Towards a new Economics?

[Thailandnotes]

Re: Towards a new Economics?

I have to wonder what Mort might think of this little piece of journalistic malpractice?

Still performing according to the cronicle...“Somewhere I decided I was a lifeguard and I was going to go and bring them back,” Sahl says, focused now, “and part of the rage is that they were committed to drowning. They don’t want to be brought back. They don’t want to see the evidence of Goldman Sachs and Hillary.”

Have read this interview with Mr. Fish/Sahl a couple of times.

http://www.truthdig.com/report/item/...fish_interview

[santafe2]

Re: Towards a new Economics?

Thanks jk, those are great points.

I liked the author's idea that a) software fits the economists definition of a public good, and b) software is starting to perform a great deal of work once performed by professional labor.
The implication is that labor is rapidly losing the ability to charge for routine work done with pen and paper.
Examples abound, like drawing up a lease for a rental property. I no longer hire an attorney to do that, I just grab one on-line for free and use it.

Each year, our world becomes a bit more complex, and a bit more complex at a faster rate. It is now impossible, over a single human lifespan to accomplish work in the same fashion as one accomplished it in early adulthood. Unless one is a brilliant thinker, the idea of elder knowledge in modern society is a farce.

Over time, almost all work changes and has become much more complex with new technologies and many more regulations. Without refining processes and without software / automation, the modern world would have come to a halt. It is the complexity of modern life and the increase in the rate of change that requires us to invent new and better methodologies for accomplishing almost all tasks we accomplished more simply in the past.

For example, in the world of US medicine, doctors went to medical school, worked through their residency program, passed their medical board exams in their late 20s and practiced in their field of medicine for the next 40-50 years without challenge. It’s not that medicine never changed but it changed at a moderate rate. A rate understandable during a human lifespan. Everyone trusted that the great majority of medical doctors, could and would keep up with their field.

About 20 years ago that changed. It wasn’t a new problem with regulators over regulating or doctors under studying their various fields of medicine. Change started coming faster to the medical field than the traditional system of regulation could support. Most doctors kept up but the group of doctors that couldn’t or wouldn’t keep up with their field began to increase. In answer to that issue, medical boards came up with the idea of decadal exams for all incoming doctors. Now instead of 40+ years, one had to stand for a high stakes exam every 10 years.

Jump forward 20 years. The decadal exam is obsolete. Medicine in the US is moving toward the continuous exam. Not a single high stakes exam every decade but an ongoing education in the physician’s area of practice that may require a small exam every week.

This change has come about in less than 1/3 of a human lifespan and in less than ½ of a doctor’s work life. There are many doctors in their late 40s who are not required to maintain their medical certifications and all of those under that threshold work under a very different set of requirements.

The issue is not robotics or regulation or software, it’s the continually increasing rate of change.

[vt]

Re: Towards a new Economics?

Good observation Santa Fe.

[loweyecue]

Re: Towards a new Economics?

I think what you are saying underscores my key takeaway from the article - humans cannot adapt fast enough to the change and that all jobs will eventually be automated. I think the software example is a really good one and he used it as an example only. Most people rely on executing the same skills they learned in school/college over and over again in their daily jobs to earn a living - Doctors doing surgery to programmers writing code. But anything that's repeatable will at some point be automated. And jobs as we know them will cease to exist.

The most successful survivors of the job market will be people who work as integrators of various technologies and skills, because every solution/product you sell will need to be more and more specialized.

[bpr]

Re: Towards a new Economics?

The issue is not robotics or regulation or software, it’s the continually increasing rate of change.

Isn't the increased rate of change, however, at least influenced (heightened) by technological advances?

In your example of doctors, which has a far wider "moat" than most industries/professions in terms of barriers to entry and changes in best practices, certainly the introduction of robotic surgery, new imaging technologies and digitization of patient records is going to squeeze the older generations to continually adapt, but have the fundamentals changed?

In other words, has our understanding of the kidney (or lung, or heart, or lymphatic system, etc.) changed significantly enough in the past 10 years to render obsolete the learning of a middle-aged nephrologist (pulmonologist, et. al.)? Or are we just talking about maintenance education to make sure that our physicians are aware of and capable of utilizing or prescribing the most recent advances and findings?

[DSpencer]

Re: Towards a new Economics?

Isn't the increased rate of change, however, at least influenced (heightened) by technological advances?

In your example of doctors, which has a far wider "moat" than most industries/professions in terms of barriers to entry and changes in best practices, certainly the introduction of robotic surgery, new imaging technologies and digitization of patient records is going to squeeze the older generations to continually adapt, but have the fundamentals changed?

