Leisure Suit Sriram

Even the retired folks these days don't seem to have leisure time.  How can that be?

The more I think about my own short life thus far, the clearer it seems that the dream was about a technological future that would launch us into an age of prosperity in which we would do very little work and enjoy a great deal of leisure time.  It would be a denial of gigantic proportions if we were to argue that we not incredibly prosperous now and, yet, leisure has become scarce?

To economists, this is no surprise.  Because, to them, leisure in prosperity means that there is much higher opportunity cost in terms of income that is not earned by doing nothing.  The more the income, the more the opportunity cost of sitting around.  So, people work themselves to death?

It is a strange world in which we live.  Ask yourself what exactly are we working for, and what exactly is it that we want to get out of the incomes that we earn?  Go ahead.  Do that first and then resume reading this post.

Yep, we earn in order to consume.  Our highly productive lives--as in economic productivity--are not about working fewer hours and creating leisure time that we can enjoy, but are about consumption.

It is almost as if we set aside the golden years for leisure.  When we can no longer do anything "productive."  What a wasteful approach to life!

There is one other problem, a nasty one:

Most people haven’t been taught to find fulfillment in their free time. To the contrary, rather than learning how to cultivate lifelong interests, students—both in primary and secondary schooling—are increasingly being educated to meet specific labor-market demands, demands that may also disappear or be automated away. Meanwhile, “It just is assumed that everyone knows how to handle their free time,” Henderson laments. “Not true!”

Yesterday, during a conversation with a student, I yet again heard the familiar: "I pack a whole lot of classes and activities because I am at a loss if I don't have things to do."

 Oh, do not for a second think of people spending time on the likes of Facebook as those enjoying leisure.  Nope. As I have blogged in plenty, people are "raw materials" in those activities, with the businesses making money out of them.  And, these businesses work on making addicts out of their users.

Over the past decade, more people have been spending more time on Facebook, whose business model is not all that different than the tobacco industry—it addicts its users, denies its own harmful effects, and expands its user base by targeting children and developing countries.
Commercial leisure and entertainment industries are undergoing a technological transformation that will be just as profound as the changes in work. But if the prevailing market incentive is to manufacture addiction, then the future of leisure could be bleak indeed. It remains to be seen if those designing social-media platforms, video games, virtual- and augmented-reality applications, and other technologies will feel pressured to do so responsibility.

So, where do we go from here?

Nowhere. We are screwed.

Not me though. Ask my neighbors--they will tell you that I rarely work.  Ask my colleagues--they will tell you I am goofing around and my work is mere mashed potatoes. Mine is a life of leisure! ;)

          Leisure

William Henry Davies

What is this life if, full of care,

We have no time to stand and stare.

No time to stand beneath the boughs

And stare as long as sheep or cows.

No time to see, when woods we pass,

Where squirrels hide their nuts in grass.

No time to see, in broad daylight,

Streams full of stars, like skies at night.

No time to turn at Beauty's glance,

And watch her feet, how they can dance.

No time to wait till her mouth can

Enrich that smile her eyes began.

A poor life this if, full of care,

We have no time to stand and stare

The dumber the better

The small little Orient Vijay television set did not have a remote control to lower the volume or to turn it off.  Channel changing was not even an option because, well, there was nothing to watch other than the government channel--Doordarshan.  A habit of sitting in front of the idiot box began.

No, that is not the dumbing that this post is about.

The old-fashioned dumbing down is nothing compared to the contemporary dumbing down.

In case you have not noticed it, "smart" is all around.  We in higher education have been familiar with the ironical usage of smart for a very long time.  Some "smart" guy decided to refer to classrooms equipped with technology--computer with internet access, audio-video devices, and a projector--as "smart classrooms."  Don't ask my why; to this date, I have no idea why a classroom with gadgets should be referred to as smart classrooms.

Of course, many of us in higher ed also started remarking that as classrooms got smarter, the system started dumbing down the education, which is the very reason why we have classrooms.

So, yes, "smart" has been around for a long time in my professional world.

Now, it is rapidly diffusing into everyday life as well.  A whole bunch of "so-called smart things — everyday devices that are connected to the internet."  It is subtle, right, how "smart" has come to mean being connected to the internet?  You are dumb when you are offline!  Oh, wait, I have already blogged about that ;)

I don't understand the fascination with the latest gadgets that are supposedly "smart."  Why would anybody want an Alexa at home to turn the lights on or off?  Is walking up five feet to reach the switch on the wall a Herculean task?

We seem to be intentionally rushing towards the Wall-E world.  Obese people sitting on their loungers, eating and drinking, while staring at digital screens, and barking commands to robots to get refills of drinks and anything else.

Maybe I am not "smart" enough to understand the tremendous value of these "smart gadgets."  I am proud of my dumbness, and will gladly wear the  badge of the global village idiot!

Like it or not, the future is coming ... with robots!

I routinely warn students, like I did this week, that we don't really know for certain how all the technological revolution will shape up in their lives.  We deal with probabilities, I like to remind them.  One aspect we can speak with confidence: The rate of change will be higher in the future than we have ever experienced.

"In this coming future, do not think of robots as the cliched robots that you have seen in cartoons and movies," I told them.  "Alexa is, for instance, a robot. which carries out your instructions and also does other things in the background."  Before we know it, there will be plenty of sophisticated robots, I warned them.

I think I saw panic in a few of their eyes.  Good for them. Now they will be alert and plan for their lives.

I am not the only one who says such things.

