5 ms·

As of right now both views seem to just be idle speculation. I'm not an economist but every other time similar things have happened in industry the economy has

by tdb7893 10y ago

As of right now both views seem to just be idle speculation. I'm not an economist but every other time similar things have happened in industry the economy has balanced out. What I don't get is how what is happening now is fundamentally different to the point where the economy won't correct?

thecrow1213 10y ago
I could give you my take but I think CGP Grey really explains it best: https://www.youtube.com/watch?v=7Pq-S557XQU https://www.youtube.com/watch?v=7Pq-S557XQU
eli_gottlieb 10y ago
>I'm not an economist but every other time similar things have happened in industry the economy has balanced out. "The economy" did not "balance out". "The economy" is not an active agent. The economy was politically managed -- for instance, via the Fed's original mandate to encourage full employment. What prevents similar management taking place today is ideological opposition to it.
- daniel_levine 10y ago
  The Fed adding improving employment to natural zero to it's mandate post Great Recession alongside controlling inflation, seems to imply that the ideological opposition isn't that strong.
joepie91_ 10y ago
CGPGrey's "Humans Need Not Apply" video addresses precisely that question: https://www.youtube.com/watch?v=7Pq-S557XQU https://www.youtube.com/watch?v=7Pq-S557XQU EDIT: Bah. Too late.
- thecrow1213 10y ago
  Hehe I think you might have actually been first!
humanrebar 10y ago
> What I don't get is how what is happening now is fundamentally different to the point where the economy won't correct? Used to be, worse came to worst, you'd just go be a hired hand for someone: a farmhand, a servant, a soldier, a sailor, etc. It also used to be that four walls and a roof was a home and bread and what-you-can-grow was food. Our standards of living are different now, at least in developed nations. We also had social structures that included multi-generational communities. So the grandparents, older relatives, etc. would watch the children, help around the house, etc. Also, people ate worse, got sick more, and died younger.
goda90 10y ago
But haven't those other corrections been somewhat painful for many people? I think the fear here is that this is so much larger because instead of letting one person do the work of 10, leaving the other 9 to do something new, this is just replacing all 10 across numerous classes of work, leaving few to no new jobs. It's going to be a lot more painful for a lot more people than previous corrections. It could result in violence, starvation, and the collapse of the middle class, leaving the have-not's entirely at the mercy of the haves with no recourse to get out of that situation.
deaddodo 10y ago
Really? AI-assisted automation has happened in the past? If so, I missed that portion in my history classes.
- daniel_levine 10y ago
  Much worse! Completely, strategically dominant replacement of human and animal muscle with the steam engine.
  - deaddodo 10y ago
    Yet, without brains.
    - krapp 10y ago
      Still, arguably, a very primitive form of "artificial intelligence."
anexprogrammer 10y ago
If robots and AI are eliminating an entire sector (starting with driving for instance), what other manual or low skill jobs are there that aren't already targeted for AI replacement? We don't need 2m more car mechanics or farm workers. This time it seem likely a certain class of job is going away. Half the population is below average intelligence, and perhaps 25% (total guess) might be best suited to a manual or semi-skilled role. What are we going to do with them? When similar things have happened previously, the once semi-skilled (eg) shipbuilder becomes a low wage driver or call centre worker. Many in an area didn't get those few roles, so became unemployed (and often depressed) for the rest of their careers. Some steel or shipbuilding towns haven't fully recovered even today. Longer ago the farmhand could get any number of manual roles in the growing industries. Blacksmiths became car mechanics, fuel attendants and so on. Also when it's only a number of regional cities affected, like with coal, steel or shipbuilding, it's much easier politically than when it's national.
- daniel_levine 10y ago
  Relatively low margin, fragmented service jobs. Waiters/waitresses, fitness instructors, barbers etc. Those jobs are often still better than the jobs being automated away (truck driving), just less economic to build such specialty robots, at least in the near term.
  - anexprogrammer 10y ago
    Aren't most of those already down at min wage? At least a proportion of waiting jobs will be going away too. Can they absorb another 10m (or however many there are) truck and van drivers who probably made quite a bit more? I know it won't be overnight, but it seems to be rapidly becoming a political rather than economic question. Like must we learn to run at 20-25% unemployment instead of <10? We'd probably have to learn to stop viewing them as scroungers too and adjust welfare somewhat.
    - daniel_levine 10y ago
      Many are, but not all. And I suspect waiting jobs as ratio compared with eating out gross revenue is shrinking (though eating out is growing and is more labor intensive than a grocery store still). Part of that is labor organization, the truckers have unions. And unions were (and are) a big political issue.
zubat 10y ago
