They Shoot Horses Don't They

Can we high-tech our way to mass unemployment? This fear has been with us for decades running into centuries; Eduardo Porter of the Times has an interesting column on it.

Jeffrey D. Sachs of Columbia University has been working with a series of colleagues on an economic model of a world in which robotization both raises economic output and immiserates workers, pushing them out of their jobs. It is not a theoretical impossibility.

“The point for me is that these two scenarios — robots lead to nirvana and hell — can happen side by side,” Professor Sachs told me. “Generally capital wins and all labor can lose. It shows up as a fall in the labor share of national income.”

In that event, preventing a dynastic society of relentlessly growing inequality would require large-scale redistribution. It could even take the form of a universal income paid for with a hefty estate tax — using some of the vast profits accruing to the owners of robots to finance a living for everybody else.

Since most paid human labor would be pointless, the disincentive to work produced by a monthly check would be unimportant. People could devote themselves to unpaid creative affairs.

“Don’t destroy the robots,” Professor Sachs said. But recognize that “not everybody would be better off as a result of market forces. With redistribution everybody could be made better off.”

On the other hand...

A research paper published last month by the Organization for Economic Cooperation and Development argued that even the occupations most at risk of being replaced by machines contained lots of tasks that were hard to automate, like face-to-face interaction with customers.

It concluded that only 9 percent of American workers faced a high risk of being replaced by an automaton. Austrians, Germans and Spaniards were the most vulnerable, but only 12 percent of them risked losing their jobs to information technology.

We hear from the always-interesting and rarely humble Larry Summers:

Last November, Lawrence H. Summers — a former Treasury secretary under President Bill Clinton, a top economic adviser in President Obama’s first term and one of the youngest people to earn tenure on the Harvard faculty — strode up to the podium at the Peterson Institute for International Economics in Washington and made an unlikely admission: Perhaps economists were not always the smartest people in the room.

He reminisced about his undergraduate days at M.I.T. in the 1970s, when the debate over the idea of technological unemployment pitted “smart people,” exemplified by the great economist Robert Solow, and “stupid people,” “exemplified by a bunch of sociologists.”

It was stupid to think technological progress would reduce employment. If technology increased productivity — allowing companies and their workers to make more stuff in less time — people would have more money to spend on more things that would have to be made, creating jobs for other people.

But at some point Mr. Summers experienced an epiphany. “It sort of occurred to me,” he said. “Suppose the stupid people were right. What would it look like?” And what it looked like fits pretty well with what the world looks like today.

For large categories of workers, wages are inadequate. Many are withdrawing from the labor force altogether. In the 1960s, one in 20 men between 25 and 54 were not working. Today it’s three in 20. The population is generally healthier than it was in the 1960s; work is almost uniformly less demanding. Still, more workers are on disability.

“Maybe the stupid people weren’t quite as stupid as I thought they were,” Mr. Summers conceded. “This was at least a serious concern that had to be thought about.”

Comments

[DrJ]

First?

[Miss Marple 2]

One of my sisters, who works in retail, has noticed an alarming trend. Younger women seem not to be concerned about the fit of their clothing. If you pay attention, you can notice this on the street.

Clothes too tight. Unhemmed pants rolled up or dragging on the ground. Too-long sleeves. Gaps in the front of blouses and jackets between buttons. She said she has even seen some clomping around in shoes which are too big, just because they like the way the shoe fits.

We came to the conclusion that it is due to two factors:

1. On-line shopping
2. Stores with no real sales help, like Kohl's or Target.

In both cases there is no one to suggest trying something in a different size or offering alterations or suggesting them.

So, the lack of face-to-face or personal service is actually having a deleterious effect.

[Miss Marple 2]

Oops. Should read "the way the shoe looks."

[Miss Marple 2]

Probably posted on an earlier thread, but just in case it wasn't:

http://www.powerlineblog.com/archives/2016/06/epic-correction-of-the-decade.php

The famous study on how conservatives are mentally ill was completely the reverse! The writers of the study have issued a major, major correction.

[henry]

More robots!!!

They don't worry about microaggressions. They don't show up late. They don't use the wrong restroom. They don't fake injury and sue you, then go on disability while playing the top golf courses world wide.