So let’s stipulate: no one knows for sure what’s about to happen to the labor market. Most observers agree, however, on at least two things. First, the pace of AI discoveries and implementation is accelerating. Robots are now doing things that seemed like science fiction just a short time ago. Was anyone talking about a retail-sector meltdown, driven in good measure by AI-facilitated e-commerce, last year? Second, fasten your seatbelts. Whether you call it “the second machine age”—as MIT professors Erik Brynjolfsson and Andrew McAfee do, in a 2014 book by that name—or the fourth industrial revolution, this will be big. Most Silicon Valley honchos, scientists, and economists think that this time is different. Exactly how many jobs will be lost, which kinds of jobs and when, and what to do to prepare for these losses may be matters of dispute. No longer questioned is that a massive disruption in the way we earn a living is coming and that it will transform communities, education—and perhaps even our notion of an America defined by industriousness and upward mobility.

The future won't be a mere continuation of the present.  It will be unrecognizably different.

One of the differences will be this: More jobs will be destroyed than created.  We need to broadcast the truth and have more people engage in the discussions.

These changes are coming, and we need to tell the truth and the whole truth. We need to find the jobs that AI can’t do and train people to do them. We need to reinvent education. These will be the best of times and the worst of times. If we act rationally and quickly, we can bask in what’s best rather than wallow in what’s worst.

But, of course, we won't--people are too busy instagramming their lives and downloading crap!

Thank you for automating!

In high school, the language classes and discussions with friends on all things that really mattered helped me situate the math and physics that I loved in an appropriate context--humanity.  Had I known back then what I now know, and had I lived in the US, I would have pursued liberal education in my undergraduate studies.  But, all those ifs there are just that--ifs. It is like saying that if my aunt had balls, she would be my uncle!

The disconnect between engineering and the real world all around me was deeply troubling.  It was flawed.  It was messed up.  It continues to be messed up; that is what I was reminded when I read this essay in The New Yorker.  It is about automation, robots, and impact on jobs, with side notes on how they affected the elections that gave us the fascist.

Consider this excerpt about Stefanie Tellex, the roboticist at Brown University:

Tellex was admitted to M.I.T. and planned to pursue a liberal-arts degree, but her mother told her that liberal-arts graduates didn’t make any money. (“One of the best pieces of advice I’ve ever gotten.”) She completed her computer-science Ph.D. there in 2010. ...
She told me that she had never thought about the political implications of her field until the tense months leading up to the 2016 Presidential election. Her parents were Trump voters, and she found herself disagreeing with them about what the causes of society’s ills were, and what the best solutions might be. She was alarmed by the anti-immigrant sentiment emanating from Trump’s rallies, especially having spent her adult life surrounded by researchers from all over the world. Economic inequality was a driving theme of the election, and Tellex began to see that automation was a contributing factor.

Until about a year ago, the roboticist had not thought about the political implications of her field--robots/automation!  And, she is one of the better ones, given that she started with a real interest in the liberal arts.  There are hundreds of thousands of scientists and programmers who even now do not see how their field has such startling political implications.  How can one bring these to their attention?

I do not, cannot, understand how any professional can go about doing whatever it is that they do without systematically thinking about the larger societal implications.  Heck, there are hundreds of thousands who work in the cigarette industry, even after decades of our understanding about how tobacco kills.  I have no idea how all these professionals, with or without Ivy League credentials, make their peace.

I made mine years ago by quitting that career path, and doing what I now do.  I try my best to convey to students, readers, anybody who wants to listen to me, about the importance of thinking about what it means to be human and to feel that we are contributing towards securing a better future for the people of tomorrow.

Something fishy about robots!

In my classes, I use plenty of contemporary examples in order to highlight the rapidly changing economic geography that makes our lives so fascinating.  Of course, not all students like my approach.  In her review of my teaching, one student wrote in the university's evaluation process that the "class is completely worthless and Sriram Khe should not be allowed to teach the way he does."  "Sriram and his shitty teaching style" made it hard for her to learn, she wrote.

Different strokes for different folks, eh!

I am sure that I will use during this academic year the example of the sushi robot; too bad if a student will not understand and appreciate its significance.

Sushi, which I have never even tasted, has been one of my favorite examples when discussing the geographic diffusion of culture.  Now, keep in mind that food is not merely cultural but has market value too.  Sushi can now be found in practically every grocery store in the US.  In the store next to mine, there is a sushi table where two chefs can be found rolling the sushi.

Sushi is not "native" to this land; it came from elsewhere.  Like how the chicken tikka masala is not native to the UK.  We live in an exciting world of awesome food possibilities.  Sushi, when first introduced in the US, was not a hit.  American consumers gasped at the very idea of raw fish.  And then Breakfast Club happened.  The rest, as they say, is history.

The making of sushi, too, has been automated.

Suzumo Machinery Co.’s robots are used by about 70,000 customers around the world, ranging from sushi chains to factories, and account for about 70 percent of the market for the equipment at restaurants, according to Suzumo’s estimates. Kaiten sushi, also known as conveyor-belt sushi, has become a $6 billion industry in Japan alone, partly thanks to Suzuki’s invention.
Cheap sushi “couldn’t have happened without our machines,” says Ikuya Oneda, who succeeded Suzuki as Suzumo president in 2004, a year before the founder died, and took over his life’s work. “You can certainly say that.”

So much of what we eat these days is a result of machines doing the work.  A while ago, I watched a video in which a creative Indian had mechanized most of the vadai making.  I am not sure if that became a hit in India.  But, it is only a matter of time before vadais become products of full automation, after which a few restaurants will advertise "traditional, hand-made" vadais.

Of course, sushi robots were met with resistance in Japan.

