Joshua Bateman — Why China is spending billions to develop an army of robots to turbocharge its economy

• Chinese President Xi Jinping has called for a robot revolution in manufacturing to boost productivity.
• Wages in China are rising, and it's becoming harder to compete with cheap labor.
• An aging population in China also necessitates automation. The working-age population, people age 15 to 64, could drop to 800 million by 2050 from 998 million today.
• Chinese robotic growth is forecast to exceed 20 percent annually through 2020.

Interesting article to read in full.

China's socialist ideology commits the elite to dealing with inequality in a way that capitalist ideology doesn't. It will be interesting to see how this plays out as it develops. I suspect that China will recognize that it is a demand problem long before the West does.

CNBC — The Edge
Why China is spending billions to develop an army of robots to turbocharge its economy
Joshua Bateman, CNBC contributor

Gwynn Guilford — The epic mistake about manufacturing that’s cost Americans millions of jobs

So when Trump won the presidential election, the true-blue data believers dismissed his victory as the triumph of rhetoric over fact. His supporters had succumbed to a nativist tale with cartoon villains like “cheating China” and a shadowy cabal of Rust Belt-razing “globalists.”

But it turns out that Trump’s story of US manufacturing decline was much closer to being right than the story of technological progress being spun in Washington, New York, and Cambridge.

Thanks to a painstaking analysis by a handful of economists, it’s become clear that the data that underpin the dominant narrative—or more precisely, the way most economists interpreted the data—were way off-base. Foreign competition, not automation, was behind the stunning loss in factory jobs. And that means America’s manufacturing sector is in far worse shape than the media, politicians, and even most academics realize....

Quartz
The epic mistake about manufacturing that’s cost Americans millions of jobs

Gwynn Guilford, reporter for Quartz

Colin Drury — Mark Carney warns robots taking jobs could lead to rise of Marxism

Mass unemployment, wage stagnation and growth of communism could come from technological advances

 Karl agrees:

The mode of production of material life conditions the general process of social, political and intellectual life. It is not the consciousness of men that determines their existence, but their social existence that determines their consciousness. At a certain stage of development, the material productive forces of society come into conflict with the existing relations of production or – this merely expresses the same thing in legal terms – with the property relations within the framework of which they have operated hitherto. From forms of development of the productive forces these relations turn into their fetters. Then begins an era of social revolution. The changes in the economic foundation lead sooner or later to the transformation of the whole immense superstructure.

In studying such transformations it is always necessary to distinguish between the material transformation of the economic conditions of production, which can be determined with the precision of natural science, and the legal, political, religious, artistic or philosophic – in short, ideological forms in which men become conscious of this conflict and fight it out. Just as one does not judge an individual by what he thinks about himself, so one cannot judge such a period of transformation by its consciousness, but, on the contrary, this consciousness must be explained from the contradictions of material life, from the conflict existing between the social forces of production and the relations of production. No social order is ever destroyed before all the productive forces for which it is sufficient have been developed, and new superior relations of production never replace older ones before the material conditions for their existence have matured within the framework of the old society.
Mankind thus inevitably sets itself only such tasks as it is able to solve, since closer examination will always show that the problem itself arises only when the material conditions for its solution are already present or at least in the course of formation....

Karl Marx, Preface to A Contribution to the Critique of Political Economy
The Independent
Mark Carney warns robots taking jobs could lead to rise of Marxism
Colin Drury

Dean Baker — Morning Edition Tells Us That Most Workers Think Like Most Economists and Don't Worry About Automation

Productivity growth (the rate at which technology is displacing workers) had slowed to roughly 1.0 percent annually in the years since 2005. This compares to a 3.0 percent growth rate in the decade from 1995 to 2005 and the long Golden Age from 1947 to 1973. Most economists expect the rate of productivity growth to remain near 1.0 percent as opposed to returning back to something close to its 3.0 percent rate in more prosperous times.… 

It is also worth noting that the high productivity growth in the period from 1947 to 1973 was associated with low unemployment and rapid wage growth. If another productivity upturn instead leads to high unemployment and weak wage growth it will be the result of deliberate policy to shift the benefits of productivity growth to those at the top end of the income distribution (e.g. government granted patent and copyright monopolies, high interest rates by the Fed, and trade policy that protects doctors and other highly paid professionals from competition -- all discussed in Rigged [it's free]). It will not be the fault of the robots.

