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Subject: Re: Will Automatons Make Things Better or Worse?

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Message Thread:

Will Automatons Make Things Better or Worse?

9/1/16       
Pat Gilbert

If news accounts are to be believed, robots capable of doing the work we humans do now are soon to replace us in the workplace. As opposed to foreign competition for jobs, it's increasingly feared that technological advances taking place right in the United States will put many of us out of work as businesses replace low and high-paying jobs alike with mechanical devices that won't talk back, will never show up late, and best of all, won't require paychecks for workweeks that will render the notion of a 40-hour week quite dated.

Should Americans worry? Will the technological advances that increased our living and work standards immeasurably come back to haunt us on the way to unemployment? The pessimism is well overdone. Robots are going to be the greatest job creators of all, and in ways that will redound to all levels of work skill.

To understand why the future is blindingly bright we need to remember what entrepreneurs and existing businesses are wholly reliant on in order to grow. They require the loans and investment that allow them to turn what is a concept into a commercial reality. More specifically, they need cold, hard cash.

Yet what's important to remember about the search among entrepreneurs and businesses for cash is that it's not "money" specifically that they need in order to grow. In pursuing dollars, they're actually in pursuit of the trucks, tractors, desks, chairs, computers, and office space that money can be exchanged for. Entrepreneurs and businesses need resources if they want to prosper.

Of course, this is why robots promise to shower us with so much wealth and job opportunity. Precisely because they won't talk back, will never show up late, won't require weekends off, and will not clamor for paychecks, their rising role in the workplace means that the resources that entrepreneurs and businesses pursue as they seek to animate their visions will become incredibly plentiful and cheap at the same time.

What all of this tells us is that the cost of starting a business from scratch, or expanding an existing one into new lines of commerce, is on the verge of becoming the opposite of expensive. Compare this to last year when Wendy Guillies, president of the entrepreneur-focused Ewing Marion Kauffman Foundation, reported that half of young companies in search of credit had been turned down. Guillies' implicit point was that for small businesses, the resources necessary to turn ideas into profit-focused companies were rather scarce.

The rise of the robot signals that resource scarcity will increasingly be something of the past. As their ability to do all manner of work that used to require human inputs increases, so will the inputs necessary to start a business and expand it become wildly cheap.

The worry now is that robots will erase millions of the jobs of today on the way to national penury, but by that metric the destruction of technological advances like the tractor, automobile, ATM, computer and internet should have long ago been made legal. All are "robots" of a sort whereby they save on human labor inputs, all destroyed millions of jobs, but as opposed to putting us in breadlines, they merely changed the nature of our work.

Implicit in the fear of robots today is that the work we do now is what we'll do in the future. But as the rise of the internet alone has revealed in exciting fashion, technological advances that render certain forms of work redundant beget new kinds of job opportunities previously unimagined. In 2016, millions of Americans have internet-related jobs, but in 1996 the number of Americans working in the internet space was quite small.

The rise of the robot promises much the same in terms of plentiful and exciting jobs. Entrepreneurs by their very name are doing what hasn't been done before, and their only historical constraint has been limited resources. The resource-abundance that robots personify signals the opportunity for entrepreneurs to innovate in ways that will fascinate us and employ us at the same time.

Instead of fearing robots, Americans would be wise to cheer their arrival. Robots foretell an impressive future of wildly varied job opportunities precisely because they foretell plenteous resources for the very entrepreneurs who will create them.

Source of Article

9/1/16       #2: Will Automatons Make Things Better ...
Blaine

Just some thoughts. I suspect that advancing robot technology will follow the path of most microprocessor based technology.

Once the ball gets rolling, the capabilities will advance so quickly that their value will be a small residual of initial cost in a short time. You will need a quick ROI.

Early adopters will have antiquated robots before they are paid for in some cases if they don't hit the ground running.

Of course to support the technology there will be a tremendous number of jobs initially, then it will be like Ethernet networking when it started becoming widely adopted, it will become so well defined that if you can understand a technical manual, you can be competent supporting the technology. A lot of people may be waxing road signs if our education system does not evolve.

Security is going to be a major issue, especially with machine vision being widely adopted. The Internet of Things and Industry 4.0 are not roses without thorns. China will know how processes have changed before it's documented as Standard Work if we are not very careful.

