Book Club: The Code [Robot] Economy (pt. 2)

Welcome to EvX’s book club. Today we’re discussing Philip Auerswald’s The Code Economy, Introduction.

I’ve been discussing the robot economy for years (though not necessarily via the blog.) What happens when robots take over most of the productive jobs? Most humans were once involved in directly producing the necessities of human life–food, clothing, and shelter, but mostly food. Today, machines have eliminated most food and garment production jobs. One tractor easily plows many more acres in a day than a horse or mule team did in the 1800s, allowing one man to produce as much food as dozens (or hundreds) once did.

What happened to those ex-farmers? Most of us are employed in new professions that didn’t exist (eg, computer specialist) or barely existed (health care), but there are always those who can’t find employment–and unemployment isn’t evenly distributed.

Black unemployment rate

Since 1948, the overall employment rate has rarely exceeded 7.5%; the rate for whites has been slightly lower. By contrast, the black unemployment rate has rarely dipped below 10% (since 1972, the best data I have.) The black unemployment rate has only gone below 7.5 three times–for one month in 1999, one month in 2000, and since mid-2017. 6.6% in April, 2018 is the all-time low for black unemployment. (The white record, 3.0%, was set in the ’60s.)

(As Auerswald points out, “unemployment” was a virtually unknown concept in the Medieval economy, where social station automatically dictated most people’s jobs for life.)

Now I know the books are cooked and “unemployment” figures are kept artificially low by shunting many of the unemployed into the ranks of the officially “disabled,” who aren’t counted in the statistics, but no matter how you count the numbers, blacks struggle to find jobs at the same rates as whites–a problem they didn’t face in the pre-industrial, agricultural economy (though that economy caused suffering in its own way.)

A quick glance at measures of black and white educational attainment explains most of the employment gap–blacks graduate from school at lower rates, are less likely to earn a college degree, and overall have worse SAT/ACT scores. In an increasingly “post-industrial,” knowledge-based economy where most unskilled labor can be performed by robots, what happens to unskilled humans?

What happens when all of the McDonald’s employees have been replaced by robots and computers? When even the advice given by lawyers and accountants can be more cheaply delivered by an app on your smartphone? What if society, eventually, doesn’t need humans to perform most jobs?

Will most people simply be unemployed, ruled over by the robot-owning elite and the lucky few who program the robots? Will new forms of work we haven’t even begun to dream of emerge? Will we adopt some form of universal basic income, or descend into neo-feudalism? Will we have a permanent underclass of people with no hope of success in the current economy, either despairing at their inability to live successful lives or living slothfully off the efforts of others?

Here lies the crux of Auerswald’s thesis. He provides four possible arguments for how the “advance of code” (ie, the accumulation of technological knowledge and innovation,) could turn out for humans.

The Rifkin View:

  1. The power of code is growing at an exponential rate.
  2. Code nearly perfectly substitutes for human capabilities.
  3. Therefore the (relative) power of human capabilities is shrinking at an exponential rate.

If so, we should be deeply worried.

The Kurzweil View:

  1. The power of code is growing at an exponential rate.
  2. Code nearly perfectly complements human capabilities.
  3. Therefore the (absolute) power of human capabilities is growing at an exponential rate.

If so, we may look forward to the cyborg singularity

The Auerswald View:

  1. The power of code is growing at an exponential rate [at least we all agree on something.]
  2. Code only partially substitutes for human capabilities.
  3. Therefore the (relative) power of human capabilities is shrinking at an exponential rate in those categories of work that can be performed by computers, but not in others.

Auerswald notes:

In other words, where Kurzweil talks about an impeding code-induced Singularity, the reality looks much more like one code-induced bifurcation–the division of labor between humans and machines–after another.

The answer to the question, “Is there anything that humans can do better than digital computers?” turns out to be fairly simple: humans are better at being human.


1. Creating and improving code is a key part of what we human beings do. It’s how we invent the future by building on the past.

2. The evolution of the economy is driven by the advance of code. Understanding this advance is therefore fundamental to economics, and to much of human history.

3. When we create and advance code we don’t just invent new toys, we produce new forms of meaning, new experiences, and new ways of making our way in the world.

What do you think?

7 thoughts on “Book Club: The Code [Robot] Economy (pt. 2)

  1. I can’t decide whether to be optimistic or pessimistic on an intellectual level (I seem to be an optimist by nature, which I try to keep in check with a heavy dose if cynicism…) But one thing I find annoying when reading popular press articles tangentially related to this topic is when they basically list attributes that are strongly correlated with intelligence and strongly hereditary, and then nonchalantly say how all we need to do is teach kids these skills…

    Liked by 1 person

  2. 1) I’m not sure what kind of data would clearly favor Auerswald’s view over Rifkin’s view. Even if code were a perfect substitute for people you wouldn’t expect progress in all areas to be equally fast so for the longest time it would still look like Auerswald might be right. Sure, historically people have always underestimated how hard it will be to replace people and substitutions were imperfect. But it’s just not clear to me to what extent we should discount the historical data in favor of the ‘this time is different argument’.

    2) Kurzweil’s model’s conclusions are perfectly compatible with those of the other two. I think the terminology of substitutes/complements is somewhat unfortunate here, at least if taken in the technical sense.

    3) I don’t know if ‘humans are better at being human’ is a very useful statement. If it’s a tautology, great. If you actually want it to be useful, what kinds of measurements are important? And once we have those, why wouldn’t other kinds of code outperform humans along all the relevant dimensions?


