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Tuesday, September 08, 2015

Email to Don Boudreaux

Dear Professor Boudreaux,

I’d like to respond to your two part critique of my recent comment. Since the comment is short, I’ll paste it here for easy reference:

“Change nearly always produces both winners and losers, and while innovations heavily favor the winners, especially over the long run, libertarians willfully ignoring the real pain of those whose lives are badly damaged or even destroyed by economic changes are a major turn off to vast swaths of the populace.

“The ideology that it's perfectly okay, indeed a wonderful thing, to allow and encourage serious destruction of some people's lives for the greater good is not widely shared by your fellow americans.”

Regarding the first sentence of my comment, you noted that there is “ambiguity of the meaning of the word “winners” when used in such contexts.” I apologize for not being clearer, but your interpretation in the first part of your critique does not match my intended meaning. My intended meaning is that the “winners” are “produce[d]” by the “change” (or changes), not that they were already “winners” (as in wealthy).

As a result, I completely agree with everything you wrote in part 1 of your critique, except for the minor detail that you weren’t critiquing what I intended to communicate. I’d feel guilty for you wasting your time writing that post except that it is a good post that I’m sure your readers found entertaining and enlightening and, besides, you could have asked me for clarification since you did realize there was “ambiguity.” I make no attempt to hide my identity and I’m easy to find and contact.

Let’s move on to part 2 of your critique. Once again, I find your critique mostly addressing things I don’t believe are contained in my comment and, at minimum, meanings I certainly didn’t intend to convey with that comment. Indeed, I agree with much of what you wrote.

Where I’m guessing we diverge is that you seem to believe that someone cannot both be “a huge beneficiary of market-driven innovation” and simultaneously have his or her life “badly damaged or even destroyed by economic changes.” It’s clear to me that there are plenty of people who have both attributes simultaneously.

For example, from Business Insider:

One out of every five suicides in the world can be associated with unemployment, according to a new study published in The Lancet Psychiatry, via CBS DC. [...]

Of the approximately 233,000 suicides examined for each year, around 45,000, or 20%, were linked to unemployment, the study shows.

I’m confident that at least some of those suicides are due to unemployment due to job loss due to “market-driven innovation.” I also believe that a life ended by suicide due to that job loss qualifies as being “badly damaged or even destroyed by economic changes” as well as “serious destruction of some people's lives” and, in your words, as “literally destroyed.” Yes, they were beneficiaries of countless centuries of innovation too, but I doubt they were thinking of the wonderment of economic progress when unfathomable despair drove them to commit suicide. Even if they were clearly beneficiaries prior to the despair that killed them, it's a tough sell to claim they are still net beneficiaries after they lost their jobs and took their own lives. It's also tough to trade off a single suicide with people paying a bit more for, say, transportation in a taxi. How many overcharged taxi fares is worth one death? I don't believe that there are a lot of people who would like to be responsible for making that trade off, even if it bothers you little.

You believe that I’m missing “the larger picture” which is, in a nutshell, that we all benefit from the sum total of all “market-driven” innovations (I’m not sure why non-market driven innovations don’t count, but that’s unimportant for this discussion) that have ever occurred. I agree completely with that “larger picture” and the point of my comment (and many of my other comments about your posts over the years) was to encourage you to consider an even bigger picture in your writings. The even bigger picture includes human psychology including emotion, irrationality, intuition, (intellectual) fashion, delusion, etc., all those things between instinct and reason that are just as critically important to the functioning of the extended order, if not more so, than economic principles.

Note that I'm not saying there's much that can or ought to be done about Creative Destruction. I'm not calling for government intervention. I'm not calling for slowing down innovation.

I'm only requesting that you occasionally consider and acknowledge some of the pain and despair caused by economic changes. I believe it would actually make your arguments more compelling to those beyond your avid followers and it might help your followers make more compelling arguments as well.

Sincerely,
Bret Wallach

44 comments:

Howard said...

Nice reply. Hopefully Don gets the point.

erp said...

Are you guys saying the status quo must always remain just that? In the oft-used example of buggy whip makers thrown out of work by the horseless carriage, it seems reasonable that the explosion of opportunities brought by the auto industry could have accommodated all but the most hide (pun intended) bound.

