
How Technology Is Destroying Jobs - anigbrowl
http://www.technologyreview.com/featuredstory/515926/how-technology-is-destroying-jobs
======
msandford
I can't help but wonder if the decoupling is a result of the money printing
that Greenspan started around that same time (2000-2001ish) and that Bernanke
has continued.

You're looking at replacing a $50k/year worker with a system that costs $1mm
in NRE and negligible ongoing cost. If interest rates are at 8% you're a fool.
With interest rates at 3% you're a genius.

[http://research.stlouisfed.org/fred2/series/FEDFUNDS](http://research.stlouisfed.org/fred2/series/FEDFUNDS)

~~~
adventured
It's the result of the Fed's policies.

They kicked us into two massive recessions in a mere 10 years, two stock
market crashes, and one giant real estate crash, destroying trillions in
wealth through malinvestment. If the Fed severely distorts the economy - which
it has been doing frequently (currently 'printing' 6% of the entire economy) -
it leads Jane to appraise her financial surroundings incorrectly, inevitably
leading to disaster.

Try figuring out a way to get minimum wage to keep up with even just 3% to 4%
real annual inflation over 40 years. Impossible.

Try figuring out how to get Americans to make sound financial decisions with
3.x% mortgage rates. Impossible.

Try figuring out which stocks to buy, when everything is going up courtesy of
easy money policies. When will the party stop? Only Bernanke & Co. know. It's
not earnings growth driving the stock market, it's pure PE expansion.

Try keeping the savings rate up, when your dollar loses value every day that
you attempt to hold onto it. So you spend it today when it has maximum
purchasing power. Wait 10 years and it'll lose half of its purchasing power.
The Fed spurs an anti-savings culture through inflation. Ever since Nixon
unlocked the dollar from the gold standard, the savings rate has been in a
death spiral, to the point where now America has an extreme negative savings
rate when all debt is accounted for (and nearly everything priced in dollars
has soared in price since 1971; from health care to education to commodities
to stocks to housing, meanwhile the real standard of living is lower than it
was 50 years ago).

At a time when America is creating more oil than nearly any other time in its
history, oil prices are at $106+. See this USA today story from just a decade
ago by comparison:

[http://usatoday30.usatoday.com/money/industries/energy/2003-...](http://usatoday30.usatoday.com/money/industries/energy/2003-12-31-oil-
prices-2003_x.htm)

"Instability in oil producing nations like Iraq, Venezuela and Nigeria helped
boost U.S. crude oil prices to an average of $31 a barrel in 2003, the highest
yearly average in more than 20 years, energy experts said Wednesday."

Global commodities are of course priced in dollars primarily. As the Fed
debases the dollar, the input cost of goods soars.

The Fed's policies affect every single aspect of the US and global economy.
Their policies are extreme by any US historical measure, and the consequences
are guaranteed to be extreme accordingly.

~~~
tedsanders
Your post is full of assertions, but empty of evidence. I disagree with almost
every hyberbolic point you make:

-There is NOT consensus that the Fed's creation of money caused the last two crashes. In fact, market monetarists argue the last recession was exacerbated by how LITTLE the Fed did. [http://www.themoneyillusion.com/?page_id=3443](http://www.themoneyillusion.com/?page_id=3443)

-Inflation is not 3%-4%. It has been very low since 2008. [http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1&year1=2008&ye...](http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1&year1=2008&year2=2013)

-Stock market gains have not been due to pure PE expansion. This is demonstrably untrue. [http://www.multpl.com/](http://www.multpl.com/)

-Inflation does not, by itself, hurt savings rates. A world with 1% inflation and 1% interest should be identical to a world with 2% inflation and 2% interest (this is not strictly true, but the simple toy model is a good thought experiment to see where your reasoning fails.)

-American oil production has almost NO impact on global prices. In fact, causation works the other way around. High oil prices make more American oil fields profitable, and drives production. (Even OPEC has very little market power. Saudi Arabia arguably has the most market power.)

-The Fed was more aggressive than the central banks of most countries in the last recession (compare to BoE or ECB or whoever). The USA has recovered better than most other countries with passive central banks. There's not consensus, but many economists believe there is a causal connection. Your theory does not fit these data.

~~~
msandford
I think the argument goes like this:

1\. There's a crash (cause unspecified)

2\. The Fed creates money to smooth things out

3\. This new money eventually gets things going, but it comes at a price: the
way it gets things going isn't sustainable

4\. Once people (traders/investors/general public) realize it is/was
unsustainable, they begin to unwind everything

5\. This unwinding is a new crash (cause specified)

6\. The Fed creates money to smooth things out

7\. Rinse and repeat

------
skore
> Brynjolfsson and McAfee are not Luddites.

No, but you try to force that argument by calling your article "How Technology
Is _Destroying_ Jobs". I don't see any citation in the article doing the same.
They just matter-of-factly state what is happening and it's the author of the
article trying to somehow convert that into a Luddite case.

I find it fascinating how this kind of sentiment is often uttered by
Americans. Other western countries have long accepted the fact that we should
better put the rewards of technological progress into a social system that at
least takes care of the people who cannot anymore contribute to the workforce.
In the US, the delusion of full employment for everyone as part of the fight
against evil socialism seems strong as ever. I suppose it works as a good
scare.

