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Foxconn replaces '60,000 factory workers with robots' (bbc.com)
344 points by jrwan on May 25, 2016 | hide | past | web | favorite | 391 comments

Robots are owned, and this is key. They are productive assets, much like houses produce rent. If they become a problem, all we need to really do is tax them. This means robots will be working for the people, because that's what taxes are -- asset distribution facilitated by government.

Of course, two major problems here. First, the government, for obvious reasons, and second, the corporations that have a stronghold on the government. If the government did it's job, it would simply be re-funneling money where it needs to go; to pay for education, social services, safety, and so on. And if corporations didn't have their way, they wouldn't be able to twist laws and regulations in ways to maximize profit and avoid taxes, because that's precisely what taxes are designed to do -- cut profits.

But if history can teach us anything, it's that even when manufacturing jobs were shipped overseas and call center jobs were shipped and agricultural labor jobs were swept by undocumented immigrants, the government here didn't do much of anything, and the businesses got their way with increased profits. In turn, our labor force got displaced, but we survived because ultimately people find a way to make money.

Every non-government job is created by an entrepreneur, either directly, indirectly, or down the line. Entrepreneurship is really what has driven America. Many will take that over government and taxation (solving the two major problems outlined above), and this is the free market argument in a nutshell.

The takeaway is, if we tax robotic labor, they'd be working for us, the people. Just as anyone paying 15% in income tax is working 2 months out of the year for the USA. Or we could hustle it out and have everyone desperately seek work to save their lives. Our choice. One leads to greater inequality.

> Or we could hustle it out and have everyone desperately seek work to save their lives. Our choice. One leads to greater inequality.

This is a total non sequitur. Machines have been taking human jobs since the late 1800s and adding robots to take/process orders is no different. You discount the notion that new jobs will appear as "the free market argument," but new jobs will be created regardless of any tax on robot labor (negating the utility of such a tax) -- I suspect the driving factor here is the size of the unemployed workforce, not the need for money, ceteris paribus.

Moreover, the two problems you note (government and corporations influence on it) aren't policy or cultural problems (implementation details, if you will), they're problems with the fundamental nature of a powerful state and human society. Never has there existed a society where powerful institutions were not able to influence other, more powerful institutions (i.e. the state) with that said power, and as long as those institutions are run by men that cannot change. Individuals are generally corrupt (to some extent or another, if you give me $5 I'll shut up), and no amount of oversight or transparency will stop corruption so long as a critical amount of power supports that corruption. In simple terms, this is the tyranny of the majority, where "the majority" is measured in terms of power, not votes. This is the fundamental political dilemma, and limiting the scope of the state to only limiting the power of society's other powerful institutions is the only solution that solves this problem empirically, as opposed to the notion that corruption is ok as long as it promotes a certain set of ideals with which I agree.

> Machines have been taking human jobs since the late 1800s

I would add that humans have been paid to do repetitive, automated, routine work for ever, and they do so inefficiently. It's not human nature to stand in a production line for 8 to 12 hours straight placing screws somewhere.

There is something profoundly wrong with the life expectations of some if they are actually defending drone work.

> You discount the notion that...

I don't.

> I suspect the driving factor here is the size of the unemployed workforce, not the need for money

And the difference is? Fundamentally people work to pay bills.

> aren't policy or cultural problems

State is policy and human society is culture. You seem to think the latter terms imply some innate quality absent in the former, but they both change, and that is because they are one in the same. Both have changed rapidly, and it's called history.

> "the majority" is measured in terms of power, not votes.

You're describing corrupt nations. This is blatantly anti-democratic, and there are too many people working to change this in America who have already succeeded to bring us to where we are today, and who will continue to succeed to help build a better tomorrow.

Limiting power is not ideal. Power does not need to be contaminated or broken, and presuming that part of it will never change is discrediting everyone that got us here. It's okay not to be satisfied because that is what will take us even further. But we're not Brazil. And their problems won't go away just by limiting power of government.

The problem with these solutions is that production moves where it's cheaper. If you tax my robots, I'll just pack up and move them to another country where they are not taxed, or they are taxed less.

This argument applies to all kinds of taxes, right? If you tax labor, I'll just move my factory somewhere that labor isn't taxed. If you tax my income, I'll move myself to a lower-tax place. If you tax my land, I'll just buy land somewhere else. And so on.

Yet somehow most countries are able to tax labor, income, land, and so on, without losing their entire populations.

Not to say that people won't leave because of taxes. Just that there are also reasons that make people stay.

The issue has a lot to do with the finances of scale. Mom and pops aren't going anywhere, and neither are you, but Apple will go to Ireland, and wealthy individuals will bank in tax havens. And hence, the wealth gap widens. Most -- the "99%" -- stay and pay taxes. The 1% don't, but they look like they're still here. They just have one foot - the tax paying foot -- in Ireland.

An accountant recently confessed to me that many wealthy Californians do the same using Nevada. Just declare an NV home as your primary residence and make sure to document your time in NV (photos, flights, ATM receipts). CA income tax is 13.3% for the wealthy. NV is 0%.

If you are making let's say 10 mln a year, that means by lying that NV is your primary residence, you did not pay more than 1 mln in taxes. For getting back that kind of money, Criminal Investigation Bureau of Franchise Tax Board can afford keeping dedicated agent who will follow you and see how often do you actually go to NV and after couple weeks of surveillance when he sees that you do not go there much, he can get court order and:

- Look at your cell phone location information for last several months.

- Use Police's license plate trackers to track your car (Probably they do not even need court order for this one).

- They can get your car's location information (I assume high income people have one of modern expensive cars and most of them have tracker in case it is stolen).

- They can talk to your made(s) (I assume you have one, since you make 10+ mln) and pressure them to tell the true story.

Sounds really dangerous to lie about your location now days when it is so easy to check it, without even leaving the room.

You, in turn, donate $50k a year to politicians who work to cut the Franchise Tax Board's investigative budget.

Some things are easier than others. Technology is easy to move around, people aren't.

> Yet somehow most countries are able to tax labor, income, land, and so on, without losing their entire populations.

That's because most of the population aren't free to give everything up because a government gradually makes their life slightly worse.

Just because the frog doesn't skip out of the saucepan, it doesn't magically mean that it's perfectly acceptable to keep turning up the gas.

And then I'll introduce tariffs on goods produced using your robots.

These are, fundamentally, political-economic questions. Not merely one or the other.

That's how you start a trade war and kill trade aka the Trump solution.

To be fair Thomas Jefferson raised tariffs significantly. Most manufactured products simply stopped existing for consumers. All of that demand and no supply spurred the creation of a domestic manufacturing industry in a country that had previously only been useful for agriculture and raw materials.

Yes, but the US basically had an entire continent that was almost free for the taking, given the relatively light resistance that Native Americans were able to put up. Of course this land had to be farmed/mined/etc. to be productive, but it's far far easier to take economic risks when you have effectively unlimited quantities of a popular asset (land) at your disposal. I'd be very wary of generalizing from that situation to economic planning in general.

All I'm saying is that tariffs are not universally good or bad. Japan has ridiculous duties on rice because the farm lobby is super strong and the inevitable result of lowering those tariffs is a loss of livelihood for many people as well as the loss of traditionally grown and sourced rice. Is that bad for the economy and for consumers? Duh. But if the rest of the economy can support the inflated price of rice and the Japanese people prefer staying true to their roots, then that's their business.

Thomas Jefferson lived in a very different time. This is a hyper-connected world with a very complex web of trade and inter-dependencies. Simply putting up trade barriers is a sureshot way of isolating yourself from global trade, when has that ever worked out for anyone?

The choice between NK/Iranian levels of isolation and complete free trade is a false choice. Plenty of countries have high tariffs for certain types of goods and do just fine. Even today.

More-over, I hardly think a tariff on the output of robotic labor applied only to expats who left the country for tax reasons is going to cause a trade war...

A collapse of consumer demand will also kill trade.

That's a much better point. Consumer demand is paramount.

> I'll introduce tariffs on goods produced using your robots.

My robot submarines will run your coast guard surveillance and deliver goods tariff free.

What if we don't need your robots?

I mean, the Fed can conjure trillions of dollars of investment capital out of thin air, I think 350 million people have a fair chance of choosing to operate a magic building that makes their lives better.

Which is ultimately what we are talking about. Should we operate highly automated factories and how should we divvy up the benefits from them?

Seriously, we could have robots taking care of us. Free food delivery and a basic income for just being a citizen. Unfortunately this undermines much of what drives innovation and hence the economy as we know it... so though the math seems to work:

automated robots = free labor = us not having to do it + receive their products

... it just isn't that straight forward. Currently it's heading towards:

automated robots = free labor for business owners = us not having those jobs + them still getting what we would have produced

When everyone has lots of free time no one will innovate new forms of entertainment. /s

Correct. It's also the problem with taxes. Corporations move to where taxes are cheaper. But this doesn't mean there are no solutions.

Also, what cannot be ignored is the true drop in production costs because savings do get passed on to the consumer. This makes the politics difficult. If kittens died change would be much easier.

> Correct. It's also the problem with taxes. Corporations move to where taxes are cheaper.

Not just corporations. All tax payers try to pay the least they can.

