[Tom Bishop]

If every job were capable of being automated with AI and humanoid robots, people would just offer to do the job for a lower wage, to the point where it is cost effective for the company. When many people are receiving lower wages, deflation will occur and everything will be a lot cheaper.

An AI Salesperson will cost money to purchase. Human Salespeople compete by charging less than what it would cost to acquire that technology. As that technology becomes cheaper, the sales people charge less and less. Will a company really spend hundreds of thousands of dollars on a machine when people are willing to work for beans?

Companies will use people, despite the possibilities of alternative technologies, because people will price themselves as a cheaper alternative. Consider automated mail or package delivery. It has been possible to create a network of automated mail and package delivery for the last 100 years. The technology existed, but that doesn't mean that a majority of cities, states or governments would actually invest in that. Using people to deliver the mail was a more primitive, but cheaper solution, and that is why delivery people still exist today.

When the automation goes down in price, so will the wages that keep people competitive. We will eventually lobby to abolish the minimum wage, and $1 will actually mean something again. Even if the new prevailing wages is 25 cents a day, the economy will adjust to make a coffee 2 cents.

We will all live in healthy competition with the AI. The better they get at creating Androids and General AI, we will just unionize and lower our wages lower and lower, into the fractions of a penny if we have to, and the economy will adjust to the current reality. Instead of annual raises, we will have annual salary reductions, and we will convince ourselves that it is a good thing.

[trekky0623]

If every job were capable of being automated with AI and humanoid robots, people would just offer to do the job for a lower wage, to the point where it is cost effective for the company. When many people are receiving lower wages, deflation will occur and everything will be a lot cheaper.

Not everything is automated all at once. If a robot is working for pennies per hour, you cannot work for a lower wage if you also need to pay for the multitude of things that are either not yet automated or cannot be automated and have not decreased in price. That person will either find another job or be unemployed. Even in countries with no minimum wage, automation is still taking over because people simply cannot compete with the robot.

Even if everything was all at once capable of being automated, it probably still wouldn't help. A human can get sick, they make mistakes, they're slow, they have to sleep. All these things set the wage needed to compete with the robot even lower.

[Lord Dave]

Nope.
First, we need to consider the cost of raw materials.  You can't make plastics without oil and oil is a traded commodity on the world market.  The price is set by investors, based on the current selling/buying price.  This more or less works for every single major raw material in the world.

The labor force is only one part of the cost equation.

For example.  Let's say with in the span of an hour, every single job in the world is automated.  Mining, manufacturing, sales, everything.

The cost of everything would then be:
Raw materials, Maintenance, power.  Even assuming the maintenance was done by machines, they still need parts and other raw materials to repair something when it breaks down as all things do.  This is going to be cheaper than humans no matter what.
Why?

Well, Humans need food,water and rest.  Not to mention shelter to rest in.  Health care when they're sick or injured as well.  Robots need maintenance and power.  Food and rest are far more costly than maintenance and power over a year's time.

Let's take food.
How would humans get food?  Well, they'd need enough money to buy food.  How much would food cost?  Well, it would cost the raw materials of the farm (pesticides, fertilizer, seeds, water, time, power for the machines, maintenance for the machines.

All that alone would cost more than humans would need to be paid.  After all, you're running a factory and a farm with both require power, raw materials, and machine maintenance.  The humans would have to be paid enough to cover the cost of producing the food (plus profit) AND the cost of their other needs.  It's simply not worth it.

Read "Player Piano" by Kurt Vonnegut.  That is the world that would exist.

[Tom Bishop]

Not everything is automated all at once. If a robot is working for pennies per hour, you cannot work for a lower wage if you also need to pay for the multitude of things that are either not yet automated or cannot be automated and have not decreased in price. That person will either find another job or be unemployed. Even in countries with no minimum wage, automation is still taking over because people simply cannot compete with the robot.

Even if everything was all at once capable of being automated, it probably still wouldn't help. A human can get sick, they make mistakes, they're slow, they have to sleep. All these things set the wage needed to compete with the robot even lower.

