Governor Bank of Canada Responds To My "Futures" Questions

Stephen Poloz, Governor of the Bank of Canada, was in Oshawa this morning to deliver an interesting talk about the history of Canada's Economic Growth. He took questions following his presentation and my question having to do with job losses to robotics and jobs being increasingly defined as part time, contract, and casual, questions pertinent to this site, starts at minute 43.

In response to my question, the governor suggested that replacement of workers by machinery has historically created more jobs which is true...but, there was no opportunity for a follow up question that might have directed the governor's attention to:

• Historical fact may have little significance for the future since we have never before produced machines with AI (artificial intelligence) with many humanoid features that allow state-of-the art computer/robotics to paint pictures, write software, poetry and music, understand and respond to the spoken word, have thinking and abstract analytic abilities to defeat the world's greatest chess champion, slaughter record setting jeopardy champs, diagnose medical conditions, design prescriptive drugs, fix disease causing DNA defects, design and "print" buildings, furnishings and tools, and accomplish any myriad of abstract tasks, etc. and with these abilities, do jobs now done by humans.
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• When machines will do most of the work in perhaps 20-30 years at the present rate of change, what policy steps would he recommend to the government now in preparation for transition to a future world of little work.  The governor's answer that history following the industrial revolution up until the 40's and 50's may have been quite accurate in that slow changing world but is less relevant in our far less predictable space-age rapidly changing world.

Unfortunately the Governor did not touch on the topic of precarious part time, contract, and casual employment that is growing twice as fast as full time work according to Statistics Canada reports.

All interesting questions of the kind discussed on this site.

LINKS TO "PRESS" RESULTING FROM THE GOVERNOR'S ADDRESS

Text of Governor's Address

Speech Summary - Oshawa  This Week

Low Interest Rates Needed To Help Canada Grow--Reuters

Governor Warns Against Protectionism - Globe and Mail

"Dust-Off" of NAFTA Welcomed---CBC

GTA's Hot Housing Market Fuelled by Strong Economy But Growing Debt A Concern---CBC

Bank of Canada Governor Speeches

Stephen Poloz, Governor, Bank of Canada backgrounder

Ontario to "Trial" a Guaranteed Income Plan

Ontario Premier Wynne is introducing a guaranteed income pilot plan, This has already been piloted in Dauphin Manitoba in the 70's before cancellation by a Conservative Government and has already been introduced in some countries with others rapidly coming onstream. While some may reject this as "welfare", it will become common in future due to massive job loss due to automation and the growing inequity between "former" workers and their "former" employers and investors who are benefitting obscenely by pocketing the wage/benefits losses of their laid off workers. This payout in the future will be universally accepted by all as job losses accelerate and this guaranteed income becomes the sole financial support of most citizens. So how is this all paid for? Stay tuned for my next post! https://www.thestar.com/news/gta/2017/03/16/pilot-project-to-introduce-a-basic-income-in-ontario-gets-strong-public-support.html

The Future! Will You Be Needed Or Wanted?

Just as Henry Ford made automobiles ubiquitous to every family and workplace, robot researchers, developers, and manufactureres are predicting that life size artificial intelligence robots with human-like mobility will reside in many average households, offices, and workplaces in 5-10 years as workers, friends, servants, and even girlfriends and boyfriends. Will there be any need for you?

Why Work?

The philosophy of the purpose of work has changed over the ages---to hunt, scavenge, or grow food for survival, to make money to consume/acquire goods not requiring our direct labour, to self-fulfillment.

Likely, our future will come full-circle to the ideas of Aristotle in 335BC who claimed the prime purpose of existence was not work, but improvement of the mind.

This video, The History of Work, unfortunately, does not speculate about our work future, stopping as it does with the advent of the early computers without speculating on their impact to our future world of work.

   

Recent years, though, have defined that future without question, and in so doing, have also defined a roadmap of the future of human life. 

Every innovation created more free time---think of the washing machine, and just as that innovation provided more time by freeing people from a consuming household chore providing time for other things, computerized technology and robotics will take that free time explosion to the extreme---back to Aristotle’s idea of a life of leisure doing what you want to do rather than imprisoning us from the need of work for survival!

During the transition, which we are undergoing now, our world will suffer severe disruption as we adjust our thinking, our expectations, our habits, our very way of life to a future of peace, eradication of poverty, equality of opportunity, and respect for our fellow man---a Shangri-La devoid of the burdens of work....the Utopia first proposed by Greek Philosopher Plato!

