More Jobs Predicted For Machines, Not People

[interestrateripoff]

http://www.nytimes.com/2011/10/24/technology/economists-see-more-jobs-for-machines-not-people.html?_r=1&ref=business

A faltering economy explains much of the job shortage in America, but advancing technology has sharply magnified the effect, more so than is generally understood, according to two researchers at the Massachusetts Institute of Technology.

The automation of more and more work once done by humans is the central theme of “Race Against the Machine,” an e-book to be published on Monday.

“Many workers, in short, are losing the race against the machine,” the authors write.

Erik Brynjolfsson, an economist and director of the M.I.T. Center for Digital Business, and Andrew P. McAfee, associate director and principal research scientist at the center, are two of the nation’s leading experts on technology and productivity. The tone of alarm in their book is a departure for the pair, whose previous research has focused mainly on the benefits of advancing technology.

And if we use machines more how are people going to be able to afford to buy goods / use services? Does this mean the elites will be served more and more by machines?

[goldbug9999]

And if we use machines more how are people going to be able to afford to buy goods / use services? Does this mean the elites will be served more and more by machines?

Automation is good and natural consequence of capitalism. Automation increases per capita productivity, this makes goods and services cheaper which in turn raises standards of living. Its why you can buy a loaf of bread for about 10 minutes of your labour even if you are on minimum wage (compare that to say 100 years ago).

Increased production effeciency will always mean you need less people to satisfy a particular need but this is compensated for by demand for new needs (the result of existing needs becoming cheaper). This is the essence of effective capitalism.

However in order for production effeciency increases to translate to cheaper prices (of everything) its necessary to have unfettered competition. Monopolies, cornered markets, resource hoarding and other anti-compeditive practices are what undermine the benefits of capitalism.

Thus the real problem is not automation itself, but where automation is used to increase profits for few (rather than reduce prices for the many) in a rigged market.

Vast wealth imbalances stem from rigged markets, not from automation. Currently one of the favourate ways the "elites" rig markets is by regulation - the cost of it creates a barrier to entry for small start up competition.

Edited October 24, 2011 by goldbug9999

['Bart']

nd if we use machines more how are people going to be able to afford to buy goods / use services? Does this mean the elites will be served more and more by machines?

The machines will start to become consumers?

[gimble]

http://www.nytimes.com/2011/10/24/technology/economists-see-more-jobs-for-machines-not-people.html?_r=1&ref=business

And if we use machines more how are people going to be able to afford to buy goods / use services? Does this mean the elites will be served more and more by machines?

Interesting. I haven't read the book yet, obviously, and maybe I will try to but my instinct is to doubt their thesis. Here's a quote from the article:

Productivity growth in the last decade, at more than 2.5 percent, they observe, is higher than the 1970s, 1980s and even edges out the 1990s. Still the economy, they write, did not add to its total job count, the first time that has happened over a decade since the Depression.

I wonder, did they look at employment trends not just in the USA but also in its trading parteners (e.g. China) to see where those missing jobs from the last 10 years might be found? Machines have been 'replacing' human labour for the last 200 years. During that process prosperity and employment continued to expand for almost everyone. Maybe there is something special about the internet, iPads and amazon.com that's caused this pattern to end but I doubt it.

[aa3]

The idea is starting to spread. Its hard for people to imagine that a machine could do their job, and most people can find some aspects of their job that today's level of machinery could not do.

Where people fail to grasp the impact is the machine does not have to do all of their job. If machinery could do say 50% of the work they do, then that would mean 50% unemployment in their profession. And those unemployed would drive the wages down to the national minimum wage.

[goldbug9999]

If machinery could do say 50% of the work they do, then that would mean 50% unemployment in their profession. And those unemployed would drive the wages down to the national minimum wage.

Advances in productivity will often penalise those employed in that area when demand becomes saturated, its pretty much inevitable and has been happening regulary for a long time already, however the wider economy always benefits from the increased overal productivity (notwithstanding my "rigged markets" comment above).

