Economic growth basically means that workers get more productive. Less hours of work means more output. GDP growth is not really possible without making workers more efficient.
It’s interesting how in the last years the old luddie arguments got revived. The idea that automation means that there won’t be any jobs anymore get’s more and more popular.
Economic growth basically means that workers get more productive. Less hours of work means more output. GDP growth is not really possible without making workers more efficient.
In principle it is possible for GDP to grow even if productivity per hour stays constant provided the number of hours worked goes up. I’ve heard that’s an important factor to consider when comparing the GDPs of France and the US, so it’s not that unlikely it also is when comparing the GDP of a country in year X and that of the same country in year X+10. (But of course such a thing couldn’t go on arbitrarily far because there are only so many hours in a day.)
When comparing accross countries, I wouldn’t be surprised if different countries had different methodologies for calculating GDP. The differences don’t have to be obvious at the first sight. For example, both countries may agree that GDP = X + Y + Z, but there may be a huge difference in how exactly they calculate X, Y, and Z. Also, gray economy may or may not be included, and may be estimated incorrectly.
(Sometimes such changes are done for obvious political reasons, for example in my country a government once reduced unemployment by simply changing the definition of how unemployment is calculated. Another example of how the same word can correspond to different things is how countries calculate tourism: in some countries a “tourist” is any foreiger who comes for a non-work visit, in other countries only those who stay at a hotel are counted.)
Economic growth basically means that workers get more productive.
Is that the best way to slice the problem? It doesn’t seem to cover well instances where new resources are discovered, or new services offered, or production processes improved to deliver a higher added value.
The idea that automation means that there won’t be any jobs anymore get’s more and more popular.
Well, I think the main worry is that there won’t be any more jobs for humans.
Well, I think the main worry is that there won’t be any more jobs for humans.
There are plenty of people who want to have more stuff. I don’t think that the constraint for building more stuff or providing more services is that we don’t have enough raw materials.
I’m not sure I’m following the analogy. If robots replace humans, we will have an increase in things to buy due to increased efficiency, but a lot more people will become poorer due to a lack of empolyment. If no other factor is involved, what you’ll see is at least an increase in the disequality of distribution of richness between those who have been replaced and those who owns the replacement, proportional to the level of sophistication of the said AI.
People get employed when their work allows an employer to create more value, that a customer can buy, than their wage costs.
Robots need to be designed, built, trained and repaired.
When it comes to wealth inequality that’s partly true. Automatization has the potential to create a lot of inequality because skill differences lead to stronger outcome differences.
The robotic revolution and possibly the next AI revolution means that the source of labor can be shifted from people to robot. Within the usual production model, output = f(capital) x g(labor), labor is to be meant exclusively as human labor, but in the next future, possibly labor will mean robot labor, which can be acquired and owned, thus becoming part of the means of production accessible to capital. In a sense, if AI will take a hold in the industry, labor will be a function of capital, and this means that the equation will be transformed as output = h(capital). Depending on the h, of course, you will have more or less convenience (humans require training and repairing too).
Before AGI there are many tasks that human can do but that robots/AI can’t. It’s possible to build a lot of robots if robots are useful.
That’s the kind of work that’s likely a constraint on producing more stuff. I don’t think the constraint will be resources. Number of robots is also unlikely the constraint as you can easily build more robots.
or production processes improved to deliver a higher added value.
That does count as workers getting more productive by the standard definition of the term as usually used e.g. in discussions of Baumol’s cost disease.
I’m confused. If productivity is unit / labor, then switching to another production line which deliveres the same quantity of items but which are sold for a higher price should increase the GDP without increasing productivity. Reading a couple of papers about Bauomol’s disease seems to agree with the definition of productivity as output per labor: the labor cost increases while the productions stays the same, so price rises without an increase in efficiency.
Economic growth basically means that workers get more productive. Less hours of work means more output. GDP growth is not really possible without making workers more efficient.
It’s interesting how in the last years the old luddie arguments got revived. The idea that automation means that there won’t be any jobs anymore get’s more and more popular.
In principle it is possible for GDP to grow even if productivity per hour stays constant provided the number of hours worked goes up. I’ve heard that’s an important factor to consider when comparing the GDPs of France and the US, so it’s not that unlikely it also is when comparing the GDP of a country in year X and that of the same country in year X+10. (But of course such a thing couldn’t go on arbitrarily far because there are only so many hours in a day.)
When comparing accross countries, I wouldn’t be surprised if different countries had different methodologies for calculating GDP. The differences don’t have to be obvious at the first sight. For example, both countries may agree that GDP = X + Y + Z, but there may be a huge difference in how exactly they calculate X, Y, and Z. Also, gray economy may or may not be included, and may be estimated incorrectly.
(Sometimes such changes are done for obvious political reasons, for example in my country a government once reduced unemployment by simply changing the definition of how unemployment is calculated. Another example of how the same word can correspond to different things is how countries calculate tourism: in some countries a “tourist” is any foreiger who comes for a non-work visit, in other countries only those who stay at a hotel are counted.)
Is that the best way to slice the problem? It doesn’t seem to cover well instances where new resources are discovered, or new services offered, or production processes improved to deliver a higher added value.
Well, I think the main worry is that there won’t be any more jobs for humans.
There are plenty of people who want to have more stuff. I don’t think that the constraint for building more stuff or providing more services is that we don’t have enough raw materials.
I’m not sure I’m following the analogy. If robots replace humans, we will have an increase in things to buy due to increased efficiency, but a lot more people will become poorer due to a lack of empolyment. If no other factor is involved, what you’ll see is at least an increase in the disequality of distribution of richness between those who have been replaced and those who owns the replacement, proportional to the level of sophistication of the said AI.
People get employed when their work allows an employer to create more value, that a customer can buy, than their wage costs.
Robots need to be designed, built, trained and repaired.
When it comes to wealth inequality that’s partly true. Automatization has the potential to create a lot of inequality because skill differences lead to stronger outcome differences.
The robotic revolution and possibly the next AI revolution means that the source of labor can be shifted from people to robot.
Within the usual production model, output = f(capital) x g(labor), labor is to be meant exclusively as human labor, but in the next future, possibly labor will mean robot labor, which can be acquired and owned, thus becoming part of the means of production accessible to capital. In a sense, if AI will take a hold in the industry, labor will be a function of capital, and this means that the equation will be transformed as output = h(capital). Depending on the h, of course, you will have more or less convenience (humans require training and repairing too).
Before AGI there are many tasks that human can do but that robots/AI can’t. It’s possible to build a lot of robots if robots are useful.
That’s the kind of work that’s likely a constraint on producing more stuff. I don’t think the constraint will be resources. Number of robots is also unlikely the constraint as you can easily build more robots.
That does count as workers getting more productive by the standard definition of the term as usually used e.g. in discussions of Baumol’s cost disease.
I’m confused.
If productivity is unit / labor, then switching to another production line which deliveres the same quantity of items but which are sold for a higher price should increase the GDP without increasing productivity.
Reading a couple of papers about Bauomol’s disease seems to agree with the definition of productivity as output per labor: the labor cost increases while the productions stays the same, so price rises without an increase in efficiency.