When General AI is invented I imagine that it would get to designing the androids right away and the competition can occur across all sectors simultaneously.

It doesn't matter if a human is slower or makes mistakes. When you are running a business and paying beans to human workers while your competitor is spending millions on automation technologies, you win. You have a bigger budget for sales, manufacturing, and can expand into sub industries or other industries entirely. The human company dominates.

For example.  Let's say with in the span of an hour, every single job in the world is automated.  Mining, manufacturing, sales, everything.

That's not going to happen. When AI is invented and it starts creating the androids, it's going to have a high upfront cost. The unions will bargain for lower wages and the companies will just keep using people.

It is already possible to automate many physical labor industries 100%. But they do not do so and keep using "primitive" human labor because it is cheaper. As long as the human labor is cheaper, that trend will continue. Human beings will be a tool no different than the androids, except cheaper, and the cheaper solution always wins.

[Rama Set]

If every job were capable of being automated with AI and humanoid robots, people would just offer to do the job for a lower wage, to the point where it is cost effective for the company. When many people are receiving lower wages, deflation will occur and everything will be a lot cheaper.

Real wages have already decreases substantially.  When does the deflation kick in?  So far North America seems content to increase poverty instead.

When the automation goes down in price, so will the wages that keep people competitive. We will eventually lobby to abolish the minimum wage, and $1 will actually mean something again. Even if the new prevailing wages is 25 cents a day, the economy will adjust to make a coffee 2 cents.

See my first point.

We will all live in healthy competition with the AI. The better they get at creating Androids and General AI, we will just unionize and lower our wages lower and lower, into the fractions of a penny if we have to, and the economy will adjust to the current reality. Instead of annual raises, we will have annual salary reductions, and we will convince ourselves that it is a good thing.

I agree with the premise of the thread, but I think it will not cause mass unemployment because new service sectors will become more prevalent.  The shrinking of wages vis a vis inflation is already a problem, and has not been self-correcting so far.  Quite the opposite in fact; the cost of living is rising while wages are staying relatively flat for the most part.

[Tom Bishop]

Real wages have already decreases substantially.  When does the deflation kick in?  So far North America seems content to increase poverty instead.

Deflation is happening. You probably just aren't carefully comparing prices between the Target grocery store and the Mexican grocery store down the street. Some companies use psychology and status to get you to shop there despite higher prices.

I agree with the premise of the thread, but I think it will not cause mass unemployment because new service sectors will become more prevalent.  The shrinking of wages vis a vis inflation is already a problem, and has not been self-correcting so far.  Quite the opposite in fact; the cost of living is rising while wages are staying relatively flat for the most part.

Housing is priced at what the market will bear. Housing is not priced so no one is able to buy or rent. If housing prices are going up in your area, that means employers are willing to pay much more in your area, and you probably better get up to date and compete for those jobs in the job market.

[Rama Set]

Real wages have already decreases substantially.  When does the deflation kick in?  So far North America seems content to increase poverty instead.

Deflation is happening. You probably just aren't carefully comparing prices between the Target grocery store and the Mexican grocery store down the street. Some companies use psychology and status to get you to shop there despite higher prices.

Source?  From what I have read, the cost of living has grown at a faster rate than wages over the last 40 years.  Is that trend changing?

Housing is priced at what the market will bear. Housing is not priced so no one is able to buy or rent. If housing prices are going up in your area, that means employers are willing to pay much more in your area, and you probably better get up to date and compete for those jobs in the job market.

Yes, but the reality of what people have to bear now is more than what they previously had to.  Markets used to be priced in a place where a single income earner could afford a home, but that is not the case anymore unless said income earner is in the very top tier of earners.  This is especially true in large urban areas. So now housing costs take up a larger portion of your earnings than they used to leaving less for savings or investment.

[Lord Dave]

That's not going to happen. When AI is invented and it starts creating the androids, it's going to have a high upfront cost. The unions will bargain for lower wages and the companies will just keep using people.