There are professional accountants who make a living by filing personal tax returns, and people pay them to advise them on tax deductions and investment schemes that lowers their tax bill.

only problem is that is not what happens..

sure robots and factories move to China with no taxes at first..but than Chinese gov figures out to pay for other infrastructure improvements to have things like the USA they have to tax something and end up taxing robots anyway..in fact its already happening

And manufactures are already moving out of China to places like Indonesia and Vietnam.

And that’s why tariffs are a thing, and why the corporations are trying to push for free-trade-treaties just before the automation is happening.

What if I'll tax the stuff you robots make? Vat could be 80% or more if money was pumped back into economy in form of basic income.

I'm sure I read there is an upper bound to VAT, after which increases in fraud loose more than the tax increase.

Not sure. Most harmful VAT fraud is caused by specific schemes relying on faking costs. Those don't depend on rates.

Other way to avoid paying VAT would be to hide the sale altogether which might be hard for company that makes and sells tons of stuff made by robots.

Doesn't this just drive trading blocks of countries getting together to agree on common standards, like the EU?


> but we survived because ultimately people find a way to make money.

Or more accurately, we just stopped caring about the people who can't.

And to treat our fears about inevitably joining them, the denigration starts. "well, they're just red state rednecks" "Poor folks should just learn more and work harder and pull those bootstraps" "if there's 5 jobs for 10 people, then the 10 people need to go back to school and get degrees, then they'll have 5 jobs for 10 people with degrees, which will be much better"

Pretty much this.

"Utopians on the coasts occasionally feel obliged to dream up some scheme whereby the unnecessariat become useful again, but its crap and nobody ever holds them to it. If you even think about it for a minute, it becomes obvious: what if Sanders (or your political savior of choice) had won? Would that fix the Ohio river valley? Would it bring back Youngstown Sheet and Tube, or something comparable that could pay off a mortgage? Would it end the drug game in Appalachia, New England, and the Great Plains? Would it call back the economic viability of small farms in Illinois, of ranching in Oklahoma and Kansas? Would it make a hardware store viable again in Iowa, or a bookstore in Nevada? Who even bothers to pretend anymore?"


wow, thanks for the link.

Robots are just machinery which can be taxed as property. We shouldn't create special tax categories for productivity tools or we'll start taxing shovels and perk scripts, too.


A single tractor is the sole responsible for eliminating the need for hiding a small brigade of farmhands or construction workers.

Efficiency shouldn't be taxed.

>They are productive assets, much like houses produce rent

The rent houses produce is very different from the money robots help you make. Rents (in the economic sense) are good to tax, can't be passed on to the tenant, and has no bad distortionary effects. If you tax robots, and don't do anything else, all that does is raise the prices of the goods produced by robots. It harms the consumer the most. If you tax robots enough, you can incentivize the owners to not use robots and hire humans instead. But then we're missing out on all the benefits of having a society where robots do the hard work, there's got to be a better way.

One solution would be to tax robots, and redistribute the taxed money back to the consumers. Everyone should benefit from the fruits of automation. This would probably work pretty well. The biggest issue here is that the government isn't known for being very good at redistributing tax revenue. So there are proposals like basic income to keep the process as simple as possible. There are probably even better options, like taxing the rents only, and taxing them very highly, and then paying that out as basic income. Theoretically this might target the people you want to be targeting, without harming the consumers. Obviously, theory only goes so far with this kind of thing. I think the point here is that taxation is tricky, and the burden of a tax is not necessarily on the person/company you're taking the money from. So "tax the robots" might not be the best thing, even though it has populist appeal.

If real estate producing rent is taxed it is definitely passed on to the tenant in the form of increased rent. It is just a cost of running a business.

Real estate taxes are in principle very similar to taxing a robot. It will be passed on to the consumer.

If you are referring to rental income being taxed (after all costs are deducted) then it is very similar to profits from robot assisted manufacturing being taxed. This will happen in the current tax regime in the US and here both are similarly situated as well.

I suspect their primary immediate concern politically is the graying Chinese workforce.


You mean something like an "imputed labour" tax kind of like some places charge income tax on "imputed rent" to homeowners?[0]

Though that may get messy as traditional human labour costs change. Maybe a straight-up imputed rent on the rental value of the machines?

0 - https://en.wikipedia.org/wiki/Imputed_rent

Robots are capital. Real estate is mostly land. Capital produces interest. Land produces rent. These are different things.

However, if robots ever became fully autonomous and sentient, then owning them could be equivalent to slaveownership, and fundamentally immoral.

Slaveowners can be said to collect rent, because just like with owners of land titles, their profit comes not from production but from the government giving them privileges.

> Robots are capital. Real estate is mostly land. Capital produces interest. Land produces rent. These are different things.

Not according to neoclassical economics! Land is just another form of capital. I still don't understand why though. Some say it's political but that feels like too much of a conspiracy theory to me. There must be a good explanation but I haven't found it yet.

And the profit went to the shareholders - pensioners and 401k holders.

While most of the tax goes into bureaucracy.

The idea of taxing automation sounds like discouragement of increasing the efficiency. If anything we should subsidise it!

This is what I've been thinking for quite a while but what allot of people seem to ignore - the "AI revolution" can very well "only" hit developing nations while skipping the developed ones.

Better, smarter robots are a threat to Chinese workers, not so much to say Dutch or Canadian workers.

The west can afford and is willing to pay more even for less, just look at how many people are willing to pay 10 times the price for "Organic Fare Traded Tomatoes" or any other "artisan" goods.

The west is also not as much dependent on manufacturing and the manufacturing it does do is usually high tech, low(er) volume and highly specialized one where it both might not make sense to automate everything and where people are more than willing to pay the extra to know that something was "hand crafted".

But overall we've developed a consumer culture especially in the past decade that is pretty much focused on retro/old school craftsmanship, small scale production and "artisan" touches, it almost makes one wonder if the whole "hipster revolution" wasn't hand crafted by some cabal of shadowy figures that foresaw the "rise of the machines", because our willingness to pay 250$ for a hand crafted hemp bag on etsy is just might be the thing that would protect us from AI automation.

The robotics and machine revolution has already hit the US.

Car manufacturing: We still build cars here, but we don't employ nearly as many people.

Logging: contrary to popular belief, the spotted owl didn't destroy logging jobs. Machines that let 1 person replace 20 did.

Manufacturing is the easiest, first place to replace workers, but AI will replace lots of people in America. It looks like trucking and taxis are on the short list - that's a few million workers - but fast food restaurants are up next (and those innovations will move up the chain to fancier restaurants).

Over the last 200 years, there was almost always a new role for people when their job was automated, but over the last 20 years a lot of those new roles were lower paying service jobs.

No way is our consumer culture actually based on small scale production and artisan touches - and not that many of those artisan touches are made by people or machines in China. That may be what you notice, but most of America's paycheck goes to the regular old normal stuff.

Logging today: [1] No muss, no fuss, just a machine on an articulated chassis that neatly cuts off trees, picks them up in one motion, shears off the branches, cuts the trunk into convenient log lengths, and stacks the logs. About two trees a minute. From Ponsse, which essentially owns this industry, after beating out Komatsu and Deere.[2] Although you don't see it, the log was scanned for defects during the cutting process, which determined where it was cut and whether it becomes boards or chips.

No more lumberjacks.

[1] https://www.youtube.com/watch?v=luygMuoFnXs [2] http://www.ponsse.com

It's really ridiculous with logging. My grandfather cut wood as part of a 100 man crew, with axes and hand saws, horses, and all of the logistics involved in running a camp to house and feed that many men and animals, to cut a few hundred cord of wood a season. My father was a subcontractor who worked on a team of four, between the chopper with the chainsaw, the cable skidder driver, the guy on the landing slashing and piling, and the truck driver, and they cut a couple hundred cord a week. Now one guy with a cut-to-length system can cut a few hundred cord a day, if he's in good wood.

But this is what already happened, we talk about the next level of automation, generic automation, machine learning, and next generation robotics that could replicate the finesse and agility of humans and are flexible enough to be adapted for any task.

The manufacturing in western nations in many cases is already as automated as it can get (yes there is always a room for more optimization but industries that have been automated since the 70's will and are already hitting diminishing returns), what has not been automated are mostly tasks that we choose not to automate for various reasons, many of which are cultural.

And yes most of the stuff we buy is mass produced, generic, and already highly automated but it's also not made in the US, the US consumer doesn't care about Chinese workers or unemployment in China, and it won't buy a 250$ hand crafted anything in China unless they are caught drunk in a tourist trap. And that's exactly the point artisan crafting and manufacturing has been developing in the US and it is pretty much immune to threats from automation and the AI/Machine Learning revolution because we as consumers are making a conscious decision to buy it. And even when we do buy mass produced generic crap just look at how many products are marketed today by selling you the human story from shoes to coffee beans it's all the same.

I fully agree that manufacturing is largely automated in Western nations, but I disagree with your assertion that hand crafted stuff will save us. $250 hand crafted goods are a tiny and shrinking part of our economy bought by wealthy individuals. This is not 5% of our labor force, nor is it 5% of our GDP.

Most the stuff we buy isn't stuff - it's services, lawyers, finance, insurance, health care. AI will dramatically reduce employment in every single one of those industries. (https://en.wikipedia.org/wiki/Economy_of_the_United_States#G...)

That is not true at all. We have an entire service economy that is rife for automation. It hasn't been automated yet because it wasn't cost efficient. It is rapidly becoming so.

