Wealth Inequality — a collection nexus

The solution to growing inequality of wealth and the eventual replacement of most work by automation is simple. But it’s easiest to imagine with a little scenario set 50 years from now.

Imagine when robots make robots.

Imagine an IBM Watson artilect (artificial intellect) within a generally capable automaton that can do ANY manual labor, from cleaning, delivery, agriculture, horticulture, construction, mining, culinary, elder care, teaching, animal husbandry — you name it, if it takes an IQ of ~ 80 to ~110 and requires the manipulation of stuff — this robot will do it. But not only that — this robot is being built-by-other-robots. Humans, or approximately 95% of them — as we know them are COMPLETELY redundant.

What then?

Well, obviously the humans that are now useless, except as vehicles for end product and service consumption — the whole reason all these robots are necessary in the first place — should /share/ in the benefit that this technology has been created for the top species of the planet. Share in the “profits” of the production of the automation age. Share in the benefits, the ultra-high standard of living, share in the health and luxury and leisure that full automation of all work has provided.

Right now little to no sharing is occurring. The bottom 90% of workers, of income earners, are not earning their portion of what all of this technological advancement is creating. Only the top 10% of capitalists are gaining in today’s world economy. If everyone earned a portion of what the conversion to an automated world will produce — then everyone will have the wealth to spend to keep the economic machine humming.

Without equality of wealth, the only way forward is revolt and revolution.

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16 responses to “Wealth Inequality — a collection nexus

  • Anony Mole

    http://www.theverge.com/2017/3/28/15086576/robot-jobs-automation-unemployent-us-labor-market

    [quote]

    The fear that automation in the form of robots or artificial intelligence is going to destroy jobs is widespread. But it can be difficult to gauge just how serious to take the threat. Different reports offer different estimations of how many jobs will be lost, while politicians and economists argue that technology creates as many jobs as it destroys, maintaining an equilibrium in employment over the long run.

    But is this really true? A new study from the National Bureau of Economic Research aims to add some solid numbers to the debate, looking at the historical effects of robots on employment in the US. Economists Daron Acemoglu and Pascual Restrepo studied the US labor market between 1990 and 2007, looking at employment rates in different areas and industries while controlling for the influence of factors like increased imports from China and the offshoring of jobs.
    “Each new robot in the local workforce means losing 3 to 5.6 jobs”

    They found that each new robot added to the workforce meant the loss of between 3 and 5.6 jobs in the local commuting area. Meanwhile, for each new robot added per 1,000 workers, wages in the surrounding area would fall between 0.25 and 0.5 percent.

    These figures may seem relatively small given some of the apocalyptic rhetoric we hear about automation and jobs, but the study’s definition of a robot is likely more restrictive than most people use. Acemoglu and Restrepo went by the definition of an “industrial robot” as outlined by the International Organization for Standardization, or ISO. These are bots that are “automatically controlled, reprogrammable [and] multipurpose.” Under this definition, something simple like a conveyor belt is not a robot, neither is software like Microsoft Word.
    “Blue-collar jobs are hit worse than other industries”

    It’s also important to remember that these job and wage losses are not distributed evenly among the population. Although the introduction of industrial robots leads to “negative effects [for] essentially all occupations,” some jobs are — expectedly — more fragile than others. Acemoglu and Restrepo write: “Predictably, the major categories experiencing substantial declines are routine manual occupations, blue-collar workers, operators and assembly workers, and machinists and transport workers.” The only jobs not affected were managerial ones.

    Looking at this study, though, the million-dollar question is: what happens next? Are these trends going to hold, or will they get worse?

    Acemoglu and Restrepo note that because there are relatively few industrial robots in the US, the number of jobs lost to them so far has been limited. (They estimate between 360,00 and 670,000 jobs — a decline in employment to population ratio of between a 0.18 and 0.34 percentage points.) “However, if the spread of robots proceeds as expected by experts over the next two decades, the future aggregate implications of the spread of robots could be much more sizable.”

    The spread of industrial robots is one thing; the spread of industrial robots augmented with AI, and of new innovations like self-driving cars (and trucks) is another. Last week, US treasury secretary Steven Mnuchin said that he wasn’t worried about the effects of AI and automation on employment. “Quite frankly, I’m optimistic. I mean, that’s what creates productivity,” said Mnuchin. That may be true, but this evidence suggests employment still suffers all the same.

