Economic Problems in Podcast: Abusing Dolores

 
Dangun
 
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Dangun
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14 December 2016 19:49
 

In an otherwise interesting podcast, Sam casually posited that robotics/technology has caused wealth inequality, but there is very little economic evidence for this claim.

There is more evidence for other factors being a cause of wealth inequality, such as globalization, tax policy (see Piketty), etc…
Moreover, there is very obvious evidence suggesting that robotics/technology is a poor explanation of wealth inequality. A couple of anecdotal examples of the failure of technology as an explanation of wealth inequality would be that: for most of the last century, inequality in the US declined despite dramatic technological progress; or a comparison of developed economies shows huge differences in wealth inequality despite identical levels of technology.

I thought that Sam looked a little outside his ambit there.

 
TroliusMaximus
 
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TroliusMaximus
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15 December 2016 04:24
 

Machines makes stuff faster and cheaper than fleshy, unionised hands do > the rich cut costs under the euphemistic guise of “productivity”  > this comes at the expense of workers > it further enriches the rich > the socio-economic gap widens.

Ipso facto.

 
Dangun
 
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Dangun
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15 December 2016 05:06
 
TroliusMaximus - 15 December 2016 04:24 AM

Machines makes stuff faster and cheaper than fleshy, unionised hands do > the rich cut costs under the euphemistic guise of “productivity”  > this comes at the expense of workers > it further enriches the rich > the socio-economic gap widens.

Its a beguiling anecdote. But it misses the bigger picture, both historically and in the present.

First the history. Technology has been replacing labor for centuries. But whether it was the plow replacing farm labor, steam engines of the industrial revolution replacing factory workers, excavators replacing workers with shovels, or email replacing the postman - there is no evidence for structurally higher unemployment now compared to 100 years ago, or 50 years ago or 1 year ago.

Secondly, in the present… While technology may replace the supply some forms of labor, it creates demands for others. The robotic welder on the car assembly line replaces the welder, but needs a designer, someone to install it, maintain it, power it, clean it etc.

Lastly, you might want to consider that the person trying to convince you that its not their fault that technology is taking the jobs away, may be wanting to distract you from the job-destroying effects of tax policy, under-investment in education, globalization etc. etc.

 
LadyJane
 
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LadyJane
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15 December 2016 06:18
 

Traditionally, with the advance of technology, the idea has been that workers would work shorter work weeks while maintaining the benefits of fair wages and appropriate health and safety standards.  Instead, rather than a hundred workers working thirty hours per week, fifty workers work a backbreaking sixty hours per week while the boss man capitalist pigdog rakes in all the dough.  Ptew!

 
 
gadlaw
 
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gadlaw
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15 December 2016 07:30
 

I’ve heard that the increase in automation is going to become a growing problem from a number of places. From the Washington Post - “The “automation bomb” could destroy 45 percent of the work activities currently performed in the United States, representing about $2 trillion in annual wages, according to a study last year by the consulting firm McKinsey & Co. We’ve seen only the beginning of this change, they warned. Currently, only 5 percent of occupations can be entirely automated, but 60 percent of occupations could soon see machines doing 30 percent or more of the work.”  https://www.washingtonpost.com/opinions/the-brave-new-world-of-robots-and-lost-jobs/2016/08/11/e66a4914-5fff-11e6-af8e-54aa2e849447_story.html

 
 
Jan_CAN
 
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Jan_CAN
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15 December 2016 09:54
 
Dangun - 15 December 2016 05:06 AM
TroliusMaximus - 15 December 2016 04:24 AM

Machines makes stuff faster and cheaper than fleshy, unionised hands do > the rich cut costs under the euphemistic guise of “productivity”  > this comes at the expense of workers > it further enriches the rich > the socio-economic gap widens.

Its a beguiling anecdote. But it misses the bigger picture, both historically and in the present.

First the history. Technology has been replacing labor for centuries. But whether it was the plow replacing farm labor, steam engines of the industrial revolution replacing factory workers, excavators replacing workers with shovels, or email replacing the postman - there is no evidence for structurally higher unemployment now compared to 100 years ago, or 50 years ago or 1 year ago.

Secondly, in the present… While technology may replace the supply some forms of labor, it creates demands for others. The robotic welder on the car assembly line replaces the welder, but needs a designer, someone to install it, maintain it, power it, clean it etc.

Lastly, you might want to consider that the person trying to convince you that its not their fault that technology is taking the jobs away, may be wanting to distract you from the job-destroying effects of tax policy, under-investment in education, globalization etc. etc.

This does not take into account that not all workers will be able to become designers, etc.  The number of jobs available for the ‘working class’, who may not be able to complete advanced education or training, has decreased.  Over the last twenty years or so, many of the working class jobs remaining have been turned into part-time/contract jobs at low pay without benefits or security.  This has increased the number of ‘working poor’ and lowered the incomes of the lower middle class.  This has an effect on the overall economy as these people become lower consumers, etc.

 
 
Incident exigence
 
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Incident exigence
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25 January 2017 12:11
 
Jan_CAN - 15 December 2016 09:54 AM
Dangun - 15 December 2016 05:06 AM
TroliusMaximus - 15 December 2016 04:24 AM

Machines makes stuff faster and cheaper than fleshy, unionised hands do > the rich cut costs under the euphemistic guise of “productivity”  > this comes at the expense of workers > it further enriches the rich > the socio-economic gap widens.

Its a beguiling anecdote. But it misses the bigger picture, both historically and in the present.

First the history. Technology has been replacing labor for centuries. But whether it was the plow replacing farm labor, steam engines of the industrial revolution replacing factory workers, excavators replacing workers with shovels, or email replacing the postman - there is no evidence for structurally higher unemployment now compared to 100 years ago, or 50 years ago or 1 year ago.

Secondly, in the present… While technology may replace the supply some forms of labor, it creates demands for others. The robotic welder on the car assembly line replaces the welder, but needs a designer, someone to install it, maintain it, power it, clean it etc.

Lastly, you might want to consider that the person trying to convince you that its not their fault that technology is taking the jobs away, may be wanting to distract you from the job-destroying effects of tax policy, under-investment in education, globalization etc. etc.

This does not take into account that not all workers will be able to become designers, etc.  The number of jobs available for the ‘working class’, who may not be able to complete advanced education or training, has decreased.  Over the last twenty years or so, many of the working class jobs remaining have been turned into part-time/contract jobs at low pay without benefits or security.  This has increased the number of ‘working poor’ and lowered the incomes of the lower middle class.  This has an effect on the overall economy as these people become lower consumers, etc.

Sam talks about this in a couple of cases, but my favourite summary is by CGP Grey (Humans need not apply) on Youtube. It stands that if you own the machines, you’re set. If you’re replaced by the machines, you’re wishing you owned them.

 
Twissel
 
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Twissel
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25 January 2017 12:24
 

Technology has a strong “ratcheting-up” effect, wealth inequality a weak one.

Yes, in many countries inequality has risen dramatically, but this can with rather simple laws and taxes be reversed.
What is almost never reversed is technological progress.

And wile a rising tide of economic growth doesn’t raise all boats, technological progress sooner or later does: in most developed countries, even the poorest live safer and healthier than kings of the past.

So we should not get too hung up about wealth inequalities: automation will lead to massive loss of jobs, (at least 1million truckers in the next decade will be made obsolete by self-driving trucks), which will create more social and political pressure for more equality.