As usual the issue is distribution, discussion of which most conventional economists take off the table as taboo.

Beat the Press
Morning Edition Tells Us That Most Workers Think Like Most Economists and Don't Worry About Automation
Dean Baker | Co-director of the Center for Economic and Policy Research in Washington, D.C

Kristin Houser — Why robots could replace teachers as soon as 2027

Many professions, including education and health care, will become increasingly automated. This won't eliminate the need for humans, however, since the social element is also a vital factor in many fields, especially education, which involves socialization.

The problem inherent in this article is difficulty thinking outside the box, in this case the traditional classroom. That model is obsolescent, and technology will soon make it obsolete. Then we will look back on it and wonder why it held on for so long in spite of the obvious limitations in addressing individualization through personalization.

Individualization and socialization need to be balanced in order to develop well-rounded people that have an optimal opportunity to develop and express their full potential as individuals, group participants ("team-players"), citizens, and authentic human beings.

World Economic Forum
Why robots could replace teachers as soon as 2027

Kristin Houser | Senior Editor at Futurism

Bill Mitchell — Automation and full employment – back to the 1960s

On August 19, 1964, the then US President Lyndon B. Johnson established the – National Commission on Technology, Automation, and Economic Progress. He established the Commission in response to growing concern during the deep 1960-61 recession that the unemployment had been created by the pace of technological change. Ring a bell! He wanted to an inquiry to explore this issue and come up with recommendations on how to deal with the possibility that automation was wiping out jobs and the future would be bleak. Before the Commission had reported, the Federal government had reversed its fiscal austerity and the resulting stimulus had driven the unemployment back down to relatively low levels. The Commission noted that unemployment was largely the result of inadequate total spending and that the Government had the tools at its disposal to eliminate it. They considered that there would be workers (low-skill etc) who would suffer more displacement from technology than those with more skill etc, but that ultimately even those workers would be able to get jobs if the public deficit was large enough. In this regard, they eschewed pointless training programs that did not provide immediate access to jobs. Instead, they recommended (among other things) the introduction of a Job Guarantee (Public Service Employment) financed by the Federal government but administered at all levels of government. It would pay the Federal minimum wage and be available on demand. This is the preferred Modern Monetary Theory (MMT) approach and rejects solutions that rely on the provision of a basic income guarantee to resolve the problems created by unemployment.

Technological innovation has often been disruptive historically, but the disruption has always proved temporary, and progress ensued. The problem is not technological innovation. Evolution always brings new challenges along with new opportunities. The primary challenge is to adapt to change. Standing in the way of change is seldom successful.

The currency-issuing government has the responsibility of maintaining aggregate spending at a level sufficient to generate sufficient jobs overall.

This level changes as the pace of labour force growth and productivity changes. But the fact remains – the government can always purchase anything that is for sale in the currency it issues, including all idle labour.

There is never a reason for persistent mass unemployment. Mass unemployment is a political choice not a financial necessity.

This doesn't imply that technological innovation is not disruptive. It may be disruptive to those that lose their jobs, or are otherwise affected, such as new industries being born (tires) and old ones shuttered (blacksmiths, horseshoes, and horseshoe nails). There was huge disruption in customary employment as a result of the transition from the agricultural age that centered on farming to the industrial age that centered on manufacturing. We can anticipate something similar in the transition from the industrial (analog) age to the information (digital) age. For example, if leisure increases as a result of disruptive technology, so will work in areas that serve it. People won't just sit around — as long as they can afford to do something of interest.

