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Robots Will Do Everything You Do Now Only Better—What Then?

SH 78_#3 BIG

The S&P 500 is at record highs, having finally regained all it lost in the 2008 financial crisis. It would be cause for celebration if it didn’t feel so out of touch with the “main street” reality of continued high unemployment. As a recent New York Times headline read, “recovery in the US is lifting profits, but not adding jobs.”

The NYT goes on to blame the divide between rising corporate profits, recovering stocks, and stubborn unemployment on big gains in productivity over the last few years. The article notes that the giant industrial conglomerate, United Technologies, “does not need as many workers as it once did to churn out higher sales and profits.”

While United Technologies (and other manufacturing firms) may not be adding jobs, it’s strange to blame today’s high rate of unemployment on the trend. Due in large part to automation, manufacturing jobs have been disappearing for over 30 years. During that period, unemployment has been as high as 10.8% and as low as 3.8%. A better headline might read, “recovery in the US is lifting profits, but not adding traditional jobs in manufacturing and that’s nothing new.”

Credit: MJ Perry, Carpe Diem, BEA, BLS

Credit: MJ Perry, Carpe Diem, BEA, BLS

It’s rarely noted, but even as manufacturing jobs have steadily decreased, total manufacturing output has steadily grown. Since World War II, manufacturing output in the US has risen over 700%. While rising productivity is often demonized as a job killer, in truth, it is a very powerful force for good in the modern economy.

The time and creativity that productivity growth frees—and it’s been happening since the Industrial Revolution—is responsible for every modern invention from healthcare to high tech, smartphones to non-invasive surgery. If humans hadn’t started using machines to do some things for us, most would still be working in the fields with few moments to spare pondering economic theory, let alone inventing new technologies.

One argument says that this time is different because soon robots will be able to do everything a human does. But it’s misguided to assume we can forecast what humans “will do.” What that statement really means is, “In the future, robots will do everything humans do today.” But what exactly it is that humans will do in the future is anyone’s guess—and few, if any, have ever successfully predicted it.

SH 78_#1Before the 20th century, most folks in the West farmed. Now, thanks to massive productivity gains in agriculture, virtually none do. To a 19th century farmer that would imply nothing less than the collapse of the economy. Why? Because the thing most people did back then was farm. Our farmer might understandably wonder, “What will we do when machines perform our jobs for us? How will we make money? How will we survive?”

We are gifted with the vision of our times and cursed with the temptation to extrapolate that vision into the future. How could our farmer know that in 2013 humans would be paid to make movies, pick up garbage, write online, build robots, clean bathrooms, engineer rockets, lead guided tours, drive trucks, play in garage bands, brew artisanal beer, or write code?

The revolution in agricultural technology liberated vast resources and made us all richer and the economy more diverse as a result. And while one might think that those riches should have accrued to only those making agricultural tech, thus permanently widening the income gap, no such thing happened in practice. While those making agricultural machinery undoubtedly made some bucks, the next economic waves provided different work and income for many levels of skill and motivation.

This is understandably a firebrand topic right now. If current unemployment marked the beginning of mass technological unemployment, you can be sure mass social unrest would be quick to follow. But we can’t prove it’s structural yet. Unemployment is a typically lagging indicator. (Click ‘show recessions’ here to see how unemployment continues long after recessions end.) In the last sizable downturn in the early 80s, unemployment didn’t drop below 7% for four years after the recession ended. And that preceded two decades of virtually unbroken growth.

We don’t know precisely what the future holds, but we do know that most in the developed world—even the poorest—live longer, healthier lives than they did a century ago. And while the world will never be a perfect place, technology and productivity have freed more minds to ponder, play, and invent today than ever before.

Image Credit: Mixabest/Wikimedia Commons (banner), photologue_np/Flickr (featured, body)

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100 comments

  • Panpiper
    Panpiper says:

    The stock market highs have little to do with actual value and much more to do with price inflation. The Fed has been monetizing US debt to the tune of 85 billion dollars a month. While that quantity of money printing ‘should’ result in massive price inflation, the refrain from the apologists is always, “but there is no price inflation”. Yes there is, it is in the price of stocks, bonds, etc., not to mention other prices that get short shrift in the calculation of the CPI like food and energy. But that is quite the aside from the subject of the article.

    Historically one of the prime mechanisms whereby society benefited from improvements in productivity has been reductions in prices. The jobs lost in sectors where technological improvements displaced workers were made up with new jobs that resulted from people having to pay less for the goods produced by the new technology. Because they paid less for those goods, they had more to spend on other things, creating new employment opportunities in those other things. A major problem is however, that nowadays we rarely see the price reductions. This is by design, this is deliberate.

    Central banks have an inflation target. They deliberately inflate the money supply every year to ensure that there will be roughly a 2% price inflation. Inflation is no accident, they do this on purpose. Ostensibly they do this to make sure there is no ‘deflation’, because they assume deflation will result in unemployment. Skip over for a moment that they are wrong in this (mostly). What this means is that if overall productivity has grown by 2% in the economy due to improvements in technology, which would normally result in a 2% reduction in prices, they inflate the money supply by 4% sufficient to eat up the reduction that would otherwise occur and to create an increase of 2% beyond that. So society as a whole does not gain the benefit of the price reductions. (The mechanism whereby they do this actually transfers the purchasing power gains to investment bankers and super wealthy speculators. This is why the income disparity has grown five fold in the last 40 years since we went to a totally fiat currency.)

    I could write tomes about how the government’s central planners have indeed created a structural unemployment that is every bit as severe as that of the Great Depression. This is for a large part hidden by the way they define the unemployment statistic that they quote. When they say that unemployment is 8%, they are deliberately not counting those people who have been out of work for so long that they have largely given up hope of ever being employed. They are also not counting the people with university degrees and such who are working part time jobs as waiters or whatever while they are hoping to get a ‘real job’ for which they studied.

    I have little hope that these structural impediments to employment will ever be fixed. Indeed I fully expect the central planners to extend their hooks ever further to become an ever greater albatross around the neck of the economy. That said, there is something these central planners could actually do, something they could win elections with. I wish we could get more people behind the idea, because it would address quite nicely a lot of problems, including the problem of technological unemployment, to whatever degree it may be a problem. That is the idea of a basic income guarantee.

    A basic income guarantee is a sum of money that is paid to every citizen every month whether they are working or not, rich or poor. It is not means tested in any way, every citizen gets it, young and old alike. Because it is not means tested it requires very little bureaucracy. The trick is to fold existing welfare, unemployment benefits and social security all into that one thing, to pool all the money those programs would spend and distribute it evenly. Here however is a major caveat. You change the tax code such that anyone not below the poverty has a tax increase such that someone earning $20K a year including the basic income guarantee, starts to have some of it taxed back. Someone earning $30K a year essentially has it all taxed back. This way you ensure that people who do ‘not’ actually need it are not getting a free lunch on the backs of the country. It also increases the amount that can be dispersed in a revenue neutral fashion.

    Done this way, the basic income guarantee would be roughly $900. a month to every citizen, including the kids, so single moms would actually be able to support their family. Impoverished seniors would be no worse off than they currently are under social security. The only ones who would lose out are retirees who are relatively wealthy who would no longer be living large off the backs of the taxpayer.

    With a basic income guarantee in place, the minimum wage could be abolished, effectively ending unemployment. Someone getting a $4. an hour job would actually be better off than they are now with a $7. job they often cannot find, as the basic income guarantee would supplement that. There are a very great many jobs that could be profitably created if people were legally allowed to work for $4. an hour.

    • Curt Welch says:

      “I wish we could get more people behind the idea” – Very true…. A Basic Income Guarantee is the way to transition smoothly from todays “work for a living” society to tomorrows automated economy where people only work for the fun of it.

    • Gorgand Grandor says:

      Yes. I too will continue to push for this.

    • David Duke says:

      It is rare for me to find such a well thought out comment. Thank you.

    • Getglobalized says:

      Whoohoo, as I have grown up with a social-European mental model, I really like your comment. Lets not forget Americans and Europeans are just 4/5 Generations mentally divided, what is this compared to 4bn. years of earth history??

      For the German case I can tell you that in our social-market economy model, we have integrated the “Hartz4 concept” which guarantees every citizen a free flat plus 385 Euro (monthly). The problem with it is that it is rather surviving than real living and has a very bad reputation in society. However it attracts many immigrants mainly from Eastern Europe who just come for this reason to Germany.

      Personally I see it as a prestep before your mentioned “basic income guarantee” which is called “Bedingungloses Grundeinkommen” debate in Germany.

      Decentralized energy independence (Energiewende), 100% working raw material circles and less population seem to be the most important constraints.

      I think much more discussion on global scale is necessary. I especially miss a section of TED talks on this important topic. Martin Ford or chancellor Merkel should go for it!!

  • Robert Schreib says:

    All technology is a two edged sword. It’s kind of the art of substituting new problems for old ones, especially in the overpopulation and socioeconomic class conflicts arena.

  • why06
    why06 says:

    I think humans will still be creating valuable things, but it may be just artificially so. Art, entertainment, virtual goods, etc.

  • User
    User says:

    This article seems to miss the real point of the technological unemployment argument. It isn’t that robots will do what humans do today. It is that robots will do everything that most humans are capable of doing. Where technological unemployment gets messy is when automation reaches a point where it literally makes humans obsolete in the work force.

    The solution in the past has been education. Humans get more educated and that opens the door for them to do these other tasks. However, at a fundamental level humans are slow learners. It takes years for someone do learn to be decent at most advanced tasks (consider computer programming as an example). Computer technology is improving exponentially and at a certain point, we will start automating stuff faster than most humans could learn the next task that hasn’t yet been automated.

    • why06
      why06 says:

      This can’t be denied. I think the point of the article, was to say that we really don’t know what the future will bring. I have however read Martin Ford’s book, and he makes a very good argument. I don’t believe we need to create conscious AI in order to have computers that can think and solve problems as well or better than us. I’ve been waiting for a while for a retort to the Light at the End of the Tunnel. But there really isn’t many faults in it. He proposes some kind of well-fare system.

      I however there is something that will still be valuable when robots can do everything, and that is the education and informing of the people who will vote on the future of mankind. In other words I think citizens primary task should be shaping the future, and they should be paid for staying informed and up to date on current issues.

      • ericxjo says:

        One thing that’s missing _so far_ is motivation. Right now, no matter how well a computer or robot performs a task relative to a human, it has no intrinsic motivation to do so. I suspect that motivation plays a part in at least in artistic expression and leadership. Will robots do these as well?

        • Curt Welch says:

          Motivation is missing from most machines. But it’s not missing from the AI research projects people are working on. All Reinforcement learning machines are motivation-based technologies. Back in the 90′s a program was created called TD-Gammon that was a motivation based Backgammon playing machine. Instead of programing it with rules and heuristics about how to win at Backgammon, it was programmed with no strategy or tactics at all. Instead, it was only given on very simple motivation – to win. It was them allowed to play itself millions of times, and learn on it’s own, following it’s one innate motivation, how to best play the game. It learned to play the game better than it’s programmer, and better than most humans, all becuase it was given a motivation, and the ability to learn based on it’s motivation.

          This class of technology is a big part of the robotics and AI machine learning community these days and has been used in lots of robotics projects already – and will be coming to more robots over the next decade.

          Motivated machines are here today in the labs, and will be all around us very soon.

  • Curt Welch says:

    The point about not knowing what humans will do in the future is valid – but totally irrelevant. When humans do something for themselves, like cook their own dinner, or take care of their children, we don’t call it “work”, and we don’t get paid for it. It’s not part of the GDP. It’s only “work” when we trade our labor. The robotic technology that’s is coming in the next few decades will be both physically, and mentally more advanced than every human on the planet. When these robots get here, no human on the planet, will be a better worker than the machines – no matter what work is needed. We don’t have to know what work will be needed, in order to know humans won’t be able to do it as well as the machines. The robots will be here soon enough, and they will cause massive technological unemployment it will be highly disruptive to the dysfunctional selfish societies that have not learned to share (like the US). The disruption will only be resolved, when Americans learn that socialism is not the work of the devil.

    However, the more short term question asked, is how much of today’s post-great-recession unemployment is actually caused by technology. That’s much harder to answer. The economy remains depressed because we have a consumer demand problem which our governments have decided not to fix. The only way to fix it is with large amounts of public spending, and we have elected not to do that, so the recovery will be needlessly long and slow.

    But, if we are facing a true structural problem of technological unemployment, and not just a simple post recession demand problem, then even public spending is not going to fix unemployment – or not fix it back to the level we would hope we could reach.

    Paul Krugman points out that even back in the great depression people were trying to argue for technological unemployment as the farms were being automated and massive numbers of people had been displaced from the farm and had not yet found new jobs in factories. So the tendency to play technology today is no different than what was happening 80 years ago. But is it different this time or not? We really don’t yet know.

    I believe that technology is not driving down employment, as much as it’s driving down wages and creating greater inequality. The recession just forced (or in many cases, allowed) companies to accelerate that process and replace more jobs with technology sooner. The unemployed can find work again, if they just accept harder work, and less pay – and in time, they will accept that, rather than starve.

    So I think technological inequality is the real problem here, not technological unemployment, and this problem will not go away, but will only show its true nature, as we recover from the recession, and see how poor wages are like once employment recovers.

  • ZeroIron says:

    No doubt that automation is the way forward. The fewer people we have doing tasks that do not fulfill them the better. Automation will free humanity to focus on creativity rather than being a task drone. In the long run I believe automation is correct direction.

    However, being the slightly odorous bacteria covered sacks of cells that we are, the transition will be difficult. I highly doubt we will gracefully lift ourselves out of the economic paradigms of the past. Until our social, economic, cultural, political, and educational systems all adapt to a world where few if any humans perform mind numbing repetitive tasks we are in for a lot of pain.

    It is possible for a graceful transition, but I don’t believe we are ready. I expect the transition to automation to be painful. In the short run (decades, maybe longer) the transition will be economically painful for those that are not already well to do. In the long run (decades, next century) automation will free up humanity to focus more on exploration, creativity, arts, etc.

    Just this sack of cells 2 cents on the matter.

    • Andrzej Wojcicki says:

      Sorry to say that, but just as the article’s author you seam to forget the fundamental difference between human labor in its current form and creativity based economy which suppose to be the future. Here are a few points against that optimistic view:

      1. First of all in terms of intellectual property “winner takes all”. Take any form of creativity (and by creativity I also mean all forms of intellectual property) and you’ll find that people want to watch great movies, listen to great songs, use the best apps etc. not mediocre ones. Maybe in the middle ages when you had to have a bard, or a storyteller actually visit your village or town and each time perform some form of art, there was a place for mediocrity. Now as copying and reproducing ‘art’ is almost free relatively to human labor the ‘system’ benefits the best individuals. You’ll have a couple of multimillionaires and all the other people will be just broke wannabes. Note that with automation we are getting the same thing with manufacturing and agriculture. A local mediocre blacksmith in your village is replaced by the 3d printer with access to the best designs imaginable. Human creative skills could be described with a Gaussian curve, but the benefits from those skills are based on a very steep exponential curve.

      2. It’s happening to fast. Not everyone can be creative. Even if we assume we’ll have some great advances in education (which now actually kills creativity), most people will be just unable to offer something to the world. A laid-off factory worker won’t start a fashion blog, start writing apps or get work in a local fablab .. that’s just not going to happen. Most of the people around the world will be left out. That’s why I think that looking for clues in the first industrial revolution is a big mistake.

      3. You don’t need to replace ALL of the work. Just make 25-30% of people permanently unemployable (or obsolete to put it more bluntly ) and you’ll have a massive crash of the whole society. We need significant changes in our society more than ever and we need them fast. So far we are still arguing what’s really happening, but that’s just because the exponential curve is slowly creeping up on us and once it accelerates it might be too late for a milder transition.

      4. and last … just my educated guess. In the long run I think we will see even the ‘creative’ work being done by machines better, faster, cheaper. I don’t think our brains are so unique that the reproducing our creative skills even without fully conscious AI will be possible sooner than most people expect.

      • Curt Welch says:

        Yes, I agree with all you write Andrzej Wojcicki. But the fix is very simple. All we need to do, is transform our welfare systems into a Basic Income Guarantee for everyone. This could be done very quickly once people understood how important it was, and how much it is needed. It would not only solve the technology problem, now, and forever, it would instantly fix the broken economy at the same time.

        The only problem, is that a vast majority of people 1) don’t understand any of this, and 2) are so predisposed to believe anything that smells like socialism is evil, that there is no short term hope in getting them to understand any of this.

        So, all that is happening, is that we are waiting for things to get so bad, that people will be willing to try anything to fix it. But, it only takes one country, to implement a basic income guarantee, to lead the way for all the others. The idea is building force as more people understand it’s value and understand why it’s needed, so it shouldn’t be too much longer, before someone implements it, and with that, will come hard data on what its true value is.

        I think that within this decade, some country or group will create a serious implementation of a Basic Income Guarantee and by the end of the decade, it will become a hot topic being given serious consideration all around the world. And within the next decade, it will become a standard part of the world economy – and with it, all the big problems of automation and inequality will be solved allowing automation and technology to once again, be a good force for humanity. It’s going to take a little while to make this happen, but it will happen, and the future will be very bright because of it.

        • Panpiper
          Panpiper says:

          “2) are so predisposed to believe anything that smells like socialism is evil.”

          Here’s an interesting tidbit. I am about as free market, non-socialist as they come, but I am 100% in favor of a basic income guarantee. It would cost no more than our existing social safety net and would be FAR more in sync with the principles of a free market. Not only that, but several extremely high profile, free market champions have supported the idea of a basic income guarantee, such as Milton Friedman and Friedrich Hayek, for much the same reasons I do. (Milton Friedman talked about a negative income tax which is not quite the same thing, but I am certain that I could have talked him into a basic income guarantee instead, inside of five minutes.)

          A basic income guarantee replaces (among other things) welfare and minimum wage. Welfare quite literally pays people to not work. That is not it’s intent, but that is it’s effect. Minimum wage makes it illegal for the least skilled workers to work at the wage at which it would actually be profitable to hire them, making it impossible for them to get hired. It also therefore makes it impossible to operate businesses that would require such lower skill workers. Both of those programs are as anti-free market as one could get.

          Any free marketer who truly understands the ramifications of a basic income guarantee really ought to get behind this in a serious way. This is one program that both socialists and capitalists could agree on.

          (A complete aside, so people do not misconstrue my own leanings, there is very little that is “free market” about our existing system, which is far closer to Fascism than anything else. I see the failings in our existing system every bit as painfully as does any ardent socialist, but unlike socialists who think that the choice is between the existing system, mistakenly called “free market”, and socialism; I am well aware that there is in fact another option, every bit as radically divergent as socialism, which is true freedom. (Note of course that one’s freedom ends where another’s starts, true freedom does not mean absence of law, it just means contractual law we agree to.)

        • pdfernhout says:

          I’m heartened to see a few people here discussing a basic income as a way to deal with structural unemployment. I agree that a basic income (giving some money regularly to every person as a human right) makes a lot of sense, since a major problem with exchange-based markets is that they only hear the needs of those with money. Thus people can starve next to grain silos full of unsellable wheat, go without shoes in the snow when the stores and warehouses are full of unsold boots, and go without medicine when there are shelves full of it in the pharmacy. Real markets (not theoretical “free markets”) also tend to concentrate wealth, both by normal economic means abd through “regulatory capture”. The wealthy normally tend to use their money within the marketplace to get richer through market position or improved efficiency or employing the most talented people and so on. But, they also often use their money to tilt the political-economic playing field in their favor. This includes lobbying to:
          * reduce their taxes as we have seen in the USA over the past few decades;
          * increase barriers of entry to small companies;
          * to get the government to enforce their monopoly control over an industry (e.g. copyright violation is now a criminal matter when it used to be just a civil matter);
          * to get preferential access to natural resources (like cheap access to government land for mining, or cheap access to broadcast spectrum, etc.);
          * to get preferential access to government contracts, especially for the military;
          * to get preferential subsidies and tax write-offs like a “depletion allowance”;
          * in general, getting laws passed to privatize gains while socializing costs, risks, and pollution (including by “corporate personhood” coupled with “limited liability”);
          * and other means (including sometimes even illegal ones involving briefcases full of cash).

          Marshall Brain points out in “Robotic Freedom” that robotics (as a capital item) will only accelerate this wealth-concentration trend overall. Greater wealth will lead to more political lobbying to protect it. And greater unemployment will lead to a race to the bottom in workers accepting ever worse wages and working conditions even as automation-augmented worker productivity soars. This is all very basic supply and demand theory — with the political twist that great wealth is used for ever increasing political leverage. A basic income helps level the playing field again. But getting one assumes there can still be found the political will in a country like the USA that has already suffered under decades of wealth concentration and related politics (including villifying any national-government-based solutions and gutting programs that existed, except the military). Western European countries like Germany may well lead the way forward on a basic income, because their democracies tend to have a healthier balance of political interests. Japan may also be a leader here as well. Both Germany and Japan have political processes that are legacies on 1940s US ideals; search on “Were You Born on the Wrong Continent?: How the European Model Can Help You Get a Life”

          But a basic income is not the only option. Going forward, we may well see a location-specific mix of a basic income with some other things like:
          * improved local subsistence by 3D printing, solar panels, and gardening robots;
          * an expanded gift economy through Wikipedia, GNU/Linux, more voluteerism, and Freecycling;
          * improved government planning through internet-empowered participatory democratic governance.

          It’s not clear how the details will play out from these four possibilities in specific countries or in specific regions, especially since things like a gift economy in information may be global. Culture may well play a big role. In the USA, the local subsistence option or gift economy aspects may have greater grassroots support in rural areas, for example. Cities might tend to lean more toward better planning or a basic income. Or, we may just see a complete meltdown with the war machines being unleashed to prop up obsolete ideologies or obsolete business models, like with the irony of using nuclear energy (embodies in weapons) to fight over access to oil field profits. Or perhaps impoverished starving countries that have lost their export markets might unleash designer plagues to gain access to agricultural lands they would not need if they could grow plants and meat indoors via better engineering. It’s hard to predict the outcome of so many changes at once. The best thing we could do may be to lower the global and local economic and military tensions by getting people to be aware of the possibilities of abundance while also making sure that a good chunk of that abundance is shared equitably somehow (whether a basic income, printing a 3D printer for your neighbor, contributing to free software, participating in local civic groups, or whatever else).

          A few years ago, I put together an essay on this topic (now on my site) called “Beyond a Jobless Recovery: A heterodox perspective on 21st century economics”.

          From the introduction: “This article explores the issue of a “Jobless Recovery” mainly from a heterodox economic perspective. It emphasizes the implications of ideas by Marshall Brain and others that improvements in robotics, automation, design, and voluntary social networks are fundamentally changing the structure of the economic landscape. It outlines towards the end four major alternatives to mainstream economic practice (a basic income, a gift economy, stronger local subsistence economies, and resource-based planning). These alternatives could be used in combination to address what, even as far back as 1964, has been described as a breaking “income-through-jobs link”. This link between jobs and income is breaking because of the declining value of most paid human labor relative to capital investments in automation and better design. Or, as is now the case, the value of paid human labor like at some newspapers or universities is also declining relative to the output of voluntary social networks such as for digital content production (like represented by this document). It is suggested that we will need to fundamentally reevaluate our economic theories and practices to adjust to these new realities emerging from exponential trends in technology and society.”

          As for the general issue of what human will do once they are all materially wealthy, raising children well can take just about as much time as an adult has. There are many unfunded volunteer causes like reversing pollution such as all the plastic floating in the oceans. Building space habitats will take some effort. Being a good neighbor or friends can take a lot of time. Hunter/gatherers (see Marshal Sahlins’ “The Original Affluent Society”) apparntely often got on quite well relative to their aspirations with most of their time going towards socializing with friends and relatives and raising the next generation. We might just be returning to that older lifestyle, but with lower infant mortality, iPhones, 3D printers, and probably someday fusion-powered spacecraft (maintained by robots). We may well see a diversity of future options unfold.

  • dobermanmacleod says:

    Here’s another: it is estimated that energy production and distribution accounts for a quarter of those employed. What happens when there is a very very cheap, super abundant (and clean) new energy technology that emerges?

    “A volume about the size of a #2 pencil eraser of water provides as much energy as two 48-gallon drums of gasoline. That is 355,000 times the amount of energy per volume – five orders of magnitude.” ( http://oilprice.com/Energy/Energy-General/New-LENR-Machine-is-the-Best-Yet.html ).

    This phenomenon (LENR) has been confirmed in hundreds of published scientific papers: http://lenr-canr.org/acrobat/RothwellJtallyofcol.pdf

    “Over 2 decades with over 100 experiments worldwide indicate LENR is real, much greater than chemical…” –Dennis M. Bushnell, Chief Scientist, NASA Langley Research Center

    “Total replacement of fossil fuels for everything but synthetic organic chemistry.” –Dr. Joseph M. Zawodny, NASA

    By the way, here is a survey of some of the companies that are bringing LENR to commercialization: http://www.cleantechblog.com/2011/08/the-new-breed-of-energy-catalyzers-ready-for-commercialization.html

    For those who still aren’t convinced, here is a paper I wrote that contains some pretty convincing evidence: http://coldfusionnow.org/the-evidence-for-lenr/

  • Robbert says:

    As a software developer I don’t think my job is in any danger of being replaced by a machine.

    • Curt Welch says:

      Well, software engineers are one of the more secure jobs, but they are already being replaced. No job is safe. You will see your job automated out of existence in the next few decades. The new robots will be learning machines and won’t need to be programmed. They will need to be trained by teachers like humans are trained. Just like electrical engineers that would wire the control logic into machines got replaced by software engineers that would code the logic into machines, the new trend will be to replace the programmers with trainers. And often, customers will be able to train their own robots, instead of hiring an engineer to do it for them. This approach is already being taken with the new Baxtor Robot but will advance much further and faster as our learning technologies improve.

    • Chris F says:

      As a programmer myself, I’d estimate that we’re maybe 15-20 years away from the time when an AI will be able to write software as well as a gifted human. That’s obviously a guess, but once we understand the basics of how knowledge is represented and manipulated in the cortex (~10 years), I suspect that ‘higher functions’ will be reverse-engineered within the space of only a few years.