  • Anony Mole

    View story at Medium.com

    “This is a critical point. People ask: if robots are stealing all the jobs then why is employment at record highs? But imagine what would happen if someone unveiled a robot tomorrow which could do the work of 30% of the workforce. Employment wouldn’t fall 30%, because while some of the displaced workers might give up on work and drop out of the labour force, most couldn’t: they need the money. They would seek out other work, glutting HR offices and employment centres and placing downward pressure on the wage companies need to offer to fill a job: until wages fall to such a low level that people do give up on work entirely, drop out of the labour force, and live on whatever family resources they have available, or until it becomes economical to hire people to do very low productivity work — serving as the fifth landscape worker on the household staff of a very rich tech magnate, for example.”

  • Anony Mole

    “What’s so bad about wealth without labor? It depends on who owns the wealth. Under capitalism, wages are how workers receive a portion of what they produce. That portion has always been small, relative to the rewards that flow to the owners of capital. And over the past several decades, it’s gotten smaller: the share of the national income that goes to wages has been steadily shrinking, while the share that goes to capital has been growing. Technology has made workers more productive, but the profits have trickled up, not down. Productivity increased by 80.4% between 1973 and 2011, but the real hourly compensation of the median worker went up by only 10.7%.

    As bad as this is, mass automation threatens to make it much worse. If you think inequality is a problem now, imagine a world where the rich can get richer all by themselves. Capital liberated from labor means not merely the end of work, but the end of the wage. And without the wage, workers lose their only access to wealth – not to mention their only means of survival. They also lose their primary source of social power. So long as workers control the point of production, they can shut it down. The strike is still the most effective weapon workers have, even if they rarely use it any more. A fully automated economy would make them not just redundant, but powerless.

    Meanwhile, robotic capital would enable elites to completely secede from society. From private jets to private islands, the rich already devote a great deal of time and expense to insulating themselves from other people. But even the best fortified luxury bunker is tethered to the outside world, so long as capital needs labor to reproduce itself. Mass automation would make it possible to sever this link. Equipped with an infinite supply of workerless wealth, elites could seal themselves off in a gated paradise, leaving the unemployed masses to rot.

    If that scenario isn’t bleak enough, consider the possibility that mass automation could lead not only to the impoverishment of working people, but to their annihilation. In his book Four Futures, Peter Frase speculates that the economically redundant hordes outside the gates would only be tolerated for so long. After all, they might get restless – and that’s a lot of possible pitchforks. “What happens if the masses are dangerous but are no longer a working class, and hence of no value to the rulers?” Frase writes. “Someone will eventually get the idea that it would be better to get rid of them.” He gives this future an appropriately frightening name: “exterminism”, a world defined by the “genocidal war of the rich against the poor”.”

    https://www.theguardian.com/technology/2017/mar/02/robot-tax-job-elimination-livable-wage

  • Anony Mole

    http://evonomics.com/wilkinson-pickett-income-inequality-fix-economy/

    [Quote:]
    The Science Is In: Greater Equality Makes Societies Healthier
    What matters is where we stand in relation to others in our own society.

    By Richard Wilkinson and Kate Pickett

    Let’s consider the health of two babies born into two different societies. Baby A is born in one of the richest countries in the world, the United States, home to more than half of the world’s billionaires. It is a country that spends somewhere between 40 and 50 percent of the world’s total spending on health care, although it contains less than 5 percent of the world’s population. Spending on drug treatments and hightech scanning equipment is particularly high. Doctors in this country earn almost twice as much as doctors elsewhere and medical care is often described as the best in the world.

    Baby B is born in one of the poorer of the western democracies, Greece, where average income is not much more than half that of the United States. Whereas America spends about $6,000 per person per year on health care, Greece spends less than $3,000. This is in real terms, after taking into account the different costs of medical care. And Greece has six times fewer high-tech scanners per person than the United States.

    Surely Baby B’s chances of a long and healthy life are worse than Baby A’s?

