Will The Rise Of Artificial Intelligence Hit The Western World Hardest?

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The White House released the text of the TransPacific Partnership yesterday, and the opponents of the agreement are already arguing against it. Environmentalists worry that it will be bad for the planet, some businesses are concerned that it does nothing about currency manipulation, and labor is upset that working Americans will probably lose jobs to other countries.

 My Concern Is Not TPP But AI

If I were a labor leader, I would be less worried about TPP and more worried about further mechanization of the workforce. I would really be concerned about robots. And if I were the leader of a developing country, rich in working-age people and little else, I would be terrified of their effects. But I am not, so I am actually an optimist about our future thanks to robots, robotics and artificial intelligence.

We have passed the stage where robots are science fiction; they are science fact. While we haven’t yet build Asimov’s positronic brain nor switched on Mr. Data from the “Star Trek” franchise, robots are real and are already integrating into our economy. Robots can already work unsupervised round the clock for up to 30 days without interruption in Japan’s car plants.

And it is only going to spread because the economics of robots and robotics is compellng. The Guardian notes:

While offshoring manufacturing jobs to low-cost economies can save up to 65% on labour costs, replacing human workers with robots saves up to 90%.”- The Guardian

Will Robots And Technology Change The Nature Of Life?

Image Source: Australian Robotics

Technology has already done it. Robots are just starting. Work, careers, life itself is going to be different, very soon. Don’t take my word for it. Read what Beija Ma at Bank of America Merrill Lynch wrote recently in a 300-page report:

We are facing a paradigm shift which will change the way we live and work. The pace of disruptive technological innovation has gone from linear to parabolic in recent years. Penetration of robots and artificial intelligence has hit every industry sector, and has become an integral part of our daily lives.”-Beija Ma

The Morningstar also noted: “Global sales of robots topped $10.7 billion in 2014, with China, the U.S., Japan, Korea and Germany accounting for 70% of the market.”

Ma believes that the robotics and artificial intelligence business will hit $153 billion by 2020, split about $83 billion for robots and robotics, leaving $70 billion for AI solutions and analytics.

Robots Will Keep Taking Over The Job Market (And More)

That latter figure is important. Robots are good at making cars, and little ones can sweep your floor while annoying the cat, but these activities don’t require much brain power. Many of us got educations to ensure that we would always be employable, and that may have proved a poor investment.

A McKinsey study in 2013 said that $9 trillion (yes, trillion) could be shaved off wage bills by replacing some information workers with AI – consumer credit rating analysis and financial advice were specifically cited. Robotic surgeries numbers 570,000 last year.

Soldiers may even find themselves out of work as robots take over more and more military jobs. Some, like Stephen Hawking and Elon Musk, believe such a development would be catastrophic.

In a country like Britain, up to 35% of the workforce could face robotic displacement by 2035. In the US, where the service economy forms a greater part of the picture, it could be as high as 47%.

British Physicist Stephen Hawking believes AI will end humanity-Image Source: Movie Pilot

Ma’s report cautions, “The trend is worrisome in markets like the US because many of the jobs created in recent years are low-paying, manual or services jobs which are generally considered ‘high risk’ for replacement. One major risk off the back of the take-up of robots and artificial intelligence is the potential for increasing labour polarisation, particularly for low-paying jobs such as service occupations, and a hollowing-out of middle income manual labour jobs.”

So both blue-collar and white-collar workers are at risk from the rise of the robots. This should increase economic and then social inequality, and unless you happened to think feudalism was a good way to organize societies, greater inequality is a negative.

Consider, though, a developing country that would normally benefit from outsourcing of jobs. If your work force can save a company 65% on its wage bill but robots can save it 90%, you don’t have an obvious path to development. There will be some equality of poverty.

Why I Am So Optimistic Of Our Robot Enhanced Future?

That’s a pretty gloomy picture from London and New York to Lagos and Jakarta. So, why am I an optimist about our robot-enhanced future? History teaches us that technology disrupts economies and societies, but in the long-run, there really is such a thing as progress.

The average person in the developed world, and a great many in countries just starting down that path, are richer than Caesar Augustus or Louis XIV because of technology. Electric lights, sewers, penicillin, refrigerators, radios, TV, smartphones – for all of their wealth, even the Robber Barons of the 1800s could not afford these things because they were not to be had at any price.

Obesity is a serious health problem, but consider for just a moment just what an amazing thing having too much to eat every day is. Some 800 million people will go to bed hungry tonight, and that is shameful, but never have so many been so well-fed (or over-fed).

The Economic Possibilities Of Our Grandchildren

Image Source: Globus Life

And so it is with robots, I believe. John Maynard Keynes wrote a piece in 1930 called “Economic Possibilities of our Grandchildren.

He argued, quite cogently, that unless we really screwed things up with war, population explosions, and a willful resistance to scientific development, capital will increase apace naturally.

And if that happens, Keynes foresaw a world where there was abundance, enough for everyone, with perhaps a 15-hour work week: “Will this be a benefit? If one believes at all in the real values of life, the prospect at least opens up the possibility of benefit. Yet I think with dread of the readjustment of the habits and instincts of the ordinary man, bred into him for countless generations, which he may be asked to discard within a few decades.”

Genesis 3:19 (King James Version) says in part, “In the sweat of thy face shalt thou eat bread, till thou return unto the ground.” In other words, God said you have to work for a living. But the robots and AI can take the jobs of about a third to a half of the population.

Do we then merely condemn those people to permanent poverty? History suggests that isn’t a stable solution. Instead, we may have to accept the idea that work and income are not really going to be linked in the future.

Robots And The Transformation Of Society Values

Image Source: Technology Press

Custom represents the experiences of men of earlier times as to what they supposed useful and harmful – and morality directly applies to the sanctity and the indiscussability of the custom. Then, morality is a hindrance to the development of new and better customs: it makes stupid.- Friedrich Nietzsche

The biggest complaint, and I think a fair one, about income redistribution is that those who produce economic value have to share with those who don’t. But that presumes two things – first that the original distribution of income was fair, and second that there are jobs to be done if people want them. If institutional unemployment is at 40-50%, that latter point matters. We may wind up sharing jobs, and we will have to figure out new ways to use our leisure time.

This is what gets me excited. When people talk about having all the money they could ever spend, they tend to wind up in the Tahiti of their imagination, taking it easy while the world turns. But I also have seen people who really do have more money than they can spend, and some of them do incredible things.

If you believe the iPhone was invented because Steve Jobs needed more money, you miss the point. Jonas Salk came up with a polio vaccine and refused to patent it; his motivation was saving lives not making money. Neil Armstrong walked on the moon, and it wasn’t for the money.

Think of the potential of the human race to do these kind of things not because they can pay, but because we don’t need to be paid.

Yes, robots will take people’s jobs and livelihoods, and that is about as serious as things get without bombs falling from the sky. But if we rethink economics, and lifestyles, and what it is we want to do with our lives, I don’t see a boundary. The future is very bright thanks to robots, which is a good thing, because we are all spending our lives there.

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