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Luke Hutchison

TED Fellow, Google

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Is capitalism sustainable?

Bono stated in his TED2013 talk that the numbers show that we can eradicate all poverty worldwide by 2030. While I really hope that is true, it begs the question: Is capitalism sustainable? Is it possible to have a rich and middle class without a poor class? The sad reality of capitalism is that if there is an exponentially small number of people with exponentially large wealth, there has to be an exponentially long tail of much poorer people who are each contributing to that wealth. Not that we necessarily need an exponentially small number of people with exponentially large wealth, but would the world keep running without capitalistic incentives that increase the separation between rich and poor? Can we eradicate all poverty without the rich sharing their riches? What happens to civilization when nobody is willing to work in the factories and orchards, or build roads?

(Please don't take this question the wrong way! Personally I wish that nobody had to work menial jobs. I just don't understand how we can eradicate poverty when so many jobs will always translate into low-paid labor.)

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  • Mar 22 2013: Let me discuss one more aspect of Capitalism from the future development viewpoint. Our economic activities have been evolving from rural agriculture to urban manufacturing culture. Then starting in the middle of the last century, both the agriculture and manufacturing have gone further labor intensive operation to the processes of "automation and robotics" (AR). This latest trend significantly changes the supply/demand scenario for he relationship between the labor force and the production of goods and services. And I would say that this trend is not avoidable, and probably unstoppable.
    In the U.S., the agriculture production is already more than halfway toward the full AR. The AR process not only saves the labor cost, it also save resources such as water, fertilizer and seeds. The manufacturing of industrial products is also improving quickly utilizing AR. They have to change because the foreign competitors are moving to automated manufacturing too. As a matter of fact, nowadays new methods in AR are started in Europe rather than the U. S. Even in service industry, they are using AR, such as the ATMs and movie rental kiosks everywhere.
    The AR in manufacturing production shifts the cost structure of the value of the products. We can no longer use the model by Karl Marx, saying that the increase in value over the raw material is entirely due to the labor cost from the workers. under the AR system, the production of consumer goods is mainly contributed by capital investment, coupled with innovation and enterprising. In most of the AR manufactured goods made from raw materials to finished products never go through a single human hand. Thus how can we say that the value of the products came from the the labor?
    As the AR process goes further ahead, there will be less required manual labor. So the economic/social structure have to change. But, as we can produce all the foods and consumer goods cheaply, there should be less poverty, but more leisure time for workers.
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      Mar 22 2013: I guess most of our labor force will be involved in manufaturing and developing the machines that feed us...
      • Mar 22 2013: The personnel involved after Automation/Robotics is in full swing, will mainly consists of engineers, software developers,and technical repairman who serve as "controllers" in case the AR process break down occasionally. Brawny labor force is not required.
        I have submitted a proposal of how to move the excess labor force to other use, such as the care-taking of the increasing elderly population in a previous conversation: "Will Automation leads to Economic Collapse?" sponsored by Matts Kaarbo. If you have difficulties finding my comment please send me an email thru TED, then I will sent you a copy of it thru email.
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          Mar 23 2013: I recall a similar conversation going on in the 70's. Congrssional hearings on what they thought would soon be a "leisure crisis". They were worried that Americans might not have enough to do to keep them occupied. It was just a short time later that we all started working 60 or 70 hours a week just tomake ends meet! Something seems to always be getting in the way of our utopia! Either way, I am okay with it, as long as I don't have to hoe 20 acres of cucumbers in my old age!
    • Mar 23 2013: Moving from human effort to machine effort, though it may eliminate some jobs does not reduce demand for a human labor force. Computers today perform more work than could be accomplished by the entire human population, but that machine productivity has created far more jobs than the limited groups of people whose jobs computers have usurped. The labor force will have a different but greatly enlarged landscape of employment as automation of labor increases.

      Consider the employment impact of the appearance of personal computers including those disguised as tablets, gaming consoles, and cell phones.

      An emerging automation technology with unlimited labor growth potential is the invention and implementation of 3D printers, both professional and personal. When these devices become as ubiquitous as personal printers the output and job potential will be as large as the computer revolution.
      • Mar 23 2013: I agree with you, Richard. though there is one consideration needs to be considered. What the additional manpower need is technological adapt workers which may not be quickly trained in large numbers. Moreover, I foresee the needs for care-taking personnel in the role of human service for the increasing (aging) elderly population. so certain adults or youngsters might be suitable to serve in a slightly less technological, or managerial or human relations positions. I have posed a comment in a previous discussion in TED, referred in my answer to James Burns above. You are welcome to take a look, if you are interested.
        • Mar 23 2013: The training question is almost a red herring argument. Computer kiosks were placed in rural towns that had never seen a computer. There were no instructions. Children saw them and began to experiment. Soon they were both computer and internet savvy, teaching themselves and each other. People have an amazing adaptability. During WWII housewives built ships and planes. Amateurs made bomb sights and cameras. When the war was over most returned to their pre-war lives. It is no different today. Workers can be taught new technology very rapidly, and few will need a broad spectrum cross discipline knowledge base. Most work will still consist of a narrow range of tasks repeated over and over. Even that will be supported by increasingly capable computer programs to deal with the more esoteric calculations. For example, thanks to the Inventor program from Autodesk I have shown newbies in hours how to create complex designs that can be realized as parts from the new 3D printers. Such engineering and drafting capabilities used to take years of specialized education. Now engineering software can assist with materials choice, weight/strength requirements, flow characteristics of liquids, gasses, and electricity.

          Sure, as always we will still need highly educated people for innovative design in esoteric disciplines, but the days of weather broadcaster, for example, needing to pore over charts and numbers to figure out what is happening in the skies are over. He only needs the computer printouts and a compelling video presence to succeed.
      • Mar 23 2013: Richard, let me answer your second response by my post in the previous TED discussion as follows:
        I also would like to make a suggestion for the "life after automation". Since human life span becomes longer which causes population aging problem. So there would be less productive worker and more dependent elderly groups. 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 teenagers; 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 (for the lack of role models or guidance) and to the elderly to relieve their loneliness and to be able to interact with someone with more cheerful view in life..
        You see, I had already thought about the adaptability of computer skills by the young generations, especially to be utilized in the AR controlled environment. But the trainees for the "controller/repairman" in the fast moving AR manufacturing processes need a good knowledge of the inner construction of the AR equipments, which has to be taught by academic or professional training rather than by kiosks. Furthermore, would you trust some teenagers to supervise the high speed manufacturing to be the main "supervisors" in the machine room? An if we are talking about adults, especially the older ones, I doubt that we can educate them to fill these jobs without a formal class and hands-on practices as well.

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