Another cracker from Pritchard

By Ambrose Evans-Pritchard

12:11PM GMT 25 Jan 2014

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Thanks to lightning-speed advances in hi-tech, humanity (or part of it) is close to achieving its dream of prosperity without toil. We are already starting glimpse the awful consequences. As Voltaire said, work is the triple tonic for needs, vice, and boredom.

A Davos vote split 51:49 on whether "technological innovation" will keep displacing jobs – and at an accelerating rate – leaving us with a deformed world where hundreds of millions are left on the unemployment scrap-heap (205m so far).

The waters have been so muddied by the global financial crisis – and the 1930s response to it in some quarters – that it is hard to separate the chronic job wastage caused by "robots" (to use a metaphor) from the temporary effects of scarce global demand.

Phillip Jennings, head of the UNI global labour federation, said it would be a "miscarriage of justice" to blame the 32 million job losses since the Lehman-EMU crisis on the iPad or the driverless car.

"You can't put technology in the dock for 50pc youth unemployment in Greece or Spain. I blame the EU Troika. It was the economic and political decisions taken that have led to the collapse of jobs. In Greece it has gone beyond depression into a humanitarian crisis," he said at the World Economic Forum.

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He said some $2 trillion of corporate cash is on the sidelines in the US, $700bn in the UK, and another $2 trillion in the rest of the world. "There is an investors strike. This is a problem of demand in our economies, they are comatose," he said.

This has a kernel of truth. The current policy settings are pushing the global savings rate to a record 25.5pc of GDP, creating a chronic surfeit of capital over labour. It is a Marxian world.

You can blame this on the "savings glut" in Asia and Northern Europe, or Chinese industrial policy, or regressive tax systems, or labour arbitrage that lets multinationals play off cheap labour in the East against the West, or growing inequality on the GINI index (all linked). As Mr Jennings says, "the social contract has been ruptured." I would go further. We risk losing social/liberal democracy altogether.

And yet, there is a deeper story. Larry Summers, the former US Treasury Secretary, told the same panel that the post-Lehman jobless spike is of course due to a failure to take "economics seriously" – though he mercifully spared us the names of his "avatars of austerity", the guilty men. We know who they are. It is a crisis caused by lack of global aggregate demand.

But he also said machines have been displacing jobs for almost half a century. The proportion of those aged 25-54 (the relevant cohort) that is not working in the US has tripled since 1965. This cannot be blamed on globalisation alone. "It predates meaningful trade with China. It is a long-term trend and it is accelerating."

For those tempted by cry Luddism, hold your thought. This is nothing like the switch from agricultural revolution to the first machine age. The new displaced cannot migrate into textiles mills and great manufacturing hubs on the 19th Century. Labour-saving technology is now sweeping all sectors, including services. "The challenge is that much more immense now," he said.

A single professor can teach 150,000 students the same academic course through digital lessons. While it still takes the irreplaceable creativity of human beings to play a Haydn Quartet, the same disc can be sold to millions, he said.

This is not a counsel of utter despair. Governments can rewrite the rule book, though that is a tall order in our global race to the bottom, with footloose capital. As Mr Summers says, the abuses did not self-correct even in the late 19th Century and early 20th Century. "It required a Gladstone, a Bismarck, a Roosevelt to make it work," he said.

Prof Erik Brynjolfsson, a tech guru at MIT, said tax policies can change the game. Some 80pc of US taxation is now on labour. But how do you shift this burden to wealth taxes in a world of open capital flows and competing national tax jurisdictions? (Protectionism perhaps, but I wash my mouth out with soap for even muttering it)

Nor will the emerging economies escape this curse. Indeed, they are in the "bulls eye", said Prof Brynjolfsson.

Apple's new Mac Pro will be made in Austin, Texas. Robots have rendered the labour cost irrelevant. The BRICS and mini-BRICS can longer under cut on price.

"Wages don't matter any longer. Off-shoring was just a way station." We are back to reshoring, but without jobs. Welcome to our brave new world.

