We are looking at the end of jobs. I know, this is something that I keep beating the drum about.
That said, it is a crucial subject to look at. There are some predictions that knowledge work will be done in about 7 years. This means that computers will be able to do all those tasks faster, better, and cheaper than humans. What does that mean for the economy?
How does one arrive at this conclusion? People are using varied forms of analysis when it comes to framing what is about to take place. However, a lot of it boils down to the pace of automation. This is something that we can derive looking at historical trends.
To me, this is a dire situation with few discussing solutions. It seems there are two camps: UBI and stick the head in the sand.
Politicans are not mentioning this topic. Trump is out there acting like it is 1965, where millions of (human) jobs will be created by building factories within the United States. The AI race is framed as a war between the US and China, without little attention paid to the jobs that will be lost or how the economy will be reshaped.
For this reason, I highlight where I think crypto can fit into this. It might seem repetitive to regular readers but people outside of this industry need to know what is coming and, perhaps, how to defend against it.
In this article we will discuss two topics that blend together to help frame how things could be unfolding.
The Automation Cliff And The Importance of Crypto
Automation and adoption.
These are two distinct areas that do not necessarily follow the same path. When discussing automation, this means the ability to convert something from humans to machine (or computer). For the most part, it deals with technological capabilities.
Adoption is a different animal. Here is where humans enter the picture.
The progress of technology always outpaces humans embracing of it. This is because we tend to resist change. For some that is minor while others are standing in cement showes: they are not moving. In total, this generates a gap.
One key aspect is the fact that the pace of adoption is accelerating. When it comes to technologies, the time until mass adoption is diminishing. A great deal of this is due to the emergence of the digital world. Adoption can happen much quicker in the world of bits.
That said, even with physical devices we see massive progress. By now, most have seen charts like this:
Source
As we can see, there was a time when it took between 50-100 years before something reached mass adoption. Much of this dates back to the late 1800s or early 1900s.
Contrast that with the left side of the chart. Many of these are newer technologies and went mainstream within a couple decades. Again, we are dealing with the physical world but we see how rapidly things are moving.
This brings up two considerations:
The first deals with something like ChatGPT. When dealing with the digital world, we move from years to days.
Source
These are some of the household names in applications from the last 20 years. Netflix spent a portion of its early days residing in the physical, mailing at the actual DVDs. That said, we can see how ChatGPT basically went vertical.
Another consideration reverts back to the physical world. If we look at the smartphone penetrating at such a rate, what happens when we deal with humanoid robots? What does that pace look like? Could we see mass penetration in under a decade? It seems likely considering the first target is commercial applications, i.e. there is direct financial incentive to make the switch.
Of course, this is a jobs killer.
The Automation Cliff
The Automation Cliff is a charting of two potentialities of automation.
Here is what it looks like.
Source
The first is the technology-oriented approach. Notice how it is a stair-step shape. As techology advances, the automation happens in phases. Some people are affected with the machines (computers) taking on a greater portion of the workload.
Unfortunately, this ignores the human component. Since people, including executives and developers, have some level of resistance to change, the other approach is often the reality. Progress happens in the background, awaiting the time when full automation is reached. This is when C level executives realize that a complete change can occur, resulting in massive cost savings.
This is why it is shaped like a cliff. The earlier levels are not implemented, causing a tsunami.
An example of this is autonomous vehicles. We have progressed up the scale of automation. Few jobs, however, were lost to this point. In fact, in many areas of transportation there is still a shortage.
Of course, regulation enters into this. Understanding the Automation Cliff helps us to realize what will happen. One day, there will be level 5 capability and human drivers will be obsolete. Then it becomes only a question of how quickly can autonomous vehicles roll off the assembly line.
The digital world is even faster. This is why some of the forecasts that knowledge work will be automated in roughly 7 years. There is nothing physical to build (other than data centers). We get adoption rates closer to ChatGPT rather than the smartphone.
What Is The Solution?
As always, the solution is to own stake in the economic production. With most technologies we see, it is a corporate-centric environment. If you can, own stock in some of these companies. Of course, that is not possible in many situation since often we are dealing with startups. At the same time, much of the global population lacks the resources to invest.
To me, this leaves crypto and building systems on permissionless networks that allow users to get involved with having stake. Through crypto-incentive programs, the ability to accumulate assets is open to anyone. This is a major shift as compared to the exclusionary financial system we are presently dealing with.
When it comes to technology, it is crucial to financially benefit. The numbers will be enormous and each should be concerned how he or she will be involved.
Sadly, most are not even thinking about this situation.
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I fear you are correct. 20 years ago a Haliburton frack crew had 60 guys working on it. They've streamlined and automated so much, they now only have about 20 guys working a crew. So now there are 40 guys who would have had a fantastically good paying job who are doing something else instead.
Jobs will never completely go away, but the good jobs will get fewer and fewer. Then what will we do? We can't all drive for Door Dash.
