16 replies to this topic

[AgentNyder]

Economics and futurism are topics that are currently fascinating me. So in this thread I will be posting relevant articles, personal strategies and my own theories about these particular dynamics of the future. Feel free to respond with your own contributions, I will probably just keep posting in this thread even if no one responds.... [lol]

The Care Economy

Increasing automation will gradually make people more productive, reducing the manpower required, and making some people redundant. In the short term, this is tolerable since new jobs are being created by new industries and services which means a shift towards and information economy. However, as machine intelligence gradually increases and applications and services more sophisticated, increasing numbers of knowledge workers and other information workers will also lose their jobs. Agencies and middlemen first, information gatherers and analysts and value adders later. Finally, information creators will also suffer from substitution. Many of the professions throughout these levels are vulnerable to massive substitution by machine intelligence. Thus, jobs which require knowledge, creativity, decision making or other intellectual skills, or almost any manufacturing or manual job, are liable to disappear.

Only jobs where people are an essential component of the service, such as caring and personal services are really safe (even here, some parts of the job which are intellectual are open to substitution). Many of the new jobs being created now or in the near future are transient. Jobs such as counselling, raising children, waiting in restaurants, hairdressing etc are good examples of jobs where substitution is unlikely for the foreseeable future. Some low paid jobs also may be uneconomic to automate, such as street cleaning.

As a result of this trend, there will come a point where increasing automation will benefit the firm but cost the country a greater amount. At this point at the latest, capitalism will have peaked and will begin to decline.

The obvious result of this long-term trend is a shift of value in jobs away from knowledge or skill, towards caring roles where workers are valued because they are people and their output is basically human interaction. Differentiators are then personality, warmth etc, rather than efficiency. We may call this the care economy. It is interesting indeed that many such jobs today are valued much less than the intellectual professions. Nevertheless, intellect seems easier for computers to learn than supposedly more simple human interaction skills.

It is also interesting that this economy will have very different demographic characteristics. While there is currently a premium on the energy, fast thinking and creativity associated with youth, the skills that may become most valued are those we tend to think of as wisdom, life experience and basic human warmth. Older people will find that they are no longer at a disadvantage.

http://www.btexact.c...ology?doc=21037

[AgentNyder]

And a good companion to that article - Robotic Nation by Marshall Brain http://marshallbrain...otic-nation.htm

I'm not too sure about the care economy. Although I'm sure a lot of people will still be operating business by having the 'human appeal' factor. Probably the sex industry will become huge, as there has always been a substantial demand for that.

I see share ownership increasing in the future too (remind me to find stats on that), so many people will profit from the increase in revenues from automation.

[advancedatheist]

I think it's time to consider whether civilization in North America is facing long-term decline because of systematic social weaknesses. Why do we prefer to spend $100 billion a year subjugating and occupying Iraq over maintaining a proper power grid? Why is the Federal Government allowing California to be overrun with illegal aliens? Why are American corporations shipping the high-wage technological jobs off to India? (Chronic unemployment among American computer professionals will probably make them re-evaluate their libertarianism. Market "discipline" is fine for others, but not for oneself.) These and other problems indicate a civilization facing some serious trouble.

[Mind]

I think it's time to consider whether civilization in North America is facing long-term decline because of systematic social weaknesses.

Our greatest strength is our libertarian birth. The problems you mention are the result of the government getting in the way and/or wielding its power against individual freedom. Iraq, the power grid, illegal aliens, are mostly due to the tussling of political power-brokers. They have too much power and it must be taken away.

As far as jobs vs. the libertarian marketplace...I would rather have my job shipped oversees than be held hostage by a tyrannical socialist government.

[Mind]

Here is an article about the state of U.S. manufacturing by Bruce Bartlett

The truth is that manufacturing is doing just fine in every way except employment. However, few economists would judge the health or sickness of any industry solely based on employment. By that standard, agriculture has been the sickest industry of all for decades. Rather, such things as output, productivity, profitability and wages better determine industrial health. On this score, manufacturing is actually doing quite well in the United States.

Read More Here

Of course the main thing to note here is that manufacturing is doing well from the perspective of the owners but not from the perspective of the employees. Oversimplified Solution...become an owner. Start a business or buy stock.

