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Why Robots Won’t Cause Mass Unemployment – Article by Jonathan Newman

Why Robots Won’t Cause Mass Unemployment – Article by Jonathan Newman

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The New Renaissance Hat
Jonathan Newman
August 5, 2017
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I made a small note in a previous article about how we shouldn’t worry about technology that displaces human workers:

The lamenters don’t seem to understand that increased productivity in one industry frees up resources and laborers for other industries, and, since increased productivity means increased real wages, demand for goods and services will increase as well. They seem to have a nonsensical apocalyptic view of a fully automated future with piles and piles of valuable goods everywhere, but nobody can enjoy them because nobody has a job. I invite the worriers to check out simple supply and demand analysis and Say’s Law.

Say’s Law of markets is a particularly potent antidote to worries about automation, displaced workers, and the so-called “economic singularity.” Jean-Baptiste Say explained how over-production is never a problem for a market economy. This is because all acts of production result in the producer having an increased ability to purchase other goods. In other words, supplying goods on the market allows you to demand goods on the market.

Say’s Law, Rightly Understood

J.B. Say’s Law is often inappropriately summarized as “supply creates its own demand,” a product of Keynes having “badly vulgarized and distorted the law.”

Professor Bylund has recently set the record straight regarding the various summaries and interpretations of Say’s Law.

Bylund lists the proper definitions:

Say’s Law:

  • Production precedes consumption.
  • Demand is constituted by supply.
  • One’s demand for products in the market is limited by one’s supply.
  • Production is undertaken to facilitate consumption.
  • Your supply to satisfy the wants of others makes up your demand for for others’ production.
  • There can be no general over-production (glut) in the market.

NOT Say’s Law:

  • Production creates its own demand.
  • Aggregate supply is (always) equal to aggregate demand.
  • The economy is always at full employment.
  • Production cannot exceed consumption for any good.

Say’s Law should allay the fears of robots taking everybody’s jobs. Producers will only employ more automated (read: capital-intensive) production techniques if such an arrangement is more productive and profitable than a more labor-intensive technique. As revealed by Say’s Law, this means that the more productive producers have an increased ability to purchase more goods on the market. There will never be “piles and piles of valuable goods” laying around with no one to enjoy them.

Will All the Income Slide to the Top?

The robophobic are also worried about income inequality — all the greedy capitalists will take advantage of the increased productivity of the automated techniques and fire all of their employees. Unemployment will rise as we run out of jobs for humans to do, they say.

This fear is unreasonable for three reasons. First of all, how could these greedy capitalists make all their money without a large mass of consumers to purchase their products? If the majority of people are without incomes because of automation, then the majority of people won’t be able to help line the pockets of the greedy capitalists.

Second, there will always be jobs because there will always be scarcity. Human wants are unlimited, diverse, and ever-changing, yet the resources we need to satisfy our desires are limited. The production of any good requires labor and entrepreneurship, so humans will never become unnecessary.

Finally, Say’s Law implies that the profitability of producing all other goods will increase after a technological advancement in the production of one good. Real wages can increase because the greedy robot-using capitalists now have increased demands for all other goods. I hope the following scenario makes this clear.

The Case of the Robot Fairy

This simple scenario shows why the increased productivity of a new, more capital-intensive technique makes everybody better off in the end.

Consider an island of three people: Joe, Mark, and Patrick. The three of them produce coconuts and berries. They prefer a varied diet, but they have their own comparative advantages and preferences over the two goods.

Patrick prefers a stable supply of coconuts and berries every week, and so he worked out a deal with Joe such that Joe would pay him a certain wage in coconuts and berries every week in exchange for Patrick helping Joe gather coconuts. If they have a productive week, Joe gets to keep the extra coconuts and perhaps trade some of the extra coconuts for berries with Mark. If they have a less than productive week, then Patrick still receives his certain wage and Joe has to suffer.

On average, Joe and Patrick produce 50 coconuts/week. In exchange for his labor, Patrick gets 10 coconuts and 5 quarts of berries every week from Joe.

Mark produces the berries on his own. He produces about 30 quarts of berries every week. Joe and Mark usually trade 20 coconuts for 15 quarts of berries. Joe needs some of those berries to pay Patrick, but some are for himself because he also likes to consume berries.

In sum, and for an average week, Joe and Patrick produce 50 coconuts and Mark produces 30 quarts of berries. Joe ends up with 20 coconuts and 10 quarts of berries, Patrick ends up with 10 coconuts and 5 quarts of berries, and Mark ends up with 20 coconuts and 15 quarts of berries.

Production Trade Consumption
Joe 50 Coconuts (C) Give 20C for 15B 20C + 10B
Patrick n/a 10C + 5B (wage)
Mark 30 qts. Berries (B) Give 15B for 20C 20C + 15B

The Robot Fairy Visits

One night, the robot fairy visits the island and endows Joe with a Patrick 9000, a robot that totally displaces Patrick from his job, plus some. With the robot, Joe can now produce 100 coconuts per week without the human Patrick.

What is Patrick to do? Well, he considers two options: (1) Now that the island has plenty of coconuts, he could go work for Mark and pick berries under a similar arrangement he had with Joe; or (2) Patrick could head to the beach and start catching some fish, hoping that Joe and Mark will trade with him.

While these options weren’t Patrick’s top choices before the robot fairy visited, now they are great options precisely because Joe’s productivity has increased. Joe’s increased productivity doesn’t just mean that he is richer in terms of coconuts, but his demands for berries and new goods like fish increase as well (Say’s Law), meaning the profitability of producing all other goods that Joe likes also increases!

Option 1

If Patrick chooses option 1 and goes to work for Mark, then both berry and coconut production totals will increase. Assuming berry production doesn’t increase as much as coconut production, the price of a coconut in terms of berries will decrease (Joe’s marginal utility for coconuts will also be very low), meaning Mark can purchase many more coconuts than before.

Suppose Patrick adds 15 quarts of berries per week to Mark’s production. Joe and Mark could agree to trade 40 coconuts for 20 quarts of berries, so Joe ends up with 60 coconuts and 20 quarts of berries. Mark can pay Patrick up to 19 coconuts and 9 quarts of berries and still be better off compared to before Joe got his Patrick 9000 (though Patrick’s marginal productivity would warrant something like 12 coconuts and 9 quarts of berries or 18 coconuts and 6 quarts of berries or some combination between those — no matter what, everybody is better off).

Production Trade Consumption
Joe 100C Give 40C for 20B 60C + 20B
Patrick 45B n/a 16C + 7B (wage)
Mark Give 20B for 40C 24C + 18B

Option 2

If Mark decides to reject Patrick’s offer to work for him, then Patrick can choose option 2, catching fish. It involves more uncertainty than what Patrick is used to, but he anticipates that the extra food will be worth it.

Suppose that Patrick can produce just 5 fish per week. Joe, who is practically swimming in coconuts pays Patrick 20 coconuts for 1 fish. Mark, who is excited about more diversity in his diet and even prefers fish to his own berries, pays Patrick 10 quarts of berries for 2 fish. Joe and Mark also trade some coconuts and berries.

In the end, Patrick gets 20 coconuts, 10 quarts of berries, and 2 fish per week. Joe gets 50 coconuts, 15 quarts of berries, and 1 fish per week. Mark gets 30 coconuts, 5 quarts of berries, and 2 fish per week. Everybody prefers their new diet.

