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What happens when all of the McDonald’s employees have been replaced by robots and computers?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.

Further:

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?

Unemployment, Disability, and Death

Source: NPR, Bureau of Labor Statistics, Social Security Administration
Credit: Lam Thuy Vo

I’ve been reading about the rise of disability, eg NPR’s Unfit for Work: The Startling Rise of Disability in America:

In the past three decades, the number of Americans who are on disability has skyrocketed… every month, 14 million people now get a disability check from the government. The federal government spends more money each year on cash payments for disabled former workers than it spends on food stamps and welfare combined. … The vast majority of people on federal disability do not work. Yet because they are not technically part of the labor force, they are not counted among the unemployed.

In other words, people on disability don’t show up in any of the places we usually look to see how the economy is doing. But the story of these programs — who goes on them, and why, and what happens after that — is, to a large extent, the story of the U.S. economy. It’s the story not only of an aging workforce, but also of a hidden, increasingly expensive safety net.

A friend of mine was homeless for a couple of decades. During that time he was put on disability. To this day, he doesn’t know why. He kept trying to fight it. It offended his sensibilities that some bureaucrat thought he was “disabled.” He wanted to prove to them that he was able, that he could still work and do valuable things.

He eventually ended up with full-blown schizophrenia, so the government official was probably correct in the first place–people who are homeless for multiple years tend to have something wrong with them, even if they themselves don’t recognize it. But he didn’t have schizophrenia then. Then he was just poor, and “disability” is backup welfare for the poor.

If that doesn’t seem obvious, ask yourself what disability means. For the government, disability isn’t a matter of how much pain you’re in or how many limbs you have; it’s a matter of whether you’re too impaired to work.

The article points out that “unemployment” numbers are kept artificially low by not counting the disabled among the unemployed, even though many of the “disabled” are really “people who can’t get job”:

There’s a story we hear all the time these days that doesn’t, on its face, seem to have anything to do with disability: Local Mill Shuts Down. Or, maybe: Factory To Close. …

But after I got interested in disability, I followed up with some of the guys to see what happened to them after the mill closed. One of them, Scott Birdsall, went to lots of meetings where he learned about retraining programs and educational opportunities. At one meeting, he says, a staff member pulled him aside.

“Scotty, I’m gonna be honest with you,” the guy told him. “There’s nobody gonna hire you … We’re just hiding you guys.” The staff member’s advice to Scott was blunt: “Just suck all the benefits you can out of the system until everything is gone, and then you’re on your own.”

Scott, who was 56 years old at the time, says it was the most real thing anyone had said to him in a while.

There used to be a lot of jobs that you could do with just a high school degree, and that paid enough to be considered middle class. I knew, of course, that those have been disappearing for decades. What surprised me was what has been happening to many of the people who lost those jobs: They’ve been going on disability.

Note: the text string “imm” does not appear anywhere in the article.

In Hale County, Alabama, nearly 1 in 4 working-age adults is on disability.

Source: NPR Bureau of Labor Statistics, Social Security Administration
Credit: Lam Thuy Vo

As the article discusses, since the definition of “disabled” depends on your ability to get (or not) jobs, it depends, in turn, on the kinds of jobs a person is qualified to work. A programmer who has lost both legs in an accident can, with a few accommodations, still program perfectly well, whereas a farmer who needs to be able to do manual labor all day cannot. It’s easier to work despite a back problem if you have a college degree and can qualify for a white-collar job where you can sit down for most of the day. It’s harder if you have to carry heavy objects.

If you have a back problem and the only work you can get involves standing and carrying heavy things, well, that’s going to hurt.

Humans are fine at standing. Being on your feet a lot isn’t abstractly a problem. The Amish do tons of manual labor and they’re fine. But the Amish get to take bathroom breaks whenever they want. They can stretch or sit down if they need to. They get to dictate their own movements.

If you’re working at McDonald’s, your movements are dictated by the needs of the kitchen and the pace of the customers.

And that’s assuming you can get a job:

[Scott] took the advice of the rogue staffer who told him to suck all the benefits he could out of the system. He had a heart attack after the mill closed and figured, “Since I’ve had a bypass, maybe I can get on disability, and then I won’t have worry to about this stuff anymore.” It worked; Scott is now on disability.

Scott’s dad had a heart attack and went back to work in the mill. If there’d been a mill for Scott to go back to work in, he says, he’d have done that too. But there wasn’t a mill, so he went on disability. It wasn’t just Scott. I talked to a bunch of mill guys who took this path — one who shattered the bones in his ankle and leg, one with diabetes, another with a heart attack. When the mill shut down, they all went on disability.

Source: NPR Bureau of Labor Statistics, Social Security Administration
Credit: Lam Thuy Vo

The human body isn’t designed to stand in one place all day. We’re designed to move. A strong or desperate person can do it,but the vast majority find it unpleasant or painful. Do it for years, combine it with another condition, close the factory… and you’ll find a lot of people willing to take that disability check over moving to a new city to try their luck at the next factory, again and again and again as each factory shuts down, moves, or fires everyone and replaces them with immigrants willing to work for wages that make disability sound attractive:

But disability has also become a de facto welfare program for people without a lot of education or job skills. … Once people go onto disability, they almost never go back to work. Fewer than 1 percent of those who were on the federal program for disabled workers at the beginning of 2011 have returned to the workforce since then, one economist told me.

People who leave the workforce and go on disability qualify for Medicare… They also get disability payments from the government of about $13,000 a year. This isn’t great. But if your alternative is a minimum wage job that will pay you at most $15,000 a year, and probably does not include health insurance, disability may be a better option.

But, in most cases, going on disability means you will not work, you will not get a raise, you will not get whatever meaning people get from work. Going on disability means, assuming you rely only on those disability payments, you will be poor for the rest of your life. That’s the deal. And it’s a deal 14 million Americans have signed up for.

I know people who’ve taken this deal. The really sad part is the despair. When people are filing for disability, it means they’ve given up. It’s like we decided to have Universal Basic Income, only we structured it the wort way possible to make recipients miserable.

I mean, this is AMERICA. Our ancestors were PIONEERS. They BUILT this place from the ground up.
My grandmother still lives in the house my grandfather built. Nearby, you can still visit the house my great-grandfather built. Those houses have all sorts of oddities because they were built by hand with whatever was available.

And say what you will, much of America is still beautiful. Forests mountains lakes rivers grasslands deserts. Beautiful.

An elderly woman I know lives in an an area with stunning natural beauty. “I hate it here,” she complains. Why? Is she blind? People stay inside and watch TV and grow lonelier.

I saw this “wine glass” at the store last night.

It was advertised as “for mom!” because what every kid wants is a drunk, alcoholic caregiver.

The marketing of chic-tee-hee isn’t it cute that we’re alcoholics? alcoholism to women is disgusting. It’s a sign of how far we’ve sunk that people see this as funny instead of a desperate cry for help.

And I don’t think I need to delve into the statistics on the opiate crisis and rising death rates among younger white women. All of the people who’ve lost their lives to drug addictions.

. Most of you live near museums, rivers, forests, parks, or other lovely places.

I can’t solve our problems. But please, don’t stop living. Keep fighting.