Replaceable but Employed: Automation and the Meaning of Work
nber.org
nber.org
I thought they'd come up with a neat mechanism that looked at actual wages in real companies where automation was introduced, but no. It's all spherical cows.
the boss's wallet and plenty of economists who made their career off supporting it were very upset about that one and tried to deny it.
As automation takes over, the value of labor collapses, and workers' market bargaining power under capitalism is the first to crumble. Ultimately, this drives up the value of real assets. I agree that tech companies can profit and gain the upper hand in negotiations simply by demonstrating a machine before licensing it, as this alone diminishes the value of workers. I am seriously worried these days.
This always makes me laugh. What motivation would the oligarchs have to pay out UBI? If they can automate the labor who needs more mouths to feed? They’ll push undesirables into ghettos and start a slow genocide of starvation and disease.
From a cost-benefit perspective, I think it's a terrible idea. In the case of a massacre, long-term instability makes it hard to build a supportive faction. But if you provide just the bare minimum to survive through UBI, the capitalists will gain a loyal faction that will act as their Red Guards to attack dissidents, which I think is much cheaper in the long run. There are already plenty of people who blindly defend corporations even when they do terrible things, right? In my opinion, UBI is simply the cheaper option. Historically speaking, post-massacre recovery has always ended up costing much more.
Isn't it obvious? Your existence is margin that they leave on the table. And for what reason if you have no real skills or anything to offer? You are a leech. You exist to consume. You create nothing in this new future. You have no value. You aren't even an asset. You are a liability.
And what you think they will fear instability that we will bring upon? We will be armed with sharpened sticks and a smattering of ar15s at best case, while we are targeted from orbit by automated precision ordinance. Imagine a war between two AI controlled nation states. One has to manage a population during this war, the other opted to cull its population early in the war and maximize all its resources into the war effort. Guess who wins that war every time and likely takes control of the planet.
Automatic gun turrets are even cheaper in the long run.
In 1930, John Maynard Keynes wrote an essay title "Economic Possibilities for Our Grandchildren"
He predicted that in 2030, technology, productivity, capitalism would solve the economy. There would be so little work to do and so many resources that the average work week could just be 15 hours!
He wrote that once all us plebes were liberated from work, what we would face is humanities greatest problem. What purpose will we have with all this new found leisure time!
We only have to wait 4 more years to relax.
The performance gap between free and paid AI models is massive. The resulting divide between children from low-income and high-income families is quite evident based on my observations in my country. It will only get harder to keep up.
I don't support UBI either. The fact that UBI is even being discussed means the market is broken. The problem is that in the current market, prices for freelance work tied to intellectual labor have been absolutely crushed by AI. Looking at indicators from Booth or the Korean freelance market, "middle-tier" jobs are disappearing. While currently established professionals remain unaffected for now, the volume of work has drastically decreased for developers or writers who are still building their reputations. There are statistics from Japan showing this as well. My workload has also decreased to a ridiculous extent. The so-called barbell structure is becoming entrenched.
The core issue is this: if that happens, how will society handle the dissatisfaction of such a massive number of people? If more than half the population are workers, there is no problem, but if more than half are unemployed, that is a serious issue. Income polarization is continuing to accelerate.
Because there are no aristocrats without slaves, capitalists need workers to elevate themselves. Wealth and power are strictly relative, and they need miserable ornaments to make themselves feel like "awe-inspiring beings." To confirm their own sense of superiority, capitalists require human spectators who look up to them while suffering in misery. Why else did ancient Rome unleash lions and gladiators in the Colosseum?
Later on, things made by humans will become expensive luxuries, while commoners like me will be fed UBI—the bare minimum bread for survival—along with cheap, AIslop.
If making money by learning a skill increasingly requires a longer time investment, you have to endure the period it takes to learn that skill and build a reputation, which is incredibly difficult for the average working class. It requires the financial backing of a wealthy family to afford a college degree, travel to academic conferences, and survive on low wages. And if someone can endure all that to build a reputation, it will naturally lead to a massive concentration of wealth at the very top.
I propose that voting on comments should have a required field addendum, so that before a vote can be cast, the voter has to type into the field the reason they are voting it up or voting it down.
The industrial revolution feels like an imperfect analogy because industrial automation still required human labor to operate the machines. The premise of this paper is a regime where machines could also operate the machines.
No. Send to fight a war. To capture resources.
The economy of the future will be about yachts, supercars, hermes bags, private air travel and ozempic. Not about how you made it possible for everyone to watch a gigantic library of videos for free, or how you made cars affordable for everyone.
AI invalidates a lot of the need for money to even exist as a concept anyway in some scenarios. If only a few people have all the stuff (huge inequality) you don't really need a large money system because you no longer need most people to get what you want (i.e. most are economically irrelevant). You have a magical genie called AI instead that can transform what you have into what you want as long as you have the raw materials, space and energy. The wealthy could then negotiate in large transactions via barter - I trade that plot of land for that copper mine. Most large transactions are negotiated in any case.
A very likely case (there are others) is that AI enables feudalism of some sort to come back - where the new lords are the owners of the other economic factors of production that remain scarce (capital, land, resources, social) - not intelligence and/or labor. This is the opposite of a meritocratic society. It would explain why people want to win the AI race; and are willing to burn uneconomic amounts of money to build it out. There is a race to the finish here.