Lately, I've been involved with public assistance bureaucracy and the stories and situations I hear don't tally with what the propaganda machine wants the public to think of their good deeds. It is, in fact, horrific -- on the level of the V.A.

Clovis e Adri said...

Erp,

No. As far as I understand, Bret is just telling Don to not show up so happy about people losing their jobs, even if that may be a good thing for the economy in the long run.

Bret is not usually much attuned to "people's feelings", but he found someone else so less attuned that he even felt the need to tell the guy to cheer up a little bit to his fellow human beings.

I think we are witnessing a prototype of future communication between our Robot Overlords, or at least the bits of it we'll be able to hear before they move along too far from our zoo cages.

erp said...

I didn't read the link and haven't read Boudreaux in a long time, but I can't believe he said he's happy about people losing their jobs. Are you sure that's what he said?

You haven't answered my comment.

What, in your opinion, should the government do about lost jobs more than is already being done: multiple year unemployment checks, EBT cards, tax payer funded job programs to retool their skills, etc. ad infinitum most of which only makes jobs for public service unions.

Fewer than half the "able-bodied" people in the US are in the work force and as takes very little to be declared totally disabled, the real number must be much higher.

Bret said...

erp,

Boudreaux is not so much happy as in complete denial that market-driven anything can ever be bad. He's sort of the anti-Harry. :-)

Consider the following Boudreaux quote: "Over the long run – to which Mr. Wallach rightly refers – market-driven innovation produces only winners."

Only winners. Ever. No other possibility. Even if you lose your job you're a winner and a beneficiary of free markets.

Bret said...

Clovis wrote: "Bret is just telling Don to not show up so happy about people losing their jobs..."

Not exactly. What I'm telling Boudreaux is that any policy argument that doesn't even acknowledge the downsides, much less discuss mitigation and solutions, is not going to get wide support, and, in fact, is going to be dismissed out-of-hand by a lot of people, if not a substantial majority.

erp said...

Bret, as I said above, there are and have been for a long time, many mitigation solutions and in the big picture, innovations are winners for us all even though in the short run, some us suffer losses, as for instance, the ice men before refrigerators whch I actually do remember. Even they, I feel sure, appreciated refrigeration after the fact.

Clovis e Adri said...

Bret,

Other than your support for a guaranteed minimum income policy, do you believe in any other kind of mitigation in a Libertarian order?

And I guess that most Libertarians wouldn't agree even with that minimum income thing anyway.



Erp,

You pose yourself too easy a task by pointing out all those menial jobs taken away by technology improvements.

Even more when talking about times when it was easy to find another menial job after you lost the old one.

We'll run out of those menial jobs. And we'll run out of a lot of non menial jobs that usually take some brain too. Your husband's profession, for example. Or mine.

The comparison people make - on how technology always further generated more and better high paying jobs - is something you shouldn't take for granted. Most new necessities generated by our new tech revolutions will most probably be fulfilled by some new targeted AI to solve them. The differente from the future, and the past, is that once you reach a "critical mass" of new AI and technology, it will keep generating more by itself. The vast majority of people already are more of spectators of this process than actors.

Will we call it "creative destruction" once its creativity no longer comes from humans?

Peter said...

Bret:

It seems to me that dominant ideological thinking on the right-left continuum has a life-cycle of about thirty to forty years. The liberal/left hegemony of the postwar years was so entrenched intellectually that there wasn't much of an organized free-market political force to oppose them until well into the sixties. The other side pretty much owned the playing field until then. The 50's and early 60's were their glory years during which civil rights and many of the basics of the social network were established with a lot of GOP cooperation/acquiescence. I see little evidence the public today has any taste for undoing those basics.

By the seventies, the bloom was off the rose and the left project became decrepit. Inflation, stagflation, crumbling infrastructure, endless union blackmail, urban decay, debt crises, underinvestment, feckless foreign policy etc. The leftist narrative is that Reagan and Thatcher rode in on the coattails of a coalition of misanthropic, dysfunctional misfits marching against history, but they were clearly a reaction to public anger and despair over failure and madness.

What I remember clearly from those years is how many confirmed leftists took the position that the problems of liberalism/socialism called, not for an honest reappraisal of misguided or outdated assumptions, but for more liberalism/socialism. The only problem with any government initiative, no matter how crazy or destructive, was underfunding. Then, as now, comparatively few were prepared to engage in honest self-criticism.

