
Automation Agenda of the Davos Elite - pseudolus
https://www.nytimes.com/2019/01/25/technology/automation-davos-world-economic-forum.html
======
brobdingnagians
>“The choice isn’t between automation and non-automation,” said Erik
Brynjolfsson, the director of M.I.T.’s Initiative on the Digital Economy.
“It’s between whether you use the technology in a way that creates shared
prosperity, or more concentration of wealth.”

This could lead to a scenario with what happened when there was aristocracy.
Land was a major necessary means of production and was overwhelmingly owned by
the aristocracy, it was guarded since they had no reason to sell it and could
rent-seek with it (and primogeniture guaranteed it didn't disperse much), and
they simply owned nearly everything.

Craftsmanship and high demand for skilled labor led to the middle class.
Automation could be the new land. A wealthy "owning class" owns all the means
of production (and less skilled labor) and has no incentive to open it up.
Automation could lead to a small wealthy class, but a rapidly expanding lower
class with little access to self-ownership of means of production.

Decentralization of means of production tends to have a beneficial effect on
society. If normal folk can own means of production, then they will do well in
any scenario because they will have choices, but if there is little choice but
to work for large corporations, then they will get squeezed on the monopoly of
means of production.

Whatever is having that effect of enforcing centralization of means of
production is eventually going to not end well. It might be the tech, it might
be some of the regulations, it might be cultural, or it might be the "legal
entity" nature of corporations and the ability to amass huge amounts of
resources with them; but whatever it is, it ain't pretty.

~~~
psadri
I agree with this thesis. However, doesn’t our economic system rely on lots of
consumers? If the majority of people are very poor, would this not reduce the
overall economy? Then what’s the benefit to the aristocracy?

~~~
anonymous5133
No, our economic system does not rely on lots of consumers. It relies on
people spending money. 1,000 people spending $1 is equivalent to one person
spending $1,000. It is the dollar amount of spending that is important, not
the total amount of consumers. Another key economic metric is the velocity of
money...or how fast money goes from one person to the next. The faster the
velocity of money...the better because we assume that when people trade...both
are made better off through specialization.

~~~
Broken_Hippo
That isn't really true, though.

If 1000 people spend $1000, that isn't the same as a person spending all that
in one month. The 1000 people are going to spend the money differently and on
a variety of things. Phone bills, electric, car payments, groceries, rent,
clothes, entertainment, coffee. Perhaps a restaurant or two or a bar. Might
need school supplies and medicine. Even better, these 1000 people are likely
to do this monthly.

One person spending 1,000,000 isn't likely to spend it on those categories nor
spend that monthly. Even then, the spending is going to be different. The
spending is also more likely to be stable.

The economy generally will survive if the one person doesn't spend their
1,000,000. Even if they stop spending that monthly, that'll be OK.

However, the economy will suffer if the many people do not spend 1000 a month,
depending on how close the people are to each other. All in one town probably
means an employer has had hard times, and eventually other businesses close
because of it - unless, of course, things start getting better again.

The economy hurts if trends shift. When folks get more poor and cannot spend
on small luxuries or stop buying as mnay cheap clothes, the economy suffers.

The person able to spend 1,000,000 a month likely very much depends on those
1000 people spending 1000 per month, consuming the things they do.

------
fvdessen
Isn't replacing people with machines what we've been doing uninterrupted since
the beginning of the industrial revolution ? In what sense is replacing a
translator with DeepL different from replacing a farmer with a tractor ? We've
gone from more than two third of the population working on the fields to less
than 5% and people still have jobs. What has changed that makes us think that
this time it will be different ?

~~~
gotocake
Replacing people with machines isn’t, and has never been the problem. Telling
generations of people who depend on the jobs they have to suck it up and move
out of the way of progress without good recourse is. Shrugging and telling
people to make do with two or three “gig” jobs is a bullshit answer to their
concerns, as are empty suggestions to retrain or find a new job. People don’t
work a coal face because it’s fun, but because it’s what they know how to do,
and it brings home the bacon.

