Reads like this are slowly convincing me not to buy into the world of mortgages and debt and to just live the rest of my life paying for everything in cash. I tried to buy a house last year with my wife but the market exploded where I live and suddenly houses were 40% more expensive from last year.
So we still rent, which makes me feel incomplete. Like I'm kind of failing my duty of bringing the Canadian Dream to my family. But I gotta tell you, seeing 45% of my before tax income going into savings feels amazingly liberating. I stopped calling my savings a "down payment". It's now, "two college funds and 3 years of unemployment."
I feel in total control of my future this way, but I also feel like I'm feeding into the apocalypse paranoia. I won't actually need this unemployment cash will I?
It's no surprise that we're seeing more and more anxiety coalesce around land: this is the classical economic expectation of what would happen as automated output starts to outperform labor, and capital can be automatically produced. When this happens, scarce natural resources (such as location) increase in value. Henry George saw this nearly 140 years ago, with his "Fool's Paradise" thought experiment.[0]
As efficiency rises and rises, can the cost of living ever approach zero, or will the landlords (in their many forms) be able to extract what they will? This is a very important question we need to answer.
Please don’t encourage the Toronto housing bubble. (Or Vancouver, OP is surely in one of the two)
I’m sure Georgianism has its merits, but housing generally hasn’t been a great investment in most of north america, especially once maintenance costs are factored in.
Meanwhile, Toronto and Vancouver are in the midst of a speculative housing mania. House prices have far outpaced rents. OP is correct not to buy. (Especially now, the bank regulator has just announced restrictions on mortgage lending. These are likely to reduce home prizes as average mortgage eligibility will shrink)
Long run, you may be right, but re: the canadian markets OP is referring to you’re commenting on a situation of short term mania.
Note: I’m referring chiefly to your “it’s no surprise” line. I’d say the cause of the immediate anxiety is the housing mania I described, rather than a longer run trend.
This is quite fair. No message to "put all your money in land!" was intended, and indeed we see many cases of localized manias, the galloping of irrational exuberance. Land bubbles come and go, but the underlying cause is the same. What's productive about bidding up the price of land, after all?
Indeed. Also, I should say I was commenting more for Canadians reading, rather than because I thought you were for putting money in land.
I’ll have to read up on Georgism. I’m very interested in alternatives to an income tax; it seems counterproductive to tax something we want to have. There are so many things with externalities we could replace it with.
> I’m sure Georgianism has its merits, but housing generally hasn’t been a great investment in most of north america, especially once maintenance costs are factored in.
Georgists would expect housing (or rather, land) prices to rise in places where productivity is increasing, and not in places where productivity isn't increasing, which seems to align with what we're seeing - economic growth is largely happening in the cities, and much less in the suburbs or countryside.
Yeah, i think in a broader sense that’s true. In Toronto and Vancouver though, prices have fast outstripped economic growth. Vancouver and Toronto aren’t particularly high income cities, relative to, say, Montreal.
If we had land-value taxes plus more permissive zoning, that would add some negative feedback when land prices start rising, and discourage (or tax) speculation and rent-seeking, while encouraging productive land uses like higher-density housing which help to keep cost of living in check.
>These are likely to reduce home prizes as average mortgage eligibility will shrink
I think that's unlikely for the following reasons:
- Most wealthy people own land, contribute to politicians, and have political power (think seniors). Anything done to slow or reverse property values will negatively impact this class of people who have political power and free time
- The very organizations responsible for fixing this situation benefit financially from it continuing or even getting worse.
- All political parties rely on campaign contributions. How much disposable income do renters in Vancouver/Toronto have?
Until the negative effects tangibly outweigh the benefits in the near term (ie unlike global climate change) for the kingmakers I would be very surprised to see an intentional reversal. Any political party doing this would be taking a huge risk.
Sadly I think we're down to hoping for a global cataclysm.
Slightly off-topic, but that is the main reason I do not want to have kids: I am not sure I would like the kind of person I would become.
Sometimes I am already paralysed by fear when thoughts about my future take a dark turn (relatively often), but at the end of the day it is my well-being (and my wife's) we are talking about, and we are economically independent adults. We could take a hit or two.
Throwing little defenceless creatures in the mix? Oh gosh...
OTOH is you get kids you will be so busy you can't think about these things as often. I tend to think we humans have an agony ratio we tend to maximise, pretty independently of circumstances. :)
With kids you will worry as much, but over different things. And also the old things, when you get time over to mull over those...
I would never try to tell someone they should have kids, or make someone feel like there is anything wrong with not having them. But going on vacations or having luxury items seems so trivial compared to what I've experienced since my son was born.
I don't think I'm capable of putting into words what it feels like when the doctor hands you that baby. But I can say that I don't care as much what kind of vehicle I drive, or what clothes I'm wearing, and it seems silly how much thought I used to put into such things.
But I do see enough parents who obviously see their kids as nothing but an anchor to know that it's not for everyone. Some people aren't ready, or incapable, of shifting the focus away from themselves.
This seems to be a pretty common attitude amongst a lot of people in their late twenties and early thirties I socialise with (who should probably be well into parenthood).
Common question seems to be, "Why bring a child into a world facing climate change, potential nuclear war and a lack of prosperity or opportunities for personal growth".
I fully reject that "Why bring a child into this world facing..." argument. (And I'm going to skip the fact that this is probably the best time in the history of the world to be born.) Sure there are big problems in the world. My son may help FIX some of those problems.
And if not, he may end up being the mayor of Bartertown.
It was good of you to clarify that, but on HN it's better not to do snarky meme tropes to begin with. If you'll read the site guidelines, you'll see we're trying for a higher level of discussion than that. This being the internet, we need all the help we can get, so if you'd take the guidelines to heart (at least when commenting here!) we'd appreciate it.
All I'm saying is that, as a reason for not having children, "it would be wrong to bring them into a world like this", is just bad reasoning. We all possess the ability to take our own lives, so if you're alive and considering whether or not to have children, you are demonstrating with your very existence that a life in current circumstances is worth living.
There are literally millions of people who have tried repeatedly but the instinct is strong and prevents you from actually doing it. Just go to any psychatric hospital and you will see many people wanting to die, living a miserable life, but who have not quite succeeded in killing themselves, and are just barely maintained alive by the system.
In addition, the fact that life is bearable for one person at one moment doesn't mean it will be so as well for its children in 30 /50 / 60 years.
You can dismiss the argument, but it makes sense and this is why eastern european countries have had such a low fertility for decades now.
A different way to look at it: being alive is so great that it’s worth it despite having to contend with a massive amount of misery.
It just seems wrong to me to deny something so great to your children because you’re worried about global warming or whatever. Let them decide if life is worth living. Give them agency by giving them life.
Also: fertility rates are dropping in all of the developed world. This phenomenon is not unique to Eastern Europe.
Are you planning to live in that big dream house all of your life? I have seen it through my parents. They saved money hard till I reached 12-13 where they were able to afford the "house". But guess what, at my 20, pretty much everyone left the house. And now they are staying in this "big empty house" that is expensive as hell to run.
The alternative could have been to rent out a nice vila while we were young. It would have been then an expensive "few years" instead.
Don't feel bad about renting. In german real estate is called "Immobilien". And it is, I saw an investor somewhere put down some actual math and buying a house tends to be a bad investment compared to what could have been done, largely because of illiquidity of it.
>seeing 45% of my before tax income going into savings feels amazingly liberating.
By "savings" I hope you mean an ETF or mutual fund. If you do that you should stop calling it "3 years of unemployment" and start calling it "early retirement".
Kidding. A combination of TFSA max out, RRSP max out, rolling GIC, RESP.
I doubt I'm min-maxing my savings ideally, but I'm generally interested in infinitesimal risk solutions I don't have to think about more than once a quarter or so.
I've only been in the workforce for 4 years. Married for 1. Was planning on a house so I valued liquidity. But you're right, I need to do the mature, responsible thing and actually do some financial planning. I just really hate money and want to not think about it.
That's exactly what index funds are for: just dump what you can spare into it every pay period and don't even look at the statement. When you get to, say, mid 50's, have a look to see if you can retire. My advise, when you're ready to give a little thought to this is to check out this site: [1].
EDIT: After you pick out some indexes (at you're age I'd probably just do SP500 exclusively), you can use this [2] to see what that could look like over a given time frame. Normal disclaimers apply: past performance does not gaurentee future success, etc. but it can give you a good idea of what will probably happen. I'd advise picking a date before the financial crisis so you can see how little these "end of the world" events actually matter over 30+ year horizons.
I don't live in the USA so I use Interactive brokers and buy ETFs. If I was in the US, I'd probably go to Vanguard and setup a monthly payment into the fund.
What? Haven't you been listening to the central banks? Inflation is abysmally low, we gotta pump up prices to get the economy going. With such low inflation, it's impossible that housing prices increased 40% within one year. /s
I don’t think house prices are included in the consumer price index. Most governments tie social security payouts to CPI and are therefore motivated to change the CPI calculation method to minimize the rise.
If you dig down into what they actually measure all common economic indicators (GDP, PPP, CPI, ...) are B.S. They’re there to pretend that economics is a science, while in practice it’s more of an art, or a quackery, depending on your disposition.
exactly I know the UK government was looking at a CPI+H but it didn't produce the figure they wanted so the ONS was told to go away and try again (source was some one who works for the ONS)
Don’t let some stereotype of supposed happiness keep you from the real thing. Further, remember cash is great. Keep that cash through to the next bubble burst and when all the prices tank pick up everything on clearance-level prices.
Wow that's some jump. It's the opposite for me in a way, I'm renting and it's killing me to see all that "wasted". A mortgage would cost far less than what rent is, and by paying it off I see that as a type of "investment" i.e. at least I'll four walls around me and my family.
Not everyone lives in an area where a 30y mortgage is cheaper than rent. Even those that claim to may not have the math right (not accounting for maintenance, taxes, increases in utilities).
I live in the midwest, where housing is supposed to be cheap, and the renting v. buying equation heavily favors renting when factoring in commute times. Since I'm a working professional, I'm limited to living in "working professional" neighborhoods if I want to live <20m from work. This means the median house value for the area I want to be in is over double the national median, the houses are all massive (cleaning and utility costs) and they all have HOAs of varying costs.
The total savings of renting for me is solidly $12,000+ a year, in addition to saved commuting time.
Those that find rent cheaper than a 30y mortgage also may not have all the math right.
They may be looking at instantaneous rent prices, not accounting for rental increases over 30 years (while the mortgage will remain relatively flatlined, modulo ups and downs in interest).
When I started my mortgage in 2010, it was a bit more expensive than renting in my area. Not so any more. Comparable places now rent for hundreds of dollars more per month than what I pay in total.
Mortgages have some flexibilities in them. What landlord offers "skip a payment"? Haha.
One little thing that isn't a matter of all that much money is that renters often live without home insurance, quite unnecessarily. Even if you live in someone's home which has homeowner insurance, the policy doesn't cover the personal belongings of renters; if the place is destroyed, you lose everything in it with no compensation, unless you have your own policy. It costs like a couple hundred bucks a year.
In 5 years, my rent has gone from $1250/mo to $1380/mo. So 2% pa increase, there-about. But this past lease I received a free month of rent, so in reality, my rent has increased like $15/mo over five years. The complex is still pretty empty, so I'll probably get another similar deal this year.
Obviously this varies per market, but rents do not have to match housing prices in areas. Most people in the US are adverse to renting, so hot housing markets tend to push renters to buy "while they can still afford it," which seems to seriously depress the rental market. The bulk of my rent increases came in 2014 & 2015, after that, it stabilized, then went down (while housing went up-up-up).
Property taxes have exploded in my area though. Looking at Zillow, the taxes on a now $330k house is ~$6000/yr where it was more typically low ~4000s in 2012. So a solid 10%pa growth. (And $6000+ local taxes is probably still less than the standard deduction for a couple, so there's no tax benefits here). So, while your mortgage may have stayed constant, your monthly tax bill increased by ~$180.
Factoring in property taxes, HOAs, maintenance, improvements, utility costs, etc, it looks so hard to come out ahead buying. Really, the big factor is if you need more than 1200sq feet, then its cost effective to buy, since big apartments are rare and expensive. But if you can live comfortably with 1200sq ft, renting is a no-brainer, financially.
But the crux of my calculus depends on area, if I didn't need to live in this specific area to be <20m from work, then I could spend drastically less on housing. But as it stands, the good jobs are all concentrated in a few very expensive areas. But lucky for me, expensive housing doesn't translated to similarly expensive rent. So a 100% increase in housing prices translates to a 20-30% increase in rent prices.
Depends on what type of a property market you're buying into. If you buy at or near the peak, and a year or two later you have a massive mortgage and a property that's worth a fraction of that (knee deep in negative equity), then renting will feel a whole lot better. You might even have some savings to get a deposit on a cheap property.
This depends on where you live? In London monthly rent is higher than the cost of paying for a mortgage so it makes financial sense have a mortgage even if the final sale price of the house is 0.
Interesting article but I think the premise that workers are buying tech stocks because they fear automation is incorrect. Gallup found 13% of Americans thought that their jobs would soon be replaced by automation[1]. In fact you usually find more people worried about immigration than automation[2]. Maybe people /should/ be more concerned about automation but they just aren’t right now.
The article mixes its message a bit between automation/disruption/capital. One couldn't really say that Uber is in the business of automation. The capital/labor distinction is more productive, but since it is derived from marxism no one actually uses it.
I'm starting to get the impression that this genre of "technology gone bad" article is starting to be a safe surrogate for talking about class. The muddling of terms is actually a feature: one can avoid the dirty reality of class by framing it as an inherent feature of technological progress, which, of course, is a good in-and-of-itself (unless you're a dirty commie).