Car washes in UK recently experienced this effect in reverse: because automated wash machines are capital-intensive they have been partly displaced by very cheap workers, mainly from Eastern Europe, who are allegedly modern day slaves [0]

[0] http://www.cambridge-news.co.uk/dozen-modern-day-car-wash-sl...

One kind of automation usually unmentioned is counter service. Gas stations in Europe are shedding staff and being replaced by self serve card machines - 24 hours, no staff.

Self serve shops where one staff member supervises 20 registers with shoppers doing the shop work!

These were the jobs that young people used two learn how to work at a job. I worked the register when I was a teenager and it taught me well and "can be trusted with money" is an important resume tickbox.

Most gas stations in the US have been that way for a long time. The main reason you have a human attendant is that it probably makes sense to have someone on-site to keep an eye on things/handle problems and their salary is presumably covered by the convenience store anyway. But it's often just the one person unless it's a larger store.

The main exception is the few states that don't let customers pump their own gas and the service stations that still exist.

It's interesting that the labor cost doesn't seem to make _that_ big of a difference, compared to other variables like taxes. New Jersey has one of the cheapest gas prices in the nation but is one of the few states that forbids motorists to pump their own gas. I don't think it's due to logistics either, since neighboring PA and NY have much higher prices. I'm guessing it's just the taxes? What else could it be?

We're at 4 double sided pumps, a roof, a sign and some CCTV. No people, no shop, no money.

Why would they do that? There's no money in selling gas. Gas stations make all their money now selling food in the convenience store. The gas pumps are just a way to get you into the store. And they're moving upmarket, making custom sandwiches and hot meals, selling fresh fruit bowls, etc.

I've seen those in the US but they're very uncommon. I assume the store pays for itself and it's considered a positive feature of the gas station by many motorists.

Agreed. Automation is also replacing service jobs.

I think you're overestimating the amount of high-skill jobs people do in the west to be honest.

Like we've got a ton of truck drivers, who'll surely disappear within a few decades, which is just one at most two generations. In terms of policy planning this is a short-term timeframe.

Same for most people who work in retail, from clothes shops to supermarkets.

But even higher-level jobs will change massively. I highly doubt education will stay as labour-intensive. And I've got family members who are attorneys, and when I speak to them they'll tell me a ton of their workload is simply going through legal documents to look up stuff, and then preparing mostly template legal documents. A lot of this is manual work that'll disappear sooner than you'd think. We've already seen examples in this field with the automated bot that helps void parking tickets.

The amount of people that work high-skilled labour is really small if you ask me. I think a decent first order approximation is to compare the amount of people that work at the Walmart or Amazon headquarters, versus their stores and warehouses. For Amazon I've seen numbers that it's roughly 24k vs 240k, and consider that this is a tech-oriented company that's already automated a lot. For walmart it'd likely be 1:1000. Take a Facebook with 12k employees, a leader in a high-skill industry, and it's the margin of error of the employee count of a leader in a low-skill industry, not in China, but right here in the west, like say Walmart (> 1m employees) or say a franchise like McDonalds. These are also Dutch or Canadian workers.

An attorney friend of mine told me that discovery is being affected by this. Instead of having a team of higher level attorneys supervise a team of lower level attorneys (and maybe paralegals also) sorting through tons of papers in discovery, those high level attorneys train an algorithm on what documents are of particular interest from a small subset of them all (creating the training set) and then they let the algo do the work.

An anesthesiologist friend of mine went back and got his MBA because he's certain that machines will dramatically reduce the amount of jobs for anesthesiologists; you'll have one anesthesiologist supervising X machines instead of X anesthesiologists.

Quite true; my wife works in e-discovery and much more of her work is in normalizing messy data sets than doing the discovery itself.

Oh, I'm sure that lawyers will be the last to go. They make the rules, after all.

Are you sure?

    Artificial intelligence was now out-performing the capabilities of junior
    lawyers and paralegals in due diligence, discovery and document drafting.
    Upcoming predictive analytics would be able to assess the outcome of court
    cases while legal diagnostics systems analysed legal problems and provided

One thing to keep in mind is that the demand of services is fairly elastic. If the cost of legal services go down dramatically the demand will go up quite a bit. The reason many people don't use these services is because of cost and decide to forgo/settle.

I bet there will be a lot of refinancing of mortgages if the closing costs were $500 and the process was one click.

I presume that this is the case with a lot of professional services. In that sense service based economies are better situated than manufacturing based economies.

It is not just manufacturing that is going to be replaced by AI and Robots and it will affect developing and developed countries.

Already there are a lot of junior lawyers being replaced [0].

Check out what a former CEO of McDonald's said about robots and the fast food industry [1].

> “I was at the National Restaurant Show yesterday and if you look at the robotic devices that are coming into the restaurant industry – it’s cheaper to buy a $35,000 robotic arm than it is to hire an employee who’s inefficient making $15 an hour bagging french fries,” the former US chief executive Ed Rensi told Fox Business’ Maria Bartiromo.

[0] http://www.nytimes.com/2011/03/05/science/05legal.html [1] http://www.theguardian.com/us-news/2016/may/25/former-mcdona...

Yes things like legal discovery, medical history research and many other things can (and could be for the past 10+ years) and will be "replaced" or more like integrated with software / machine learning assist. Large firms that hire 30 new associates instead of 50 won't be a big blow to the economy, even McDonalds switching to more automation won't have that much of a negative impact McDonald's can and should be the "cheapest" option, but don't expect the local diner to automate at the same time, and don't forget that we are willing to pay more for a barista even tho when you use the same beans even 25 year old automated coffee machines produces a better and more consistent product than the vast majority of barista's out there. The Restaurant industry in the US overall employs about 15M people and that figure is expected to grow by 10% in the next 10 years even with automation.

Automating good baristas in a cost-effective way is actually a pretty hard problem, but automating your typical Starbucks espresso machine button pusher is trivial -- machines that can make passable cappuccinos already exist. But people don't go to Starbucks for the coffee; they go to Starbucks for the same reason they go to bars.

I think a lot of the service sector automation that will happen in the next 20+ years is analogous. Anything customer-facing is bound to stick around as long as people have spending money, while anything that's not customer-facing will slowly become automated.

E.g. The person at the counter in a McDonalds is the easiest person to replace -- all you really need is an iPad and a couple accessories. But if I were a betting man, I would bet that McDonalds will replace food prep jobs before replacing humans with kiosks in most locations.

> E.g. The person at the counter in a McDonalds is the easiest person to replace -- all you really need is an iPad and a couple accessories.

Except that most people are REALLY BAD at operating a kiosk. You want a person at the kiosk so that they can gently guide the SUV driving suburban wife with the high maintenance order gently out of the way of the rest of the customers.

The backend jobs will be the first to get automated.

Actually, Sheetz (think fast food meets convenience store; based out of Ohio and only present in a few mid-Atlantic states) has been using kiosks for ordering food for years. Granted, payment is still at a register manned by an actual person, but it's not like that's uncharted territory, either -- Chili's allows you to pay at your table without needing to hand your credit card over to your waitress.

Right, but that's a captive market. No one goes to Sheetz for food; they stop there for gas and grab something to eat while they're stopped. So making the food ordering process a bit less pleasant is NBD.

McDonalds has to compete with other chains and prices are already bottom barrel. In McDonal's case, taking human interaction out of the equation seems like a losing proposition.

In western Pennsylvania, where I'm from, people definitely do go to Sheetz just for food.

Funny, Sheetz immediately comes to my mind too when I think about the topic of automation. It works a little too well!

We have a gas station that serves food that is cooked to order. It is a WaWa station. All orders are by kiosk and the kiosk is pretty well designed. My family and I don't have problems using it. We are however, all educated.

It uses pictures and text. I will have to watch next time I'm in there to get coffee and see how well people use it.

Ah, Wawa's adopted that model, too? That must be relatively new. Guess PA likes kiosks for ordering food.

can confirm ... same at wawas here in Orlando, FL

These have been at Wawa at least since 2010.

So we instead rely on the equally bad, minimally trained person behind the counter to input the order instead?

My success rate for getting my order correctly at fast food restaurants is somewhere south of 50%.

> You want a person at the kiosk so that they can gently guide the SUV driving suburban wife with the high maintenance order gently out of the way of the rest of the customers.

Even if that's the case, you could still plausibly turn three to four people manning a register into four kiosks and one person to assist.

>But if I were a betting man, I would bet that McDonalds will replace food prep jobs before replacing humans with kiosks in most locations.

Panera Bread proves you wrong. Go into any corporate-owned store (not the franchise ones, they're behind), and they have iPad kiosks for taking your order. The food is still prepared by hand. They frequently even give you a bonus, like a free cookie, if you order with the kiosk instead of going to the human. And the kiosk does a far better job too: there's little or no line, you can easily look up your old orders or favorites and re-order them, you can easily make changes to your order (more or less salt/pepper, more or less lettuce, different bread selection, etc.) which you can't easily do with a human because the human won't present dozens of different options to you when you order, they just ask "what do you want?". Visual communication systems are far more information-dense than verbal ones.

The goal for coffee roasters and shops is consistent coffee. With machines you could get personalized coffee.

