

Technology Is Taking Jobs Away, But Here’s How It Might Give Them Back - cwan
http://www.xconomy.com/national/2011/05/27/yes-technology-is-taking-jobs-away-but-heres-how-it-might-give-them-back/

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rubiety
His definition for "ephemeralization" is "doing more with less", which is
strange since my academic background in economics teaches me the word for this
is nothing more than "efficiency".

So many of his claims supporting his "net destroyer of jobs argument" contain
no real analysis are amount to fallacies exposed by the history of economic
progress. At almost any point in history you could make an almost identical
argument about something else where efficiency improvements reduce the number
of jobs in one particular industry. People used to also worry that more women
getting into the work force would reduce the jobs "available for men". Classic
"lump of labor fallacy": <http://en.wikipedia.org/wiki/Lump_of_labour_fallacy>

Even all this aside, and sweeping away any historical parallels (one of which
he mentions - Ford) where the ultimate conclusion flatly contradicts his
pessimism, there's a healthy dose of "make work bias" implicit in the entire
article. It's still puzzling to me why people focus so much on work as being
something desirable to per-sue in it's own right. Work is the _price we have
to pay for consumption_ :
[http://en.wikipedia.org/wiki/The_Myth_of_the_Rational_Voter:...](http://en.wikipedia.org/wiki/The_Myth_of_the_Rational_Voter:_Why_Democracies_Choose_Bad_Policies#Make-
work_bias)

This statement alone completely blows away his credibility to speak on
economics: "And for all its vaunted technological prowess, the United States
hasn’t outpaced the rest of the world in GDP growth". It's well understood in
growth economics that we wouldn't expect advanced economics such as the United
States to outpace growth of 3rd world countries playing "catch up". He could
do the same analysis against modern, industrialized countries instead and come
to a very different conclusion. Even if this statement was accurate, it's a
complete non-sequitur in support of his overall claim.

It's funny that the second part of his article back-tracks from his original
claims and contains far more sense than the first part. "Ephemeralization
[READ: efficiency] itself might eventually give rise to new types of jobs."
That's exactly right, and has been true for centuries without fail.

Finally, it's embarrassing that he chooses to quote Tyler Cowen, a respectable
economist who would would surely call out this article more forcefully than I.

------
hugh3
The problem as I see it (and I've probably said this before) is that not all
jobs are equal... or rather that not all people are equal. Increasing
technology doesn't take away jobs, it increases the amount of wealth you can
create with the same amount of labour, at least up to a certain point. But it
also makes the jobs that do exist harder (intellectually speaking), because as
the jobs switch from "assembly line worker" to "guy who supervises the robots
that work on the assembly line" the brainpower needed to do the job increases.

Roughly half the population has two-digit IQs, half the population has three-
digit IQs. Two thousand years ago, 90% of all jobs were in the fields and
could easily be done with a two-digit IQ. A hundred years ago, jobs had
started to shift to the cities, but probably still 75% of 'em could be done
with a two-digit IQ. Nowadays I'm worried that we're reaching the point where
60% of the jobs which actually and economically exist require a three-digit IQ
to be done properly, and that this will only continue to increase as the easy
jobs get automated away. What, then, do we do with the world's stupid people?

~~~
Detrus
Mine them for data after making them share as much about their life as
possible.

More seriously, those three-digit IQ jobs will turn to two-digit IQ jobs as
technology makes them easier. There's a predictable cycle for technological
progress, until a certain point at least.

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sentinel
The same "ephemeralization" has also created thousands of jobs for people that
produce those devices and people that build applications for them.

------
orenmazor
technology doesn't take jobs away. humans can repurpose, roombas can't.

~~~
FlowerPower
Technology must take jobs away.

