The Endpoint of Automation

For companies, it’s just a question of money.

By James Murray:

Earlier this year, Citi Global Perspectives & Solutions came out with a report on what computerization and automation in the US will do to jobs. It built on a study that Oxford University had produced in 2013. By looking at “702 detailed occupations,” it found that about 47% of all jobs would disappear over the next 10-15 years.

There are certain things that you have to understand. About 53% of the jobs will not disappear, and no job on the list will disappear totally. Some jobs will lose a lot of people, some jobs almost no people, which makes good logical sense.

For example, farriers (people who shoe horses) are still in demand. Not nearly as many as 100 years ago, but there is still a need for farriers.

When companies look at automation, they use a simple formula. You take the initial cost, add in interest to borrow the money, add in the cost of maintenance, and divide by the number of hours of useful life. That gives you a cost per hour.

Then you look at the cost of a human (or humans) per hour to do the same job with all the perks, and compare the two numbers. The lower number wins.

The calculation varies due to a lot of factors. If you have an enormous bank that fields 1000s of phone calls per hour 24/7, the amount of money you can invest and save with an automated voice system is a lot different from a small company with 7 employees that is open 8 hours a day, 5 days a week and receives 20 phone calls a day, and they may not automate their phone system.

The problem comes in the mid-sized companies. Suppose that you have a mid-sized company and run the calculation and the numbers come up equal. You will probably do nothing. But, you can expect automation to get cheaper and labor costs to increase, so at some point, automation makes financial sense.

About 15 years ago, a “basic” home computer system cost around $600-$1000. Today, you can buy a basic system for half that amount but instead of an 80gb hard drive, it comes with a 1tb hard drive, the CPU is 5 times faster and has 4 times the memory. In another 15 years, who knows?

I expect that in 15 years, you will not be able to buy a “desktop” as we know it today. Already sales of desktops are dropping like a rock, losing out to tablets, smart phones, etc.

The social implications of this are awesome to contemplate. Suppose that I have a company with 10 people and automate them out of a job. They are gone and no longer my problem. But the government now has 10 unemployed people to deal with. If they don’t find another job, they are now wards of the state. The government cannot just box those 10 people up and ship them off somewhere.

Companies are going to keep automating anytime the numbers work in automation’s favor. The engineers of the world are going to keep coming up with new automation products to replace people. The price of automation will keep dropping.

The politicians keep saying they will “create jobs and grow the economy,” but are they talking about human jobs or automated jobs?

What happens when there are no jobs for a large portion of humans? How is that going to work? I’m sure that somewhere some very smart people are looking at this problem, but I don’t see any evidence that this is happening. Maybe they just don’t have a solution.

I’ve seen articles where some dreamer is saying that people will only work 20 hours a week and have all that free time for hobbies, education etc. If people are having trouble making ends meet working 40 hours a week, how will they manage on 20 hours a week?

I’ve also seen a “basic income” scheme floated where everyone gets a monthly check. I’m all for free money, but where is the money going to come from? Certainly not from those people working 20 hours a week.

Technically, I can’t think of any job that can’t be automated eventually, provided you are willing to invest enough money into the project. The thing that keeps humans employed today is not that automation can’t do their job; it is that humans can do it cheaper. With the falling price of automation, that may not last very much longer. Then what happens? By James Murray.

The impact on wages? There have been plenty of signs. And the fate of the consumption-based US economy? Not good. Read…  “Negative Growth” of Real Wages is Normal for Much of the Workforce, and Getting Worse: New York Fed

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  128 comments for “The Endpoint of Automation

  1. Kevin Smith says:

    Furriers deal with fur,
    FARRIERS deal with horse shoes ….

    • Saylor says:

      Thank you. I was just warming up my keyboard for that one.

      And…he did not touch on A.I. which is already here.

      What will cause A.I. to grow?
      For starts, there is already enough memory. Memory is cheap. All A.I. really needs are sensors to allow them to absorb more. People forget the important mime about A.I. given enough input and memory, A.I. teaches its self. That is what A.I. is all about.

      • Saylor says:

        BTW…try to view the TED Talks ‘robotic machinations’.

        Cool…very interesting…even more so…..scary.

      • Petunia says:

        AI is the global warming of the tech community. Yes, it exists, but only under very limited constraints. Computers can’t even generate code yet. You won’t see much AI for a generation, probably longer.

        • Saylor says:

          I feel a bet coming on!

          I watched a video (I will most definitely try to find it again). It was rather funny. Apparently some of the news articles you read are A.I. generated. And there was classical music playing that turns out was generated by an A.I. while the narrator gave a litany of different A.I. that were already in place. That was were I got the information about the A.I. that did ‘discovery’ work in 8 hours that would reportedly take a staff of two lawyers and 3 para legals two weeks to provide. Gotta find that clip.

    • nick kelly says:

      And that’s just for openers!
      Frankly this is just a lot of ‘who knows?’ what the future holds.

      One thing is FOR SURE- farriers aren’t in danger of having their jobs automated. And without a lot more specifics- there is nothing here to suggest anything we don’t already know.

      Of course progress will continue- but not at the geometric rate sometimes called ‘Moore’s Law’- the notion that computing power will constantly double over (unspecified, presumably short) time periods.
      Since NOTHING increases geometrically indefinitely- it is silly that this prediction was ever called a ‘law’.
      Anyway it has already been falsified, in the last five years, the increase in computing power per dollar has slowed dramatically.
      It is also plateauing where dollars are not an issue- the super computer.

      A thing to note is the physical appearance of a super computer- it is crowded. The frames are as close to each other as possible because the speed of electricity through cables is a limiting factor.

      BTW: the theoretical limit of information storage already exists physically in human DNA. The ENTIRE blueprint for a human needs an electron microscope to be seen. The ‘atoms’ of info are atoms!
      Arrangements of a very few atoms encode each of the instructions.
      There are a lot of instructions. As small as the complete double helix (two inter-coiled springs) is- if it could be unwound it would be two feet long.
      The most compressed man- made storage available is an abacus by comparison. The good news- there is room for improvement. But there has been nothing major in the last five.
      About 20 years ago or more someone was toying with the idea of theoretically modifying an atom to store info-but that’s the last I heard of it.
      Note the time from now the author picks for this revolution to happen.
      Fifteen years. Is that the misty future? He looks at where we were 15 years ago, extrapolates fifteen forward- voila, a revolution.

      Does fifteen years seem like a very long time ago to you? This Toshiba Satellite I’m typing on is a 2007-almost two- thirds of the way there.
      It was $800 new. Sure today’s model will be quantitatively better, but qualitatively?

      I’m not going to rattle on because regular readers of the comments will have identified the skeptics about A.I., robotics etc., by now.
      So..we’ll just have to see.

      But my advice young man, if you don’t want to succumb to automation and are scared of horses. Plumbing.

      • nick kelly says:

        PS: because some things will not change in 15 years.

        • Big Duke says:

          I just hope these robots don’t use Microsoft’s operating system. Can you imagine the constant updates, security flaws and system crashes these robots will have if running Windows? I really hope I won’t have to quickly reboot the robot taxis driver using Microsoft software before it drives over the bridge……

        • JerryBear says:

          Very enlightening Nick!

      • Petunia says:

        I can think of a way to automate horseshoeing.
        Scan the hoof for size. Use a 3D printer to print the horseshoe. Bond it with dental bonding, the blue light kind.

        I think I just created a new industry. You’re welcome.

      • Semper gumby says:

        “One thing is FOR SURE- farriers aren’t in danger of having their jobs automated. ”

        This assumes there will still be organic horses in the future. I swear I saw a robotic mule being developed. How long till they have a robotic horse to ride?