My favorite coffee shop in NYC is The Roasting Plant, their coffee is roasted, brewed and poured by a pneumatic (well the process of sending the beans to their destination is a set of pneumatic tubes) coffee robot[0] (and handed to you by a human barista).

Really fucking cool, and the coffee is excellent, too.

0) https://roastingplant.com/our-story/javabot

Why is replacing baristas a difficult problem? Not being sarcastic, I'm genuinely curious.

A good barista pays attention to their work:

* A good barista will notice when they screw up the shot and pull pull another.

* A good barista will not burn or under-steam milk.

* A good barista will make sure you have the proper amount of milk and foam. (Getting a perfectly consistent result when steaming milk isn't really possible using a dead-reckoning controller or when using simple sensors like temperature AFAICT.)

* A good barista will make sure the drink looks as good as it smells and tastes.

  * A good barista will have no problem customizing drinks.
Note that I didn't say impossible. Just difficult. You can probably get to better-than-Starbucks quality without too much AI. Auto coffee shops that beat starbucks already exist. But I'm not aware of any auto espresso machines that can compete with the baristas at my local coffee shop. And even if they could, I'd probably only use them at work, at airports, and at hotels.

I confess to not knowing very much about the black ambrosia that I love so much, but it does sound from your checklist that a lot of those qualities could eventually be automated. That said I have taken part in several 'artisanal' coffee tasting sessions and while they have given me some appreciation for the growing and roasting process there wasn't much time spent on the brewing.

> but it does sound from your checklist that a lot of those qualities could eventually be automated

Totally. But the current generation of dead-reckoning-and-maybe-a-bit-of-very-simple-sensing style of control for grinding/tamping/steaming/pouring won't be sufficient. I would be unsurprised if substantially improved sensors (perhaps even vision) are necessary before we see computers over-taking the best baristas in an abssolute sense.

And unfortunately I don't think there's much demand for that sort of investment for the reasons outlined in other posts on this thread (even if robotic baristas could smash the human competition in coffee making, they still wouldn't displace the neighborhood coffee shops.)

Yeah, but who the fuck cares? Ultimately it's an infusion made from roasted beans. I made my own coffee for years and was perfectly happy with the simple french press method. No doubt a skilled barista would do far better, just as a skilled chef cooks better than I do. But the gourmet market isn't big enough to drive the rest of the economy. We are not headed fora future where people have amazing jobs as amazing baristas and then go to be gourmet consumers of something else when they quit work, such that everyone is simultaneously an employee and an epicurean. For a tiny few, being a barista may approach the heights of being a sommelier in a top-rated French restaurant, but for the majority they'll be slinging coffee, just as most people who serve wine in a restaurant are just waiters, and none of these people will enjoy the fabulous life when their shift ends, just some discounts (official or otherwise) on the same product they serve to the customers.

Sorry, I wasn't implying that anyone cares. I even state a few times in this thread that people specifically don't care in aggregate. And even if people did care, it wouldn't have a major impact on the extent to which barista jobs are automated.

But it is just interesting, from a technical/hacker perspective, that good barista work is a pretty hard robotics problem!

Because allot of the "marketing" of the "experience" has been focused branding the individual person behind the coffee rather than the coffee it self.

Go into any "artisan" coffee shop and the barista would pretty much look identical, many of them will engage and have their own "shtick" to make the experience of drinking their coffee "unique". The coffee it self is also going to be heavily branded and sold to you as some fantastic story with many images which again will be heavily focused on the people who were involved in the entire process from growing the beams to your cup.

This is what we are buying now, 20$> an ounce "fair traded organic beans" with some nice retro photographs of Bolivian coffee farmers combined with some 20 year old millennials inspecting the beans to make sure you get the "best" ones in your cup.

This is what you can't replace, brewing the coffee and even foaming milk is something that a machine can do easily, and arguably better than most people, heck even latte drawing can probably be better done with a 2-axis drip nozzle than a barista with a bamboo stick but when you pay 7$ for a cup of coffee you aren't paying for coffee you are paying for the experience that no machine can actually give you simply because you don't want it. You want the human contact because at least in my personal belief that is a coping mechanism we have adopted to make for the isolationist life style that many of us live today in which we spend more time with our phones than with people, and so we care now more about how our coffee and burritos are being made and by whom than ever before.

> brewing the coffee and even foaming milk is something that a machine can do easily, and arguably better than most people, heck even latte drawing can probably be better done with a 2-axis drip nozzle than a barista with a bamboo

Is this true?

I'm mostly convinced about the brewing part (except that even the most meticulous machine will make mistakes, and a good barista will throw out a bum shot whereas a machine probably won't know the difference).

But I'm not convinced about the milk part. Do you have links?

(FWIW I totally agree with the tone and overall thesis of your post. And I really wish someone would deploy freshly ground-or-vacuum-sealed/fresh milk machines in airports/cafeterias/hotels/anywhere there's only a starbucks. But I also feel like better-than-average humans are still better than state-of-the-art machines.)

Screw the human contact; I'd rather pay less for my latte and get it made correctly, and more cheaply, by a machine.

For human contact, just have a nice coffee shop with comfy chairs where people can sit around and read, chat, etc. You don't need humans making the food for your human contact, you just need to be in an environment with other human customers.

You can also have a human server who brings the drink you ordered to you. One human can run the whole establishment, filling in in all the ways the robots can't, but letting the robots do the more skilled work. When I go someplace for food or drink, I want to sit down and relax, not talk to the guy prepping the food. And since the food prep necessarily has to be done someplace away from the seating area (because that's where the foaming-milk machine is), I don't see any value in having a human back there when a machine can do it better. Now I do see some value maybe in being able to chat up the girl who brings the drink to me where I'm sitting. But the person behind a counter making the drink, who I can barely even see because there's a giant milk-steaming machine in the way? No, I don't see the value there.

I'm inclined to agree with your assessment, even if it seems to drip with bile. I've not much experience with genuinely interested baristas, but those that I have known made drinking coffee more of an event rather than just a forgettable occasion.

There's still room for the human touch but sometimes you just want a decent double espresso and to be left alone.

Artisan coffee shops are like vineyard wine-tasting that way. Maybe slightly better product, but what you're really paying for is ceremony.

A good barista is like a good bartender. Their interaction with the customer goes way beyond simply making and handing off the drink. A robot would largely make that interaction like a soda machine. Not very personal, and not really something that keeps people loyal to your shop vs the one on the other side of the street.

Considering my own ratio of canned and fountain soda bought in restaurants, grocery stores, and convenience stores (at least a couple times a week) versus soda pulled by a soda jerk (never, nada, not even a single time), this does not bode well for the good baristas of our world!

While I have bought alcohol from a bar, the ratio of my non-bar alcohol still dwarfs bar-purchased alcohol. And frankly, even with the bar-purchased alcohol, it was social events with friends, the bartender could just as easily been a serve-yourself machine.

Depends. I have been to bars where the bartender is a large part of the experience. Good bartenders joke and make you feel good at the place. Bad bartenders ignore you, don't get you drinks in a timely manner, and generally make you feel small and ignored. I would vastly prefer to go to an establishment with the good bartenders than to have a soda-machine like experience.

My local McDonalds already has touch screen self-service. A human still cooks it and brings it to your table, but ordering and payment is automated.

It's currently optional, but I could see it becoming standard fairly soon.

In case anyone else is curious like I was about the stated figure on restaurant employment, here's a reputable source: http://www.restaurant.org/News-Research/Research/Facts-at-a-...

and i'm significantly more likely to buy the fries if they weren't bagged by a human.

for essentially two reasons; a) mcdonalds treats their employees like shit. no job is better than that job ( i live in a country with social welfare) b) the person bagging the food scratched his balls just before doing so, and he sure as hell isn't bothering to use gloves now.

and they forgot the salt! again! arrrrrgh.

That's easily remedied with the little salt packets.

Too much salt on the other hand...

Robot automation can be fun as well.

Bartender on a cruise ship.


I wonder where the senior lawyers will come from...

[edit] then again, automation of software development tasks held back the software industry at all...

I think you're missing the point. It's not that AI will replace all lawyers, it'll simply shrink the lawyer pool size due to increased productivity per capita.

Oops. That's the point I meant to make with my edit, but leaving out a word by accident I said the opposite.

What about this[0] move by Adidas pulling Asian production back to Germany (but now completed by robots instead of humans). Clearly a loss for factories in Asia, but much of a win for anybody but Adidas ?

[0] http://www.nbcnews.com/business/business-news/adidas-pulls-b...

There is a win for Germany: - more opportunities for high skilled robotics engineers, so they can stay at home, and don't move to US - tax income for country, which can be spend wisely.

Sure, it's great for Germany. Those robots don't maintain themselves.

Not just a threat to Chinese workers but also the Chinese government. Unemployment tends to foster civil unrest.

In this connected world, top elites of the world have to figure out how to tax each territory, how to maximize the profit and how to be adaptable and sustainable. China in chaos seems not a decent option within the near future.

i think this hipster revolution is happening in small circles in a few cities. to put the revolution in perspective, here are etsy's gross marketplace sales (GMS) compared to annual revenue of some mass-market retailers:

etsy: $2.3B [0]

target: $73B [1]

williams sonoma: $5B [2]

bed bath and beyond: $12B [3]

[0] https://investors.etsy.com/phoenix.zhtml?c=253952&p=irol-new...