It is already possible to automate many physical labor industries 100%. But they do not do so and keep using "primitive" human labor because it is cheaper. As long as the human labor is cheaper, that trend will continue. Human beings will be a tool no different than the androids, except cheaper, and the cheaper solution always wins.

Yep, upfront costs will be very high. 
Then they won't be.

As for why they don't automate industries, it's due to two reasons.
1. Expense of the machines
2. You still need operators.

Most factories are already automated as much as possible but humans are better at certain tasks than machines.  Code to find defects in a can, for example, are not nearly as good as human judgement.  The majority of human jobs in manufacturing are due to human judgement and operations, not because of skill.  Once you get AI that can do those things as well as a human, what's left for the human to do?

Heck, if you have a factory of 5 people whose job it is to do Q&A, you cold replace that with 5 cameras and one software. 

I actually worked at a warehouse that was experimenting with new technology: Automated retrieval and storage.  Basically grocery items were loaded by a forklift driver onto a conveyer belt, it was taken apart and the items were stored inside a structure that was far narrower and with far more shelves than the normal aisles.  As such, more product could be stored in a smaller space.

When you needed items, machines would take the items, put it on a conveyor belt, and they'd be stacked, wrapped, and sent to the end for a forklift driver.

A job taking probably 20 people was cut down to 4:1 operator, 1 bot handler (who went in to fix robots), 1 electrician, and 1 forklift driver.

Overall that's a big savings.  More product, less space, never stops working.

[Tom Bishop]

Yep, upfront costs will be very high. 
Then they won't be.

As for why they don't automate industries, it's due to two reasons.
1. Expense of the machines
2. You still need operators.

Most factories are already automated as much as possible but humans are better at certain tasks than machines.  Code to find defects in a can, for example, are not nearly as good as human judgement.  The majority of human jobs in manufacturing are due to human judgement and operations, not because of skill.  Once you get AI that can do those things as well as a human, what's left for the human to do?

Heck, if you have a factory of 5 people whose job it is to do Q&A, you cold replace that with 5 cameras and one software. 

I actually worked at a warehouse that was experimenting with new technology: Automated retrieval and storage.  Basically grocery items were loaded by a forklift driver onto a conveyer belt, it was taken apart and the items were stored inside a structure that was far narrower and with far more shelves than the normal aisles.  As such, more product could be stored in a smaller space.

When you needed items, machines would take the items, put it on a conveyor belt, and they'd be stacked, wrapped, and sent to the end for a forklift driver.

A job taking probably 20 people was cut down to 4:1 operator, 1 bot handler (who went in to fix robots), 1 electrician, and 1 forklift driver.

Overall that's a big savings.  More product, less space, never stops working.

When the first androids come out for $millions the unions will immediately go into negotiations if they thought that their jobs were threatened.

When the prices go down people still aren't going to buy a $300,000 android if people are willing to work for $2 a day, okay?

It doesn't really matter how cheap they can make these androids. The people have the power to change the value of the dollar. Depending on how people price themselves, dynamics of the economy could deflate to where $50,000 has the purchasing power of $1,000,000 today. If a company prices its androids at $50,000 it might as well be pricing it at $1,000,000. It makes NO good business sense to spend a million dollars over hiring people for beans.

[DuckDodgers]

You're argument falls apart when you have to introduce deflation to make it work, that just won't happen.  Nevermind the fact that deflation would also dramatically effect the price of the android, thus making it a cost effective choice again. Let's go with your 20:1 deflation, and assume a brand new Android will cost a company $5 mil in current dollars, this would make it $250k in deflated dollars.

Now, let's go with your worker salary of $2 a day. Assuming an 8 hour day, that's $.25 an hour or a 29,000% reduction if you take minimum wage in the US. It'd cost $4.5 dollars a day to run that position for 18 hours a day, which if it would take 6 hours to recharge the android, would be the same productivity level, $6 if the android has a permanent power supply.

