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Our Robotic Future (Nerdy Show #232)

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    Kutsu Shita

    Since the topic introduced by our Nerdy Show hosts in this episode is such an incredibly interesting and complicated issue for our near future — a future in which we will be living for better or worse — and I previously got drawn into a facebook discussion (of all god-damned things) on this topic, I felt the need to get this discussion going following this episode.

    Of course, a great deal of issues were discussed, including regulating artificial intelligence, but the main talking point remained how we as a society will cope with a potentially very different future. As an economist I’ve got some idea of the systems that more or less keep our civilization afloat and from that perspective will be speculating on what might happen as the robotic futures comes ever closer to our robotic reality. Not that I’m some kind of oracle or expert on this specific matter, but at least you’ll know where I’m coming from.

    In the previous discussion I had on the topic this perspective felt desperately needed. It started out bemusing the benefits of a universal income which was quickly dubbed a dire necessity when someone brought in the fact that robots will soon be taking all our jobs. The self-driving car, I was assured, would be a reality within 5 years from now, putting pretty much every truck driver out of a job soon after, and they wouldn’t be the only ones. Obviously there would be trouble on the horizon if a huge amount of people became unemployed and something needed to change. Solution; universal income.

    Given how these things go, and the internet high-fives were flying gratuitously to and fro the shocked and frightened people who quickly agreed on the matter I came upon somewhat a hard time to put the foot on the brakes just a tad. Mind you, I think universal income is pretty clever and any step closer to it is probably a good one, but it is not a matter of simply starting to hand out X amount of dollars to every man, woman and child and utopia will be achieved.

    Now be warned, here come the economics…

    It was already pointed out in the podcast briefly that simply handing an income that would be high enough for people to live off of without anything else changing basically means the government is printing a lot of extra money. Well… ‘printing’, printing is so last century! This would lead to the mentioned inflation, which is pretty bad. Considering the amount that would suddenly be printed, yeah, that’d be quite a lot of inflation. In the end, what inflation really is, is a way for the economy to straighten out its prices; if you increase the supply of money without the commodities and services that can be bought with it also increasing in proportion the result will be an increase in prices. The logical result of printing extra money is a proportional increase in prices, meaning the universal income the government printed money for will very quickly become insufficient to provide an income to live off of. You could then of course simply print more money, but… you can probably guess what happens next.

    So, yes, it needs to come out of money that is already circulating in order to avoid the inflation issue. I happen to live in the Netherlands (and yes, Utrecht is a lovely city, thank you) so I’m going to use it as an example for what follows next. This little pimple on the face of the world that is the Netherlands has a government that spends about 250 billion euros on its various activities a year. We’ve got some 17 million citizens and people on welfare get about 1.000 euros a month.

    12 x 1.000 x 17.000.000 =

    A universal income in the Netherlands of 1.000 euros a month would cost over 200 billion a year, or 80% of what the government is spending currently. But, there are many (assumed) benefits to providing a universal income; removing the stresses of unemployment (or perhaps even employment) would make people happier and healthier. Aside from giving people the freedom to do all these possibly amazing things they can do if they are given the ability to pursue already discussed in the podcast.

    But let us look at the budget; a universal income would replace unemployment benefits and their ilk as we move away from accenting being employed so deliberately. The Dutch government spends about 80 billion on that, or 40% of what the proposed universal income would cost.
    That is also immediately the largest category of spending, the second largest is healthcare; 70 billion. If we really become healthier perhaps some savings could be made here, but cutting too much just means the costs of going to the doctor have to be paid directly by the people, which effectively reduces their universal income. I’d be surprised if 10 billion could be shaved off, but let us pretend, so we’ve found 45% of our basic income so far, but we’re quickly running out of possible savings.
    The third largest expenditure is on education, which I’m sure we’ll all agree on more often than not needs more money spent on it rather than less, so we probably want to leave the 30 billion spent on that alone. What is left is things like infrastructure, justice, defense spending, interest on loans and a bunch of small items.
    Universal income probably won’t usher in a new era of peace, so we should hang on to the less than 20 billion spent on justice and defense, infrastructure is also pretty important and we can’t simply ignore that we’ve made a bunch of debt either. We probably need the little stuff too… So we’ve maybe found half the money we’d need to fund a universal income in the Netherlands, and that is being generous. The rest would have to come out of additional taxes.

