> Just because there are new jobs doesn't mean the people whose jobs were automated out of existence will be able to take them.
Yes it does, because those are the people whose labor will be available. They'll take whatever jobs they're qualified for, which may lower wages in those occupations until the lower price increases demand or reduces supply by driving anyone currently in those occupations who is qualified for another job into the other job.
The change isn't necessarily Pareto optimal. There can be people who are worse off because the amount their cost of living went down was less than the amount their wages went down. But for most people it will be the opposite, because the change is an increase in productivity. You get more production with less labor, so you on average need to do less labor to meet your cost of living.
> Outside of undergraduate economics 101 textbooks Labour is not perfectly fungible.
It wasn't claimed to be. That's why people whose skills are now in lower demand may make less money than other people. But that doesn't mean they can't find jobs.
> You get more production with less labor, so you on average need to do less labor to meet your cost of living.
Citation Needed.
This isn’t how it works out in practice though. If the predictions of the 1950s were to come true, we’d all be working 10 hours a week and bringing in the same wages.
They weren’t wrong though. Efficiency did go up. It’s just that these efficiencies were never passed on to workers. Instead you’re now 3x productive, but for less money. That’s a pay cut.
The same thing happens if/when AI automates us all. We won’t become unemployed, because people like pmarca are scared to death of people with the time and energy to be mad about the raw deal they’ve been given. So instead, we’ll all get paid less, while working longer in more bullshit jobs.
This is the most cynical take, but also sadly the most true to history and therefore probably the future. Sure, the future might have every one of us with the ability to boot up with a command a self-assembling automated factory that previously took a supply chain of thousands of workers to run, but due to the suddenly enormous cost of land and raw materials relative to our make-work wages, nobody can afford to build it.
I am somewhat serious, but also being a little factitious here. There's a breaking point of widespread democratized (runnable by like 1-5 people, or a small community) technology where these companies don't have the same ability to absorb all these gains. If/when the basics for living are largely automated and able to be bootstrapped for very cheap / very little labor by AI-assisted tools, then the only way people are going to settle for jobs that give less than what these provide is by top-down dictatorial artificial scarcity and rent-seeking, blatantly destroying this production ability. I think there's definitely a cynical reality where that happens - and definitely regions of the world where it will - but everywhere..? Eh...
My money for the cynical take is much more along the lines of "massive social upheaval kicks off a world war with terrifying consequences" or "AI eradicates humanity". Less than that and honestly - we're gonna be golden in the long run, and it's gonna be an awkward but neat short/medium run.
> There's a breaking point of widespread democratized (runnable by like 1-5 people, or a small community) technology where these companies don't have the same ability to absorb all these gains
That is actually a technological solution for a societal problem that I see as a way out:
A device that produces food, water, energy and does sanitation for a family of 4-5 people. This device would make it possible to give families higher leverage in any negotiation because they can not be forced to work for survival.
We have the tech, only limiting factor is the size, but we will find a way.
- Solar Foods [1] (Protein production with CO2 and solar energy with a fermentation process)
Yep, exactly. I hope and expect to see automated vertical farm systems as cheap consumer products soon enough, for one. Though I also don't think we necessarily need to reinvent the wheel with this stuff - it doesn't have to be some independent micro system (which are typically much less convenient than mass-produced systems). We can still use standard farming/water/energy-production/sanitation - we just need to reduce the bottom-line cost of those services (which I am still strongly betting AI will impact hard) and make it so creating a competing system takes much less capital to boot up, in case existing services decide they want to try and charge the same consumer prices while eating up all the efficiency gains from AI.
We don't need to settle for lower quality, or convenience. We just need to ensure capitalism does what it's supposed to, and pass on the efficiency gains down to the consumer.
Though also, for my money - water, energy, sanitation? Those are already very cheap, and will get cheaper naturally. And food is cheap if you keep to basics. Automated housing construction and automated high-quality-meal kitchens (not just basics) seem like the areas to tackle for real cost savings. Ultimately the last bastion will be rent seeking on land though - which could be alleviated by creating housing alternatives off the conventional grid, or uplifting the quality of services in much of the developing world so there are much more options of safe areas to live (which again, is happening fast already and will happen much faster with a rapid improvement from AI tooling).