It's not that it won't correct, it's that the correction offers no guarantee of being humane. In the 20th century, the population of horses (in the US) started declining rapidly, from a high of over 20 million in 1920 to under 5 million in 1960. Industry decided the horse was unnecessary after thousands of years of history, thus they were slaughtered in short order. The only difference between me and a horse from the market's view is that I do different jobs and consume human goods. To the extent that I am necessary it is because the market will need someone to move goods and services to, but left to its own devices it might well decide to sell weapons that I get killed with. Markets are honest, not smart.
- daniel_levine 10y ago
  Citation on horse slaughtering in the mid-1900s that probably was relatively unrelated to the Great Depressions? Legitimately interested.
  - zubat 10y ago
    I don't have a detailed source on hand for the slaughtering operations specifically, but this is a good overview article of where the meat went: https://priceonomics.com/when-americans-ate-horse-meat/ https://priceonomics.com/when-americans-ate-horse-meat/
    - daniel_levine 10y ago
      Just to be clear for everyone who doesn't click through. The car was one (and seemingly a very small one) amongst many reasons people ate horses, coupled with varying economic recessions, shortages of other meat, and changing consumer taste.
      - maxerickson 10y ago
        Yeah, over 40 years it would be easy to reduce the number of horses simply by attrition.
pyrale 10y ago
Could you explain what you mean by "the economy", and how it is of importance that it has "balanced out" ? I mean, one could probably say that the economy has balanced out after the great depression, after WW2, after the 2008 crisis, and so on. Many people did not.
tpeo 10y ago
Well, if it takes some time for workers to shift sectors and if "creatively destructive" technological innovation on the other hand happens to accelerate, it's conceivable that at a certain point, the absolute majority of workers will be redundant. There won't be an equilibrium, because the workers are trying to chase an accelerating point while moving at a constant velocity. There doesn't need to be anything "fundamentally different" except that we finally reached the exponential part of technological progress, which up until now seemed like a linear process. Just like population growth until 1800s, or economic growth until the 1820s. Those two were pretty much linear and not very different from zero until they weren't. I don't actually subscribe to this rationale, though. I'm just putting it out like this because it's pretty much what everybody says and I recognize that it's quite plausible, given the two first hypotheses.
- dragonwriter 10y ago
  > There doesn't need to be anything "fundamentally different" except that we finally reached the exponential part of technological progress, which up until now seemed like a linear process. Most processes involving people (and lots of others, besides) that look exponential at some point are really logistic, so even in that case, there's probably some equilibrium point somewhere in the future, though its possible that its many generations down the line from the point where the appearance of exponential change first occurs.
  - tpeo 10y ago
    Good point. It's quite possible that there's a fundamental limit to technological achievement and that we just haven't reached it yet. On the other hand, I'd like to say that it's also possible that some particular processes can follow exponential laws without any restriction. It might be somewhat hazy, but what if outside of a few measures (infant mortality, life expectancy, etc) economic progress is nothing more than a subjective measurement of how present consumers value past output? I'm not saying anything new here, both Easterlin's paradox and the idea of a "hedonic treadmill" support the idea that more income doesn't necessarily equate into increased happiness. And specially in the case of economic innovation, which might not actually be technically interesting or require any "new physics" at all - just mashing some current technologies into a marketable product - it might never ever stop, and will just degenerate into an endless chase of ever changing fads. Past economies wouldn't be particular poor, just particularly quaint, and a repository of dead fads. https://en.wikipedia.org/wiki/Easterlin_paradox https://en.wikipedia.org/wiki/Easterlin_paradox
Futurebot 10y ago
It's very far from idle speculation at this point; many prominent economists and economic researchers[1] have grappled with the issue. Both the Lump of Labor Fallacy and Luddite Fallacy may prove themselves to be fallacious in the new era. Gwern has a good post with links: http://www.gwern.net/Mistakes?cx=009114923999563836576%3Adv0a4ndtmly&cof=FORID%3A11&q=chunking#neo-luddism http://www.gwern.net/Mistakes?cx=009114923999563836576%3Adv0... Here are a few prominent ones: http://economics.mit.edu/files/5554 http://economics.mit.edu/files/5554 https://hbr.org/2015/06/the-great-decoupling https://hbr.org/2015/06/the-great-decoupling http://www.economist.com/news/briefing/21594264-previous-technological-innovation-has-always-delivered-more-long-run-employment-not-less http://www.economist.com/news/briefing/21594264-previous-tec... http://ftalphaville.ft.com/2014/08/28/1942571/david-autors-guide-to-labour-and-the-machine/ http://ftalphaville.ft.com/2014/08/28/1942571/david-autors-g... http://krugman.blogs.nytimes.com/2011/03/06/autor-autor/?_r=0 http://krugman.blogs.nytimes.com/2011/03/06/autor-autor/?_r=... http://www.asymptosis.com/are-machines-replacing-humans-or-am-i-a-luddite.html http://www.asymptosis.com/are-machines-replacing-humans-or-a... [1] Autor, Ford, Cowen, Krugman, Acemoglu, Brynjolfsson, McAfee just to name a few
- tdb7893 10y ago
  I think some of these are good insights. There is no question that society will change a lot over this century, I'll be curious to see if it changes in a way that anyone predicted.