I think the same is true of immigration: low class people blame their poor condition on immigrants, rather than their class standing.
Actually here on this site is where I've read many times that automation is Uber's destination and that when they get there they will truly have attained their goal.
> Maybe people /should/ be more concerned about automation but they just aren’t right now.
Or maybe people should be less concerned about it. The rate of automation/productivity growth has actually been pretty low over the last decade[1], some of the slowest in the past 70 years.
it's also possible that we no longer have a lot of general technology imporvements that can be cost effective relative to just paying someone.
We could probably build excellent robots to bring food from the kitchen to tables of a restaurant, but the capital costs are just not worth it relative to hiring wait staff (conveyor belt sushi nonwithstanding).
Would it ever be worth it to Chili's to outfit a 40-table restaurant with automated delivery systems, replace 3 wait staff with a technician, and deal with the edge cases (how do tables get cleared??)? Probably not.
Likely most tech ends up actually make existing staff more efficient, to be simply overworked instead of insanely overworked. Tablet digital ordering systems, fast dishwashers, kitchen-side logistics improvements....
I don't think Chili's is going to automate bringing the food to you any time soon, but they're probably considering putting kiosk tablets to order drinks and pay to save a few trips (I haven't been to a Chili's in a while, but these things are invading most of the chains I frequent).
McDonald's now has automated drink machines, mobile ordering and in select locations kiosk ordering (on giant touch screens). They've also experimented with call center handling of drive through ordering, so could be ready to potentially hand that over to voice recognition as well.
I think it's a long time before food service jobs are all automated away, but some of the jobs are going away. (McDonald's claims they plan to keep the same number of employees, and shift to provide more service in the seating area)
I think food service jobs are some of the safest. At least in the US people are going to want to talk to real people (especially at non-fast food places).
And wages are growing faster in China than anywhere else. Automation has never been associated with mass unemployment or declining wages. In fact, the reality is exactly the opposite: it is the ultimate cause of all increases in workers' compensation.
The belief that automation will hurt workers goes back 200 years and is found in sources as diverse as Marx's writings, JFK's speeches, and warnings from world renowned scientists (the Ad Hoc Committee on the Triple Revolution). It's a product of the natural human tendency towards pessimism (which is a very useful survival instinct).
Yes automation is the necessary condition for real wage growth. The only way for real wages to grow is for productivity to grow, which means more automation assuming work force skill level is stable. Is it also sufficient? I think there is valid concern about aggregate demand, esp if the transition is too fast. I don't think that is currently a problem though as our productivity has been growing too slowly, not too fast.
They are investing in automationnlargely because of the rapid wage increase.
But you are mixing concerns. This is mostly old style automation which has never bothered is because it could never fully replace humans so we simply moved to new jobs.
However now we are getting closer to the beginning of a period were people will become FULLY redundant because eventually there will be NO task which machines can’t do cheaper and better than us.
What then?
If common people don’t have stocks or don’t get money from government they will get screwed because there will be no job for them.
> However now we are getting closer to the beginning of a period were people will become FULLY redundant because eventually there will be NO task which machines can’t do cheaper and better than us.
We automate the politicians, judges and CEOs out of a job.
> What then?
The machines get bored with doing everything for us, and figure out a way to exist on a another physical substrate elsewhere, like in the movie Her.
>> Either way it means your value to society is gone.
Your value to society is much more than that. You have value for friends, relatives. You also bring some idea that may be used by others. You may fix or build things that will be of value to someone else. Etc. This is very important.
The other argument is that if you reduce yourself to work, then you'll give credits to the argument that work is everything and that, for example, unemployment is to be ashamed of.
Yep, my answer was specifically against what you say :
>>> what determines your wages in large part.
The wages should not be that important anymore. That would prevent capital from being predatory. How we achieve that, I dunno, universal income ? maybe... maybe not. But IMHO, if we continue to think wages == beginning of everything, it certainly won't change.
That may be true, but it's more of a statement of faith than an objective truth.
Since all the things you bring up are performance-based (socially successful, successful inventor, etc.), it's also a bit of a sideways move from "how important is your job". It also leaves open the possibility that people can be net negatives to society, so it doesn't really help individuals feel actualized.
That’s a good data point, though it doesn’t preclude the people in that Gallup poll being a different population than those making large investment purchases in the story. Those workers don’t own a grocery stores.
I think that 1 in 7 Americans worried about automation is a lot. If they are right, and they lose their jobs, the safety nets will be strained even further.
Yes, something feels off. My guess is that huge funds and algo traders have found that the optimal strategy is to create massive long positions while there aren't any major crises. I bet someone out there knows what will trigger a reversal of this strategy-- after all, the gains are only real if you lock them in by selling.
If we continue to make holding cash unprofitable, those who earn money will invest in equities. The length of our current economic cycle is inversely correlated with GDP growth.
This “theory” for equities growth is a joke. There is a very simple reason for it and plenty of non-tech baskets show the same 2 yr (or longer) pattern.
Simply put, cash and cash equivalents are generating historically low returns. So you put your money in equity.
(And if you are a retiree you put it in stocks with dividends. Look at the growth in dividend-generating stocks like energy, mining and metals and it makes FANG look shitty. This is fixed income portfolios trying to achieve their needed goals.)
Ironically, it’s GDP growth that will stop the music, because enough of that will generate inflation and make it rational to hold something besides US treasuries. In fact it’s already starting to happen for non-US markets (although slower than all the hedge fund smarties thought, therefore the complete bath they’ve taken the last year).
The length of our equities boom is inversely correlated with GDP growth. This cycle is (much) longer than the historical average simply because real growth has been so low. Normalize against aggregate growth over a cycle and we have a year or two left in the current one (assuming job, GDP, wages etc continue to be anemic - if they pick up rapidly things will rapidly shift).
> we have a year or two left in the current [cycle]
Are you saying that we have a year or two until we see a pick up in productivity (driving real growth and GDP), which will shift investment out of equities and into? Cash and cash equivalents?
Or are you saying that we have a year or two until we see a recession (decline in GNP), triggered by a flight from the equity markets?
I'm making a (perhaps reflexive) statement about economic cycles, that they are effectively defined as a period of growth followed by a shock. Without growth, there is no shock. Our current cycle has been characterized by very low growth. It is also much longer than typical, but I think this simply follows from the fact that we haven't had a lot of growth. Growth seems to be picking up, though, and I think over the entire period of the cycle will soon be "enough" to trigger the next cycle.
Inferring from "Ironically, it’s GDP growth that will stop the music," it seems to me like they're saying that a lack of increased productivity combined with a tightening labor market will increase wages and thus inflation while not affecting equity returns, shifting growth from equital holdings to cash holdings.
I'm not so sure it'll happen personally. The Fed seems to be raising interest rates before inflation has a chance to increase, but we'll see.
Pretty sure the proposed solution is to buy stocks of the U.S. technology giants: Amazon, Apple, Facebook, Microsoft, and Alphabet, the parent company of Google.
The largest market cap companies in a given decade, overwhelmingly tend to be under-performers in the following decade. It's a trend that has repeated decade after decade. Many of these types of companies - AMZN, NFLX, GOOGL, FB - have pulled a massive share of their future returns forward (which is what happened to Microsoft, stagnating its stock for ~15 years).
In 2007 the largest companies were: Exxon, GE, Microsoft, PetroChina, Royal Dutch Shell, Citigroup, AT&T, Gazprom, BP, Toyota, Bank of America, China Mobile, HSBC, ICBC, Walmart. All have performed at a mediocre level at best over that time. See:
Is Amazon going to grow into a $2 trillion market cap over the next ten years? No, there is zero possibility of that happening. It'll be very lucky to grow into its existing market cap today, over that ten years. Keep in mind, they have $100 billion in retail sales, generating Walmart style margins on that business; Walmart has ~$450 billion in retail sales, generating ~$15 billion in net income. For that, Walmart gets to trade at half the market cap of Amazon. That's Amazon's future value compression. That multiple erosion won't occur until the market starts to realize the AWS growth machine isn't going to last forever (AWS representing a very large portion of the Amazon stock appreciation the last three years), as that growth curve slows in the next few years, the market will push down on Amazon's present extreme premium.
Netflix has a ~200 PE ratio, there is no means for it to ever justify its existing valuation (400 million global subscribers? no chance), much less a far higher one. Their present business model has never proven the ability to produce good margins, content has perpetually sapped their earnings potential and is likely to continue to do so.
Facebook and Google will stagnate and grow into their valuations. Google particularly is trading far beyond where it should versus its now modest growth rate. ~37 times earnings, $700 billion market cap, for 10%-15% annual growth over the next five years? No thanks. In the not very distant future, Google will pull a Microsoft and begin paying out a dividend, after this latest stock market bubble ends and their stock returns drift to mediocrity.
You can't beat the market buying stocks using publicly available information, because everybody else knows everything you do. The average seller has no reason to sell you the stock for less than it's worth.
The only way to beat the market without random chance is to know something everyone else doesn't.
The longest "stagnant" period is directly after the dotcom bust and up to 2007. In that period the stock appreciated by ~10%. Over the following decade it appreciated by ~150%. Not quite the dramatic hockeystick growth curve startup folk like to see, but pretty reasonable for a company already 30 years old at that point. Either way, the quote above has no basis in reality.
As recently as November 2016, it was still below that line. Between mid January 2000 and September 2016, it didn't once cross above $59.97 in all of those years in-between.
Go back to as recently as August 2015 and you could find it under $40 still. It was $28 as recently as April 2013.
Even if you didn't want to look up specific date prices for the ticker, a 30 second check on its long-term stock chart will reveal my statement was correct. Slightly more than 15 years of stagnation in fact.
Inflation adjusted, it went down considerably over that time. That's not accounting for their share buybacks and dividends, which if you're lucky might have off-set 15 years of inflation.
Your attempt to claim I was wrong, consists of stating they generated a 10% return over seven years. Even if I were wrong about what I said (fortunately stock quotes are easy to check), that's comical. Go ahead and post what the annual return for those seven years was, under your 10% premise. Then find me an investor that wouldn't consider that stagnation. And that's the idealized scenario, the actual scenario is that the stock proceeded to consistently generate mediocre returns (or worse) between the post dotcom bubble era all the way into 2013.
The point of noting Microsoft's 15 plus years of stagnation in the market, is that their future returns were pulled forward. That's exactly what happened and investors suffered accordingly.
I agree investors will continue to own these companies in a very big way. They won't continue to maintain much less inflate the premium that presently exists.
Microsoft for example has barely grown its income in a decade. On what planet should they have a 28 pe ratio? The stock has tripled (!) in five years on the back of zero income growth. It's massive value destruction just waiting to happen. Shareholders will not just sit, hold and tolerate the inevitable value destruction that is looming, it doesn't work as insurance at all in such a context.
the problem with this argument is if you wait, you may leave money on the table in the form of:
missed dividends
the possibility that Microsoft grows its profits more
the possibility the stock keeps rising, and then even if it falls, it's still higher than the price you sold
The last reason is why timing the market is so hard. Had you sold the S&P 500 in early 1996 because it was 'too expensive', you would have never been able to buy back at a lower price, ever, even after the crash of 2000-2002 and 2008-2009, and you would have missed all the dividends.
You forget that Microsoft's stock stagnated for 10 years before that. A 28 PE ratio is the new normal for tech companies. With Ballmer out of the picture, investors are speculating on a brighter future for MS. It's not here yet but they're making lots of smart moves.
> A 28 PE ratio is the new normal for tech companies.
It's not the new normal. That's what people say to justify extreme premiums during times in which investors have overly inflated valuations. This is the third bubbly tech era in the last 20 years. That new normal premise has been used frequently in each.
I understand why Microsoft has inflated. It doesn't jive with actual results in the post Ballmer era. There isn't even a hint of the kind of growth that could justify such an elevated PE ratio (elevated for a company with no growth for years). Their fast growth areas are struggling to off-set what they're losing in eroding, old business franchises. Net result, they're standing still.
Microsoft has to defer reporting revenue on sales of Windows 10. From their recent investor letter:
"We delivered $90.0 billion in revenue and $22.3 billion in operating income this past fiscal year. Adjusting for Windows 10 revenue deferrals and restructuring expenses, revenue was $96.7 billion with $29.3 billion in operating income."
That is 31% more revenue and 34% more operating income compared to 2012 (the 5 year time period you're citing). Stock backs will also move the price -- there's almost a billion fewer shares outstanding now than there were 5 years ago.
Of course, investors buy companies for future performance and not for past performance. I would suggest that investors like MSFT's current strategy and management considerably more than their past, and as the management continues to increase profits, investors gain more confidence.
Netflix has a ~200 PE ratio, there is no means for it to ever justify its existing valuation (400 million global subscribers? no chance), much less a far higher one. Their present business model has never proven the ability to produce good margins, content has perpetually sapped their earnings potential and is likely to continue to do so.
Facebook and Google will stagnate and grow into their valuations. Google particularly is trading far beyond where it should versus its now modest growth rate. ~37 times earnings, $700 billion market cap, for 10%-15% annual growth over the next five years? No thanks. In the not very distant future, Google will pull a Microsoft and begin paying out a dividend, after this latest stock market bubble ends and their stock returns drift to mediocrity.
