AI is going to kill all the jobs - isn't that wonderful?
An interesting little bit of research about an entire sector of jobs that really were killed off by automation - telephone operators.
Telephone operation was among the most common jobs for young American women in the early
1900s. Between 1920 and 1940, AT&T adopted mechanical switching technology in over half of
the U.S. telephone network, replacing manual operation. Although automation eliminated most of
these jobs, it did not affect future cohorts’ overall employment: the decline in operators was
counteracted by reinstating demand in middle-skill clerical jobs and lower-skill service jobs.
Using a new genealogy-based census-linking method, we show that incumbent telephone
operators were most impacted, and a decade later more likely to be in lower-paying occupations
or have left the labor force
AI taking all the jobs (or more likely, many in some sectors, few in others) is not a problem over time. Mechanisation works just like us free marketeers say it does over those long periods of time. Simply because the young grow up and do other things other than that which has now been automated.
Where there is a potential problem is in those thoroughly trained in that old thing now gone and don’t or can’t retrain across to those other, newer, things that are now to be done.
Another way to put this is that it is the speed of transition that matters. A transition that takes place over a working lifetime doesn’t matter at all. One that happens tomorrow might well do.
But that’s not the end of the story. There always is jobs churn in the economy anyway. And it’s much, much, higher than people generally think it is. A rough guide is that 10% of all jobs in the economy are killed off each year, another 10% newly created each year. There’s near always some technological shift between the old and the new as well. Unemployment is not this flow from job to job, the unemployment number we see quoted is those who get stuck in this position of no job, not those moving across from old to new.
At which point, if the job destruction/creation rate, as a result of the new technology, rises substantially above that normal societal rate then perhaps we might actually have that claimed problem of technological unemployment. If not we won’t.
Currently the management consultancy predictions are of the order that AI endangers 40% of jobs over the next decade or two. A period of time in which we expect 100 to 200% of all jobs to be destroyed anyway. This is not to say that there’s going to be no problem here - there are always problems with humans. Rather, the jobs inferno about to be brought about by AI seems well within the usual limits of the jobs inferno that always does exist within the economy. We might even have marginal problems but we’ve not got a large and systemic one.
Another way to put this is that we’ve already got the systems in place to deal with the problem - a free market in labour and an unemployment system for those who get stuck, temporarily, in the transition. What else do we need?
Unleashing Britain's Potential: The Power of a Modern Great Exhibition
In 1851, the United Kingdom astounded the world with the Great Exhibition—an iconic showcase of innovation, industry, and cultural exchange. Dr Anton Howes of The Entrepreneurs Network has made a case showing how, in the 21st century, a modern-day Great Exhibition has the potential to reaffirm Britain's commitment to new technology and solidify its position as a global leader. By hosting such an event, the UK can harness its strengths, inspire innovation, attract investment, and foster international collaboration.
A modern Great Exhibition would serve as a catalyst for innovation, igniting the imaginations of entrepreneurs, scientists, and inventors from across the globe. By providing a platform for showcasing cutting-edge technologies and ideas, the UK can inspire a new wave of innovation and creativity. This exhibition could highlight the country's expertise in areas such as artificial intelligence, biotechnology, renewable energy, and advanced manufacturing, encouraging breakthroughs and fostering collaboration between academia, industry, and startups.
Hosting a Great Exhibition would enable the UK to position itself as a global leader in new technology. By featuring groundbreaking inventions, research, and development, the UK can demonstrate its commitment to pushing the boundaries of progress. This exhibition could emphasize the UK's prowess in emerging fields, allowing the world to witness firsthand the nation's capacity to embrace technological advancements and drive positive change. As The Entrepreneurs Network puts it:
“Visitors would see drone deliveries in action, take rides in driverless cars, actually use the latest in virtual reality technology, play with prototype augmented reality devices, and see organ tissue and metals and electronics being 3D-printed in front of them. They would see industrial manufacturing robots in action, have a taste of lab-grown meat at the food stalls, meet cloned animals brought back from extinction, and themselves perform feats of extraordinary strength wearing the exoskeletons that are already in use in factories and warehouses. Visitors would naturally get to meet the inventors and scientists and engineers who developed it all, too. They would browse the latest in fashion, art, and architecture, seeing them alongside historical examples. And the whole thing would be powered using only the cutting edge of clean energy technology, much like how the great new Corliss Engine drove the 1876 Centennial Exhibition in Philadelphia, or how Westinghouse’s alternating current powered the 1893 Chicago World’s Fair. Visitors might also be able to view air CO2 removal machines in action.”