Sadly, you need people work with other people. So I'll have to put up with non-robot behavior for the forseeable future.

[henry]

Ryan... peace through strength / control the border. Plus other blather. Now onto poverty programs (from the other day), welfare reform-- make people work / make work pay.

[henry]

Now the Trump question.

"because he won fair & square" by the Republican electorate.

Also wants help with his agenda thing.

Wants fewer distracting antics from Trump.

Wants to focus on concrete choices set up by Congress.

[RattlerGator]

Speaker Ryan owes Donald Trump a very public apology. I, for one, hope Trump nails him on it very publicly if it is not forthcoming.

[Porchlight]

MM, young women haven't shopped at stores with attendants for a long time. I would say it's probably online shopping that's mostly to blame. You can't try on different sizes unless you buy multiple sizes and return the ones that don't fit or don't flatter. I am really lazy about returns myself.

I do think young women are much less self-conscious about their weight than they used to be. Overall, that may be a good thing.

[Porchlight]

Wants fewer distracting antics from Trump.

Trump is the head of the party. Ryan is in no place to boss him around.

[henry]

RG, it didn't sound forthcoming.

[Maryd]

Totally agree, RG.

[jimmyk on iPhone]

The stupidity was not thinking that tech progress is good, it was thinking all the Keynesian carp--stimulus, ZIRP, NIRP--were helpful, raising the minimum wage, Obamacare, green energy, etc made any sense.

[RattlerGator]

The Larry Summers portion of this post hints at the blindness of most of us to paradigm shifts. There are a range of things we simply cannot know with any degree of certainty.

More directly, the admission by Summers is also a reminder of how overrated "intelligence" can be -- in part because it (broadly understood) is not amenable to easy definition or measurement. In the hard sciences, yes. But in the social / political environment? No sir, buddy.

[pagar a bacon, country ham and sausage supporter]

Horses?

http://www.lifenews.com/2016/06/08/assisted-suicide-will-be-legal-in-california-tomorrow-targeting-the-elderly-and-disabled/

Before you just had to worry about the leftists killing your grandkids or great grandkids; NOW
You too.

[henry]

California, retirement mecca.

[cheerleader]

IOW, Ryan doesn't want Trump to be Trump. They want to control him.

[cheerleader]

Not. Going. To. Happen.

[cheerleader]

pagar,

I find the legalization of assisted suicide a terrifying prospect. Swiftly, very swiftly, it will turn into being compulsory. You often hear the lefties in comments saying that it's the fuddy-duddy old people who are stopping them from implementing all the social changes they want to make.

[Old Lurker]

Crossposted:

Guys, ask Jimmy...there are dozens of stories about small shop owners who have had their cash taken by the Feds for suspicion of "Structuring" their cash deposits to stay under the $10,000 reporting requirement. Then when it is shown to be nothing more than the ususal daily cash deposits from their store cash registers, the Feds say "hire a lawyer and sue us and maybe you will get it back eventually, or if you prefer, we will give you back 50% right now and call it even...".

This is not a joke or a "fear", it is very real.

This is SUPPOSED to now be against the regs but guess what...

Then you have the cash confiscated along north-south bound interstates under "suspicion" of drug proceeds where the vig is split by all the police agaencies up the chain. Need a contribution to the Police Welfare fund? Go shake down some cars on I95.

[matt]

Creative destruction has always been with us. Now, the casual economy is replacing traditional workplaces as government has killed those jobs.

McRobot is going to affect the low end worker the most, whether it is in a factory or at the fast food store. In the past those low wage jobs were taken by the young and the undereducated. Now, at least in the Western States and the chicken processing industry in particular they are taken by legal and illegal immigrants.

We had a contract to supply 50 robots to one of the top automotive electronics manufacturers, who have several big factories in Mexico.

The machines were replacing workers who had to solder difficult components onto printed circuit boards.

The savings in rework and repair justified the replacement costs. The return on investment of @ $2.8 million or so was calculated at 14 months.

In addition, the safety factor in the cars those components were going into was increased by a substantial margin.

[Threadkiller]

Will elderly and disabled judges need to recuse themselves from assisted murder cases?

