A robot slices a ball of dough and drops the strips into a pot to make noodles at a food stall in Beijing. – photo by AP

I just finished reading Rise of the Robots, by Martin Ford. This is a nonfiction book in which Ford predicts that all jobs will soon be automated away, and that this will lead to an economic crash, since no one will have any money to buy anything.  I’ve written about this idea before, and Ford’s position hasn’t changed much since his previous book, Lights in the Tunnel.

Economists call the idea that automation makes jobs disappear the “Luddite fallacy,” and have long dismissed that this can happen.  Because, up until now, whenever jobs were taken away by automation in one area, new jobs were created in another, so there was nothing to worry about.  Luddites are named after Ned Ludd, who, along with his followers, smashed some weaving machines at some point in English history in order to save the jobs of weavers.  But progress rolled on and weavers apparently found other jobs to do.  Just as automation on the farm put farmhands out of work, new jobs opened up in factories.  This pattern has been repeated over and over since the Industrial Revolution.

So why should we even listen to Ford and his ranting that jobs are actually disappearing, not just changing?  Well, for one because he does a decent job of documenting actual job stagnation.  I had assumed that we were just sending jobs (such as call center jobs) overseas, i.e. offshoring.  And while this feels painful to us, if it means that even poorer and hungrier people in other countries get more food, then that doesn’t seem like a bad tradeoff.  But while Ford acknowledges that maybe offshoring is the cause of employment stagnation in the US, most of our money is spent on services that can’t be offshored.  So he insists that jobs are being taken by machines, not by starving foreigners.

He documents an impressive array of recent machine accomplishments, from making hamburgers to composing emotionally compelling music.  I don’t doubt that this is happening.  There is almost nothing that humans do to earn money that machines won’t be able to do more cheaply at some point.  The key question is WHEN this will happen.  Ford thinks that this could happen somewhat soon, and that we’d better whip out the guaranteed minimum income pretty quickly, so we don’t have a massive social collapse.  He even digs up Austrian economist Friedrich Hayek, who is worshipped by free market libertarians, and who thought that the guaranteed minimum income was a good idea, in order to overcome their objections to this idea.

Unsurprisingly, he fails to placate the free market libertarian Robin Hanson, who rationalists know and love from his OvercomingBias blog.  Hanson wrote  a nice takedown piece of Ford’s book on Reason.com.  Hanson focuses on Ford’s egalitarian streak and is most annoyed that anyone would object to his beloved economic inequality, which he holds near and dear to his heart, as any proper conservative should.  Ford and Hanson have locked horns before, and I do find their sparring entertaining, but I don’t feel that Hanson properly dissects the core of Ford’s argument.

To me, the basic question is this: Can our world  economy continue to function in the absence of consumers at the bottom?

In Ford’s view, the economy will stall if there are only rich consumers, because the rich spend a smaller percentage of their income than the poor do.  This is called the “marginal propensity to consume” or something.  Yet, somehow, consumer spending has increased even as wages have remained stagnant, and also, the rich have made up a greater percentage of consumer spending.  Ford says that this is because debt has increased.  Hanson replies with the apparent non sequitur that debt hasn’t increased as much as inequality.  Uh, what?  Debt needs to increase enough to cover consumer spending, not to match inequality.  But the fact is that if consumer spending increases, and the percentage that the rich contribute to consumer spending also increases, well, maybe we don’t need poor people to run the economy.

I don’t really understand these economics.  But it does sort of seem that the Fed is just printing money and trucking it directly into the bank accounts of the super rich, who aren’t spending much, so that would explain how inflation is held in check.  Then again, deflation from automation would balance all that quantitative easing.  Um, I think I will shut up now.

Anyway, I figured that of course you need a lot of poor consumers because they will cover the space of all possible desires for products better than a few rich consumers, and thus provide a broader base for innovation.  But then again, the poor are just cattle that herd together like idiotic conformists, all consuming the same garbage media like Taylor Swift and wearing the same outfits from the mall.  Whereas the rich value eccentricities?  They probably spend more money on Cristal and superyachts than fine art and health extension.  I don’t know.  Next topic.

If it does play out that the poor are automated out of work, and yet the economy keeps running based on the demands of a tiny, super rich elite, we could end up with what Noah Smith calls the Robot Lord scenario:

“The day that robot armies become more cost-effective than human infantry is the day when people power becomes obsolete.  With robot armies, the few will be able to do whatever they want to the many.  And unlike the tyrannies of Stalin and Mao, robot enforced tyranny will be robust to shifts in popular opinion.  The rabble may think whatever they please, but the Robot Lords will have the guns.  Forever.”

Nice!  Noah is a futurist after my own heart.  Who is going to force the super rich to hand out guaranteed incomes if they can sequester themselves in gated communities protected by autonomous weapon systems?  Sick as this may seem, it’s a remarkably American way for things to play out.  So what would happen to the lumpen masses?  This is grist for a great sci-fi novel.  Ragged, unaugmented humans trying to scrape out a meager existence in the trash heaps of the super rich transhuman aristocrats.  I guess the film Elysium examines this sort of scenario.  I haven’t seen it, but I might check it out in spite of the Hollywood stench that surrounds it.  Bruce Sterling sees this trend of “dematerialization” as more than just a Silicon Valley buzzword and imagines a “favela chic” scenario:

“You have lost everything material, no job or prospects, but you are wired to the gills and really big on Facebook.”

It’s not clear to me how the government fits into this scenario.  Governments do like to stockpile weapons and other real assets.  It is hard to see how they would go away entirely.  Maybe they will be the ones handing out the food bars while we fervently click the “like” buttons to trigger neurotransmitter spikes with our VR headsets on.

Nonetheless, we can imagine that hackers will play some unique role in this fully automated future.  They might be like Merlin, working magic for the future kings of capital.  Or perhaps some will be like Robin Hood, stealing from the rich to feed the poor.  Still others will be like Loki, wreaking havoc and glorying in the chaos, as hackers have always done.  But maybe the aristos will simply be replaced by hackers in the end.  After all, when all you have are robots to protect you, you better not be vulnerable to any SQL injection attacks, or you will get owned by super class a hackers.  I better book my trip to Las Vegas for DefCon this year.  I’ve got a lot of studying up to do if I want to survive the next feudal age.