It's now been thirty-five years since the triumph of free-market thinking and your little dispute with Café Hayek shows something similar may be happening on the right. Free-market theories have been so dominant in economic thinking in the West that in the 90s even liberals like Clinton, Blair and others governed from the right economically (culturally is a whole different story). But beginning in 2008 cracks have started to appear in North America and especially Europe: the ambiguous benefits of the religion of ever-expanding free trade, the political power of the financial industry and central bankers, the concentration of wealth, etc, not to mention wildly expensive foreign policies that thwarted confident predictions--all should be leading us to honest self-criticism based on what our lyin' eyes tell us is going on out there and with respect for the reality of peoples' lives rather than seeing them as interchangeable rats in an ideological lab. Instead we see libertarians calling for ever purer applications of their theories and leaning on rote shibboleths like crony capitalism and bad individual choices (I treasure the fellow over there who tried to argue people are individually responsible for the havoc caused by losing their jobs--poor planning).

Even our rhetoric has grown stale. In the 80's, there was much hope and excitement over the thrill of breaking out of a sclerotic stasis. Words like innovation, excellence, "morning in America", etc. inspired many. I don't see much today except for repeatedly touting the virtues of "hard work" to a population faced with a bewildering tornado of "creative destruction" over which they feel they have no control. Not much to offer a new generation yearning for ideals to define their lives around.

Individuals can change, but rarely a whole generation. So hats off to you and keep up the good fight. There's a special place for you in the next world, but I fear maybe not in this one.

erp said...

Clovis, for a young guy, you yearn for the old and the static.

Things are always changing mostly for the better when left to individuals doing it. As far as my husband's profession: when he started, he had to do a three-year apprenticeship before he could even take the CPA exam. That was after a four year college degree in Business Administration. Then everything was done with pencils and pads with huge ten-key adding machines in themselves a huge improvement over the machine between their ears, although my father could easily beat even modern calculators in simple arithmetic.

So, pencil and pad makers took a hit, but developers of software took up the slack and made it not only easier to keep your accounts, but offered huge improvements in record keeping of all kinds.

It's individual brains and creativity that moves the human condition forward.

... and I did offer non-menial examples in the auto industry for all kinds of jobs from the conveyor belts to the corner offices.

Bret said...

Clovis asks: "...do you believe in any other kind of mitigation in a Libertarian order?"

In the United States, we have the federal government, state governments, county governments, city governments, community governments, housing association governments, charities, churches, NGOs, think-tanks, companies, associations, volunteers, etc., all of which can plausibly play a role in the mitigation of adverse economic events.

I think that the federal government's role in mitigation should be limited to limited broadbrush redistribution (perhaps such as a guaranteed income or block redistribution between the states) and the remaining mitigation should occur at lower and more localized levels.

Bret said...

Peter,

That's a really good comment. Mind if I elevate it to be a post? I would just create a post, preface it with "Peter wrote in the comments on the post ..." and then post your comment in verbatim. It seems a shame to let something so well written languish in the comments section, to soon be buried for all time.

Bret said...

erp wrote: "Clovis, for a young guy, you yearn for the old..."

He studies the origin of the universe! There ain't nuttin' older than that there!

erp said...

Bret, having had a member of Clovis' cohort born into our family, I can attest to their ability to comprehend what is to us lesser beings incomprehensible while the obverse is also observable.

There are numerous anecdotes in our family lore about the manifestations of our genius' cluelessness.

Bret said...

Don Boudreaux responds.

I'm commenting up a storm in the comment section. Well, maybe not a storm, but a least a light drizzle?

Peter said...

Sure, Bret, go ahead and feel free to copy edit. It was an early morning comment born in the land of sweeping generalities, so I suppose I can expect a lot of attacks, but I'll have to live with it.

Boudreaux is obviously a bright guy, but this sentence from his response struck me as the nub of his fallacy: But when politicians, preachers, popes, pundits, and professors point to job losses they do so overwhelmingly in the context of calling for, or at least implying the desirability of, policies to prevent or reduce the number of such changes. That's very true, the left is constantly trying to head off change and happenstance. But at some point it responds to the reality of the human condition. Why does he think most people would happily endure repeated disruptions and dislocations because he has convinced them that, together, they hold out the promise of an ever-larger macro economic pie? "Go West Young Man" is the advice a resilient, optimistic society gives to young people seeking opportunity, but if you need such advice ten times in a lifetime, you may well end up a psychologically exhausted, embittered defender of constancy and stasis.

erp said...