[AgentNyder]

Oversimplified Solution...become an owner. Start a business or buy stock.

Good advice mind. [B)]

Here's an article on the US - Australia free trade deal that is being anticipated..

Even if it's not free, US trade deal will have some benefits

Wolfgang Kasper

Published in The Australian Financial Review 31 May 2003

Should Australia sign a free-trade agreement with the United States? No, says John Quiggin, ARC professorial fellow at the University of Queensland and the Australian National University, because it will mean accepting US terms on sensitive matters such as copyright and pharmaceuticals. (His response can be found on www.afr.com) But that misses the point, says Wolfgang Kasper, senior fellow at Sydney's Centre for Independent Studies Australia has a historic opportunity to integrate its economy with the US.

Wolfgang Kasper:

The horse-trading over a free-trade agreement with America is in full swing. Numerous details still need to be resolved, however, the point has been passed for debating whether or not to pursue a preferential, bilateral deal. Nor is it time yet to get excited about petty details, such as a pharmaceutical subsidy here or farm-lobby obduracy there.

Instead, we should focus on the wider context.

The negotiations are about comprehensive economic relations, not simply about trade and tariffs. Nonetheless, Australian exporters will in future not have to fear sudden US quotas. And farmers will not be handicapped vis-a-vis their Latin American competitors, whom the US has already offered preferences. More importantly, the fast-growing national markets for services will be integrated.

For investors, the prospective deal will partially remedy the defeat of the multilateral agreement on investment, which was sunk five years ago by narrow-minded nationalistic manoeuvring and noisy opposition from anti-globalisers. Mutual economic relations with the US will now be given a trust-inspiring, formal basis. This will enhance the mobility of capital, knowledge and enterprises.

The technical and organisational standards of leading US producers will be brought to Australia, and competitive domestic producers will be able to engage with confidence in the US. Australian savers and super funds will be better able to pursue opportunities in the US, and US investors will be in a better position to exploit opportunities on this side of the Pacific. Many will build a local base for business in the West Pacific time zones, adding to Australia's weight and prowess in Asia.

Many now anxiously discuss what benefits might be reaped from the US deal. Experience with economic integration elsewhere shows that smaller partners have relatively more to gain, but this depends primarily on their political and business responses to the integration challenge. Fortunately, both Australia and America enjoy high levels of economic freedom and share many cultural and legal institutions. This will make integration relatively easy, also for smaller businesses. Nonetheless, the 'homebase Australia' inflicts two distinct handicaps: a relatively heavy burden of government, and the remnants of the restrictive industrial relations system. These handicaps will come under renewed reform pressure.

No econometric model can capture the dynamic of how liberalisation triggers institutional reform. Abstract models, produced to influence a confused Australian public, only obfuscate the issue. Another source of confusion is the debate to which Productivity Commission modellers recently contributed about whether multilateral liberalisation is preferable. Indisputably, multilateralism made postwar trade liberalisation the motor of economic growth, mainly because more openness triggered economic reforms.

Alas, multilateralism is a spent force for now. Many Uruguay Round promises remain unfulfilled. All agreed deadlines in the current Doha Round have been missed. The European Union has made it clear there will be no farm-trade concessions. It would therefore be foolhardy for Australia simply to await further multilateral liberalisation. The World Trade Organisation's trade focus also detracts political attention from what now matters most: openness to capital, knowledge and enterprises.

The Australia-US deal will expose the anti-competitive holdouts from Australia's bygone economic order and make a reactionary stance more costly. This is why those who oppose economic reform, also oppose a preferential deal with the US. Only by more Australians claiming greater economic freedom for themselves will we reap the full material gains from the agreement.

Therein lies its historic promise.

Wolfgang Kasper is a Senior Fellow at Sydney's Centre for Independent Studies.

http://www.cis.org.au

It all sounds good to me. Actually, I'll be travelling to the US in a few months. I got a job in Virginia - can't wait to add to your GDP

Edited by AgentNyder, 17 August 2003 - 02:40 AM.

[AgentNyder]

Get rid of Central Banks, and replace them with computers. Excerpt of an article containing an interview with Milton Friedman:

"Money is too important to be left to central bankers," Mr. Friedman says. "You essentially have a group of unelected people who have enormous power to affect the economy one way or another."

