From the 1% conference in Davos (though most would see that the opinions range from raging socialists to capitalists depending on where they sit)
http://www.marketwatch.com/story/worlds-big-thinkers-weigh-in-on-robots-trump-and-the-coming-revolution-2016-01-22The problem I have with some of these big thinkers is that they are far too removed from the trenches to have a fully informed opinion. Especially when they talk about the impact of tech which is quite multi-dimensional, not just the domain of coders replacing manufacturing jobs.
There are two major categories of tech that have different impacts. This distinction is missed by most "big thinkers"
1. Tech in which the marginal cost of production and distribution is close to zero. Most software and software services that require no further labor to be consumed and negligible distribution costs. This, in my opinion, is the most disruptive on society and one likely to cause the most long term damage.
This characteristic is unlike anything that has happened in history and so IS part of "this time it is different". The reason that this is so disruptive is because it tends to create huge monopolies with very little labor participation. As the marginal costs go to zero, a company can supply the entire world by pricing it close to zero which can prevent competition from gaining a foothold (you cannot compete with free with a dominant player and you cannot claim predatory pricing to prevent monopolistic policies) and the company can do so with relatively few people. Facebook is a perfect example of this. Snapchat could be next one.
This is the tech where most of the startup funding is going these days. Multiple companies come up where the VCs know only one of them is going to make it and become a unicorn but they don't know which. It doesn't matter. They spread it amongst all and when they get their one unicorn, the returns are so huge that it matters very little to them others fail. But it has changed the nature of employment. It is like playing a lottery for the employees where they keep trying with no long term stability. It is also only for those in selected geographical areas where there is startup funding. What the millenials who are participating in this do not realize is that if they do not make it by the time they hit late 30s, like many sports fields they have lost their employability except in dying large companies. Agism is the dirty little secret of Software Valley.
This type of tech does very little to improve lives elsewhere or increase the standard of living. Just concentrates wealth in a few and since it makes enough for them to not have to worry about it for a generation or two, there is very little incentive to create long term sustainable industries, just keep it going while the going is good.
Imagine if Ford had not only come out with a mass producible car first but had a cloning machine that could clone them out at zero marginal costs and could be delivered anywhere with no cost. There would have been no GM or Chrysler or even Detroit. Just one big brand. This is why Tesla cannot become the only brand supplying electric cars even if they wanted to and had the mass producible technology before everybody else.
This is the tech one really has to worry about. No amount of retraining skills or coding classes will help raise broad living standards.
2. Tech which has the same constraints and costs as traditional industry. Apple with its devices, Drones, Robotics, Medical devices, all of which do not allow a single company to dominate at the exclusion of others. This is actually good for everybody because it allows many small and large companies to co-exist that creates large employment. Scaling of such industries creates significant employment. Because, the returns in such companies are based on a longer term market penetration, the employment is also more stable. This is also, unfortunately, the field where there is the least amount of investment money available because there is no scope for a unicorn lottery win. Most of the startups in this area have been self funded or comes from work in taxpayer-supported means: Universities, government funded research labs, etc. Unfortunately, this is in serious decline except for visionaries like Elon Musk who are not thinking in terms of just the next app but has the cajones to invest personally in but also lead and deliver products against tremondous odds. Anyone who has been responsible for delivering rather than just talking, will appreciate the magnitude of contributions from people like that.
This tech can be disruptive. For example, robotics replacing workers but on the whole appears to create more jobs elsewhere unlike the first category.
Don't know of any big thinkers who have realized this distinction and so their statements may be true or false depending on which of the above categories one is looking at.
Comments
Robots and artificial intelligence during an increasing population (30% from '00 to '50) and moving production to low costs areas (SEA, Africa) will create poverty and hardship.
Your opinion on the creation of poverty and hardship from technological advances has been there since the Industrial Revolution and may indeed be true in the short term but history has shown it to be not so in the long run. When people say this time it is different, it is my opinion that it is true in the first category of tech above but not the second for reasons I have outlined.
The fallacy in your thinking above is assuming that it is a closed ecosystem for a single product so costs are allocated elsewhere. You are correct if that was the case. In the second type of tech, that is a false assumption. First, ability for multiple manufacturers of a type encourages not only a number of industries vying to do the same and better (robots for example) each employing people and thriving but also getting a share of the market allows them to branch out into other area which would not have existed otherwise. To take a concrete example, SpaceX creating jobs in its area would not have existed without advances in robotics, in say the car industry that may have lost jobs from it. This is opening new markets so the costs of SpaceX does not get added to the costs of car manufacturers. This is how economies have grown through centuries and the primary fallacy in your argument of assigning costs. I don't need to argue something history has shown.
