Tag Archives: Robotics

On Immigration into UK. It’s (not so) complicated…

I don’t think there is much doubt that the primary emotional driver behind the Leave campaign is that of immigration. Namely, a strong feeling among many British citizens that there are just too many immigrants in Britain now and that the flow should at least be reduced substantially.

Of course there are other drivers too: about the alleged ‘undemocratic’ nature of the EU, its alleged inefficiency and financial profligacy, its alleged ‘red tape’ regulatory regime over which we Britons are alleged to have little or no control, its alleged control over our justice system. All of these could be argued. For instance, there are some sectors of the business community (particularly some SMEs and swashbuckling entrepreneurs) which just hate regulation of any sort. But I don’t wish to talk about any of this now because these issues, none of them, or in combination, provide the sheer emotional charge behind the Leave agenda.

So let’s look at immigration.

We’re in the here-and-now, so best not to rabbit on about Britain being a ‘nation of immigrants’. Rather better to start with the fact that we have an order of net immigration from outside the EU which is similar to that of the net numbers from within the EU.   Net migration from within the EU and from outside the EU were both running at around 185,000 per year in 2015. Thus, despite the EU ordained requirement that the UK accept ‘free movement of labour’ to and from the EU, we have been perfectly free to cut non-EU immigration very substantially if the UK government had wished to do so. And despite David Cameron’s stupid promise to cut immigration to the tens of thousands, his government has done absolutely nothing to start any process of restricting non-EU immigration.

The reason the promise was stupid and the reason nothing has been done about non-EU net migration into the UK is that our economy has needed the immigrants, irrespective of source. The evidence for this is that, despite the total volume of immigration, the rate of unemployment in this country continues to decline. Within this, the level of employment among UK-born citizens continues to rise. See here. Both are now at near-record levels. This fuels our economic growth, such as it is.  Why this has not led to near record growth is another matter, to do with piss-poor UK business and state investment levels.

But the evidence of the need for immigration is also clear from the sheer numbers of immigrants gainfully employed in our social services, health services, construction and commercial sectors, without whom all these sectors would be in an even more woeful state than they are currently. Their state would be woeful because the UK-born population is ageing itself into retirement and ill health and our youngsters are simply not breeding enough to make up for this.

Were it not for the immigrants there is no doubt that some sectors would have invested more significantly in IT/Robotics/Automation to replace the greying UK population – but it has proved cheaper and more convenient to avoid doing this by simply employing more human bodies, irrespective of origin. I have argued in previous posts why business investment is so low in the UK (most especially the UK), but the problem is not only business – the state sector could also have been investing more, likewise argued in previous posts.

But since we are where we are, we need the immigrants who have come and are coming to fill the job vacancies we have in the UK. Without them our economy would decline and our social and health services would be in an even worse state.

But what about the over-demand (‘pressure’) on our social-service, education and health sectors?

This is simply the increased demand we should expect from an increasing population. Provision should have been made for it.

Indeed, up to 2010, until the coalition government abolished it, there had been a poor, underfunded, Migration Impact Fund (MIF) which had been half-heartedly designed to deal with precisely this issue. But of course that would have required government investment in the housing, health, social services and educational sectors expected to be negatively impacted in demand terms by a growing population. Not that a young, healthy immigrant inflow would be making significantly greater demand on social services and health (except probably GPs). But surely they would on eduction and housing needs. We can see the dilemma the UK government is in: its policy of austerity forbids it from borrowing more or taxing more so it can spend more, even on investments that would provide significant medium- and long-term economic returns for the state.

So, when it comes to immigration and the increased pressure it puts on housing, the GP health service (less so hospitals), and education in particular, the government is fighting the Leave campaign with one hand tied behind its back.

Which is most unfortunate, as otherwise it could easily have taken the steam out of the part of the anti-immigration movement which is not wholly motivated by a dislike of foreigners.

Meanwhile, Labour has been quite hopeless in its misguided and half-hearted emphasis primarily on the protection of workers rights, etc, in its fight against Leave.

Even if the Remain campaign wins, the referendum (delightfully referred to in the FT as the ‘neverendum’) has been a wholly unnecessary, wholly disruptive and damaging event. And a cockup from beginning to end.





On the IT/Robotics third (fourth?) industrial revolution, employment and wealth distribution

A certain panic has recently been setting in that the IT/Robotics revolution, as it continues to mature and develop, will significantly eat into employment opportunities among the middle-and-highly-skilled-working classes.