His proposal is simple: "I've always been in favor of replacing the Fed with a computer." In essence, a PC could determine the economy's monetary base and consistently increase it by, say, 3 percent annually. "That amount of money would be created and distributed, either by buying up government securities or by financing current government expenditures," Mr. Friedman explains. "It would do that week after week, month after month, hopefully year after year."

"It sounds so simple," Rose Friedman says. "Why can't a human do this?"

"There's no reason the Fed couldn't do this, but it obviously is not going to," Mr. Friedman continues. "They're going to believe they can do better."

By attempting to outguess hundreds of millions of U.S. producers and consumers, the Fed has steered the economy onto the rocks in previous years.

"Because of its performance in the last eight or 10 years, which has been very good by historical standards," Mr. Friedman explains, "people tend to forget that the long history of the Fed is not one of success, but of failure. The most recent dramatic failure was in the 1970s when you had the largest inflation the U.S. has ever had in peacetime as the result of poor monetary policy. So, avoiding mistakes like that would be the major advantage of an automatic computer system."

http://www.nationalr...ock051101.shtml

Of course Friedman reckons that we don't even need a Central Bank..

I always favoured the privatisation of currency. That, in theory, would create unparalled opportunities for investment and make companies more competitive. For example; McDonalds, Microsoft, Subway, etc; would all have their own currencies and when you go to buy them, there would be an exchange rate just like for any other currency. It would also eliminate a lot of the power of Governments to control the money supply.

[AgentNyder]

Here's ONE economic solution to poverty (well maybe):

Superannuation for babies

Instead of forcing employers to contribute to their employees superannuation funds, thereby increasing the costs of hiring workers - the Government could make superannuation compulsory for people having children (or they could use it as part of their 'baby bonus' scheme) (IE In Australia, the Government gives you money if you have a baby!).

If you invested $5000 with compound interest at 7%, contributing $10 per week, you would come to total of $46,558.89 by the time the kid turns 21. They could then use that money for a deposit on a house or whatever.

Their currently is a system like that except they only let you access it when you are of retiring age, and there are tax incentives for people to make contributions for their children under age 18.

Anyway not the best of ideas and it goes against libertarian principles but it is still a better system than the superannuation one I think.....

[AgentNyder]

^Actually forget that. I prefer some sort of system where people's level of financial awareness is raise through education...

More Economics of the Future:

A simple exogenous growth model gives conservative estimates of the economic implications of machine intelligence. Machines complement human labor when they become more productive at the jobs they perform, but machines also substitute for human labor by taking over human jobs. At first, expensive hardware and software does only the few jobs where computers have the strongest advantage over humans. Eventually, computers do most jobs. At first, complementary effects dominate, and human wages rise with computer productivity. But eventually substitution can dominate, making wages fall as fast as computer prices now do. An intelligence population explosion makes per-intelligence consumption fall this fast, while economic growth rates rise by an order of magnitude or more. These results are robust to automating incrementally, and to distinguishing hardware, software, and human capital from other forms of capital.

http://hanson.gmu.edu/econofsf.html

[Lazarus Long]

I just created this post here on Immortalist Economics and I would love some input. I am leaving it as a stand alone post because of what it intends but I am referencing it here because the topics overlap.

[AgentNyder]

Is that in the member forum, Lazarus? I can't seem to access it.

[Lazarus Long]

I started it in General Discussion and then moved it to the Members forums I will reverse this because I would like you and others to provide input.

Give me a few minutes to fix this, it won't take long.

Done, try the link now and you will find I put it in Immortalist Memetics

[AgentNyder]

The only thread so far in the member's section, hey? Well that may make some of us more motivated to sign up. Me included! However, I won't be until March because I'm going to the USA to work for 3 months. After that though - the sharemarket will become a daily obsession! Funny too, that I'll be getting a US social security number which will make it easier for me to trade on the US stock market.

Oh, and do you want a list of technology stocks on the Australian Stock Exchange? I've been monitoring them recently and some of them seem to be partly based in the US and other countries. Just wait, it's like sorting through a virtual minefield.

