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The Automation Myth

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21–30 of 54 posts

Re: The Automation Myth

#21
An underlying premise of productivity tracking is that we are able to consume more indefinitely. But in all likelihood there is a logistic curve to human material needs as well.

If we did have $30,000 more on average, as the article states, how would it be used? The case is obvious for the poor, but as you go to higher income brackets more and more of the possibilities fall into "luxury" and "status symbol".

Take, for example, the rise in the cost of college education. It's absolutely bizarre that in an era of low fiction information, tuition has actually gone up. That is, until you consider the credentialing as a form of signalling for limited jobs at the high end. The colleges aren't getting funded to expand the core mission of education, they're chasing each other to provide a premium experience that will attract people with a pedigree, who subsequently raise the status of that institution.

From that angle, automation's effect is to shuffle around the job landscape, not to directly increase productivity. More minds on higher value jobs - but eventually we start cutting into the highest value stuff we can think of. What automation doesn't do for us is expand our ability to be creative about what work is and what jobs could be done that aren't. That capability is directed through our social structures and "what people will pay for." Anyone good at conversation knows that you can have the same room and the same people and achieve wildly varying outcomes in discussion. You can have an economy that "shrinks" because less is measurably produced, yet people feel wealthier on average. Indeed, that's central to discussion of open source software and its commodifying effect.

In conclusion, no, we don't know. Social science is a fragile thing and the things that seemed obvious to one generation have a habit of being discarded by the next. Maybe the $9000 of income inequality is, in fact, the important number, even if we can fabricate another bigger number with linear extrapolation.

Re: The Automation Myth

#22
post #13

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, pr…

> (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.

Well, the owners would be the ones calling the shots to the intelligence systems.

I would gather that the country would look similar as Marshall Brain's Manna. Although, I'd take out the nicer parts about the "Australia Project".

Re: The Automation Myth

#23
post #21

An underlying premise of productivity tracking is that we are able to consume more indefinitely. But in all likelihood there is a logistic curve to human material needs as well. If we did have $30,000 more on average, as the article states, how would it be used? The case is obvious for the poor, but as you go to higher income brackets more and more of the possibilities fall into "luxury" and "status symbol". Take, fo…

Who cares if it's a luxury good as long as it's not a positional good? If a larger group of people take, I don't know, out-of-town vacations or buy cool-but-not-very-useful electronic gadgets or take classes in glassblowing or firebreathing, then that's economic activity which in turn provides jobs for hotel staff, factory workers, and craftspeople.

Your single example is a university education, which is at least arguably a positional good. But tons of luxury items aren't positional.

Re: The Automation Myth

#24
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…

He's talking about average rather than median precisely because his point isn't that "the economy grew, but the growth was captured by the wealthy," but rather "the economy hasn't grown much per capita." So you want to look at average, not median.

And he isn't saying that trends didn't continue, he's saying trends went one direction, but the policy discussion is as though the trends went in exactly the opposite direction, and that that's important.

Re: The Automation Myth

#25

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…

We've had very low inflation in the last 20 years or so. While certain numbers, especially short-term ones, are reported in nominal dollars instead of real ones (it's actually kind of hard to report on real dollars except in considerably retrospect), neither Yglesias nor anyone else in the broadest definition of economic literature is confused about the nominal/real distinction.

That said, productivity is not declining. The first derivative of productivity is declining -- that is, productivity is going up, but it's not going up as fast as it used to. Also, the population is going up. And that explains the (real, not nominal) stock market growth.

Re: The Automation Myth

#26
post #21

An underlying premise of productivity tracking is that we are able to consume more indefinitely. But in all likelihood there is a logistic curve to human material needs as well. If we did have $30,000 more on average, as the article states, how would it be used? The case is obvious for the poor, but as you go to higher income brackets more and more of the possibilities fall into "luxury" and "status symbol". Take, fo…

> in all likelihood there is a logistic curve to human material needs as well.

Material needs, probably yes. But not all needs are material needs.

> as you go to higher income brackets more and more of the possibilities fall into "luxury" and "status symbol".

Those are loaded words; one person's "luxury" is another person's preferred entertainment.

> It's absolutely bizarre that in an era of low fiction information, tuition has actually gone up. That is, until you consider the credentialing as a form of signalling for limited jobs at the high end.

That's probably a contributing factor, but it can't be the primary reason tuition has gone up so much, precisely because, as you say, there are only a limited number of jobs for which this signalling is useful.

The primary reason tuition has gone up so much is the fact that student loans and grants are so widely available. Colleges have simply raised their prices in order to consume all that extra money. Most of those loans and grants don't go to people who view a degree as a status symbol or a signalling device; they go to people who, rightly or wrongly, sincerely believe that a degree will give them a chance at a better life, and the wide availability of financial aid means that more people are likely to come to that conclusion. (IMO, we've pushed that lever too far; many of the people now using loans and grants to get degrees will not get enough of a better life to make it worth it to them. But that's a whole other discussion.)

Re: The Automation Myth

#27

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 wi…

It's all the same thing from a high enough level. If your manager can do the work of two managers because he has an inventory system, you don't suddenly manage twice as much inventory (because everything else about your business doesn't change at the same time), you fire every other manager.

But the point is that society as a whole is richer because you can get a good from a manufacturer to a customer with less overall spending, and so while an individual inventory manager may or may not be able to get another job -- and might legitimately suffer -- ultimately the business does grow, and there are more jobs created than destroyed (though the created jobs may not be inventory manager jobs, and the displaced inventory managers may or may not ultimately benefit).

Re: The Automation Myth

#28

    The power of Moore's Law — which states that the power of computer chips doubles
    roughly every two years — is such that the next five years' worth of digital 
    progress will involve bigger leaps in raw processor power than the previous 
    five years. It's at least possible that we really will have a massive leap 
    forward in productivity someday soon that starts substantially reducing the 
    amount of human labor needed to drive the economy forward.
I wonder how long it's going to take for word of Moore's Law's end to filter out into the wider public perception. Here, in the industry, we look at Intel's delays going to first 14nm and 10nm as clear signs that Moore's Law is sputtering out (as all exponential growth does, eventually). But out in the wider public, there seems to be a perception that chips will get "twice as good" every year into perpetuity. It's going to be interesting to see when (or if) people realize that their hardware isn't getting better at the same rate, year-over-year, that it used to.

Re: The Automation Myth

#29

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 wi…

It's all the same thing from a high enough level. If your manager can do the work of two managers because he has an inventory system, you don't suddenly manage twice as much inventory (because everything else about your business doesn't change at the same time), you fire every other manager. But the point is that society as a whole is richer because you can get a good from a manufacturer to a customer with less overa…

"and there are more jobs created than destroyed"

Why? Well, I know its tradition to say it, but there appears to be no causal relationship, just occasional coincidence. The mathematical model would be interesting to see.

Re: The Automation Myth

#30
post #26
post #21

An underlying premise of productivity tracking is that we are able to consume more indefinitely. But in all likelihood there is a logistic curve to human material needs as well. If we did have $30,000 more on average, as the article states, how would it be used? The case is obvious for the poor, but as you go to higher income brackets more and more of the possibilities fall into "luxury" and "status symbol". Take, fo…

> in all likelihood there is a logistic curve to human material needs as well. Material needs, probably yes. But not all needs are material needs. > as you go to higher income brackets more and more of the possibilities fall into "luxury" and "status symbol". Those are loaded words; one person's "luxury" is another person's preferred entertainment. > It's absolutely bizarre that in an era of low fiction information,…

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