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Will Automation Lead to Economic Collapse?

Most of the agriculture and industrial jobs are already phased out by machines. Over 70% of jobs and labor is currently to find in the service sector, but also this sector is being phased out and replaced by automation which means decreased purchasing power of the general public. Just take a look at this: http://www.thefiscaltimes.com/Articles/2012/08/20/Will-Robots-Cause-Mass-Unemployment-in-China.aspx#page1

Let's make an example as well. What exactly happens when people get automated by machines? They loose their jobs and need welfare to support themselves until they get a new job, if they ever do. But, where does welfare come from? It comes from tax payers. And do people on welfare pay taxes? They don't. So, what happens when everybody is on welfare due to automation and nobody pays taxes? This example is the reality in Michigan and the government there have been on the brink of shutting down due this exact issue. And we are beginning to see this never-ending spiral go out of control in the rest of the world. The trends are definitely there, but where's the solutions?

Is an economic collapse, in fact, an imminent event and a mathematical certainty, looking at the trends in Michigan and China? And is there a way out of this, looking at it in an economical perspective?

  • Sep 25 2012: I find automation a good thing and if leads to the end of the current system so be it.
  • Sep 10 2012: I worked with computers all my life. Automation definitely decreases jobs. The people who own the machines will NOT share the wealth. They will simply keep the profits for themselves and toss the displaced workers aside.That is what the 99% do.
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    Sep 17 2012: Perhaps unskilled workers will be paid to think. Perhaps automation will allow us to simply think, exercise and educate ourselves in sustainable behavior. It could be that economic innovation will provide the foundation for a truly humane global commerce policy, one that taxes each market transaction and distributes it according to real-time humanitarian needs.
    • Sep 17 2012: I would say that for automation to do this to our society we would first have do develop better energy sources. Right now all economy is based around energy and for us to transition into a money less society energy need to be free and abundant....

      I think we all dream of that day ;)
      • Sep 19 2012: Noa: You're quite right, but it is no dream. A perfectly safe, cheap, Green form of limitless energy production has already been invented and demonstrated, and right now, the Chinese are developing it further. I mean the forgotten nuclear powered airplane engine project from the Cold war: the Thorium LFTR power plant. Look it up on Youtube.
        • Sep 19 2012: Cool, that sounds really good! But also a little dangerous having China sitting on all that energy?
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          Sep 27 2012: I agree - the USA had a Thorium test reactor in the 1960's - why didn't it get developed further and provided cheap, sustainable, safe (no need to have a pressurised dome), with little radioactive waste? Answer - because the politicians wanted a Uranium/plutonium reactor to make BOMBS with! How's that for joined up thinking?
          Energy is the answer to nearly all the worlds problems - so we need to get on with developing both Thorium and solar massive energy installations (both are sustainable and 'green')

          see
          http://www.commonsensethinking.co.uk/energy.html

          jp
      • Sep 20 2012: You can't pay people in energy, especially if its cheap, then its not worth much. You have to pay people in money.
        Money is of course, nothing special, just a medium of exchange that allow for dissimilar commodities to be valued according to a agreed upon formula.

        It can be anything but the source must be controlled. If money were leaves, we would all be millionaires, but each individual leaf would be valuless because it grew on a tree.

        So, if you are going to pay someone, they must do something of value to gain that pay.
        If you are just going to put people on the dole, then you are creating a debt that must be paid back in the future by people who do work, or you can print more money and make each exisitng curency unit that much less valuable.

        Every extinct civilization in th past has gone this route and crashed hard.

        We are actually running the automation experiment in real time in our economy. We went from agrarian to industrial, to automation to globalization.
        Global trade is just ofshore automation using cheap people rather than cheap machines but it has the same effect.
        Automation taken to its ultimate conclusion leaves us with a population that has nothing to be paid for. You end up looking like Greece, where everyone is a cab driver or a barista.
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          Sep 20 2012: When you boss pays you a paycheck and you buy gas for your car, part of your paycheck was the energy that got you back and forth to work. So value of the paper money is equated in energy, food, cloths, comfort.... Indirectly, if paper is equal to those objects and conditions, you are being paid not only in energy, but solid forms of matter.

          Gas is energy.

          Really cheap energy and automated machines could create an environment where we just don't have to work anymore. Once your belly is full and the cloth is on your body, what do you care? Suddenly it's time for fun, games, education, parenting, hanging around with Socrates.

          If money becomes worthless, we will just have to exchange our company with one another.
          That could be much more fun than slaving away at the grind each and every day.

          The only reason Greece needed money was to pay the soldiers to protect them. The slaves did all the work. If automated machines became like slaves, we could live like them. If there was nothing to be protected from, why would we need money?
        • Sep 20 2012: "You can't pay people in energy, especially if its cheap, then its not worth much. You have to pay people in money."

          No, you need energy to make/provide useful goods and services, you might as well pay people in units of energy. Money without energy is useless, energy without money works fine.
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          Sep 27 2012: Ok, there is a really serious discussion point here - we see the economy / society from a very limited point of view. The real underlying issue (once the bots are doing everything in say 50 to 100 years or so), is RESOURCES ... call it the move from Capitalism to Resourcism.

          http://www.commonsensethinking.co.uk/philos.html#capitalism

          Resources with continue to become scarcer (until we leave for the stars) and it is the share-out of these finite resources (including nice bits of land on which to live and play) that will be the main issue for the human race - this means new politics - and no-one is thinking about how we move on this yet, even though our children or certainly grandchildren will be faced with this move directly during their lives. Payment is likely to be made (as no one is working) by a 'share' of the resources, these are likely to be swappable and finite as they will reflect precise physical resources (so no inflation et al)

          see - Capitalism vs Resourcism and new political structures
          http://www.commonsensethinking.co.uk/philos.html#capitalism
          JP
      • Sep 20 2012: Noa: Luckily for all of us, just about every country in the world is "sitting on all that energy", if they would only wake up. Unlike oil and coal, Thorium is so plentiful, that it would not be worth fighting about. See Thorium Energy Alliance for more details, or Youtube. Right now, in the US, Thorium is a waste product they would pay you to take away.
    • Sep 25 2012: That hasn't been my experience. I used to work in the IT center of a company that made automation products. At first, we were considered skilled for being mainframe operators. Then, as they expanded their IT system to include several server farms, the comm network, databases and apps, etc, we had the added responsibility of monitoring that as well as the mainframe, but we also got classed as unskilled labor, script followers. Unskilled labor aren't paid to think in the business world. They are paid to execute orders and follow rules.

      Eventually, the whole dept was outsourced and all but four of us lost our jobs at the height of the recession. I'm still trying to find a job that will allow me to keep my house, but I fear that is not going to happen. The bank is going to get the house and I'll have to file for chapter 7 to avoid paying the difference of what they end up selling it for and what I mortgaged for.
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    Sep 11 2012: It means that we grow with the times. Somebody has to make the machinery, make the and design the software, etc.We have to have a different set of skills.
  • Sep 4 2012: Suppose we automate the jobs no one wants to do, and let humans do the jobs that are interesting, creative, and fun. We could find ourselves enjoying sports, movies, hundreds of tv channels, more music than we could possibly listen to in one lifetime, building space ships, learning lots of things in universities, libraries and on the internet. Does this seem familiar?
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      Sep 8 2012: Only problem is... We already have that, and there's still 10% unemployment.
      • Sep 8 2012: That is a problem, and IMO it will get worse before it gets better.

        But eventually people will adapt to new jobs, largely in entertainment and service. The bad news is that many of these jobs will not be very challenging. The good news is that most of these jobs will not be onerous. A carpenter once explained that if you find yourself doing hard physical work, you are not using the right tool. And when we are not doing our jobs, our leisure time will be much more fun, like here at TED.
        • Sep 9 2012: Barry: the real problem is that there has never been and never will be any mechanism to guarantee that everyone who wants to work will find a job available. Except, that is, for the Nepotism factor: people who can afford it want to find jobs for their friends and relations, if only to keep them out of trouble. Now with automation and robots, we have to consider what to do with all the "unemployed", the number of which can only increase if Industrialism is doing its job, which is to put "Labor" out of work.. It is a common feeling that people who don't contribute anything to the economy don't deserve much sympathy, unless they are handicapped in some way. Well, we are going to have to get used to the idea that the non-existence of "jobs" is a handicap. Wealthy people have always gotten a pass on all this; no one accuses them of being lazy, etc. So I guess what it comes down to is that we as a society will have to get used to practicing Nepotism for everyone, without feeling remorseful.
          In former times, it would be possible to say that we "can't afford" this. But since the invention of unlimited cheap Thorium Power, it is clearly in the cards that such a limitation in only political. The real idea of Socialism is not that far from Nepotism: you want to take care of the people you care about, un-economic or not. And as Proudhon said "Property is Theft", an extreme statement, but which doesn't imply confiscation, only fairness.
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    Oct 1 2012: Automation will lead to economic efficiency...
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      Oct 1 2012: for some time that is a true statement... but i guess the question has to do with the extreme scenario... when all manufacturing jobs are replaced by machines... who is the consumer for the products? even if their manufacturing is done at 99% efficiency?
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        Oct 1 2012: still holds
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          Oct 1 2012: Indeed Krisztian, economic efficiency still holds, but doesn't the consumer base shrink with automation?
        • Oct 1 2012: "Indeed Krisztian, economic efficiency still holds, but doesn't the consumer base shrink with automation?"