        Horses are expensive to have and need attention every day. A robot horse stands in a corner plugged into a wall socket…well, you know the rest of the story.

    • d says:

      Beat me to it.

    • Wolf Richter says:

      Thanks. Fixed.

      • nick kelly says:

        Hope the guy doesn’t feel bad- the last time I looked Stockman was still talking about the warp and the ‘woof’ (?) of the economy’s fabric. I believe it’s the warp and the weft.
        One time I wrote a piece for a local rag and referred to some economic factor as a ‘bellweather’
        A guy hand- delivered quite a snarky letter to the editor pointing out it’s ‘bellwether’ And he didn’t even explain the root- a wether is an old word for a sheep and a bellwether is one with a bell that let’s you know where the flock is heading.

        There was a real beaut in yesterday’s Globe and Mail’s business section.
        Some folks may not know that the headlines are often written by someone other than the writer- a higher echelon in the case of a staff writer. In this case the piece was by N,Roubini and the headline was
        ‘Fiscal Policy passes the baton, at last’

        I thought huh? and sure enough the headline had it backwards.
        It’s monetary policy passing the baton and fiscal policy receiving it.
        (I.e, they may give up tinkering with interest rates and build infrastructure etc.)
        The on-line edition has corrected it. It’s not as catchy now but at least it’s correct.

  2. Bookdoc says:

    Although, for the top percenters, there will still be a need for furriers! My daughter also mentioned something about “furries” and I imagine they will need them as well!

  3. Larry says:

    There are plenty of furries at the various comic book conventions.

    • Saylor says:

      I think there are ‘furries’ and ‘plushies’.

      Hey, I just read about this stuff o.k.?

      • Scooter says:

        Is that how you get your jollies?

        • JerryBear says:

          The furries are a warm tribal brotherhood of creative, intelligent, independent and interesting people who are not all prejudiced against older guys like me (known as “gray muzzles”) and include some of my closest friends.

      • JerryBear says:

        Plushies are stuffed plush animals like teddy bears. One of the worst insults you can make to a furry is to um… accuse him of molesting plushies.

  4. 173d Viet Vet says:

    One should look at modern farming methods which have greatly reduced the number of persons needed to prepare fields, plant, fertilize. spray weed suppressants, harvest and transport the produce to markets/graineries.

    City dwellers would be surprised to learn that there are tractors and harvesting combines that can be started remotely, travel to the correct field designated and do all of the jobs listed above without any human on the machine, EXCEPT transport the produce to markets/graineries…. We rural dwellers would not want huge tractor trailer trucks full of produce/grain driven on our two lane roads by just a computer. With these modern machines, farmers can now cultivate thousands of acres with the same number of people that they used 25 years ago to farm 1/4 of the acreage.

    I foresee a day when few will live on farms, and their jobs will involve maintaining vehicles to include the loading of fuels. Tractors and combines will leave the farm’s barns/maintenance areas and drive themselves to the tract to be farmed. GPS inputs will have been downloaded that direct the exact paths the tractors and combines will take on each pass of the fields. This saves labor costs and more efficiently uses chemicals, seed, and fuel to maximize net returns after harvesting. Even the transport will ultimately be performed by computer directed machines without human drivers. Markets/graineries will likewise be so automated that they too will have few operators and maintenance staff.

    And as one looks at the processing of the newly harvested produce/grain, most of that too will be automated, but that is a subject for others to discuss.

    As the song says, the times, they are a changin’…..

    • nick kelly says:

      ‘With these modern machines, farmers can now cultivate thousands of acres with the same number of people that they used 25 years ago to farm 1/4 of the acreage.’
      Impressive, but not the same rate of change/ improvement as the mechanization of farming from 1940- to 1965.

      It sounds like you are also talking about agri- business, very large farms on relatively flat land, farming most likely cereal grains. I am familiar with the Canadian prairies and a section (640 acres ) is still a respectable sized farm. You say ‘we rural dwellers’- do many folks nearby have one of these self- driving combines? If so are they much more expensive than the human- driven one?
      I know there are auto-pilots that reduce driver fatigue by steering a straight line- I mean the kind that goes from the barn or wherever by itself.

      • Dan Romig says:

        GPS controlled combines can monitor the yield they harvest and store that data into an attached lap-top computer. Then the grower (fancy term for farmer, eh?) can use this data as he or she applies fertilizer. The lap-top is connected to the spray rig to vary the amount of fertilizer that’s applied based on which parts of the field had higher or lower yields.

        At seeding, a GPS controlled system can both drive in straight lines, and have virtually no overlap of where seeds have been drilled into the ground. This makes for nice looking fields that are easier to maintain, and the most efficient use seed to be planted.

        A trained eye is needed to be sure as there are so many variables to farming. This year in the Red River valley (Fargo & Grand Forks), there was a lot of rain as wheat was heading, and this caused fusarium blight, or scab, that needed to be treated with fungicide(s).

        Today’s growers need to be proficient in agronomy, mechanical engineering and computers. Plus they have to be wise about how they contract out expected grain at harvest. If corn futures trade at $4.00 per bushel for October delivery in late March, it sure beats selling to elevator at harvest for $2.82 (market price in Breckenridge MN, 16 September).

    • Jon Sellers says:

      Grapes of Wrath part deux.

    • Sadasivan says:

      If you don’t live in your Farm,how will you protect your Harvests?Drones can be useful in Battles and other things,but one still has to be present in one’s farm!

    • Alistair McLaughlin says:

      Since they’re already using GPS and remote sensing for seeding, fertilizing, spraying and drainage mapping (and have been since the mid-1990s), self-driving farm equipment is in the offing for sure. In fact, I think it’s more likely than self-driving cars. Big empty fields present a lot less risk for experimentation than crowded freeways.

  5. Bryce Nelson says:

    The money for basic income can come from taxing robots and the owners of capital. Isn’t the goal for humans to be working less, not more? Where did we go so wrong? Trickle-down economics? Spending beyond our means? Wasteful military spending? Wasteful medical spending? Broke Americans thinking they are just temporarily embarrassed millionaires?

    I could see in 100 years the need for labor close to almost non-existent. Artificial intelligence will make humans look like monkeys eventually. Let the robots do the work for us, while we enjoy the fruits of their labor. Robots don’t sleep, don’t take vacations, don’t need bathroom breaks, don’t need human resources, don’t get sick, and don’t care that their only purpose is to work. I say we tax the robots so everyone can have the possibility to enjoy life more.

    • Chicken says:

      I firmly believe humans need gainful employment, this reduces the chance of unemployed playing cops and robbers in the streets.

      Are internet commerce and high tech equally sharing the burden of paying for infrastructure with small business? I’m not sure they will when they’re incentivised to keep their profits in offshore accounts.

      What would Theodor Geisel say?

      • Alistair McLaughlin says:

        Exactly. Too much time on one’s hands is a recipe for all kinds of mischief-making. Also, lots of free time usually requires more disposable income, to fill that time with mindless amusements and distractions. Don’t believe me? Think of some guy you went to high school with who you know is now involved in drug dealing, gangs and organized crime. (We all know a few past acquaintances like that right?) Now look up his Facebook page. Cars. Women. Night clubs. More night clubs. Resort vacations. More night clubs. The photos on the FB pages of such guys tends to run into the thousands.

        They’ve got nothing but time to create trouble, since they don’t work, and their leisure-class lifestyle creates an insatiable demand for ever-more income to support it. Incentive for committing even more, and riskier, crimes.

        “Idle hands are the tools of the devil” as my grandma used to say. :)

    • Shawn says:

      I agree, but one step further. Do away with money altogether, then you won’t have the 1% or .001% parasites of the world sucking all the wealth out of it. Let’s the robots build everything we need and let them do all the service related jobs as well.

