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Pastimes : The Big Picture - Economics and Investing

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To: Maurice Winn who wrote (685)9/25/2003 12:15:30 PM
From: Crabbe   of 686
 
Mqurice (seems to be your name of choice)

We do agree on most points but we certainly disagree on a few. First I don't think IT is necessarily Cyberspace. It will however utilize Cyberspace. The Internet/Cyberspace is not going to wake up like the computer Heinlein writes of in "The Moon is a harsh mistress". The first intelligent computer will be designed by us to be cognizant. The Internet is already far more complex in connections and interconnections than the brain and as yet it hasn't awoken, basically it is not designed to.

The standard computer is designed for "point thought". It thinks in just one point of information at a time, or 64 if you will with Atholon 64 and the Itanium. Massively Parallel Computers think in hundreds or even thousands of points at a time but do not interconnect any of those thought points on a real time basis. The human brain thinks in literally billions of points at a time on a slow but real time basis. Computers however can simulate one point at a time a neural network (human brain) and for all intents and purposes appear to be what it is simulating. Is there a difference? For purposes of waking up and being a "Being" I think there is. 15 years ago or so, I think it was intel, announced a chip basically as intelligent as a cockroach, it was a silicon neural network. I have never again heard of further development in this field. Though much smaller in neurons this chip being faster than chemically based thought made up for the difference with the speed of silicon and electrons.

As I intimated in my prior post It will probably be a combination of the three basic computer types that we presently know of. Von Neuman, Quantum, and Neural Network, and probably one or two we haven't yet invented (photonic?).

We also disagree it seems on the impact. Being raised as a fundimentalist protestant, evolving into an atheist, I don't put great stock in biblical prophesy, but the prophesies of Armageddon seem to fit the present scene more and more. Armageddon and latter day prophesy was always a subject of interest to the sect that I was raised a member of. Worries of atomic war and worse, descriptions of a war so brutal that babies are ripped from the womb and attrocities too damded to even describe were always subjects for deep discussions.

As described in my youth, Armageddon would be a World Wide Calamity of impossible dimensions followed by one thousand years of peace and prosperity.

You don't see the transitional problem that I see.

There are 4 areas of the economy where jobs exist. They are Office/Service, Government (mostly office), Manufacturing, and Farming/Natural Resources.

Farming/Natural Resources was the first employer of man. Cavemen spent 100% of their working time in hunter/gatherer activities. The second employer became manufacturing (arrowheads, , bows, spearpoints, clothing, etc.), but for the first 2,000,000 years or so this manufacturing was on an individual basis, I made my own arrowheads.

About 10,000-50,000 years ago a very intelligent woman probably noticed that the garbage heap grew vegetables that they had eaten last year and deduced that the seeds that were to rough to eat and were thrown away were producing new plants and she invented the first garden by planting the discarded seeds from her meal in an area seperate from the garbage heap. Prior to this the Asian Wolf had domesticated us, becoming a hunting partner with us.

After woman had invented agriculture she of course complained that plowing the field was to much work so she turned it over to Men. Men probably brought home baby animals orphaned when they slew the mother for food to their mates, as they were cute and they knew even then how to "make Points".

Harnessing animal power after these babies grew up for hunting (horses and dogs) was a monumental improvement in productivity. Harnessing animal power for farming (oxen) was an even bigger improvement in productivity.

Studies of primitive scocieties show that when the living is easy cultures develop. An example - Tlinket Indians in Southwest Alaska were on the cusp of developing written language and had advanced art forms when the white man invaded. A second example - Easter Island, a culture that destroyed itself with religion. Free time gives time for science.

Getting back to the point at hand, today less than 2% of the population is engaged in the natural resource trades (farming/timber/mining) vs. 100% in the begining.

In the 18th century after Watt made the Steam Engine a practical source of power manufacturing began to develop as a second major employer, Office work became increasingly important also. By 1860 manufacturing and office had reached the levels that each employed about 10% of the workforce.

100 years later the roles were reversed, Natural Resources employed 20% of the workforce while manufacturing and Office employed about 40% each.

Today Office/Service employs >80%, manufacturing <20%, and Natural resources <2%.

Computers and automation are just begining to affect the office with improvements in productivity. Gone are the repetitious work of data entry and typing pools, replaced by Word and PC's, scanners, OCR's, etc. Gone are stenographers replaced by recorders and management operating their own keyboards. The next to go will be many "back office" jobs. Accountants, Financial Analysts, Data Base Maintenance, Phone Receptionists, Etc..

IT Cyberspace is a huge exacerbating problem for Americans. A financial analyst in New York earning $100K+/year can and will be replaced first by an English speaking MBA in India who earns ~20K/year, then eventually by software that allows productivity increase to where one MBA in India can do what 10 Financial Analysts in America are doing today, to finally software that totally replaces financial analysts.

In the chain of Schumterian Destructions of jobs from Natural Resources to Manufacturing to Office, when one decreased the next was were ready on a historical scale to absorb the displaced workers. First Natural Resources to Manufacturing, then Manufacturing to Office, now Office to ???????. Government is the only field still increasing jobs and the only field less likely to export jobs to India, can Government absorb the huge displacement that is about to occur? I doubt it, our economic structure is not able to accommidate that type of jobs distribution. We tax labor not production to a large extent.

As computer intelligence improves, and robotics advances, and communications continue to gain speed and flexibility, there will be fewer and fewer jobs that can economically be done by humans.

Eventually Unemployment must rise to unprecedented levels never seen before, yet at the same time the stockmarket may continue to boom. It will though end. People who have known affluence will not stand by and starve while others flourish. Class war will develop.

It is not a pretty picture, with a world full of goods and food and pleasures, those who have had but don't now will revolt.

The aftermath will be the rosy 1000 years. Computers will serve us and we will co-exist peacefully. But it will not be smooth.

Rod
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