18 June 2012

Heartiste’s Questions

Regarding the future:
1. How is the present automation and productivity conundrum qualitatively different than ones from the past (for example, the classic case of the auto replacing the horse and carriage)? If you do not believe it is qualitatively different, explain how we escape the “zero marginal productivity” worker trap, especially in an era when human capital is shrinking due to a combination of dysgenic birth rate differentials and mass migration of unskilled poor? Note: “Humans are fungible” is not an acceptable cop-out.

The present automation and productivity conundrum is not qualitatively different from the past. The zero marginal productivity trap is escaped by the fact the fact that human demand always exceeds supply, broadly speaking. As such, there will always be demand for more…something, anything, and everything.

Of course, the broader assumption—that automation and productivity will continue apace without interruption—is wrong. In Neurodiversity, the author noted that dysgenics and/or small populations lead to technological stagnation and regression. Furthermore, the history of progress is not exactly linear. Thus, we may be in for a stretch of devolution for a while, as “society” becomes too stupid to maintain its current level of wealth. It’s happened before (that’s why it was called “The Dark Ages”). Let’s not be so arrogant to suppose it won’t happen again.

On a more optimistic note, it may be the case that technology becomes more idiot friendly, which enables the less intelligent to capitalize on intelligence without actually possessing any. Simplified UIs should do the trick, they it will be a while before they are common. I’ve written on this before.

2. If, say, most of the profits go to the top 10% in society, while the bottom 90% are unemployed or marginally employed, how is it exactly that those top 10% will be able to extract profits from a customer base that doesn’t have the income stream to afford more than the basic necessities?

It helps to keep in mind that money is dynamic. It is a medium of exchange, after all. Income is usually spent, which is how the wealthy extract profits from it. The poor earn money then turn around and spend it. Rinse and repeat. The key is to differentiate between wealth and income. Income is what you earn; wealth is what you keep. The wealthy will keep, in a sense, the labor of the poor (beyond that which is necessary for survival, of course). Since poor people don’t want to starve to death, they will continue to work as long as they can provide for their needs. And the rich will exploit them in the meantime. Assuming, of course, that the poor don’t get pissed off and kill the wealthy and the elite, as has been done in the past.


  1. I'd say that the current situation is very qualitatively different from the past, and the reason is General Computing. In the past, job-obsoleting inventions came one by one: the auto replaced the horse and carriage, but it took something entirely different to replace the telegraph.

    Nowadays, on the other hand, it's all computers. Google's self-driving cars? Cars hooked up to computers. Smartphones? Tiny little computers. Even 3D printers are either computers or hardware which gets attached to computers.

    When it comes to automation of labor, I think we've only seen the beginning. I really think that a hundred years from now, we're going to have a world where the numbers are inverted, where 10% employment is considered high and 90% unemployment is considered low. The only exception (god forbid it) would be a dystopia where the government forces useless make-work on everyone.

  2. What's crazy is every year production goes way way up but wages never increase.

  3. @Xamuel- I think I've written before on how government policies have shited the time-preference of tech development forward, diplacing workers. Technology simply expands man's potential productivity; it does not generally replace it.

    Regarding self-driving cars, I've noted before how government interference has made this development necessary. Suffice it to say that this particular development is only necessary because the government is too paternalistic to allow people to to act autonomously.

    Your predicition of 10% employment being high is predicted on a lot of assumptions, like the absence of a widescale destruction of infrastructure, or a discontinuation of the current dysgenic social trends. You also assume that employing human beings (instead of, say, machines/robots) won't become a status symbol for wealth. There are other assumptions as well, but most of them are reated to the more general assumption that humans will never act self-destructively in the next one hundred years, which seems incredibly optimistic to me. I guess we shall see.

  4. @Randy- it's not so crazy when you consider that most production gains are due to automation and not human capital imporovement.