[matt]

I think they would be happy if Trump stopped being such a d**k. It's not a lot to ask.

[cheerleader]

If you think he's being a dork, you are under the spell of the msm.

[cheerleader]

and of the peecee left.

[cheerleader]

He said nothing wrong, he did nothing wrong, and he's not going to bow down to lefty thought manipulation.

[Theo]

Not a lot to ask Mattt. But I fear, in the words of cheerleader, Not Going To Happen.

[cheerleader]

If McDonalds (as an example) goes completely automatic, its profits will sink as a result.

The new and innovative thing, to draw business, will be to hire real people so that human & social interaction returns to the buy and sell process, as it has been forever. That is what makes shopping fun, or makes it not fun, but either way, it's human.

[cheerleader]

If it does happen, he'll lose. Period.

[henry]

Price has no impact on store performance. The entire point of fast food is human interaction with surly teenagers. Got it.

[cheerleader]

The teenagers are not always surly, they even tell jokes sometimes, and when things go wrong, you have someone to yell at, as opposed to hammering a machine.

[Truthbetold5]

cheerleader

He could never lose. He could only get tired of winning. Right?

I mean after all, he can walk on water. Right?

[cheerleader]

And no price is not everything. If I have to pay a few dollars more to get service, I'll take that any day.

[matt]

When I was a kid they had what they called automats in New York City. My mom took us to the World's Fair in '64 and that was one of the highlights of the trip. It was reasonable and it was packed and the food was okay. Automation works. It was a big part of my career as it turned out.

Tact - to speak or act without offense. If Trump really wants to win he has to stop insulting @ 50% of our society with playground names. Andrew Jackson was a vicious son of a bitch, but he managed to act presidential. When you have a guy next to you holding the "football" it's not good to call Putin "that commie bastard" or worse.

[cheerleader]

No, he can't walk on water. But he win against stupid peecee politicians, as he's proven.

[cheerleader]

Sorry, Matt, if you believe he's offended 50 per cent of the population, you are getting your information from the wrong sources.

[Truthbetold5]

You mean like Obama did?

[cheerleader]

You wanna be tactful to Hillary?

You should really listen to this:

Stefan Molyneux: The Truth About Trump University and Judge Gonzalo Curiel

https://www.youtube.com/watch?v=E9XMioUUa3E

[cheerleader]

Only idiots believe that between night and day are the same thing.

[pagar a bacon, country ham and sausage supporter]

You say you didn't get yours?

http://www.washingtonexaminer.com/ajit-pai-fraud-from-obamaphone-program-reaching-500-million/article/2593375

How many of these frauds can the nation stand?

[sbw]

But at some point Mr. Summers experienced an epiphany. “It sort of occurred to me,” he said. “Suppose the stupid people were right. What would it look like?” And what it looked like fits pretty well with what the world looks like today.

Suppose it was a stupid article by stupid people reaching a stupid conclusion because they overlooked the stupid government leaders sabotaging a perfectly workable imperfect market economy.

[cheerleader]

Carlos Slim was the provider of the Obamaphones.

[Threadkiller]

Hello, matt. Glad to see your posts.

cheerleader, I don't think matt is wrong here although I personally don't put as much emphasis on it.

Trump himself has recognized that he need to tone it down and has on several occasions.

[Threadkiller]

...he needs...

[Old Lurker]

Cheerleader at 10:38 made a funny joke, right?

McDonald's just needs to improve the "human & social interaction (of) the buy and sell process"???

a) I cannot recall ever having any such experience at McDonalds, nor, frankly, have I ever wanted one.

b) The more they can become a vending machine for freshly cooked predictable items on there predictable menu, the better.

c) Matt's 14 month payback for those 50 robots doing skilled work suggests the cost/benefit curves have crossed and are here to stay. That is an ROI in high double digits at a time when cash earns nuthin and the cost of humans is increasing, is unpredicatable, and is now political.

No brainer.

[cheerleader]

TK

I don't see his saying that he wasn't going to talk about it any more as "toning it down."

Imo, toning it down is: "They're right, I shouldn't have said that."

Should he be "tactful" to Hillary?

[Old Lurker]

their

[cheerleader]

OL,

I'm sure I frequent McDonalds far more than you do. The more automated ones are crappier than the less automated ones.

