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Computers taking over our jobs and our pay?

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It’s making business choices by computer

that caused the rapid shift of earnings away from wages, toward profits,
in three big ways,  explaining the massive shift seen in the data.

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See also:
Robert Reich Feb 4 2015 article
in Salon: How even the “sharing economy” profits computers and sends labor backwards
and my long comment It’s computers programmed to maximize growing investor profits that naturally causes those effects.

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Preface: My last post on the dramatic declining share of wages in GDP since 1970 mostly discussed that remarkable change in behavior of the whole system in relation to how the numbing complexity of business would make computers better “wage earners”, shifting income from wage earners to investors. Complexity too great to follow what’s happening… ?? The graph here is a simpler version, showing the same dramatic shift in the disproportionate changes in wages and GDP since 1970.

This post is on how the same shift from wages to profits reduces demand for the products, “made for people” but for which neither business decision making tools nor investors have an appetite.  The economy visibly changed behavior.  It was coincident with computer decision making emerging as a leading tool of business, and the historic numbing complexity everyone has experienced (reflected in changing language use).

The third important way is a later realization.  Computers are overwhelmingly better at making deterministic predictions… but can’t be programmed to consider human values, so they’re omitted from the rules for what to optimize… Computers are even more likely to keep applying old values that no longer apply than humans too.   When resource prices go up, for example, the old standard investment models say “speed up”, while nature is signaling “slow down”.

It may seem there’s nothing more dispassionate and “neutral” than automated decision making, but that easily becomes purely ruthless too.  So it seems to create a “perfect storm” of misdirection to use computers to multiply their programs in a time of fundamental change in our world. If the model says “choice A = X profit” there’s no way to tell if a different story would be told had humans studied how ‘A’ applied in the current circumstance, so the model built without human values also omits any way to argue with it.

You can see one global effect of this naturally “inhuman” decision making of computer models in their universal penny shaving for profit.  That seems directly behind the ever stricter control of decisions, since computers were introduce, by the computer’s measure of value, “the bottom line”.  Before that, business people needed to think of the business as a whole, and not a single number, ruling almost every choice.  So it produces ever growing pressure to “make money” for the sake of money, whether making a bit less to invest in other values might be a better fiduciary choice.

– See also A decisive moment for Investing in Sustainability
– Below are recent comments on a 9/3 Business Insider article by Charles Smith “The Future Of Work In America” suggesting “Technology and the Web are destroying far more jobs than they create.”

Author’s Note: 2/16  – My work on this problem dates back to the 70’s really, and my developing methods for “whole system accounting”.  In simple terms “whole system” or “inclusive” accounting means you can’t keep “robbing Peter to pay Paul” without noticing. It comes from the customary methods of natural science, not used in economics.  Instead of using arbitrary accounting categories, one uses naturally defined partitions of the whole system to define your categories.  One is ultimately forced to get it right by there being lots of natural reasons you can’t keep “robbing Peter” (calling what’s unaccounted for ‘externalities’) without dire consequences.

Whole system accounting models force you to look at what you are leaving out of the model, by requiring the use of accounting categories that add up to the whole, partitions of the system.   That’s what natural science does to validate the data collection and produce “closed accounting” of the system in question.   Oddly so do business financial accounts, but just not economic accounts.   Using partitions of the whole for your accounting categories forces you to estimate how much is going uncounted.   The first discussions of complete economic economic models of that kind are my 1983 General Allocation Theory and 1985 Unconditional Positive feedback in the economic system in the SGSR proceedings for that year.

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1970 marked the sudden end of steadily growing US wages, as a sharply accelerating trend of growing economic inequity and loss or resilience began.

“Information overload” was a rapidly growing topic of conversation and
computers emerged as the premiere tool for driving business profit.

_________

Was that how humans began to be replaced by technology,
as things got too complex?

comment 1.