    In fact, Baby A, born in the United States, has a life expectancy of 1.2 years less than Baby B, born in Greece. And Baby A has a 40 percent higher risk of dying in the first year after birth than Baby B. Had Baby B been born in Japan, the contrast would be even bigger: babies born in the United States are twice as likely to die in their first year as babies born in Japan. As in Greece, in Japan average income and average spending on health care are much lower than in the United States.
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    If average levels of income don’t matter (at least in relatively rich, developed countries), and spending on high-tech health care doesn’t make so much difference, what does? We can’t say with certainty, but inequality appears to be a driving force. Greece is not as wealthy as the United States, but in terms of income, it is much more equal—so is Japan. There are now many studies of income inequality and health that compare countries, American states, or other large regions, and the majority of these studies show that more egalitarian societies tend to be healthier.1 This vast literature was given impetus by a study by one of us, on inequality and death rates, published in the British Medical Journal in 1992. In 1996, the editor of that journal, commenting on further studies confirming the link between income inequality and health, wrote:

    The big idea is that what matters in determining mortality and health in a society is less the overall wealth of that society and more how evenly wealth is distributed. The more equally wealth is distributed the better the health of that society

    Inequality is associated with lower life expectancy, higher rates of infant mortality, shorter height, poor self-reported health, low birth weight, AIDS, and depression. Knowing this, we wondered what else inequality might affect. To see whether a host of other problems were more common in more unequal countries, we collected internationally comparable data from dozens of rich countries on health and as many social problems as we could find reliable figures for.* The list we ended up with included:

    level of trust
    mental illness (including drug and alcohol addiction)
    life expectancy and infant mortality
    obesity
    children’s educational performance
    teenage births
    homicides
    imprisonment rates
    social mobility

    Occasionally, what appear to be relationships may arise spuriously or by chance. In order to be confident that our findings were sound, we also collected data for the same health and social problems—or as near as we could get to the same—for each of the 50 states of the United States. This allowed us to check whether or not problems were consistently related to inequality in these two independent settings. In short, they were— and strongly so.

    To present the overall picture, we have combined all the health and social-problem data for each country, and separately for each U.S. state, to form an Index of Health and Social Problems for each country and U.S. state. Each item carries the same weight—so, for example, the score for mental health has as much influence on a society’s overall score as the homicide rate or the teenage birth rate. The result is an index showing how common all these health and social problems are in each country and each U.S. state. The higher the score on the Index of Health and Social Problems, the worse things are. (Some items, such as life expectancy, were reverse scored, so that on every measure, higher scores reflect worse outcomes.)

    We start by showing, in Figure 1, that there is a very strong tendency for ill health and social problems to occur less frequently in the more equal countries. With increasing inequality (to the right on the horizontal axis), the score on our Index of Health and Social Problems also increases. Health and social problems are indeed more common in countries with bigger income inequalities. The two are extraordinarily closely related—chance alone would almost never produce a scatter in which countries lined up like this.

    To emphasize that the prevalence of poor health and social problems in rich countries really is related to inequality rather than to average living standards, we show in Figure 2 the same Index of Health and Social Problems, but this time in relation to average incomes (national income per person). It shows that there is no clear trend toward better outcomes in richer countries.

    The evidence from the United States confirms the international picture. Across states, health and social problems are related to income inequality, but not to average income levels.

    It is remarkable that these measures of health and social problems in the two different settings tell so much the same story. The problems in rich countries are not caused by the society not being rich enough (or even being too rich), but by the material differences between people within each society being too big. What matters is where we stand in relation to others in our own society.

    Inequality, not surprisingly, is a powerful social divider, perhaps because we all tend to use differences in living standards as markers of status differences. We tend to choose our friends from among our near equals and have little to do with those much richer or much poorer. Our position in the social hierarchy affects who we see as part of the ingroup and part of the out-group—us and them—thus affecting our ability to identify and empathize with other people.

    The importance of community, social cohesion, and solidarity to human well-being has been demonstrated repeatedly in research showing how beneficial friendship and involvement in community life are to health. Equality comes into the picture as a precondition for getting the other two right. Not only do large inequalities produce problems associated with social differences and the divisive class prejudices that go with them, but they also weaken community life, reduce trust, and increase violence.