In 1976, sushi was still largely a food for special occasions. It was mostly sold through a legion of small restaurants, where artisan chefs dispensed morsels with no price tags and charged how they saw fit.
Not surprisingly, those chefs were up in arms when they heard about Suzumo’s plan. In their view, it took 10 years to train someone to make sushi. No machine could possibly do the job.

We humans hate change.  We are wired to be conservatives.   That is how we survived in the wild.  But then we humans are also quick to adapt to changes--once we see the benefits of change.

Suzumo stuck with the task, and two years later the sushi chefs finally said the machine was usable. In 1981, the company completed its first robot, which formed sushi rice into balls called nigiri. These days, it offers 28 different sushi machines.
“What they’ve done is allow kaiten restaurants to democratize and make good Japanese food affordable and accessible,” says Robin Rowland, chairman and chief executive officer of Yo!, a U.K. sushi chain with almost 100 restaurants globally.

And, thus, the conveyer-belt  sushi that we have seen, where people point to which box they want.  Further, in a market system, customers know what they want, especially if the price is right:

Already, about three-quarters of Japanese people say that when they eat sushi, it’s from a conveyor belt, according to a survey published by fishery company Maruha Nichiro Corp. in March. Almost half of them choose which restaurant based on price.

I tell ya, whether students find all these to be awesome or shitty, I have a great time understanding this fascinating world through my preferred framework.

In Lake Wobegon, everybody is above average

As trump continues to merrily sail with the supporting white supremacist winds (thank you, New Yorker) it is not only his adopted party folks who are trying to figure out how to deal with him and their own political futures--the Democrats are seemingly having a tougher time figuring out what message they want to convey to voters in 2018 and 2020, other than being anti-trump.

The temptation is to go uber-left.  After all, that was Bernie Sanders' platform, and of Elizabeth Warren's too.  I hope better sense will prevail.

Take for instance the case of minimum wages.   It is tempting to think that we can make the lives of the lower-income households by simply mandating higher wages.  If only the world were that simple:

There is new evidence that raising the minimum wage pushes business owners to replace low-skilled workers with automation. And it shows that old, young, female and black low-skilled workers face the highest levels of unemployment after a minimum-wage increase.
Economists Grace Lordan of the London School of Economics and David Neumark of UC Irvine studied 35 years of government census data for their working paper, which was released in August, titled "People Versus Machines: The Impact of Minimum Wages on Automatable Jobs."

After a long gap, I recently went to Target.  I was shocked that even that store has introduced self-checkout counters.  Which is exactly what happens when we make labor more expensive:

These automatable jobs include positions like supermarket check-out clerks, who can be replaced by self-service checkout cashiers, and assembly-line workers in manufacturing plants, who can be replaced by robotic arms. Low-skilled workers, for the study, are defined as those who have a high school diploma or less.

As Catherine Rampell writes:

It’s easier, or perhaps more politically convenient, to assume that “pro-worker” policies never hurt the workers they’re intended to help.

Or, as I learnt in graduate school, the road to hell is paved with good intentions!

More from Rampell:

We’ve already seen preliminary evidence that raising wages in Seattle to $13 has produced sharp cuts in hours, leaving low-wage workers with smaller paychecks. And that’s in a high-cost city. Imagine what would happen if Congress raised the minimum wage to $15 nationwide.
In West Virginia, the median hourly wage is just $14.79; in Arkansas, it’s $14.48; and in Mississippi, it’s a depressingly low $14.22. A $15 minimum wage could be binding on more than half of jobs in these states. In fact, in every state (not including D.C.), it could cover at least a quarter of positions.

Two years ago, I wrote in an op-ed about the minimum wage increase in Oregon:

Be careful what you wish for, we are advised. But then we don’t follow that advice anyway.

This guy gets pissed off that I always critique without offering solutions.  I will once again say the same thing: We work out the solutions politically.  Unlike a challenge of how to get humans to the moon and back, or how to vaccinate people, these are not technical issues.  In a democracy, we are, therefore, at the mercy of voters and politicians.

On this issue of minimum wages, all I can state with certainty is this: We do need to increase the federal minimum wage from the pathetic low of $7.25.  (States can have their own minimum wages, but it cannot be lower than the federal minimum.)  What is more urgent is the need to strengthen the safety net for the workers--from health care to child care to affordable housing to ... The new social contract that I have been arguing for years.  A new contract for which those with earnings that are way higher than the minimum wages have to pay higher taxes.  This much I know for sure.  The rest is up to the Democratic Party in 2018 and 2020.

I. Told. You. So.

But then you, like everybody else, would not listen to me!

In many posts here, I worried about the rapid annihilation of jobs in the retail industry.  In recent posts, like here and here, I expressed my concerns that unlike previous economic revolutions, this will not lead the displaced workers into more productive jobs.  Automation is king, of course,

It is not that the retail job losses are only in large metropolitan areas.  Nope.  They hit hard--perhaps even hardest--the very areas that also coincide with the regions that elected trump, whose empty rhetoric on coal and manufacturing apparently swayed the voters:

Small cities in the Midwest and Northeast are particularly vulnerable. When major industries left town, retail accounted for a growing share of the job market in places like Johnstown, Decatur, Ill and Saginaw Mich. Now, the work force is getting hit a second time, and there is little to fall back on.
Moreover, while stores in these places are shedding jobs because of e-commerce, e-commerce isn’t absorbing these workers. Growth in e-commerce jobs like marketing and engineering, while strong, is clustered around larger cities far away. Rural counties and small metropolitan areas account for about 23 percent of traditional American retail employment, but they are home to just 13 percent of e-commerce positions.
E-commerce has also fostered a boom in other industries, including warehouses. But most of those jobs are being created in larger metropolitan areas, an analysis of Census Bureau business data shows.

