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The Automation Myth

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Re: The Automation Myth

#11

Post by Terribledactyl »

This article was very confusing and difficult to read. There seems to be a conflation of workers being replaced 'robots' (Human teller -> ATM) and the process by which humans are simply more productive through augmentation (Manager with paper ledger -> Manager with inventory system).

There are some nasty potential error sources when comparing productivity per country over time because they use different currencies with their own value changes over time. (Probably related to productivity, but lots of other factors)

And my biggest issue was the Wells Fargo twitter chart. Average growth per year is an ok tool, but it's simplistic. It gets really messed up when you consider a 5 year time frame 98-03 and a 10 year 04-14. With the straight averaging method compounded growth/loss gets messed up.

Re: The Automation Myth

#12

Post by dang »

natmaster wrote: post #6

You're looking at the benefits to the common man of productivity. That stalling doesn't mean productivity has stalled, it just means it is offset by people like Obama stealing more and more of those benefits for himself and his crony friends.

> Obama stealing more and more of those benefits for himself and his crony friends.

Please let's keep political talking points off this site.

Re: The Automation Myth

#13

Post by debacle »

norea-armozel wrote: post #2

This is something that I've always found odd about how the actual value in the economy is tracked. Specifically, how the stock markets continue to rise despite the decline in productivity. If I was told as a shareholder or private owner of a company, that an hour of labor and inputs are making me mess than I was making 20 years ago I would be upset but that doesn't seem to be reflected in the volumes and prices of th…

> Why is this case? Is there something I'm missing?

Labor is a market. It's segmented geographically and by industry, but you can think of it as a single market.

You might be 500% percent as productive as a person with your same abilities was 20 years ago, but so is everyone else. So you're contributing five times as much to your employer's bottom line, but since he's in a demand-constrained market (post-scarcity, pretty much everyone is), he doesn't need 500% percent productivity.

So he hires fewer workers. So the demand for workers goes down. So your skills are worth less.

This trend is going to continue until you have (hyperbole) a single person hitting a single button periodically as the sole employed person in the market. What happens to everyone else? No one knows.

Re: The Automation Myth

#16

Post by electricblue »

lucisferre wrote: post #7
natmaster wrote: post #6

You're looking at the benefits to the common man of productivity. That stalling doesn't mean productivity has stalled, it just means it is offset by people like Obama stealing more and more of those benefits for himself and his crony friends.

I'm not really sure what this is supposed to mean.

'don't tread on me' 'live free or die' 'don't blame me i vote for the Bush dynasty' 'from my cold dead hands' 'gubmint cant create jerbs' etc

Re: The Automation Myth

#17

Post by gitah »

debacle wrote: post #8

The author espouses this economic knowledge on his twitter feed: "Never could have guessed from the name that the Communist Party of China wouldn't be all that interested in having a credible stock market." That's all you need to know about reading this article. This entire piece is relatively baseless. It's relatively trivial to say "If trends had continued in a straight line, things would be different, but they did…

Productivity statistics are lagging indicators. Looking at them to predict the future is incomplete and short sighted.

The concern about automation lately is due to the R&D roadmaps of up and coming technologies. This is a leading indicator. Whether or not these new technologies actually catch on should be the debate.

Re: The Automation Myth

#18

Post by devinhelton »

I think my explanation was better than Mr. Yglesias's, if I do say so myself: https://devinhelton.com/2013/01/20/economic-classes/

Automation has increased productivity in many areas. But there are multiple factors of production: labor, natural resources, zoned residential land near jobs. Plus there are other limits to production, such as monopolies and regulation. So if just automation improves, production only increases and prices only fall to a point, until natural resources, marketing, and monopoly profits make up the bulk of the cost. As a 22-year-old entering the job market, all you have is your labor to trade, but you need access to natural resources and constrained goods like housing. Since automation makes your labor less valuable, you actually need to work just as many hours or more to get the same purchasing power. Worse, you end up in a zero-sum game of marketing and sales, where everyone works just to get ahead of everyone else.

Re: The Automation Myth

#19

Post by devinhelton »

norea-armozel wrote: post #2

This is something that I've always found odd about how the actual value in the economy is tracked. Specifically, how the stock markets continue to rise despite the decline in productivity. If I was told as a shareholder or private owner of a company, that an hour of labor and inputs are making me mess than I was making 20 years ago I would be upset but that doesn't seem to be reflected in the volumes and prices of th…

Specifically, how the stock markets continue to rise despite the decline in productivity.

The stock market rises in nominal dollars, which is meaningless, since that is just a result of monetary inflation. Corporate profits, and personal income invested in the stock market will rise with total nominal national income. In economics terms, nominal national income growth is proportional to the growth in the money supply (M*V=Y). So the growth in the stock market is just a result of the growth of the money supply. It has zippo to do with any real thing like productivity. That is why it is always silly when newscasters report the stock market changes every day, and view it as good when it rises, and bad when it falls. They are essentially cheering on monetary dilution. (But inflation always feels good in the short term, so they aren't entirely wrong to cheer it on, it feels good when the stock market rises, even if the same underlying mechanic is also pushing up your milk price).

Re: The Automation Myth

#20

Post by norea-armozel »

devinhelton wrote: post #19
norea-armozel wrote: post #2

This is something that I've always found odd about how the actual value in the economy is tracked. Specifically, how the stock markets continue to rise despite the decline in productivity. If I was told as a shareholder or private owner of a company, that an hour of labor and inputs are making me mess than I was making 20 years ago I would be upset but that doesn't seem to be reflected in the volumes and prices of th…

Specifically, how the stock markets continue to rise despite the decline in productivity. The stock market rises in nominal dollars, which is meaningless, since that is just a result of monetary inflation. Corporate profits, and personal income invested in the stock market will rise with total nominal national income. In economics terms, nominal national income growth is proportional to the growth in the money supply…

Thanks for clearing that up. It's one area where I can't seem to get a solid grasp on it (I know micro-economics and some macro-economics, but those don't seem to be helpful in understanding financing imo). So basically the stocks will rise regardless of productivity. But then where does productivity come into play? Maintaining the real cost of production below/at a certain threshold regardless of the nominal cost?
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