Tim Burroughs

2 December, 2014
Econ 105
Economic Effects of Automation
The Industrial Revolution was an enormous boon to humanity. The introduction of tools
that replaced human labor with the stronger, more tireless abilities of machines freed up humans
to specialize. When the majority of the workforce werent required for the cultivation of our
sustenance, people were able to use that free time to advance their worldly knowledge in other
areas. This kind of specialization, as YouTube personality C.G.P. Grey notes, is how economies
grow and standards of living rise. Indeed, the technological advancements made since the 1800s
would astound any gawking onlookers from two centuries ago. Famed British author Arthur C.
Clark is credited with the saying Any sufficiently advanced technology is indistinguishable
from magic, and I feel confident that much of the technology we possess would be quite
magical to even the most wizened Industrial Revolution-era scientist. Significantly, there seems
to be no slowing the pace of technological advancement. Models of this progress such as
Moores Law show us that it is increasing rapidly, at an exponential rate. What happens, then, as
we continue invent tools which increase productivity, even outperforming human workers in
some of societys most prevailing jobs? We will soon learn firsthand as we enter this new era.
Grey presents his ideas on the impending state of the job market in a highly
popular video titled Humans Need Not Apply. The presentation of his perspective is

accompanied by a slew of data-backed facts, convincing talking points drawn from observation,
easy to follow anecdotes, and an entertaining allegory concerning two Luddite horses. The case
is made that automation is inevitable and it will inevitably leave enough people out of work to
cause real societal problems if were not prepared, and as Grey explains in his video, we are not
prepared. Although, if the end result isnt all doom-and-gloom, such an economic system would
lend itself to a society of abundance, which would be quite obviously good, but perhaps it would
be best to examine some of the elements presented which foretell a job market run rampant with
robots and automation of all kind.
One of the biggest goals of a company in an economy as strongly capitalistic as our own
is to maximize profits. One of the largest explicit costs incurred by businesses is related to the
human element. Be it directly in wages and salary or other, less obvious, faucets like wasted
time, errors, accidents, and plain carelessness, humans are a huge burden to the potential profit
margins of companies. Things are changing though. As computers and robotics continue to
advance, many employers will have to make the decision of whether keeping that human element
on their payroll is in the best interest of the company, and where the profits of the company are
concerned, that is an easy decision to make.
When cheapish general purpose computers came onto the market, they quickly became
vital to everything. Now, as engineering and scientific advancements in a diverse array of fields
converge to democratize the availability of low-cost, effective, and general-purpose robots, we
will see that they too become as indispensible as our computers have. Baxter is one such bot,
able to be shown how to do something then repeat it, a far step ahead of typical industrial
automation which is highly specific, requiring a skilled programmer to set on task. Baxter,

though, is just one in the vanguard of automated bots set to rock the economic landscape. The
company Nightscape has some robotic guards, K5 and K10, which will roam around your store
looking for intruders. Saviokes Botlr is a fully autonomous robotic hotel servant, programmed
with a detailed map of the hotel and the ability to deliver a toothbrush, boarding pass, or
newspaper to a guests room. Options for personal house cleaning, iRobot has released a gullet of
Roomba machines that roll around your house vacuuming, mopping, and generally sweeping up.
Dyson has jumped into the automated vacuum market with a revamped Roomba-style device that
takes whats good about the Roomba and makes it even better. We even have robotic surgeons
like the da Vinci, which can perform more accurate operations without the limitations of a human
surgeon. Amazon uses a fleet of 15,000 Kiva robots across its network of warehouses to shuttle
shelves of items around efficiently, increasing the throughput of the amazon ordering process
many times over. Lowes is introducing a first generation of OSHBots that will navigate the
stores isles, interact with customers in their native language, and help them fulfill their visit
quickly and easily by leading them to the items customers inquire about. Mining operations in
Australia are being optimized with driverless trucks, trains, and drills, which replace manual and
dangerous mining jobs. The important thing to note is that all this automation is here and it
works. People are constantly working to improve upon it and the examples I gave dont even
represent a sliver of the automation taking place in the world. Physical machines take time and
effort to iterate, prototype, and improve. A much more dynamic form of automation is occurring
that strives to optimize a different sect of the job market. (Diamandis).
Software is a fascinating creature. With a few lines of code, a skilled programmer can
write a program that can do a vast array of things. Calculating change, assigning seats on an
airplane, or any number trivial tasks that once required a human touch are now handily dealt with

by a machine of silicon. There is a whole class of computer professionals, automations engineers,

whose entire job it is to write software programs that do other, more complex jobs. The highest
tier of programmer couldnt write some of the most complex software we use. Fortunately, they
can write a piece of software that can teach itself how to do some highly intricate tasks. For
example, look at the stock market. The floor of the New York Stock Exchange is now largely a
television studio, as most of the traders are software bots that taught themselves how to trade
stocks, trading those stocks with other bots who taught themselves how to trade stocks. As a fun
aside, trading by machines is one reason why a hoax A.P. tweet last year about a White House
bombing made the Dow Jones Industrial Average suddenly drop 146 points. Such fun quips often
downplay the astounding ability of our systems. As discussed by Andrew McAfee in his TED
talk Are droids taking our jobs? we have algorithms that write perfect financial reports. We
have general-knowledge systems like IBMs Watson that are able to go toe-to-toe with the best
general-knowledge humans on the quiz show Jeopardy. If we would hook up Apples Siri to
Watson we would suddenly have an astoundingly advanced machine. The artificial intelligence
isnt perfect, but its quite good. The smartphones in our pockets do a good enough job acting as
a translator for any language we could want. All of this technology is improving exponentially as
well, so as McAfee states, we aint seen nothing yet.
As our technology steadily improves, taking over the labor market, we will see the
demand curve for labor left as businesses fins they are less willing to pay premium pricing for
human employees when some form of bot, be it physical or software, is able and willing to do
that same job at a fraction of the price. The new demand curve will result in a lower equilibrium
point at the intersection of demand and supply, meaning fewer people are going to have the
chance to find employment. Maybe it will make some new jobs, but when you can have 30

cashiers replaced by an overseer and 30 self-service lanes, I dont see the situation exactly
equaling out. When suddenly large segments of the population find themselves unemployable
through no fault of their own, it may lead to choppy metaphorical waters if were not prepared,
and as Grey explains in his video, we are not prepared.
Works Cited
Diamandis, Peter. The Day Youll Prefer Robots to Humans. Singularityhub.com. Singularity
University, 1 Dec. 2014. Web. 2 Dec. 2014. <singularityhub.com/2014/12/1/the-day-youllprefer-robots-to-humans/>
Diss, Kathryn. Robotic trucks taking over Pilbara mining operation in shift to automation.
Abc.net.au. Australian Broadcasting Corporation, 25 Apr. 2014. Web. 2 Dec. 2014.
Grey, C.G.P. "Humans Need Not Apply." Cgpgrey.com. N.p., 13 Apr. 2014. Web. 30 Nov.
2014. <http://www.cgpgrey.com/blog/humans-need-not-apply>.
McAfee, Andrew. Are droids taking our jobs? Youtube.com. TEDx, 24 Sep. 2012. Web. 2 Dec.
2014. < https://www.youtube.com/watch?v=WMF-Z74C1QE>
Tam, Donna. Meet Amazons busiest employee the Kiva robot. Cnet.com. N.p., 30 Nov.
2014. Web. 2 Dec. 2014. <www.cnet.com/news/meet-amazons-busiest-employee-thekiva-robot/>