So if you want people to do more than spit on us as we pass, we should put
effort into ensuring a safety net for them when the work we domtskes their
livliehood away. Right now that doesn’t happen, the wealth just accumulates at
the top while we suckle drops of it when it “trickles down” on us. It’s easy
to talk about how machines will give us more free time, because we can afford
it.

~~~
overtone
> People don’t work a coal face because it’s fun, but because it’s what they
> know how to do, and it brings home the bacon.

Far more than that, coal workers take pride in their work, it's part of their
identity and it commands a certain degree of respect as being "hard labor". If
it was just about "bringing home the bacon" they might as well take any other
job.

This is in contrast to working for Wal-Mart or McDonalds, there's no pride in
it, it's _not_ part of people's identity. People want to move on from these
jobs, but there are less and less opportunities to move on to.

> So if you want people to do more than spit on us as we pass, we should put
> effort into ensuring a safety net for them when the work we domtskes their
> livliehood away.

A safety net is well and good, but if people lose their jobs and get stuck in
the net, it destroys them. Again, it's about pride and identity.

~~~
bksenior
Eh. This seems fluffy.

This seems more like the Industrial Revolution + Twitter. Just like all the
studies that the world is technically better off in every modern metric of
improvement (poverty, starvation, mobility..etc, but things feel shitty
because you are forced to read about the one dude kidnapping and eating
children one state over, I think it's probably just amplified fears (and
ultimately seperation of teams) than it was during other large periods of
change.

It's also worth noting that people dont die, jobs just shift unexpectedly.
Sure it can crush a generation (see the american midwest from 1960-2020), but
most people move to where the work is geographically and intellectually or
just die out.

~~~
NeedMoreTea
There was far more to it than that. Whole communities arose around the pit,
steel works or ship yard. Hundreds or thousands of local families depended on
it. Family, friends and everyone in the street was a part of it. When it goes
a few shop or driving jobs may be possible but leaves the majority up shit
creek with no paddle.

> Sure it can crush a generation (see the american midwest from 1960-2020),
> but most people move to where the work is geographically and intellectually
> or just die out.

That is possibly the most heartless thing I have read on this site. I imagine
your perspective would change markedly if it were you that were stuck, unable
to afford to move, in a dead town whose industry left, while you contemplate
your time until you die out.

~~~
pas
You are right, so is OP, but I don't think OP's post is heartless. It's simply
descriptivist (positivist) and not normative. It is what it is, there's no
point in sugar coating it.

And yes, of course our response to these facts are even more important. Do we
just short steel mill stocks and Pittsburgh bonds or advocate for retraining,
for subsidizing emerging industry establishments in the affected areas, etc.