So in current dollars, assuming minimum wage, 18 hours a day working, and $5 mil for the android, it'd take 105 years to make up the value on salary alone (prohibitive). Under deflation, same conditions and ratios stated above it's 152 years, an increase in price recoupment, but only a 50% increase. This doesn't take into account any form of production increase due to an android being able to do the job at a faster and more accurate pace, meaning more production volume. So if an android can get even close to a 50% production volume increase, it becomes a zero sum game when considering deflation.

[Tom Bishop]

You're argument falls apart when you have to introduce deflation to make it work, that just won't happen.  Nevermind the fact that deflation would also dramatically effect the price of the android, thus making it a cost effective choice again. Let's go with your 20:1 deflation, and assume a brand new Android will cost a company $5 mil in current dollars, this would make it $250k in deflated dollars.

Now, let's go with your worker salary of $2 a day. Assuming an 8 hour day, that's $.25 an hour or a 29,000% reduction if you take minimum wage in the US. It'd cost $4.5 dollars a day to run that position for 18 hours a day, which if it would take 6 hours to recharge the android, would be the same productivity level, $6 if the android has a permanent power supply.

So in current dollars, assuming minimum wage, 18 hours a day working, and $5 mil for the android, it'd take 105 years to make up the value on salary alone (prohibitive). Under deflation, same conditions and ratios stated above it's 152 years, an increase in price recoupment, but only a 50% increase. This doesn't take into account any form of production increase due to an android being able to do the job at a faster and more accurate pace, meaning more production volume. So if an android can get even close to a 50% production volume increase, it becomes a zero sum game when considering deflation.

With deflation, the android might become cheaper in dollars as you say, but work-value of the android also becomes equally less due to deflation. The price of the android will always be equivalently expensive in any economy, because of its potential value.

The androids will start expensive and stay (comparatively) expensive. The price of the android will never get below the potential value of the totality of a human life, because humans will just lower their own value to compete, to whatever that number needs to be, morphing the economy to suit themselves.

The android company cannot simply lower its prices. Even if the android company went completely suicidal and decided to price the androids at $10,000 to compete with the humans, the entire economy suddenly changes to meet that decision. The unions then immediately bargain to a price point which morphs $10,000 into $1,000,000 (or some other high number) and the android company may as well have not changed the price at all.

It is simply not possible to win the battle when you actually have to pay something to create your product and the humans can basically work for free and can change the fabric of the economy to keep your product expensive.

[DuckDodgers]

No matter the case, the cost of producing the android will be effected by the same deflation you are proposing, meaning the cost will continually decrease, add to that the general deflationary decerase in technology as it becomes more main stream, the $1 mil cost will turn into a $750k cost before taking deflation into consideration, thus reducing the cost further. There is a point where a person will not be able to reduce their cost because they won't be able to survive for themselves off their work, making it pointless to do that work.

[trekky0623]

Tom seems to think there is something special about humans that makes them invulnerable to economics. Make a robot good enough, and even just in raw materials, they become cheaper than an equivalent collection of humans. The robot needs electricity and maintenance. A human needs food, water, shelter, free time, maintenance. There is a bottom limit to how much you can work for, even considering deflation. If the robot's needs are cheaper than my own, I can't compete with it.

[Lord Dave]

Yep, upfront costs will be very high. 
Then they won't be.

As for why they don't automate industries, it's due to two reasons.
1. Expense of the machines
2. You still need operators.

Most factories are already automated as much as possible but humans are better at certain tasks than machines.  Code to find defects in a can, for example, are not nearly as good as human judgement.  The majority of human jobs in manufacturing are due to human judgement and operations, not because of skill.  Once you get AI that can do those things as well as a human, what's left for the human to do?

Heck, if you have a factory of 5 people whose job it is to do Q&A, you cold replace that with 5 cameras and one software. 

I actually worked at a warehouse that was experimenting with new technology: Automated retrieval and storage.  Basically grocery items were loaded by a forklift driver onto a conveyer belt, it was taken apart and the items were stored inside a structure that was far narrower and with far more shelves than the normal aisles.  As such, more product could be stored in a smaller space.