          No, Murray Rothbart and Ayn Rand will rise from the dead and magically create new jobs for all those people.
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        Oct 1 2012: nope. consumers don't go anywhere. don't buy keynesian crap. not the cart pushes the horse.
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          Oct 1 2012: I was not thinking about Keynesian crap. I was in Mexico when computer manufacturing moved from the USA there, and I was also there when the same manufacturing moved from Mexico to China. In both cases, for a period of time, there was a shift from manufacturing to services, but the number of people employed was always less after the manufacturing sector was replaced with the service sector.

          If anything, automation would tend to shrink the service sector too... I trust that the human ingenuity is tremendous... but I don't buy on the idea that it can keep creating new economy sectors forever
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        Oct 1 2012: if you focus on short term changes, you might come up with the idea that the sun is lower and lower every day, since it goes down every day.

        the fact is still this: every job taken over by machines were replaced by other jobs. we have no reason to believe that it will ever stop.
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        Oct 1 2012: exactly. supply and demand always clears on an undisturbed free market.
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          Oct 1 2012: like in the case of (insert country name here)...

          I promise you, I am willing to be proven wrong, i just have never seen proof of the invisible hand in action
    • Oct 1 2012: As Andres said: the question at hand here is not productivity, it's what happens to the people who used to be workers.
    • Oct 1 2012: People who used to be workers find employment in providing new products and services. Human needs are infinite. All parties gain. Consumers gain by increased spending power, Businesses gain by staying in business, Price competition drives price to lowest possible that still makes the process of providing the good or service worth while. Profits above the minimum can only be achieved through Innovation (Joseph Schumpeter) Innovation leads to the creation of new products and services that leads to new employment opportunities.
  • Oct 1 2012: As long as we stay in our current economic system, automation leads to collapse. No jobs or income? Then we can't sustain the "vicious cycle of consumption". If we change our economic system, automation can free us, can end the starvation and wars. We can manage our resources intelligently (a resource based economy), and get rid of all the occupations and careers which are no longer relevant. We believe that our current system is "real", and has to continue. But it's just a fictional money game that has run its course. Watch "Money In The Future" -- http://www.youtube.com/watch?v=5NAxSYF1SAk
    • Oct 1 2012: interesting video. I thought I was the only guy thinking that the world could / should progress towards this kind of world.
      I do disagree with the later parts but it's a nice conceptual video. I don't want to believe that the monitairy system is evil (like the video somewhat shows).
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        Oct 1 2012: ... it NOToptional - the future won't exist for most people (ie the rest die) unless we follow this path - no other conceivable options, to understand why see the 'story' (always an interesting perspective looking back from the future).

        Capitalism – Level 2 history notes Nov 25th 2199

        http://www.commonsensethinking.co.uk/philos.html

        cheers JP
  • Sep 27 2012: Everyone relates automation to labor, and yes, it is part of the picture. But it needs to be equated to efficiency. Labor reduction is a small part of the justification of a new machine, let's say, in a manufacturing environment. You have quality consistency, space reduction, and less downtime. You also still have the employment of programmers and operators. Point being, just because there is a reduction in labor does not mean it harms our economy. It puts our businesses in a better position to be competitve. Therefore, the business improves and grows creating economy.
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    Sep 25 2012: This is a tricky subject for me. I can understand the negative consequences of automation. I think you did a great job of highlighting the issue here Mats...so thank you for that.

    As you stated Mat...about a displacement to the service sector. These are generally low paying jobs with little possibility for advancement. This result is concerning as we would ultimately like an employment climate that gravitates towards more high paying careers.

    However, if the service sector is booming the jobs must be filled. The fact that people are finding employment is a positive. We obviously want a more progressive state for our society. However, I think we sometimes get confused with the real issues.

    The current problem is really about education, government policy, and peoples general attitude. None of this is the fault of anybody in particular. I don't think it is healthy to blame anybody for our current state.

    If progression is our target then moving forward is the only positive state.

    I don't like to post things like this without solutions. Doing so would probably just make me look like a preacher.

    1) Let's talk about education!

    I think there's much debate about degree over certification or trade. This disparity is an illusion and we need not pay attention to it.

    That being said...what you should pay attention to is what you are good at. What are you really good at?

    I think it's important to focus on such things because if you don't realize what your good at....come on...how do you realize your potential?

    Once you have a subject that makes you feel good inside...go to it. If you utilize passion your every move will be full of energy and desire. This is a necessity...don't look past it as a "hippie concept" :)

    As far as degree over certification...just do what's necessary. If you want to be a doctor...guess what?

    Just my opinions.

    Great post Mats.
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    Sep 24 2012: The economy has already collapsed! Automation has speeded up the process!!
  • Sep 14 2012: "Will Automation Lead to Economic Collapse?"

    It will most likely bring us to the brink of collapse, but doesn't necessarily have to push us over it. Automation is a blessing and we screw that through our current economic system which is the actual problem. A smart society would take advantage of automation by making people work less hours for the same wage to make everyone happier. A stupid society let's half the people work just as many hours as they used to, fires the other half to let them die in the gutter and translates the gain in efficiency into mulit million executive bonuses. It's clear which category our current society falls in, but it doesn't have to stay like that forever.
  • Sep 14 2012: It is a natural evolution of our species to develop technology and utilize it. People who do not recognize technological automation as a exponentially increasing real thing, need to wake up. As if we are going to stop at the scientific calculator or the iphone. Not only that, but productivity is inverse to employment, so it's irresponsible for us not to try and mechanize and automate wherever possible. Instead, we have an economic system that inhibits this progress by requiring people to perform obsolete tasks, essentially modern day slavery. As for technology creating new jobs, what is everyone going to be working at Facebook just to keep this stupid labor for income 'game' going. Where are the Da Vinci's and Einstein's of our time? I'll tell you, they are serving Subway sandwiches and poking people on Facebook! So to answer your question, will automation lead to an economic collapse? Yes, the collapse is coming, if it hasn't hit already. You look in the news and what do you see everyday, 500 jobs cut here, 3000 jobs cut here.. This is a downward spiral because less people working means less people buying things to keep the economy going. Eventually the majority of people on this planet will be unemployed because corporations are liable to one thing only - profit. Once that happens, a globally conscious effort will need to be made by every individual to change to a more sustainable and humane economic system. Hopefully one without money or credits.
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    Sep 13 2012: We should also consider the fact that automation has also led to the creation of new jobs as in the software development industry, and not forgetting the jobs that has been created by the internet and online platforms(design/content etc).

    Maybe automation leads to a metamorphosis of jobs and not necessarily loss of jobs.
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      Sep 13 2012: The ultimate purpose of automation is to save money -- and eliminating labor costs is the major area of savings. If automation didn't produce a net reduction in labor costs, no one would bother to do it.
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        Sep 13 2012: The much migger impact of automation is to make human life better, and in some cases to make it more secure. Would you rather harvest crops by hand, mine with hand tools, fly to space with analog systems, and clean up radioactive waste yourself? There many more such examples, but when automation comes into play most of them are handles by machines efficiently and securely.
        • Sep 14 2012: That's not how it works currently: the multi billion multinational corporation that has to decide whether or not to implement some form of automation doesn't give a rat's ass about making human life better, so in practice automation only happens when it reduces costs.
        • Sep 19 2012: John: But the whole history of the Industrial Revollution for 400 years shows that it DOES reduce costs.
      • Sep 14 2012: There will certainly be jobs created for mechanical engineers and programmers, which are highly skilled professions. A handful of college graduates will replace hundreds of uneducated laborers. This might not lead to collapse, but will certainly widen the gap between rich and poor.
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    Sep 12 2012: No. Because machines do not have magic in them, they are made by designers, engineers, computer scientists who work hard to make them happen. I believe it is nature of human civilization to make some type of jobs obsolete and to bring new ones into life. Even if machines we have are reducing the need for human factor in industrial jobs, there more types of new jobs that require human knowledge and thinking.
    • Sep 13 2012: While this sounds good on paper, it doesn't hold up in reality. One technician can easily fix several machines in a day. By this logic, the number of computer scientists that exist will always be greater than the number of computer scientists required to keep the machines running.
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        Sep 13 2012: Technician is not necessarily a computer scientist, and fixing machines is very small part of what people have to do with them. Engineers and scientist are needed for many more purpuses that just maintaining existing architecture. It's ok if you think in terms of individual products, but know that behind each product there is hard work of hundreds of people. More specifically in software industry, each great project requires continious collaboration of thousands of individuals to keep up the developnent to fulfill ever changing demands. That is what happens in reality.
        • Sep 14 2012: I hope, but do not think, that you're right. If it takes a hundred day laborers to work a field, a dozen technicians can do it. Once that system is refined, it scales to other fields easily, instead of needing to find more unskilled workers by the truckload.

