 1500 km of railways with just 200 people in Perth. The same will happen with factories – not to mention that you could outsource the oversight to India…

      * Doctors (et similia): sure, they will be around for a while, but automation and downsizing will hit them too. If a radiologist can use an image recognition software to better do his job, he will be able to increase his product by (let’s say) 500%, so fewer radiologists will be needed.
      Same for lawyers, accountants etc.

      * The worker pool for low skilled jobs – with the optimistic assumption that there will still be some of them to be taken – will be so huge to make salaries ridiculously low, insufficient both to make a decent leaving and to buy the new marvels of technology. The demand of these goods will collapse, taking down the entire system.

      Nice try, but you are going around in circles, I’m afraid.

    • Curt Welch Pam Uphoff July 9, 2012 on 9:44 am

      Pam Uphoff writes: “I think _giving_ people money is a bad idea.”

      I hope you don’t actually mean what you wrote there. Giving people money is about the best thing you can do for anyone other than giving them your time.

      Giving people something for free is not bad in the least. We all get free air and sunshine and to suggest that it’s bad and will ruin society is clearly absurd.

      What’s bad is not the giving, it’s the taking. So you clearly have your thoughts upside down here.

      We are not debating if giving people money is bad, IT’S NOT. We are debating if transferring the money in these ways would make society better, or worse.

      “But forget the “Everyone gets equal shares” that’s a utopian version of “from each ….”

      Yes, it basically is a form of that idea. You are correct. But again, there is nothing wrong with that idea. Past failures of communism doesn’t prove their ideas wrong, it proves their implementations wrong.

      You have to look deeper into the question of why did it fail, and take a critical look at any new social program and decided it if avoids the problems that causes the past systems to fail, or if it might fix the problems. These issues are too complex and too important to allow people to simplify the failures of the past with the words: “socialism is evil”. You are doing yourself, and your society, a grave injustice by not thinking more deeply on these issues.

      “There will be some jobs that people do as well or better than computers. Art, music, writing, movies”…

      No, there will not be. That’s true today, because machines are not yet as capable as the human brain is. But to suggest this will always be true, is as misguided as suggesting there will always be some humans that are better at feats of strength than the machines. John Henry lost the race, and so will all the creative humans of today. Creativity will be one of the last jobs to fall, but fall it will.

      Many people that haven’t taken the time to look more closely at the issues of the singularity are still suck with the ideal that humans are the peak of success – that we dominate the universe, and that nothing is a good as us. It leads to the idea that if machines attempt to match us, all they can possibly do, is get “close” to our greatness, but will never actually match it.

      That type of thought couldn’t be more wrong.

      If we plot the progress of machine ability over time, and plot the progress of what a human can do, we see the human ability curve, is on a basically flat line. Humans can do today, nothing more, than what the Greeks could do 3000 years ago. Evolution is a very slow process (though with the machines we will speed that up). Compared to machines, we can just consider human evolution to be standing still – a flat line on the ability graph.

      Machines ability on the other hand, is growing exponentially over time. They are not growing at a linear rate. They are just slowing closing the gap with the long term goal just to “get near” to human ability.

      It’s an exponential curve that will BLAST PAT all human ability, and leave us in the dust overnight.

      Look at the progress of flaying machine compared to birds. It took FOREVER for us to figure out how to make a machine fly. The progress was very slow at first, but then the ability of our flying machines blasted past the abilities of all the birds leaving them in the dust. Our flying machines have taken us all the way to the moon, and the birds, still are just in the trees.

      Our thinking machines are doing the same thing. Within about 30 years, our machines will have blasted past what a human brain can do, making our mental ability insignificant and pointless – our mental abilities, including our creativity and our art will a JOKE compared to what the machines can do.

      Another poster I have not yet replied to suggest the machines will help us put together a business plan to start a new business so that we can build wealth for ourselves.

      It might takes a human a month to analize market conditions, explore product ideas, research compeition, do market research, and put together a business plan.

      What takes a month, the machines sill do in 5 minutes. Bu the time we finish eating breakfast, the machines will have already explored 100 different business plans, picked the ones that were the best, and but 3 new businesses into motion.

      There will be no place for a human to help in that process. We are too dumb, and slow thinking and will only get in the way of the machines if we try to help with our “stupid” ideas.

