We, Robot

Barry’s last post spurred several comments and references to articles dealing with the general subject of the meltdown and post-meltdown strategies to deal with unemployment.

That raises the interesting question:

If we are setting a course to cut costs in government and in health care, where will people find work?

If you watch network television, you’ve seen an ad Chrysler Corp is running for the Jeep SUV extolling the virtues of American manufacturing.  For those who forgot, Chrysler was the first big bailout way back when.  Then they introduced the mixed curse/blessing of the minivan, recovered, and then got taken over by Mercedes.

Everything the Germans didn’t strip out of the old Chrysler was then monetized by private equity buyers for their 2-and-20 management’s benefit, and then the financial crisis came and bailed out the few remaining line workers and the union.

What I find striking about the ad is not the gorgeous photography (it is), nor the lack of anything new to excite me about the vehicles (there isn’t).

The discontinuity between the voice-over talking about America making excellent products and the video showing a factory with no Americans in it was the problem with the ad.

The video shows a production line with no people, American or otherwise.

I understand that those doors the robots are attaching to the bodies of those Jeeps were made in smaller factories all over the midwest, and that most of the window motors, door linings, insulation and trim on those door sub-assemblies were put there by people who still have jobs.

The message I take away is that it is only a matter of time before all the people are replaced in all the factories.  I wonder what the employment numbers will look like then.  Worse yet, if the hard core “only private industry can create jobs” ideologues get their way, there will be no taxes on corporate profits or capital gains, so gains and income can compound to infinity without the awful friction of paying for the system that makes it all possible and protects their property.  That will be left to wage-earners, but obviously not the wage-earners who aren’t visible on that assembly line.

As I’ve pointed out before, for most of our history, we taxed commercial enterprise and property, not individual income.  That paid for government that  spent most of its effort improving the nation’s infrastructure, educating the people, and especially defending those same commercial interests beyond our shores.  It was a bargain that worked.

Today,  corporate “citizens” have more rights than ever, and pay less.  Our current Supreme Court went out of its way to re-write the Constitution and give legal fictions more power to affect the outcome of elections than it gives the citizens.  Our Congress has seen fit to tax every dollar earned by labor, but avoid taxing most dollars earned by capital.

Naturally enough, all the capital and most of the income ends up in the hands of the few who control the corporations.  The Russians called it serfdom, but for some reason we persist in calling it capitalism.  When the owners of the capital actually pay for the infrastructure they use to make and protect their wealth, then it will be capitalism.  Until then, it’s something else, much closer to feudalism than any kind of capitalism.

Eventually all the resources and all the productive infrastructure will be owned or controlled by a relative handful of people operating behind corporate fronts, leaving the rest of us competing for the chance to work for our supper, pay our rent or mortgage, and die poor.

I’ve seen this movie before, but it’s too early in the film to tell which one it is.

I can only hope the rest of the movie isn’t from the Terminator or Matrix series, but I’m pretty sure it won’t be the Jetsons.

hh

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8 Responses to We, Robot

  1. jivko says:

    I think to some extent this steams from the economics theory that taxing capital creates less deadweight loss and less in-efficiencies than taxing income.

  2. Gary Anderson says:

    If you noticed the article on the German economy in this morning’s WSJ, you got a quick refresher course in the value of manufacturing to an economy, a value which has substantially diminished in the US economy.

    While creating robots to take on many of the jobs we used to associate with manufacturing is good for everyone, outsourcing what jobs remain to those on distant shores is an accounting shuffle that doesn’t examine the costs of outsourcing to society.

    The idea that a “knowledge worker” has greater value than a “production worker” is a handy way to justify that there is no loss, in theory, to the economy when jobs are outsourced. Unfortunately, it fails to recognize that not all humans are born with the wherewithal to be “knowledge workers”. Thus, as our economy has evolved away from one where production plays a large role, it has left a portion of the population unfit for participation.