I think the question is quite relevant, and in line with Nobel laureate Wassily Leontief’s 1983 warning that humans will go the way of the horse in the business of providing goods and services. What most people don’t know is that started dramatically in ~1970,

Indexing UN GDP (1880 to 2010) and US median wage levels (from 1948) at 1970 shows how they grew at the same rates before 1970, and then have been growing apart.  It shows the divergence between levels of wage incomes and wealth, a societal shift from earned incomes and wages, toward unearned income and finance.

It’s remarkably clear in the data, quite indelible as a “coincidence” between introducing computers for business use in ~1970 and the “the great divergence” of breaking American society apart with lagging earnings from employment and multiplying earnings from wealth. Why did it occur.   Following from my  2010 Complexity too great to follow what’s happening… ? one could explain it as cause by the numbing increase in the complexity of everything we do, affecting people but not the computers or the calculation of profits.   Looked at from a social view of ever faster increasing economic inequity… it looks more like people using computers to make money, robbing Peter to pay Paul and not counting it.

For those interested, here’s the same data without indexing the wage curves to GDP:

History US GDP with Percentiles of Median Wages approximately scaled as partitions of the whole

Continue reading Computers taking over our jobs and our pay? →

For teachers, Natural Economy, Natural systems, Policy discussion, What to do

Principles for detecting and responding to system overload

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On now to recognize the somewhat universal responses to system and relationship overload, as strains resulting in loss of resilience and a risk of sudden disruption; replying to Helene on Systems Thinking World on her “UN Call for Revolutionary Thinking” thread.

The most general pattern is resilient relationships becoming rigid, like the surface of a balloon does *before* it can be easily pricked by a pin, or as people become rigid before losing patience.  I think that comes directly from resilient systems generally being organized as networks of things that share their resources, and when all the parts run out of spare capacities to share at once the system can’t be flexible, and is then vulnerable to sudden failure.

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@Helene – Thanks for the reminder. Here are some principles for detecting and responding to the inflection point. Mathematically it’s “passing it’s point of diminishing returns”, when increasing benefit of expansion starts to decrease. Long successful habits of expanding a system become a liability, and strain their internal parts and environments.

It means about the same thing for a whole economy as for a little girl outgrowing her only party dress. Ignoring strain on one’s limits brings an unexpected end to the parties. The problem for systems operated by abstract rules of thinking, is that responding to change isn’t in the rules. So there’s a need to revive common metaphors for responding to the unknown, like for “overdoing it” or “crossing the line”, as strategic signs of externalities needing close examination.

Overload is a surprisingly common feeling, with visible effects

The most common signs of “overdoing it”, and needing new strategy, are formerly stable and flexible sub-systems

becoming “unresponsive”,
developing “the shakes” or “become rigid”

Continue reading Principles for detecting and responding to system overload →

Natural systems, Research & Measures, Scientific theory

Mining cells of natural language (for semantic ontology)

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This is a brief but relevant comment, from my Systems Thinking World discussions, points out a way the efforts by Goggle and others, to mine “meaning” from of the massive quantities of semantic data now available, is missing a golden opportunity. There are a variety of ways to use the natural structures of languages as a key.

@Ferenc – I don’t recall the subject of data mining semantic meaning coming up, but I sure agree there seems no computer search strategy yet in use for that.    I have some original technical ideas of how to do it, but they all begin with  learning to recognize how natural languages “integrate common knowledge” for you, by how language communities naturally develop within their own social commons, (or “silo”).

So the first step to learning how to read the natural organization of semantic structures generally is to learn how recognize and observe the development of natural languages and the semantic webs they create.   This STW community is one, for example, as is any other community with a sustained internal conversation.

Armed with that, perhaps a computer whiz could learn to crawl the web to develop a lexicon of the code phrases of a great variety of distinctive language communities.  That could provide a way to let you search on any topic of your interest, for any language group’s interest in it.