          Regardless of the demand for programmers and roboticists, the uneducated poor will never have a chance to join these elite. Free, universal, quality education is still a pipe dream. As efficiency goes up, we might have enough food for everyone (I doubt it), and we certainly won't have enough work.
  • Sep 11 2012: Automation will succeed if and only if the government assumes the initial development of structures and education. In an fully automated society education will be the main resource humans would fill. If we build new cities that are autonomous, with energy and resources, Arts and Science would be our main focus. What do we learn at College? You get a BS or a BA, there is our answer, Education!
    • Sep 11 2012: How would this fit in the current socioeconomic system though?
      • Sep 11 2012: That is the problem, our current socioeconomic system is wrong. The Chinese would of been the conquerors of the world but the Emperor recalled the ships when they reached South Africa. Why? So the money would be used to feed the Nation. If we build a whole city with fish farms, indoor gardens and the like, we will benefit in the long run. If the government taxes us for the "poor" well wouldn't it be better to make a productive city for those that need. That would be a start. Once that is in motion our production levels rise. Eventually money as we know it should disappear and a Resource society should arise!
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          Sep 11 2012: The problem is that the government isn't going to take any initiative nor will the corporations who finance them (and the media) allow anyone to take the initiative. They'll continue to find a way to profit from the situation. It's really up to the people in general to take the initiative to rearrange their own lives to become more community minded and teach essentials like permaculture to their own children and neighbors. The corporate run media isn't going to advertise consciousness for us. We each have to pitch in and do a little ourselves. Finding movements that promote a permacultural lifestyle helps, not joining just one, but all movements that promote sustainability. Using social media to raise consciousness, using the web, and just practicing it in your daily life and 'being the change you want to see in the world' so your friends can see for themselves that the old system is obsolete. Eliminate your debts, don't go into debts, do without what you can't afford and adopt a hunter-gatherer lifestyle to repair, recycle and repurpose waste is a start. Trade with those who are out of work before you buy something new or go to a corporate run service. Use craigslist to find and offer work. Use food or things you own or services instead of currency, before you buy from Waltard. We use old Silk Yogurt containers to store food rather than buy new Tupperware. We haul recyclables to town when we go. We barely have a full trashcan for the trash guys even when we skip a week's pickup. Compost your food scraps. My girl helps at a food pantry in exchange for food that would normally get thrown out. Did you know that Kroger now composts their old produce rather than give it to the local food pantries? How wasteful is that? But that's the corporate mindset. We have to do this ourselves. The government is a joke and we're all the butts. They will continue to spoonfeed hope while accomplishing nothing.
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    Sep 9 2012: It will definitely change the economy. It will eliminate jobs that less educated people would be applying for, and in my opinion, the best way to fix that is to make college free.

    We have free education up until the end of high school - and we're given just enough education to be slaves... to shut up and flip the burgers and mop the floors. Why is it we have to pay thousands of dollars to get 4-6 more years? Imagine the benefit to society overall if everyone had a full college education. Right now, only the wealthy can afford it. So only the wealthy get jobs. If you take out a student loan, you don't get enough to finish. When you do you start your career in horrible debt. Most scholarships are only for a year or two.

    The coming technological unemployment mandates free higher education. That education can come in the form of recorded classes online. Colleges spend outrageous money on their lavish buildings. The cost of running free online courses is minimal in comparison - and the benefits are priceless.

    Imagine someone becoming a doctor because they care about healing the sick, instead of becoming a doctor so they can buy a yacht (not always the case - but tell me it doesn't happen). I learned my business on my own - no schooling - just the library and the internet. Imagine if the knowledge found here was organized into something the average person didn't have to stumble through for 10 years to find! How much would that really cost when you compare it to paying out unemployment benefits with money that isn't being earned because there are no jobs to tax?
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    Sep 9 2012: I see 2 main problems with increased automation.

    One is runaway productivity, as Tres English explained earlier in the thread.

    The other is centralization of wealth. Excessive wealth centralization is dangerous for the economy. People often argue that jobs will move to the service industry, but if all the wealth is moved to a tiny fraction of the population, how many jobs could there possible be to serve them? I don't see any solution to the dilemma. Technology was supposed to make our lives easier, but over the last 40 years people have had to work more and more to get by. There was a time when a single income family could own there own home and raise 4 kids. Now both parents have to work, people put in more overtime, go into student debt just to get a job and are no farther ahead.

    Something needs to change so that when robots do the work for us we can celebrate and relax, instead of having to work harder to get by.
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      Sep 9 2012: today we have bill gates. but walmarts and tescos all around the world does not sit tight waiting for bill gates to finally walk in. people cooperate with each other, work for each other.

      you have a total unrealistic view of the world or of the future. wealth does not concentrate in few hands. maybe it does in percentage. but the total sum of wealth in poor people's hands also increasing. that is the direct consequence of markets: in an exchange, both parties benefit. in a capitalist future, there might be some super rich that makes trillions of dollars. but the average fella also will have more than today.
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        Sep 9 2012: I'm glad you brought up Walmart, since it is a perfect example of my point. People who work at walmart don't make enough money to support their families. Poor people in north america are not better off than they were 40 years ago. They are poorer if you account for inflation and have to work more to survive.
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        Sep 9 2012: I know someone who works at walmart, he makes just over 10 dollars an hour in Kelowna, British Columbia, Canada.
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        Sep 9 2012: I don't know what the cost of living is in budapest.

        Let me ask you this, could you support a wife, 2 children, buy a home, pay for the kids education and have enough to retire? That's what my father did with a grade 12 education. This is what I mean when I say that the middle class is in fact not richer than a generation ago.
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          Sep 9 2012: now wait a second. nobody said you are richer than a generation ago. i said the free markets bring progress. you don't have that now. not since the "progressive" era gradually destroyed it. this fall in real wages is a very nice example why we don't need government interventions. you will see more of it.
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      Sep 9 2012: The state of affairs reminds me of a turn of the 20th century communist prescription to capitalism's future. "You can't fix a problem with thinking that allowed the problems to start."" New evils must be fought with new innovation" Who are you, Krisztian, to say someone has a total unrealistic view of the world? How does wealth justify the suffering and injustices classes of wealth creates? People's whole value system and goals in life have a dollar sign attached or some material object to be cyclically consumed and not the real intrinsic value of quality, thoughtful consideration to posterity, and self-fulfillment we all owe ourselves before we die. The average fella is gonna keep taking whatever the government will give him as he's getting workied more and more to maintain profits in the face of automation until we experience economic meltdown or continued wars from failure to adapt.
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        Sep 9 2012: it is kind of a pity that these false statements are around for 150 years refuted. so what do i do? give up, for if 150 years was not enough, we have no hope? depressing. or should i just open up any web page refuting marxism, and copy-and-paste stock answers to these stock questions? or should, as i used to, try to find some entertainment value for myself in trying new ways to shine light on things. but i find less and less satisfaction in it.
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          Sep 9 2012: "but i find less and less satisfaction in it."

          Tired of talking to yourself?

          Me thinks that some are awake and most ain't...
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          Sep 9 2012: Only a couple problems with your history lesson. The internet wasn't available until recently. Since change in technology is happening exponetially, the current economic model can't keep up. I'm all for free enterprise and capitalism but it's current condition is riddled with corruption and in the fact can't keep up with the imbalance of collapsing demand due to the death of competition.
    • Sep 10 2012: i do agree so much with you scott, and your fears are mine and many many million people around the world. if you don't have read it already have a look at jeremy rifkin's "the end of work" that deals exactly with this topic and gives a gleam of hope. i'm worried as you're about an excess of automation as i don't believe that there is a solution with mass-employment in view of the loss of so many working places. my parents have greatly enhanced their living conditions compared to the condition of my grandparents. they'd got better salary, incredibly more rights (as payed vacation, they were payed if they got ill ecc..) while i belong to a generation that's swimming in a swamp, with little or no guaranties at all, nor for working conditions nor for retirement, it's the first generation since many decades where the sons get it worse than their parents.
  • Sep 3 2012: Yes automation will contribute to the next collapse. The question is who benefits and who suffers from the collapse.
    The benefits will always fall to those individuals whose fortunes remain through limited liability and/or taxpayer bailout money. These are the players in "national" and "global" economies. After the collapse they seize the opportunity to exploit the newly expanded and increasingly desperate work force. Isn't globalization beautiful!
    A more pressing question is where does all this leave local economies?
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    Sep 3 2012: We will find something new where human involvement will be needed.....
    This fear was always there through out the history as human civilization evolved....
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    Sep 1 2012: NO, look at how farming once the vast majority of employment is now way less than 5%, Manufacturing is similar. The jobs just go to other areas.