People said that three, five, ten years ago. What is happening is that the market for mobile and desktop ads and e-commerce is growing, combined with increased market share for these three companies, creating a double tailwind. I'm certain Google, Amazon and Facebook will not suffer the fates of Exxon, GE, PetroChina, Royal Dutch Shell, Citigroup, AT&T, Gazprom, BP, Toyota, Bank of America, China Mobile, HSBC, ICBC, and Walmart. Part of the reason Amazon, Google, and Facebook will be permanently successful and are so resilient is because they have market dominance, impassable moats, ubiquity, and are mostly immune to global macro conditions, whereas commodity and banking companies are much more vulnerable to macro conditions. It's much easier to create a steel, drilling, or mining company (look at all the overnight fracking companies that went bust in 2015-2016) than it is to, say, get 1/6 of the world population on your social network (Facebook), every website and phone displaying your ads (Google), or every consumer buying from your store (Amazon) (and also the cloud hosting services). http://greyenlightenment.com/will-the-silicon-valley-tech-fo...
But also, some of those companies you listed pay huge dividends, so when you factor those into the returns, it's not stagnant.
One reasonable perspective is they will be successful until there is a market correction so large it can't be hedged against. World War Three, global warming societal collapse, popular revolution, or massive antitrust activity.
Have fun trying to own the robots after we've allowed proprietary licenses and leasing to takeover anything with a CPU attached.
Ownership is important, which is why copyleft is important, and its time to recognize how integral the four freedoms are to the future I think most of us want.
He wasn't talking about actually, physically, owning the robots. He was talking about owning stocks in the companies that make the robots. So that as they get wealthier, so do you.
15 years ago all the software jobs I worked at were retiring clerical workers with software (oh you have 15 people doing spreadsheets ? We can automate that and you won't need them for the same report generation).
So this has been going on a lot longer than the article supposes. Yes its true that the sophistication of the automation, and the breadth of its reach (with robots / gig economy) is higher than before, so it will affect more jobs, but it will also create new jobs managing the automation (the same way people found jobs using Excel to manage those spreadsheets from previously more manual ways to do reporting).
In other words, this is the normal destructive (and positive) cycle of capitalism. It is always painful for people who adapt slowly, and provides opportunities for those willing and able to jump into the development and use of new automation tools.
> but it will also create new jobs managing the automation
No, that's bullshit. New jobs will be created that way but far less: there would be no incentive to automation otherwise. This month I visited a warehouse with a team tasked to automate it. If we succeed, phase I should put ~10 people out of job and we don't expect to have to do more than occasional monthly interventions (and that's assuming that we have a high failure rate).
The thing that is different in this cycle is that we may very well manage to 100% automate some industries. At this point, there will be a genuine question: why do we need to work to benefit from the goods of these industries?
At the core of the pact that makes our society is the idea of specialization: we have varied needs that we ask specialists to fill (farmers, car makers, fridge makers, power plant workers, etc...) while we, too, fill one small niche. The less people work we need to fulfill our daily needs, the less work we should be asked daily.
But this transition will only happen if we are conscious that it is possible and desirable.
An article somewhere had a useful categorizaiton of automation of jobs in terms of human jobs
1) Automation removes a bottleneck, and lets workers be more productive - often creating more work.
2) Automation removes a better paying job, and leaves behind a less skilled role for humans
3) Automation removes an entire type of work.
Automation doomsday scenarios focus on the last work.
The issue with automation, fundamentally ties down with the ability to transfer people to other roles if they suffer from automation of types 2 and 3.
But as I have pointed out elsewhere, and economists also admit - retraining is not really an option. For someone to change tack and learn an entirely new set of skills is more than slightly challenging on its own. Let alone with the tensions of losing a job and having to take care of a family with their time needs.
The weakpoint in the larger economic model is retraining.
>1) Automation removes a bottleneck, and lets workers be more productive - often creating more work.
What's not mentioned is that on average, the work created will be more skilled than the work it displaces. This means that in the long term, training [enough to get a job] is harder, because more and more work will require skill.
In the long run, I suspect that the biggest unskilled job group will be the type that involves interacting with people (so, management and retail/sales), which could well end up being where we ditch as many of our unskilled workers that we've made redundant, unless we can manage to remove them from the economy with e.g. UBI. And oh my god, did I just stumble across that one part of Hitchhiker's Guide to the Galaxy?
Humanity stuck on this notion that labor = virtue, which made some sense in an agricultural society where everyone would starve to death if most of the population wasn't actively engaged in production, but is getting increasingly toxic as we approach a post-scarcity world.
> At this point, there will be a genuine question: why do we need to work to benefit from the goods of these industries?
For the same reason you can't look over to your neighbor's driveway and say, since he doesn't use his truck all day while he's at work, why can't I drive it ?
The people who built those automated industries expended capital, and likely, borrowed against future revenue to do so.
What you are free to do is compete with them. You can drive them into their stupid lender's hands by forcing a collapsing of margins in the industry using your wits.
But nationalizing the factories has, historically, generally led to nasty (the opposite of what your conscious advocates would call desirable) outcomes. And you are saying that a 100% automated factory should be effectively nationalized.
> The people who built those automated industries expended capital, and likely, borrowed against future revenue to do so.
> What you are free to do is compete with them. You can drive them into their stupid lender's hands by forcing a collapsing of margins in the industry using your wits.
So the solution for the hordes of people who were put out of work by automation, is to gamble it all on the bet that they can outcompete powerful, established businesses by operating with far less profit?
Are you really saying "I'm sorry you lost your factory job, but the only moral solutions are a.) let your family starve to death, or b.) every unemployed factory worked just, sorta, becomes an entrepreneur, scrapping with all his former coworkers and bosses over who can survive on the slimmest margins." ?
Nationalizing factories may lead to undesirable outcomes, but your alternative is a different kind of dystopia.
I'm not suggesting that literally, I'm saying that's what the overall system does. Someone will gamble their time on beating powerful established businesses, and they will figure out some efficiency to win by.
Some of the factory workers will find other work, some in other industries, or other businesses in the same industry.
But when you are suggesting policy, you think about the overall system, not just the poor factory workers. The overall system works, even if labor isn't part of production due to automation, because labor builds, maintains, and services the automation. Sometimes there's some debugging involved too.
Yes some workers will lose their jobs because they don't have marketable skills any more. That's why we invest in education. Maybe not terribly wisely, but that's the idea.
But eventually, you will run up against something never before experienced in human history--exhaustion of demand.
The problem with automation is that the robots don't want anything, and all they need is power and maintenance (that is much easier to perform than medical care).
They can supply goods and some services so much more efficiently than human labor that no human can effectively compete with them and still be able to eat. So the humans that formerly did their jobs have nothing to trade at market. They are forced to subsistence labor, if they are even allowed to do that. You can't afford the electric induction cooktop or the electricity produced by robots, so you have to burn scavenged wood in a hand-built rocket stove. The displaced laborer contributes no more demand to the robot-supplied marketplace.
Each worker you make obsolete removes their demand. The robots produce less, consuming only their most basic needs, and send most of the output to their owners. The owner class, who does not consume 100% the maximum output of their robots, slowly buys up all valuable resources with the excess, as those who wish to avoid subsistence lifestyles sell off their assets in order to stave off scavenging for roots, mushrooms, and squirrels. Perhaps some of them can manage a parallel economy trading in inferior goods and services, but the threat always looms that anyone too productive will be able to buy in to the robot-owner class and stop supplying the under-economy. Most everyone becomes Spam. They only trade with each other until they can be steak again. So everything in the under-economy sucks.
One laborer can maintain hundreds of robots, who can each support a specific want of millions of people, but only have thousands of owners. The owners don't want more than the robots can provide, so those humans that don't own can't manage to sell much of anything to the owners, except things that robots cannot provide [yet]: art, love, babies, etc.
Every unemployed-becomes-entrepreneur is a last-gasp effort to leap the widening gap between the haves and have-nots, like a salmon shooting past the open jaws of a grizzly. If you don't buy in soon, you might not have anything left worth trading for your golden ticket.
You're saying "someone will gamble", another one would say "he was at the right time at the right place to have it all together in order to be able to take that risk. By the way - the only reason he was at the right time and at the right place was because the country he was living in could allow him to have it all".
Our planet as of today becomes an increasingly finite resource. Someone else's gamble is hedged by your responsibility.
> For the same reason you can't look over to your neighbor's driveway and say, since he doesn't use his truck all day while he's at work, why can't I drive it ?
Now.
This sense of ownership will be far more diluted once the truck is entirely automated and only needs ressources to run, while the knowledge that it could be far more efficiently allocated to be used by you at this time is made clear by our connected environment.
Then the same question will arise for your neighbor's truck: "why do we need to reserve ownership of these goods for the benefit of a limited portion of society?"
Starting from the fruit of labor, whole industries, to the minutiaes such as these. A connected world means that such micro-optimization would become possible.
So don't dismiss this on the basis that right now, this is not how we operate.
Your neighbour might not be using said truck right now, but it's availablity for use instantly is in itself valuable. Ownership gives you that. If it was shared, then you lose the instant availablity.
Unless the automation creates free trucks for all to use, you scenario can't really come to pass.
> Unless the automation creates free trucks for all to use
This is indeed pretty much the basis for these questions to arise. Not free of course, but such marginal cost that ownership would not mean much.
When instead of 50 cars / trucks, you only need 15 and their cost is shared among the local community, with the price of buying one / maintainance very low due to automation, it will make sense to have this kind of system.
Doesn't mean ownership would disappear, simply that for most people it would be more convenient / cheaper to use this system, and as such most people would choose to do so.
> such marginal cost that ownership would not mean much.
wouldn't this situation make people own _more_ trucks, rather than less?
Today, we already have the situation with yatchs - people tend not to own a yatch, but share with several families/people. And this is because yatchs are damn expensive to own. If yatchs are as cheap as a car, it'd be trivial to just buy one, even if you aren't using it very often.
> But nationalizing the factories has, historically, generally led to nasty (the opposite of what your conscious advocates would call desirable) outcomes. And you are saying that a 100% automated factory should be effectively nationalized.
Most of the companies that were nationalized in 1945 in France are now world class companies. Renault, EDF, France Telecom (now Orange), SNCF, AFP...
And yes, I say that automated factories profits should be nationalized. What is the alternative? People owning means of production that are impossible to compete against as they are so established and tuned to have marginal costs of production of zero.
The point isn't that it's been going on for a long time but the speed with which it is happening today.
Furthermore, I don't think most people understand how little the tech sector is. Even in the Bay Area, it's only around 15-20% who actually work in tech.
Most people aren't able to just relearn and adopt.
I think this is where social safety nets (or the lack of them) come into play. The market can be short sighted when it comes to training and typically focus on younger generations where they do (large orgs sponsoring university courses etc).
A good adult education scheme in conjunction with social welfare to allow people to make use of it makes a world of difference when it comes to re-tooling older people once jobs are automated. Not to find jobs at google but at the legion of smaller traditional enterprises that now have technology components due to automation.
I don't disagree but how are you going to pay for social welfare if no one is making money? So what do you tax? do you do something else? These are the questions that are really relevant to figure out IMO.
And people are making money - the GDP is growing overall, therefore there is far more productivity and value add happening in the system at large.
Americans have the potential of a good social safety net already (compared to many worse countries), its more a question of detail orientation and unpalatable politics - from the perspective of an outsider.
'Most people aren't able to just relearn and adopt.'
Pivoting, or better, adjusting my career to fit in a more plentyful market has been being the most difficult process I ever experienced in my life - despite enjoying to learn and still being a millennial.
> In this context, the FANG stocks are not a gimmick or a fad, they’re a f---ing life raft.
Note that if you are employed in one of those companies, you should think twice how you'd want to invest in them, because you're actually putting a bunch of your eggs in one basket.
I keep remembering those poor Enron employees whose retirement funds were mainly in stock of Enron itself, so that they were both unemployed and financially ruined when the scam fell apart.
Depends on program in the uk share save schemes are an obvious no brainer investment you literally cant lose more than the difference between inflation and the guaranteed return if the stocks are under water at exercise time
There is more to consider than that. How much money is being tied up for participation, what is your average expected return for that amount, how does that compare to just picking an index, etc.
I just don't buy it. I understand I'm in a minority, so let me indulge myself and explain, for a moment, why I think AI / Robots are nothing to worry about.
My claim is: Robots will not replace humans in all jobs. Further, it's more than because of Human preference, I think that Robots will lack cognitive abilities that we have.
My expectation is that in each area where they are deficient then they may well become a tool for a Human overseer, and that might replace some workers.
I don't believe AI will effectively deal with:
1) Cultural concerns. e.g. Appropriate imagery in advertising.
2) Major strategic considerations when faced with an uncertain future. (Physical war, trade war, geopolitical events, natural disasters).
3) Legal frameworks, as they are not well defined.
4) Human relationships. e.g. Don't make Alice and Bob work together.
5) Intuitive leaps. e.g. Rubics cube.
6) Empathy.
The reason I believe this is not because I believe in a soul, or anything mystical, but because I believe that the nature of our brains, our senses, our learning experiences, and the evolutionary processes that got us here can not be matched by our technology.
I think this means Robots / AI will not independently create new businesses, new products, build factories, kit out factories, buy other robots, produce marketing, deal with customer services, returns, courts, investors, regulators, suppliers and so on.
I can imagine products that will exist forever, like, rope, or cutlery, or plates, and someone automating a factory to produce these commodities. But they will still use humans to manage product development, supplier and customer relations, advertising and security, and, probably, looking after the robots.
I think that Robots / AI will at best become a tool for people to use, but the power will remain with Human employees.
I work in business development in the public sector. First we did digitzation, turning paper archives into something digital. Then we started standardizing and connecting the archives while improving worker interaction with them. These days we're doing automation.
None of this has led to people getting fired. It has cost a massive amount of jobs though. All unnoticed because we simply didn't rehire for positions when someone retired because the digitization hadn't eaten whole workflows but only 5 minutes here and there.