A currency issuing government has the ability to address change in a timely way so as to minimize the effects of disruptive innovation by maintaining full employment and keeping the economy on track. It's a matter of maintaining demand so resources that technological innovation and increased productivity make available are not idled owing to lack of demand.

A currency issuer is capable of addressing this by maintaining the flow of money at the level of effective demand commensurate with supply at full employment to the degree that the private sector does not. In this sense, government uses its "power of the purse" to act as a buffer against unemployment.

Technological innovation increases the potential for prosperity and also leisure. Managing the transition involves political decisions along with a correct understanding of economics and government finance. Then it is a distribution issue

Distribution is a political issue with respect to who wins and who loses, rather than just an economic one. Currently, this is where the problem can be traced. Its' a matter of ignorance about economics and government finance, but also involves ideology heavily.

Bill Mitchell – billy blog
Automation and full employment – back to the 1960s
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Duncan Green — What does Artificial Intelligence mean for the future of poor countries?

Important. 

Is global society and the global economy at a turning point and if so, what happens next? It's chiefly about the developing world, but similar challenges face the developed world. 

Technological innovation results in emergence and emergence present fresh challenges along with new opportunities. How those involved in rapid change will react is uncertain. Will they be able to adapt, and, if so, how? While coordination increase the return from coordination, or will competition separate winners from losers? What does this imply for the level of conflict, types of conflict, and reactions to conflict?

From Poverty to Plenty
What does Artificial Intelligence mean for the future of poor countries?
Duncan Green

Aaron Berger — We should let the robots take our jobs - and then pay us all a basic income

Thinking outside the box, the box being wage-based capitalism. Are we in the phase transition to the next system?

Instead of "basic income," I would prefer "social dividend."

Business Insider
A 32-year-old investor with ties to Elon Musk wants to upend America with his crazy, utopian plan for the future
Chris Weller

World Economic Forum | Agenda
We should let the robots take our jobs - and then pay us all a basic income
Aaron Berger

CNBC
Sam Altman will spend big on a new political movement to fix US housing, health care and more
Tony Romm

David F. Ruccio — Technology, employment, and distribution

I can make the case that things would be much better if the adoption of new technologies did in fact displace a large number of labor hours. Then, the decreasing amount of labor that needed to be performed could be spread among all workers, thus lessening the need for everyone to work as many hours as they do today.

But that would require a radically different set of economic institutions, one in which people were not forced to have the freedom to sell their ability to work to someone else. However, that’s not a world Autor and Salomons—or mainstream economists generally—can ever imagine let alone work to create.

Technological innovation increases the potential to substitute leisure for work, but that is ruled out institutionally and operationally in a capitalist system operated on wage labor. Rather than increasing leisure the gain from increased productivity goes to owners of technology and technology workers. This puts downward pressure on other workers and increases unemployment in less desirable work. The result is increasing inequality and social dysfunction.

Occasional Links & Commentary
Technology, employment, and distribution
David F. Ruccio | Professor of Economics, University of Notre Dame

Xinhua — China's self-driving truck passes test

A Chinese-made self-driving truck has passed a navigation test, heralding the era of intelligent, automated heavy vehicles.

FAW Jiefang, the leading truck manufacturer, debuted the self-driving truck at FAW Tech Center in Changchun City, Jilin Province. The truck was able to recognize obstacles, slow down, make a detour, and speed up.

The truck reacted correctly to traffic lights, adaptive cruise control, remote commands and successfully overtook, company sources said.

FAW Jiefang now plans to commercialize the intelligent driving vehicle as early as 2018.

Hu Hanjie, FAW Jiefang general manager, said the company has built a whole industry chain partnership to develop, manufacture, sell, and service self-driving trucks. The participation of more firms across the sector will accelerate the technology's use on heavy-duty vehicles, Hu said.

Leading Chinese tech firms, including Baidu and Tencent, have invested in self-driving entities. Baidu, for example, has tested driverless mini cars at the annual World Internet Conference for the last two years.