    Let us put that in perspective; The Gross National Product of the Netherlands is a respectable 800 billion, about 250 billion finds its way to the government already and we’re looking for at least 100 billion more, or 1/8th of the GNP. We can’t tax willy-nilly, if we end up taxing very basic things more heavily all we’re really doing is decreasing the universal income as prior with cutting into healthcare. We’d have to tax ‘luxuries’ or ‘wealth’ specifically.
    I don’t know how many of you have heard of Thomas Piketty, the French socialist — uh, I mean economist — who has written a book about the growing gap between the rich and poor in our current society, because the return on capital happens to be larger than the return on labor. Even if his book is entirely factual and the conclusions hold (which is debatable) taxing the wealthy more heavily is reasonable. Is 100 billion euros still reasonable? I suppose that is a political question, but it sure is a LOT of money.

    Despite me questioning Piketty, it is clear the money can only come from the richest among us. In the discussion I had prior some were under the illusion that the replacing of people with machines would somehow magically create wealth, and they suggested the money these machines were making should be used to fund the universal income. We might find some economic growth come out of the automation process, but we’re looking for 100 to 200 billion euros worth of growth in my Dutch example, or a growth of 12,5% to 25% of GNP due solely to automation. This is quite unlikely. Funny thing about economic growth? In the long run it is equal to the growth of the population. Well, in theory. I’m not sure how that holds in a robotic future…

    Why replace a person with a machine in the first place? Because the machine can do the same work cheaper than the person, right? The better the machines the cheaper whatever they make becomes, which is actually great. In a sense machines are looking to be the near future’s China or India. Yes, ‘dey turk uwr jerbs’, but you get really cheap stuff in return! The economics of it are known as the ‘comparative advantage’ and the short of it is, all parties involved gain from it. Of course, the robots don’t have their own nation (yet), but despite the problems the shift in the jobs market will create on possibly a completely unprecedented scale, we all do in fact stand to gain from it.

    But that is assuming the unemployed don’t get ignored and more and more impoverished leading to a very bleak dystopia. Especially given how I’ve argued it is pretty damn difficult to imagine a universal income that actually allows for a comfortable life to suddenly become a reality.
    So then what? Well, most likely those jobless due to the machines will have to find other employment. ‘But the machines and their maniacal efficiency!’ I hear you cry, ‘what jobs will there be left!?’. Well, the economics of it may not be exactly uplifting, but they suggest equilibrium will be found as the prices adjust to supply and demand. Raise the supply of workers and demand will match them after an appropriate change in prices. In short wages would drop and people would work jobs which are more service oriented, or just slightly too complicated that it would take a machine that could be built but is just too expensive to compete with the cheap labor available.
    For example, in the previous discussion I foolishly asked aloud; ‘If cars will be driving themselves 5 years from now, why are there still people driving trains? Surely implementing a train that drives itself is a lot easier and cheaper than a car.’ The answer, as if it came from someone who understood economics, was; ‘A huge portion of the cost of moving something by truck is the driver, for trains its mostly the capital cost of the train and the guy in it is pretty irrelevant.’
    People are going to be replaced by machines, as they have have been by tools we’ve invented since the dawn of time, but only as far as it makes sense to do so, yes, even when we’re talking about robots. It doesn’t matter that they’re cool, I promise.

    So, hey, bright side, it won’t get to a point where half the workforce is irrevocably unemployed! Even lower wages aren’t necessarily a huge problem, considering goods and services are also being provided more cheaply. But it is very likely that the most vulnerable workers will lose out as their wages drop far more than the price of living. So I still wouldn’t suggest we simply let the economics run its course, mind you.

