Saturday, December 31, 2011

America and the growth of bureaucracies

What we see happening to America is all these bureaucracies and associated contractors are propelling growth of their area with no regard for the greater good of the society.

Every year the defense department wants to expand its budget and scope.
Every year the prison system wants more prisoners and more money spent per prisoner. Bot the private and public prisons want to expand, along with their unions.
Every year the medical industry wants to grow revenue with no regard for whether this benefits patients.

Education is yet another example, the USA is now spending more per student on education than all the major European nations. But because education is seen to be failing the cries are for more money to the system.

I had to laugh in my area one of the politicians was quoting a police official saying that we need to spend more on policing. Roofer arguing we should spend more on roofing.

At some point the nation needs centralized leadership who thinks about the big picture. But that seems a long way off.

Thursday, December 22, 2011

Super Genius Productivity

One super genius programmer who creates a better mousetrap which say gives a 5% productivity improvement across 200,000 workers in a specific job around the entire globe.. that super genius has godlike productivity.

It is also a permanent increase. His advance is not just 200,000*5%*average wage... its the net present value of the future savings of that forever. Then next year he can work on the next 5%.

Wednesday, December 21, 2011

Betting against technological advance the conventional view

The Japanese also believed that useful generalized robots were coming int he 1990's and spent billions researching it. They eventually had to admit to themselves that the hardware/software just wasn't there and wouldn't be for quite awhile.

If you look over the last 15 years there has been an explosion in AI. One small example is 15 years ago airlines did the maximization of seat use on their flights with humans, and it wasn't sure how long it would take computers to be able to do it. Today computers do it all, booking the seats, setting pricing, scheduling their flights to maximize revenues. Its almost taken for granted that a computer would do those things now.

Also realize the commercial incentive is going to be insane. Right now there is no point trying to develop an AI robot. Because your average computer still does about 100,000 times less FLOPS than a human brain. That is a big step up from 20 million times less FLOPS a decade ago, but still something that a human brain would recognize in 1 second, would take the robot over 24 hours to figure out!!

However in the 2030's when a computer might figure the same question out in 1 second, its a different picture. At that point the googles, microsofts, facebooks and friends of 2030's are going to be in a race to bring out useful AI, and updating at a furious pace. No doubt there will be many hard problems.. but they will be able to put thousands of super genius programmers and philosophers and working on them.

The problem with the people who are betting against technology and saying its impossible.. is they are betting that of thousands of teams of geniuses around the world, some with near unlimited budgets, none of them will make any breakthroughs.

Its the same problem with the peak oil crowd. They are always betting that mankind will never be able to come up with new ingenius ways of extracting the oil. All it takes is one engineer somewhere to make a breakthrough and their theory is shattered.

Tuesday, December 20, 2011

Societal Changes in early days of Automation

Yes its going to be bigger change than we can really conceive of.  Most people even those who actually think about these things are so short-sighted, they say things like 'wow that is going to suck for low end manual workers.  Good thing I do knowledge work, a computer can never replace that.'
I argue that even though we are at the very early stages of automation.. we are already seeing profound changes across the Western industrialized nations.  Britain is now losing half a million net jobs every year like clock work.

It shakes the entire basis of our economy.  An economy driven by the mass consumer market.. Those consumers earning money to consume with from selling their labour in a competitive labour market.  If you upset that balance in the labour market between supply and demand you can cripple wages and thus their ability to consume.

Traktion argues powerfully that declining prices is a good thing.. and the price of things will deflate faster than wages fall.  One minor problem our monetary system is a debt backed system, where the nominal amount of hte money you owe remains the same.. and it only really works with inflation. 

Otherwise it is mathematically impossible for everyone to pay back all the loans.  The collapse of the banking system is a logical outcome of a broad deflation.  And that is just one of the consequences.

Monday, December 19, 2011

Indirect impacts of mass technology redundancy in your society

Something that is already occuring is as technology automates millions out of work... it has a growing and ultimately catastrophic impact even on those who are still in work.

Firstly there is an evaporation of their market. I think a good estimate in the UK is we are losing ~half a million jobs a year. A net loss of that. About 1% of the labour force each year. Well say you live in a town where the steel mill gets retrofited and now needs only 2,500 workers instead of 6,000. You are talking a virtual obliteration of the town's economy.. I've seen it in the North of England.

This obliteration affects near all the local businesses and their employees. This is one of the reasons Brits are fleeing to 'greater London'.. sort of a last stand of the old economy. Like a regime dying under assault from another power, eventually the remaining regime forces coalesce in the capital city.

The second indirect assault comes from the impact that a flood of now unemployed workers exerts on the remaining workers. Say you are fairly well making £25 pounds an hour. You are smart, good with customers.. but ultimately like all humans have flaws too. Well many of the now unemployed are also smart, hard working.. and now desperate. Some say they can learn and take over your job and would be happy to do it for £15 an hour.

A report on the front page of the forum said 'wages fall for the 5th straight year'. -Entirely predictable in a world of automation and surplus human labour.