      • Shawn says:

        Pretty soon robots will be able to grow our food, build our houses, build our roads, run our utilities, transport us from point A to B, make our coffee and do our taxes. Well, if there is no money, then no need for taxes I guess.

        • Jeb says:

          Marx is dancing on the graves of 130 million people at the end of this thread, lol!

    • Konstantin KS says:

      The only thing robots demand from you is build and repair. SO, the only job of the feature will be building and maintenance of robots, in transportation, communication, agriculture. Everyone on earth SHOULD build or maintain robots.
      Entairtainment will be free and mutually shared and provided.
      So then give the governmental jobs to robots and you do not need taxes. You are going to need a revolution for this. And governments will have the robots.

      • Mark says:

        Just like Stars Wars when Luke Skywalker and his father did nothing but work on Robots.

      • Shawn says:

        My biggest problem with the movie I Robot, staring Will Smith, is when there are 35 billion robots in the world (assuming the Earth has a population of 7 billion and there is five robots for every man, woman and child on the planet). They why would you need to swipe your credit to pay for that beer in the bar at the end of the scene when he was talking to the chief, his boss? With 35 billion robots you figure that growing the hops, generating the electricity, fermenting the beer, bottling the beer and then transporting it to the bar would cost next to nothing.

      • Shawn says:

        Nope, robot will eventually build and maintain themselves.

      • nick kelly says:

        First they have to exist- at the moment they are only useful for extremely repetitive basic tasks. Packaging is probably #1

        There is something about the word ‘robot’ that sets off the creative imagination in the human mind- as it did in the 1950’s

        Honda’s robot walks! If it falls it gets up, slowly.
        Holy sh*t!
        But it is not going to be a useful domestic servant in the forseeable future.

        • Wolf Richter says:

          Robots don’t have to be humanoid. My friend’s full-auto self-cleaning self-starting self-grinding espresso maker is a robot and can be programmed in a myriad ways. Who needs a barista?

        • nick kelly says:

          I only employ a barista when I go out for coffee- where I want the human contact ( usually) -part from that I agree a completely automated coffee machine is a feasible robot.
          One question- is it self cleaning?

        • nick kelly says:

          Oh sorry just read it’s self cleaning.

          This is an example of an ‘extremely basic repetitive task’ for which automation is fertile ground. I was wondering about the concept of a fully auto coffee maker 20 years ago- the version would have been plumbed in like a dishwasher- a backwash would have blown out the old grounds. More likely an office app.
          But there was nothing stopping anyone from doing it 20 years ago- it’s not an example of an advance in the science.

          For these debates re: automation, AI and robotics I think we have to separate tasks where decisions are required- where the
          environment may suddenly change.

          The coffee maker: no. The self driving car: yes

    • J Freeland says:

      So will this automated utopia resemble Tom Swiftian vision of technological peace and prosperity or a more Johnathan Swiftian society reminiscent of Idiocracy? Given the intransigency of our human nature I fear the latter. But as an old broken down farrier, what do I know?

  6. Chicken says:

    A consumption based economy?

    1) the using up of a resource.
    2) a wasting disease, especially pulmonary tuberculosis.

  7. Big Duke says:

    Perhaps we can all own worker robots to take our place at the office. The Future: we would each pay for our robot and be responsible to maintain it. Since there will be many robot mfg’s, the cost and quality of the robots will vary, so their performance at work would also vary so our robot salaries will be based on similar human performance standards we all enjoy today. It will be nice to have a robot worker I can send to work in the morning, then go back to bed, then watch tv re-runs all afternoon as I wait for my robot to come home so I can recharge their batteries.

    • Chicken says:

      Good news, everyone! I’ve invented a way to turn robots into a human using a process I call “reverse fossilisation”.

    • 173d Viet Vet says:

      Big Duke prompted me to interject this comment:

      I see from Big Duke that we human “overseerers” will own and control the activities of our robots. We will reap the profits from our robotic workforce’s collective endeavors. From that profit, we will pay taxes which will be used by the governors (hopefully) for purely equal and completely un-corrupted public purposes (faith in human nature has now been supplanted by liberal thoughts of unanimity….).

      So if these are the “givens”, does that make the owners of robots modern “slave masters”…..????

      Whooo-boy !! That is a whole heap of thought that the liberati will not swallow and which will be resisted by the politically correct and those who sing themselves to sleep humming the tune to Kum-Bayah….

      • Big Duke says:

        173: that’s a good pt.! My idea won’t work in this politically correct world we live in. This means anyone under age 50 is screwed as the robots take all jobs away.

      • Petunia says:

        Never mind robots being slaves. I heard on tv that
        Mitch Daniels, ex Indiana governor and now heading some university, wants students to use their future earning capacity in exchange for an education. Yes, he wants to indenture our kids to the education system. And some people think this is a good idea.

        You can’t make this up, be afraid, be very afraid.

  8. John S says:

    Something that no one seems to mention is that even if a specific job is not automated it will come under pressure due to automation. As people lose their jobs to automation they will look around and try to switch to those jobs that haven’t been automated yet increasing the supply of labor and putting downward pressure on wages.

    • Jon Sellers says:

      Of course. That’s the point. That’s why you get a big tax break for replacing people with machines.

  9. Bobcat says:

    I strongly recommend Martin Ford’s book, Rise of the robots.

    I predict a large increase in the numbers of unnecessary people. The policy makers will ignore this until it quickly becomes too big to ignore. Once it reaches crisis proportions, the surplus of unnecessary people will be incarcerated.

    Basic income is unlikely to gain traction.

    • Big Duke says:

      Bobcat, I think watching the Terminator series will also be helpful.

      • walter map says:

        “We’re not going to make it, are we?” John Connor asked. “People, I mean.”

        “It is in your nature to destroy yourselves,” said The Machine.

  10. Erich says:

    “Technically, I can’t think of any job that can’t be automated eventually, provided you are willing to invest enough money into the project. The thing that keeps humans employed today is not that automation can’t do their job; it is that humans can do it cheaper. With the falling price of automation, that may not last very much longer.”

    Humans need not apply

    “Then what happens?”

    Either the return of the Luddites or perhaps “Terminator” where the machines figure out things would be better without all those carbon based life forms running around ….

    • polecat says:

      maybe Frank Herbert’s History of the Butlerian Jihad was an intruction manual ;”)

      • d says:

        “maybe Frank Herbert’s History of the Butlerian Jihad was an intruction manual ;”)”

        Should Read.

        .maybe Frank Herbert’s History of the Butlerian Jihad was a WARNING

  11. Chhelo says:

    Before the robots take all the jobs we will likely go dystopian. Have to beat the robots into plowshares and farm for a living. No shortage of jobs.

  12. Ptb says:

    Low skilled jobs are the likely targets. People are xpensive and fallible in many ways. And all these displaced people are not likely to become software programmers or other such higher skill level workers.
    It is interesting that we are headed in divergent directions of population growth and decreasing employment.

  13. Richard Hill says:

    What about personal services. Like Huma Abedin supplies to HRC. Personal waiters at top restaurants. Butlers etc. I think robotising these jobs is a long way away. Some people may always prefer humans in these roles.

    • polecat says:

      Somehow, seeing a robotic huma or weiner …. would cause my human head to explode !!

  14. Scooter says:

    You know they already have state funded day programs for people with developmental disabilities. These include both day programs and overnight accommodations called group homes

    You know we have business leaders admonishing policymakers that there are plenty of job openings amid a dearth of qualified applicants. But, on the other hand, we have massive underemployment , weak income growth and anemic consumer demand.