      I agree with Curt that software jobs are fairly safe in the near term, but unfortunately I don’t think the future is especially rosy :

      = The outlook for the global economy remains extremely gloomy, Many companies are in ‘cost-cutting’ mode – there’s little appetite for building new systems
      = Web-based software services (eg HR, payroll, CRM) are slowly reducing the need for dedicated in-house programmers
      = The availability of high-quality free software is putting pressure on those who used to make a living by selling pre-packaged software
      = Programming jobs will continue be offshored to cheaper locations as telepresence becomes more effective and widespread
      = As more and more jobs are lost to automation, billions of working-age humans will scramble for an ever-shrinking number of jobs, That will inevitably drive down wages for those lucky enough to still have jobs

    • Dirk Maes says:

      Partly true.

      Most commercial software contains a lot more automatically generated code due to frameworks and scaffolds than ten years ago. It follows the same trend as any other industry.

      Automation is like the water level on an island. Software developers, artists and scientists may live on the top of the mountain while laborers and craftsmen live in the valley. With our current social economic model, the laborers will drown first, but as long the water level keeps rising the entire island will vanish eventually.

  • Scribe says:

    The global economy is royally messed; the environment continues to be consumed at an increasing rate; governments are strapped for cash as major corporations do not pay the vast majority of taxes they once did, individuals are making up in terms of increased tax rates and decreased government benefits; the threat of outsourcing continues to remove the willingness of workers and politicians alike to fight for livable wages (leading to less wages for consumerism and so more credit-card debt to pay for consumer culture); and the disparity of wealth continues to stretch the world’s wealth to super-poor and mega-rich with few people in between.

    To add to the entire instability of this situation: automation is speeding the pace of change/growth.

    Good or bad: there is nothing we can do to alter the fact that the world is changing. We can attempt to slow the pain of growing via bail-outs, but massive destabilization seems inevitable.

    What rebuilds itself from the ashes of this global calamity will not only be framed from the technologies heralded on SH, but also the results of new and global conflicts that will result.

  • Steve Morris says:

    As machines take on more and more tasks, it will clarify our economic thinking. Large economies are so complex that we are unable to see clearly how and why they work. This is why the comments here contain wildly opposing political and economic opinions.

    Consider also: if AIs could replace all human jobs and do them better, they could replace politicians and economists and do those jobs better too.

    • Curt Welch says:

      It will be interesting when the machines can do more of that so that when people suggest one political action or another we will have machines without human bias to explain the expected consequences of each alternative to us. We will still endlessly debate which path we want for our society, but at least we won’t spend as much time debating the what we think are the “facts” and can get down to just voting on which direction we each prefer. I wonder if it might even help reduce political debates because they can more quickly get translated down to personal opinion to be voted on vs debate over perceived “facts” that often aren’t facts at all.

      Imagine expert AIs on all fields fact checking anything anyone says instantly so we always know the truth behind the issues instead of all these personal opinions made to look like facts.

  • Frank Whittemore says:

    Radical Abundance: How a Revolution in Nanotechnology Will Change Civilization …

    by K. Eric Drexler, the founding father of nanotechnology …

    http://www.blogginglifeextension.com/?p=7511

  • Roaidz says:

    Robots were only created by man. and as we see in the past, all things
    that were created by man diminished, only because new discovery had
    been found. But man will be retained here in our planet, because we are
    created by God. And all things that were created by God are forever.

  • danbeaulieu says:

    Jobs aren’t lost on net balance. People who lack the ability to see the big picture will argue this, as they can see the workers put out by automation but what they cant see is a great deal of jobs created in another industry in result of the automation. Henry Hazlitt has a great chapter on this in his book Economics In One Lesson:

    http://www.fee.org/the_freeman/detail/the-curse-of-machinery#axzz2RriFQ826

    • Chris F says:

      I read the page that you linked to, Dan. I think the flaw with Hazlitt‘s argument is that he assumes that new jobs will inevitably be created to “absorb” the displaced workers. Historically this has always been the case, but there is no fundamental law which guarantees that it will continue to be true – and in fact there are good reasons for thinking that things really are different this time.

      Imagine if someone were to invent a humanoid robot that could do literally anything a human worker can do. There’d simply be no way for a human worker to compete against something like that. How can I earn money to feed myself when a robot will do the same job for free ?

    • Curt Welch says:

      It’s funny to me that you would suggest people are blind to the big picture, and then show how clearly blind you are to the true big picture. The article you quoted is from 1964. Really? You think that automation in 1964 is the same as it is today in 2013?

      There are few big picture issues you seem blind to. First, the only way for a human to find new work after being displaced, is if there remains some job that the person can still do better than the machines. We are reaching the point where machines are becoming so advanced, they are displacing everyone. This game of musical chairs where the machines keep taking away chairs, can’t last forever. In the end, there will be no chairs left for humans. And though in 1964, there were still lots of chairs for humans, in 2013, there aren’t nearly as many. Give it a few more decades, and there will be no chairs left as all. Humans will pushed out of the economy just like the horse was pushed out of the economy once machines became more advanced.

      Second, there’s a bigger problem than unemployment being created by automation and that’s inequality. The real problem of automation, is that it greatly amplifies the power of the few to make lots of money, and reduces the power of the many, to participate. It creates a super star economy where the best of the best, are able to dominate ever growing markets, while the many, are left in second place, with an insignificant share of the business and wealth. When every town had to have it’s own local boarding house and restaurants, then thousands of people were able to run their own store, and capitalize on their local market. One really talented owner in one city, had no ability to use his talent, to steal market share from the next town. But as technology grows, the reach of these talented business people grows. They create chains and are able to operate many stores, and put the other guys out of business. This was only possible, with improvements in communication and transportation – with advances in technology. Now one really talented, ruthless, and aggressive businessman, can take over markets all around the world, like Walmart. And all those guys that once were able to operate their own stores, are out of business. All those local shops, many of which were very generous to their employees, and paid them well, were put of business by the guy that does everything he can to screw over his employees – by the guy that is the best in the business, at not sharing the success of his business, with his employees, or suppliers.

      This trend of technology creating inequality is nothing knew. It’s what happened in the 1800′s with the robber barons. Growing advances in technology made a few men very rich, because they were the best of the best at leveraging the technology. like JP Morgan, and John D Rockefeller. To offset this effect of technology creating inequality, new laws were created, such as the antitrust laws, and the labor laws, and minimum wage laws – all becuase with the technology of the time, the few were becoming too powerful and hoarding the wealth for themselves. The laws were all made to force them to hoard less, and share more.

      But technology didn’t stop it’s progress 100 years ago, it has kept right on advancing, and it keeps giving the few, ever greater powers to hoard ever larger amounts of the wealth. Our laws and tax structures (in the US) however have not kept up with technology, and starting in the 80′s public policy actually took a turn for the worse, and gave us 2 decades of giving more money to the few, and less to the many, accelerating the damage technology is doing to society, by accelerating the growth of inequality.

      Technology will be our saviour if, and only if, we share the wealth it is creating fairly. Don’t share it fairly, and we will have revolt. The closer we get to man being pushed out of the workforce completely, the worse the inequality will get as a shrinking minority of super-investors gain control over the bulk of all the automation, and technology, and in turn, the natural resources as well.

      The economy will always assign some value to human labor, and anyone willing to work for that value, will be able to have a job. So it’s true that jobs are always “available”. But that “value” will be so insignificant, that people won’t be able to feed themselves or providing housing for themselves with the money they can make. A job that doesn’t pay enough to feed and house a person is not a “job” worth having. The person can do far better by becoming a thief. Or just by buying a gun and going out and shooting the rich guys that refuse to share the mega wealth created by the technology.

      • shaker says:

        That person would have to have a job that earns them basically nothing for it not to be worth it in the future:

        Advanced A.I. makes education very inexpensive
        - Automation can make housing very inexpensive
        - abundant energy can make food very inexpensive
        - automated cars make transportation very inexpensive.

        in the society of the future, poor people wont be able to take vacations to mars, wont be able to buy new body parts and invite superstars to their house to entertain their children. But they will be able to have everything a person in today’s middle class can afford.

        The problem is we are always redefining what it means to be poor. Poor people in america can ride the bus, go to school, get an operation and have enough to eat that they tend to be obese.

        I am not saying that i don’t want everyone to “have everything”. i wish the best for everyone. but at the same time we need to realize that life is better for everyone. And saying that “robots will take all our jobs” and therefore we will be poor and destitute just doesnt make sense. The math just doesnt add up.

        We will only be poor if the central planers/bankers destroy our money supply. But i feel we’ll switch to a global computerized currency system to prevent that from happening.

        Tech and automation creates wealth. It does not destroy it.

        Our problem is not technology. It is the people who control the money supply, create imaginary boundaries that we call countries, and those that manipulate the laws. I can only hope that as humans become more educated and wealthier globally we can fight the real problem and stop with the scare tactics.

        • Curt Welch says:

          “And saying that “robots will take all our jobs” and therefore we will be poor and destitute just doesnt make sense. The math just doesnt add up.”

          You are not listening Shaker. I’ve never said that.

          The problem is not one of wealth. Automation creates HUGE amounts of wealth – which is super good for a society to be wealthy.

          The problem, is that with free trade based on working for a living DOES NOT SHARE THE WEALTH IN ANY SENSE. It causes all the wealth, to shift to a small handful of people while the rest starve.

          Free trade does not share the wealth created by the machines, with a person born poor, has NOTHING TO TRADE.

          Free trade does not share the wealth created by the machines, when a person that makes a bad investment, loses all his wealth (maybe not even caused by him, but caused by a corrupt super wealthy protecting each other by dumping bad investments on the unsuspecting public), and is again, left with nothing to trade.

          Free trade just DOES NOT WORK at all, as a system for fair sharing of this vast wealth, when people don’t have anything to trade.

          Free trade has worked for thousands of years, because every healthy normal human had something highly valuable to trade – their labor. But with the advance of the machines, the value of human labor keeps declining. More and more, companies don’t give a shit about humans, because they make more money by investing in computers and other tech, than by investing in humans. And this is going to get much worse fairly quickly as machine technology keeps advancing.

          Lots of wealth, makes everything every cheap. But if the rich aren’t willing to give you a free car, or free food, how are you going to get it if free trade is the only law of the land? How are you going to get the rich guy that owned a billion dollars worth of food, to trade you for it? What do you own, that he gives a shit about? NOTHING! These super investors and their corporations owns all the land, all the genetically engineered crops, all the machines that farm the land, all the oil fields, all the homes, and what do you have that they need, to make them trade some of this stuff with you? NOTHING, because once the corporations don’t need you to work for them, once they don’t need your labor, you are SCREWED.

          Many people are effectively already in this position of having nothing to trade. They don’t have the skills needed, to allow them to find a job, and they don’t have money needed, to get the education, or the time left in life, to take advantage of the education, if they could get a loan to pay for an new education. They are just screwed. Billions of others, are just being squeezed out by the corporations by being offered bad jobs for low money and they have no options to do better either.

          All this will continue to get worse over the next decade as automation and machines get exponentially better at replacing humans.

          Having a wealthy society is pointless, if there’s no social system in place for that wealth to be distributed to the people. Capitalistic free trade, the social system we have used to determine how wealth is distributed in society for thousands of years, is failing us, as the machines advance, and will fail us completely, once the machines are more advanced than all humans. But the fix is very minor and simple – because the problem is very simple. The problem is that wealth accumulates to the few, and the fix is to force some percentage of the wealth to be shared, to offset that accumulation.

          If you don’t believe all the wealth will accumulate to the few, just wait, and watch what happens over the next 10 years. Then go back and see what’s happened in the past 30 years and get ready for my “I told you this was happening”.

  • Jane Cabot says:

    What a douche of an author. Farmers did not change into programmers and an article writer – that’s only a tiny minority. Farmers turned into employees of real industries, such as steel, car, appliance. They turned into a logical next step. None of which exist today. If you think that your modern factory conveyor operator will take a programming job once he looses his to the robot, then I’ll see you on the other end during the civil unrest.

  • Robotech says:

    As someone who’s lived through the automation revolution like I did, I offer a case study of a class of programmers who are now extinct.
    During the 60s, 70s, and 80s thousands of highly trained programmers worked in manufacturing. They were known as “NC Part Programmers.” Their job was to examine the geometry of a paper drawing and translate that geometry into a script code called APT (Automatic Programmed Tool). The code was then translated by a mainframe computer into another numerical machine code (NC), to direct the motions of a robotic milling machine to cut out a part.
    The advent of direct translation of part geometry from a CAD (Computer Aided Design) drawing into APT and then NC eliminated the need for an “NC Part Programmer,” resulting in the almost total elimination of that category of highly paid worker.
    Today only a handful of workers are engaged in that task.

  • Robyn Wyrick says:

    Great article. I would add this, though. The automation revolution that pushed people off of the farm started *very* early, and was one of the main spurs to the cooperative movement (granges) and the union movement. And the social upheaval it fostered set the stage for massive social unrest.

    Now with unions so successfully broken in the U.S. I don’t see what is going to prevent massive social unrest once again. For the past 30 years, not only have jobs been harder to get – good paying jobs have grown ever more scarce. Wages and benefits have declined. Many protections for workers are at a fifty year low.

    And with an ever increasing gap between the rich and the rest, the national politics has moved forcefully toward accommodating the ruling class.

    So, while I generally agree with your warning against forecasting what jobs will be around in 20 or 40 years, I think history does have valuable lessons: social mobility is not created happenstance; it is the result of specific policies and institutional supports that actively promote wealth equality, income equality and power equality.

  • Luke Rohde says:

    Um… Didn’t farm machinery contribute to mass unemployment and the concentration of capital that lead to the depression. The US dug itself out with that new deal politics that sought to redistribute capital (progressive taxation) and opportunity (education and health) to the masses – this lead to massive prosperity in the 50s and 60s. And this only came about because of the threat of unrest/revolution/communism etc… Ted Kennedy said he’d have given away half his wealth to keep the other half under the rule of law (or enjoy in peace and safety, depending the source). We’re seeing it all over again, but nobody is learning – will the republicans/wealthy/1% etc… only relent when they’re threatened by revolution. Economically speaking, “small govt” leads to over supply and weak demand. Technology is neutral, but could crush us or liberate us depending on how we navigate the change.

    • Panpiper
      Panpiper says:

      Reading things like this leads me to despair, and I lack the energy to respond each and every time. You could not possibly be more wrong.

      • Steve Morris says:

        Panpiper, I know exactly how you feel. Don’t despair, you are not alone.

      • Chris F says:

        Hi Panpiper – I’d like to understand your position. Luke seems to be in favor of redistributing a certain amount of wealth from the rich to the poor, via tax. I’m guessing you’re not in favor ?

        Without some form of redistribution, isn’t it inevitable that the rich will continue to get richer, just through basic compounding ? The first year the ratio of wealth looks like 3:2… next year it’s 9:4, then 81:16… each year, the wealthiest pull further and further away from the rest of society. The problem is compounded (no pun intended) when capital gains are taxes at a lower rate than earned income.

        • Steve Morris says:

          I’m not answering on behalf of panpiper, but I just want to point out your basic conceptual problem. In your mind you have a box that contains “rich people” and another box that contains “poor people”. In a free society, poor people can become rich. In fact, most of the people in your “rich people” box started in the other box. So your analysis is completely wrong. However, this issue is entirely off-topic and nothing to do with robots.

          • Curt Welch says:

            I’m not answering for Chris, but I often write about the divide between the rich and the poor, but though my words may read AS IF I was putting people in boxes I am not. If you read my words that way, it’s you Steve that is making the conceptual error.

            Most people start out life relatively poor, earn most the money in the middle of their life in the working years, and end life poor again. Though there are plenty of exceptions, there is generally a lot of wealth mobility over time with people.

            The problem with technology and the free market is that it amplifies not only our ability to be productive, but it also amplifies the shifts in wealth over time. These amplified shifts in wealth destabilize our society and is not good for it. People do not benefit by great shifts from poor to wealthy to poor, any more than they benefit by living in a society with large levels of wealth inequality created by the technology.

            The larger the inequality, the less stable the society and the economy becomes, and the more pain and suffering we allow to fall onto the people of the world.

            If the purpose of our society is not to end human pain and suffering, what is the purpose?

          • Luke Rohde says:

            Its totally on topic. In the world where machines are cheaper and better than humans, humans become a market externality. i.e. no investor can be expected in the interests of his shareholders to hire a less productive human over a machine. Its not rich vs poor. Its that money has its own morality/ego and it can be inhumane if unregulated.

            You could call “luddite fallacy”, and say eventually we’ll all be employed in fanciful jobs that no-one today could imagine but what happens in the meantime, as our economy undergoes massive restructuring? Nevermind the point beautifully illustrated by Curt Welch below.

            In response to “what then?” as posited by the article title, I propose
            A) revolution
            B) new deal style concessions.

            Our current political/economic path (reagan onwards) has presided over incredible productive growth at the same time as we’ve seen increased poverty and real middle class wages go backwards. Super-investors have an abundance of capital, prop up the economy by loaning it back to the middle class rather than paying them better wages then the bubble burst. Now we have raising unemployment and it has all happened before but not like this.

            If these same super-investors own all the robots (they’re investing in this stuff) and end up wielding all the political power (conservative and liberal politics are owned by big money), I don’t fancy our chances if those robots are also better at warfare.

          • Chris F says:

            I’m still not 100% convinced that it’s my reasoning which is flawed Steve, but then again I’ve been wrong plenty of times before and I’m quite happy to be convinced :)

            What I find difficult to grasp is, how will the folks who start out poor supposed to lift themselves up, *if* they can no longer sell their labour because they’re being out-competed by software and machines ? I suppose one answer is that will always be jobs that we humans can do that cannot be automated, but personally I’m not swayed by that argument. Ultimately we’re all replaceable.

            Curt puts it more eloquently than I, but like him I’m also concerned about the amplifying effect of technology. I just see fewer and fewer opportunities for the poor to “catch up”, in a world in which capital is increasingly significant and labour is increasingly irrelevant.

        • Panpiper
          Panpiper says:

          Actually I am wholeheartedly in favor of a basic income guarantee, which would actually not require any new taxes, just instead a rather wholesale restructuring of how we implement our existing social safety net (or rather any changes in tax structure would be revenue neutral and not necessarily actually increase taxes on the wealthy). I am a free market fundamentalist, and a basic income guarantee is infinitely preferable over what we are doing now. It does not mess with the mechanism of the market one bit, unlike the programs it replaces, which create massive market distortions that result in institutionalized poverty and structural unemployment. (Though how the money is levied can mess with the market, but that is a separate discussion.)

          The comment I made was the despair from seeing the standard propaganda line from most civics/history teachers from public schools, people who as often as not know very little of real history and absolutely nothing about economics. It is vastly more political propaganda than it is anything else, but because that “big brother is your friend” line is what most people were fed in their government classroom, that’s what most people believe.

          Steve made the very salient point that wealth is quite mutable, that it is not one ‘class’ of people who are necessarily and always wealthy and another that are inverse, that there is enormous movement between. That said, it is certainly true that the child born to a ‘crack whore’ is likely permanently disadvantaged relative to the one with the silver spoon. Curt makes the also very relevant point that vast extremes in income distribution are dangerous to society, at least that is true if the worst off cannot afford the essentials. Curt and I both champion the same thing, a basic income guarantee. Though we sometimes approach our reasoning from very different angles, we arrive at the same conclusion.

          • Panpiper
            Panpiper says:

            Addendum:

            Concentration of wealth does not grow to infinity. Extreme wealth only rarely survives the next generation. A wealthy person dies, often having devoted their retirement years to some philanthropy and then leaves some of what remains to charitable institutions or their own foundations, and some to their heirs. The money left to heirs is almost always either squandered or within a few decades has dwindled to relative insignificance. The business acumen and discipline needed to amass the fortune are not typically inherited.

            That said, there ‘has’ been a huge grown in income disparity over the last forty years. There has always been a relatively large gulf between the richest in society and the poorest. But the ration of that gulf has remained relatively stable for the last couple of hundred years. But in just the last forty, the ratio has increased five fold.

            This has absolutely nothing to do with not taxing the rich enough. Through much of the time in which the ratio was stable, the rich were in fact taxed ‘much’ less than they are now. It is not the taxes that have made the difference either way. The difference is in the way central banks manage the money supply.

            Historically wealthy people did not get wealthy by speculating vast sums in the stock market, and most especially, they did not leverage their speculations. Historically if a wealthy person wanted to borrow capital, they had to pay the market rate for capital, a price for money that was determined by the equilibrium between the supply of loanable funds and the demand for capital. This interest rate was much higher than the interest rates being ‘set’ for the last forty years by the central planners of our central banks. It is only in the last forty years since we went off the gold standard and went 100% fiat, allowing the central bankers to create any amount of money they want and set any interest rate they cared to, that the vast disparity in wealth has grown to such a gulf.

            Nowadays a well connected super wealthy speculator, or any investment banker, can borrow money for ‘less’ than the inflation rate instead of the old style ‘real’ interest rate, and with that free money, they can gamble wildly. If they win they get to keep the winnings, if they lose they are “too big to fail” and get bailed out by the taxpayer. in fact, to the degree that the ‘loans’ are below the inflation rate, these speculators are literally paid to take the new money with which they gamble.

            The newly burgeoned gulf in wealth disparity has been manufactured by our fiscal policy.

          • Chris F says:

            Thanks Panpiper, I appreciate you taking the time to explain your position. You make some excellent points and have given me plenty to think about.

  • mrguy710 says:

    This is a natural development and one that clearly benefits humanity by freeing us from repetitious and mundane labor, labor that requires no intellectual or creative input. This development of technology reflects our transition to a different economic system, as does the downfall of economies around the world show this reflection.
    The inherent flaws in this far outdated monetary system have been intensifying. The rich get richer, poor poorer, and the system gets more corrupt. There is no monetary economic system that will work anymore. It doesn’t matter if your dollar is commodity backed and your banks are fair and humane, the core issues of a monetary system will always exist in that kind of system.
    Those who make it to the highest class of monetary “success” always try to take power and keep it. The environment that this monetary economy creates is one saturated by greed, selfishness, and division. This kind of human behavior is understandable in a system that divides everyone and pins them against each other in a game of competitive survival.
    It is no longer sustainable, for everyone to be able to own a chunk of the planet and live excessively. It’s not realistic in a global economy where we are all a part of one planetary system to not share our planets resources and cooperate at every level.
    Will be an interesting transition but I believe the dark is before the light. Meaning that out of this old system of subservience can come a system of equality, freedom, and true prosperity. Just imagine a whole planet sharing all the resources for the benefit of everyone, one giant tribe called humanity. No more taxes, no more labor, no more competitive market bullshit, everyone working together to make the best of everything.
    Think about it with an open mind. Look into a thing called a resource-based economy which is a term used by a man named Jacque Fresco (The Venus Project). It is a system that uses no money where everything is provided through the intelligent use of technology, and it is totally possible. Now compared to what we got I think It’s worth a peek.

    • Panpiper
      Panpiper says:

      Most of the evils of the monetary system have nothing to do with money itself and everything to do with the absolute perversion we have created in our existing central banking institutions and the crony-capitalism that results from government power being essentially, for sale. The disparity in income distribution has grown five fold in the last forty years over what had been historically the norm for centuries prior. What changed in the last forty years was the world going from a commodity money (gold backed currency) to a totally fiat currency (backed by nothing). This has allowed governments to get away with massive deficits they never would have been able to afford before and prosecute wars they could never have gotten away with if they actually had to tax their people to pay for.

      The society Jacque Fresco advocates assumes that a computer program could do a better job of resource allocation than could billions of human beings making their own decisions as to what they value the most. How could any computer, regardles of how intelligent it might be, know better than I what I value most? And if it does not, how could that computer make resource allocation decisions for me, better than I could? Fresco advocates a ‘resource based economy’, but in fact we already have such an economy. The difference is that every human being ‘votes’ with their pocket book on how much they value the resources available, as opposed to a machine removing from them even that much free will.

      In this thread, we bemoan the consequence of robots taking over all the jobs. The Venus Project insists that we should also surrender our own personal decision making to the machines. That is not a solution, it is an abject surrender.

      The correct solution is a basic income guarantee, in which a portion of the wealth of society is allocated to every citizen, every last one of them. Those who are able to still find ways to add additional value to society can earn more by doing so, but everyone has enough to afford at the least the bare essentials, and with time no doubt, much more than that. But that would still be a money of sorts, else why can everyone not have a beachfront home with a private beach?

      I value being able to play in my virtual world all day, another person values being able to meditate in a tree house. A computer making value judgements for us is NOT superior to us simply having money with which to purchase our choice of resources. You might say that we could vote with the computer, but that is inferior to our simply voting with our wallets.

  • Franz Ternaut says:

    We don’t know what jobs will exist in the future or whether there’ll be work everyone can do, so we should keep a realistic appraisal of our uncertainty, not becoming too confident in any particular picture of the future or method of forecasting. But the market did re-employ everyone the last time we were displaced by technology, so we can be confident that it’ll do so again. These two claims are contradictory, but the author doesn’t spell out the second one, just leaves the implication hanging there, so perhaps you won’t notice. Very clever.

  • Lou Nisbet says:

    Hi,
    Don’t expect a robot to be playing guitar better than ANYONE anytime soon.

    • Curt Welch says:

      Yes, being artistically appealing better than the best human will take some time, but there are fun guitar playing robots already:

      http://www.youtube.com/watch?v=u8WJu6MNfSg
      http://www.youtube.com/watch?NR=1&v=r19kDKHyXs4&feature=endscreen
      http://www.youtube.com/watch?v=_sUeGC-8dyk

      Don’t be surprised when really talented guitar playing robots show up in a decade or two.

      More important however, is that the robots don’t need to play guitar to take over the music business. If they can generate pop music electronically that sells better than _most_ other human composers and performers, then we will be in the same problem of humans losing their jobs to machines. The fact that we might still rate 10 humans as the best guitar players is of little concern when two companies have taken over 90% of the music industry and they don’t employ a single human musician.

      • shaker says:

        why can’t we all own these guitar playing robots?

        give me free labor (robots) and i could build a thousand companies. just like millions of other entrepreneurs.

        What people like you and Martin Ford are basically saying is that there are some people who are too stupid to earn anything, no matter how much infrastructure we give them. I don’t buy into that. I believe any person can bring value to society, especially with a good teacher.

