[P2P-F] Automation Doesn't Just Destroy Jobs--It Destroys Profits, Too

Thu Dec 3 15:47:56 CET 2015

Thanks Eric.

It is also interesting to look at it from the point of perspective of
control, property, of who controls what.

My feeling is that capital, and artificially scarce money as capital, is
only a tool to transfer and concentrate property and control in the hands
of a minority over time.

If , in the logic of concentrated power, humans are not any more needed ,
or only a small percentage of humans are needed to control other humans, or
to maintain the priiledges of certain super wealthy in a competition with
other super wealthy, and if less money is circulating,
it may not necessarily be a big problem for the super wealthy.    The issue
I would speculate, is not if they loose billions or make billions, but
rather how much control the super wealthy have in relation to others.

If a great part of the population ends up without money, the billions they
already have can buy them much more power.

If it leads to a great deal of the population being even more alienated, it
only poses a threat as soon as such populations get organized to generate
alternative "games" of organization, and can disenfranchise themselves,
eventually by using technology, too.       Yet there , once more,
concentration of land, requirements for paying taxes in corporate currency,
and so forth, reduce by so much the opportunities for disenfranchising.

We may indeed, as I noticed some articles speculating, be beyond capitalism
already.

On Mon, Nov 9, 2015 at 5:08 PM, Eric Hunting <erichunting at gmail.com> wrote:

> This is an argument I've been making for many years myself. In the debate
> about automation and job destruction it is commonly overlooked that labor
> and capital are in the same boat when it comes to long-term impact because
> production capability itself is becoming a commodity. Machines aren't just
> getting smarter, they're getting smaller, more adaptive, progressively
> lower in minimum necessary production volumes, and cheaper. You can now
> initiate more kinds of production 'out of pocket' than ever before. You can
> now competitively manufacture more things in the space of a four car garage
> than ever before. You can now approach a conventional middle-class standard
> of living based on entirely local and personal production and open source
> designs. Corporations are beginning to abandon the ownership of their own
> means to production in favor of job-shops because as that production
> capacity becomes more of a commodity the cost of money and the adaptability
> lost to amortization becomes the chief drag on market competitiveness. The
> volume of consumer goods produced in job shops went past that from
> traditional factories in the year 2000, and it never went back. The
> factory--and the traditional capital creating it--is already an
> anachronism. This brings us to the core premise of Post-Industrial
> futurism; that the paradigms of the Industrial Age are being eroded by the
> evolution of the very technologies on which they depend. This is the
> ultimate crisis of Capitalism; the eventual obsolescence of capital itself
> by the automation it cultivated as value shifts away from material goods
> and the means to make them and becomes virtualized, integral to design. The
> product has no value. The real value is in the 'spime'. Already
> corporations are increasingly obsessed with litigation, intellectual
> property, whittling-away at the First Sale Doctrine, and limiting the
> rights and controlling the behavior of the consumer as means to maintain
> market share.
>
> The long-term evolution of production and distribution is a transition to
> localization, networking, production-on-demand, increasing reliance on
> management automation through quantitative analysis, increasing
> cost-transparency, and eventual integration into the infrastructure of the
> built habitat as a kind of municipal utility. The global economy will shift
> from trading in goods to trading in commodity refined materials and modular
> parts. As labor is factored out of production, cost of production becomes
> more transparent, market prices capitulate and fall except where they can
> leverage the value of exclusive design and designer prestige. 'Brand'
> manufacturers will increasingly take on the aspect of ateliers--design
> studios. The next Apple will be composed of a relative handful of people
> whose chief jobs are design, development, and the management of spimes with
> all production owned by someone else and local to the consumer. The next
> Ford or Toyota will assemble cars on demand at the dealership--maybe
> generic dealerships. (an overlooked impact of electric cars and the
> electric power train is their ability to radically drive the number of
> components in a car down. Tomorrow's car might have less than 100 parts and
> go together like a desktop PC!)
>
> So Capital is running out of things to do, the paradigm or money is
> failing, and the model Westphalian state is running out of people to tax,
> while, now evolved to accommodate Industrial Age paradigms, having no other
> mechanism to define, capture, and collectivize surplus social productivity
> to do anything with. (are you going to conscript labor off the street to
> make fighter jets?) The state and the monetary system have been very
> closely wedded through the Industrial Age, premised on a concept of
> extracting and collectivizing monetary capital as societal debt to gift to
> elites to create the means of production, and now their common paradigms
> are breaking-down. To continue to exist government will have to devise a
> new basis of economics--a new paradigm by which to define resource
> collectivization and a rationalization for it--or (more likely) a new
> economy will emerge stigmergically by the logic intrinsic to the underlying
> technology and the compulsion of people to make things work day-to-day.
> This is why, when I talk about basic income myself, I talk about two forms
> of it. An 'institutional' basic income--that is disbursed as money and
> administered by some kind of bureaucratic institution--and an 'integral'
> basic income that's built into the 'firmware' of the infrastructure of the
> built habitat and disbursed as on-demand access to goods based on a
> systemic quantitative analysis of demand. Long-term, we are likely to
> evolve toward that integral form as local communities are compelled to take
> on increasing responsibility for keeping daily life going as the state
> increasingly fails them and people discover the at-hand means/technology to
> do that in their now local production capacity.
>
> All these things add up to a picture of a very different lifestyle in the
> future that I don't think we communicate too well right now. This is why
> I've been very interested in the notion of using the approach of Living
> Museums in a future context to illustrate future lifestyle and am working
> on projects like the Open House documentary to showcase open source living.
>
>
> On 11/9/15 4:52 AM, p2p-foundation-request at lists.ourproject.org wrote:
>
>
>
> ---------- Forwarded message ----------
> From: Chris Quigley <cmqesquire at gmail.com>
> Date: Mon, Nov 9, 2015 at 6:33 PM
> Subject: Fwd: Excellent Art By Charles Smith
> To: Michel Bauwens <michel at p2pfoundation.net>
>
>
> Michel,
>
>
> Thought this might be of interest.
>
> Kind regards,
>
> Christopher
>
>
> ---------------------------------------------------------------------------------------------
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> ------------------------------
>
>
> *Automation Doesn't Just Destroy Jobs--It Destroys Profits, Too*
> <http://www.oftwominds.com/blognov15/automation-profits11-15.html>
>
> *November 9, 2015*
>
> *The idea that taxing the owners of robots and software will fund
> guaranteed incomes for all is not anchored in reality.*
>
> *Automation is upending the global order by eliminating human labor on an
> unprecedented scale--and the status quo has no reality-based solution to
> this wholesale loss of jobs.*
>
> Two recent articles highlighted the profound consequences of advances in
> robotics and AI (artificial intelligence) on employment: four
> fundamentals of workplace automation
> <http://www.mckinsey.com//Insights/Business_Technology/Four_fundamentals_of_workplace_automation>