This is the reverse of how the economy actually works. You need labor and capital to turn raw materials into goods and services. If you invested a lot in capital in automation, you don't want that getting screwed up for want of labor, and so you pay a premium for workers who will do the job right and ensure you're getting full value from your capital.
That's why highly automated companies pay their employees better than less automated companies, and highly automated professions pay better than less automated professions.
Which specific industries are these which currently have a fleet of robots and 0 technicians?
Unless you mean that it would have the capacity but would be told not use it in this specific situation. It can't be programmed deterministically, and getting it to never do this emergently would take significantly stronger guardrails than anything even the frontier labs have been able to put together.
So I've seen this argument made before, but they never seem to explain convincingly enough why that sole technician (or small group of technicians) would be paid so handsomely.
In a market in which there's a glut of labor, wouldn't there be plenty of desperate, and very capable, workers competing for the few available positions, thereby driving down the wages for those positions significantly as well?
Why not paying the technician $80,000 a year?
Because every other company has also replaced their 6 warehouse workers with a fleet of robots and 1 technician, and that technician's skills are more rare and specialized than the warehouse workers, so you're competing with every other warehouse-owning company to hire that technician, so that technician can demand a higher salary. In other words, capitalism.
You pay the one technician $200k instead of $80 because that technician has an outside option that will pay him $199k. He has that outside option because everyone is automating their warehouses and factories and stuff, and so in aggregate we basically wind up with 6 times as many warehouses and factories each employing 1 person.
It's a little more nuanced. There is not infinite demand for warehouses. So some of what happens is an $80k/year warehouse worker becomes a medical technician making $90k/year providing non-automatable services to the warehouse guy making $200k/year -- but the general story is everyone's wages go up. And history bears that out.
Usually the amount of pay increase no way compensates for the total pay lost across all workers - that's one of the incentives to continue with the efficiency gain of course. If it happens too fast only a select few will have jobs because the demand won't have time to match the new supply.
All the above assumes you need greater levels of intelligence to deal with the next bottleneck and that intelligence comes from humans as its only source. If AI is more intelligent than humans then this effect - known for most of human history - becomes an invalid assumption of the economic model; bottlenecks and the ability to solve them goes to the highest/cheapest intelligence.
IMV should AI do this it would invalidate most economic system assumptions including ones in capitalism, socialism, etc. My base case isn't a positive one sadly of what comes out on the other side.
While all the grinding skilled workers get displaced the bureaucracy jobs will remain. Ironic.
Even people that go off grid and develop self sufficiency will eventually be subsumed by the need to feed more resources to the AI genie to grant more wishes. Whether it is land taxes, forced relocations, etc. Their land will be taken over, mined and or farmed - similar to colonies of old that were technologically less advanced than their invaders.
You are already IMV starting to see the beginning signs of the above as AI gets better. More competition in jobs, less certainity for the working class, businesses with other moats using AI to increase profits, data centres vs local communities taking land/energy/water over, AI required commodities increasing in value (e.g copper) and others. There will be more.
Modern times where we have democracy and capitalism are a relative recent phenomena when looking at the whole of human history that we take for granted when we shouldn't.
i.e. the community, rather than AI/big corp, would need to somehow own the scarce assets required for AI and extract economic rent from them. Whether it is energy, land, water, etc. I think its a better system then say UBI because both parties still provide something of value. This isn't my base case but it is possible. It also needs to be done while human power structures still have economic power (i.e. governments)
So it would be a combination of political will (i.e. you can't use frontier models unless they can be run by end users) and technical in that you need to have enough compute distributed with the profits of that going to local communities (e.g. data centre rent). When the AI labs engage the community that way they will pay "money" which creates a demand from large corps to local communities and adds life to the monetary system - a good thing.
Effectively compute needs to be a commodity that is rent-able/accessible to everyone at competitive prices and have multiple providers. That enables open source models, and allows a spread around the ownership of AI. It can't be hoarded by the AI labs, nor can the chips (e.g. GPU's) have only a few producers.
Human labor has value because it is limited. If we keep up our current pace of data center buildouts and breakthroughs in model efficiency, then artificial intellectual labor will become functionally unlimited. Unlimited resources do not tend to hold their value. In that case, there are two potential outcomes: deliberate limitations on the output of artificial intellectual labor, which would require all parties involved to decide to lock themselves into their current market shares; or financial collapse of the whole ecosystem. What happens after that collapse is anyone's guess, but you have to imagine that it's the lenders who financed the whole thing who will be deciding what happens next rather than the failed tech businessmen.
Capital can drive the cost of inference down but the value is determined by whoever wants to pay for that inference. Therefore this question is not answered: how valuable really is these llm inferences and how much of a supply of such inference does the world really need.
This keeps human labor devalued while not allowing artificial labor's value to fall to low enough that human labor is back to being cost effective.
Works fine on my machine. Maybe don't view from a phone, I guess?
It's not a landing page for some SaaS, it's a manuscript for some academic publication. "Mobile first" is definitely not top of mind.