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29-06-2023, 09:20 PM
#15011
https://www.cnbc.com/2023/06/28/powe...-meetings.html
Federal Reserve Chairman Jerome Powell talked tough on inflation Wednesday, saying at a forum that he expects multiple interest rate increases ahead and possibly at an aggressive pace.
“We believe there’s more restriction coming,” Powell said during a monetary policy session in Sintra, Portugal. “What’s really driving it ... is a very strong labor market"
Last edited by Valuegrowth; 29-06-2023 at 09:21 PM.
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29-06-2023, 10:44 PM
#15012
Originally Posted by Valuegrowth
https://www.cnbc.com/2023/06/28/powe...-meetings.html
Federal Reserve Chairman Jerome Powell talked tough on inflation Wednesday, saying at a forum that he expects multiple interest rate increases ahead and possibly at an aggressive pace.
“We believe there’s more restriction coming,” Powell said during a monetary policy session in Sintra, Portugal. “What’s really driving it ... is a very strong labor market"
Good quote VG. Good economic news becomes a double edged sword. At least inflation is dropping and dropping fast in some countries
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30-06-2023, 06:45 AM
#15013
Originally Posted by Valuegrowth
He's fighting the trend of an aging population... many americans are unhealthy to say the least and would rather pack it in at 60.
Last edited by Panda-NZ-; 30-06-2023 at 07:27 AM.
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30-06-2023, 07:23 PM
#15014
Originally Posted by Daytr
Will there be mass unemployment as a result is the big question & I can't see how people will adapt quick enough to new careers, so I think there has to be.
The fear of job loss due variously to mechanisation, automation, computerization, or AI has been a recurring panic for hundreds of years, since the original onset of machinery such as the mechanical loom. Even though every new major technology has led to more jobs at higher wages throughout history, each wave of this panic is accompanied by claims that “this time is different” – this is the time it will finally happen, this is the technology that will finally deliver the hammer blow to human labor.
And yet, it never happens.
We’ve been through two such technology-driven unemployment panic cycles in our recent past – the outsourcing panic of the 2000’s, and the automation panic of the 2010’s. Notwithstanding many talking heads, pundits, and even tech executives pounding the table throughout both decades that mass unemployment was near, by late 2019 – right before the onset of COVID – the world had more jobs at higher wages than ever in history.
Nevertheless this mistaken idea will not die. And sure enough, it's back
This time, we finally have the technology that’s going to take all the jobs and render human workers superfluous – real AI. Surely this time history won’t repeat, and AI will cause mass unemployment – and not rapid economic, job, and wage growth – right?
No, that’s not going to happen – and in fact AI, if allowed to develop and proliferate throughout the economy, may cause the most dramatic and sustained economic boom of all time, with correspondingly record job and wage growth – the exact opposite of the fear. And here’s why.
The core mistake the automation-kills-jobs doomers keep making is called the lump of labour fallacy. This fallacy is the incorrect notion that there is a fixed amount of labor to be done in the economy at any given time, and either machines do it or people do it – and if machines do it, there will be no work for people to do.
The Lump Of Labor Fallacy flows naturally from naive intuition, but naive intuition here is wrong. When technology is applied to production, we get productivity growth – an increase in output generated by a reduction in inputs. The result is lower prices for goods and services. As prices for goods and services fall, we pay less for them, meaning that we now have extra spending power with which to buy other things. This increases demand in the economy, which drives the creation of new production – including new products and new industries – which then creates new jobs for the people who were replaced by machines in prior jobs. The result is a larger economy with higher material prosperity, more industries, more products, and more jobs.
But the good news doesn’t stop there. We also get higher wages. This is because, at the level of the individual worker, the marketplace sets compensation as a function of the marginal productivity of the worker. A worker in a technology-infused business will be more productive than a worker in a traditional business. The employer will either pay that worker more money as he is now more productive, or another employer will, purely out of self interest. The result is that technology introduced into an industry generally not only increases the number of jobs in the industry but also raises wages.
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30-06-2023, 07:26 PM
#15015
Think of what it would mean for literally all existing human labor to be replaced by machines.
It would mean a takeoff rate of economic productivity growth that would be absolutely stratospheric, far beyond any historical precedent. Prices of existing goods and services would drop across the board to virtually zero. Consumer welfare would skyrocket. Consumer spending power would skyrocket. New demand in the economy would explode.
Entrepreneurs would create dizzying arrays of new industries, products, and services, and employ as many people and AI as they could as fast as possible to meet all the new demand.
