basic theme that never fails to hit a nerve
is the fear that machines will replace human workers. During
his luncheon talk at a March 2004 robotics conference in Cambridge,
iRobot CEO Colin Angle talked about how his firm teamed up with a
consumer products company in the late 1990's in hopes of developing
floor cleaning robot concepts for corporate users. He discovered that
mobile robot projects have to sell themselves on the new revenues
that they can bring in for corporate users, rather than on simply
the labor costs that they can save. He mentioned that often "labor
will find a way" to avoid being replaced. While studying potential
floor cleaning applications, he discovered that the particular people
who perform clean-up jobs, and the amount of time that it actually
takes for each job, is often quite different than what is officially
reported. Trying to select worthy robotic projects based on replacing
human jobs as a main criteria ended up being too simplistic.
Four of this series I described how entrepreneurial calculation
should start first with an estimate of what a buyer will pay for a
brand new "value proposition." This is much better approach
than focusing on replacing the human labor that goes into existing
products. The new product concept should impress the buyer with its
ability to perform myriad tasks and functions, which may or not have
a human counterpart. Many of the modular frontiers that I outline
Three can be combined in ways that are impossible for any human
or even groups of humans to match, which is where we get into the
real power of robotics. To reinvoke my example of the robot that tends
vineyards, it is not about replacing one agricultural worker with
one robot. It is really about putting a robot in the vineyard that
not only picks grapes, but is also part of a database system that
monitors, analyzes, responds to, manages, and optimizes everything
about the agricultural process (soil, rain, sunshine, planting, harvesting,
etc). It may have sensing, manipulation, database, reconfiguration,
or exotic mobility characteristics totally beyond the capabilities
of hundreds of human workers. It may have artificial intelligence
capabilities almost beyond human imagination. The new process may
be more important than the machine. This is what the "robolution"
is really all about.
this more comprehensive view, human social issues inevitably get entangled
with robot issues and create political obstacles. They can unnecessarily
complicate them and give rise to economic fallacies and misperceptions.
A major purpose of this last part of my series is to discuss public
anxiety and ways to sort out the issues and better understand their
anxiety has been around a long time, and never seems to go away. In
fact, robots may intensify it. One of the most famous historical examples
involved the Luddites who smashed over a thousand looms in early 19th
century England in an effort to save their jobs from the new devices.
his famous book Economics
In One Lesson, Henry Hazlitt wrote, "In the depression
of 1932, the game of blaming unemployment on the machines started
all over again. Within a few months the doctrines of a group calling
themselves the Technocrats had spread through the country like a forest
fire...The Technocrats were finally laughed out of existence; but
their doctrine, which preceded them, lingers on. It is reflected in
hundreds of make-work rules and featherbed practices by labor unions;
and these rules and practices are tolerated and even approved because
of the confusion on this point in the public mind."
though the Technocrats were laughed away, Hazlitt pointed out how
in 1946 the same viewpoint resurfaced in an article by FDR's wife
Eleanor Roosevelt which stated,: "We have reached a point today
where labor-saving devices are good only when they do not throw the
worker out of his job." According to Hazlitt, in a 1978 revision
of Economics In One Lesson, this sentiment remained widespread
and continued to resurface decade after decade among political and
labor leaders no matter how many times it was discredited.
may be viewed as"automation on steroids," and as such they
elicit much stronger emotional reactions than factory machinery per
se. In the book Robo
Sapiens, some roboticists suggest that American robot makers
have tended to refrain from making humanoid robots and have focused
more on animal models because of the perception in America that humanoid
robots may evolve in sinister ways This may have very serious social
ramifications to the extent that it increases the reluctance of US
firms to keep pace with their Japanese counterparts in making certain
far-sighted robotics-related investments that could have vital strategic
importance later on.
discussed in Part
One how the Japanese openly embrace humanoid robot research, hoping
for the day when robots can better assist their aging population,
and how major Japanese firms are spending hundreds of millions of
dollars on visionary robotic projects that are cute and commercially
useful. Paradoxically, because of the relative lack of investment
by large American firms, DoD has become the largest de facto long
term investor. The military's emphasis on war-related applications
helps create a self-fulfilling prophecy that risks reinforcing Americans'
image of robots as potentially sinister devices.
aggravate and complicate this situation even further, a number of
influential individuals with computer science backgrounds have weighed
in with trepidation. Three good examples are as follows:
Brain, a computer science college teacher and web site entrepreneur
who created the very popular site www.howstuffworks.com,
has also created the site
Robot Nation, which includes excellent updates on robotic developments
at his robot blogspot.
