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Richard Baldwin on the “inhumanely fast” next phase of globalization

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Re: Richard Baldwin on the “inhumanely fast” next phase of globalization

#51

Earlier quoted context omitted.

Automation has been in use in the auto industry for decades, and yet it employs much more people than it did before automation was widespread.

Car sales in total have increased though. Due to the population of the world and adoption of automobiles in the rest of the world as well. I don't find any compelling arguments to disprove what a lot of seeming educated and intelligent researchers and social critics are saying regarding the coming disruption of the labor market.

The claim is that automation destroys jobs. This has been historically false, despite claims made each time that “this time it will be different”.

Among the most viable of all economic delusions is the belief that machines on net balance create unemployment. Let us turn to Adam Smith’s Wealth of Nations. The first chapter [...] is called “Of the division of labor,” and on the second page of this first chapter the author tells us that a workman unacquainted with the use of machinery employed in pin-making “could scarce make one pin a day, and certainly not twenty,” but with the use of this machinery he can make 4,800 pins a day. In the pin-making industry there was already, if machines merely throw men out of jobs, 99.98 percent unemployment. Arkwright invented his cotton-spinning machinery in 1760. At the time it was estimated that there were in England 5,200 spinners using spinning wheels, and 2,700 weavers - in all 7,900 persons engaged in the production of cotton textiles. The introduction of Arkwright’s invention was opposed on the ground that it threatened the livelihood of the workers, and the opposition had to be put down by force. Yet in 1787 [...] the number of persons actually involved in the spinning and weaving of cotton had risen from 7,900 to 320,000, an increase of 4,400 percent. [...] Technophobes will assert: “That may have been all very well in the past, but today conditions are fundamentally different; and now we simply cannot afford to develop any more labor-saving machines.” If it were indeed true that the introduction of labor-saving machinery is a cause of constantly mounting unemployment and misery, the logical conclusion to be drawn would be revolutionary, not only in the technical field but for our whole concept of civilization. Not only should we have to regard all further technical progress as a calamity; we should have to regard all past technical progress with equal horror. There is also an absolute sense in which machines may be said to have enormously increased the number of jobs. The population of the world today is four times as great as in the middle of the 18th century, before the Industrial Revolution had got well under way. Machines may be said to have given birth to this increased population; for without the machines, the world would not have been able to support it. Three out of every four of us, therefore, may be said to owe not only our jobs but our very lives to the machines.

[From “Economics in One Lesson”]

Re: Richard Baldwin on the “inhumanely fast” next phase of globalization

#52

Earlier quoted context omitted.

It seems like the people studying this stuff disagree with your opinion: https://www.brookings.edu/blog/the-avenue/2019/02/25/automat...

Automation has been in use in the auto industry for decades, and yet it employs much more people than it did before automation was widespread.

How much of that can be accounted for by increased population and demand? Has the number of people employed scaled linearly with production and demand?

Re: Richard Baldwin on the “inhumanely fast” next phase of globalization

#53
post #45
post #2

I remember reading Average is Over and A Fairwell to Alms just when I first started working. They convinced me that labour power was going to decline precipitously. I stared saving 60+% of everything I made and putting it into index funds. Anyone making a good salary should attempt the same. Much of white collar work is extremely amenable to automation, much more than even truck driving: https://en.m.wikipedia.org/wi…

> I think it is a really good idea to start accumulating capital, even at today’s valuations. This is an interesting take. The alternative to individually trying to each become capitalists, is grouping together and making sure we all have access to the proceeds of automation.

Becoming a capitalist has a long history of being successful. The other way not as much.

Re: Richard Baldwin on the “inhumanely fast” next phase of globalization

#54
post #53
post #45

Earlier quoted context omitted.

> I think it is a really good idea to start accumulating capital, even at today’s valuations. This is an interesting take. The alternative to individually trying to each become capitalists, is grouping together and making sure we all have access to the proceeds of automation.

Becoming a capitalist has a long history of being successful. The other way not as much.

A couple thousand years is a blink of an eye for a species.

Re: Richard Baldwin on the “inhumanely fast” next phase of globalization

#55

Earlier quoted context omitted.

Automation has been in use in the auto industry for decades, and yet it employs much more people than it did before automation was widespread.

Car sales in total have increased though. Due to the population of the world and adoption of automobiles in the rest of the world as well. I don't find any compelling arguments to disprove what a lot of seeming educated and intelligent researchers and social critics are saying regarding the coming disruption of the labor market.

>Car sales in total have increased though.

_because_ of automation lowering car prices among other causes.

Re: Richard Baldwin on the “inhumanely fast” next phase of globalization

#56
post #52

Earlier quoted context omitted.

Automation has been in use in the auto industry for decades, and yet it employs much more people than it did before automation was widespread.

How much of that can be accounted for by increased population and demand? Has the number of people employed scaled linearly with production and demand?

Why would it have too? The claim is simply that there are more people employed now in the industry than there were before automation. That these workers now are able to be massively more productive makes the situation even better.

Contrast this with the claim that automation leads to massive unemployment.

Re: Richard Baldwin on the “inhumanely fast” next phase of globalization

#58
post #43

Earlier quoted context omitted.

Being a consultant with clients in a wide range of industries I concur. Most of the employees I come into contact with have jobs that could be automated with a few days or weeks of programmer effort. They are one successful software project from losing their jobs. Lucky for them their companies are terrible at shipping software. Conversely, automating the work of a plumber would require a massive investment in AI and…

"Most of the employees I come into contact with have jobs that could be automated with a few days or weeks of programmer effort." After looking at some of the business processes at my company I am not so sure about this anymore. There are a lot of jobs that are pretty mundane but when you look a little closer most of the processes have a lot of exceptions where the employee makes decisions that don't follow the proce…

The key bit that companies that shift hard to software seem to figure out: How many of those corner cases are actually worth bothering with? Is the net loss associated with a corner case greater than the significant gain of dropping an FTE or FTEs? Sometimes it is (safety related things, etc.), but many times, it's not...just because you CAN handle something doesn't mean it's worth it do so.

Re: Richard Baldwin on the “inhumanely fast” next phase of globalization

#59

> Q: Several studies show technology will disrupt jobs, but they also argue that almost as many jobs will be created. > A: There’s a mismatch of job displacement and job creation. Job displacement is being driven at the speed of digital technology, which is explosive at this moment. And displacement is the business model for the AI geniuses and all those companies. All of them are hoping to get rich by displacing wor…

Employment rate is fairly useless unless you really have a burning desire to know how many people are participating in work. Instead look towards bankruptcy rates, savings rates, etc for a better measure of how our economy is serving it's constituents.

By those sorts of measures we aren't doing great over the last 30 years.

Re: Richard Baldwin on the “inhumanely fast” next phase of globalization

#60
post #58
post #43

Earlier quoted context omitted.

"Most of the employees I come into contact with have jobs that could be automated with a few days or weeks of programmer effort." After looking at some of the business processes at my company I am not so sure about this anymore. There are a lot of jobs that are pretty mundane but when you look a little closer most of the processes have a lot of exceptions where the employee makes decisions that don't follow the proce…

The key bit that companies that shift hard to software seem to figure out: How many of those corner cases are actually worth bothering with? Is the net loss associated with a corner case greater than the significant gain of dropping an FTE or FTEs? Sometimes it is (safety related things, etc.), but many times, it's not...just because you CAN handle something doesn't mean it's worth it do so.

It’s something the organization needs to decide. If you automate a process it means you are setting it in stone and lose flexibility . Maybe that’s a good thing or not but something people need to be aware of and accept.
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