Some of the affected people feel it as elitism, socialism, etc. Usually
because outsiders are blind to and ignorant of the local complexities, and
also because good fashioned bias and denialism. It's easier to simply deny
climate change and hate green liberals than accepting that coal is out. And
that software has a much higher ROI due to the marginally aomost zero cost of
adding new users/customers than hard labour jobs, etc.

~~~
NeedMoreTea
There's a certain truth to it, but I think we owe society far better, rather
than just blithely accepting it as it is what it is and tough shit for
everyone affected. If we want a society at all, that is.

For instance, I remember the wave of de-industrialisation of the 80s. While I
wasn't personally affected, I knew plenty who were. For many tens of thousands
it wasn't a simple case of just move to where the work is.

How do you do that when your house is worth a quarter or tenth of of what you
paid, but the mortgage debt remains? When almost everyone else locally is
trying to move to get work too. Who is going to buy the house? In a town with
no work. They may lose the dozen ship builders or steel works, but also lose
the hundreds of businesses that serviced, supplied and depended on the
products of those major works, then everything that depended on the money
flowing from those - the takeaways, supermarkets, cinema, garages etc. The
whole supply chain breaks. You may as well ask them to flap arms and fly out
of the ghost town.

If one of the lucky few that were able to get out, carry a debt that can never
be paid off, whilst earning half or less of the former skilled wage. They
can't all move to the outskirts of London to work in banking or retrain in age
discriminating IT in their mid 50s. Who's going to employ that junior? It
ruins more than just one generation. The kids deprived of education and other
life chances, or just the consequences of having parents from whom the hope
has been sucked, perhaps on anti-depressants long term. Little wonder most of
those places gained a huge drug and crime problem in the aftermath. Some
places have still not come close to recovering.

Clearly we can't artificially keep every rural pit village viable, but we
could, and should try not to lose whole towns, cities and regions, unless we
want more civil unrest and more extremists elected. That history even goes
some way to explaining Brexit. So yes, from what I've seen over those 40 years
in the UK, we should and probably must subsidise through tax and incentives
new industries and services establishing in deprived areas until they can
sustain once again. Ignoring whole regions as acceptable losses in a "free"
market was a huge, unforgivable mistake. Adequate regeneration help is
probably far cheaper for the state once you consider all consequences anyway.
Particularly in a future where it appears likely many more will lose their
work, much more quickly, than in the past.

------
Animats
We need to make progress on automating the job of the CEO. The CEO is just an
intermediary between investors and profitable activity. Why should they be so
expensive? ROI would improve if CEO costs could be cut, especially for
underperforminmg CEOs.

There's already a hedge fund where an AI has a board vote on acquisitions.
This isn't that far out of reach.

~~~
bduerst
Liability, mostly. It's hard for the board to sue a machine or for officials
to send a machine to prison.

Also ML/AI isn't even near strong enough to make the varied decisions
necessary to run a publicly-traded company, but it could augment decision
makers with recommendations.

~~~
gammateam
I think the public facing role and risk is adequately compensated.

CEO's start the company and suffer share dilution. They did their job if the
shares are valuable.

Future CEOs don't get the same incentive package, and need something somewhat
comparable.

~~~
bb2018
Even CEOs who don't start the business and are paid more money that seems
necessary are probably worth it. Lloyd Blankfein gets 50M+ at Goldman Sachs
but with profits of 10B its hard to argue hiring the best possible CEO won't
help improve profits by a tiny percentage.

Is it fair that society lets someone keep so much money? Maybe not. But if you
are an owner (directly or through stock) or even an employee who de facto
wants the company to succeed, it is mutually beneficial to have such highly
compensated executives.

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MBlume
...Good? Work is horrible? If a drop in the amount of work that needs to be
done is actually a _problem_ then that's a policy failure.

~~~
empath75
It’ll be a problem because ultimately the people who own all the capital won’t
need anyone else to survive. They’ll build walls and robot guards and live in
their utopias of plenty while everyone else starves.

~~~
redahs
The ownership of land by value is more unequally distributed than the
ownership of capital. Capital depreciates and needs to be regularly replaced
each generation. The wealthy have never needed robots to live a life of
plenty; they can extract as much labor power as they need through rent.

~~~
throwaway218649
The "rich will just live on their land without workers" seems like a
hypothetical scenario, but it actually happened a few times during the
colonization of the Western United States and Australia (post-Native
American/Australian genocide). Marx has an interesting note on this in chapter
33 of volume I of Capital:

> It is the great merit of E. G. Wakefield to have discovered, not anything
> new about the Colonies, but to have discovered in the Colonies the truth as
> to the conditions of capitalist production in the mother-country… First of
> all, Wakefield discovered that in the Colonies, property in money, means of
> subsistence, machines, and other means of production, does not as yet stamp
> a man as a capitalist if there be wanting the correlative - the wage-worker,
> the other man who is compelled to sell himself of his own free will. He
> discovered that capital is not a thing, but a social relation between
> persons, established by the instrumentality of things. Mr. Peel, he moans,
> took with him from England to Swan River, West Australia, means of
> subsistence and of production to the amount of £50,000. Mr. Peel had the
> foresight to bring with him, besides, 3,000 persons of the working class,
> men, women, and children. Once arrived at his destination, "Mr. Peel was
> left without a servant to make his bed or fetch him water from the river."
> (E. G. Wakefield. "England And America," vol.ii, p. 33)

In the United States, the slave labor system kept the workers from subjecting
their masters to this "violation" of property rights. There are many
historical records of European colonists running away from indentured labor to
join Native Americans (the reverse does not seem to have ever happened).

The wealthy need poor laborers a lot more than vice-versa. What is really
happening with automation is that it is being used to build militarized police
states around the world that keep the poor from squatting the land held by the
rich, to force the poor to work for the benefit of the rich (for example,
someone is going to have to keep working on oil extraction for a long time to
come, even if all the farming will be done by robotic tractors). A police
state forcing people into wage slavery is the necessary precondition for the
"rich live in automated luxury" scenario to occur.

------
sgt101
Journalists are credulous, and sell clicks. Execs are credulous, and sell
tenure till the next bonus. Consultants and vendors are selling themselves.

There will be automation, it will take much longer to deliver than is being
pitched. It will deliver smaller benefits (initially) than are being pitched.
It will probably not realise the type of value that is easy to pitch.

In the meantime lying liars are scaring people; this suits all the liars
because scared people are compliant.

