Like many people, I long worried about the specter of technological unemployment – as machines get smarter and gradually can do the jobs that people do, will we reach a point where machines can do everything people can do?

If and when that happens, we may have a paradise of abundance – machines will make everything we want, without any people needing to work.

But at the same time, how will people get money to buy these things?


I no longer think that’s going to be a problem.

Last week’s Economist has an excellent report on “The return of the machinery question”, which examines the problem from a historical perspective. People, after all, have been thinking about this problem since the start of the industrial revolution.

Despite all the hand-wringing, the economy always seems to generate more jobs than automation displaces.

Now I understand why (others have understood for a long time).

I’ll explain with a simplified economic model.

LIMITED STUFF-MAKING ABILITY

At any given time, the world (or national) economy has the ability to produce a certain amount of stuff. Food, clothing, houses, cars, entertainment, etc. – all the things we humans want.

How much stuff we can produce at any given time depends on:

  • Labor: How many people exist (each has hands and brain)
  • Capital: How many machines, factories, buildings, etc. we’ve accumulated. How much education people have received, etc.
  • Resources: How much raw materials we can easily get at – metals, chemicals, energy, land, etc.
  • Technology: The ways we know to do things and use the things we have.

Of course how well we use these things matters – we can run factories 24×7 or only 8 hours/day. We can have rules that make us waste time and materials, or incent people to be efficient. We can work long hours, or take lots of vacations.

And over time how much of these things we have changes – population can grow or shrink, resources can be discovered or run out, and we can discover new ways to do things that are better.

But, still, there are limits. At any given time, we can only produce some given amount of stuff.

LIMITED MONEY

Also at any given time, there is a (again, roughly) fixed amount of money in the world.

Sure, we can print more, but that doesn’t help. If we can make a billion stuffs each day, and there are a billion dollars of money, then the billion dollars will buy all the stuffs, so 1 stuff for each dollar.

(I said this was simplified.)

But if we print another billion dollars, that doesn’t help. Now there are 2 billion dollars, but only 1 billion stuffs each day. So you need 2 dollars to buy each stuff.  (This is inflation.)

MONEY CAN ONLY BE SPENT ON PEOPLE

When someone buys something, they give money to some person.

Yes, you can buy a building, which is not a person. But to buy it, you give money to a person (who owned it).

The same is true with everything – whether you’re buying labor or capital or resources or technology – the money goes to people.

There’s no place else it can go, except to people.

NOW INTRODUCE ROBOTS

So, we can make a given amount of stuff, and the given amount of money will buy that stuff.

And money can only be spent on people.

Now we introduce lots of robots that can do most of the jobs that people do. The robots are cheaper to use than humans, so they get used instead of people.

So now there are people doing nothing, who used to be making stuff.

I just said “the robots are cheaper”. This is key.

Let’s simplify some more and assume we’re still making the same amount of stuff (actually we’ll be making more, which makes things better, but let’s ignore that for now).

So we’re making the same amount of stuff, but the robots are cheaper. That means somebody has extra money left over (probably whoever is using the robots, but that’s not important, as we shall see).

Same amount of stuff. Extra money left over. Which can only be spent on people.

The extra money will eventually get spent.

If it’s spent on stuff made by robots, there is still extra money left over. Because robots don’t get paid, only people do.

Yes, robots cost money, but that money is paid to people – the people who make or own them.

So there is still extra money around. Held by people. They can spend it on more robot stuff as much as they like, but that doesn’t use up the money – it just moves it around to other people.

And since we’re already making as much stuff as before, that means it has to be spent on new stuff made by people, that wasn’t being made before. That’s the only place it can be spent.

So now we’re making more stuff than before. And that new stuff was made by people. And the only people available – who aren’t already busy making the old stuff – are the ones who lost their jobs to robots.

So those are the people who get hired to make the new stuff.

That’s it.

That’s why despite 200 years of worries, technology has never caused mass unemployment.

Because it can’t. There is only so much money around at a given time. If money is saved by cheaper robots, that money gets spent on people.