I’ve tried to suggest that to Google a few times, to let people do web searches from a “scientific” viewpoint, or “entertainment” or “youth” or “religious”, “liberal”, “conservative”, “European”, “Asian” or other distinctive community of interest.

Wouldn’t having that option, to look in on other language cultures and learn from what they’re learning from, would be very entertaining and enlightening itself, wouldn’t it?

—-

also

The physics of Happening & Statistical Methods

 

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Telling the whole stories of how things change

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A crowd sourcing proposal.   Suggested to WNYC as a new form of news coverage

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From a natural history view, how the US news media reports on what’s happening of public importance is, well, entertainment news, that misses most of what’s actually happening and how it’s connected.  Even Public Radio mostly giving us six shows a day of talk about all the same things that “everyone” is talking about.  It tracks how the discussion is changing, but misses almost entirely how the world itself keeps complexly and dramatically changing by itself.

Germination and Nurture
Telling the Whole Story

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For teachers, Mail & Comment, Natural Economy, Natural systems, Popular, Scientific theory, What to do

Natural Whole Systems Thinking – philosophy & method on STW

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To open a LinkedIn community discussion in “Systems Thinking World”, on the “whole systems approach” and scientific method I use, for discovering and understanding natural systems, I offered the following lead-in

Related theory pages:  1 Natural Pattern Languages,  2 ‘Big Data’ and the right to human understanding,  3 Global accounting of responsibilities for economic impacts,  4 Missing Principles of Ecological Thinking – in plans for the Earth,  5 Steering for the organizational Lagrange Point,  6 “The next big challenge” a biomimicry for a self-regulating financial commons,  7 General intro: Natural Systems & Synapse9,  8 Archive of early data analysis studies.  9 & other theory posts

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Could we study systems that invent their own theories?

We might study anything identifiable, and growth curves in time­-series data seem associated with some kind of growing system, developing from scratch. The usual difficulty discovering what’s going on inside them may be strong evidence that they’re organized and changing internally, not visible to or determined by their environments. If such individual systems exist, would they also have locations, external bounds of some kind, a beginning in time and an end?

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 7/24/12

54 comments

#1• Jessie Henshaw • There are a few problems I’m trying to raise with this. One is the scientific difficulty of studying things you can point to, but can’t actually define. Science does better with “data” and numerical relationships, studying that as a ‘map’ for a more complex ‘territory’. Organizational change within individual natural systems isn’t readily mapped by “data”, though.

Is that one of the reasons there appear to be so many kinds of individual events and natural systems that display periods of essentially explosive creative organizational development, from storms to personal relationships, to social movements, disease outbreaks and swarms of new technologies, but science seems not to have yet identified that as a field of study?

12 days ago

#2 • Fabian Szulanski • What about agent based modeling? Would that be a point of departure for helping understand? Then some emergence, bifurcation and disorder could eventually appear.

12 days ago

#3 • Jessie Henshaw • @Fabian ­Well, that would be studying models for mathematical rules, not natural systems, wouldn’t it? To study natural physical systems, as if they were ABM’s, is more like what I’m suggesting.

Say you assume the natural world is like the big amazing computer the physicists postulate it actually is. Well then, we’re looking right at nature’s ABM without realizing it, and just need to discover it’s way of inventing things. We don’t have access to a “de­compiler” of nature’s source code, though, do we? What we see are systems that evolve new organization by changing everywhere at once, somehow. It makes it appear that nature is doing fresh programming, on many levels at once, with nearly every process and event she creates. Continue reading Natural Whole Systems Thinking – philosophy & method on STW →

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the commons, the milieu, the space of connection

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Helene has a nice short inquiry into “Configuring yourself for the transformation” the nature of “the milieu itself”.   We’d been exploring ideas for how to define “the commons” as both a place and a trust, and a new paradigm for organizing people to make the world work as a whole.  I responded with what I feel is a nice concise statement of how self-organizing systems physically work.

