
The Automation Myth - vermontdevil
http://www.vox.com/2015/7/27/9038829/automation-myth
======
Terribledactyl
This article was very confusing and difficult to read. There seems to be a
conflation of workers being replaced 'robots' (Human teller -> ATM) and the
process by which humans are simply more productive through augmentation
(Manager with paper ledger -> Manager with inventory system).

There are some nasty potential error sources when comparing productivity per
country over time because they use different currencies with their own value
changes over time. (Probably related to productivity, but lots of other
factors)

And my biggest issue was the Wells Fargo twitter chart. Average growth per
year is an ok tool, but it's simplistic. It gets really messed up when you
consider a 5 year time frame 98-03 and a 10 year 04-14. With the straight
averaging method compounded growth/loss gets messed up.

~~~
aetherson
It's all the same thing from a high enough level. If your manager can do the
work of two managers because he has an inventory system, you don't suddenly
manage twice as much inventory (because everything else about your business
doesn't change at the same time), you fire every other manager.

But the point is that society as a whole is richer because you can get a good
from a manufacturer to a customer with less overall spending, and so while an
individual inventory manager may or may not be able to get another job -- and
might legitimately suffer -- ultimately the business does grow, and there are
more jobs created than destroyed (though the created jobs may not be inventory
manager jobs, and the displaced inventory managers may or may not ultimately
benefit).

~~~
VLM
"and there are more jobs created than destroyed"

Why? Well, I know its tradition to say it, but there appears to be no causal
relationship, just occasional coincidence. The mathematical model would be
interesting to see.

~~~
AnimalMuppet
Just occasional coincidence? Looks to me more like there's very common (almost
uniform) coincidence, with occasional exceptions. But we don't actually call
that "coincidence", we call it "normal behavior".

------
Mithaldu
It's nice of worthless articles when they lie within the first few sentences
to make it clear they should be disregarded.

> President Obama has warned that ATMs and airport check-in kiosks are
> contributing to high unemployment.

No, in the youtube segment linked he merely uses those as examples of jobs
disappearing and thus creating an impetus for the government to stay on its
toes about changes.

------
devinhelton
I think my explanation was better than Mr. Yglesias's, if I do say so myself:
[https://devinhelton.com/2013/01/20/economic-
classes/](https://devinhelton.com/2013/01/20/economic-classes/)

Automation has increased productivity in many areas. But there are multiple
factors of production: labor, natural resources, zoned residential land near
jobs. Plus there are other limits to production, such as monopolies and
regulation. So if just automation improves, production only increases and
prices only fall to a point, until natural resources, marketing, and monopoly
profits make up the bulk of the cost. As a 22-year-old entering the job
market, all you have is your labor to trade, but you need access to natural
resources and constrained goods like housing. Since automation makes your
labor less valuable, you actually need to work just as many hours or more to
get the same purchasing power. Worse, you end up in a zero-sum game of
marketing and sales, where everyone works just to get ahead of everyone else.

------
chipsy
An underlying premise of productivity tracking is that we are able to consume
more indefinitely. But in all likelihood there is a logistic curve to human
material needs as well.

If we did have $30,000 more on average, as the article states, how would it be
used? The case is obvious for the poor, but as you go to higher income
brackets more and more of the possibilities fall into "luxury" and "status
symbol".

Take, for example, the rise in the cost of college education. It's absolutely
bizarre that in an era of low fiction information, tuition has actually gone
up. That is, until you consider the credentialing as a form of signalling for
limited jobs at the high end. The colleges aren't getting funded to expand the
core mission of education, they're chasing each other to provide a premium
experience that will attract people with a pedigree, who subsequently raise
the status of that institution.

From that angle, automation's effect is to shuffle around the job landscape,
not to directly increase productivity. More minds on higher value jobs - but
eventually we start cutting into the highest value stuff we can think of. What
automation doesn't do for us is expand our ability to be creative about what
work is and what jobs could be done that aren't. That capability is directed
through our social structures and "what people will pay for." Anyone good at
conversation knows that you can have the same room and the same people and
achieve wildly varying outcomes in discussion. You can have an economy that
"shrinks" because less is measurably produced, yet people feel wealthier on
average. Indeed, that's central to discussion of open source software and its
commodifying effect.

In conclusion, no, we don't know. Social science is a fragile thing and the
things that seemed obvious to one generation have a habit of being discarded
by the next. Maybe the $9000 of income inequality is, in fact, the important
number, even if we can fabricate another bigger number with linear
extrapolation.

~~~
pdonis
_> in all likelihood there is a logistic curve to human material needs as
well._

Material needs, probably yes. But not all needs are material needs.

 _> as you go to higher income brackets more and more of the possibilities
fall into "luxury" and "status symbol"._

Those are loaded words; one person's "luxury" is another person's preferred
entertainment.