[1] https://www.google.com/finance?q=NYSE%3ATGT&fstype=ii&ei=ruN...

[2] https://www.google.com/finance?q=NYSE%3AWSM&fstype=ii&ei=EOR...

[3] https://www.google.com/finance?q=NASDAQ%3ABBBY&fstype=ii&ei=...

Another figure to add to the hipster revolution: Youtubers and Twitch streamers. It could one of but a few ways to make money in the future (entertainment).

I hope you like playing with Play Doh!

Self-driving trucks will have a significant impact on North-American workforce. Something like 6% ppl in NA are employed in the trucking industry.

There are knock-on / 2nd order effects in other industries, as well. E.g. if robotic trucks lower the cost of over-the-road shipping by removing a big cost component (the driver), then it might affect the breakeven point at which rail shipping becomes more desirable than OTR (currently around 500 miles for most types of freight). And if taking the human drivers out lets you run trucks nonstop for longer, overall cargo velocity could increase, which makes various types of just-in-time logistics easier. It'll be interesting to see how it all shakes out.

Something I never hear when discussing automated trucks is the 10% of truckers that are owner-operators. Won't they just slap automation onto their trucks, and continue to own (but no longer operate)?

Won't displaced truck drivers become motivated to be owners themselves? It doesn't seem as bleak as everyone makes out. I don't really think most big companies want to own and maintain their own fleets of trucks.

Where are they going to get the money to become owners if they don't have a job anymore, but still have to support their family?

I'm not sure why you're being down-voted. People driving their own truck for a living are probably not swimming in capital, and outfitting a truck with self-driving capabilities (or buying a new truck) is likely to be expensive. Furthermore, they are more likely to lose out to bigger players who can aggregate inevitable software/sensor upgrade/repair costs across an entire fleet.

The idea that everything will work out because working people can just become capital owners ignores the obvious fact that working people work precisely because they don't have capital.

I'm being downvoted because people don't want to think of these things, or that access to capital is largely based on luck. They want to believe in a Just World, which means that their success was all due to their hard work, and if these people can't have that level of success, then it's clearly because they didn't work hard enough.

Most "owner" operators are running equipment that the bank still has the title on. Not exactly swimming with liquid cash to perform upgrades with.

Economies of scale seem like a large win, here. If you own a thousand trucks, your per-truck maintenance costs are less than if you own one truck. Companies that don't want to own and maintain a fleet of trucks will outsource to those who do, but it's simpler to deal with one external entity that can supply trucking than ten or a hundred such entities.

That’s where cooperatives could come in – what if the owner-operating truckers would just start a cooperative and own the fleet together?

That is the scary part. If you include other dependent jobs like service industries (hospitality/truck repair etc) related to trucking/transport it might be north of 10%.

IMO self-driving trucks won't displace humans behind the wheel. Trucks on public roads will be self-driving in the same way that planes are self-flying.

> IMO self-driving trucks won't displace humans behind the wheel. Trucks on public roads will be self-driving in the same way that planes are self-flying.

Not this year. Not next year. But they will.

I think the point is that robots will do the shitty low-margin jobs like drive trucks, bag french fries, and change tires, and humans will get to do more enjoyable jobs like creating "artisan" goods as you refer to them.

The laws of supply and demand mean that the artisinal jobs will in turn become shitty and low margin because of the oversupply of cheap labor.

Well I'm also assuming people will also spend a lot less of their lives working. Otherwise you're correct, there will be a huge oversupply of labor.

With what money?

Robots are happy to work for free (minus operating costs) and there won't be enough work left to occupy all adults for 5 days a week. I think the economics of all this are the hardest question to answer right now.

Robots work for free. They aren't developed, assembled, and maintained for free. So that brings us back to the original question: With what money is that former truck driver supposed to start their robot trucking business?

There are still applications for computerised "assistants" outside of manufacturing that can have a direct impact on jobs in the west. Eg self service checkouts at supermarkets, automated car washes, and we're increasingly seeing robots and drones being tested for delivery services.

The problem isn't so much east vs west. The problem is technology is cheaper than people so unskilled labour is easily replaceable.

There are a lot of assumptions in your response as it relates to manufacturing and the "west". How can you say this will "skip" developed nations in light of current statistics about the US middle class. The US started moving in this direction a long time ago because labor cost more here. We are realizing the effects today and will continue to see worse effects in the long term. You don't see too many of these articles in the US because firing 60,000 people in favor of robots is not viewed as a badge of honor. FoxxConn is using this as a puff piece to appease foreign buyers.

It'll affect developing countries more only because their labor force is dominated by low value added manual labor which is easiest to replace, so they will face the brunt of it. On the other hand, developed nations have been on this trajectory already, so the hit will be much more buffeted and gradual, but it will eat at the more automatable jobs like driving, harvesting, and jobs involving paperwork/discovery, fast food service, education, etc.

Robotics and AI have improved significantly and will continue to improve into the future. How much have humans improved over the last 30 years? People simply cannot compete, and this is a trend that cannot be reversed, or shouldn't be reversed.

Just as mass industrialization necessitated huge social change in response. The emergence of a middle class, the growth of cities, organized labor and work hours, etc.

As automation and AI continue to replace jobs and more and more people find it difficult to compete at any price. I predict you will see similar societal changes in response. I don't know what those will be, and they probably will not come easy. We could see a utopian future similar to Star Trek, or a dystopian one instead.

We live in interesting times. :)

This begs the question: as human productivity is increasingly usurped by machines, what will happen to the human manufacturing population? Will we finally figure out a way to distribute wealth in a agreeable way (through, for example, basic minimum income) or will we go back to the a feudal model of living?

Interestingly, someone has to purchase the goods that these systems create. Thus, giving people the funds to do so, regardless of where they come from, seems like a necessity.

This was basically Marx starting point: The idea that capitalist competition will cause capitalism to eat itself - sooner or later there are no new markets to expand into for growth, and competition will force ever slimmer margins and ultimately the only place you can trim margins in in employment costs. Then what happens to your market?

His belief was that on one hand capitalism was/is absolutely necessary to create sufficient wealth to make redistribution viable (he made the point in The German Ideology that a redistribution before that point would do what we saw e.g. in the Soviet Union: simply spread poverty around, and restart the class struggle it tried to erase as people tried to et out of poverty), on the other hand it would in its end-stages lead to "overproduction" combined with mass unemployment as it would fail to reconcile the need to try to win more of the market with the need to cut employment costs.

The ways society could prevent this happening are many, including things like basic minimum income as you suggest. But Marx argument was that societal changes of this magnitude tends to instead result in increasing tensions until revolutions erupt for the reason that ruling classes rarely see the gravity of the situation until it is too late.

There are many ways he could be wrong about this, but I find it very interesting to observe the increase in frequency with which this issue of automation and its consequencs is now coming up again.

Marx didn't consider how capitalism, coupled with a lack of a satiating supply of survival staples (aka today "guaranteed basic income" aka welfare entitlements), necessitates raising the accepted standard of living and thus creating a renewing demand for labor (mundane included). Most of humanity past did not enjoy what we now consider poverty-level baseline necessities, much of which exist thanks to jobs of all kinds both creating and buying those products & services. He never dreamed of the poor needing & owning cell phones, indoor running hot drinking water, a/c, a car for every adult, TV, etc.

Actually, Marx foresaw exactly "a renewing demand for labor" (although foresaw is kind of the wrong word; directly observed would be more accurate.) See "Capital".

He also foresaw the shift from manual labor to intellectual property as the essential component in production.

What happens is QE is used in a top down fashion to infuse the market with capital. Basically the opposite of a living wage. Its happening now on a large scale ie. Japan and the US.

QE benefits everyone who borrows money for anything. We bought a house with a 3.1 rate, something that would have been unheard of in generations past. Same with rates for auto and every other type of loan.

Doesn't benefit me a lot, five years behind you trying to buy an identical home for 30% more borrowed money.

Doesn't do much for savings accounts.

The elites will share their wealth only insofar as it's cheaper to do that (bread and circuses) than it is to keep the proles at bay through force.

What Marx saw as an inexorable trend towards socialism may have in fact just been a temporary consequence of the industrial revolution, wherein labor was especially important and the power of an individual worker was large in historical terms. It's not impossible to imagine a sort of "Neo Feudalism" where a small minority of elites find it cheaper to maintain control via technological force-multipliers than to share their earnings such that everyone is actually happy or nearly so.

Not quite. He did note the increasing automation (and sadly either willfully or not fudges his numbers to make the worker more important) in his writing.

His message was less about how important labor was, but how labor got squeezed between the industrial capitalists owning the factories, and the rentier capitalists who owned the land, housing and issued loans.

Alternatively, as massive increases in productivity in manufacturing lead to plunging prices of goods, much smaller incomes will be able to support an increasing standard of living.

People still needs some income at all. Otherwise, they will either rely on welfare or resort to crime for survival. This is a explosive combination, specially in a society where the unemployable's fare is seen as just and self inflicted.

Still no cure for $1300/month rent for a 2bed apartment two hours east of Cleveland...

Exactly right. I feel housing/medical expenses remain independent of all the gain productivity. With PEs buying large housing stock in markets and hospitals keep getting increasingly larger and integrated I do not see what would force them to not extract maximum possible money irrespective of the cost to them.

Yup. Trinkets for everyone. Health care and nice digs for the elites only.

