Saturday 2011-09-03

Jaron Lanier tackles technological unemployment in the latest Edge in addition to other economic ideas, like:

You have more and more complex financial instruments, derivatives and so forth, and high frequency trading, all these extraordinary constructions that would be inconceivable without computation and networking technology. At the start, the idea was, "Well, this is all in the service of the greater good because we'll manage risk so much better, and we'll increase the intelligence with which we collectively make decisions." Yet if you look at what happened, risk was increased instead of decreased.

Since economies have a habit of crashing over and over again, does it make sense to pin this crash on derivatives and HFT? There could be some hidden third variable (like over-confidence).

It seemed to create savings for people initially who were the end users, the leafs of the network, very much as Google, or Groupon, seem to save them money initially. But then in the long-term it took away more from the income prospects of people than it could offer them in savings, very much as Wal-Mart did.

Likewise, throughout history, people have lost their jobs when technology advanced or competitors got cheaper. While it's not easy on the individuals, our society has benefited from both rising standards of living and huge increases in average lifespan. Is there any reason to believe that people won't be able to train up?

That's not to say that people won't choose to work less. When entertainment and sustenance costs have fallen, work becomes relatively more expensive. While this voluntary unemployment may stress parents, this trade-off will become more common as the costs of the-fun-life continue to fall. The companies which can organize time-fragmented and author-fragmented work into usable work flows will succeed. Those that require full-time awareness will have to pay much more for it.

Those who choose a low-work lifestyle and have low savings will be fine as long as the costs of their desires continue to remain low. If health/life maintenance costs continue to rise, some people will choose faster more ephemeral lives while some choose to work more to live longer.

Lanier seems to think that the world has a fixed amount of work that needs to get done. That when I add a robot, I take away a job from somebody. In reality, the amount of work is infinite and it's only by making things relatively cheaper that we push the frontier back and get more done.

This breaks down when machines can do everything that a human can. But then again, everything breaks down at the Singularity....