A modern Great Exhibition would be a magnet for international investors seeking opportunities in the UK's vibrant technology sector. By showcasing the country's commitment to innovation, the exhibition would demonstrate the potential for lucrative partnerships and investments. It would attract the attention of venture capitalists, industry leaders, and entrepreneurs, fostering economic growth and creating job opportunities. Additionally, by highlighting the UK's thriving research institutions and vibrant startup ecosystem, the exhibition could draw global talent, promoting knowledge transfer and enriching the nation's pool of skilled professionals.
A Great Exhibition would provide a unique platform for international collaboration, fostering partnerships between the UK and nations around the world. By inviting countries to showcase their technological advancements, the exhibition would encourage knowledge exchange, cross-cultural learning, and collaboration on global challenges. This shared experience could create lasting networks and partnerships, promoting diplomacy and cooperation across borders.
Hosting a Great Exhibition would generate a sense of national pride and confidence in the UK's capabilities. It would remind the world of the nation's rich history of technological progress and innovation, while also signaling a bold vision for the future. By celebrating its achievements, the UK can inspire a renewed sense of purpose and confidence in its ability to shape a prosperous and sustainable future.
There is no doubt that a modern Great Exhibition holds immense potential for the United Kingdom. By showcasing its commitment to new technology, the UK can stimulate innovation, attract investment and talent, foster international collaboration, and boost national pride. This exhibition would serve as a testament to the nation's determination to embrace progress, shaping a future where innovation and technological advancement drive economic growth and societal well-being. The time has come for the UK to once again captivate the world's attention by hosting a Great Exhibition that reaffirms its status as a global leader at the forefront of the technological frontier.
To be conspiratorial - who was giving Tanzania such terribly bad advice?
A little story from the world of metals. Indiana Resources has just won an arbitration case against the government of Tanzania. The full announcement is here. Pretty open and shut case in fact, effectively the government nicked a nickel mine and didn’t pay compensation for having done so.
But there was something of a pattern of this in Tanzania. The previous President, John Magufuli, had a habit of insisting that the mining companies were ripping the country off. Maya Forstater (yes, that lady, of beliefs in gender fame) describes the Acacia Mining case here. To convey the meaning without the reading the claim was entirely ridiculous. Either so grossly misinformed as to be delusional or entirely made up.
At which point who has been, or was at least, purveying such nonsense to Magufuli? We do suspect that it was some NGO or suchlike advisor but we’ve no idea who at all. Whoever it was has just cost Tanzanian taxpayers $100 million and change in the compo that now needs to be paid to Indiana Resources.
What we particularly relish is that it’s possible to take the story one layer deeper. Unconnected - entirely unconnected - with the Tanzania case there was the one about Zambian copper export revenues. This analysis was performed by Alex Cobham while at the Centre for Global Development. It was ludicrously wrong, something pointed out by Maya Forstater (with a very small assist from one of us here). Cobham then left CGD to go and run the Tax Justice Network (a step up for that organisation, previously it was Professor Richard Murphy). This meant space at CGD for a researcher which is where Ms Forstater landed - and yes, the same CGD that was the defending employer in the recent case about gender. Which we do think is cute.
However, back to the larger point. Someone, somewhere, has clearly been feeding gross misinformation to the Tanzanian government over mines and mineral deposits. That misinformation has - just so far, as this one case emerges from arbitration - cost Tanzanian taxpayers that $100 million and change. Don’t you think we should hunt down whoever caused this catastrophic loss and make them pay the bill?
Even if nothing else we do think that causing some sleepless nights for those who purvey entirely ghastly advice - so obviously wrong that Tanzania’s own appointment to the arbitration board ruled against them which is how we read the statement that the decision was unanimous - to poor country governments would be a good idea. Being wrong for good reason is forgivable, but if we can find who it was we can ask their reasons and find out whether they were good.
Or, to put this another way, those who’ve been misleading poor country governments over mineral claims and values should be made to sweat a little, no?
Adam Smith's Legacy
On this day in 1790, the great economist, moral philosopher and social psychologist Adam
Smith died. The story is that he was entertaining friends at his home, Panmure House off
Edinburgh’s Canongate, when he felt unwell, rose and said: “Friends, we will have to
continue this conversation in another place.” He died soon after.