– 8/27/12 Helene then also linked to this in her lovely elaboration of “the commons” approach and the systems thinking needed, as “Commons Sense for a Sustainable World”

Configuring Oneself for Transformation –

Our system of systems is made of parts that we could consider as coexisting in a milieu, an environment that is not just a container with properties greater than the sum of the parts, but that has a substance, a density, a richness. Something exists “in between” the parts, from which the parts get some “nutrients”. Many metaphors can be used, call it a field of possibilities and potentiality, a collection of intangibles that would precipitate serendipity, attraction, connection, exchange, osmosis… the Noosphere… and that would finally lead to a metamorphosis. Continue reading the commons, the milieu, the space of connection →

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Steering for the organizational Lagrange Point

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A discussion comment from a LinkedIn conversation on Systems Thinking World to clarify what “steering” means for complex systems and in response to a question (paraphrased).

So can you describe how “small changes at a location in a system alters the direction of the whole,” discussing the theory, certainly, but also examples because this dense country boy sometimes has trouble wrapping his mind around abstractions.

 

Yes, it would help to think of “steering point” as referring to a potential for controlling the direction of something, unless also speaking of someone or thing using it to steer something. They might also be like Lagrange Points in space, where due to a balance of forces it’s easier to turn.

For natural systems there’s a particularly large variety of situations where “small change” has “big influence”.  It would include all the temporary positive “feedbacks”.  You might as well just start listing them at the beginning.  There was the “big bang”.  We didn’t directly observe it but from all appearances it was produced by a process that multiplied from small beginnings, and really really blew up.  That original chain of events was very small and had big results!
Kaboom

That ANY event in nature implicitly starts with its own “big bang” of a sort is one of the curious direct implications of the continuity principle.   The proof is that it would violate energy conservation for energy uses to start without developing, requiring an individual burst of energy uses and the development of the processes doing it for every event.

True, you often don’t notice them, but with a little experience you can find them most places, like in a keystroke.  Any keystroke begins with a brief multiplying cascade of focused energy releases to move your finger, “kaboom” is how it would sound if you stretch out the time scale and have a volume control on the energy surge moving your finger.   It’s the attack of the “ka…” sound at the beginning of that word (same use of “attack” as in music), that refers to the explosive growth period if the local self-organizing system that releases the directed energy. Continue reading Steering for the organizational Lagrange Point →

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“Wasteful Splendor” Astoundingly expensive arts and crafts

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We keep leaving unaddressed that political will is just not enough
to overrule the power of money.

It’s in the interests of money to change course, to use profits to offer services to the commons rather than exploit it till it fails.

Even spending on astoundingly expensive arts an crafts, like “building pyramids” to ourselves, may not be an ideal service to the economy and the earth, but is a far better one than investing profits to multiply demands on it.   It would generate earned income, which would then relieve debt.   It would keep profits from being used to extract ever growing unearned income, for ever growing inequity and debt.

Political will won’t have a chance otherwise

Posted to Climate Code Red 7/20/12

Yes, there’s a very solid case to be made to “do something”.  We’ve also been fooling ourselves from the start about political will being able to overtake and control the behavior of money.  Because for the past 40 years even discussing that subject has been avoided…,  now if we don’t face the need for a more comprehensive approach our efforts are clearly doomed to fail.

There’s also a readily visible, but somehow counter-intuitive, strategy that works for lots of businesses large and small, and for self-organizing systems throughout nature.  It’s for “the bosses” to recognize the system needs them to change roles, and become “service provider in chief” rather than “exploiter  in chief” for the system to survive and thrive.   A CEO of a large corporation or the managing partner of most professional corporations,  needs to be the lead service provider to their network of resources, not an authoritarian ruler demanding ever growing profits.

How to apply that same principle to the economy as a whole is for the financial fund owners (retirees, NGO’s, governments & the super rich) to use their profits to heal the earth, managing their funds like endowments.   Some already do, and that just needs to become universal.  That reverses the traditional practice using profits to multiply your exploitation of the earth for more.