        • Curt Welch says:

          Not at all Shaker. It’s not about the people being too stupid. It’s not even about people bringing value to society – that’s the whole point – in the coming machine economy, people won’t add ANY useful value to society – it will all be done by the machines. What a human will be able to create will be seen as insignificant.

          Can you add value to a market you have no skill in, such as the music industry? Can you create pop music as good enough to compete with any of the 100 top money making musicians today? Can you play a sport as any of the best pro athletes? How much do you think your value would be worth on a team playing pro sports? Basically zero – they would pay you NOT to get in the way if they were forced to.

          In this new machine economy, that will be what it is like for anything, and everything, a human tries to do to add value to society. We will ALL be too stupid to be of any useable value to society. We won’t even be good as entrepreneurs because no matter what we think of to try and make money with, the machines will have figured it out sooner, and faster, and do a far better job at it. Anything we try, will only get in the way of the machines.

          The only way to make money, will be by being the first one to own the best machines. Just like in the game of monopoly, the only way to win, is by owning the right properties first.

          An economy based on capital investments becomes a monopoly game, and in a monopoly game, there’s always one guy, that by luck or skill, wins IT ALL, and everyone else loses. The game can’t keep running because once a player makes a bad bet and loses it all, he’s out of the game and has no way to get back into the game.

          Without being able to sell our labor into the economy, that’s what will happen to all of us. When we remove the human labor variable from the economy, it destabilizes wealth sharing and turns the free market into a winner take all gambling game.

          But before we get to this future where the robots are better at everything than humans, we have today – where robots are better than humans at a lot of things, but not everything.

          But we are already in a time where lots of skills that humans have, are just not all that valuable anymore, and that’s why we see sinking wages. The jobs that are still valuable, are hard for people to master the skills. It’s no longer just about getting a good education. That was true 30 years ago, but not today. There are endless stories of students graduating with degrees that should produce good jobs, but yet they can’t find any good work. Part of that of course is the short term depression we are in, but more systemic is the the fact that good paying jobs are in a steady decline while a few at the top are becoming super rich.

          Though employment is likely to keep slowly improving as we claw our way out of the recession, inequality will only be worse as the jobs return because they will return primarily at the low end, and not the high end.

          There will never ever, in the history of man, be a flood of good high paying jobs again. The will be no economic boom, where suddenly there are lots of good middle class jobs chasing too few workers were we see jumps in middle class income. There will be nothing but a long steady decline in wages as technology continues to advance.

          Unless, we add to the equation, wealth redistribution in one form or another. That will fuel an economic boom, but not a wage boom – there will simply never ever again, be another “wage boom” for man. Man is being slowly, but steadily, phased out of the labor force.

          • shaker says:

            “in the coming machine economy, people won’t add ANY useful value to society – it will all be done by the machines. What a human will be able to create will be seen as insignificant.”

            Humans have to create the “playing field” for the machines to make fields – i have to create a business plan and then put machines to work. Unless you are talking about machines coming up with the ideas and then implementing them, but now we are talking about a world in which machines are the superior race. I, nor you, or any anyone knows what happens in such a world.

            “Can you add value to a market you have no skill in, such as the music industry?”

            Why do i have to? I just have to find an industry that i am good at. Do robots need repair? I think i could be good at that…

            “In this new machine economy… We will ALL be too stupid to be of any usable value to society. We won’t even be good as entrepreneurs because no matter what we think of to try and make money with, the machines will have figured it out sooner, and faster, and do a far better job at it.”

            You are now talking about a world in which machines rule. I have no idea what happens in this world. Maybe machine decide to treat me like a King, maybe they decide to kill me. I don’t know.

            “The only way to make money, will be by being the first one to own the best machines. Just like in the game of monopoly, the only way to win, is by owning the right properties first.”

            Why can’t we all own machines? I never get that answer from you. Why can’t we all own super machines? And this isnt monopoly. In monopoly the board NEVER changes. In the game of machines new machines NEWER and BETTER machines are created every day. no one can own the best machines. It is like owning a server today. I buy a server, and 6 months later there is a better faster server available. If a billionaire spent all of his/her money to buy machines then their machines would be worth 1/2 as much a year later due to moores law. You would be much better off buying the stock in the companies that “used” the machines.

            You don’t get as an economy gets more robust it becomes harder to control it. NO ONE can control the future economy. it will be far to large. No one can control something that has an annual value of 200 Trillion, that is what the economy will be worth by 2050. The richest person in the world has 50 Billion. Do the math.

            This control that you think is coming is not going to happen. You cannot control something that is losing value every year (machines). OIL companies have gained controlled of a diminishing market. Tech Companies have lost control over a growing market. There was a time that IBM and ATT were every bit as powerful as Exxon. But tech is an ever expanding field. 30 years from now there were be 100X as many as tech companies. They will be in every aspect of society. No one is controlling technology. Machines are technology.

            “Without being able to sell our labor into the economy, that’s what will happen to all of us.”

            we will sell our brain power. We will sell being “human”. We will have enough money not to buy “mass produced” good. I don’t eat at McDonalds any more. Why? because i can afford not to. I don’t care how efficient it is.

            “But we are already in a time where lots of skills that humans have, are just not all that valuable anymore”

            this is isnt true. It is not “humans” it is “americans” Americans are not as valuable as they once were. We can now be replaced by a global workforce of 8 Billion people. If China and India fell into the ocean the U.S. economy would have ZERO unemployment.

            “There will never ever, in the history of man, be a flood of good high paying jobs again.”

            I cannot believe you said this. There are plenty of GREAT paying jobs. We just decided not to go into those fields: Doctors, Programmers, Engineers & Bankers.

            “The will be no economic boom, where suddenly there are lots of good middle class jobs”

            I disagree. People will continue to have more even with less. There might not be a time where High School drop outs can stand at an assembly line and make lots of money doing very little. I know i sound like a dick but i think that was actually bad for America. It made this country lazy. It made people think they didnt need to get an education.

            I think it is becoming clear to people now that you need a minimum of 4 years college to make good money.

            I think this is good for the world. A society where people actually have to LEARN and READ is great for mankind. I much rather have that world than have the “average joe” drinking beer and hammering bolts all day.

            “Unless, we add to the equation, wealth redistribution in one form or another.”

            Education leads to “natural” wealth distribution. Ten years from now ANYONE, will be able to get a PHD from their laptop. That will lead to the greatest economic boom our world has ever seen.

            Imagine advanced education systems that could teach us 3 times as fast as our current education system. Imagine becoming a doctor in 4 years. Imagine learning bio-tech in 2-3 years.

            It’s all coming. you can be pessimistic if you like, but i for one am not. You can sit around thinking that you will be replaced. If people want to join you, so be it. But to me the world gets better everyday – and it will continue to do so for a long time. Praise God.

            There is no way we have Abundant Energy, Transportation, Education, Communication, Computation, Food and advancements in health and the world gets worse.

  • Sumantra Roy says:

    The discussion here has ignored one of the basic laws of economics – David Ricardo’s law of comparative advantage. This law states that if Country A is more efficient at producing both product X and product Y compared to Country B, this does not mean that people in Country A will actually produce both products and people in Country B will starve. This is because, while Country A may be more efficient at producing both X and Y compared to B, on its own, it may actually be more efficient in producing X than Y. In this case, free trade between countries A and B would ensure that A specializes in producing X and B specializes in producing Y (even though A is more efficient than B in producing Y) and they trade with each other and BOTH of them benefit from that trade in terms of having more of both products X and Y available to them than if there was no trade.

    The same principle applies in this discussion regarding what happens to human workers if robots are more efficient than humans in producing everything. Even if robots are more efficient at producing everything than humans, they will still be more efficient at producing some products and somewhat less efficient at producing other products (even if they are more efficient at producing the latter set of products than humans).

    Now there are 2 possibilities:

    a) Robots are scarce (i.e. there is a price that someone needs to pay to buy a robot)
    b) Robots are non-scarce (which would mean that robots are free).

    Let’s take (a).

    Let’s further assume that we are dealing with 2 products X and Y, that robots are more efficient than humans in producing both X and Y, but that robots are more efficient at producing X than Y.

    As long as robots are scarce, it would make economic sense for the owners of these robots to only use the robots for producing X. Humans would continue producing Y, and these humans would then trade their Y for the X produced by the robot owners’ robots.

    Both sets of parties – the humans producing Y and the robot owners producing X – would benefit from this transaction because both of them would have more of both X and Y than would have been the case if robots had produced both X and Y. And both sets of people would also be better off in this situation than in the pre-robot situation where there are no robots, because they would again have more of X and Y than in the pre-robot situation.

    Now what if robots start becoming less scarce and therefore, cheaper?

    In that case, robots will continue to incrementally replace humans in different activities (but unless robots become free, they will, based on the law of comparative advantage, never be able to replace humans in ALL activities). And yes, assuming the money supply remains the same, this would cause a decrease in the NOMINAL wages paid to humans. However, please keep in mind that what is important is the REAL wage rate, not the NOMINAL wage rate. As robots become cheaper, the products produced by them would become more abundant, and competition between the companies producing these products would lead to lower prices for all these products. So, while humans would earn less in terms of nominal wages, this is counterbalanced by the fact that the purchasing power of every dollar of wages has increased.

    What happens net-net? Is there an increase or decrease in real wages? Net-net, there will ALWAYS be an increase in the real wages. Why? This is because, as any economics text book will tell you, real wages increase when the rate of growth in invested capital is higher than the rate of growth in the population. And it’s an empirical fact that barrings periods when there are wars etc., the rate of growth in invested capital has always tended to be higher than the rate of growth in the population.

    Now what happens in the limiting (and obviously, unrealistic) case where robots are no longer scarce? If something is no longer scarce, it means that it will be available free of cost. And if robots are available free of cost, and if robots are more efficient than humans at producing everything, then this means that we have reached utopia – we can all get as many robots as we want (since they are free) and we can spend our time lying on the beach contemplating the higher meaning of life while our (free) robots are busy providing everything that we need for us. And everything that we need will also be free, since robots are manufacturing everything and the robots themselves are free.

    Therefore, all the commentators here who are advocating a guaranteed minimum income for everyone are incorrect – such a guaranteed minimum income is NOT necessary in a world where robots are more efficient than humans at everything since even in such a world, there will still be things that humans will do and get paid for, and in fact in this world, humans will have a higher REAL wage rate than in a non-robot world.

    • Panpiper
      Panpiper says:

      In the scenario you have outlined, there are two problems. I agree with you that comparative advantage would always leave humans with something to do, however trivial and paltry in comparison to what the monied elite will command with their ownership of the machines. But the extremes in wealth would likely be so extreme as to dwarf the imaginations of the best cyberpunk writers. That does not bode well for a future that is not distopic.

      Note solely from a social justice point of view, but also from the stability of society, that level of extreme must be mitigated. It is already the case that one sufficiently disgruntled man can kill hundreds in their rage, and the future will magnify that manyfold.

      You wrote: “As robots become cheaper, the products produced by them would become more abundant, and competition between the companies producing these products would lead to lower prices for all these products.”

      My biggest concern is that we have in place an economic paradigm that deliberately acts to stop these lower prices from becoming available to people. It is the prime raison d’etre of central banks to prevent deflation (leave aside that I think this to be madness on their part). They do this by measuring a ‘consumer price index’ and deliberately creating sufficient expansion in the money supply to eliminate any reductions in prices caused by improvements in productivity and technology, and to create a 2-3% price inflation beyond that. Some prices fall faster than they keep up with, but those get compensated for by higher increases in other sectors, and overall the cost of living for the average person goes up by the amount they have targeted.

      The mechanism whereby they do this is by centrally planning interest rates to be below what the market would set and in effect to invent out of thin air the difference between the resulting supply and demand for capital. These lower interest rates serve to subsidise the speculations of the already super wealthy. This amounts to a transfer of wealth from the poor and middle class who cannot get virtually zero interest loans, to the super wealthy, who then wind up owning all the machines. This is neither just nor sane.

      The basic income guarantee that I (and Kurt) so champion is not some new “spread the wealth” socialism. It would be revenue neutral, requiring no new taxes, and would replace welfare, minimum wage, and similar such programs. It is vastly superior to the programs it replaces and vastly more free market friendly than what we are doing now.

    • Steve Morris says:

      Thank you Sumantra for your eloquent analysis of the situation. Throughout history machines have increased productivity and the result is the modern world we see around us – more abundant wealth than ever before. The route to even greater abundance is through increased productivity, i.e. robots and free trade.

      • Curt Welch says:

        Well Steve, except of course, Sumantra Roy’s analysis fails to address the growing issue of inequality. He makes the same classic mistake you are making – the proven invalid assumption that rising tides will always lift all boats. Technology is good, it grows total wealth. But free trade does not guarantee everyone will benefit:

        http://www.nytimes.com/2013/01/13/sunday-review/americas-productivity-climbs-but-wages-stagnate.html?adxnnl=1&adxnnlx=1367611254-fWvUDRf3xfuxFuGhikMGFQ

        ““Some people think it’s a law that when productivity goes up, everybody benefits,” says Erik Brynjolfsson, an economics professor at the Massachusetts Institute of Technology. “There is no economic law that says technological progress has to benefit everybody or even most people. It’s possible that productivity can go up and the economic pie gets bigger, but the majority of people don’t share in that gain.”

        For the past 100+ years, we have used lots of different techniques to try and better balance the sharing of productivity gains so to make the rising tides story true. We have created anti-trust laws to keep individual companies from getting too powerful, forcing them to share the market and to maintain more competition. We have supported the formation and use of trade unions, to force factory owners to share wealth with the workers. We had added minimum wage laws to force the sharing of wealth with low wage workers (by making those who pay for the services pay higher prices). We have created highly progressive tax structures to force those with greater income to carry most the burden of paying for the government. We had used those progressive taxes to fund lots of services for the needy, like education, and welfare programs.

        All these things have worked to an extent, but they all have their limits. The more technology we add, the more the inequality grows, and the more we have to step in and fix it with some external controls. Unions for whatever reasons, have been falling, and losing their strength so society has nearly lost that control. Minimum wage is a weak control at best since it makes the customers carry the burden, and since minimum wage workers are more likely to be creating goods and services for the poor and middle class, all minimum wage does, is make the middle class support the lower classes. The rich get off without carrying their fair share of the minimum wage support.

        Progressive taxes only works to the extent that there are legitimate government services to be paid for. The taxes are already so progressive that a very small percentage of the population is carrying most the burden of paying for the entire government in the US. The only way to really create more redistribution, though that path, is the create more government services – but we don’t need any more government services.|

        The reason inequality has gotten worse in the past 30+ years is because people got fed up with how large government was growing to be. We need more redistribution, but we need less government. We don’t want the government to create huge agency’s to spend the wealth of the nation, let the people spend it for what is most important to each of them.

        Technology has pushed inequality beyond the means of our current systems to control. That is why inequality has been growing so much in the past 30 years. This is why it’s time to implement straight wealth redistribution, and to remove, most the other systems which nearly all had bad side effects we want to get rid of.

        But many people have an issue with straight wealth redistribution – they see it as some form of theft. So, because it was needed, despite being politically unpopular, the government had to hide it in ways that made it hard for the average man to know it was happening. It had to be implemented in ways that made it seem as though someone else was paying for it.

        But these tricks aren’t working anymore because the amount of redistribution needed to fix inequality is now too large to be hidden in complex tax codes. But since it can’t be hidden, the fools of society are rejecting it – and their selfish desire to not allow the wealth to be shared, is creating a highly disfuctional society which is only getting worse.

        It’s this call for free market selfishness that you Steve, and you Sumantra, support, is the very CAUSE of this last recession that has caused people all around the entire world to suffer and will continue to cause unneeded suffering for years

        Just one point of the problem, is that the suicde rate is on the rise:

        http://www.nytimes.com/2013/05/03/health/suicide-rate-rises-sharply-in-us.html

        There is highly likely to be an economic component to this, which means the current recession is not just taking wealth away from people, and making them survive with fewer toys, it’s literally KILLING PEOPLE.

        “The rise in suicides may also stem from the economic downturn over the past decade. Historically, suicide rates rise during times of financial stress and economic setbacks. “The increase does coincide with a decrease in financial standing for a lot of families over the same time period,” Dr. Arias said.”

        Issues like gun control are NOTHING compared to the damage to society done by inequality. Inequality is the direct cause, of stress and fear in people, that both drive the crime rates and violence higher, but at the same time, drive the desire to own a gun, higher, which leads also to more accidental deaths.

        All that could have been prevented, and fixed, if we simply agreed, as a society, to share more of the wealth, to balance the inequality back down to reasonable levels, instead of voting for increased selfishness through more unregulated free trade that Steve and Sumantra are arguing for here.

        Technology is driving the wealth production, but it’s also driving the growth in inequality. We don’t want to stop the technology, but we MUST stop and reverse, the growth in inequality, and all the pain and suffering and death that it’s creating.

    • Curt Welch says:

      “Sumantra Roy” – your argument is mostly valid, but your conclusion couldn’t be further from the truth. You have totally ignored and failed to address the only real problem there is – inequality.

      You wrote:

      “Therefore, all the commentators here who are advocating a guaranteed minimum income for everyone are incorrect – such a guaranteed minimum income is NOT necessary in a world where robots are more efficient than humans at everything since even in such a world, there will still be things that humans will do and get paid for, and in fact in this world, humans will have a higher REAL wage rate than in a non-robot world.”

      100% wrong!

      All your discussion of wages has left out the fact that in an automated economy, people don’t make money in the form of wages, they make it as investment income. They make it becuase they own the robots, not because they are still “working” for someone who is paying them a wage. Investment income has nothing to do with how many hours you work, it is controlled by how wise of an investment decision you make 10 years in the past.

      So let me show you the errors in your logic.

      “As long as robots are scarce, it would make economic sense for the owners of these robots to only use the robots for producing X. Humans would continue producing Y, and these humans would then trade their Y for the X produced by the robot owners’ robots.”

      You are treating this as an absolute – that as long as the robots are scarce, they will NEVER produce any produce Y. Horse shit. Nothing in economics is an absolute like that. It’s always a large complex balancing act.

      We used to deliver mail by horseback rider. Then the car was invented, and now all mail is delivered by trucks and planes. Maybe, somewhere, we have a few guys still delivering some mail by horse, but 99.999% of all mail delivery has been taken over by the machines – the trucks and planes. And now that we have switched to email, and posting here on singularity hub, the message deliver is 100% by machine.

      So, you are suggesting, that humans will still work delivering messages? And that maybe one of our 1000 email messages will be delivered by horseback rider, instead of by the computer robots? What are you smoking???? If a human did try to deliver a message around the world by horseback, he would have to pay the going rate for the delivery by machines – far less than 1 cent. But because it took him 6 months to deliver a message the machines delivered in 3 seconds, he has to accept a serious cut in pay for his lack of quality – so he’s making 1 millionth of one cent for delivering the email message by horseback. In other words, he’s not making enough to feed himself, or his horse. So he won’t take the job. This is what will happen to all jobs.

      The people making the money, will be the one that own the computers delivering the messages, not the people that try to work for a wage, and compete with the machines.

      But I’m still just ranting over your ignornce. Let me get back to pointing out your real error:

      “In that case, robots will continue to incrementally replace humans in different activities (but unless robots become free, they will, based on the law of comparative advantage, never be able to replace humans in ALL activities). And yes, assuming the money supply remains the same, this would cause a decrease in the NOMINAL wages paid to humans. However, please keep in mind that what is important is the REAL wage rate, not the NOMINAL wage rate.”

      Ok, so you are assuming all humans keep working at whatever job they can find, and we assume they will find better jobs than trying to complete with email servers.

      But what happens is that the total product and wealth produced by the economy is still fixed – it’s fixed at the GDP for the year. And though the GDP keeps growing because of advances in technology, it never “explodes to infinity”. The singularity concept in that sense, is a myth. It’s always finite.

      With massive automation, it means that humans labor is producing a decreasing amount of that total GDP every year. The machines produce a larger percentage of the GDP, each year. So we have to look at how the wealth – the total GDP – is divided between the humans. So we have one guy, that’s a venture capital investor. He forms a start up, and hires an engineer to design a farming robot. He pays the engineer a handsome living for doing the work, say $200K a year. The engineer invents new farming technology, that manages to 100% automate farming. And another such engineer, invents the manufacturing technology to 100% automate, the building of the farm robots.

      The investor, then goes about using the inventions he now owns, to take over the world’s farming industry. He spends billions of dollars to buy land, to build automated farms on, and to build automated factories on. He spends billions also buying controlling interest in iron ore mines, and other mines needed for the raw material to build his robots and his factories. He spends billions buying up rights to genetically engineered seeds.

      Soon, he controls 70% of all food production in the world. And with the help of his automation, he’s reduced the cost of food by 50%. He only employs maybe 100 workers, and the rest is all automation. But the food is not “free” to people because the cost of the food translates to the cost of the land and raw materials needed. He’s got billions of dollars of investments he’s paying interest on which far outweighs the insignificant wages of his 100 well paid employees.

      But since this guy has the best farm automation in the world, he’s able to produce food cheaper than anyone else. And because he has no close competitors, and he’s able to produce food at 50% of the cost of everyone else, he’s able to sell his food higher than his true costs – he’s able to make billions of dollars in profits every year – which all go right into his own pocket as a reward for making wise investment decisions.

      But, as you suggest, all the humans keep working at other jobs besides trying to be part of the farming industry. But this one guy, now controls by himself, say 25% of the world GDP. People still highly value food, and they are happy to pay this guy his rate, because his food is far cheaper than the other food. So 25% of all real wages, go to pay this one guy, which mostly go to pay for “rent” of the natural resources he is controlling (all his farmland and energy and other raw materials etc).

      As you suggested, total real income went up because of this, but equality DID NOT STAY THE SAME. This one guy, now controls a larger percentage of the GDP than any other single human in history. 25% of all money spent in the economy, goes to this guy, and not to “wages” of human workers.

      GDP did go up because of the automation. Total income went up, but most income is now investment income, not wage income.

      As more industries follow this same path, we find more and more of the total GDP, being controlled by a small handful of these people investing wisely in automation. More of the GDP every year, goes to investors, and less and less, go to wages.

      Before long, 95% of all work is done by machines, and the money paid for the wealth they produce (all the food, and services, and goods), goes to a small handful of super investors, and are not paid as wages to anyone. Wages only account for 5% of the total GDP at that point. The people trying to live on wages alone, are no longer being paid enough, to buy food to eat. The only people with enough money to eat, are the super investors, and the small numbers of people they employee. These people, not only have enough money to eat, they have enough money to buy themselves huge estates all around the world. They have enough money to throw their other super investor friends huge parties just for the fun of it. In effect, the elite have taken over control of all the worlds resources, and use the resources, to provide goods and services for each other, while 90% of the population is starving. The investors must protect themselves from the poor, so they build themselves nice robotic armies and they build detainment camps to hold the poor, and they feed them just enough stay alive, but they force them to be sterilized so they can’t reproduce, and they take their vote away, since they have been “committing crimes”.

      So, your argument fails first, because you make the argument that all GDP translates back to wages – it does not. Most of it goes to capital, not to labor, and the trend is shifting further towards capital every year because of technology. Second, and your worse logic error, is that you assume that of total wages rise, it means all individual wages must rise as well. It does not. 10% of the wages can rise, while 90% fall, and still end up with total wages rising. And that’s exactly the situation we are moving into because inequality is growing FASTER than GDP is growing.

      The point of creating a basic income is to fix the inequality problem – not to fix the “cost” problem as you suggest. There is no “cost” problem. Automation and technology is what drives GDP higher every year. When GDP grows, it means society as a whole is richer – our economy is producing more things of value this year, than it did last year, because of technology. It means the things we got last year, are cheaper this year – the relative cost of everything keeps dropping, as GDP goes up.

      But there’s no economic law that says this wealth must be shared by everyone. The rising tides argument is HORSE SHIT made up by the rich to justify their hoarding of the wealth. It’s their argument to try and justify that no matter how much they make, everyone else is doing better because of it. But it’s HORSE SHIT. If the rich get a 200% gain in income when the poor see a 2% rise in wealth we don’t call that progress, we call it crimes against humanity and those guilty need to be punished – if not outright put in jail for the rest of their lives.

      Basic income is a simple fix to keeping INEQUALITY under control. I works by allowing the free markets to do whatever works best for maximising profits – including put all humans out of work if that’s the way to make the most profit. But it forces the income produced by the economy, to be fairly shared between all humans.

      In other words, we humans need this planet to survive. And If we are going to allow one guy, or some small group of individuals, aka one corporation, to gain total control of the land to grow food on, we should allow that, if, and only if, they share a fair amount of the wealth (aka the food) with everyone.

      This same thing hold for all private property. If we are going to allow anyone, the private right to control anything on this planet, be it energy sources, land, raw materials, patents, inventions, ideas, information, we will strike a bargain with them. If they want the right to own anything, they can do so, only if they are willing to share the wealth with everyone. They will get more of the wealth as a reward for using the item to create wealth, but they must share some of it, with everyone else.

      We are way past the point in our technological progress, where maximising GDP is of prime importance. Making sure that every resource is used to it’s fullest potential, is no longer of prime importance – in fact, it’s dangerous to our survival, due to risks like global warming, and peak oil. We don’t need everyone to work from sunup to sundown trying to make as much “money” as they possibly can.

      We need instead, to maximize our safety, and happiness, while reducing stress and discomfort. One of the most stressful forces in our society is inequality. The rich are stressed out trying to stay rich, the poor are stressed out trying to not be poor. The rich fear the poor will try to take their money, the poor fear the rich will use their power to take their freedom away. Automation is making us richer, but because the wealth is also showing up in the form of higher levels of relative inequality, the wealth is doing more harm than good to society. But by adding a Basic Income Guarantee, we can reduce, and cap the growth of inequality, without stopping the growth of GDP so that wealth can actually make everyone happier, instead of adding more stress to society.

      • Panpiper
        Panpiper says:

        Curt, as you know I completely agree with you about the necessity of a basic income guarantee. I believe however you make an error in strategy when you state that the rich need to be willing to share more. That would inevitably be the effect, when everyone realizes that the vast improvement not only in the well being of society as a whole, but even in the transitioning economy due to the vastly more free market friendly social safety net that the basic income guarantee is when compared to what it replaces. But it is not necessary to increase the taxes on the rich (on net, taxes on the sufficiently well off ‘would’ increase sufficient to tax back the basic income guarantee that they received) in order to implement a basic income guarantee, a fairly decent such basic income could be provided simply by changing the way we implement the existing quantity of resources currently being spent on our existing social safety net.

