The future is now, or maybe next week or next year... what do we do about it?

2014 August 13
by Daniel Lakeland

This video was posted to my FB news feed by a friend who works in technology. It gives voice to a lot of thoughts I've been having recently on the future of the economy:

Here are some things I've been thinking about related to this:

It's easy for me to imagine a coming world, in my lifetime, in which the vast majority of the frequently repeated tasks currently performed by humans are performed by computer and robot. This includes:

  • Transporting things (by truck, train, within warehouses, picking, packing, shipping, etc)
  • Selling things (from what Amazon already does, to cars, houses, industrial supplies...)
  • Making decisions about which things are needed where, or how much of a thing to make or acquire (much of store management, middle management).
  • Cleaning things (janitors, maids, etc)
  • Diagnosing illness and treating common illness (let's say 80 to 90% of general practice medicine)
  • Manufacturing things, even or especially customized things (3D printers, general purpose CAD/CAM, robotic garment construction)
  • Basically, anything you do more than 1 day a week...

In that context, first of all vast numbers of people will be unemployed, or looking for alternative employment, and second of all, the only alternative employment will be doing things that are "one off" where the cost of teaching a machine to do it doesn't pay off. So humans will need to find a series of relatively random things to do. Things which you won't typically repeat more than a few times a month or year.

Furthermore, it now becomes impossible to rely on working at a "regular job" to provide a regular level of income to feed, clothe, house, educate, medicate, and otherwise sustain the basic needs of a human being. So, all else equal, the average wages humans will earn will go steadily down.

At the same time, cost of producing things will go down too. A decent pair of glasses might be something you can 3D print the frame of, and online order the lenses for, assembling it all yourself in less time than it takes to get a pair from a current Lens Crafters, at a price of say $3.00 instead of $50 or $250 (for designer frames), and choosing from a vast vast selection of designs. So, the bottom might drop out of the price of everyday goods. Note that you can already buy cheap eyeglasses online for around $10 if you don't care about relatively high quality lens material and coatings.

The question is, what will be the value of the ratio \bar P/ \bar S, that is the average price (P) of a basket of important common goods that you consume in a typical year, divided by the average salary (S) in dollars per year. This is a dimensionless ratio and describes whether you are breaking even or not (>1 = losing, < 1 = winning). Both of these quantities are in theory going to be decreasing. But what matters is not just what is some new asymptotic value, 100 years from now or more, but also what are the dynamics of these changes during the next 10, 20, 50, or 100 years. It is entirely plausible that the bottom drops out of the market for labor quicker than it drops out of the market for goods for example. The result is potentially worse than the Great Depression during a period where nevertheless we have vast potential growth in real wealth through automation!

One problem area seems to be social and political technology. Conservative ideas about how the world should be: "work hard and get ahead" sort of thoughts could very well be highly counterproductive during these changes. The future may well be in "find stuff no-one has thought to automate yet, and do that for a little while until it isn't needed anymore", where "a little while" might be anywhere from an hour to a couple of months or a year but probably won't be ten or twenty years.

We already see some of this in things like "Etsy" where individuals produce one-off or short batches of custom goods, not that Etsy is by itself changing the economy dramatically, but even the world of people buying used books from libraries, marking them up by a few pennies, selling them on Amazon with shipping and handling fees, and pocketing a few dollars per book is an example of humans going out and doing one-off tasks (namely combing through boxes of books for likely candidates). Even that, with its regular nature is fairly automatable, and it only exists because we don't legally allow technology to scan and reproduce those books electronically (copyright anyone?).

One political advance I see being needed is relatively simple and efficient redistribution of wealth. We're already redistributing a lot of wealth through tax systems, welfare systems, etc. But we could set some baseline standard, and create the Universal Basic Income, or build it in to our taxation system (see my previous post on optimal taxation with redistribution). The idea being that we give everyone a simple cushion to help make the risky entrepreneurial aspect of doing a wide variety of non-repeated things more workable for people, and let people improve on their basic level of income through this entrepreneurial process, with people essentially running a vast number of small businesses utilizing the tools that a bot-based production system creates.

Like it or not, I just don't see 9-5 jobs having very much future beyond my generation, but we should probably embrace that idea and make it work for us as a society, not rebel against the inevitable. Doing so will require new social structures, new identities, new laws, and new ideas about work.

2 Responses leave one →
  1. Manoel Galdino permalink
    August 18, 2014

    I think they underestimate the need of bid data availability to replace humans with computer programs. How about other languages, institutions and cultures?

    Also, it's not clear right now when using correlations for predictions is enough and when we do need causation. Using Big Data correlations may be better to feed algorithms may be better than human beings on average, but what about the tails? What if errors are catastrophic with robots replacing humans beings? And what about feedback effects of this replacement on society and the robots themselves?

    I think there are too many unanswered questions to be so sure of the pace of the change. I'm more skeptical than the video. Interesting to watch, though.

  2. Daniel Lakeland
    August 18, 2014

    But there are lots of areas where there essentially is no catastrophic tail: travel agents, retail makeup and jewelry sales, dry cleaning services, coffee servers, loading and unloading containerized ships, book stores, tire mounting, stocking shelves.

    In certain areas there's the potential to do a lot of harm: prescribing drugs, driving large vehicles on the public roads, flying airplanes, trading stocks. But typically the potential for harm is clear ahead of time, and the design is different in such a way as to minimize harm. We already see Google automated cars having driven N miles with many fewer accidents per mile than typical human drivers.

    I think the point of the video is that many of these things are ALREADY HERE TODAY in some working form, but they aren't quite cheap enough and widely available enough to replace huge rafts of workers. But that doesn't necessarily have to take all that long. If you could buy a Google car today for $150k, with enough economy of scale, you might be able to buy one 7 year from now for $25k, with the equivalent non-automated car being say only $19k, and the difference in insurance costs paying for the difference in price in less than a few years. by that point, is there such a thing as a taxi driver anymore? Could taxis literally fall off the face of the earth in less than 10 years? I don't see any obvious reason why not. It depends on a lot of things of course. There is a lot of uncertainty in the pace of change, I agree, but that just means that really quick changes are not at all ruled out. And really quick changes are potentially very disruptive to a lot of people.

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