What limp economy? Things have been rolling along quite nicely since 2010. Cheap housing.. record low interest rates...an uptick in manufacturing..cheap energy. Stocks have done very well. I don't see anything limp unless you're out of work.
The real problem that is at the root of this anxiety over job loss today is the limp economy that we have had since 2008, and the spreading belief that it is the “new normal.” This is not the fault of automation or foreign competition. And the good news is that a bad economy can be fixed by revising policies.
Revising policies is a way of truly stimulating the economy by appealing to human nature. This is opposed to the bogus way of stimulating the economy by showing it a symbol of robust spending as though the economy is an animal that can be tricked into action. That kind of “stimulus” is what is often done by governments. The stimulus that actually works is for governments to change policies.
Change in policy would revive the economy so it had a growth rate that supports the present population growth. A wise change in policy would also reduce or reverse job loss to foreign competition if it is able to reduce the cost of domestic protection.
The supposed crisis of job loss due to automation is an imagined problem that is unlikely to materialize. In my opinion, this imaginary crisis is serving as a pretext to expand government by ramping up safety net programs. It is also just a natural part of the marketing hype for modernity. If we ever really are faced with the question of what to do with two-million displaced truck drivers, we will do what we always do. That is to tell them to get another job.
dakotafred There is a difference between jobs eliminated by progress -- jobs that, through no fault of the workers, have outlived their usefulness -- and jobs eliminated by government fiat, out of political ideas mistaken or not. The one happens because of the market, the other by artificial means that may or may not serve the market. Don't tell me that coal and true automobiles will disappear because of market forces. This will happen through government intervention -- to the detriment of our freedom and pocketbooks.
There is a difference between jobs eliminated by progress -- jobs that, through no fault of the workers, have outlived their usefulness -- and jobs eliminated by government fiat, out of political ideas mistaken or not.
The one happens because of the market, the other by artificial means that may or may not serve the market.
Don't tell me that coal and true automobiles will disappear because of market forces. This will happen through government intervention -- to the detriment of our freedom and pocketbooks.
Sounds like a view is a politically/ideologically driven view that in a materialistic world the Market is always right. It is as if the Market was imbued omniscience, omnipotence and infallibility. The Market can do no wrong.
But behind the mythical Market are businesses, and behind the businesses are people, who are no more omniscient or infallible than the people (may actually be the same people) who elect people to form Government. So still comes down to people making choices and the decision of a business leader in the market place is not inherently any more or less wise than the decision of a government leader. They're both people.
Sometimes government does things right and sometimes not. Sometimes business does things right and sometimes not.
Do Enron and Wells Fargo ring a bell? Not exactly high moments for business and the Market.
UlrichWho knows, this entire post is predicated on rapid advances in technology that bring about self drive vehicles sooner than later. Of course, if that doesn't happen then the displacement problem is mitigated or goes away entirely. But I think we will see some major changes over the next half decade.. From a business standpoint people are expensive, and having people who are grossly underutilized is all the more expensive and untenable over the long term. So there are forces at work to minimize the need for human capital. Who really knows how fast things will evolve.
You're very right. "Who really knows?"
But I think a lot of people here are falling for the "Luddite Fallacy".
As in: "In 1920, there were 1.3 million coal miners, now there are less than 6,000. That doesn’t mean we have 1.3 million unemployed coal miners. Those jobs get absorbed into new areas of the economy. " (These are UK numbers.)
What new areas of the economy will absorbe the railroaders, inland mariners, and drivers displaced by new technology? Again, "Who really knows?" We don't have many unemployed railroad telegraphers or firemen. The people who would have filled those bygone jobs are now doing other, presently more useful, work. Mainly in jobs that did not exist when railroad telegraphers were "Slinging Lightning."
Its historically been that way and there is no reason at all to believe "This time it's different."
http://www.economicshelp.org/blog/6717/economics/the-luddite-fallacy/
Technology will advance. There will be localized pain in the economy because of that. But, you can't remove pain from any economy.
Maybe they can all become day traders..
schlimm Ulrich Things are different this time in that there's no place for all of these workers to go. Do you have any ideas? Lets suppose that the self drive truck does come about over the next 15 years.. where will two million plus drivers go? In the past and in recent cases, folks get new training. Some go back to school. Are you suggesting truck drivers are unable to do what other workers have done for hundreds of years?
