6 ms·

I like the universal basic income idea too, but haven't we gone through a similar crisis during the industrial revolution? How did we pull out of that? This is

by ahoy 13y ago

I like the universal basic income idea too, but haven't we gone through a similar crisis during the industrial revolution? How did we pull out of that? This is a genuine question, I'm a poor student of history.

mberning 13y ago
I think that the general consensus is that the industrial revolution did end up replacing many of the jobs that it eliminated, and then some, it just took time. This new revolution in automation may do the same, or it may not. I like to look at the very real possibility of self driving cars and trucks. How many truck drivers are employed today? They will be made obsolete very quickly once self driving trucks hit the market. Where are they going to turn for work? Are they going to suddenly become a programmer, writer, graphic designer, etc? I don't think so. Manual labor jobs were much more interchangeable than labors of the mind.
marcosdumay 13y ago
We let people get hungry, and die of overworking. The survirvours inherited a more productive society.
- Radim 13y ago
  Actually, it brought unprecedented power to the workers, balancing the power between employer/employee significantly. It certainly was a tough period (hardly alone in that respect!), but the romanticised images of starving children chained by ankles in sweltering mines, whereas they had happily capered about their sunny villages all day long prior to the revolution, are way off [0]. [0] http://www.bloomberg.com/news/2013-03-19/why-workers-welcomed-long-hours-of-industrial-revolution.html http://www.bloomberg.com/news/2013-03-19/why-workers-welcome...
  - pessimizer 13y ago
    If you restrict your survey of the condition of the working class to those who have published autobiographies and memoirs, you will have a distorted view of the condition of most workers during the period.
    - Radim 13y ago
      If you're referring to the linked article: it's true I haven't read her books, but I hope that a leading UK scholarly expert on the industrial revolution would have taken your point into account!
rayiner 13y ago
It's not clear that we ever did pull out of it. A certain small class of people who couldn't move away from agriculture, say Native Americans who wanted to maintain their traditional lifestyles, suffered tremendously as the country industrialized and the valuable land was taken over for industrial agriculture. They have never recovered, and are the poorest people in the U.S. to this day. What this means is that people need to move to whatever is next, and those who don't, or more importantly can't, will be left behind. But what's next? During the industrial revolution, people moved to cities to go work in factories. But what's the way forward today? Arguably the key difference between today and back then is that the industrial revolution caused a change in where labor was demanded, while the automation revolution reduces the need for labor across almost all sectors of the economy. Yes, some people need to program the machines, but not that many. After all, during the industrial revolution it wasn't mechanical engineering that offered job opportunities for the masses. To me, the obvious "what's next" is this: those whose jobs are obsoleted by automation personally service those whose jobs aren't. It's possible that the future of America is 2/3 of the population acting as nannies, personal assistants, etc, to the 1/3 whose jobs haven't been automated. I bet there are a ton of people even now who would cook/clean/etc for $5/hour + board. You'd already see this in the U.S. if it wasn't for the minimum wage/welfare. What happens when automation drives the price of unskilled labor down to $2-3/hour? The U.S. becomes Bangladesh is what happens. I think it's a social disaster in the making, but I struggle to think of alternatives.
- jonnathanson 13y ago
  Essentially, this is the road back to serfdom. The key difference being that Medieval serfs worked land on behalf of landowners, whereas in this scenario, they simply provide services. I agree that it's a social disaster in the making, but I suspect it's a real possibility.
- LiweiZ 13y ago
  I believe the key to this issue is to have more middle-class to increase the needs for a certain quality service. We all know good service is more than just fulfilled the basic needs. To make it more clear, there has to be more people with middle class consuming capability. We are hitting a bottleneck. If it cannot be raised in a certain period, bad things could happen. Human society has its own way to force the rebalance. However, it's quite ugly. And I wish we can avoid this.
slurry 13y ago
Picture a herd of elephants crossing the savannah. Each elephant carries 50 monkeys on its back. A sudden mutation makes it so that each elephant can now only carry 30 monkeys, but also doubles the number of elephants in the herd. This is terrible news for two-fifths of the monkeys currently riding. Some may never be able to climb back up an elephant and a few unfortunates may find themselves trampled underfoot. On the other hand, the monkey-carrying capacity of the herd is now 20% greater than it was before. Assuming we can sort out the logistics properly, there is enough room for all current monkeys and their offspring, plus maybe a few monkeys from outside who hadn't had a chance to ride yet. KEY: Fewer monkeys per elephant = displaced jobs due to automation. More elephants in the herd = economic growth due to automation. Monkeys = workers. Elephants = "the economy" or "the means of production". People who tell you that automation is going to lead to long-term net job losses from are betting on something that has a very drastic job-displacement effect (WAY fewer monkeys per elephant) while having a very small effect on economic growth (few if any additional elephants). That doesn't make sense to me. The implausibly perfect technologies they tend to talk about would create a massive amount of new value in the economy, i.e. a great deal more elephants for us monkeys to ride on, even if only four abreast. It's much easier to predict the jobs that will be displaced than the new jobs that will be created, so it's cognitively simpler to take the pessimist's side.
- rayiner 13y ago
  It's not implausible at all. The displacement effect is the fact that the skill and education bar keeps getting ratcheted higher, making it ever more difficult for people to crawl onto a new monkey. The growth-limiting effect is both intrinsic and extrinsic. Intrinsic, because with depressed labor wages there is no internal demand for more growth, and extrinsic as you run up against natural resource and energy limits.[1] [1] I think the fact that oil is 4x more expensive than it was a decade ago is a dramatically under-appreciated reason for the tepid economic growth we have faced in that time.
- svachalek 13y ago
  Consider instead the scenario where the elephants don't really enjoy how smelly and messy the monkeys are and replace them with nice clean robot monkeys, who actively discourage the bio monkeys from climbing back up. That's a lot of trampled monkeys. That's the "very drastic job-displacement effect". We're moving into a future where elephants just don't need monkeys anymore.
a-priori 13y ago
It's mostly speculation at this point what will happen to the labour economy over the next few decades. Certainly it has gone through upheavals in the past and yet there's still a demand for labour today. It's even possible that Jevrons' paradox (http://en.wikipedia.org/wiki/Jevons_paradox http://en.wikipedia.org/wiki/Jevons_paradox) may come into play, whereby increasing the efficiency with which we use labour will actually increase demand for it. I think that is at least a partial explanation for the labour boom of the industrial revolution. We could see a similar thing happen again. Or it could cause the value of labour to drop dramatically. But whichever happens I think basic income is worth exploring, because it offers other, immediate benefits: 1) It replaces the existing needs-based social assistance with something that's less intrusive and paternal, and that doesn't leave welfare traps: working more always means you take home more and do not risk what you currently have. 2) It adds financial security for the unemployed and students, which means that more people may pursue higher education and job training. That would help people adjust to a changing labour market. 3) It makes the labour market voluntary. In order for price discovery to work properly in a market, transactions must be voluntary for both parties. If the seller (i.e, the worker) cannot exit a market because they or their family will die or become homeless, then the price (i.e, the hourly wage) will be driven to zero. (Aside: The same logic applies to patient-pays private healthcare systems, except in this case the buyer cannot exit, which means that the price is driven to infinity. This may explain the insane cost of healthcare in the United States.) 4) Relatedly to point #3, basic income would remove the need for minimum wage laws. Currently, they're necessary because the value of unskilled labour may be less than the cost of living.