It’s a nice story, though greatly exaggerated for effect. Adam Smith’s religious beliefs are a
matter of debate, and it unlikely he believed in an afterlife anyway. Indeed, though he died
seventy years before Darwin’s Origin of Species, he was grasping towards an evolutionary
explanation of why human life, in economics, morality and other areas, seems to serve us in
generally beneficial ways, without the need for any conscious direction from governments
or anyone else. As if directed by an Invisible Hand, he wrote, though he knew there was no
conscious entity moving that hand. Or Providence, he suggested. How it generated the
harmony that F A Hayek would later call spontaneous order was a mystery to Smith, and to
his friend David Hume and other scholars of the age.
Smith ordered that, on his death, all his papers should be burned, apart from one essay on
The History of Astronomy. It was not such an uncommon request at the time: people did not
want to be judged on the basis of their random notes and half-though-out jottings. But we
were lucky he spared The History of Astronomy, which is a remarkable essay in the
philosophy of science, advancing a trial-and-error thesis that would not be lost on the
twentieth-century author of The Logic of Scientific Discovery, Sir Karl Popper.
The fact that Smith wrote on scientific method demonstrates how wide his interests
and his expertise were. As well as the economics for which he is most remembered today, he also
wrote and lectured on the use of language, on the arts, on justice, on politics and on moral
philosophy. In fact it was his first book on ethics, The Theory of Moral Sentiments, that in
1759 made him internationally famous — and guaranteed him a generous income for life
that would give him the freedom to think about economics and write his 1776 masterpiece
An Inquiry into the Nature and Causes of the Wealth of Nations, which he referred to as his
Inquiry, but to us is known as simply The Wealth of Nations.
In this, Smith offers an explanation of why, in economics, the spontaneous order idea
works. For centuries, people imagined that the only gainers in any economic transaction
were those who ended up with the money. But Smith noted that their customers benefited
too, by getting goods or services that they valued more than the cash. Indeed, the trade
would not happen unless both sides thought they were getting value from it. To maximise
the creation and distribution of value, he concluded, we need to be facilitating free
exchange — not thwarting it with protectionist measures against foreign imports or
domestic regulations on what and how people are allowed to trade.
This simple ‘system of natural liberty’, explained Smith, was what allowed the spontaneous
society to flourish and raised nations from poverty to prosperity. It enabled individuals to
strive to ‘better their condition’, and that of their families. By contrast, regulations and laws
were too often laid down by politicians and their business cronies: to promote their own
interests, most generally in opposition to the interests of the working poor.
Smith would have regarded a government that controls nearly half the economy, spending
nearly half the nation’s GDP — a concept that he introduced to the world on the very first
page of The Wealth of Nations — as the greatest tyranny. Taxes, he thought, were another
way in which established interests skew things in their favour and block potential
competition. Taxes, he argued, should be as low as possible, should encourage rather than
restrict free trade and innovation, and should be simple, understandable and convenient to
pay. One can imagine what he might have thought of a tax code like the UK’s, which is
longer than The Wealth of Nations itself, and a regulatory rule book that is even longer.
When economic freedom, tempered by Smith’s moral virtues of prudence, justice,
beneficence and self-control, has been allowed to flourish, it has led to the greatest
increase, and spread, of human prosperity. The free trade era of the nineteenth century
enriched much of the world and brought humanity cheap food and manufactures. The
globalisation of the twentieth and twenty-first brought nearly all nations into the world
trading system and thereby pulled a billion people out of dollar-a-day poverty.
Adam Smith’s intellectual and practical legacy is plain enough. The issue is whether the
world’s governments will ever stop frittering it away.
Cheap, clean energy is on the way
Eight years ago in 2015, I published “Britain and the World in 2050,” setting out my predictions for the world ahead of us. It was widely covered in the media, with journalists going to town on the recreated woolly mammoths and dinosaurs, not revived from mosquitos preserved in amber, but by back breeding and genetic manipulation of flightless birds.
Some also picked up and covered my remarkable prediction that the cost of energy would have dropped dramatically by 2050. I wrote:
“Energy costs will by 2050 be a fraction of their present-day costs. For most consumer uses, energy will be effectively free.”
The cost of energy has witnessed several spikes since then, and is now more expensive than it was. Partly this is down to the Russian invasion of Ukraine, with some contribution made by a go-green agenda that shuns the cheaper sources in favour of more expensive ones.
Nonetheless, I remain convinced that my prediction will come about. The fossil fuel we’ll still be using will be gas, but nuclear will take a larger share, particularly with the new small reactors coming on line. Solar will be making a major contribution, as ways are found to increase the efficiency of photo-voltaic cells by combining ultra-thin surfaces on the silicon.
There are several new technologies that could be game changers. There are vast reserves of natural hydrogen beneath the Earth’s surface, more than previously supposed, and more accessible.