[buccaneer morgan]

Larry summers of the Russia raiding party, as that demotivator gift with gene wilder say 'tell me more'

[Dave (in MA)]

Even George Jetson had to go to the office a couple of days a week to punch a few buttons for Mr. Spacely.

[Old Lurker]

Cheerleader, Matt can endlessly tweak the robot to make the experience better and better a whole lot easier than retraining the ever changing staff. Any automated systems you have encountered at McD's to date are just beta testing concepts.

[Threadkiller]

http://www.thegatewaypundit.com/2016/06/shock-videowhite-teen-trump-supporter-rabbit-punched-twice-black-man-left-mob-san-jose-firefighters/

http://transparentcalifornia.com/salaries/2014/san-jose/

[cheerleader]

Where do you expect young people to earn money in entry level jobs?

[buccaneer morgan]

And Jeffrey Sachs was part of that crew as well, that yielded Morales, volodya and cornea, I think menem was smarter but the provinces overspent,

[henry]

Different question cheerleader. Paid protestor seems popular right now.

[cheerleader]

Yes, it's a different question, but it is a related question.

[Lurker Susie]

Pavarotti,

How many of these frauds can the nation stand?

Don't worry the republicans will convene a committee to look into it.

[Lurker Susie]

How did autocorrect change pagar to pavortti?

[Old Lurker]

Why should I have to pay double for a Big Mac so some kid can make $15 bucks an hour flipping burgers when a finally tuned automated system might give me my Big Mac Meal for half the cost?

(And I use "double" and "half" seriously since the cost curve for hiring humans is steeply rising, and the cost per unit of Matt's robots is falling just as steeply.

[Old Lurker]

Wait. I need more coffee. Is Cheerleader punking me?

:-)

[cheerleader]

I shop in small hardware stores with clerks who can answer questions, as much as I can. I avoid big box stores, where help is as scarce as honest reporting in the msm.

SERVICES are as important as goods.

(Although that might change since the head of Home Depot is a Trump supporter.) :-)

[Old Lurker]

Pagar, when I saw that $500 M story yesterday, I realized that is just the FRAUD in that Obama-Phone boondoggle. Now add the Base Cost of the program to the money being wasted and you get real money!

[Jack is Back!]

Remember I, Robot?

Lt. John Bergin:
We're going to miss the good old days.

Detective Del Spooner:
What good old days?

Lt. John Bergin:
When people were killed by other people.

[buccaneer morgan]

We all know the robots rebel, animatrix, blade runner, terminator, its science

[Beasts of England]

Trump should act more like Mitt, amirite?

[henry]

Wait, is cheerleader saying all Trump support is from latter day Luddites?

[cheerleader]

OL,

what about the topic of the thread, the social impact of unemployment due to automation? Do you think it's not a problem? If it is a problem, what are your ideas for solving it?

[buccaneer morgan]

There are more significant policy issues, involved, but raising the base pay artificially has little impact

[DrJ]

SERVICES are as important as goods.

For some things, yes. For others, not so much. The rise of big-box stores and Amazon says that for many purchases customers do not view service as important as price or convenience.

Did you know that Walmart has sales of almost $500 billion a year, and accounts for about 11% of all retail sales in the country? Is their service good?

[RattlerGator]

Don Surber, In Praise of the Trump Voter:

http://donsurber.blogspot.com/2016/06/in-praise-of-trump-voter.html

That post gets at what I was addressing a day or two ago.

[Captain Hate]

I think Walmart's services range from OK to excellent. I had a nice woman in jewelry almost ruin my watch by ineptly changing the battery and a nice woman in the optical area do an outstanding job of repairing my glasses and refusing to take any compensation for the improvised solution she did.

[Jim Eagle]

Because of Amazon and all internet sales, if you were filming The Graduate today, the advice whispered to Ben would be "Cardboard".

[buccaneer morgan]

So the ap gets around to what Catherine herridge pointed out a while about the email. After the emmaculation as rush would put it.