        Once we have such a basic income guarantee, we are already over the hump. It might not initially be of the scale you would prefer to see for the vast majority of those who would inevitably come to rely upon it, but that is not a problem. The basic income would inevitably at that point start to be increased, as the rich realize that their ever growing piece of the pie is still able to support them in whatever style they wish to be accustomed and so when the forces of democracy are levied to insist upon a larger share being shared, they simply won’t resist effectively enough, the share will increase.

        When talking to capitalists, do not talk in ‘socialist’ terms, speak to them in their own language. Work towards getting a net tax neutral, basic income guarantee, and sell it as such, no net increase on their taxes, just a vastly more free market friendly way of doing a social safety net, that ‘also’ fixes the longer term problems of the obsolescence of human labor.

      • shaker says:

        Kurt, i have a lot of respect for you. I even share in a lot of your idea. I hate wealth disparity. i hate poverty. I hate the fact that some people “control” other humans and that some people “use” others to benefit.

        with that being said, what you said above really makes me shake my head. can one person control everything? maybe. Is it likely to happen. Probably not. To control any major portion of this world today is nearly impossible. Once, long ago, a king could destroy other countries and take control. Someone like Rockefeller could take over a “new” industry like oil. But to take over any industry today, when the world is constantly changing is just foolish.

        What is valuable today is less valuable tomorrow. Give me any industry today that someone might try to own and i will give you a future technology tomorrow that will destroy it. The rich man of today has to diversify to hold on to his wealth, not buy up all of one thing.

        Why worry about income disparity? We should be asking if the people of today can own more than the people of yesterday. The problem is that so many things are free that they are not counted in GDP. this discussion we are having is free. People from 50 years ago would have paid a hefty price to discuss a topic like this with smart, eloquent, educated people from around the world.

        Don’t base your ideas about wealth based on American or 1st world people. the 1st world is in decline. I bet you’d think far differently if you were living in india or bazil for the past 10 years. Go move to egypt today and then document the next 15 years – 2013-2018. I bet you’d end up thinking tech and capitalism are amazing.

        • Curt Welch says:

          “with that being said, what you said above really makes me shake my head. can one person control everything? ”

          Of COURSE that won’t happen. I only write that in the context of “if we continue down this same track”. It’s meant to show how the path suggested by people like Sumantra cannot happen. Long before one person took control of everything, someone (or some nation) would literally just kill him or arrest him, or do something to stop him.

          “What is valuable today is less valuable tomorrow. Give me any industry today that someone might try to own and i will give you a future technology tomorrow that will destroy it.”

          Food, Energy, Medicine, Transportation, Manufacturing. These industries will never go away. They will only change their nature.

          “The rich man of today has to diversify to hold on to his wealth, not buy up all of one thing.”

          Oh that’s utter nonsense. If someone could get away with buying up an entire industry, and creating a monopoly, it would make them endlessly rich. That’s why we outlawed such actions long ago. Our governments force these businesses to be broken up when they get too powerful like that so as to force continued competition. That’s one of the examples of why it’s obvious what I talk about won’t happen – the people will revolt when someone gets too rich, and sick their government on the person to stop them.

          “Why worry about income disparity?”

          You need to talk to some poor people. You need to talk to some people that are now homeless because they lost their jobs and can’t find a new one. Talk to them, and then come back to me, and repeat that nonsense again.

          read this:

          http://news.firedoglake.com/2012/09/12/census-statistics-show-continued-decline-in-median-income/

          (or the 100′s of other articles and papers and books repeating the same thing).

          “Don’t base your ideas about wealth based on American or 1st world people. the 1st world is in decline. ”

          If the 1st world was in decline, because of a great wealth equalizing as the wealth poured out to the other nations, this would be a great thing. It would mean it will all balance out in time and we will all then see rising benefits.

          But that has nothing at all to do with the increase in INEQUALITY. Outsourcing of work to the rest of world does not explain why inequality is rising in the US. In fact, it has nothing to do with equality at all.

          I base my argument on the US because I live here and see what’s happening. IF there is something bad happening here, it will also happen in the 3rd world nations as they catch up to the developed world – which is a story about technology displacing humans from the economy and turning our economies from one based on labor, to one based only property ownership.

          I can only repeat this so many times. What’s happening is DEAD SIMPLE and will be obvious to everyone in time.

          Humans are being pushed out of the economy by technology, and as this happens, our economy is becoming highly inequitable as the few manage to lock up great sources of wealth, while the many see slow and steady decline in their ability to make money.

          There is no long term fix to this other than straight up wealth sharing. As the world recovers from the recession, inequality will only get worse. Median wages will continue to fall even though GDP and total wealth continues to soar. Life will keep getting worse for the average person, as the few see more wealth gains than they feel comfortable spending.

    • Chris F says:

      It’s interesting that you reference Ricardo, Sumantra. Didn’t he also wrote explicitly about the the likely effect of machinery on labour ? Ah yes : http://economistsview.typepad.com/economistsview/2012/09/david-ricardo-on-machinery.html

      “Ever since I first turned my attention to questions of political economy, I have been of opinion, that such an application of machinery to any branch of production, as should have the effect of saving labour, was a general good,
      ….
      These were my opinions, and they continue unaltered, as far as regards the landlord and the capitalist; but I am convinced, that the substitution of machinery for human labour, is often very injurious to the interests of the class of labourers.
      ….
      My mistake arose from the supposition, that whenever the net income of a society increased, its gross income would also increase; I now, however, see reason to be satisfied that the one fund, from which landlords and capitalists derive their revenue, may increase, while the other, that upon which the labouring class mainly depend, may diminish, and therefore it follows, if I am right, that the same cause which may increase the net revenue of the country, may at the same time render the population redundant, and deteriorate the condition of the labourer.”

    • Luke Rohde says:

      Great point being made by Sumatra. However there is a lot that is not captured by economics text books about power and politics, and the rate of technological change. I suppose I’m hoping for a govt that is prepared to step in and ease the transition to abundance, rather than allow a few winners to take all the productivity gains as has been happening since the 80s. Real wages for the middle class have gone backward while we’ve experienced relentless productivity growth. Here’s a ominous video – with some dramatisation here but its a problem worthy of drama. http://www.youtube.com/watch?v=QPKKQnijnsM.

      The problem isn’t robots doing all the work, its preventing destructive civil unrest as we transition to abundance. This unrest has the potential to undo our incredible advances and installs a regime that takes away our freedom, in the promise of equity. Capitalism is great for increasing our wealth but without careful tending, can be inhumane and unjust. Economic progress at the GDP level doesn’t necessarily improve quality of life or standard of living – America, for all its wealth, lags way behind less wealthy countries in this regard. Whats the point of economic success if only a few can enjoy it and the rest must suffer.

      If technology is progressing exponentially and we are starting up the steep part of the exponential curve, “obviously unrealistic” things can happen like robots not being scarce. (Brynjolfsson in Race Against the Machines). People will be displaced faster than we can invent fanciful new jobs for them. Apparently this is something economists can’t study by looking at past data.

      Panpiper is suggesting one simple way to ensure we can all continue to participate, and not get too wretched while we are all out looking for work as machine maintainers. But this is only one way to redistribute wealth.

      Read about the great compression too http://en.wikipedia.org/wiki/Great_Compression

  • dobermanmacleod says:

    Interesting discussion on the monetary system and the rich/poor. Let me point out that most wealth is non-monetary. Furthermore, another dynamic is the digitizing of the economy. Finally, there is dynamic of globalization.

    First, something like 2% of the population owns something like half of the capital (monetary and non-monetary). Of course those people want the status quo. Nations (who ought to have the general good as their goal) want to re-circulate the wealth, at the very least because it is unhealthy (and a threat to their power) to have a permanent under-class.

    OTH, the digitization of the economy (among other things like the poor now generally have access to things even the very richest didn’t have 200 years ago like refrigerations, phones, indoor plumbing, TV, the internet, modern medical technologies, motor transportation, etc) means that you can be dirt poor but still be very rich (for instance I own over 10 gigabits of ebooks which is more than an average library has, or I can take a MOOC free, or I can be entertained by video).

    Finally, globalization has allowed a person to seize a small fraction of the market and still get very rich very fast. There is a lot of capital floating around, along with crowd sourcing, and rapid market movement (Microsoft still keeps big bucks in case they get outflanked in the marketplace). How many new BILLIONAIRES have emerged worldwide in the last few decades?

    One final thing: I don’t many people realize the ultimate equalizer is about to emerge – the opening of a virtually infinite frontier of space. Outside our gravity well we can set up exponential production systems that not only will allow fantastic opportunities, but return unimaginable “wealth” (whatever that is). Furthermore, the ultimate wealth is health and long life, and both are within reach big-time due to exponential progress in medical technology.

    The only real danger is that AI (robots) and humans will engage in a zero-sum “game.” There is plenty for everyone – dominance/submission is in our jungle genes, and ultimately that is the danger: look in the mirror – that is your enemy, not AI or robots.

  • Sumantra Roy says:

    Curt:

    Your comment is so long and so full of errors that it will take me days to refute all of them one by one. Unfortunately, while I would love to do so, I don’t have that kind of time. I’d suggest reading Murray Rothbard’s Man, Economy and State. If you read that book, you’ll get to understand some of the fundamental mistakes you’ve made in your argument. The most fundamental mistake is your statement that GDP gets paid to capital and labour. It doesn’t. As Rothbard has demonstrated, in the final analysis, the proceeds from the sale of ALL products gets paid to land and labour – NOT capital and labour, even if it appears on the face of it that it is getting paid to capital and labour.

    Instead of refuting all your arguments, I am going to take up that example of your imaginary venture capitalist and point out just a couple of the errors you’ve made. The fundamental error in this entire imaginary scenario that you’ve built is that you are assuming that every other person in the world is going to sit idly by and will not change their economic behavior at all as this investor of yours starts trying to do what you say he will do, i.e. your fundamental error is that in building this imaginary world of yours, you’ve forgotten all about reality.

    “He spends billions of dollars to buy land, to build automated farms on, and to build automated factories on. He spends billions also buying controlling interest in iron ore mines, and other mines needed for the raw material to build his robots and his factories. He spends billions buying up rights to genetically engineered seeds.”

    This is where your errors begin. You are assuming that when this imaginary investor of yours starts buying up this land and the iron ore mines etc., that the prices of these resources will remain the same.

    They won’t.

    If there is a new investor who wants to buy lots of land and iron-ore mines, it is going to cause a dramatic increase in the price of land and iron-ore mines. And the prices will keep on increasing as he keeps buying more.

    There will come a point where it is no longer profitable for the investor to buy more land and iron-ore mines because the prices have gone up too much. This means that there is a natural limit to how much of the world’s natural resources this investor can end up owning.

    “And because he has no close competitors, and he’s able to produce food at 50% of the cost of everyone else, he’s able to sell his food higher than his true costs – he’s able to make billions of dollars in profits every year ”

    Here’s your next error. You are trying to imagine a world that doesn’t exist in reality. You say that he has no close competitors. But for how long? While he may have no close competitors in the short term, as time passes, the excess profits he is making will attract new competitors who will replicate his system and therefore drive down prices. Denying that competitors won’t enter the field upon seeing the excess profits he is making is denying reality. If you say that new competitors cannot replicate what he is doing because of patent protection, patents only last for 20 years, so after that 20 year period, food prices will come down dramatically and he will no longer earn any excessive profits that will allow him to keep controlling 25% of your imaginary world GDP.

    Further, you ignore so many other changes that are going to take place in this imaginary world of yours because of your investor. Even in a situation where he is making excessive profits because competitors haven’t yet come in, what happens to the money that his customers save by having to pay less for their food? These customers are then going to use this money to either buy other goods and services that they could not earlier afford to buy (thus increasing their material prosperity) or, they are going to use this money to increase their savings – i.e. they will invest this extra money that they now have with them and therefore better their lot in life in the future.

    Who will these cost savings benefit the most? The rich or the poor? It’s the poor who will benefit most from these cost savings. That is because the poor spend a far higher portion of their incomes on food than the rich. So any reduction in the cost of food benefits the poor far more than it benefits the rich.

    So this rapacious investor of yours, in spite of all his greed and power-lust, ends up benefiting the poorest sections of society through his actions.

    The problem with most of your arguments is the issue that the French economist Bastiat had identified 150 years ago – “That Which is Seen, and That Which is Not Seen”. Your arguments are all about the first-order consequences of an action (i.e. the stuff that can be seen), but ignore the second-order consequences of those things (i.e. the stuff that can’t be seen but are nonetheless there) which totally change the conclusion.

    • Curt Welch says:

      “I’d suggest reading Murray Rothbard’s Man, Economy and State.”

      If that’s where you got your understanding of economics, thankyou, but I think I’ll skip it Sumantra.

      “The most fundamental mistake is your statement that GDP gets paid to capital and labour. It doesn’t. As Rothbard has demonstrated, in the final analysis, the proceeds from the sale of ALL products gets paid to land and labour – NOT capital and labour, even if it appears on the face of it that it is getting paid to capital and labour.”

      Well, to be clear, in case others don’t understand the point, it’s not just “land”, it’s all non-human assets, which means all the tools and equipment and buildings and oil and coal and sunlight and food that come from the land. So we mix together the products of the land, and the human labor, to generate total GDP each year.

      I did not make the error you claim, in fact it was your error in talking as if “wages” where the only aspect. No you fess up to the fact that wages are not the only commodity and that all these other assets must be paid for as well.

      When we add robots, their cost, and their productivity, gets added to your “land” side of the equation, not to the “wages” side.

      When I talked about “capital”, I was talking about the COST OF LAND (to use your term). Clearly, you were unable to grasp that. But now that I’ve explained it to you, go back and read my post, and every where I talked about the cost of capital, substitute “cost of land” so that you can understand it.

      You had made the error of claiming that as productivity goes up, the cost of goods and services go down, in proportion to the cost of labor (wages), so that end the end, people working for a wage, can always buy more stuff with their wages.

      But the total income is not just wages, it’s wage income and (as you like to call it) land income – income from owning non-human assets. And as we become more automated, more money is spent by the total economy on the “stuff” (aka machines and land and energy), than is spent on wages.

      And the person that get the income from the money spent on the stuff, is not the “workers” but the “owners”.

      Now, if everyone owned a decent share of the stuff, and this remained true forever, everyone would get a nice income. No one would need to work, because the “stuff” would creating all the things of value we wanted (aka the land does it on it’s own once we have human level robots to “own”). But property ownership never works that way. The best investors, will end up owning everything. When people gamble with what money they have, and loose, they are forced out of the came completely. Once someone is broke, they have zero income, to try and gamble again. The economy becomes a true monopoly game once we have machines that are better than humans at all work. But long before we reach total automation ability, those that own the “land” (again using the terms you seem to need to have it explained to you), win it all.

      “This is where your errors begin. You are assuming that when this imaginary investor of yours starts buying up this land and the iron ore mines etc., that the prices of these resources will remain the same. They won’t.”

      No, I did not make that error. If you understood the basic dynamics at play in the economy, you would have understood in the long run, it’s not relevant that the prices go up.

      “If there is a new investor who wants to buy lots of land and iron-ore mines, it is going to cause a dramatic increase in the price of land and iron-ore mines. And the prices will keep on increasing as he keeps buying more.”

      “There will come a point where it is no longer profitable for the investor to buy more land and iron-ore mines because the prices have gone up too much. This means that there is a natural limit to how much of the world’s natural resources this investor can end up owning.”

      Ok, let me help you with the part that went over your head. I stipulated that my investor owns a monopoly on technology that allows him to produce food at half the price of the current economy. That means, he’s able to turn LAND into FOOD at half the cost of everyone else on the planet. Anyone that refuses to sell him his land, to this guy, and tries to keep operating a farm will be forced to compete with my investor because that’s what technology does – it expands the sizes of markets – it allows my investor to compete in EVERY market on the planet with his food. So my investor can produce corn for 50 cents an ear, and the other guys, can’t do it any better than $1 an ear. So my investor sells it at 80 cents an ear, while he’s taking over the market, and makes tons of profits. The other guys, if they try to sell it at 80 cents, will lose money every year, and eventually go bankrupt. But instead of going bankrupt quickly, the other farmers can try selling it for $1, and will find some people that will still buy it. But in time, my investor will drive most of the other farmers out of the market, and then drop his price down to say 60 cents an ear. At that point, any farmers left will be driven completely out of the corn market. They can’t find enough buyers at $1 to keep operating. If they try to shrink the size of their farm they lose economies of scale, and their prices go up and they go out of business even faster. In the end, they are so broke, they are forced to sell their land just to get enough money to buy food. They can’t even grown their own food, because they can’t afford to buy gas for their tractors. They can’t even afford to operate a small garden by hand, because the country expects them to pay land taxes on their one acre of land they have left, and they can’t sell enough corn to even pay their land taxes, so they are forced to sell.

      This path can only be stopped, if the farmer can find something else to use his land for – which in some cases is what happens to small farmers. But mostly, they just sell their land, and let someone else, like super farmer, or a land developer use the land for something else.

      In the end, the price of land doesn’t go through the roof, but my super investors will have taken over the worlds ENTIRE corn business. If anyone else is growing corn, it’s because they want to, not because they are doing it to make money because it would be cheaper for everyone on the planet, to buy corn from my super investor, than to grow it themselves.

      But, what stops that from happening, is that while this robotics farmer investor is taking over the worlds food business, he’s also driving human wages down and down. And there will come a point, that humans are so poorly valued, that the old human driven farming process will actually equalize with the robot cost.

      BUT, the cost will be so low, that a human working at that wage, won’t be able to make enough money to buy the very corn he’s producing. This is because the human trying to work as a farming, is competing with the cost of silicon, used to make the tractor intelligent enough that it doesn’t need a farmer driving it anymore.

      Using todays numbers, lets say it costs $50K in computer hardware, to automate the tractor and put the human tractor driver out of business. And lets say the hardware is expected to operate for 10 years so we are talking around $5K a year.

      So the human can still find a job driving a tractor, but only if he’s willing to work for $5K a year. But can you produce enough food to feed a farmer on $5K a year? What happens when the AI computer costs $500 (which it will be some time later).

      The cost of corn is still 50 cents, because all the human costs have been replaced with very low cost machines, but the land costs are still part of the equation – the fact that the land still needs to be used to grow all the corn, and operate the factories.

      The problem here, is that people working for _wages_ will be marginalized out of the economy. Smaller and smaller amounts of the GDP will go to pay for the humans, and larger and larger amounts will pay for the land and raw materials and energy.

      People will still get all the money, but it will come to them mostly by investment income – by what they own. And investment income, unlike wages, don’t automatically get shared in any sense of “fairness”. And that’s where it all falls apart.

      People born poor, will have ZERO options, for getting into the investment game. They have no money, or assets by which to buy into the wealth. If the try to work, they money they would be paid will be so low, that they can’t feed themselves, while the super investors are making billions and billions every year, and will have nothing to do with it, besides wasting it on silly things that the super rich dream up to spend their money on.

      ” You say that he has no close competitors. But for how long? While he may have no close competitors in the short term, as time passes, the excess profits he is making will attract new competitors who will replicate his system and therefore drive down prices. Denying that competitors won’t enter the field upon seeing the excess profits he is making is denying reality.”

      Ok, again, I have to explain this stuff slowly to you. I made up a example to prove YOU wrong. Your error, was that you only talked about wages, and didn’t talk about land income. My example was fictitious to just bring into the discussion the fact that you had ignored income from land in your post.

      The validity of my argument doesn’t change, if you fix this “error” you spotted in my simplified example. So, this guy with great robots, starts to make huge profits, takes over a large amount of the food industry. This attracts R&D money to create a competitive technology (or to just steal it), and competitors show up. So now we have 100 robotics businesses not just taken over farming, but also talking over every other human business in the world with robots. Each company employs about 1000 people so these 100 companies only employ 10,000 people in the planet. They are all building 1000′s of new robots of every size and shape every day and within 10 years, every business on the planet has been duplicated with 100% automation. The cost of producing any good and service, is now only the “land” cost of the automation hardware, and the “land” cost of the energy to operate the hardware.

      Now, humans can still try to run their own businesses, but the burger stand on the corner, still has to compete with the automated McDonald’s across the street. Not only has McDonald’s automated their process, they now may really good gourmet quality burgers to order in minutes. And they have huge economies of scale in buying their raw materials like meat so they get far better deals than a small guy operating a single burger stand.

      The end result, is that the small guy, can’t even buy raw materials as cheaply as McDonald’s sells their finished burgers for. The burger guy, is forced to charge 10 times as much as McDonald’s charges, and he takes 3 times as long to make the burger, doesn’t have the choice and option, nor consistency of quality the robotic McDonald’s have.

      So at a much higher cost, and lower quality, how much market can he take away from McDonald’s? Not much, If he can sell 5 burgers a day he would probably be doing good. Again, can he make enough money, to eat, and to pay rent for a home? Probably not. He’s probably going to be a homeless burger chief that lives in his burger cart and only makes enough money to afford to fix himself one burger a day.

      So, with competitors added, we have 10,000 humans, running and owning every robotic business in the world. These 100 companies took over the entire world economy, before anyone else could figure out how to make their own AI robots. They bought up all the land, and all the natural resources of the world. There was lots of competition, but still, all done by only 10,000 people, and a few billion robots.

      The rest of the world, owns no land. The ones that used to own land, sold it to get enough money to eat for a few more years, but now all that money is gone. The people only get to live, because these 10,000 people decided to build reservations for these people to live on – in the Sahara Desert, and gives them prison food to eat – but has required that they all be sterilized in trade for free food for the rest of the lives, sot hey can’t bring any more “losers” onto the planet.

      “Even in a situation where he is making excessive profits because competitors haven’t yet come in, what happens to the money that his customers save by having to pay less for their food?”

      Again, doesn’t change the result. Do I really have to explain everything to you?

      Everyone else in the planet gets laid off. They have no income. In time, whatever wealth they owned when they lost their last job, is spent on food, and they become broke. They sell their land so they can keep eating. In time, they run out of money, and beg or steal to get food.

      Some owned land. But without a job, they had to try and find a use for the land. But these 100 robotic companies have found ways to utilize land better than anyone else can. The only way to make money with their land, is to lease it to the robots businesses. And some might get away with that for some time, and be able to make enough money to eat. But, the robotics businesses known they can make more money, if they stop leasing the land, and buy it, so they will use their powers to force the landowner to sell it. That is, they will simply stop leasing it, until the guy gets so desperate, he will be forced to sell.

      And of course, there is only 10,000 people in the world that the business need to take care of (the 10,000 elite workers), so they don’t need the entire planet for food or anything else, they just “want” the entire planet. So they can afford to not lease the land, and just use what they own, to make all their money with.

      Now, if the few land owners got together, and tried to form a new commune, and live off their own land, and vowed never to buy any goods or services from the robots companies, they could form their own economy, and keep living on their own. But there standard of living would be well below, what the robots economy was offering for sale. So if any of them “broke” with the community, and went out and traded some of his land, say for some robots life saving medicine, the wealth of the commune would be reduced, and in time, the robots economy would likely take it all over – it would only be a question of how long they could hold out.

      “or, they are going to use this money to increase their savings – i.e. they will invest this extra money that they now have with them and therefore better their lot in life in the future.”

      They can’t save, and invest, when you have no job. You have to keep paying for the food and basic material requirements to keep yourself alive.

      You don’t grasp that basic idea that machines will be so much better than humans, that the humans won’t have any work.

      I make nails the old fashion way as a Blacksmith as a profession right now (well, nails are one of things I make). I’m paid about $1 a nail to do it. Even though I can sell nails like this, I 1) can’t sell enough nails to keep myself employed full time, and 2) even if I worked full time, it would net me out a lifestyle of about $20K a year at best. And I’m able to do that, only because we still have billions of people working a good wages, that enough of them will buy such an outrageously expensive nail, as a souvenir – or because they want something reproduced in the “old way” for an outrageously expensive price. If there were only 10,000 well employed people left in the economy, I couldn’t make enough nails for them. And besides, they could get their robots to hand forge nails for them and get the same result for a fraction of the cost. Only if they were will willing to pay $1 a nail for one made by human, instead 1 cent for one that is made the exact same way, but by robots, would the human find work.

      In the end, the only money humans will get for “work like” stuff, will be charity donation, not “real pay” for “real work”. Money will be made only by the land you own, and in the end, only a small number of super investors, will have taken control of most the land, and there will be massive numbers of people who own nothing of value, and can’t invest, or work, and can only survive, if the rich decide to feed them.

      “Who will these cost savings benefit the most? The rich or the poor? It’s the poor who will benefit most from these cost savings. That is because the poor spend a far higher portion of their incomes on food than the rich. So any reduction in the cost of food benefits the poor far more than it benefits the rich.”

      YOU JUST DON’T GET IT. Massive numbers of people will have NO INCOME and NO JOB. it makes no difference how cheap things become when they have NO MONEY AT ALL. Massive numbers of people will become homeless and dead broke and will exist off of what they can find in the trash and what they can get in the way of hand outs if we follow your plan of NOT implementing something with the effect of a Basic Income Guarantee to force sharing of some of the wealth produced by the super investors.

      “So this rapacious investor of yours, in spite of all his greed and power-lust, ends up benefiting the poorest sections of society through his actions.”

      That’s right, the guy that owns half the world, makes billions of dollars a day, is benefiting the “least” compared to the 4 billion homeless and jobless people of the world. Right. Are you really that dense?

      People will not have JOBS because the more we automate, the more wealth creation will shift from wages, to capital (or as you need it spelled out for you – to the landowners).

      You are right, that humans could, in theory, keep working, but their wages will be so low, that they will be effectively zero – human labor will become abundant – effectively free because there is endless supplies of it that aren’t needed for anything important. The only scarcity remaining, is land, and raw materials, and energy. And whoever invests the wisest in these properties, will win it all.

      With human labor, a person is only able to work 24 hours a day. YOu can’t work twice that, or 100 times that. No matter how much I work, you too can work 24 hours a well, and the third guy can also work 24 hours – I can’t monoplize all the work becuse I’m only one person.

      But with property ownership, there are no such limits. One person can, own all the property on the earth, leaving zero for eveyone else.

