Robots and the economy

Why a booming economy feels flat

From tha rticle:And:Note this sentence: "Some experts worry that wage stagnation may prove more permanent this time, because of an increasingly global market for labor." Now imagine robots moving into the picture and taking millions more jobs in the American economy.

Also note this sentence: "Normally, as employees are able to produce more in each hour of work, the result is greater cash flow that can be divvied up between workers and owners or investors." That is not happening this time. In fact, wages are retracting, not expanding. This is because of the Concentration of wealth mentioned in Robotic Freedom.

The statement: “Some expert’s worry that wage stagnation may prove more permanent this time, because of an increasingly global market for labor.”, also shows the effects of over-population. Your favorite “supply and demand” predicts as more people compete for jobs, wages go down. In a town growing into city, property values also rise. So overpopulation destroys quality of life (QL) and reduces pleasure to passive mind-atrophying entertainment (movies, TV, play, etc.). So over-population and automation seem to be squeezing everyone’s QL. Except the financially advantaged.
"So over-population and automation seem to be squeezing everyone’s QL."

Your analysis falls flat when looking at the effect of a global market on those developing countries, and not a western centric view.

We in the West worried about a single quarter with lower wage growth. We still have a huge middle class, and what were once luxuries are available to almost everyone.

Look at it from India and China's perspective: hundreds of millions of people leaving poverty.

This is a very good thing.


Wasn't this story already posted a few days ago?

Is Brain just managing a group of interns that post independently ;-P ?
"‘Normally, as employees are able to produce more in each hour of work, the result is greater cash flow that can be divvied up between workers and owners or investors." That is not happening this time"

Actually, that is exactly what is happening... in a quote a few lines above, "most of the gains in the economy have gone into profits rather than wages."

This means high stock values, or the company will invest more, or a higher dividend will be paid, or even kept in a bank where the investment bankers invest it. All amount to the same thing: the saved money gets recycled back into the economy.

In this case, the workers don't get increased wages. Rather, more people get work through new or bigger initiatives in response to this increased investment.

The put it plainly: just because workers don't directly get the cash, doesn't mean society, and even blue-collar workers, are without benefit.
Dear Ivan,
If overpopulation and automation are NOT squeezing your own country (and others) into a low quality of life (QL), then why does your poverty level keep rising each year? Reported by your own government:


Measures of poverty are difficult. Read this and this.

This is also good.

Part of the problem is that in the 60s a basket of “necessities” was measured for different family sizes. They would find that food, for example, required N% of your income.

All those values are scaled for inflation, and the result is a level of income below which you are considered poor.

This is very misleading, as the minimum requirements for living have changed. Generally, rents are slightly higher while food is much cheaper. Health care is more expensive, but the number of diseases cheaply treatable or treatable period has drastically grown.

What is needed is a better measure that accurately portrays the minimum income level needed to live. No car, no microwave, no PSP, basic health care, etc.

The problem is that quality of life could somehow be used as a measurement, while this is rather arbitrary. People should be able to purchase basic health care, but what is basic? Also, what about medical costs which are preventable by free exercise or cheap maintenance, like flossing? If you need to pay for procedures without which your life is in danger, but for ailments which are preventable with greater responsibility, should such procedures be incorporated into this “minimum level”?

On one extreme, you have the average middle class family’s life style defined as “necessary”. On the other, you have the incredibly low income needed to not starve or die of exposure.

My point is that you can't just boil it down to "there are more poor people". This is especially untrue given the decades long trend of average income rising.

Finally, I want to also point out that other measurements show an increase in poverty only when there is an increase in "inequality". For instance, if the number of millionaires were to increase, but the number of those making minimum wage were to remain fixed, then those measures would show increased poverty.

That doesn't make sense. We should desire growth, preferring across the board growth, rather than merely reducing differences in income.
This is an excellent and very relevant book.
This is a description of exactly how poverty is measured in America.

Actually these changes to the CPI were added in the mid-90s and many argue that they have uderstated true inflation and thus poverty may also be further understated.

On the other hand some one in poverty in the U.S. would likely be considered middle-class in many developing country.