My argument is this is the natural way capitalism works - or is supposed to work - and we should treat that with hearty skepticism. But the only way this doesn't happen seems to be if there are monopolistic forces actively holding it back. Otherwise there really should be an abundance of cheap options for living coming to consumers in the near future, which would effectively be close to a UBI, and a "living off the land" alternative to wage labor.
(P.S. for housing, my bets are more on modular housing production in a factory setting becoming highly automated - the quality level of those builds is already quite high. But also just automation on the materials production all the way down the stack. There's hope for in-place construction savings (robots!) but I think that'll come much later. Logistics transportation was already due for some major improvements before AI reared its head - cheap electric engines just enable some very different structures that effectively have a net-0 cost of operation when combined with solar. Any innovation on that front would dramatically reduce the cost of everything else.
Dark kitchens are already a thing, and expect them to keep growing - especially as the tools improve. You could probably supply a whole city with the same wide variety of well-cooked dishes from a single facility with efficient transport. There's an element of dystopia there as cook jobs disappear and thus the personal touch, but the consumer reality (should be) basically-free meals at the same quality we expect from restaurants, on demand.)
You're ascribing the evils of market concentration to automation. Automation isn't why housing and higher education are so much more expensive now than they were.
Yeah, I saw that post too, but didn’t want to pile on every one of your facile economic takes.
You’re right, automation isn’t why housing and education are more expensive now. The increase of those is direct result of government policy choices encouraged by the voters. For housing, were taking zoning laws, and public objection laws. Higher education tuition increases for public universities is directly tied to cuts in government support for said government institutions.
But let’s get back to the topic at hand, whether or not benefits of productivity increases are felt by workers, or if it’s primarily concentrated with the already wealthy.
The answer is clear. The benefits are concentrated with the few. Sure prices drop, but so do wages and overall wealth by the majority. This isn’t even a controversial take. Government statistics have been tracking this for 40 years.
You’re asking questions like they’re some great unknowable, but not only is this common knowledge, but just an google image search away.
Company size drops too though. Enough automation and every person has the abilities that took hundreds of people in their parents' day. Sure, the wealthiest will be able to leverage their gains the furthest - that's just how capital works - but it's also reducing people's dependency on these big firms and enabling them to personally capture the gains from the drastically-improved means of production. If and when communities are able to self-sufficiently produce most of what they need with just a few people and some AI tools, the game changes. Sure, at that point the rich would already be building death stars and wealth inequality would be even more laughable than it is today, but it'd at least still be a step-up in quality of life from the current regime.
> Higher education tuition increases for public universities is directly tied to cuts in government support for said government institutions.
Government spending on higher education has gone up dramatically.
Most of the increase there is probably attributable to student loan subsidies and the inability of borrowers to default. Make it possible for anyone to borrow an obscene amount of money to bid on status goods like elite degrees and the consequence isn't that hard to predict.
> But let’s get back to the topic at hand, whether or not benefits of productivity increases are felt by workers, or if it’s primarily concentrated with the already wealthy.
> The answer is clear. The benefits are concentrated with the few. Sure prices drop, but so do wages and overall wealth by the majority. This isn’t even a controversial take. Government statistics have been tracking this for 40 years.
What you've failed to establish is any link between the productivity improvements and the concentration of wealth. Why has capital captured the higher share? TFA provided the answer. Market concentration as a consequence of regulatory capture.
Consider the result if we had this degree of market concentration without the efficiency improvements from automation.
A significant part of productivity gains went to workers up until 1999. There is no universal law that says productivity gains are inherently captured by shareholders. Of course if this is a possible option capitalists will choose it. I think this is a consequence of government policy where monopsony power prevents labour from getting a fair price due to only a handful of monopolists having the things that improve productivity.
The predictions of the 1950s were wrong because people chose more stuff over less work. Partially because of the rising cost of land due to concentrated demand leading to needing “more home” in wage adjusted terms. Labour saw gains from increases in productivity and this didn’t really decouple until 1999 after which it mostly didn’t.
Yes it does, because those are the people whose labor will be available. They'll take whatever jobs they're qualified for, which may lower wages in those occupations until the lower price increases demand or reduces supply by driving anyone currently in those occupations who is qualified for another job into the other job.
The change isn't necessarily Pareto optimal. There can be people who are worse off because the amount their cost of living went down was less than the amount their wages went down. But for most people it will be the opposite, because the change is an increase in productivity. You get more production with less labor, so you on average need to do less labor to meet your cost of living.