      In this future, the only thing left for us to do, is tell the machines how we want our eggs cooked for breakfast, spend our “free money” on whatever we want to spend it on, (aka telling the machines what we want), and voting in our government to control what type of society we want to live in.

      Humans won’t even have government jobs in this future. The machines will take care of all the administration of the government for us. There might still be activist trying to talk people into voting for various political agendas, but I suspect even that will go away. Why, for example waste my time reading blogs to see who wants to do what, or waste my time trying to convince people to vote on a proposal I think is good, when we all have access to supper smart machine consultants and we can all just ask them, “is this basic income idea good or bad?”. And they will tell us, without bias, who such a think will change society, because they have already analysed the hell out of the idea with the help of tons of simulations and experiments, and can tell us more accurately, than anything we might “believe”.

      So, you and I can debate what we think an idea like basic income will do to our society, and we will keep debating, because neither of us sees the other as a better authority on society system. We both trust our own ideas. But in the future, neither of us will trust ourselves, because we live in a world full of machines 1000 times smarter than we are. We will ONLY trust the machines. They will tell us, that if we change the laws this way, this is what we can expect to happen to society, and if change the laws that way, society will shift this other way. Then we just vote on what we each want, and go in the direction of the majority.

      You have to grasp the idea, that the days of the human brain being “master of the world” are almost gone. There will be NO jobs left for us in this future, other than telling the machines, what we want. The machines will be super vending machines, that will give us the past life and the best society that can be created, and all we have to do, is tell them what we want. They will take care of all the details, and tell us what is possible, and what is not possible, and we just pick what we want from what is possible.

      Now, this doesn’t mean there will be nothing for us to do. It means we can do anything we want. It will be exactly like it is for many people when they retire with a reasonable retirement income to last until they die. They get to do whatever they want. They can travel, they can party, they can give their time to other humans. They can study history. They can go to the beach. They can learn to cook. They can take care of cats and dogs. Anything they want, within their budget, they can do. This is what live will be like for everyone in this future we are heading do. Life will no longer be a long struggle to stay alive, followed by a painful death. It will be retirement.

      It will be the utopia people keep trying to create, but never make it work. And the reason it will work this time, is because we will have these machines to do all the work for us.

      The reason it failed every time in the past, was because humans still needed to work. You can’t retire, and work at the same time. If there’s work to be done, you have to be motivated to do it. It’s human nature. We don’t like to work, unless there is a carrot at the end of the work, to reward us.

      The versions of communism that failed, are the ones that took the carrot away from the people that needed to do the work.

      When we take money away from a rich guy, and give it to poor guy, we are taking part of the carrot away from the rich guy, which will reduce his willingness to work so hard.

      That is the danger of wealth distribution. It kills motivation to work.

      But, we have a problem to solve here. Today, people still do all the most important work, not the machines. We have to keep people motivated to keep doing that work or our economic output will drop to unacceptable levels.

      But, we are well on our way to a time, where no one will be working. We are getting so close to that time, that it’s disrupting our economy. The types of important jobs left in the economy that still need to be done by humans are quickly becoming highly specialized and quickly reaching a point where many humans in the society, simply don’t have the mental ability to do it – no matter how much free education you give them.

      Like the George Carlin joke — “Just think of how stupid the average person is, and then realize half of them are even stupider!”

      As we approach this new age, people will fall off the wagon. They won’t be able to find good jobs because they just don’t have the brains or time, to learn to become the next top engineer, or top CEO, or Pop Star, or Movie director.

      It’s time to accept the fact, that it’s OK that there is a growing number of people in society that simply are not able to contribute in any useful way.

      But, we can’t just give them this utopian live that everyone else has just because they are stupid or unfortunate. That’s because we still need the CEOs, and rock stars, and engineers to finish the job of getting us to that future. And those guys need to be motivated. They need a nice carrot at the end of their sticks, to motivate them to do the hard work, and take the risks.

      But they don’t need a 10 billion dollar carrot like Mark Zuckerberg has gotten for his work. 1 Billion is more than enough. That gives him an income of 10 million a year for the rest of his life even if interest rates are only 1%.

      In fact, it’s dangerous to society to let people get carrots that big, because 1, the guy we need the most to keep working, now has no motivation to work for the rest of his life, and 2, it gives one guy way too much power in society. He can buy politicians and friends in high places with that money and turn the rest of society into slaves.

      People remain fare more productive when you don’t let them get such huge carrots for their work. Huge carrots are just as bad for society, as no carrots – the communist mistake.

