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Automation, Hypocrisy, and Capitalism

Table of Contents

1. Introduction

Many people talk of automation in a negative light when it comes to their jobs. I believe that this is a fallacy, and that we should seek to automate as many useful jobs away as possible. Now, I can't really change anything about the way things are currently run and I can't really change public opinion, either, but if you are here with an open mind and believe automation is taking away useful jobs from workers or believe have a strong fixation on the material conditions of workers after jobs have been automated, this will be for you. However, I will also try to articulate my views on production in general, as well as an outline of why I believe that the profit motive is a good thing.

1.1. On Production

It is no question that specialization has caused much wealth to be generated. It is my opinion that this is a good thing, and if you do not believe this is a good thing, I have bad news for you: you're outnumbered. However, good for you. And if you actually do believe we should go back to disease, hunger, and base subsistance, then this writing is not for you. Otherwise, we shall agree that technological progress is a good thing. Right?

Now, then, we shall proceed. Because specialization is what generates these living conditions, we should seek to maximize the extent to which we specialize, at least with respect to non-hobby jobs. If everyone takes a cut of the work that the global production system needs, then everyone wins out, because commodity transfer is made easy with money. This volume of trade, GDP, ensures that resources are optimally distributed, because trades are beneficial for both parties. If a lot of mutually valuable trades happen, then the world becomes richer without production. In a sense, trade optimizes for a lack of waste, or at least, an optimal usage of resources over time.

So the aggregation of mutually beneficial agreements is what makes up an economy, and mutually beneficial trades are often equivalent to voluntary trades. There are many cases in which that is not true, but for the sake of this simplified model, we shall assume it to be so.

Then, what happens to an automated job? Yes, that job replaces a job that used to exist. However, if the price signals dicate that it is profitable for that job to be automated, that means that it uses less resources. Wait, how can using a machine, which takes so long to assemble and makes so much waste, use less resources?

Well, that's a good question, and it's not strictly true. But since one machine can replace thousands of jobs, it means that the economic cost of trades that occur in a chain end up being less for all parties than hiring the workers to do the job. Now, there is a global warming component to it, but that could theoretically be priced in with a carbon tax.

Okay then, so having a machine doing the job is more efficient than the workers doing the job given that the price is lower. But what about all the workers? Well, remember what I said about specialization? There are a lot of consumers, and not a lot of workers in any given industry. So, in order to scale, we should make it so that everyone does a little bit of the job in order for everyone to benefit. Same principle applied here, in order to scale, we should value the prices that consumers pay much more than workers. If you are a worker in that industry, the world already priced all the other automation into your purchases, so it's not fair that we halt the progression of any one industry arbitrarily.

So, whenever someone complains about automation, they've been profiting off of automation for as long as they've been buying things, and they want to stop it in their industry for some arbitrary reason. The effects of automation on consumers is invisible, whereas the effect is visible on producers. Since I want to be better off on average, I would like to see automation in as many useful industries as possible.

1.2. An Extended Explanation of Global Warming

This is an externality, not priced in by the market because the transaction harms a third party that did not agree to the trade happening. Thus, we cannot accurately price pollution beccause nobody owns air, and therefore nobody can take accountability for polluting it. Therefore, a carbon tax roughly equal to the problems caused by pollution is in order. This applies to all externalities, positive and negative, where voluntary actions between people end up having consequences on a third party that did not agree to the transaction.

2. Why we Can't Just Stop at our Current Technological Level

Continuing our trend of technological progress is required for several things, as I will talk about in these sections.

2.1. Stock Derivatives

Most of the world runs on a private equity system, and this is probably not going anywhere. A lot of credit is tied in the expectation of technological advancement. What's more, people want technological advancement because it makes life easier. This translates to people betting on its advancement, which means a lot of money is at stake when we talk about automation. This is not even a bad thing as investments are needed in order to drive innovation in these sectors.

So if we just halted progress tomorrow, the economy would just vanish with it because all those derivatives would be worth zero. Retirement funds, private banks and hedge fund institutions, everything would go down the shitter. And don't think you wouldn't also go down the shitter with it, because you would. Less credit means less investment which means less credit which means less investment… and then a debt spiral. You could stop this for a while by printing a lot of money, but we would waste a lot of resources, because all that capital that went into automation would suddenly vanish, instead of being used for something more short term. Needless to say, we probably don't want that to happen.

Well, it could also be a gradual process, but I have one question: why? We could live ever more comfortably, ever more well, and it would be extremely popular to continue advancing. We have outer space to discover, and new physics to discover as well, which requires industrialization. It's really cool, so in my opinion, we should continue.

2.2. Exploitation of Third World Countries

If you want to create more wealth so that everyone can have nice things, you need to produce things, hence you are talking about a problem of efficiency and resource allocation yet again, not a problem of morals. If you want to help people who are in need, we must make it in everyones' best interests to work together and improve everyone's living conditions by making trades with third world countries that benefit both parties. Factors such as corruption will be unprofitable in the long term.

It is the case that we have abundance here in the first world, but that wealth can't be exported cheaply. A very effective way that has been done is by outsourcing labor and companies engaging in foreign investment, but shipping over supplies itself consumes supplies, and we want to create incentives to distribute things because we want those methods of distribution to be sustainable for us. Hence, exporting excess wealth will not work in the long run.

2.2.1. Exploitation by Keeping Third Word Countries as Slaves

This is a common argument that is often made in order to deter the commercialization and commodification of resources in many countries. The argument goes as follows: the fact that both parties have a choice doesn't matter because one country is exploiting another's permanently weaker position in order to make the trade much more beneficial for us than for them, and in the long term, it would benefit both parties more to give aid because redistribution creates externalities in society that are positive. Let us investigate these claims.

First of all, we have a living counterexample to the first claim: China. China was a desparately poor country, and embracing relatively lax foreign investment law lead to its large labour force getting put to work. But this very fact that Chinese workers were being put to work by foreign multinational corporations was not a factor that lead to their permanent subjugation. Much the opposite: these workers became productive, and wealth was generated for foreign countries, as well as China itself. They did not need foreign aid in order to continue industrializing, and we see in many of the east Asian countries this story repeats itself, sometimes with government investments, sometimes with private investment, but always with the intention of the USA making a profit. Would these countries rather close their borders, close off capital, and remain isolationist, resisting the so-called expoitation by a foreign power?

It remains clear that the idea that countries that are utilized for labor or capital is somehow exploitation is quite bogus. It's clear in practice, but in theory, what is happening is simply that it's not profitable for companies and governments to continue exporting labour without also exporting the capital and infrastructure required for labour to become productive. And that is simply what correlates to a rise in living conditions: if people don't have roads, it is as bad for a company that needs workers to be on time as it is for the common person driving to the grocery store.

What's more, these third world countries might even be disproportionally benefited by foreign involvement. Most of the capital generated today is in intellectual property, something that can be exported very easily. Technologies that are already developed by industrial giants need only be sold to poorer countries, and they need not develop such technologies themselves, which is an economic boon for themselves, and also the person selling such products in question. For example, third world countries need not develop their own methods of scaling, as the problem has already been solved by others.

Not to mention the fact that even if none of this were true, making people within your country poorer for the purpose of helping others that they don't know would never gain popular support. Therefore, the best way we know of to help foreign countries is clear: we need to employ economies of scale in as many countries as we can to meet consumer demand.

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