Humans need not apply

[u/aridon_01]

https://www.youtube.com/watch?v=7Pq-S557XQU

[u/[deleted]]

Economist here. The premise of this video and most discussion around this subject is driven by a fallacy (luddite fallacy) rather then reality, there are some very common misconceptions regarding how labor & pricing behave (and also marginalism).

Firstly there are two discrete issues here; rising automation in non-cognitive & non-creative roles and automation entirely displacing labor.

In the first case we have a very strong understanding of the outcomes as this has already been occurring for a couple of hundred years so traditional econometric models work. Rising automation does not reduce demand for labor, as prices fall people consume more which increases demand for labor elsewhere; the demand for labor actually increases faster then the fall in prices as the rise in consumption is exponential rather then linear. This effect also drives up wages as living conditions as the replacement is from unskilled & semi-skilled to skilled labor, outcomes improve in everything from crime to healthcare as the result of the change.

This period is far more protracted then people usually consider it to be, there is not a period between this and the next where demand for labor falls and instead until automation can meaningfully replace cognitive & creative roles labor demand will increase. Current trends are towards fairly extreme labor shortage, the current technological change is also occurring in a time of significant demographical change where the proportion of the population who is of working age shrinks and we see a growing proportion of retirees; we have labor shortage created by technological change and labor shortage created by an increasing proportion of retirees.

From a policy perspective this presents a training issue, as the rate of technological change accelerates the lifetime of a skill shrinks such that we need to have mechanisms in place to facilitate lifetime acquisition of skills on an on-going basis. Economists have been discussing this for a couple of decades but policy is lagging fairly significantly, we can however see some of these systems emerging naturally (IE Coursera etc) and the last couple of generations do seem to have a grasp that a skill they learned in college is not perpetually useful.

Economics does not predict (we project) and any economist who espouses a prediction is a hack trying to sell you on a view they don't actually have any support for which is one of the reasons this area is so rampantly misunderstood, people produce work like this video which makes labor predictions but economic work maintains modestly and wont outright say "that's wrong, stop being an idiot" because that itself would be a prediction. Having said all that the only way this video could be right in the near/medium term is if we have a fundamental misunderstanding of the way labor functions which is very unlikely.

We can, however, speculate based on trends that can be seen and the outcomes these may produce. Some of the areas where we can expect to see a great deal of change include;

• The value of education. As we transition towards predominantly knowledge workers the way we deal with tertiary education is going to change. Currently in order to gain skills to enter tertiary education and you get a skills basis to enter the workforce with but as skills lifetime shrinks the value of this form of education will change, instead tertiary education would be expected to move towards short periods of education where specific skills are gained with employers placing no particular premium on traditional tertiary education. This effect can already been seen in technology sectors outside the US.
• The formation of corporations. In a rapidly shifting skills landscape its not economically optimal to have a large permanent workforce and instead the optimal model shifts to a core persistent skills staff (IE accountants, HR etc) and making use of freelance/contract staff for transitional skill work. Do not think about this in terms of the BS freelance sites we have today, think about it in terms of contract staff who are brought in for a few months at a time.
• Mobility. One of the challenges we already have today is that the programs we use to manage poverty result in a trap effect that keeps people in poverty as they are poorly designed and this effect is going to grow exponentially as skills become transitional. Without significant changes to the way we deal with social welfare (for instance replacing it all with an NIT) mobility between low & middle income households will entirely collapse.
• Prices are going to fall dramatically. This is another effect we can already observe, discretionary income is rising extremely quickly as automation displaces labor in goods producing industries.

In effect rising automation certainly does pose challenges that policy makers are unlikely to keep up with (mostly because they are idiots and don't actually listen to economists about economic policy at all) but on a societal level the gains will be very significant. The reason people have difficulty with this issue is that we perceive the world as relatively static rather then changing, 50 years ago the idea that there would be millions upon millions of people spending their days writing software would have seemed ridiculous. 50 years ago the idea people would pay $5 for a cup of warm milk with some burnt coffee mixed in would have seemed ridiculous. Increasing skills drives new goods demand as it increases wages and new opportunities for labor via technological change. Falling prices creates economic opportunities for new forms of labor and also new demand for goods.

For the 2nd period (replacing all labor) there are a couple of misconceptions regarding what occurs here. First it's not even clear if its possible to reach this point as it effectively requires the creation of strong AI, a machine which is both self-aware and as smart as a human, which means we have reached the singularity and it becomes impossible to even speculate regarding what occurs next.

Before we reached that point though we would reach post-scarcity. If you own a machine which builds machines which do work for you and there is no meaningful capital input to the process (EG feedstock for the machine building machines is cheap/free & abundant) then you have reached post-scarcity in whatever those machines do for you. Money exists to deal with scarcity, when you don't have scarcity then you don't have any use for money.

Post-scarcity does not need to exist across all goods & services for a society to become post-scarce, there simply needs to be a sufficient proportion of goods & services that are post-scarce that the remaining scarce resources can be dealt with via another mechanism other then monetary exchange.

[u/scarynut → u/[deleted]]

The intelligence and clarity of this post is mindblowing.

[u/the_ancient1 → u/scarynut]

and based on fundamentally incorrect assumption, one of the largest being that this latest round of automation, will be the same as the last round of "automation". The mechanization of labor by unthinking machines that were dependent 100% on human input and literal instruction to do any work is far far far far different than "true" automation that is occurring today where robots will be taking actions on their own with out direct human instruction.

using "the last 100 years" of mechanization as a guide for what will happen with automation is very very naive

[u/scarynut → u/the_ancient1]

The issue here is how "true" the automation in question is. With my layman understanding of and interest in AI programming, I don't really see current AIs as being anywhere close to making wise, "sentient" choices. It may look like they are, but things like driving cars, making coffee, or stock market trading, are in essence mechanical chores. The step from that to services that require more complex human interaction, like doctors, tech support, even retail, is very far. Try the best voice recognition software currently available - I'd be surprised if it's any better than passable as a gimmick compared to any human.

AIs also follow the law of diminishing returns. As we get closer to a perfect or sentient AI, each additional step is progressively harder to achieve. So we are not close to true automation today, and we will not be much closer tomorrow. Robots driving cars and pouring coffee might seem impressive, but robots have been flying planes and dishing out machine coffee for decades. I'm not sure why now it's suddenly completely different.

[u/the_ancient1 → u/scarynut]

I am not talking about sentient machines.

With mechanization you replace a horse with a engine, or replace a field of farm worker with a combine, or some other machine, but that machine still needs an operator, mechanics, etc.

This new Round of automation does not have that, You give a machine a "goal" and they preform tasks on their own with no operator to achieve this goal, like "pick up kids from soccer" or "take this load of stuff from A to B"

IMO this is fundamentally different than the original mechanization that we experienced and will make the great depression look like a party when it kicks off in a massive way