Production Trade Consumption
Joe 100C Give 50C for 15B + 1F 50C + 15B + 1F
Patrick 5 fish (F) Give 2F for 20C + 10B 20C + 10B + 2F
Mark 30B Give 25B for 30C + 1F 30C + 5B + 2F

Conclusion

The new technology forced Patrick to find a new way to sustain himself. These new jobs were necessarily second-best (at most) to working for Joe in the pre-robot days, or else Patrick would have pursued them earlier. But just because they were suboptimal pre-robot does not mean that they are suboptimal post-robot. The island’s economy was dramatically changed by the robot, such that total production (and therefore consumption) could increase for everybody. Joe’s increased productivity translated into better deals for everybody.

Of course, one extremely unrealistic aspect of this robot fairy story is the robot fairy. Robot fairies do not exist, unfortunately. New technologies must be wrangled into existence by human labor and natural resources, with the help of capital goods, which also must be produced using labor and natural resources. Also, new machines have to be maintained, replaced, refueled, and rejiggered, all of which require human labor. Thus, we have made this scenario difficult for ourselves by assuming away all of the labor that would be required to produce and maintain the Patrick 9000. Even so, we see that the whole economy, including the human Patrick, benefits as a result of the new robot.

This scenario highlights three important points:

(1) Production must precede consumption, even for goods you don’t produce (Say’s Law). For Mark to consume coconuts or fish, he has to supply berries on the market. For Joe to consume berries or fish, he has to supply coconuts on the market. Patrick produced fish so that he could also enjoy coconuts and berries.

(2) Isolation wasn’t an option for Patrick. Because of the Law of Association (a topic not discussed here, but important nonetheless), there is always a way for Patrick to participate in a division of labor and benefit as a result, even after being displaced by the robot.

(3) Jobs will never run out because human wants will never run out. Even if our three island inhabitants had all of the coconuts and berries they could eat before the robot fairy visited, Patrick was able to supply additional want satisfaction with a brand new good, the fish. In the real world, new technologies often pave the way for brand new, totally unrelated goods to emerge and for whole economies to flourish. Hans Rosling famously made the case that the advent of the washing machine allowed women and their families to emerge from poverty:

And what’s the magic with them? My mother explained the magic with this machine the very, very first day. She said, “Now Hans, we have loaded the laundry. The machine will make the work. And now we can go to the library.” Because this is the magic: you load the laundry, and what do you get out of the machine? You get books out of the machines, children’s books. And mother got time to read for me. She loved this. I got the “ABC’s” — this is where I started my career as a professor, when my mother had time to read for me. And she also got books for herself. She managed to study English and learn that as a foreign language. And she read so many novels, so many different novels here. And we really, we really loved this machine.

And what we said, my mother and me, “Thank you industrialization. Thank you steel mill. Thank you power station. And thank you chemical processing industry that gave us time to read books.”

Similarly, the Patrick 9000, a coconut-producing robot, made fish production profitable. Indeed, when we look at the industrial revolution and the computer revolution, we do not just see an increase in the production of existing goods. We see existing goods increasing in quantity and quality; we see brand new consumption goods and totally new industries emerging, providing huge opportunities for employment and future advances in everybody’s standard of living.

Jonathan Newman is Assistant Professor of Economics and Finance at Bryan College. He earned his PhD at Auburn University and is a Mises Institute Fellow. He can be contacted here.

Economic Theory Really Is Pro-Immigration – Article by Luis Pablo de la Horra

Economic Theory Really Is Pro-Immigration – Article by Luis Pablo de la Horra

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The New Renaissance HatLuis Pablo de la Horra
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In his now-classic work The Myth of the Rational Voter, Bryan Caplan identifies four systematic biases about economics held by the average citizen: make-work bias (an inclination to overestimate the disadvantages of temporary job destruction due to productivity increases), anti-market bias (a tendency to overlook the benefits of the market as a coordination mechanism), pessimistic bias (an inclination to underestimate the present and future performance of the economy), and anti-foreign bias (a tendency to underestimate the economic benefits of interaction with foreigners).

Widespread biases on economics are far from being harmless. Wrong ideas held by voters usually lead to catastrophic policies due to the inherent nature of the democratic process. In other words, in most cases, politicians undertake those policies that they deem popular among voters in order to get reelected. If those policies beget pernicious consequences for the economy, harmless beliefs turn into lower living standards for all.

Of those four biases, the most potentially harmful is the anti-foreign bias. This inclination to underestimate the benefits of economic cooperation with foreigners manifests itself politically in two main ways: protectionism and anti-immigration policies. Despite the recent surge of protectionism in some developed countries, free trade is now the rule rather than the exception in most parts of the world. However, when it comes to immigration, only a few steps have been taken worldwide over the last few decades in a direction of liberalization (even though the consensus about the benefits of more open borders in the economics profession is probably as strong as the consensus around free trade).

As I will show in this series of two articles [see the second article here], anti-immigration policies reduce the well-being of both potential immigrants and host societies, as shown by economic theory and empirical evidence. Or, to put it differently: even a partial liberalization of immigration restrictions would, in the long-term, contribute to improving the standards of living globally.

Economic Theory Supports Immigration-Friendly Policies

The economic case against less restrictive immigration policies rests on shaky pillars. The most common anti-immigration arguments are related to the supposedly negative effects that immigration has on the host country’s labor market, and, more specifically, its impact on employment and wages. According to advocates of immigration restrictions, immigrants do not only take natives’ jobs, but also have a depressive effect on wages.

However, economic theory does not support these assertions. First, the economy is not a zero-sum game: the numbers of jobs available is not finite. As pointed out by Alex Tabarrok (here and here), immigrants are not only producers but also consumers, which implies that an increase in demand triggered by the expansion of the immigrant population goes hand in hand with an increase in total employment. Also – and contrary to conventional wisdom – not only highly-qualified immigrants create positive externalities on host economies. Low-skilled immigrants tend to take lower-productivity jobs (as they often either lack higher education or do not speak the language), allowing the native-born to access higher-productivity jobs (assuming free trade and a flexible labor market).

All said above can be also applied to wages. All else equal, the law of supply and demand says that an increase in the supply of labor would inevitably cause lower wages. However, more immigrants also mean a higher demand for goods and services, which in turn results in a higher demand for labor, preventing a generalized decrease in salaries. Even in those cases when wages in a particular sector are temporarily pushed down, lower wages lead to lower costs for companies, which usually results in lower prices for consumers due to the process of competition.

Immigration-friendly policies can also help tackle the demographic problem that many developed countries have been experiencing over the last years. For instance, the progressive demographic ageing of the American population is already having an impact on the US Social Security system. According to the Population Reference Bureau, the number of Americans over 65 years old will have moved from 15% in 2014 to 24% of the population by 2060. As a result,  the worker-to-beneficiary ratio will decrease by 32%, from 3.4 in 1990 to 2.3 in 2030. This problem could be mitigated by adopting a more flexible immigration policy that increases the working population, reversing the trend that will otherwise end up with significant spending cuts in Social Security benefits.

