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Tim Burroughs

2 December, 2014
Econ 105
Economic Effects of Automation
The Industrial Revolution was an enormous boon to humanity. The introduction of tools
that replaced human labor with the stronger, more tireless abilities of machines freed up humans
to specialize. When the majority of the workforce weren’t required for the cultivation of our
sustenance, people were able to use that free time to advance their worldly knowledge in other
areas. This kind of specialization, as YouTube personality C.G.P. Grey notes, “is how economies
grow and standards of living rise.” Indeed, the technological advancements made since the 1800s
would astound any gawking onlookers from two centuries ago. Famed British author Arthur C.
Clark is credited with the saying “Any sufficiently advanced technology is indistinguishable
from magic,” and I feel confident that much of the technology we possess would be quite
magical to even the most wizened Industrial Revolution-era scientist. Significantly, there seems
to be no slowing the pace of technological advancement. Models of this progress such as
Moore’s Law show us that it is increasing rapidly, at an exponential rate. What happens, then, as
we continue invent tools which increase productivity, even outperforming human workers in
some of society’s most prevailing jobs? We will soon learn firsthand as we enter this new era.
Grey presents his ideas on the impending state of the job market in a highly
popular video titled “Humans Need Not Apply.” The presentation of his perspective is

“we are not prepared. many employers will have to make the decision of whether keeping that human element on their payroll is in the best interest of the company. accidents. able to be shown how to do something then repeat it. they quickly became vital to everything. as engineering and scientific advancements in a diverse array of fields converge to democratize the availability of low-cost. requiring a skilled programmer to set on task. One of the biggest goals of a company in an economy as strongly capitalistic as our own is to maximize profits. humans are a huge burden to the potential profit margins of companies. and plain carelessness. When cheapish general purpose computers came onto the market. less obvious. such an economic system would lend itself to a society of abundance. and an entertaining allegory concerning two Luddite horses. Be it directly in wages and salary or other. . and where the profits of the company are concerned. and general-purpose robots. but perhaps it would be best to examine some of the elements presented which foretell a job market run rampant with robots and automation of all kind. effective. that is an easy decision to make.” Although. easy to follow anecdotes.accompanied by a slew of data-backed facts. and as Grey explains in his video. a far step ahead of typical industrial automation which is highly specific. Baxter is one such bot. The case is made that automation is inevitable and it will inevitably leave enough people out of work to cause real societal problems if we’re not prepared. convincing talking points drawn from observation. Now. which would be quite obviously good. if the end result isn’t all doom-and-gloom. we will see that they too become as indispensible as our computers have. Things are changing though. One of the largest explicit costs incurred by businesses is related to the human element. errors. faucets like wasted time. Baxter. As computers and robotics continue to advance.

Software is a fascinating creature. Amazon uses a fleet of 15. Calculating change. and generally sweeping up. With a few lines of code. programmed with a detailed map of the hotel and the ability to deliver a toothbrush. which can perform more accurate operations without the limitations of a human surgeon. Savioke’s Botlr is a fully autonomous robotic hotel servant. which will roam around your store looking for intruders. K5 and K10. The important thing to note is that all this automation is here and it works. trains. and help them fulfill their visit quickly and easily by leading them to the items customers inquire about. increasing the throughput of the amazon ordering process many times over.though. The company Nightscape has some robotic guards. Physical machines take time and effort to iterate. and improve. boarding pass. Mining operations in Australia are being optimized with driverless trucks. Dyson has jumped into the automated vacuum market with a revamped Roomba-style device that takes what’s good about the Roomba and makes it even better. (Diamandis). assigning seats on an airplane. We even have robotic surgeons like the da Vinci. is just one in the vanguard of automated bots set to rock the economic landscape. Lowe’s is introducing a first generation of OSHBots that will navigate the store’s isles. iRobot has released a gullet of Roomba machines that roll around your house vacuuming. interact with customers in their native language. or newspaper to a guest’s room. and drills. which replace manual and dangerous mining jobs. People are constantly working to improve upon it and the examples I gave don’t even represent a sliver of the automation taking place in the world. Options for personal house cleaning.000 Kiva robots across its network of warehouses to shuttle shelves of items around efficiently. A much more dynamic form of automation is occurring that strives to optimize a different sect of the job market. a skilled programmer can write a program that can do a vast array of things. prototype. mopping. or any number trivial tasks that once required a human touch are now handily dealt with .

P. The artificial intelligence isn’t a machine of silicon. taking over the labor market. For example. We have general-knowledge systems like IBM’s Watson that are able to go toe-to-toe with the best general-knowledge humans on the quiz show Jeopardy. be it physical or software. we will see the demand curve for labor left as businesses fins they are less willing to pay premium pricing for human employees when some form of bot. but when you can have 30 . automations engineers. tweet last year about a White House bombing made the Dow Jones Industrial Average suddenly drop 146 points. The highest tier of programmer couldn’t write some of the most complex software we use. trading those stocks with other bots who taught themselves how to trade stocks. but it’s quite good. As a fun aside. meaning fewer people are going to have the chance to find employment. trading by machines is one reason why a hoax A. is able and willing to do that same job at a fraction of the price. “we ain’t seen nothing yet. Maybe it will make some new jobs. whose entire job it is to write software programs that do other. There is a whole class of computer professionals. The floor of the New York Stock Exchange is now largely a television studio. Fortunately. The smartphones in our pockets do a good enough job acting as a translator for any language we could want. If we would hook up Apple’s Siri to Watson we would suddenly have an astoundingly advanced machine. As discussed by Andrew McAfee in his TED talk “Are droids taking our jobs?” we have algorithms that write perfect financial reports. they can write a piece of software that can teach itself how to do some highly intricate tasks.” As our technology steadily improves. All of this technology is improving exponentially as well. Such fun quips often downplay the astounding ability of our systems. The new demand curve will result in a lower equilibrium point at the intersection of demand and supply. so as McAfee states. more complex jobs. look at the stock market. as most of the traders are software bots that taught themselves how to trade stocks.

2014. <singularityhub. “Robotic trucks taking over Pilbara mining operation in shift to Australian Broadcasting Corporation. 2014. "Humans Need Not Apply. 30 Nov. <http://www. <www.G. 30 Nov. N. 13 Apr. 25 Apr.” Abc. Singularity University. 2 Dec. Donna.p. Web. C.” Singularityhub. Web. 2014.P. I don’t see the situation exactly equaling out.cgpgrey. Web. Web. “Meet Amazon’s busiest employee – the Kiva robot.cashiers replaced by an overseer and 30 self-service lanes.>. Peter. 2014. 24 Sep.” Cnet.>> Tam.p. < https://www. Andrew. 2 “The Day You’ll Prefer Robots to Humans. “we are not” Works Cited Diamandis. Web. 2014. N. “Are droids taking our jobs?” Youtube. and as Grey explains in his video. it may lead to choppy metaphorical waters if we’re not prepared. 2 Dec. When suddenly large segments of the population find themselves unemployable through no fault of their own." Cgpgrey. TEDx. 1 Dec. 2 Dec. McAfee.> . 2014.