Algorithms, Robots and the Global Economy

[Y_Participant 4591]

Artificial Intelligence, robots and the Global Economy [1][2]

[Y : It is not a question of if but when. We know current manufacturing costs have risen in emerging markets that has affected profits in the global supply chain. With the Federal Reserve carrying out monetary tightening much of the collateral owed to banks will see a drastic shift to repayment of interest on the debt used to fund production.

Markets have resorted to currency wars (devaluation) and trade wars (import tariffs) to overcome these rising costs. A third option is now available that was not before – the Rise of the Machines.

Given the unprofitability of human workers to robots and algorithms (commonly called Artificial Intelligence) the switch to a low-cost robotic workplace is now in motion all over the globe.

The official narrative is lack of human labour – this is a lie – at least for now.

In the United States the real unemployment rate is approximately 10% not 3.9% – based on more than the 10 million who have given up looking for work. In the EU the situation is more critical at 8.5% – with Greece, Italy and Spain in dire need of policies to increase jobs. In China it is 4.7% and rising. In Japan it is about 4.5% as well. But no businesses seem to want people if they can help it.

The jobs increase is not expected to happen – every nation seems to have decided humans are not worth investing in and will continue to replace us with robotics when they can – not if they can.

The long term effects of this financially-driven social experiment has been explained by Charles Hugh Smith [3] – which does not solve labour and demographic issues but rather trades one problem for something much worse. But then again who said bankers were smart?

Our aging demographics aside as an excuse, there is more than enough willing labour to meet productivity – but not profit. That in a nutshell is the problem.

Let us look at the expected expansion of automation in the next decade. If you have read the other post from Charles Hugh Smith [3] that gives some basis for these events, the way forward appears to be quite entertaining to say the least.

Again – thanks for reading. Y.]

Robotic Startups Larger Map
https://cbi-blog.s3.amazonaws.com/blog/wp-content/uploads/2017/01/robot_planet_2016_2.png

Robots will take over 45% of all jobs in manufacturing and shave $9 trillion off labour costs within a decade, leaving great swathes of the global society on the historical scrap heap.

In a sweeping 300-page report, Bank of America predicts that robots and other forms of artificial intelligence will transform the world beyond recognition as soon as 2025, shattering old business models in a whirlwind of “creative disruption”, with transformation effects ultimately amounting to $30 trillion or more each year

“The pace of disruptive technological innovation has gone from linear to parabolic,” it said. Any country that fails to embrace the robot revolution will slip rapidly down the rankings of competiveness, and will be left behind.

South Korea is currently in the lead with 440 industrial robots per 10,000 employees in the manufacturing industry, followed by Japan and Germany. Britain is languishing far behind at 75, one of lowest levels in the developed world, the dark side of the UK’s low-productivity labour policies.

The report said the demand for automation is “skyrocketing” as the world’s population ages – with the number of people over 60 expected to rise from 841m to more than 2bn by the middle of the century – and as the once limitless supply of cheap labour dries up in Asia.

Manufacturing wages in China have jumped ninefold since 2000, and the country’s workforce is shrinking. China is already the world’s biggest buyer of robots, making up a quarter of the global market.

The costs of robots, “care-bots” for the elderly, “agribots” to plants seeds or pick fruit, commercial drones and artificial intelligence have, on average, dropped by 27pc over the past 10 years, and are expected to fall a further 22pc by 2005.

The price of an advance robotic welder fell from $182,000 in 2005 to $133,000 last year, and its sophistication is increasing all the time. The standard Baxter collaborative “cobot” that works side by side with people on the factory floor – fixing bolts on a conveyor belt, for example – costs just $22,000.

We are coming close to the crucial “inflexion point” when it is 15% cheaper to use a robot than to employ a human worker.

This threshold has already been crossed in the American, European and Japanese car industries, where it costs $8 an hour to employ a robot for spot welding, compared to $25 for a worker. Hence the eerie post-human feel of the most up-to-date car plants. “We are facing a paradigm shift, which will change the way we live and work,” said the report’s author, Beijia Ma.

The social effect is to squeeze out those at the bottom of the employment ladder, rendering them almost unemployable without re-education. Bank of America describes this as the “displacement of human labour”, estimating that almost half of US jobs could be at risk.

Productivity will soar but wages will not rise at the same pace, if at all. The owners of capital will take an even bigger slice of global income, pushing inequality to yet greater extremes. Labour’s share of the pie peaked at 65% in 1975 in the rich countries and has already dropped to 58%.

The workforce will split yet further into the “haves” at the top of education scale and the “have-nots” with just high school qualifications, not to mention the 800m illiterates in the world. It is easy to imagine the explosive political consequences if governments fail to take action to mitigate the effects, yet this may be almost impossible in a borderless, globalised world.

Nor are the middle classes invulnerable. Bank of America said “robo-advisors” using algorithm-based systems will “disrupt” 25million workers in financial and legal services. The Millennial generation – now 18-34 years old – will be the first to switch en-masse to these post-human services. This rising cohort already holds $7 trillion of liquid assets and is likely to inherit another $30-$40 trillion from Baby Boom parents.

Not everybody accepts this overall hypothesis. Professor Charles Goodhart, from the London School of Economics, wrote a paper recently for Morgan Stanley making the opposite argument, contending that the demographic crunch across the Northern hemisphere will overwhelm the effects of technology and lead to an acute labour shortage.