Wasn't feudalism mainly a hierarchical means of controlling land and the people that worked the land? If you don't actually need peasants/serfs to do anything then you wouldn't need feudalism.

One of the drivers for feudalism was the prevalence of cavalry in warfare starting after about 700AD. Mounted knights are expensive to maintain, hence the solution of providing land grants in exchange for military service. It's a medieval version of the military-industrial complex.

The connection between mounted warfare and feudalism is controversial [1] but it's common enough that societies adopt social structures optimized for defense. There were almost certainly multiple reasons for the prevalence of feudal relations.

[1] https://en.wikipedia.org/wiki/Great_Stirrup_Controversy

Not exactly. Feudalism was rent seeking from top to bottom. Local Barons obtained the right to get rent from peasants who lived on their land. In turn they paid to their local Earl who paid to the local Duke and so on up the ladder to the King. Without the peasants at the bottom their would have been no feudalism. Of note, the peasants alone were generally forbidden from bearing arms.

I mean, you can have hereditary control of land and a military apparatus _without_ letting anyone live on the land.

This has already happened. The US has a service economy. Healthcare increasingly employs more workers than manufacturing.

Yeah...how's that working out for folks?

Why do you think we need to do that? The economy will sort itself out as it always has. The job market will just shift. Some jobs will stop being, others will be more in-demand, which will create entirely new ones.

This is hand waving.

60,000 jobs were just destroyed by automation, this isnt hypothesizing anymore its reality.

Where do these 60,000 people go now? What are the new jobs that these robots have created?

Jobs like creating, progamming, maintaining those robots?

So if i replace 100 workers with 1 robot, and it takes 1 programmer and 1 maintenance technician to maintain said robot - I've created 2 jobs by destroying 100.

This is what you are proposing as the solution to the problem of job shortages?

The economy will sort itself out and efficiently provide goods for those with the means to trade for them. For those without something to trade, the economy will provide nothing.

And what will the people who's jobs stopped being do?

No we don't, I am not anti-progress but my personal opinion is that increased automation will lead to further inequality and potentially economic contraction. Thing is, we are not born equal, different people have different skills, we can't be expecting everyone to become an engineer or a scientist. Blue collar workers losing their jobs will not lead to interesting times...

I'm pretty sure that the these are the sort of interesting times to which the grandfather intended to refer https://en.wikipedia.org/wiki/May_you_live_in_interesting_ti...

> we can't be expecting everyone to become an engineer or a scientist

We don't have to. There are many complicated jobs that aren't white collar but still require a highly skilled individual and are not currently achievable by robotics (millwrights for example).

The OP is referring to removing monotonous, simplistic, repetitive jobs.

True to a point but you're trying to handwave around some very simple math. We are not seeing new industries emerge that require large pools of labor which means the jobs being wiped out by automation are not being replenished.

> We are not seeing new industries emerge that require large pools of labor which means the jobs being wiped out by automation are not being replenished.

Do you have a citation for that? I would be interested in seeing that. According to the Chinese government (which has been accused, in fairness, of fudging the numbers) their unemployment rate is highly stable.

Historically, as countries transition from developing to developed their workforce will shift from primarily non-skilled labour to primarily skilled labour [1]. China appears to be following this line naturally, if you trust their reported unemployment rates.

[1]: http://images.slideplayer.com/21/6263323/slides/slide_12.jpg

I do not have a citation. Are you aware of any combination of industries that have emerged in the last 30 years that have produced strong demand for unskilled or semi-skilled labor? Housing & construction hasn't blown up, manufacturing sector jobs have vanished. Mining is in sharp decline. Forestry has automated away most of it's workforce. Infrastructure is also in the toilet. So what am I missing?


Basically hiring people to dig and fill up white-collared holes.

It will take time, most likely a generation.

The generation preceding the current generation will be better educated and take-on the more skill demanding jobs.

What more skill demanding jobs, specifically? Where?

Those jobs can still get hit hard by new technologies that obviate a skill or assistive technology that allows a single worker to do more.

> Blue collar workers losing their jobs will not lead to interesting times...

Sure it will, because it'll force large social changes and such changes are interesting regardless of whether they're bad or good.

I think you may be ascribing meanings to the word "interesting" and conflating it with "good, positive, benign" change.

World War III breaking out would most certainly be considered "interesting" news, although there is absolutely nothing positive about it.

They will be very interesting because robots don't need to buy things and people without jobs will not afford the things robots build.

I highly recommend Manna by Marshall Brain - http://marshallbrain.com/manna1.htm - He looks at how this may play out, with several variations on the theme throughout a single storyline.

Some might ask; well if this is the case, can we move production (back) to the US? The answer (imo) is no. The Chinese have done an amazing job building the supply chain. Need a part, go right down the street and meet the vendors, need packaging, its just down the other street. The infrastructure built to bring products to market is their real advantage here. Try sourcing a new chip in the states and then try over there. This is true not just for electronics, but also with textile production.

The answer is not 'no'. The answer is, 'It will take some investment'. There is a big difference between those two answers.

People who say it is impossible to move production from one country to another don't understand what the word 'impossible' means.

> The answer is not 'no'. The answer is, 'It will take some investment'.

That's also the answer to 'can we move production under the sea?'

Not really "some investment" is not equal to "extraordinary investment". One is possible with little change and costs, the other would require lots of change and waste.

Which one is which?

the difference is that there are lots of parties that stand to profit by moving the production back to the u.s.. if a u.s. packaging company is able to be price competitive with a chinese counterpart, it will certainly emerge... over time, the whole supply chain can reemerge.

This feels an overly technical objection? Very little of our problems are actually "impossible" if by "impossible" you mean something like "inverting a one-way function".

What I think most people mean is that moving production is impractical, e.g., that there is no realistic incentive that justifies making the investment and so for that reason nobody will make the investment, and production will not move, etc.

It would be more effective to argue that the required investment is smaller than expected, and some particular entity does have an incentive to make the investment after all, etc.

Yes, it's only 'impossible' if you hold a bunch of economic variables constant.

Precisely. It's much easier to move supply chains when you don't have to move the labor (people) with it.

Also it is not limited to electronics - as others have pointed out, Addidas moved automation back to Germany.

>Some might ask; well if this is the case, can we move production (back) to the US? The answer is no.

Says who? Addidas is moving its robot factory into Germany and the US. The perceive benefit you see from China doesn't exist once we have proper automation.



>Try sourcing a new chip in the states and then try over there.

Fabs are different because western nations have strict environmental laws. China's big benefit with fabs is its willingness to pollute its lands and poison its people for us. This is a negative all around and the sooner we get fabs out of China and into environmentally responsible countries and using environmentally responsible methods the better.

Does China actually have that many fabs? I used to work in the semi industry and I never heard of anyone going to China for customer support, even for older tech. Taiwan and Korea led the industry.


There are those that are seriously concerned about China's ability to compete, including the Chinese Government.

Doing a quick search for "American manufacturing output graph" shows that we are producing more output than ever before, relative to our past.

The solution going forward is specialization. We handed manufacturing to China while our service sector exploded. Let each country produce those goods it does best and then trade with one another. Why bring production back to the US? Only if it makes sense to do so.

I thought textile production had long since shifted to another location, multiple times. Isn't textiles what is generally used to bootstrap the rest of manufacturing, but the margins get too thin as you increase your national standard of living through competition in the local market, so textiles moves to the next country that's trying to bootstrap their poor economy?

Before I did IT, I used to work in that industry. Most of the high labor stuff has moved cheaper, vietnam, sri lanka, cambodia. Things like embellishments, excess decorations, that all left china. However if you are doing run of the mill stuff, china is still great to work in. The wash plants were next to the mills which were down the street from where I sourced packaging. It may have changed in the last 8-10 years, but pretty much if I needed anything done it was only 15 minutes away from whatever fty I was in at the time.

The source of most of my info on this is the Planet Money T-Shirt project[1]. On this topic specifically, I believe the episode "'Our Industry Follows Poverty': Success Threatens A T-Shirt Business"[2] was the one that covered this (but the whole series, and the podcast in general, is great)

1: http://www.npr.org/series/248799434/planet-moneys-t-shirt-pr...

2: http://www.npr.org/sections/money/2013/12/04/247360787/our-i...

The recent move of Adidas back to Germany seems to contradict your assertion: http://www.theguardian.com/world/2016/may/25/adidas-to-sell-...

Adidas doesn't need tons of customized and specially produced screws, fasteners, metal cases, and other such things that smartphones and laptops and other consumer electronics do.

The supply chain to support making shoes seems like it would be MUCH smaller.

There is a huge supply chain in the US for very complicated goods due to defense procurement. It is not cost optimized (even close...) but it exists. It is a falsehood that "we don't make that stuff here anymore" for virtually any value of "stuff".

It would take a relatively small tweak to import duties to make most types of outsourcing uneconomical.

Yet you can build those supply chains easily in Germany – all the factories to produce the parts you need are already there.

Germany, in fact, is in the business of producing the machinery that is then used in other countries to produce your phones, tanks, ice cream cones.

Supply chains for simple products such as a yoghurt can actually be quite complex.


You are correct to point out that moving large scale physical manufacturing is a massive undertaking. Building a factory in a new location is the least of your worries; available skilled workers, supply chains, transportation networks, various legal hurdles all have to be overcome. But it's doable - after all, it has happened in China's direction over the past fifty years. What you said was true of the United States once (and still is, in many industries).