The US Geological Survey concluded in April that there is probably enough accessible hydrogen in the earth’s subsurface to meet total global demand for “hundreds of years”. Currently, the effort to extract it commercially resembles the early days of fracking, with ‘wildcatters’ setting the pace. It portends cheap and clean generation of electricity, bypassing fossil fuels and emitting no greenhouse gases.
Another possible technology involves the use of thin layers of materials flecked with nanoholes. The pores are essentially small enough (100nm) that the molecule's electrical charge can pass through them and be harvested to generate electricity. Water molecules pass through, generating a charge imbalance that produces harvestable electricity plucked not from thin air, but from naturally moist air.
The device is called an Air-gen and can operate at all times despite the weather conditions because moisture is always in the air. When scaled up, it offers low-cost, clean electricity.
A newer technology from scientists at the University of Rochester uses semiconductor nanocrystals for light absorbers and catalysts and bacteria to donate electrons to the system. The system is submerged in water and driven by light. Bacteria interact with nanoparticle catalysts to make hydrogen gas more cheaply than can be achieved by electrolysis.
It is not that any of these might necessarily be the magic bullet that gives us cheap, clean energy. It is that some of them, in combination with yet more ingenious ways still to be developed, will give us the energy we need at a price we will be prepared to pay. And that price will be very low. We won’t use less energy; we’ll just produce it more cleverly.
Bernard Levin's warning about the Single Issue Fanatic
Bernard Levin spent many years warning of the Single Issue Fanatic. Someone who was so convinced of the importance of this one, single, thing that there was no acknowledgement of the fact that life is a series of trade offs. The recommendation was that no SIF should ever be given any power at all in our governance system. Simply because government never is about the one single issue. We live in a constrained world, everything is a trade off, there are always opportunity costs:
New housing is being blocked unless councillors agree to introduce green schemes such as Ulez and low-traffic neighbourhoods, in an approach that the environment watchdog is preparing to roll out across the country.
Natural England, which is already accused of blocking up to 145,000 homes, has commissioned a review of “mitigation measures” that could be used to limit emissions associated with new properties in the vicinity of more than 330 designated areas across the country.
Here we now have a statutory body which carries great power and is run by SIFs. That it’s currently run by Tony Juniper - why any Tory government made that appointment is a thing of wonder - is not the grand error. It’s that an organisation which will so obviously end up being run by fanatics over this single issue even exists that is the problem.
We have far too many of such as well, the CCC being only the most obvious of the others. The reason we can’t do anything is because the political system has these veto points and there is no system for being able to insist on consideration of the trade offs. The answer is to abolish them all.
No, all of them. We’re against much of the interference politics makes into lives, that’s true. But a useful insistence is that anyone who does wish to interfere politically has to stand for election. Whatever political power there is needs to be exercised by politicians we can get rid of - along with their plans - rather than this series of isolated power centres deliberately walled off from the body politic.
If there is to be politics then let there be politics, not bureaucracies accountable to no one.
Mr. Colville suggests that it’s the policies that are the problem. We insist that it’s allowing anyone to even have a policy.
Kill the quangos, stone dead.
On the young being later to buy their first house
A common enough statement these days is that the young of today are buying their first house later than did the young of our own youthful times. This does have the advantage of being a true statement. But it is also worth musing over why this is happening.
Yes, obviously, there is the price of housing - we really do need to blow up the Town and County Planning Act 1947 and successors, kablooie - and so on. However, there’s something else here which makes this delay a mechanical certainty.
The Times runs a piece about a lady who didn’t go to university and has bought at the age of 23. And that is the crux of the matter. Again, we agree there are other influences, but the crux of the particular point we wish to make here.
Back 50 years some 10 to 12% of the population went on to university. Today that appears to be very close to the 50% target proclaimed. We’ve therefore an extra 40% or so of the population delaying their entry into the world of work and earning by at least that 3 years. There’s also that little point that professional salaries tend to start lower than blue collar ones, it being in the middle and later years of career that they soar above.
So, yes, some substantial portion of the young have less money than the generations before them. Thus they’re buying their homes later. Note that this happens however university is financed, whatever other influences there are on the economy. A huge portion of the age cohort now takes years longer to work and earn. Therefore the things bought by work and earnings are bought later.
A surprise that really, isn’t it?
We should therefore be wary of those insisting that the system must change to deal with this problem. Because it has been caused - in part at least - by that previous system change. If it’s all so awful - people delaying buying their first house - then why not attack the root cause, too many people going to university first?