      The sort of arguments you have tried to make, only apply, as long as HUMAN LABOR remains a required component of the economy. As long as companies MUST use humans, to produce goods and services, then what you say is mostly right. No matter how productive each human becomes, as long as the human is still required, every human has an effective strangle hold on the economy – human labor remains a scarce and required component of the economy.

      But this is exactly what all falls apart with advanced machines that outperform humans in _EVERY_ field of work. At that point, it has nothing to do with “productivity”, because productivity just became infinite once the human is 100% replaced by the machine.

      Already, humans have been 100% replaced in endless fields of work, and the only reason the economy hasn’t totally collapsed, is becuase there is still lots of jobs that only humans can do, and lots of others, that humans do better and cheaper than machines. But that list is shrinking fast, and the rate of shrinking is growing exponentially.

      “The problem with most of your arguments is the issue that the French economist Bastiat had identified 150 years ago – “That Which is Seen, and That Which is Not Seen”. Your arguments are all about the first-order consequences of an action (i.e. the stuff that can be seen), but ignore the second-order consequences of those things (i.e. the stuff that can’t be seen but are nonetheless there) which totally change the conclusion.”

      I left off the second order issues to simplify the example so even YOU could understand it. As I demonstrated above, when I add in the second order, consequences, nothing about my argument changes. The argument just gets more complex.

      The issue is that YOU are trying to argue what the future will be like, based on logic from the past, that only applies, when humans are REQUIRED in the loop to create things of value. In the not too distant figure, that requirement will vanish completely from the equations – and when it does, all your arguments about prices and wages moving to make thinks better for everyone, turns to total horse shit.

      So, let me again, outline your errors. One, you ignored “land” income in your discussion completely and argued as if wages were the only form of income. Two, you assumed that since “total wealth” was rising due to technology, it mean that EVERYONE had to become better off.

      But your wage argument fails, when wage inequality, rises to such extreme levels, that half the population aren’t paid enough to feed themselves. To plug that hole in your argument, you have to explain why massive levels of inequality can’t happen – and you have failed to even mention that, let alone try to put up an argument against it.

      And two, you have failed to understand that all current wage income, is shifting to land income – which is why inequality is growing. Wage inequality is capped, because no one can work more than 24 hours a day, and the work of two humans, is always fairly equal. No one human, can be a better worker, than millions of others he competes against. There will always be other humans to replace his “work” and take part of his wages.

      But land income, has not such inequality limits. One person can, gain control of the entire world, and all the income. It’s this shift of income from wages to land, that is destabilizing the economy, and allowing inequality to grow out of control. It’s that in quality, we must “fix”. A Basic Income Guarantee is a simple direct, and fair way to fix it.

      “Further, you ignore so many other changes that are going to take place in this imaginary world of yours because of your investor.”

      The one change, is that people will learn that your argument doesn’t hold water when they see massive amounts of inequality, systemic high unemployment, and continued loss in wages and benefits for most people. They will realize that inequality is the problem that must be solved, and they will come in time to understand it’s technology that has caused this shift. And they will, in time, come to understand that free trade in a machine economy, is not the same thing as free trade in a labor economy.

      In the end, we will add more socialism to our society, but if there are too many people thinking in the past like you, the displaced and disenfranchised will turn ever more violent and cause endless amounts of death and suffering, all because, people like you, can’t see how yesterday’s labor based logic doesn’t apply to today’s machine economy. The longer it takes you to catch on, the more suffering you will have created for society. The deaths and suffering will be on YOUR head (but you of course will deny it).

      • Panpiper
        Panpiper says:

        My goodness Kurt, just how fast do you type? ;-)

        “The sort of arguments you have tried to make, only apply, as long as HUMAN LABOR remains a required component of the economy. As long as companies MUST use humans, to produce goods and services, then what you say is mostly right. No matter how productive each human becomes, as long as the human is still required, every human has an effective stranglehold on the economy – human labor remains a scarce and required component of the economy.”

        This sort of thing is an extremely strong argument, it makes the crucially salient point that could well serve to turn on the lightbulb in the mind of the reader. Bravo. But there is a problem…

        In much of your post you have adopted an adversarial tone. Believe me, I understand how hard it is to avoid that sometimes, especially when we feel so passionately about the point we are trying to make. The point I would make in this post is that you harm your (our) cause by giving into this. The instant you adopt an adversarial tone, as opposed to say, a professorial tone, you have lost your influence upon the reader. At that point, you might as well stop writing.

        Finally, unless you are talking to socialists, please don’t refer to a basic income guarantee as ‘increasing’ socialism. It does not. It merely takes the existing socialism in our society (welfare, etc.) and fixes it so it works vastly better for the future. We will never achieve our goal if we phrase it in such a way that it is “one side” that wins, which implies that the other loses (even though they don’t).

        • Curt Welch says:

          “In much of your post you have adopted an adversarial tone.”

          :) Yeah, there comes a time where being nice is pointless. :)

          There are some people that will never agree simply because they have a fundamentally different outlook on life and on society. Sumantra Roy is clearly a die hard conservative/libertarian that will NEVER agree to helping those in need by means of wealth redistribution. He wants to believe the world is something it simply is not. He wants to believe that if the government just got out of the way, and allowed everyone to interact though free trade of personal property, that anyone that worked hard, would be able to have a fair chance of a decent life, and that anyone that fails to have a decent life, has only themselves to blame. The world doesn’t work like that, has never worked like that, and is becoming even less like that, as we move forward into this machine economy.

          These people can not be persuaded no matter how nice you are to them because their fundamental beliefs won’t allow them to accept the idea as valid.

          The only solution, is to show that it’s ok to stand up to this sort of nonsense, and get everyone else, who is not locked into these absurd beliefs, to speak up for what is needed.

          I’ll let others be “nice”. I’m too pissed off that I have to live in a world of selfish paranoid idiots to be nice anymore. :)

          But I like your intent of trying to help me be nice Paniper!

          “Finally, unless you are talking to socialists, please don’t refer to a basic income guarantee as ‘increasing’ socialism. It does not. It merely takes the existing socialism in our society (welfare, etc.) and fixes it so it works vastly better for the future.”

          Well, that would be an improvement if we did that. But it won’t be enough. In the long run, we will transform to almost total human socialism. By the time the machines are advanced enough, cheap enough, and plentiful enough to actually replace all humans, we will need to have transformed to an nearly full socialistic society for humans (the machines will still operate under a capitalistic production economy between each other). At that point, all humans will get the same basic income, and they can choose to spend it on whatever they want, or they can save it to buy something bigger in the future – but all humans will effectively be economically equal.

          This might not come to be until the end of the century.

          But before then, we need to start the transformation now, to offset the damage technological inequality is doing to society. And it needs to be bigger than our current welfare system to be done correct.

          If I were president, and trying to talk a nation into doing something, I would have to be very careful with my words, and my arguments. But I am not in that role. I’m writing silly personal opinion comments on articles about robots taking our jobs and I can tell it like it is.

          People need to learn to think differently about these things. They have been trained to see socialism as evil because they are told it’s like stealing the work of one person, and giving it to another. Behind that type of nonsense is the belief that value is ONLY created by human labor. So if you take money from someone, you must be taking their labor for them. But labor is NOT value. Machines create most our value today. That’s like a slave owner trying to claim it was “his” work that produced the cotton picked by his slaves.

          When we redistribute wealth, we are MOSTLY forcing slave owners to share some of the wealth created by their slaves and not in fact stealing THEIR labor.

          But a typical conservative shows no ability or desire to understand this, and from my experience talking with them, they show as little hope understanding this, as a devout creationist shows an ability to accept or understand evolution.

          Todays machine economy, is not yesterday’s human labor economy, but a typical conservative, is stuck in the past, and unable to see how society is changing in front of them, and how the future will not be like the past. Their solution to everything, is “go back to the way it was and that will fix it”.

          Sometimes that in fact works. But it’s not going to work for a paradigm shift as large as what’s happening today due to machines replacing humans in the work force.

          “We will never achieve our goal if we phrase it in such a way that it is “one side” that wins, which implies that the other loses (even though they don’t).”

          Well, what’s happening, is that inequality is growing every day. More and more people realize things are getting worse for them instead of better. Which means more and more people, are joining our side every day. We don’t have to convince anyone. Their lack of income will do it for us. When enough people realize how much society is screwing them over, and realize there’s no need for it to be like this, they will vote for a basic income guarantee to fix it.

          Our job, in my view, is not to try and convince everyone it’s needed, but rather, just to put it in front of them, so they understand it’s a valid option that millions of people believe in, which they can vote for whenever they figure it out it’s in their best interest to do so.

          • Luke Rohde says:

            I agree with Curt. Without wealth redistribution when robots are cheaper than labour, too many people can loose their investment capital and chance of getting back in the game.

            Its like the arcade game Daytona USA – Its thrilling because of the “competitive assistance” that boosts your speed the more you fall behind. Without this, the game wouldn’t be fun and if you crashed you’d have no chance of clawing back a victory.

            Most of human history has been dominated by crushing dictatorships and slavery – power can’t be allowed to aggregate to the point where this becomes a possibility again. That’s why we need some kind of “competitive assistance”.

            No one would openly support slavery these days, but I wouldn’t be surprised that those people who believe in unfettered dog-eat-dog competition and conservation of “hard-won” privilege were the ones that supported slavery. There is no point being nice to these people, because they won’t be nice back.

            I think our politics needs to mature because neither liberal or conservative ideologies will successfully navigate the robotic future.

  • Sumantra Roy says:

    Panpiper:

    I agree with what you said about how central banks try to prevent deflation, and how artificially low interest rates lead to a transfer of wealth from the poor and the middle class to the wealthy. No argument there. That is why I believe that central banks should not be setting interest rates at all – i.e. that interest rates should be market determined and NOT set by the government. One of the main causes of the financial crisis of 2008 is (as opposed to the free market selfishness that Curt incorrectly wants to blame) the fact that the FED under Greenspan set interest rates at an artificially low level.

    However, where I disagree with you is regarding your views on inequality. Both you and Curt seem to believe that inequality is a bad thing. Curt went to the extent of saying that if the rich increase their wealth by 200% and the poor by 2%, that, according to him, is grounds for sending some people (presumably those rich people although Curt didn’t specify who) to jail.

    This is where I differ. I don’t particularly care about either inequality or equality. In my book, a situation where everyone has become wealthier is something to be celebrated, regardless of whether some people have become more wealthy than the others.

    What exactly is the moral/philosophical/ethical reason that inequality is a bad thing and equality is a good thing, given that human beings are, by nature, unequal and are born with different talents, different tastes and preferences, etc.? And even more importantly, what is the moral/ethical reason that inequality a bad thing in a situation where everyone is getting better off than what they were before (even if some people are getting more better off than others)?

    And on what fundamental notion of justice does society get to violate individual rights (through the forced redistribution of wealth that is inherent in any form of minimum guaranteed income) in order to reduce inequality?

    I have never seen a good philosophical argument to justify this primacy that you and Curt are placing upon inequality. All such arguments I’ve ever heard of in the past ultimately boil down to “Inequality is morally/ethically bad because I said so”. John Rawls did try to provide some moral/ethical justifications regarding why inequality is a bad thing, but Rawls’ argument has plenty of holes which even I, with no formal background in philosophy, was able to identify. Other thinkers far wiser than I have ripped Rawls’ arguments to shreds.

    If you have some moral/ethical arguments against inequality, I am open to hearing them.

    One of the arguments you have made against inequality seems to be from the point of view of pragmatism – that inequality creates social disturbances.

    First, do you have any empirical proof of this? And please note this empirical proof has to prove causation, not correlation.

    Second, let’s assume you do have some empirical proof. Now correct me if I am wrong, but what you seem to be saying is that because people who find themselves on the wrong side of inequality may (because of jealousy) create social disturbances, we should give them some money in order to appease them. To me, this sounds like a fundamental miscarriage and distortion of justice. Justice demands that people who create social disturbances through the use of physical force on others, or by destroying property, need to be punished – not rewarded for their potential actions. In effect, this argument seems to be that I should voluntarily pay a thief so that he doesn’t steal even more from me. I don’t quite see the justice in that.

    • Panpiper
      Panpiper says:

      If we were able to ‘invent’ the perfect anarcho-capitalist society and with a wave of a magic wand, convince the nation/planet to go along with it, then a basic income guarantee could easily be provided for by leasing the commons and from the proceeds, paying a monthly dividend to each citizen. Thus could such a social safety net be provided without any initiation of force.

      The standard line from Rothbard and such is that the commons (those that are currently held by governments) ought be sold off, as the theory goes; private owners would be more motivated to provide for their long term value. The problem with that is that the buyers would for the most part be those very investment bankers and super wealthy speculators that have profited from the wholesale looting of society through virtually zero interest leverage. So the crony-capitalist crooks get to be the ‘landed aristocracy’ and the rest of us get to be their serfs.

      One could stipulate that no, every citizen will be given an equal share in the commons being sold off. The problem there is that fools and drunkards will sell off their shares for a short term gain to those very same crony-crooks, leaving their children (who are blameless) with no birthright and again, we have the fundamental injustice of one child born with the silver spoon, and the other to abject poverty.

      Note that at no point yet in this post have I invoked theft or force. The question is not one of your position being ethical and mine being not. I submit that a position without violence that addresses the problem of children born into poverty is superior prima facie to a position, still without violence, that does not. I assert that a basic income guarantee provided to all through the leasing of the commons is the correct way to construct a voluntary society. The leasor of commons need not be a ‘government’ or any entity possessing a legal right to initiate violence. Indeed, I would hold that it should be just like any other organization in society, contracting for the provision of legal insurance, etc.

      Given that…

      We are faced with reality, not simply theory. We have the practical reality that the world is going to be going through some massive changes over the next few decades. Already due to (criminal) fiscal policy, the ratio of wealth distribution between the wealthy and the impoverished, which had largely held stead for two centuries prior, has grown by a factor of five since we went off the gold standard in 1971. That same fiscal policy will continue, the gulf will continue to grow. These nouveau riche did not ‘earn’ their wealth through thrift and industry (the Elon Musk’s and Richard Branson’s of the wealthy world being exceptions sadly not the rule nowadays), they have literally stolen it through central banking policy. You have in essence been arguing that there is nothing wrong with letting things go on as they are, that somehow these thieves ought to be allowed to get away scott free with their larceny and we should not take any action whatsoever to mitigate the consequences.

      I do write tomes about the evils of our existing fiscal policy. I expect you do too. But there is virtually no chance that our voices will ever change the course of governments. We might given a century or two, evolve the thinking of society away from violence and towards voluntarism. But we do not have centuries. We don’t even have decades. Things are going to be changing, they are going to be changing fast, and the changes will be huge. If we do not put into place something now to mitigate the worst extremes of what will come to pass, the future will not be of relatively well off ‘poor people’ staring in unjealous awe at the majesty of their betters. It could well be a future in which poor people for lack of bread will storm the gates of the enclaves.

      You asked me to provide empirical proof that inequality creates social disturbance. I find myself almost incredulous at that, to me it is so bleeping obvious that I feel I am being asked to provide empirical proof that inadequate communication leads to misunderstandings (no correlation equals causation please). When people are unable to provide for the basic necessities of life, when they cannot feed themselves and their children, and they watch privileged elites eat cake in palaces, they WILL invoke a terror, for they have nothing left to loose.

      The practical reality is that we do have a state, we do have taxes. Whether or not you prefer that we do is ‘absolutely’ immaterial. The question is not one of allowing society to commit suicide while we wax philosophical about what fools we mortals be and otherwise do nothing. The criminal, absolutely undeserved, fivefold increase in the wealth of super wealthy crony crooks will continue unabated. They will soon be in a position to purchase virtually all wealth leaving the poorest NOT with lowered prices with which to purchase more despite this, but with inflated prices as a result of the mechanism of their looting. The mechanism which has historically allowed the automation of society to translate into improvement for all is being actively thwarted.

      In the face of that, would you stand there and actively oppose a change that would drastically improve the lives of billions and potentially avert catastrophe, simply because it involves a change in the way the state operates? A basic income guarantee does NOT cost any more money than is being currently taxed. It does NOT raise net taxes on the wealthy. It does NOT represent an increase in state power.

      • Sumantra Roy says:

        Panpiper:

        Your and my positions may be much closer than I originally thought.

        From what I gather from your post, you are arguing for the Henry Georgist position of a land value tax or something similar. Although I don’t agree with the Georgist position, contra-Rothbard I am somewhat sympathetic to it purely because the other principle of property rights allocation – the one that I agree with in spirit – the Lockean homesteading principle – is something that I know has a number of holes as well, especially when you take that principle to its logical extremes.

        “Already due to (criminal) fiscal policy, the ratio of wealth distribution between the wealthy and the impoverished, which had largely held stead for two centuries prior, has grown by a factor of five since we went off the gold standard in 1971. That same fiscal policy will continue, the gulf will continue to grow. These nouveau riche did not ‘earn’ their wealth through thrift and industry (the Elon Musk’s and Richard Branson’s of the wealthy world being exceptions sadly not the rule nowadays), they have literally stolen it through central banking policy. ”

        I agree with you regarding this. It is the U.S. government’s fiscal and monetary policy along with the military industrial complex that has caused a massive transfer of wealth from the poor and middle class to the wealthy and politically well-connected.

        “You have in essence been arguing that there is nothing wrong with letting things go on as they are, that somehow these thieves ought to be allowed to get away scott free with their larceny and we should not take any action whatsoever to mitigate the consequences.”

        No – this is not what I have been arguing at all. In principle, if there was a way to get crony capitalists like the Lloyd Blankfeins, Jamie Dimons and Jeff Immelts of the world (along with most of the politicians in DC) to give up all their ill-gotten wealth and for this wealth to be then transferred back to their victims, I would be all for it.

        My point, however, is that the Elon Musks and Richard Bransons of the world, who have achieved their wealth legitimately, should NOT, under ANY circumstances, be forced to share even a dollar of their wealth with anyone to fund either a welfare state or a minimum income guarantee program, and that doing so, on the grounds of “inequality” as Curt suggests, is morally reprehensible.

        Now let’s come to practical reality:

        What you seem to be suggesting is that your and my discussing the dangers of U.S. fiscal and monetary policy isn’t going to change anything. You may well be correct. However, the fact that there has been such a significant upsurge of interest in the principles of liberty especially amongst the youth in the last 4 years thanks to Ron Paul gives me a flicker of hope. And this upsurge of interest was helped enormously by the Internet and its ability to expose people to viewpoints like these that are different from what they get in the mainstream media.

        Here’s the problem though: purely on the grounds of practical feasibility, I am not sure how practical your suggestion of replacing a portion of the welfare state with a minimum income guarantee is either. This is because, knowing how politicians operate, the minimum income guarantee is not going to be achieved by transferring existing resources from the welfare state to this minimum income guarantee program as you suggest. Instead, the way it is going to be implemented, if it ever came to that, is by preserving the welfare state in exactly the format it is now, and for the government to run even larger deficits in order to fund the minimum income guarantee program on TOP of the existing welfare state.

        Which would bring us right back to square one.

    • Curt Welch says:

      “What exactly is the moral/philosophical/ethical reason that inequality is a bad thing and equality is a good thing, given that human beings are, by nature, unequal and are born with different talents, different tastes and preferences, etc.? And even more importantly, what is the moral/ethical reason that inequality a bad thing in a situation where everyone is getting better off than what they were before (even if some people are getting more better off than others)?”

      “And on what fundamental notion of justice does society get to violate individual rights (through the forced redistribution of wealth that is inherent in any form of minimum guaranteed income) in order to reduce inequality?”

      The moral justification is that high levels of wealth inequality exists only as a form of thief. It’s well hidden in the complexities of market dynamics, but it’s thief nonetheless.

      If the few take the wealth of the many, it makes no difference how they did it, the many will rise up and kill the few for doing it, and that’s exactly what we are heading for in this world as our free market is increasingly becoming destabilized by growing inequality.

      Either the wealth stop stealing, or their heads will role. Having the massies vote in forced redistribution is the kind and just way of ending the thief. If that doesn’t happen, they will do it with guns and bombs. It’s going to happen one way or other. It’s happened in every civilization that has existed over time. When the elite become too selfish, they end up having to pay at some point. It’s only a question of when that point will be for our modern society, and what form it will come in.

      What confuses people like you Sumantra Roy is that free market trading never “feels like” you are stealing from the poor because you are only entering into trades that both parties agree to. But by allowing free market trades to be the rule of the land, you have created a system where many are guaranteed to suffer. It’s your chose to back free market trading, that is your injustice against society that morally, the masses have the right to stop. Supporting free market capitalism, in a time of rapid technological growth, is itself, a crime against humanity. You will grow to understand this is time, or you will see the punishment of your ignorance come to you – one way or another.

      “”What exactly is the moral/philosophical/ethical reason that inequality is a bad thing and equality is a good thing, given that human beings are, by nature, unequal and are born with different talents, different tastes and preferences, etc.?”

      Let me talk to this last specific issue however.

      To suggest that our inherently difference is a moral justification for the strong to do anything they can get away with, is the error of every society in the past the failed. But yet, you bring it up here, as if it were morally justified. You know Hitler used that same logic to kill the jews (forget Godwin’s law). He argued that since his race was obvious superior, he had the moral right to subjugate the Jews. Your argument is IDENTICAL to his. You are suggesting that anyone that is able to steal wealth from others, through free trade, has a moral right to do so – even when it gets so out of proportion, that the loser ends up with so little wealth, they can’t even fed themselves without taking food from trash cans. Where does morality even BEGIN for you if you think this way? If you think you are allowed to trick people into given you their wealth, you are morally right in doing it?

      The effects of wealth and income inequality has been extensively studied around the world in all cultures and societies the same facts emerge. Societies with more equality are happier, healthier, less violent, less crime ridden, than societies with less equality. It has nothing to do with wealth. Poor societies with equality, are far better off, than rich societies with high levels of inequality. Wealth doesn’t fix social problems, only equality can. A lack of equality in society, is the root of all evil and all social problems.

      Wealth is only important to the extent that there is enough wealth to provide for basic needs, like feeding and housing everyone. Once you are past the basic needs for survival, then everything else is gravy, and inequality starts to be the big problem in society, and not wealth, or GDP growth, itself.

      If you want to understand the moral problems with inquality, read the book I’ve quoted:

      http://www.amazon.com/Spirit-Level-Equality-Societies-Stronger/dp/1608193411

      It’s a book full of hard data from decades of studies showing just how much damage inequality is doing to societies s all around the world. Large levels of inequality create societies with higher levels of violence, high levels of crime, more people being cared for by the state in jails, higher levels of mental illness, more depression in society, more people turning to religion to escape the fears created by the society they live in, more social distrust, more gun ownership, more gun deaths, shorter life spans, more teen pregnancies, the list goes on and on and on. There is statistically significance across all these measures and inequality.

      If you let people steal from each other, and turn life into a competition of seeing how can take the most wealth from the other guy, you end up with a socially dysfunctional society – like the US – with some of the worse health problems, highest prison population, etc, of all the developed nations of the world.

      To not fix this, is a morally bankrupt position, but one which, due to your desire to be 100% selfish, in spite of all the pain and suffering it created in society, is what your are now trying to argue as morally just.

      You are in effect arguing, that if you have the physical power to steal food from a baby, you should be allowed to do it, because you were born stronger than the baby. Do you really not understand how such an argument is morally bankrupt?

  • Sumantra Roy says:

    Curt –

    This is going to be my last comment to you, because your comments are SO long and so full of internal contradictions and strawman arguments that it is going to take me a couple of weeks to get through all of them – time that I don’t have. Further, my typing skills don’t match up to yours (perhaps I need a robot to type for me).

    To begin with, I would recommend getting a dictionary and looking up the meanings of words like “stealing” and “theft”. Words have specific meanings and you cannot define words to mean whatever suits your fancy.

    Let me get to just a few of the statements in your latest post first because it is a prime example of the kind of fallacious logic, false analogies and deliberate distortion of the meanings of specific words that characterize a lot of your arguments.

    “The moral justification is that high levels of wealth inequality exists only as a form of thief. It’s well hidden in the complexities of market dynamics, but it’s thief nonetheless.”

    No – it isn’t. You may want to look up the meaning of the word “theft” in a dictionary. In a free market (i.e. absent government intervention in the economy and therefore absent crony capitalism), wealth inequality can only exist because the person who has more wealth creates more value for his fellow man than a person who has less wealth. Because in a free market, a person can only become wealthy if other people have voluntarily given their money to him because they believed that what they were getting in return from the wealthy person exceeds the value of the money they were giving to him.

    “You know Hitler used that same logic to kill the jews (forget Godwin’s law). He argued that since his race was obvious superior, he had the moral right to subjugate the Jews. Your argument is IDENTICAL to his.”

    I see. The first thing you may want to do before you draw up an analogy between my argument and what Hitler did to the Jews is to look up the word “force” in a dictionary. Hitler applied physical force on the Jews. A free market, by definition, does not allow the use of physical force.

    “You are suggesting that anyone that is able to steal wealth from others, through free trade, has a moral right to do so ”

    Before making a nonsensical statement like the above, you may want to look up the word “steal” in a dictionary. Stealing involves taking something from someone WITHOUT that person’s permission. Free trade, by definition, is based on the voluntary permission of both individuals who are a party to the trade.

    Like I said, words have meanings and you cannot use words to simply mean whatever you would like them to mean, just so that you get to attach the negative connotations associated with words like “stealing” and “theft” to free markets.

    Now let me get to your previous post.

    Forgive me for being so slow, but I now realize where some of the contradictions in your economic arguments come from. You have implicitly assumed that land (which I define to mean all natural resources) is a scarce resource. Except that it isn’t.

    And this is why you should read Rothbard.

    As Rothbard demonstrated, what is scarce is not land itself, but the technology (i.e. the knowhow) and the capital that allows us to USE the land that is already there and make it useful for humans. For instance, there is a vast amount of land that exists beneath our oceans that has not been utilized. Not because it doesn’t exist, but because we don’t yet have the technology and/or the capital to make use of it. Even the water in the oceans (which is also “land” since it’s a natural resource) has not been fully utilized. There is also a limitless amount of land that exists in outer space that has not been utilized.

    Therefore, until such time as human beings establish property rights over most of the atoms in the entire universe, land can NEVER be a scarce resource. There will ALWAYS be unowned and unutilized land that is ripe for human exploitation. The only thing that will limit anyone from exploiting this land is technology and capital.