Of course that is the story.  Any lame-brained pretentious economic geographer in small town Oregon could have told you that!

“Every time you lose a corner store, every time you lose a restaurant, every time you lose a small clothing store, it detracts from the quality of life, as well as the job loss”

Yes, that is exactly how the downward spiral happens.  While in the aggregate customers are all better off thanks to the efficiency offered by e-commerce and automation, the impacts are local and tangible.  

As I have often argued here, politicians need to, therefore, rework the social contract and strengthen the safety net.  Instead, trump and his (adopted) party are hell bent on shredding even the minimal safety net of today.

This situation will only worsen with the increasing level of automation that we can and should expect.  So, what can be done?

Part of the answer will involve educating or retraining people in tasks A.I. tools aren’t good at. Artificial intelligence is poorly suited for jobs involving creativity, planning and “cross-domain” thinking — for example, the work of a trial lawyer. But these skills are typically required by high-paying jobs that may be hard to retrain displaced workers to do. More promising are lower-paying jobs involving the “people skills” that A.I. lacks: social workers, bartenders, concierges — professions requiring nuanced human interaction. But here, too, there is a problem: How many bartenders does a society really need?

Exactly.  It is not as if we need a gazillion bartenders and waiters.  Right?

So, can we think creatively in another way? 

The solution to the problem of mass unemployment, I suspect, will involve “service jobs of love.” These are jobs that A.I. cannot do, that society needs and that give people a sense of purpose. Examples include accompanying an older person to visit a doctor, mentoring at an orphanage and serving as a sponsor at Alcoholics Anonymous — or, potentially soon, Virtual Reality Anonymous (for those addicted to their parallel lives in computer-generated simulations). The volunteer service jobs of today, in other words, may turn into the real jobs of the future.

If trump and his (adopted) party cannot even understand how retail jobs vastly outnumber coal mining jobs, there is no way on earth will they even begin to understand that paragraph!

Who will pay for these jobs? Here is where the enormous wealth concentrated in relatively few hands comes in. It strikes me as unavoidable that large chunks of the money created by A.I. will have to be transferred to those whose jobs have been displaced. This seems feasible only through Keynesian policies of increased government spending, presumably raised through taxation on wealthy companies.

Yep, this will take reworking the social contract by increasing the tax on the gazillionaires--not by offering them more tax cuts!

Anything else that will be restatement of what I have been talking about and writing about for ever?

As for what form that social welfare would take, I would argue for a conditional universal basic income: welfare offered to those who have a financial need, on the condition they either show an effort to receive training that would make them employable or commit to a certain number of hours of “service of love” voluntarism.
To fund this, tax rates will have to be high. The government will not only have to subsidize most people’s lives and work; it will also have to compensate for the loss of individual tax revenue previously collected from employed individuals.

If only you would listen to me!

Here is the most interesting twist; the author of that essay, on how to deal with the increasingly sophisticated automation that borders on artificial intelligence, is:

Kai-Fu Lee is the chairman and chief executive of Sinovation Ventures, a venture capital firm, and the president of its Artificial Intelligence Institute.

Some day, sooner than later, there will be a few people who will regret not having listened to me ;)

What's the price of retail jobs?

The pussygrabber ranted on and on about jobs in the coal mines, as if he knew anything about the industry or the people who work.  But, 63 million suckers voted for him anyway!

If only his voters had paid attention to the real world, they would have been worried about an entirely different industry: "The retailing industry employs 15.9m people, accounting for one in nine American jobs."

The retail industry is shedding jobs, and closing stores, are frightening speeds:

 Since January the industry has shed 50,000 jobs, with more lay-offs sure to come. Mr Mathrani reckons that, for shopping centres to match demand, 30% of space should close permanently. In one particularly gloomy scenario, all retail property would shrink by as much. If staff dropped by the same proportion, 4.8m would be at risk of the sack—around half the number of American jobs lost during the financial crisis. Eventually, even more may be laid off, as remaining stores cut costs through automation.

Did you notice that "a" word?  Automation!

The result is that America’s rich landscape of shops now looks like a dangerous glut. Since the start of 2016 Macy’s has announced that it is closing 140 shops. J.C. Penney said in March that it would shut 138. More closures are sure to come. Department stores’ floor space has contracted by 11.5% since 2006, but sales have shrunk more than twice as fast, according to Green Street Advisors, a real-estate research firm (see chart 2). To reach the inflation-adjusted sales productivity of 2006, at least another 800 department stores would need to close, reckons D.J. Busch at Green Street.

In the world of politics, it is coal that translates to diamond when it comes to votes:

This slow melt has so far attracted little attention from politicians, despite jobs in retailing outnumbering those in coal mining, which has caught the political eye, by a factor of 300.

Meanwhile, automation in retailing is taking on another fundamental aspect of the transaction: price.

The right price—the one that will extract the most profit from consumers’ wallets—has become the fixation of a large and growing number of quantitative types, many of them economists who have left academia for Silicon Valley.