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30-06-2023, 08:45 PM
#15016
Originally Posted by SailorRob
The fear of job loss due variously to mechanisation, automation, computerization, or AI has been a recurring panic for hundreds of years, since the original onset of machinery such as the mechanical loom. Even though every new major technology has led to more jobs at higher wages throughout history, each wave of this panic is accompanied by claims that “this time is different” – this is the time it will finally happen, this is the technology that will finally deliver the hammer blow to human labor.
And yet, it never happens.
We’ve been through two such technology-driven unemployment panic cycles in our recent past – the outsourcing panic of the 2000’s, and the automation panic of the 2010’s. Notwithstanding many talking heads, pundits, and even tech executives pounding the table throughout both decades that mass unemployment was near, by late 2019 – right before the onset of COVID – the world had more jobs at higher wages than ever in history.
Nevertheless this mistaken idea will not die. And sure enough, it's back
This time, we finally have the technology that’s going to take all the jobs and render human workers superfluous – real AI. Surely this time history won’t repeat, and AI will cause mass unemployment – and not rapid economic, job, and wage growth – right?
No, that’s not going to happen – and in fact AI, if allowed to develop and proliferate throughout the economy, may cause the most dramatic and sustained economic boom of all time, with correspondingly record job and wage growth – the exact opposite of the fear. And here’s why.
The core mistake the automation-kills-jobs doomers keep making is called the lump of labour fallacy. This fallacy is the incorrect notion that there is a fixed amount of labor to be done in the economy at any given time, and either machines do it or people do it – and if machines do it, there will be no work for people to do.
The Lump Of Labor Fallacy flows naturally from naive intuition, but naive intuition here is wrong. When technology is applied to production, we get productivity growth – an increase in output generated by a reduction in inputs. The result is lower prices for goods and services. As prices for goods and services fall, we pay less for them, meaning that we now have extra spending power with which to buy other things. This increases demand in the economy, which drives the creation of new production – including new products and new industries – which then creates new jobs for the people who were replaced by machines in prior jobs. The result is a larger economy with higher material prosperity, more industries, more products, and more jobs.
But the good news doesn’t stop there. We also get higher wages. This is because, at the level of the individual worker, the marketplace sets compensation as a function of the marginal productivity of the worker. A worker in a technology-infused business will be more productive than a worker in a traditional business. The employer will either pay that worker more money as he is now more productive, or another employer will, purely out of self interest. The result is that technology introduced into an industry generally not only increases the number of jobs in the industry but also raises wages.
I fully agree with everything you wrote, bring on the progress! Here's a video on youtube I came across one time that's somewhat humorous.
It's worth noting there is a legitimate argument for regulation of AI, since it could pose an existential threat.
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01-07-2023, 08:04 AM
#15017
It doesn't. Throw out your terminator dvds and spend an hour looking at your toaster. You will sleep better.
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01-07-2023, 08:12 AM
#15018
Originally Posted by SailorRob
It would mean a takeoff rate of economic productivity growth that would be absolutely stratospheric, far beyond any historical precedent. Prices of existing goods and services would drop across the board to virtually zero. Consumer welfare would skyrocket. Consumer spending power would skyrocket. New demand in the economy would explode.
Replace consumer with shareholder welfare and it's true. You're right about prices but there could be a situation where people cannot afford even these low prices, without a secure income.
Last edited by Panda-NZ-; 01-07-2023 at 09:02 AM.
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01-07-2023, 08:14 AM
#15019
Interestingly though... reserve bank policy is to fight deflation using any means necessary.
Which could mean printed money with no inflation consequences, which can be distributed more fairly to the population than currently.
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01-07-2023, 09:02 AM
#15020
Originally Posted by ValueNZ
I fully agree with everything you wrote, bring on the progress! Here's a video on youtube I came across one time that's somewhat humorous.
It's worth noting there is a legitimate argument for regulation of AI, since it could pose an existential threat.
It's sure going to be interesting & you could be correct re the outcome but no one really knows of course. I think some of your assumptions are incorrect.
The basis of job losses isn't based on a fixed amount of Labour required. It's based on the speed of change that is coming and will humans be able to adapt quick enough if their job is made obsolete. Machine learning is only going to accelerate and what occurred over 150 years with industrial revolution could happen in less than 15 years this time.
Will AI create more human jobs than it removes? I personally doubt it. AI will further consolidate wealth within the high tech companies and their power as they have the financial capacity to invest and develop or buy out others that have breakthroughs. These tech companies themselves are huge employers but it will be other industries that they absorb into tech is where the real 'damage' will be done.
Perhaps it's the transitional period that will be the rockies and after a while the expansion period you describe takes over.
What new jobs & new industries do you think AI will create new human jobs in?
Anyway it's all conjecture and it will be interesting how it all pans out, we will know soon enough and everyone is entitled to their own outlook to the future.
Last edited by Daytr; 01-07-2023 at 09:43 AM.
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