Tiger Stone Illustrates the Pressure Labor Faces as a Commodity in the Knowledge Economy

I (partially) disagree that this is nothing new. Most technological advancements were incremental and made older technologies obsolete, but they didn't remove the need for human labor. In instances where disruptive technology did supplant humans (e.g. printing press, mechanized agriculture), displaced workers simply migrated to another area where they were needed. Today, there are fewer and fewer places left to go. We're making humans obsolete, not just technologies.

Regarding your prediction about education: around the time OWS was going on, we briefly talked about the genetic predisposition to invent, discover, and learn. Back in prehistory, it was advantageous to have a nerd or two inventing stuff while everyone else was getting trashed around the campfire. Today, we need more nerds...but the proportion of cognitive-oriented people vs. labor-oriented people isn't changing fast enough. That's why we'll still need "indoctrinators" rather than true "teachers" in the foreseeable future.

Good points. (Though displaced workers did not always go so quietly ... the Luddite movement is a bit terrifying if you realize how the primitive response was harmful to the long-term interests of humanity. Part of me worries about neo-luddism if the changes come too quickly; if they are, instead, spread out over several decades, I think it can be avoided. At least, I hope so. To some degree, though, I'm not sure where that line should be drawn. For example, I'm wrestling with the question of whether or not the violent response seen by some as a result of wearing Google glasses in otherwise private settings is, perhaps, in some sense rational and justified; one of the working papers I need to finish. Particularly, given the fact Google won't permit the devices in their own stockholder meeting!)

What's really unnerving is when the technology (and cost) shrinks to the point where you cannot tell the difference between normal glasses and glasses with webcameras, microphones and GPS in them. It will be microscopic.

Then a few years later contact lenses.

It makes you wonder about the tech distance between the public and the gov projects this very moment...I guess mosquito drones might actually be believable. Loss of control over this stuff is inevitable. It will be in everything, more and more as the cost become pennies. They can make regularly-disposable ones.

I apologize for the spam. Joshua, is privacy an "Oak Tree"?

You know I think the "war" on privacy is just beginning. "Privacy" is going to go the way of the dinosaurs by the end of the century. I'm willing to bet everything on that.

It compounds. Soon those microscopic cameras/microphones will have all the waves in the spectrum like x-ray and microwave. Highly advanced biometric pattern recognitions. Throw in "smart" advertising. And that's just what we know.

That isn't freedom.
I think we need to appreciate being able to take a shower and being intimate with our spouses without being watched 24/7/365 simultaneously by everyone else on the planet. Future generations won't have that privilege.

I can't be the only one sad about this right? Was privacy just an illusion to begin with? Is it an "Oak Tree"?

Thank you if you read it.

The effect was greater than just social movements like the Luddites'. Look at the jobless farmers and factory workers whose collapsing consumption helped create the perfect storms of the Great Depression and the Great Recession respectively.

I would love to see education follow your predictions.

It seems to be heading in the right direction as evidenced by those who are able to sell their work to others.
http://pandodaily.com/2013/11/04/teachers-are-earning-millions-of-dollars-selling-their-lesson-plans-on-the-itunes-of-education/

In talking with relatives in the netherlands, they are starting to see a different shift in the workplace. With the vast majority of youth graduating with four years degrees and a desire for an office job, it has left a void in "Manuel labor" jobs. Plumbers, carpenters, electricians, utility workers are being paid just as much as computer programmers because of a shortage of qualified workers

Great point! This could turn out to be a very nice counterbalance that makes the social change more palatable and easy. That's happening in the advanced manufacturing jobs here in the United States at the moment, though few people seem to notice. There's a shortage of workers who can fill the positions (while too many low-skill manufacturing workers who are trying to find jobs that no longer exist). It's one of the reasons free markets work so well - they balance themselves through incentive shifts.

This reminds me of the works of the great Dr Seuss. American universities have become liken to Sylvester Mcmonkey Mcbean and his "Star On Machine" pumping out Sneeches as fast as possible with "stars upon thars". I think this will fuel Joshuas prediction of an educational paradigm shift. For the bachelors of science degree holder, up to their ears in student debt and working the drive through window, it is unfortunate this shift hasn't happened sooner.

Technology should be helping humans live better. Therefore, if human labor is not required to punch in for 40 hours/week, maybe a 30 hour week should be the norm?