Yep, "the right price can change by the day or even by the hour" thanks to automation, which is killing the real world stores:

Guru Hariharan uncapped a dry-erase marker in a conference room at Boomerang’s headquarters in Mountain View, California. He was talking about what had led retailers to this desperate place where it’s necessary to change prices multiple times a day. On a whiteboard, he drew a series of lines representing the rising share of online sales for various kinds of products (books, DVDs, electronics) over time, then marked the years that major brick-and-mortar players (Borders, Blockbuster, Circuit City and RadioShack) went bankrupt. At first the years looked random. But the bankruptcies all clustered within a band where online sales hit between 20 and 25 percent. “In this range, there’s a crushing point,” Hariharan said, clapping his hands together for emphasis. “There’s a bloodbath happening.”
Beyond this crushing point, traditional retailers with both a brick-and-mortar and an online presence feel compelled to compete purely on price. Hariharan talked wistfully of the days when he’d walk into RadioShack and have a salesperson direct him to the exact connector cable he needed. But once retailers enter the crushing zone, expenses like staff, training, and customer support typically are slashed. Profit margins keep falling nonetheless—why go to the store at all if no one there can help you?—and a death spiral ensues. (RadioShack traced just this path before filing for bankruptcy in 2015.)

Yet, the pussygrabber always talks about those few thousand coal mining jobs?

From ENIAC and EMERAC to ... HAL and Siri

There were three questions in this quiz. Ahem, I scored three out of three!

Go ahead, take that quiz, and come back for the rest of this post.  OK?

Alright, you are back.  Well, you never left, did you? ;)

Consider the statistics in the following image:

Source

Yes, even Kenya.  Wherever one is, the bottom-line is no different:

For all the differences between countries, many of automation’s challenges are universal. For business, the performance benefits are relatively clear, but the issues are more complicated for policy makers. They will need to find ways to embrace the opportunity for their economies to benefit from the productivity growth potential that automation offers, putting in place policies to encourage investment and market incentives to encourage innovation. At the same time, all countries will need to evolve and create policies that help workers and institutions adapt to the impact on employment.

For regular readers of this blog, this is all same-old, same-old, right?

Unfortunately, such stuff is not discussed on Fox & Friends, which is where the current president learns about what is happening around the world and in the US!

On the other hand, news programs like this one that the president and his 63 million fucking minions do not care for, remind him:

President Trump has very specific talking points when it comes to jobs in the U.S. They go kind of like this: China — bad. Mexico — bad. Outsourcing — bad. Made in America — great. Hiring American — even better.
Trump and his supporters have spent a lot of time focusing on trade policies and how to bring back jobs lost to globalization, but experts say most of those jobs are not coming back. The key issue facing the American workforce — and therefore America’s prosperity and stability moving forward — is not trade, but technology.

Ah, those supporters of his are soon going to figure out that they are nothing but 63 million suckers!

So, what can be done?

“The jobs that we’re preparing them for haven’t even been created yet, and really, that’s a hurdle that we need to figure out how to get over, because how do you prepare them for the unknown?”

Ahem, I have written plenty about this.  Even as op-eds.  Like this one in which I wrote about educating for a world of unscripted problems.  

Unscripted because we do not know what the future holds. But, we do have a sense of how we might be able to reasonably prepare for that future, by developing skills that will help people to constructively engage with the unscripted problems.
Yet, contemporary public policy discussions on higher education and workforce preparation rarely ever go into serious and sustained thinking about the “world of unscripted problems."

Some day, after I am gone, maybe a couple of people will remark that people should have listened to me ;)

How will you bet on Man v. the Machine?

Intellectually, rationally, I have a very tough time understanding how trump could have campaigned telling workers that he will bring back their old jobs.  It is beyond my imagination and understanding.  It is a crime to intentionally mislead gullible and helpless people by promising a future that simply cannot happen.  Yet, he did.  And he won telling such tales that have no basis in reality.

I, on the other hand, have been telling students for years that the reality of business decision-making, and the reality of advancement in science and technology, mean that anything that can be outsourced will be outsourced and anything that can be automated will be automated.

An essay by David Rotman--the editor of MIT Technology Review--is about all these issues, which make me worry even more about the demagoguery:

It is “glaringly obvious,” says Daron Acemoglu, an economist at MIT, that political leaders are “totally unprepared” to deal with how automation is changing employment. Automation has been displacing workers from a variety of occupations, including ones in manufacturing. And now, he says, AI and the quickening deployment of robots in various industries, including auto manufacturing, metal products, pharmaceuticals, food service, and warehouses, could exacerbate the effects. “We haven’t even begun the debate,” he warns

For a while now, I have also been telling students that the transition that we are now in will be challenging.  Painful for some.  Just like how the Industrial Revolution was a painful adjustment process.  The pain that led the Luddites to break a few machines.  But, that didn't stop the Industrial Revolution, did it?

I often quote Andrew McAfee--also at MIT--when I tell students that we haven't seen nothing yet.  Rotman writes that the changes coming our way will be beyond our imagination:

Joel Mokyr, a leading economic historian at Northwestern University, has spent his career studying how people and societies have experienced the radical transitions spurred by advances in technology, such as the Industrial Revolution that began in the late 18th century. The current disruptions are faster and “more intensive,” Mokyr says. “It is nothing like what we have seen in the past, and the issue is whether the system can adapt as it did in the past.”

Adapting to the changes will require principled and responsible political leaders.  Exactly the kind that we do not have today.  The November 2016 election threw out the only candidate who tried to bring a level of reason and responsibility.  That candidate talked a lot about the need for retraining, for which the US spends very, very little:

Even that little bit that we spend, well, left to the GOP they want to gut it because they will rather spend the money to strengthen the military, and provide taxcuts to the rich!

Not only might automation and AI prove particularly prone to replacing human workers, but the effects might not be offset by the government policies that have softened the blow of such transitions in the past. Initiatives like improved retraining for workers who have lost their jobs to automation, and increased financial protections for those seeking new careers, are steps recommended by the White House report. But there appears to be no political appetite for such programs.