Even his calm and reasoned academic demeanor, it is easy to miss just how provocative Erik Brynjolfsson’s contention really is. ­Brynjolfsson, a professor at the MIT Sloan School of Management, and his collaborator and coauthor Andrew McAfee have been arguing for the last year and a half that impressive advances in computer technology—from improved industrial robotics to automated translation services—are largely behind the sluggish employment growth of the last 10 to 15 years. Even more ominous for workers, the MIT academics foresee dismal prospects for many types of jobs as these powerful new technologies are increasingly adopted not only in manufacturing, clerical, and retail work but in professions such as law, financial services, education, and medicine.

How Technology Is Destroying Jobs | MIT Technology Review

The rise of the top 1 percent is likely very tied up with technology. When George Eastman had a fantastic idea for photography, he got quite rich, and the city of Rochester became a flourishing city for generations, supporting thousands of middle-class workers. When Steve Jobs had had remarkable ideas, he and his colleagues made a very large fortune, but there was much less left over – there was no flourishing middle class that followed in their wake. So, understanding what’s happened to the top 1 percent is important in understanding the overall picture.

Robots are hurting middle class workers | Lawrence H. Summers

Yuji Honkawa knew the humans were losing by April 2010, when no matter how fast he sent orders to be filled at the Tokyo Stock Exchange, a machine beat him. Unemployed now after 20 years dealing equities at seven different brokerages, the 47-year-old Honkawa watched as the market sped up and automated traders went from generating 10 percent of orders at the start of 2010 to as much as 72 percent last year.

Robots Take Tokyo as High-Frequency Equity Infiltration Hits 70% - Bloomberg Business

Whoever owns the capital will benefit as robots and AI inevitably replace many jobs. If the rewards of new technologies go largely to the very richest, as has been the trend in recent decades, then dystopian visions could become reality. But the machines are tools, and if their ownership is more widely shared, the majority of people could use them to boost their productivity and increase both their earnings and their leisure. If that happens, an increasingly wealthy society could restore the middle-class dream that has long driven technological ambition and economic growth.

Will Advances in Technology Create a Jobless Future? | MIT Technology Review

We’re in the midst of a jobs crisis, and rapid advances in AI and other technologies may be one culprit. How can we get better at sharing the wealth that technology creates?

Will Advances in Technology Create a Jobless Future? | MIT Technology Review

Retail is one of the sectors still employing a lot of lower skilled workers. But robots that lead you to what you are looking for, robots that have internet connections to store chain employees in distant places, and robots that stock the shelves and polish the floors are just a matter of time. In some cases, in just a matter of a pretty short period of time. Silicon Valley start-ups are developing hotel concierge service robots too.

FuturePundit: Labor-Saving Robots To Cause Mass Unemployment?

Those modern day luddites complaining that technology is taking people's jobs may have to eat their hat. Research by economists shows technology has created more jobs than it's destroyed—and they have 140 years of data to prove it.

Don’t fear the robots, tech creates more jobs than it destroys: report

A lot of people worry that robots — or more generally, software and automation — will take everyone's job. One study found that almost half of US jobs are capable of being automated over the next two decades. But automating routine jobs isn't something that might happen in the future. To a large extent, it's something that already happened. Today, just 8 percent of American workers work in the manufacturing sector — less than a third of the share 50 years ago. Another 6 percent work in industries like construction, mining, and agriculture that are involved in producing physical goods.

Good news: automation already destroyed most of the jobs - Vox

A leading thinktank has urged the government to spend billions of pounds helping poorly skilled workers in the less prosperous parts of the UK cope with the threat of the looming robot revolution. The left-leaning Institute for Public Policy Research (IPPR) said in a new report that those most at risk from automation were concentrated in low-skill sectors of the economy and were least able to adapt to change. More than 10m jobs in the UK – a third of the total – are thought to be at risk from automation within the next two decades and the IPPR said the scale of the challenge required urgent action.

Robots to replace 1 in 3 UK jobs over next 20 years, warns IPPR | Technology | The Guardian

As the world’s business and government leaders gather at the World Economic Forum in Davos, Switzerland, this week, the meeting will focus on what advanced technology means for the global economy. This is a big open question. While many who work in high-tech jobs like to think their field is improving the world, the truth looks to be more complicated. There are signs that spreading access to the Internet enhances inequality, for example. Workers like those in Silicon Valley, who are blessed with ample technological resources, may be on the right side of a winner-take-all economy. And what of the increasing automation of jobs? Are robots robbing the working class of a steady paycheck?