~~~
rafiki6
I love how they always lump words like AI, automation, ML, Deep Learning
together. They make it seem like there already exists an army of robots just
as capable as humans ready to take over. Sure, many companies have managed to
automate lots of things, but this isn't new and is expensive and takes lots of
time to achieve. Further capitalism is predicated on growth, and growth
requires people to have money and for the population to continue growing to
see spending growth. We run into an interesting problem. Why do we need so
much production if no one has money to buy anything? Why do we need so many
people if we have an automated labour force? Further has no one considered
that much our economy is based on solving entirely unique human problems?
Things like finance, communication, luxury goods and even energy
production...these are things for humans. I have yet to read an meaningful
analysis of what a truly automated labour force will mean for the human
population and capitalism.

~~~
sgt101
Ha ! Try The Culture novels by Iain M. Banks :)

------
choonway
What a piece of reverse psychology/propaganda.

The agenda of the so called "Davos Elite" is to maintain the status quo.
Because that is all they know what to control. Automation and AI and the
future unknown unknowns scares them to hell.

------
rafiki6
The biggest missing point in this article is that the companies who actually
succeed at automation are few and far between, and generally speaking entire
industries need to be upended for automation to actually take hold. I don't
agree with the re-skilling narrative, but I do think they're overblowing the
capabilities of something like RPA. It's not as good as they claim and
generally speaking you have to rejig an entire process for it to make sense.
The most important missing discussion point here is that unless we have a
global view of humanity and our goals as a species, who are we doing all this
automating for? If people lose their jobs and can't spend money, why do we
even care about high production? The real thing no one at Davos is openly
talking about is the global population and what to do with 7 billion people if
you really only need a world of 500 million since you've automated all that
labour away and now you don't need to produce as much.

~~~
heurist
Automation thought leaders have become an echo chamber divorced from the
reality of problem solving. I rarely see discussion of concrete steps to take
to automate something, only fluffy high level conversation about impacts
should a vague widespread automation rapidly occur. Meanwhile, the hardest
problems are still out there and it's impossible to determine impact without
knowing what those problems are and basic steps to automating them.

That said, there are broader trends that can be studied and discussed, like
the impact of the industrial revolution on the world wars, global trade, etc.
But those are academic in nature and don't directly indicate investment
potential, so tend to stay in academia.

------
rblion
Universal income will become a necessity to avoid people losing their heads.
Otherwise, the super rich can hide out on islands, mountains, skyscrapers
surrounded by guards.

They kind of already do that though.

------
blinkingled
I think automation will succeed where humans hate to do the job because it's
too monotonous, risky or unhealthy - fruit picking, Foxconn, mining etc. It
also makes the most economic sense to automate those jobs. Knowledge workers'
jobs on the other hand - it'll be much easier for employers to put downward
pressure on the salaries of those jobs than to replace them with automation
due to higher automation costs and risks.