>  and Robots may shatter the global economic order within a decade
> <http://www.telegraph.co.uk/finance/economics/11978542/Robots-may-shatter-the-global-economic-order-within-a-decade.html> as
> the pace of automation innovation has gone from linear to parabolic (via
> Mish).
>
> *The status quo apologists/punditry have offered two magical-thinking
> solutions to the sweeping destruction of jobs across the entire spectrum of
> paid work*:
>
> 1. Tax the robots (or owners of robots) and use the revenues to pay a
> guaranteed income to everyone who is unemployed or underemployed.
>
> 2. Let the price of labor fall to the point that everyone has a job of
> some sort, even if the pay is minimal.
>
> Neither one is remotely practical, for reasons I will explain today and
> tomorrow.
>
> *Today, let's examine the misguided fantasy that automation/robotics will
> generate enormous profits for the owners of robots.* Here's the problem
> in a nutshell:
>
> *As automation eats jobs, it also eats profits, since automation turns
> labor, goods and services into commodities.* When something is
> commoditized, the price drops because the goods and services are
> interchangeable and can be produced almost anywhere.
>
> Owners must move commoditized production to low-tax regions if they want
> to retain any profit at all.
>
> *Big profits flow from scarcity, i.e. when demand exceeds supply.* If
> supply exceeds demand, prices fall and profits vanish.
>
> (Monopoly is a state-enforced scarcity. In our state-cartel economy, there
> are many monopolies or quasi-monopolies. While eliminating these would
> lower costs, that wouldn't reverse the wholesale destruction of jobs and
> profits--it would only speed the process up.)
>
> *The other problem the "tax the robots and everything will be funded"
> crowd overlooks is the falling cost of software and robots lowers the
> barriers to competition*: nothing destroys profits like wave after wave
> of hungry competitors entering a field.
>
> The cost of automation and robotics is falling dramatically. This lowers
> the cost of entry for smaller, hungrier, more nimble competitors, and
> lowers the cost of increasing production. When virtually any small
> manufacturer can buy robots for less than the wages of a human laborer,
> where's the scarcity necessary to generate profits?
>
> The parts needed to assemble a $45 tablet are dropping in price, and the
> profit margins on those parts is razor-thin because they’re commodities.
> Software such as the Android operating system is free, and many of the
> software libraries needed to assemble new software are also free.
>
> *Automation increases supply and lowers costs. Both are deadly to profits.*
>
> *Here’s the core problem with the idea that taxing the owners of robots
> and software will fund guaranteed incomes for all:* the more labor, goods
> and services are automated/commoditized, the lower the profits.
>
> The current narrative assumes more wealth will be created by the digital
> destruction of industries and jobs, but real-world examples suggest the
> exact opposite: the music industry has seen revenues fall in half as
> digital technology ate its way through the sector.
>
> A $14 billion industry is now a $7 billion industry. Profits and payroll
> taxes collected from the industry have plummeted. So much for the fantasy
> that technology always creates more jobs than it destroys.
>
> As subscription music services replace sales of songs and albums, revenues
> will continue to decline even as consumers have greater access to more
> products. In other words, the destruction of sales, employment and profits
> is far from over.
>
> *Examples of such radical reductions in paid labor abound in daily life.* To
> take one small example, our refrigerator recently failed. The motor was
> running but the compartment wasn’t being cooled. Rather than replace the
> appliance for hundreds of dollars or hire a high-cost repair service, I
> looked online, diagnosed the problem as a faulty sensor, watched a tutorial
> on YouTube (what I call *YouTube University*), ordered a new sensor for
> less than $20 online and completed the repair at no cost beyond a half-hour
> of labor, which cost me nothing in terms of cash spent.
>
> The profit earned by YouTube was minimal, as was the profit of the firms
> that manufactured the sensor and shipped it. The sales and profits that
> were bypassed by using nearly-free digital tools were an order of magnitude
> higher.
>
> I was recently interviewed via Skype by an online journalist with millions
> of views of his YouTube channel. A decade ago when he worked in mainstream
> TV journalism, an interview required costly, time-consuming travel (for the
> crew or the subject), a sound engineer, a camera operator, the talent
> (interviewer), editor and managerial review. These six jobs have been
> rolled into one with digital tools, and travel has been eliminated entirely.
>
> Some will argue that the quality of the video and sound isn’t as high, but
> the quality of the user experience is ultimately based on the viewer’s
> display, which is increasingly a phone or tablet. So in terms of utility,
> value and impact, the product (i.e. output) produced by one person replaces
> the conventional media product that required six people.
>
> My own solo digital content business would have required a handful of
> people (if not more) only a decade ago. With digital tools and services, it
> now requires just one person. Those of us who must work with digital tools
> to survive know firsthand that what once required a handful of workers must
> now be produced by one person if we hope to earn even a marginally
> middle-class income.
>
> Multiply an appliance that doesn’t need to be replaced and a repair
> service that doesn’t need to be hired, a half-dozen positions replaced by
> one part-time job, a fully functional commodity tablet that costs 10% of
> the high-profit brand and you understand why profits will plummet as
> software eats the world.
>
> *These are not starry-eyed examples based on projections; these are
> real-world examples of widely available digital technologies destroying
> costs, sales and profits on a massive scale.*
>
> Some observers have suggested taxing wealth rather than profits to fund
> the super welfare state of *guaranteed income for all.* But the value of
> assets ultimately rests on their ability to generate a profit. As profits
> fall, wealth may be more chimerical than these observers believe.
>
> Tomorrow we'll look at the rising costs of human labor and explore why
> this trend will persist even as labor becomes increasingly surplus.
>
>
> --
> Eric Huntingerichunting at gmail.com
>
>
>
>
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