Peter, what can't be cured, must be endured. If there are repeated disruptions in ones circumstances, what is your solution? Declare the status quo to be optimum and disallow by law innovations and new inventions?

There are already many remedies in place for those in distressed circumstances which you guys have ignored.

What more do you think should be done?

Peter said...

what can't be cured, must be endured.

Now, there's a winning slogan for the right. Almost as good as "Freedom is Hard".

We live in democracies, erp. That means you have to win elections to exercise power. That means more people have to find your ideas compelling and inspirational than the other guy's. If you are happy to be one of those frustrated political losers who walk around saying "what the people don't understand is..." that's fine, but I'm not.

Besides, I'm often told by libertarians that we are each best qualified to determine what is good for us as individuals and what is not. Why wouldn't it be perfectly reasonable for a citizen to decide there is only so much change and creative destruction he will experience before the incremental marginal value is less than the marginal value of more security and stability? I haven't got a crystal ball but I'm betting more and more people are going to make that choice in the next few decades.

erp said...

Peter, freedom is hard -- hard to win and hard to maintain and I didn't think I need the s/off at the end of the first sentence.

Totalitarian communism came the closest to stability in modern times. Is that what you propose?

You haven't answered the question: What more do you think tax payers should fund over and above the current panoply of handouts and free retooling programs for latter-day victims of progress.

Bret said...

Peter,

Possibly the most fundamental principle of libertarianism is that as many interactions as possible between people are voluntary. Especially economic ones.

X offers Y at job for an arbitrary, but hopefully longish, period of time for $Z per hour - all voluntary. P makes an innovation that enables him to sell Q to person R at a low price (all voluntary) and substantially below what X sells it for. Y's job is now not sustainable and X lays him off (all voluntary as part of the original employment deal - if it wasn't part of the employment deal, X wouldn't have voluntarily hired Y in the first place). All of these interactions and events are completely voluntary. This is also Creative Destruction.

Where do you interrupt this process? Tell P he can't innovate or that he must hide his innovation? Tell R that he must pay a higher price for Q? Tell X he must keep paying Y even though he can't possibly sell any of the Qs that Y makes?

Which? All the choices are quite coercive and damaging to the coerced party?

It's easy to say that a citizen could "decide there is only so much change and creative destruction he" is willing to experience. It's quite hard to really do something about it without some pretty serious government coercion.

That's why I'm more inclined to support broad brushed and less coercive things like Charles Murray's proposal for a guaranteed income. Stopping Creative Destruction is very destructive in and of itself, so maybe it's better to try to mitigate the negative effects.

Peter said...

Enough with the slippery slopes, erp, I am no less opposed to government dirigisme of the economy and no less a believer in the market than I ever was. The only new public programmes I can think of I would support would be in the area of mental health care. But I do wish people would stop musing about getting rid of the basics (not necessarily the details) of the social welfare system we have, which is a one-way ticket to the political wilderness.

A hard look at ever-expanding free trade is overdue. It works well-very well--between and among countries with similar legal and social cultures, but going head to head with corrupt countries who pay workers pennies and care nothing for things like health and safety is another matter. The left is gradually moving towards the disaster of autarky in reaction to the scourge of "neo-liberalism", a.k.a. free markets and internationalism. Conservatives should come up with something better than one happy global free trade zone.

The banking and financial industries are too complicated for me to propose specifics, but can we please look at their growing political clout from the perspective that they are not just another private sector industry whose sole purpose is to maximize profit? They have fiduciary/trust duties attached to the money they invest and the "too big to fail" syndrome shouldn't give them a pass on being accountable for them. Plus even if you don't like government, surely you would agree they are subject to the authority of government, not the other way around. And let's please admit that income inequality and the growing concentration of wealth are real issues? I'm happy to listen to market solutions grounded in the realism of the here and now but not simple affirmations of faith about how everything will fix itself automatically once we cut back government to mid-19th century scale.