Highly skilled weavers (the Luddites) lost their role as a result of the first industrial revolution in the late 1700s as weaving became mechanised in Britain. And the industrial revolutions of steam, electricity, the combustion engine, and even later, early automation caused significant and painful socio-economic and employment disruptions – before the wealth and growth created engendered further employment opportunities.

In 1930, as Keynes looked into the future, he predicted an enormous growth in leisure, with people only needing to work for 15 hours a week to provide for their needs. So much, as the Adam Smith Institute people would say, for Keynes’ prediction.  For, not only did ‘needs’ change, but the actual distribution of income and wealth confounded Keynes’ prediction. If the wealth generated currently were distributed more equitably between ‘capital’ and ‘labour’ we might (or might not) be on our way to fulfilling his prediction. But it is not and we are not.

In the developed world, since the 1980s to the present, it is now agreed that there has been a very significant growth in inequality. It is all very well not needing to work as much in a more IT/Roboticised economy, but this has translated into under- and unemployment and/or low incomes for many rather than an unadulterated increase of pleasure in leisure. The very wealthy have garnered most of the wealth of economic growth into their own hands rather than it being equitably distributed among all. This is not because they are evil but because they, themselves, are most likely on a vanity treadmill to ‘keep up with’ (and, if possible, surpass) their own ‘Joneses’. Human nature. Wouldn’t you?

Throughout this process what we in Britain define as the middle-classes – lawyers, accountants, engineers, architects, market researchers, economists, and so forth, have remained reasonably comfortable on the whole. Though it is agreed that middle-class real income in the USA has not actually advanced since since the 1980s. While that of those in the top 0.1% of the population has increased enormously. Here is the picture for the USA.  In the UK the picture is more complex, and open to more ‘interpretation’ but there is some agreement that the ‘middle-income’ group of households is shrinking in comparison with the poor and the wealthy. A detailed ONS analysis of UK middle-income households’ changing wealth since 1977 is provided here.

Many predictions now point to a lot of these people losing their full-time employment to continuously maturing IT/Robotics, therefore, doubtless, needing to join the relatively poorly paid ‘gig’ economy in the next few years, or taking on more poorly paid work in other sectors, save for those with the most enterprising spirit. That doesn’t sound good unless something happens to encourage a more equitable distribution of wealth in advanced economies. Which does not seem very likely.

However, all is not necessarily doom-and-gloom, because this argument ignores the ‘demographic time bomb’ in advanced economies. Populations are tending to decline and age in advanced economies, following Japan’s lead. There will be a medium term demographic respite in some countries, like the UK, where there has been significant recent immigration. But as immigrants settle in, the declining-and-greying population trend will continue even in these countries. This points to a decline in growth and wealth in advanced economies. Unless…

…Unless IT/Robotics turns out to be less of a threat to employment and incomes than has been predicted. It could be a benefit if, instead of increasing unemployment or lower incomes, it ends up substituting for the inevitably missing population numbers. Some really interesting analysis of this is provided in these excellent blog pieces from ‘Rick’ at Flip Chart Fairy Tales, first here and subsequently here.

The distribution of wealth, however, will remain a major issue which is unlikely to be resolved.  Largely because of ‘capture’ of the political process by very wealthy people running the oligopolies and much of the media.  So, although it could, I am not at all optimistic that everything will come together at the right time and in the right way.

I think we may be in for some very turbulent times in the next few decades. This, from here, may be putting it mildly….

In today’s parlance, we speak of “disruptive technologies.” But no-one should be gulled by jargon: New ways of producing things often kill off old industries and jobs before the full benefits of the successor mode of production are realized. A certain degree of violence inevitably accompanies human progress.

According to Steven Pinker human violence is very much on the decline. This is, of course, disputed. But maybe we shall see a reversal, if decline there has been.

In the meantime here is the WEF’s latest report (2016) on the Future of Jobs. Among many other things it posits the following for jobs lost and created worldwide via the ‘fourth industrial revolution’

Winners and losers
Jobs lost
4,759,000 clerical/administration
1,609,000 Manufacturing and production
497,000 Construction and mining
151,000 Sports and creative industries
109,000 Lawyers
40,000 Mechanics/maintenance
Jobs created
492,000 Banking, accounting, insurance
416,000 Management
405,000 IT/data analysis
339,000 Architecture and engineering
303,000 Sales
66,000 Teaching and training

The report needs some digesting. It is survey-based. And while I note ageing population effects are covered in respect of demand and employment I don’t think it really covers the interaction between IT/Robotics/Artificial-Intelligence and ageing/population decline on employment. I need to read the report… (but I may not).