Ulrich Things are different this time in that there's no place for all of these workers to go. Do you have any ideas? Lets suppose that the self drive truck does come about over the next 15 years.. where will two million plus drivers go?
Things are different this time in that there's no place for all of these workers to go. Do you have any ideas? Lets suppose that the self drive truck does come about over the next 15 years.. where will two million plus drivers go?
In the past and in recent cases, folks get new training. Some go back to school. Are you suggesting truck drivers are unable to do what other workers have done for hundreds of years?
What emergent job opportunities will be able to employ 2M redundant truck drivers without forcing the better part of 2M families onto the welfare rolls?
Never too old to have a happy childhood!
Who knows, this entire post is predicated on rapid advances in technology that bring about self drive vehicles sooner than later. Of course, if that doesn't happen then the displacement problem is mitigated or goes away entirely. But I think we will see some major changes over the next half decade.. From a business standpoint people are expensive, and having people who are grossly underutilized is all the more expensive and untenable over the long term. So there are forces at work to minimize the need for human capital. Who really knows how fast things will evolve.
I do not believe the drivers will ever be displaced, for reasons as stated earlier.
I agree that taxation would be the only way to handle the subsidization of the massive numbers of misplaced workers that you suggest will occur. However, I do not believe that the cost savings in automation will yield the necessary bounty to make that degree of redistribution economically possible.
I also do not believe that worker displacement will be as sudden and widespread as you suggest. I think there is a lot of marketing hype leading everyone to believe that sweeping automation has suddenly arrived. I think that is false, but convincing to many because everything in the tech revolution is presented as moving very fast.
If self-driving trucks are coming, they will begin baby steps maybe within 15 years. That will be very limited test applications with lots of development in control, and safety. This will evolve to possibly full implementation within 50 years at the earliest. Drivers will be displaced gradually, and do what displaced workers do now and have done in the past.
Ulrich No one likes taxation, but taxation is necessary and not a dirty word. Should all of those savings flow into the pockets of industry? Or should some of those savings flow back into the social net in order to take care of displaced workers? I'm arguing for the latter. Realistically we won't be able to find meaningful employment for millions of displaced workers. So the question becomes, do we cut them lose to fend for themselves or do we take care of them some other way? I guess we could turn every job into a sinecure and pretend they're real jobs.. Doing nothing and letting displaced workers find their own way would likely lead to massive (and expensive) social upheaval.
No one likes taxation, but taxation is necessary and not a dirty word.
Should all of those savings flow into the pockets of industry? Or should some of those savings flow back into the social net in order to take care of displaced workers? I'm arguing for the latter.
Realistically we won't be able to find meaningful employment for millions of displaced workers. So the question becomes, do we cut them lose to fend for themselves or do we take care of them some other way?
I guess we could turn every job into a sinecure and pretend they're real jobs..
Doing nothing and letting displaced workers find their own way would likely lead to massive (and expensive) social upheaval.
Maybe it could develop that our economy will gain such efficiencies as to create so much excess wealth that it can carry most of the population without them working to contribute to the productivity. As Dave Klepper mentions, the Saudi Arabian economy is able to do that because of their oil wealth.
But I am skeptical that efficiencies from automation will lead to such excess wealth. Being endowed with natural wealth such as oil is not the same as simply increasing efficiency in a market that competes with everyone else also increasing efficiency.
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C&NW, CA&E, MILW, CGW and IC fan
Maybe ..
http://www.ccjdigital.com/shifting-age-demographics-among-truck-drivers-could-exacerbate-driver-shortage-over-next-10-years/
The flow of history shows frequent displacements of workers because of advances in technology, in whatever field. The idea that current events are somehow very different and will be a disaster is far-fetched.
This is different..this time the displaced have no where to go. In the 70s displaced factory workers turned to the trucking industry in droves. If you can't do anything else you can always drive a truck was the mantra. Well, that option along with others is being replaced with.. "if you can't be a NASA engineer.. good luck!".
Gee, all those dispaced home weavers? Stage coach drivers? Canal packet crews? Still unemployed or raising hell or "sabotaging." Old Ned Ludd still terrorizing mill owners?