The Tension Between Technology and Inequality | MIT Technology Review

“The hard problems that are easy for AI are those that require the application of complex algorithms and pattern recognition to large quantities of data – such as beating a grandmaster at chess”, says Joshi. “Or a job such as calculating a credit score or insurance premium, translating a report from English to Mandarin Chinese, or managing a stock portfolio.” Seen in this light, the looming threat is obvious. The first army of machines wiped out well-paid jobs in manufacturing; the second army is about to wipe out well-paid jobs in the service sector. In many cases, the people who will be surplus to requirements will have spent many years in school and university building up their skills.

The new robot revolution will take the boss's job - not the gardener's | Business | The Guardian

Almost 250,000 public sector workers could lose their jobs to robots over the next 15 years, according to a new report which claims machines would be more efficient and save billions of pounds. Reform, a right-of-centre thinktank, says websites and artificial intelligence “chat bots” could replace up to 90% of Whitehall’s administrators, as well as tens of thousands in the NHS and GPs’ surgeries, by 2030 – saving as much as £4bn a year.

Robots 'could replace 250,000 UK public sector workers' | Technology | The Guardian

Mnuchin is not overly worried. Concerns about AI and jobs are so far way "it's not even on our radar screen... 50-100 years" away, he said, according to Axios. "I'm not worried at all" about robots displacing humans in the near future, he said, before adding, "In fact, I'm optimistic." However, studies have estimated that AI could affect jobs much sooner than that. And, crucially, technological advancements will likely not only be impacting the manufacturing sector. In a paper published in 2013, Oxford University's Carl Benedikt Frey and Michael A. Osborne looked at which current jobs are susceptible to technological innovations such as machine learning, and estimated the probability that the 702 different occupations they looked at will be computerized. Notably, they did not estimate the number of jobs that will actually be automated, but rather a given occupation's "potential job automatability" over an unspecified number of years. They found that about 47% of total US employment is in the high risk category, which the team defined as jobs they expect could be automated "relatively soon, perhaps over the next decade or two."

The robots are coming whether Mnuchin says so or not - Business Insider

The future of U.S. homebuilding depends on more people like Cyndicy Yarborough, a 26-year-old former Wal-Mart clerk with no background in construction. At Blueprint Robotics in Baltimore, she works in a factory that builds houses like cars, on an assembly line, using robots that fire thousands of nails into studs each day and never miss. Yarborough operates a machine that lifts floors and walls and packs them onto a flatbed truck, the final step before delivery to a development site where they’ll be pieced together.

Robots May Help Build Your Next Home and Fill the Labor Gap - Bloomberg

Hidden inside a busy industrial building in Somerville, Massachusetts, a robot arm spends its day picking up seemingly random objects—bottles of shampoo, onions, cans of shaving foam—from a conveyor belt that goes in a circle about 10 meters in diameter. The odd-looking setup is a test bed for a system that could take on many of the mundane picking tasks currently done by hand in warehouses and fulfillment centers. And it shows how advances in robotic hardware, computer vision, and teleoperation, along with the ability for machines to learn collaboratively via the cloud, may transform warehouse fulfillment in coming years.

A Robot with Its Head in the Cloud Tackles Warehouse Picking - MIT Technology Review

Our analysis suggests that around 30% of UK jobs could potentially be at high risk of automation by the early 2030s, lower than the US (38%) or Germany (35%), but higher than Japan (21%).  The risks appear highest in sectors such as transportation and storage (56%), manufacturing (46%) and wholesale and retail (44%), but lower in sectors like health and social work (17%). You can explore the results by sector and occupation in more detail using our interactive data tool below.

UK Economic Outlook March 2017: PwC UK

What if part of your job became teaching a computer everything you know about doing someone’s job — perhaps your own? Before the machines become smart enough to replace humans, as some people fear, the machines need teachers. Now, some companies are taking the first steps, deploying artificial intelligence in the workplace and asking their employees to train the A.I. to be more human.

Meet the People Who Train the Robots (to Do Their Own Jobs) - The New York Times