by tdb7893 10y ago

thecrow1213 10y ago

I could give you my take but I think CGP Grey really explains it best: https://www.youtube.com/watch?v=7Pq-S557XQU https://www.youtube.com/watch?v=7Pq-S557XQU

eli_gottlieb 10y ago

>I'm not an economist but every other time similar things have happened in industry the economy has balanced out. "The economy" did not "balance out". "The economy" is not an active agent. The economy was politically managed -- for instance, via the Fed's original mandate to encourage full employment. What prevents similar management taking place today is ideological opposition to it.

daniel_levine 10y ago
The Fed adding improving employment to natural zero to it's mandate post Great Recession alongside controlling inflation, seems to imply that the ideological opposition isn't that strong.

joepie91_ 10y ago

CGPGrey's "Humans Need Not Apply" video addresses precisely that question: https://www.youtube.com/watch?v=7Pq-S557XQU https://www.youtube.com/watch?v=7Pq-S557XQU EDIT: Bah. Too late.

thecrow1213 10y ago
Hehe I think you might have actually been first!

humanrebar 10y ago

> What I don't get is how what is happening now is fundamentally different to the point where the economy won't correct? Used to be, worse came to worst, you'd just go be a hired hand for someone: a farmhand, a servant, a soldier, a sailor, etc. It also used to be that four walls and a roof was a home and bread and what-you-can-grow was food. Our standards of living are different now, at least in developed nations. We also had social structures that included multi-generational communities. So the grandparents, older relatives, etc. would watch the children, help around the house, etc. Also, people ate worse, got sick more, and died younger.