Although the idea of automation putting people out of work has an intuitive appeal as a "bad thing" its really a missconception caused by the fact that the negative effects are local and tangiable whereas the positive effects (of the increased efefciency) are not localised. Its the same misconception that give false credence to the idea that purging non-jobs are a bad thing.

In fact an automated-away job is just as much a non-job as a pointless public sector "out reach counceller" or whatever and the agument for protecting them just as flawed.

Edited October 24, 2011 by goldbug9999

[alexw]

Automation is good and natural consequence of capitalism. Automation increases per capita productivity, this makes goods and services cheaper which in turn raises standards of living. Its why you can buy a loaf of bread for about 10 minutes of your labour even if you are on minimum wage (compare that to say 100 years ago).

Increased production effeciency will always mean you need less people to satisfy a particular need but this is compensated for by demand for new needs (the result of existing needs becoming cheaper). This is the essence of effective capitalism.

However in order for production effeciency increases to translate to cheaper prices (of everything) its necessary to have unfettered competition. Monopolies, cornered markets, resource hoarding and other anti-compeditive practices are what undermine the benefits of capitalism.

Thus the real problem is not automation itself, but where automation is used to increase profits for few (rather than reduce prices for the many) in a rigged market.

Vast wealth imbalances stem from rigged markets, not from automation. Currently one of the favourate ways the "elites" rig markets is by regulation - the cost of it creates a barrier to entry for small start up competition.

more MSM derived garbage.

Demand is not infinite, nor are resources. Even in the absence of zero market barriers, the first two mean that unemployment will rise.

[northwestsmith2]

One machine can build an airconditioner unit = every machine can build an airconditioner unit.

The cost of the robots is minimal, the software is the really expensive part.

http://www.almacam.com/alma_industrial_software/customers/case_studies/trane_robotized_welding_and_cutting

With more than 26 000 employees and a turnover larger than 6 billion dollars, ...............

Robots: improving welding productivity and answering a triple-sided issue

Other constraints explain Trane interest in robotization. Seasonal fluctuations have a very strong impact on air conditioning and refrigeration appliances production. This requires to be able to call on, preferably highly qualified, welders at the right time. Furthermore, the welding quality required to adhere to the demands of pressure vessels design codification calls for the welders to follow a three-month formation cycle. Seasonal load fluctuations, hard-to-find and costly-to-train manpower, quality issues related to manual welding... Faced with this triple sided problematic, welding robotization appears to be the right choice.

This of course calls for the robot to be able to weld the products, but the exchangers conception led to an uncontrolled looseness in the shell positioning in regard to the plates located at its ends. This could be up to 20 mm on a 4 m long shell. In 2002, the design office began working on modifying the products conception to guarantee the parts positioning, precondition to any robotized welding. At the same time, the welding strategy was updated.

Benchmarking was initiated with an American sister plant, already using several welding robots. Different robots manufacturers were contacted. The chosen installation, consisting of a cell equipped with a robot hanging from a longitudinal translation axis frame, fit quite nicely with Trane configuration. Two parts-bearing rotating positioners enable loading/unloading the assemblies in masked time.

Offline programming was comprised from the beginning of the project

The American plant experience indicates that teach programming for one exchanger required the full use of a robot for a week. That would amount to tying up 25 weeks of robot time in the Charmes plant. It was deemed as too costly and led to offline programming being considered from the start of the project. act/weld, alma's welding offline programming software was assessed in 2003. It seemed more efficient than the manufacturers solutions, a simulation software not specific enough or a “virtual” teaching tool deemed too rigid and imprecise. Alma's deep knowledge of the controller and the existing relationship between Trane and Alma won over the project's managers. As a matter of fact, alma's 2D cutting/punching CAM software had been used in production in the Charmes and Golbey plants for several years already. The project's managers first objective was that the programs must not be modified on the robot, that all the settings and tunings had to be performed directly through the software. “The whole programs must be repeatable and usable on a computer” indicated Vincent Guerbeur, quality manager of the Charmes plant, who was then welding manager for permanent assemblies responsible for the robotization project.