Sorry about this but we just can't afford any more government
This is a point that we’ve made before, a number of times. Britain hsa already got more government than Britain is willing to pay for. Therefore we cannot have any new government. No new plans for this or that - simply because we’ve already promised ourselves more than we’re willing to pay for.
The OBR is saying this now:
The Government must find more than £100bn to keep the UK’s debt mountain from spiralling out of control, the budget watchdog has warned, suggesting that steep tax rises or spending cuts are on the horizon.
The Office for Budget Responsibility (OBR) said pressures from an ageing population, surging debt interest and the shift to net zero meant Britain’s £2.5 trillion debt pile was on course to soar in the coming decades.
Debt is expected to surge from 100pc of GDP today to more than 300pc within 50 years without spending cuts or tax increases.
This is without anything new. Without “making child care affordable”, without “investing in the climate” and without, even, giving the NHS 4% more each year. This is just the totting up of what we’ve already promised ourselves. A pension in our dotage and all that.
We pointed this out 5 years ago and we did so before that too.
Or as we’ve been known to point out, we aren’t willing to pay for the welfare state we’ve already promised ourselves, let alone anything more or new.
The expansion of what government can do for us - or more likely, in our view, do to us - cannot continue simply because we’ve already spent more than all we’re willing to send to pay for it.
Sorry about that and all for those who have further grand plans. But you can’t have them - not unless you identify which bits of current spending you’re going to kill to make room for the new.
Resource constraints always are interesting, aren’t they?
Welcome to the Growth Commission
A welcome new initiative is the newly-formed “Growth Commission” that will analyze policy suggestions to assess their likely long-term impact on the UK’s GDP. This is useful because all too often policies are proposed without consideration of whether they will adversely affect the UK’s ability to grow its economy. Instead of cost-benefit analysis being performed, there is a tendency to consider only the benefits the new policy might bring, without looking at the costs it could impose.
The new Growth Commission aims to fill that gap, drawing on the work of more than a dozen expert economists. There was a similar, but not identical, initiative under the Presidency of George H Bush, and headed from the White House by his Vice-President, Dan Quayle. It was called the Council on Competitiveness, and its mission was to study every new initiative emerging from Congress and the bureaucracy, and to assess its likely impact on American competitiveness.
Well-meaning and possibly worthwhile initiatives would be set forward without any thought to the costs they might impose on American business, or how less competitive they might make it. The Vice-President’s Council on Competitiveness changed that because the initiatives would have to be examined before they could proceed, and changes were made and amendments inserted to lessen the impact on competitiveness that initiatives might otherwise make.
It met with strong criticism on with the American Left, largely because it kicked many of their costly proposals into the long grass. Some called it “the roach motel of congressional legislation.” This was because a popular series of TV ads at the time featured a box called a roach motel into which cockroaches were attracted by the scent, but once inside were killed by the poison. The voice of Muhammad Ali accompanied the ads saying, “They check in, but they don’t check out.” The same fate was alleged to happen to Congressional initiatives.
One difference is that the Growth commission will look at likely effects on growth, not just on competitiveness, although there is overlap. The big difference is that the Quayle Commission had real powers emanating from the Vice-President’s office. The Growth Commission is independent and outside of government and has no similar powers. While it is an immensely useful body to oversee what Departments and the bureaucracy are doing, it might be more effective if it were allowed to operate from within Downing Street, with direct access and input to decision makers.
If something's not worth repairing then it's not worth repairing
As with recycling - if it’s worth it, do it, if it’s not, don’t. Recycling ciopper into new plumbing fixtures works, makes a profit. Recycling concrete into hardcore works economically, recycling concrete back into cement does not (yes, it is possible) so don’t.
France will soon begin paying people to have their clothes and shoes repaired instead of throwing them away in a push to reduce waste.
From October, the French will be able to claim a “repair bonus” worth up to €25 (£21) for clothing alterations and shoe repairs as part of a government mission to divert textiles from landfills and fight fast fashion.
This is silly and we’re actually given the example of why it is:
For years, tailors have been fighting an uphill battle against fast-fashion brands, Mr Liotet said, pointing out that consumers are less likely to pay €10 to repair a torn shirt when they can buy a new one for €4.99.
Quite. Prices do contain the information about the resources required to make or do the thing. Repairing a shirt requires more resources than a new shirt. So, to save resources have a new shirt, don’t repair the old.
The problem here is that people have reified the concept of “saving resources” without ever bothering to think about the resources being saved. And the information is all there in prices - things that are more expensive require more resources.