by John Galt
March 15, 2015 22:00 ET
The smartest individuals in American capitalism are hiding a secret in plain sight, yet nobody of consequence wishes to address them about the future they are planning.
One of the most amazing, and insightful beginnings to a book was written by Martin Ford in The Lights in the Tunnel:
What if technology progresses to the point where a substantial fraction of the jobs now performed by people are instead performed autonomously by machines or computers? Is that likely, or even possible? And if it is, what are the implications for our economy? What is this future?
The future could quite simply be the typical justified capitalist response:
The term in question is “technological unemployment” and believe it or not, the idea of imposing this term in the economic discussion did not start yesterday, but has been an ongoing result of a century of technological revolution, most recently accelerated in the past two decades as robotics and artificial intelligence have imposed the logic of economic efficiency on positions at auto assembly plants to the trading floors of America’s stock exchanges. The latest example was a shocker to the financial world as reported by CNBC on February 4, 2015:
Why is this relevant and how are upwards of 70,000,000 Americans possibly facing the unemployment lines in the near future? To understand the coming sociological firestorm, viewing this video from CGP Grey titled “Humans Need Not Apply” will provide a frightening perspective on the coming economic conundrum.
Within the video the figure of “45%” was bandied about as to how many positions currently employing humans to perform a job function could be automated or replaced with a robot. Think about this as the Bureau of Labor Statistics Table B-1. Employees on nonfarm payrolls by industry sector and selected industry detail report gives my readers a visualization of just what that means:
Using basic math and a calculation including farm payrolls plus illegals self-contracting, self-employed contractors, etc. reaching the 70 million figure is not difficult to imagine. Yet most Americans are blindly living their lives on 1980’s standards of education, cultural evolution, and governance while failing to realize that capitalism will not stop wringing efficiency out of our economic model; even if it means creating a societal crisis unseen of such a degree since the Mongols invaded Peking and Baghdad in the 13th Century. While I do not expect robots to invade, pillage, rape, and destroy humanity at this time, the economic equivalent is on our doorstep within many of our lifetimes.
The scarey part is that even those in the government who think they are prepared, are not even close to understanding what is approaching and the antiquated system of regulation and governance could exacerbate the economic problem rather than help to find a practical solution.
Fast forward to the data and stories recently released and start to consider the implications:
Are robots better than humans? Not if jobs are lost – Seattle P.I., March 15, 2015
Robots may make it harder for some Americans to get ahead – CNBC, March 13, 2015
Robot workers are now employed at Johnson Nursery – WCET-TV News, March 10, 2015
Ascent of the robots has begun, and it’s not good for humankind– The Australian, February 27, 2015
The Rise of Turing Robots Leads to a Fall in Wages – Newsweek, February 25, 2015
What Clever Robots Mean for Jobs – Wall Street Journal, February 24, 2015
Watch out, coders — a robot may take your job, too – Infoworld, February 19, 2015
Robots gaining on humans at faster rate – AP, February 14, 2015
Robots could cut labour costs in factories by 24%, study suggests – CTV News, February 10, 2015
How Uber’s Autonomous Cars Will Destroy 10 Million Jobs And Reshape The Economy by 2025 – CBS SF Bay Area January 27, 2015
Dalek-style robot security guard patrols in Silicon Valley, equipped with crime prevention gadgets – NY Daily News, November 21, 2014
Yes, security robots which at this time are “unarmed” but in the future, if not already, can be armed with tasers, stun grenades, tear gas, or lethal weapons of any desire. Thus the point of this article, and the stories relating to it which are not beginning to permeate the undercurrent of economic discussions and some parts of the mainstream media as the current era “buggywhip” is about to become an extinct portion of the greater global economy. That buggywhip is what will determine the course of not just economic discussions in the immediate future, but politics, morality, and philosophical discussion for the next twenty years.
You Are the Buggywhip
One graphic from the story linked above from The Australian sums it up for the immediate future:
As that story points out the highest risk portions for replacement via robotics, the other stories indicate a path that many have never considered. While the Uber story above Glenn Beck highlighted on his radio show last month inferred that the logistics industry may feel an impact via the automated taxi or carriage industry, the truth is that industrial replacement of human drivers via truck or rail has already begun. In the story linked above from the Wall Street Journal, the implications not highlighted in the graphic above are obvious:
“It’s gotten easier to substitute machines for many kinds of labor. We should be able to have a lot more wealth with less labor,” Mr. Brynjolfsson said. “But it could happen that there are people who want to work but can’t.”
