What an old Patriots NFL game reveals about Amazon Prime Air

Amazon recently announced plans to try to develop the ability to deliver packages with autonomous flying machines. It’s funny, I blogged about the same idea back in April. The venture will face huge challenges. One of them is safety.

Thirty-four years ago today, a fan was killed at a Jets-Patriots game by a flying lawnmower.

No, really.

Some nut combined a lawnmower’s body and a model airplane’s machinery for the half-time show. It crashed into the stands and hurt two people, killing one of them. I don’t think this is the one that was at the half-time show, but it probably looked a lot like this:

http://www.youtube.com/watch?v=kNWfqVWC2KI

(Links via Bob’s Blitz. The Jets won, by the way.)

The point is that these things can be dangerous, especially if there’s no one piloting it. Amazon’s promo video at the top shows the drones delivering things in perfect weather, but there’s no mention of how it would handle strong wind, rain, snow, vandals or thieves. Drones also raise important privacy concerns. Lawsuits about faulty or misused drones are inevitable. (The Jets were sued for having such a dangerous halftime show.)

Despite the challenges, there’s definitely a place for drones in the private market. Amazon is also testing out using robots for warehouse sorting and loading. This year Mesa County, Colorado saved almost $10,000 by doing an annual air survey of a landfill with a drone instead of a piloted craft. There are places where drone delivery can definitely be useful: In Alaska, things often have to be delivered by air anyway.

A hundred years ago, it would have seemed crazy to suggest that mail could be delivered through the air. Today, regular first-class interstate mail is delivered by airplanes every day. All mail is Air Mail.

The military has already begun to use drones for delivery.

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Think: What would you do if a robot stole your job?

RobertoParada_Robot_MotherJones

Image from Mother Jones magazine. Artist: Roberto Parada

Worry about machines taking away people’s jobs goes back to at least the 1700s, when the real-life Ned Ludd started smashing “job-stealing” machines and began a movement called Luddism. (Followed by the Captain Swing movement, where farmworkers smashed the farming equipment that did the work they used to do by hand).

Later came the legend of John Henry, who died heroically proving his worth against a machine.

john_henry_stamp

Over the past couple centuries, the world’s economies have transitioned from agriculture to manufacturing as new technologies enabled more work to be done with fewer employees. When America declared its independence from Britain, close to 90% of the population worked in farm-related jobs. Today only about 2% of the population is employed in agriculture, yet food is cheaper than ever before.

Jobs shifted from agriculture to manufacturing as it became more possible to run a farm with fewer farmhands. The American economy was based on manufacturing through most of the 1900s, but manufacturing has been going the same way as agriculture. Mechanization and exportation of labor allowed manufacturing to be done cheaper with machines or foreign workers willing to work for less. Classically American things like Black & Decker tools and Radio Flyer wagons are now made in China.

Manufacturing jobs have moved to countries where labor is cheapest. But countries around the world have been improving their circumstances; developing countries eventually become developed countries. So some manufacturing jobs have moved from China to less-developed countries like Vietnam. Some manufacturing jobs have even moved back to the U.S., but it won’t be enough to restore manufacturing to its former top spot.

Manufacturing has declined in both employment and share of GDP in all but the poorest countries, replaced by the service sector:

ManufacturingAsShareOfGDPFalls

But today, even service sector jobs can be automated. A New York Times story on the work of a pair of MIT economists (Erik Brynjolfsson and Andrew McAfee) explores this trend:

During the last recession, the authors write, one in 12 people in sales lost their jobs, for example. And the downturn prompted many businesses to look harder at substituting technology for people, if possible. Since the end of the recession in June 2009, they note, corporate spending on equipment and software has increased by 26 percent, while payrolls have been flat.

Corporations are doing fine. The companies in the Standard & Poor’s 500-stock index are expected to report record profits this year, a total $927 billion, estimates FactSet Research. And the authors point out that corporate profit as a share of the economy is at a 50-year high.

Productivity growth in the last decade, at more than 2.5 percent, they observe, is higher than the 1970s, 1980s and even edges out the 1990s. Still the economy, they write, did not add to its total job count, the first time that has happened over a decade since the Depression.

Productivity and employment levels used to rise together, but not anymore.

Chart from the New York Times showing a trend called "the jaws of the snake"

A trend called “the jaws of the snake”: Productivity over the past decade has increased while employment levels haven’t.

Brynjolfsson and McAfee recently wrote in the Times:

Adjusted for inflation, the average U.S. household now has lower income than it did in 1997. Wages as a share of G.D.P. are now at an all-time low, even as corporate profits are at an all-time high. The implicit bargain that gave workers a steady share of the productivity gains has unraveled.

What’s going on? Why have job volumes and wages become decoupled from the rest of the train of economic progress? There are several explanations, including tax and policy changes and the effects of globalization and off-shoring. We agree that these matter but want to stress another driver of the “Great Decoupling” — the changing nature of technological progress.

As digital devices like computers and robots get more capable thanks to Moore’s Law (the proposition that the number of transistors on a semiconductor can be inexpensively doubled about every two years), they can do more of the work that people used to do. Digital labor, in short, substitutes for human labor. This happens first with more routine tasks, which is a big part of the reason why less-educated workers have seen their wages fall the most as we moved deeper into the computer age.

As we move ahead the Great Decoupling will only accelerate, for two reasons. First, computers will keep getting cheaper over time. Digital labor will become cheaper than human labor not only in the United States and other rich countries, but also in places like China and India. Off-shoring is only a way station on the road to automation. ….Second, technologies are going to continue to become more powerful, and to acquire more advanced skills and abilities.

We’re now in a third transition like the ones from agriculture to manufacturing and manufacturing to services.

What’s next?

Economist warns of the coming robot apocalypse

A followup to my earlier post on technological automation:

Tyler Cowen, a professor of economics at George Mason University, writes in the current issue of Politico that the trend toward automation in economies around the world is leading to a robot takeover.

ShortCircuit3-2

Okay, that’s not it exactly. There’s no robot apocalypse. But there is a global trend of better and more widespread technology leading to increased automation, which Cowen says is shifting employment patterns and remaking American politics.

The highest-paid job in America is anesthesiologist. So it’s surprising to see that even this highly skilled occupation is seeing automation encroaching on its turf, too: A new system called Sedasys is able to do what previously only expert doctors could. Sedasys only does a small range of what these doctors do, but it’s more than anyone would have thought possible not too long ago. Anesthesiologists are paid so much because, contrary to what you see in the movies when somebody is given a knockout gas, it’s really hard to strike the fine balance of chemicals necessary to safely knock somebody out.

Other occupations facing possible competition from automated replacements: butcher, taxi driver, financial journalist, and comedian. (Hat tip to Politico’s Elizabeth Ralph for the links.)

Cowen predicts that the growth of automation will help to continue the shrinking of the middle class:

In 20 years, intelligent machines will expand their reach into every corner of our lives, and as technological change rewards a select few, these social and economic fissures will only deepen.

Our future will bring more wealthy people than ever before, but also more poor people, including people who do not always have access to basic public services. Rather than balancing our national budget with higher taxes or lower benefits, we will allow GDP growth to falter and the real wages of many workers to fall, creating a new underclass. But this polarization notwithstanding, America’s political collapse is much less likely than the pessimists imagine, between the general aging of American society and the way new technologies are improving basic living standards.

I’m not sure I agree with everything he says in this piece, but he makes some really interesting points.

(Side note: It’s also kind of interesting that Cowen starts his article out with an Isaac Asimov story, because one of my favorite economists, Paul Krugman, was inspired to become an economist in the first place because of Isaac Asimov.)