If it works out like that and the displaced workers are supported by their
governments with equivalent income that will be a net positive. Those whose
skills are still in demand will have jobs, others will have UBI and not many
will complain.

However we don't learn anything - UBI will never come in time and there will
be a lot of needless suffering and upheaval as a result of hurried, ill-
managed drive towards automation.

There is also the whole identity crisis thing - many people equate their worth
with their job and not having one will make for a lot of unhappy people.

Interesting times indeed.

~~~
mistrial9
no I think you mishandle the spin.. business will try to create new companies
where the AI is doing the work, whatever that year's AI is capable of .. no
bargaining, instead straight to "disruption"

secondly, the horrible, unanticipated errors will be the catch, while the raw
capacities of the machine side will continue to soar..

$0.02

------
asynchrony
Can we all get smarter? Children easily become experts at any modern device.
If we automate everything and pour resources into cheap and scalable education
could we make the majority of the population into information workers? Just a
thought.

------
Robotbeat
I think we've killed the "automation will allow us to kill off all the
workers" idea. Automation isn't going to kill work.

~~~
mac01021
why do you think that?

------
mlthoughts2018
Worth a re-link in this conversation,

[https://slatestarcodex.com/2016/05/30/ascended-
economy/](https://slatestarcodex.com/2016/05/30/ascended-economy/)

------
scottlocklin
Lol, Davos. I'm pretty sure they had a meeting in the early 2000s where they
worried we'd all be grey goo by now.

------
airbreather
So when a significant portion of the population has no work because they have
been replaced by machines, who will buy what the machines make (or do)?

Seems like a short sighted race to extinction.

Not everything that can be done should be done.

Footnote:in the long run if society survives the initial shock, I predict it
will actually lead to a resurgence in artisanal crafts to manufacture bespoke
items that are prized not because they are perfect or the best, but because
they are unique and have a back story.

~~~
jackcosgrove
For most of history economies were fighting against scarcity, working to
produce as much as possible to keep people alive. It is only in the past 100
years that we have had a problem with too much productive capacity. The
consumer economy you are describing is one way to solve that problem, in which
increased supply stokes increased demand. However it appears to have been a
fleeting solution. Number one, needless consumption is environmentally
destructive. Number two, consumerism is hollow and a poor motivator compared
to poverty. For the latter reason more than the former (although the former is
more concerning), I believe many people are consciously choosing to shrink the
population by having fewer children. And that is in many ways a completely
sensible reaction to overcapacity and overpopulation.

There is no dictum that consumerism is the only way an economy can work.
Consumerism is (not exclusively) a manifestation of mass affluent democracies,
but I can imagine other systems. The economy ultimately is a mixture of social
norms and economic laws. There's enough leeway that I don't think you need
mass consumerism.

The devil is in the details, however, and the big question is: who will
inherit the earth? Increasingly it's a question of motivation and not
survival.

~~~
throwaway218649
> For most of history economies were fighting against scarcity, working to
> produce as much as possible to keep people alive. It is only in the past 100
> years that we have had a problem with too much productive capacity.

That really does not describe hunter-gatherer or feudal economies. And it's
not even true for capitalist economies: for instance, there were periodic
gluts of cotton (1820s, 1860s), or in the textile products made from cotton
(1850s, during a global economic crisis). Famine has different causes,
independent of the economy: either deliberately caused by forced displacement
(ex: Irish famine), or a result of local weather patterns (for any geographic
region, there will be a weather event, like drought or late/early frost, that
will cause harvest failure roughly every 15 years). Improved shipping, which
in a positive feedback loop was the cause of and response to increased trade,
is largely what is responsible for eliminating famine. You first of all need
to be able to ship grain to a region that is experiencing famine (agricultural
over-production in a different region does nothing to prevent people from
starving to death otherwise), and the region experiencing the famine has to
have something to trade for the grain (people have, and continue to, starve to
death in places that experience agricultural surpluses).