Invent something, do something, so you never have to do it again, or any one
else. Enjoy life. Meet people, talk about ideas and new inventions, if you
like programming all day, do it. If you like singing and dancing all day do
it. If you like making movies, giving healthcare to people do it.
Unconstrained by employment.

~~~
EliRivers
Agreed; the (possibly impossible) goal of any sensible government should be
full unemployment.

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chailatte
You know what else takes jobs away? Free. Free apps. Free website. Free TV
shows. Free movies. Free music. Free video games. The customers start to be
conditioned to the word 'free', and slowly refuses to pay for anything in
those categories. The cumulative market shrinks as result, leading to more
companies shutting down and more layoffs.

Oh, but there's advertising, one say. And there's the unlimited amount of
venture capital funding these 'free' companies. Well, if we keep losing jobs
in valuable sectors because we keep giving things away for free, how will
people pay for products that will sustain advertising budgets in those
companies? Will we just keep selling advertising to each other? And at a
certain point in the economy, consumer is more conscious about price than
brand (like now), in which case advertising will start to falter.

So the next time you give away products for free, you should think about
whether or not it'll cause you to lose your company/job in the future.

~~~
rubiety
Yet another absolutely classic example of both the "lump of labor fallacy" and
"make work bias".

When are we going to starting teaching more Economics and less Literature in
high school?

~~~
chailatte
That's true. We should also teach how to present a valid, explanatory
counterargument instead of thoughtless one liner.

~~~
rubiety
Wow, you should be embarrassed. Read the rest of the comments and see my real
reply to the original article - posted 10 minutes before yours.

It's also hilarious that this comment commits the very fallacy you seek to
expose!

~~~
chailatte
Your reply was regarding efficiency. My reply has to do with free. Let me put
it in an example. Electric cars are more efficient than gas vehicles. So
consumers switch to electric cars. Those workers whose jobs were rendered
useless transitioned into higher knowledge jobs in the electric cars industry.
There might be more jobs in the new industry. And customers will likely pay
the same amount for the new electric cars (IMPORTANT: demand, the willingness
to pay for said utility, still exists). So net loss is neglible. As for the
oil/gas industry, the consumer pays for less oil/gas for their cars, so the
oil/gas industry switches market to focus on other utilities for their
oil/gas.

On the other hand, if the electric cars were free !? People would not have to
buy cars ever anymore. Therefore an existing market was destroyed.

But I don't have to explain this to you, you spent lots of money on your
economic classes!

~~~
rubiety
I'm not even sure where to begin on your confusion here.

1\. Firstly, efficiency concerns the ability to more with less. Zero is less,
and there's no reason why zero is substantively different than paying $0.01
per car - it's on a continuity that affords the same analysis. So saying you
reply "has to do with free" speaks absolutely nothing about my initial
arguments focused on efficiency.

2\. Money is a veil. Like the discredited mercantilist beliefs century ago,
you're confusing output with money. What matters for prosperity is the
quantity of goods and services being produced in an economy. You may not
realize it, but your argument is essentially granting authority of money over
output in estimating prosperity. Output - the actual goods and services
produced in an economy - is what matters (and the consumption we enjoy
therefrom), not whatever dollar value we assign to them. This by the way is an
extremely common confusion among non-economists, so don't feel bad about
misunderstanding it.

3\. Since you seem so fixated on this concept of "free" sidestepping my
arguments, let me take your analogy and present another similar one. Imagine
that it's the year 1910 and the price for buggy whips is $25, with a thriving
industry producing them. It's already clear that I'm claiming efficiency
improvements resulting in a price reduction is a _good thing_. Now let's
introduce your concern: buggy whips are free! "Therefore an existing market
was destroyed." Yes, this market would be destroyed. And in fact it was -
buggy whips were free in the sense that cars displacing buggies simply did not
require them. There is no economic difference here. Yet no one _with the
knowledge of hindsight today_ wouldn't even think about arguing that the
production of value which is essentially "free" in that case is something
"bad", and it's not clear whatsoever that there is some net decline in jobs
(in fact all evidence points to this being precisely the opposite - touched
upon by your point "There might be more jobs in the new industry").