Industry insiders, however, said the technology may prove more practical when it is used on trucks than private cars as truck drivers are more likely to drive tired. The new systems could cut operational costs by replacing drivers.

Ecns
China's self-driving truck passes test 

Xinhua | Editor: Yao Lan

David F. Ruccio — What, them worry?

How automation and robotics eat jobs and increase inequality of income and wealth. Even if some workers are better off, they are still disadvantaged in terms of distribution of the surplus. Owners of technology, top management, and highly skilled workers take an increasing share of the pie. But because the pie is also increasing, at least some ordinary workers benefit although not as much.

Occasional Links & Commentary
What, them worry?
David F. Ruccio | Professor of Economics, University of Notre Dame

Ramanan — Robots, Globalization, Unemployment, Etc

Economists have played down the notion of technological unemployment. If production is constant and productivity rises, there’s a fall in employment because less labour is required to produce the same output. So output has to rise to keep employment from falling because of “automation”. In Post-Keynesian economics, the principle of effective demand matters both in the short run and the long run. So technological unemployment is a real possibility. New Consensus economists concede that John Maynard Keynes rules in the short run but assume that Jean-Baptiste Say rules in the long run. The irony hence is that New Consensus economists seem to show worry about automation these days.

In my opinion, this is because the sacred tenet of free trade must be defended by economists at all costs. So they make a concession about loss of employment to robots. Unfortunately that’s not right either. Globalization—both because of competition by international producers and offshoring of jobs via global supply chains—has led to the loss of livelihood for many in the Western world....

Tradeoffs.

Automation and robotization increase productivity, reducing the need for labor, which reduces worker incomes in developed countries. Globalization increases the available work force in open economies, increasing competition among workers in the global labor pool and reducing worker incomes in developed countries. Reduction in worker incomes undeveloped countries reduces effective demand, leading to excess capacity and potential oversupply, unless lagging demand is addressed by government fiscal policy.

Both globalization, which benefits emerging world workers, and automation and robotics, which increases productivity across the board, should be welcomed as an emergent opportunity and addressed simultaneously as an emergent challenge. Government that are currency sovereigns have tool for this, and global economy policy aimed at win-win can be achieved through concerted action rather than harmful competition and a beggar-thy-neighbor approach.

The developing world can be lifted up without necessarily dragging down the developed world.

The Case for Concerted Action
Robots, Globalization, Unemployment, Etc
V. Ramanan

Ryan Avent — How Automation with a Robust Safety Net Increases Productivity

Workers replaced by technology don't drop out of the labor market because then the would face poverty, alone with bankruptcy and seizure of assets if they are indebted, as most workers are. So workers replaced by technological innovation have to seek reemployment. This drives down the wage and employment conditions that workers in general are willing to accept.

So there you are: continued high levels of employment with weak growth in wages and productivity is not evidence of disappointing technological progress; it is what you’d expect to see if technological progress were occurring rapidly in a world where thin safety nets mean that dropping out of the labour force leads to a life of poverty.

Technological innovation that increases productivity provides the opportunity for increased leisure but this doesn't mean that this opportunity will be distributed, especially when the benefits accrue chiefly to owners, top management, and highly skilled workers associate with the technology.

Evonomics
How Automation with a Robust Safety Net Increases Productivity
Ryan Avent | senior editor and economics columnist at The Economist

David F. Ruccio — Hammer time

The future is here. Automation and robots are taking millions of jobs and promise to take millions more.

Larry Summers and Brad DeLong think that's good. David Ruccio, not so much.

I agree with Summers and DeLong that in real terms technological innovation is a benefit in that it increases efficiency, effectiveness and productivity overall. The benefits in real terms are enormous.

I also agree with Ruccio that this needs to be qualified. Like the  terms of trade where imports are benefits in real terms with respect to goods, labor is disadvantaged by embedded labor that costs jobs and reduces pay. So the benefit in real terms only applies at full employment or if workers share in the gains with increased compensated leisure.

