The inevitable automation of a large part of the job market & how to profit.

[Laxputs]

Watch this very well done short doc. 15 minutes. Then tell me how to profit from it please.

 

[LC]

Find out which monopoloy/oligopolies this will impact. More competitive industries will most likely pass the cost savings down the line.

 

 

[yadayada]

LRM, ASPS and OPRX come to mind.

[beerbaron]

IBM has made Watson and data analysis as one of their 3 pillars for future growth. They are probably the only company in the world to put that much effort and resources.

 

BeerBaron

 

 

[radioheadok3]

While I agree with many aspects of the video, I think it misses the big point that wealth/resources cannot endlessly accrue to capital providers. At some point in the automation cycle we'll hit the point where there is real demand destruction and/or a deepening of the economic divide already present in our country. Both of these scenarios would lead to civil unrest and hopefully a redistribution of wealth. The very jobs that are being automated are the ones that are needed to support products produced by automation. The premise that automation can happen ad infinitum without eventually destroying the economy is specious, in my opinion.

[rkbabang]

While I agree with many aspects of the video, I think it misses the big point that wealth/resources cannot endlessly accrue to capital providers. At some point in the automation cycle we'll hit the point where there is real demand destruction and/or a deepening of the economic divide already present in our country. Both of these scenarios would lead to civil unrest and hopefully a redistribution of wealth. The very jobs that are being automated are the ones that are needed to support products produced by automation. The premise that automation can happen ad infinitum without eventually destroying the economy is specious, in my opinion.

 

There isn't a finite amount of stuff to do.  It isn't as if you can say, OK now we have these jobs filled that is it, there is nothing left.  Human wants are infinite, thus there will always be more to do.  That isn't to say that someone who works 25 years in a factory and loses his job to automation won't be in trouble.  At a certain age learning new skills is difficult. And who wants to start over at the bottom in a new industry late in life?  Those people will likely remain unemployed, but the next generation will simply learn different skills.  This is capitalism's creative destruction and there are always people hurt in the shuffle.  It isn't a new phenomenon.

[DTEJD1997]

While I agree with many aspects of the video, I think it misses the big point that wealth/resources cannot endlessly accrue to capital providers. At some point in the automation cycle we'll hit the point where there is real demand destruction and/or a deepening of the economic divide already present in our country. Both of these scenarios would lead to civil unrest and hopefully a redistribution of wealth. The very jobs that are being automated are the ones that are needed to support products produced by automation. The premise that automation can happen ad infinitum without eventually destroying the economy is specious, in my opinion.

 

There isn't a finite amount of stuff to do.  It isn't as if you can say, OK now we have these jobs filled that is it, there is nothing left.  Human wants are infinite, thus there will always be more to do.  That isn't to say that someone who works 25 years in a factory and loses his job to automation won't be in trouble.  At a certain age learning new skills is difficult. And who wants to start over at the bottom in a new industry late in life?  Those people will likely remain unemployed, but the next generation will simply learn different skills.  This is capitalism's creative destruction and there are always people hurt in the shuffle.  It isn't a new phenomenon.

 

There is always change going on...I work in an industry that is likely to have 85% less workers in about 5 years due to software improvements/learning (document review).  What is interesting is the people I work with.  Most of them are in their very late 20's and early 30's.  Most of them still live at home.  Most of them are saddled with $100k+ in student loan debt.  A significant percentage have $200k+.  They all have graduate degrees and are all professionally licensed attorneys.

 

I have a hard time figuring out a good outcome for these people...They make enough to live, and perhaps to pay interest on the loans...but not enough to make a dent vs. the balance due.  If these people stay in the legal profession, they simply can't make enough to pay their loans.  These people are going to be a "lost generation".

 

The other problem is that it is very rare to get 2,000 hours of work in a year.  A more realistic assumption would be around 1,500 hours.  This is because we work on a project basis.  When the project is over, there is no more need for workers, and you get "benched".  There are frequently multiple projects going at the same time, but there are times when nothing is going on (right now).  Of course, the better you are, the more work you get.  However, only maybe the top 5% are employed 2,000 hours a year.