goda90 10y ago

But haven't those other corrections been somewhat painful for many people? I think the fear here is that this is so much larger because instead of letting one person do the work of 10, leaving the other 9 to do something new, this is just replacing all 10 across numerous classes of work, leaving few to no new jobs. It's going to be a lot more painful for a lot more people than previous corrections. It could result in violence, starvation, and the collapse of the middle class, leaving the have-not's entirely at the mercy of the haves with no recourse to get out of that situation.

deaddodo 10y ago

Really? AI-assisted automation has happened in the past? If so, I missed that portion in my history classes.

daniel_levine 10y ago
Much worse! Completely, strategically dominant replacement of human and animal muscle with the steam engine.
- deaddodo 10y ago
  Yet, without brains.
  - krapp 10y ago
    Still, arguably, a very primitive form of "artificial intelligence."

anexprogrammer 10y ago

If robots and AI are eliminating an entire sector (starting with driving for instance), what other manual or low skill jobs are there that aren't already targeted for AI replacement? We don't need 2m more car mechanics or farm workers. This time it seem likely a certain class of job is going away. Half the population is below average intelligence, and perhaps 25% (total guess) might be best suited to a manual or semi-skilled role. What are we going to do with them? When similar things have happened previously, the once semi-skilled (eg) shipbuilder becomes a low wage driver or call centre worker. Many in an area didn't get those few roles, so became unemployed (and often depressed) for the rest of their careers. Some steel or shipbuilding towns haven't fully recovered even today. Longer ago the farmhand could get any number of manual roles in the growing industries. Blacksmiths became car mechanics, fuel attendants and so on. Also when it's only a number of regional cities affected, like with coal, steel or shipbuilding, it's much easier politically than when it's national.

daniel_levine 10y ago
Relatively low margin, fragmented service jobs. Waiters/waitresses, fitness instructors, barbers etc. Those jobs are often still better than the jobs being automated away (truck driving), just less economic to build such specialty robots, at least in the near term.
- anexprogrammer 10y ago
  Aren't most of those already down at min wage? At least a proportion of waiting jobs will be going away too. Can they absorb another 10m (or however many there are) truck and van drivers who probably made quite a bit more? I know it won't be overnight, but it seems to be rapidly becoming a political rather than economic question. Like must we learn to run at 20-25% unemployment instead of <10? We'd probably have to learn to stop viewing them as scroungers too and adjust welfare somewhat.
  - daniel_levine 10y ago
    Many are, but not all. And I suspect waiting jobs as ratio compared with eating out gross revenue is shrinking (though eating out is growing and is more labor intensive than a grocery store still). Part of that is labor organization, the truckers have unions. And unions were (and are) a big political issue.

zubat 10y ago

It's not that it won't correct, it's that the correction offers no guarantee of being humane. In the 20th century, the population of horses (in the US) started declining rapidly, from a high of over 20 million in 1920 to under 5 million in 1960. Industry decided the horse was unnecessary after thousands of years of history, thus they were slaughtered in short order. The only difference between me and a horse from the market's view is that I do different jobs and consume human goods. To the extent that I am necessary it is because the market will need someone to move goods and services to, but left to its own devices it might well decide to sell weapons that I get killed with. Markets are honest, not smart.

daniel_levine 10y ago
Citation on horse slaughtering in the mid-1900s that probably was relatively unrelated to the Great Depressions? Legitimately interested.
- zubat 10y ago
  I don't have a detailed source on hand for the slaughtering operations specifically, but this is a good overview article of where the meat went: https://priceonomics.com/when-americans-ate-horse-meat/ https://priceonomics.com/when-americans-ate-horse-meat/
  - daniel_levine 10y ago
    Just to be clear for everyone who doesn't click through. The car was one (and seemingly a very small one) amongst many reasons people ate horses, coupled with varying economic recessions, shortages of other meat, and changing consumer taste.
    - maxerickson 10y ago
      Yeah, over 40 years it would be easy to reduce the number of horses simply by attrition.