If humans are not needed to run farming, lay infrastructure, then maybe we should simply let the machines do it, and for humans to enjoy the fruits of that labor.

My thinking, too.

It is actually really simple, yet people are trying to over complicate it. I can reasonably forecast that the work week will be reduced, and vacation times increased. Europeans work 25% less than Americans, and many countries are very productive and innovative - like the Netherlands.

The general problem here is that skilled labor is a complement to technology. In order to use computers you need skilled computer scientists, programmers, etc. So advances in technology create an increase in the demand for skilled workers. If demand for skilled workers rises faster than the supply (we can measure this by the education level, for instance), inequality grows because the skilled workers will now command a higher wage. If the supply grows faster than the demand, however, the inequality will shrink.

This is essentially why you get high profits right after a technological breakthrough. A technological breakthrough suddenly creates a high demand for skilled labor, and sort of like when the frontier opens you have a rush of people trying to stake a claim to the newly found land, you now have people bidding up the price of say, computer scientists in an attempt to quickly build out infrastructure and lay claim to your market (more so since computer technology companies tend to be winner take all due to network effects and the lack of geographic constraints). The key is that speed, not efficiency, is the key in a new market. So this creates a sort of vacuum that produces high wages in the field - initially. Over time things will eventually get back to normal. Its like an asset bubble, except this time for labor instead of the traditional bubbles we see in securities etc.

I can see what you are saying when you say the Luddite movement is a primitive response and harmful to the long term interests of humanity, but I think the error is in assuming that the long term interests of humanity are binary, that everyone must hold this to be the highest good, or that it is justifiable that the benefits and costs are not borne by the same people. Clearly given the content on this site I don't think you actually beleive that. Out of the points you stress - money is not a god to be worshiped, it is a tool.

Likewise, I'd say the same thing about this notion of "progress". The long term interests of humanity may be a noble goal, but must be weighed against other values such as the state of society today. It is difficult to justify the long term interests of humanity if you're the one suffering right now. I suppose that if we forced everyone to save all their income except for the basic necessities of food, shelter, and clothing, we could devote enormous amounts of resources to investing in the future and thus grow the economy faster than we do now. Yet we don't do that, because we also want to enjoy the fruits of our labor now. Alternatively, we could consume everything now and not save anything for the future, but that would be a great disservice to our grandchildren.

Thinking that something is justified "in the name of progress" can be dangerous because it implicitly assumes that humanity is a collective unit - that since the benefits outweigh the costs that we should always choose progress if it is the available option. Yet in reality, there is no collective "humanity", there are only individuals in the society. So really the costs and benefits of progress are borne by different people in different time periods*. I think you can make a strong case arguing that you should apportion consumption/investment in such a way that all generations can benefit in such a way that no matter what year you happened to be born in or whatever position in society you started in, you would be satisfied with the allocation. Yes, the Luddite movement is irrational - we don't want to be destroying machines that are making us better off as a whole. However, I think the core of the Luddite argument is a protest against the idea that progress for humanity as a whole justifies our lack of empathy or recognition for the sacrifices that must be made today . The people who enjoy the benefits and the people who pay the price are not the same people. Whether or not this is by choice or whether it is good and just is for another discussion, but those are my thoughts on the core idea of the Luddites.

*This is the essence of politics - deciding who bears the costs and who receives the benefits of progress (or, alternatively, as a mechanism for zero-sum redistribution)
**Writing this makes me realize that the whole problem is on free agency vs. determinism - whether economic outcomes are solely of our own choice, solely deterministic, or a mixture of the two will determine our attitude on how fair certain outcomes are

(Its late, hopefully I am not too incoherent)

That brick laying machine is really fascinating, but check out this automatic train track laying machine. It takes that approach to an incredible new scale. http://youtu.be/Rb5z58weXWk

Great post. The effect on rising education cost and a system of pay much like teaching is in law. A close personal friend accumulated over $200k in debt getting his JD from a prestigious law school, only to find that employers cared most about his number of years experience unless he was in the upper end of his graduating class. Further, the starting salaries have been decreasing. A first or second year attorney is happy to get a job, let alone break 70k (California). The starting salaries of new attorneys are actually on the decline, from what I've seen.

To make matters worse, person seeking to get into a more altruistic area of law would essentially find it nearly impossible unless they were receiving family assistance, grants, or other "free money" as these fields pay the least and repayment of loans are enormous. Further, to get into it you typically need to have done an internship in the field in school, which is unpaid.