 _> It's absolutely bizarre that in an era of low fiction information, tuition
has actually gone up. That is, until you consider the credentialing as a form
of signalling for limited jobs at the high end._

That's probably a contributing factor, but it can't be the primary reason
tuition has gone up so much, precisely because, as you say, there are only a
limited number of jobs for which this signalling is useful.

The primary reason tuition has gone up so much is the fact that student loans
and grants are so widely available. Colleges have simply raised their prices
in order to consume all that extra money. Most of those loans and grants don't
go to people who view a degree as a status symbol or a signalling device; they
go to people who, rightly or wrongly, sincerely believe that a degree will
give them a chance at a better life, and the wide availability of financial
aid means that more people are likely to come to that conclusion. (IMO, we've
pushed that lever too far; many of the people now using loans and grants to
get degrees will not get enough of a better life to make it worth it to them.
But that's a whole other discussion.)

~~~
Retric
Status based economies are fragile.

There have been a few waves such as the Beatniks where people say _eff_ status
I want to relax. Electronics pushed that off for a while, but that treadmill
seems to have slowed down. So, I expect the next wave of young people to
accept they can live well on a 2 day a week job.
[https://en.wikipedia.org/wiki/Beatnik](https://en.wikipedia.org/wiki/Beatnik)

Such is fine for 20-30 year olds without health issues or kids, but does not
keep widget factories staffed or pay for pension checks.

------
norea-armozel
This is something that I've always found odd about how the actual value in the
economy is tracked. Specifically, how the stock markets continue to rise
despite the decline in productivity. If I was told as a shareholder or private
owner of a company, that an hour of labor and inputs are making me mess than I
was making 20 years ago I would be upset but that doesn't seem to be reflected
in the volumes and prices of the stock markets themselves. Why is this case?
Is there something I'm missing?

All in all, I hope someone or some firms figure out how to break through the
hurdle to automation in industries where it would matter like healthcare. It
would be the first step to correct the economy in my opinion.

~~~
devinhelton
_Specifically, how the stock markets continue to rise despite the decline in
productivity._

The stock market rises in nominal dollars, which is meaningless, since that is
just a result of monetary inflation. Corporate profits, and personal income
invested in the stock market will rise with total nominal national income. In
economics terms, nominal national income growth is proportional to the growth
in the money supply (M*V=Y). So the growth in the stock market is just a
result of the growth of the money supply. It has zippo to do with any real
thing like productivity. That is why it is always silly when newscasters
report the stock market changes every day, and view it as good when it rises,
and bad when it falls. They are essentially cheering on monetary dilution.
(But inflation always feels good in the short term, so they aren't entirely
wrong to cheer it on, it feels good when the stock market rises, even if the
same underlying mechanic is also pushing up your milk price).

~~~
aetherson
We've had very low inflation in the last 20 years or so. While certain
numbers, especially short-term ones, are reported in nominal dollars instead
of real ones (it's actually kind of hard to report on real dollars except in
considerably retrospect), neither Yglesias nor anyone else in the broadest
definition of economic literature is confused about the nominal/real
distinction.

That said, productivity is not _declining_. The first derivative of
productivity is declining -- that is, productivity is going up, but it's not
going up as fast as it used to. Also, the population is going up. And that
explains the (real, not nominal) stock market growth.

------
quanticle

        The power of Moore's Law — which states that the power of computer chips doubles
        roughly every two years — is such that the next five years' worth of digital 
        progress will involve bigger leaps in raw processor power than the previous 
        five years. It's at least possible that we really will have a massive leap 
        forward in productivity someday soon that starts substantially reducing the 
        amount of human labor needed to drive the economy forward.
    

I wonder how long it's going to take for word of Moore's Law's end to filter
out into the wider public perception. Here, in the industry, we look at
Intel's delays going to first 14nm and 10nm as clear signs that Moore's Law is
sputtering out (as all exponential growth does, eventually). But out in the
wider public, there seems to be a perception that chips will get "twice as
good" every year into perpetuity. It's going to be interesting to see when (or
if) people realize that their hardware isn't getting better at the same rate,
year-over-year, that it used to.

~~~
stdbrouw
> But out in the wider public, there seems to be a perception that chips will
> get "twice as good" every year into perpetuity.

I'd think people in the wider public have no clue as to exactly how much
faster computers get every year. Considering that software usually gets slower
at about the same rate as processors get faster, I'd imagine many people would
think the increases in speed are much smaller than they actually are.