Benefits for the Sending Countries and Immigrants

The discussion so far has focused on the benefits of immigration for receptor countries. How do the sending countries and immigrants benefit from the migratory phenomenon? Immigrants usually transfer part of their income to their countries of origin with the aim of economically supporting their families and friends. These so-called remittances are flows of capital from developed to developing countries which assist in the economic development of sending countries.

The main beneficiaries of eliminating barriers to labor mobility would be, no doubt, immigrants themselves. This is due to the concept of Place Premium. This concept, first introduced by Michael Clemens, Claudio E. Montenegro, and Lant Pritchettin in a 2008 paper, refers to the automatic increase in earnings (PPP adjusted) that a worker experiences by moving from a low-productivity country to a high-productivity country, without increasing the worker’s human capital. The factors behind this phenomenon are multiple: differences in capital accumulation, quality of infrastructures, technology, proximity to high-productive workers, different legal frameworks, etc. The empirical evidence (which will be dealt with in the second and final article of this series) shows that wage differences among countries due to Place Premium are immense. The corollary is simple: more open borders would bring about a substantial reduction in poverty levels across the world.

Potential Gains from Reducing Global Migration Barriers

What would happen if migration barriers were partially or totally eliminated on a global scale? In his paper Economics and Immigration: Trillion-Dollar Bills on the Sidewalk, Michael Clemens, senior fellow at the Center for Global Development, reviews the academic literature on the topic. If all barriers to labor mobility were to be removed, world GDP would increase in the range of 50% to 150%.

Even partial liberalizations would bring about considerable gains. For instance, a reform that allowed 7% of the population to emigrate to higher-productivity countries would result in an efficiency gain of 10% of world GDP. To put this into perspective, if all remaining trade barriers were eliminated, world GDP would grow by just 2% or 3%. As shown, the impact of relaxing migration barriers on the world economy would be extremely positive, especially for the poorest segments of population.

The theoretical analysis above clearly supports the adoption of more immigration-friendly policies as a way of increasing economic growth and improving the welfare of millions and millions of people, including those in receptor countries. However, economic theory needs to be supported by facts. In my next article, I will provide empirical evidence in support of eliminating barriers to immigration.

Luis Pablo de la Horra is a Spanish finance graduate from Vlerick Business School.

This article was published by The Foundation for Economic Education and may be freely distributed, subject to a Creative Commons Attribution 4.0 International License, which requires that credit be given to the author.

Yes, We Still Make Stuff, and It Wouldn’t Matter if We Didn’t – Article by Steven Horwitz

Yes, We Still Make Stuff, and It Wouldn’t Matter if We Didn’t – Article by Steven Horwitz

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The New Renaissance HatSteven Horwitz
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One of the perennial complaints about the US economy is that we don’t “make stuff” anymore. You hear this from candidates from both major parties, but especially from Donald Trump and Bernie Sanders. The argument seems to be that our manufacturing sector has collapsed and that all US workers do is to provide services, rather than manufacturing tangible goods.

It turns out that this perception is wrong, as the US manufacturing sector continues to grow and in 2014 manufacturing output was higher than at any point in US history. But even if the perception were correct, it does not matter. The measure of an economy’s health isn’t the quantity of physical stuff it produces, but rather the value that it produces. And value comes in a variety of forms.

Manufacturing is Up

The path to economic growth is not to freeze into place the US economy of the 1950s. Let’s deal with the myth of manufacturing decline first. The one piece of evidence in favor of that perception is that there are fewer manufacturing jobs today than in the past. Total manufacturing employment peaked at around 19 million jobs in the late 1970s. Today, there are about 12.5 million manufacturing jobs in the US.

However, manufacturing output has never been higher. The real value of US manufacturing output in 2014 was over $2 trillion. The real story of the US manufacturing sector is that we have become so much more efficient, that we can produce more and more manufactured goods with less and less labor. These efficiency gains are largely the result of computer technology and automation, especially in the last fifteen years.

The labor that we no longer need in order to produce an ever-increasing amount of stuff is now available to produce a whole variety of other things we value, from phone apps to entertainment to the expanded number and variety of grocery stores and restaurants, to the data analyses that makes all of this growth possible.

Just as the workers in those factories we are so nostalgic for were labor freed from growing food thanks to the growth in agricultural productivity, so are today’s web designers, chefs at the newest hipster café, and digital editors in Hollywood the labor that has been freed from producing “stuff” thanks to greater technological productivity.

Or, put differently: those agricultural, industrial, and computer revolutions collectively have enabled us to have more food, more stuff, and more entertainment, apps, services, and cage-free chicken salads served with kale. The list of human wants is endless, and the less labor we use to satisfy some of them, the more we have to start working on other ones.

But notice something: all of the things that we produce have something in common. Whether it’s food or footwear, or automobiles or apps, or manicures or massages, the point of production is to rearrange capital and labor in ways that better satisfy wants. In the language of economics, the point of production (and exchange) is to increase utility.

When we produce more cars that people wish to buy, it increases utility. When we open a new Asian fusion street food taco stand, it increases utility. When Uber more effectively uses the existing stock of cars, it increases utility. When we exchange dollars for manicures, it increases utility.

Adam Smith helped us to understand that the wealth of nations is not measured by how much gold a country possesses. Modern economics helps us understand that such wealth is not measured by how much physical stuff we manufacture. Increases in wealth happen because we arrange the physical world in ways that people value more.

Neither producing cars nor providing manicures changes the number of atoms in the universe. Both activities just rearrange existing matter in ways that people value more. That is what economic growth is about.

Misplaced Nostalgia

We’re richer because we have allowed markets to produce with fewer workers. When we are fooled into believing that “growth” is synonymous with “stuff,” we are likely to make two serious errors. First, we ignore the fact that the production of services is value-creating and therefore adds to wealth.

Second, we can easily believe that we need to “protect” manufacturing jobs. We don’t. And if we try to do so, we will not only stifle economic growth and thereby impoverish the citizenry, we will be engaging in precisely the sort of special-interest politics that those who buy the myth of manufacturing often rightly complain about in other sectors.

The path to economic growth is not to freeze into place the US economy of the 1950s. We are far richer today than we were back then, and that’s due to the remaining dynamism of an economy that can still shed jobs it no longer needs and create new ones to meet the ever-changing wants of the consumer.

The US still makes plenty of stuff, but we’re richer precisely because we have allowed markets to do so with fewer workers, freeing those people to provide us a whole cornucopia of new things to improve our lives in endless ways. We can only hope that the forces of misplaced nostalgia do not win out over the forces of progress.

Steven_Horwitz

Steven Horwitz

Steven Horwitz is the Charles A. Dana Professor of Economics at St. Lawrence University and the author of Hayek’s Modern Family: Classical Liberalism and the Evolution of Social Institutions.

He is a member of the FEE Faculty Network.

This article was originally published on FEE.org. Read the original article.

Mises on Protectionism and Immigration – Article by Matt McCaffrey

Mises on Protectionism and Immigration – Article by Matt McCaffrey

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The New Renaissance HatMatt McCaffrey
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The economic causes and consequences of immigration are among the most important issues facing the world today. Both pro- and anti-immigration advocates are digging in their heels, and both sides look increasingly unlikely to relent. Despite the bleak outlook, however, there is still hope for a peaceful and charitable discussion of the economics of immigration.