(Yes, technology has caused, and will cause in the future, temporary problems as people switch jobs. That’s different.)

Finally – Since the robots are cheaper, prices for the stuff they make go down. Which means people can afford to buy more of them.

Which means that people actually get wealthier, in terms of how much stuff they can afford to buy. (They don’t necessarily have more money – they might have more or less – but they can afford more stuff.)

They can’t buy more of the stuff made by people, but they can buy more of the stuff made by robots. Which means stuff made by people is more expensive – more valuable – than stuff made by robots.

Which means the wages of the people who make stuff has gone up, in terms of what the money you pay them will buy.

Up, not down.

Technology makes wages rise. Not decline. Rise.

And that is why we have nice things today, like houses, and medicine, and clean rivers, and airliners, and indoor toilets, and the Internet, that our ancestors with little technology didn’t have.

Experts in any field seem very unwilling to speculate, or even endorse speculation, about long-term developments in their field.

Whether it’s physics, or AI, or medicine, or politics, experts don’t want to talk about their ideas on long-term developments. In those rare cases where they do, they often use pseudonyms (many professional scientists have published science fiction, but only rarely under their real name).

I’m not sure why this is, but I’ve been collecting possible reasons:

1 – They have a lot to lose as experts if the speculations turn out wrong, and by their nature speculations are…speculative.

2 – They are very focused on immediate problems and progress. This is what they’re paid to to do, and where they get their professional prestige.

3 – They are more keenly aware than non-experts of the many difficulties there will be in the actual implementation of speculative ideas. While they may know intellectually that these difficulties are not insurmountable in principle, as an expert they’re overwhelmed by the amount of work yet to be done, and tend to assume it’ll never happen.

4 – Even if they think the speculations are reasonable and will turn out correct in the long run, because of #3 they fear losing professional respect within their field – other experts may be discouraged by the amount of work yet to be done, and so consider as “crazy” anyone who takes a longer-term view.

Supporting these ideas is the observation that those few experts who are willing to engage in speculation tend to be from the very top (Nobel laureates, etc.) or very bottom of their field.

Those, in other words, who are either so respected they don’t fear a loss of status, or who have no status to lose in the first place.

In a recent post on his blog Overcoming Bias, Robin Hanson notes:

we often have academics who visit for lunch and take the common academic stance of reluctance to state opinions which they can’t back up with academic evidence

Which doesn’t directly explain why they don’t want to, while providing an excuse. Hanson suggests:

One does not express serious opinions on topics not yet authorized by the proper prestigious people.

Or, as Stephen Diamond has suggested,

Long-term speculation is hard to falsify until its propounders are safely dead. I suspect this is the reason for reluctance: it may seem a cheap way to get acclaim without empirical responsibility or consequences.

I think that’s a charitable interpretation – I suspect Hanson is closer to the truth.

For a shock, read Francis Wayland’s The Elements of Moral Science (1835; try also here), “one of the most widely used and influential American textbooks of the nineteenth century“.

As Wayland explained, prior to Darwin’s theory of evolution, conventional mainstream Christian morals were based on the idea that Man was made by God, and so had special moral responsibilities.

Darwin knocked that bucket over, and in the process broke the long-accepted rationales for all kinds of legal, moral, and ethical rules. The reverberations from that were still being felt at least into the 1970s, and included socialism, progressivism, communism, the sexual revolution (of the 1920s, not the 1960s one), fascism, bad art, ugly buildings, environmentalism, hippies, flower power, and more. Some of it was good, more of it was bad. Things didn’t really start to settle down until the 1980s in the US, the 1990s in Europe, and still aren’t settled in the Islamic world.

And there are plenty of people – all over the world – who still haven’t made peace with it.

In Asia there wasn’t as much commotion about Darwin because Asian societies tended to take their social rules from non-theistic sources (as the West does now, mostly); Darwin’s revelations didn’t invalidate them.

It is telling, I think, that East and West had more-or-less similar rules (and still do, post-Darwin), despite supposedly getting them from independent sources.