There is no shortage of serious issues that could benefit from market-inspired solutions, but can we stop our fixation with fringe issues that only make us look wacky? Who the hell cares whether the government funds PBS, museums, libraries and symphony orchestras? The market has never worked all that well in that field and besides, if that keeps the lefty artsy crowd distracted, it's a sound investment from my perspective.

Basically, I'd like to see a more realistic intramural discussion of the reality of 21st century government as expected and depended upon (and I don't just mean welfare and handouts) by the electorate rather than public Luddites dreaming of reversing more than a hundred years of history.

How am I doing?

Peter said...

Bret, I wouldn't go very far in challenging you about all that, although I'm not sure mitigating the effects of creative destruction necessarily implies coercive regulation only. But let's give X, Y, P, Q and R names, histories, ages and family circumstances before assessing and measuring the theoretical damage.

Peter said...

Besides Bret, if these five dudes are allowed to do whatever they want, as sure as God made the little green apples, G, L, K, M and O will show up to complain their freedoms are being denied. :-)

erp said...

Peter, I can't believe you believe this never mind actually putting fingers to keyboard and typing it: Who the hell cares whether the government funds PBS, museums, libraries and symphony orchestras? The market has never worked all that well in that field and besides, if that keeps the lefty artsy crowd distracted, it's a sound investment from my perspective.

This is what you and all of us should care the most about. It's where regular people, not those like us who like nothing more than arguing about ideas, get their information. These institutions have been in the hands of the far left for decades, if not, centuries and they define tastes, trends ...

I disagree with your other points vehemently. Government isn't the solution, it's the problem.

I don't think you guys have actually seen government at work and understand how easily most people play the system while the truly needy get the runaround. You are busy working and bringing up families, etc. Try doing some volunteer work with those who are out of the main stream in every conceivable way. Young girls with a couple or more babies have guys who live off them, taking their checks for drugs or gambling and abuse them and the kids. These girls receive lots of benefits, but have no more idea of how to manage their lives, take care of their kids or their finances than a new born babe.

Peter let's not go too far back -- just to the New Deal. Things have from bad to worse as our betters sought to control fairness in all things.

Plus even if you don't like government, surely you would agree they are subject to the authority of government, not the other way around.

What does that mean? The government is the servant of We, the People. Has that been reversed? Are we now the government's subjects.

Peter said...

Darn it, erp, and here I had such high hopes of turning you around.

I fear that, like a good Marxist, you are determined to sniff out ideological deviation far and wide and that, if the facts get in the way, well the facts will need a new interpretation. Fortunately, other conservative voices appreciate that all is not well in free marketland. Before we even begin to argue his policy prescriptions, I suggest to you that a large proportion of the electorate has come to believe that the very title of that book is an oxymoron.

Here's some more heretical thinking grounded in an eyes-wide-open observation of what is going on out there and a refusal to be blinded by all-purpose exculpatory shibboleths like creative destruction.

erp said...

Peter, turned around to what? You haven't spoken to what more you think should be done in the name of fairness and equality of income distribution, especially in areas of the world where $2/day represents a 100% increase in their daily income.

Clovis e Adri said...

Erp,

---
Clovis, for a young guy, you yearn for the old and the static.
---

Well, it is true I may be fond of old things and old people - why else would I be in a blog where everybody else is next to 60 or beyond?


But on jobs, no, I don't yearn for the old order. I admire and enjoy technology. I am making the case though, that our current political and social order is not prepared for the next phase of tech revolutions. It will make a few people even more unbelievably rich and turn a large majority into destitutes - for the main wealth engine transmission, jobs, won't be around for them.

Too pessimistic? Well, maybe, I am an old soul in a 34 years old body :-)

Clovis e Adri said...

Bret,

I would comment in that Cafe Hayek thread, had I a Facebook account, but as I haven't, I'll drop it here:

One thing Boudreaux and Krugman have in common is that both look to be very sure of their views on Economics, and all they need is to explain it all to those stupid people out there so they can understand it too.

I've been used to such condescending behavior in my own narrow field too. The Physicists I know who most remind me of such Economists are String theorists: they too have multiple self-conflicting theories and, nevermind not a shred of evidence to their side, they do think to be hitting at some ultimate truth. They only need to explain it a little bit better to us stupid people who can't get it.

And Nature laughs.

erp said...