How terrible!

The economic anxiety over AI and automation is real and shouldn’t be dismissed. But there is no reversing technological progress. We will need the economic boost from these technologies to improve the lackluster productivity growth that is threatening many people’s financial prospects. Furthermore, the progress AI promises in medicine and other areas could greatly improve how we live. Yet if we fail to use the technology in a way that benefits as many people as possible (see “Who Will Own the Robots?”), we risk fueling public resentment of automation and its creators. 

It is way, way, way more difficult to understand these issues and convey these to voters who need to be educated on such matters.  It is far, far, far easier to simply yell and tweet Make America Great Again!  What an asshole trump is, and what a bunch of assholes the GOP leaders are!

Automate or die

My class freaked out when we got to discussing the economic geography of the future that will be highly automated.  Well, these are the latest class to get all worried; I have been doing it to students for a few years now.  Because, it has been an open secret that automation has been replacing humans at various jobs here in the US. However much trump wants to tell his people that China, Mexico, and India are to be blamed for their job losses, automation is the real story.

And that story has barely begun.  You ain't seen nothin' yet!

Imagine if trump and his people were to even glance at the headlines that USA Today recently had:

Bill Gates: If a robot takes a human job, it should be taxed

Read that again.  It is Bill Gates.  Yes, that Bill Gates.  He is making an argument that robots taking jobs from humans should be taxed.

Not a human in China, Mexico, or India, but a robot right here in America!

Ah, but all these are nothing but fake news anyway, right Mr. President?

There is a reason that Bill Gates wants to talk about taxing robots.  Robots are not the real problem.

Well, automation is for real, and the robots--physical and software agents--are an unstoppable force.  But, we humans are the ones designing and using the robots, right?  Who benefits from the use of automation?

Answering that question, which is what Gates does, means that trump and the Republicans have to seriously engage with a topic that they would rather not: Redistribution.  Or, if you prefer the milder phrase that I have been blogging about for years: The Social Contract.

The NY Times gets to that in its editorial:

While breakthroughs could come at any time, the problem with automation isn’t robots; it’s politicians, who have failed for decades to support policies that let workers share the wealth from technology-led growth.

You think that the fabled white working class will not support this, if the logic is explained to them?  They will immediately embrace it.  They will demand a new social contract.  But, of course that is exactly what trump and his party do not want to do.  After all, the white nationalist party hates the very idea that some brown-skins might also benefit from this redistribution!

The editorial gives a quick lesson in economic history, and then concludes with:

Economic history shows that automation not only substitutes for human labor, it complements it. The disappearance of some jobs and industries gives rise to others. Nontechnology industries, from restaurants to personal fitness, benefit from the consumer demand that results from rising incomes in a growing economy. But only robust public policy can ensure that the benefits of growth are broadly shared.
If reforms are not enacted — as is likely with President Trump and congressional Republicans in charge — Americans should blame policy makers, not robots.

My guess is that such reforms will not even be discussed.  And trump and the GOP will continue to blame China, Mexico, and India, and the white voters will continue to vote for the white supremacists who promise to beat up on the non-whites.

Jobs, jobs, and jobs. But, hey, incomes?

"I am especially keen to have you involved in the panel given your distinguished track record," was a sentence in a lengthy email inviting me to a session at the upcoming international conference.  After years of marching to my own drumbeat of scholarship that is aimed at public engagement, it is encouraging that there is some recognition of the urgency of the issue--and, of course, recognition of what I do as an academic.

I won't hold my breath for any recognition within my university.  The latest was an email from my dean who pooh-poohed my work and external recognition with a note on how I need to work on "scholarly activities."  I.e., my public scholarship is not "scholarly activities."  I figured that his email is best ignored--no reply.  I hope at some time--sooner than later--he and the rest will understand that intellectual onanism is not necessarily what "scholarly" means.

In many op-eds and blog-posts over the years, and in classroom discussions with students, I have been worrying a lot about automation's impact on jobs and incomes.  My bottom-line to students has always been that they will experience a fantastic future thanks to automation, but that jobs--and well-paying jobs, in particular--might not be easy to come by.  "It could be a challenging future" is what I typically tell them.  But, like my faculty and administrative colleagues, most students too do not listen to me.  Why should they, when they hear from those faculty and administrators that awesome jobs wait for college graduates!

This POTUS does nothing to help people understand the rapidly changing employment scene.  He thinks believes that jobs--and well paying middle-class jobs--can be brought back by him beating the pulp out of the CEOs, as if his job is to be the mafia chief.  Why doesn't he explain to his faithful followers, and to the unprincipled Republican leaders, the reality about automation's impacts on employment?

Trump knows virtually nothing about technology — other than a smartphone, he doesn’t use it much. And the industries he’s worked in — construction, real estate, hotels, and resorts — are among the least sophisticated in their use of information technology. So he’s not well equipped to understand the dynamics of automation-driven job loss.

One does not need to even work in the information industry, or in manufacturing, in order to understand the impact of automation.  Consider, as a contrast, the former POTUS, whose experiences were shaped elsewhere--"community organizing" that the unprincipled Republicans always ridiculed:

“The next wave of economic dislocations won’t come from overseas,” Mr. Obama said. “It will come from the relentless pace of automation that makes a lot of good, middle-class jobs obsolete.”

Even if he is informed enough, the current POTUS does not want to talk about automation because that will mean speaking truth with people.  And he has made it immensely clear that truth is nowhere in his mind, ever.  While he makes a grand spectacle out of his "negotiations" over plant closings and offshoring,

automation-related job loss is difficult to negotiate about. It’s the silent killer of human labor, eliminating job after job over a period of time. Jobs often disappear through attrition. There are no visible plant closings to respond to, no press releases by foreign rivals to counter. It’s a complex subject that doesn’t lend itself to TV sound bites or tweets.