 

Some of these people went to highly ranked schools too.  I work with a Georgetown graduate, Duke, Vanderbilt, University of Michigan...and others.

 

The document review industry employs a lot of people now, but automation & improvements will eliminate a lot of those jobs in a few years.  This will add to labor displacement.

 

There is also a problem with off-shoring legal work to India.  The ABA has said as long as it is supervised by an a licensed American attorney and the locals are locally licensed, it is OK.

 

Thus, the legal industry has lost a lot of jobs, and it will continue into the future.  How many other industries are like this?

 

 

 

 

[rkbabang]

While I agree with many aspects of the video, I think it misses the big point that wealth/resources cannot endlessly accrue to capital providers. At some point in the automation cycle we'll hit the point where there is real demand destruction and/or a deepening of the economic divide already present in our country. Both of these scenarios would lead to civil unrest and hopefully a redistribution of wealth. The very jobs that are being automated are the ones that are needed to support products produced by automation. The premise that automation can happen ad infinitum without eventually destroying the economy is specious, in my opinion.

 

There isn't a finite amount of stuff to do.  It isn't as if you can say, OK now we have these jobs filled that is it, there is nothing left.  Human wants are infinite, thus there will always be more to do.  That isn't to say that someone who works 25 years in a factory and loses his job to automation won't be in trouble.  At a certain age learning new skills is difficult. And who wants to start over at the bottom in a new industry late in life?  Those people will likely remain unemployed, but the next generation will simply learn different skills.  This is capitalism's creative destruction and there are always people hurt in the shuffle.  It isn't a new phenomenon.

 

There is always change going on...I work in an industry that is likely to have 85% less workers in about 5 years due to software improvements/learning (document review).  What is interesting is the people I work with.  Most of them are in their very late 20's and early 30's.  Most of them still live at home.  Most of them are saddled with $100k+ in student loan debt.  A significant percentage have $200k+.  They all have graduate degrees and are all professionally licensed attorneys.

 

I have a hard time figuring out a good outcome for these people...They make enough to live, and perhaps to pay interest on the loans...but not enough to make a dent vs. the balance due.  If these people stay in the legal profession, they simply can't make enough to pay their loans.  These people are going to be a "lost generation".

 

The other problem is that it is very rare to get 2,000 hours of work in a year.  A more realistic assumption would be around 1,500 hours.  This is because we work on a project basis.  When the project is over, there is no more need for workers, and you get "benched".  There are frequently multiple projects going at the same time, but there are times when nothing is going on (right now).  Of course, the better you are, the more work you get.  However, only maybe the top 5% are employed 2,000 hours a year.

 

Some of these people went to highly ranked schools too.  I work with a Georgetown graduate, Duke, Vanderbilt, University of Michigan...and others.

 

The document review industry employs a lot of people now, but automation & improvements will eliminate a lot of those jobs in a few years.  This will add to labor displacement.

 

There is also a problem with off-shoring legal work to India.  The ABA has said as long as it is supervised by an a licensed American attorney and the locals are locally licensed, it is OK.

 

Thus, the legal industry has lost a lot of jobs, and it will continue into the future.  How many other industries are like this?

 

 

Quite a lot, I'd imagine.  The sad fact is, if you are young and want to be employed you probably should be studying some kind of science or engineering.  Maybe medicine or finance would work too.  I've told both of my kids this already.  Taking out student loans for any other field isn't going to end well.  The world is what it is, not what we want it to be.  Spending all kinds of money and just hoping it works out isn't a good strategy.

 

[jouni1]

::) it breaks my heart that there's no future for sobotkas on the waterfront!

[yadayada]

except then they will steal your stuff.