The phrase "Go west young man" translates into grab the new opportunities and don't lament the passing of the old.

The few unbelievably rich often transform the world as the "robber" barons of old did and the new techo-rich are trying to do today by their support of misguided social engineering or their literal reaching out for the stars.

Destitution ain't what it used to be either with the destitute in the US living better than pashas of old.

A 30 year old girl of my acquaintance who has two children on full disability without any visible manifestations of same gets tax free $6,000/mo. from us taxpayers. Lives in new public housing with all the amenities, has a new $40,000 Jeep and lives la vida loca (no, she is not black nor hispanic nor any other protected minority) on our dime. Multiply that hundreds of thousands if not millions and you can see why so many people are not looking for work.

A regular tax paying citizen would need a six figure income to net that much and then would need to pay for living expenses out what remains.

The worst part of that scenario is those on the dole are not contributing to the common weal and aren't teaching their children that with rights come responsibilities.

That's what you should be worried about, not robots.

Robots can't take over the world while we maintain control, but a large portion of our fellows are finding it very easy to give over control for a handful of colored beads and fire water. Nothing much has changed in that respect and I expect robots will take the lesson when they take over.

erp said...

Clovis, I wonder if you see a parallel in string theorists' belief that the problems with the theory is it hasn't been explained clearly enough to be understood by the general public and lefty thinking that socialism hasn't worked yet because of imperfect implementation, not that the theory itself is flawed.

Bret said...

Clovis wrote: "I would comment in that Cafe Hayek thread..."

Commenting there is not for the faint of heart. The resident attack dogs are pretty nasty. For example here where I'm called a bald face liar (impossible, I have a beard!) and extremely ignorant (among other insults).

Clovis wrote: "One thing Boudreaux and Krugman have in common is that both look to be very sure of their views on Economics..."

They sure are! I work hard on becoming so certain of things, and sometimes I almost get there, but then I fall back into a sea of uncertainty.

Clovis wrote: "...all they need is to explain it all to those stupid people out there so they can understand it too."

I think that describes Boudreaux. I rather think Krugman's shtick is to say, "X is obvious even to a moron, so if you disagree you're clearly a really bad, awful, horrible, evil person." He's a master at appealing to emotion and tugging on heartstrings. The difference is subtle, but there's no doubt in my mind that Krugman's approach is far more successful.

Clovis e Adri said...

Erp,

----
A 30 year old girl of my acquaintance who has two children on full disability without any visible manifestations of same gets tax free $6,000/mo.
----

We live in very different countries, Erp. Down here such a person wouldn't get more than $200/mo. Even accounting for purchasing power parity, they would keep being destitutes.


Let me add that, knowing how jobless/destitute people live down here, I am completely justified in my worries about a robot dominated jobless future.

Maybe in America you'll yake care of everybody with all the wealthy coming from those technology wonders - I don't know.

What I do know is that down here things are different.

erp said...

Clovis, that doesn't compute. If there are so many jobless people on hand to work, why would it be necessary to produce expensive robots?

Clovis e Adri said...

Bret,

----
He's a master at appealing to emotion and tugging on heartstrings. The difference is subtle, but there's no doubt in my mind that Krugman's approach is far more successful.
----

Well, being the Krugmann-defender-in-chief at this blog, I must say you understimate his powers.

He looks to also excel at (i) his command of the English language (by what I mean his literary prose) when translating Economy to plain language and (ii) his efficient use of irony in the service of progressive worldviews (and in attacking other views in Economy too).

Those are qualities only Master Propagandists truly dominate.

Clovis e Adri said...

Erp,

Because robots will get ever less expensive, as per Bret's recent post examples.

erp said...

Clovis, With all the things to worry about in today's world, I put robots taking over very far down the list.

Clovis e Adri said...

Erp,

You get it backwards.

Precisely due to all things to worry about in today's world, it is better to think of a future menace to life on Earth so we can comfortably rest in a stupor now.

Bret said...

Clovis wrote: "I must say you understimate his powers."

I agree with your additions and would add some more as well. Still, his ability to make soooo many sentences have emotional appeal in the rather dry world of economics I think is his most impressive ability.

Clovis e Adri said...
This comment has been removed by the author.
Clovis e Adri said...