No one likes taxation, but taxation is necessary and not a dirty word. As automation increases and payroll numbers decline then so will payroll taxes. If nothing else, taxes will therefore decline with increased automation. And anyone who has to meet a payroll and has to remit payroll taxes will tell you that those taxes are significant. Moreover, improved efficiencies in technology reduce taxation also... for example, truckers who invest in the latest technology get better fuel mileage and therefore pay lower fuel taxes.. again taxes go DOWN. Other costs decline with automation.. in trucking (going back to the original discussion of robot vehicles) a significant cost and barrier in the industry is sourcing good drivers. Payroll and taxes are just one component: there's also the cost of recruiting and training people... and the cost of paying recruiters and trainers. Clearly, vehicles that are self operating or can be operated with minimal skill would result in huge cost savings over time, both directly and indirectly. Should all of those savings flow into the pockets of industry? Or should some of those savings flow back into the social net in order to take care of displaced workers? I'm arguing for the latter. Realistically we won't be able to find meaningful employment for millions of displaced workers. So the question becomes, do we cut them lose to fend for themselves or do we take care of them some other way? Allowing them to live and enjoy the fruits of a productive society without the stigmatization of "lazy" or "useless" or "free loader" might be the cheapest option we have. I guess we could turn every job into a sinecure and pretend they're real jobs.. a locomotive engineer who does nothing.. a truck driver who sits in his seat and does nothing..like having firemen on diesel locomotives.. its a short term fix. Doing nothing and letting displaced workers find their own way would likely lead to massive (and expensive) social upheaval. Maybe alot of these displaced workers could then become soldiers or police officers, if we feed them to the wolves, they'll be needed.
1 We will always require qualified and tested drivers for cars, buses, and trucks, even if driven automatically. As is true today for trains and airplanes.
2. There will always be people who wish to contribute to society and find working at their chosen professions enjoyable.
3. Until recently, Saudi Arabians had the choice of not working. If you were a Saudi citizen, you had a negative tax, you were paid just because you were a citizen, with oil revenues funding the program. But this is changing as the world market in oil has changed.
Ulrich Euclid Ulrich The market decides what is fair. But not everything is monetized or even monetizable, or works in accordance with supply/demand. Einstein, Tesla, Newton etc weren't motivated by financial gain, nor were their contributions driven by any need beyond their own interests. Which goes back to what I was saying earlier.. as we become more productive as a society through robot cars, planes, and trains, there may nolonger be a need for all of us to contribute. Or maybe we'll all go to a two day work week or retire at 40. Who knows. Maybe we'll be able to become full time parents, or make our hobbies our primary preoccupation. How can the market decide to support people who choose to not be productive? How can the market decide that productive people must give up some of their earnings to support people who prefer to not work? What kind of market would make those decisions? Those Robin Hood principles are the opposite of market forces. They are the principles of a command economy. Ever heard of taxation? That's exactly what's happening right now and has been happening for years. Where do you think the money for welfare and social assistance comes from? Yup.. comes out of your pay and mine. Get used to seeing alot more of that unless you've got some ideas on where to employ millions of displaced workers with limited education and skills. Any ideas on who might want to hire two million professional drivers who are nolonger needed? I don't either.. so do we let them fend for themselves or do we keep them going some other way? Unless you like war and massive social unrest, I think looking after them (welfare without the stigma perhaps) is the better of the two options. And what about the kids growing up now? Back in the 70s when I was in school there were options for everyone... if you weren't all that gifted or career oriented you could still get by quite nicely with a HS diploma. Kids coming up now don't have those options any longer. Those lower end but fairly good paying jobs are going away. So, again, do we let those kids fend for themselves?
Euclid Ulrich The market decides what is fair. But not everything is monetized or even monetizable, or works in accordance with supply/demand. Einstein, Tesla, Newton etc weren't motivated by financial gain, nor were their contributions driven by any need beyond their own interests. Which goes back to what I was saying earlier.. as we become more productive as a society through robot cars, planes, and trains, there may nolonger be a need for all of us to contribute. Or maybe we'll all go to a two day work week or retire at 40. Who knows. Maybe we'll be able to become full time parents, or make our hobbies our primary preoccupation. How can the market decide to support people who choose to not be productive? How can the market decide that productive people must give up some of their earnings to support people who prefer to not work? What kind of market would make those decisions? Those Robin Hood principles are the opposite of market forces. They are the principles of a command economy.