[AgentNyder]

Very recently the economics approach has taken up greater credibility in it's application to the human sciences. There are two fields in particular - cyborg sciences and evolutionary sciences that put forward the hypothesis of man as an evolving mechanism with a priori programming (which could be significant to the development of AI) and the study of human interaction with the other sciences which puts forward the perspective that society is more like the workings of a complex machinery with man as a type of computer making rational calculations. Both theories have some interesting points to make about the inherent nature of man and I strongly suspect with the evolution of philosophy and science in this direction - the inclination towards man's eventual merging with machine will be less abrasive.

For further information, read Phillip Mirowski - How Economics Became a Cyborg Science and Simon Herbert (http://ideas.repec.org/e/psi29.html)

Evolutionary Economics - google directory: http://directory.goo...onary_Economics

[B)]

[AgentNyder]

Has anyone seen the movie Alien?

Aside from the nice visuals and superb suspense, I noticed that in this version of the future they had a system where employees are paid shares rather than wages or a salary.

Ripley - "You're guaranteed by law to get a share"

Now here is where socialism meets capitalism with no fanciful ambiguities or collective force. Workers can gain a share in the company's profit in a fully capitalist system and this system may even work better than the wage/salary incentive.

Employers could, instead of paying their employees credit into their bank accounts or issuing pay cheques, instead pay them the equivalent with entitlement to own shares in the company. The employee can then go and do whatever he/she wants to do with the shares - be it sell them, hold them, use for them for equity or whatever.

The benefits are that the company gets to expand its capital base while at the same time offering very powerful incentives for employees to work towards the company goals as the company's performance determines the value of their assets.

Most people in protected full time jobs who are unlikely to be sacked by the employer will always receive the same salary/wages despite the financial outcomes of the company (unless they go bankrupt and are retrenched).

Potential problems with this proposal could be that the employee could find that their income has decreased for the week if the share price goes in the negative by 1 cent or so. But then again employees would most likely be offered dividends or preference shares anyway.

Well there's my crazy idea for the day. [8)] Any comments?

[bitster]

Ripley - "You're guaranteed by law to get a share"

I reached some similar conclusions recently, relating to a number of other threads I've been thinking about:

Democratic government and corporate government share similarities. These similarities obviate their differences. Both utilize a rule-by-majority democratic ethos, but vary in their goals, in the scope of their decisionmaking, and in the ease with which the right to vote can be garnered or given up.

Goals: Corporations are out only to profit shareholders, and are not only indifferent to greater good, they are legally bound to to be so.

Scope: Governments (traditionally) draw participation lines at geographic borders, whereas Corporations draw them at particular business models.

Membership: Want in or out? Buy or sell stock. Even the poorest person can buy at least one corporate share (theoretically), but immigration is a life-consuming endeavor. On the flipside, Governemnt votes are not saleable, and so do not favor the rich.

I thought about attempting to devise and promote a new kind of corporate charter that divides equity in the company, not by capital investment, but by temporal investment. I have yet to see a clear reason why such an arrangement would possess a competitive advantage in the marketplace, though.

[bitster]

You mention automation as a factor that will spur education among workers by displacing their jobs.

One of the big factors in how this process will play out will be the determination of the legal status for increasingly sophisticated machines.

Presuming that independent AI develops faster than Intelligence Augmentation (a scenario I actually find unlikely), there will be some point where the question of artifical personhood arises - where owning an intelligent machine is viewed as slavery. This may prompt society to consider mandating that, at some point in a machine's developement in complexity, it ceases to be capital property, and becomes an employee - a worker. The role of the machine in the job displacement/education formula shifts in a fundamental way.

The profit motive for AI research would be heavily curtailed, fewer independent intelligent machines would be "born", and less job displacement/education would occur in complex job roles. While this would be a relief in the short term, in the long term I think it would create serious problems with overall scientific and economic progress. In such a case, creating a slidable scale complexity, intelligence, or what have you might be useful, so that over time, it could be steadily raised as an incentive to all legal persons, of whatever origin, to expand their education.

Then again, I still have yet to read a cogent argument as to why independent AI is more likely to be developed than intelligence augmentation technologies, which by and large sidestep all these sticky ethical and political questions.