In other words, has our understanding of the kidney (or lung, or heart, or lymphatic system, etc.) changed significantly enough in the past 10 years to render obsolete the learning of a middle-aged nephrologist (pulmonologist, et. al.)? Or are we just talking about maintenance education to make sure that our physicians are aware of and capable of utilizing or prescribing the most recent advances and findings?

I think a bigger issue is when will it be more effective to input someone's demographics, medical history, symptoms, lab work, diagnostic imaging, etc into a computer and get a diagnosis and recommended course of treatment. There are already programs designed to assist in diagnosis currently. I am guessing it will be a long time before physicians are truly replaced but I expect they will be more and more reliant on technology to guide decisions.

[jk]

Re: Towards a new Economics?

new technologies for evaluation and treatment, new drugs mostly with old mechanisms. some new kinds of treatment being developed - e.g. immunological treatments for cancer. digitizing patient records has so far caused a skyrocketing of costs [it's so easy to order another test.] plus, from what i've seen, the digitized records are designed to optimize billing, making sure that treaters hit the maximum number of "bullet points" to justify the most highly paid procedure code. in the course of doing this the record scatters clinical information through a variety of screens that makes it extra hard for clinicians to extract a useful clinical history. i know someone who has invested in a software startup which is designing a program to sit on top of epic - one of the most widely implemented electronic medical records. this new software will take the clinical information scattered through the epic file and re-assemble it so a clinician can read it and know the clinical story.

[thriftyandboringinohio]

Re: Towards a new Economics?

All these comments from you guys are pretty interesting, and seem to be making a cluster of points the are gathered near each other.

1. rapidly changing technology and shifting job landscapes are crappy for real human people.
We real humans are healthier and happier when we settle in and master a trade and a workplace.

2. As far as automation goes, this time it does seem different.
Our software systems and machinery are so highly effective that we don't need so many people working.
We can produce all the things we need for everyone with just a small fraction of us working.

3. Scarcity of labor might be gone forever.
Point 2 makes us need fewer people working, while globalization has quadrupled the available workforce.
Until recently billions of people had a simple disconnected local agrarian life as subsistence farmers and handicraft workers
Now those billions of people are all available as employees for any industry that cares to throw up a building near their homes.

4. when you combine points 2 and 3, we might be looking at the true end of economic scarcity.
If nothing much is scarce, the concept of demand curves finding price equilibrium goes out the window.
The fundamental ideas in our economic theories and financial systems don't work under these new conditions.

5. Our current economics are fundamentally based on growth, but we might be hitting real limits.
Our labor participation rate won't grow, it will shrink. Our basic industries like timber and mining and fishing can't double output again and again.
We can already dig all the iron in the world or catch all the fish in the sea if we really tried hard.

6. the facts seem to cry out for new kind of economics. One based on stasis, not growth.
One based on the fact most people won't need to work most of the time.
One that does not require most people to live in poverty and misery because they haven't worked much.

7. One can imagine a pretty nice world economy that works for real humans in the new conditions.
When people do get work, the wages need to be astronomically high so the wages last until the next chance to work.
The new technologies will give short employment opportunities to the newly trained while pushing into sabbatical those who are now obsolete.
The economy needs to pay enough good interest to give income to workers on sabbatical for years.
The system needs to outlaw scams and rackets that rake in the saving of those on sabbatical , essentially stealing wages that can't be replaced.

I can't help but wonder of we are not looking at the chaotic transition between the two kinds of economy.

[jk]

Re: Towards a new Economics?

here's a link that i posted earlier this morning in a different thread. it speaks very much to all you've said above, thrifty. what's happening in manufacturing now is what happened in agriculture about a century ago. late 19th-early 20th century 35% of workers were farmers. then farm productivity went up, farm production went up, agricultural prices went down, and farm employment plummeted. back then the shift was from agriculture to manufacturing. now it's from manufacturing to services. the article links this to changes in wealth and income inequality, trade imbalances, record corporate profits, and so on. worth reading imo.

http://www.advisorperspectives.com/a...global-warning

[DSpencer]

Re: Towards a new Economics?

Thrifty,

1. Maybe, but humans are very adaptable and many don't like monotony and over-specialization.

2&3. There is still tons of work to be done and things will likely move slower than expected. I don't think we are on the verge of a "singularity" where everything is done by robots. As always jobs will be destroyed but new ones created. My big fear is that scarcity of certain types of labor is gone forever. I worry that some people will always be doomed to unemployment or low wages because they can only do jobs for which there is abundant labor supply. I'm one of those evil pessimists that isn't convinced that with enough training anyone can become a computer programmer or nuclear physicist.