    So, the Democrat-Education Industrial Complex (DEIC) is more than happy to intercede here, hat in hand, and promise to prepare future generations for the jobs of the future if the policymakers were willing to loosen the purse-strings on more resources. The problem is is it was the DEIC’s purview to prevent this mismatch of jobs and job pool from occurring in the first place. Rewarding the failure of the DEIC is a political cul de sac where the status quo does tire squealing donuts for a seeming perpetuity.

    But, what I envision is a revolution and a paradigm shift whereby the underemployed are deemed developmentally disabled and awarded group home accommodations and day programs so they can participate in meaningful activities with their peers, under the supervision of staff.

  15. kevin says:

    Actually, as long as humans love sex and make babies intentionally or otherwise, the mass of humans are always going to be cheaper than robots.

    AI and robots implies ownership and the owner has to be the one to maintain, take care of and upgrade the machines. The more complex the machines, the more time, cost and effort involved.

    On the other hand, human labor maintains themselves (eat, drink, sleep, whatever) and the boss just pays the basic salary for the worker to perform the job. Everything else is, strictly speaking, not the Boss problem. One engineer with advanced degrees in AI-robotics-what-not is going to cost a lot more in man-hour rates than say 1000 cheap laborers from some third-world country.

    Poor humans are a desperate lot, willing to work in extreme and dangerous conditions for a pittance. The sad fact is that it will still be cheaper for me to get a thousand Indian workers and pay them 10 rupees a day to do some work that does not require precision or high quality.

  16. JIM says:

    Stop having children.

    The population will decrease to the level where the population will equal the workers needed.

    Having children is a selfish act unless you can provide for their future. Farmers used to have huge families to work the farm which supported the family and subsequent generations. When infant mortality was high, people had Larger families to compensate. Farmers no longer need large families and infant mortality in the rich world are infitesimally low so these aren’t relevant.

    Stop having children. Added benefit, I won’t need to listen to inane Right Wing Family Values Right to Life non issues any more.

    Save money, move somewhere cheap, be a subsistence farmer, die with dignity. It’s how most of the world’s population lives. You don’t need a 3,500 SF house, three leased cars, five 50″, Chinese made TV’s and disposable Target clothes. You also probably don’t need any children.

    • Wolf Richter says:

      Japan is the experiment for that right now. Automation will solve much of their demographics-based “worker shortage,” which is said to exist, but I have not seen it. What I have seen is an unwillingness to pay enough to attract more of the right kinds of workers. Everyone wants cheap labor.

      Japan is the global leader in robotics. Automation is of greatest benefit when the workforce is rapidly shrinking, as it is in Japan.

      • Petunia says:

        Japan’s, like America’s, greatest asset is its culture. Too bad they have both lost sight of that fact. Japan has been wiser in taking an economic hit in order to preserve it, we have not. The future will determine who was right. But, I don’t see the Japanese turning in their passports.

      • polecat says:

        That’s all nice and fine …. while energy remains relatively cheap and available ……. when it is no longer the case …then what ???… Riddle me that!

    • Earl Smith says:

      Our leaders are working on this.

      The Gates Foundation and the Rockefeller Foundation have teamed up with the World Health Organization to surreptitiously sterilize vast numbers of women in Mexico, Philippines, and Kenya by providing a vaccine for tetanus that just happens to contain a human hormone to control reproduction. The combination triggers an auto immune reaction the destroys the cells that stop the menstrual cycle during pregnancy. The result is that the woman will miscarry continuously.

      Other researchers have developed a GMO variety of corn that induces sterility.

      A few years back a researcher at the Texas Medical Center in Houston discovered that the corn cobs used as bedding for his rodents caused them to drastically reduce the size of litters.

      Scientists are definitely diligently working to solve the problem of too many people. The grants to fund them are very attractive.

      • kevin says:

        The problem is not solely due to too many humans or automation alone. Its a combination of too many humans on a finite planet, which naturally leads to the Tragedy of the Commons being the inevitable end-state, no matter which way you look.

        Even if we somehow stumble onto an Utopian global world where all robots work and humans just laze around (anyone here familiar with the Resource Based Economy RBE concept and the Venus project? I think it will fail for the reasons as follows…), there will still eventually be a situation of scarcity and the distribution of wealth / ownership rights which comes into play. In fact, I’d speculate that the rich-poor gap will be even far worse than now, because the minority who has advanced expertise on AI/robotics will be the new Masters of the Universe, and OWN and CONTROL 99.99999% of all the wealth, since all the robots produce the wealth and the whole society cannot function without AI and robots. In fact, those overlords who programs the AI/robots will be even more powerful than any Dictator in human history. A distinctly Dystopian end-state.

        Someone who labors and creates a more advanced robot will still want to own that invention and gain more resources for himself, whether its more land, a more beautiful wife, a bigger house for his family, more children, a longer life with advanced medications, more luxuries relative to his neighbors ad infinitum. Thus, there will still be competition for real-world physical resources which cannot be shared and are exclusively for the person able and willing to pay the price to own it. Short of pumping everyone with mood-altering Soma drugs as in the Brave New World by Aldous Huxley, I think human nature will still be possessive and expansionary and sometimes devious.

        By contrast, a digital resource, such as a VR experience, can be duplicated and enjoyed simultaneously by multiple parties in real-time. Not so in the real-world of physical resources, on our little blue planet. So, unless we all live within the Matrix (another Dystopia), we’re stuck with the physical realities of scarcity vis-à-vis the ballooning population growing according to the geometric function.

        Going the other direction, to de-populate the world, intentionally or otherwise, sounds like the wrong solution too. Firstly, its nasty whether done surreptitiously or via outright genocide, besides having the dreadful question of who should be deciding whom to terminate and in what numbers. Some all powerful God-like AI to decide? or some elite group of Overlords to decide?

        In this respect, my pet theory is that human societies NEED wars to do the dreadful act of de-population every once in a while. Modern WAR is our ritualized way to remove excess numbers among ourselves (when in the past, it was God that did the blameless work via natural calamity and diseases) in a way that no one is really to be blamed. We even honor those who fight bravely on either side, even when what they are doing is really no different from any mass-murderer in civilized society. They are called to do a “service” to their tribe without any blame perhaps because they faced Death equally at the hands of the opponent and as such are both subject to and doing “God’s work” at the same time.

        Any ecologist will tell you that when groups of animals belonging to the same species compete for scarce resources, fights become more frequent. Equilibrium is reached when enough dies-off or more resources are found to support the larger population. I suspect humans are not exempt from the Laws of Nature, despite all our attempts at civilization so far. Am I the only one here hearing more frequently on wars and rumors of war?

        We are at a quandary with WAR as the instrument of de-population too because its now advanced to the nuclear age, so any big enough war may be so effective that it will be our last. So that ritualized sacrificial exercise may no longer be advantageous for overall humanity too.

        So what gives? My bet is with Space travel, just as Elon Musk, Jeff Bezos and a couple of other intelligent Billionaires with too much time of their hands, would have figured it out.

        That is the only viable alternative which any advanced civilization, will be forced to pursue eventually. There is simply not many saner choices as most other alternatives shown above lead to Dystopian stasis or extinction.

        Space is practically infinite and there are more planets out there than there are sand grains on this planet alone. What better way to have space for infinite expansion, infinite material resources for economic growth (e.g. Jupiter alone has more Hydrogen to last us a million years of clean energy use), infinite real estate such that prices never have to be inflated (I’m not sure if it makes any more sense to have psf prices if a growing population can just pack an go). Plus, we can make good use of AI and robots to help us get there. I mean, if you feel its too crowded or too expensive, just go get your own planet, bro!. That would be a wonderful thing to say.