Door Dash will be automated too.
Well crap! There goes my new career.
I am working on my lapdancing skills as we speak.
Bwahaha! I'll tip you a $2 bill, but you can hold the lapdance.
Go work for SpaceX. There are hundreds of Mechazillas and thousands of Starships to be constructed over the next two decades and then heaps of heavy construction on Mars itself over the next centuries.
I like the way you're thinking!
And asteroid mining. Will be mostly automated but still need people to fix and direct the machines.
For centuries people have been saying that machines would replace humans and there would be no jobs.
But this has never happened.
Old jobs are replaced by machines and new jobs are created.
Humans jobs move up the scale, using more of the unique qualities of the human intellect and doing less shit work.
AI will NEVER match or exceed the intellectual capabilities of a well educated human.
It is simply impossible under the laws of physics and mathematics. See Kurt Gödel's Incompleteness Theorems.
George Gilder sets this out in great detail in "Life After Google".
AI is simply yet another tool.
The problem facing humanity is the exact opposite of not enough jobs.
The problem is not enough people, particularly educated people in advanced nations.
The fertility collapse is already leading to a drop in working / consuming age people across all advanced economies (except Israel).
Robots and AI can partly address supply side issues but nothing can solve demand side issues caused by simply not having enough people to buy stuff.
While Gödel's Incompleteness Theorems are quite complex math, the population collapse from ultra-low fertility is very simple math.
Laborforce participation rates peaked globally in 1990. In the US, it topped out in 1997. That means the job creation did not keep pace over the last quarter century.
I think this is incorrect. When it comes to straightforward intellectual capabilities, such as logic, calculations, and reasoining, machines will usurp humans. I am in the camp, however, that these things will not be conscious since there is no emotional intelligence, genetic information passed on from generations, or other aspects that enable the flow of "intelligence" among species.
Finally, the pace things are moving is what makes things different. Never has knowledge work been under attack.
I'm talking about the size of the labor force (and consumer base) shrinking rapidly and indefinitely, not about laborforce participation rates.
You are focussed too narrowly on traditional short term economic indicia rather on the thing that drives everything - long term demographics.
In the past 15 years birthrates in all civilised counties (other than Israel) have gone from bad to catastrophic. Post COVID there has been a further apocalyptic crash in birthrates globally.
The shrinking of the labor force is not a problem due to the fact that robotics and AI are taking over. Economic output is going to explode to the point where I believe that an economic singularity is the result.
As for the population, you are right about the developed countries. There is a decline there. However, overall the population growth rate has slowed but is still increasing. The problem with consumption is not really a problem as that seems to go up over time.
How the economic structure is framed is a problem especially with debt levels that are unsustainable.
The shrinking labor force IS a HUGE problem that AI & robotics can only ameliorate to a limited extent. The Japanese experience is not positive in this regard and hopeful belief in unproven technologies is not an answer to a certain and massive reduction in the labour force.
I can't believe you wrote this given my earlier comments.
Where do you think demand comes from? The tooth fairy?!!
Demand comes from PEOPLE wanting or needing goods and services and having the money to pay for them.
The world faces an intractable problem that, because of ultra-low fertility in the developed world, the number of PEOPLE with money to afford the goods and services the modern world produces is SHRINKING, currently slowly, but getting faster and faster.
In particular the 20 - 60 year old demographic are peak consumers with older people consuming much less because they already have everything they need and don't adapt well to new technologies.
Real growth in consumption is IMPOSSIBLE in such circumstances.
Attempts at short term fixes like letting in masses of immigrants and giving money to them (as has happened throughout the West) depresses fertility further and creates social unrest. In any case the sources of PEOPLE for immigration are drying up as fertility collapses in the 3rd world too.
What the world faces is inevitable and endless DECLINE in consumption that will disrupt innovation and investment in all the technologies you talk about.
Why would any business make a capital investment in robotics or AI when there is LESS demand for their products each year. In this situation businesses cut costs, use existing equipment and don't innovate - there is no point.
This is important to remember. We've heard this story over and over for at least 100 years.
In the event of AI humanoid robot taking the world which will takes place sooner than what we think when. For us human in order to make a living or to be alive, the government or an organization or group of people, shall push the what we call a "universal basic income". This income maybe from the fraction of the taxes corporation is made.
Maybe these take over will fully adopted in the next 5 to 10 years from now. When it comes to SEO it'll already happening. Writers of products review is not 100% human now. As Google let it happened as mention on Google webmasters tool that, they don't care if it's human or AI unless it is a helpful content and relevant to what search is all about.
Imagine that in the way that this AI humanoid robot taking over jobs. These time money is hard for an average human not prepared for that.
Maybe, there will be barter of things and value, and the world reset in happening.
You faith in government might be risky.
I agree, government doesn't really care its citizens. However, in order for us to live a life normally, we need to abide there laws.
I think for a long time human monitoring and invervention will be a requirements even with automation in the crypto world.
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