Robotics or fascination with anthropomorphism

Recent discussions about the “advent of robots” have some rather unusual features. The threat of robots replacing humans is seen as something truly novel possibly changing our civilization and way of life. But in reality this is nothing new. Introduction of machinery to replace repetitive (or even more creative) labor has been applied on a significant scale since  the beginning of the Industrial Revolution. Robots are not different from any other machine.

The obsession with, or fear of, robots has to do, I believe, with our fascination with their anthropomorphism. Some people speak of great profits reaped by “owners of robots”, as if these owners of robots were slaveholders. But there are no owners of robots: there are only companies that invest and implement these technological innovations and indeed they will reap the benefits. It could happen that the distribution of net product will shift even more toward capital, but again this is not different from the introduction of new machines that substitute labor—a thing which has been with us for at least two centuries.

Robotics leads us to face squarely three fallacies.

The first is the fallacy of the lump of labor doctrine that holds that the new machines  will displace huge numbers of workers and people will remain jobless forever. Yes, the shorter our time-horizon, the more that proposition seems reasonable. Because in the short term the number of jobs is limited and if more jobs are done by machines fewer jobs will be left for people. But as soon as we extend our gaze toward longer-time horizons, the number of job becomes variable. We cannot pinpoint what they would be (because we do not know what new technologies will bring) but this is where the experience of two centuries of technological progress becomes useful.  We know that similar fears have always existed and were never justified. New technologies ended up creating enough new jobs, and actually more and better jobs than were lost. This does not mean that there would no losers. There will be workers replaced by the new machines (called “robots”) or people whose wages will be reduced. But however these losses may be sad and tragic for individuals involved they do not change the entire society.

The second “lump” fallacy which is linked with the first, namely our inability to pinpoint what new technology will bring, is that human needs are limited. The two are related in the following way: we imagine (again, looking only at any given moment in time) that human needs are limited to what we know exists today, what people aspire to today, and cannot see what new needs will arise with a new technology. Consequently we cannot imagine what will be the new jobs to satisfy the newly created needs. Again history comes to the rescue. Only ten years ago we could not imagine the need for an intelligent cell phone  (because we could not imagine it could exist) and thus we could not imagine the new jobs created by the iPhone (from Uber to ticket sales). Only 40 years ago, we could not imagine the need to have our own computer in every room and we could not imagine millions of new jobs created by the PC.  Some 100+ years ago we could not imagine the need for a personal motor car and thus we could not imagine Detroit and Ford and GM and Toyota and even things like Michelin restaurant guide.

Even best among the economists, like Ricardo and Keynes (in “The economic prospects of our grandchildren”) thought that human needs are limited. We should know better today: the needs are unlimited and because we cannot forecast the exact movements in technology, we cannot forecast what particular form such new needs will take. But we know that our needs are not finite.

The third “lump” fallacy (which is not directly related to the issue of robotics) is the lump of raw materials and energy fallacy, the so called “carriage capacity of the Earth”. There are of course geological limits to raw materials simply because the Earth is a limited system. But our experience teaches us that these limits are much wider than we generally think at any point in time because our knowledge of what earth contains is itself limited by our level of technology. The better our technology, the more reserves of everything we discover. Yet accepting that X is an exhaustible energy source or a raw material and that at the current rate of utilization it will run out in Y years is only a part of the story. It neglects the fact that with the rising scarcity and price of X, there will be greater incentive to create substitutes (as inventions of sugar beet, synthetic rubber or fracking show) or to use a different combination of inputs to produce the final goods that now use X.  Indeed, the cost of the final good may go up  but here again we are talking about a change in some relative prices, not about the a  cataclysmic event. Earth carriage capacity which does not include development of technology and pricing in its equation is just another “lump” fallacy.

Some famous economists like Jevons who collected tons of paper in the expectation that the trees would run out entertained the same illogical fears. Not only did it turn out that, with many thousand (or million?) times greater use of paper, the world did not run out of trees—Jevons simply, and understandably, could not imagine that technology would enable recycling of paper and that electronic communications would substitute for much of what paper was used for. We are not smarter than Jevons because we too cannot imagine what might replace fuel oil or magnesium or iron ore, but we should be able to understand the process whereby these substitutions come about and to reason by analogy.