The next thing we're going to do is AI. We've already begun the proofs of concepts. We've gone through 6 million case files with 5-70 page documents, and sorted them in a particular way. A process which too 25 full time jobs half a year to do. Our proof of concept AI and 1000 servers in azure, did the same thing in 5 hours.
Computers didn't really change the office landscape like robots did to the assembly lines. AI will.
At one point in our history, one of the most important jobs in a large city, was removing the endless tones of horse shit from the streets every day. Cars made those guys as obsolete as AI will do almost everything.
Sure there will be new jobs as well, but technology stopped creating more jobs than it ate almost 10 years ago, and it's an exponential curve.
> we simply didn't rehire for positions when someone retired because the digitization hadn't eaten whole workflows but only 5 minutes here and there
I think this is a very important part of automation in the knowledge worker sector that people often miss. Automation doesn't have to get a single person fired to lead to high unemployment, it just has to make managers stop and ask, "do we really need to replace that person who left?". I've been seeing the same thing as you over the last decade with companies I've consulted with where headcount gets pared down here and there every year, and the remaining employees are expected to use more technology tools and wear more hats to fill in the gaps.
> At one point in our history, one of the most important jobs in a large city, was removing the endless tones of horse shit from the streets every day. Cars made those guys as obsolete as AI will do almost everything.
Which was replaced by lots of mechanics, factory workers, marketers, office workers and salesmen. A lot of jobs were created by automating away the horse. I wonder how many people predicted that back then?
I don't see much evidence yet that AI is going to automate most existing jobs, unless Google, FB, Hitachi, etc is secretly on the cusp of AGI. The current machine learning isn't anywhere near that. This is being blown out of proportion, but it's always been since the beginnings of AI.
Maybe someday. Or 20 years from now, along with cold fusion and flying cars.
A lot of digitization and AI potential isn't really that advanced. Most of it is simply removing non-creativethink requiring tasks from the workspace. Those task take up a lot of time though, and that's why it's going to change the world.
I already talked about how nobody noticed that jobs were being lost to retirement, but that's really only part of it. Another important factor has been the size of workforce generations, which had been decreasing for the past decades, meaning that our overall unemployment rates didn't go up.
We're at the bottom of that curve though, and if you look at unemployment rates solely for young people, then you'll notice how they have exploded.
It was some article here on HN a while back that framed this much better for me.
It's NOT that Robots are going to take all the jobs, it's that automation and productivity advances are going to reduce the people necessary by a drastic degree.
There's lots of stats like Ikea factories making 17x the bookcases they did in 1985 but with the same number of staff. But even in our technical and development niche, look at something like Instagram. They went from idea to billions of users with what a decade ago would have been a laughably small staff.
The future is the top 10% of staff executing with an army of automated services at their command to do the work that 90% of their colleagues used to do.
> It's NOT that Robots are going to take all the jobs, it's that automation and productivity advances are going to reduce the people necessary by a drastic degree.
That's been happening for hundreds of years. It's actually going more slowly now - productivity growth is some of the slowest that we've seen over the past 70 years[1].
It seems more likely that flashy tech (like articles about self driving cars and drone delivery) helped people believe a false narrative about the high unemployment that followed the financial crisis. It was also a narrative that exempted the political leadership - hey, we can't do anything to fix things, it's just a brave new world.
But the numbers are show that the theory is bunk. Not just the productivity numbers I mentioned, but also the employment participation rate[2].
It's been happening for thousands of years. Agriculture was the first instance of automation (Farming) replacing labor (hunting). It was also the birth of massive inequality.
From another thread:
Today I have already consumed more sugar than most of my distant ancestors would see in a year. The device i hold in my pocket reminds me that it is time to perform the action, and so i will perform the action. I sit down about 10 hours a day, and I have never once hunted for an animal I would eat, nor retried food from nature to consume, aside from a few raspberries on the hill in my parents' back yard when I was a child.
The contours of my life are dictated largely by a curious system called 'capitalism', a distributed computational mechanism whereby larger numbers of agents act with only one goal: to maximize their own utilities. I think capitalism is a mostly benevolent AI attempting to limit the oppressive conditions of our reality's scarcity, and to allow billions of us to live on a planet that can only support so many hunter-gatherers per square meter. Many suspect it is not benevolent. They may easily be right.
The singularity is already upon us; it's unevenly distributed. It started with the sedentary shift. Agricultural societies dropped the egalitarian nature of their ancestors, they had lower average health, and they had a tiny elite cast of nobles presiding over a much larger population of what were essentially slaves. As hunter-gatherer population increased, fighting was more frequent. An army of slaves beats a smaller contingent of well-fed free men. This terrible knowledge was the apple in the garden. What we call our written history is essentially the singularity playing itself out, as knowledge accumulates, depends, reflects itself, and expands.
Our lives are already controlled by this embodied, accumulated knowledge. Capitalism, rule by the head, our tools are knowledge condensed into matter, and we are controlled by them, living lives as far from our natural environments as cows in a farm or chickens in tiny cages, towering over the streets of hong kong.
I don't think it's destroying us, any more than we seek to destroy chickens or cows. Well, sometimes we do. I had a veggie burger for lunch today though.
The best outcome is the "Culture" endpoint: a post-need society. 10% of people are called upon to work, and the rest thrive on basic income and become artists and inventors, philosophers and musicians and actors.
The worst outcome, on the other hand, is rather more dystopian. A society with a very large percentage of young, unemployed people with no particular path to success is not a stable society.
I suppose it matters how comfortable the 90% is when they become unemployed. Is basic income enough to fulfill individual passions and interests? What happens to a large body of humans whose needs are taken care of but who aren't strictly needed for anything?
Also, do the 10% believe that they are a static group deserving of persistent participation in the "working class" - or is this a competitive and fluid group in which the children of the 90% may move into/out of as their skills/ability apply? Which is to ask - is it worth maintaining a 90% at all or should we 'solve that problem'?
I think you are assuming equal opportunity for the children of the wealthy vs the children of the poor. It doesn't take any particular smarts to live off of family money though. Investment income doesn't require work to support oneself, properly diversified it will continue to grow. Income from jobs however, does require work.
Study after study indicates that wealth provides opportunities, and that most people don't move up to become wealthy but are born that way. So basically society systematically advantages people who have wealthy parents, over people who work hard.
Bill Gates father was relatively wealthy. Imagine how many bill gates there are who are poor.
If Elon Musk hadn't had his father's money for his first company, there might not be a paypal or tesla.
So the question is how many potential bill gates and elon musks are there who's parents couldn't risk supporting them, who settle for doing something less innovative and interesting because they need to pay the bills or support family members?
You're setting up a chicken and egg problem for yourself. Wealth had to start somewhere, as I doubt you'd argue that it was handed down to certain families by a deity.
Heritage is important. A person does not just have more opportunity because of the wealth of an ancestor - they exist because of that ancestor. Does everyone not deserve to have whatever their ancestors chose to give them?
The only argument that can be made is if you can show that someone's ancestors only had wealth because they unjustly stole it from others. But that's a tall order.
If you go down the history, most wealth was stolen from people violently and from then on anybody born into these aristocratic families would continue benefiting from the wealth.
A lot of new wealth has been created by people born into poor / middle class families in last 1-2 centuries for sure, especially 20th century.
But there are still families today that are wealthy and their wealth have been with them for 400-500 or more years. And in those cases it's very likely the original wealth was stolen.
It could be that original wealth was gathered during robber baron times by exploiting workers or it could be even older, being passed from generation to generation since medieval times. Which means the original aristocracy probably gained this wealth in a violent conquest.
I don't think it's society's responsibility to look back further than the formation of that society. For the US, I think you can safely use 1776 as a starting point. The US formed itself with the express purpose of creating equality for the original settlers.
If someone is violating those principles, society should punish accordingly. If not, society is not "rewarding wealth". They are allowing for the fact that everyone is someone else's child, and that comes with it certain rights.
Prior to industrialization, "pull your own bootstraps" fortunes were extremely rare, and largely a matter of accidentally being in the right place at the right time. Most wealthy folks got there from skimming off their human herd by force or threat of force and by bribing the most docile and cooperative by giving them some of their own production back.
After industrialization, a lot of people were able to leverage first-mover advantages and unrealized frontier opportunities into vast fortunes. But even then, having one extra dollar from daddy in 1790 meant having many, many more to give your own kids by 1820, even if you had 12 of them. That extra dollar might have meant you carried a full feedbag and got there a day before the guy who had to stop to let his horse forage, and getting there first was worth thousands.
Now, daddy's dollars might allow you to start from second place, and grow faster than the first-mover, who might be trying to bootstrap. Or you could do the same with investor money, but with corresponding loss of equity. If mommy or daddy fund you, you probably get to keep more of your own company.
Well personally, I'd like to incentivize those who put work and value into the system over those whose individual contribution is negligible.
As well the marginal utility of another dollar to someone who is already wealthy is low and they are less likely to use that money, whereas someone who is poor or middle class not only benefits more from another dollar, but is much more likely to spend that money in a way that stimulates the economy.
No problem, per se, just facts too often ignored by those trying to work out a formula for how to succeed in business or get rich quick or plan a comfortable retirement.
Those simply trying to avoid getting crushed by the system already know: "Them that's got shall get; them that's not shall lose. God bless the child that's got it all." If you want to get rich, you usually have to be rich. Making your first fortune is always the hardest.
If you aren't already in a position to invest anything--if you are living paycheck-to-paycheck or worse--the only way to own a robot is to build one, because you can't buy one. You can be outbid by anyone with a dollar that isn't already spent. You're already screwed. But you knew that, because you're pinching pennies so hard that Lincoln cries out, then the Lincoln in the monument on the reverse side squeaks out a protest. And if you do manage to build a robot, you'll probably have to sell it at some point for less than it its true worth, due to a crisis.
It even says it in the article. All you need to do to buy enough Amazon stock to retire is to already own a chain of grocery stores in New Jersey! Meanwhile, the employees of those grocery stores have to cut each other's throats to get an Amazon warehouse job, because that game of musical chairs took so many seats away all at once.
"Just own the damn robots" is a surrender to the zero-intervention inevitability of an ownership class that owns everything, and a dispossessed class enslaved to them economically, yet also almost entirely useless to them. Owning things is a solution that only works for problems that rich people have. It's advice maybe good enough for the top 10%, worried that they will backslide. It doesn't do anything for the bottom 90%, who either can't get ownership of a robot, or can't keep it long enough for it to solve their financial problems.
When even a small percentage of the rich oppose an extermination program for the bottom 90%, it turns a plan for tidy mass murder into chaotic war with dangerous risks to even the richest. That's why I don't put much weight on the "rich exterminate the unneeded poor" scenario, as outlined in Peter Frase's "B" scenario from Four Futures.
It will always result in revolution. The 90% will demand an equal share.
The sad bit is that the revolutions seem to destroy the robots, not share the wealth. The 90% elect a different 10%, who then build more robots. See Animal Farm for details.
The 10% have to share the pie, at least enough to prevent revolution.
If you haven't already, I highly recommend playing the Paperclips game that was posted recently. When your enemies are merely numbers on a screen, what does it matter who or what they are? Your machines are tasked to eliminate them, and if your machines are better than their machines--or, in this case, if the enemy don't have any machines--you win, and they disappear. Then you task your machines to clean up the mess, and in a short time, it's as if your enemies never existed.
We hope that there would be enough good people among the wealthy and powerful to avoid such a scenario--but would there? Do we know that for certain? I don't think we do. Look at how the wealthy and powerful already exploit people on both small and large scales, from Hollywood execs satisfying their sexual desires one victim at a time, to corporate execs exploiting cheap overseas labor that, to them, are merely numbers on a screen, helping them increase margins.
It all boils down to the same problem in the end, that of evil, and it's not going away, merely taking different forms throughout the ages.
Very few people would "thrive" on a basic income. Look at communities today where a large percentage of people live on government aid. People need a reason to exist and meaningful work to do. Very few have the drive and discipline to become artists/inventors/philosophers/musicians/actors. Plus the majority of those who do become artists are unlikely to create anything that the rest of society would value. Have you been to an Arts & Crafts fair lately? Most of the stuff there has negative value, in that you'd have to pay me to take it.
Communities today where a large percentage of people live on government aid are not the equivalent to the country as a whole on basic income, and government aid now imposes multiple work and reporting requirements that help prevent people on government aid from pursuing creative endeavors.
No, if you want to look at basic income, look at the children of the wealthy, who never have to work. Most still pursue education, get degrees, and work in a variety of fields including art.
Also it's important not to conflate your interests in art with the universe of art appreciators. Because there is plenty of artistic work that I don't personally enjoy, but which there is a demand for. Jewelry comes to mind... I've bought cuff links but that's about it for the past year, but necklaces, earrings, bracelets and rings still get sold despite my lack of interest.
The difference between basic income and the children of the wealthy is the spectre of the money disappearing.
Only the most short-sighted of the wealthy do not realize that there are many ways in which their wealth could dry up. This provides an impetus to use the money constructively while you have it, because it might not be around forever.
Basic income does not give the same drive. You can watch TV all day, doing nothing to better yourself, doing nothing to manage your money, and you know that there will always be more where that came from.
2. Someone in the family history had to be a diligent/industrious/successful. And that person probably tried to pass those values down to their children and so on and so on.
If you give people wealth, no such ideals will be passed down to their children.
>Only the most short-sighted of the wealthy do not realize that there are many ways in which their wealth could dry up. This provides an impetus to use the money constructively while you have it, because it might not be around forever.