    This video speaks to this subject:

    http://www.ted.com/talks/peter_diamandis_abundance_is_our_future.html
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      Sep 9 2012: Farming was automated and former farmers became factory workers. Factories automated (and outsourced). Former factory workers became medical billing clerks which automated and former medical billing clerks became landscape maintenance workers. Landscape maintenance was automated and former landscape workers became pool cleaning service owners. Pool cleaning was automated and former pool cleaners became general laborers. General labor was automated and former laborers became organic farmers. Organic farming was automated and. . . .
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        Sep 9 2012: Not really, you wax pejorative. The reality if you look at the specialization of jobs that have been created over the last 100 years is more opportunity and more productivity and a higher standard of living although maybe a sedentary life style becomes the bigger danger?
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          Sep 9 2012: The disparaging tenor of my words is fitting for the subject; which I understand to be the effect of continuing automation on the economy. My hypothesis is that automation carried to its ultimate application (no human contribution necessary) will cause the collapse of the economy. The past hundred years cannot be the continuing model for displaced workers. Sooner, or later if EVERYTHING is automated people will have no means of purchasing.
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        Sep 9 2012: The evidence indicates the opposite.

        Why I could even envision where a feller could make his living and retire by doing nothing more than making engineering drawings for other fellers? Of course Auto Cad or Solid Works with FEA could put him out of business? Wait a minute that did not occur.

        Of course there will be causalities buggy whip manufacturers and the like. The prognosticators say that most people will not have just one career. Should we do away with Google to keep the librarians gainfully employed should we start a local chapter of the Luddites?

        My grandfather will tell the story of how fellers would come out to his fathers ranch and dig a water well with a drill instead of shovels, he said that is what I'm going to do for a living. If Star Trek is any indication everyone on the show seemed to be busy.

        In fact I would go so far as to say to do otherwise violates mankind's prime directive.

        P.S. This video indicates the senior datum for a successful life in the future and the past.

        http://www.ted.com/talks/matt_ridley_when_ideas_have_sex.html
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          Sep 10 2012: Displacement and retraining can only go on for so long. As automation replaces more people eventually when 100% automation is reached there wil be no non-automated jobs for people to be retrained for. I repeat, "The past hundred years cannot be the continuing model for displaced workers". The question is: will automation cause economic collapse. I say once all humans are outplaced the answer will be YES.
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        Sep 10 2012: Why was the gross product of the world in 1900 1 trillion and today is 70 trillion? The automation has never been as high as it is now while the employment has never been higher.

        The last 100 years is the indicator of the future. Perhaps what you are missing is the specialized jobs that will have to be performed.
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          Sep 10 2012: Compensation of Employees (COE) is a major component in the GDP. With 100% automation the COE will be zero. End of economy.
        • Sep 17 2012: "Why was the gross product of the world in 1900 1 trillion and today is 70 trillion? The automation has never been as high as it is now while the employment has never been higher."

          Employment was higher 100 years ago: people worked more hours, kids worked, less people spent many years at school, less people were pensioners. Also, are you sure that $1 trillion GDP in 1900 figure accounts for inflation? The world's population is four times as high as it was in 1900.

          The truth is that automation has destroyed job opportunities but that's ok: I don't particularly fancy leaving school at age 12 to work 60 hours a week until the day I die.
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        Sep 10 2012: Ain't gunna happen, I will agree to disagree.
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          Sep 10 2012: I agree 100% automation is not going to happen, but that is not what the question is asking. The question asks would the economy collapse IF automation continues to grow?
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        Sep 10 2012: As I'm sure you know I meant the COE is not going to go to zero. And the answer to the O.P. is NO.
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          Sep 11 2012: No Pat, I was not sure you meant the COE because you did not say you meant the COE. You said QUOTE: "Ain't gunna happen," I assumed 100% automation was your subject. What exactly do you think the O.P. is asking? Maybe I am on the wrong page.
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        Sep 11 2012: He is asking if there is a correlation between automation and jobs. And what it will do to the economy.

        Once again as indicated by the World GDP 100 years ago being 1 trillion today it is 70 trillion and easily 70 times the automation of 1900

        No the jobs will not go away.
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    Sep 1 2012: Hypothetically 100% automation means the only essential human labor will be controlling the automated processes aka robots-- unless, of course, that too is automated. If there is no labor, how will people earn wages to buy the stuff and the services the robots are providing? How will the autonomous robots establish and maintain the support infrastructure to keep themselves running? Why will the robots keep making stuff and providing services if nobody is buying any of it? Sounds like economic collapse to me.
    • Sep 9 2012: edward : you have pointed out a real problem. But it need not lead to collapse. Consider my former life in the US army.: money was not really an issue. We had chores, like KP, but no one had to be "paid" for it. In ancient armies , such as the Romans, the troops did farming in their spare time, and supported themselves. Large groups of people , like the Amish, function in similar ways. Kind of a monastic life, not big on Fun Things, like buying and showing off expensive stuff, but still quite humane. As long as there is no War.
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        Sep 9 2012: If the definition of "economy" is the management of income and expenditures then currency is subsumed. What you suggest is that where there is no economy ($) there is no possibility of economic collapse. I disagree. The Amish system must collapse in an extended drought or persistent crop failure. They might try to establish a non-agricultural commercial endeavor but that would be replaced by automation and we are back to economic collapse. The Army runs on currency even though the dogfaces don't see much of it. "Free lunch" (welfare) programs run on currency even though the beneficiaries don't see much other than coupons and vouchers. Cash is the written evidence that commerce has occured. If commerce is 100% automated there is no buying power for the displaced workers and there is no need for cash for the non-consuming robots. . . . economic collapse. People gotta work!
    • Sep 10 2012: A robotic utopia seems like a good solution. Each individual is given an annual amount of credits (which basically translate into something like total energy produced / number of people). You could exchange those credits for what you need to survive or pool them with other people to have new novel things created - but the robots would be handling the "back end" of society so to speak. Marshall Brain does a fantastic job outlining this in his book ROBOTIC NATION which you can get for free online.
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        Sep 10 2012: That simply replaces currency with credits and is still an economy. Are the robots going to sustain themselves and perpetually exist simply to altruistically meet all of our human needs for products and services? The question being debated here is not about "the back end of society", or some limited use of automation. TOTAL automation will cause economic collapse.
  • Sep 1 2012: I wouldn't say that automation by itself if meaningful. The problem is runaway productivity. Automation is only one way to achieve that. (Think the waiter in the restaurant that takes your order on a hand-held device that places the order with the cook, makes an entry in the sales receipt, and deducts the materials from inventory.)

    Every time you hear that productivity has increased by two percent, you need to think that either labor costs (employment and/or wages) must decrease by 2%, OR consumption must increase by 2%. In the first case, this leads to our current jobless recovery and eventual economic collapse. In the second case, it leads to eventual ecological collapse.

    Automation is only one way to cause runaway productivity.
  • Oct 1 2012: We should approach this topic from a pure economic perspective and the best way to do that is to measure the overall welfare of the economy before and after automation. We can all agree that, because of automation, there would be gains to certain groups and losses to other groups. We should notice that, if the gains are of greater absolute value than the losses, then the argument must support automation.

    First of all, we should look at why producers look towards automation. It is because of the fact that they are trying to reduce costs and produce their product at the lowest possible price. In other words, they are trying to achieve competitive advantage in order to gain market share and increase profitability. This act will eventually lower the prices of the products for consumers. From this, we can see that automation causes a gain for the producers (businesses) and a gain for the consumers (note that people that work at businesses are also consumers). The problem with automation arises from the fact that people lose their jobs as a result. This is the loss associated with automation (note that the people being laid off are also consumers of other products).

    So we can see that automation provides the economy with large gains to large groups (producers and consumers) but causes a loss to a small group (laid off workers). This is where the emotional argument against automation comes in. The individual that is laid off may suffer more in absolute value (loss) than a certain individual gains from the process of automation. We should notice that the companies are better off with automation, but would still be better off even if they were to pay these few existing employees their salaries until they died (sure, they would have to pay these people for not doing the work, but the long run benefits would still outweigh these short run costs).

    In other words, consumers gain, producers gain, and some workers lose, but the economy experiences a net gain.
    • Oct 1 2012: "We should notice that, if the gains are of greater absolute value than the losses, then the argument must support automation."

      No, you can't just "notice" that. A society where 1 million people make 20k is much better than one where 999.990 people make 2k and 10 people make 15bn. Now of course things would be different with redistribution...

      "So we can see that automation provides the economy with large gains to large groups (producers and consumers) but causes a loss to a small group (laid off workers). This is where the emotional argument against automation comes in."

      Most consumers are workers themselves, so if not enough replacement jobs are provided quickly enough the number of unemployed can reach very high levels and the impact on society would not be negligible.
      • Oct 1 2012: That is the premise of my argument; my argument is based on a purely economic perspective; no emotions involved.

        You give a certain scenario and state that the prior is "better" than the latter. How do you measure better? I use the one dollar, one vote metric; you do not.

        The cost to society would be less than the gain; as others have said, job creation would move towards different sectors and prices would be pushed downward (the income effect of price change should be noted here).

        It's really simple.
  • Sep 29 2012: Even if automation eventually lead us to nirvana, we might all burn on the way there in the riots that may ensue.

    Rapid automation is certain to create vast pools of unemployed whose skills are no longer required. No alternative jobs that produce tangible goods will be awaiting. Some form of goods and services redistribution will need to be devised before people go cold and hungry.