    Now let me take this dystopian world of yours as a given and see how things will play out in the free market in this world.

    You say that 10,000 elite workers and their employers now control all of the earth’s industries and that there are no jobs for anyone else. OK.

    However, in this world, technology (to the extent of the knowhow of building super-efficient robots) is not a scarce resource because anyone who chooses to will have the ability to learn how to build a super-efficient robot.

    Also, in this world, as I have established, land will also not be a scarce resource. (Now before you claim that I have assumed that we would have figured out how to exploit the land under the oceans and the resources in outer space by then, yes, I have. This is an entirely reasonable assumption in the framework of this advanced technological world that you have imagined).

    Therefore, the only thing that MIGHT be scarce in this world, and the only thing that MIGHT prevent these billions of unemployed people from building their own robots and going about exploiting the unutilized land in the oceans and in outer space, is capital. However, further note that capital is scarce only amongst these billions of unemployed people. Capital will be relatively abundant amongst the 10,000 elites.

    The free market now has an easy solution for your dystopian world.

    All that one would need is a single entrepreneur from this group of 10,000 elite workers and employers to realize that there is a huge market opportunity here that is waiting to be exploited. All that an entrepreneur would need to do is to simply strike a deal with these billions of people wherein he would let each of them have access to some capital which they would then utilize to establish property rights over land in other planets (or beneath the oceans of the earth) and then use the knowhow that they already have for building robots to manufacture all the stuff that they need. In exchange, they would give this entrepreneur a certain portion of the products produced by the robots that they have created for a certain period of time.

    But, you say, because this entrepreneur has capital and these unemployed people don’t, the entrepreneur will try to extract as much of their production as possible for as long as possible and leave them as little as possible. Sure, in the absence of competition, he might. But once again, the forces of competition will come into play and as long as there is another entrepreneur who is also willing to supply capital to the unemployed, the forces of competition will ensure that neither of them get to make excessive profits on their capital.

    Therefore, until such time as most of the atoms in the universe have been exploited by man and property rights have been established over all such atoms, i.e. until such time as unutilized land actually becomes scarce in the universe, the scenario that you have painted is simply never going to happen in reality in a free market. It’s simply a figment of your very rich (but very flawed) imagination.

    Anyway, like I said, this is my last reply to you. I believe that everyone who has followed this thread has by now read enough of both your arguments and mine to come to their own conclusions regarding who is correct and who is wrong. Of course, if you want to have the last word, I will let you have it. You should feel free to reply and post an even bigger comment than your last one containing even more strawman arguments, false analogies, internal contradictions, dystopian fantasies that have nothing to do with reality, and deliberate distortions of the meanings of words.

    • Sumantra Roy says:

      Curt – a quick clarification regarding my comment above. You may object that not everyone amongst the unemployed would be smart enough to know how to build a robot, i.e. that even technology, and not just capital, may be scarce. That problem however can be easily solved by our elite entrepreneur simply using his robot teachers to train the unemployed on how to build robots, with perhaps a slight increase in his share of the proceeds from the products produced by the unemployed people’s robots.

      Therefore, as long as land is not scarce, and as long as you need human beings to establish property rights over erstwhile unutilized land (and you do, since robots cannot establish property rights), your dystopian world will never come to fruition.

      • shaker says:

        roy,

        I am so glad you made all these points. i have argued with Curt in other threads about this very topic, but alas i am a lay person and i don’t have the economic background to fully debunk everything he says.

        What you say makes 100% sense to me. I think the only problem humans will face is not the free market, but crony capitalism and governments that deceive their people. We can say the agreement between the U.S. and China to basically “use” its citizens in order to benefit the 1% has as much to blame for our current economic condition as technology.

        my problem with Curts line of thinking is that he creates a world of “super robots” but NEVER gives a reason as to why EVERYONE cannot own these robots.

        • Sumantra Roy says:

          Shaker – even though you may not have a formal background in Economics, your instincts about the topic are almost entirely correct.

          The reason behind the royal economic mess that the U.S. is in today is entirely due to the government and the Fed – Nixon taking the U.S. off the gold standard in 1971, Greenspan setting interest rates at an artificially low level after the dot com bust and thus creating the housing bubble, and of course the crony capitalists on Wall Street working hand in glove with the Fed and the politicians in DC.

          THAT, and not free markets or free trade or technology or any of the things that people like Curt want to blame, is what has caused the massive wealth transfer in favor of the rich over the last few decades, and is continuing to do so.

          In case you have the time and want to study Economics a little bit, you may want to read the book “Economics in One Lesson” by Henry Hazlitt. This is an out-of-copyright work that you can get free of cost (just search for the pdf version of the book in Google). It’s a brilliantly written, lucid book that explores and debunks the most common fallacies in Economics (you’ll find many of these fallacies in Curt’s posts).

          • Curt Welch says:

            Shaker,

            “your instincts about the topic are almost entirely correct.”

            In fact, that are almost entirely wrong.

            The problem with economics, is that it’s very complex, and that there are many factors at play for every event that happens, like a recession.

            If you make the error of assuming your instincts are right, and then go look for supporting evidence, you will ALWAYS FIND IT in economics. This is the error the conservatives of the world make. They are by their nature, closed minded people. Once they decided something is true, they will do everything in their power, to justify their belief, rather than change. That’s whey they have been come to be called conservative – their like to _conserve_ their beliefs.

            Nothing irritates a conservative, more than having to change. Not following well established rules, drives them up a wall. Not sticking to a belief, drives them up a wall. They see people who fail to follow social traditions as weak, and undisciplined. Just because that’s how their mind works.

            Conservatives don’t do good science. They are the worlds WORST scientists. Scientists have to be open minded, and able to accept change, when new data suggests an old idea could be wrong. This is why higher education tends to be filled with highly liberal thinkers.

            Conservatives do war very well. Nothing works better in an army, than someone willing to follow the rules – which is why the military is highly conservative. You can’t win wars, by second guessing every decision your leader makes.

            The conservatives in the US, tends to be filled with people that like the American dream of independence – to not be “controlled” by higher unjust forces – like governments. America was founded on the idea of escaping authoritarian rule in Europe and it remains a very strong thread in the US culture – especially in the “don’t like to change” conservative side of the society.

            So, when it comes to politics, thoughts with conservative types of minds, hell bent on the “righteousness” of individual freedom and liberty (aka doing whatever the fuck you want and not having a higher force like government, tell you not to do it), will always blame all economic problems on “not enough liberty”.

            And when they do looking at the complexities of economics, they cherry pick the data that supports their beliefs, while rejecting as insignificant all the data that says otherwise. And in following this erroneous process, they end up creating self fulfilling prophecies that make them believe even stronger that their initial “instinct” was right.

            That is exactly what Sumantra Roy, and his “expert books” are all about. They are nothing more than rationalizations of his instincts – of what he WANTS to believe is true.

            It’s also clear that you lean towards some of that same “wanting”. So it’s possible you will get sucked into his thinking for the same reason he’s gotten sucked into that line of thought.

            He wants to believe that if government just got out of the way, everything should be as it should be! He doesn’t even GIVE A SHIT how it will turn out, because all he really wants, is to get government out of his life – so he can do whatever the fuck he wants to do.

            And by “getting government out of his life” what he’s really saying, is that he doesn’t give a shit about the other people in the world thats will suffer when he does whatever he wants to do. Being able to NOT CARE about them, is what is most important to him, and most im portant to every economic argument he has made here. He will call this desire to not care about others “liberty” and “freedom” to try and give it a sugar coating that tastes sweet in a debate. But the bottom line, is that what he really means, is that he morally has not desire to help others, or to change anything about his life, in order to help others. He wants a world where everyone takes care of themselves, and if, in that, some make billions, and other become homeless, then “that is just the way it was meant to be”.

            Sumanta Roy and I will never agree on the finer points of economics, because we have fundamentally different beliefs at our core. I don’t believe I have the moral right, to ignore the needs of other humans, and Sumantra Roy doesn’t believe he has the moral obligation, to serve the needs of others.

            You Shaker, are free to pick the morals by which you think your life, and your society, should be based on.

      • Curt Welch says:

        “That problem however can be easily solved by our elite entrepreneur simply using his robot teachers to train the unemployed on how to build robots”

        Ha ha ha. In other words, the problem of wealth accumulating at the top will be “solved” by the “good will” of a few bright people. You are so NAIVE.

        Knowing how to build a tractor, does not allow an out of work farm hand to make himself a living. It takes more than knowing how to build a tractor to compete against the mega corporations that have taken over farming and put the old farm hand out of work.

        And likewise, knowing how to build a robot, will not help an ex minimum wage Walmart employee , make a living, by competing against a fully automated Walmart, with the one homemade robot he built in his garage. The Waltons will own millions of robots, millions of stores, and have the supply chain all nicely locked up so that one guy, with one robot, won’t be able to make a living competing against the mega corporations and their private owners that will dominate the economy.

        The economy will become dominated by private mega corporations with tons and tons of advanced technology – but little to no human workers.

        It’s not “one robot” these unemployed workers need to compete against, it’s the entire mega-corporation the workers are competing against and that is not a battle individuals can win by getting a “free education” on building robots.

        And of course, lots of the tech that gives these mega automated corporations an economic advantage, will be closely held trade secrets that simply won’t leak out to the public on its own.

        Can an unemployed worker today compete against the McDonald’s and WalMarts of today? Do you think a few WalMart workers could just open a store next door to WalMart and manage to survive? And you tihnk it will be easier, in the future, when WalMart has replaced it’s workers with robots, for the millions of unemployed ex-Wal-mart workers to all build themselves a robot, and start a business to compete against this super automated WalMart of the future?

        So you plan, for all these millions of ex Walmart Workers, is to take free online courses on how to build a robot, and that will solve everything for them?

        I repeat, you are SO NAIVE.

        • shaker says:

          Kurt, i hate to say this, but your thesis makes no sense at all. And on top of that you are very arrogant about your views, which makes it worse. You create “wild” arguments like a man taking over the entire XYZ industry. that has NEVER happened in the history of man, nor will it happen in the future. Many have tried to “control” the system. they always lose. The system is far to complicated to control, and it only continues to get more complicated, and it continues to change at an exponential rate.

          it’s one thing to try to monopolize cattle in the 1800′s. its another thing to monopolize software in the 21st century. Only a fool would try doing so.

          Machines are machines. Whether is be a tractor or a super robot. Machines will continue to replace humans, and humans will always find something to do.

          You keep saying “people wont earn enough”. What you don’t realize is that people will be able to buy more with less money in the future. All goods will be cheaper. And i am fairly confident that Energy, Transportation, Education, Communication and many other goods will be nearly FREE.

          15 years from now we might all get free rides everywhere, so long as we watch a few commercials while sitting in automated cars.

          The robot industry will be no different that todays computer industry: there will be some big players MS, Goog, Apl, FB, Intl, etc. However, there will also be 10K small companies that employ millions.

          Your hypothetical argument about one person/entity buying up “all the machine” is absurd my friend. Intel powers all our computers, they are a monopoly, and yet they arent even as powerful as the many companies that would shut down with out their microchips.

          Google will buy a million robots, just like they now buy a millions servers
          Walmart will buy 10K robots just like they now buy 10K servers.
          I will buy 1 robot, just like i buy 1 Server.

          We will all continue to earn a living.

          Walmart will eventually replace all its workers with robots. So what? It will drive down the price of their goods, and we will all save money. That saving will be used in other parts of the economy. That’s how its always been. We are not going to “eat” or “burn” our saving.

          • Chris F says:

            Shaker, re your comment “What you don’t realize is that people will be able to buy more with less money in the future.” I’m pretty sure that Curt understands this point. But the problem is that the price of goods won’t fall to zero, even when the labor is free – it’ll only fall to match the costs of the energy and raw materials that goes into them.

            So we’ll have products in the stores that are cheaper than they are today, but not free. At the same time, we’ll have literally billions of people worldwide who cannot find work at any wage because they’re competing against free machine labor. Your core argument seems to be that humans will always be able to find things to do that machines can’t, because of our unique creativity/imagination or some other quality. But I don’t agree – the machines are doubling in capability every few years, and yet we humans are standing absolutely still. It’s inevitable that, at some point, machines will be able to do every single thing that a human can.

            Ultimately, it’s no good owning an army of super-robots if you don’t have access to land, patents, raw materials and energy. Controlling access to those resources will ultimately determine the “winners” and “losers” in tomorrow’s society. But I’m afraid anyone who plans to make a living using their hands or brain is in for a very nasty shock….

          • Curt Welch says:

            Yes, I agree 100% with what Chris just wrote.

            My talk about “one man controlling it all” is just confusing you shaker.

            “You keep saying “people wont earn enough”. What you don’t realize is that people will be able to buy more with less money in the future.”

            I fully realize that. But what you don’t realize, and Chris does understand, is that for MOST people, wages will drop faster than prices of consumer goods. So those attempting to work for a living (attempting to “find something to do”), will at some point, not be able to make enough to even pay for the cheap food.

            The only way to make real money in the not too distant future, is by investing wisely, not by “working”. But when the economy becomes a game of who’s the best investor, most people will lose badly. And once you lose, you are out of the game totally, because without a Basic Income, or other type of free handout from the rich, you won’t have any more chips to play the game with and the rich will just tell their bouncers to send you to the curb.

            There’s a way to get kicked out of the game, but no way to get back into it, so over time, the number of players will keep declining. It’s an unstable system that will drive most of humanity to poverty, if we don’t add some form of forced sharing of the wealth of the game. If the winners are force to share 10% of their winnings with all the other players, then we have a stable game, and everyone gets to keep playing, and eating, even if we still have super rich winners, and supper poor losers (but at least the poor get to eat and get to play).

            If we don’t add the forced sharing rule, the poor starve and are sent to jail.

            We are already playing this game, and we already have lots of forced sharing rules, with our current welfare systems.

            But as automation advances, the game is getting harder and harder for the average person to “win”.

            The conservative right in the US is doing everything in their power to remove or reduce the forced sharing rules which, if they succeed, only forces the game to fall apart faster. They are doing it for good reasons – because they believe the forced sharing rules are the _cause_ of the problems, not the solution, but they are dead wrong. If they succeed, they will find out just how wrong they are (but being conservatives – it will be hard for them to even recognize they were wrong when the world collapse around them, because conservatives have a really hard problem accepting that something they believe in could be wrong, so they will find some rationalization that allows them to blame it on something else).

        • shaker says:

          HI Curt,

          this wasnt a topic about lib vs con. i am highly liberal in most of my views. I actually think the “redistribution” of wealth is a good things. I think “winner take all” is not good for economics. I don’t think brinn and page wouldnt have invented google had they only been able to keep 50% of their earnings.

          that being said, this is about robots taking all our jobs. i pointed out in a post below that your thoughts are WRONG because you don’t assign a DOLLAR VALUE to robots. Until you can show me how robots will drive humans to poverty/anguish/despair by using dollar values i will continue to think of your views as “sci-fi” not economics.

          Your tale of the “rich taking over” sounds good on paper. It doesnt add up when you plug in any kinds of numbers.

          here are things that you NEVER REFUTE when you post:

          - cost of hypothetical super machine
          - why can we all buy super machines?
          - aren’t there going to be 100′s of millions of job building, selling, maintaining, managing, powering the super machines just as there are with today’s tech industry?

          you “world of despair” only makes sense if machines are FREE and if only the “RICH” are allowed to own them. Yes, if we lived in that world everything you say is true, but that’s like saying we could live in a world where ONLY Chinese men ages 20-40 are allowed to own slaves. yes, in that case chinese men ages 20-40 would have a competitive advantage over everyone who is not = to them.

          Can that type of world exist? Sure. Is it likely. Prob not.

          So long as we live in the current world, where any one is free to “own” property and we all play by the same rules, then your world where a few people own robots and the rest suffer will NEVER happen. Robots are no different that smart phone, laptops and servers. Eventually, everyone will own them. They have a built in COST; therefore, so long as you sell “YOUR LABOR” for less than the cost of the super robot you will have a job.

          That is basic economics.

          this is what i wrote below. please refute it.

          chris wrote:
          “So we’ll have products in the stores that are cheaper than they are today, but not free. At the same time, we’ll have literally billions of people worldwide who cannot find work at any wage because they’re competing against free machine labor.”

          How do the machines become FREE? They don’t. That is what you guys always miss in your argument. Machines have a cost. They are not FREE. If they are free then why cant i own 1 million machines? Why can’t i buy land in Arkansas for $1 an acre and live there with my free machines? At the very least i will live like people in the 1800′s except i will have FREE machines to do all my daily work. Why can’t i take my 1 million FREE machines and open up a chain of McMachine hamburger restaurants?

          The only thing machines will do is drive down the COST OF LABOR. You need to think of this way because it is the only way you should be thinking about it.

          Cost of Super Machine:
          If $200 hourly then everyone who earns MORE THAN $200 gets replaced
          this would mean that doctors, lawyers, bankers, (people who earn more than $200 per hour) get replaced by machines. It means that the cost of surgeries, legal work, investments, etc goes down. WE (THE AVERAGE JOE) wins big time as we get more for less. We use our savings and buy new/more goods. The economy gets better as wealth is NATURALLY DISTRIBUTED due to a CAP on high end labor costs. Dare i say it: THE POOR AND MIDDLE CLASS GET RICHER. THE RICH GET POORER. They can no longer sell their services for more than $200 hourly.

          If $100 hourly then everyone who earns MORE THAN $100 gets replaced.
          Same scenario as above. Think of all the people than make more than $100.

          If $50 hourly then everyone who earns MORE THAN $50 gets replaced.
          Same scenario as above

          If $10 hourly then everyone who earns MORE THAN $10 gets replaced.
          Now the machines are EFFECTING THE AVERAGE JOE. But who cares? no one on planet earth is earning more than $10 dollars an hour. The only people who are earning more are PEOPLE WHO OWN CAPITOL. However, with labors costs this low (Lawyer, Accountant, Programmer, Doctors, etc for $10 an hour A VAST MAJORITY of humans can now START THEIR OWN BUSINESSES.) I can open up a surgery center and have super robot orthopedic surgeons at $10 hourly. The competition becomes very steep and prices all over the planet for EVERY SINGLE GOOD/SERVICE have dropped dramatically. Unless you invent something new your profits in any industry will drop dramatically.

          If $2 hourly then everyone who earns MORE THAN $2 gets replaced.
          All a human has to do is work for LESS THAN $2 hourly. However, $2 hourly in a world where the highest labor costs $2 is still a GREAT WAGE. everything in society (orthopedic surgeon, physics professors, Investment Banker) only cost $2 per hour (replaced by super machines) so you’ll get a lot more bang for you buck. YOU WIN. I repeat: YOU WIN.

          You guys need to seriously examine your argument. I am sorry to say but it is FUNDAMENTALLY FLAWED.

          You need to assign per hour labor value to the machines. Only then will you see how “super machines” would effect society. You cannot say “super machines” will be used to replace walmart workers, but then give no reason as to why they cannot be used to replace orthopedic surgeons, singers, actors, etc which would bring down the COST OF ALL GOODS.

          The only other argument you can make is that the machines will be “IQ BASED”. They will have an IQ of 150, 125, 100, 75, etc. That they will be used to replace people with IQ’s less than XYZ. this argument will also be flawed. Why? Because even the DUMBEST of humans (unless mentally handicap) are typically GREAT at SEVERAL THINGS. They might not know math like a genius but they can Cook, Clean, Paint, etc better than any genius. This means that if you had a machine of 90 IQ it would replace all humans of 90IQ. however, those humans could then find something that they are GREAT AT and compete against the machines.

          • Curt Welch says:

            Shaker says:

            ” i pointed out in a post below that your thoughts are WRONG because you don’t assign a DOLLAR VALUE to robots.”

            Every argument I’ve made included the idea that robots cost money to make. So I really have no clue why you are saying this. I don’t know how to respond to something I’ve never said.

            If was Chris F that wrote: “At the same time, we’ll have literally billions of people worldwide who cannot find work at any wage because they’re competing against free machine labor. ”

            And that is what prompted you to say “we” are not including the cost of the machines.

            Chris’s concept is right, but his wording just got you confused. Robot labor is never free. But it will reach a point where it’s cost is so cheap, that a human trying to compete with it, will not be able to make enough money to even feed themselves, let alone have some reasonable standard of living. Chris understands this Shaker.

            “The only thing machines will do is drive down the COST OF LABOR. You need to think of this way because it is the only way you should be thinking about it.”

            That’s the only way I’ve ever been thinking about.

            Let me state again, what’s happening. The cost any produce we want to buy, can be thought of as a combination of it’s labor cost, and it’s non-labor costs, like raw material, and energy, and land. Basically, everything that was used, or consumed to make the item, other than the human labor costs.

            When machines replace human labor, then the cost of the produce is the cost of the MACHINE’S LABOR, plus all the other costs.

            Human labor is very scarce. If a business needs 100,000 engineers to start a project to build a factory on Mars, it’s nearly impossible to get the labor to do this. Most the humans that have the skills to do these jobs, are already employed. So to get them off their current job, to work on this new jobs, would require a large raise in salaries – it would make this project very expensive.

            But with robots, if you already have one robot with the skills needed, you can clone the robot, for only the cost of the hardware to build a new one. The robots might be $20,000 each to build new ones. Compare that to what it would take in time and money, to grow another 10,000 humans, and train them all the be engineers – or whatever workers are needed.

            Robot labor will be very cheap compared to human labor – so cheap, that most the costs, of any product, will not be the labor costs at all, but instead, the raw material and energy costs.

            So, with these robots doing all the work, labor costs get driven down to be only a small percentage of the total GDP. In this market, humans can work, only if they are willing to work for less than what the robots work. Which, in today’s money, could be $1 a day. If burgers still cost $2, working for $1 a day is not exactly going to feed someone. That’s because the cost of the burger is no longer the cost of the labor, but instead, the cost of all the natural resources used to produce it.

            People won’t be able to make enough money by “working” in this new future. The only way to make money, will be by OWNING resources, like land, energy sources, factories, robots, businesses, etc.

            “If $200 hourly then everyone who earns MORE THAN $200 gets replaced
            this would mean that doctors, lawyers, bankers, (people who earn more than $200 per hour) get replaced by machines. ”

            Yes, that’s true. But not very realistic. Becuase machines won’t be just one type. They will come in all different sizes and times as they do today. And though a machine to replace a doctor might cost $200 an hour, a machine to replace a bank teller – aka an ATM, does not cost $200 an hour.

            So who will get replaced first will be a complex question of how easy their job is to automate, and how cheap the hardware is to do it. But your basic tihnking is of course correct, when the machine costs less than the human, the human will only be able to keep working if they are willing to work for less than the machine. But often, the machine has other advantages than just being cheaper – like the fact it can work 24 hours a day without needing sleep, or can do the work much faster, or with far less errors, so the human, being a worse option, will not only have to work at the same rate, but offten, have to accept a rate of pay way below the cost of the machine, before the business will be willing to hire them.

            Businesses can use computers to do book keeping, and the computer might cost $1 an hour to operate. But a book keeper, adding accounts by hand, is so damn slow, and so error prone, that it would take 100 book keepers, to equal the work of that one computer working for $1 an hour. So if you want to get paid TODAY to be a book keeper, you better be willing to work for about 1 cent an hour.

            So you understand why there is (almost) no market for bookkeepers that keep books on paper by hand anymore right? It’s because the machine, has driven the cost of THAT labor, down to about 1 cent an hour, and no human can live off of 1 cent an hour. Humans can do much better for themselves, by digging food out of dumpsters.

            This same effect, is going to happen to ALL jobs in time.

            Humans don’t just get replaced by machines, they see their waves driven downward by machines long before they get replaced. Cashiers used to have to do things like memorize the price of goods, and punch in prices into the cash register. Now stores have bar codes on everything, and the cashier only needs to know how to operate the scanner. This makes it easier and faster to train new cashiers, which means the workers have less bargening powers to get the company to pay them more, so the wage of the cashier drops, just because some of the work, is now done by the computer.

            “It means that the cost of surgeries, legal work, investments, etc goes down. WE (THE AVERAGE JOE) wins big time as we get more for less. We use our savings and buy new/more goods. The economy gets better as wealth is NATURALLY DISTRIBUTED due to a CAP on high end labor costs. ”

            Well, all your logic is based on the idea that the high end jobs will be the first to go but that’s just nonsense. The EASY jobs to automate will be the first to go, and the easy jobs to automate, are often the low wages jobs. Which flips our argument upside down – making it the low wage workers to be first to lose their jobs, leaving the high wage workers the ones that get to keep their jobs.

            But in fact, it’s not that simple either, and jobs all across the board are being automated. Some higher end jobs, like salesmen are being automated by web sites that do all the sales, and some lower wage jobs, like janitors will be safe for a while longer.

            “If $2 hourly then everyone who earns MORE THAN $2 gets replaced.
            All a human has to do is work for LESS THAN $2 hourly. However, $2 hourly in a world where the highest labor costs $2 is still a GREAT WAGE. everything in society (orthopedic surgeon, physics professors, Investment Banker) only cost $2 per hour (replaced by super machines) so you’ll get a lot more bang for you buck. YOU WIN. I repeat: YOU WIN.”

            Ok, that above, is where you are are failing to grasp how the economy works.

            The costs of products are NOT based ONLY on labor costs.

            lets assume you are right, and we have machines that cost $2 an hour, and are just as good as humans, but NO BETTER than humans, so any human can still find work if they want it for $2 an hour as well. (but if the machines can work twice as fast as humans, humans and cost $2 an hour, humans would be forced to work for $1 an hour or less – which is more accurate of what really happens – but I’ll ignore that).

            Now, labor costs everywhere are $2 an hour. Of course, if we still have minimum wage laws at $7 an hour, no human could be employed legally for $2 an hour. So we have to remove minimum wage laws. So lets pretend we do that as well.

            But, the cost of a product, like a hamburger, is not just the labor costs all through the supply chain from cow and wheat to burger, but also the LAND and ENERGY costs. And once labor becomes $2 an hour, most the cost of the burger, will become the land and energy cost, not the human labor cost.

            So the cost of the burger will NOT drop as far as the labor costs drop. Human’s won’t be able to buy burgers, just because they work. They will need to own land and energy sources as well, and get rents on what they own, to be able to afford the burgers.