If only his people will understand this:

Technology delivers its benefits and harms in an unequal way. That explains why even though the economy is humming, it doesn’t feel like it for a large group of workers.

The solutions to this are not simple, and "they’re not easily summarized in a sound bite."  Certainly not in 140 characters!

Celebrate, or condemn, this self-service economy?

I have blogged about:

• grocery stores, especially the small-talk
• robots and automation
• self-service future; remember this?
• reading the Economist
• watching television

In this post, I can bring them all together--hey, understanding the cosmos is all about connecting the dots, right? ;)

Every once in a while, I catch re-runs of That '70s Show.  Sometimes, I even stream it on Netflix as I work.  In one of those episodes, two hormone-raging teenage males decide to hit on, and pick up, married women at the grocery store--the Piggly Wiggly.

When watching the episode, I thought it was a fictional store, like how the town where they lived, Point Place, was a fictional name.

Now I know better.  Piggly Wiggly is for real!  I learnt that from reading this piece in the Economist, which argues that "businesses should think carefully about continuing to heap work on their customers."  The report begins with:

IN 1916 Clarence Saunders changed the face of retailing when he opened his first Piggly Wiggly supermarket in Memphis, Tennessee. Hitherto, shops had kept all their goods behind the counter: customers told the staff what they wanted, waited while their purchases were bagged up, then handed over their money. Saunders came up with the idea of self-service. Customers selected their own groceries from the shelves, and took their baskets to a cashier on the way out. Saunders proclaimed that by cutting labour costs his idea would “slay the demon of high prices”.

Who woulda thunk that!  Piggly Wiggly is for real.  And it began in Tennessee.  And it was nearly a 100 years ago that this idea of self-service began.  "as an idea it has conquered the world" indeed.  That Saunders was way ahead of his time, eh!

You thought I waste time watching TV! ;)

The self-checkout at grocery stores is merely taking the 100-year old idea to the next level.  And, of course, not going to the store but clicking the order from home and have somebody deliver it is all in that same continuum. As the Economist notes, "The variety of businesses touched by the self-service revolution is ever greater." The magazine includes its unique humor:

Before long, no doubt, self-service barbershops will invite customers to pop their heads into a clipping machine and turn a dial to select the severity of the cut.

Thankfully, I will be gone long before that--and I don't have to miss all the joyful small talk at the haircut place ;)

But, ... yes, there is always a but!

The rise and rise of the self-service business raises two worries in particular.

What are they?  For one:

Consumers are being ever more clearly divided into a “cattle class”, herded into the back of the cabin and offered precious little service, and a pampered “business class”, for whom no amount of fawning is too much.

Well, some people do not care about such inequality.  However,

Not only might this intensify resentment of the haves by the have-nots; it also robs the have-nots of entry-level jobs. 

Any other but?

The second worry is for businesses themselves. If they never meet their customers, they will lose touch with them.

 So what, you ask?

 although self-service is great for saving costs, its effect over time is to train customers to shop on price, and thus to switch as soon as a slightly cheaper rival comes along.

Maybe I need to stop reading and thinking, and instead do what those teenagers in That '70s Show always did! ;)

I am increasingly worried about the on-demand economy

Back in the elevator in the 37-story tower, the messengers do talk, one tells me. They end up asking each other which apps they work for: Postmates. Seamless. EAT24. GrubHub. Safeway.com.

Welcome to the on-demand, app, world.  If this is the future, then I don't want any part of it.  Because, as the writer notes:

And that’s when I realized: the on-demand world isn’t about sharing at all. It’s about being served. This is an economy of shut-ins.

Shut-ins.  

There is something strange happening.  Back when I started teaching in California, which seems like eons ago, the business school faculty were getting all excited to offer courses with "e-commerce" somewhere in the title.  It seemed all novel at that time, when Netscape was the dominant web browser!  We were all toying with phrases like "click and order" will wipe out "brick and mortar."  Alan Greenspan thought it was all irrational exuberance; remember that?

All that was before the iPhone revolution. Before Android. Before "apps" that work on smartphones.  Now, there seems to be a new app every day that people are gushing about.  I read the other day that messages via WhatsApp and other apps, plus the good old SMS, means that the phone, apparently, is not for calling people anymore!

In total, Americans spend about 26 minutes a day texting. That compares to spending about six minutes a day on voice calls.

 What the heck are we texting about?  It could be even for things like this:

A woman hauling two Whole Foods sacks reads the concierge an apartment number off her smartphone, along with the resident’s directions: “Please deliver to my door.”

That woman is a worker bee in this on-demand economy.  Yes, this is not the first time I blogged my concerns about this trend.  

Last year the venture capital firm SherpaVentures — whose offices are just down the street from that apartment building full of Ubers and Squares and Twitters— released a sunny study on the future of our on-demand world. They have a stake in making it go big , of course: they’re seed investors in Shyp and Munchery and have $154 million to invest in on-demand businesses. As the desire for more instant, app-based services expands up the economic chain, the report argued, entrepreneurial freelancers — everyone from grocery deliverers to cleaners to accountants to lawyers — will have flexibility to monetize their time when they want to and pursue their passions. Brick-and-mortar stores die out, and so do their low-wage retail jobs, which it suggested would personalize the world, away from the sterile anonymity of big-box stores to a “21st-century village economy,” in which we’re “united” by cellphones.
So who are we uniting with in this scenario? 