by ahoy 13y ago

mberning 13y ago

I think that the general consensus is that the industrial revolution did end up replacing many of the jobs that it eliminated, and then some, it just took time. This new revolution in automation may do the same, or it may not. I like to look at the very real possibility of self driving cars and trucks. How many truck drivers are employed today? They will be made obsolete very quickly once self driving trucks hit the market. Where are they going to turn for work? Are they going to suddenly become a programmer, writer, graphic designer, etc? I don't think so. Manual labor jobs were much more interchangeable than labors of the mind.

marcosdumay 13y ago

We let people get hungry, and die of overworking. The survirvours inherited a more productive society.

Radim 13y ago
Actually, it brought unprecedented power to the workers, balancing the power between employer/employee significantly. It certainly was a tough period (hardly alone in that respect!), but the romanticised images of starving children chained by ankles in sweltering mines, whereas they had happily capered about their sunny villages all day long prior to the revolution, are way off [0]. [0] http://www.bloomberg.com/news/2013-03-19/why-workers-welcomed-long-hours-of-industrial-revolution.html http://www.bloomberg.com/news/2013-03-19/why-workers-welcome...
- pessimizer 13y ago
  If you restrict your survey of the condition of the working class to those who have published autobiographies and memoirs, you will have a distorted view of the condition of most workers during the period.
  - Radim 13y ago
    If you're referring to the linked article: it's true I haven't read her books, but I hope that a leading UK scholarly expert on the industrial revolution would have taken your point into account!

rayiner 13y ago

It's not clear that we ever did pull out of it. A certain small class of people who couldn't move away from agriculture, say Native Americans who wanted to maintain their traditional lifestyles, suffered tremendously as the country industrialized and the valuable land was taken over for industrial agriculture. They have never recovered, and are the poorest people in the U.S. to this day. What this means is that people need to move to whatever is next, and those who don't, or more importantly can't, will be left behind. But what's next? During the industrial revolution, people moved to cities to go work in factories. But what's the way forward today? Arguably the key difference between today and back then is that the industrial revolution caused a change in where labor was demanded, while the automation revolution reduces the need for labor across almost all sectors of the economy. Yes, some people need to program the machines, but not that many. After all, during the industrial revolution it wasn't mechanical engineering that offered job opportunities for the masses. To me, the obvious "what's next" is this: those whose jobs are obsoleted by automation personally service those whose jobs aren't. It's possible that the future of America is 2/3 of the population acting as nannies, personal assistants, etc, to the 1/3 whose jobs haven't been automated. I bet there are a ton of people even now who would cook/clean/etc for $5/hour + board. You'd already see this in the U.S. if it wasn't for the minimum wage/welfare. What happens when automation drives the price of unskilled labor down to $2-3/hour? The U.S. becomes Bangladesh is what happens. I think it's a social disaster in the making, but I struggle to think of alternatives.

