Posted on 07/09/2015 9:13:02 PM PDT by 2ndDivisionVet
Peter St. Onge writes: The job-threatening rise of the machines is an economically illiterate meme that refuses to die. We’re actually probably in the early stages of it, a bull-market in neo-luddism, if you will. Bastiat’s “Candlemakers Petititon” answered this one long ago, but today I’ll run a little thought experiment that owes it all to good old Bastiat.
Let’s say Weird Al Yankovic invents a machine capable of making everything with a single push of a button. The first thing he does is print up a bunch of machines and sell them for a ton. Weird Al is now a billionaire, and there are thousands of make-everything machines.
This diffusion of Weird Al’s new technology replicates the market process, where new tech spreads in proportion to its usefulness. If you doubt this, because of patents, for example, check out Brazil’s experience with AIDS drugs, where they tore up the patents on humanitarian grounds.
Weird Al’s machines will, at a minimum, be mass produced in Brazil. Or China. Or Mozambique.
So, one way or another, we get a bunch of make-everything machines.
What happens to the jobs? We’re getting everything for near-free now. So all the production jobs disappear. There are still lots of jobs, of course — child-care, gardeners, musicians. But all the production jobs have vanished — something like 20 percent of jobs, maybe up to 50 percent when you include knock-on replacement of people by capital (truck drivers, robot bartenders). Heck, let’s go crazy and say 90 percent of the jobs vanished. Nobody’s got a job outside of preschool or performing on a stage. It’s the end of the world, right?
Well, the key here is that, now that everything is made with the push of a button, everything’s extremely cheap. For example, a sixteen-bedroom house or a Lamborghini costs almost nothing. Let’s say they now cost ten cents.
The main expense in such a world is probably surface space. To park all those dime-a-dozen cars. It’d take a while to “run out” of space, though — divide the world by the people and you get about twenty acres (eight hectares) for a family of four — about 100 large surburban yards. Add in the oceans — floating islands cost nothing, remember — and triple that. We end up with about 300 homes-worth of space per family.
What about those unemployed people? Well, when a house or a year’s food costs a dime, they’ll be willing to work really cheap. We’ll work for a penny a day. After all, that’s a new house or a years’ food every two weeks.
Who would hire these workers for a penny? Plenty of people. Heck, if workers cost a penny a day I’d hire several for each of my children. Just to keep the kids from getting bored. I’d hire another to cook, one to clean, one to run errands. One to keep track of my mail. One to check Facebook for me. At a penny a day I’d personally hire 100 people, easy. You would too — a buck a day’s nothing.
So the remaining 10 percent of workers who didn’t lose their jobs — babysitters, baristas, musicians — would want 100 workers each. Even at a penny, they’d take them all, and they’d be paying an outrageous rate — a tenth-house per day! That’s a daily rate of $15,000 in today’s terms.
Now, those who kept their jobs would, of course, see dropping wages. A barista who made $12 an hour in the old days would have to compete with the hordes of unemployed workers. Maybe her wage would drop to a penny, too. But, remember, a penny now buys $15,000 worth of stuff.
When the smoke clears, most people would make some extremely low wages — a penny a day. And that extremely low wage would be worth an awful lot — $15,000 a day. Implying an annual income north of several million dollars in today’s values. Some lucky few would make a dollar a day — probably the people who are good at things machines cannot do: entertainment, child-care, being a good listener, strumming the guitar at the old-folks’ home, and laughing at jokes. At a dollar a day, this super-rich elite that excels at human skills — such as making us laugh — would be billionaires in today’s values.
Either way, there would be nothing we think of even remotely as “poverty.” Sure, there’ll be inequality, but it’ll be of the sort “Sarah’s got 200 Lamborghinis and I’ve only got 40.”
The upshot is that wages plunge, but production costs plunge even more. Of course, this is based on the ridiculous Weird Al machine. Why do this? To illustrate the absolute worst-case scenario, when machines make everything for near-nothing.
What about going one step further, that the machine destroys all jobs in the whole world — it makes every single thing for us free, and it even keeps the folks entertained and the warm fuzzies flowing at the old folks’ home.
Well, we’ve already got a case study there — the sun. It gives us warmth and mangos for free. And how do we respond? We sit around and lazily enjoy it. So a machine that truly replaced all jobs would simply mean nobody works anymore — life’s somewhere between a non-stop party and a non-stop pleasant walk in the woods followed by a nice bonfire with friends and chardonnay.
We should all be so lucky that the machines do actually take every last job there is.
That’s the premise of Ayn Rand’s novel Anthem.
LOL...noted for future use...
for what purpose? if there is unlimited land, food and stuff
Nice theory but idle minds would create a lot of destruction.
You mean like Wall-E where everyone is fat and flying around on their floating chairs.
Control.
I said “capital” referring to how time, land and materials are monetized based on the highest bidder willing to exchange. apologize if used incorrectly. if these things became unlimited, it would eliminate that system.
that system at least partially encourages innovation for greater power in the marketplace. sometimes at the expense of others and natural resources.
say you eliminated the marketplace entirely and people had all the free time to innovate purely out of the goodness of their hearts. do you not believe that MORE good things will be created then?
of course I also do understand that in our present culture of laziness, endless wasteful consumption and violence, being unlimited would lead to self destruction...
why? if everyone can have their own land, their own stuff and choose who to live with
Like the Jetsons where george just shows up at work and presses one button....
> Comments?
There are two possibilities, and it applies to this scenario in the extreme as it applies to worker efficiency generally.
1. Everyone is freed from the duties of labor to go produce value that doesn’t involve drudging along at some job, whether that’s burger-flipping or predictive analytics, and goes on to be the person they were always meant to be before someone told them they had to get a ‘job.’
2. Given a chance, most people revert to sloth, and the people in control of the machines that create production of actual value try to figure out how to get rid of the population that is neither good for the jobs taken over by machines or anything else.
Are you joking? Who could believe that?
someone that does everything out of the goodness of their heart...
say you eliminated the marketplace entirely and people had all the free time to innovate purely out of the goodness of their hearts. do you not believe that MORE good things will be created then?
Don't you see the paradox in "say you eliminated the market place" ? This posits totalitarianism. Goodness of heart would not be in the picture.
Don't we all? I always say, I have a heart as big as the galaxy, and that's the way I feel, but perhaps we overestimate ourselves.
But aside from that, haven't you ever run up against someone who was perhaps less expansive than yourself? More selfish? It's a sudden downer.
The proper word to describe this essay is “sophomoric.”
That’s the last thing the control freaks on the left want.
And “choose who to live with”? God is real, you know.
The heart is deceitful above all things, and desperately wicked: who can know it?Very few men or women buck that trend, and they cannot do it without help from above.
— Jeremiah 17:9
Mmm...I dunno. If machines were to take over all of our jobs, and meet every whim at the touch of a button, I wonder what would happen to man’s work ethic? Our material needs would be completely taken care of, but where would the challenge be? A few would take advantage of the opportunity to expand knowledge and perhaps accomplish things never dreamed of before, but I suspect most of us would become the ultimate couch potatoes. Most of humanity could end up living idle, empty, and ultimately unsatisfying, lives.
To borrow from Captain Kirk from “This Side of Paradise”: “Maybe we weren’t meant for paradise. Maybe we were meant to fight our way through, struggle, claw our way up, scratch for every inch of the way. Maybe we can’t stroll to the music of the lute. We must march to the sound of drums.”
I will pay three cents a day, triple the author’s market rate, to come clean my toilet.
However, you must provide your own transportation.
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