9/1/16       #3: Will Automatons Make Things Better ...
Pat Gilbert

The moral to that story is don't be the first kid on your block...

From a macro view as the article states jobs are created by a division of labor. This is literally what has created the economy we have today.

I'm sure there will be some tumult in the process but at the end of the day we will be better for it and there will be more jobs than there are today not fewer.

Today the US is mostly a service economy with very low unemployment. Where did all the farmers go. At one time 60% of the population in the US were in farming today it is 2%.

The US was only recently dethroned as the largest manufacturing country in the world. China does not do much more manufacturing than the US.

9/2/16       #4: Will Automatons Make Things Better ...
Blaine

Critical thinking will be more needed that ever in the workplace, and much of the waste in processes will go away.

The issue of being the first kid on the block is real, but there has to be a point of entry as well.

My dentist was one of the first in the area to have a CNC crown machine. It is an amazing piece of technology, and he adopted early. 2 years into owning the technology, the cost of the technology dropped more than 60%. I asked what he thought about that, and he had a refreshing answer. He indicated he had almost 2 years of experience using the technology, and no one else in the area was close. He can map and make a model of a patient's tooth, and install it as a crown in less than 24 hours. He can utilize the technology faster, and consistently get the tooth coloring correct. He purchased with a 1 year estimated ROI, so really did come out ahead despite the drop in the price of the technology. And he benefited from the tax code by investing in his business.

9/2/16       #5: Will Automatons Make Things Better ...
Sam

Being out in front has its advantages, but all in all, I subscribe to the concept that its the second mouse gets the cheese.

Not to say being on the bleeding edge doesn't have merit, just that paying attention, and watching where the first guy out of the gate stumbles can have an even bigger payoff.

9/2/16       #6: Will Automatons Make Things Better ...
cabmaker

The Economist Magazine has an article today about how the UberWorld is transforming transportation.

Yesterday's Wall Street Journal had an article about how container shipping on the ocean will soon happen on ships without any crew at all.

That automation is going to take over the world is no surprise at all. The big question is how the profits are going to be distributed.

Or, more importantly, what will society look like when the majority of people have nothing at all?

Uber World

9/2/16       #7: Will Automatons Make Things Better ...
Pat Gilbert

That ain't gunna happen.

Where did all of the farmers go?

Or closer to home where did all the cabinetmakers go?

They are doing something else because the machinery replaced them or their jobs got off shored. But I don't hear anybody saying their are too many cabinetmakers. Because the division of labor creates more jobs albeit different jobs.

9/2/16       #8: Will Automatons Make Things Better ...
cabmaker

Pat,

If you don't need to own a car anymore then we don't need to manufacture cars anymore.

The butcher, baker & candlestick maker all depend on something to be manufactured.

We can't all be economists or baristas.

9/2/16       #9: Will Automatons Make Things Better ...
Pat Gilbert

I can't remember is this Tim or someone else?

How would you explain current job openings to someone 75 years ago?

Website designer, CNC operator, Cabinet Vision engineer, programmer, SEO optimizer, etc

If what you are saying is true then why does unemployment keep going down?


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9/2/16       #10: Will Automatons Make Things Better ...
cabmaker

Pat,

A graph by itself means nothing.
It's the interpretation that we need to pay attention to.

If you were to make a graph of income distribution, what would it look like?

If you were to trend this graph out one more generation, what would it look like?

What would our communities look like as a reflection of that graph? What do communities in other countries look like that also share similar income distribution graphs?

In South Africa you know your children are always safe because wherever they are it's usually behind at least two rows of electric fence. Does this mean the future employment will be in electrical engineering?

9/2/16       #11: Will Automatons Make Things Better ...
Pat Gilbert

There is a better chance of those charts stating the facts than your stories.

Income equality is meaningless all anyone cares about is are they doing better or not.

The charts say they are doing better.

9/2/16       #12: Will Automatons Make Things Better ...
Pat Gilbert

Here is another chart.


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9/2/16       #13: Will Automatons Make Things Better ...
Blaine

I think we would see a vastly different unemployment chart if the same criteria and parameters were used as were used in 1980, throughout the entire timeline represented.

Long term unemployed drop completely off the chart with the calculations as they are currently done. this has not always been the case.