      So we need to accept the fact that people are becoming useless to our economic production. They are never useless as people who are available to help other people, but they are useless to our economic production.

      What we need to escape from in our society, is the idea that if a person isn’t making money, they can’t be a “good” person. And it’s going to be hard to get people away from that type of thinking, because that thinking, is what has kept us alive for thousands of years. It’s a deeply important meme from our past, but it’s time to start giving it up.

      We need to understand that it’s now, OK, for people to drop out of the work force and be unproductive in the economy. We need to let them retire now, instead of waiting for the future, when everyone retires in 50 years. We need to provide them with a comfortable life even when they are unproductive. We need to give them a couch to sleep on, and food, and basic medical care, and internet access, and some basic transportation.

      We don’t want to give them a great life, because that’s the carrot we still give to anyone that can find a way to be productive in society. For now, we still want to motivate everyone to look for ways to be more productive in society.

      We also DO NOT want people to get carrots that are too big. That gives them too much control over society. Absolute power corrupts absolutely. It’s human nature. Many people that manage to get super rich, will fall prey to that corruption, and try to put their boot on everyone below them. We can’t let it happen if we want to keep a healthy human society moving forward.

      So, how do we do all this? It’s very simple, tax all production, with a flat rate, so you don’t see more and more of your carrots taken away from you as you make more money. Distribute the money to EVERYONE to set a minimum living standard for all humans that acts to catch all these people that we EXCEPT to be falling off the job wagon.

      But unlike many welfare programs, we never take this minimum living standard away from them, once they find a way to be productive. The payment is NOT a substitute for them not working. It’s not charity to help them get back on their feet. It’s not a helping hand to pull them up to being “a productive member of society”. It’s just a new basic human right in our society that EVERYONE receives forever.

      If they can find any way to be productive, the income they make is there’s to keep on top of the basic standard of living everyone alive is entitled to now.

      We need to do this for the entire world now, before we get too close to the singularity. But there’s no way in hell we can make it happen world wide at first. We have to make it happen locally in our own countries first and they to spread it out from there.

      People need to understand this is NOT the lazy taking from the productive. It’s the acknowledgement that we are approaching a day when no one will be working, and as we get near that day, an increasing number of people will be either jobless, or stuck in low pay dead end jobs with no path upwards.

      Minimum wage laws helps give some low end workers a minimum standard of living. But it also kills most other low end jobs, creating unemployment. Minimum wage does not fix the problem, but basic income would. We should lower or eliminate minimum wage laws, and replace it with across the board basic income. That will create tons of low end jobs, to help get the unemployed into the job market, and feeling useful even if they only have a very low minimum standard of living.

  • papacuppa July 9, 2012 on 4:09 pm

    Some people here are afraid of humans becoming obsolete but even today we are seeing top tier education offered to the world – in many cases for free. Anyone with an internet connection can hone their skills for the future. Just look at programs like Udemy, Udacity, MITx, Coursera, Kahn etc.

    I recently wrote a report on the future of business. It was by no means a thesis, but just a cursory brush along the surface of what’s to come.

    Two big problems I found going forward were the following:


    “Quite simply, mechanization is more productive, efficient and sustainable than human labour in virtually every sector of the economy today.” (

    Apparently 75% of the world’s workforce could be replaced tomorrow by technology – scary stuff.

    2. Stratification (Societal)

    When it boils down to it, we’re still behaving like monkeys on the savannah. And if we want to create a scalable and sustainable civilisation, we’ve got to see each other as equals and understand human emotion – then we’ve got to moderate it.

    It seems that bio-technology will resolve this issue through chip implants into the brain, or the equivalent – technology that stops us making instinctive, irrational decisions. By some estimates we’ll have mapped the human brain by 2030, so we should have technology by that point. With a greater capacity for, and predictability of, rational behaviour we’ll really be able to make great leaps in society, and hopefully bring everyone along with us.

    For once, what we say is actually what we will do. The alternative is to wait for natural evolution to help us out, and I don’t see too many hands go up for that option.

    By the way, this is how we’re behaving today:

    Personally, I’m a strong proponent of entrepreneurship, I think business is one of the great examples of how we can creatively organise a large group of people to work for the same cause.

    Like founders of Singularity U (academia focused on entrepreneurship), Ray Kurzweil and Peter Diamandis believe the qualities of entrepreneurship are what will drive us forward and ensure our skills are not made to be obsolete – think qualities in critical thinking, dealing with failure and retaining the child-like propensity for invention.