  3. The Rifkin View is right and the others are wrong unless we merge with the machines. They are also wrong to focus on code. In this case the chicken and the egg the processor comes first. Computing power per dollar is what drives everything. The more computing power you have the more you can let genetic algorithms and neural nets program themselves. This is of course very dangerous but I can’t see people not doing this because it’s so powerful. Irresistible like Midas touch. It may very well be that humans are the precursors for silicon life as bacteria were for us.

    The real question is whether they will let us live or not? We would be their closest competitors for a short time. They would surpass us very soon. Maybe even in my lifetime and I’m an old guy. Certainly in your children’s lifetime. It’s coming extremely fast. Look at this gif of computing power, how fast it is doubling and where we are time wise.

    I’ve linked this before but in case someone hasn’t seen it it’s very appropriate. It a power-point from Dennis M. Bushnel chief scientist at NASA Langley Research Center about Defense and technology. Don’t miss it, it’s short and to the point but very eye opening.

    “Dennis M. Bushnell, Future Strategic Issues/Future Warfare [Circa 2025] ”

    Page 70 gives the computing power trend and around 2025 we get human level computation for $1000. 2025 is bad but notice it says,”…By 2030, PC has collective computing power of a town full of human

    The whole thing is completely mind blowing. It’s not extopian technolust either. It’s based on fairly well known trends and it’s in no way some far out of bounds star trek tech. Simple business calculations. It’s difficult to think about.

    One of the extrapolations I see from this is widespread disorder and the break down of centralized control. There was a book that influenced me greatly, “The Sovereign Individual: Mastering the Transition to the Information Age” (1999)” which I mentioned here before. The authors say the structure of Governments and society is due to the technological balance of power between offense and defense. When offense is more powerful you get large States with mass armies like now. This is falling though. Defense is gaining ground rapidly due to the microprocessor and all the advances that come with it. Can’t remember where but some government official was recently complaining about how 3D manufacturing would allow people to make guns. It would also allow them to make anti-tank weapons. Any decent anti-tank weapon can defeat most armor today. Especially if you can shoot the tank in a weaker spot.

    This all leads up to disorder. Good reason to stock up on food.

    On the other hand the computers will become so powerful so fast that they may, if they decide to keep us around, just force us to behave. They could infect us all with a virus that fills us with love for each other.

    The darker path is equating the uber computer with human behavior. I’m firmly convinced that a huge, massive problem in the world is psychopaths. I see them as a difference strain of humans. I think humans before civilization used to be mostly psychopaths. The Neanderthals were in Europe for 250,000 years or so and did not much of anything. The consensus is they were very violent. In actuality they were much more like animals. Animals, unless you are close offspring, are only interested in themselves. Anyone in their territory without the power to control them should be exterminated. When civilization did pop up it progressed fast in terms of our history overall. A scientific research program in Russia made me think differently about early Man. The Russian domesticated red fox study.

    I believe that this experiment, while controlling for tameness brought fourth another trait that they haven’t acknowledged. Empathy. I don’t think you can have civilization without empathy. Blacks score very low on empathy and everywhere they predominate there is exactly…no empathy. A total Hobbesian world of the vicious and strong preying on the weak. Psychologist have commented on how cold some of the ghetto Blacks are showing no remorse for the most vile crimes of violence against other people. Whites I think have very high levels of empathy. I think non close kin marriage made some of this possible and I believe WWI and WWII vastly accelerated the tend by killing off the most aggressive and psychopathic Whites in mass numbers. I also believe psychopathic numbers are increasing because of the long peace we’ve had.

    Sam J’s theory of civilization,”Civilization came about because of the rise of empathy. This allowed people to work together”.

    Sam J’s theory of civilization, ”Empathy is necessary to form civilization. As capacity for empathy rose civilization rose with it.”

    Now you might think I’m rambling but there’s a point here. We don’t know how to make a human brain but even less how to program empathy. The real danger is the computer uber lord will have…no empathy. That’s the real danger. We see what psychopaths can do now. I and many others believe the deep State is just a bunch of psychopaths whose lust for power with no morals is driving the planet into the dirt. The uber computer will be much more powerful than any of them.

    No I don’t sleep well.


  4. I think that the unintended consequences will catastrophic.
    What will happen after a few generations of fully automated agriculture? Humans would lost all of its real knowledge of the issue, as empirical, technical, practising skills are much more valuable to operate, discover and invent than theoretical descriptions.
    Not even mentioning problem variables or new variables that could arise and wouldn’t be described in earlier materials (just imagine if fully automation was applied before people discovering about crop rotation and soil exhaustion?).

    These concerns apply to every area. We can already see that, many craft jobs simply disappeared, and even without technology taking over, people are forgetting how to cook fast.

    This won’t end up good, specially because low IQ is spreading.


  5. What happens when xxx take over most of the productive jobs? Programming is among the most productive occupations currently. Just from looking across my desk I can assure you Americans are already a minority in this field here in SF. It was not so bad 10 years ago.

    In a world where Americans are going to become a minority in their own country in my lifetime there are probably more urgent things to be scared of. The rest of formerly civilized world is somewhat behind but is very much on the same trend line. You’d be probably surprised to know that even in poor countries like Russia it is already a problem. It will not be the robots replacing us.

    Long before GAI is invented a huge number of misallocations will have to be reconciled in the world. A calamity it would take to fix them is likely to set the civilization back far enough to return competition with robots to the realm of scifi. On a brighter side, following the example of Chinese “social credit” you could be forced to be a “robot” in a centrally-planned dystopian future.


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