    Let say miraculously, the new economical equilibrium is achieved. All physical or routine mental jobs are automated so 99% population don't need to work. All goods and services are delivered by robots to each individual.

    What will happen to the people? You can start by watching "Wall-E" http://en.wikipedia.org/wiki/WALL-E

    Think of typical side effects when people are not busy or challenged:
    1) they procreate -- can automation solve issues resulting from geometric population growth?
    2) they seek thrills -- resulting in risky behavior, drug use
    3) they want more -- more stuff, more control over others, new social orders, revolutions, radicalism ...

    So to avert these, everyone would have to be occupied with mental and physical activities to keep them busy or else suffer the consequences.

    Good Luck.

    [ Pragmatic Understanding of Trade Imbalance http://ideabits.blogspot.com/ ]
  • Sep 29 2012: Only one basic problem; If, for the sake of argument, we say that robots can create any product or service a human being can provide, there is still one fundamental thing a robot will ~never~ do: ~BUY~ the product or service it creates!

    Within the framework of our present economic culture, there are only two ways this could work; either we create sentient androids that can buy the products & services they create (they'd have to be paid & then they would totally replace us) OR we fundamentally change our socio-economic structure into... what? Robotically enhanced Socialism, where we all equally benefit? Doesn't look bloody likely!

    Let's not ignore the parallel development of recombinant DNA. Within 40 years Biotech will provide the means to increase life spans by 100-200% and arrest the ageing process. Not to mention increased intellect, strength, durability, vision, etc, etc. Who will benefit from these mega-enhancements? It will NOT be egalitarian, it will only be available to the rich & powerful among us (the .001%). If it were applied to the masses it could be a disaster, there aren't enough resources available for the present (short lived) world population. These procedures could cost millions of dollars, whomever becomes the 'Bill Gates' of the Biotech Company providing these enhancements could become a multi-trillionaire.

    The gap between the 'haves & have nots' is about to increase by ~several orders of magnitude~! These lucky few may be considered to be Homo Sapiens 2.0, and who better to lead/rule society?! (I suspect that these 'super beings' will consider themselves as Homo Sapiens 1.0, the rest of us were just beta models.)

    Combine this with a robotically run society including robotic police & armies and a very unsettling & downright scary future can easily be imagined.
  • Sep 29 2012: Mats: If automation is as successful as it has been , and is likely to be, that can only mean more "production", of goods and services. So the "problem" of having everyone on welfare, with few or no taxpayers is only a problem if one insists that our economy remains in its present form: using "salaries" as sources of "money" which at present is actually a combination of Bookkeeping, credit , and Debt. But as long as the "stuff", food, etc. is produced, there is no reason we couldn't run it without "taxpayers" or money, or debt. Of course, there would have to be something like money, because we need to keep track of things. In the Army, years ago, there was very little salary, even that was not needed. No debt, etiher, except maybe for playing Poker. To sum up, the Free Enterprise , "Capitalist" system has pretty much run into its limits: a very few people got most of the "money", to the point where there is not enough "Consumption" to keep it all going. I hope that the next economic model is more like that of a wealthy clan: i.e. you take care of your members , whether they are efficient or not, because they are your relatives. Now we know that , like it or not, all people are actually ARE our relatives, annoying as it may be.
  • Sep 28 2012: NO... when it frees us up to be artistic in our disciplines.
    YES... when it's hacked after we forget how it all works.
  • Sep 28 2012: I presume (having not referenced this, as yet) automation would result in at least a few significant effects on society: (1) Development of new skilled jobs and production chains, for design, engineering, and production of the tools of automation; (2) Smaller labor forces, in automated tasks; (3) Technical jobs creation, for employees operating and maintaining the machines of any newly automated part of a production line.

    From the bluesky point of view, I'd like to think it could also result in more leisure time for workers - therefore more opportunities for community involvement, and probably more local economic involvement consequently. I'm afraid that's not been the case, though, in how it's been working out so far, in the US. (I think it seems bleak to me, personally, in how it's been working out so far - namely, as starting with work weeks far exceeding the typical 40 hour "norm" being not uncommon at all, to my understanding, and following from that, also less community involvement in society, and less local economic interaction, consequent with the diminished leisure time.)

    Considering automation, specifically, there are tasks that cannot be usefully automated - so simple as landscaping and gardening and so complex as expert medical work. Regardless of how far automation would proceed, in mass production industries, no doubt jobs will still exist for fulfilling those tasks, in society.

    As far as possible unemployment resulting from automation, in regards to the situation of being layed off if a plant becomes newly automated, that would not be an end to one's employability, of course. Retraining and horizontal job shift become possible, at least at the transition.

    Considering economic shift, the number of economic flows in a society is not limited to those passing through an automated production chain. Without analysis, I wouldn't want to blame machinery for economic difficulty, . (In fact, I'd probably look at management, first. ;)

    Intriguing questions
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    Sep 27 2012: Ok, there is a really serious discussion point here - we see the economy / society from a very limited point of view. The real underlying issue (once the bots are doing everything in say 50 to 100 years or so), is RESOURCES ... call it the move from Capitalism to Resourcism.

    http://www.commonsensethinking.co.uk/philos.html#capitalism

    Resources with continue to become scarcer (until we leave for the stars) and it is the share-out of these finite resources (including nice bits of land on which to live and play) that will be the main issue for the human race - this means new politics - and no-one is thinking about how we move on this yet, even though our children or certainly grandchildren will be faced with this move directly during their lives. Payment is likely to be made (as no one is working) by a 'share' of the resources, these are likely to be swappable and finite as they will reflect precise physical resources (so no inflation et al)

    see - Capitalism vs Resourcism and new political structures
    http://www.commonsensethinking.co.uk/philos.html#capitalism
    JP
  • Sep 27 2012: Lets take an example of a factory. Usually a new machine wil not replace only one worker but a group of workers. This means that this group of workers if not relocated in the same factory, they may loos their jobs. No jobs => No income=> No spending => No tax paying because there is no spending => slow economy. As far as i know robots do not pay taxes, because they receive no income.
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      Sep 27 2012: how about continuing the line of logic?

      => cheaper product => expanding demand => more sells => expanding business => more hires

      and also

      => cheaper product => people have more money to spent on other things => more demand for everything else => all other business expand => hiring everywhere

      and also

      => cheaper product => people have more money to save => increased capital formation => even faster growth
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      Sep 27 2012: ps: your reasoning reminded me of that old joke:

      the more you learn the more you know
      the more you know the more you forget
      the more you forget the less you know

      ergo the more you learn the less you know
      • Sep 27 2012: Krisztian, you make a few good points but it's not as simple as you (or Roberto) make it seem.

        If robots replace 10% of the workforce, and require the resources of 2% of the workforce to run, then assuming perfect competition, prices will fall to 92% of their previous level, so far so good. However, 10% of the workforce is without a job, now there are enough resources to give 8% a new job for the same pay, or give all 10% a new job for 80% of their former pay. In the former case 2% will be permanently unemployed, in the latter case 10% will see their purchasing power fall to 87% of its former value. Average purchasing power has gone up in both cases but that doesn't benefit everyone unless everyone's wages are reset or everyone's working hours are reduced (redistribution), that's unlikely to happen in any capitalist society: a rising tide doesn't always lift all boats, and that's something you should keep in mind when you read these highly theoretical economic models that don't factor in reality (or perhaps the original authors never imagined people would later quote only half their model, conveniently leaving out the redistribution part).

        @below

        I choose not to work with dollars, but resources because that avoids needlessly pondering of deceptive things like inflation and because you can indeed not eat money. I hope you are aware that there has been a lot of redistribution in the form of (government/union mandated) working hours reductions since the industrial revoultion began. But the biggest reason we still have jobs is that we're using a lot more resources (and using them more efficiently) than we used to, this progress is not guaranteed to always be faster than automatization, in which case my model basically describes reality (you'd get to the same outcome if you went hadcore and did all the math withoutomitting money), at least for some people. The point of the model is to show that the free market can fail under the right/wong circumstances.
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          Sep 28 2012: it is kind of ironic that you condemn highly theoretical models, and favor reality, after presenting an overly simplistic calculation to show us how something that works in real life can not work.

          in fact that happened, i say again, for like 200 or 300 years, during the industrial revolution, and after that, up to now. jobs constantly got replaced, but laid off workers were hired in other jobs. not only the average income grew, but median, and lowest trenches too.

          your calculation does not work for many reasons. first, price is not determined by used resources, but by supply and demand. technology raises the supply curve, so the equilibrium point moves. by how much, depends on many factors. second, resources don't grant jobs proportionally. third, it is not good to count life standards in dollar amount. we don't eat dollars. in a free market economy with a sound money system deflation is the normal state of affairs. as the amount of stuff increases, and the amount of money is near constant, prices continue to fall. thus, lowered wage in money terms is not a necessarily a problem, only a relative loss. fourth, using robots usually not reduces the used resources at all. it only reduces the used man hours.
      • Sep 28 2012: "it is kind of ironic that you condemn highly theoretical models, and favor reality, after presenting an overly simplistic calculation to show us how something that works in real life can not work."