9/2/16       #14: Will Automatons Make Things Better ...
Pat Gilbert

I believe if I use this chart showing total employment numbers that will circumvent any problem you are talking about.

Which would mean that there are way more employed people.


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9/2/16       #15: Will Automatons Make Things Better ...
Pat Gilbert

Here is another one.

The doom gloom is a narrative that is hard to prove.


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9/2/16       #16: Will Automatons Make Things Better ...
Blaine

It's not gloom and doom, nor is it Skittles and rainbows.

I don't know that you should be getting a check from a government unemployment agency to be considered unemployed, that's all I mean to say.

U5, U6, and official unemployment since 1995


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9/2/16       #17: Will Automatons Make Things Better ...
Pat Gilbert

It is a lot closer to the later than the prior.

One of the reasons for your U6 number may be that the government pays them to be unemployed.

My chart shows the U3 at below 5% which is pretty much full employment.

9/2/16       #18: Will Automatons Make Things Better ...
Gary Matthews

This article is looking in the rearview mirror. Automation has already drastically changed the workforce. Total employment may not have changed much at all, but the types of jobs have. Middle class jobs have been replaced with lower class jobs, while the owners of capital walk away with the profit and stash it on the sidelines.

Americans for the most part don't fully understand the dynamic of how technology has made this happen. Ask a coal miner and he will blame liberal politicians rather than robots running the mine. Ask a woodworker and he'll blame immigrants rather than CNC machines, cabinet vision, etc.

But the younger generation knows that they are getting the shaft, even if they don't know why. They see their student debt mount while their parents hardly paid anything for college. They see housing prices out of reach for them, while they were totally within reach for their parents generation. And they have crappy job prospects that don't pay much, unlike the job market of their parents.

Automation will force us to make a choice: continue in our capitalist tradition and become an oligarchy like Russia, or embrace European socialism. A tipping point will come when the number of people with crappy low paying jobs outnumbers the lucky ones and the trust fund babies. I'd give it 1 or 2 more election cycles.

9/2/16       #19: Will Automatons Make Things Better ...
Pat Gilbert

If you look at the windshield you haven't seen anything yet. Blaine could speak to this as that is his specialty.

As far as the lower standard of living goes I think you are right. But not for everybody. If you have a college education or a trade you will be all right. See the chart below Unemployment amongst college graduates has remained very low.

I think a bigger consideration regarding this is the dearth of unions.

Technology is the hallmark of higher salaries. Wages are a percentage of production, you can pay the running the backhoe more than you can pay the guy running the shovel.

Point being that capitalism is what created our current economy. More accurately the free market created a higher standard of living. To think otherwise is to ignore the obvious facts.

Trouble is you have to get some education to operate the back hoe instead of the shovel.

The younger generation is hip to this fact and are way more educated than us.

The very definition of inflation is when more money chases fewer goods. Government's solution to everything is to throw money at it and regulate it which means the prices go up on healthcare, college education, military, etc.

Government spending has created much/if not all of the income inequality that some of you like to complain about.

Government is not the solution, shrinking government is the right direction.


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9/3/16       #20: Will Automatons Make Things Better ...
Larry

There are always two ways to look @ everything. Fact is technology has improved the lot for most people, even the "poor." I see "homeless" sitting outside of hot spot businesses using their tablet computers (looking for a job? or checking for government (your) $ having been put into their account.) Things brought to the masses by computers and robots: cell phones, better cars, TV, fresh produce year round, on & on. How many of you watched the semi-automated cabinet line run @ the SCM booth? The robot reading the bar codes, feeding the doweling machine and edgebander cost $52K! Cheap!

9/3/16       #21: Will Automatons Make Things Better ...
cabmaker

Larry,

Stop beating up the poor and be thankful for your blessings.

The number of people sleeping in a car or under the bridge next to my cabinetshop has been increasing. There are certainly some who brought them on themselves. Some just merely become unemployed or had their rental home converted to condos.

This judgmental bullshit is just plain pious.

9/3/16       #22: Will Automatons Make Things Better ...
Pat Gilbert

Keep in mind that "the poor" is a statistical group. That group is not flesh and blood people. People move out of this category almost as quickly as people move out of the highest statistical group. You can think of it as a professional sports team, they have many different players every year.