If the cost of labor is gone, another cost comes into focus - cost of transportation, including the time it takes to ship.

Example: Zara produces in Spain as high fashion items have a very short shelf life, whereas a container with skirts takes a bit to come from China to Europe.

If I gain an advantage by producing closer to my buyer, I'll do it.

Just-In-Time production becomes even tighter. That Amazon Prime 24h delivery item could come hot of the press.

Zara (or more generally Inditex) does quality control in Spain, but a small part of the products are manufactured in Spain.

Their Bangladesh suppliers have ~300,000 workers vs. ~6,000 in Spain [0]. To counter your point, it seems that a piece of clothing manufactured in China will be shipped to Spain, quality controlled, tagged, fitted with RF-ID and then sent back to China for selling [1]. So it doesn't seem to follow the model you suggest where proximity matters.

[0] http://www.elespanol.com/economia/20160222/104239851_0.html [1] http://economia.elpais.com/economia/2015/03/17/actualidad/14...

Zara has a very unique marketing/manufacturing/logistic model.

I wonder if times are changing again. It just seems that meeting vendors or walking down the street for resistor strips is no longer necessary.

Rationale: you now just need to bulk order the raw materials / components and "feed the machine".

We aren't there yet, but jeez we seem to be racing there quick?

The real problem is latency in modifications of advanced IC design. To quickly iterate a design, it's not enough to have the 'standard' components available. Many breaking technologies rely on designs utilizing the latest versions (or custom made) ICs, which are simply not available at the same time in the US/EU compared with China.

for long-gone and 'dirty' industries like the textile industry you're probably right. on the flip side - as the prices of the robotic setup go down exponentially lowering the barrier of entry for smaller manufacturers I can totally see them contemplating producing locally instead of outsourcing.

once that happens it's a 'snowball', if the price is right the supply chain will catch up.

PS: see the link posted in another comment: http://www.theguardian.com/world/2016/may/25/adidas-to-sell-...

If you don't need much of a workforce the main thing is to avoid taxes and regulation. These "guaranteed income" people want to steal your profits. The robot factories will be in Somalia or similar. Pay off the local lords at a reasonable rate, rather than deal with the EU or American federal government.

Energy costs also become increasingly relevant as labor costs drop to a smaller fraction. Why not set up in iceland where geothermal electricity is free.

So... Better to have highly automated high tech factories producing in third world countries, with their poor roads, patchy electricity supply, unreliable access to raw materials, difficulty sourcing the educated labour you will need to run it locally & difficult to get people to move there to run it, patchy access to international transport, risk of internal conflict impacting on physical infrastructure, rather than paying taxes?

I guess you could always pay off the local warlord, then pay for your own roads, and all the rest... But perhaps better to have a government take care of it for you?

What you describe is how big pieces of the mining and oil industry work already. It's not as daunting as you think to move things around and buy security in the poorer parts of the world.

Getting smart people to come on contract to live in luxury and service your robots won't be hard. Why on earth would you live in a dingy NYC or San Francisco apartment if you could go somewhere and as merely an engineer be waited on hand and foot in a luxury condo while saving up bank. Go golfing after work every day for free.

> Why on earth...

1. Security

2. Friends

3. Family

4. Security

Those are all great reasons. It isn't for everyone. I made the move at 30 when I had few commitments and have been here 4 years.

I've lived overseas in Cambodia and Taiwan. The lower cost of living, warm weather, and challenges of living in a different culture can make life pretty enjoyable.

I chose both places carefully and visited before deciding to move. I still visit the US once a year and my vacations now take me to places I would never go if I lived in the US. A weekend trip to the Philippines, Vietnam, South Korea, China, or Japan is feasible from Taiwan. From Cambodia, you're right next to Vietnam, Thailand, and Laos, all safe places if you read up on what to watch out for.

Cambodia may be developing but most people wouldn't grade Taiwan on the same scale, and both are a long way from paying a warlord 'protection money' in Somalia

Absolutely. I don't mean to equate them, except in the ways I mentioned, which is that they're warmer and cheaper than the US. I mention them together because I've lived in both.

Taiwan is much more developed than Cambodia, and yes, are nothing like Somalia. That's not a place I would choose to live, myself.

You probably have a warped view of a lot of these countries. A big part of Harare is a much nicer version of Beverly Hills, it just costs less than a tenth for that lifestyle.

Why not make Detroit, for example, that city with the streets?

Related: Adidas to make shoes in Germany again – but using robots http://www.theguardian.com/world/2016/may/25/adidas-to-sell-...

> The shoes made in Germany would sell at a similar price to those produced in Asia, he said.


This is the angle I thought first world countries would take to get manufacturing back in-house. It still makes sense to do it if the recurring infrastructure costs (like power) are similar. However a plant may no longer bring in 100-200 workers so not much for the politicians to preach about. It is going to be a few high skilled personnel, a handful of physical workers (to replace and maintain robots), and a temporary building supervisor (required while humans inhabit the plant). Eventually second generation plants will reduce that even further with only a supervisor coming around for extreme cases.

I thought first world countries still manufacture lots of stuff, just that we're really efficient at it so it doesn't employ many people?

e.g. There is a statistic that peak manufacturing output for the UK was actually fairly recently:

"A 2009 report from PricewaterhouseCoopers, citing data from the UK Office for National Statistics, stated that manufacturing output (gross value added at 2007 prices) has increased in 35 of the 50 years between 1958 and 2007, and output in 2007 was at record levels, approximately double that in 1958"


The way worldwide logistics and shipping is constructed makes this more more or less impossible.

The supply chains are based around china, india being the primary manufactoring.

Disruption is an abused term these days, but it applies precisely to this kind of thinking. When conventional wisdom says things are impossible, there is money to be made by making it possible.

Sure but disrupting is much cheaper when it comes to technology than when it's about physical space. But sure.

That can change. The supply chain wasn't always based around Chinese and Indian manufacturing.

Working at a 'traditional manufacturing' company that makes a lot of products in Asia, I can see that we are already starting to move manufacturing back to America (where the bulk of our customers are), despite our supply chain still being deeply entrenched overseas. I would expect this trend to continue in the coming years.

Sure but we are talking 30 years of change.

That was my thought to recently. If you have robots replacing low wage workers, which most people don't really realize was nothing more than the evolution of slavery, then you have zero incentive to produce in said low wage countries. The next wave of "low cost production" regions will be determined by access to low cost energy and low cost space. In many ways, I suspect that the robot based production could even move towards the north as cooling may play a significant factor. We kind of see some of that already as Google and the likes have been moving their massive server farms into northern regions for cooling purposes.

Another factor in this matter is that the uncomfortable reality is that "we" need to stave off the influx of uneducated and unskilled people. Reality is that people will lose ever more value, especially as, rather oddly, the liberal autonomist types advocate for things the they don't realize will only commodify the vast majority of people.

The people there are really starting to feel the encroaching mass-automation of low wage jobs then :/

I hope that the spokesperson was speaking the truth when they said that the increased automation would not lead to long-term loss of employment.

But I can't imagine reeducating that much (previously) low(?) skilled employees, rather than hiring a new graduate (of which there are reportedly many) for R&D.

Not only are jobs being lost through robotics on factory floors, they will also be lost through self driving vehicles. Massive swathes of people are at the risk of facing unemployment, and I think it's going to catch a lot of people off-guard.

Increasingly to me a universal income guaranteed by the government seems like sensible policy to ease in sooner than later. I see no other option, lobbying to allow lower minimum wages or eradication of minimum wage to keep humans competitive against mass produced robotics and AI is quite frankly idiotic.

> Not only are jobs being lost through robotics on factory floors

That is at least theoretically debatable.

Demand is a function of price. Imagine a human driven factory producing 10 parts for $100 in wages, and a competitor using humans and robots that can produce 11 parts for $100 in wages. The competitor can bid prices down, and not only capture the human only factory's orders, but create new orders as it becomes cheap enough to use the part in new ways.

The empirical question is whether that increase of orders makes up for the decrease in labor demanded per unit. It's not immediately obvious which way that goes, and there's multiple anecdotes provided law professor James Bessen of cases where increases in labor demand occur http://www.theatlantic.com/business/archive/2016/01/automati...

Nothing I've read of his suggests a conclusive 'more bots always means more jobs,' and perhaps his anecdotes are carefully chosen, but a blanket assumption that more computers implicitly means fewer people working is unwarranted.

Perhaps we've overstated the benefits of linking our personal fare to the economy. Humans have lived for many years in autonomous or small tribes, living off the land. I'm not advocating a return to ancient times, but I think we can reduce our dependency towards the economy. The only thing that is really needed is land. Food is nearly free if you have the land to grow it on and the time to tend to it.

Shelter, well that's a huge variable: building your own house is almost impossible with many regulations that require a certain expertise to navigate. But once you have food, shelter—and friends/family—you're in a decent spot from a survival standpoint.

We don't have to live like the Amish, but perhaps a happy medium can be found, by being less dependent on the economy. Instead of buying 100% of your survival needs, perhaps it's possible to buy 50% of them and make the rest yourself. With the better telecommunications we have today, I often wonder about a society that's only 50% plugged in to the economy—and 50% self-reliant.