 

I guess the problem is that the last revolution simply changed the way work was done. Manual labor went from the farms to the factories, and now the manual labor is replaced, and also most of the brain work is replaced. You have a few jobs for the people who can design all these machines that will put people out of work, and when that is done it kind of runs itself mostly.

 

You basicly only have service jobs now. And creative jobs. I mean creativity and empathy , and very complex stuff. That is basicly the three area's that cannot be replaced (yet). And it seems this will only give a small amount of jobs. Marx might be right after all.

 

On the other hand, stuff will become cheaper and cheaper. So cost of living should come down drastically too? But the problem here is that housing, healthcare and education will stay expensive.

[Guest longinvestor]

This is a thought provoking video and yes, very well done, including the impactful choice of words in the narration. Food for thought but could I suggest stock picks just from the video? Wish I was that smart, would not have been on message boards now, but on the board of directors!

 

I have worked all my life as an engineer in the manufacturing world and would like to temper the generalizations made in the video based on my learnings from industry. Questions I have include,

 

- Does/ has all automation work/ed? No they do/have not. In my experience, there has been plenty of capital destroyed via automation that was poorly conceived/designed/implemented. This includes large scale IT system deployments.

- Are all tasks automatable in the real world, outside of the laboratories? This is not just a question of the physics or chemistry behind but the economic relevance and such. The world stopped buying model T's  a while back. As an engineer, I've seen that as humans we suck at flexible automation. The low skilled jobs that the automation purportedly was designed to save, spawned (unintentionally of course) very highly skilled positions which barely kept the automation working. I've seen many cases where the automation was abandoned. Again, this includes physical as well as IT automation. The world did not need it, could not afford it etc.

 

Perhaps, and this is just my observation, one of the single best business where we can learn about the correct approach to automation is Toyota. The pioneers of the famed Toyota Production System figured out long before the rest of the world did, that an intelligent (versus blind) approach to automation was exactly what was called for since about the 1960's. They were the first to see the world moving to mass customization, away from mass production giving birth to the TPS. There is more to the TPS than just the approach to automation but I am trying to raise awareness that it's not "if it is automated it's got to be good"

 

Back to the question posed by the original poster, where can we profit from this? Find businesses that are ardent pupils of the Toyota Production System. A classic example is Danaher. They don't make cars but follow the principles. They have made plenty of money for shareholders.  Colfax is a sister company of sorts and there are threads for both. Surely there are many others and I do know that there are some analysts out there who use this investment thesis, looking for truly lean companies to invest in. And these are likely long term investments.

[oddballstocks]

While I agree with many aspects of the video, I think it misses the big point that wealth/resources cannot endlessly accrue to capital providers. At some point in the automation cycle we'll hit the point where there is real demand destruction and/or a deepening of the economic divide already present in our country. Both of these scenarios would lead to civil unrest and hopefully a redistribution of wealth. The very jobs that are being automated are the ones that are needed to support products produced by automation. The premise that automation can happen ad infinitum without eventually destroying the economy is specious, in my opinion.

 

There isn't a finite amount of stuff to do.  It isn't as if you can say, OK now we have these jobs filled that is it, there is nothing left.  Human wants are infinite, thus there will always be more to do.  That isn't to say that someone who works 25 years in a factory and loses his job to automation won't be in trouble.  At a certain age learning new skills is difficult. And who wants to start over at the bottom in a new industry late in life?  Those people will likely remain unemployed, but the next generation will simply learn different skills.  This is capitalism's creative destruction and there are always people hurt in the shuffle.  It isn't a new phenomenon.

 

There is always change going on...I work in an industry that is likely to have 85% less workers in about 5 years due to software improvements/learning (document review).  What is interesting is the people I work with.  Most of them are in their very late 20's and early 30's.  Most of them still live at home.  Most of them are saddled with $100k+ in student loan debt.  A significant percentage have $200k+.  They all have graduate degrees and are all professionally licensed attorneys.