    But like I said before I started spouting all of this economic nonsense, any step towards basic income is probably a good one, but we have to be aware of what we’re talking about and that such a fundamental change is not something that we can or even should do from one day to the next. Though starting such a change sooner rather than later is probably a good idea, completing it properly will take a great deal of time. But the rate at which jobs are lost won’t be instant either.

    Uh, so yeah. That’s that. I’ve homed in on only one aspect of this episode, about which on a whole much, much more could be said (and no doubt will be said). So, chime on in, fellows!

    "Wait, he says. Do I look like a waiter?"


    Wow @kutsu-shita! Thanks for that response! Much valuable perspective to chew over and very good points.


    Some excellent points, @kutsu-shita. Obviously I’m not an economist, but in your example, the Netherlands spends about 250 billion euros a year for a population of about 17 million people. The six richest Americans are currently worth about that much (when put together). And that’s just six people. America spends over 6 trillion dollars a year for about 319 million people. So by my quick (and terrible) math, the population is 18x bigger, with 20x more spending. Giving $1,000 to each person a month sounds impossible. I’m not really trying to make a point other than that’s a huge amount of money.

    I always imagined universal income (from an American perspective) would be a soft cushion to maybe cover some expenses. For those with a low income job, it’d assure that you’d have enough money for rent and food. But isn’t that what our welfare program is supposed to be doing already? But you’re right. Where does the money come from?

    What if instead “universal income” was “supplemental income” for people between ages 20-60? Then after “retirement age” it gets lowered? But then the first time this gets implemented, it will seem unfair for everyone who just turned 61 and didn’t have 40 years to savings fall back on. Boy, is this getting complicated. So I’ll just end it by saying I believe there is an answer out there somewhere. I just hope it’s not Skynet.

    If you want to reach my in-character profile as "General Manager" of the Ghostbusters, tag me using: @seven

    Kutsu Shita

    It was my pleasure to add to the discussion, gents 🙂

    Was everything clear? I certainly tried to keep it simple, but obviously I’m more accustomed to these concepts than most, so I could imagine if you had questions about what I wrote. In which case I’d be happy to try and clarify.

    But yeah, @Doug, it being a huge amount of money was pretty much my point too, hah! It takes a lot of money to do this universal income thing ‘right’. At least we do know the money is out there, the economy is large enough, but moving it around in the way we’re talking about is the real trick. Clearly there are vested interests and generally conflicting ideologies that need to be overcome. Though, on that note, universal income isn’t blatantly socialist. I mean, redistribution of wealth is pretty inevitable to pay for it, which liberals are unlikely to enjoy, but the universal income itself is fundamentally egalitarian.

    Technically, universal income doesn’t need to cover the cost of living for a person. But when it comes to combating the effects of the automation of the economy that is what people believe will make the problems go away. More generally universal income is just a fixed amount of money everyone gets irrespective of anything. But when it doesn’t cover the cost of living clearly a job would still be required and some fear those will be in short supply. But I’ve talked enough about that already.

    And then you bring up who should get the universal income? The definition that it is something ‘everyone’ gets is pretty appealing. But can it really be both in practice? Not sure why you wouldn’t give it to people above 60, but giving it to children… Then you’d be subsidizing having children. Not unheard of, of course, but giving them/their parents the same amount of money as an adult could be troublesome.
    What about immigrants? The system obviously can’t handle ‘universal income seekers’, but when has an immigrant earned a universal income? Mind you, a universal income will lower the overall wage level, so they’d have a harder time living off of their wages alone. Someone tell Trump there’s no need for a wall, we’ve found another way!

    "Wait, he says. Do I look like a waiter?"


    This was an excellent episode and I enjoyed the hell out of it.

    it was very clear and hearing an informed opinion is wonderful. We can talk maybe’s and what-ifs all day but someone who can through down some decent numbers and knowledge provides some nice grounding.

    If you want some fiction that has explored the idea of a Post-Scarcity Society Iain M. Banks’ The Culture series explores this a great deal. I think Excession is a good book for this, its been a while since I’ve read them so I could be wrong. David Brin’s short story Aficionado explores this a bit as well.