I think that shows the rules really came from social evolution, a la Friedrich Hayek (certain rules tend to make societies dominant). Ironic, no?

Thank you, Lee Kuan Yew

March 23rd, 2015

lee-kuan-yew

Lee Kuan Yew passed away yesterday.

Much to my regret, I never met him. I did not agree with him about many things.

But he was the greatest single benefactor of mankind in history.

As a direct result of the actions of Harry Lee and his “socialist” People’s Action Party, billions of people were lifted out of abject poverty, through reforms first in Singapore, then copied in China and in much of Asia.

Billions of people.

Today Reuters quotes Lee as saying in 1986 “We have to lock up people, without trial, whether they are communists, whether they are language chauvinists, whether they are religious extremists. If you don’t do that, the country would be in ruins”.

He outlawed long hair on men in the 1970s. Banned the sale of chewing gum. And, of course, many drugs.

Those things don’t fit with my politics. But look at the result. Singapore, once almost a synonym for filth and poverty, today is arguably both the freest and wealthiest country in the world. And – billions of people.

Deng Xiaoping, architect of China’s rise through market economics, based directly on emulation of Lee Kuan Yew’s policies in Singapore, famously said “it doesn’t matter whether a cat is black or white, if it catches mice it is a good cat”.

Lee’s cats caught mice.

And so, despite everything, I mourn Lee Kuan Yew.

And, about our political disagreements? Maybe I’m wrong.

sm lee press conference

Modern times

March 13th, 2015

God said, “I am the Lord thy God, King of the Universe. You shall do as I command, or suffer the consequences.”

Man was unhappy, but resigned.

Darwin said “There is no God.”

Man said “I am free! I may do as I please. I want utopia without effort. I want socialism, and fascism, and communism. There shall be no need for greed or hunger. All children shall be above average. I so command!”

God said nothing, since He did not exist.

Reality said “here are the consequences”.

Man was unhappy. But then, he had always been so.

Slogans

August 4th, 2014

Be nice. Work hard.

Be tolerant.

Correlation is not causation.

Internalize externalities.

It’s a democracy; compromise.

Life is only fair on average.

Spend less than you earn. (Other people do; you can too.)

Subsidy is the root of all evil. (Separate post coming on this…someday.)

In One Time Pads We Trust. (All others pay cash.)

Keep Right Except To Pass.

Abstraction is good, magic is not. Remove magic.

Be polite to armed people.

Don’t buy consumer goods on credit.

Perhaps it had to come to this…

December 18th, 2012

From Techdirt, 2012-12-17:

China Tries To Block Encrypted Traffic
from the collapsing-the-tunnels dept

During the SOPA fight, at one point, we brought up the fact that increases in encryption were going to make most of the bill meaningless and ineffective in the long run, someone closely involved in trying to make SOPA a reality said that this wasn’t a problem because the next bill he was working on is one that would ban encryption. This, of course, was pure bluster and hyperbole from someone who was apparently both unfamiliar with the history of fights over encryption in the US, the value and importance of encryption for all sorts of important internet activities (hello online banking!), as well as the simple fact that “banning” encryption isn’t quite as easy as you might think. Still, for a guide on one attempt, that individual might want to take a look over at China, where VPN usage has become quite common to get around the Great Firewall. In response, it appears that some ISPs are now looking to block traffic that they believe is going through encrypted means.

A number of companies providing “virtual private network” (VPN) services to users in China say the new system is able to “learn, discover and block” the encrypted communications methods used by a number of different VPN systems.

China Unicom, one of the biggest telecoms providers in the country, is now killing connections where a VPN is detected, according to one company with a number of users in China.

This is the culmination of at least 35 years of official concern about the effects of personal computers.

I’m old enough to remember. As soon as computers became affordable to individuals in the late 1970s there was talk about “licensing” computer users. Talking Heads even wrote a song about it (Life During Wartime).

The good guys won, the bad guys lost.