4. I don't think that conclusion follows from 2 and 3. Land, energy, materials will still be scarce. Economic demand is unlimited or nearly so. Most of the world's population aspires to a lifestyle of a rich 1st world person. We are nowhere near providing that lifestyle to everyone.

5&6. I could be wrong, but I think it was you who has said: "too many monkeys on the rock". I agree. I believe that with the right technology the earth can support several times the current human population. However, I think a population equal or smaller to our current one could enjoy a much better lifestyle and avoid many negative consequences to the environment as well. I would much prefer a world with 5 billion people rather than 50 billion.

7. This seems to assume that the work will/could be divided equally. In reality I would expect an ever growing population of people who have little to no employment opportunity forever and another group that has essentially unlimited work available. I think we are already seeing this to a degree.

I fear that our future will turn into a kind of Idiocracy meets The Time Machine where the employable live in luxury and the majority live on universal basic income to keep the peace. Hopefully it doesn't turn out that way.

[vt]

Re: Towards a new Economics?

https://www.washingtonpost.com/news/...ding-to-tesla/

[dcarrigg]

Re: Towards a new Economics?

All that and he still can't turn a profit, is way behind on production, and is bleeding money faster than ever.

https://techcrunch.com/2016/08/03/te...4402-vehicles/

The emperor has no clothes.

[dcarrigg]

Re: Towards a new Economics?

I found this article interesting

https://www.edge.org/response-detail/26756

I have been reluctantly forced to the conclusion that if technology had killed capitalism, economic news would be indistinguishable from today’s ...

Remember this old piece from the Atlantic?

http://www.theatlantic.com/magazine/archive/1999/03/the-market-as-god/306397/

A few years ago a friend advised me that if I wanted to know what was going on in the real world, I should read the business pages. Although my lifelong interest has been in the study of religion, I am always willing to expand my horizons; so I took the advice, vaguely fearful that I would have to cope with a new and baffling vocabulary. Instead I was surprised to discover that most of the concepts I ran across were quite familiar.Expecting a terra incognita, I found myself instead in the land of déjà vu. The lexicon of The Wall Street Journal and the business sections of Time and Newsweek turned out to bear a striking resemblance to Genesis, the Epistle to the Romans, and Saint Augustine's City of God. Behind descriptions of market reforms, monetary policy, and the convolutions of the Dow, I gradually made out the pieces of a grand narrative about the inner meaning of human history, why things had gone wrong, and how to put them right. Theologians call these myths of origin, legends of the fall, and doctrines of sin and redemption. But here they were again, and in only thin disguise: chronicles about the creation of wealth, the seductive temptations of statism, captivity to faceless economic cycles, and, ultimately, salvation through the advent of free markets, with a small dose of ascetic belt tightening along the way --snip--

[GRG55]

Re: Towards a new Economics?

All that and he still can't turn a profit, is way behind on production, and is bleeding money faster than ever.

https://techcrunch.com/2016/08/03/te...4402-vehicles/

The emperor has no clothes.

How many Model 3 buyers will give a tinker's damn how many robots are in the factory? Unlike the Model S, which is a status symbol, or the Model X, which is a weird curiosity, the Model 3 is by all accounts targeting the mass market buyer. Those buyers want value for money - a good quality, reliable vehicle at a price they can afford to pay to purchase, operate and maintain. Mrs. GRG55 and I both drive full size American pick-up trucks with well more than 200,000 miles on each of them (one is fast approaching 300k), and both still going fine with no current plans to replace either of them. If Elon can create the same value proposition I might pay attention.

[shiny!]

Re: Towards a new Economics?

How many Model 3 buyers will give a tinker's damn how many robots are in the factory? Unlike the Model S, which is a status symbol, or the Model X, which is a weird curiosity, the Model 3 is by all accounts targeting the mass market buyer. Those buyers want value for money - a good quality, reliable vehicle at a price they can afford to pay to purchase, operate and maintain. Mrs. GRG55 and I both drive full size American pick-up trucks with well more than 200,000 miles on each of them (one is fast approaching 300k), and both still going fine with no current plans to replace either of them. If Elon can create the same value proposition I might pay attention.

I hate to derail another thread but I have to ask you, GRG55: how often do you change your oil and what kind of oil do you use?