Samir’s Selection 05/20/2013 (p.m.)

  • Bill Wasik: “… For the Programmable World to reach its full potential, we need to pass through three stages. The first is simply the act of getting more devices onto the network—more sensors, more processors in everyday objects, more wireless hookups to extract data from the processors that already exist. The second is to make those devices rely on one another, coordinating their actions to carry out simple tasks without any human intervention. The third and final stage, once connected things become ubiquitous, is to understand them as a system to be programmed, a bona fide platform that can run software in much the same manner that a computer or smartphone can. Once we get there, that system will transform the world of everyday objects into a design­able environment, a playground for coders and engineers. It will change the whole way we think about the division between the virtual and the physical. This might sound like a scary encroachment of technology, but the Programmable World could actually let us put more of our gadgets away, automating activities we normally do by hand and putting intelligence from the cloud into everything we touch… ”

    In fact, if this indeed sounds to you like a “scary encroachment of technology,” Wasik’s word of assurance offers little consolation. The fact that the gadgets are unseen, activities are automated, and cloud intelligence saturates our environment means that the encroachment will be effectively total precisely because it will be invisible and, as they say, frictionless…

    What’s the goal of the Programmable World anyway?…

    …is it the perpetual passive documentation of an automated life which is algorithmically predicted and preformed for me by some future fusion of Google Now and the Programmable World.

    For some people at least, the idea seems to be that when we are freed from these mundane and tedious activities, we will be free to finally tap the real potential of our humanity. It’s as if there were some abstract plane of human existence that no one had yet achieved because we were fettered by our need to be directly engaged with the material world. I suppose that makes this a kind of gnostic fantasy. When we no longer have to tend to the world, we can focus on … what exactly?

    tags: automation programming computing AI future

  • The economics community just hasn’t spent much time over the past couple of decades focusing on the effect that machine intelligence is likely to have on the labor market.Now is a particularly appropriate time to think about this question, because it was two centuries ago this year that 64 men were brought to trial in York, England. Their crime? They were skilled weavers who fought back against the rising tide of power looms they feared would put them out of work. The Luddites spent two years burning mills and destroying factory machinery, and the British government was not amused. Of the 64 men charged in 1813, 25 were transported to Australia and 17 were led to the gallows…

    Increasingly, then, robots will take over more and more jobs. And guess who will own all these robots? People with money, of course. As this happens, capital will become ever more powerful and labor will become ever more worthless. Those without money—most of us—will live on whatever crumbs the owners of capital allow us.

    This is a grim prediction. But it’s not nearly as far-fetched as it sounds. Economist Paul Krugman recently remarked that our long-standing belief in skills and education as the keys to financial success may well be outdated. In a blog post titled “Rise of the Robots [15],” he reviewed some recent economic data and predicted that we’re entering an era where the prime cause of income inequality will be something else entirely: capital vs. labor…

    In the economics literature, the increase in the share of income going to capital owners is known as capital-biased technological change…

    The question we want to answer is simple: If CBTC is already happening—not a lot, but just a little bit—what trends would we expect to see? What are the signs of a computer-driven economy? First and most obviously, if automation were displacing labor, we’d expect to see a steady decline in the share of the population that’s employed . Second, we’d expect to see fewer job openings than in the past. Third, as more people compete for fewer jobs, we’d expect to see middle-class incomes flatten in a race to the bottom. Fourth, with consumption stagnant, we’d expect to see corporations stockpile more cash and, fearing weaker sales, invest less  n new products and new factories. Fifth, as a result of all this, we’d expect to see labor’s share of national income decline and capital’s share rise…

    WHAT CAN WE DO about this? 

    Solutions to this will remain elusive as long as we resist facing the real change in the way our economy works. When we finally do, we’ll probably have only a few options open to us. The simplest, because it’s relatively familiar, is to tax capital at high rates and use the money to support displaced workers. In other words, as The Economist’s Ryan Avent puts it, “redistribution, and a lot of it. 

    Alternatively, economist Noah Smith suggests that we might have to fundamentally change the way we think about how we share economic growth. Right now, he points out, everyone is born with an endowment of labor by virtue of having a body and a brain that can be traded for income. But what to do when that endowment is worth a fraction of what it is today? Smith’s suggestion: “Why not also an endowment of capital? What if, when each citizen turns 18, the government bought him or her a diversified portfolio of equity? In simple terms, if owners of capital are capturing an increasing fraction of national income, then that capital needs to be shared more widely if we want to maintain a middle-class society. Somehow—and I’m afraid a bit of vagueness is inevitable here—an increasing share of corporate equity will need to be divvied up among the entire population as workers are slowly but surely stripped of their human capital. Perhaps everyone will be guaranteed ownership of a few robots, or some share of robot production of goods and services…

    it might turn out to be something we can’t even imagine right now—it’s time to start thinking about our automated future in earnest. The history of mass economic displacement isn’t encouraging—fascists in the ’20s, Nazis in the ’30s… 

    tags: labour future robotics economics macroeconomics philosophy publicpolicy Luddite KevinDrum AI Krugman unemployment

  • tags: labour future robotics economics macroeconomics philosophy publicpolicy MichaelSacasas

  • 1. Economists generally use rational to mean “logical coherence—reasonable or not.” For example, Becker in “A Rational Theory of Addiction,” says rational means having “a consistent plan to maximize utility over time.” Utility is a theoretical equivalent for profit or pleasure (see Bentham’s bucket error). Becker and his so called rational-agent school, by focusing exclusively on utility, tune out key realities. For them drug addiction is just another method of maximizing utility.
    2. Kahneman says Becker’s “faith in human rationality” is ill founded because abundant evidence shows that certain kinds of inconsistency are “built into the design of our minds.” Measuring these “cognitive biases” established the new field of “behavioral economics”—its name amusingly emphasizing what’s been lacking—dedicated to describing the everywhere evident ways in which we often aren’t rational.
    3. The word rational really incorporates three types of assumptions: first, about desirable goals; second, about effective methods of attaining them; and third, about whether agents have the needed skills.
    4. As Steven Pinker puts it, “The logic of the market remains cognitively unnatural.” Methods to calculate maximum benefit based on probabilities exist, but the skills needed are “cognitively unnatural.” Without training so that these become like second nature skills, we can’t routinely make probabilistically rational choices.

    tags: rationality choice economics behaviouraleconomics market StevenPinker quote DanielKahneman neuroeconomics

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