50% unemployment by year 2050, stating, "The rise of the robotic
nation will not create new jobs for people -- it will create jobs
for robots." . He has written an online novel Manna
in which an unemployed protagonist migrates to a new robo-zone in
Australia. There he finds a society that has abolished private property
and freely distributes goods produced by robots at ever lower prices
to happy people.
Sapiens discusses the robot research of Dr. Kevin Warwick
of the University of Reading, UK. According to Sapiens, "In
Warwick's view of the future, the world will be populated by hybrid
creatures --part living flesh, part electronic device. Linking humans
to machines, he said, involves `creating cyborgs--there is no way
around it--people that are part human, part machine.' Such entities,
he admitted, will have `values that are very different from human
values. But that is the way that we are going. I know that is a bit
sci-fi-ish, but that is the direction. That is clear.' He adds, `The
destruction of the human race as we know it seems inevitable.'"
a last example, the book Robo Sapiens also shows a cutaway
picture of My Real Baby Doll, that I have already discussed at some
length in Part
Four. The Sapiens author Peter Menzel asked the good
folks at iRobot to cut away half the doll's face to show the machinery
underneath. He said that when he showed the photo to roboticist Matsuo
Hirose in Tokyo, the chief engineer of the Honda humanoid project.
"He shuddered, `I don't like this picture,' he said, `I feel
like this baby might do something to me...'"
|The Wonderful Wizard needs to figure out what kind of
heart is suitable for Tin Man
comments have so many underlying social and technological issues entangled
within them that they remind me of huge Rorschach blots. I believe
that the technological issues are fairly straightforward. However,
the social issues entail political, cultural, economic, and ethno-racial
dimensions that are very tricky to deal with. America today is a multi-racial,
multi-cultural society riddled with disparate special interests and
value conflicts. Culturally and demographically it is a very different
country today than in the 1800's, which adds to value confusion. Honest
discussions of America's many conflicts are often repressed and distorted
in our national media in the name of preserving unifying ideology.
To borrow some imagery from the Wizard of Oz, our society
finds it extraordinarily hard to honestly sort out the real issues
and define the heart we need for Tin Man and the courage we need for
Cowardly Lion. We are no longer even on a yellow brick road.
mean "yellow brick road" both figuratively and literally,
since the yellow
brick road in the children's novel by Frank Baum meant the gold
standard. The Tin Man symbolized the industrial worker, and more generally
industrialization, and the Cowardly Lion symbolized "populist"
politician William Jennings Bryan, and more generally "politics"
and perverted remnants of Jacksonian and Jeffersonian democracy. In
this paper the Tin Man symbolizes the robot, and more generally advanced
automation and its human programmers.
can invoke pro-robot arguments to counter every negative one. For
example libertarian commentator Lew Rockwell has written
about how "Every bad thing you can name [about the Internet]
is matched by a more powerful good thing." The Internet gives
people more access to new ideas, skirts old information monopolists,
and helps evolve more sane social policy.
I would ask why we can not extend Mr. Rockwell's comments about the
Internet to robots, and hope that the eventual dispersion of cheap
robot power might help to make people more economically self-sufficient
on a grass roots level. Perhaps with the advent of mobile robots,
the continuing industrial revolution is going through a disaggregation
phase that will mean more dispersed, flexible work throughout industry
and society. Perhaps this will ultimately mean more decentralized
economic and political power throughout the world, compared to the
highly centralized governments of the 20th century that coincided
with consolidated factory complexes and the big city centers. The
latter pulled most Americans off the self-sufficient homesteads that
coincided with 19th century Jeffersonian and Jacksonian democracy.