            But MOST people, who’s only real income, is from wages, don’t own oil wells, and farms and the like, and as such, won’t have the rents needed to buy themselves a burger.

            Rents can also be understood as interest income – they are ONE AND THE SAME THING. The cost of money in an economy, is directly tired to the average expected rent income from all investments in the economy – from every investment that can be easily sold and bought. We know this is true, because if an investment is producing an income greater than the current prevailing interest rates, investors will borrow money at the interest rate, and buy the investment which is producing a return greater than the current rate – that reduces the money supply (by 1/5 of the size of the loan given a 20% reserve requirement in the banking system), driving interest rates up, and taking one more investment opportunity out of the market. The steady state – the equilibrium point is reached when all current investment opportunities yield less than the current interest rate.

            So, all income can be thought of as either wage income, or interest/investment income (aka rents). When robots drive wage rates down through the floor, the price of all goods and services, do not go down with them, they go down to the prevailing INTEREST rates but no further.

            So all the land used to produce burgers, still has a real cost. And whoever owns the land, expects to be paid for the use of his land, to raise cows, and grow wheat. He expects to be paid a rent, that’s equal to the current interest rates of the cost of the land. Or inversely, the current value of the land, is equal to the rent that’s paid, relative to the current interest rates.

            So all the land in the world, has a value in the economy, relative to how useful the land is to people. People like burgers, and must pay for the land, used to make the burgers. So the price of bugers, becomes the cost of the land to produce them. So if 1 acre of land, can yield 1,000 burgers a year, and such land costs $1000 an acre, and the interest rate is 5% per year, than that land’s rent needs to be $50 a year, meaning burgers sell for $50/1000 or 5 cents each.

            So even though labor costs are driven down to 1 cent a day, burgers can still cost 5 cents each.

            Now, if everyone on the planet, owns a fair share of the land, and collects rent from it’s use, then everyone will have a decent share of the total income, and all will be good.

            But ownership never works that way. Walmart is a private company owned by a small handful of people in the Walton family. The company owns all it’s assets, including all the land the the stores sit on (assuming they are not leased), the buildings, the store hardware, etc etc. So all the assets the Walmart company owns, is really owned, by 10 people in the Walton family. None of the millions of people that work at Walmart, own any of that land.

            So the Walton family is not paid a wage for working, they are paid billions of dollars, just because they own all that stuff in the world.

            The Walton family is the wealthiest family in the world, valued at 100+ billion:

            http://en.wikipedia.org/wiki/Walton_family

            They collect “rents” on what they own, that is, they expect the stuff they own, to return at least, the prevailing interest rates – in fact, the value of what they own, is SET based on prevailing interest rates, relative to the income they receive from Walmart. So if interest rates are 1%, and they own 100 billion, they expect to get 1 billion income every year – not as a wage, but as a rent, from stuff they own.

            When robots drive wages down to zero, the Walton’s STILL get $1 billion a year income, for not working, because of what they own. The Waltons still have lots of money to buy burgers, and boats, and planes, and vacation homes. But the milion people that got laid off from Walmart when Walmart bought the robots (that the Waltons would then own), get no income at all.

            None of them happen to have a 100 billion in savings to live off of like the Walton’s. So what do they do? Starve to death.

            So as robots replace people, our income will be based not on how many hours we work, but by how much of the wealth in the world we each own. So how is wealth distributed currently?

            Look at this:|

            http://en.wikipedia.org/wiki/File:U.S._Distribution_of_Wealth,_2007.jpg

            In 2007, in the US, the top 40% of the population, owns 96% of the wealth. The bottom 60% only owns 4.2%. When robots replace humans, this ownership is what people will then live off of.

            The bottom 60% will then only be getting, 4.3% of the GDP each year – aka the interest payments on their wealth.

            But what happens, for all the people in that group that have no savings and no property? They get no income, and they have nothing to sell, and they can’t work anymore, they just starve to death – well, in fact they turn to crime for a living or are homeless and living off what scraps they can find for free.

            But an even larger percentage of that 60% will have some savings. But not enough so that they can live off the interest – so they will be forced to SELL what they have to live – they will spend their savings, and sell their home, just to have enough money to buy food. Some might have enough to survive until they die. But a large chunk of people will just run out of money, and become homeless.

            Only the top wealthest will have enough money, to allow them to live a nice life,. And in addition to a nice life, they will have lots of extra money. And they will use that extra money, to buy up the homes, and the land, and the assets of the people who are forced to sell everything they own. So they will gain more assets, which will produce even more income for them.

            The result will be some small percentage of the population will be like the Walton’s and own tons of land and natural resources, and assets that produce huge rents for them, while the bulk of society has been driven to poverty and are homeless.

            This is ALREADY HAPPENING. It’s why welath keeps moving to the top in society. Wages are being slowly reduced, while rents raise.

            The stock market is a market of assets that people own that produce income. The stock market right now is soaring, because “owning stuff” is where people are making money today. Wages however continue to DROP while “owning stuff” SOARS.

            http://www.huffingtonpost.com/2011/10/20/us-incomes-falling-as-optimism-reaches-10-year-low_n_1022118.html

            But inequality (aka who owns the stuff) keep rising (in the US).

            http://en.wikipedia.org/wiki/Wealth_inequality_in_the_United_States

            ” However, after the Great Recession which started in 2007, the share of total wealth owned by the top 1% of the population grew from 34.6% to 37.1%, and that owned by the top 20% of Americans grew from 85% to 87.7%. The Great Recession also caused a drop of 36.1% in median household wealth but a drop of only 11.1% for the top 1%, further widening the gap between the top 1% and the bottom 99%.[1][9][10]”

            The closer we get to the time, where the only income people will have, is based on their investment income, the more see the only a few end up owning everything.

            The ultimate underlying force allowing this shift of who owns all the “stuff” in the world, is technology.

            If we don’t offset this, automation will only cause most people to become homeless, nd a few to become super wealthy. But most countries other than the US are doing a fair job of offsetting this, by forcing the wealthy, to share their wealth, through some form of taxation and sharing of services, or sharing of money.

            Without forced sharing created by the government (aka socialism in some form), automation and free trade would lead to most people being homeless, and a small minority being super rich like the Walton’s.

            But by adding forced sharing of some percentage of the wealth, no one is homeless, and everyone gets to benefit to some level, from the massive wealth created by the automation.

            If that forced sharing was at the 50% level, then the walton’s would have to make do with 500 million a year of income, instead of 1 billion a year – oh my god, they would have to figure out how to “live” on only a million dollars a day of income. At that level, what would be their motivation to keep Walmart open? (/sarcasm)

            I’ve repeated all this information about 10 times now. Do you still not understand what’s happening here?

            When robots drive wages costs to near zero, income will come from interest on savings and income on investments – on what people own. If you don’t own enough, so that you can live on your income, you will, in the end, have to spend all your savings, and will become homeless. Right now, MOST people in the US don’t have enough savings and investments, to be able to stop working, and live a good life on the income of their savings.

            Most people in the US, expect to make enough from wages, to retire on, so they only save enough, so they can have money to spend at retirement, and a little money to pass to the kids to get them started. But as wages drop from automation, it’s going to catch MOST people off guard, and they won’t own enough to survive. Even if they all believed they needed to switch to a highly frugal lifestyle today, and save as much as they could, they would not have enough to compete with the Walton’s of the world, once full automation was here – because most people don’t have a clue what’s coming – just like you Shaker, have not yet understood the “simple” economics I’ve tried to explain about 10 times here.

            It’s going to catch most people off guard. But the fix is SIMPLE. A basic income guarantee solves it all and can be “turned on” in an instant, once people understand it’s needed. It’s just a matter of waiting to see how long it takes people to understand it’s needed and why.

  • Tan Nguyen says:

    You didn’t even attempt to make a prediction or even suggestion possible outcomes of the situation. Come on !

    • shaker says:

      this is a reply to chris and curt:

      chris wrote:
      “So we’ll have products in the stores that are cheaper than they are today, but not free. At the same time, we’ll have literally billions of people worldwide who cannot find work at any wage because they’re competing against free machine labor.”

      How do the machines become FREE? They don’t. That is what you guys always miss in your argument. Machines have a cost. They are not FREE. If they are free then why cant i own 1 million machines? Why can’t i buy land in Arkansas for $1 an acre and live there with my free machines? At the very least i will live like people in the 1800′s except i will have FREE machines to do all my daily work. Why can’t i take my 1 million FREE machines and open up a chain of McMachine hamburger restaurants?

      The only thing machines will do is drive down the COST OF LABOR. You need to think of this way because it is the only way you should be thinking about it.

      Cost of Super Machine:
      If $200 hourly then everyone who earns MORE THAN $200 gets replaced
      this would mean that doctors, lawyers, bankers, (people who earn more than $200 per hour) get replaced by machines. It means that the cost of surgeries, legal work, investments, etc goes down. WE (THE AVERAGE JOE) wins big time as we get more for less. We use our savings and buy new/more goods. The economy gets better as wealth is NATURALLY DISTRIBUTED due to a CAP on high end labor costs. Dare i say it: THE POOR AND MIDDLE CLASS GET RICHER. THE RICH GET POORER. They can no longer sell their services for more than $200 hourly.

      If $100 hourly then everyone who earns MORE THAN $100 gets replaced.
      Same scenario as above. Think of all the people than make more than $100.

      If $50 hourly then everyone who earns MORE THAN $50 gets replaced.
      Same scenario as above

      If $10 hourly then everyone who earns MORE THAN $10 gets replaced.
      Now the machines are EFFECTING THE AVERAGE JOE. But who cares? no one on planet earth is earning more than $10 dollars an hour. The only people who are earning more are PEOPLE WHO OWN CAPITOL. However, with labors costs this low (Lawyer, Accountant, Programmer, Doctors, etc for $10 an hour A VAST MAJORITY of humans can now START THEIR OWN BUSINESSES.) The competition becomes very steep and prices all over the planet for EVERY SINGLE GOOD/SERVICE have dropped dramatically.

      If $2 hourly then everyone who earns MORE THAN $2 gets replaced.
      All a human has to do is work for LESS THAN $2 hourly. However, $2 hourly in a world where the highest labor costs $2 is still a GREAT WAGE. everything in society (orthopedic surgeon, physics professors, Investment Banker) only cost $2 per hour (replaced by super machines) so you’ll get a lot more bang for you buck. YOU WIN. I repeat: YOU WIN.

      You guys need to seriously examine your argument. I am sorry to say but it is FUNDAMENTALLY FLAWED.

      You need to assign per hour labor value to the machines. Only then will you see how “super machines” would effect society. You cannot say “super machines” will be used to replace walmart workers, but then give no reason as to why they cannot be used to replace orthopedic surgeons, singers, actors, etc which would bring down the COST OF ALL GOODS.

      The only other argument you can make is that the machines will be “IQ BASED”. They will have an IQ of 150, 125, 100, 75, etc. That they will be used to replace people with IQ’s less than XYZ. this argument will also be flawed. Why? Because even the DUMBEST of humans (unless mentally handicap) are typically GREAT at SEVERAL THINGS. They might not know math like a genius but they can Cook, Clean, Paint, etc better than any genius. This means that if you had a machine of 90 IQ it would replace all humans of 90IQ. however, those humans could then find something that they are GREAT AT and compete against the machines.

      peace my brother. go to sleep better at night. your machines WILL take your jobs, and you should be HAPPY that they eventually will.

      • Curt Welch says:

        Shaker, you miss all the important factors that drive inequality.

        You fixate on how machines will lower costs and raise effective wealth – which is all true – but you fail to show any understanding of how the wealth is shared between people.

        Money is constantly flowing in a circle in the economy. A consumer spends a dollar, the dollar goes to the business that provided the good, and then the business, uses the dollar, to pay for two types of things. Labor, and Capital. Or, as others in this thread think it should be called, labor, and land. That means, some of the money, goes to pay the workers, and the rest, goes to pay for the raw materials and resources used by the business. And the money that goes to pay for the resources, ends up in the hands of the people that OWN the resource.

        So people receive money in this circle of cash flows in one of two ways. They receive it because they sold their labor to someone (worked for a wage), or because they owned something valuable and received “rent” money.

        The actual dollar value assigned to all the things bought, is controlled by the money supply – by how much money is flowing in this circle, relative to how many things pf value are being produced. The actual dollar value of a service is totally relevant. The only thing that is important is the relative value – the fact that one thing cost 10 times more than another. Inflation and deflation, in general, change the price of everything, without effecting the relative costs.

        Human labor is one of the goods and services sold and paid for in the economy. People that sell their labor, don’t care what they get paid in absolute sense, they only care what they can trade those dollars for. If one hour of work, translates to a one meal, that’s what’s important to them. If they can get 10 meals for one hour of work, that’s better for them.

        As we add automation into the system, human labor is devalued. But the value of the raw materials DO NOT CHANGE. An acre of land, still costs the same. A KW of power still costs the same. It still takes the same number of acres of land, to grow the wheat to make a bun for a burger. It still takes the same amount of land, to operate the bakery that turns wheat, into bread. It still takes the same amount of land, to put the McDonalds on. These costs do not go down.

        But in the flow of money, as automation replaces humans, more of the money flowing in the circle, goes to the rest collectors – the people that own the land. The people that own the factories. The people that own the McDonald’s stores.

        So, when McDonald’s takes in $5,000 in a day retail sales, $800 might have gone to the people that worked there. The rest, went to cover the other business expenses many of which were just “rents” aka money that went to the people that owned the store, or owned the resources that produced the meat and bread. But when automation replaces the workers, and we have automation that costs 1/10 of the workers, then $80 goes to cover the cost of the machines instead of $800 to the workers.

        Burgers are now a little cheaper, but not much, because most the money was already going to rent holders, and not to human workers to start with. So not the rent holders are making more money. The guy that owns the store, got a loan to buy the $500K in automation, and now the money is going to pay off that loan, aka, to pay for the automation, instead of to pay for the workers.

        So burgers are a little cheaper, but the flow of money, is all going to the rent holders – the guy that paid for the machines – and not to the hourly workers. So how do the guys that used to work at McDonald’s get money to buy the $4 burgers (that used to cost $5) when they have no job?

        In order for the laid off workers to have money, they have to become rend seekers themselves. They have to go buy themselves their own McDonalds or some other investment.

        But if interest rates are 5%, that means the average return on investments in about 5%. So if you make invest $1000, it can be expected to produce income in the range of $50 a year.

        So we started with a McDonalds with 10 workers being paid $10 an hour. They got replaced by expensive machines and the money that used to go to pay the workers, is not going to pay for the machine. And since the machine was made by other machines, the money is all just going to pay the cost of the raw materials and energy to produce and run these machines.

        So in order for these 10 workers, to buy into this rent collection game, then need enough investments, to replace their old wages – which in my example, was $20K a year for 10 workers, or $200K total. With 5% return, that means they need to invest 4 million so they can make a $200K return to live off of, to replace their old wages.

        Where, ON EARTH, do 10 laid off McDonald’s workers, find $4 MILION DOLLARS to invest in order to make up for what they were lost, when their job was automated?????

        These guys don’t have jobs. They were laid off due to automation. There are no other jobs to be had, because at this point, we are seeing massive layoffs in many different industries, and we have thousands of unemployed workers fighting over every minimum wage job that does open up.

        How do all these guys, laid off from their minimum wage jobs, find the money, to make the massive investments needed in their to replace their wage income, with investment income? Because in this new future, investment income will all there will be – no one will be able to sell their labor.

        And worse, those that have millions already invested, have a nice income to live off of – and enough extra income, to make more investments with. Everyone that has extra money, is fighting over the right to own the next great investment. Which drives the cost of all investment options up to their value that matches their expected return relative to all other investment options. So the people ahead of the investment games, are the ones with money, to buy more of the investments, and control even more of the wealth. Money ends up following money . If you don’t have lots of money to start with, you can’t stay in the game.

        This is the whole problem we are moving into – money and wealth distribution across society will be controlled by investment income, not by wage income. And investment income is a game where money follows money. Those with the most investments currently, are the ones most likely, to be able to buy more resources and gain a further lead in the game. If you don’t have enough income to cover basic living needs, food shelter and clothing, you will have no income left over to invest. And those that have more than enough to cover basic living needs will be the ones to have more income to invest, which means they take over more of the economy and get further ahead. Investment is not a “fair” game, like labor is. With the automation of labor, we are trying wealth from a game of working, to a game of investing, and massive numbers of people will end up losing the investing game while a small number of people win big.

        “You need to assign per hour labor value to the machines. ”

        I’ve always done that. To suggest I’ve not done that means you don’t understand the basic dynamics I’ve been talking about.

        “Because even the DUMBEST of humans (unless mentally handicap) are typically GREAT at SEVERAL THINGS. They might not know math like a genius but they can Cook, Clean, Paint, etc better than any genius. ”

        You are showing new clue what you are up against with these machines.

        The new machines that are coming will be able to learn just like humans learn. They can be taught by other humans, or by other machines. They can learn on their own, just like humans, by simply trial and error – by trying to do something and then figuring out how it works.

        But these machines will have on HUGE advantage over humans. Once you train one of them, you can clone their knowledge to other robots, in seconds, just by copying the software.

        So, lets say McDonald’s today, comes out with a new sandwich. What they have to do, it put together training materials, to teach their 1 million cooks, how to make this new sandwich. And 1 million cooks, have to spend however many hours it takes, to learn the new sandwich. McDonald’s may have to pay 100 million dollars, in training costs alone, just to introduce a new sandwich.

        But with robots doing the cooking, only one robot has to be trained to make the sandwich. And then, in one massive download that takes only a few minutes, all the robots around the world, now know how to make the sandwich. That saves McDonald’s 100 million dollars, because they are using AI robots, instead of humans, to do the cooking, and learning can be cloned by downloading with these machines.

        Once the machines drop to anywhere near the cost of humans, the humans will be replaced, and McDonald’s will never go back to using humans, who it must train one at at a time.

        The cooking robots might have 10 arms, and 10 eyes for example. One big brain, with enough power to do that. No set of 5 humans, can work we all together, as one robot, with 10 arms and 10 eyes controlled by a single brain that can multitask and do 10 tasks at once. And these robots can be trained back at master R&D kitchen, and then download the new information to the million cooking robots around the world.

        If one of these 10 armed 10 eyed cooking robots costs $100K and works 24x7x365 and translates, with energy and maintenance costs to say $200K a year to operate, which is $22 an hour, how does that compare to what a company would have to spend, to replace this machine with humans? You might need 6 cooks, and 1 supervisor to replace this robot. But you need 3 shifts of these work crews to keep working 24 hours a day like the robot. And one store manager to supervise it all. Or 22 people working full time jobs (80 hour work weeks), to replace this one robot, which costs $22 an hour. The robot doesn’t need health insurance, or a retirement plan. The robot will never sue the owners over some job discrimination issue. It will never ask for a vacation, or complain about it’s job.

        People don’t have a chance to compete against such machines in the job market. There will be thousands of specialised machines for different jobs, all that do things no humans could ever do. Every job, will have some specialized variation of the robots designed to do that specific job and no human will be able to compete with it.

        The only way to get income in this future, will be by what you own – by what you have invested in. And unless you own your own McDonald’s chain, you will have no money to invest, because most people won’t be able to find a job to give them money to invest with.

        Shaker, you keep talking as if everyone will have good paying work, that there will always be jobs for people – and that just won’t be the case. It’ s not even the case today where we have millions of people that want work, but who can’t find a job. It’s going to get much worse in the not to distant future.

        But to make the future a true utopia for everyone, instead of just for the 1%, only a small tweak needs to be added – a simple tweak where all those rent seekers, are forced to share a percentage of their rents with everyone.

        • Chris F says:

          You nailed it Curt – agree 100%.

          Shaker, I’ll definitely take your advice and think about my own arguments some more. I’ve been wrong plenty of times before, and maybe this is another of those times. But I’d urge you to do the same – I think Curt makes some excellent points, and there’s a growing number of professional economists who are arriving at broadly the same conclusions. I really hope your optimistic view of the future comes to pass – but recent statistics paint a pretty gloomy picture, and I fear it’s going to get a lot worse before it gets better.

          Thanks all for a very interesting discussion !

        • shaker says:

          Kurt,

          I appreciate your well thought out response. It is less sci-fi and more based in facts and numbers. However, you are again making critical errors in your logic which are leading you down a path of doom and gloom.

          Error 1: McDonalds argument.
          This is the Luddite fallacy in its purest form. You have read enough economics books to know this. When/If McDonalds replaces its labor force with cheap machines there can only be two outcomes:
          Outcome 1: Lower Prices for the general public
          Outcome 2: Increased Profits for McDonalds.

          Both outcomes lead to ECONOMIC GROWTH. This has always been the case when machines replace humans. The result of outcome one is more money in MY pocket. The result of outcome 2 is more money in McDonalds pockets. If McDonalds has more profits they then HAVE TO INVEST that money somewhere or it will be devalued on a yearly basis due to inflation.

          The result of either outcome will be NEW JOB CREATION somewhere in the economy. Either currently unemployed people will now get work, or in a perfect work the people who got fired at McDonalds will get jobs in “NEW” areas of the economy.

          Error 1A:
          You stated in your argument that McDonalds will develop robots. When did McDonalds get into the robotics business? McDonalds produces fast food. Saying they will develop robots is like saying they will develop more fuel efficient trucks, or better transistors to make their business more economically efficient.

          McDonalds will NEVER develop their own robots. A robotics company will. That same robotics company will sell those robots to any hamburger producer around the globe. That is the beauty of current economic system. No company controls their supply chain A-Z. You and I could buy these same robots and produce hamburgers, thus increasing OUR WEALTH and lowering the costs of hamburgers.

          Error 2:
          The topic is “will robots replace humans causing mass unemployment”. The topic is not, nor has it ever been, “will robots result in economic disparity/inequality”

          You are now changing the subject. I, nor you, can say that robots will create more income redistribution or lack thereof. I can make just as many arguments as to why robots will eventually lead to “wealth being spread out more” as you can make for “wealth being spread out less”

          There are many factors to wealth inequality.
          Born Rich (steve forbes)
          Born with an Advantage (Kobe Bryant, Lebron James, Steven Hawkings)
          Right Place Right Time (Mark Zuckerburg, Bill Gates)

          Whether we live in a world of robots or not these things will always occur – its called luck, or statistical anomalies.

          I can also make a case that robots will eliminate many advantages people have – thus reducing the advantages of luck/statistics. Currently, a good portion of our wealth disparity is due to education and location. An “online” world and a world of robots can dramatically lessen both these factors. You won’t have to live in the U.S. to sell to people in the U.S. we are already seeing what a “global” economy can do for people in far off lands. This will only increase, resulting in greater income distribution. Go ask people in india and china if the internet is good thing. Go look up alibab.com or freelancer.com. They are now global hubs of commerce. That is WEALTH DISTRIBUTION, not accumulation. Again, you pay far too much attention to the 1st world in your argument, and often neglect the entire system in order to prove your point.

          Education: I have stated this countless times in previous posts, but it is worth saying again. Those same “super robots” that McDonalds uses can be used to offer VERY INEXPENSIVE education throughout the globe. This will lead to LESS income disparity, not more

          Error 3: You state that technology/robots only results in “lower labor costs” and you state that “resources will continue to increase costs”
          I cannot believe that you would make such a statement. On a long enough timeline, the cost of resources drops to NEAR ZERO. It does not increase to infinity. We have UNLIMITED resources. We simply lack the knowledge to “tap into” them. To say that land, energy, and wheat costs will only go up is incorrect. We already produce 50X as much wheat on the same acre of lands as we did 100 years ago. Who is to say we won’t produce another 100X in the next 100 years?

          Solar will lead to energy costs dropping. It will lead to world where we grow produce underground – so more land and less food costs.

          Automated Cars will lead to less roads, no parking lots, greater urban sprawl – more accessible land

          Robots: Can probe the solar system for resources.

          We may eventually move to another planet or planets. Again, resources on a long enough time line LOSE value, they don’t gain value. We have INFINITE resources.

          Error #4: You are very blasé about the “owner of the machines”

          Your Quote: So burgers are a little cheaper, but the flow of money, is all going to the rent holders – the guy that paid for the machines – and not to the hourly workers. So how do the guys that used to work at McDonald’s get money to buy the $4 burgers (that used to cost $5) when they have no job?

          That one person who owns/supplies the machines is a COMPANY. It’s not an individual that is making machines using his magic fairy dust. Who is to say that that “ONE PERSON/COMPANY” will not employ MORE people than McDonalds?

          You need to understand this:
          The probability that Robot Company X will employ MORE people to build the robots that replace McDonald workers is EQUAL to the probability that Robot Company X will employ LESS people to build the robots that replace McDonald workers that make the hamburgers.

          So don’t just through your comment/quote out there like it is a fact. It is not a fact. It is “worst case scenario. The problem with most of your arguments is that you base everything on worst case scenarios. However, all your worst case scenarios cannot occur simultaneously. Some of your scenarios actually have very positive effects somewhere else, that you never point out, overlook or simply gloss over.

          Example: you cannot say that the costs of resources will go up and yet say that the costs of machines will stay the same. As energy goes up, so too does the costs of machines (they require energy). As the cost of materials go up then machines cost more, you need materials to build them.

          Error #6: Machines making Machines
          There is no such thing as Machines making Machines. There is such a thing as owners of Machine A using Machine A to produce Machine B for the Owner of Machine B. By not assigning ownership of these machines you overlook the fact that Multiple people are getting wealthier as more machine are produced.

          Your quote: Where, ON EARTH, do 10 laid off McDonald’s workers, find $4 MILION DOLLARS to invest in order to make up for what they were lost, when their job was automated????? These guys don’t have jobs. They were laid off due to automation. There are no other jobs to be had, because at this point, we are seeing massive layoffs in many different industries, and we have thousands of unemployed workers fighting over every minimum wage job that does open up.

          The companies that are producing robots now have to hire at a feverish pitch in order to build the robots that are being used to lay off workers. This is how the economy has been for the last 500 years. What is different about it? Those robots do not “magically” appear. And in every one of your arguments you make it seem as if they do. Google did not “magically” appear. 10’s of thousand of people work their. And million makes money using google. It’s like saying over the last 15 years software has replaced millions of workers and we are all now poor. Yes, but software companies have hired millions of workers.