In the Australian Outback, for example, mining giant Rio Tinto uses self-driving trucks and drills that need no human operators at iron ore mines. Automated trains will soon carry the ore to a port 300 miles away.
The Port of Los Angeles is installing equipment that could cut in half the number of longshoremen needed in a workplace already highly automated.
The fact that we may witness an almost totally autonomous logistics circuit means that human frailties which interfere with transportation needs could be replaced within a decade via self-driving semis, forklifts, and completely automated railroads which would massively increase efficiency and safety of operation while reducing cost.
Beyond the logistics front, the cry from the current administration and outdated financial television reporting services continue to stress the creation of “manufacturing jobs” in the so-called economic recovery. The Wall Street Journal article though highlighted an important point which everyone has missed except for those of us within the so-called ‘geek’ community which understand that implications of advancements in industrial robotics:
The newer machines are no longer the singular purpose robots which can weld a certain weld, or attach widget A to widget B; in fact many of the new systems have the ability to move up and down assembly lines multitasking and eliminating the necessity for human intervention during the manufacturing process be it an automobile or company which manufactures junk food for human consumption.
However, the changes are far more than just the former cherry assembly line jobs, longshoreman, etc. I posted the story about the robots working at the nursery with the video in the links above to alert my readers as to the coming change in agricultural and other so-called “low skilled” labor positions. The agricultural robotics revolution is well under way with machines capable of doing the work of dozens of farm hands in the very near future with machines that can plow fields 24/7, then sow them, fertilize, weed, treat for pests, and harvest entire crops at up to 80% lower labor costs than currently are incurred by corporate and family/small business farms. The innovations in this field alone will incur the wrath of millions of “migrant” workers, be they here legally or not, as the necessity for humans to work in agriculture becomes a luxury rather than a necessity, hence with over 10 million illegals in this nation, what will this society do to assimilate them as they are replaced by robotics on the farm, construction positions, and other low-skilled jobs.
In a paper prepared by Citigroup, “TECHNOLOGY AT WORK – The Future of Innovation and Employment” the authors postulated the following (bold/coloring by me for emphasis):
The upcoming digital age may cause more upheaval than previous technological revolutions as it is happening faster than before and is fundamentally changing the way we live and work. Technology in the 21st century is enabling the automation of tasks once thought quintessentially human: cognitive tasks involving subtle and non-routine judgment. Through big data, the digitisation of industries, the Internet of Things and industrial and autonomous robots, the world around us is changing rapidly as is the nature of work across occupations, industries and countries.
Although we can’t predict exactly which jobs will be affected, we do have a reasonably good idea about the type of tasks computers will be able to perform in the near future. Based on this, Carl Benedikt Frey and Michael Osborne predict that 47% of the US workforce is at high risk of automation as a result of these trends and low-income and low-skill jobs are now, for the first time, most likely to be automated.
Think about that figure. 47%. I am a tad bit more pessimistic about this new “industrial/digital revolution” because I believe religious and political interference will slow the ascent of mass automation along with robotics integration in the workforce. However, any nation which dares impair this implementation will fall so far behind economically that the ability to recover could be terminally damaged by the failure to innovate beyond the obvious profit motive and societal dislocation which occurs on either path. As the Citigroup paper states so damningly above, “this time it’s different.”
I can not predict what the future may hold for American society other than debates are being held on college campuses, economic discussion groups, and think tanks around the world highlighting the problem. Sadly, the politicians in every nation are failing to recognize that the evolution of the robots is now far outpacing their willingness or ability to change a 19th century political construct for a 21st century world. In the end, as unemployment creeps past 50% in America and within other industrialized nations the welfare, sloth, and general dissatisfaction of citizens could and probably will result in massive national upheaval, with governments being overthrown and societies destroyed from within.
The immediate economic impact which is already being seen not due to robotics and economic advances has begun with disinflation and deflation within many advanced nations around the world. While Japan and the European Union are already suffering from this problem, China and the United States have yet to feel the full impact, while the BRICS are suffering through the growing pains of evolution from a first world post-colonial society into the modern era of the 20th century. Unfortunately for the two remaining economic superpowers of the world, once per unit production costs and delivery price per unit final sales prices start to decline in a rapid fashion due to robotics and expanded automation, the societal upheaval of deflation then hyper-deflation will begin to take hold. The question then becomes simple to some, complicated however for the world as it exists now:
Is it the responsibility of the individual to adapt and create value for their labor to justify their standard of living, or is it government’s responsibility to maintain a minimum living standard for all of its citizens?
I fear this question will be answered in the next fifteen years and those of us who are pure capitalists are not going to like the answer.