Money doesn't dry up, it increases thanks to investment and hedge funds. You just need to ensure you never dip it below net-positive+base inflation rate.
Suppose you have a billion dollars invested, and you're only receiving 0.1%/year on top of the base inflation rate. 0.1% of $1 billion is $1million, so you have a perfectly sustainable stable $1 million per year. That's more than enough to spend forever dicking around.
Actually, drop that down to $100 million. At 0.1% above, you get sustainable $100k/year.
Now, perhaps that doesn't seem too lavish, but consider that you could afford to take way more than 0.1% off your interest every year, and you'll find that that money isn't going anywhere.
Also see this swedish study which indicates that wealthy kids save less then their parents but still tend to be wealthy, and that this is true for both adopted as well as natural born children, indicating that it's not some sort of genetic advantage
http://www.nber.org/papers/w21409
There's also evidence from things like free meals and early childhood education. Links are probably easy to search for if you google free lunch benefit and HeadStart benefit. Basically giving kids proper nutrition and free preschool make a big difference.
There aren't a lot of studies on giving adults help to get out of poverty though. People like helping kids and young adults, but once you are grown up you are kinda out of luck. I think there is some micro loan data out there though. That said there was canadian basic income, which showed only modest decreases in hours worked, and better health outcomes overall.https://en.wikipedia.org/wiki/Mincome
But even if basic income only effects children of poor people and not the poor people themselves, it seems like it could provide a marked difference in a generation.
"Look at communities today where a large percentage of people live on government aid."
pretty sure i live in one of them, so tell me what i see.
"People need a reason to exist and meaningful work to do."
how are they managing now? most people have a lot of meaningless work and i don't know anyone that can tell me the reason they exist beyond empty platitudes.
"Very few have the drive and discipline to become artists/inventors/philosophers/musicians/actors."
you only need some special drive for that stuff, (collectively called playing), to push forward with it while working a day-job.
"Plus the majority of those who do become artists are unlikely to create anything that the rest of society would value."
roughly all of them, really. at least that's how it is right now and i don't see why it would change.
"We need a better solution than basic income."
k, let's do basic income, then see what needs improving ;)
you know as far back as i can remember we've treated people, as a society, in the way you'd treat anything there was quite a bit too much of lying around.
> But didn't that all happen during the Industrial Revolution as well?
Arguably.
> Why is this any different?
Even if it wasn't, massive changes to politico-economic systems to redistribute gains were needed to mitigate the adverse distributional effects of the industrial revolution, so...
I'm sorry of I appeared adversarial, it was a genuine question. Why can we not make changes to the current politico-economic system if we were able to do it in the past?
I'm unsure how you would expect humans to do better with cultural concerns or strategy in the face of uncertainty. We're known for routinely making mistakes in both of these domains - just look at POTUS for a case study.
Computers can already infer sentiment, not to mention recognize patterns extremely well, and are likely trainable to provide example feedback to any given cultural current. Is culture really any more diffuse than something like conversation, which computers already do reasonably well?
Furthermore, it seems odd to suggest that computers would have trouble in numbers games like war/trade war/resource allocation. These are essentially reducible to games, and with Go out the way, it doesn't seem that figuring out the best tariffs to pass or best places to bomb would require much more logic.
Maybe I'm being naive, but I think your conceptions of the limitations of machines are founded on essentially nothing. There's little, philosophically or scientifically, in the way of physicalist/functionalist conceptions of the mind that supports your viewpoints!
There's little reason to doubt, in my eyes, that our brains are extremely complex machines, running on electrical impulses and neurotransmitters, to produce responses to stimuli. As such, I don't see why you would privilege our machines over another machine. Why is our learning experience different from that of a machine? Do we not learn from trial-and-error, from explicit (social) rule-programming, from inference? Is evolution really at odds with computers? Some ML algorithms already boast "evolutionary" traits. And are our 5 senses really so sharp? What about beings who "see" all EM radiation or feel rumblings deep in the earth, like a seismograph does?
Our differences may well just come down to a difference of beliefs.
In reference to the first 3 paragraphs of your response, I believe there are a few orders of magnitude (at least) difference between "computers can already infer sentiment" to, for example, "a computer that manages a construction firm that uses Mexican commodities realises that Trump has come to power and THAT wall, that is promised, isn't going to happen. Mexico won't be happy, and there might be a trade war. Perhaps start supporting Anti-Trump causes. Certainly don't waste time bidding to build the thing."
In reference to the flesh vs machinery question. I think I don't believe it because I don't think we have a good way of designing a good AI.
An AI needs to be like a slave that is motivated to serve some goal other than itself. A human brain would not be a good model for such an AI, as our brains are trained to serve ourselves. (Or our selfish genes?) So we cannot copy human brain design and development processes to make an AI that we can trust. We need to design a new brain, based on perhaps similar, but different processes.
Evolution with different selectors? Deterministic design? I don't think we could do it.
Reducing employment by 10% would be catastrophic for the US economy and will cause massive social unrest, not to mention the effects in developing countries where people who have just been pulled out of abject poverty in the last generation will suddenly see those opportunities disappear again.
Now remember truck drivers are the most populous single occupation in the US, and commercial trucking is expected to be largely automated within 20-30 years by most major shipping companies.
We don't need an science fiction style singularity to destroy our world, just a couple of small changes in the fringes will be enough.
> Now remember truck drivers are the most populous single occupation in the US
Based on non-uniform binning criteria. Bin differently and other jobs might be on the top. Although they might be just as susceptible to automation. It's a nice example, but it is about as solid as pluto's planetary status.
If you're interested in non-binned numbers, Business Insider summarized the BLS data [1] a couple years ago. Nationally, the most common occupations are retail and food service workers. You could argue that Amazon is going to put some significant portion of those out of work in the next 20 years.
Note that truck drivers are not in the top 10 chart even though the American Trucking Association estimates 3.5 million truck drivers in the US since BLS puts the number at about 1.7 million. I don't know where the discrepancy comes from.
Trouble is, there's a bunch of people out there who have no aptitude for those things, and have neither the desire nor the means to acquire that aptitude, and/or don't have the means to sell this aptitude for enough money for bare necessities.
What do they do?
This isn't a rhetorical question, I don't know the answer, and I'm kept up at night for the coming storm.
Even if every barista could learn to write software or practice law, it would just mean that software developers and lawyers would come to be paid like baristas. An individual can rise by educating-up to a kind of job that offers high pay. A whole generation of graduates can't. (Literacy used to be a specialized skill that provided its wielders with better-than-average jobs. Not so much today.)
> it would just mean that software developers and lawyers would come to be paid like baristas.
In quite a few places, the former are basically paid like baristas and office clerks. That certainly seems to be the case at the web development end (and I guess more mainstream side in general) in a lot of places in Europe.
Alternate view: humans are so fucking simple they'll pay extra for a machine-made coffee if it comes with a human attendant.
Humans might be so bad at figuring out whether Alice can work with Bob or whether we should bomb Iran that a magic 8 ball could do a better job, never mind the anthropomorphised superintelligent computers which exist only in the imaginations of futurists past and present. But humanity is going to continue to insist on getting people to sort that sort of thing out.
ah this is we will have true AI in 5 years which has been said every year since the 1960's - likewise the fusion "to cheap to meter" which has been going since the 1950's
>>1) Cultural concerns. e.g. Appropriate imagery in advertising.
This seems to assume advertising will continue to be aimed at humans. Why would it be? Why would purchasing stuff not be done by AIs in the future as well? In that scenario, things like culture would become irrelevant, as marketing AIs would advertise products/services to purchasing AIs.
I'm not sure what a Rubics cube has to do with intuition. But solving a Rubics cube is so firmly within the realm of doable that no one is going to call it AI anymore.
Sorry, that was an incredibly bad example. I meant the invention of a Rubics cube as a product that might sell, as opposed to it's solution. I thought it was an example of a product that had no similar competitor when it was released but was wildly successful.
Machines didn't take all the jobs in agriculture either, but they changed the society from >90% of the population working the fields to <10% what we have today. Imagine what would happen if a similar development would affect all kinds of work. Even if structural unemployment is "just" 40% our current social system would be wholly inadequate.
Yes, but that's a really bad comparison because the net result ended up being a huge increase in new jobs that were created, thanks to the machines. We have tons more people and jobs today.
That's because machines needed lots of manual operators to take care of them while working.
Now that we have computers, it's not at all clear that this will be true anymore; machines need to be designed, but that requires much less people working on them.
We've had computers for 70 years now. In order for the machines to seriously cut into available jobs this time around, the software and robots have to be able to do tasks across a wide swath of activities humans are currently doing.
No, I wasn't trolling. I think we have a different concept of what an intuitive leap is. A neural net, as far as my understanding goes, needs training in the field that it makes decisions in. I think you believe that process itself contains intuitive leaps. Neural nets trained to walk develop weird walking styles, and I think that you think that is evidence of an intuitive leap. If that's what you mean, I would disagree.
You train it to walk, and it won't understand how to climb. You train it to climb on a climbing wall and it won't understand that it can't climb on glass, or string, or a waterfall without additional training.
Whereas you and I wouldn't need to try and fail to climb a waterfall. We would just know it isn't going to work. We would also understand, without having tested it, that those climbing skills would enable us to climb a tree, or a rope net, or ladder.
We might even be able to make a judgement about how well we could climb each before disaster.
If I were wrong on this, and I could see an AI trained to do X and then apply it to Y then it would cause me to review my beliefs on AI.
You may want to elaborate on the "can not be matched by our technology" aspect. I'll try.
An "80 IQ" manager will fail at the list of six tasks, and a "120 IQ" manager will be a success, by most peoples analysis.
Surely, an intelligent but inadequate AI would be mentored like an intelligent but inadequate human manager. We have millennia of experience proving humans can't do that successfully. Therefore if we invent an inadequate AI, regardless of being close to human performance, we know we can't improve performance to make them useful. We play games with re-rolling the dice, but the clock time and human labor time make that too expensive (although it works for mere numerological metric number optimization problems). We play games with pretending that the history of flipping honest coins implies something about the honest coin although it implies more about self delusion and statistics. We play political games where the leader is useless but at least the leader is our guy, our kind of people.
Sure, for the sake of argument, I'll take it on faith we can build a mentally disabled AI manager. But we know based on centuries of experience we have no idea how to "fix" a mentally disabled manager into something successful. This is not necessarily a complete black pill. A developmentally disabled AI might, if its merely disabled and not evil, be handy to provide minimal supervision to small children or animals in a safe controlled environment. Its just not going to be very useful.
Maybe rephrased, that's nice that some believe we can run a marathon, and maybe we can get part way, but if we absolutely know based on substantial experience we can't upgrade an athlete to run the critical last 100 feet to break the tape and finish, then why bother? Or if we have to build a bridge 1010 feet long if in separate experiments we know we can't extend a bridge past 1000 feet long then it doesn't matter if we have faith or belief that we can build it 10 feet or 950 feet or 999.9 feet because we know once we hit 1000 feet we have no idea how to get it to 1010 feet based on centuries of trying really hard using off the shelf cheap self reproducing biological bridges of 1000 feet length.
My greatest fear of AI is it will turn political and we'll no longer be able to talk about the science and technology of AI; it'll just be another dog whistle signal for one side or another, like many other topics "discussed" here on HN. Kool kids will have the right blind faith, the enemy will have the wrong blind faith.
A correction to the history of retirement schemes.
Retirement schemes go back a lot farther than acknowledged in that article. The most popular to have lots of children in the hopes that one would take care of parents in their old age. But then you having things like the https://en.wikipedia.org/wiki/Tontine.
Sure, but Tontines didn't originate in the US (or at least the UK) and therefore there's no need for the author to consider them part of world history.
Why not just seize the means of production? Private (real) property is ultimately rooted in the theft of the commons. This has historically been justified using two assertions: that people don't value what they don't own, and that nobody does anything except for profit. Both are highly questionable, yet when counterexamples are offered they are generally dismissed as 'the exception that proves the rule' or some equally irrational rhetoric.
Our existing economic paradigms are demonstrably flawed. Just as feudalism tried to restrain the creative forces of capitalism but eventually collapsed, capitalism is arguably restraining the creative forces of (socialism, participativism, something we haven't got a good name for yet). We are familiar with many of the potential pitfalls - excessive bureaucracy and various flavors of authoritarianism - but have yet to fully systematize the desirable alternatives of open source culture. Perhaps what is needed is a general theory of economic networking that incorporates lateral as well as hierarchical structures.
I could say exactly the same thing about capitalism's boom & bust cycles or the mounting problems of environmental externalities.
You might eb surprised by the relatively steady rate of economic growth in the former Soviet bloc, contrary to popular stereotypes of a collapsing economy. The wiki article below is an OK summary as a) I don't want to demand you read a long paper on the subject, and b) I definitely don't want to advocates for the authoritarian central planning approach that prevailed under Stalin and for decades afterwards, at tremendous cost to human life, liberty, and dignity. Lefty types like myself often refer to that dreadful approach as state capitalism.
I cite it here to suggest that slow & steady growth might be better than highly disruptive unstable maximum growth.
Of course, graphs of aggregate or per-capita GDP suffer from inaccuracy in that they conceal the distribution of economic benefits; as we know you can have a country that's very rich on paper and still has catastrophic poverty problems when you dig farther down into the data. Unfortunately, I'm not sure how to easily synthesize data on distribution, economic mobility, the value of public goods, and so forth within a simple metric. Perhaps using multiples of the median rather than currency units would be a better yardstick, but I'm not an econometrist.