With that in mind, I want to consider Mises’s thoughts on the topic. For Mises, emigration and immigration are motivated by a simple economic fact: the conditions of production are not the same in all places. Natural and human conditions change constantly, and as a result, the productivity of land, labor, and capital do so as well. Therefore in order to take advantage of changing conditions and produce in the most productive ways possible, people must constantly migrate to those places where their contributions are most valuable (1919, pp. 84–85).

The desire to move from low-productivity to high-productivity regions is for Mises the fundamental explanation for the migration of peoples, and limits overpopulation (1919, p. 85). We can say a country is relatively overpopulated when the same amount of capital and labor is less productive there than in another nation. Reducing overpopulation means reducing this “disproportion” by allowing for the mobility of persons and goods (1919, p. 86). In Mises’s view, mobility was an achievement of liberalism:

The principles of freedom, which have gradually been gaining ground everywhere since the eighteenth century, gave people freedom of movement. … Now, however — as a result of a historical process of the past — the earth is divided up among nations. Each nation possesses definite territories that are inhabited exclusively or predominantly by its own members. Only a part of these territories has just that population which … it would also have under complete freedom of movement, so that neither an inflow or an outflow of people would take place. The remaining territories are settled in such a way that under complete freedom of movement they would have either to give up or to gain population. Migrations thus bring members of some nations into the territories of other nations. That gives rise to particularly characteristic conflicts between peoples. (1919, pp. 86–87)

Mises has two types of conflict in mind: economic and social. Economic conflict occurs because domestic workers resent that fact that immigration bids down their wages:

[I]n territories of immigration, immigration depresses the wage rate. That is a necessary side effect of migration of workers and not, say, as Social Democratic doctrine wants to have believed, an accidental consequence of the fact that the emigrants stem from territories of low culture and low wages. (1919, p. 87)

Social conflict can also arise. Mises emphasized, however, that in most cases immigrants are obliged to give up their national identity and adapt themselves to the culture of their new home. Only in relatively extreme cases, such as European imperialism, was it historically possible for immigrants to replace original inhabitants and their cultures (1919, p. 89). In fact, according to Mises, strong cultures need not resort to government in order to protect themselves:

A nation that believes in itself and its future, a nation that means to stress the sure feeling that its members are bound to one another not merely by accident of birth but also by the common possession of a culture that is valuable above all to each of them, would necessarily be able to remain unperturbed when it saw individual persons shift to other nations. A people conscious of its own worth would refrain from forcibly detaining those who wanted to move away and from forcibly incorporating into the national community those who were not joining it of their own free will. To let the attractive force of its own culture prove itself in free competition with other peoples — that alone is worthy of a proud nation, that alone would be true national and cultural policy. The means of power and of political rule were in no way necessary for that. (1919, pp. 103–04)

However, for Mises, cultural considerations are mainly an aside. In general, he saw conflicts over immigration as being driven mostly by protectionism rather than insurmountable differences in human beings or cultures (1935). In particular, domestic unions support government policies to restrict immigration and thus keep low-wage competition out of the labor market:

Public opinion has been led astray by the smoke-screen laid down by Marxist ideology which would have people believe that the union-organized “proletariat of all lands” have the same interests and that only entrepreneurs and capitalists are nationalistic. The hard fact of the matter — namely that the unions in all those countries which have more favorable conditions of production, relatively fewer workers and thus higher wages, seek to prevent an influx of workers from less favored lands—has been passed over in silence. (1935)

As Per Bylund notes, this is precisely what is happening in Sweden, where unions prevent the integration of immigrants so as to keep wages high. Protectionism at home also breeds protectionism abroad, as foreign nations try to cope with lower productivity through their own regulations designed to counter “unfair” competition on the world market. As economic conditions worsen in those countries where migration is prevented by the state, conflict becomes inevitable:

[People in these countries] will certainly still have just as much cause to complain as before — not over the unequal distribution of raw materials, but over the erection of migration barriers around the lands with more favorable conditions of production. And it may be that one day they will reach the conclusion that only weapons can change this unsatisfactory situation. Thus, we may face a great coalition of the lands of would-be emigrants standing in opposition to the lands that erect barricades to shut out would-be immigrants. … Without the reestablishment of freedom of migration throughout the world, there can be no lasting peace. (1935)

In this way, protectionist policies inevitably lead to conflict and the destruction of human life and welfare. In fact, Mises even hints that government policies aiming to control the movement and employment of individuals suffer from the same problems socialist central planning does (1919, p. 85). At the same time, entrepreneurship and the division of labor are the foundations of a rational social order, and neither is possible without free labor markets.

The main threat facing society then is illiberal ideology, and the only solution to this “principle of violence” is to develop a consistent liberal philosophy to serve as the basis for a peaceful society (1951, p. 49).

Mises believed that any society that rejected the values of liberalism was doomed. In an age of nationalism, protectionism, and war, it’s easy to see what he meant.

Matt McCaffrey is assistant professor of enterprise at the University of Manchester.

This article was published on Mises.org and may be freely distributed, subject to a Creative Commons Attribution United States License, which requires that credit be given to the author.

Ludd vs. Schumpeter: Fear of Robot Labor is Fear of the Free Market – Article by Wendy McElroy

Ludd vs. Schumpeter: Fear of Robot Labor is Fear of the Free Market – Article by Wendy McElroy

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The New Renaissance Hat
Wendy McElroy
September 18, 2014
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“Report Suggests Nearly Half of U.S. Jobs Are Vulnerable to Computerization,” screams a headline. The cry of “robots are coming to take our jobs!” is ringing across North America. But the concern reveals nothing so much as a fear—and misunderstanding—of the free market.

In the short term, robotics will cause some job dislocation; in the long term, labor patterns will simply shift. The use of robotics to increase productivity while decreasing costs works basically the same way as past technological advances, like the production line, have worked. Those advances improved the quality of life of billions of people and created new forms of employment that were unimaginable at the time.

Given that reality, the cry that should be heard is, “Beware of monopolies controlling technology through restrictive patents or other government-granted privilege.”

The robots are coming!

Actually, they are here already. Technological advance is an inherent aspect of a free market in which innovators seeks to produce more value at a lower cost. Entrepreneurs want a market edge. Computerization, industrial control systems, and robotics have become an integral part of that quest. Many manual jobs, such as factory-line assembly, have been phased out and replaced by others, such jobs related to technology, the Internet, and games. For a number of reasons, however, robots are poised to become villains of unemployment. Two reasons come to mind:

1. Robots are now highly developed and less expensive. Such traits make them an increasingly popular option. The Banque de Luxembourg News offered a snapshot:

The currently-estimated average unit cost of around $50,000 should certainly decrease further with the arrival of “low-cost” robots on the market. This is particularly the case for “Baxter,” the humanoid robot with evolving artificial intelligence from the US company Rethink Robotics, or “Universal 5” from the Danish company Universal Robots, priced at just $22,000 and $34,000 respectively.

Better, faster, and cheaper are the bases of increased productivity.

2. Robots will be interacting more directly with the general public. The fast-food industry is a good example. People may be accustomed to ATMs, but a robotic kiosk that asks, “Do you want fries with that?” will occasion widespread public comment, albeit temporarily.

