To those who think that all this sounds like science fiction, we point out that yesterday’s science fiction is today’s fact. The Industrial Revolution has radically altered man’s environment and way of life, and it is only to be expected that as technology is increasingly applied to the human body and mind, man himself will be altered as radically as his environment and way of life have been.” - Theodore Kaczynski

This week, we recommend you to watch Al-Jazeera’s documentary on the rise of robots and their potential impact on the economy, especially jobs. As regular readers may have picked up in the numerous links we’ve shared in recent years, it is not only lower skilled jobs that are threatened by the rapid deployment of increasingly capable machines. Higher skilled jobs, from data analysis (i.e.: equity analyst) to doctors, are also being targeted by robotic / software companies.

While these advances may surely increase overall wealth, the distribution of these gains is already seriously skewed toward the owners of capital. In addition, the technologies’ rapid advances do not allow for the gradual reconversion of replaced employees. Both problems point to an obvious issue: if money is owned by a few while the rest cannot spend, this will bring to a halt the very substance of the mass-consumption society in which we are living.

As described by various economists: ‘workers spend what they get, capitalists get what they spend‘. In other words, investments are the main driver of the economy, thanks to the multiplier effect. But for companies to invest, the overall economic environment must be conducive. Should unemployment continue to increase, it will decrease the overall economic spending (the rich’s propensity to spend cannot plug the consumption shortfall) and further slow economic growth.

The above scenario applies for developing or developed countries. But the documentary also highlights the fact that robots also threaten countries that haven’t started their economic development: by replacing workers by robots in labor intensive industries (i.e.: textile) in the above countries, many poor countries cannot benefit from the gradual industrialization that leads their societies to leap toward better ways of life.

While we do not anticipate immediate radical changes, we still believe that the robots’ quiet rise threatens more than our jobs: it is a challenge that strikes deep into our current political and economical organizations.

Science, General Knowledge & Environment

Humans creating sixth great extinction of animal species – “Modern rates of extinction were eight to 100 times higher , the authors found. For example, 477 vertebrates have gone extinct since 1900, rather than the nine that would be expected at natural rates.

People and Power – The Technology Threat – [Video] – “A two-part Al Jazeera documentary examines how technology is hollowing out former mid-range skill, middle income jobs, and how that process is set to intensify over the coming decade.

History & Geopolitics

Conversation: Analyzing the Venezuela-Guyana Maritime Boundary Dispute – [Video] – “Stratfor Editor Lynn Wise and Latin America Analyst Reggie Thompson discuss Venezuela’s maritime boundary dispute with Guyana and the domestic politics behind it.

A Net Assessment of East Asia – “The internal evolution of China is, in fact, the key to the region. China has moved from limited liberality to increasingly intense authoritarianism. The evolution of this government is at the heart of the East Asian dynamic. North Korean nukes, Chinese aggressiveness at sea and American threats are all secondary.

Finance & Economics

Zombie update: the silent hedge fund apocalypse – “The point isn’t all hedge funds are bad, it’s that constant failure makes selection of funds so difficult, even before the recent industry track record is considered: for the last five years, the average hedge fund has failed to beat a simple portfolio of stocks and bonds.

Chinese experts raise red flags about New Silk Road investments – “Other experts are pointing to the potential for waste. They warn that short-sighted exuberance for the project could trigger overspending that leads to heavy debts for borrowers and lenders. This is similar to what followed the government’s 4 trillion yuan in stimulus spending after the 2008 financial crisis.

Picture of the day: Inceptionism: Going Deeper into Neural Networks  – (Hat tip Ludo) – “The techniques presented here help us understand and visualize how neural networks are able to carry out difficult classification tasks, improve network architecture, and check what the network has learned during training. It also makes us wonder whether neural networks could become a tool for artists—a new way to remix visual concepts—or perhaps even shed a little light on the roots of the creative process in general.

Robots dreaming of electric pagodas (who could have guessed!)

Robots dreaming of electric pagodas (who could have guessed!)

About Carlito Riego

"Great perfection may appear imperfect, but its usefulness is inexhaustible. Great abundance may appear empty, but its usefulness cannot be exhausted. Great correctness may appear twisted, great skills appear crude, great eloquence appear awkward. Activity conquers cold; inactivity conquers heat. Clear serenity governs the world." - Lao Zi