    Back to your point, not only have we not taxed the profits on capital, we have allowed those profits in many cases to be generated in ways that create additional societal costs, and we have failed to adequately plan for addressing those costs.

    • hhill51 says:

      Good points, Gary.
      I was discussing related topics with a friend this weekend, and saw much of this from yet another point of view. The outsourcing of manufacturing to China has created a class of indentured servant over there as poor families from the countryside (where mechanization is doing just what it did to labor-intensive farming in the US in the early 20th century) essentially sell their young daughters into factory work.
      \\\
      Her claim was that Ronald Reagan would not have believed his Utopian vision of Supply Side economics if he had known that the result was 10-year-old Chinese girls crammed into dormitories working 14 hour days while Americans rotate into and out of Walmart jobs they hold just a week less than the time that would qualify them for health insurance.
      \\\
      The other costs, the ones that even here we still let corporations skate on, are the long-term costs like pollution. Worst case, the company goes out of business and the owners and managers who made fortunes pulling the resources out of the land keep those fortunes and start/invest in another company. Probably the biggest “outsourcing” issue isn’t the worker safety or abuse, though. It’s probably the fact that we outsourced the pollution that cheapest-to-deliver manufacturing creates.
      \\\
      I recall a few years ago when the Federal Government was actually considering issuing hard rock mining permits to extract minerals out of the walls of the upper Grand Canyon, on national park and national forest land. And then you have yahoos like Rand Paul saying that mountaintop removal improves the land, because it leaves a flat place you can build on.
      \\\
      I think we’ve gotten way too far away from the sense that those who use the common green should pay the rest of us for the private use and profits they enjoy. Most particularly, they should pay for all the damage they leave behind. It doesn’t matter whether they use a machine to make their profit, a flock of sheep, or a work crew of people.
      \\\
      hh

  3. Giancarlo Nicoli says:

    You are too much a pessimist, but I got your point. I think you are onto something.
    By and large, I agree.
    Regards,
    Giancarlo

  4. […] problem is amplified in this dandy Howard Hill piece “We Robot”  which mentions the human-replacement problems in the auto industry (for one) and brings up […]

  5. Leslie Schwartz says:

    George,

    Your column, and We Robot came very close but missed the biggest issue concerning the same issues discussed.

    There will be a time ultimately when people in general are not needed in the production or economy of (nearly everything) everything that is produced.

    But in capitalism, no job, means no income, and that means we could have a human society with tremendous productive capacity but no means to distribute those products. I feel this point needs to be made a simply as possible for most people.

    Of course this issue has been dealt with in a number of science fiction stories, as well as in some classical economics theories, such as the utility of a “social credit”.

    Anyway, today, huge factories in China/Korea could make every article needed in some categories like cell phones/iPods (e.g., Foxconn), but as more and more American’s lose their jobs, our domestic market continues to deteriorate, and of course the Chinese laborer, (or generic low wage nations laborer), does not have the money to buy those products. As you know, over the past several many years, domestic consumption in China has fallen, as their “economic miracle’ continues.

    The point is that we are already at the stage of ‘irresponsible globalism’ where the economy has reached a point of irrationality.

    The globalist idea is that humanity would be better off with total economic interdependence between all nations, but given the result of economies of scale in production and the concentration of production and capital towards low wage rate nations, this is a system that is fatally flawed and cannot be made to work without totally marginalizing a huge percentage of humanity.

    Leslie

  6. tritumi says:

    kurt vonnegut, 1952, Player Piano

  7. Max Hardwood says:

    I see that you, also, are aware of the threat technology
    poses to humanity. Many authors share your fear. Nick Bostrom
    and Drexler, just to name a couple.

    It is my firm opinion that humanity (actually, all biological
    entities) was created to serve some purpose, for the benefit of
    some machine, somewhere, somehow.

    The act of ‘deciding’, or making choices, seems to be a common thread.
    Our morals are constantly being tested, to what end? To provide some
    machine somewhere (outside of out ‘reality?) with input.

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