        I'm not the one preaching the gospel of the unfallible free market (or any economic system). All I have to do is poke the tiniest hole in your reasoning and I can use highly theoretical, simplified models for that because I only have to come up with possible scenarios, not scenarios that describe the entire current economic system in great detail.

        "in a free market economy with a sound money system deflation is the normal state of affairs. as the amount of stuff increases, and the amount of money is near constant, prices continue to fall. thus, lowered wage in money terms is not a necessarily a problem"

        It doesn't have to be a problem, but it can be with the right/wrong parameters (such as automatization not being accompanied by an even stronger increase in resource utilitization efficiency at some point in time), and tht wuld be a failure of the free market to work for everyone, that was my whole point.
  • Sep 26 2012: Our current economic system is not sustainable, but that doesn't necessarily mean we're headed for a "collapse." it's more likely that the system will change over time to suit its new environment.
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    Sep 26 2012: I just wrote an editorial about this... http://www.pddnet.com/blogs/2012/09/how-lose-your-job-robot
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    Sep 26 2012: I think the key point is where do you focus "automation". We should never replace human thoughts and ethics by automate responses to complex problems. Though automation gives us more calculation capacities, we can only say that we can do faster analysis, I'm not sure that they are always better analysis ;)

    Regarding other views mentioned on this thread, of course, we cannot compete with machines on repetitive tasks and we should focus on added value, creativity and of course, human services...
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    Sep 25 2012: it is not automation that leads to economic collapse; rather it is the players that control and create automation. Our economy is very much like a Monopoly game, when money is distributed everybody gets to play. The game goes on for a while, eventually somebody wins. The money that was circulating didn't suddenly disintegrate into nothing, nobody burned it, it is simply amassed by the winners. The winners have used whatever means to victory, and that includes automation, however eventually there will be no need for automation, because the product that is being produced with automation can no longer be sold, simply there is no buyer. In conclusion, will automation lead to economic collapse? True answer is NO.
  • Sep 25 2012: My answer is no.Machines works more efficiency and creats more value.The reason why people lose their jobs is the limitation of resources.In my imagination,when the space technology is fully developed,resources won't be a problem anymore.All the jobs will be controlling machines.Some one may think about robots.But that's another question.
  • Sep 25 2012: if you go full automation, it will destroy human society, because having no income, people would be unable to buy things they need (food, etc.) and if you give it out, people would likely do nothing, or else try to find work.

    If you do partial automation, the question is where do you draw the line? Which jobs do you automate and which ones do you not?
    • Sep 25 2012: if it's fully automated then food won't cost anything either. So not having an income to buy free food won't be a problem.
      • Sep 25 2012: automated doesn't mean free, it means cheaper production costs, nothing about the sales price (although that usually drops to allow for more sales) also there is no way any automated system would distribute its finished product for free, it makes no sense unless upkeep, energy, and space are absolutely free also
        • Sep 25 2012: "automated doesn't mean free"

          It could though, if we wanted to. It's all a matter of choice. If we choose to declare all of Earths resources as the common heritage of all mankind and fully automate the production and distribution of goods and services we could provide everybody with food, clothes, shelter and a high standard of living within ten years, including the planning and building the infrastructure (source: http://www.amazon.com/The-Best-That-Money-Cant/dp/0964880679/).

          A World Hunger Education Service report (http://www.worldhunger.org/articles/Learn/world%20hunger%20facts%202002.htm) "reveals" that "the world produces enough food to feed everyone. World agriculture produces 17 percent more calories per person today than it did 30 years ago, despite a 70 percent population increase. This is enough to provide everyone in the world with at least 2,720 kilocalories (kcal) per person per day according to the most recent estimate that we could find. The principal problem is that many people in the world do not have sufficient land to grow, or income to purchase, enough food."

          What about energy? The amount of geothermal energy we are able to tap from Earth, just today, is enough to provide us with 4000 years of clean, renewable energy (source: http://geothermal.inel.gov/publications/future_of_geothermal_energy.pdf). And on top of that we have solar, wind, wave and tidal to mention a few.

          It's all a matter of choice.
        • Sep 25 2012: well perhaps I extrapolated your idea further than you intended it to be extrapolated but eventually we could automate almost all processes on this world which would lead to nobody having a job while everything you need is being produced by machines.
          Then why would you need money?
      • Sep 25 2012: Nothing will really be free, it could be so that people won't have to work and can just pick up a meal at the local food replicator, but the amount of food they could pick up would always be limited. If you could pick up 1000 plates per day then you might as well say your daily income is 1000 plates of food.

        @Richard Krooman

        Food is just an example, people need other stuff as well, the point is that there would always be a limit to how much can be consumed (resources are finite) and that necessitates some kind of rationing system which would be equivalent to an income.
        • Sep 25 2012: Why would you want to get more food than you would want/need if it's free anyway?
        • Sep 26 2012: there are a finite number of people too... and besides if we manage to mine/colonise other planets before we f*ck this one up there will be infinite resources.

          But you are right though... But I just replied to the food. I do hope that in the future (say 50 years from now) all 'regular' meals would be free of charge for everyone.

          It's true that if everything is free then a lot of things need to change... Your example of a rationing system could work. But, to stay on topic, everything for free would definitely mean that it is the end of our current economy.
          How to best solve the problems that go with that problem is something I do no thave an answer for.
      • Sep 25 2012: @ Mats
        I don't think that geothermal is a good idea, the idea of drilling into a high pressure high temperature system like the earths core is very scary to me.
        As for solar, wind those two have two important restrictions, and are very costly.
        Water flow based enery has its own issues too (inland is huge amounts of flooding) and sea side is ecological disruption (especially if done in areas where there is fish migration)

        As for food, that also has a distribution problem, because you will need fuels to transport, people to distribute, thus it will still have a cost
        • Sep 26 2012: "I don't think that geothermal is a good idea, the idea of drilling into a high pressure high temperature system like the earths core is very scary to me."

          Then I will happily calm you down with the fact that most of Islands, the country, energy comes from geothermal. It's all safe and sound.

          "As for solar, wind those two have two important restrictions, and are very costly."

          What I was trying to convey in my previous post was the amount of efficiency we could have in a moneyless society that is based on collaboration and sharing of resources rather than competition and narrow self-interests.

          "Water flow based enery has its own issues too (inland is huge amounts of flooding) and sea side is ecological disruption (especially if done in areas where there is fish migration)"

          First of all, sourcing energy inland doesn't make any sense since there is little to no water activity. Second of all, sourcing energy sea side would have no effect on fish migration.

          "As for food, that also has a distribution problem, because you will need fuels to transport, people to distribute, thus it will still have a cost"

          Distribution is fairly simple and can be totally automated. Have you heard about pneumatic tubes? This is actually already in use in some hospitals. For longer distances we could use maglev's and other hi-speed transport that run on renewable energy. And again, this would be completely free and automated in a moneyless society.
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    Sep 20 2012: Already been worked out - see the article explaining what happens and how... an history lecture from the year 2337
    www.commonsensethinking.co.uk/history1.html

    So, here's an extract:-

    But “what was the point” my students would shout out! How could you possibly use more than a few people's "Lifetime Shares" anyway? This of course was where it got really interesting.

    Trying to explain the concept of wealth, materialism and capitalism endemic in this old society was tricky. My students live in the solar group that has no concept of capital and material things in general, nearly everything physical is available, mostly you don’t even need to offer a Share to obtain what you need as they are developed autonomously by the drones and many are not dependant on finite resources..... read on if you want to find out how it all happens!

    www.commonsensethinking.co.uk/history1.html
    also see Resources vs Capitalism
    www.commonsensethinking.co.uk/philos.html

    JP
  • Sep 20 2012: Yes, it may in fact have that effect. however, I strongly believe that automation will encourage human computer cooperation. learning to master this relationship will be key, there is no point in trying to stop this industrial revolution. I hope that education systems are tailored accordingly to this new era of labor.
  • Sep 16 2012: I'd like to add to your question - will automation justify social darwinism since unskilled workers will be less in demand?
    • Sep 16 2012: No, of course not: if you cut the poorest people out of your society every generation you go extinct because no society of 100% doctors and lawyers can function. Also very important, automation doesn't have to lead to unemployment: if you reduce working hours everyone can stay employed. That you thought of social darwinism before you thought of reducing working hours seems very disturbing to me.
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      Sep 20 2012: Skilled labor will always be in demand to satisfy our need for trinkets, pictures, toys. What we won't need is white collar workers. Computers can do most of their work today. The only thing that makes white coller workers valuable is money. They can't grow food, they can't make cloths, they just keep track of numbers (a computers job) and other record keeping chores, all done by computer today, just not implemented yet because no one want's to deal with a bunch of angry people in the streets.

      The machines to make a no money, no worry world is already here. What we need is less people.
  • Sep 15 2012: Ask the Luddites.
  • Sep 14 2012: In theory yes, economy should collapse. As the purchasing power of people drops and the production power rises this system and the economy as we know it can't function. But in reality it's more of a transition. Towards what i don't know but the transition is already taking place and any transition is hard.
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    Sep 13 2012: Interestingly, this issue was addressed back in 1995 in the book "The End of Work" by Jeremy Rifkin. And this was *before* the major off-shoring of jobs began - a trend which Rifkin largely failed to anticipate at the time.
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    Sep 13 2012: If technology overdrives this earth then Humans are out of this race and then Robotics might enter and they may fight each other and another technology might come arrive to destroy Robotics .