Then, even before the Web, we had the Clipper chip. The EFF was created in response. And again the good guys won.

Then we had the CDA, and then CDA2. And again, the bad guys lost and the lovers of liberty won.

In the West, the war is mostly over (yet eternal vigilance remains the price of liberty).

Not so in the rest of the world, as last week’s ITU conference in Dubai demonstrated.

I say – let them try it. Let them lock down all the VPNs, shut off all the traffic they can’t parse. Let’s have the knock-down, drag-out fight between the hackers and the suits.

Stewart Brand was right. Information wants to be free. I know math. I know about steganography. I know about economics.

I know who will win.

Americans love war

October 21st, 2012

Probably so does the rest of humanity.

Here in the USA, we have:

  • The War on Cancer
  • The War on Drugs
  • The War on Poverty
  • The War on Drunk Driving
  • Hoover’s “War on Crime”
  • Jimmy Carter said the 1970s energy crisis was “the moral equivalent of war”

Then we have the “Good War”, war movies (good guys vs. bad guys), war heroes, and countless war metaphors.

All these wars are supposed to be good things. Necessary things.

Whatever else he was, Jimmy Carter didn’t seem like a nasty guy. But think about “the moral equivalent of war”. Was Carter saying that he thought it was OK to lie in order to deal with the energy crisis? To cheat? Steal? Kill?

Cheating, lying, destruction, theft, and murder are all allowed (indeed, acclaimed) in war.

So is groupism that would otherwise be criminal – in war, when the enemy leaders attack you, it’s OK to respond by killing innocent civilians – so long as they’re subjects of your enemy. Or, even, just in the way.

We declare war on whatever we don’t like because, in war, the normal rules of civilized society don’t apply. And people, especially people in power, don’t like to be constrained by the rules of civilized behavior.

The universe is not parsimonius

October 21st, 2012

One of the defining characteristics of the universe is that it is not parsimonious.

Consider that fish produce many thousands of offspring to replace themselves once – all but two don’t make it to reproduction.

Consider evolution.

Consider the proportion of the Earth’s mass that participates in the biosphere. Of the solar system’s mass. Of the galaxy’s mass.

Consider the number of planets in the universe, and the number that have people on them (~ one).

Consider the proportion of the universe’s mass that is even matter. And the proportion of matter that has an atomic number greater than two.

Now consider the Many Worlds interpretation of quantum mechanics.

The universe is not parsimonious.

[This is not to disparage Occam’s Razor. Parsimony in explanation is indispensable. But the thing being explained need not itself be parsimonious.]

A Day in the Future

May 19th, 2011

(This was originally posted 2011-01 on Raptitude.com by David Cain. Reposted here by permission.)

I awake in bed. I’m warm and safe, like every morning. Outside it is twenty below zero, but from inside my home winter seems far away.

As I rise and stretch, I notice I’m sore. Not from tending the fields though. I have no fields. Some unseen person does all the field-tending for me. Sometimes I forget that there’s any field-tending going on at all.

I buy all my food — I wouldn’t know how to grow it or hunt it. Three or four hours’ pay gets me a week’s worth. It’s a pretty good arrangement. I’m thirty years old and I’ve never gone a day without food.

My soreness is actually from my leisure time, not work. I spent yesterday sliding down a snow-covered slope with a board attached to my feet. After that I was pretty worn out, so I went to a friend’s house, drank beer that was wheeled in from Mexico by another person I never met, and watched a sporting event as it unfolded in Philadelphia.

I don’t live in Philadelphia, but my friend has a machine that lets us see what’s happening there. I have one too. Almost everyone does.

The sun won’t rise for another hour, but I don’t need to light a fire or candles. I have artificial ones, mounted on the ceiling. Hit a tiny switch and I can see everything, any time of day.

I bathe while standing. The water comes out whatever temperature I like.

I use a few machines in my kitchen to get my breakfast ready. It takes about five minutes. Toasted buckwheat groats with raisins, almonds, dates and sunflower seeds. I don’t know where it came from but I’d be surprised if it was from anywhere near here.