All of this might on balance also end up being a good thing towards
the advancement of both human liberty and more accountable government.
regard to Mr. Brain's concern that a robot invasion could bring 50%
unemployment by the year 2050, I am more concerned that America could
experience an Argentina-style meltdown and massive unemployment beginning
some time over the next five to ten years because of America's
failure to fully embrace automation over the last several
decades as well as going forward from here.
one long paragraph, I would like to touch upon some of the serious
social issues typically ignored by people who attack robots.
has less than half as many engineers and more than 40 times as many
lawyers per capita as Japan. (Please note the Grandfather economic
report chart showing how lawyers per capita is now inversely
correlated with balance of trade health. This may suggest a society
quietly warring within). America's extreme "free trade"
policies are based on a self-destructive principal that "charity"
(technology reinvestment preference and trade secret giveaways) begins
with alien peoples rather than ones own kind, who are further penalized
with heavy taxation, regulation, and affirmative action and quota
hiring requirements that undermine meritocracy. Forbes editor
Rich Karlgaard commented
in the Sept 6, 2004 issue, "America's immigration policy is also
tilted in the wrong direction -towards uneducated workers and against
educated ones," a point also made in Alien
Nation by Peter Brimelow. The priority in America since the
LBJ "Great Society" administration has involved Big
Government growth and intervention, social reengineering, massive
pork barrel and social transfer payment spending, overseas bailouts
of NY City-based big money center banks, and increasing foreign entanglements.
Foreign alliances have included expansion of NATO up to Russia's borders,
a special relationship with Israel, and "New World Order"
global cop interventionist
schemes that have ranged from Africa and Asia to Europe and Latin
America. The U.S. has divorced itself from focusing upon real automation
engineering or economic progress within its own borders. Ten of America's
largest Wall Street firms paid
$1.4 billion in fines in 2003 for defrauding investors (not a
good sign regarding honest, rational entrepreneurial calculation,
but instead spotlighting rising greed, alienation, and immediate gratification).
America has lost over
half its manufacturing capacity as a percentage of GDP in the
last fifty years, contributing to its chronic trade deficits and out
of control indebtedness. In fact, the noteworthy Grandfather Economic
Report shows alarming deterioration in "vital
signs" that include education
quality performance, international
Dr. Laurence Kotlikoff of Boston University points out that with $51
trillion in un-funded liabilities the U.S. is de facto bankrupt.
According to some recent estimates, America's financial system might
now have as much as $170 trillion in unregulated derivatives (Warren
of Mass Financial Destruction"), perhaps seventeen times
America's GDP and more than double the amount that existed during
the Long Term Capital Management crisis in 1998. A "Perfect
Storm" scenario could trigger a financial meltdown far too
big for the Fed to contain. The Fed has been pumping up the money
supply at a rate of roughly 10% a year for the last
decade, and will likely kick into a hyperinflationary
mode in the near future. The Fed will
be forced to create even more money to buy into growing debt
and trade deficits that foreigners are increasingly walking away
Given all of the aforementioned rising problems, we are beginning
to see more public criticism, ranging from Gore Vidal's 1994 National
Press Club address on the Left, to Thomas Chittum's Civil
War II on the Right, that question America's ability to hold together
in the 21st Century.
of the aforementioned ultimately involve serious human social problems,
not robot problems. The Roman Empire had similar problems during its
decadent phases, when robots were not an issue. Scapegoating robots
is not the answer.
notion in Manna that robots will produce so many goods that
private property owners will comprise a stingy impediment to the distribution
of the new abundance is nothing new. Similar sentiments existed towards
factory owners in the early phases of the Industrial Revolution prior
to the publication of the Communist
Manifesto in 1848.
property is commonly abolished by the state and redistributed during
national emergencies and to feed starving armies. This really means
"relief" or "welfare" for people in extreme circumstances
incapable of earning a living and engaging in entrepreneurial calculation.
terms of sustaining a viable and competitive economic system, under
normal circumstances radical socialism, which entails the elimination
of most private property and the "public," "government,"
or "collective" control of most industries, has always been
a disaster compared to a free enterprise private property system.
