Tag: economics

Automation Crisis?

Even if nearly all currently existing jobs will eventually be automated, as we progress toward that point new jobs will continue to be created for humans, preventing the kind of mass unemployment or low wages that might be expected, as long as the market has time to adjust (which isn’t necessarily the case– if the pace of automating jobs were to speed up enough, we could still see a crisis.) However, once machines surpass human capabilities for a low enough price in all jobs, the entire economy will change and something else will take its place. What that is we can’t really say– our economic models break down, and the future becomes even more difficult to predict. Beyond this point, we don’t even know to what extent humans are still guiding the course of civilization, let alone how employment will work.

Internet GDP

Are we undermeasuring productivity gains from the internet?

the productivity slowdown implies a cumulative loss of $2.7t in GDP since the end of 2004; in other words, output would have been that much higher had the earlier rate of productivity growth been maintained. If unmeasured gains are to make up for that difference, that would have to be very large. For instance, consumer surplus would have to be 5x higher in IT-related sectors than elsewhere in the economy, which seems implausibly large.

and

the US productivity slowdown dates back to 1973, and that is perhaps the single biggest problem for trying to attribute this gap mainly to under-measured innovations in the tech sector

Future Of Work stories

The future of work is likely to be complicated

The Nole Edge Economy: I’ve been talking a lot about protocols over platforms lately, and wanted to explore such a world in a fictional context — and combined 2 other elements: the incredible wealth of DIY info found totally free online such as on YouTube (I was inspired to write this after learning how to rebuild a carburetor via YouTube videos) and also the odd dependencies created by shareable, reusable code. Also, there’s a little nod towards SLAPP suits as well. In short, this is a story that hits on a lot of regular Techdirt points.

eMotion: by our very own Timothy Geigner. He kept telling me he was too busy to write something, and then at the last minute delivered this wonderful story exploring what the world might look like when artificial intelligence is granted its own rights — and starts to require what probably can’t be called “human” resources any more when dealing with job changes and transitions. But, in such a world, certainly the line begins to blur between who gets to make decisions for whom. And, I mean, how do you let a military artificial intelligence know that its services are no longer needed.

Genetic Changelings: by Keyan Bowes was one of the few stories we received that didn’t focus on artificial intelligence, but rather started exploring a world where genetic engineering has taken off to fairly spectacular levels. It’s a world that will seem quite familiar to today’s… but with a few potentially startling differences. I mean, when a story starts out in its first line discussing a child’s tail, you know it’s going to be a bit different.

Harbinger customers

there exist “harbinger customers” who systematically purchase new products that fail (and are discontinued by retailers). This article extends this result in 2 ways. First, the findings document the existence of “harbinger zip codes.” If households in these zip codes adopt a new product, this is a signal that the new product will fail. Second, a series of comparisons reveal that households in harbinger zip codes make other decisions that differ from other households. The first comparison identifies harbinger zip codes using purchases from one retailer and then evaluates purchases at a different retailer. Households in harbinger zip codes purchase products from the second retailer that other households are less likely to purchase. The analysis next compares donations to congressional election candidates; households in harbinger zip codes donate to different candidates than households in neighboring zip codes, and they donate to candidates who are less likely to win. House prices in harbinger zip codes also increase at slower rates than in neighboring zip codes. Investigation of households that change zip codes indicates that the harbinger zip code effect is more due to where customers choose to live, rather than households influencing their neighbors’ tendencies.

Existential risk and growth

Technological innovation can create or mitigate risks of catastrophes—such as nuclear war, extreme climate change, or powerful artificial intelligence run amok—that could imperil human civilization. What is the relationship between economic growth and these existential risks? In a model of endogenous and directed technical change, with moderate parameters, existential risk follows a Kuznets-style inverted Ushape. This suggests we could be living in a unique “time of perils,” having developed technologies advanced enough to threaten our permanent destruction, but not having grown wealthy enough yet to be willing to spend much on safety. Accelerating growth during this “time of perils” initially increases risk, but improves the chances of humanity’s survival in the long run. Conversely, even short-term stagnation could substantially curtail the future of humanity. Nevertheless, if the scale effect of existential risk is large and the returns to research diminish rapidly, it may be impossible to avert an eventual existential catastrophe.

UBI Plans

most of them fail on basic math – they rely on funding schemes that wouldn’t come close to covering costs. The rest are too small to actually lift people out of poverty. None of them are at all credible. These plans fail even though they cheat and give themselves dictatorial power. “End corporate welfare, then redirect the money to UBI!” But if it was that easy to end corporate welfare, wouldn’t people have done it already, for non-UBI related reasons? “We’ll get a UBI by ending corporate welfare” is an outrageous claim. And even the plans that let themselves make it fail on basic math.

Grabbing Now vs Later

So instead of grabbing stuff from the rich and businesses today, consider the option of waiting, to grab later. If you don’t grab stuff from them today, these actors will invest much of that stuff, producing a lot more stuff later. Yes, you might think some of your favorite projects are good investments, but let’s be honest; most of the stuff you grab won’t be invested, and the investments that do happen will be driven more by political than rate-of-return considerations. Furthermore, if you grab a lot today, news of that event will discourage future folks from generating stuff, and encourage those folks to move and hide it better.

Hal Varian

COWEN: But then you must think we’re not doing enough theory today. Or do you think it’s simply exhausted for a while? VARIAN: Well, one area of theory that I’ve found very exciting is algorithmic mechanism design. With algorithmic mechanism design, it’s a combination of computer science and economics. The idea is, you take the economic model, and you bring in computational costs, or show me an algorithm that actually solves that maximization problem. Then on the other side, the computer side, you build incentives into the algorithms. So if multiple people are using, let’s say, some communications protocol, you want them all to have the right incentives to have the efficient use of that protocol. So that’s a case where it really has very strong real-world applications to doing this — everything from telecommunications to AdWords auctions.

Privacy economics

the major tech companies are much less of a threat to our actual privacy than is typically assumed. For most people, gossip from friends, relatives, colleagues, and acquaintances is a bigger privacy risk than is information garnered on-line. Gossip is an age-old problem, and still today many of the biggest privacy harms come through very traditional channels. Privacy is a real issue, but to the extent it can be fixed, most of that needs to happen outside of the major tech companies. Most of what is written about tech and privacy is simply steering us down the wrong track.