When you needed items, machines would take the items, put it on a conveyor belt, and they'd be stacked, wrapped, and sent to the end for a forklift driver.

A job taking probably 20 people was cut down to 4:1 operator, 1 bot handler (who went in to fix robots), 1 electrician, and 1 forklift driver.

Overall that's a big savings.  More product, less space, never stops working.

When the first androids come out for $millions the unions will immediately go into negotiations if they thought that their jobs were threatened.

When the prices go down people still aren't going to buy a $300,000 android if people are willing to work for $2 a day, okay?

It doesn't really matter how cheap they can make these androids. The people have the power to change the value of the dollar. Depending on how people price themselves, dynamics of the economy could deflate to where $50,000 has the purchasing power of $1,000,000 today. If a company prices its androids at $50,000 it might as well be pricing it at $1,000,000. It makes NO good business sense to spend a million dollars over hiring people for beans.

Humans need more things to function than androids.  The cost of maintaining human life will always be greater than machine maintenance.


You can't infinitely lower wages because at some point it becomes worthless to work as you won't make enough money to pay for your living expenses.

[garygreen]

i can't wait to be a part of the free-labor workforce for our robots overlords.

[Tom Bishop]

Humans need more things to function than androids.  The cost of maintaining human life will always be greater than machine maintenance.

You can't infinitely lower wages because at some point it becomes worthless to work as you won't make enough money to pay for your living expenses.

That's not how the economy works. Wages can be infinitely lowered. Companies price their products based on how much the customer is willing to pay. If people cannot pay for the products because they are working on beans, the prices of those products are reduced to match.

Tom seems to think there is something special about humans that makes them invulnerable to economics. Make a robot good enough, and even just in raw materials, they become cheaper than an equivalent collection of humans. The robot needs electricity and maintenance. A human needs food, water, shelter, free time, maintenance. There is a bottom limit to how much you can work for, even considering deflation. If the robot's needs are cheaper than my own, I can't compete with it.

The economy is based around what humans are willing to pay for their products. That places them in a special spot. There is no bottom limit to how much you can work for, because the prices will all flow down to be reasonable for you to pay. Companies cannot exist without people to buy their products.

The robots are going to start off expensive, and they are going to stay that way. They have too much competition from humans who are willing to work for beans and are willing to morph the entire economy to keep them expensive.

Eventually the government may step in and put limits on how much the robot company can slash its prices each year, due to economic concerns. People will be conspiring at all levels of government to keep the economy stable and the android companies in check.

[Tom Bishop]

No matter the case, the cost of producing the android will be effected by the same deflation you are proposing, meaning the cost will continually decrease, add to that the general deflationary decerase in technology as it becomes more main stream, the $1 mil cost will turn into a $750k cost before taking deflation into consideration, thus reducing the cost further. There is a point where a person will not be able to reduce their cost because they won't be able to survive for themselves off their work, making it pointless to do that work.

Again, it is not possible for people to be "paid too little to survive" because the existence of every company depends on people being able to buy their product. The prices of their products and services will just be lowered to match what their customers are now being paid at.

[TotesNotReptilian]

No matter the case, the cost of producing the android will be effected by the same deflation you are proposing, meaning the cost will continually decrease, add to that the general deflationary decerase in technology as it becomes more main stream, the $1 mil cost will turn into a $750k cost before taking deflation into consideration, thus reducing the cost further. There is a point where a person will not be able to reduce their cost because they won't be able to survive for themselves off their work, making it pointless to do that work.

Again, it is not possible for people to be "paid too little to survive" because the existence of every company depends on people being able to buy their product. The prices of their products and services will just be lowered to match what their customers are now being paid at.

2 problems with this logic:

1. You are assuming the entire economy runs through a single corporation. If there is any semblance of competition, this logic doesn't apply.
2. You are assuming that the price of basic necessities will fall at the same rate as wages. This is a bad assumption. The price of basic necessities is based on the population of a nation and it's GDP, among other complicating factors. However, the wages that a company is willing to pay is dependent on the cost of automation, which can fall arbitrarily low.