Essentially, the cost of schooling prevents the greatest benefits of schooling.

Even in medical school. Want to go assist the poor in third world countries? Sorry, you're $300,000 in debt and your payments are now due.

It truly is sad.

I also attribute people's unhappiness to this. Although we can blame their lack of research before applying to schools, I believe many go into medical or law with altruistic career dreams and end up doing the grunt work of their profession to pay their debt. For a society that encourages a form of career heroism, we sure don't make it very possible.

This is exactly why I had to change directions. I knew too many attorneys valeting cars and making mojitos. You gotta flow with the tides man.
There is nobility in every job done well. If some guy makes me a hamburger and puts it together just right with the mustard and pickle - that is an honorable job he just did making my burger. Likewise, if a person is a janitor and can feed his family and keeps the floors clean, he is just as important as the attorneys that walk the halls during the daytime. Maintenance keeps the floors shiny and the microbes at bay. You must follow the money and put your heart into every job, altruistic career dreams are for followers, not leaders.

First off, forgive me if this sounds critical. I do not mean it so.

$5000 after tax on $20,000 a month, I don't see you figures here. Last I checked, $300,000 a year was a minimal salary for a MD other than primary care. I can see the $5000 after paying insurance and loans while making an initial salary only.

I'm also not following the comment on doing $20,000 in work and getting $10,000 back? How do you value the work at $20,000? What is a fair return on educational investment? A fair time based compensation also relative to school?

I think doctors stand apart from the plague in law. The return on investment for a MD can be much larger than most careers along with the lifetime earning power total, without getting into the compounding benefits of quickly obtaining so much disposable income.

Frankie your observation is correct. I was making a joke about paying taxes. I see your point about valuing work.
It is very difficult to quantify this idea, which may be a sign that it
is a bad idea. I am talking about my prototype mental model.
I was not referring specifically to MDs when I mentioned the 20,000 dollars worth of effort, to get 10,000 dollars worth of money.
Perhaps a better example would be to think about caloric utilization.
If you eat 3,000 calories you will not get 3,000 calories of energy to move around. Some will be wasted, like frictional expenses.
I believe that with labor based income earning, the more money you want to earn, the more difficult those extra hours of work, overtime, education, etc gets. In other words you get diminishing returns.
Thanks for the replies.

As far as making a great sandwich or being a janitor, I like Good Will Hunting as much as the next guy but I adopt the stance of his friends in the film: society has enough people of lower capabilities to make a great sandwich. It is a sore loss for the world and a true cop-out to accept such a career when you have doctorate level potential. Not everyone truly has that ability. Further, there are greater ways to aid the world that greater minds are capable of. If you want to live on $20k a year flipping burgers, live on $20k a year and do something that pays more, then use the additional funds to build a nonprofit business that supports your favorite charities. Suddenly, flipping that burger looks like a poor justification for never risking a wound to your pride by pursuing something greater. It's not honorable to someone with vastly higher capabilities. It's weak. Those people spend their whole lives talking about how they could've done way everyone else is doing, they just chose not to. Cutting down the success of others as something to not be celebrated, as though you "could've but chose not to." It's weak and protecting the fragile ego, nothing more.

I agree.

Recently, while watching a video of a house being built by a robot, it occurred to me that, just as the Agricultural Revolution was accelerated by the Industrial Revolution, the Industrial Revolution is accelerating in the Information Age. These epochs build on one another like the sand falling on to an ever growing pile. The base is made exponentially broader with every inch the pile climbs. It struck me at once that perhaps Marx was not so wrong after all. Industrialization increased the value of labor. All these wonderful wealth generating machines suddenly required minds to drive, operate, and fly them--let alone highly developed skillsets to design, maintain, and repair. Perhaps his crude early 19th century notions of industrialization represent a more distant world than we, two centuries later, still have not lived to see? What happens to labor when the machines need no minds to run them? How would class function in a society where a small minority holds jobs? We may be on a path to finding out.

That last question is fascinating ... It's almost 3 a.m., I'm about to go bed, but this is going to keep me up for awhile. My first reaction is to think it would be based on other forms of capital and exclusivity, but with resource access being such a huge evolutionary prestige factor, the absence of it could create some weird results. I need to give this my full attention.