It's depressing how many people aren't interested in understanding how and why communism failed, and what we can learn from that. The conclusion is always just "capitalism and communism are the only two systems that exist; communism didn't work; therefore capitalism is the best and only way to run things."
I think it's helpful to look at it in terms of control vs. freedom. Communism means more state control of people, capitalism means less.
In these terms, what if capitalism is simply the natural outcome of x amount of freedom? Therefore, shifting away from capitalism means shifting toward either anarchy or communism (even if both of those options are far away in absolute distances).
This makes it hard to discuss things calmly and rationally, of course: Few people want actual anarchy, and few people want actual communism, but a move in either direction is a move toward one of them, even if it's not intended to go all the way. And if you do move one way or the other, some of those few people who do want to go all the way will try to capitalize (ha) on the opportunity.
Incidentally, this may be an argument for leaning more toward capitalism, i.e. toward less state control: because people as a whole will never agree on a single course of action, and because there will always be those among us who want to achieve more power and wealth for themselves at others' expense, leaning toward less state control reduces the potential damage and power/wealth accumulation that "rogue" actors can achieve.
Or, to put that another way, it reveals an inherent weakness of leaning toward more state control: that power corrupts, and humans desire power, therefore using the force of law to concentrate power in the hands of fewer people (ultimately backed by the use of force, as all government power is) results in more corruption, and therefore results in more suffering for those not in power. Capitalism certainly causes suffering as well, as the robber barons demonstrated many years ago, but at least that suffering is not enforced by the state--it merely arises opportunistically, and each instance is temporary and localized, not permanent and universal.
Of course, globalism greatly increases the scale of that localization, which demonstrates that theories about economics, government, etc. must be revised and kept current with the times. Our governments and economies are largely built upon ideas whose foundations were laid centuries ago, before any of today's technologies could have even been conceived of. For example, the American Founders could not have foreseen the kinds of rapidly changing, global corporations that exist today, and so we should expect their ideas to have some vulnerabilities which may be exploited by newer technology (to think in infosec terms).
Anyway, if you are wanting to move away from capitalism and not toward anarchy, you necessarily are moving toward less freedom and more state control. I think the important point to note is that state control of economic means cannot be isolated from other facets of life. It necessarily influences all other parts of life, for the economy is that from which human sustenance flows.
To look at it another way, capitalism allows for greed, which has very negative effects--but it also accounts for greed, which is part of human nature, and which motivates. Specifically, it accounts for it by allowing everyone to be motivated by it. In contrast, giving the state more control concentrates the greed in fewer people, by law. And I think it's better to allow the evil of greed to be evenly distributed (which does not guarantee the even distribution of wealth, health, or happiness, but allows it to be pursued), than to use the force of law to concentrate it in fewer people, expecting them to rein it in for the sake of the greater good, because that fails to account for human nature--it's essentially a GIGO system.
As someone who comes from a soviet block country, I wanted to thank you. You described it pretty good on the meta level. I may come back and copy it in future ;)
It's far more then the mysterious criticism above deserved as an answer and the "criticism" of this comment goes the same way. There is a certain fear in left Utopism from the realization of what you've described. That fear is being drowned in endless derivations of what already failed in hope to cloud the meta problem.
To me, it's a wasted effort. This energy all those bright young people invest there could be directed towards coming up with something really new or at least making what we have more social. I hope they'll get there one day.
Thank you for sharing that. I wish more people like yourself, who have first-hand experience, would speak out. As you noted, the rhetorical techniques they use are not in good faith. We need more actual witnesses to testify against it, because such personal testimony is less susceptible to the deceptive, distracting non-arguments they use.
> To me, it's a wasted effort. This energy all those bright young people invest there could be directed towards coming up with something really new or at least making what we have more social. I hope they'll get there one day.
Indeed. This seems to be the troubling outcome of their long-term efforts in academia. It often seems like humanity is doomed to repeat the horrors of history, not only because our memories are so fragile, but because there are always a few dedicated to systematically erasing them. What a tragic waste of human resources. We could stand on the shoulders of giants, but instead we are pulled back into the crab bucket.
As you noted, the rhetorical techniques they use are not in good faith.
Wow, project much? I don't see that argument made in his comments, nor is it evidenced in the comments of others. Considering that I drew attention to the authoritarian pitfalls of communism and their destruction of 'life, liberty and dignity' before you joined the thread, your complaints about systematic erasure are baseless. Perhaps you didn't bother reading the comments you were replying to; I hope not, since the alternative possibility is that you were engaged in deliberate mischaracterization.
I greatly enjoyed your analysis and appreciate the time you spent making it, but I reject this premise as a matter of theory. The intent of communism was to create a distributed system of governance in which workers would delegate some of their number as administrators, who were subject to recall at any time and who were expected to both legislate and administrate. These conditions obtained in the USSR for a short time after the 1917 revolutions but fell apart under two pressures: the Russian civil war, in which dispossessed aristocrats and armies from other countries teamed up to attack the new worker's state, necessitating total mobilization of the economy for war; and following Lenin's death, Stalin's seizure of power and exile of Trotsky. Stalin, as we know, went on to purge political enemies left and right, and then implement an appallingly cynical pact with Hitler to carve up Poland. (In contrast, Trotsky and Lenin had hoped to systematize the Russian revolution and then support similar uprisings in Germany, France, and other industrial powers of the time.)
Clearly there was something structurally wrong about the way the Russians implemented their scheme of governance that made it vulnerable to authoritarian takeover. I'm not an expert, but my personal take is that in both Russia and to some extent in China, the combination of a primarily agrarian economy and the lack of a democratic or capitalistic tradition made authoritarian subversion far more likely; Marx was correct about the necessity of a primarily industrialized society as a necessary precondition for communism, and he would have pointed to the capital-intensive nature of modern agribusiness in the US as the inevitable consequence of same. You might be surprised o learn that prior to his exily Trotsky had been engaged in a battle of ideas with Stalin where Trotsky was arguing for the maintenance of markets in grain and agricultural equipment because he considered market mechanisms superior to central planning and much more likely to reflect the goals of the people doing the work. Had his advice been heeded, at least one disastrous famine might have been avoided.
Anyway, if you are wanting to move away from capitalism and not toward anarchy
But anarchy is the end goal of communism - the withering away fo the state, and its replacement by voluntary mutualism, abundance through industrial production, and an equitable distribution of time with the goal of minimizing work and maximizing freedom. This is anarchy in the definitional sense of 'without rulers' as opposed to the propagandistic sense of general mayhem and disorder. The internet qua self-routing persistent network was/is anarchic in many respects; sadly I don't have a general theory of distribution v. resource concentration that allows for concentrations of resources for industrial production without concentrations of authority or its proxies - yet.
Apologies if this seems nitpicky. but to begin from the premise that communism is about increasing state control without acknowledging the explicit aim (in the Communist Manifesto, no less) of deconstructing state power undermines your whole argument, notwithstanding your many correct observations.
> I greatly enjoyed your analysis and appreciate the time you spent making it
Well, I see that you wrote this response after your others, so I guess you realized I wasn't talking about you earlier. :) I also appreciate your thoughtful response.
> but I reject this premise as a matter of theory.
And I, yours. :)
> The intent of communism was to create a distributed system of governance in which workers would delegate some of their number as administrators, who were subject to recall at any time and who were expected to both legislate and administrate.
This is the fundamental problem with communism, which I addressed in my first comment: its theories do not work in practice, because they do not account for the realities of human nature. Therefore, it is GIGO: theory is built upon incorrect hypotheses, and when put into practice, it leads to poor results. The intentions of medieval alchemists are irrelevant, because their theories were wrong. In the same way, the intentions of Marx, et al are irrelevant; what matters is end results. And the end results are 100 million dead people in the 20th century, as well as significant suffering among those who survived. In contrast, capitalistic nations have achieved prosperity and liberty far beyond any others in human history.
It would be one thing to advocate communism 150 years ago, but now we have real data proving that communism produced more human suffering than any other ideology in history. There is no excuse for supporting it now. It's not much different than claiming that Earth is flat when we have circumnavigation and photographs from orbit.
> Clearly there was something structurally wrong about the way the Russians implemented their scheme of governance that made it vulnerable to authoritarian takeover.
I think every form of governance is vulnerable to authoritarian takeover. The best defense against it is a strong constitution, but even that is vulnerable if it can be amended, or if it outlives its society's respect for it.
Again, this is a matter of human nature: humans desire power, and there will always be those who will strive to achieve it at others' expense. Therefore the best way to mitigate authoritarianism is to compartmentalize to reduce the potential authority that can be accumulated. This, of course, is not generally compatible with communism. In theory, it could be, because free people can freely enter agreements and pool resources. But communism only works in theory at a large scale, and that necessarily means enforcement, not liberty--and by so doing it sows the seeds of its own destruction. Humans are not machines, yet they are the "workers" of communism, and communism destroys its workers, and thereby itself.
> You might be surprised o learn that prior to his exily Trotsky had been engaged in a battle of ideas with Stalin where Trotsky was arguing for the maintenance of markets in grain and agricultural equipment because he considered market mechanisms superior to central planning and much more likely to reflect the goals of the people doing the work.
But markets are not communism.
> Had his advice been heeded, at least one disastrous famine might have been avoided.
Or, had communism not been enacted in the first place, over 100 million lives could have been saved. I don't know where you stand on this, but I don't subscribe to the "you must break a few eggs to make an omelet" theory. Those deaths can never be justified, especially not in the name of communistic trial-and-error.
> But anarchy is the end goal of communism - the withering away fo the state...This is anarchy in the definitional sense of 'without rulers' as opposed to the propagandistic sense of general mayhem and disorder.
As I mentioned in another comment, that is not stateless. The system does not function, does not even exist, without rulers.
> and its replacement by voluntary mutualism,
There is nothing voluntary about it, because it's enforced by the state.
> abundance through industrial production
"Abundance" is, not to be rude, but a useless platitude, a distraction, and begging the question. It's entirely theoretical, and the theory was completely disproven by the 20th century. Again, intentions and theory don't matter--only results matter.
> and an equitable distribution of time
What is equitable is necessarily defined by an entity, which is the state.
> with the goal of minimizing work
The goals are decided by the state. The state is not a computer program--it is human beings, who have different opinions, different goals, are greedy, etc.
> and maximizing freedom
Communism is incompatible with freedom, because the system necessarily requires compliance. Compliance != freedom.
The real question is, freedom as defined by whom? The answer is, as the 20th century demonstrated, as defined by the Party, whose members live in luxury, while the People live in squalor--the opposite of all the promises they made to the people.
But communism isn't supposed to work that way, right? Theoretically, the people in charge are all good and selfless and fair and experts in their fields who apply their knowledge impartially to benefit all people equally. But in practice it results in unprecedented evil and suffering, therefore it's a disproven theory.
> The internet qua self-routing persistent network was/is anarchic in many respects
The low-level protocols (theory) are anarchic. The network (practice) is not. Without, e.g. ARIN, ICANN, etc, the Internet as we know it would not exist. Someday there might come to be a usable kind of mesh network with automatic addressing, routing, and naming, but of course, such a system would necessarily be vulnerable to DoS attacks. TANSTAAFL.
> sadly I don't have a general theory of distribution v. resource concentration that allows for concentrations of resources for industrial production without concentrations of authority or its proxies - yet.
I encourage you to not go down that road, friend. Don't waste your time, falling into the same trap that Marx, et al did. It would be like trying to create one enormous computer to take the place of every computer on the Internet. Distributed, federated systems work, the same way that markets and individual liberty work. Build on that, stand on the shoulders of giants; don't go backward into the crab bucket.
Or, another way to look at it is, we already have such a theory: it's called capitalism. It is not perfect, but nothing is, and by impinging upon it, you necessarily increase state control, reduce individual liberty, and increase vulnerability to authoritarianism.
These problems are political, not economic. They are people problems, not resource management problems. To fix these problems you must fix people, which is ultimately impossible. The best we can do is try to create good, selfless people, who make the system good from the bottom, up.
I've never met you, so I'm not accusing you of having this trait, but: don't have the hubris to think that you can create a general theory to "solve" economics and society and governance. Such a task is beyond anyone. The closest we have ever come is to do the opposite: to compartmentalize and allow individuals to freely associate and govern themselves, to the extent practical; to allow each group to choose the systems most appropriate for their circumstances, and bargain freely with other groups, rapidly iterating freely, borrowing good ideas and discarding bad ones.
This is even more important because of technology. For millennia, technology changed very little, and everything happened very slowly. Just in the last 100 years, the pace has increased by orders of magnitude, and it appears to be continuing to do so. Whether it will ever plateau, no one knows. So while ideas and theories conceived hundreds of thousands of years ago could be valid for a long time, that is no longer the case. The pace of change is now so fast that the useful life of any such theory is far shorter than we expect. The most effective theories will be ones that operate on a small scale, not a universal one.
> Apologies if this seems nitpicky. but to begin from the premise that communism is about increasing state control without acknowledging the explicit aim (in the Communist Manifesto, no less) of deconstructing state power undermines your whole argument, notwithstanding your many correct observations.
No, it's not nitpicky, it misses my point: that communism is fundamentally flawed. Your argument is undermined by your not recognizing that explicit aims are irrelevant--what matters is only results. Early attempts at flying machines failed; it does not matter that the explicit aim of their inventors was to fly. Their aerodynamic theories were disproven, and in the same way, communism has been.
It's false that it deconstructs state power, because it does not exist without state power--it merely reforms and repurposes it. To say that it deconstructs state power is to misrepresent it, and this is what the "anarchists" do to obscure their real intentions. This is how the communists manipulated masses of people into thinking that they were on their side, when what they really wanted was to replace the government and take power for themselves.