 

I have a hard time figuring out a good outcome for these people...They make enough to live, and perhaps to pay interest on the loans...but not enough to make a dent vs. the balance due.  If these people stay in the legal profession, they simply can't make enough to pay their loans.  These people are going to be a "lost generation".

 

The other problem is that it is very rare to get 2,000 hours of work in a year.  A more realistic assumption would be around 1,500 hours.  This is because we work on a project basis.  When the project is over, there is no more need for workers, and you get "benched".  There are frequently multiple projects going at the same time, but there are times when nothing is going on (right now).  Of course, the better you are, the more work you get.  However, only maybe the top 5% are employed 2,000 hours a year.

 

Some of these people went to highly ranked schools too.  I work with a Georgetown graduate, Duke, Vanderbilt, University of Michigan...and others.

 

The document review industry employs a lot of people now, but automation & improvements will eliminate a lot of those jobs in a few years.  This will add to labor displacement.

 

There is also a problem with off-shoring legal work to India.  The ABA has said as long as it is supervised by an a licensed American attorney and the locals are locally licensed, it is OK.

 

Thus, the legal industry has lost a lot of jobs, and it will continue into the future.  How many other industries are like this?

 

 

Quite a lot, I'd imagine.  The sad fact is, if you are young and want to be employed you probably should be studying some kind of science or engineering.  Maybe medicine or finance would work too.  I've told both of my kids this already.  Taking out student loans for any other field isn't going to end well.  The world is what it is, not what we want it to be.  Spending all kinds of money and just hoping it works out isn't a good strategy.

 

I have a degree in Computer Science and spent my first few years out of college programming various systems.  Then I realized I loved finance and worked to steer my career into a non-programming direction.  Then I had the light bulb moment, I had two skill sets that are unique and combining them would be much better than just one on it's own.  So now I have a finance startup.  There are things we're doing that a programmer couldn't do without a very deep understanding of specific topic areas.  But the power of automation is mind numbing.  I can pull back every single bank in the US and value them 5 different ways instantly. 

 

In the past the problem was getting data, now it's applying the data.  This is where creativity comes into play.  It's been fun to work on this stuff and get both sides of my brain working again.  I'm no longer 'running' from programming, I've merely embraced it and applied my finance knowledge to it.  That's where the power is.

 

I have no idea what to suggest my kids do.  Anything my dad suggested I didn't listen to.  My friend knows a guy who started covering one song a day on YouTube with his guitar.  Then he branched out into writing a song a day and making a video.  The guy isn't on MTV or anything, but he has enough of a following that he is living off the ad revenue from YouTube for his full time job.  These aren't things colleges are preparing kids for, it's entrepreneurism and creativity combined with whatever natural talents are possessed.  Cool stuff.

[Vish_ram]

There will be plenty of service jobs created.

 

example - huge % of population in US will be morbidly obese. You need some help them change their bed pan, give them a sponge bath etc.

 

The big % of young and unemployed (unemployable) will become (already did become) electronic addicts (years of playing clash of clans, and other games). There'll be more de-addiction centers than McD's. More jobs..

 

I can go on and on

 

[rkbabang]

While I agree with many aspects of the video, I think it misses the big point that wealth/resources cannot endlessly accrue to capital providers. At some point in the automation cycle we'll hit the point where there is real demand destruction and/or a deepening of the economic divide already present in our country. Both of these scenarios would lead to civil unrest and hopefully a redistribution of wealth. The very jobs that are being automated are the ones that are needed to support products produced by automation. The premise that automation can happen ad infinitum without eventually destroying the economy is specious, in my opinion.

 

There isn't a finite amount of stuff to do.  It isn't as if you can say, OK now we have these jobs filled that is it, there is nothing left.  Human wants are infinite, thus there will always be more to do.  That isn't to say that someone who works 25 years in a factory and loses his job to automation won't be in trouble.  At a certain age learning new skills is difficult. And who wants to start over at the bottom in a new industry late in life?  Those people will likely remain unemployed, but the next generation will simply learn different skills.  This is capitalism's creative destruction and there are always people hurt in the shuffle.  It isn't a new phenomenon.