One of the main reasons they don't move out of this group is that they get public transfers (welfare) to be a part of this group and they make money under the table without paying any taxes.

9/3/16       #23: Will Automatons Make Things Better ...
Gary Matthews

"Point being that capitalism is what created our current economy. More accurately the free market created a higher standard of living. To think otherwise is to ignore the obvious facts."

Well, China is not a free economy. It is state run and has consistently had higher growth than the US for about 3 decades now, and every year their standard of living gets better and better. There's a lot to dislike about China. But China refutes the notion that free markets are "better" than state run economies. In terms of economic growth, it's simply not true.

9/3/16       #24: Will Automatons Make Things Better ...
cabmaker

Pat,

What do you mean by "they make money under the table without paying any taxes"?

You wouldn't be talking about anybody in the construction industry would you? You're just talking about those poor who are really just statistical groups. Right?

9/3/16       #25: Will Automatons Make Things Better ...
Pat Gilbert

Definitely in the construction industry.

In the US 1/3 of the welfare goes to Calif with 1/8 of the population in the US. 33% goes to 13%, what is wrong with this picture?

It gives this group an unfair advantage in the trades as they are subsidized by the government.

9/3/16       #26: Will Automatons Make Things Better ...
Pat Gilbert

You are taking what the Chinese Politburo says at face value?

Or you can believe your lying eyes and notice that they are practicing CAPITALISM.

IIRC they have an apparatchik in every district who's job it is to get as much commerce into his district as possible. They are paid according to the gross so they are benefited by empty cities and the like.

The Chinese cook the books and print money to make the GDP numbers appear much better than they are.

Same as the US right? The US government uses the GDP numbers to prove that our standard of living is rising. Somehow that does not reconcile with Tim's homeless people living under the bridge statistic. Who are you going to believe the government or your lying eyes? But I would question why there has been an increase.

For extra credit you can read about mercantilism and see how that plays into things as well.

For more extra credit you can read about how demographics plays into things as well.

9/3/16       #27: Will Automatons Make Things Better ...
cabmaker

Pat,

What do you think would happen if somehow we were able to eliminate all people in the construction industry who work "under the table"?

Would this cause the price of housing to go up or go down?

If the price of housing went up what do you think would be the effect on how many new housing related projects that would take place?

My hunch is that when prices go up, demand goes down.

Ergo, if we did not have these undocumented workers in the construction industry we would probably not have as many cabinets to build.

So every time you see an undocumented worker on a job site you should walk up and shake his hand, give humble thanks for how his nefarious behavior has improved the quality of your meals (not to mention the lettuce in your sandwich).

9/3/16       #28: Will Automatons Make Things Better ...
Gary Matthews

Hmmm... the Chinese are are a bunch of apparatchiks with empty cities, cooked books... who are also capitalists. Huh?

You are confused at to what capitalism means. It means that you allow capital to freely move where it gets its highest return on investment. The Chinese have a hybrid system in which they allow a significant amount of unfettered movement of capital. But they also direct massive government spending into infrastructure along with subsidies to support certain industries (the socialism half). And it works. You don't have to believe the government statistics. Nobody does. But their trade balances don't lie. They hold trillions of USD. Trump is right when he says they are winning. And they are winning because they pair up smart socialism with capitalism, just like the US did in the first half of the 20th century when we built the Hoover dam, the highway system, and on and on.

Then people got lazy and selfish and didn't want to invest anymore. They wanted lower taxes. And they got it. So here we are today with crumbling infrastructure and a country full of overweight diabetics while the Chinese are kicking our butts because they have embraced socialism while we abandoned it.

9/3/16       #29: Will Automatons Make Things Better ...
Pat Gilbert

Tim the price would go up in the construction industry. But it is a false price right now as the government subsidizes the low income workers.

I'm not blaming the immigrant worker, if I was in their shoes I would do the exact same thing.

They are not the problem.

9/3/16       #30: Will Automatons Make Things Better ...
Pat Gilbert

Gary I'm not confused about any of this.

You need to look up comparative advantage and look up price discovery.

Comparative Advantage

9/4/16       #31: Will Automatons Make Things Better ...
Pat Gilbert

Is this relevant to this thread?


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