As I eat, it occurs to me that my co-worker has a machine I might need to use at work today, so I want to make sure he brings it with him. We work about ten miles from my home, and he lives about ten miles from me, but that’s no problem. I’ve got a device that lets him hear my voice from that distance. Wherever he is, I can talk to him.

One minute later I’ve solved that problem, and forgotten about it.

I put my dishes into another machine, which will clean them for me while I’m away at work.

I get dressed and leave. My destination is ten miles in the distance and I’ve got twenty-five minutes, which is plenty of time, because I won’t be walking.

I get into my most expensive machine. It’s actually quite miraculous, but I forget that all the time. It allows me to sit in a comfortable chair, sealed from the elements, while it propels me at incredible speeds.

Just like my home, I can make it any temperature I wish inside. I don’t have to exert any real effort to make the thing go. I use my hands and my toes to control it.

I don’t know quite how it works, but it’s powered by a liquid I can buy pretty much anywhere. For two hours’ pay I can buy enough of it to transport myself hundreds of miles from here. I can transport hundreds of pounds of whatever I want, and even listen to long-dead musicians singing and playing instruments while I do it. I remain sitting comfortably the whole time.

So I hurtle myself to my workplace, which is well beyond the horizon, looking from my house. There, I do what a corporation asks me to, for most of my daylight hours. It’s not that tough really.

I hurtle home in the same manner, without really thinking about it. I make dinner for myself, and eat. Then I turn on one of my favorite machines. It’s about the size of a book.

It has a glowing window inside it. A single page. But I only need one page because its contents change at my command. Sometimes there are words, sometimes photographs, sometimes both. The photographs can move and talk.

The stuff in the book can be written by anyone in the world, even as I’m reading it. There’s more in that book than I could ever read. It provides me with unbelievable advantages. Anything I don’t know, I can find out in a few seconds.

I can get instructions on how to do pretty much anything that has ever been done. I can summon complete histories of almost any person or culture you could name, expert opinions on anything at all, unlimited advice, unlimited entertainment, unlimited information. I can buy pretty much anything from where I’m sitting, and have it brought to my door.

I can even write anything I want and publish it myself. I don’t need permission or credentials. The whole world could read it.

These are true superpowers, only we don’t call them that because they’re completely normal. Almost everyone has access to this kind of power. Yet somehow many people complain of boredom, or of not having enough power.

I know it sounds pretty good. Ease and power are everywhere, for almost everyone. But there are downsides.

Because we’re used to ease, we don’t deal with unease particularly well. We are addicted to machines and the powers they provide. Sometimes it’s hard for people to even have lunch without one of them using a machine to talk to somebody who isn’t at the table.

We’ve lost certain skills because machines and cheap services do things we don’t want to do. Some adults don’t know how to cook anything worthy of serving to someone else. Grown men have childlike handwriting. Almost nobody knows how to wait.

We lose track of what’s right beside us, because we can listen and talk across oceans. Some people are barely there because they’re staring at a machine in their hands while they eat, walk down the street, or even while people are sitting right next to them. Even while they’re hurtling down the highway.

We generally don’t fix machines when they break. We buy new ones and have somebody haul the old one off to be buried in the ground. Nobody knows how to fix them anyway.

Because we acquire new possessions so frequently — often without even realizing it — we don’t treat them very well. It’s normal to have boxes and boxes of tools, supplies and ornaments that we don’t use, and may never be used.

We have so many things that they cease to become things. They become indistinct stuff, and their value and usefulness become lost on us. I often marvel at the thought of the unimaginable value someone two hundred years ago could get out of a random box of somebody’s neglected junk.

We forget that what we have is more than what we need. Obscenely more. I know it may sound perverse, but here in the future people often feel like they need more than they have.

***

The sun went down hours ago, but with my artificial light I haven’t noticed. I’ve been up, writing without a pen. When I’m able to summon the willpower, I close my favorite machine and go to bed.

I’m warm and safe, like every night.