 

There is always change going on...I work in an industry that is likely to have 85% less workers in about 5 years due to software improvements/learning (document review).  What is interesting is the people I work with.  Most of them are in their very late 20's and early 30's.  Most of them still live at home.  Most of them are saddled with $100k+ in student loan debt.  A significant percentage have $200k+.  They all have graduate degrees and are all professionally licensed attorneys.

 

I have a hard time figuring out a good outcome for these people...They make enough to live, and perhaps to pay interest on the loans...but not enough to make a dent vs. the balance due.  If these people stay in the legal profession, they simply can't make enough to pay their loans.  These people are going to be a "lost generation".

 

The other problem is that it is very rare to get 2,000 hours of work in a year.  A more realistic assumption would be around 1,500 hours.  This is because we work on a project basis.  When the project is over, there is no more need for workers, and you get "benched".  There are frequently multiple projects going at the same time, but there are times when nothing is going on (right now).  Of course, the better you are, the more work you get.  However, only maybe the top 5% are employed 2,000 hours a year.

 

Some of these people went to highly ranked schools too.  I work with a Georgetown graduate, Duke, Vanderbilt, University of Michigan...and others.

 

The document review industry employs a lot of people now, but automation & improvements will eliminate a lot of those jobs in a few years.  This will add to labor displacement.

 

There is also a problem with off-shoring legal work to India.  The ABA has said as long as it is supervised by an a licensed American attorney and the locals are locally licensed, it is OK.

 

Thus, the legal industry has lost a lot of jobs, and it will continue into the future.  How many other industries are like this?

 

 

Quite a lot, I'd imagine.  The sad fact is, if you are young and want to be employed you probably should be studying some kind of science or engineering.  Maybe medicine or finance would work too.  I've told both of my kids this already.  Taking out student loans for any other field isn't going to end well.  The world is what it is, not what we want it to be.  Spending all kinds of money and just hoping it works out isn't a good strategy.

 

I have a degree in Computer Science and spent my first few years out of college programming various systems.  Then I realized I loved finance and worked to steer my career into a non-programming direction.  Then I had the light bulb moment, I had two skill sets that are unique and combining them would be much better than just one on it's own.  So now I have a finance startup.  There are things we're doing that a programmer couldn't do without a very deep understanding of specific topic areas.  But the power of automation is mind numbing.  I can pull back every single bank in the US and value them 5 different ways instantly. 

 

In the past the problem was getting data, now it's applying the data.  This is where creativity comes into play.  It's been fun to work on this stuff and get both sides of my brain working again.  I'm no longer 'running' from programming, I've merely embraced it and applied my finance knowledge to it.  That's where the power is.

 

I have no idea what to suggest my kids do.  Anything my dad suggested I didn't listen to.  My friend knows a guy who started covering one song a day on YouTube with his guitar.  Then he branched out into writing a song a day and making a video.  The guy isn't on MTV or anything, but he has enough of a following that he is living off the ad revenue from YouTube for his full time job.  These aren't things colleges are preparing kids for, it's entrepreneurism and creativity combined with whatever natural talents are possessed.  Cool stuff.

 

Very cool stuff, both your story and the youtube entrepreneur.  My point wasn't that science, engineering, medicine and finance are the only things you can do.  Far from it.  For a creative person willing to take some risks, starting a business, etc, the sky is the limit.  Like I said above there will always be plenty of stuff that needs doing.  But what I was saying is that those fields are the only fields likely to be worth taking on large amounts of student debt for.    Your youtube entrepreneur would not have benefited from taking large student loans to get a liberal arts degree.

[yadayada]

I knew someone who made pieces of art out of glass and sold them online for several 100 euro's. There are lot's of people like this. I hear a lot of people complaining about the one %, they should be thinking about how to make money of them. A small group with enourmous amounts of capital and not much to do, must be a lot of opportunnities!