Disclaimer: I'm no macro-economist.

I think it's a bit naive approach. The food is cheap because of the highly efficent agriculture. If you are going to grow stuff yourself your output per square meter is probably going to be much lower and it's going to take a lot of time and energy than if you were to rely on the economy. It's simply not feasible for masses to go back, without changing their diet, ie having to eat less with smaller variety of food. And if you take into account the impact on the country's economy due to this shift, it would be disastrous and put your country behind every other country in the world. It would also mean that you were going to be exposed militarily because of the inferior war technology caused by the inefficient economy. And so on.

Here's the rub: The people who are the least dependent on getting a job in order to survive are the best positioned to succeed in the economy. They can take time to educate themselves. They can spend time networking, and building relationships. They don't have to struggle to be well fed, well clothed. They have lower levels of stress.

Contrast that to someone who is 100% self reliant. They don't have friends or family to lean on. Every day they have to figure out where their next meal comes from, where they will sleep. Basic safety is not even guaranteed. (You can't be 100% on guard, without break.) The constant demand to take care of one's basic needs slowly wears them down. They have to struggle just to stay clean and well dressed. If you live in a city, you see people like this all the time. They're not part of social support system that benefits economically successful people – and the results are tragic.

There's another point, which I should mention: the kind of job that is most suitable to part-time remote working is also the kind that happens to pay very well and, as you point out, not the lot of those who are the most dependent on getting a job.

So yes, there's a bias in my proposition.

It would be interesting to see studies on the overall happiness of individuals that are 100% "plugged in" or dependent and individuals leaning more towards the self reliant Amish living. If all the modern conveniences of a plugged in world aren't making us happier/healthier, maybe we should look at a major shift in the way we interact with the world and people around us.

You can analyze it in terms of your time budget.

Say growing your own food while limiting inputs from the broader economy would take 30% of your available time. You can compare that to how much time you are currently spending earning money to pay for food (probably less than that).

Is the greater certainty that comes with the self reliance a good trade?

Yes, undoing hundreds of years of development sounds like a fantastic idea.

There simply isn't enough land on earth to support substantial farming for 7 billion people. What you are advocating is to kill well over half the world's population.

If enough people lose their jobs they will vote for a government that solves this problem.

Hopefully many countries will get an unconditional basic income and only a few become new Nazi Germany :\

I don't know you implement a basic income scheme on a nation-state by nation-state basis.

If one nation taxes the robot overlords and gives the money to unskilled humans... then the robot overlords will move to a friendlier nation, while also seeing inflows of unskilled humans immigrating.

The immigration issue is a difficult one, because the nations most likely to embrace basic income are also the least likely to embrace draconian immigration controls. The movement of capital issue is more difficult still, and perhaps outright impossible. How do you break the race-to-the-bottom cycle if some nations opt-out of the new order?

Basic income is an interesting idea, but I haven't heard any plausible proposals for it that wouldn't depend upon nations giving up sovereignty and moving closer to global governance. Back here in reality, Europe is struggling to keep a single continent loosely tied together.

> then the robot overlords will move to a friendlier nation, while also seeing inflows of unskilled humans immigrating.

This is a bad assumption, the robot overlords can't just move to another nation, markets don't work that way; they're here because they're selling in this market, you don't just say oh well I'll stop selling stuff in the US and only sell stuff in Germany because they're going to tax me less as it's a much smaller market and a culturally different one as well. What sells in the U.S. won't be what sells in another country, and other markets are much smaller and/or would require complete culturally relevant re-branding to a large degree that might not be possible. The U.S. is a huge basically mono culture market, the E.U. is not, you can't just move shop, you have to change the entire way you do business.

tldr; markets are sticky, the rich people don't/won't/can't just leave when tax policy doesn't swing their way because their money machines are tied to those markets.

Yes, I agree that a human can (even with massive cuts to minimum wage, and/or subsidies to companies) never catch up to automated workers.

Not only should we not try because we can't win on economic grounds (I think). It'll probably force the people that must compete into inhumane working conditions for negligent compensation before we admit that we lost. Banning automation is also not ethical. Because increased efficiency also indirectly translates into increased quality of life, and directly translates into better health care and lower mortality rates.

You're probably right about the basic income, though I wish we could skip that part. My personal crystal boll says that we'll end up with a system more aching to that in the star trek universe anyway. Where _things_ are free, instead of giving people free money.

Star Trek never really explains its economy. Why does Picard's family own a vineyard[1]? Presumably other people would like to have that. Why does starfleet headquarters get to be in the middle of SF. Don't they know that real-estate is expensive?

Even in post-scarcity world of things, there are non-divisible goods, like land, access to people (think, concert) and so on. So some form of allocation of resources would need to happen. Money is one way to do that. Others exist too like lottery, or government ownership are options too.

I'm all for post-scarcity, and think we can go a long way toward just having things be allocated and free, but you'll never get away from the miserable business of allocating scarce resources.

[1] http://memory-alpha.wikia.com/wiki/Chateau_Picard

> My personal crystal boll says that we'll end up with a system more aching to that in the star trek universe anyway.

The economics of Star Trek are the incoherent and inconsistent mass of contradictions that one would expect of a system in the background of fiction where the focus is elsewhere and no one was doing detail socio-economic worldbuilding in constructing the setting.

I mean, on the most basic economic element: the Federation both explicitly does not have money, and explicitly has a defined unit of money (the Federation credit) to which there are several references to its use in trade.

High minimum wage is what prompted this automation in the first place. UBI will solve some problems and create new ones. So we will likely have the same amount of problems or possibly more after UBI as before. How UBI will be funded is another matter, also how much $$$ will it provide? What is a necessity anymore, internet in my home? A cellphone? What a can of worms UBI is.

Ok so say the minimum wage didn't go up. Wait 2-5 years for the price of robots to come down. Now can we fire the workers? These jobs are going away. Now or later its just a matter of a handful of years for big job losses.

Raising minimum wage is for workers who are not going to be fired because of automation in the next 5+ years.

> High minimum wage is what prompted this automation in the first place.

`High` is subjective. $x minimum wage did not prompt automaton, a rising minimum wage catalyses R&D into automaton with better incentives. It's inevitable, and Mr CEO was always going to fire everyone and replace them with robots the moment it became cost effective.

> How UBI will be funded is another matter

Larger profit margins for big corporations turning to automaton, let's tax them more.

It's a can of worms that really needs to be explored. Maybe the answer is not UBI, but there needs to be some good ideas on the best ways of transitioning to a "post-wage" world, if such is indeed happening (http://www.theatlantic.com/magazine/archive/2015/07/world-wi...)

Mind you, the robots-are-taking-our-jobs predictors have been wrong before. But if they aren't, the issue I see is that a big spoke of the modern capitalism wheel revolves around employment. Employment provides income that supports a wider range of people than mere rentiers can. These employees can in turn spend this income at businesses. If there is no consumer income, any business that depends on consumer demand... well, they have a problem.

I guess it's easy to envision things being pushed a lot further, where automation has eliminated huge amounts of work. The main economy would thus largely be revolving around rentiers, who are unaffected by a lack of jobs, people that support the automation (which so far has been a relatively small group), and any other employment which can't be automated (in an extreme scenario this would be very little). From my perspective, such an economy would hardly look like modern capitalism at all, it would potentially look more like previous rentier-dominated economies. Because jobs are such an important pillar in 20th century life, there will probably also be a culture shock on top of that. Without some changes, it's possible that this transition will be rather rough (even if the automation doesn't quite go so far as some predict).

Low interest rates are another culprit that few seem to identify. If that robot purchase can be financed with a 0.5% loan then it is suddenly very cost efficient to replace workers.

There are other factors that come into play as well like overtime pay rules, medical costs/regulations for workers etc.

>I hope that the spokesperson was speaking the truth when they said that the increased automation would not lead to long-term loss of employment.

This is of course untrue (its technically true as foxconn hires a lot of temps/seasonal/demand workers it doesnt consider employees). I think China is in some deep water when it comes to automation. Their main productivity is based on having lots of cheap human labor. If they're not careful, they'll fall into an India-like slump where over-population means lots of servants and such, but no real industry, growth, or innovations.

Addidas is moving back to Germany soon also. They are opening a fully robotic factory. This stuff is moving fast. Jobs are definitely going to evaporate here. China is probably headed for another peasant revolution sooner than later if this moves too fast. Building your economy on making other people's things isn't a smart move.


I may be thinking of this wrong, but at a macro level, as we've seen in advanced countries, the labor pool can shift towards different types of jobs. The money is still out there. We have more high-end wedding photographers, expensive video games for people to buy, luxury vacations to spend money on.

When automation occurs, the wages previously paid to the workers doesn't just evaporate into thin air, but it moves around into other areas.

I'm sure there are lots of studies out there that might show something different in reality, but the world is richer as a whole than it's ever been. It may fluctuate in allocation, but it's still richer overall. Now I suppose overall richness and unemployment are two different things, but the poverty level is lower than ever, which is a good sign. I suppose the challenge is for poor/middle class learning how to better separate the wealthy from their wealth at a faster rate, in a productive way?

That is just PR bullshit.

Yes, just look toward history to see this newfound fear of mass automation that has been found true for centuries! When the cotton gin made everyone homeless, the tractor made everyone hungry and the sewing machine made everyone naked.


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