        • ERG says:

          After reading your first two sentences, I lost interest. Although I did get a strong sense that eventually the topic of outer space would come up.

          However, I would like to ask you a question: Do you consider yourself to be among those ‘too many people on a finite planet’?

          If so, then what do you plan to do about it?

          If not, then how do you know you’re not?

        • kevin says:

          ERG’s comment below did not have a reply button, so I’m replying here instead.

          Yes, it is a long story, but the purpose was precisely to show the futility of all the other options and hence demonstrate the only sensible choice available. It is not obvious but you need to have patience to read everything before jumping to conclusion.

          You actually asked me 3 questions, not one.
          1) No, I do not consider myself one of those “too many people…” primarily because I have contributed to my nation and economy in various ways, besides being able to count to 3, at least ; )

          2) Nevertheless, I have a strong biological sense of self-preservation having been made by my parents choice, same as everyone else here. Hence, I intend to make the best use of my time and skills while I’m here.
          I did make a commitment to NOT have children. I am happily married but decided not to have kids by conscious and deliberate choice. Which is probably why I have more money and more time than most folks, allowing me to contribute more to my community, instead of being yoked to the cycle of capitalistic production and consumption.
          How about you, dear Sir/Madam?

          3) ditto above, as already explained.

      • Smingles says:

        Wolf, you’ve got some total nutters on your blog here. Sheesh.

        • kevin says:

          Right…and I presume this particular website is not so nutters themselves?

          Looking at the Armagedonnistic prognostications of Wolf and his merry men of followers here, is a journey in delusional negativity that few can match. I’ll bet you many of the “fans” here have been losing money big time shorting the market for the past 6 years? ;-)

          Well, Smingles, a broken clock will still be right twice in a day, except you’ve lost all your money during the rest of the times you trusted your broken clock blaring warnings continuously. l o l

        • Wolf Richter says:

          Kevin, you clearly haven’t read WS for long. For one, it wasn’t around six years ago. And two I turned bearish on stocks last year, on bonds in 2014, and on housing in some key cities in late 2015, early 2016 – same with CRE in some cities.

          In June 2014, with WTI at over $100, I published this article, which would have saved over-exuberant energy investors a TON of money. Check it out:

          “Where Money Goes to Die: How Fracking Blows Up Balance Sheets of Oil and Gas Companies”

          And people who heeded our warnings about European banks saved a TON of money. Etc. etc.

        • kevin says:

          Well, great when you hit it spot on, even Cramer gets it right sometimes too.

          I think a statistical analysis of ALL the past 6 (or whatever no. of years) of prognostications given here would give a more balanced and valid perspective, don’t you think?

          And I hope this comment of mine doesn’t get “moderated” away, as I have other comments that somehow disappeared because they apparently put this website in a bad light.

          To be fair, Wolf does give some insights at times and the commentators can be funny, but everyone should be given a fair hearing, as long as there’s reasoning and no F-bombs.

          I mean, Wolf itself (just like your competitors ZeroHedge & MarketRealist too) needs to make online revenue too, so whatever attracts eye-balls in big or small ways, right? Everyone has their agenda.

          Oh btw, yes, I’m relatively new to Wolf because ZH was the more popular site, but I’m “diversifying” the bad news sources. lol.

        • Wolf Richter says:

          If you’re reading my stuff (that I wrote personally) to get “prognostications,” you’re looking for the wrong thing. I do news, analysis, and commentary on current situations. I rarely do prognostications. Instead, I point at problems such as overcapacity, structural issues, and a million other things, including bubbles (btw, a bubble is bullish until it deflates … so turning points are crucial and I try to identify those).

          And if you’ve been reading my energy articles, you know that I’ve been bullish natural gas for months – not the drillers (I think they’re toast due to their debts), but the price of natural gas itself, which now has nearly doubled. I’m sill bearish oil though.

          Some of our contributors do prognostications, such as James Murray in this article or Harry Dent in other articles. But I don’t do them. Even when I write about natgas, I never say what its price will be down the road. I analyze the current data and let readers decide.

  17. Big Duke says:

    I’m ok with a robot wife. At least I could unplug her battery pack and put her in the closet when she gets on my nerves. Sadly, I can’t do this yet as my human wife is complaining about something as I type this……

  18. ML says:

    The state of the global economy today is a product of machinery inventions of the past. If we do not like things as they are and fear for the future then perhaps we should invent things that need people. A good start would be to kick the habit of thinking mass market.

    It is not the task of business to create jobs so that the economy has full employment. It is however the task of politicians to facilitate conditions to encourage business to take on more employees. Where politicians go wrong is not by introducing draconian laws to curb the worst but in using a sledgehammer to crack a nut. The more laws that are imposed on businesses the more employers will look for ways to avoid employing people.

    People could help themselves by not thinking ‘work-life’ balance. Instead thinking work and productive work at that. Which reminds me, I should get up out bed now, it is 0812 GMT

  19. Purvez says:

    This is a bit of fiction I came across a while back which resonated with me and is relevant to this discussion.

  20. c smith says:

    The “future” puts more and more of us out of work, assuming the underlying economic incentive is to reduce costs (economize). Today government, both in the form of fiscal stimulus and money printing, works at cross purposes to this directive. Social goals trump (bad pun) the productivity/profit motive. Economic stagnation results. So, isn’t deflation really the solution instead? Isn’t the goal of a properly functioning economy to drive down the real cost of goods and services over time? Who is blocking this function, and why? Is it banks and government (who have the most to lose from deflation) that are really the obstacles to a properly functioning economy?

    • r cohn says:

      What happens to debts during deflation.A number default.If you are correct that deflation is the solution,then those holding debt will lose.

    • d says:

      Just like the globalized vampire corporates, allied with china, you have profit and economy, served by society.

      It can, and should be the other way, with out being Communist or Socialist.

      The globalized vampire corporates, currently allied with china, have no national loyalty, or social responsibility. Hence many of our Global problems today.

      The globalized vampire corporates, are a product of, and mow masters of the unsustainable, globalised, consumerism model, of capitalism, with its ever expanding consumer population pyramid.

      Which is untenable on a fixed area planet with finite resources.

      Globalised capitalism is not the problem, the way the globalized vampire corporates, allied with china, are doing it, is.

      Step one in the rectification process, is to change the system and Tarrif these globalized vampire corporates, allied with china, out of business in the manner they currently perform it..

      • kevin says:

        I would propose Step 2: To remove all corporate entities as a separate legal “person”. The company is helmed by CEO or Chairman with the board of Directors. These are the “real” flesh & blood persons behind the corporate veil of limited liability.

        Hence, currently no personal liability whatsoever for greed, environmental degradation, nor social responsibilities to the community in general because hey, its an impersonal, blob with no face and no shame, no emotion and no human attributes, mislabeled by the legal system as a “person”.

        Once the nameable CEO, Chairman and board members in proportionate measure, are held PERSONALLY accountable for debts, for environmental damage, for financial losses, for working conditions and so on and so forth, and their names are published in the evening papers for any wrongdoings (instead of an amorphous company named XYZ limited), don’t you think everyone will wise up and do the right thing?

        It is really simple in principal but of course, not so simple to undo in practice; after hundreds of years of since the formation of companies as separate legal “persons” in order to shield the real owners from any and all liability and consequences of their actions and behavior.

  21. bead says:

    I’m unimpressed by robot journalism thus far. Must be too detailed for computers. Same goes for computer translators.

    We were promised trips to the moon, flying cars, leisure, and reliable weather forecasts (or even directed weather), back in the heroic era and we’re still waiting.

    • Wolf Richter says:

      I was contacted by some folks working on algorithms that write news stories. They showed me some samples. I guess they wanted me to use their algo to try it out on our readers… Ha!