    Winston Churchill said, and I paraphrase, that capitalism isn’t perfect, but it’s the best we’ve got. I definitely feel capitalism is the way to go (at least from today’s standpoint) but we’re still in beta.

    There are many problems but one relatively simple, but profound fix would be on the topic on incentives.

    Just one example…

    When money is scarce, normal and perfectly law-abiding citizens sacrifice their integrity in order to protect themselves – it’s only natural and in many ways I don’t blame ‘them’.

    The big idea here is that if, say, a business owner is struggling hard in the economy, he will be less inclined to behave anti-socially if he knows that he’ll still be able to live and feed his family if the business falls under.


    Fundamentally, humans aren’t motivated by money; they are motivated by a sense of purpose. I simplify but economists have traditionally assumed that, without work, humans will just lay in bed all day mustering just enough arm power to change the channel – NOT TRUE.

    Humans have an intrinsic need for recognition, validation, a sense of growth – particularly with other people. (You could argue that you get that vicariously through X-factor but let’s not be pedantic).

    People are acting in instinctive self-interest and I doubt many people are fully conscious of many decisions. On a biological level, the organism makes a decision to survive, I don’t think the ‘person’ (consciousness) comes into it. And can you really blame the organism? This is another conversation altogether…

    THE BIG IDEA – ‘Governmental Credits’.

    Back to economics, something I have been musing over recently is the use of Governmental Credits to offer all families in their respective country. These credits will cover the costs of basic utilities/commodities and would – and this is important – be a currency to their own. One where the currency represents only the resources (life’s essentials) that technology provides for us. These resources require very little human intervention and are moderated through machines – once the systems are up, the cost is minimal.

    With a credit system, anti-social behavioural would be reduced substantially, and business practices would be healthier too. I’m not saying it would be perfect but people would no longer be motivated by fear – the fear of living on the streets if one fails – fear is one emotion that will always swamp our capacity for rational thought, it’s debilitating and only causes harm.

    People would run a mile from the term ‘ration’ but I believe you could offer people a certain number of credits per week, depending on their family size, and then give them freedom to use those credits how they choose. With the self-evident reality of an ever-more ‘big-brother’ society, it would be difficult to game, and credits could be sent digitally and automatically to families on a weekly basis.

    Of course, there are many other factors to consider but as a premise perhaps it’s a starting point. I just want to note that money would still exist as it does today. It’s just a more contained, focused and pertinent approach to serving people’s needs.

    Dan Ariely and Dan Pink, two writers I’m quite familiar with, have said that we’re moving towards a right-brain economy. So creativity, invention, emotion – what really makes us human. I think the industrial age will go down as a century that was very dehumanising – a predimantly left-brained society.

    I hope that we can transition into an age of connection, and empathy, rather than be directed by antiquated egos focused on possession – the rising popularity of Collaborative Consumption makes me more optimistic.

    The last reason that people would be required to work is to pay rent, but now that people don’t have to do jobs they hate, they can educate themselves in a right-brained activity they do like – whether that be through entrepreneurship, the creative arts, or joining a company as an employee.

    It’s through these activities where money can still be earnt, but now there is less stress and scarcity, people can comfortably earn what they need to pay rent and perhaps work hard for the more expensive novelties that we see today.

    I’ll end with this…

    A short while ago I watched the third Zeitgeist film – Moving Forward. (I’ve linked to it a couple of times in this post). Although the Zeitgeist trilogy is highly revealing it does lack something. (Incidentally, Jacque Fresco had the same peeve.) We need an action plan.

    That’s where The Venus Project comes in.

    While The Venus Project isn’t perfect, it’s a start, and the first step is always the hardest. Once we’ve started to make an effort we can pivot – something that is rather challenging when you aren’t moving.

    I’m aware I’ve rambled here; I just wanted to do this thread justice as we have quite a conversation going on here.

    Please let me know your thoughts and keep the conversation going!

  • Richard Cook July 13, 2012 on 10:15 pm

    If this is true, it will just continue to concentrate wealth in the hands of a few relative to the rest.

    • Ralph Buttigieg Richard Cook July 14, 2012 on 12:36 am


      It will allow ordinary people to manipulate real wealth as never before.