Ulrich The market decides what is fair. But not everything is monetized or even monetizable, or works in accordance with supply/demand. Einstein, Tesla, Newton etc weren't motivated by financial gain, nor were their contributions driven by any need beyond their own interests. Which goes back to what I was saying earlier.. as we become more productive as a society through robot cars, planes, and trains, there may nolonger be a need for all of us to contribute. Or maybe we'll all go to a two day work week or retire at 40. Who knows. Maybe we'll be able to become full time parents, or make our hobbies our primary preoccupation.
The market decides what is fair. But not everything is monetized or even monetizable, or works in accordance with supply/demand. Einstein, Tesla, Newton etc weren't motivated by financial gain, nor were their contributions driven by any need beyond their own interests. Which goes back to what I was saying earlier.. as we become more productive as a society through robot cars, planes, and trains, there may nolonger be a need for all of us to contribute. Or maybe we'll all go to a two day work week or retire at 40. Who knows. Maybe we'll be able to become full time parents, or make our hobbies our primary preoccupation.
How can the market decide to support people who choose to not be productive? How can the market decide that productive people must give up some of their earnings to support people who prefer to not work? What kind of market would make those decisions? Those Robin Hood principles are the opposite of market forces. They are the principles of a command economy.
Ever heard of taxation? That's exactly what's happening right now and has been happening for years. Where do you think the money for welfare and social assistance comes from? Yup.. comes out of your pay and mine. Get used to seeing alot more of that unless you've got some ideas on where to employ millions of displaced workers with limited education and skills. Any ideas on who might want to hire two million professional drivers who are nolonger needed? I don't either.. so do we let them fend for themselves or do we keep them going some other way? Unless you like war and massive social unrest, I think looking after them (welfare without the stigma perhaps) is the better of the two options.
And what about the kids growing up now? Back in the 70s when I was in school there were options for everyone... if you weren't all that gifted or career oriented you could still get by quite nicely with a HS diploma. Kids coming up now don't have those options any longer. Those lower end but fairly good paying jobs are going away. So, again, do we let those kids fend for themselves?
Yes I understand taxation. But you began this by predicting that people may one day find that they can choose not to work and yet survive by sharing in the fruits of the increased collective productivity of the society as a whole without contributing much or anything to it. This is being done already to a limited extent, but you are suggesting a massive increase where not working will become a viable way of life.
Obviously this will require a lot of money to support everyone who prefers the option of not working if they don’t have to. So the magnitude of this massive compensation could not be accomplished merely by the redistribution of our typical taxation.
So that is why I asked where the money for sharing with the people choosing to be non-productive was going to come from. You seemed to imply that the money needed to compensate the people who wanted to cease being producers would come from the rising efficiencies of automation. Therefore, the people not contributing could nevertheless share in the bounty as a sort of abstract principle in which nobody has to lose money by paying the people who choose not to work.
But somebody will have to pay that money, and they will not want to pay it because they would prefer to keep it for themselves. The money produced by the increased efficiencies of automation will rightly belong to the people who took the investment risk to create that automation.
There won’t be any automation if the automaters are suddenly faced with spiraling costs associated with taking care of all the workers that automation replaces. The whole point of automation is to save the cost of labor.
So now you have come full circle back to the principle of taxation to take money from the producers to pay the people that need support due to their choice not to work. When I earlier asked you where the money would come from, I could not see any means other than taxation to raise the money.
I believe this would be a sort of economic perpetual motion machine doomed to fail. People would not be willing to invest in automation if they were going to be economically punished for the jobs lost buy automation. What would be the point? And if working people were to be offered the opportunity to live a good life without work, they will all take the offer.
Ulrich:
What to do is the $64 question. I'm just saying the old socialist answer of more taxation isn't the answer.
The relentless pressure, right now, is unfair trade competition -- dumping by China of steel and aluminum comes to mind -- rather than automation. So, first things first. Put up some of those old trade walls. Our prosperity would have bought a lot of protection once. Maybe it can again.