 

Basicly if your driven you will make it. You cannot sell art like that if you go through art school like a drone.

 

Also a lot of the service jobs mentioned above need to be paid for. How will these obese people pay for them? They will have to get money from the government. Jobs are suposed to add value. Otherwhise it is just leeching tax money to keep them offf the street.

[gary17]

this is one company i've invested in taiwan that'd slowly replace human labour -

 

http://markets.ft.com/research/Markets/Tearsheets/Summary?s=6206:TAI

 

they pay about 5% cash dividend + 10% stock dividend each year ,   

 

for most people, however, it'll be difficult to buy unless you have an account in Taiwan.

 

Gary

[Valuebo]

While I agree with many aspects of the video, I think it misses the big point that wealth/resources cannot endlessly accrue to capital providers. At some point in the automation cycle we'll hit the point where there is real demand destruction and/or a deepening of the economic divide already present in our country. Both of these scenarios would lead to civil unrest and hopefully a redistribution of wealth. The very jobs that are being automated are the ones that are needed to support products produced by automation. The premise that automation can happen ad infinitum without eventually destroying the economy is specious, in my opinion.

 

There isn't a finite amount of stuff to do.  It isn't as if you can say, OK now we have these jobs filled that is it, there is nothing left.  Human wants are infinite, thus there will always be more to do.  That isn't to say that someone who works 25 years in a factory and loses his job to automation won't be in trouble.  At a certain age learning new skills is difficult. And who wants to start over at the bottom in a new industry late in life?  Those people will likely remain unemployed, but the next generation will simply learn different skills.  This is capitalism's creative destruction and there are always people hurt in the shuffle.  It isn't a new phenomenon.

 

There is always change going on...I work in an industry that is likely to have 85% less workers in about 5 years due to software improvements/learning (document review).  What is interesting is the people I work with.  Most of them are in their very late 20's and early 30's.  Most of them still live at home.  Most of them are saddled with $100k+ in student loan debt.  A significant percentage have $200k+.  They all have graduate degrees and are all professionally licensed attorneys.

 

I have a hard time figuring out a good outcome for these people...They make enough to live, and perhaps to pay interest on the loans...but not enough to make a dent vs. the balance due.  If these people stay in the legal profession, they simply can't make enough to pay their loans.  These people are going to be a "lost generation".

 

The other problem is that it is very rare to get 2,000 hours of work in a year.  A more realistic assumption would be around 1,500 hours.  This is because we work on a project basis.  When the project is over, there is no more need for workers, and you get "benched".  There are frequently multiple projects going at the same time, but there are times when nothing is going on (right now).  Of course, the better you are, the more work you get.  However, only maybe the top 5% are employed 2,000 hours a year.

 

Some of these people went to highly ranked schools too.  I work with a Georgetown graduate, Duke, Vanderbilt, University of Michigan...and others.

 

The document review industry employs a lot of people now, but automation & improvements will eliminate a lot of those jobs in a few years.  This will add to labor displacement.

 

There is also a problem with off-shoring legal work to India.  The ABA has said as long as it is supervised by an a licensed American attorney and the locals are locally licensed, it is OK.

 

Thus, the legal industry has lost a lot of jobs, and it will continue into the future.  How many other industries are like this?

 

 

Quite a lot, I'd imagine.  The sad fact is, if you are young and want to be employed you probably should be studying some kind of science or engineering.  Maybe medicine or finance would work too.  I've told both of my kids this already.  Taking out student loans for any other field isn't going to end well.  The world is what it is, not what we want it to be.  Spending all kinds of money and just hoping it works out isn't a good strategy.