pyrale 10y ago

Could you explain what you mean by "the economy", and how it is of importance that it has "balanced out" ? I mean, one could probably say that the economy has balanced out after the great depression, after WW2, after the 2008 crisis, and so on. Many people did not.

tpeo 10y ago

Well, if it takes some time for workers to shift sectors and if "creatively destructive" technological innovation on the other hand happens to accelerate, it's conceivable that at a certain point, the absolute majority of workers will be redundant. There won't be an equilibrium, because the workers are trying to chase an accelerating point while moving at a constant velocity. There doesn't need to be anything "fundamentally different" except that we finally reached the exponential part of technological progress, which up until now seemed like a linear process. Just like population growth until 1800s, or economic growth until the 1820s. Those two were pretty much linear and not very different from zero until they weren't. I don't actually subscribe to this rationale, though. I'm just putting it out like this because it's pretty much what everybody says and I recognize that it's quite plausible, given the two first hypotheses.

dragonwriter 10y ago
> There doesn't need to be anything "fundamentally different" except that we finally reached the exponential part of technological progress, which up until now seemed like a linear process. Most processes involving people (and lots of others, besides) that look exponential at some point are really logistic, so even in that case, there's probably some equilibrium point somewhere in the future, though its possible that its many generations down the line from the point where the appearance of exponential change first occurs.
- tpeo 10y ago
  Good point. It's quite possible that there's a fundamental limit to technological achievement and that we just haven't reached it yet. On the other hand, I'd like to say that it's also possible that some particular processes can follow exponential laws without any restriction. It might be somewhat hazy, but what if outside of a few measures (infant mortality, life expectancy, etc) economic progress is nothing more than a subjective measurement of how present consumers value past output? I'm not saying anything new here, both Easterlin's paradox and the idea of a "hedonic treadmill" support the idea that more income doesn't necessarily equate into increased happiness. And specially in the case of economic innovation, which might not actually be technically interesting or require any "new physics" at all - just mashing some current technologies into a marketable product - it might never ever stop, and will just degenerate into an endless chase of ever changing fads. Past economies wouldn't be particular poor, just particularly quaint, and a repository of dead fads. https://en.wikipedia.org/wiki/Easterlin_paradox https://en.wikipedia.org/wiki/Easterlin_paradox

Futurebot 10y ago

It's very far from idle speculation at this point; many prominent economists and economic researchers[1] have grappled with the issue. Both the Lump of Labor Fallacy and Luddite Fallacy may prove themselves to be fallacious in the new era. Gwern has a good post with links: http://www.gwern.net/Mistakes?cx=009114923999563836576%3Adv0a4ndtmly&cof=FORID%3A11&q=chunking#neo-luddism http://www.gwern.net/Mistakes?cx=009114923999563836576%3Adv0... Here are a few prominent ones: http://economics.mit.edu/files/5554 http://economics.mit.edu/files/5554 https://hbr.org/2015/06/the-great-decoupling https://hbr.org/2015/06/the-great-decoupling http://www.economist.com/news/briefing/21594264-previous-technological-innovation-has-always-delivered-more-long-run-employment-not-less http://www.economist.com/news/briefing/21594264-previous-tec... http://ftalphaville.ft.com/2014/08/28/1942571/david-autors-guide-to-labour-and-the-machine/ http://ftalphaville.ft.com/2014/08/28/1942571/david-autors-g... http://krugman.blogs.nytimes.com/2011/03/06/autor-autor/?_r=0 http://krugman.blogs.nytimes.com/2011/03/06/autor-autor/?_r=... http://www.asymptosis.com/are-machines-replacing-humans-or-am-i-a-luddite.html http://www.asymptosis.com/are-machines-replacing-humans-or-a... [1] Autor, Ford, Cowen, Krugman, Acemoglu, Brynjolfsson, McAfee just to name a few

tdb7893 10y ago
I think some of these are good insights. There is no question that society will change a lot over this century, I'll be curious to see if it changes in a way that anyone predicted.