So many robotics manufacturers have diversified into new areas. All of these employ labor because scaling in these kinds of industry which requires other infrastructure and suppliers, creates jobs as well and many of them diversify again to create new markets and products that didn't exist. A single dominant brand as would happen with the first category discourages that.
Yes, one can argue the lack of concrete numbers on hand (it is too complicated for that) to prove precisely that point and so it would not be unreasonable to advance your view but, in my opinion, history would be against you in that type of a blanket statement especially when backed with a fallacious argument. But it could be true in the proliferation of the first category of tech but not for the reasons you think. It is not that it is displacing jobs but rather it is tying up capital with a good return in areas where it is not creating many jobs at all which otherwise could be employed in areas which it would create new jobs and new markets. That is what is different this time.
http://www.morningstar.com/news/dow-jones/TDJNDN_2016012013350/drug-and-diagnostic-companies-issue-joint-declaration-on-antibiotics.html
https://en.wikipedia.org/wiki/Normalcy_bias
And you are wrong that I am thinking about a closed ecosystem - growth in population and a world wide free trade that allows for the free and immediate movement of money, intellectual property, and manufacturing is not a closed ecosystem.
The changes that began with the industrial revolution benefited man because it was not a closed ecosystem - high cost mfg, and other enterprises moved to low cost areas. Now with robotics, artificial intelligence, population growth and what I mentioned in the above paragraph the people will be poorer.
Like the old war axiom, you too 'are fighting the last war'.
About the closed ecosystem, you missed that I said that for a single product based on your statement. It isn't. If you are saying that the cost increase is for the entire ecosystem and that is a the problem, then that would miss the very basic principle of economics which is that growth increases the total markets (and hence the size of the ecosystem) which is what has always supported increasing costs and hence standard of living. If you are making a claim that the growth is suddenly going to stop or reverse to make it a problem then I would like to see a rationale for it as to why that would happen rather than assume it to beg the question in a cyclic argument. Otherwise, it would be in the same league as the sky is falling doomers.
There is one view from Davos that perhaps with the newer technologies the growth may not be fast enough to support displacement because the changes are much more rapid than ever. That is a more reasonable view than what you are suggesting and has some truth to it. It is definitely true of the first category of tech that I have mentioned in the first post but is not necessarily defensible in the second.
But even that does not try to make a statement that it would be more than a short term adjustment even if painful. Such adjustments have happened with great pain over the centuries. No one can really say that it will necessarily be long or sustained with any certainty while many may share that doom and gloom view. People have done that over centuries especially when all they had was a craving for attention. Economic cycles have shown to be self-correcting rather than necessarily reaching the logical extremes of any trend good or bad. The latter is what the doom and gloom crowd typically depend on.
Setting the false premise of fighting a war aside for the sake of discussion, it would seem winning a real war yields more results than fighting an imaginary one.
https://www.washingtonpost.com/news/the-switch/wp/2015/01/28/bill-gates-on-dangers-of-artificial-intelligence-dont-understand-why-some-people-are-not-concerned/
Here are some more Doom and Gloomers
http://observer.com/2015/08/stephen-hawking-elon-musk-and-bill-gates-warn-about-artificial-intelligence/
You mention of the 'doom and gloom crowd' is the normalcy bias at work. You are looking at the world in through the old lens of understanding. Also, fighting a war is not a false premise.
The well known saying is "Generals fight the last war." It means they are not prepared with proper fighting techniques for the current war. Another way of saying your analytical tools are not the right ones for the current situation.
This is a good demonstration of what makes the doom and gloomers wrong through history. They pick up a current trend and extrapolate it to its logical extremes to claim nothing can be done and we are all doomed regarding the consequences. Of course, nothing is done by people who claim nothing can be done.
You have not given any argument so far to differentiate your views from the multitude of doomers over the centuries using that extrapolation to claim the doom and gloom conclusions, other than simply asserting that others who are not seeing it are wrong/blind. But this is also what the doomers always say along with the other favorites - if only you had the right tools, if only you weren't stupid or not looking at it wrong or whatever which are all self-serving but also a well known logical fallacy. I am sure you know which one it is.
And then there is the other fallacious argument used by doomers - if you don't think it is going to end badly, then convince me now how it is going to end better. I am sure you know that this is also a logical fallacy for which you can find a link if you wanted to.
That is like someone saying, tell me now why and how this market is going to reverse and go up and since you cannot it must end in [pick your favorite doom scenario here].
Tell me something new.
Thanks for your input to the thread. It has been fun.