If not, what do we have to lose? Less than 2 percent growth? Labor participation of just above 60 percent?
jeffhergertIf automatic and completely crewless freight trains happens before I retire, I guess I can always go drive truck. Oh, right.... Jeff
We'll have to go back to working at the strip club, I guess.
It's been fun. But it isn't much fun anymore. Signing off for now.
The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.t fun any
We already, to some extent, have trains operating in the US that operate themselves. I know UP, NS and CP are using them. They are used for "fuel management", but I don't think they've been saving as much fuel as the salesman said it would. They currently are a clear block systems. That is, they don't see restrictive signals, they assume you are the only train out there. They do recognize permanent and temporary speed restrictions and work zones, provided they are in the system when intially logging in. Unforseen restrictions, radioed to the train, have to be acted upon manually.
UP has both NYAB's LEADER and GE's Trip Optimizer. I believe NS has LEADER and CP Trip Optimizer. (Not all routes of the railroads listed may be equipped.) IMO, both are scary, for different reasons.
LEADER has two versions. One only prompts the engineer to make throttle/dynamic settings. (Both systems prompt the engineer if using air brakes is needed.) If you are DP, it assumes the DP is in sync mode. The newer version, and slightly better, is an auto-throttle/dynamic operation. It actually runs the train. In auto throttle mode, it operates any DP separately from the lead. I feel it's scary because it's train handling isn't good. Especially the first version. It's caused people, myself included, to tear trains apart when following the prompts. About the only good thing about LEADER I can think of is the display. It's better than the Trip Optimizer display and will be close to what the PTC displays will be.
Trip Optimizer has been an auto-throttle system from the beginning. We just got it on our part of the system a few months ago. It's scary because it's pretty good when it's working. My MOP said the algorithims for our PTC will be the same used by the Trip Optimizer program.
If automatic and completely crewless freight trains happens before I retire, I guess I can always go drive truck. Oh, right....
Jeff
A couple of years ago, there was an article in the Des Moines Register. It was picked up from another news outlet, so I don't know where it originated. It was when the possiblity of driverless vehicles first started to make the general media. In it some economists talked of the future. Maybe not the next 10 or 15 years, but down the road when more and more jobs at all levels are automated. Some said unemployment rates of 50% or more could become the norm. They posed the question of what that will do to society, but didn't have any answers. I'm not sure anyone does. I know I don't. Something like that is very hard to imagine.
So what would you do with the millions of unemployed? They can't all be retrained as high tech people. They can't all go to work as fruit pickers or school custodians either. In the short term at least they'll need to be supported somehow.. Paying them in idleness has a cost of course, but I don't think that cost would be nearly as high as simply letting them fend for themselves..
"Ever heard of taxation?" Yeah.
The rich pay most of our income taxes now. Businesses are already taxed at a rate that makes them uncompetitive in a global market. What next?
You sell government debt, like Greece, Italy, Spain ... and the U.S. But it turns out there's an end to that too, at interest rates you can afford to pay. Next is Default City.
Never has worked, never will. If you think automation -- not to mention the gorilla in the room, stupid trade agreements -- is truly the future, you've got to come up with better than taxation.
Productivity can go up while the need for labor decreases. In the past we've been able to sidestep the issue as displaced workers moved into other lines of work. The option will likely not be available this time around as hundreds of thousands of people will be displaced. Where are they all going to work? And will they even need to work? The money to support the displaced workers would likely come from business through taxation or by some other mechanism. I don't know.. does society support these displaced people or do we let them fend for themselves? Supporting them might be the better option.. Just in my industry alone we're talking about hundreds of thousands of people with HS or less... we're going to find alternative employment for them? Where? Supporting them as non workers might be the only real option we have.
Ulrich ... (A)s we become more productive as a society through robot cars, planes, and trains, there may nolonger be a need for all of us to contribute. Or maybe we'll all go to a two day work week or retire at 40. Who knows. Maybe we'll be able to become full time parents, or make our hobbies our primary preoccupation.
... (A)s we become more productive as a society through robot cars, planes, and trains, there may nolonger be a need for all of us to contribute. Or maybe we'll all go to a two day work week or retire at 40. Who knows. Maybe we'll be able to become full time parents, or make our hobbies our primary preoccupation.
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