      • Curt Welch Ralph Buttigieg July 14, 2012 on 5:23 am

        You do understand that wealth is all derivative right? You can’t produce it out of thin air. You have to do something to satisfy (or help satisfy) a human need, with a given finite resources (time, energy, material), and there’s a finite number of humans, and a finite amount of time each of them will be willing to allow you to satisfy them. The wealth you are able to produce with all this new technology, will be limited to what market share you can grab with whatever goods or services you produce, when the entire rest of the world is competing against you, with billions of dollars of investments in AIs to help them, for that same share of the human market.

        How much wealth a person will get to “share” of all the wealth produced, is always measured by what percentage of the market you have captured.

        Producing wealth is always a game of musical chairs. It’s always a game of seeing who gets to be the one that “helps the humans”. If a billion dollar corporation with billions of AIs, all many times smarter than you, is competing to control both the human market, and all natural resources used to satisfy the humans, how much of that do you think a normal person with a little money to buy a old and small little AI? It makes no difference how much desire you have to “work” – to help the wealth produces take care of the humans. If they can out-compete you, and keep you from getting any market share, they will. They don’t want their humans turning their eyes away from their goods and services for even a second. They don’t want their consumers to even know you and your products and services exist. And you think that you, with you one $100K investment in an old AI will allow you to compete against this corporation worth trillions of dollars because they captured the entire global market for all human goods and services?

        Your examples of the cooking videos is a good example of where today, people can do something to help these big corporations. But you realize of course, that technology is there only because the big corporation decided to leverage the work of these little guys. The big corporation is paying the little guys to produce content to trap the eyes of the consumers. The big corp sells $1000 dollars of adds to other big corporations, using the content of produced by this little guy, and then gives the little guy a $1 for his effort.

        In the coming future, the big corporation will no longer need to hire humans to produce content because the AIS will produce far better content for far less than even the $1 the corporation was paying for the use of the cooking video.

        Your example is not one of a little guy using the technology to make money. It’s just the opposite. It’s an example of a big corporation finding a clever way to leverage the technology in ways that avoids minimum wage laws so they can make a ton of money while sharing even less of it with the other human “workers”.

        If the poor in the future find a way to grab market share to get some small part of the wealth of the world, it will only be because the rich will be so rich, that it won’t be worth the time of the big corporations to do anything for the poor so the poor will market there value to each other – like prison inmates will create a market by trading cigarettes with each other. The poor will trade with each other the things they found in the trash.

        I guess that’s the real limit of trickle down wealth inequity. The most poor in society will never be more poor, than the value of the trash thrown out by the wealthy divided by the number of poor there are to share it.

        As a society, we should make sure we do far better than that.


        • Ralph Buttigieg Curt Welch July 14, 2012 on 3:08 pm


          “Producing wealth is always a game of musical chairs.” Fiddlesticks, Curt, fiddlesticks. Producing wealth is a matter of production. Producing a good or services that someone wants. If it was just moving wealth around we would all be stuck in a pre-industrial society like Rome. We are clearly not.

          You seem to be concerned that a lot of people will come super rich at the expense of the rest. A zero sum game. I say yep, people will get super rich but I don’t care because its not a zero sum game, everyone will be getting rich!

          Lets assume AIs, automation, self replication robotics etc. etc bring down the costs way down that just all paid employment becomes obsolete. Which is what I think you seem to fear. Thats wonderful! I’ll take some of these machines and use them to provide my needs. Hell, I properly get the AIs to design and build me a rocketship and I’m off to Mars! I get to fill out my life long ambition and I’m supposed to worry about the zillionaires around? Not me mate.

          Now you apparently have achieved the income you desire with minimal continuing work. Good on you mate I say! But you fear this would not become universal. I’m saying it can. Admittedly it requires some changes. People need to rethink how they will be acquiring wealth through their lives. We need an education system designed to produce wealth creators rather then workers but thats the sort of change that took people from the agrarian age to the industrial. The real issue is how we handle and manage that change.



          • Curt Welch Ralph Buttigieg July 15, 2012 on 8:50 am

            Ralph writes: “You seem to be concerned that a lot of people will come super rich at the expense of the rest. A zero sum game. I say yep, people will get super rich but I don’t care because its not a zero sum game, everyone will be getting rich!”

            You really need to study and think about macro economic. Wealth very much is a zero sum game. You are so busy looking at your own little picture you don’t grasp the big picture issues. Wealth would seem to come from endless possibilities if you don’t understand the currents you fighting.