The robot cell and the act/weld software became operational in April 2004. Alma then performed the cell software calibration (update of the virtual cell to correspondence with the actual cell), an essential service which conditions the programs quality. Even if nothing was left to chance, robotized welding was a complete unknown in the plant and everything remained to be learned. Fortunately, Trane fully assigned Vincent Guerbeur, welder engineer, and two robot operator to this task. “ At the end of the training given by Alma, we had to master the offline programming tool, familiarize with the parameters, establish a programming method, find out the correct configurations and test them on the actual robot.” remembers Vincent Guerbeur, aware that he bore a huge responsibility on a fascinating assignment. It took about two months to harness act/weld and define the necessary parameters. Four more months were required to reach the productivity and quality objectives set at the beginning of the project. Around thirty programs are created in these six months, encompassing the whole product range.

The same technology to cut the shells in 3D

By the end of 2004, Trane management started thinking of robotizing the shells manufacturing, outsourced until then. “Following the successful integration of robotized welding, we wondered whether we could not produce better and cheaper shells, by cutting them ourselves, with a robot.” said Stéphane Hacquard, process and development manager of the Charmes plant. Technologically, robotized plasma cutting consistently ensures theperfect quality of the chamfers and, as a consequence, ensures minimum looseness during welding. From an economic point of view, a cost benefit analysis easily confirms the relevance of this new project by showing cost reduction of more than 35% over outsourced manufacturing.

Edited October 24, 2011 by northwestsmith2

[aa3]

Advances in productivity will often penalise those employed in that area when demand becomes saturated, its pretty much inevitable and has been happening regulary for a long time already, however the wider economy always benefits from the increased overal productivity (notwithstanding my "rigged markets" comment above).

In a perfectly free economy, like with no credentialism, licenses, housing restrictions, etc.. the market could probably solve the problem for a long while yet. As citizens fled to the final remaining opportunities for human labour.

In our world with all the restrictions its not so easy. Like its easier said than done for someone who is 45 years old to go back to school for years and retrain as a new profession. Especially in our society with most of the population so deep in debt.

[goldbug9999]

more MSM derived garbage.

Demand is not infinite, nor are resources. Even in the absence of zero market barriers, the first two mean that unemployment will rise.

Increased effeciency actually leads to higher overall demand, not lower, because existing needs can be met with a lower proportion of ones income, which leaves the remainder to create demand for new things. This process has been happening in developed countries at a rapid pace for hundreds of years.

We have to solve the unemployment problem by finding ways to make people useful in an highly automated society and not by artificially protecting thier jobs.

Edited October 24, 2011 by goldbug9999

[aa3]

One machine can build an airconditioner unit = every machine can build an airconditioner unit.

The cost of the robots is minimal, the software is the really expensive part.

The quality and consistency of the robots is a huge part. In say automobile manufacturing you have parts made that need to work together with other parts. Human beings have variability in their work, and there are limits to the precision attainable by the human.

[Si1]

Increased effeciency actually leads to higher overall demand, not lower, because existing needs can be met with a lower proportion of ones income, which leaves the remainder to create demand for new things. This process has been happening in developed countries at a rapid pace for hundreds of years.

We have to solve the unemployment problem by finding ways to make people useful in an highly automated society and not by artificially protecting thier jobs.

waiting tables at pizza express seems a common answer, and fair too

[Garf]

Automation upsets Bob Crow ... so it must be a good thing:

http://www.huffingtonpost.co.uk/2011/10/24/unions-fury-over-leaked-d_n_1028537.html

[clockslinger]

more MSM derived garbage.

Demand is not infinite, nor are resources. Even in the absence of zero market barriers, the first two mean that unemployment will rise.

unless the working week is three days and the same wage...which ought to buy more as the goods are made by efficient machine driven production. Marx was right in this as in so much else...it is who controls the machinery and to what purpose that matters.