I also post here my email to Don Boudreaux on another topic. Unfortunately I didn't have the honour of an answer, like Bret.


--------------------------------------
Dear Prof. Boudreaux,

You recently posted this link in your Cafe Hayek blog:

"Inspired by a new paper by William Nordhaus, Tim Worstall – writing over at Forbes – makes clear why there is no sensible reason to worry that automation will destroy all jobs."

I kindly ask for further comments in your blog about it.

In my opinion, Nordhaus paper does not look like to describe neither what you mean ("no sensible reason to worry that automation will destroy all jobs") nor what Mr. Worstall interprets from it.

For example, the same graph and numbers used to display the 200% wage growth highlighted by Worstall, also imply no jobs for humans in the long run. In other words, the 200% wage growth will contemplate an ever dimishing share of workers (no wonder Capital's asymptote to 100% share). Not to mention how sound was to assume constant labor for that simulation.

An alternative headline could as well be "William Nordhaus makes clear automation will destroy all human jobs in the long run, but the few remaining ones in the meantime will pay very well". Not exactly an unexpected result.

My regards,
Clovis Maia

Bret said...

Clovis wrote: "I didn't have the honour of an answer..."

I'm not sure I felt honored, exactly, by the response to my email. :-)

I think that many bloggers are far more likely to respond to emails about what they write as opposed to what they link to so please don't feel dishonored by his lack of reply.

Clovis wrote: "Nordhaus paper does not look like to describe neither what you mean..."

I have a blog post in process about that paper (though I only ever finish about half of the posts I start, so it may never make it through the pipeline). My take on that paper is that the approach of the singularity is not detectable at this time from any economic measures and models. To the extent that some measures might detect it, it's more than 100 years away. Thus, the model of the singularity can be safely ignored. Thus, Tim Worstall's "writing over at Forbes" probably has nothing to do with reality in, at minimum, our lifetimes.

Nordhaus could be wrong, because his model of this particular singularity might be off. Different singularities have much different behaviors in their neighborhoods. Black holes can be detected a long ways off whereas sin(x)/x has no hint whatsoever of interesting behavior in the neighborhood of zero.

But, what Worstall is saying, is that at the singularity (the one that's far off), is that we may only need to work a microsecond per year, but we'll make billions of dollars during that microsecond. So yes, the amount of work humans do will go towards zero, but boy-oh-boy will we be rich anyway.

Whereas the exact logistics of working for a microsecond is not necessarily straightforward to see, it's easy (for me) to imagine alternatives such as a guaranteed income enabling widespread benefits from a robotics singularity.

Clovis e Adri said...

Bret,

Thanks for your views here. I'll wait for that post.

Hey Skipper said...

[Clovis:] We'll run out of those menial jobs. And we'll run out of a lot of non menial jobs that usually take some brain too. Your husband's profession, for example. Or mine.

The comparison people make - on how technology always further generated more and better high paying jobs - is something you shouldn't take for granted.


Dammit, why is there never a like button around when you really need one?

Clovis, what you are saying encompasses what I see in every investment portfolio prospectus I have ever seen: History is no guarantee of future performance.

And there is a particularly elephantine reason to invoke that now. Previous technological changes were almost exclusively about getting more energy, and using that energy more efficiently.

Since the first transistor, though, technological change has mimicked more and more of what the human brain does.

Having more energy, and using it more efficiently, gives people more things to have, and more to do. Harnessing information is a different matter, altogether.

My occupation is, for the moment, in very high demand, and is remunerated accordingly. But sometime in the not too distant future, maybe within my lifetime (I probably have at least 25 years left to me), silicone brains will be able to do what wet brains do now. Which will lead to an emblematic transition: a machine up front doing the hard stuff, while people in back — flight attendants — are still required to do the easy stuff.

Unfortunately, I don't see anything like a compensatory occupation to take up the slack.

And my occupation is far from the only one.

erp said...

Skipper, chances are even more likely flight attendants will be robots too, but you aren't giving the youngsters their due. Even though you're a kid to me, there are real kids out there who will be thinking of things that would never occur to me or you or even your kids.

I wish I could be around when we will tell a real Scotty, to beam us up, down and all around. There'll be things to do and places to go neither we, nor Horatio, even knew about in our universes.

If we can throw off our oppressors, there's no stopping us humans.