Socialist intervention destroys the free market pricing system an
economy requires to efficiently coordinate and balance its myriad
activities on a decentralized level. It is impossible to engage in
rational entrepreneurial calculation if the factors of production
or profit incentives can be expropriated away. Socialist "central
planning" has always been relatively clumsy and inefficient.
a sociobiological viewpoint, radical socialism is frequently based
on misdirected instinctive envy and misguided instinctive altruism
and affiliativeness. It usually penalizes the productive while rewarding
the nonproductive. In addition man, like all other mammals, has strong
territorial instincts that will never be eliminated by modern liberal
propaganda. Eliminating private property demarcation lines can create
huge territorial ambiguities that can lead to much
greater conflicts later on. Radical socialism can cause de facto
property control to gravitate to the leaders of what effectively becomes
a plantation society. In other words, radical socialism can be the
ideological pheromone that parasites (or in human terms, criminals
or alien exploiters) propagate to invade and strip away territorial
defenses within a host society and rule it by brutal dictatorship.
bottom line is that if a society has the overall intellectual capacity
and level of honesty and social efficiency necessary to sustain technological
advancement, it should stay with a private property free enterprise
Dr. Murray Rothbard
restated many key ideas voiced by this man
us briefly look at an example of an economic disaster that got blamed
on automation when the real underlying causes involved special interests
and human social policy problems. The late Dr.
Murray N. Rothbard argued in his classic work America's
Great Depression that a major underlying cause of the Great
Depression involved the aggressive expansion of America's credit system
and money supply. All of this started with the Federal Reserve System
created in 1913, and proceeded with World War I mobilization and accelerated
through the 1920's. The Fed also promoted increasingly aggressive
fractional reserve bank lending policies. This made a lot of insiders
richer, to include banking interests with private ownership shares
in the Federal Reserve System. It also created a huge bubble that
eventually imploded. Incidentally, the Federal Reserve System has
delivered on its original promises or been
audited. Its negative impact was predicted by Thomas Jefferson
and other founding fathers who vehemently and explicitly opposed the
creation of a national central bank in order to preserve individual
and regional liberty.
the post-bubble mess of the early 1930's, the U.S. Government implemented
price controls. This bought votes for pork barrel politicians and
served certain special interests, but it also undermined free market
clearance and the redeployment of mal-invested assets. Both the Hoover
and FDR Administrations were highly interventionist. FDR hiked certain
tax rates over 90%, which the super rich could work around with loopholes.
This undermined straightforward entrepreneurial capital formation
and the creation of new jobs, plant, and equipment. FDR promoted the
bailout of reckless and dysfunctional banks, particularly those tied
in with the Fed. Today this has led to bigger and vastly more reckless
banks who have spawned today's unregulated derivatives growth. According
Rothbard, these and other interventionist policies of the FDR
Administration actually helped to prolong and deepen the Depression.
historian Dr. Jeffrey Hummel compares the interventionist, socialistic
FDR administration to the vastly superior performance of the noninterventionist
Martin Van Buren administration (1837-1841) in his lecture: "Martin
Van Buren: What Greatness Really Means." The Van Buren administration
stood back and allowed the free market to sort out a stock market
crash and a very serious business recession. America was on the gold
standard and had no highly leveraged fractional reserve banking system
or Fed-like central bank that could pump out fiat "paper money"
and credit like a Sorcerer's Apprentice. The free market cleansed
and sorted out the system in only two years, which then proceeded
on a strong steady growth track. Martin Van Buren, incidentally, steered
certain Americans away from waging aggressive war on Canada, which
according Dr. Hummel is another reason why he should be considered
one of America's greatest presidents.
back to computers and robots, they may actually serve to enhance private
property and free enterprise, and increase rather than decrease forms
of scarcity. Computers will make it easier to track and record equity
ownership in greater detail and precision, a process that has already
accelerated with online stock purchases. Rather than reduce scarcity,
which would be reflected in falling prices, robots may create a demand
for complex products that consume basic materials faster than they
can be extracted, refined, or transported from the earth or other
places in our galaxy, putting upward pressure on certain commodity
prices. We have seen an aspect of this paradox with the entrance of
China into the world economy, whose low cost manufacturing and assembly
labor initially helped reduce prices for consumer electronics items,
yet whose burgeoning economy has put long term upward pressure on
the prices of basic commodities.
I address these and other abstract social issues, I begin to get ahead
of myself. Obviously it is hard to address automation economic issues
without addressing broader economic issues. However, we
need to start by reviewing the history of automation to see what kinds
of legitimate inferences we can make regarding its probable impact
on human societies, while trying to keep constant "noise"
related to other factors such as geopolitical events, cultural values,
and types of government.