    Its all about creation and destruction .
  • Sep 13 2012: Wait...???
  • Sep 13 2012: This article talks about the issue of automation in China. Interesting read. http://www.thefiscaltimes.com/Articles/2012/08/20/Will-Robots-Cause-Mass-Unemployment-in-China.aspx#page1
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    Sep 12 2012: Google just came out with their open source "Course Builder" https://code.google.com/p/course-builder/
    maybe that will inspire people to teach - especially out-of-work teachers who would still like to teach but can't find a job in the field.

    We have to create our own jobs now.
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    Sep 12 2012: We will have a lot more time to practice our chess skills.

    I'm working on a radio controlled lawn mower. This will replace 5 guys who cut my grass and trim the lawn. Using technology to save me money deprives others of jobs. This means less tax revenue for local and national governments.

    Based on today's economic system the trend is to replace all labor at every opportunity and it will have a sever impact on the way we do business. When the transistor was invented in the 50's, it paved the way for smaller, less power consuming devices. The transistor was incorporated into chips which service the devices we use today. This was done in a little over 62 years.

    Today, technology is put to use almost as fast as it is invented. The time from prototype to retail device is under 10 years in today's highly integrated and networked world. We are looking at robots and radio controlled devices replacing perhaps 50 % of the worlds labor force (in most modern 1st word countries) probably within the next 25 years, maybe less. I think this translates into around 1.5 billion labor jobs (not counting the 3rd. World countries).
    It could take over 40% of labor jobs in the US alone.

    We have somewhere around 25 to 40 years to adjust to the new technology by either getting ride of half the labor force or education them to do other things. But, Technology needs resources to be developed. Natural resources are declining at the rate of perhaps, 3 to 7 % per year. An example of what I'm talking about is a giant road pave could be constructed to pave roads, which is completely controlled by electronics. The cost to purchase the steel and other metals to build it will be higher priced as time goes by. The electronics to control the device will be cheap. All the human does is control the device and build it. The rising price of natural resources to construct devices slow the rate of implementing the cheap electronics to control the devices.
    • Sep 15 2012: "We have somewhere around 25 to 40 years to adjust to the new technology by either getting ride of half the labor force or education them to do other things."

      Why not just halve everyone's workweek? After all, isn't technology meant to make life easier?
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        Sep 15 2012: Good Idea Mr. Smith.

        We could entertain some practical ideas like adequate unemployment compensation that does not expire, minimum wage, and a health care system that is not tied to an individuals economic standing.
        Economic downturn should be a shared, national condition, that is not born by a national social group while other groups just go on vacation till things get better. It should be a national goal to learn from our mistakes and rebuild. We should look at some of the ideas revealed in Livi LCL's conversation on nationalism and other similar questions, to see if they have relevance in this goal.
        We should invite and insist that our local leaders participate in social media networks like TED so we can have access to their thoughts and ideas, as well as, expose them to ours.

        Our leaders should be experts, not politicians.

        There should be some form of qualification process that stipulates a person is right for the job.

        We need to be serious in this country.

        An idea that came to me this morning was that we should motivate our high school students to ask themselves a simple question: "did they leave their high school in better condition than they found it?"

        Responsibility should be imparted into our next generation to help prepare them for the future life they will inherent and control. Perhaps we should start this process in Middle School.
        • Sep 16 2012: Nice post, but the idea is that there won't be an economic downturn (though I realize you may have been talking about the current situation, not a hypothetical automated future) if automation comes with reduced working hours: everyone will still be employed and the same amount of goods and services will be produced (machines will just produce a greater share than they do now). Living standard will go up because you'll still have all the material wealth you have now, plus more free time.
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        Sep 16 2012: You paint a very lackadaisical picture of the future Mr. Smith; we are far from this idealization. There will be economic downturns, but mostly because of the increasing rise in democracy and entrepreneurship this is growing in the third world. Our status as a superpower will diminish as those countries gain control of their nations by individual vote, which will direct the political machines and the automated process that feed their country. They will send us packing because they don't need our aid to feed their workers so we can exploit their resources. They can feed them with the agricultural that will develop in their countries.

        Yes, they will employ automation and develop their own means of creating these machines and employing them. The will compete with the Western world for market control, etc.

        So, what will happen here in the USA?

        As our economic share of the market declines, we will be forced to apply more tax revenues to feeding, housing, educating and providing medical care for those who out of work.

        You can't look at this picture from a static perspective. You have to dynamically follow it as it evolves, speeds up and slows down. You have to envision solutions then alter those solutions or disregard them, as the game progresses. You end up with a trash can full of paper and a relatively stark project folder.

        When the bell rings on wall street. The trading just doesn't stop.
        • Sep 16 2012: "we are far from this idealization."

          Of course we are and I never said we would react to automation by reducing working hours, it's the reaction that would give the best outcome but that doesn't mean it'll happen.

          "They will send us packing"

          They can't overtake us unless we make more mistakes than they do, at best they'll just get to the same level and I don't see a problem with that. If they can feed their own people and produce their own goods then so can we. The only countries that will have an advantage are those with lots of natural resources, most of them are already rich (US, Canada, Australia) or well on their way (Brazil, Iran, Russia, China).

          If we really need cheap foreign labor for our living standard (which I doubt when I see that Apple could spend $30 billion more on wages and still be profitable) then developing countries will have the same problem and if we don't need the cheap labor then we won't be hurt by other countries becoming richer as long as natural resources allow it.
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        Sep 16 2012: John you make constant references to "they", "them", "we". who are you talking about? Who are these people or nations? Without names, your comments sound a bit personal as opposed to enlightened and evidential.
        • Sep 16 2012: We're both from rich countries, "they" are the third world/developing countries. Do you agree that it is impossible for a poor country to overtake (though they can get to the same level) a rich country economically in a world where technology spreads very fast, and assuming the rich country doesn't make some really stupid mistakes?
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        Sep 16 2012: Well John........... feel that hot breath on the back of your neck? That's India and China fixing to pass you on the straight a way.
        • Sep 16 2012: I really don't see how they would scucceed: my country (which is not the US) has a solid education system and infrastructure. Any problems my country cannot overcome India and China can't overcome either. China and India can try to get to my country's level and they may succeed in that but they'll never overtake it unless my country makes mistakes (or China and India get their hands on alien technology).
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        Sep 16 2012: Well John it's like this, We in the US and Europe, used to have a space program. We had designs on creating a moon base, a mars base, now we can't afford it anymore. China's space program is still going strong and Russia..... well if we need ride to the space station, we have to hitch a ride with them.

        India, not to be outdone by China is proposing that they pick up the pace. India, as you are aware is the forth country to place their flag on the moon.

        By the way, Iran already has a flying saucer. :)
        • Sep 17 2012: Get back to me when India, China and Russia start spending more $ per capita on their space programmes than the US and Europe...
  • Sep 11 2012: This is a question I raised with my friend early last year. The following ideas I suggested probably related to your questions.
    First of all, we have already heard the recent development of automation and robotics in manufacturing as well as in other fields such as education and health care. There is bound to be effects on the demand of labor force and the skill requirement of workers. For the developed countries, we will have much higher productivity in industrial products, thus the unit cost will be cheaper. So as long as we could manufacture consumer products to satisfy our needs, (except few things we could trades between countries.) there should not be serious consequence for all the people. In other word, as soon as most citizens of the countries could make comfortable lives with fewer workers by automation, then everybody can survive with perhaps more leisure times.
    I also would like to make a suggestion for the "life after automation". Since huam life span becomes longer which causes population aging problem. So there would be less productive worker and more dependent elderly groups. So, we could make available a condominium system with elderly in one wing on a floor together with able-bodied young couple with children in the other wing on the same floor, The younger residents will "adopt" one or more "adopted parent(s) or grandparent(s)" to care for the elderly. The arrangement will also use the developed automation and robotics to mechanize and automate lots of care facilities so that most of the caring would be done by robots operated by a push of a few buttons which, of course, could be quickly learned by the teenager adopted grandchildren after a brief training. The young couples (mostly unemployed) could be the managers, bookkeepers, cooks, etc. for the condominium or the building complex maintenance system. This system would be beneficial for both the children and the elderly because the human relationships could be beneficial to both sides
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    Sep 11 2012: Hi Krisztian..I consider your thumbs up with joy......never got one from you before (:>)
  • Sep 11 2012: "So, what does increased automation mean for our, national and global, economy?"
    Well, it's always a question of supply and demand. If the demand for manual labour is going down, its supply should go down too. In other words, people who can't ensure a good education for their kids should stop giving birth. Why do they continue to give birth? Because the productive people are robbed (taxed) to support the children of unproductive ones.