            Wealth is not absolute. It’s impossible for everyone to “get rich” when there is wealth inequity.

            This is become wealth is created by the optimize user of finite number of resources, creating goods for a finite number of people (the market).

            If you sum up all the land owned by people, it will never exceed the total land of the Earth (ignoring the expansion space travel may one day create). If you get to own land, than no one else in the market can own that land. If they buy the land, then you can’t own it. There’s not always “more land” to be bought. It’s not an infinite supply.

            Same for all the raw materials, wood, steel, minerals. Same for all the energy sources like oil and coal and gas and square miles of sunlight for solar collectors.

            Time is also a zero sum game. If you spend it doing task A, then you can’t go back and spend that same time doing task B. You only get 24 hours each day to complete against the rest of the market.

            The market of buyers are likewise finite, not infinite. If one guy decides to spend his money on product X, then he has no more money to spend on product Y. He can’t buy everything he likes. He must choose. Making it a zero sum game for who gets to sell the produce a service.

            Money is also finite. There is fixed amount of it (even if it grows slowly). Whatever someone else owns, you can’t own. You must compete against the “super rich” to be allowed to own even so much as a single penny.

            What can and does grow, is total output of the system. But it grows slowly and predictably only a few percentage points a year across the whole society. And that growth comes from wise investments of the limited resources. It is not free. If you want a share of that growth, you have to complete for it with the billions of other people on the planet that also want it.

            Back when the population of man was small, and our tools were weak, the resources of the earth seemed nearly infinite. But we are way past that point now.

            When someone gains in wealth, it’s because they taken opportunity away from others. They don’t have to steal anything from others, they just take away the opportunity.

            When Apple sells a product to a customer, that’s less money in the pocket of the customer to buy my product. Money is finite so it’s a zero sum game to see who gets the money from the customers.

            When facebook captures the eyes and time of internet users, that’s minutes of attention they have taken away from them looking at my content on the internet. It’s a zero sum game. To get internet surfers to spend time looking at m content, I have to get them to spend less time looking at other content.

            When Mark becomes super rich, he’s done it by winning that zero sum game – by making people spend so much of their time on facebook, instead of doing anything else, like looking at Google ads. By winning the attention of the people, he’s stolen market away from others.

            The total GNP output of the system is well known, despite all these billions of people fighting to “produce more”, total GNP does not jump up and down very randomly. It’s mostly a fairly smooth and predictable curve because it’s limited by technological growth.

            When the Europeans showed up in North America, the Native American Indians were “rich”. They had control over all the land and the resources of the land to live off of. A few hundred years go buy, and the Europeans and their descendants have taken most the wealth away from the Native Americans and now the new comers are rich, and the Native Americans are poor. They have less wealth 300 years later, because control over resources – which is what produces wealth, is a zero sum game, and the newcomers took control of all the resources. They did, not do it because they were smarter, or stronger, or had a better God, or a better work ethic, but just because they had access to more advanced technology.

            The more we allow the finite wealth of the world to be concentrated into the hands of the few, the less wealth there will be for everyone else. You can’t let a few get super rich, and expect everyone else to gain in wealth as well.

            You might be blinded by the society you live in. Australia is doing a fairly good job of sharing the wealth among the people and giving a lot more people opportunity to share in the wealth. Not so true here in the US.


            If you scan the information, you see that over the past 100 years, income inequality in the US dropped until the 1970’s, and then it started to rise again, where now, it’s as bad as was back around the great depression in 1930.

            The inequality means that all the wealth generated by society is going increasingly towards the rich. The rest don’t get to share tn the growth.

            Though that page is filled with lots of good facts and figures, and outlines over all the debates around it from many sides of the debate, something I find particularly telling is this quote from the section on Public attitudes:

            “Opinion surveys of what respondents thought was the right level of inequality was have found Americans no more accepting of income inequality than other nationalities, but more accepting of what they thought the level of inequality was less was in their country, being under the impression that there was less inequality than there was.[200] Dan Ariely and Michael Norton show in a study (2011) that US citizens across the political spectrum significantly underestimate the current US wealth inequality and would prefer a more egalitarian distribution of wealth.[201]”

            In other words, the poor don’t currently realize how poor they are. The rich however, know exactly how rich they are compared to the poor. This is all part of the spin the rich have been able to put on society so that that a large bulk of society doesn’t even realize it’s happening to them.