          I stated once before, imagine your robots as nothing more than glorified cars. 1 in 5 Americans now works for a company that is directly or indirectly tied to the auto industry. Are you trying to tell me that ½ the humans will be replaced by robots and yet only a handful of people are going to work for this robot industry? Even you, the staunchest advocate of doom and gloom, cannot say this with a straight face. The robot industry of the future will be the auto and tech industry COMBINED. It will literally employ ½ the people on earth. We will in essence produce (design, sell, maintain,) the robots that are replacing us.

          The only argument that you can makes is that people might not be skilled enough to join this new industry – but we do have a pretty big welfare state.

          Again, the argument is not “will people who are laid off due to automation find jobs of equal value”. The argument is “will automation lead to any dramatic increase in unemployment”.

          If you want to make an argument that people who are replaced by robots at McDonalds will NEVER find the same work again, then congratulations. You have won. I agree. They will never find the same job at the same price ever again. But you havnt made an argument as to why they cannot work somewhere else, or why the overall economy is worse. And the problem is, you never will. Wealth is attributed to knowledge. And knowledge increases, it does not decrease. Every year humans compound their knowledge. We learn and pass knowledge to the next generation which in turn produced MORE using LESS.

          Unless you delete everyone’s brain, burn every book and clear every hard drive on planet earth simultaneously, we will continue to get richer. Our wealth is based on universal information and universal information is INFINITE. People who are poor lack the knowledge that lead to collection information. However, I have hope that with advanced education systems we will end up with a much more intelligent and skilled world. You cannot say that we are a more advanced species than we were just 25 years ago. There are more college grads today than ever before. The ability to obtain knowledge will only grow exponentially.

          I have never once stated that a basic income guarantee is a bad thing. I believe it is a good thing. However, I also believe that it will be rendered unnecessary by the hyper competitive economy of the future. The colliding of information results in “new combinations” and therefore needs new skills. There are an infinite number of combinations and therefore we need an infinite number of people to fill those combinations. Yes, machines can fill that void, but so long as machines have a cost you can underbid a machine to fill that void and have a job/function.

          My hope from the future stems from that fact that I believe that person like Curt Welch will soon be able to open up his own online school. There he will be able to reach millions of people and teach them all they need to know to earn a living. That person could not have done this in the past.

          • Curt Welch says:

            Shaker writes:

            ” you are again making critical errors in your logic which are leading you down a path of doom and gloom.”

            I don’t believe there will be any substantial gloom and doom at all Shaker. I think long before it gets really bad people will understand the issues I’m talking about, and add a Basic Income Guarantee to society (or something close to it) and then we will have a highly stable, fairly utopian, democratic economy with most people not having to work as we know it today. The ones that do work, choose to do so just becuase they like it, not because they need to.

            “Error 1: McDonalds argument.
            Outcome 1: Lower Prices for the general public
            Outcome 2: Increased Profits for McDonalds.
            Both outcomes lead to ECONOMIC GROWTH. ”

            Yes, I’ve said the same thing many times. Why do you do this? You keep saying I’m making an error, and then you repeat the same things I’ve written as if it were something new and different?

            “The result of outcome one is more money in MY pocket. ”

            How can that be, if you don’t have a job? Where is your money coming from? It makes no difference if burgers drop form costing $2 to 10 cents. If you have no money, McDonald’s will not give you a burger. You will have to get a free handout from someone, and we have a name for “free hand out” in this thread, it’s called “A Basic Income Guarantee”. So your logic leads to the same place – the fact that someone will have to give you a free handout, OR, you believe everyone will have a job in the future where robots have replaced all humans in the workforce. How can we be talking about a time where robots have replaced everyone, and at the same time, you continue to believe people have incomes from working????

            “If McDonalds has more profits they then HAVE TO INVEST that money somewhere or it will be devalued on a yearly basis due to inflation.”

            Nonsense. They can just give the profit to the shareholders as a dividend. But yes, the money is not taken out of circulation if that was the point you were going for.

            “The result of either outcome will be NEW JOB CREATION somewhere in the economy.”

            Yes, McDonalds will invest in a million new robots. The robots were ordered on-line through the Amazon Robot web site. The robots were built to order in a fully automated factory, and transported to the correct locations by self driving delivery trucks. All the raw materials needed to build the robots were also ordered though similar automated systems, and all the raw materials like the iron or was dug from the ground by automated mining robots, and processed in automated steel mills. From iron or to McDonald’s robots showing up a the new restaurant, not a single human was used to make it happen.

            So no, there were no HUMAN JOBS created at all, when McDonald’s invested their profits in even more automated technology.

            This is you constantly failing shaker, you keep assuming humans will have jobs, and you have no understanding of the fact that most humans will just be unemployed due to the fact that humans have no useful function when we have machines that can do EVERYTHING a human can, but better, and cheaper, and faster.

            You have to stop thinking of humans as “special” creatures. We are JUST MACHINES and like all machines, we will become outdated and replaced. It’s like saying no matter how advanced our economy becomes, there will always be jobs for 10 million bows and arrows because bows and arrows are the backbone of our hunting industry and the backbone of our military.

            No, sorry, there is no “job” for 10 million bows an arrows in todays economy. There might be jobs for 10,000 of them, but the rest will be put in a closet and never taken out and used.

            The same thing will happen to humans soon. Most humans will have no use in the future economy and they will find no way to get a job that pays enough, to make it worth their time to work. 10 minutes digging through the trash can behind McDonald’s, or standing on the corner begging for change will produce more wealth for them than a day’s worth of paid work in the future.

            “in a perfect work the people who got fired at McDonalds will get jobs in “NEW” areas of the economy.”

            Today yes, tomorrow, no. Today there are still MILLIONS of tasks that humans do that machines cannot yet do, and millions of other tasks, that humans do better than machines. So for all that work, humans can find work that pays well enough, to justify working.

            But, TODAY, we have a growing problem of inequality, where fewer and fewer have the skills and brains that today’s economy needs. We don’t need much of that strong back weak mind labor like we once needed so much of. We need lots of very smart human labor now because too much of the simple dumb work has been replaced by machines already. This lack of smart educated humans has created growing wealth for the few that do have the smarts, and declining wealth for those that don’t. This has always been true to some extend. People with an IQ of 65 simply never could make a living wage. But as automation guts out the ranks of the average IQ jobs, we find all average IQ workers facing declining wages. What the lower wage classes loose, the upper wage classes gain. Inequality grows, and more and more people find they can’t find jobs, or can’t find jobs which pay a living wage. This will keep getting worse, until we get all the way to the point that all human jobs are basically gone.

            But the years before the last jobs vanish, some very few, very smart very educated people, will still have jobs that pay enough to live off of. But the rest will have NO JOB making it pointless how cheap a burger now is.

            “Error 1A:
            You stated in your argument that McDonalds will develop robots. When did McDonalds get into the robotics business? McDonalds produces fast food. Saying they will develop robots is like saying they will develop more fuel efficient trucks, or better transistors to make their business more economically efficient.”

            Or, it’s like saying the phone company will never develop transistors to make their phone network more efficient. Oh, wait, Bell Labs did INVENT THE TRANSISTOR! And the Unix Operating system that basically runs the internet now.

            Or would a Bookstore become the leading computerized Cloud Computing Platform just to help their Book Store more efficient? Oh, yea, Amazon did that, didn’t they.

            Don’t discount just how much even a food business like McDonald’s might end up investing in other technologies.

            “McDonalds will NEVER develop their own robots.”

            Silly goose. You are so far behind the times. McDonald’s had their own engineers developing automated robots back in 1992:

            http://articles.chicagotribune.com/1993-10-17/business/9310170101_1_robots-crew-members-mcdonald

            “You and I could buy these same robots and produce hamburgers, thus increasing OUR WEALTH and lowering the costs of hamburgers.”

            One robot does not a McDonald’s make. Even if you have saved enough to buy a burger making robot, it will not allow you to open your own restaurant and compete with McDonald’s. To complete with the giant’s like McDonald’s and Walmart you need to invest BILLIONS and most the Americans currently working at low wage jobs are not going to have that option. They will just get fired, and lose their jobs, and not be able to find another one.

            But of course, just like McDonald’s was doing back in the 1990′s they are developing their OWN proprietary technology and will not be selling it to their competitors. So much of the most advanced technology, will not be available to someone trying to compete with the giants that will dominate the economy.

            “Error 2:
            The topic is “will robots replace humans causing mass unemployment”. The topic is not, nor has it ever been, “will robots result in economic disparity/inequality”

            “You are now changing the subject.”

            I’m talking about what the future will bring, and what we need to do about. I’ve never talked about anything else here.

            Yes, robots (and all the other technology) will cause near total unemployment in less than 50 years. But before we get to near total unemployment, we will see more of what we have seen over the past 30 years – growing wealth inequality DUE TO the technology moving us closer to the near total unemployment we are quickly approaching.

            It’s all the same subject and I’ve been making the same arguments in every post.

            “You are now changing the subject. I, nor you, can say that robots will create more income redistribution or lack thereof.”"

            Yes, I can. Do you not understand that I’m only one of THOUSANDS of people saying this?

            Here’s a 2003 report on the very subject where people that study this stuff for a living are saying the same thing.

            http://www.nber.org/reporter/winter03/technologyandinequality.html

            Just google “skill biased technical change” to find many people other than myself debating these ideas – people that study this stuff as their profession.

            “we are already seeing what a “global” economy can do for people in far off lands. This will only increase, resulting in greater income distribution.”

            Yes, that’s true. The huge inequality of the world, has been greatly reduced by technology allowing producers to reach a growing consumer base. There are MANY factors at work in the economy.

            But we don’t care about the little short term factors, we care about the big long term factors in the type of discussions we are having here. Globalization is a “little” factor, that will die out, once all major markets become global.

            Again, this is not something that I’m making up here for the fun of it. It’s what economists have been debating for years.

            let me quote a line from the paper I gave you a URL for above:

            “Some economists now believe that, although other factors including the decline in the real value of the minimum wage, de-unionization, and globalization have played some role, the major driving force behind the changes in the U.S. wage structure is technology”

            See, where it says “globalization have played some role”, BUT “the major driving force behind [wage inequality] is technology!”

            People study this stuff Shaker and I’m just saying the same things they are saying. There is debate about these things, nothing is firmly agreed on, but this is not just my pet theory. It’s believed by many very well respected economists.

            “Education: [] will lead to LESS income disparity, not more”

            That logic is valid, if education were the only problem. If we could take any person off the street, and turn them into the next Google employee by sending them to college that would be true. But we can not, because most of the population in fact is TOO DUMB to ever work at Google, or on Wall Street. It’s not just a matter of education. That was true for most of the past 100 years, but now we are reaching a time where most people simply don’t have the brain power needed for these new jobs. They are born with TOO LOW AN IQ and there’s not a damn thing we can do about that (at least not yet). At this point, we are pretty much maxed out the educational potential of a human.

            All ANIMALS have a limit on what they can be taught to do and Humans are just animals. Machines have no such limits, and will be 1000′s of times smarter than even the Einsteins of the world.

            You just don’t seem to grasp this idea that humans will not have jobs in the future. We can debate how long that will be, but no one with any basic understanding of how technology has been advancing, believes humans will always have a place.

            And even today, most humans can’t be trained, to do most jobs. You can’t take random people off the street, and turn them into the next Steve Jobs, Mark Zuckerberg, or Wall street billionaire. THese guys are SMART. If you have never met or worked with many people like this, you might not grasp just how smart they are. I have worked with these sorts of people, and the BLOW away the average joe on the street. The BLOW away, even the very smart people.

            Though there are lots of smart people in the world, and it’s a matter of luck and timing which smart guy, becomes the next Mark Zuckerberg – what you NEVER FIND is a an average IQ quy, becoming the next Mark Zuckerberg.

            Advancing technology makes the low end work, simpler, lowering wages, but makes the high end work, the people creating the new technologies, and the new business that use the new technologies, more complex. Every ounce of extra IQ a person has gives them a big advantage over their competition in this highly complex high tech world we have created.

            “Error 3: You state that technology/robots only results in “lower labor costs” and you state that “resources will continue to increase costs”
            I cannot believe that you would make such a statement.”

            I was talking _RELATIVE_ to labor costs. When labor drops to near zero, and resources don’t drop to near zero, the resource costs GO UP _RELATIVE_ to labor costs.

            Which means the cost of a burger, will be made up more of resource cost, than labor costs. Once a burger can be made with NO human labor, the human labor cost won’t be near zero, it will be ZERO, making the resource cost “infinite” RELATIVE to the labor cost.

            My point in that argument was to show that wealth, flows not to the “workers” because there will be no workers, but instead, flows to the owners of the resources. And even today, long before we have eliminated all the human workers, we already see wealth shifting away from workers, and towards the owners.

            “On a long enough timeline, the cost of resources drops to NEAR ZERO. It does not increase to infinity. We have UNLIMITED resources. We simply lack the knowledge to “tap into” them.”

            Yes, there are many untapped resources. But no, they are never unlimited, and never free.

            In an economy based on people owning all the resources, the question will always be one of how that ownership is distributed. Will everyone own a “fair share” of the resources, or will most be held by a few?

            There’s nothing to suggest that free trade moves society towards a fair share of ownership. In fact, it’s been written about by since the beginning how a major weakness of capitalism is the lack of sharing inherent in the system. Capitalism doesn’t just allow the best workers to make more, it shifts CONTROL and OWNERSHIP to the best workers, and in so doing, shifts the wealth that ownership generates to those same workers. This shift helps the society as a whole maximize it’s wealth, but it fails to fairly share the wealth in any sense across the people.

            This is where a basic income fixes the flaws of capitalism, without breaking the golden goose. It allows the best of the best to manage the resources, but forces the wealth produced, to be better shared.

            resources are never free. Time is always one of the major limited resources. All things of value take TIME to create, and the resources we allocate to the creating of the thing of value, can not be allocated to some other task, AT THE SAME TIME.

            Again, society is already very rich, compared to what it was 100 years ago. And in another 100 years, we will be exponentially that much richer again. Basic life needs like food and shelter and health care will be almost free compared to what they cost today. But if people don’t have jobs, they won’t have the social “right” to get any of the “almost free” stuff.

            Only if we decide to share the wealth will the people be allowed to have some of it. But of course, this is exactly what I’ve said in every post – we must share the wealth. We must create a world wide sharing of the wealth in the form of a world wide basic income for everyone. We must start smaller, but it must grow as automation displaces larger numbers of workers and devalues the wages of many others.

            “Who is to say that that “ONE PERSON/COMPANY” will not employ MORE people than McDonalds?”

            Why are you so dense on this subject? Why do you not understand that NO ONE WILL BE WORKING in the future? What do you think is so magical about these meat puppets we call humans that makes you think we can’t build machines that are 1000 times cheaper and faster than meat puppets for every job? All these companies will be using machines to do everything and won’t employ ANY humans.

            “The companies that are producing robots now have to hire at a feverish pitch in order to build the robots that are being used to lay off workers. This is how the economy has been for the last 500 years. What is different about it?”

            The differences is that the machines have gotten so advanced, that the people needed to build the machines on average, must be smarter than the people who lost their jobs. For 500 years, almost all work was low skill. Humans were “over powered” for most the work they did. This is why such simple machines could be created to replace the humans in this highly low skill jobs. But the more machines we built, the less low-hanging-fruit there is left to replace. So as we keep automating, the IQ and education requirements for the new work keeps advancing. At some point, we will reach a point where many people being displaced, simply can not quality for the new jobs. Either they don’t have raw brain power to learn it even if they tried, or they simply don’t have the resources and time, to go out for a new 4 year degree in a new field, and restart their career in a mid or late work life. So what’s different now is that we have cleaned out much of the low hanging fruit, and technology is advancing exponentially faster, so people are being displaced exponentially faster. There comes a time where man will lose this race to the machines, and that time is already here. Lots of people have already lost the race.

            Within as short as 10 years, we might be at a point where MOST workers will need to be working in the robotics industry – not as simple assembly line workers, but as robotics engineers. Half the population has not hope of learning to be robotics engineers. Most people just don’t have the mind to do that type of work – I’m sorry, but humans have their limits and we are seeing those limits for real in industry now.

            “It’s like saying over the last 15 years software has replaced millions of workers and we are all now poor. ”

            TRENDS shaker, TRENDS. I’m talking trends. The trend is that wages are faling, not rising.

            You keep saying automation should make things better for everyone, but yet the trends do not support that. For the past 30 years, life HAS NOT been getting better for everyone. For most, inflation adjusted, it’s stagnated, or it has been getting worse. GNP per capita has been getting worse for MOST.

            In the places it’s done better, it’s due to countries that have larger amounts of socialism – of wealth sharing.

            In the short term, as you have mentioned, the third world countries are doing much better do to globalization. And that’s good, but it’s going to level out and stop soon and then the third world nations are going to be caught up in the growing wealth inequality, that exists in the first world nations.

            Technology is NOT for the past 30 years, made things better or more equal for most in places like the US, so you must explain why that is. Why is one of the most wealthy countries in the world, also one of the most unequal and why does it keep getting worse, instead of better?

            As I said above, a large percentage of economists believe technology is the PRIME cause of this. But like I’ve said many times, it’s EASY to fix, you just add more socialism, but getting people to agree that helping everyone in society lead a better life is more important than letting the rich make more money, is not so easy to do.

            “I have never once stated that a basic income guarantee is a bad thing. I believe it is a good thing. However, I also believe that it will be rendered unnecessary by the hyper competitive economy of the future.”

            Well, that’s where you and I don’t agree in the least. I strongly believe that due to automation displacing workers, we will shift into an economy of huge wealth inequality and that the growing inequality we already have, is due to this effect already at work. It will just keep getting worse, as we add more technology. It will never get better on it’s own.

            The only way to make it better, will be to add more socialism to society, and a basic income guarantee I think is the best way to do it – one not based on individual need, but rather, on the rights of all humans to be treated as equals in our society.


            Yes, machines can fill that void, but so long as machines have a cost you can underbid a machine to fill that void and have a job/function.”

            That’s not true now, so I find it absurd for you to suggest it will be true in the future.

            We use hammers in the work force to replace what was once done by hand. Do you think you can underbid the job of a hammer so that a framer will hire you to drive nails instead of using his hammer? ha ha ha. Of course not. You can not make a living trying to push nails into wood with your hands.

            We use dynamite to break rocks. Do you think you can under bid the cost of a stick of dynamite by breaking the rocks with a hammer and make enough money feed yourself. Again, ha ha ha.

            We use elevators in tall buildings to transport people to the 100th floor. How much do you thoink you would have to under-bid the cost of the elevator so that you could get a job caring people up to the 100th floor on your back up the stars? again, ha ha ha.

            How much would you have to underbid the cost of the google servers, before google will hire you to replace their servers doing internet searches?

            100 million humans working for free, would not be enough to replace the google servers.

            You just don’t get it. Humans are weak, slow, dumb machines. The way we humans do things today, like cook a burger, will be nothing like how they are done in the future. Just like in the past, a librarian used to type of cards for the card catalog, and file them alphabetically, so we could use them to search for books by subject. Today, we use google, which does something very different, and which no humans can do. Not only will are jobs be replaced, they will be done in totally different ways, that no human can copy. For example, maybe most manufacturing will all happen in the vacuum of space, or on the moon in factories where humans couldn’t even survive. Or at the bottom of the ocean, or deep underground – so deep that the temp is too hot for humans to survive. You can’t underbid these machines and get a job working in space because the space factories have no human life support systems.

            The machines will do it all and this is coming very soon. Not tomorrow, not in 10 years, not too far off. But long before we displace all workers, we will have displaced enough workers to cause major social problems if we don’t decide to care for them. And the best way to care for everyone, is with a basic income guarantee. There’s plenty of room to debate how large it should be to start, and how to fund it, and how to change other social programs to help pay for it, but there’s no valid logic to argue we shouldn’t already have it. (but lots of invalid arguments people mistakenly believe are valid).

            Even if it’s only $50 a month, we should already be doing it. Even at that level, it will have major effects for the poor, and as an economic stimulus that in this time of depressed economy, is highly important as well.

            “There he will be able to reach millions of people and teach them all they need to know to earn a living. That person could not have done this in the past.”

            Well, that’s already happening with the likes of all the MOOC sites. Of course, this same thing was true after the invention of the printing press – suddenly, one person with information to share, could dispute it to 1000′s of people for almost “free” (compared to what it cost before the printing press).

            But, when there’s no way to “make a living” no course is going to teach you what can’t be done.

          • Curt Welch says:

            Shake also wrote:

            “But you haven’t made an argument as to why they cannot work somewhere else, or why the overall economy is worse.”

            Again, I’ve never said the overall economy would be made “worse”. I’ve alway said the growing technology will make GDP grow, which means more total wealth. The problem isn’t TOTAL wealth, it’s the distribution of that wealth.

            If 50% of the population has no money, and needs an income to live on, but can’t find a job, we are in big trouble for the society. The society can be very wealthy, but still full of big problems when 50% of the people are homeless and the rest are worth billions (but not willing to pay the basic income taxes to give the other 50% of society a basic income to live on. But that’s where we are headed.

            And I have made the argument why they can’t work someone else – it’s because the machines all do the jobs MUCH BETTER than any human ever could. This seems to be the part you have the most trouble understanding. You keep thinking that there is something magical about humans, which means no matter how poor they are as workers compared to the machines, someone will still be willing to pay them to do something.

            Do you think you could go to capitol records today, and talk them into hiring you as a rock star? Based on your logic, no matter how good these other “machines” are (like Pink to pick one rock star), you should be able to underbid them, and still get a job? So how much do you have to underbid Pink to get to do her work?

            YOU CAN’T. You are not good enough to be hired AT ALL by capitol records to work as a rock star. Your value is less than zero. You would have to pay THEM millions of dollars before they would “hire” you to work as a rock star.

            The machines of the future will be the “rock stars” of ALL WORK. They will be so much better at the work than humans, that no one would even consider paying a human to do the work.

            This is something you have consistently failed to grasp. And if you can’t grasp this is coming in the future, you won’t correctly gasp how much it is already here today disrupting our society and our economy.

            The machines will do things for us in the future, that no human ever could. And once we have these new better-than-human goods and services, we will have no interest in going back to the crap humans could do. Instead of a human taking our order at a restaurant with the same 10 items we have been eating for 30 years, the new machines might understand our desires better than we do, and cook us something new we have never had before, for every meal. With the new machines, instead of mass producing products to cut costs, maybe we will become a society where everything is custom made to fit our own preferences. Every time we get dressed, it’s in new cloths that were custom made for us that day and which get recycled when we take them off. So we never wear the same design, or style, twice. You can’t get a job washing clothes in an age where clothes never get washed and where making new clothes in 2 minutes is not something a human can even do. You can’t get a job working in a factory mass producing clothing, when no clothing is being mass produced anymore.

            I was in my car, sitting at a stoplight today, thinking, that if a computer was controlling my car, and communicated with all the other cars, the stop lights would not be needed at all. In fact, the cars could just zip between each other in the intersection from opposite directions without stopping at all with perfect timing as long as there was enough space in the cars to do this – and of course they would all work together to make the spaces where they were needed by speeding up and slowing down as need be. And cars could travel at speed upwards of 200 mph while doing this. Again, once the cars were doing this, it would not be possible for a human to drive a car at all, so you can’t “underbid” the computer, and get a job as a taxi driver.

            When shipping warehouses are automated, and goods and packages are flying around in all directions without hitting each other, again, there’s no way a human could get in there, and not get hurt, or not get in the way of the machines, so again, you can’ t underbid a machine, and get a job in shipping warehouse.

            And if you try to create a human based shipping service, to compete with the fully automated one, you would find you needed a warehouse 5 times larger than the automated one, in order to accommodate the humans, and how slow they were, to move as many goods per hour. But since one of the prime cost of the warehouse is it’s real estate costs, the human factory being 5 times larger means there is no way for it to compete price wise with the automated one – so there is again, no way for humans to bid low enough, to get the job.

            Or maybe instead of a truck full of packages being driven to each destination, we will have small flying package copters that each fly one package to a destination, and then get re-scheduled by the master scheduler system, for the next pickup and drop off. Again, no room for a human to help there. No job for humans available.

            In the future automated economy, no jobs will be done like they are done today. They will be done by machines that do the work very differently, than how the work was done by humans, and the end result is that they do it for far less, than a human could ever do the work for, so the human again, just won’t ever be hired to do the job. The old human jobs, will all be gone, replaced with new machine jobs, that are faster and cheaper, and which no human can even do anymore.

            Another example – say the counter clerk at McDonalds. Every McDonalds I walk into, the person doesn’t know who I am and doesn’t know what I like or how I like to special order my food – so I have to explain itg all gain. But with automation, every McDonand’s in the world, could be driven off a master databse, so it knows who I am, and what I like, no matter what McDonald’s I walk into. It always says “Hi Curt, glad to you see you back, you want your regular?”. I don’t want to talk to a human that doesn’t know who I am, when I can have machine, as smart or smarter than a human, who knows me, no matter where I go. Again, no matter how low you bid your labor for, McDonald’s won’t hire you, because you can’t do the work the machine is doing – the work of knowing what food 4 billion different people like to eat and being able to recognize them all on sight. Oh, and also speak every language of the world as well. No way for a human to do that at any price.

            All the goods and services produced in this not too distant future, will be done in new ways that only the machines can do, which we like better, than what the humans used to do.

            Now that doesn’t mean that all humans will be unable to find work. Some will find work for being humans. Some will become a social celebrity for some reason, and could sell their time for people that wanted to meet them. The guy that got hit by lightning more than any other human. The oldest human alive. The US’s last human president before we switched over to machines operating the government. The first human clone baby. Whatever the reason, some humans will have something special about them they can “sell”. But most will have nothing “special” to sell so won’t have any income except what society is willing to “share” with them.

            We are sliding into a future, where humans just won’t be working, and we are already at a point, where lots of humans can’t really get a decent jobs, and shouldn’t be allowed to be poor and starve, just because they don’t have anything “special” to sell to others.

  • Sanjeev Sabhlok says:

    This is a sensible position, although a bit cautious. There is absolutely no reason to fear the robotics revolution. It will lead to glorious abundance and a surge of human creativity never seen before. A short summary here: http://sabhlokcity.com/2013/08/a-book-project-the-glorious-abundance-and-creativity-of-the-robotic-age/. More inside a draft book I’m working on – linked to the above blog post.

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