Comment from displaced fast-food restaurant workers may not be so transient. NBC News recently described a strike by workers in an estimated 150 cities. The workers’ main demand was a $15 minimum wage, but they also called for better working conditions. The protesters, ironically, are speeding up their own unemployment by making themselves expensive and difficult to manage.

Labor costs

Compared to humans, robots are cheaper to employ—partly for natural reasons and partly because of government intervention.

Among the natural costs are training, safety needs, overtime, and personnel problems such as hiring, firing and on-the-job theft. Now, according to Singularity Hub, robots can also be more productive in certain roles. They  “can make a burger in 10 seconds (360/hr). Fast yes, but also superior quality. Because the restaurant is free to spend its savings on better ingredients, it can make gourmet burgers at fast food prices.”

Government-imposed costs include minimum-wage laws and mandated benefits, as well as discrimination, liability, and other employment lawsuits. The employment advisory Workforce explained, “Defending a case through discovery and a ruling on a motion for summary judgment can cost an employer between $75,000 and $125,000. If an employer loses summary judgment—which, much more often than not, is the case—the employer can expect to spend a total of $175,000 to $250,000 to take a case to a jury verdict at trial.”

At some point, human labor will make sense only to restaurants that wish to preserve the “personal touch” or to fill a niche.

The underlying message of robotechnophobia

The tech site Motherboard aptly commented, “The coming age of robot workers chiefly reflects a tension that’s been around since the first common lands were enclosed by landowners who declared them private property: that between labour and the owners of capital. The future of labour in the robot age has everything to do with capitalism.”

Ironically, Motherboard points to one critic of capitalism who defended technological advances in production: none other than Karl Marx. He called machines “fixed capital.” The defense occurs in a segment called “The Fragment on Machines”  in the unfinished but published manuscript Grundrisse der Kritik der Politischen Ökonomie (Outlines of the Critique of Political Economy).

Marx believed the “variable capital” (workers) dislocated by machines would be freed from the exploitation of their “surplus labor,” the difference between their wages and the selling price of a product, which the capitalist pockets as profit. Machines would benefit “emancipated labour” because capitalists would “employ people upon something not directly and immediately productive, e.g. in the erection of machinery.” The relationship change would revolutionize society and hasten the end of capitalism itself.

Never mind that the idea of “surplus labor” is intellectually bankrupt, technology ended up strengthening capitalism. But Marx was right about one thing: Many workers have been emancipated from soul-deadening, repetitive labor. Many who feared technology did so because they viewed society as static. The free market is the opposite. It is a dynamic, quick-response ecosystem of value. Internet pioneer Vint Cerf argues, “Historically, technology has created more jobs than it destroys and there is no reason to think otherwise in this case.”

Forbes pointed out that U.S. unemployment rates have changed little over the past 120 years (1890 to 2014) despite massive advances in workplace technology:

There have been three major spikes in unemployment, all caused by financiers, not by engineers: the railroad and bank failures of the Panic of 1893, the bank failures of the Great Depression, and finally the Great Recession of our era, also stemming from bank failures. And each time, once the bankers and policymakers got their houses in order, businesses, engineers, and entrepreneurs restored growth and employment.

The drive to make society static is powerful obstacle to that restored employment. How does society become static? A key word in the answer is “monopoly.” But we should not equivocate on two forms of monopoly.

A monopoly established by aggressive innovation and excellence will dominate only as long as it produces better or less expensive goods than others can. Monopolies created by crony capitalism are entrenched expressions of privilege that serve elite interests. Crony capitalism is the economic arrangement by which business success depends upon having a close relationship with government, including legal privileges.

Restrictive patents are a basic building block of crony capitalism because they grant a business the “right” to exclude competition. Many libertarians deny the legitimacy of any patents. The nineteenth century classical liberal Eugen von Böhm-Bawerk rejected patents on classically Austrian grounds. He called them “legally compulsive relationships of patronage which are based on a vendor’s exclusive right of sale”: in short, a government-granted privilege that violated every man’s right to compete freely. Modern critics of patents include the Austrian economist Murray Rothbard and intellectual property attorney Stephan Kinsella.

Pharmaceuticals and technology are particularly patent-hungry. The extent of the hunger can be gauged by how much money companies spend to protect their intellectual property rights. In 2011, Apple and Google reportedly spent more on patent lawsuits and purchases than on research and development. A New York Times article addressed the costs imposed on tech companies by “patent trolls”—people who do not produce or supply services based on patents they own but use them only to collect licensing fees and legal settlements. “Litigation costs in the United States related to patent assertion entities [trolls],” the article claimed, “totaled nearly $30 billion in 2011, more than four times the costs in 2005.” These costs and associated ones, like patent infringement insurance, harm a society’s productivity by creating stasis and  preventing competition.

Dean Baker, co-director of the progressive Center for Economic Policy Research, described the difference between robots produced on the marketplace and robots produced by monopoly. Private producers “won’t directly get rich” because “robots will presumably be relatively cheap to make. After all, we can have robots make them. If the owners of robots get really rich it will be because the government has given them patent monopolies so that they can collect lots of money from anyone who wants to buy or build a robot.”  The monopoly “tax” will be passed on to impoverish both consumers and employees.

Conclusion

Ultimately, we should return again to the wisdom of Joseph Schumpeter, who reminds us that technological progress, while it can change the patterns of production, tends to free up resources for new uses, making life better over the long term. In other words, the displacement of workers by robots is just creative destruction in action. Just as the car starter replaced the buggy whip, the robot might replace the burger-flipper. Perhaps the burger-flipper will migrate to a new profession, such as caring for an elderly person or cleaning homes for busy professionals. But there are always new ways to create value.

An increased use of robots will cause labor dislocation, which will be painful for many workers in the near term. But if market forces are allowed to function, the dislocation will be temporary. And if history is a guide, the replacement jobs will require skills that better express what it means to be human: communication, problem-solving, creation, and caregiving.

Wendy McElroy (wendy@wendymcelroy.com) is an author, editor of ifeminists.com, and Research Fellow at The Independent Institute (independent.org).

This article was originally published by The Foundation for Economic Education.

Commonly Misunderstood Concepts: Employment (2009) – Article by G. Stolyarov II

Commonly Misunderstood Concepts: Employment (2009) – Article by G. Stolyarov II

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The New Renaissance Hat
G. Stolyarov II
Originally Published November 26, 2009
as Part of Issue CCXX of The Rational Argumentator
Republished July 24, 2014
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Note from the Author: This essay was originally published as part of Issue CCXX of The Rational Argumentator on November 26, 2009, using the Yahoo! Voices publishing platform. Because of the imminent closure of Yahoo! Voices, the essay is now being made directly available on The Rational Argumentator.
~ G. Stolyarov II, July 24, 2014
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The mistaken identification of wealth with money, which I refuted in an earlier installment of this series, results in yet another damaging fallacy: the idea that the only legitimate “employment” is work performed for somebody else in exchange for money. This cultural confusion has become so deep-rooted that even people who own their own businesses or function as independent contractors are classified as “self-employed” – which, despite the second component of that term, is somehow seen as distinct from being “employed,” which has become in the minds of many identical to working for a formal organization on a fixed schedule for largely fixed compensation. There is nothing wrong with the latter kind of employment; indeed, I am currently engaged in it, and it pays well. It is a practical and a tremendously useful way to earn a living for many. But the societal stigma against many individuals who choose not to pursue that path needs to end.