I should mention an amusing but dystopian SF story by Frederick Kornbluth in 1954, called The Midas Plague, which envisaged robots taking over most jobs. Which, of course, meant that most of the ex-workers were too impoverished to consume the robotic production. Yes, indeed, ‘lack of demand’ ensued (or maybe it was Secular Stagnation?). The solution was to force the poor to consume more and more by giving them reverse ration cards. The poorer you were the more your ration card forced you to use the production of the robots. There were sanctions if you didn’t because otherwise the economy would collapse (sound familiar?). Eventually one bright spark got their house robot to do the consuming… It’s a long time since I read that story, but I think it ended in the discovery of the miscreant, who was then promoted to the upper classes, needing to consume less, in order to keep him shtum. But I think Kornbluth may have found a solution to secular stagnation… (Are you listening Prof Krugman, Prof Summers?)

Oh… And here be yet another suggestion of things turning very nasty as a result of what I now guess we must all call the 4th Industrial Revolution (even though I still think it is really the 3rd coming home to roost, but who am I to argue with the Very Serious Gurus of Davos?).

I think I ought to link this to my post of Sept 29 2013. But I’ve just noted that in that post I incorrectly quoted Kornbluth’s 1951 novella The Marching Morons rather than his 1954 novella The Midas Plague.

I’ve edited this post more than enough and will now leave the subject alone.

What if We Are Seeing a Dystopia in The Making – Caused by The Third Industrial Revolution Finally Reaching its Tipping Point?

OK, so we appear to be coming out of a demand-led recession (or, as a few would have it, a supply-side recession)… provided there are no more ‘shocks’ (China? Ungovernable USA? More eurozone shenanigans?). However since UK business investment is currently down further to more than 8% less than last year, and since the UK trade deficit is stubbornly large despite severe sterling devaluation, and since we have a relatively (to other countries) severe productivity problem, I’m far from convinced our debt ratio will be much improved in the medium term.  I’m also pretty convinced that ‘ordinary people’ will not see much benefit from the growth we do achieve in this ‘recovery’.

But I do also wonder if what happened and is now happening is not only a normal, albeit rarish kind of finance-triggered recession, exacerbated by misguided government austerity policies and their aftermath, but rather a ‘tipping point’ adjustment as an underlying IT/robotics technological revolution has finally reached escape velocity, while increasing globalisation also did the same? Maybe business doesn’t need to invest more?

What would that imply for the future?

There is some interesting research regarding the effect of computerisation on jobs in the UK and in the USA and other ‘developed economies’ too This doesn’t excuse appalling governmental mismanagement via austerity policies with doubtless appalling hysteresis effects on the part of the UK, the Eurozone and, to a lesser extent, the USA. But I wonder if the longer term problem isn’t one rather more equivalent to that of anthropogenic global warming – which hasn’t yet caused its major shock, (but surely will).  In this case, the issue being that there are simply too many people who need jobs for the jobs that will be available – both middle and working class – in the short to medium term. I have no idea how long the employment disruptions of the first two industrial revolutions (say, steam/rail and electricity/internal combustion engine), actually lasted. But I have a nasty feeling feeling that this third industrial revolution’s disruption to people’s employment prospects in the developed economies and, later, worldwide, is going to last much longer and produce much more severe unrest and even revolutions, as large proportions of our populations simply become ‘unemployable’ and feral, while the uppermost tier of our societies – the global elite – live in gated communities which may cut their dependence on the people and infrastructure among and within which they reside.

It would, of course, be theoretically feasible to avoid such an outcome if the production potential and profits could be widely distributed so that ‘ordinary people’ did not need to work very much – their main function becoming simply to consume (l believe Kornbluth got there early, with his novella The Marching Morons in the 1951, if it wasn’t Keynes a couple of decades earlier). But without a nasty revolution it looks to me more like the coming dystopia of Elysium

EDIT: Noted for further thinking: http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2013/10/abundance-revolution.html (and multiple links…) Goodstuff!

EDIT again: An interesting 2012 paper on ‘robots’ replacing labour and being at least partially responsible for secular stagnation in advanced economies is here