AUTOMATION ECONOMICS 101
first question we need to ask is as follows: All other things being
equal, what does automation tend to do for a society?
in One Lesson, Henry Hazlitt pointed out that while it is
true that machines obsolete certain jobs, it is also true that they
simultaneously create new jobs elsewhere. They create new jobs designing
and tending to the new machinery. They create new jobs distributing
the additional goods that are produced. The lower cost of the goods
leaves more money in the pocket of the consumer, whose spending creates
new jobs elsewhere. The increased profits of the manufacturer creates
a greater pool of savings for him to reinvest, either in new plant
and equipment, or as general investment capital. The greater number
of goods produced at lower costs add more to the physical infrastructure
of the society, which in turn helps it to create even better machinery
to create even more higher quality goods at even lower costs.
simply creating human jobs is the only goal, it is true that you can
always create or protect more jobs by eliminating machinery and returning
society to a more primitive level. The problem is that the jobs are
of lower productive quality. The society that has too many of them
may eventually be overpowered by more efficient outside predators.
points out that we can create tens of thousands of jobs overnight
if we pass a law that requires that all goods carried between Chicago
to New York have to be done in Neolithic style --on people's backs.
This kind of "make work" would seem ludicrous to most Americans
today. Looking back at the 19th century, we can see how it would have
been ludicrous to have thwarted automobile-related automation to protect
wagon teamster jobs. People fifty years from now will probably think
the same thing about any "make work" or "keep job"
decisions today to not install robots.
points out how certain emerging industries grew in jobs as
they added automation. For example, the auto industry grew from 140,000
people in 1910 to 941,000 people in 1973. Aviation and aircraft parts
went from zero in 1900 to 514,000 by 1973. (Hazlitt, page 58). My
guess is that the robot industry will also be adding tons of jobs
in the decades ahead.
many ways the whole human "job" concept currently used as
an intellectual construct is grossly inadequate. We need to ask deeper
questions about the tasks accomplished and the overall "work
smarter" quality of the jobs that we are creating. This even
became clear to savvy economists well before the 20th century. According
to Hazlitt (page 51) "The power capacity already being exerted
by the steam engines of the world in existence and working in the
year 1887 has been estimated by the Bureau of Statistics in Berlin
as equivalent to that of the 200,000,000 horses, representing approximately
1,000,000,000 men; or at least three times the working population
of the earth..."
in other words the machinery of the Industrial Revolution up until
1887 had added job-equivalents of three times the earth's
working population compared to an earlier period of, say, the 17th
century, and yet in 1887 we continued to see something close to full
human employment in both the United States and England. This
was despite the fact that the populations of both England and the
US more than doubled in the mid-19th century compared to the 18th
the impact of machinery is to eliminate human jobs, there should have
been increasingly massive unemployment towards the latter part of
the 19th century coinciding with the progression of the Industrial
Revolution. Instead, the addition of automation was part of an entrepreneurial
environment that continuously added more job-equivalents compared
to an earlier era for both machines and for humans.
Perhaps the real job we should focus on in society involves a process
of continually innovating and creating better and more effective machines
that get more productive work accomplished per worker, as opposed
to trying to cocoon ourselves inside a repetitive work routine for
fixed wages. Until we build star ships that take us to far galaxies,
there will always be plenty of jobs that need to be performed, and
even then I would expect the human innovative imagination to reach
even further. According to some economic theorists, human needs are
insatiable, therefore there may be no limit to the extent that each
human worker can be empowered with robot production.
achievements of workers and industrialists during the 1800's are remarkable
given the lack of resources we take for granted today. It is very
important for our social issues analysis that we take a closer look
at these societies.
and Britain were the world industrial leaders during the 19th century.
They were both on a gold standard during most of this period. Despite
economic set-backs of the Napoleonic Wars for Britain, and the Civil
War and War of 1812 for the US, there were long stretches in both
countries where economic growth rates averaged 5% a year, an amazing
feat by late 20th century American and British standards. In Great
Britain money actually doubled in value within a century. (I discuss
this in more detail in Part
One and Part
Two of my series of articles about gold.) Average living standards
more than doubled by the end of the century. There was no significant
government stimulus or intervention in the economies. Except for times
of war, there was no central bank or personal or corporate income
tax. Total government prior to the War Between the States comprised
less than 5% of GDP, compared to over 40% today. The US government
raised its revenues from tariffs and land sales. Private industry
was able to make massive and continual reinvestments in itself.
were relatively laissez faire economies with stable monetary conditions
favored competent entrepreneurial calculation. These societies promoted
personal savings, a strong work ethic, and a deep sense of personal
honor. Most non-black Americans in the early 1800's were of Northern
European descent or anthropologically of a Nordic background.
same was true of the elite that controlled the levers of power in
banking, media, and industry. Their sense of shared ethnic history,
racial pride, and traditions of innovation and individual liberty
provided a strong incentive to work honestly and harmoneously
their neighbors without requiring top-down governmental oversight.