Your present political philosophy, your ideas of independence and self-sufficiency, your present role as a wealthy business owner, a worker, or a pauper, will make little difference in defining the future world and your role in it.   Everyone will have only one objective---survival!  Survival of life, survival of production means to provide human needs and wants, and survival of a working economy to sustain the needs of the population, and there are not many available options!

A world without work for humans will bring profound changes to the past rules that defined our world, its economy, and the roles of people---- And no matter what you think and believe now, you too will be swept up in the tsusami of social and economic change.---and acceptance of and adaptation to the profound changes will be your lifejacket to survival.

Forget Everything You Know About Work And The Economy

The next social revolution is here---joblessness. And we have to start thinking about coping with the change. Be prepared to forget everything you know about how the economy works and how wealth is distributed.   Silicon Valley agrees with me---jobs are disappearing

An Economic Model that Restores Jobs, Wages, and Profits in the Robotics Age

In response to inquiries, I have been inspired to dig deeper to further clarify thoughts I've expressed before but have never detailed through numbers. So following is an economic model that I've devised that returns and supports pre-robotics hiring and salary levels, as well as traditional corporate profit levels and that provides a reasonable and sensible model for the transition to the robotics future of little work. The major problem faced in most economic systems of all political philosophies is to glorify greed by concentrating wealth in the hands of a few. In Canada, for example, the two richest Canadians are wealthier than the bottom 30%. The rich and powerful are concentrating wealth by replacing workers with robotics, who neither get paid nor consume the product they make. Without acknowledging that in the end this slows down consumption ultimately resulting in the bankrupting of their companies as well as in helping to bring down the entire economy. The solution lies in evaluating merit of continuing the historical rules and ideas that are no longer working...Everything we know about economies and economic rules must change to alleviate the economic problems that we have to avoid upcoming revolution. In this case, historical practice and beliefs is a giant inert rock that is perpetuating a failing economy for most people. Change may require full-fledged revolution or international war but my hopeful wish is that change will come voluntarily and peacefully when all the rich corporate guys start recognizing their ensuing bankruptcy when robotics steals most jobs resulting in few product sales. A wise intermediate step would be to significantly cut work hours to retain nearly full employment with pay tied to productivity rather than hours worked. For example GM Oshawa used to employ 30,000 workers but now robotics has resulted in increased production with only 2000 workers, and huge corporate profits generated by cost savings from the decreased workforce. So GM could afford to hire the former 30,000 40 hr/week workers for 3 hr/week at the traditional old salaries based on productivity and not hours of work while maintaining traditional profit levels. Right now, the former salaries of the 28000 laid off employees is going to executive salaries and bonuses and record GM profits and investor dividends. Robotics will continue to deflate employment to near zero in the future. Lock step with this is the hope that common sense will prevail to insure that necessary change and revision occurs as needed to insure both sustainable economic health and a peaceful social future. Without voluntary and peaceful change to more fairness in the distribution of the proceeds of our North American economies, the revolutions in China and Egypt will be repeated here. Please note ---All figures quoted here are guestimates for illustrative purposes only---but principles used in their generation apply to the real situation.

Computerized Technology and Robotics Have Ushered In A New Era

The Intellectualist' magazine published the following table showing a shap change in economic performance in 1980---and someone asked me to account for the change.

January 2 at 11:27am · 

The Intellectualist

December 27, 2016 at 2:52pm · 

"The Great Regression" - Do you notice where the change occurred? (Credit: The New York Times)

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And so I responded!

Apple computers were invented in 1976, and in 1977, my employer purchased 12 and provided me with one of the 12. My secretary had a very user-unfriendly IBM wordprocesser at the time where a lengthy address had to be inputted to find and access files

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Apple used a menu of icons to easily find and access files, a system Microsoft copied in producing its windows operating system, which then became the norm for office computing and sparked similar ease-of-operation systems in the development of computerized mechanization of manufacturing technology.

 
All this happened starting in about 1980 to exponentially increase productivity, lower prices, and foster high employment and wage gains during the transition.

 
The reverse is true now with growing unemployment as robotics and other computerized technology steals most jobs which will usher in a new era when few work and sparking new rules about how we keep consumption necessary to keep the economy afloat for the new world.