I’ve been reading the “Beyond Scarcity” series on FTAlphaville recently, and it’s made some very interesting points. The posts argue that the current economic environment is deflationary with regard to goods. I think that is true, and one of the reasons is because of technology. Firstly technology is constantly making everything more efficient and because of global competition this is both reducing the production costs and making goods cheaper. Secondly technology is causing structural unemployment, which means less people have money to spend and there is less money flowing around the economy. Other factors causing deflation are the tight monetary conditions, the aging population, and potentially the effects of quantitative easing.
There is an interesting post over at pieria.co.uk called “The Financialisation of Labour”. Frances Coppola compares the changing economic incentives between a company making a capital investment in a slave and an employee. She then suggests replacing the word “slave” with the word “robot”.
Jon Perry has written an interesting post listing some strategies for dealing with the Technological Unemployment Problem.
The Technological Unemployment Problem is the issue of technology replacing humans to the point that there is massive unemployment.
There is an absolutely awesome bit of Neal Stephenson’s book Reamde, that goes like this: The brain “was sort of like the electrical system of Mogadishu. A whole lot was going on in Mogadishu that required copper wire for conveyance of power and information, but there was only so much copper to go around, and so what wasn’t being actively used tended to get pulled down by militias and taken crosstown to beef up some power-hungry warlord’s private, improvised power network. As with copper in Mogadishu, so with neurons in the brain. The brains of people who did unbelievably boring shit for a living showed dark patches in the zones responsible for job-related processes, since all those almost-never-exercised neurons got pulled down and trucked somewhere else and used to beef up the circuits used to keep track of NCAA tournament brackets and celebrity makeovers.”
The Luddites were a 19th century anti-industrialisation movement (and militia), who believed that their jobs were at risk because of the industrialisation of manufacturing. They proceeded to try and destroy mechanical looms in a vain attempt to turn back the rising tide of industrialisation. These days anyone seen as a “Luddite” is perceived to be backward and anti-technology.
I just finished reading the Kindle book Race Against The Machine, a book I thoroughly recommend. This was the driver of the NPR article I blogged about recently.
The book is mostly oriented towards the US, although the issues they discuss seem to be prevalent across all major economies. The authors make the case that technological improvements are severely impacting every job market except those for highly-skilled individuals.
I’ve just read two blog posts on creating written content programatically. The first was the article How I automated my writing career by Robbie Allen. This article gives a brief description of how the author’s company generates web-site content automatically using the quantitative analysis of data.
NPR has a story about How Technology Is Eliminating Higher-Skill Jobs. It features IBM’s Watson System, that can beat the world’s best human Jeopardy competitors. This technology is currently being used to automate the fields of law and medicine, so a lot of very technical jobs will disappear from some quite high-paying and respected professions.
Are the American people obsolete? Salon argues that because of globalisation and technology there is now a increased separation between capital and labour. The activities that generate wealth have both been outsourced to cheaper shores, and become more efficient because of technology. As a consequence the social contract in Western society between rich and poor – the rich provide the capital while the poor provide the labour – is breaking down. The rich still have capital, but they can now move the production of goods to the East, creating a shortage of jobs in the West.