Honesty aided rational long term entrepreneurial calculation and teamwork.
Private charities, family and community ties, and concern by industrialists
for their workers, later denounced by Marxists as "paternalism,"
provided economic shock absorbers. An emphasis on foresight, delayed
gratification, and individual responsibility and initiative helped
workers adapt to changing industrial conditions.
to Dr. Ralph Raico
in his lecture "Classical
Liberal Historians," the French observer Alexis de Tocqueville
noted in the mid-1800's that a distinguishing feature of American
society compared to their European counterparts was the ability of
Americans to organize themselves on a local level without hardly any
government. De Tocqueville noted that France, with a population roughly
the same size as America, had thirty times as many governmental bureaucrats.
Dr. Raico added that when the Russian anarchist Mikhail
Bakunin visited America in the mid-1800's after fleeing Czarist
police, he said that Americans had little need for his anarchism because
they had so little government to begin with. Finally, Dr. Raico observed
that classical American liberalism should not be confused with modern
liberalism, which takes opposite positions on many key issues, to
include government size and intervention.
his lecture, "The
Industrial Revolution," Dr. Raico points out that a report
to the English Parliament in the early 1800's that helped give rise
to the "Dark Satanic Mills" and other "exploitation"
propaganda used by Marxists was extremely biased and was based on
selective anecdotal evidence. Apparently the Tory party, which had
slave-holders, was looking for ways to discredit their political opponents,
who consisted of budding industrialists. These industrialists tended
to be anti-slavery, so this was the Tory way of saying, "Who
are you to criticize us?"
serious abuses did in fact take place, as is true in virtually any
political and economic system, the Industrial Revolution did a lot
for people, particularly those who had lived out in the British countryside.
According to some studies, many of these rural people previously had
to spend 60% of their income on food just to stay alive, and could
rarely afford new clothes. Dr. Raico pointed out that if you do not
like the Industrial Revolution, look at places which at that time
never had one, such as Ireland during the potato famine of the 1840's
(or Calcutta India, for that matter). The same potato blight that
hit Ireland also impacted on Scotland, Holland, and Northern Germany,
but did not create anywhere near the same economic catastrophe in
large part because the people in these other areas had industry to
fall back on, whereas constant civil conflict with absentee landholders
for centuries in Ireland had discouraged local investment.
summarize this section, we see that automation helps to increase the
quantity and quality of goods while driving down their costs. If managed
properly, it can rapidly expand what could be considered "job-equivalents"
and productive output per worker relative to what existed prior to
the advent of new automation. It adds new jobs or productive output
per human worker at a faster rate than the jobs it obsoletes. A corollary
of this is that it also expands the division of labor, increases specialization,
and increases the demand for technological devices and services. The
best driver of this whole process is private entrepreneurial calculation,
not government bureaucracy, which tends to be inefficient and wasteful.
increasing the physical stock of goods and services in a society,
automation clearly increases its overall wealth. This gives people
more options regarding how they deal with life. The average citizen
in the US and Britain who was involved in the Industrial Revolution
had far more personal freedom than the average Irishman who got caught
in the potato famine of the 1840'. Automation, if managed wisely,
can help increase political liberty.
also helps to create a shift in the average character of jobs in an
economy. For starters, automation causes people to have many more
machines in their lives both at home and at work. Their lives become
more oriented towards operating, maintaining, and fixing mechanical
and technical things. We can expect that trend to continue when people
begin to supervise more robots. They already manage quasi-robots in
their homes with washing machines and dish washers, and more recently
with Roombas and robo-mowers.
tends to increase the average intellectual content of productive human
jobs. It also increases the number of service jobs in an economy related
to managing and enjoying the additional wealth created by machines.
Some of the most important job creation in this area involve financial
services, government, the legal profession, and luxury goods and leisure
is an interesting long term historical correlation between the existence
of competitive manufacturing capacity within a country and the number
of service jobs that it supports and its overall standard of living.