~~~
true_religion
One can think that technology destroys jobs, but still not be a Luddite
because they support the change that technology brings.

An example would be people who are looking forward to the technological
singularity which will make all work obsolete, and usher in a utopia.

~~~
skore
No, I think "destroy" carries a clearly negative connotation.

The people cited in the article talk about jobs becoming obsolete. The author
talks about jobs being destroyed.

------
fnordfnordfnord
Isn't that the idea? At least in one sense, technology must destroy jobs, or
at least it should. In theory, it frees us from drudgery and allows us to go
on to do more productive tasks. In practice it isn't always so easy to find
employment those who are displaced by machinery.

~~~
berkay
"allows us to go on to do more productive tasks" The idea only works as long
as there are sufficient number of jobs in "more productive tasks". If jobs are
destroyed but there is no place to deploy the resources gained by the
productivity increase, then there is not much value, and there are many
negative side effects.

~~~
tzs
That's true as long as people need jobs in order to have a decent life.
Eventually, the productivity gains from technology should produce enough gain
to allow for a guaranteed basic income [1] sufficient to allow displaced
workers to effectively retire if they wish. You'll only need to find a job if
you want more than the GBI can provide.

[1]
[http://en.wikipedia.org/wiki/Basic_income_guarantee](http://en.wikipedia.org/wiki/Basic_income_guarantee)

~~~
jiggy2011
Question is, at what point do you implement that? Any politician who stands up
and says "We have given up on lowering unemployment, time to pay everyone to
stay at home" is not going to be popular until the problem is of such a
magnitude that you cannot ignore it.

Even in such a situation, what incentive besides purely humanitarian does an
individual with a job have to sacrifice income for those who do not?

Currently you can justify subsidising a non productive person in the hopes
that they will be productive later. What happens if that is highly unlikely
and instead they devote their time to breeding more people who will also
likely become unproductive and require subsidy?

~~~
gambogi
We know that intrinisically motivated people will aspire to do, even if there
isn't a need for them too. If we provide for both the intrinsic and extrinsic,
we effectively cover 100% of motivated individuals. By making it easy for
those with passion to act on it we do all of society a favor. As for the non-
productive members of society, it's not a huge issue because they don't need
to be productive to live. This means that your right to live is unconditional.
Excuse my corniness, but after all, why should there be conditions on your
right to life, liberty, and the pursuit of happiness?

~~~
jiggy2011
What about the jobs that still need doing but people are not generally highly
intrinsically motivated to do relative to other things they _could_ be doing
if they had free choice?

For example if you gave software developers a bunch of cash and told them to
work on whatever they wanted, how many would go and build video games or
invent esoteric programming languages (fun but not important) vs how many
would want to build (or worse maintain) a system for the administration of
taxes (less fun but very important). Hell, how many would even develop
software at all vs just take up some other activity of even less value.

Therefor the best way to motivate these people is to extrinsic motivate them
with money. However what happens if most of that money is taken as taxation
and spent on people who sit around and do whatever they want all day? Do they
still have the same incentive to do the boring but necessary jobs?

~~~
tzs
> What about the jobs that still need doing but people are not generally
> highly intrinsically motivated to do relative to other things they could be
> doing if they had free choice?

There will be luxuries some people want that are beyond the reach of those who
live just on the guaranteed basic income. Those people will do the jobs that
have not yet been replaced by technology to earn the extra money they need.

For instance, some people might want more living space. Some might want
fancier cars than those people on the GBI can afford. Some might fancy a boat.
Some might want a high end home entertainment system. Some might like
expensive food and drink.

~~~
jiggy2011
If you want to earn money to have these luxuries , why pay to those who don't
give you anything in return (nor have the potential to)?

------
cpursley
No. Mechanical farm equipment arguably replaced way more jobs than any modern
technological movement. And just look at the human potential it unlocked.

~~~
anigbrowl
I'm not sure you read the article. What timescale are you making your
assertions from, and what numbers are we talking about?

~~~
jsnk
Have you read the article? The article actually says:

>In 1900, 41 percent of Americans worked in agriculture; by 2000, it was only
2 percent.

~~~
anigbrowl
Mechanical farm equipment existed before 1900, and I also don't know whether
the gp is referring to the US, globally, or what. That's why I'm asking.

------
snowwrestler
Obviously technology creates more jobs than it destroys over time, because the
nations who have developed the most technologies tend to have the lowest
unemployment rates.

~~~
3minus1
Technology in one country can most definitely affect employment rates in
another. One example from history is when the Industrial Revolution in England
destroyed a large textile cottage industry in India.

~~~
gz5
This seems to be the flaw in the data cited:

"By 2011, a significant gap appears between the two lines, showing economic
growth with no parallel increase in job creation"

It seems the data set is US jobs only. In our new flat world, how many jobs
did US-based companies create in other countries that previously were created
in the US?

Not sure the US middle class has been destroyed, more that it has moved to
other countries.