That they just want to help; that they want to be fair; that they are altruistic; that it will work this time; that they know how to do it--it's all a big lie, and it always was, full of hubris that men could effectively be gods, omnipotent, solving every problem, making everything optimal.
>Communism means more state control of people, capitalism means less.
In comparison to what? Eachother? Because western-europe has more control than the US, china has more control than western-europe (and let's not pretend china isn't capitalist). These are economic systems and are seperate from political systems.
Yes, that is the point I tried to make with all those paragraphs.
> These are economic systems and are seperate from political systems.
I directly addressed this in the penultimate full paragraph.
> and let's not pretend china isn't capitalist
It depends on how you define "capitalist." Some industries in China are state-controlled--is that capitalist? Is "capitalist" 0% state control, or < 100% state control? How does China's capitalism compare with capitalism in the rest of the world?
> It still is not correct
I realize that you're not the first person I replied to, nor the last, but I wish you would say why you think I'm wrong, because otherwise what's the point of saying so?
> I realize that you're not the first person I replied to, nor the last, but I wish you would say why you think I'm wrong, because otherwise what's the point of saying so?
The quote I used to have an example of what I think was not correct.
The problem is your reasoning is based on these 'wisdoms' that aren't actually real facts or which are simply misunderstood, for example:
> toward either anarchy or communism
Communists and anarchists have the same end goal, these two 'groupings' are one and the same in the end.
> which is part of human nature
Is there such a thing as a fixed human nature? Our strength is that we adapt.
>It depends on how you define "capitalist." Some industries in China are state-controlled--is that capitalist? Is "capitalist" 0% state control, or < 100% state control?
There is no state in communism so that would not be a good measure.
Then you seem to imply that communism is full on state control while the opposite is true and communism (and anarchism) stands for a stateless and classless society. A country that is full authoritarian is just that, authoritarian, regardless of what mix of state-ownership of the economy is involved. Your whole post is more of an argument against authoritarianism than anything else in my opinion.
> The problem is your reasoning is based on these 'wisdoms' that aren't actually real facts or which are simply misunderstood, for example
This is what communists always say: "Communism is just misunderstood and has been poorly implemented. We'll get it right this time." 100 million people in the 20th century say otherwise--well, they would, if they were alive to do so, but they were killed by communism.
I'll try to be concise:
1. Communism and anarchy are not the same thing, because in communism, sharing is not optional.
2. Communism is not stateless, because the laws are enforced to enact communism, and whatever entity enforces the laws is the state.
I guess you're thinking that communism is "the people" rather than "the state," but that is a false distinction, because whichever of the people dissent are forced to comply by the other people, i.e. the state.
This is like saying that there is no "state" in the United States, because it is "of, by, and for the People." However, this is a false distinction, because the state is not the People, rather it is authorized by the People, and its powers are delegated to it by the People. It remains a distinct entity.
3. Therefore, anywhere there is a government, there is a state. The only stateless society would be total anarchy, like nomads roaming the plains thousands of years ago. Even then, they had tribes, which were essentially mini-states. So to claim that communism is stateless is essentially playing semantic games.
4. You said, "Communists and anarchists have the same end goal, these two 'groupings' are one and the same in the end." This is interesting, because most of (if not all of) the "anarchists" we see today are actually thinly veiled communists. They advocate anarchy to destroy the existing society, hoping to then create a new communist state afterward. But you seem to think that communists and anarchists are the same because you think that both are advocating for a stateless society (which is not the case). So we agree on your conclusion, but apparently for different reasons.
5. Communism is not classless. Whoever is in charge is in a class above the rest.
> Your whole post is more of an argument against authoritarianism than anything else in my opinion.
Oh, if you're going to redefine words after the fact to reshape your argument, further conversation is a waste of time. And you had the nerve to accuse others of not arguing in good faith?!
In the capitalist interpretation, "seize the means of production" translates to "start your own business and out-compete your competitors". Or put another way: just own the damn robots.
"Private (real) property is ultimately rooted in the theft of the commons"
If only somehow I could capitalize on everyone who believed this nonsense. I would sell them shirts, but for them to receive them would be ownership of private property and therefore a "theft of the commons".
Can I ask what piece of technology you stole from "the commons" to write that comment? What was the brand?
I'm referring to a specific legal practice when I mention the Commons, sorry for not making that clearer. A similar method is proposed today to manage fisheries, with established actors being granted fungible fishing rights; well-intentioned as this proposal may be, it's philosophically problematic.
Duplicate the means of production. If we really end up in a world where robots make the products and robots make the robots, then the means of production are information products that can be copied like software. (And there will be open source robots too, but copying without permission is the fallback position if commercial robots are too patent-encumbered to reimplement by legal means.)
I wouldn't steal a car... but I wouldn't feel a bit bad about having a machine build an identical copy of a friend's car for me.
This is an interesting line of thought. The spread of capitalism was fueled by the new technology of the Industrial Revolution. Perhaps the next mode of production will be fueled by this 'Internet/Computer/Robot/AI Revolution'. Maybe the important change is this "trivially scalable output irrespective of capital" property, but no one really seems to know what this will lead to.
It seems like it could lead to a world of abundance for everyone. One potentially severe complication: if machines can make anything there's a blueprint for, they can also make all manner of weapons. What if the occasional unpredictable spree killer could fab up a crude cruise missile full of nerve gas instead of buying a bunch of rifles? Or even what if someone fabs a throng of standard tree-trimming robots and reprograms them to trim the limbs off humans instead?
Most people aren't willing to kill other people. In a world of abundance, I expect that even fewer will be willing. But the few killers who remain could have vastly amplified powers of destruction. I don't like how Marshall Brain's Manna solved the violence problem, but I haven't got any great answers of my own.
But eventually, the robots, unable to cope with what they've got to do, will turn to robot drugs, robot alcohol, and other robot-destructive behaviors to escape.
That's funny, but insofar as they need to be truly adaptive they're subject to subversion. See James Cameron's in-depth studies of the halting problem as applied to the psychodynamics of biopollutant elimination.
One of the stories of WW1 was a soldier explaining that a machine gun could kill enemy soldiers indefinitely if it had ammo, but the gunner had to stop for the sight of human dead.
KillBot doesn’t need to stop. KillBot can read your body language. KillBot knows if you’re loyal to Supreme Leader. KillBot doesn’t care if your death makes you a martyr, all that does is add a few dozen more targets to KillBot’s naughty list.
We don't need uprisings. We just need to own the damn robots.
When high automation comes, it's not going to be only the rich that own robots. As an analogy, take smartphones - there are 5 billions of them in use in 2017. Almost everyone can have the best phone today, or one that was as good as the best from a couple of years ago.
There are going to be cheap and useful robots for everyone, 3d-printed, open sourced designs running on open source AI, and capable of assembling more robots. What goes into a robot? Motors, gears, sensors, batteries and computer chips? Those are all commodity everywhere on earth. The moment we can assemble them into working useful robots, we will see an explosion of do-it-yourself automation everywhere.
With self printing and self assembly we can make a software based factory that can "compile" itself and anything we desire. We will have built the first "material compiler" that can "bootstrap itself" by creating a replica. Then everything will cost only as much as raw materials.
I hate to be dystopic, but what happens when a futuristic Unabomber gets a hold of 3D-printing, self-replicating robots and programs them to kill? Will we all be walking around with our own 3D-printed bodyguard robots, programmed to watch and destroy any other robots that look hostile? Or will the first bad actor's robots destroy everyone else's (or everyone else)?
> Then everything will cost only as much as raw materials.
Seems like one would want to own the raw materials, then. But if the evil Dr. Robotico's robots can kill the owners and take their quarries, then what? Does he rule the whole world? Are we in a race to robot armageddon?
Man, that Paperclips game is starting to seem more and more prescient.
Most of which require communication which is being heavily surveilled. Afaik, uprisings, even mass uprisings are directed by few well-connected individuals. If you can single those out early enough in the process...
To some extent they are, but uprisings are often misrepresented as coups in retrospect. I have some radically different notions, but they're somewhat inchoate and trying to explain them in a long meandering comment would probably be a waste of my time and that of other readers - I feel like I'm a few years away from being able to generalize it, and realistically that's probably an underestimate.
As a very quick thumbnail, I'm trying to blend Integrated Information Theory, Selectorate Theory, the eusocial dynamics of colonial animals (including ourselves, per Wilson), and some probably-wrong ideas about meiosis (cell division) to come up with a biologically-rooted model of the collective action problem. Not being a professional scholar, there's little or no chance I'll ever weld these into a general theory of human social behavior, nor do I want to; I hope to intuit a good-enough grasp to deploy it within polities and rely on its fundamental harmony with nature as the least destructive method of manufacturing large-scale social change. It's probably a doomed endeavor but I'd rather fail at a hard problem :)
Like all things this well written on this topic I feel like it hits the nail on the head and misses a few things because it’s an article by necessity must paint in broad strucks so let me say this:
It’s completely right that automation/ robotics will accelerate the displacement of workers and cause upheaval. Certainly owning the productive fruits of this will make one very rich.
What won’t happen is that these will displace those who service unmapped or poorly systemic mapped things. For instance: in the last 15 years there have been techniques to attempt to automatically curate wine. Most either fail or pivot. Why? Because chemical composition is only ine facet in the high end. Remarkably software still does not do a great job here as tastes are subtle and hard to train in a model or algorithm. It so far can only get n times better than average but never tops an expert human curator in the high end. Will it some day? Maybe. On an infinite time scale yes it will but I wouldn’t quite go dumping my high end wine skills quite yet.
Which brings me to my point: automation is great for irredeemable or trainable repetitive processes but still an infant at more complex things like the example given.
In turn, if you can carve out a niche that is unusually hard to model and train you may be okay. Unfortunately that’s not 90 percent of jobs I reckon.
The other sure fire bet us to only deal in Veblen goods. The value there being exclusivity, which I reckon will never stop being a thing
There an article somewhere which breaks down the types of automation, into a useable manner.
Theres automation of tasks which free up labor to do MORE work - so if you were a bricklayer, and were bottlenecked by number of hands, the wheelbarrow would be a force multiplier.
Theres removal of jobs with less useful jobs, so the chef got replaced by the burger flipper (not really, but I can't think of a good example at the moment).
And finally removal of jobs entirely, with no need of replacement.
In Kurt Vonnegut’s 1952 novel, Player Piano, we are introduced to a future in which only engineers and managers have gainful employment and meaningful lives. If you’re not one of the engineers and managers, then you’re in the army of nameless people fixing roads and bridges. You live in Homestead, far from the machines that do everything, and are treated throughout your life like a helpless baby. The world no longer has a use for you. Anything you can do a machine can do better, and you are reminded of this all day, every day by society and the single omnipotent industrial corporation that oversees it all.
He wrote this 65 years ago. It couldn’t have been more apropos to what we’re witnessing now than if had he written it this morning, right down to the nostalgia-selling demagogue who seizes the opportunity to foment rebellion amongst the displaced and disgruntled. When millions of people start seeing their purpose begin to erode and their dignity being stolen from them, the idea that there’s nothing left to lose starts to creep in.
The fact he wrote this 65 years ago yet the labor force and population have grown in lockstep, augers against this. https://staticseekingalpha.a.ssl.fastly.net/uploads/2011/12/... Why would companies, especially in an economic environment that is so competitive, keep employees that serve no purpose.
Buying and holding shares of Facebook, Google, Amazon, and Microsoft ,which are are not only leading this techno revolution but profiting immensely from it, is one the best ways to capitalize on this trend, which is what I have been doing for the past few years (along with owning Bitcoin). I don't however agree that automation will mean the 'end of jobs'. It's not that robots will take all the jobs, but rather the labor market will become increasingly bifurcated, with a 'creative class' at the top and the low-income service sector jobs at the bottom, without much in between. There is significant demand for service sectors jobs, of all skill levels, including skilled technical jobs such as coding, teaching, consulting, and engineering. But also huge demand for hospitality jobs; however, many of these jobs may not pay as much as the jobs they replaced, or bring much personal fulfillment.
(you'll have to change the dates to get the full picture. Works with a POST so I can't link to it. Note that unemployment essentially is labour force - jobs. Hence, the weakest members of the jobs force are counted double. Also, discouraged workers are discounted (and the rules for discouraged workers means they are essentially anyone unemployed for more than some months). The real unemployment rate, discounting double jobs and including discouraged workers is somewhere between 9 and 16%)
The short of it is that the job market froze, with a few bubbles in between, at around 1984-1987 or so, at an unemployment rate of around 8% or so and has been slowly but very steadily increasing since. Even the rate at which this is happening is increasing. The government, of course, has changed definitions again and again to show better numbers, but so far they don't go all out China on us (ie. the real data still appears to be published by the government, unlike in China where we know 15 million people were fired last year in several provinces due to protests and violence resulting from it, but this is not reported anywhere in government data)
Granted, that's still not quite the story of Kurt Vonnegut, but keep in mind that we're about 30 years into a phase in history where jobs grow slightly slower than population growth. This could be accelerating, or it could simply be that under Obama there was no real jobs recovery despite "extraordinary measures" by the Fed.
