09 March 2016

Men At Work

The knuckleheads at the NYT managed to keep me from my daily dose of dead trees all the news. Fortunately, today it's back. And what a wonder it is. One of the minor themes of these endeavors is, what is the relationship among declining real investment, income concentration, wages, aggregate demand, and economic growth. In sum, my view is that history has shown us that a broadly overweening middle class, has most of national income, is the prerequisite for a stable society and economic growth.

So, two related stories in today's edition. First, Eduardo Porter on the working class. Second, a debate, of sorts between Porter and Farhad Manjoo on the trajectory of automation.

The points of interest in the Porter piece can be summed up in this quote:
Stepping into the vacuum, the technologically endowed of Silicon Valley are talking about a future that bypasses the labor market entirely. They are offering up a universal basic income -- financed by taxing rich capitalists and an elite corps of computer programmers tasked with making sure the robots perform meticulously -- as the tool to satisfy people's basic needs without any work involved.

And, of course, the ultimate hypocrisy of the Redneck
Research by Suzanne Mettler and Julianna Koch from Cornell University underscores how any plan to help Mr. Trump's beleaguered supporters may end up entangled in ideological knots. They found that on closer inspection, many Americans who deny ever benefiting from a government social program actually received far more public support than they realized. And the most strenuous denials come from conservative Republicans.

Having seen some news footage from Red states in the last year or so, it's not that the Rednecks don't realize they get the money. They simply deny that the Damn Gummint is doing them a favor.

The debate/conversation:
If robots were eating our lunch, it would show up as fast productivity growth. But as Robert Gordon points out in his new book, "The Rise and Fall of American Growth," productivity has slowed sharply.
-- Porter

Bending the truth here. Yes, macro productivity numbers have stalled. But research going back to the beginning of the PC infestation has found that white collar computerization hasn't improved productivity. Some research makes clear what anyone who's been in an office environment for a while knows: fancy word processing and slide decks leads folks to worry about the sizzle and ignore the steak. FIRE sectors have been the areas soaking up "high value" talent over the last two or three decades. But, FIRE is all overhead from a macro point of view, so not only has computerization not improved FIRE productivity, it's all dead weight to begin with. On the other hand, there's no debate that the production of physical things has replaced humans with automation. Whether robots are actually cheaper, in the long run, is not certain. After all, you still have to pay the vig on the robot no matter how much you produce. Robots don't understand the pink slip.

More contradiction:
They see software not just altering the labor market at the margins but fundamentally changing everything about human society. While there will be some work, for most nonprogrammers work will be insecure and unreliable.
-- Manjoo

Anyone who's attempted to continue in the software world past age 35 knows where the end of a career occurs. Whether kiddie koders really should be the future of IT is a long discussion. Just consider that my generation perfected ERP, building out RDBMS systems from VSAM antecedents. ERP enabled the large productivity gains in manufacturing. Can the same be said of social networking, twitter, or e-commerce? Not.

Finally, we fall through the looking glass
We will be able to invent materials to precisely fit the specifications of our homes and cars and tools, rather than make our homes, cars and tools with whatever materials are available.

First, no amount of code can specify a molecule that physics says can't exist. At least, for more than a few nanoseconds. Second, and more importantly, a Star Trek replicator will chew energy like Pacman. Well, lots faster.

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