      The articles weren’t bad per se, from a data point of view. I just couldn’t read them. They were wooden. They had no soul, no passion, no point of view, no story line. Just words lined up in a somewhat meaningful and grammatically correct manner.

      So on this site, it will ALWAYS be real humans writing with real passion.

      But these algo news articles are already out there. I keep running across them. I can tell when I read them.

      • Timothy Hagios says:

        I believe that there are algo comments as well. A while ago, I found a pair of comments on an article on the Huffington Post that looked like they had been written by a program. They were for an article on Libya, both in support of Obama’s policy. One of them said something to the effect of “I am a British journalist living in Tripoli, and things are better here than you might think,” followed by a few more lines. A few comments later, the very same comment was displayed, except it ostensibly came from an Italian businessman in another city. The comment was otherwise identical, and my conclusion is that both comments came from a program that randomly filled in nationality, profession, and location.

        One can imagine that in the future, algorithmic comments will be commonly used to “help” direct opinion.

        • Wolf Richter says:

          Now that’s a business model!

          You could do a startup with a handful of people and a big algo, offering to “help direct” opinions, whether about politicians, products, or whatever. If it works, you’ll have lots of big companies and the entire political world breaking down your door.

          Come to think of it – it’s probably already out there.


        • d says:

          “One can imagine that in the future, algorithmic comments will be commonly used to “help” direct opinion.”

          You are very behind the times, muslims’s, russian’s, and the chinese, have been doing this for some time.

    • Graham says:

      Trips to the moon are problematic because our technology is inadequate, the closest we’re likely to get is Borehamwood LOL.

  22. bead says:

    I’m counting on the Japanese to come up with perfected solipsism, companions who take commands, personal extensions to offload memory when brain biology fails, and other AI helps.

  23. R cohn says:

    As robots replace more and more workers in China,it is inevitable that social unrest will happen.Are financial markets prepared for Tianamen Squares on steriods.

  24. Smingles says:

    “The politicians keep saying they will “create jobs and grow the economy,” but are they talking about human jobs or automated jobs?”

    Wait, so you mean Donald Trump isn’t serious about magically bringing manufacturing jobs that pay $0.10 / hour back to America where employers will happily pay American labor 100 times that, plus benefits, all without increasing the price of their product? It just can’t be. His supporters tell me the jobs will come back and America will be great again.

    On a more serious note, whatever the answer is to all of your “how” questions, it’s clear that it will have to be dramatically different than our current quasi-capitalist system. Capitalism can only work in a democratic society when there is a balance between capital and labor– anything else results in strife, revolution. The system is already fraying on the edges, as evidenced by the fact that a reality TV show clown currently has a pretty decent chance at being elected leader of the Free World because he’s an “outsider,” and the trend is only speeding up. We reap what we sow: one political party has gleefully dismantled the power of labor for decades now with their anti-union actions.

  25. Graham says:

    “I’ve seen articles where some dreamer is saying that people will only work 20 hours a week and have all that free time for hobbies, education etc. If people are having trouble making ends meet working 40 hours a week, how will they manage on 20 hours a week?”

    Therefore it’s clearly a wealth distribution problem.

    If machines do the farming, gadget building and house building, those 40 hours a week are rather wasted. Paying people for working is the old debt money model, allowing people to share in the wealth of the world is the simple answer to that.

    How much exactly does the 0.1% own now?, and how many times richer would we be if they stopped hoarding and learnt to contribute to society instead?

    • c smith says:

      “Therefore it’s clearly a wealth distribution problem.”

      The market can solve a “wealth distribution problem” if only given the chance. The answer is deflation – lower costs of goods drive up real wages, redistributing wealth to wage earners from entrenched bankers and bureaucrats. The reason it doesn’t happen is the POWER of banks and government. Banks fear deflation because it reduces the security value of their assets. Government fears it because it reduces tax revenue. So the institution at the NEXUS of these two groups – the Federal Reserve – ACTIVELY PREVENTS IT.

    • polecat says:

      Exactly ! ….. What happened to ‘too cheap to meter’ … endless leisure …. and flying cars ?????

  26. Don Tipon says:

    As always, everyone focuses on the wrong problem. The actual problem is not technology, robots, taxes, government, resources or even human nature. The root problem is human ignorance and the only real solution to all these problems is to accelerate human understanding. So why are so few people working on accelerating human understanding? Human ignorance! The solution is not easy because of human ignorance. Humanity faces various known knowns, known unknowns and unknown unknowns. Everyone is ignoring the unknown unknowns. Humanity cannot afford to continue to do so. I suggest following in Einstein’s footsteps and using thought experiments to find and solve unknown unknowns. Your ignorance is your worst enemy.

    • polecat says:

      “These problems are always attributed to ‘human error’ …

      …says HAL

      • nick kelly says:

        Dave, Dave..what are you doing?
        Dave, I know I’ve made some mistakes, but I can get better

        Dave thinks: “Yes Hal you are about to get a lot better”

  27. Ishkabibble says:

    What follows is an email I sent to Wolf over a year ago. I think it’s very relevant to this discussion, so here it is.

    I think that people who read this web site and contribute to it are unencumbered by loyalty to what has already been proven to not work. They are able to judge the results and recommend changes, but there are some assumptions that seem to go unchallenged, even by politically and financially adroit observers and reality-seekers. For example, do you think that it is a good thing that people, or businesses, or governments can buy things without first having the money “up front” to buy them (especially war)?

    Before we attempt to answer that deceptively simple question, let’s face the fact that the vast majority of “we, the people” don’t really need many of the things that we are brainwashed into thinking we do. Therefore, I would recommend that we stop all unnecessary spending right now and start saving like heII. Ha! If we don’t already think that there is “excess manufacturing capacity”, we soon will. And by doing the right thing, many more of us will soon be rewarded with unemployment.

    Yes, God Growth would be severely inhibited under a system that requires cash payment (and no borrowing), but would that actually be a bad thing, considering the present-day human condition? And by “condition”, I mean the human population explosion.

    It took human beings 9,000 years to get their number from 2.4 million to 115 million, then 2,000 to go from 115 million to 295 million; 600 to go from 295 million to 553 million; and 250 years to go from 553 million to 1,262 million (1.2 billion) in year 1850.

    Then things get interesting.

    Fifty years to go from 1.2 billion in 1850 to 1.7 billion in 1900 and then, astonishingly, only 65 years to DOUBLE the human population from 1.7 billion in 1900 to 3.3 billion in 1965.

    Apparently there still weren’t enough people, and all it took was another 42 years to once again DOUBLE the human population from 3.3 billion in 1965 to 6.7 billion in 2007.

    Finally, in the last 9 years of human history, human beings have somehow managed to add another approximately 700 million people to planet earth’s fragile biosphere – a “mission” that once took over 11 thousand years to “accomplish”.

    Human beings, well done!

    The question that must be answered, and answered very soon, is just exactly WHY did the human population have to rise as it has, and just exactly WHAT role have the “economic systems” had to play in that rise?

    I believe that by bravely attempting to answer that bone-simple question (that is for soon-obvious reasons never, ever asked), a fundamental flaw with the capitalist system is revealed. It is the “it” that must be dragged into the political light of day and “cured”. More on “it” later.

    What is commonly referred to as “economics” should in fact be referred to simply as “human behavior”. Why? Because the present economic / financial crisis must by logical conclusion be a flaw in human behavior ………or a flaw in human motivation or emotion, if you believe that these are what “cause” people to behave the way they do.

    At this point I’d really rather not discuss nature vs. nurture, or even whether people are naturally good or bad, but, no doubt about it, at some point one does have to confront this head on, because this is precisely where the formation of an “economic policy” must begin. What I am about to say will lead there.