    I know I sound awfully harsh. From what I have seen, Idiocracy (http://www.imdb.com/title/tt0387808/) is not a fantasy scenario. I foresee things turning out exactly that way.
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      Sep 11 2012: LOL, that's why they call us "Human Resources" :-) Pretty soon, we're not gonna be a resource anymore. Then what? :-)
      • Sep 11 2012: That's like when a 400kg guy is advised by his doctor to lose weight, and he says "But doctor!! I'll end up looking like an emaciated child from Somalia." :-)

        But consider this, peak coal, if it hasn't happened already, will happen within the next couple of years. Peak oil will happen in our life-times. I just don't see a way we can keep making babies at this rate, automation or not.

        Think of it in another way. We need resources of all kinds to survive. No one is just going to give it to us. We have to trade some of our resource to get the resource we want. We all have some combination of muscle, educated brain power, beauty, etc. What happens if there is too much of muscle and too little oil?
  • Sep 10 2012: For those interested in this subject, a very interesting read is: "The Coming Job War" by Jim Clifton, CEO of The Gallup Organization.

    http://www.amazon.com/The-Coming-Jobs-War-Clifton/dp/1595620559
  • Sep 10 2012: For me personally, Indonesia is developing country and mostly the land use in Indonesia are agriculture, forest and palm estate. Indonesia got economics recession at 1997 because the government was trying to change from agriculture system into industry system. The government did not prepare well for the basic need such as the human resources. Indonesia is wealthy country for their natural resources, unfortunately the human resources really need to be more workout, so it will make them more competent. I mean that for the developing country like Indonesia, the automation will lead to economic collapse if the basic need are not strong enough. Thank you.
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      Sep 10 2012: forced automation decided not by the people but a central board or person. the question poses itself: automation is the problem or central decision making?
      • Sep 10 2012: Based on my country experience, automation lead the economics in to reccession. But I am still considering about the automation, if Indonesia can implement the system because the weather in Indonesia is becoming drought and the farmers feel loss becauase their farmland doesnt give a contribution anymore. So... fifty-fifty...
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    Sep 10 2012: Why are humans so stupid????? Of course the eventual result of automation will be complete and udder collapse. Whether it comes from a total social (perhaps inter-generational civil war) or from unleashing 'Frankenstein' in the forms of chemicals, pollution or the death of bees and insects. The direction we are collectively heading is toward extinction. Faster and faster every day...
    • Sep 10 2012: "Why are humans so stupid?????"

      Because humans are victims of culture. It isn't their fault. It's the environment they grow up and live in that shape their values and actions.

      I, however, am here to give people a certain train of thought and ask the question people should be asking themselves where they hopefully find solutions on their own, by thinking things through.
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        Sep 10 2012: and who created culture?
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          Sep 11 2012: Humans are mostly monkey-see-monkey-do. 1% figures out how to separate sand from wheat by throwing it in the air, the rest start doing it cuz it works (even if they don't do it as well). When 1% figures out how to dupe the other 99% into a system that enslaves them by offering them a nice car, a swimming pool, Wii, a 92" 3D color TV, it's not hard to get them to follow that carrot. What the forward-thinking, non-following humans need to learn to do is figure out what kind of carrot will lead the rest of the race to a common sense, sustainable, permacultural world. monkey-see-monkey-do is forced upon us in elementary school where free thinking is squashed not only by teachers and the grading system, but by our own peers. It's tough for humans to NOT be the 1% of thinkers when it's easier to just go along with the tribe. I think at-home internet education could help to eliminate some of that. Interaction could come from social programs, like games or productive projects like building something or growing food, instead of classroom settings where there is competition and creative suppression. (and the word is 'utter' Craig :-) Not 'udder'. .Udders are on cows ;-) (in case it wasn't just a typo.)
  • Sep 10 2012: Edward - perhaps I wasn't clear. The credits would be an allotment of the total energy produced and humans would no longer need to harness energy themselves.

    "Are the robots going to sustain themselves and perpetually exist simply to altruistically meet all of our human needs for products and services? " - this would be ideal and what I currently think seems the best way to go. After all, in a purely capitalistic society, anyone who is working and not making capital off investment of capital is simply filling the role of the robot for the capital holders -- this is an old concept. In the robotic utopia model, one is simply putting all of humanity into the 1% so to speak, and the robots fill the roles of the 99%. This is a simplification, but that is certainly a useful end game. We will have android robots with dexterity better than humans soon at a price per hour that will out compete most every last human, along with general artificial intelligence that will surpass the smartest humans.

    As for total economic collapse -- I'm not sure if that is true -- certainly a drastic collapse in what the economy means today -- but economic collapse to me seems to imply some sort of social breakdown and dystopic future -- which could happen, but with the right planning, we may opt for something a bit brighter.. It seems it could simply result in an abundance economy where artificially intelligent self sustaining robots take care of humanity -- through producing food, building housing, handling wastes, medicine, education, etc. We create a new base layer for humans to exist on and they can then essentially focus all time in the higher relms of maslows pyramid.

    Some humans may choose to do these things on their own purely as entertainment, however no one need be required to work. Of course, this is assuming the AI is happy to take care of humans, and contains all sorts of other potential problems- but that is another thread, no?
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    Sep 9 2012: From my perspective, automation is fine. The problem is, education lags way behind. All the people who used to do the work, didn't go to night classes to learn robotics, physics, engineering, and programming.

    That being said, we need to take actions to serve the economy while we adjust for the learning curve. With demand for goods and services dropping so will go the demand for production.

    If we could invest in growth and innovation rather than profit margin we may be able to pull out of this spiral.

    Edited to add: Automation should not be confused with innovation. To automate a meaningless task has no innovative value as it only mimics that which is already known.
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    Sep 9 2012: I believe we are collectively heading toward inter-generational civil war, as automation and greed has rendered hope about ones future a hallow possibility. Once the occupy movements around the world realize their future has been sold to the highest bidder, watch out. It could get quite ugly.... and who can blame them?
  • Sep 9 2012: im just wondering what happened to those horse and buggy manufactures? Is that called creative destruction? If the schools did there job and the govt got out of the way and parents stayed together to raise their kids history shows the population is resourceful even w automation to survive. Do hate automated voice mails at call centers. Where are the people? But true it is some dont have the qualifications to answer
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    Sep 3 2012: recognizes that automation is ongoing for thousands of years, increasing our wellbeing, allowing the creation of newer and newer jobs along the way.

    fears that further automation will lead to collapse.
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      Sep 8 2012: Yes... 70% of the population is in the servant... I mean service industry... Much better.
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        Sep 11 2012: Is your tongue in your cheek David? Do you think automation is making the economy better and will continue to do so? Really? No sarcasm please (I am sarcasm challenged/blind).
  • Sep 3 2012: It depends. There are so many issues; however, a key issue is that only people with money can pay taxes or buy things. Don't get rid of well payed workers too soon. Look for the subsidies so many of these alleged low cost producers receive.
  • Sep 3 2012: I have an outlier perspective on this:

    (1) Yes, automation will eventually render most people unemployable (within a few decades).

    (2) In the end of days, once the robots and AI's have taken over almost all the jobs ... we'll make even more robots, and THEY will be the consumers. So we'll keep people employed at otherwise meaningless creative tasks, by making an infinite robotic/AI world in which their output gets consumed.
  • Sep 2 2012: Technology will cause the collapse or contraction of some sectors of the economy which are being automated. The workers who are displaced by machines will feel the collapse and experience the chaos of a world which changed when they were unable to change with it.

    Out of the chaos will come a new normalcy which will prevail until the next revolution of technology. Then the world will change again; people will be left bewildered and scrambling to re-invent themselves and to cope with the changing world.

    And the cycle will continue at an ever increasing pace.

    Perhaps one of the adaptations than man will make will be the realization that it will be necessary to predict what changes will come and to prepare society for them in order to avoid riots and revolutions by those displaced and impoverished by the latest wave of technology.

    We haven't done too well at predicting those changes. The "coming catastrophe" of the year 2000 fell far short of a yawn. Visionaries, such as the people at Xerox's Palo Alto Research Center, were regularly ignored for creating such useless devices as personal computers capable of networking with other computers. At the turn of the 19th to 20th century, the head of the US patent office announced that the patent office should be closed since everything that could be invented had been invented.

    It will be the individual visionary-entrepreneur who will see the path of the future. Unfortunately, he/she will too often be drowned out by the strident voices of the prophets of doom peddling their dime-novel, global warming grade road apples on NPR.
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    Sep 1 2012: Automation, if pursued without consideration for the overall good of humanity and without moral restraint, will bring much misery and pain. Just like the pursuit of money without moral bounds. Most things are good in their right proportion; but when taken in excess, they could become addictive, and then the destruction of the addict.
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    Gail .

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    Sep 1 2012: Combine run-away population growth with quickly spiraling automation, and there is no doubt that the time will quickly come when there are no more consumers to hold the economy in place. (There will be weeping and gnashing of teeth in those circles that impose such a harsh and cruel economic system on us so that they can live in mansions with servants, and fly in private jets.)
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    Sep 1 2012: Mats,

    I have no fear of automation. Artificial Intelligence is no match for real stupidity.

    Therefore I have job security.

    Bob.