[Momto2]

Really sweet guy - worked until age 90!

http://www.startribune.com/obituary-robert-reardon-gave-new-meaning-to-the-golden-age-of-flying/382171501/

[Dave (in MA)]

cheerleader, I don't miss the Good Old Days when the only hardware stores in town closed at noon or 1 on Saturday and weren't open Sunday, and:
The frustrated homeowner would have to endure an argument with the grouchy old guy in the store about what he needed and why it's the right item at one store,
or...
The chain-smoking wives of the store owners at the other place waiting on you knew absolutely nothing about hardware or tools including where in the store the items were, and if you wanted to asked someone who wasn't clueless a question, he was only in the store during the hours when you yourself were at your job,

or...

If you needed to go to a lumber yard (also only open 9-5 M-F and Saturday morning if you were lucky) they'd eventually get around to waiting on you only once they finished up with all of the guys in the trades who they knew, and they'd also give you a hard time about what and why.

Good riddance to mom & pop hardware stores, IMO.

[Dave (in MA)]

Good one, Jack!

[buccaneer morgan]

Heh I forgot about us robotics,

[Momto2]

Another small business that has been destroyed is the independent bookstore. We once owned a small bookstore. It was impossible to compete with Walmart and Amazon. We could actually buy the latest books cheaper at Walmart than from the distributor.

Things we did that are not possible at Walmart include - having authors come for book signings, carrying a larger variety of things (not just the top sellers), having a small section of OOP and rare books, and recommending books based on the readers' taste.

We never made money and my husband basically broke even some months and lost money other months. The ladies that worked there had been there for many years before we took it over and he hated for them to lose their jobs. But we eventually could not keep it open.

This one experience gives me great empathy for small business owners. They work long hours and can never rest on their laurels.

Next weekend I am driving an hour and half each way to meet an author at a book signing. It is a small, independent store and I have a list of summer reading that I'll purchase from them rather than Amazon - even with free shipping!

[rich@gmu]

>>>Since most paid human labor would be pointless, the disincentive to work produced by a monthly check would be unimportant. People could devote themselves to unpaid creative affairs.<<<

Professor Sachs

>>>For as soon as the distribution of labour comes into being, each man has a particular, exclusive sphere of activity, which is forced upon him and from which he cannot escape. He is a hunter, a fisherman, a herdsman, or a critical critic, and must remain so if he does not want to lose his means of livelihood; while in communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic. This fixation of social activity, this consolidation of what we ourselves produce into an objective power above us, growing out of our control, thwarting our expectations, bringing to naught our calculations, is one of the chief factors in historical development up till now.<<<

Professor Marx

[Old Lurker]

DrJ is exactly right. In some things, service counts; in others it does not.

If you need instructions on how to screw in the lightbulb, by all means go to the neighborhood ACE Store and pay "double" for the 75w bulb. If you know how to screw them in, go to Home Depot, grab a box at half the cost, zip through the selk checkout line and go one your way.

I put Big Macs in that group; getting a great steak and nice wine in a pleasant setting, not so much.

[rich@gmu]

wouldn't the robots have to be built, programmed, maintained, upgraded ... or is Samaritan or Ultron going to take care of that as well

[Lurker Susie]

I love my local hardware store. They are open on Sunday. You can get
Whatever you need. They are knowledgeable. When you ask they give
you names of local retired plumbers, painters, electricians. I can call and these guys show up do the repairs. Of course it's cash only under the table.
They work enough to supplement their hunting and fishing trips.. You know those hard working white rural middle class Americans. The ones that cling to their bibles and guns.

[Jim Eagle]

A Traveler's best friend: Robots now park your car and check your bags at the airport. And their not former Somalian warlords.

http://www.cntraveler.com/stories/2015-12-15/robots-will-now-bring-you-snacks-park-your-car?mbid=nl_060816_Daily&CNDID=41726203&spMailingID=9032778&spUserID=MTMwODU5MTM1NTc1S0&spJobID=940802222&spReportId=OTQwODAyMjIyS0

[jimmyk]

Where do you expect young people to earn money in entry level jobs?

The problem is not technology, but the minimum wage and a zillion other regulations that make employing teenagers no longer economical.

[Janet]

RattlerGator's link at 11:28 is wonderful.

[cheerleader]

Dave,

I've never had experiences such as yours at a local hardware store, so that probably makes the difference.