I am not here seeking to justify individuals who refuse to work out of sloth or rebelliousness – or individuals who choose to subsist off of the welfare system. Indeed, I am not at all seeking to justify individuals who refuse to work at all. Rather, I seek to effectuate a cultural re-identification of employment with doing actual useful work – physical or mental – irrespective of how much, or how little, money that work earns. If wealth is not money but rather useful goods and services, then useful employment is any activity that generates useful goods and services. Some such activities happen to be highly compensated with money, either because there is large market demand for them or because they are subsidized by private institutions or governments. But other such activities arise out of individuals’ volunteer efforts, hobbies and interests, and desires to improve their immediate environment. An individual who devotes himself or herself primarily to the latter sorts of activities can be as worthy of respect and just as productive as an individual who makes a six-figure monetary income.

First, it is essential to recognize that either market value or institutional advantages that result in monetary subsidies are not necessarily a reflection of genuine wealth creation or usefulness. For instance, numerous products of high culture – including philosophy, literature, and classical music – are not in high demand among the masses, who simply do not understand such products. The creators of high culture will not earn as great an income on the market as the creators of light magazines and popular music. However, these same creators will contribute a much longer-lasting value to human knowledge, refinement, and moral standards for generations to come, whereas the creators of more popular works are unlikely to remain in demand for more than two generations. There is nothing wrong with this differential in compensation, per se, as people who do not appreciate high culture are entitled to vote with their dollars however they please. But this state of affairs does invalidate any notion that the amount of money one receives from one’s work is in any manner connected with one’s worth as a human being or one’s contribution to improving one’s own life and the lives of others – both in the short term and in the long term. Many creators of more refined works have even decided that it is unwise to try to make a living from such works and depend on their approval by a mass audience; instead, they have decided to subsidize their own creations and the dissemination of these works by means of a monetary income they earn from another occupation. This allows for works of high culture to be created exactly as the author intended them to be; if the author is talented and has a consistent vision, such works will be much more likely to endure long into the future.

Another important recognition is that some work is either impossible to transfer to the market given present technology or is prohibitively expensive to transfer. For instance, if I wish to go into my kitchen and get myself a beverage, it would be highly impractical for me to hire another individual to do this for me. If I get the beverage myself, I do not either collect or spend any money – provided that I already own the beverage, the glass, and the living space. But it cannot be denied that the act of getting the beverage was desirable to me and improved the quality of my life. Likewise, numerous actions that an individual performs to improve his or her own skills – such as reading books, practicing musical instruments, and doing mathematical problems – cannot be outsourced to other individuals and retain their value for the individual, which arises from the act of learning new skills that the individual himself would be able to use in the future. Indeed, it is true that all of us, if we have even the slightest desire to live well, will perform a wide variety of work every day for which we receive no monetary compensation at all! If we did not perform this work, it is unlikely that we would be in any position to earn any money, either.

A popular source of contempt in contemporary culture is the individual who, instead of leaving the home to work for money, chooses to remain at home and maintain it in good working order. This is, in my judgment, the single most egregious consequence of the fallacy that employment is the same as working for money. Working within the home – especially when supported by the monetary income of another family member – is a tremendously useful and life-affirming occupation; it facilitates a division of labor where various family members can specialize in the tasks they are most skilled at performing, thereby making good use of the principle of comparative advantage. Moreover, it enables a greater degree of care for any children in the household and provides a source of relief for those individuals who simply do not like working outside the home on a fixed schedule.

I note that there is nothing in this implying that any particular gender of individual should choose to stay at home, or that a family cannot function well if all of its members choose to work outside the home. Rather, I argue that a productive family can exist irrespective of which of its members do or do not choose to work for money. Indeed, for a family which has accumulated sufficient money and physical goods, it is possible to maintain productivity and a high standard of living even if none of its members earns a regular monetary income. Even if an individual has never earned any money in his or her life and, say, lives off a vast inheritance, it is still possible for that individual to perform useful and productive work. Indeed, one of the arguments that the great Austrian economist Friedrich Hayek made for the right of inheritance can be summarized as follows. Even if the vast majority of people who inherit their money will spend it unwisely, it is enough for one out of a thousand inheritors to be a great thinker and innovator. This individual, through his inheritance, will have the time and leisure to bring his vision to fruition, without needing to worry about providing for his day-to-day subsistence. The result could be a tremendous philosophical, technological, or artistic breakthrough that improves the lives of millions for centuries to come – and this result is worth the wasteful spending any other heirs might engage in.

Of course, the manner of productive work one does is often constrained by one’s current material situation. Many people will work for money, even if they wish to do something else, because they need the money to maintain the standard of living they wish to have. Increases in monetary income can go a long way toward improving both one’s access to leisure and one’s level of security and comfort. On the other hand, the same goals can also be achieved in part by spending less of the money one already earns and by living within one’s means – never letting one’s expenses exceed one’s income, which is akin to deficit spending for individuals, and not taking out interest-bearing debt, unless there is no other option, and the good the debt would fund could be seen as a necessity – such as a house. Devoting some time to managing one’s spending and establishing less expensive lifestyle choices is just productive as working to earn a salary increase.

If you wish to work to earn money, by all means do so. If you would rather focus on working in the home or doing volunteer work of any sort, this is excellent as well. Provided that one works and has useful outcomes to show for it, there is no need to feel any inferiority in one’s own case or any disrespect for others.

Read other articles in The Rational Argumentator’s Issue CCXX.

Productivity Enhancement – Video Series by G. Stolyarov II

Productivity Enhancement – Video Series by G. Stolyarov II

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The New Renaissance Hat
G. Stolyarov II
June 2, 2013
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In this series on productivity enhancement, taken from Mr. Stolyarov’s e-book The Best Self-Help is Free, Mr. Stolyarov discusses the fundamental nature of productivity and approaches by which any person can become more productive.

This series is based on Chapters 7-14 of The Best Self-Help is Free.

Part 1 – What is Productivity?

The most reliable way to achieve incremental progress in your life is by addressing and continually improving your own productivity. Productivity constitutes the difference between a world in which life is nasty, brutish, and short and one in which it is pleasant, civilized, and ever-increasing in length.

Part 2 – Reason and the Decisional Component of Productivity

In order to properly decide what ought to be produced, man can ultimately consult only one guide: his rational faculty.

Part 3 – Perfectionism — The Number One Enemy of Productivity

Perfectionism engenders a pervasive sense of futility in its practitioner and mentally inhibits him from pursuing further productive work.

Part 4 – Quantification and Productivity Targets

Quantification enables an individual to set productivity targets for himself and to escape underachievement on one hand and perfectionism on the other.

Part 5 – Habit and the Elimination of the Quality-Quantity Tradeoff

A common fallacy presumes that there is a necessary tradeoff between the quantity of work produced and the quality of that work. By this notion, one can either produce a lot of mediocre units of output or a scant few exceptional ones. While this might be true in some cases, it overlooks several important factors.

Part 6 – The Importance of Frameworks for Productivity

Time-saving, productivity-enhancing frameworks can be applied on a personal level to enable one to overcome the human mind’s limited ability to hold and process multiple pieces of information simultaneously.