    I think it will take a while before the technology is ubiquitous enough that everyone is comfortable with it. Something similar happened when Elevators became automated. We still had people inside to “operate” them for a while for the comfort of passengers. All they really did was hit the button but they provided psychological comfort. There will probably be a similar transition period going into self driving vehicles. But we should still be preparing.

    I think in the short term one of the things we can do is improve how easy it is to change careers. Losing those jobs can be disruptive but if we can make it easier to change careers that will make the transition easier. Universal income would have that effect but in the US at least it seems politically unlikely. Right now schooling is extremely expensive but there is already political pressure for free college level education and several countries already provide it. It isn’t quite as useful as guaranteed income, but I can see it easier to push for politically. An alternative to the universal income would be something similar to the Canadian MINCOME. That would probably be easier to get passed politically and would probably cost significantly less. You are no longer paying 1,000 to your entire population but only the unemployed/underemployed ones.

    Steam: Garayur


    @garayur That’s a really good point about elevator operators. What a weird, weird thing.

    Kutsu Shita

    @garayur Yeah, I think you’re right about the psychological comfort. It’ll probably cause a lot more ruckus than it did in the day with elevators, considering it’d be driverless trucks on our public roads where pretty much everyone will be confronted with them. It’d be the same fear/distrust of technology as with elevators, but on a larger scale with a public that has a much easier time raising their concerns. Who knows what’ll happen politically as a result?

    Alaska’s Permanent Fund is perhaps the longest running ‘experiment’ concerning a basic income; it pays out dividends from the income derived out of its natural resources to all Alaskans. It’s not enough to live off of and sadly also pretty variable, but has been going strong for more than 30 years.
    If nothing else, it at least points to ways to help facilitate a universal income (or something like it), but it all points to some form of huge government oversight.

    I also saw an article on the BBC website about the likelihood of robots taking our jobs;
    It says 35% of all UK jobs are at a high risk of being replaced by automation over the next two decades. The article has a little search box where you can put a profession and see the risks and a whole bunch of stats, it is very neat! Oddly enough there’s a 4% chance of artists getting automated. But clearly the lowest probabilities are in the areas of healthcare both physical and mental, education and a lot of highly paid/highly educated professions.
    It also references an academic paper on the subject;
    Its numbers are based on the US which states 47% of jobs are at a high risk of being replaced (a pretty large discrepancy between the US and UK, and I’m not sure why). As with the BBC article they rank professions and the probability that it’ll be automated, you can find it at the very bottom of the document.
    They conclude that the better you’ve been educated and/or the higher your wage, the less likely you are to be automated (WOW SUCH UNEXPECT) and they end the paper with; “Our findings thus imply that as technology races ahead, low-skill workers will reallocate to tasks that are non-susceptible to computerization – i.e., tasks requiring creative and social intelligence. For workers to win the race, however, they will have to acquire creative and social skills.”

    So yeah education will play a big part in how this automation thing plays out. It’s prudent to get students to either have well honed creative and/or social skills, or make sure they’ve been educated enough to have skills beyond a robot’s capabilities starting very soon. And on top of that there’s going to be a lot of people who need to be directed towards different professions, which will no doubt be the biggest re-educational challenge. Unless at that point we’ve got a satisfying way of providing an income for these people who’ve lost their jobs, but… yeah…

    "Wait, he says. Do I look like a waiter?"

    Kutsu Shita

    I accidentally stumbled onto a regional news bulletin about a bunch of locals forming an group to ‘further basic income’ and was reminded that Utrecht should be running its experiment starting right about now. I figured some of you here might be interested in the progress on this subject, so here’s what’s up.

    It turns out this experiment in Utrecht has been further delayed, since the national government has not yet given the green light. They’re aiming for April now but as a positive more cities are showing an interest in also doing the experiment, so that might add some pressure to get something going.