The value of cash is somewhat arbitrary. Instead think of it in terms of something more concrete. Let's define something called a "Necessary Resource Unit" (NRU). One NRU represents the necessary food/shelter that a person needs to survive for one year. A country can only distribute a finite amount of NRU's per year, based on its GDP. They aren't limitless.

The minimum wage that a person can survive on is one NRU. However, the cost of automation could theoretically dip below one NRU. If it does, it behooves a company to switch to automation if they want to maximize profit.

[Screamer]

I have a number of issues with Tom's premise.

The major issue I have is that as more work becomes automated by machine, it will actually change the value of money. Right now, money is a store of wealth that we equate to labour we intend to do (a debt based currency). So if I have $10, and I work for $10 an hour, that $10 represents an hour's work. Everyone agrees on this. I can swap an hour of my work for an hour with a plumber. We can agree that a doctor or lawyer might earn more lets say 3 times as much as me, but we all see that as fair because not everyone can be a lawyer and supply demand and all that. But when we trade money for goods, it is on the understanding we are trading our efforts.

Now, let us assume I make little metal widgets. And I can make 20 in an hour and they are worth a dollar profit each. I'm earning $20/hour and that seems fair. Now consider a machine that hammers out 40,000 in an hour. I cannot compete with that. I can't lower my wages to that. Because now the cost of a widget does not represent the effort it takes me to make one. It is represented by the energy it took the machine to make one. In other words you disconnected the value of money from it being a unit of work, and it is now a unit of energy ... how many watts does it take to make the widget. This makes energy companies the new central banks ... they supply the energy ... whoever controls the money supply, rules the empire and all that ...

What we will see is a massive deflation as everything is calculated in energy, not human effort, and machines become more efficient ... deflationary as it takes less effort each time to make the new widget - the cost goes down.

The next thing is, someone will likely create an entrepeneur bot. A bot that scours the markets and spots demand. Creates a company, solves the problem, markets to the target consumers and collects revenue. No man will be able to compete. No new business can be set up. The entrepeneur bot will out compete anything and everything. The upshot is ... no jobs, no self employed, no work at all. You can only make money through crime, the one place a corporation can't beat you.

This leads to the final phase. There will be two types of people. Those who own the machines, and those who do not. Those who own the machines will make and create everything. Those without cannot earn and have no way of making money. So they turn to the state. The state now can't tax people as they don't have jobs. So it relies on whatever it can get from the people who have the machines/corporations. The hand that gives is always above the hand that receives. So the corporations will pay taxes that they decide upon, in exchange for alterations to human rights and laws to gain even further control. You will have most people completely dependent on the government, and government that is completely dependent on the few who create wealth to keep it going. There isn't really a modern day word for this, so I'm going to go with enslavement.

Never in the history of man, have the rich said to the poor "hey, we're making a killing here, you just relax and we'll share our wealth with you". Not in the industrial revolution, not in the post war boom, not during empires, and it won't be the same now. Those who own the machines will not go to work to run their businesses and let everyone else sit on their backsides. They are going to demand everything first; homes, assets, any residual wealth ... it will be utter confiscation. And when you have nothing left to give including your rights ... you are worthless and will be treated that way. It will be the end game. Someone will rule the world ... the guy with all the machines that bought every other company out. Ladies and gentleman ... we have a winner. His prize, planet earth and everything on it and he runs the world's automated military to make sure that will never change.

[TotesNotReptilian]

Basically, it comes down to this: machines are potentially thermodynamically more efficient than humans.

It will be the end game. Someone will rule the world ... the guy with all the machines that bought every other company out. Ladies and gentleman ... we have a winner. His prize, planet earth and everything on it and he runs the world's automated military to make sure that will never change.

Maybe the Machine-Emperor will have pity on us plebs, and designate a new planet for us to start over in at the stone age.