This post The Truth About Robots appeared first on Daily Reckoning.
Is Elon Musk really wrong? Is Robin Chase, the founder of Zipcar, really wrong? Aren’t they smarter than me? Yes, they are.
They are all building rockets into space and teleportation machines and revolutionizing entire industries. But I’m absolutely sure they are wrong about robots. And history backs me up on this. Common sense backs me up on this. Basic counter-examples back me up on this.
Here’s the issue: if artificial intelligence (AI) and automation really destroy all jobs and change all industries, won’t everyone become poor and we’ll need a Universal Basic Income to survive?
Elon Musk, Robin Chase and many other billionaires say “yes.” Am I against a Universal Basic Income? I don’t know. It works for the world of Star Trek. It doesn’t work for the world of Star Wars. So who am I to say? It would be nice for everyone to have free money, but that’s not the way the world has ever worked.
First let’s look at the reality. Many industries are certainly changing because of automation and AI:
Cashiers at retail stores are being replaced by self-checkout stations.
People who work in warehouses, like Amazon warehouses, are being replaced by robots that roll around the warehouse floor picking products and putting them in boxes to ship out.
Truck drivers, cab drivers, people who makes cars, etc are all being replaced by smart machines.
And, yes, a lot of high income jobs are being replaced by automation and AI as well: surgeons, some lawyers, accountants, etc.
Will all of these people become homeless? Let’s assume they will be. Millions of people will be without jobs. Then I ask the very basic question: if that happens, who is buying what the robots produce? Nobody. Even the rich will stop getting richer. The doctors and lawyers will be out of jobs.
Automation doesn’t just affect Walmart cashiers. The next wave of AI is going to affect doctors, lawyers, and MANY higher income jobs. Get ready for it. Right now there is ENORMOUS demand for many services and products that society has never been able to meet. One basic example from the recent past: ATM machines.
There was huge demand for an easy-to-use machine that would allow people to get cash without waiting in line at a bank.
The bank teller industry was terrified. Would this be the end? Would we no longer need tellers? Here’s the truth of what happened:
It turned out the demand for banking services was FAR greater than simply getting a few $20s.
The cost of providing banking services went way down, allowing banks to open up more branches and provide more services to their customers.
More services provided meant greater conveniences for consumers.
The lower costs per service provided allowed banks to offer 10x the number of branches that existed previously.
Today the number of bank tellers and other bank employees is probably 1000% or more greater than it was when ATM machines were created.
That’s just one example. Now let’s go to the theory:
The …read more
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