    More exciting news came from Finland recently, though the initial media reports were probably far too optimistic. Some would have you believe Finland is getting a basic income in 2017, but that is not yet happening. But at least the Finnish government is considering a country wide experiment with basic income. From what I have learned the government has set aside 20 million euros for the experiment that should run for 2 years. That should cover quite a large amount of people, so the data from this experiment (if, when and how it might actually occur) should be very interesting.
    A Finnish survey polled the Fins about basic income and 70% of the respondents were in favor and felt that 1000 euros would be a good figure for it. I don’t know, I find that amusing. I just get the feeling people like the idea of free money and these polls don’t adequately point out the things that will be cut. I did the math for the Netherlands above, so what the Fins want is probably quite unrealistic. Anyway, I don’t trust polls of this nature, of course I don’t exactly know the way the poll was conducted, but the framing is so often and so easily biased…
    But never you mind my rambling.

    Lastly, it turns out the organization ‘Unconditional Basic Income Europe’ is holding a conference in the Netherlands (fairly close to me) at the end of January. It’s open to anyone for a small fee and they’ll be discussing the benefits of a partial basic income and the state of experiments in the Netherlands, Finland, Switzerland and maybe even other countries. Now, clearly this is relevant to my interests, but I’m known to be somewhat lazy, so I may or may not attend. Anyone here interested in a relay of a whole day filled with nothing but talk about basic income to nudge me along?
    Uh, wait, I should nerd that question up… Remember, the robits are coming for your jobs! So do you want to know how we will manage to avoid dystopian poverty and decay of society or not, Fleshbag!? Beep Boop!

    … If not, that’s cool, I’ll just spend my saturday in my sweatpants playing videogames…

    "Wait, he says. Do I look like a waiter?"



    Thanks for the new update! This is all very, very interesting data. I, for one, think you should totally go to that conference. Not often that super-specific conferences relevant to one’s interest pop up in your backyard. Remember that one time Jon attended the Augmented Reality conference in Orlando? The next year it was in Seoul or something.

    Kutsu Shita

    Today the Swiss had a referendum on the matter of implementing a basic income for the entire country, though it is looking like 78% of the Swiss voted against it.

    Not exactly surprising that it won’t be happening just yet, but the fact that a significant amount of people supported the referendum and then there still being some 20% voting in favour of it is pretty impressive.

    Pretty sure the Utrecht initiative is still being stalled at a national level, so no news on that front.

    And while I didn’t attend that conference in January, fun detail; the next one is in fact held this July in, you guessed it, Seoul!

    "Wait, he says. Do I look like a waiter?"


    78%? Hmm. I wonder why it’s still not catching on. Some kind of loophole that could be exploited? Or was the motion too vague? Or just good old fashioned politics as usual?

    If you want to reach my in-character profile as "General Manager" of the Ghostbusters, tag me using: @seven

    Kutsu Shita

    I’m not sure anyone could tell you exactly why @Doug. Surely people are afraid of the system they are paying taxes for being exploited by ‘lazy people’. And while the motion might not have been vague (could have been, though) it certainly calls for a sweeping and radical change to the system as it is in place right now. Politics wise, Switzerland has a conservative government in power right now, and they had no interest in helping this motion get put into law, that is for sure.

    I believe the people responsible for getting the referendum on the agenda were happy with the result because back in the beginning of the 20th century there was a referendum on a little thing called pensions which was equally defeated for being too radical of a change.

    As long as there’s people pushing the issue and experiments with changing benefits start rolling there’ll be stuff to substantiate these initiatives and counter the fear of the unknown and serious change to a system we’re used to (however inefficient and ineffective).

    Pessimists will see people quitting their jobs and just freeloading, which will lead to the collapse of the system.
    More optimistically people will continue to contribute to keep the system running and we’ll all be happier and more future proof as a result.

    If a universal income follows the path of pensions, we’ll find out in a decade or two…

    "Wait, he says. Do I look like a waiter?"


    Holy monkeys there is a lot to read in this thread. It’s interesting stuff so I want to read it and respond, but I’ll have to do it tomorrow as it’s late tonight when I’m posting this. I’m pretty sure I missed this Nerdy Show episode somehow so I’ll listen to it, read this thread and get back to my reply.

    Kutsu Shita

    It was an interesting episode, no doubt.

    "Wait, he says. Do I look like a waiter?"

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