Fears of robotics and technology respond, I think, to two human frailties. One is cognitive: we do not know what the future technological change will be and thus cannot tell what our future needs will be.  The second is psychological: our desire  to get a thrill from the fear of the unknown, from that scary and yet alluring prospect of metallic robots replacing workers in factory halls. It responds to the same need that makes us go and watch scary movies. When we do not go to a movie theater we like to scare ourselves with the exhaustion of natural resources, limits to growth and replacement of people by robots. It may be a fun thing to do but history teaches us that this is not something  we should rationally fear.

  

“Can we love?” More on commodification

I read today’s Diane Coyle post on commodification of services which is (to some extent, Diane says) a reply to my earliest post, but to be honest I do not see how it is a reply.

I basically agree with almost all that Diane writes today (here).

But note that my two posts (here and here) had, if I summarize them quickly, two key points.

Primo: Gig economy with one-off deals and extremely fast turnover of labor breaks the relations of confidence and trust that are often established between people (buyers and sellers). If my tax driver changes all the time, dry cleaner stays in his job one week, my professors fluctuate quarter by quarter, it seems to me obvious that this type of flexibilization of labor market ---while probably leading to gains in productivity—reduces incentive to establish longer term relationships and thus to invest in being “nice”. It does not mean that I am going to be rude to a waiter and throw a plate at him, but it means that I am not going to invest in a chit-chat that otherwise I would. And he/she would behave the same. To put it in  economic terms, it does not pay to be nice (high fixed cost) if you keep on having only one-off relationships. (Incidentally, it is not too different from today’s culture of hook-up. While it probably increases freedom and sexual pleasure, it surely does not contribute to relationships.)

Secundo: My second post (here) dealt with the intrusion of marketization in family relations. I used the examples of food consumed, individually and outside of home not together over a dinner table, and of external tutoring of kids. Both were activities previously done by parents and they I believe tended to make relations between family members closer. But now these ties no longer exist, replaced by purchased food and purchased tutoring.

My third example was living alone which again comes with higher income and is something that people really love to do and so they choose it whenever they can afford (I do it, most of the time, myself). But is it helpful for relations? I think, not.

I think that both points are so incontrovertibly true that only due to some misunderstanding can we reach different conclusions. This is why I wanted  to clarify them here.

I enjoy discussion with Diane because I think that we have very similar basic opinions. Perhaps the difference is that I often see advances in marketization or in income as not 100% improvements in all human dimensions.  In a most economistic way, I think we always gain some and lose some. Sure, by our choice (say, to hire tutors or to live alone) we show that we care more about having a bathroom and a kitchen to ourselves or not to be bothered too much with kids’ homework which makes us probably lead happier lives as individuals. But we lose some, in lessening the ties with other people.

At the end, as in Herzog’s new movie “Lo and behold: the reveries of an interconnected word”, we can ask: “Can we envisage a life as automatons purely exchanging services and goods without seeing each other (ordering pizza, cleaners, shirts on the Internet), talking to people only on the web, eating solo, listening to music alone with first-rate audio speakers etc. and just having every single activity be a market transaction”. Yes, we can, the modern IT wizards say. But then Herzog asks “Can we love?”.

The two insurgencies

The Twin Insurgency by Nils Gilman is an excellent article that succeeds in explains both the plutocratic insurgency (gated communities, off-shore accounts) at the top, and the “criminal” insurgency (drug cartels, arms smuggling) at the bottom as part of the same process of rejection of a modern social state.

I find the discussion compelling even if no single aspect of the article is new (that is, was not argued before). But it is putting them together in a coherent whole which represents the strength of Gilman’s piece. A person who flies in a private jet and opens an offshore account in the Bahamas to avoid taxes and a people- smuggler in Mali both react to the withdrawals of the state and both, by their actions, ensure that that withdrawal will persist.

There are two things on which I would like to expand on Gilman. First, the role of ideology, and second, the interaction of the plutocratic, criminal and political worlds.

Why the “criminal” or deviant globalization occurred is, I think, best understood (as Gilman writes) as a product of the weakening of state capacity. But this is not all. I would also include the ideology of enrichment by any means. Deng Xiaoping put it best  when he said that “to be rich is glorious”; he might not have added by “any means” but this is how the message was understood. At its extreme, the message was understood as such in transition countries, especially in Russia and Ukraine, that engaged in massive stealing of state assets by those who were close to the governing circles. This has continued for almost thirty years: it is only that the kleptocratic groups change depending on who is in power, but the differences between the way that Khodorkovsky and Rotenberg, Pinchuk and Poroshenko have become billionaires are non-existent. In those countries, we see mafias becoming the state and we see the seamlessness between the three worlds, plutocratic, political and criminal, at its clearest.