    It may seem obvious that problems associated with relative deprivation should be more common in more unequal societies. However, if you ask people why greater equality reduces these problems, the most common assumption is that greater equality helps those at the bottom. The truth is that the vast majority of the population is harmed by greater inequality.

    Across whole populations, rates of mental illness are three times as high in the most unequal societies compared with the least unequal societies. Similarly, in more unequal societies, people are almost ten times as likely to be imprisoned and two or three times as likely to be clinically obese, and murder rates may be many times higher. The reason why these differences are so big is, quite simply, because the effects of inequality are not confined just to the least well-off: instead, they affect the vast majority of the population. For example, as epidemiologist Michael Marmot frequently points out, if you took away all the health problems of the poor, most of the problem of health inequalities would still be untouched. For a more detailed example, let’s take a look at the relationship between inequality and literacy.

    It is often assumed that the desire to raise national standards of performance in fields such as education is quite separate from the desire to reduce educational inequalities within a society. But the truth may be almost the opposite of this. It looks as if the achievement of higher national standards of educational performance may actually depend on reducing the social gradient in educational achievement in each country. Douglas Willms, professor of education at the University of New Brunswick in Canada, has provided striking illustrations of this. In Figure 3 (below), we show the relation between adult literacy scores from the International Adult Literacy Survey and their parents’ level of education—in Finland, Belgium, the United Kingdom, and the United States.

    This figure suggests that even if your parents are well educated—and so, presumably, of high social status—the country you live in makes some difference to your educational success. But for those lower down the social scale with less well-educated parents, it makes a much larger difference. An important point to note, looking at these four countries, is the steepness of the social gradient—steepest in the United States and the United Kingdom, where inequality is high; flatter in Finland and Belgium, which are more equal. It is also clear that an important influence on the average literacy scores in each of these countries is the steepness of the social gradient. The United States and the United Kingdom have low average scores, pulled down across the social gradient. In contrast, Finland and Belgium have high average scores, pulled up across the social gradient.

    Willms has demonstrated that the pattern shown in Figure 3 holds more widely—internationally among 12 developed countries, as well as among Canadian provinces and U.S. states. The tendency toward divergence also holds; Willms consistently finds larger differences at the bottom of the social gradient than at the top.

    What is most exciting about our research is that it shows that reducing inequality would increase the well-being and quality of life for all of us. Far from being inevitable and unstoppable, the deterioration in social well-being and the quality of social relations in society is reversible. Understanding the effects of inequality means that we suddenly have a policy handle on the well-being of whole societies.

    Politics was once seen as a way of improving people’s social and emotional well-being by changing their economic circumstances. But over the last few decades, the bigger picture seems to have been lost, at least in the United States, the United Kingdom, and several other rich countries in which inequality has increased dramatically. People are now more likely to see psychosocial well-being as dependent on what can be done at the individual level, using cognitive behavioral therapy—one person at a time—or on providing support in early childhood, or on the reassertion of religious or family values. Every problem is seen as needing its own solution—unrelated to others. People are encouraged to exercise, not to have unprotected sex, to say no to drugs, to try to relax, to sort out their work-life balance, and to give their children “quality” time. The only thing that many of these policies do have in common is that they often seem to be based on the belief that the poor need to be taught to be more sensible. The glaringly obvious fact that these problems have common roots in inequality and relative deprivation disappears from view. However, it is now clear that income distribution provides policymakers with a way of improving the psychosocial well-being of whole populations. Politicians have an opportunity to do genuine good.

    Rather than suggesting a particular route or set of policies to narrow income differences, it is probably better to point out that there are many different ways of reaching the same destination. Although the more equal countries often get their greater equality through redistributive taxes and benefits and through a large welfare state, countries like Japan manage to achieve low levels of inequality before taxes and benefits. Japanese differences in gross earnings (before taxes and benefits) are smaller, so there is less need for large-scale redistribution.