    For the moment, I want to take a mind trip. I want to compare two worlds – the earth on which we live and another planet that is identical to ours, except that in that solar system there has been a solar event whose radiation has not only instantaneously killed all of the people on that planet, but, amazingly, also slows down the physical deterioration of any of the things that the planet’s deceased inhabitants created.

    Hearing about the calamity on the twin planet, millions of people from our planet, who just happen to be unemployed ex-technicians from various professions (yes, a very competent bunch), jump into spacecraft and fly to that other planet. But before they leave they agree that all of what is on the other planet will be “owned” equally among them and used for the good of all. (Yes, you’re right, that is exactly where I’m going.)

    Just like there is on this planet, there is an internet on the other planet, so the immigrants instantly realize that a so-called representative government will not be necessary …………. on the other planet. In that place there shall be direct democracy. People will hammer out important decisions amongst themselves using the internet as a means of virtually instantaneous, mass communication. (Ah yes, “human nature” will certainly be tempted in this new Garden of Eden.) There will be only one “nation” on one new world, so human beings will either sink or swim together.

    After the new immigrants arrive on their new planet, using existing transportation systems, they disperse all over their planet so that they can get their new (old) machines up and running; fields plowed and planted; hospitals operating, etc. (Yes, it wasn’t easy. But with the common good in mind, people were successful. Just accept it for the moment.)

    The immigrants soon realize that it takes very few people (far fewer than immigrated) to keep the machines running, food on the table, etc., and, with some more design engineering, even fewer people will be required as time goes on. Not only that, but the products of these machines can be made to a much better quality then they apparently were previously, so these products will last far longer. As a result, it is realized that perhaps some of the huge machines can be operated far less-frequently than they used to be. For example, automobiles soon come to be made much simpler, easier to fix and more reliable. They have a FAR greater useful lifespan than they once had.

    The people enjoy leisure time, developing their artistic abilities, playing games and other non-productive activities.

    Rather than unfairly have the same small number of people constatnly toiling on the machines, the people decide to divide up, or “distribute”, the LABOR that is necessary to operate the machines, plow the fields, construct buildings, roads, etc. That is, EVERYONE has to work on the machines, etc., but for only a short period of time each year. And as the machines get improved and further automated, even less labor is required and, therefore, even more of each individual’s time is “free”.

    The newly-designed machines in this new world come to do almost all of the things that must be done, and the “profit” from the machines – leisure time AND the products of the machines–is equally divided amongst ALL people.

    Naturally, some of the leisure time is used for training all people in the variety of tasks they will be undertaking – everything from brain surgery to sewage treatment. Apprenticeship and training via video (just like Youtube on planet earth!) are found to be the ideal ways of training people. It is soon discovered that most medical and dental procedures can be either performed by robots or learned in a fraction of the time once thought to be absolutely necessary.

    Through apprenticeship and video “schooling”, the population becomes very intelligent, so they soon realize that by reducing their own population by slow attrition – by having only one or two children – the remaining population has even less to do (less water treatment, housing, electricity, food, everything), so their descendants have even more free time to themselves.

    These people’s newfound religion is two-faceted — the Golden Rule and the continually-evolving simplicity, ease-of-use, and, most importantly, high-quality-construction and, therefore, long usable life, of the products they create. They strive to manufacture things ONLY ONCE — things that with simple, inexpensive maintenance, last FOREVER.

    Transportation systems move people to and from the machines and other places where labor is needed, as well as moving people about the planet for other less practical reasons.

    Life is great in the new world.

    • c smith says:

      “Life is great in the new world.” As it would be here on earth as well, IF we repealed the 2nd law of thermodynamics, as you suggest. Tough one.

  28. HJD says:

    “I’ve also seen a “basic income” scheme floated where everyone gets a monthly check. I’m all for free money, but where is the money going to come from? Certainly not from those people working 20 hours a week.”

    Obviously, the money will come from profits generated by automation. There’s no other solution than to tax and redistribute the income produced by employed computers and robots. In the long term, it will become necessary for wealth produced by automated processes to be utilized in supporting the unemployable. That means a guaranteed annual wage (which should not be described as “free money”). In a highly automated world that precludes income-producing jobs for significant numbers of humans, we must create mechanisms for sharing the wealth and providing jobless individuals with interesting and productive life-activities. It’s a challenge that cannot be ignored.

  29. disc_writes says:

    I think the problem of automation getting people out of their job has been pondered on since the late 1700s by, among others, luddites, socialists, anarchists and, of course, marxists.

    Not to mention economists, who do not see it as a problem at all. But economists never see anything as a problem.

    So I am a bit baffled by this automation scare: have we not been there before? Did the world end then? Why should it end now?

    Also, robotics and IT are the sort of places where capital goes to seek higher yields. So part of the current automation wave is due to excessively cheap capital: if you think cheap money will last, you should be scared.

    If you think it will all come crashing down at some point in the near future, you probably have other things to worry about.

    And automation depends on lots of energy, and energy is expensive. That energy now seems cheaper than 2 years ago is again due to Ponzi financing in the gas and oil industry.

    And again, if you think the energy bonanza will last, then you should be worried about a robot taking your job.

    If you think it won’t, then you should worry about high energy prices.

    • polecat says:

      Yes …. ‘energy slaves’ ….mainly petroleum, and the machines and systems they power, will eventually diminish to the point where real human, and animal power will once again become necessary to get work done!

      • polecat says:

        I forgot to add that ‘Renewables’ will NOT allow society to function in the manner to which it is currently accustomed to ….. they don’t scale …….

        But they’ll think of something right ??

        NOT !

        • Wolf Richter says:

          Check the growing amount of electricity derived from renewables. They scale just fine.

          Below data for 2015, per EIA. This does NOT include roof-top solar and similar household generation. This is only utility scale and industrial power generation:

          Coal = 33% (declining sharply, down from over 50%)
          Natural gas = 33% (rising)
          Nuclear = 20% (flat)
          Renewables = 13% including:
          – Hydropower = 6% (flat, can be down due to drought)
          – Wind = 4.7% (rising rapidly – particularly in Texas)
          – Biomass = 1.6%
          – Solar = 0.6% (does NOT include roof-top solar)
          – Geothermal = 0.4%
          Petroleum = 1%
          Other gases = <1%

        • Mike B says:

          Ugo bardi had an essay in Resilience a while back that did a pretty good job of debunking the panglossian obsession with renewables.

          He doesn’t say it’s impossible, and he doesn’t believe it’s impossible (nor do I) but it will be a LOT harder that a lot of people want to believe it will be and it most definitely will NOT support a level of consumption that we have become accustomed to.

  30. Mark says:

    I run a small manufacturing operation here in Oregon and the elephant in the room is that there are large variations in human beings. Of course, you might say, “some are bigger or faster or stronger than others, that’s obvious”. We all accept that as self evident.

    But mention that all human’s are not equal when it comes to intelligence and watch out! You’ll be accused of being elitist and worse.

    Here’s the reality I face. I have some very good line workers who are great employees doing basic assembly work. They are loyal, hard working and just a pleasure to be around. They come in on time, never complain and are dedicated and conscientious. But some of them just don’t have the capacity to do complicated tasks on the computer or program a robot. Its not about training, its about basic abilities.

    Just as physical strength is a continuous scale from weak to strong, the same is true for mental ability.

    I hear the politicians talking about ‘retraining’ workers to run the automated tools and I think two things: 1) I don’t need that many people to program the machines and 2) some people just don’t have the mental capacity to learn those skills in the first place.

    I generally worry over the fate of those on the low end of the spectrum.

