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Another assumption going on here that's not correct is that our education system (I mean higher education) is inferior to the system in the developing countries and that quality of their resources (human resources that is) is higher.
This is a bunch of BS being shoved down our throats to justify outsourcing. There is no shortage (and never has been) of qualified professionals here, neither there is a shortage of well educated and prepared graduates in science and technology fields. We are not 'bleeding brain power', in fact American universities are so highly regarded overseas that many of the developing and developed nations elite and upper middle class send their kids here. So, I guess these degrees are worth something.
Let me tell you about education in the developing countries. I've gone to college to one of the developing countries and also attended university in the US. The education system of many developing countries is corrupt. Going to the university is not for everyone, there is a lot more competition, so those who end up going are either brilliant or have parents who are able to afford the education and many times give bribes when the kid can't cut through the competition. A lot of kids that end up in the universities aren't there because they deserve it. Another thing that many don't know is that cheating is much more accepted in the higher education system in other countries. I am not bad mouthing any particular country or education system or everyone who managed to get a degree overseas. There are a lot of honest people that compete on merit and really care about their education. But there are many who simply cruise through since there is a good peer support for cheating. When I went to college in the US, I was shocked at the negative attitude of American students towards cheating on the exams, labs and written assignments. Where I was studying before, it was the norm, almost a survival skill, here you could be ratted out by your classmate if caught cheating. Of course I am in no way suggesting that students in American colleges don't cheat or that every student overseas is cheating, I am simply talking about trends and attitudes of people. Bribery is very much entrenched into the fabric of society in many developing countries. It's pretty much a legacy left over from the class segregation and poor class mobility or from the decades of the communism regime. Developing countries are slowly growing out of it. In the US and other developed countries while bribery exists it's not as accepted and is hidden and considered a crime. I am also not saying bribery is done in the open in the developing countries, but it's much more accepted as a way of life.
Now, from my own experience working with IT in the US. I've come to work with many H1B individuals and I have to report that majority of them are pretty average in terms of their reasoning abilities and their skills. They are very much comparable and in no way superior than average American workers. I've met only maybe 1 or 2 truly brilliant individuals, most were OK and some were so dense that I couldn't understand how they would be able to even get a college degree. Working with some of the less gifted individuals I often wondered how much money the company is saving on bringing them here and wouldn't an average Comp Sci graduate from US average college do just as well, or even better.
So, I don't buy for a minute into the tirades that we are failing to compete with the developing countries when it comes to the brain power. People are people, we are all human. No nation in the world can claim that they are somehow more intelligent or educated that the rest of the world. It simply can't be. Majority of people, all people of the world are average, some are gifted and some are dense, the distribution of smart/average/dim witted is pretty much the same in every society and culture that has some access to education to most of its people. I am not talking about the impoverished war-torn nations where citizens have nothing to eat. I am talking about countries with good education systems, free public schools, mandatory school education for the kids and incentives for brilliant kids to succeed.
Those who control and build the robots will reap the money, and the swarms of people who once did labor now done by robots will not be "reading a book" on the beach, they will be begging in the streets for food.
Sooner or later robots will control themselves. Regardless, just as all technological progress in the past, this will not result in massive unemployment.
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Originally Posted by Randomdude
Actually, in many third world foreign factories, equivalent jobs that are done by robots in industrialized modern economies, are often completed using last generation labor intensive technology, because its actually CHEAPER to use many human hands doing the job then one couple million dollar robot is to buy and maintain, and eventually replace.
I'm talking about electronics and in that case, with the exception of final assembly, the components have to be made with robotics. Humans are not able to do it, regardless of the cost of labor.
Ultimately, the Corporations that are constantly seeking wage/labor arbitrage are going to find themselves in a pickle, as these Special Economic Zones get phased out and absorbed into the rest of the Country.
Not at all. Firstly there are still places to manufacture things cheap, secondly automated manufacturing is getting cheaper and cheaper. By the time they run out of countries to exploit, they can just move to automation. I expect the move to automation to occur way before they run out of countries to move to.
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Originally Posted by chuck22b
I agree that long term wise nothing is fixed. And in economics, that is also agreed upon. But, in the most part, our life times are finite, and investors and CEOs, look at things in the intermediate term.
Even in our economy things happen much faster than life times! Economies adjust and they do so pretty quickly, but as I said before it does involve a good deal of human suffering. You seem to be caught up in the human suffering part, I can only guess because you are suffering from the current events. I'm talking about the big picture.
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Originally Posted by chuck22b
The diminishing marginal return is not a technological limit... It's an "economic" and resource limit. I have very high hopes that the Human mind and improvements in technology can in theory be "limitless". But, it's the physical limitations, economic limitations, political limitations that are part of this Productive Constraint.