[cica]

And if we use machines more how are people going to be able to afford to buy goods / use services? Does this mean the elites will be served more and more by machines?

Because they'll make stuff cheaper (that's still desirable) especially if it's to do with food production and shelter. Industrial/technological process is not the corruption you think it is. Usually it's the elites that hinder progress in some fashion.

[LJAR]

Jobs are a cost, the fewer of them that are needed to produce any given product the better off we all are.

Unfortunately it looks like demand is effectively infinite as people always want to be better off and more comfortable than they already are. If nothing else they want better for their own children than they had for themselves.

[wonderpup]

Automation is good and natural consequence of capitalism. Automation increases per capita productivity, this makes goods and services cheaper which in turn raises standards of living. Its why you can buy a loaf of bread for about 10 minutes of your labour even if you are on minimum wage (compare that to say 100 years ago).

Increased production effeciency will always mean you need less people to satisfy a particular need but this is compensated for by demand for new needs (the result of existing needs becoming cheaper). This is the essence of effective capitalism.

However in order for production effeciency increases to translate to cheaper prices (of everything) its necessary to have unfettered competition. Monopolies, cornered markets, resource hoarding and other anti-compeditive practices are what undermine the benefits of capitalism.

Thus the real problem is not automation itself, but where automation is used to increase profits for few (rather than reduce prices for the many) in a rigged market.

Vast wealth imbalances stem from rigged markets, not from automation. Currently one of the favourate ways the "elites" rig markets is by regulation - the cost of it creates a barrier to entry for small start up competition.

The problem is that a core aim of capitalism is to put everyone out of work- not because it's evil, but because this way lies the most profit- and profit maximisation is the aim- not providing either goods or services or employment- both of these positives are a side effect of that profit seeking behaviour.

This is not to deny that in the past Capitalism has been on whole a good thing- but the logic you employ here is really just a specialised form of luddite thinking- the idea that a given 'technology' cannot or will not be replaced. If and when it becomes practical to replace human labour it will be done.

And no- this will not lead to flowering of a new set of needs because those displaced will not be in a position to generate such needs- their former wages- now being banked by their former employer- will instead be sitting in offshore bank accounts to avoid tax liability.

The 'technology dividend' will go the same way as the 'peace dividend' and find it's way into the pockets of the rich.

[cica]

The problem is that a core aim of capitalism is to put everyone out of work

...of what they are currently doing.

Unless you believe that the unemployment we are currently seeing is permanent and this is the turning point then capitalism hasn't done any such thing.

We know what the problems are right now and it isn't what we history think of as capitalism e.g. entrepreneurs, ideas, inventions, progress, improvement, to mutual gain.

Serious question, do you really think the real unemployment (economic inactivity) we have right now is down to technological progress or is it because they are being paid to do F-all by s**t government policies.

[Traktion]

I think they should ban robots, factories and computers. Then we would all have jobs!

EDIT: And cars, trains, planes, oil, electricity! Bloody job stealing technology!

Edited October 24, 2011 by Traktion

[mfp123]

http://www.nytimes.com/2011/10/24/technology/economists-see-more-jobs-for-machines-not-people.html?_r=1&ref=business

And if we use machines more how are people going to be able to afford to buy goods / use services? Does this mean the elites will be served more and more by machines?

theres nothing wrong with machines doing jobs - it benefits the economy and make things more efficient.

if a robot or a computer can do a job for you, its massively beneficial to you.

the key is how you manage that ownership part of the equation. if you dont own it, you need the state to tax and redistribute that wealth.

Edited October 24, 2011 by mfp123

[Bloo Loo]

The idea is starting to spread. Its hard for people to imagine that a machine could do their job, and most people can find some aspects of their job that today's level of machinery could not do.