------
itsybitsycoder
That first graph stinks. It only counts job work hours worked per job worker,
not work hours per person. In 1950 there were an awful lot of households with
one adult working a paid job and one adult handling most of the household
work. According to this graph, that one worker did 1900 hours per year plus a
bit of household work, and the other adult did ??? hours of work. Now both
adults are doing 1700 with the household work on top. Granted, the amount of
household work has gone down, but has it really gone down by over 1500 hours
per year? If not, we're working more, not less.

------
exelius
This is an awful article. Let me count the ways:

1\. You don't measure productivity by the number of hours worked. There are
just different cultural norms at play and it doesn't make sense.

2\. Comparing an economy that started out with low productivity and grew
quickly to an economy that started out with high productivity and grew more
slowly isn't really telling me anything other than the low-productivity
economy caught up. Which happens, because it's harder to push the frontier
than follow in someone else's footsteps.

3\. The effect of automation is very hard to quantify because it tends to
displace low-skilled jobs that don't pay much in the first place. But the
social impact of this is huge -- you take the people at the bottom of the
economy and take away the only jobs that were accessible to them. Social
unrest is inevitable. This will likely impact the economy in negative ways in
years to come, and we need to understand this.

Anyway, all around a terrible article. The author has no grasp of basic
economics and seems to have cherry picked statistics that he thinks back up
his claims. Has anyone created a "top 10 logical fallacies of data analysis"?
Because this article would tick all 10 of them.

~~~
strange_quark
> You don't measure productivity by the number of hours worked. There are just
> different cultural norms at play and it doesn't make sense.

The article doesn't. It measures productivity in terms of actual monetary
value per worker and then compares it to the number of hours worked.

> The effect of automation is very hard to quantify because it tends to
> displace low-skilled jobs that don't pay much in the first place. But the
> social impact of this is huge -- you take the people at the bottom of the
> economy and take away the only jobs that were accessible to them. Social
> unrest is inevitable. This will likely impact the economy in negative ways
> in years to come, and we need to understand this.

Again, addressed by the article. Would you have considered milkmen or
household servants high-skilled jobs? Both these jobs have been all but
replaced for the majority of people, yet there wasn't that much social unrest
when the refrigerator or washing machine was invented.

------
debacle
The author espouses this economic knowledge on his twitter feed:

"Never could have guessed from the name that the Communist Party of China
wouldn't be all that interested in having a credible stock market."

That's all you need to know about reading this article.

This entire piece is relatively baseless. It's relatively trivial to say "If
trends had continued in a straight line, things would be different, but they
didn't, so they aren't."

Also, talking about average household income is a waste of time. Talking about
average anything when you are talking about the working class is foolish. The
average net worth of a household is five times the median.

The demand for automation slowed _precisely_ because the demand for labor
plummeted. That's the exact same thing as saying "The demand for oil plummeted
because the cost of relative demand for natural gas plummeted."

Reading this article was a waste of time.

~~~
aetherson
He's talking about average rather than median precisely because his point
isn't that "the economy grew, but the growth was captured by the wealthy," but
rather "the economy hasn't grown much per capita." So you want to look at
average, not median.

And he isn't saying that trends didn't continue, he's saying trends went one
direction, but the policy discussion is as though the trends went in exactly
the opposite direction, and that that's important.

------
Taek
This article encouraged my to look at why my life was so expensive.

1/3 of my expenses are related to living in Boston. Rent is 2/3 of my total
expenses, and 1/2 of my rent is only because of the city I live in, if I chose
a cheaper city or lived 15 minutes further away, I could have the same house
for 1/2 the rent. Of the remaining 1/3 expenses, many of those are cost-of-
living related as well.

Location is something that's never really going to get cheaper, because
location is fundamentally scarce. You can have as many cities as you want, but
you can only have 1 SF, 1 Boston, etc. I don't want to live in _a city_ , I
want to live in Boston. And that's expensive compared to other cities around
the world.

I think this is a testament to how cheap technology has made our lives. 100
years ago, things like clothes and food were a much more significant part of
lifetime expenses. And as technology continues to improve, location is going
to continue to eat up a larger portion of total expenses.

~~~
gitah
Autonomous vehicles or high-speed subways that are cheap to build will destroy
housing prices. Technology can reduce the cost of transportation increasing
the usable land around a city.

Other advances include new construction techniques making it cheaper to build
taller buildings. ie prefabs or 3D printing

~~~
mooreds
Hyperloop!
[https://en.wikipedia.org/wiki/Hyperloop](https://en.wikipedia.org/wiki/Hyperloop)

------
bd_at_rivenhill
Author has things reversed. Automation is affecting jobs with higher wages and
higher productivity first, turning those markets into winner take all or
eliminating labor altogether. The remaining workers are forced to crowd into
lower productivity jobs and work longer hours for lower wages to make ends
meet. Automation appears to cause lower overall productivity, but the actual
effect will be quite obvious when the cost of automation is low enough that it
comes for all the low wage workers.