None of these "limitations" are actual limitations. Advances in production will continue to increase the worlds standard of living, including Americans.
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Originally Posted by chuck22b
In an ideal world, growth is limitless. But in reality... there are limitations in both resources, capital, political, economic, etc, etc. Hence I won't dismiss the diminishing marginal return.
The diminishing marginal return is real. The problem is the way you are using it. Short term there is undoubtedly a diminishing marginal return on a number of things as the related variables do not move that quickly (Remember, you have to fix things to even calculate the diminishing return!!). But longer term, the related variables are not fixed and talking about a "diminishing marginal return" of such and such is meaningless.
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Originally Posted by chuck22b
It's already happening. It costs way more for a little more "advancement" and companies are focusing more on "cost" reductions rather than production innovation. With chips, Moore's Law is not the problem
No, it is not happening in general. I don't know why you are quoting Moore's law, it is not a restriction on computation. Its a restriction of a particular technology used in computation. The current technology still has another good 10 years before it runs its course, but there are a number of alternatives in the works. But again, even with the current chips its not a restriction on computation in the more general sense. Theoretical advancements (in say parallel computing) can creately increase the computatin power even while using current generation chips.
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Originally Posted by chuck22b
That's why although robots and pure automation and AI sounds great... the cost benefits aren't quite there yet. Most certainly some day... but we all have a finite life span and the short-term labor arbitrage is easier.
I don't know what you're talking about. "Pure automation" is used all over the place in industry. Ford has an auto plant that is almost entirely robotic, its in brazil because they could build it here because the unions and well....folks like yourself that think it would cause "unemployment".
The stuff that is being out-sourced is being out-sourced largely because of limitations in AI (Not computing or chip design). But to say, the "cost benefits aren't quite there yet" is absurd. Its been used for some time now in a number of manufacturing processes.
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Originally Posted by chuck22b
With this economic downturn, I think a lot of light bulbs have turned on and a lot of Americans are realizing that we need to buck up, retrain, and adapt.
I've just noticed a much of complaining.
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Originally Posted by chuck22b
We still have this demand problem in the short to mid-term. Where is this demand going to come from without equivalent wages or rabid credit? Perhaps the developing nations can finally spend some of their savings?
Again, that is the point of fiscal policy.
Anyhow, automation of factories is not the only thing that is going to occur. We are not that far from replacing millions of low-skill office, health etc jobs either. See the future face of customer service here:
Not at all. Firstly there are still places to manufacture things cheap, secondly automated manufacturing is getting cheaper and cheaper. By the time they run out of countries to exploit, they can just move to automation. I expect the move to automation to occur way before they run out of countries to move to.
Even in our economy things happen much faster than life times! Economies adjust and they do so pretty quickly, but as I said before it does involve a good deal of human suffering. You seem to be caught up in the human suffering part, I can only guess because you are suffering from the current events. I'm talking about the big picture.
None of these "limitations" are actual limitations. Advances in production will continue to increase the worlds standard of living, including Americans.
The diminishing marginal return is real. The problem is the way you are using it. Short term there is undoubtedly a diminishing marginal return on a number of things as the related variables do not move that quickly (Remember, you have to fix things to even calculate the diminishing return!!). But longer term, the related variables are not fixed and talking about a "diminishing marginal return" of such and such is meaningless.
No, it is not happening in general. I don't know why you are quoting Moore's law, it is not a restriction on computation. Its a restriction of a particular technology used in computation. The current technology still has another good 10 years before it runs its course, but there are a number of alternatives in the works. But again, even with the current chips its not a restriction on computation in the more general sense. Theoretical advancements (in say parallel computing) can creately increase the computatin power even while using current generation chips.
I don't know what you're talking about. "Pure automation" is used all over the place in industry. Ford has an auto plant that is almost entirely robotic, its in brazil because they could build it here because the unions and well....folks like yourself that think it would cause "unemployment".
The stuff that is being out-sourced is being out-sourced largely because of limitations in AI (Not computing or chip design). But to say, the "cost benefits aren't quite there yet" is absurd. Its been used for some time now in a number of manufacturing processes.
Again, that is the point of fiscal policy.
Anyhow, automation of factories is not the only thing that is going to occur. We are not that far from replacing millions of low-skill office, health etc jobs either. See the future face of customer service here:
Ok, user_id,
You can live in your euphoric utopia world of factories, offices, logistics, distribution chains, supply chains, store fronts, warehouses, media outlets, etc. etc. controlled by robots and AI.