    What matters is the level of inequality you finish up with, not how you get it. However, in the data there is also a clear warning for those who want low public expenditure and taxation: if you fail to avoid high inequality, you will need more prisons and more police. You will have to deal with higher rates of mental illness, drug abuse, and every other kind of problem. If keeping taxes and benefits down leads to wider income differences, the ensuing social ills may force you to raise public expenditure to cope.
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    There may be a choice between using public expenditure to keep inequality low, or to cope with social harm where inequality is high. An example of this balance shifting in the wrong direction can be seen in the United States during the period since 1980, when income inequality increased particularly rapidly. During that period, public expenditure on prisons increased six times as fast as public expenditure on higher education, and a number of states have now reached a point where they are spending as much public money on prisons as on higher education.

    Not only would it be preferable to live in societies where money can be spent on education rather than on prisons, but policies to support families—such as providing high-quality, publicly funded preschool—would have meant that many of those in prison would have been working and paying taxes instead of being a burden on public funds.

    Modern societies will depend increasingly on being creative, adaptable, inventive, well-informed, and flexible, able to respond generously to each other and to needs wherever they arise. Those are characteristics not of societies in hock to the rich, in which people are driven by status insecurities, but of populations used to working together and respecting each other as equals.

    This article is excerpted, from The Spirit Level: Why Greater Equality Makes Societies Stronger, by Richard Wilkinson and Kate Pickett, published in 2009 by Bloomsbury Press.

  • Anony Mole

    “Frase believes that the likelihood our future is a utopia or dystopia comes down to two factors: whether we solve or succumb to the climate crisis, and whether we evolve into a society that is more equal or more hierarchical. Laying out the permutations of these two variables yields Frase’s four futures, each of which is granted its own chapter. All our futures will have robots, says Frase (who acknowledges his thought experiment framework is deliberately reductive). But will they have abundance or scarcity, and will they have equality or hierarchy?”

    https://www.fastcompany.com/3067160/robot-revolution/will-robots-usher-in-a-utopia-or-dystopia

  • Anony Mole

    “Automation is happening, and it will bring substantial benefits to businesses and economies worldwide, but it won’t arrive overnight. A new McKinsey Global Institute report finds realizing automation’s full potential requires people and technology to work hand in hand.”

    http://www.mckinsey.com/global-themes/digital-disruption/harnessing-automation-for-a-future-that-works

    “The right level of detail at which to analyze the potential impact of automation is that of individual activities rather than entire occupations. Every occupation includes multiple types of activity, each of which has different requirements for automation. Given currently demonstrated technologies, very few occupations—less than 5 percent—are candidates for full automation. However, almost every occupation has partial automation potential, as a proportion of its activities could be automated. We estimate that about half of all the activities people are paid to do in the world’s workforce could potentially be automated by adapting currently demonstrated technologies. That amounts to almost $16 trillion in wages.”

  • Anony Mole

    “Mining company Rio Tinto has 73 of these titans hauling iron ore 24 hours a day at four mines in Australia’s Mars-red northwest corner. At this one, known as West Angelas, the vehicles work alongside robotic rock drilling rigs. The company is also upgrading the locomotives that haul ore hundreds of miles to port—the upgrades will allow the trains to drive themselves, and be loaded and unloaded automatically.

    Rio Tinto intends its automated operations in Australia to preview a more efficient future for all of its mines—one that will also reduce the need for human miners. The rising capabilities and falling costs of robotics technology are allowing mining and oil companies to reimagine the dirty, dangerous business of getting resources out of the ground.

    BHP Billiton, the world’s largest mining company, is also deploying driverless trucks and drills on iron ore mines in Australia. Suncor, Canada’s largest oil company, has begun testing driverless trucks on oil sands fields in Alberta.”

    https://www.technologyreview.com/s/603170/mining-24-hours-a-day-with-robots

  • Anony Mole

    “Conservative ideology has fought against every positive social change in American history: ending slavery, giving women and blacks the right to vote, stopping child labor, establishing a minimum wage, instilling a 40-hour work week, setting an 8-hour work day, workplace safety regulations, unemployment insurance, workman’s comp, social security, Medicare, integration, interracial marriage, gay marriage, anti-discrimination laws, equal pay for women, Obamacare, global warming, and the list goes on…”

    http://www.samuelcspitale.com/single-post/2015/12/30/GOODBYE-MIDDLE-CLASS-Part-16-Recap-and-Conclusion

  • Anony Mole

    “Paleolithic humans had the answer: share.