Where people fail to grasp the impact is the machine does not have to do all of their job. If machinery could do say 50% of the work they do, then that would mean 50% unemployment in their profession. And those unemployed would drive the wages down to the national minimum wage.

why pay £200K for a machine when you can hire 500 Indians to do it for less, and when they wear out, you get another lot?

[madpenguin]

I was always puzzled by Dave's concept of "The Big Society" until by chance I was reading up something about automation in Wikipedia when by chance I came across this :

"Writers such as Rifkin,[9] Brain,[11] and Ford[3] often suggest that the structure of the economy will have to shift to a basic income because its present structural foundation (trading labor for income) will no longer be an available option on a full employment basis. It would perhaps be available to only 90% of workers in the next decade, perhaps 75% of workers a decade after that, and so on. Often included in the basic income idea is an element of civic obligation, such that able people must somehow contribute civically in order to receive the basic income (sometimes differentiated as guaranteed minimum income). The labor-market economy (trading labor for income) already achieves that outcome today (because working for income generally produces civic value in various ways, directly and indirectly), but the argument is that advanced automation will decouple the linkage that makes that possible. Thus the same result (trading civic value for income) would have to be driven by different forces—either non-market ones, or via a new kind of market. The non-market idea seems infeasible given the generally abysmal performance record of planned economies. But the idea of engineered new markets leaves room for the disciplining and motivating powers that make capitalist markets capable of positively shaping human behavior where government alone is usually unable."

http://en.wikipedia.org/wiki/Relationship_of_automation_to_unemployment

Looks like they are making preparations already

[wonderpup]

...of what they are currently doing.

Unless you believe that the unemployment we are currently seeing is permanent and this is the turning point then capitalism hasn't done any such thing.

We know what the problems are right now and it isn't what we history think of as capitalism e.g. entrepreneurs, ideas, inventions, progress, improvement, to mutual gain.

Serious question, do you really think the real unemployment (economic inactivity) we have right now is down to technological progress or is it because they are being paid to do F-all by s**t government policies.

Of course the reasons for unemployment are a combination of many things, not just technology.

But what seems to underpin a lot of the arguments on here is the idea that capitalism is essentially a benign force, a provider of wealth and employment. And, historically, this has been the case- but to extrapolate from this the idea that the intent of capitalism is to be a provider of general wealth and well being is not correct.

The much vaunted (and quite real) benefits of capitalism are the outcome of a power struggle between labour and capital that has been going on since the begining- and it is a power struggle that labour is gradually losing. So to say that because in the past capitalism has been of general benefit does not automatically mean that in the future this will continue to be true.

We could possibly be in the midst of a transition in which the mechanisms of capitalism cease to be of benefit to the majority, a future in which the benefits increasingly benefit only a minority. To say that this cannot happen just because it has not yet happened is the most elementary error of futurology- the belief that the future will closely resemble the past.

So my point is really to observe that just because capitaism in the past has been a good thing for most people does not guarantee that it will continue to do so in the future- indeed the current evidence suggests that for more and more people the current system is failing them- they find themselves excluded and marginalised as the wealth created by the system migrates to the top 1%

[Traktion]

theres nothing wrong with machines doing jobs - it benefits the economy and make things more efficient.

if a robot or a computer can do a job for you, its massively beneficial to you.

the key is how you manage that ownership part of the equation. if you dont own it, you need the state to tax and redistribute that wealth.

Because violence always solves everything, eh?

If you want to remove monopolies, start with the state granted ones - intellectual property.

[We’re all in this together]

Slavery was never abolished, merely repackaged. The ominous thing now is that our masters need fewer and fewer slaves as more and more processes, from farming to manufacturing, and even warfare, are automated.

Q: What's even cheaper and less trouble than a robot?

A: A really, really cheap slave.

I posted this a couple of weeks ago. Then Max Keiser's guest Michael Betancourt (I think that was his name) added so called 'expert systems' to the list. Even bankers and accountants are under threat.

So, not all bad news, then.