Perhaps someday we won't even need a CEO since everything is automated.... but until then, in the short and mid-term people are still necessary and the consequences of political and economic policies are real factors that are affecting millions of developed world residences (not only America). Actually these policies are affecting the billions in the developing nations as well as the money doesn't get channeled to the producers but instead to the capital owners.
Without the advent of free flowing "credit", the working masses of the developed world is coming to realize how these jobs that new innovations were suppose to bring have never materialized. People are working more, educated more, but still making less in Real terms (adjusted for inflation and credit use) than their predecessors.
And as a result of less economic demand from the developed nations, political posturing by the masses - ie, protectionist policies, the developing nations will have to lift their restrictions (peg on dollar, dollar to credit feedback loop, special economic zones, tax subsidies, etc.) by actually spending on their own populations and spurring internal demand. And by doing that, they will also increase their standard of living, labor costs, industries, and change how corporations see "labor" in these markets. After all, economy super cedes political economic manipulation. And in most all economic models, the developing world's wages and currency should have lifted way higher than they currently are based on their productive capacity vs. buying power.
Of course corporations can chase labor all they want. They can spend billions building new infrastructure, sewer, energy sources, reform politics for Africa to build factories there. But at the end, the guy who innovates wins. And those companies that innovate, improve here in the States or in the developed world will be in a better position than those that chase the labor shell game (and btw, building all these things, providing all the bribes costs capital that could of been applied to innovation instead) because they Have to innovate to compete. The robots will be built here or in the developed world if anything else to compete. What makes more sense? Building infrastructure, reforming governments, to get that labor advantage? Or spending that money on innovation?
In terms of fiscal policy spurring demand? Fiscal policy can only go so far.... governments can't substitute household incomes indefinitely. The resulting taxation on the rich would ultimately hurt productive capital. Only innovation and productive resources can spur sustainable incomes and demand. Nations with surplus capital have a more likely chance of spurring fiscal policy demand than those with excessive debt like ours.
You can live in your euphoric utopia world of factories, offices, logistics, distribution chains, supply chains, store fronts, warehouses, media outlets, etc. etc. controlled by robots and AI.
Unless you plan to live in the forest hunting for food, you'll be living in the same world.
Quote:
Originally Posted by chuck22b
Perhaps someday we won't even need a CEO since everything is automated.... but until then, in the short and mid-term people are still necessary and the consequences of political and economic policies are real factors that are affecting millions of developed world residences (not only America).
Huh? I never said there are not "consequences of political and economic policies". I have disagreed with your economic claims much of which is little different than those of the luddites about 200 years ago.
Quote:
Originally Posted by chuck22b
Without the advent of free flowing "credit", the working masses of the developed world is coming to realize how these jobs that new innovations were suppose to bring have never materialized. People are working more, educated more, but still making less in Real terms (adjusted for inflation and credit use) than their predecessors.
How many developed nations have you visited lately? Except of course Los Angeles. The working masses in the develop world do not realize this because its a fabrication. "How much they are making" is not the important measure, rather their standard of living. China has brought a massive number (100's of millions) of people out of poverty...and you claim that it "never materialized". People from the country side are not forced to work in factories, they willing move to the coastal areas to work. The same can be said of a number of other countries.
You see the real problem with globalization is not what is happening in the developings nations its what is happening to the western nations. The western world has been sucking the wealth out of the developing world for centuries, but as soon as the developing world starts to grow and gain power western powers complain about the dire consequences! Its comedy. Face it, the days of US and Western dominance are over.
Quote:
Originally Posted by chuck22b
In terms of fiscal policy spurring demand? Fiscal policy can only go so far.... governments can't substitute household incomes indefinitely. The resulting taxation on the rich would ultimately hurt productive capital.
Fiscal policy only needs to "go so far". All it needs to do is supplement demand while the economy adjusts. That is the point. If there were not so many lags in the economy it would not be necessary. The resulting taxation on the rich? Huh? We have a progressive tax system so certainly the rich will pay more for it than the poor. But that has been the case for decades.
Also, note that the stimulus will only last for a few years, where it will be paid off over decades. It is sucking very little capital out of the system on a year-to-year basis and that is just the point.
Quote:
Originally Posted by chuck22b
Nations with surplus capital have a more likely chance of spurring fiscal policy demand than those with excessive debt like ours.
No idea what you mean by this. The stimulus works the same regardless of whether its done with deficit spending or not. Also, government debt is not an issue in the way people think it is. There is always a buyer of last resort, namely the FED. The FED can buy treasuries all night and day, trillions and trillions. Of course, at some point there are consequences. But we have not reached that point yet.