When societies lose their ability to manufacture tradable goods within
their own territory, as in the case of Argentina during much of the
20th century, or as in the case of the United States in the past few
decades, they tend to lose meaningful service jobs and suffer a relative
decline in their standard of living. Conversely, a country such as
Ireland that lured in competitive physical industry with tax incentives
in the 1970's and 1980's, or China which has steadily grown its low
cost manufacturing and assembly operations in the past two decades,
tend to see a steady rise in service jobs and economic growth. Even
in regard to within the U.S., the book The
Southern Advantage by Joseph Hollingsworth argues that the
South has had the fastest job growth rate in America in recent decades
because it has been more successful in luring manufacturing than any
other region of the country.
next important question we need to ask is what does automation NOT
do for us?
automation can create more wealth, and provide people with more time
and resources to evolve better policies to manage, consume, or reinvest
that wealth, it still does not prevent incompetent people from wasting
their wealth or prevent alien or criminal interests from seizing control
and plundering a society. Technology is simply a form of leverage
that allows people to do more. Period.
way in which technology is used often reflects the underlying character
of the human society. So when things go wrong with technology, that
really means that we are dealing with social issues regarding the
people who control or create the technology, and not the technology
itself. Technology itself does not solve a very ancient problem, namely
how the people in society who are productive can defend themselves
against the elements in society that live by fraud and plunder.
this sense, the part of the robot debate that involves its most advanced
technology becomes very similar to the nuclear proliferation debate.
The degree of leverage in robot technology is beginning to progress
to the point that people may begin to worry about whose hands it might
fall into. Obviously societies that appear relatively stable, prosperous,
and non aggressive such as Japan and the Scandinavian countries may
make us feel more comfortable about who will take robotics to a higher
level compared to various Third World countries whose instability,
aggressiveness, irresponsibility, or overtly criminal leadership make
us feel much less uncomfortable. Paradoxically, the strategic nature
of this technology should also create an analogy with the nuclear
arms race of the Cold War, where those nations that have leadership
will feel compelled to pour ever more resources into robotic development
to avoid falling behind.
do societies go about advancing automation?
already know what the values, talent, and social organization should
look like because America and Britain had enough of all of these things
back in the 1800's to make incredible progress.
need to save more, delay gratification, and focus on the production
of real and useful things rather than engage in gambling and "devil
take the hindmost" financial speculation. We need more technically-savvy,
smart people. We need a meritocracy so the most capable people rise
to the top. We need individual flexibility so that people can more
easily shift into new jobs if their current jobs become obsolete.
We need shared cultural values so that tech companies can develop
teamwork and long term trust. We need personal honor so that investors
can trust entrepreneurs with their capital and trust their progress
reports. We also need honesty so that entrepreneurs can receive more
accurate information from other members of society on which to base
entrepreneurial calculation. . Rather than relying solely on government,
we need foresight and savings on a local level. We need to recognize
the importance of family support and frankly a good measure of corporate
ethics and paternalism to help workers grow in their jobs and handle
the hard knocks of capitalism. We need government that works with
rather than against business, and does not lie to us about the economy
and its policies. We need allow communities in America to organize
themselves along lines that are natural to them, rather than according
to government social re-engineering criteria. We need to live in a
society with enough heart-felt commonality so that people can work
productively together through common sense rather than massive government
This is the
yellow brick road. I know that what I am writing is beginning to sound
like a sermon. You have no doubt heard these views expressed many
times before, particularly from populist politicians who stump this
line to win votes. Unfortunately once they get settled in their new
offices in Washington, D.C., they have this amazing way of turning
into Cowardly Lions with totally different decision criteria. We also
get tantalized with this rhetoric by America's national media, which
also have this amazing way of tantalizing us with tidbits of early
American rhetoric while simultaneously spin-doctoring us in the direction
of modern liberal values that encourage society to go in the exact
VI of series
Two ..... Part
Three .. ...Part
report is for research/informational purposes only, and should not
be construed as a recommendation of any security. Information contained
herein has been compiled from sources believed to be reliable. There
is however, no guarantee of its accuracy or completeness.
Bill Fox is VP/Investment Strategist, America First
Trust. Bill welcomes phone calls and email responses to this article.
His most current contact
information is at his web site: www.amfir.com.