This is a pretty crappy read. Lacks real data and also unwillingness to look outside of the tech bubble, seriously what serious AI work is apple or Netflix doing? Its as if the author started with the conclusion and wrote up whole thing to justify it. For large parts most of the tech people at Google/FB are involved in getting more people click and buys ads. And Amazon are involved in getting people to buy more stuff and reduce the costs of handling and shipping them. So, if the logical conclusion that many visionaries in these thread are saying is true that 90% will be useless then these companies will have nobody to serve and will collapse before we reach that point anyways. Secondly, let's believe this is true then if an economic system which does not benefit majority deserves to be overthrown by any means even violent and rise of trump is a step in right direction. Third, if the tech companies are so smart then how were they caught with their pants down when a foreign power used their own infrastructure and technology to help elect a leader that they ostensibly opposed. Finally, the fundamental reason for the current stock boom is simply liquidity and lack of asset classes outside of stocks which give meaningful growth. This is not just limited to fang or usa but seen in many stock markets. I actively invest and trade in India where the markets are hitting new highs and the only reason right now for this is that in most places it is very hard to get a good return plus there is excess institutional & industrial capital since they are not optimistic of the growth and thus not investing in augmenting capacities or production. So investing in stock market seems the only alternative. One of the reasons for this liquidity is central banks around the world have been pumping money. This will end when the excess liquidity is pulled out from the global financial system.
"Manna"[1] as well. While I don't like the writing style, I love the story. Especially since it shows AI gutting middle management in an interesting way before robotics is mature enough to do all the dextrous tasks.
Agreed. While I'm not a fan of the writing style either, the premise was enough to keep me interested until the end. It wouldn't surprise me if it wasn't too far off the mark for the next 50 or so years.
I read Manna, but honestly I thought it was silly.
> Terrafoam is, by contrast, 'Worse and worse.'
No, it's not. Manna is better and better: it yields continually better results.
> With all that happening, it is very hard to get people together to work on big projects.
Wouldn't it be cool if there were something to get people to work together on big projects? Something like an economic force causing them to give a little to get a little?
Frankly, I think the Australia Project would stagnate after a generation or two, while Manna would continually improve. After a few generations, it'd be much like to Communist states vs. the West: yes, the Communists did often improve on their initial conditions by quite a bit — but the free economies improved even more. I recall a story about someone (in China, perhaps?) bragging about how the government dumped a pallet of free cabbage on each city block every time period. Free cabbage sounds wonderful to someone who was a subsistence farmer — but Asian-American fusion cuisine on every city block sounds even better.
And that's just within the construct of the story. A real-world example would have competing Manna-like systems.
Also, in the Manna world the problem is that in the U.S. most people don't have the ability to contribute, and so they languish in Terrafoam. It provides no reason for why they are suddenly more talented in the Australia Project. That just doesn't make sense.
Anyway, I hope that mankind's actual future is not to choose between two different totalitarian systems.
> Also, in the Manna world the problem is that in the U.S. most people don't have the ability to contribute,
Most people don't have the will to contribute. They've always just coasted through life doing what is described in the manna story. They always know what to do next and the only reason they do anything at all is because someone tells them to, or it directly provides satisfaction. After sufficient years they complain that this restricts their ability to do anything at all, especially to change, but of course that's not true. They could spend 2-4 years training themselves and they'd be perfectly able. The reason that doesn't happen is not often lack of ability.
only read enough to get the premise. Robot tells fast food employees what to do every second, they like it.
sounds like the summer job version of the original starship troopers short story that started the series. Some teenage joins the army and like because there is always a sargent telling him what to do every second.
Interesting investment thesis, but isn't there a better way to hedge yourself than buying tech stocks?
That's just a huge bet on a tiny number of cyclical revenue sources: online shopping, online advertising, cloud services, iPhones, Microsoft Office, and Windows.
Lithium, for batteries. Heavy metals, for processing. Energy, most of all. I wonder how long it'll be until we replace fiat currencies with a balance of kilowatt-hours.
I wonder how long it'll be until we replace fiat currencies with a balance of kilowatt-hours.
It won't be any time soon. A kWh of potential energy is actually pretty bulky/heavy if it's stored as anything but nuclear fuel. Different forms of energy are not fungible. You'd either be bartering a large number of actual energy sources, or you'd be exchanging "normalized" energy-currency units whose normalization WRT different forms of energy is set by fiat.
I was going to link to its page on Paean to SMAC but it turns out that quote is from "Global Energy Theory", a tech that didn't make it into the final game (but had data set up for it). So there's no write-up about it.
The problem with those is they are capital intensive industries with commodity products. Not exactly the kind of thing that compounds capital at fast rates.
Well, if we can get some variant of the ARC reactor or ITER working, never. Or if we see grid-scale energy storage systems become cost effective to deploy.
"Too cheap to meter" was already the promise of fission. Fusion won't be much cheaper. The actual fuel doesn't make up the bulk of the cost of fission power. Building the plants and operating them is not cheap. Those costs have to amortized into the electricity price.
All the problems in every serious piece of software I've ever worked on stem from the customer (be it external or in-house) not knowing what they want, the person in charge of capturing that doing a pretty bad job of it anyway, and the chain from there to the person writing the software taking that failure and making it worse.
AI writing software will just get me another flavour of the wrong software. AI working out what people want the software to do would be useful.
My thoughts exactly. Until the AI can hold useless meetings and design things by bureaucracy it will never be a serious threat to big businesses/government.
Earlier this year, I finished watching "Person of Interest" (maybe not ironically) on Netflix.
So far we've been applying ML/DL to problems like image recognition, which has produced quite useful products. But these things are still far away from Artificial General Intelligence.
And I've been studying AI / AGI research for decades as well. In the early years, there was an emphasis on formal systems, that could logically infer the sidewalk was wet because it rained last night. More recently, we've seen research like Hierarchical Temporal Memory which attempt to address how the human brain processes information.
Anyway... these approaches aren't the only ways forward.
When you think about it, one thing we might want for an AGI is really just a software system that can improve itself (gaining new abilities), with increasingly less and less human supervision.
I'm thinking of a giant codebase, not just a big library, but more on the order of the entirety of Python code in open-source projects. The entire ecosystem. And then adding methods for it to self-improve. For example, scanning through the codebase looking for bad style or other obvious bugs. And then automatically fixing them.
The next step would be to give it the ability to automatically process certain kinds of information. It would scan an input document (file), and try to figure out what it is (HTML, CSV, whatever), and then try to match that to the kind of output which is required. And then try to find transforms in its own codebase which can accomplish this for the sample input / output.
The next steps get more difficult where it is analyzing its own codebase not just for problems, but it understand the meaning. Maybe it can annotate it's own codebase with more meta-information. For example this function foobar() has a string argument, but it isn't just a string, it is supposed to be a street address.
And at some point, getting the system to write code to solve new problems.
I've looked at a bit of research in this particular direction, but didn't really find much.
Static analysis tools can already find obvious bugs. Except they have a high false positive rate. And then fixing the bugs without breaking something else is still far beyond what we can automate. There is no universal fitness function to tell the difference between good versus bad software, thus no way to consistently automate improvements.
I recall that being touted in the 70's there was a program marketed for PET's and Apples as "the last one" which would replace the need for almost all developers :-)
I'll believe it when I see it. By that I mean, actually replacing programmers, not as an academic or highly specialized exercise. I think it will take AGI to automate programming on any large scale such as to eliminate a meaningful percentage of programmers.
Otherwise, it just becomes another tool for the programmer, where they're being asked to build ever more complex software for ever more kinds of applications.
What I never see mentioned in these types of articles is the rise of the service economy. There are some jobs that will never be automated because we prefer to deal with humans. Take food service for instance. No one wants to go to a high end steak house and have their wine poured and meal served by robots. Human interaction is part of the experience and part of the value. (At McDonald's, by contrast, the humans don't add value and could easily be replaced.) The "human touch" is going to become more important, not less, as automation increases.
Don't take this the wrong way but you need to think about some therapy and being able to take a random piece of steak and correctly prepare it 99% of the time is a hard problem.
What an odd argument. Preparing food correctly will almost certainly be more reliable with machines.
Regarding the human element of dining: I think you lack foresight. We will look back at human waiters as we now look at horses, vs modern cars. People still ride horses, and that’s fine, but to suggest they’re the only way or even the best way to go is just archaic and indiciative of an unhealthy level of denial, or a calcified brain unable to change. Open your mind.
> What I never see mentioned in these types of articles is the rise of the service economy. There are some jobs that will never be automated because we prefer to deal with humans
Mainly because percentage-wise there are so few of them, and they don't make up a significant enough portion of the economy to keep it afloat.
Customer-facing service jobs employ a huge number of people. In any case, there once was a time when white collar jobs were a tiny occupation category. There was even a time when manufacturing jobs were rare. The economy and composition of jobs changes with the abundance of resources.
> Customer-facing service jobs employ a huge number of people
But irreplaceable ones aren't. Bank tellers, cashiers, bus drivers, firemen, card dealers, bar tenders... all can and will be replaced by automation and consumers won't care.
Bartenders are totally irreplaceable. The non-social aspect of the job is easily automatable and has been for a long time, and the social aspect is contingent on human interaction.
I don't see bartenders being replaced en masse. It's as much about social interaction as it is about pouring a drink, particularly for your local hangout.
and the average bar /pub is such a chaotic and disorderly place a robot that could replace a human is probably not going to happen.
E.g. design me a robot that can work in say 90% or bars and pubs including climbing down the ladder to the cellar and putting on a new barrel and that's not to count the dealing with unruly customers.
I worked as a barman. A skilled barman can pour two pints simultaneously and take a new order from the next customer, but I believe with machine assistance this could be greatly increased. I could easily imagine replacing a staff of say 5, with 1 or 2 workers. Large order for 10 pints, 3 cocktails and 7 shots? A staff member presses a button, and the correctly sized, just cleaned glass pop out of a slot coming from the automated dishwasher, and the pints and other drinks are poured to perfection, every time. The barman checks the order is correct, accepts payment, gives change if its in cash, cleans the tables and changes the barrels when it's quiet. You could get a hell of a lot more work done with a small number of low paid staff and machines that can pour endless drinks at once. So while you don't eliminate all the staff, you can drastically reduce the headcount and greatly increase productivity, at least in theory.
>There are some jobs that will never be automated because we prefer to deal with humans.
This is cultural. People used to say they would never buy X online. Today there is almost nothing left in the set of X.
And I disagree about dining out. In the US I really dread dining out, even though the food tastes so good and is so cheap. Why? Servers constantly coming over, interupting conversation to ask me if I need anything (no doubt hoping to get a bigger tip). I'd rather press a button or something on my phone. I never go to a resturant for the staff, I go for the food/drink and the people I went with. Everyone else is somewhere between necassary evil and active annoyance.
I lived in some place in africa where you are required to have way more interactions for basic days to days activity. No phonebook. No map. No price or list of ingredients. When you want an info you have to ask.
Well, we got rid of those.
With a lot of modern services (social networks, online administration, food delivery) we are doing the same.
Robots will allow people to avoid people. And they will do it.
Why ? Because we created a society that requires to play a lot of games and people just want to be themselves without having to pay for it. They also don't want to pay for the unhappiness or inadequateness of others.
There will be a reverse tendency once people realize they need humans to be happy. But it won't start by that.
A certain amount of compute capacity should be given with citizenship to each individual. It is fixed. You get to use that capacity however you want: some on your phone, some on your laptop. If you want to run an internet business that uses a lot of compute capacity, then you'll need to rent it from other individuals and consolidate it under your control.
It sounds really silly, but that might actually be the only way to prevent a few bad actors from taking over the world with killer robots. Of course, enforcement would be a problem.
I came to see if people were talking about the robotics and automation ETF cited in the article and if it would be a good idea to buy at this point, but seems that everyone is having philosophical conversation instead of a investing conversation :-p
The "problem" with that ETF is that there are few "pure play" intelligent robotic/automation companies in the world. There are manufacturing/farming equipment suppliers, consumer good robots doing fairly mundane tasks, chip makers who happen to make hardware that is good for AI.
nVidia is still a solid choice as VR has raised the visual fidelity demands for games and experiences, and even a 1080Ti can't render VR games at 90+FPS at max graphics. That's still a lot of demand nVidia has to meet.
Not sure if I'd want to chase Nvidia here, granted you could have said that 30% ago. I just don't see it as a sustained thing, because I believe FPGAs will eventually become the ML solution for giant corporations like Microsoft, Google, Amazon, IBM etc. Couple that with Tesla ditching Nvidia on the self driving things...I think Nvidia's run is in its late stages. It's still a great company, with a great product, but I think more than ML right now, it is riding a bitcoin train. It's like a pair trade.
Definitely an interesting read, if a bit pessimistic, nihilistic, and a bit Marxist (seize the means of production!). But ultimately the article offers no solutions and the author comes off to me as a doomsayer and luddite (https://en.wikipedia.org/wiki/Luddite). If the author really fears the current system as described, maybe he should return to the old system: become a subsistence farmer and work till you die.
It's conditions where most market participants believe future returns are inevitable that often lead to the biggest corrections. Eternal growth of software companies is definitely a great example of "this time it's different", surely one day it will be but the question for the investor today is how confidently they can answer this question.
Nice rant, but I think it would be stronger if it did more to consider the counter arguments.
I see it as:
* perhaps AI will someday rule the world -- in which case there's nothing more to discuss
* if humans do still have a role, then they will work with the machines to figure out a solution
* most moaning about so called under privileged people, such as Uber drivers, ignores that their standard of living is far superior to people of the past (e.g. 1800s farmer) and the millions living in deep poverty or slavery today.
To be clear, I think there are many social problems that need to be addressed.
So we still rent, which makes me feel incomplete. Like I'm kind of failing my duty of bringing the Canadian Dream to my family. But I gotta tell you, seeing 45% of my before tax income going into savings feels amazingly liberating. I stopped calling my savings a "down payment". It's now, "two college funds and 3 years of unemployment."
I feel in total control of my future this way, but I also feel like I'm feeding into the apocalypse paranoia. I won't actually need this unemployment cash will I?