4\. Speaking of net decline in jobs, I'm disputing this being necessarily a
problem at all. To say otherwise is to ignore trade-offs and categorically
value one thing over another as a society. Jobs are another thing people
routinely confuse with prosperity, and they also tend to believe that they are
somehow assets instead of transactions. It's like saying "buying a car" is an
asset, instead of the car itself. With labor, the software we produce is the
asset, not our job that allows such production to take place via a quid-pro-
quo. If I could purchase everything I wanted to live by for $1, I'd only work
one hour the entire year doing some freelance, and not have a job. Is "not
having a job" bad in that sense? Not really - but the point is it depends on
_the amount of consumption I'm able to enjoy_ , and the job is just a
transaction that effectively grants me consumption purchasing power. It's the
seen vs. the unseen that makes thinking about these issues (and really most
things in economics) very difficult.

5\. You made an important point about willingness to pay, but drew the wrong
lesson from it. You seem to think that having a high willingness to pay and a
low price ($0 in your example) is a bad thing, but this is precisely the
opposite of the truth. In fact this is the very definition of "Consumer
Surplus", the net increase of which is a good thing. See my point (1)
concerning actual output/consumption being what matters.

6\. Really this all boils down to your closing argument, "Therefore an
existing market was destroyed", and focusing on some costs and benefits while
completely ignoring others. Whether or not destruction of any particular
industry is good or bad is not relevant unless you fully account for all
costs/benefits. Actual accounting for this empirically is difficult, but
axiomatic economics shows that advances in efficiency and producing more with
less _is precisely the way growth occurs_ \- a _net_ benefit.

To fully explore all the issues here would require much longer. Hence is the
simple fact that making nonsense claims takes one paragraph and carefully
explaining the often non-intuitive economists implicit in such claims takes
10x as long. Sounds like some debate asymmetry if there ever was any.

~~~
CJefferson
2\. If money doesn't matter, can I have all of yours, because I've found I
don't have enough recently.

3\. No, buggy whips were never free. People stopped wanting them. The problem
now is that the things in highest demand, and which people want more of, and
the same things which are free.

~~~
rubiety
2\. I claimed "money is a veil", not "money doesn't matter". People focus too
much on money when discussing macroeconomics and the effects of complex
changes in the economy, and not on the true measure of prosperity. As a simple
example, if the Fed started printing even more obscene amounts of money than
it does not, our GDP next might be twice what it is in 2011. Wow, 100% growth!
What an easy way to prosperity!

3\. In the economic analysis I made, I've pointed out that the _effects_ that
he is so worried about are identical, in much the same way that the effect of
increasing trade patterns and specialization is very similar to the effect of
increasing technological efficiency. Sure people stopped wanting them instead
of them literally being free, but that doesn't change the analysis regarding
the effects.

------
FlowerPower
Its good technology is taking away jobs, if it is not, that means we are all
doing something really really wrong.

Who in their right minds would like to do things just to do more things?
People always come up with new things so they can stop doing what they are
doing. Lazy programmers are the best, the ones that dont want to do things
when a computer can do it for them.

People should stop working. We have enough technology to feed everyone on the
planet, and maintain and develop our current rate of progress, even without
aiming for full employment. We have to strive for lesser work days. Why is 8
hours acceptable? We are designed to work only 2 hours per day, maximum. That
is why we invent.

~~~
sedachv
Not only do we need to reduce working hours, we need to provide a basic income
guarantee (<http://en.wikipedia.org/wiki/Basic_income_guarantee>). This is
what the promise of technological progress is about, and is one of the tenets
of Marxian communism. Ironically, the basic income guarantee is also something
that is advocated by many liberal and libertarian economists.

These two factors are IMO key to further accelerating the rate of
technological innovation. They enable anyone who is interested in science and
technology to freely pursue these interests, whereas today many people are
driven away from science by huge disincentives (massive student loans and poor
career prospects).