Under his scenario, workers will take their revenge and claw back the lost share of income as wages rise. The return on capital will fall, and the global deflationary supercyle will end in a bloodbath for the bond markets.

There have always been fears of mass destitution with each sudden shift in technology, whether it was the 18th century wool weavers of Yorkshire and the West Country displaced by cotton, or the machine-breaking Luddites in the 19th century threatened by the power loom, or dozens of other such episodes across the world throughout history.

The losers – or their children, at least – are eventually absorbed back into new industries. Human ingenuity has always prevailed. Larry Summers, the former US Treasury Secretary, warns that history is non-linear and it may be different this time.

The proportion of those in the US aged 25-54 and not working has tripled since 1965, suggesting that a chronic effect is already taking hold.

They cannot migrate to textile mills and the manufacturing hubs of the cities, as they did in the 18th and 19th centuries to escape the effects of the agricultural revolution.

There is nowhere to go. Labour-saving devices are sweeping everything, everywhere. A single professor can teach a course to 150,000 students through digital technology.

We may achieve the dream of prosperity without toil as robots take over, but find ourselves living in a jobless dystopia.

Ambrose Evans-Pritchard
The Telegraph
22nd May 2018

Citations
[1] https://www.telegraph.co.uk/finance/economics/11978542/Robots-may-shatter-the-global-economic-order-within-a-decade.html
[2] https://www.telegraph.co.uk/business/2018/05/15/high-unemployment-threatening-eu-economic-recovery-imf-warns/
[3] /forums/topic/automation-doesnt-just-destroy-jobs-it-destroys-profits-too/
[4] https://www.cbinsights.com/research/robotics-startups-world-map/

[Jan SobieskiParticipant 28791]

Great article.

Love is just alimony waiting to happen. Visit mgtow.com.

[743 roadmasterParticipant]

Essentially for our generation, over 30 crowd. It is not going to be an issue. Under 30 good chance in your lifetime you will be replaced by a bot 2 or more times in your working lifetime.

I see the future as 2 classes of people. 1st class having made money before the change so will have money. 2nt class no job no money, no way to get a job and money.

2 things are going to happen. Robotics in the work place, every work place.
AI. We have warned ourselves of the possible future. Person of interest, two sides of the same AI coin. One ruled by man the other ruled man. You know someone will want it, antifa comes to mind, greens who think letting bots rule will save some odd little animal. Given the right set of situations we have the ultimate self warning in skynet.

mgtow is its own worst enemy- https://www.campusreform.org/

[Handsome VicParticipant 1613]

Interesting article, thanks for posting!

We’ll see if new automation drives down the cost of goods and services in proportion to how much it reduces the value of the human labour to produce them.

There may be positives… producing goods and services faster or more cost-effectively through automation may open up new opportunities for human labour in areas which have been ignored as cost-prohibitive… like fixing up the crumbling urban infrastructure, building up the power grid for all the new electric vehicles that will supposedly be on the road, etc.

I'm going my own way. Maybe I'll see you there.

[KevinStylesParticipant 2580]

Ya robots/automation/selfhelp type things will decimate most minimum wage type jobs in the next 5-10 years. And as AI continues to improve this kind of stuff will work up the corporate ladder quickly. I’m glad my timeline to retirement will outpace the robot/ai revolution but I worry for my little nieces and nephews all <10yrs old and how hard it’s going to be for them to make ends meat.

[ShineParticipant 1696]

The way I saw the computer market grow throughout the 80s, it took a good 30+ years or so to get to where we are today.

The technology hardware always appeared to be slow incremental improvements, to keep consumer prices high and also the need to upgrade regularly.

Same way alot of cars are built to a lesser standard and alot of profits are made in servicing, breakdowns and spares.

The 🤖 takeover will be slow by design, and the benefits will be kept back so as the manufacturer can sell the upgraded model 5 years later.

Software on the other hand can advance alot quicker as it’s people with ideas vs people with ideas.

AI in the sense of decision making and humanizing a device is advancing to a stage where it is imaginable to be able to perform complex tasks in both everyday personal assistant type stuff, upto a higher business level of managing large software systems.

Augmented reality will allow the AI a way to provide mission control data and be the next step up from smart phones, Google Glass eg that had problems launching will most likely see a return.

"Society is to blame" Denton

[iMickey503Participant 12465]

Good. Start with the Lawyers.

You are all alone. If you have been falsely accused of RAPE, DV, PLEASE let all men know about the people who did this. http://register-her.net/web/guest/home

[Ranger OneParticipant 16836]

All these social experiments, run by a bunch of self-important, superior-acting, bloviating, elite c~~~s randomly pushing buttons and turning dials on society.

Like the social experiments of communism and feminism have worked so well in the past. F~~~ing social engineers should all be tortured to death.

As in put their faces and dicks in metal cages with hungry rats in each cage. Their screams of agony would be to me like Beethoven’s Ode to Joy.

Keep pushing those buttons c~~~s. See what happens.

All my life I've had doubts about who I am, where I belonged. Now I'm like the arrow that springs from the bow. No hesitation, no doubts. The path is clear. And what are you? Alive. Everything else is negotiable. Women have rights; men have responsibilities; MGTOW have freedom. Marriage is for chumps. If someone stands in the way of true justice, you simply walk up behind them and stab them in the heart-R'as al Ghul.

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