[Old Lurker]

Cheerleader, I have no more sympathy for the dolts being replaced by robots today than I would have for the people making buggy whips a century ago, or the people spinning cotton by hand the century before that. Nor do I care a whit about the dummies I grew up with in West Virginia who were too "low energy" electrons to see that life in Appalachia as they knew it was over and if they wanted real jobs, like high energy electrons jumping to higher orbits, they should go to the Carolinas and build cars or, perish the thought, learn something and a skill that people will pay for.

I have said before and I really mean it. More people going hungry would not be a bad thing.

So there.

:-)

[Old Lurker]

Susie, Home Depot is open 24x7 near me and it is easier to park there. And their landlord does not charge them $50PSF in rent like I charge my tenants.

[jimmyk]

It was impossible to compete with Walmart and Amazon.

Most retail seems to have shifted toward products that can't easily be purchased on line: Fresh food, restaurants, higher-end or formal clothing, dry cleaners, etc. Meanwhile electronics, casual clothing, books, music, etc. have been disappearing. Not be uncaring and unsentimental, but that seems like a good thing. If I know exactly what I want, it's a huge convenience to be able to press a few buttons on my computer and a few days later it shows up, as opposed to traipsing to the other end of town and hoping I can find it in a store.

Which is a long-winded way of repeating that progress is good, unless it's been forced by government meddling in the markets.

[rich@gmu]

Posted by: Miss Marple 2 | June 09, 2016 at 08:57 AM

an interesting observation ...

a subtle, but visible, difference between inferior goods and normal goods (in an economic sense)...

[anonamom]

That "second rate" Governor Nikki Haley---

She just vetoed 52 items in the budget she was sent from the SC legislature. Pork, pork, pork.

Not sure what you all are expecting of the girl, but from my perch above SC, she's gotten their economy going, and they sure needed that.

[rich@gmu]

and I should have just read the rest of the thread ... bother.

[cheerleader]

OL,

Do you understand that in America today, eating at McDonald's is for many people and families the equivalent of your dining out on steak and fine wine. Many people can not afford to pay week's rent on a dining-out experience at a classy restaurant.

You would not like your steak and wine to be automated, but you're okay with the hoi polloi having to deal with the lower standards of automation.

I'm not saying that wealth doesn't or shouldn't have its privileges, but I don't think of double standards as a privilege.

[jimmyk]

RattlerGator's link at 11:28 is wonderful.

Yes, the Mike Stivic vs Archie Bunker discussion is great. Ironic that lefty Hollywood types like Norman Lear inadvertently stumble into a conservative message. Larry David does it too, though more by satirizing the left than depicting a positive alternative.

[Janet]

I hear ya, Dave & OL.

I used to stick up for Walmart for the same reasons.
Little stores in little towns are charming 'n stuff ...except that the people that live in the town would like a bigger selection of goods for a better price.

Instead of 3 pricey cameras to choose from at the old, cute downtown photo shop ...Walmart had tons to choose from & at good prices. Just about everyone could afford to own a camera then.

I sorta think that people that hate the bigger stores never lived in a place where they couldn't get or couldn't afford what they wanted.

Now the internet has changed that...but years ago, it was wonderful when Walmart opened.

[Dave (in MA)]

Service-wise, my experience with McDonalds is far superior to my experience with Dunkin Donuts, and I live in the town where DD is headquartered.

[cheerleader]

OL,

My tone in that post was not hostile. :-)

[lyle]

https://pjmedia.com/news-and-politics/2016/06/05/obama-on-ramadan-reject-voices-that-seek-to-limit-our-religious-freedom/

Seven. More. Long. Months.

[Old Lurker]

Jack, a few years back were we trying to cram more cars into an underground space beneath a protected site. We spent several months looking into the various designs of automated garages (pull onto a platform and get out; the car and platform are whisked away and stacked somewhere out of site underground.) The cost numbers were doable but in the end our demand pattern was too clumped up to work without waiting times too long to be attractive. But for that, this is an attractive technology that will work in many settings.

[Captain Hate]

Haley's a mixed bag; I don't think any of her erstwhile detractors would think otherwise. I still think her actions in a high profile setting disqualify her from VP consideration now.