    (Suspending my nihilism for a moment here…)

    Our altruistic heritage, ~80k years of it, worked pretty well. Unfortunately, in growing populations, pure altruistic societies tend to break down; greed trumps (ew!) sharing in large populations. Capitalism is a response to this greed, that is, capitalism is greed formalized, standardized, and organized such that the wealth pyramid remained fairly flat while productivity remained relatively low. What didn’t change, however was the distribution of profits of those goods and services produced by the increased productivity.

    A simple extreme example serves here. Imagine the ultimate corporation. It has a CEO, a board of directors, shareholders and a vast network of robots producing a valuable service or good – as a monopoly. And that’s it. All the profits funnel into the owners of the corporation. All overhead (read “workers” here) has been reduced or eliminated. Robots repair robots. Robots mine resources. Robots deliver goods. Robots perform all work. This is ultimate productivity. This is the ultimate corporation.

    That’s where we are headed – albeit slowly. Along the way, if those increasing profits from increasing productivity could be distributed equitably to the entire corporation’s work force, those enriched workers would have been able to start their own wealth pyramids; spawning other pyramids and so on and so forth.

    This didn’t happen. The pyramids became tall and narrow. And continue to do so. The reason for this is that government failed to understand the ultimate goal of a capitalistic corporation – which is – to built the tallest, narrowest pyramid possible.

    You want to change the world? Smoosh the wealth pyramids. Spread them out.

    Corporations are constructs of society. They don’t /have/ to be our masters.”

  • Anony Mole

    • Does everyone at least agree that egregious income and wealth inequality exists?
    • How about agreeing that this trend is worsening?
    • That severe inequality is a general bane on society?
    • Lastly, is there consensus on the idea that *some* means of reducing this inequality should be pursued?

    Pretty much “do we agree we have a problem, that it’s a growing problem, and, should we try and fix it?”

    Given the above are all true, is it not in society’s interest to find or develop a path that ameliorates the inequality? From what I’ve read, historically, such inequality generally results in expanding turmoil and often ends in bloody revolt.

    Specifically, do humans have a responsibility to the welfare other humans? Are we our brother’s keeper — to any degree? If this is true is it not society’s role then to enact rules of behavior that support and enforce this responsibility? If we are a true collaborative species, evolved through altruism and mutual support, I do not see how we can not take such a path.

  • Anony Mole

    Co-operation vs corporation. Sounds groovy. But hasn’t the world moved too far into the capitalists camp?

    Here’s the fundamental issue with capitalism: money = voice. The more money you have the greater influence you can exhibit. Whether it’s in a political campaign or activist investors or entrenched corporate board members — your money, your investment weighs your voice louder than the rest. This is the basis of a public company. And this is the basis for elevating bottom line above all other concerns.

    Private companies can model votes differently. Co-ops too generally model decision structures more equitably. But public corporations are a fixture in the world today; our corptocracy an ugly reminder of a good idea gone awry. So are there ways to mitigate public corporation hegemony?

    28th Amendment: Corporations are not people
    29th Amendment: Non-sequential term limits for all of Congress
    30th Amendment: Campaign contributions limited to one day’s median worker’s gross wage, per candidate, per annum.

  • Anony Mole

    https://www.stlouisfed.org/on-the-economy/2016/may/does-stock-market-impact-income-inequality

    “The increase in income inequality in the 1970s was accompanied, in part, by gains in the stock market. Comovement between stock prices and income inequality results from the fact that gains in the stock market tend to benefit those in the wealthiest portion of the income distribution, who have better access to and higher participation in these asset markets.”

  • Anony Mole

    http://qz.com/692115

    2015: “CEOs running the biggest US companies saw their pay increase an average 4.5% last year, putting the median CEO pay package at $10.8 million, according to a report from the Associated Press. At $468,449, the median pay raise alone is more than 10 times the pay of the average American worker.”

  • Anony Mole

    Something massive and important has happened in the United States over the past 50 years: Economic wealth has become increasingly concentrated among a small group of ultra-wealthy Americans.

    http://www.vox.com/2016/5/23/11704246/wealth-inequality-cartoon

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