Part 7 – The Benefits of Repetition to Productivity

One of the most reliable ways to reduce the amount of mental effort per unit of productive output is to create many extremely similar units of output in succession. Mr. Stolyarov discusses the advantages of structuring one’s work so as to perform many similar tasks in close succession.

Part 8 – Making Accomplishments Work for You

Producing alone is not enough. If you just let your output lie around accumulating dust or taking up computer memory, it will not boost your overall well-being. Your accomplishments can help procure health, reputation, knowledge, safety, and happiness for you — if you think about how to put them to use.

The Best Self-Help is Free – Treatise by G. Stolyarov II – Second Edition

The Best Self-Help is Free – Treatise by G. Stolyarov II – Second Edition

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The Rational Argumentator is pleased to announce the publication of the Second Edition of The Best Self-Help is Free by G. Stolyarov II. This 85-page treatise has been enhanced with additional chapters and is available for free download in PDF, MOBI, and EPUB formats.

Cover Art by Wendy Stolyarov

The Best Self-Help is Free – G. Stolyarov II – Second Edition

Cover Design by Wendy Stolyarov

Public-Domain Cover Art by Albert Bierstadt (1865): Looking Down Yosemite Valley

The Best Self-Help is Free is not your conventional self-help book. Instead of leaving you poorer for purchasing it, this book can only benefit you at no monetary cost to you and with no strings attached.  G. Stolyarov II – author, actuary, philosopher, and rational individualist – presents common-sense, reason-based approaches to improving quality of life, enhancing productivity, and clearly perceiving fundamental realities in the face of widespread obfuscations, fallacies, and illusions. Unlike many self-help books, this one will not attempt to diminish you, break you down, or build you back up in the author’s image. Rather, it is written as a set of respectful deliberations on self-improvement from one fundamentally decent, intelligent person to another, based on the author’s own experiences and discoveries of approaches that truly work to achieve results.

This is the Second Edition of The Best Self-Help is Free, made available (of course) for free. The majority of this 85-page treatise was originally written in 2008. The Second Edition includes five new chapters, written in 2009 and 2012.

The Second Edition of The Best Self-Help is Free is available in PDF, MOBI, and EPUB formats.

 

Download the PDF version.

Download the MOBI version.

Download the EPUB version.

 

 

The Rational Argumentator welcomes your reviews of The Best Self-Help is Free. You can submit them to TRA by sending them to gennadystolyarovii@yahoo.com. You are also encouraged to spread the word by reprinting the information on this page or your own comments concerning the book on other media outlets.

Guide to Stolyarovian Shorthand

Guide to Stolyarovian Shorthand

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The New Renaissance Hat
G. Stolyarov II
February 11, 2013
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Stolyarovian Shorthand was originated in 2003 and has evolved gradually since. For the first time, it is being made available for free to the public, under a Creative Commons license. You can read and download the free Guide to Stolyarovian Shorthand as a PDF file here. The Guide explains this history and evolution of Stolyarovian Shorthand and allows the reader to learn its general rules and special symbols. An extensive (but non-exhaustive) Glossary at the end presents nearly ten pages of symbols in one convenient reference document.

The Modularization of Activity – Article by G. Stolyarov II

The Modularization of Activity – Article by G. Stolyarov II

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The New Renaissance Hat
G. Stolyarov II
February 7, 2013
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On February 2, 2013, I ran my first ultramarathon: 50 kilometers (31.07 miles) in 5 hours, 10 minutes, 50 seconds – all within the comforts of my home on my elliptical trainer. I experienced no pain, no pounding, no strain on the joints, no car traffic, and no vicissitudes of weather. More importantly, I had constant access to water and nourishment if I wished it. The elliptical trainer’s shelf held my tablet computer, and I could pass the time reading articles, watching videos of philosophical discussions, and listening to Mozart.

This kind of experience is truly new. Even when I ran my first elliptical-trainer marathon in 2008 (see my article about that experience and its advantages here), I could not have replicated it. I had to content myself with reading a hard-copy book back then, prior to the age of e-readers and tablets. Cumulatively, I have read thousands of hard-copy pages while running, but the strain required for such reading is certainly far greater. Occasionally, one must hold the book still. The tablet screen is far more stable and versatile, offering vast possibilities for entertainment. With an Internet connection, immense repositories of information are at one’s fingertips, all without interrupting one’s workout!

Although the ability to radically customize my exercise has been quite recent, I have been contemplating the broader development it represents for years.  In 2008, when walking between two buildings during a frigid Michigan winter, I was struck by the realization that life did not have to be this way in the future. I wanted to reach my destination and its amenities, but being outside in freezing weather was a mere contingent circumstance, unrelated to the specific goals I sought. As a result of this insight, I proposed that, in addition to indefinite life extension, complete liberty, and the cessation of all aggression, a worthwhile endeavor for the future should be the decoupling or de-packaging of activities from one another. Life should improve to such an extent that, when considering any activity, people should only need to accept the constitutive parts of that activity – not extraneous physical circumstances that simply get in the way.

Running is excellent exercise, but it has historically been fraught with unnecessary risks and discomforts. People have even died during “traditional” marathons, due to lack of preparation, lack of nourishment, extremes of weather, and the inability to access emergency aid. The repeated pounding of feet on the pavement damages the joints and bones; this is why so many lifelong runners get knee and hip replacements in their forties and fifties. By contrast, the elliptical trainer is gentle. The feet rest firmly on the pedals; there is no pounding or jarring. One can think more clearly and focus on study, esthetics, or entertainment. There is no worry of being stranded from civilization and its amenities. When running outdoors, every mile run away must be run back, even when one might not be in the proper condition to do so. I still remember, from my college days, what it feels like to have no choice but to run for miles after a fall, to have one’s path obstructed by unexpected deep snow, or to face a sudden, chilling wind. I remember the dangerous behavior of distracted drivers at street crossings and even the occasional loose angry dog.

It is self-defeating to take serious short-term risks in pursuit of long-term health. For the past 4.5 years, I have frequently been able to isolate the “pure exercise” element of running from the unnecessary vicissitudes of the outdoor environment. The benefits in improved productivity have been enormous as well: I attained all seven of my professional insurance designations through studying mostly performed on an elliptical trainer. I am able to keep up with current world events and read more opinion pieces, philosophical treatises, and online discussions than ever before. Writing on the elliptical trainer is still quite laborious, but I can consume content during my workout as well as I could sitting at my desktop.

What enables this modularization – this separation of the desirable from the undesirable and the recombination of the desirable parts into simultaneous, harmonious experiences? Technology is the great de-packager of experiences that have hitherto been inseparable of necessity. At the same time, technology is the great assembler of experiences that could not have previously coexisted. In the eighteenth century, you would have had to be among the wealthiest kings and aristocrats in order to hear a string quartet while reading or writing. You would have needed to retain your own court musicians, or to hire professional performers at great expense.  Now you can avail yourself of this combination at virtually any time, on demand, without any incremental expenditure of money.

Other common modularizations now occur with scant notice by most. Today, thanks to global shipping networks, you can eat two fruits on the same plate, whose growing seasons are months apart. Some of these fruits will only have the parts you like, and none of those pesky little seeds – thanks to genetic engineering.  Whereas previously you would have had to purchase prepackaged  vinyl records, cassette tapes, or CDs, now you can obtain individual songs, lectures, speeches, podcasts, or audiobooks and combine them in any way you like. Whereas old-style television networks expected you to adjust your schedule to them, and to sit through annoying advertisements every ten minutes, you can now access inexhaustible content online and watch it at your own schedule.