But what made this possible was an ideology that argued that “society does not exist” and that the only sign of success is material success. Being rich mattered socially more than before simply because other forms of competition (meaningfulness of a job, contribution to society etc.) were declared irrelevant. Success became easy to measure because every success, whether in Olympian swimming, software code or journalism, was translated into a single metric: money. Just observe how every athlete, professor, economist, journalist who, for whatever reason, becomes at one point known, immediately converts that notoriety into cash: appears in ads, charges speaking fees. (Even Gorbachev ended up in a Louis Vuitton commercial. Federer has sold everything from watches to underwear.)

This concentration on money as a common dominator of success makes comparisons between people much easier because we do not need to be bothered by figuring out success of two individuals in several dimensions. If all dimensions are folded into one, it is simple to tell success from failure. This also occults the way money is made, or makes it irrelevant since the important thing, in a unidimensional world, is to have it.

Combined with increased commercialization of activities that have hitherto remained outside the market (see my Commodification post) and with globalization that allowed everybody to see and almost experience what was the desired consumption pattern of the rich, it led to moral equivalence between the ways wealth is made. I do not argue that it was an entirely new development because historically wealth was acquired in even much more brutal ways than today (e.g. slavery) and once acquired was quickly “washed” of its original stain. What I think was new was the broad societal acceptance that the way wealth is made does not matter.

That societal acceptance is in turn based on cynicism about the overlap between the three circles I mentioned before: business, crime and politics. Businessmen were often criminals (and vice versa) and both interacted with or even became politicians. One could go on listing such phenomena endlessly, from those in Russia and Ukraine to Berlusconi in Italy, Thaksin in Thailand, the entire political establishment in the Philippines etc. But a recent piece, published in the latest New Yorker, unwittingly brought this aspect to light and allowed one to see how it functions in rich countries where state institutions have  ostensibly not been destroyed.

In an article about Trump’s family (mostly, about his daughter and son-in-law) we learn about the contacts between the son-in-law’s father and the Clintons. The father was one of the largest donors to Hillary Clinton’s senatorial campaign, and to express gratitude for the money she got, Hillary Clinton came to a private dinner the father gave. The father later ended up in jail for fraud and extortion. Moreover, we learn also that Bill Clinton was speaking, for significant “compensation”, at some of the events organized by the same funder.

The striking thing here is not what the author of the article somewhat naively wants us to focus on, namely the links between the wealthy New York-based families of the Trumps and the Clintons, but the ease with which business, criminal and political worlds merge into one. And we can be sure that this one example could be multiplied by ten or more. It was a shameless use of either past political office to rake in enormous money (the Tony Blair and Bill Clinton approach to politics) or the use of future political office to sell favors in exchange for funding (which is done practically by all politicians) that has conveyed the message from the top that any activity should be leveraged into money and that all means to get money are fine.

It is therefore I think massive corruption at the top and ideological change that have empowered the so-called deviant globalization. If president of a country can sell favors, why cannot a drug lord sell his goods? If the rich can open thousands of accounts containing billions of dollars in tax havens, why should a small hotelier in Greece pay taxes? If the law applies selectively, then you need to carve out your dominion where you will be the boss. This is how the extra-state areas of which Nils Gilman writes have come into being.

The essential point to take is that the two insurgencies go together: without plutocratic-criminal insurgency at the top, there would be no deviant criminal insurgency at the bottom. The only point on which I might differ from Gilman is that he applies the adjective “criminal” to the bottom insurgency only.

Commodification again—a response to Diane Coyle

In a very nice post published today Diane Coyle, commenting on my blog on Commodification (published yesterday) takes me to task for the following sentence:

“The most obvious case is commodification of activities that used to be conducted within extended families and then, as we became richer and more individualistic within  nuclear families. Cooking has now become out-sourced and families often do not eat meals together. Cleaning and child-rearing have become more commercialized than before or ever.”

I should have added a number of other activities: fixing the roof, doing kids’ homework, car repairs, gardening, and this quintessential US activity of raking the leaves.