jonnathanson 13y ago
Essentially, this is the road back to serfdom. The key difference being that Medieval serfs worked land on behalf of landowners, whereas in this scenario, they simply provide services. I agree that it's a social disaster in the making, but I suspect it's a real possibility.
LiweiZ 13y ago
I believe the key to this issue is to have more middle-class to increase the needs for a certain quality service. We all know good service is more than just fulfilled the basic needs. To make it more clear, there has to be more people with middle class consuming capability. We are hitting a bottleneck. If it cannot be raised in a certain period, bad things could happen. Human society has its own way to force the rebalance. However, it's quite ugly. And I wish we can avoid this.

slurry 13y ago

Picture a herd of elephants crossing the savannah. Each elephant carries 50 monkeys on its back. A sudden mutation makes it so that each elephant can now only carry 30 monkeys, but also doubles the number of elephants in the herd. This is terrible news for two-fifths of the monkeys currently riding. Some may never be able to climb back up an elephant and a few unfortunates may find themselves trampled underfoot. On the other hand, the monkey-carrying capacity of the herd is now 20% greater than it was before. Assuming we can sort out the logistics properly, there is enough room for all current monkeys and their offspring, plus maybe a few monkeys from outside who hadn't had a chance to ride yet. KEY: Fewer monkeys per elephant = displaced jobs due to automation. More elephants in the herd = economic growth due to automation. Monkeys = workers. Elephants = "the economy" or "the means of production". People who tell you that automation is going to lead to long-term net job losses from are betting on something that has a very drastic job-displacement effect (WAY fewer monkeys per elephant) while having a very small effect on economic growth (few if any additional elephants). That doesn't make sense to me. The implausibly perfect technologies they tend to talk about would create a massive amount of new value in the economy, i.e. a great deal more elephants for us monkeys to ride on, even if only four abreast. It's much easier to predict the jobs that will be displaced than the new jobs that will be created, so it's cognitively simpler to take the pessimist's side.

rayiner 13y ago
It's not implausible at all. The displacement effect is the fact that the skill and education bar keeps getting ratcheted higher, making it ever more difficult for people to crawl onto a new monkey. The growth-limiting effect is both intrinsic and extrinsic. Intrinsic, because with depressed labor wages there is no internal demand for more growth, and extrinsic as you run up against natural resource and energy limits.[1] [1] I think the fact that oil is 4x more expensive than it was a decade ago is a dramatically under-appreciated reason for the tepid economic growth we have faced in that time.
svachalek 13y ago
Consider instead the scenario where the elephants don't really enjoy how smelly and messy the monkeys are and replace them with nice clean robot monkeys, who actively discourage the bio monkeys from climbing back up. That's a lot of trampled monkeys. That's the "very drastic job-displacement effect". We're moving into a future where elephants just don't need monkeys anymore.

a-priori 13y ago

It's mostly speculation at this point what will happen to the labour economy over the next few decades. Certainly it has gone through upheavals in the past and yet there's still a demand for labour today. It's even possible that Jevrons' paradox (http://en.wikipedia.org/wiki/Jevons_paradox http://en.wikipedia.org/wiki/Jevons_paradox) may come into play, whereby increasing the efficiency with which we use labour will actually increase demand for it. I think that is at least a partial explanation for the labour boom of the industrial revolution. We could see a similar thing happen again. Or it could cause the value of labour to drop dramatically. But whichever happens I think basic income is worth exploring, because it offers other, immediate benefits: 1) It replaces the existing needs-based social assistance with something that's less intrusive and paternal, and that doesn't leave welfare traps: working more always means you take home more and do not risk what you currently have. 2) It adds financial security for the unemployed and students, which means that more people may pursue higher education and job training. That would help people adjust to a changing labour market. 3) It makes the labour market voluntary. In order for price discovery to work properly in a market, transactions must be voluntary for both parties. If the seller (i.e, the worker) cannot exit a market because they or their family will die or become homeless, then the price (i.e, the hourly wage) will be driven to zero. (Aside: The same logic applies to patient-pays private healthcare systems, except in this case the buyer cannot exit, which means that the price is driven to infinity. This may explain the insane cost of healthcare in the United States.) 4) Relatedly to point #3, basic income would remove the need for minimum wage laws. Currently, they're necessary because the value of unskilled labour may be less than the cost of living.