A fundamental weakness of trans-national economic comparisons is that methdologies and standards vary so widely to the point that such comparisons are often quite spurious.
From here: Poverty, by definition

"there is no generally accepted standard of adequacy for essentials of living except food."

I'd like to see a budget breakdown for AnyTown USA. Minimum acceptable costs for Food, Housing, Education, Clothing, Health Care, Transportation, Child Care, etc.

Education should include adult education. You can easily do the math for 22 working days of 8 hours daily earning $5.15/hr, yielding $906.40.

That's just slightly lower than the single person under 65 poverty threshold or $9,827/yr.

The estimate should first take into account just net income, then add in local, state, and federal programs.

I find it hard to believe you can't account for what it takes to live, at a minimum. That should be the definition of poverty, nothing like a loose notion of quality of life.

Health care is tricky: if you can't cure your prostate cancer when you're 50, are you poor? Who knows?

Relevant here: is Brain's $25K figure too high? I would imagine, adjusting for inflation, everything on the list of 'necessities' would decrease in price because of mass automation.

That is a related to a discussion here and here. If productivity continues rise at a high pace, will western nations be able to easily afford a welfare state without the current high tax rates? What is the effect of this change on the mentality of those on welfare? In Star Trek, do federation provided replicators cause a race towards mediocrity. The comments in the first of the two links mentions Diamond Age, which is Robotic Nation on steroids.
Robotic Nation on steroids: The Age of Spiritual Machines might be a better match than the Diamond Age.

I don't remember reading about robotic caretakers or the Australia project in the Diamond Age. There aren't really many humanoid robots in Diamond Age, if my memory serves me right. Just lots and lots of materials and nanites.

Kurzweil's The Age of Spiritual Machines has a society something like the Australia Project, at the end of the 21st century. It seems much more similar, to me.

-- Lion Kimbro
The robots in Diamond Age are the nanobots.

You must admit that a fog that assembles into any object, protects a city, attacks a city, etc. is a bit more powerful than an automated car.
Sure. It's just not Robotic Nation.
May I suggest a thorough reading of the following: "Freakonomics : A Rogue Economist Explores the Hidden Side of Everything" by Steven D. Levitt, Stephen J. Dubner

It may illuminate some of your current discussions, and vaporize some of the pseudoscience that passes for research on this site.
I can also highly recommend Freakonomics.
I'm sorry, you too, but you're not speaking high-minded enough.

You need to work on raising your eyebrow and nose there; That can really help you make your point.

It's not, "may I suggest," but rather, "Dear sir, I know that your time is valuable, but I would like to place before you a consideration of a thorough (but comforting and leisurely reading) of the esteemed, "Freakonomics : A Rogue Economist Explores the Hidden Side of Everything" by the honorable Steven D. Levitt, and Stephen J. Dubner."

Then, why stop at illumination? "It may illuminate and enlighten contemporary popular discussion."

Now we want to show how contemptable any research preformed here is. "The books will also show what poor thinking and reseearch capabilities are exercised here. When you read the information contained and transmitted from within this literature, there should be no doubts about the pseudoscience found on this site, that passes for "research." You'll be able to, with the subtle powers of your intellect, to immediately dismiss complaints and worries with a simple reference to this, and other fine quality books."

If you think the research on this site is pseudoscience, then why are you here?

Read Freakanomics for the Fortune Cookie storie. Then go read "Nickel And Dimed in America," and continue reading Robotic Nation, to understand unjust, market-based suffering in America.

-- Lion Kimbro
Ivan, in Marshall Brain, the poor weren't in poverty. Rather, they lived in Terafoam housing.

Just because the poor can survive, it doesn't mean that it's good that the lower class is getting larger, and the middle class smaller.

For all we know, the folk in Terafoam housing had perfect medical care. Perhaps the 1% of Libertarians running the robotic empire would be fine with that. "See, they real are better off for us."

Somehow, I'm not convinced.
ivan said:

" All amount to the same thing: the saved money gets recycled back into the economy."

Yes, exactly, that's why wages have increased over the past four years and the poverty level continues to decrease. Oh... wait... I think I got that backwards. Somehow all that money recycling doesn't seem to be helping anyone other than those who already have money.
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