It would have been, perhaps clearer, that I did not have in mind only activities predominantly done by women but also by men.

Now two points remain to be explained.

Was this increased commodification? Unambiguously, yes. It is simply a definitional issue. Activities that were conducted within families and went uncompensated entered the sphere of the market:  helping kids with their homework got outsourced to a tutor, cooking meals went to McDonald's. So that part is purely factual and definitional.

The second, more difficult, part is, does it represent an improvement (however you want to think of an “improvement” )? I would say in most instances, “yes”. When I was a little boy, my mother had to wash my fathers’ shirts in a back-bending and back-breaking position running them over by soap and water in a bath-tub. Was this fun? No. It was both hard and humiliating. Was the washing machine, and later ability to outsource the cleaning of shirts to a professional cleaner, a great progress? Unambiguously, yes. In addition, as Diane mentions, it enabled women to lead professional lives which they could not if they had to spend entire days cooking and washing. (This is by the way, why I also agree with Robert Gordon that the inventions of the 1930s-1950s had a much more dramatic effect on our lives than the current IT inventions.)

But the great material progress and great improvements in welfare (mainly for women who used to do most of these thankless tasks) created also trade-offs in some cases. Families today eat fewer meals together, not only because they are busier, but because cooking has been outsourced, to the MacDonald’s for the poorer households or to Cosi for the richer or to fancy restaurants for those in the top 1%. (Moreover, these meals are taken by individual household member one by one,, “I go to the MacDonald’s at 1 pm, you at 2 pm”). There is greater marketization, greater specialization and probably greater output (certainly greater recorded output), but we do lose something in not having a place and time when family gets together.

The same can be said for the outsourcing of help to children with their homework. In the past it used to be, and was often ridiculed in theatre plays, that only rich families would hire a multitude of tutors to help their kids get good grades. This has spread, as societies have grown richer, along a large part of the income distribution, sometimes to ridiculous extent (not only homework, but SAP preparation classes and special life coaches for teenagers). When a teenager used to have a problem, it was dealt by parents, or at most by a teacher. Now, the teachers ask parents to hire professional help so both the parents and the teachers wash their hands of the problem. The issue has become “institutionalized” and “commodified”. All these things weaken personal links and replace them with purchased services.

There are many similar examples.

There was recently a graph circulated on Twitter showing the percentage of kids aged 25  living with parents in various countries in Europe. Predictably, the percentage was the lowest in rich, Nordic countries. This simply confirms people’s general preference to be left alone and become individualistic as they get richer and can afford it. They are obviously happier living alone than with their  parents. I was too. But I cannot overlook the fact that it yet further diminishes personal ties. If you live alone, thousands of miles from your parents, you are unlikely to display the same empathy when your father gets sick as if you lived together. (Now when many people live together and the space is very limited  perhaps you may wish for your father to die quickly because you would have an extra room for yourself, but I think it is a rather extreme example).

To make it very clear, I wanted to make two following points. On a pure factual side, I do not think there is a serious argument disputing that as societies get richer, the sphere of commodification extends. (I saw that first hand when I worked on African household surveys where a number of activities that are routinely monetized in rich economies had to have their values imputed in Africa, for otherwise we would grossly underestimate consumption of people in many African countries.)

Second, while in many cases, greater commodification has made our lives better and responds to a definite choice of people, it has also in many cases weakened personal ties and in some cases made us more callous because our knowledge that any pesky little problem can be solved by throwing money at it made us less concerned about our neighbors and family.  

Therefore, as we live increasingly in a commodified environment where interactions (and I relate this to my points on the gig economy and flexibilization of labor) become one-off deals, I  see a shrinking space where we can exercise “nice” cooperative behavior. As we end up all becoming just “agents”  in one-off deals, there would be zero place for niceness. Now, that would be both a Utopia of wealth and Dystopia of personal relations.  

PS. On a personal note, when I moved to New York almost three years ago I discovered a very liberating, but also somewhat disconcerting, thing: if you have enough money and a wireless connection, you can dispense with real people. (This was liberating because I hardly knew anybody in New York; it was disappointing because I realized that I do not need to make much effort to meet anyone).  Now, this ambivalent freedom was made possible by technology (wireless) and higher income, and perhaps my overall happiness increased. But I am aware that, if I look at inter-personal relations, it has not been a gain.