 

I have a degree in Computer Science and spent my first few years out of college programming various systems.  Then I realized I loved finance and worked to steer my career into a non-programming direction.  Then I had the light bulb moment, I had two skill sets that are unique and combining them would be much better than just one on it's own.  So now I have a finance startup.  There are things we're doing that a programmer couldn't do without a very deep understanding of specific topic areas.  But the power of automation is mind numbing.  I can pull back every single bank in the US and value them 5 different ways instantly. 

 

In the past the problem was getting data, now it's applying the data.  This is where creativity comes into play.  It's been fun to work on this stuff and get both sides of my brain working again.  I'm no longer 'running' from programming, I've merely embraced it and applied my finance knowledge to it.  That's where the power is.

 

I have no idea what to suggest my kids do.  Anything my dad suggested I didn't listen to.  My friend knows a guy who started covering one song a day on YouTube with his guitar.  Then he branched out into writing a song a day and making a video.  The guy isn't on MTV or anything, but he has enough of a following that he is living off the ad revenue from YouTube for his full time job.  These aren't things colleges are preparing kids for, it's entrepreneurism and creativity combined with whatever natural talents are possessed.  Cool stuff.

 

Interesting oddballstocks. Really like the start up and hope you do well!

 

I have a bachelor in finance and am starting a basic .NET programming course in 3 weeks. Classes at night 2 times/week, only a small fee and paid education holiday to study (government pays back my employer). I only know some front end web dev so no idea whether I'll like this. At the very least I'm broadening my general knowledge. Zero risk and at 25 still very easy to do. I could do this annually if wanted, quite a few things to try out!  8)

Doing nothing is basically employment suicide over the long run. Sad most don't seem to realize this. Here too (back office in insurance), lots of jobs will disappear in the next 5-20 years. Those that remain will have to shift more and more to an advisory job and focus less and less on administration/input of data.

 

I dare to bet that we'll continue to see technology develop lots of new sectors where jobs will sprout from. It happened in the past and it will happen again. Service jobs will increase as well and I don't see how they generally won't add value. It's simply a matter of broadened living standards and increased wealth that adds all these layers of things that are considered value adding and support the economy. Our economic limit is likely very far out, even if we continue to automate the most mundane daily tasks in our daily and professional lives.

 

Just my 2 cents!

[turar]

In the past the problem was getting data, now it's applying the data.

Slightly off-topic, but where are you getting your data for your startup, and how much do you pay, if anything? Sorry if this might be too intrusive of a question, feel free to ignore.

[randomep]

 

Shouldn't the answer to this thread be: OWN INCOME PRODUCING CAPITAL???

 

Doesn't all this mean money is moving from the workers to the company owners (shareholders?).

[Fat Pitch]

 

Shouldn't the answer to this thread be: OWN INCOME PRODUCING CAPITAL???

 

Doesn't all this mean money is moving from the workers to the company owners (shareholders?).

 

I'm glad someone figured it out. The whole premise of an economy is centered around the owners of production "renting" the labor from "freed" folks. Turns out it's cheaper to pay someone a wage then actually owning them since wages can deflate in real terms, but having to feed, clothe, and put a roof over their heads actually keeps up with inflation.

 

Karl Marx alluded to the final steps of capitalism is to completely displace human labor with machines in his Communist Manifesto. Of course the workers will feel disenfranchised and rise up beginning the age of communism. Pretty amazing foresight from someone writing in the 1800's.

 

[LC]

 

Shouldn't the answer to this thread be: OWN INCOME PRODUCING CAPITAL???

 

Doesn't all this mean money is moving from the workers to the company owners (shareholders?).

 

I'm glad someone figured it out. The whole premise of an economy is centered around the owners of production "renting" the labor from "freed" folks. Turns out it's cheaper to pay someone a wage then actually owning them since wages can deflate in real terms, but having to feed, clothe, and put a roof over their heads actually keeps up with inflation.

 

Karl Marx alluded to the final steps of capitalism is to completely displace human labor with machines in his Communist Manifesto. Of course the workers will feel disenfranchised and rise up beginning the age of communism. Pretty amazing foresight from someone writing in the 1800's.