Meanwhile, in the crowded less developed economies:

grocery delivery has taken off massively in hyper-dense developing countries, where huge income disparities allow upper-middle-class citizens to turn the rest of the workforce into their personal delivery network.

The WSJ has a story about India on that point:

One morning, Ashok Kumar hoisted a huge, 110-pound pack jammed with books, cellphones, bluejeans and other items onto his back and cinched the shoulder straps.
Then he donned a helmet, climbed onto a motorcycle and, balancing precariously, headed out into the traffic-clogged streets of the Indian capital for his daily rounds.
Mr. Kumar and thousands of men like him fan out across the crowded cities of the world’s second-most-populous nation every day—foot soldiers on the front lines of India’s e-commerce revolution.
This low-tech army of urban sherpas hauls bags of online purchases down narrow alleys and up flights of stairs, lugging everything from laser printers and kitchen appliances to cans of Coca-Cola for their country’s burgeoning consumer class.

So, what exactly is my worry here?

In the new world of on-demand everything, you’re either pampered, isolated royalty — or you’re a 21st century servant.

We aren't thinking this through.  It certainly has the feel of "share-the-scraps economy."

If the Internet of Things is the future, then I want no part of it!

The other day, I went to Best Buy.  I walked about in the store to look at some of the latest gizmos.  From flashy refrigerators and laundry machines, to snazzy coffeemakers, to cameras big and small, to phones and tablets, all of them made me feel like everything I own dates back to the Flintstones.  I worried that if I talked to a sales person there, whatever I say might comes across as Yabba Dabba Doo! ;)

And then there were all those gizmos with which you can watch your home from anywhere on the planet, set the thermostat, open the garage door, switch lights on and off.  The gizmos that are connected to the internet, and all you need is your smartphone.  They looked cool.  And, at the same time, it is freaky!!!

I am not the only one who is uncomfortable about the future that is already here:

It is already possible to buy Internet-enabled light bulbs that turn on when your car signals your home that you are a certain distance away and coffeemakers that sync to the alarm on your phone, as well as WiFi washer-dryers that know you are away and periodically fluff your clothes until you return, and Internet-connected slow cookers, vacuums, and refrigerators. “Check the morning weather, browse the web for recipes, explore your social networks or leave notes for your family—all from the refrigerator door,” reads the ad for one.
Welcome to the beginning of what is being touted as the Internet’s next wave by technologists, investment bankers, research organizations, and the companies that stand to rake in some of an estimated $14.4 trillion by 2022—what they call the Internet of Things (IoT).

I used to have a coffeemaker that had a simple clock-driven program feature--load up the coffee and water in the night before going to sleep, set it switch on at a certain time and, presto, the coffee is ready waiting for me in the morning.  I hated that, and stopped programming it.  It felt, yes, freaky.  I was missing my connection to the experience of brewing coffee through all the steps, and being there as the first drops percolated through and as the wonderful aroma of coffee started wafting through the home.   The Internet of Things take that programmable features to a dimension that no man has ever gone before.

These gizmos are slowly creeping up on us:

One reason that it has been easy to miss the emergence of the Internet of Things, and therefore miss its significance, is that much of what is presented to the public as its avatars seems superfluous and beside the point. An alarm clock that emits the scent of bacon, a glow ball that signals if it is too windy to go out sailing, and an “egg minder” that tells you how many eggs are in your refrigerator no matter where you are in the (Internet-connected) world, revolutionary as they may be, hardly seem the stuff of revolutions; because they are novelties, they obscure what is novel about them.

Many of these novelties that are tethered to the internet are simultaneously devices that in turn keep track where we are at any moment.  (Even now, the location info in my smartphone is one that I always keep in the off mode unless I really, really, need that feature.)

as human behavior is tracked and merchandized on a massive scale, the Internet of Things creates the perfect conditions to bolster and expand the surveillance state. In the world of the Internet of Things, your car, your heating system, your refrigerator, your fitness apps, your credit card, your television set, your window shades, your scale, your medications, your camera, your heart rate monitor, your electric toothbrush, and your washing machine—to say nothing of your phone—generate a continuous stream of data that resides largely out of reach of the individual but not of those willing to pay for it or in other ways commandeer it.

Freaky!

in September Apple offered a glimpse of how the Internet of Things actually might play out, when it introduced the company’s new smart watch, mobile payment system, health apps, and other, seemingly random, additions to its product line. As Mat Honan virtually shouted in Wired:

Apple is building a world in which there is a computer in your every interaction, waking and sleeping. A computer in your pocket. A computer on your body. A computer paying for all your purchases. A computer opening your hotel room door. A computer monitoring your movements as you walk though the mall. A computer watching you sleep. A computer controlling the devices in your home. A computer that tells you where you parked. A computer taking your pulse, telling you how many steps you took, how high you climbed and how many calories you burned—and sharing it all with your friends…. THIS IS THE NEW APPLE ECOSYSTEM. APPLE HAS TURNED OUR WORLD INTO ONE BIG UBIQUITOUS COMPUTER.

So, where are we headed?

So here comes the Internet’s Third Wave. In its wake jobs will disappear, work will morph, and a lot of money will be made by the companies, consultants, and investment banks that saw it coming. Privacy will disappear, too, and our intimate spaces will become advertising platforms—last December Google sent a letter to the SEC explaining how it might run ads on home appliances—and we may be too busy trying to get our toaster to communicate with our bathroom scale to notice. 

First those evil corporations come for our toasters ...

The Flintstones era is looking better in the rear-view mirror, but is fading rapidly.

But, hey, only twenty-five more years! ;)

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