    Those nice, dedicated, hard working employees who just can’t meet the new requirements. What choices do I have? Not automate and eventually go out of business (and everyone loses their job) or automate and let some of them go.

    I don’t have an answer, just an observation of a problem that society just doesn’t want to talk about.

    • polecat says:

      Well … maybe the idea of ever onward and upward ‘progress is the problem …. all technological progress does not necessarily equate good … let alone just …

      …to continue things as they are is an eventual road to perdition !

    • kevin says:

      Yes, everyone has encountered the one guy who can do math and programming computers on short notice, while another one is only good at artistic renditions, while others are mediocre at everything but great at juggling bottles and making people laugh.

      Capitalistic free market systems have so far been quite good at matching people to the best available job that fits their natural inclinations and/or God-given advantages. Any other central planning model given the variety of human talents and learned skills will end in disaster.

      The problem is that most human talents and skills are not that useful or transferrable into other contexts. The Math engineering guy would probably find great use somewhere else if you let him go, but the mediocre one who happen to be excellent at juggling bottles may not want to work in a circus with no future, no respect and miserable pay.

      Some skills are simply more valuable to contemporary society than others. There is no solution to this conundrum of universal Inequality because God made men Unequal to start off with, despite what the collectivist religions tells us. The sooner we accept that, the better.

      Furthermore, societies change in terms of what they deem to be valuable skills. Great horse riders in the dark ages would be far more valuable and presumably be paid more, than a Math guy doodling with complex calculus. Today, the Quants are paid heaps by Banks to manipulate complex transactions while the horse rider has limited choices. And these trends are changing even more rapidly today, than individuals can adapt to in time.

      Thus, State-sponsored basic income is worth exploring now, to minimize the disruptions from ever increasing automation. You can only relief the pressure for the broad masses and allow the invisible hand to work its magic, you can’t legislate people to do this or that type of work. With basic income in place, societies will gradually redefine what is work and, what is a hobby and what is leisure. Who knows? with more time of their hands, the circus might even be back in vogue (witness the success of Circque du Soliel_) and your born juggler might think its not such a bad idea with the public demand now and higher pay. Besides, his job as an Clown is highly unlikely to EVER be replaceable by a robot.

      That’s the deal case for basic income, but in real-life as always, the journey towards it is anything but.

  31. Mike Welford says:

    Yes computers are half the price of a few years ago and more powerful. But working in IT I see ZERO productivity gains from that change. The same people are doing the same jobs at the same speed.

    This whole article smells of a man almost WISHING for a workforce armageddon, so he extrapolates every bad thing possible to its worst possible outcome, then multiplies those numbers together. But just like the wishful thinkers don’t get what they want, the doom mongers normally don’t either. Reality as normal will be crap but not as crap as the doom mongers think.

    • Mike Welford says:

      Most changes seem to be coming not from increases in computer power (which have actually slowed massivelly because physics is getting in the way) but because people are figuring out new ways to use what already exists – for example the sort of automation seen in banks could have been done with computers from 10 years ago, they just hadn’t got around to it.

      Mobile is the main outlier here – these devices couldnt have existed 10 years ago.

  32. Genius says:

    Sale of desktop computers are falling because desktop computers are no longer becoming 2 times faster every 2 years, so there is no longer a need to keep replacing desktop computers.

  33. Paid Minion says:

    Anyone who thinks “the machines will take over” doesn’t work with machines on a daily basis.

    For starters…..who is going to be held responsible, when the machine effs up?

    Eliminate zero interest rates, and tax deductions, and some of the rationale for automation goes away.

    Automation is also dependent on secure, reliable infrastructure. Which may develop problems with security and reliability, when the wretched refuse is incentivised to throw sand in the gears.

  34. Chris from Dallas says:

    I think (hope?) AUTOMATION is going to be the defining issue for this century.

    If not, then the alternatives are wars, medical/bio-engineering catastrophes, and resource/economic crashes.

    “BASIC INCOME” already exists, it just isn’t “UNIVERSAL” yet and is designed to INFLUENCE social goals and individual behavior. As examples consider Social Security Income, disability income (SSI), Earned Income Credit, Rent Vouchers, discounted services such as VA mortgages, the IRS mortgage deduction, healthcare, etc.

    One of the biggest problems is that more FREE TIME gives people more time to WORRY about what they DON’T HAVE.

    Here is a study that shows a direct correlation between the more advanced the society is and the higher the number of depressed individuals.

    At one extreme, if you have to spend all day on food, shelter and safety from wild animals you don’t have the TIME to be depressed. At the other, you have nothing REQUIRING you to get up in the morning and do something.

    Another huge problem is the extent to which automation removes the economic and time costs for procreation. How many babies AREN’T BORN due to delaying or not even having children because of the EXPENSE of another mouth to feed/clothe/raise and the TIME for maternity/paternity leave/raising kids? Then add the democratic incentive for certain groups to expand their voting base. Can the Earth (and our societies) withstand a massive wave of births?

    To what extent does the lack of modern skills CAUSE the absurdly high US African-American and French Muslim unemployment rates?

    Despite all the negative possibilities I remain optimistic and welcome the freedoms and possibilities.

  35. Ram says:

    And about that part where the 7 people company will find it uneconomical to invest in automation … Has the author not heard of SaaS?

    Google is offering me an entire “G Suite” for $5 per person. So, in a decade or two, whats to prevent an automation company offering me the same (AI-based, fully automated, deep-knowing call answering services in 200 languages)?

    Our patchy knowledge of the AI/Robotics automation domain as well as its infancy implies we will mostly get it wrong in terms of where all this will end up.

    To term this article “end-point” is highly presumptuous and proves the point that little knowledge is highly dangerous!!!

  36. Bill Fee says:

    Yes all will come down about the same time . Some of the larger index say ” when time comes let’s try to manage the crash ! Quick turn on the pumps and hope we can manage it !

    This is what Thay have done to my country ? Stand up

  37. Kevin says:

    The endpoint can only be deflation. Collapsing prices. This is what the markets are desperately aching for, right now, and we would have it were it not for the legions of central bankers who are working only for the top 1%, desperate to keep it going another month, or week, or day.

    • d says:

      Politicians, civil/municipal/state employees and CB’S, work together in the best interests of, politicians, civil/municipal/state employees and CB’S.

      You haven’t learnt that.

      You also haven’t learnt that politicians will take money from the Globalized Vampire Corporates and big national industry’s, then try to make the civil/municipal/state employees, do what the Globalized Vampire Corporates and big national industry’s want. They do not always succeed in this, as politicians control the heads of the Bureaucracy’s. Not the center’s, and it is the centers of the Bureaucracy’s, that control and run everything.

      When their cultures of the Bureaucracy’s become bad, as most of them have in America. The country Develops huge financial problems, and the Sheeple are told, to blame, the rich.

      They do, as the Bureaucrat’s tell them, as the Bureaucrat’s know, which targets to pick, and which buttons to push, to manipulate the sheeple to attack the rich and blame them for all the problem’s.

      Americas infrastructure is falling apart, state after state and muni after muni is going into bankruptcy, Industrial job’s are being offshored due to municipal costs, and poor infrastructure.

      And the sheeple do as the beuracrat’s say and attack this 1%, as being responsible for this.

      The sheeple in the democracy’s are the problem, as the Beuracrats know the sheeple will never vote for a change that will harm their personal incomes, and always vote for berni sanders FREE FREE FREE.

      No matter how obviously long term untenable, the promises of free, are.

      As a voter in a democracy, doing exactly as the bureaucrats want, if you wish to see where the problem start’s, look in a mirror.

  38. notmyname says:

    You say the engineers of the world are going to keep coming up with new automation products to replace people. I say studying engineering isn’t worth the bother.

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