 

Maybe for society this is true, but take the business owner's perspective. I see it a lot like Buffett talking about Berkshire back when he bought it. All the textile mills buy new equipment to lower their cost but never see any of the margin expansion due to competition...all the cost savings eventually flow are passed on to their customers. Therefore a monopoly business would benefit most as they don't have as much competitive pressure to pass these cost savings on.

[Guest]

This book is decent but dated.

 

http://www.amazon.com/Lights-Tunnel-Automation-Accelerating-Technology/dp/1448659817

[yadayada]

Altisource is basicly moving customer service for the mortgage servicing industry to countries like india. They have this IT system that feeds people without expertise lines to say to the customers. They only select for high empathy people who will blindly follow what the machine tells them to say.

 

Their complaint ratio is some of the lowest, and they have a almost 70% cost advantage. And these AI systems take quite some time to make and finetune. So that seems a decent moat. So for people saying that tech will create more service jobs, that is only true if you got empathy. But they will be scarcer. So all you have is only  a few new jobs that pay poorly. Over time they will figure out how to replace empathy too, and let some computer voice say all the lines.

 

The point of that video is that even service jobs are sort of being replaced now. No more need to have some financial expert, or someone with a lot of knowledge on how to handle angry homeowners. Just some dumb guy who sounds like he/she has empathy and the machine will do the rest.

 

So now the workforce will be split up in really smart people who design the semismart systems, and some really low level employees with highest empathy levels.

 

And if you think that some machines don't do a good job? Over time this will be tweaked and improved. The first computers did a poor job. And a lot of people thought they were not a threat to a lot of industries. But this is basicly an engineering problem.

 

Since we are now in the early phase of replacing humans with IT systems, ofcourse there will be a lot of bugs and hiccups. But don't you think this will be finetuned over time? Just imagine if you told people when the first computer chips were being made decades ago, that some day all of human knowledge would be in the palm of your hand. They would have called you crazy. Gates said, we overestimate what we can do in 2 years, and underestimate what can happen in 10.

[jay21]

 

Shouldn't the answer to this thread be: OWN INCOME PRODUCING CAPITAL???

 

Doesn't all this mean money is moving from the workers to the company owners (shareholders?).

 

I'm glad someone figured it out. The whole premise of an economy is centered around the owners of production "renting" the labor from "freed" folks. Turns out it's cheaper to pay someone a wage then actually owning them since wages can deflate in real terms, but having to feed, clothe, and put a roof over their heads actually keeps up with inflation.

 

Karl Marx alluded to the final steps of capitalism is to completely displace human labor with machines in his Communist Manifesto. Of course the workers will feel disenfranchised and rise up beginning the age of communism. Pretty amazing foresight from someone writing in the 1800's.

 

I think this was a well established fear before Marx's time.  The Luddites spring to mind as an easy example.

 

Also, I wouldn't necessarily say that owning income producing capital is the definitive answer.  It probably matters what asset we are talking about but let's say a manufacturer as the first poster alluded to money moving from workers to shareholders.  If automation makes the company that more profitable, I think you may see an increase in competition, which will offset some of the profitability gains.

[rkbabang]

The other thing automation brings us is more leisure time with less work needed for us to meet our needs.  As everything becomes automated, everything becomes cheaper and people don't need to earn as much to buy the things they need.  People spend a lot less time working now than they did 100 years ago.  Children don't work at all now, where they used to work almost as much as adults.  Maybe 100 years from now a 3 day work week will be common and the only people who will work more than that will be the low income or just starting out younger people, or people who want to live a more lavish lifestyle.  Think what it would mean for automation brought to the absolute extreme. It would be when you have a nano-replicator in your home and you only need to work maybe 1 day per week to have most of everything you want 'unemployment' won't be a huge issue for anyone who is the least bit technical or creative.  The problem is that the completely unskilled and/or completely uncreative jobs are already disappearing and will continue to do so.