Rearming a rag tag gang with guns that shoot straight…

On the Systems Thinking World, Helene and others had been discussing the sustainability strategy now called “circular economy” aka “cradle to cradle”.  That is a name change I was unfamiliar with that threw me off guard at first.   In theory, the economy would be “decoupled” from depleting non-renewable resources if they were 100% recycled.   That vision and intent are great.  It needs to respond to the past great failures of the same purpose, though, how “sustainability” was turned back into “business as usual”(BAU), to become a strategy for maximizing growth.   Continue reading “Wasteful Splendor” Astoundingly expensive arts and crafts →

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Emotionally proof reading your logical models…

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Excerpted from intro to JLH website homepage. JLH 6/29/12

I’ve written several short “what this site is about” essays, you’ll find in various places elsewhere. They all attempt to introduce a way to begin studying the eventful lives of the individually organized and behaving systems of nature, our many kinds of animated companions with which we share the environment .    It’s naturally quite hard to understand what’s happening inside a visibly eventful social group, for example, though we may be intensely aware of its presence. That also applies to much of the eventfulness of history in general, that life is a place where “things happen” and often for relatively invisible and apparently local causes.   Any natural system is defined by its own internal loops of relationships, is a way to state that as a problem, so for an observer, the working parts of any animated system start off being largely invisible.

One very powerful technique for probing the organization of eventful and self-organizing cultural or economic systems is one I’ve rarely mentioned.   Maybe it’s the one I should lead with, though.  It’s a way of using your two natural modes of thought, intuitive and rational, to “proof read” each other’s work.  It allows your feelings to read and inform your reasoning and vis-a-vis.

The effect of learning how to do that is to create “theories with feelings”, and “feelings that make sense”,  something that is some individuals achieve on their own, but is rarely if ever taught as a practical technique.  It’s very valuable for connecting your naturally “reductionist” explanatory thinking with your “holistic” intuitive and experiential thinking.

Finding the emotional content in a logic driven world

It helps overcome the problem that explanations are powerful tools but completely lack the responsiveness to their environments that intuitive feelings about things bring out.  Similarly, emotional realizations maybe responsive to vastly complex sets of relationships, but it’s rare that people can derive their more practically useful logical elements, what I sometimes call “cybernetic body parts” that I look for to use in explanatory models of self-organizing systems.

Continue reading Emotionally proof reading your logical models… →

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Why ‘reality’ doesn’t work as a concept!

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The curiosity that “reality” doesn’t make sense as a concept (as it can’t be represented in the mind) becomes more sensible in natural language terms at least. You can then ask what makes reality work so well as a process.  … Comments from a LinkedIn discussion group “UN call for revolutionary thinking [for] economic survival..6/24/12”

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1.       Struggling to get scientists to discuss natural self-organizing systems: 6/24/12

Jessie Henshaw @L –  It could help to notice how you restated my saying “They [scientists] tend to go direct from data to models without studying [the] complex working processes the subject came from or operates with.”    To me, your response displays the basic problem I’m describing.

I’ve spent years with large and small scientific communities trying to get them to let me demonstrate a way to study the instrumental processes of individual complex systems, helping expose how they develop and change.  After 30 years of that, making steady advances all along myself… I still feel about as stumped as before about how to share them.

A sign of the problem is in how you restate my complaint, changing the subject.   Your restatement of it was “her generalization that scientists in general leap from data to models without regard to systems”, saying that has not been your experience.

You changed the phrase “without studying [the] complex working processes the subject came from or operates with” to the phrase “without regard to systems”. That rephrasing shifts the subject from phenomena of nature (in their own form), to system models (as concepts for nature) defined within the researcher’s own framework of explanations. That’s my complaint!

Continue reading Why ‘reality’ doesn’t work as a concept! →

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