I really don't know what the point of the rest of what you said was. Corporations are going to do what makes the most sense profit wise and at the moment that is often out-sourcing to other countries. I'm not sure how you think businesses operate, but much of what you're saying does not make sense in a real business environment. Investors are not going to keep poring money into a company year after year waiting for innovation that may make their product cost competitive vs out-sourcing at some point. While toy company XZY is trying to innovate, the other guy is selling millions of products and becoming well entrached into the market. You seem to think the current companies are short sighted, I suggest its the other way around.
Unless you plan to live in the forest hunting for food, you'll be living in the same world.
Huh? I never said there are not "consequences of political and economic policies". I have disagreed with your economic claims much of which is little different than those of the luddites about 200 years ago.
How many developed nations have you visited lately? Except of course Los Angeles. The working masses in the develop world do not realize this because its a fabrication. "How much they are making" is not the important measure, rather their standard of living. China has brought a massive number (100's of millions) of people out of poverty...and you claim that it "never materialized". People from the country side are not forced to work in factories, they willing move to the coastal areas to work. The same can be said of a number of other countries.
You see the real problem with globalization is not what is happening in the developings nations its what is happening to the western nations. The western world has been sucking the wealth out of the developing world for centuries, but as soon as the developing world starts to grow and gain power western powers complain about the dire consequences! Its comedy. Face it, the days of US and Western dominance are over.
Fiscal policy only needs to "go so far". All it needs to do is supplement demand while the economy adjusts. That is the point. If there were not so many lags in the economy it would not be necessary. The resulting taxation on the rich? Huh? We have a progressive tax system so certainly the rich will pay more for it than the poor. But that has been the case for decades.
Also, note that the stimulus will only last for a few years, where it will be paid off over decades. It is sucking very little capital out of the system on a year-to-year basis and that is just the point.
No idea what you mean by this. The stimulus works the same regardless of whether its done with deficit spending or not. Also, government debt is not an issue in the way people think it is. There is always a buyer of last resort, namely the FED. The FED can buy treasuries all night and day, trillions and trillions. Of course, at some point there are consequences. But we have not reached that point yet.
I really don't know what the point of the rest of what you said was. Corporations are going to do what makes the most sense profit wise and at the moment that is often out-sourcing to other countries. I'm not sure how you think businesses operate, but much of what you're saying does not make sense in a real business environment. Investors are not going to keep poring money into a company year after year waiting for innovation that may make their product cost competitive vs out-sourcing at some point. While toy company XZY is trying to innovate, the other guy is selling millions of products and becoming well entrached into the market. You seem to think the current companies are short sighted, I suggest its the other way around.
I'm pretty much fine with automation and the such... and I've mentioned the US adjusting to a new world economic arena. I also don't propose that the US will dominate the world and/or be the sole super power.
Furthermore, I agree and acknowledge the developing world has grown and that is why their wages and buyer power should rise while ours fall (yes, America has been living large). That is why I critisize economic and monetary policies of both sides that keep on "trying" to maintain the status quo. Like I said before, economy can't be held back by political economic policies (if your production capability is X, you can only live at Y so long)... but can be drawn out with the detriment of a harder landing.
Anyhow, whether or not these corporate actions are going to be successful or failures are yet to be determined. Either of us can be right or wrong. The economic downturn definitely has a large impact on whether their strategies will prevail. From what I can tell, the developing nations should have a bit of an advantage by holding savings and production capacity.
Btw.... haven't debated with you for some time... how has business been? and are you still in Ventura?
Btw.... haven't debated with you for some time... how has business been? and are you still in Ventura?
No idea what you're talking about.
In terms of the the savings of the developed nation, that is just a bunch of hot air. You can't compare savings between developed and developing nations. China for example has very few safety nets in comparison to the US or Europe and as a result must save more. The savings rate in China will only decline once China develops more social programs, but this will suck money out of their economy. In other words the "savings" is never going to be spent.
you cant and walmart uses prison slave chinese labor to make goods. so the answer is you cant. the solution is when we stop buying.
no market no product. or start making our own stuff and stop buying theirs.
the power is in your wallet and in your arms. who controls the wallet in your house?
the french have been stonwalling the china machine for years. fighting for their jobs. they got unions, while we have sneered at them for years sinking to the bottom of the pool smiling.
Sooner or later robots will control themselves. Regardless, just as all technological progress in the past, this will not result in massive unemployment.
Most of the past technological progress resulted in equally manually intensive jobs. What labor is going to be needed when robots are cleaning streets, taking fast food orders, and even fixing themselves?
I'm not too certain about innovating here in the States...
I am only asking this as a question and do not take this in any other way beyond a question. Do you read anything outside of public media? I am not talking about politics either.
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