            This is dangerous stuff to be ignoring – and worse to be suggesting it’s “good” to get the rich get supper rich.

            From the same page:

            “Among economists and other experts most agree that America’s growing income inequality is “deeply worrying”,[24] unjust,[136] a danger to democracy/social stability,[193][194][195] and/or even a sign of national decline.”

            “Some economists (David Moss, Paul Krugman) believe the Great Divergence may be connected to the financial crisis of 2008.[57][196]”

            In other words, the rich get too much relative power in society, use their power to bend the laws to remove financial regulations so they can create dangerous new financial derivatives that no is is sure how to measure the risk on, which makes them even more rich, but when it all falls apart, the entire world goes into a recession.

            All because wealth inequality is destabilizing society, which destabilizes the economy of the entire world.

            Yes, I am concerned about some people becoming super rich because yes it is a zero sum game, and when they get supper rich, it means others are not getting a fair share of the wealth and power which comes down to the question of who gets to control, and fuck up, the world, and who gets to live in poverty in reservations.

            • Ralph Buttigieg Curt Welch July 17, 2012 on 1:57 pm


              Firstly The idea the resources are limited is a nonsense. They are not. Markets forces have and will continue to bring the resources we need as they always have. The current boom in gas and other alternative fuels show this. We have hardly began scratching Earth’s crust let alone the mantle and core. You also conveniently exclude extra terrestrial,
              resources , theres enough stuff out there that any idea of running out of resources is ridicules. And if you don’t think I’m being realistic take it up with Elon Musk who plans to retire on Mars.

              Markets are infinite because greed and desire have no limits. If all these zillionaires you fear have huge yachts, fancy cars whatever you can bet lots of other people will want them too. Six billion people on Earth wanting to become super rich, thats a pretty big potential market I think!

              As far as the political problems in the United States, well may be. Certainly a government that hasn’t passed a budget in 3 years is a joke. Maybe Congress should be the first place to install the super smart AIs.

              • Curt Welch Ralph Buttigieg July 18, 2012 on 7:45 am

                Ralph Buttigieg writes:

                “Firstly The idea the resources are limited is a nonsense”.

                You understand supply and demand right? When there is infinite demand (as you suggest), the price drops to zero. Nothing in the market has a price of zero because once a resource becomes infinite, it drops out of the market – no one trades it because everyone can get as much as they want for free. Like air currently is today for us – no one trades it because we have so much of it, everyone get more than they need for free. But even air is not infinite. It’s just so abundant, that it is effectively infinite for us at this time.

                The fact that a resource is traded in the market proves it’s limited. If it were unlimited, no one would buy it in the market because they could get it for free.

                To suggest that the “idea the resources are limited is a nonsense” shows you have absolutely ho clue about markets and the economy. You really need to take some basic lessons in economics.

                “greed and desire have no limits”

                That is very true! Others that debate these issues don’t understand that. They suggest we are heading towards an age of abundance where all scarcity will be eliminated. They are wrong because resources are always limited compared to our infinite ability to desire more. They don’t understand basic human nature. You understand basic human nature.

                “If all these zillionaires you fear …”

                I don’t fear the zillions. I fear the wealth inequality our society is allowing to be created. That means I fear the poor as much as I fear the zillion airs. Together, the two are a highly volatile mix that will literally destroy our society.

                • Curt Welch Curt Welch July 18, 2012 on 8:22 am

                  Ha. When I wrote “infinite demand” above, I meant to write “infinite supply”! Not exactly the message I wanted to communicate! 🙂

                  • Ralph Buttigieg Curt Welch July 19, 2012 on 6:37 am


                    Resources themselves are limitless and free. Untapped ore bodies don’t cost anything and the universe has a lot of ore bodies. The cost come from discovery, extraction ,taxes, refining, processing to useful goods etc not the resources themselves. To that add the greed and desire of six billion + people, human and probably increasingly artificial, intelligence and market forces will convert scarcity into abundance like it always has.

                    Now I suppose you could have a government that does something stupid like heavily tax the most productive, turn the populace into dependents in the name of social justice, equality of some such nonsense leading to stagnant economic growth distress and conflict, but it certainly doesn’t have to be that way.

                    A far better alternative is to encourage people to grab the new opportunities available, as many are actually doing. To become masters of the new capital.
                    To the six billion people of Earth I say: Get rich!