~~~
rjbwork
Well, yeah. We've been helping develop the middle classes in china, india, and
other such south east asian, central american, and african countries for a
couple to a few decades now.

------
cgag
I should hope so. Jobs aren't a goal. Jobs blow.

------
JDDunn9
I wonder if these shifts disproportionately affect the less intelligent. By
definition, half the population is below average. If the jobs being destroyed
are low skill, and they are replaced with jobs in math/science/tech, people
with learning disabilities may not be able to get a job at all in the future.

------
fatman
Whatever the merits of socialism vs. capitalism in the past, doesn't this sort
of progress portend an eventual move toward the former? And is this
necessarily a bad thing - when machines do more of the work, shouldn't humans
be at leisure - or free to pursue formerly "frivolous" careers in arts,
literature, sport, etc. while being supported by a strong social safety net?

~~~
dnautics
well, no, socialism is a system where a central authority decides the
allocation of resources. The guiding philosophy is "From each according to his
ability, to each according to his needs" \- and what constitutes "ability" and
what constitutes "need" become very important questions, and whoever gets to
make those decisions wields incredible power.

Free-marketism, by contrast, exerts no moral judgement on the needs (or wants)
of individuals nor who can provide by what ability, and lets the individuals
work those parameters out in a decentralized fashion. If one wants to pursue
"frivolous" careers, that's fine, so long as the needs that require the effort
of other people (materiel, supply, whatever) can be met through free
enterprise.

Capitalism is a different beast altogether, where "the accumulation of
capital" is in and of itself considered a moral virtue.

------
brimanning
Kurt Vonnegut's Player Piano is a very interesting read on just this, albeit
fictional and taken to the extreme, but it has some interesting insights.

------
jrn
No, there are unlimited amounts of jobs, technology frees people to do jobs
that previously weren't done. Read Armen Alchian.

------
fear91
Does it always has to be the same in all cases?

The results of technology advancement are various and complicated. It's not
all white and black.

------
eeky
It doesn't destroy jobs, it obviates the ones it replaces (and sometimes
creates new ones). Which is a good thing, right? It makes it so that no one
has to do those jobs to receive the same productivity. Thus freeing up our
time for either leisure or something else productive.

Also it should be noted that technology is a double edged sword and can also
make things worse. An example: a big farming corporation decides to improve
profits by using new chemicals to preserve their food longer. Of course this
may seem like a productive decision on paper, but it could actually be
unproductive to society as a whole if the chemical has subtle but negative
side effects that take a bigger toll.

~~~
Aqueous
Unfortunately a lack of jobs that people are being paid for also creates a
wealth disparity. You can't buy food if you don't have a job

We need a stronger social safety net because there's just not going to be
enough wealth-producing activity for humans to do that we will all be able to
live on that alone.

If you're right we are headed towards a society where we are collectively
resting on the backs of the robots who are there to do our most mundane
chores. If the robots produce enough economic output then, assuming our
society restructures itself to distribute that economic output proportionally,
we should be able to arrange it so that we lift everyone out of poverty.

Or maybe the robots will decide they no longer need us and that will be that.
It could go either way, really.

~~~
eeky
The problem you are talking about arises from the result of competition in the
markets. If someone has a cheaper production because of better technology,
then the market as a whole will use their business (as the buyer has the
freedom to choose who they buy from). This is fair, consensual, and it makes
sense to help society gain more value as a whole. Limiting this in any way (as
many regulations unfortunately do) is a restriction of people's free choice
and thus an aggressive and unethical act. But of course the negative part
comes in when the person who used to work in that market has now lost their
job and thus their income. Well that is like crying about the slow gazelle who
got eaten by the cheetah. It's nature and unfortunately you can't artificially
make everybody win, or nature would push back.

Some solutions include higher taxes to make an assured living wage. This is
possible today but not if everyone keeps raising the standard of what a
"living" wage is. If we could produce a guaranteed living wage, we could get
rid of minimum wage and thus give people a ladder to compete in markets they
otherwise wouldn't be able to get experience/train in. This would be because
you could literally work for free, so the company could only see a benefit to
hiring you (rather than being stymied by minimum wage).

The wealth disparity is normal, look at any statistical data like humans and
you will see outliers. Thus you will see people with ideas that are a million
times more productive than others. Don't worry, if someone else gains wealth
and you didn't lose, it does indirectly benefit you. Don't be jealous bro.

~~~
Aqueous
Not being jealous just wondering how people who don't own or make robots will
be able to make a living wage off of their labor in the coming decades.
There's just not going to be enough work for them to do once we have
unlimited, skilled, cheap robots.

the only solution i see without massive inequality is one where we can
distribute wealth. it's not jealousy. it will be a technological utopia if
executed correctly - nobody will have to work, we all get to do whatever we
want all day.

there will always be inequality, but if we live in a just society it will be
one where the least well off person is still reasonably well off. a guaranteed
living wage might do that - and that's exactly what i'm talking about,
actually. but there might be enough breathing room in the future to give
_more_ than a living wage.

obviously it's a little pie in the sky at this point, but in 10 years it won't
seem so much.