Saturday, December 17, 2011

How long until we see a dusting, polishing robot

In the confines of a controlled factory the dexterity of robots is now beyond any human. The Japanese auto industry surpassed what the finest german master craftsman could do in 2002-2003.. forcing the Germans to rush in robotics.

However in the real world robots still have a ways to go. The computing power to even walk around the room is huge. For example each aspect of a step the robot takes changes how the forces of gravity are acting on the robot, as it now is in a different position, plus the momentum is moving in directions. So it has to be able to think ahead. We do that automatically.

Our brain is estimated to do 20 million billion calculations a second by Ray Kurzweil. In the year 2000 a desktop computer reached about 1 billion calculations a second. In 2011 we probably have desktop computers around 500 billion calculations a second. Still 40,000 times out from what the human brain can do.

We will probably see human brain level desktop computers around the mid 2030's.

Where it gets bizarre is a decade later we will probably see desktop computers that have 500 times the brain power as a human brain.

For the task you are describing, sort of a mass produced consumer robot which can dust and polish, I would estimate 2040. Of course such a robot could easily be uploaded with other programs and other arm attachments so it could do nearly every manual job.

Tuesday, December 13, 2011

Wonderpup's breakthrough in labour compensation theory

Wonderpup from housepricecrash forum, made a breakthrough awhile back to realize that the value of your labour in a free market is not in fact based on your production. Although that isa factor int he maximum theoretical amount you could make. Instead the price for your labour is based on the lowest bidding human offering the same labour.

So we see in auto production for example, the first industry to broadly use industrial robots, an astonishing rise in productivity. Production per worker is up 300% just since 1990 in the auto factories! Yet the auto companies have been cutting wages and benefits over that time. Simply because other humans are bidding lower.

As you say a big trend in our society is wages are trending towards zero. At many of the big private employers like the big box retailers and grocers the wages are so low that there is no way a person could live on them. Yet these operations are also immensly productive per man hour! Wages are so low that millions are choosing to go on welfare, which is a pathetically low standard of living, but actually better than what they get working full time. I like your wording, the commodification of labour.

Sunday, December 11, 2011

Declining marginal reward of Working

Say there is 15 million available jobs in the private sector.  And 20 million people who want to work full time.  (most people are worker bees, they don't have the independent thought to open their own business and run it).  That overhang of 5 million people will over time drive down the wages until there is no marginal benefit to working.

And btw as automation, offshoring, immigration, over-regulation and so on make us more efficient, each year the private sector is contracting.

It is simple supply and demand.  Imagine the auto industry in Europe produced 20 million cars every year.  But demand fell off to 15 million cars a year.  Yet the industry kept pumping the cars out.  It would only be a short time until the marginal profit on the cars was nothing - or even losses.  What the industry would do at that point is reduce capacity, as they have done since 2008, until capacity was better aligned with demand.  Alas we can't reduce our population by 5 million easily. 

Thursday, December 8, 2011

Saturday, December 3, 2011

The Nazis and debt free money

The UK has a broad money of ~6 trillion pounds. I would like to see them print 3 trillion pounds and spend it into the economy on national projects over several years.

When Hitler came to power the bankers were lending him money for the first year or so and he was spending that money into the economy. But then the bankers decided to cut Germany off, and the German government was faced with laying off millions of people working on the national projects.. and the economy going back into a depression.

So the Nazis came up with Labour Treasury Certificates. 1 certificate was worth 1 hour of labour for the average worker on the projects. They made the certificates convertible into normal currency. They used this to build factories, railroads, the autobahn, ports, etc.. The bankers had a meltdown and tried to completely cut Germany off. And were running propoganda saying Germany would have hyperinflation, economy going to blow up. 3 years later Germany was the wealthiest country in Europe... this from the poorest country in 1932.

All without the bankers and their debt-money. Some conspiracy theorists argue this is when the bankers started pushing for a world war to take out the Nazi government.

This is the type of things you can do with debt free money:

Just to give you the idea of the scale we could spend on if we wanted and if we had leaders with vision, here are a few examples.

A 1,600 MW French Areva EPR nuclear reactor will probably cost about £5 billion each. A lot cheaper in Asia, but factoring in UK costs. Well the current UK grid is about 78,000 MW. We could build say 30 EPR's bringing in an extra 48,000 MW of baseload generation. And having nearly free electricity for decades to come. Cost of 30 of them is £150 billion pounds. We printed £275 billion so far and simply gave it to the bankers!

There is a serious housing shortage in the country, especially in the southeast. We could build 1 million council houses costing £250,000 each for 250 billion pounds. I mean in London these could be basically high end tall condo buildings for that build cost. Thats still less than we printed and gave to the bankers! Building 1 million council houses would put to work probably 1 million men, when you look at not just construction, but procurement of British made building materials, utilities installation to the houses and infrastructure like roads, water and natural gas to the houses.

For £10 billion a year, we could put to work 50,000 scientists at an annual cost of £200,000 each, to look into adult stem cells and develop that industry for the UK.