Curtailing technological innovation is Luddite and attempts to restrain material progress won't work. The actual issue is distribution of the surplus, was David Ruccio observes, and that needs to be revisited given emerging conditions that are resulting in challenges along with opportunities.

What's needed is innovation in thinking about distribution and also about work as a source of income in a market-based system in which distribution is rationed by price.

Occasional Links & Commentary
Hammer time
David F. Ruccio | Professor of Economics, University of Notre Dame

Dean Baker — Washington Post Lies to Readers Again: Job Loss in Manufacturing Due to Trade, not Automation

For fans of data rather than myths, the basic story is that manufacturing has been declining as a share of total employment since 1970. However there was relatively little change in the number of jobs until the trade deficit exploded in the last decade.

Beat the Press
Washington Post Lies to Readers Again: Job Loss in Manufacturing Due to Trade, not Automation
Dean Baker | Co-director of the Center for Economic and Policy Research in Washington, D.C

Bill Mitchell — Is there a case for a basic income guarantee – Part 4 – robot edition

This is Part 4 in the mini-series discussing the relative merits of the basic income guarantee proposal and the Job Guarantee proposal. It is the ‘robot edition’. The march of the robots is the latest pretext that basic income proponents (including the IMF now) use to justify their policy advocacy. There is some truth in the claims that the so-called ‘second machine age’, marked by the arrival of robots, is not only gathering speed, but is different from the first period of machine development with respect to its capacity to wipe out human involvement in production. But the claims are somewhat over the top. Further the claims that these trends are inevitable are in denial of the basic capacities of the state to legislate in the common interest. While the innovations in technology will free labour from repetitive and boring work and improve productivity in those tasks, there is no inevitability that robots will develop outside the legislative framework administered by the state and overrun humanity (even if the predictions of robot autonomy are at all realistic). We will surely need to develop a coherent adjustment framework to allow these transitions to occur equitably and where they are not possible (due to limits on worker capacity) alternative visions of productive work are developed?

Further, the Job Guarantee is a better vehicle for handling these type of transitions and creating new forms of productive work. Adopting a basic income guarantee in this context just amounts to surrender.…

Bill Mitchell – billy blog
Is there a case for a basic income guarantee – Part 4 – robot edition
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Jason Furman — Is This Time Different? The Opportunities and Challenges of Artificial Intelligence

Is This Time Different? The Opportunities and Challenges of Artificial Intelligence

Jason Furman

Chairman, Council of Economic Advisers

Remarks at AI Now: The Social and Economic Implications of Artificial Intelligence Technologies in the Near Term

New York University New York, NY July 7, 2016

This is an expanded version of these remarks as prepared for delivery. 

ht Brad DeLong

Daron Acemoglu, Pascual Restrepo — The race between machines and humans: Implications for growth, factor shares and jobs

Many economists throughout history have been proven wrong in predicting that technological progress will cause irreversible damage to the labour market. This column shows that so far, the labour market has always adapted to the replacement of jobs with capital, using evidence of new types of skilled jobs between 1970 and 2007. As long as the rate of automation of jobs by machines and the creation of new complex tasks for workers are balanced, there will be no major labour market decline. The nature of new technology, and its impact on future innovation potential, has important implications for labour stability.

They are not concerned yet.

vox.eu
The race between machines and humans: Implications for growth, factor shares and jobs
Daron Acemoglu, Pascual Restrepo

Sandwichman — Post Post Work Post

What Karl Marx really meant. And therefore why most of what goes by the name "economics" is a crock. It's actually a story gussied up in math that is used to dupe the rubes.

EconoSpeak

Post Post Work Post
Sandwichman

The Engineer — High Design: Tiger Stone Paving Machine Makes Brick Roads Like Laying Carpet

Solidarity Economics
High Design: Tiger Stone Paving Machine Makes Brick Roads Like Laying Carpet

The Engineer