But this great process of empowering individuals by breaking down old pre-packaged bundles is just beginning. Consider the improvements we could witness in the foreseeable future:

1. The rise of autonomous, self-driving vehicles could not only get rid of the chore of driving, but could also save tens of thousands of lives annually, as the overwhelming majority of automobile accidents and fatalities are due to human error. In the meantime, occupants of autonomous vehicles could entertain themselves in ways previously inconceivable. Texting while driving will no longer pose a risk, because the vehicle will not depend on you.

2. The mass production of in-vitro meat could enable humans to consume meat without requiring the deaths of millions of animals. This will not only increase the ethical comfort and esthetic satisfaction of meat-eating, but will also reduce the messiness of food preparation. It will also reduce the unpleasant odors emanating from large-scale livestock farms.

3. The rise in videoconferencing and telecommuting will simultaneously raise productivity, lower business costs, and improve employee morale. Employees will be able to more flexibly balance their jobs and personal lives. Neither work emergencies nor personal emergencies would need to escalate, unaddressed, just because attending to such emergencies immediately is impractical. More remote collaboration will become possible, without the need to amass huge travel bills or endure sub-optimal and sometimes outright undignified conditions at airports or on roads.

4. Personalized medicine – aided by vast and cheap data about the body and the use of portable devices as the first line of screening and diagnosis – would save considerable money on medical costs and encourage a focus on prevention. It would also enable people to avoid much of the bureaucracy associated with contemporary medical systems, and would free doctors to receive visits related to genuinely the serious conditions that require their expertise. Patients who discover specific health problems could apply directly to specialists, instead of using general practitioners as filters. Burdens on general practitioners would thereby be reduced, enabling them to provide a higher quality of care to the patients that remain.

5. Improved infrastructure should mitigate the effects that the vicissitudes of weather and vehicle traffic have on our everyday movements. Air conditioning and heating in automobiles, trains, and airplanes have already helped greatly in this regard. Additional investments should be made into covered passageways connecting proximate buildings in cities, as well as subterranean and above-ground pedestrian street crossings. Dashing across a traffic-filled intersection should be made obsolete, and our future selves should eventually come to be astonished at the barbarism of societies where people took such outrageous risks just to get from one place to another.  In less populated areas, the least that could be done is for sidewalks for pedestrians and bicyclists to be made ubiquitous, so as to avoid the mingling of cars with less protected modes of transport.

6. Nanofibers and innovative fabrics could render much clothing immune to the typical inconveniences and hazards of everyday wear. Wrinkling, staining, and tearing would become mere historical memories. Packing for a trip would become much easier, and compromises between esthetics and practicality would disappear. Individual expression would be empowered in clothing as in so many other areas.  Some clothing might be engineered to keep the temperature near the body at comfortable levels, or to absorb solar energy to power small electronic devices.

7. Education could be greatly improved by decoupling it from classrooms, stiff metal chair-desks, dormitories, bullies, enforced conformity, and one-size-fits-all instruction aimed at the lowest common denominator. The Internet has already begun to break down the “traditional” model of schooling, a dysfunctional morass that our culture inherited from the theological universities of the Middle Ages, with some tweaks made during the mid-nineteenth century in order to train obedient soldiers and factory workers for the then-emerging nation-states. The complete breakdown of the classroom model cannot come too soon. Even more urgent is the breakdown of the paradigm of overpriced hard-copy textbooks, which thrive on rent-seeking arrangements with formal educational institutions. Traditional schooling should be replaced by a flexible model of certifications that could be attained through a variety of means: online study, apprenticeship, tutoring, and completion of projects with real-world impact. A further major breakthrough might be the replacement of protracted degree programs with more targeted “competency” training in particular skills – which could be combined in any way a person deems fit. Instead of attaining a degree in mathematics, a person could instead choose to earn any combination of competencies in various techniques of integration, differential equations, abstract algebra, combinatorics, topology, or a number of other sub-fields. These competencies – perhaps hundreds of them in mathematics alone – could be mixed with any number of competencies from other broadly defined fields. A single person could become a certified expert in integration by parts, Baroque composition, the economic law of comparative advantage, and the history of France during the Napoleonic Wars, among several hundreds of relatively compact other areas of focus. Reputable online databases could keep track of individuals’ competencies and render them available for viewing by anyone with whom the individual shares them – from employers to casual acquaintances. This would be a much more realistic way of signaling one’s genuine skills and knowledge. Today, a four-year degree in X does not tell prospective employers, business partners, or other associates much, except perhaps that a person is sufficiently competent at reading, writing, and following directions as to not be expelled from a college or university.

The modularization of activity promises to liberate immense amounts of time and energy by enabling people to focus directly on what is important to them. The hardships that are typically seen as part of the “package” of certain experiences today are not, in any manner, necessary, ennobling, or “worth it”. A good thing does not become any better just because one has had to sacrifice other good things for it. Modularization will enhance individual choice and facilitate ever greater customization of life. Some will allege that this will reduce the diversity of experience; they will claim that individuals lose out on the breadth of exposure that comes with being involuntarily thrust into unexpected situations. But this was never an optimal way to pursue diverse experiences. A better way is to remove from one’s life the time-consuming byproducts of useful activities, and to fill the resulting extra time with a deliberate pursuit of new endeavors and experiences. If you do not have to drive in busy traffic, you can spend the extra time reading a book that you would not have read otherwise. If you do not have to deal with a random group of people your age in a traditional school, you can instead go out and meet individuals with whom you could undertake meaningful interactions and mutual endeavors.

Because modularization allows individuals to form their own packages of activities, it will enable us to arrive at an era of truly effective multi-tasking – not the frenzied and stressful rush to do multiple incompatible tasks at the same time, as often occurs today. Technology allows for diversity among individuals’ minds and enables each person to combine and recombine activities so as to make the most out of all of their abilities at any given time. For instance, I think of activities as occupying particular “tracks” in my own mind. I can only competently handle one verbal “track” (written or spoken) at one time. I can combine a verbal “track” with a motion-based “track” and an auditory non-verbal “track” – by reading, exercising, and listening to music simultaneously. I can also do so by writing (which is both verbal and motion-based) and listening to music simultaneously. If I am listening to an audio recording of a book, essay, or podcast, then my visual faculty is free to look at art, or to create it. I can do the former while exercising.  On the other hand, I do not enjoy leaving off any particular verbal or motion-based task prior to its completion, in order to engage in another task of the same “track”. Thus, I generally structure my activities so that such tasks occur in a linear succession and without interspersion. Auditory experiences are easier for me to halt and resume, so I can more readily shift from one to another, depending on where I am on my other “tracks”. It may be that some of my readers have extremely different combinations with which they are most comfortable. The very purpose of modularization is to allow each individual to make choices accordingly, while being subject to increasingly fewer material or cultural limitations that constrain people to accept any particular “packages” of activities.

Modularization is liberation – of time, energy, comfort, and productive effort. It is yet another way in which technology empowers us and enhances our lives in an unprecedented fashion.