atomic_fungus (atomic_fungus) wrote,
atomic_fungus
atomic_fungus

#5268: Since everyone else is doing it....



Try it yourself, if you like.

I scored as high as Vox Day did. I think that means we both got one wrong; there was one word I'd never even seen before. But my vocabulary is huge, mainly because I have always read whatever I could get my hands on regardless of what it was. I fully expected to score at that end of the scale. (The test does not look like it's timed, so I'd assume it's possible to get a perfect score by using a dictionary. I did not.)

I suppose that if, like me, you have an occasional penchant for excessively bombastic circumloqution, the aquisition of a brogdignagian vocabulary is inevitable.

* * *

Linkaround and not much commentary because today is errand day and it's already after noon.

Apparently the state of shipping volume is not good. This continues a trend we've noticed here for some time: several years ago some 15% of ships were idle at anchor, and for some routes the fuel costs more than the company can charge for carrying cargo because demand is so poor and capacity is so high. Stratospheric, in fact.

...which is why he says, "It looks like the guys on the beaches are going to be getting a lot of steel in the near future." Because when he talks about "the guys on the beaches" he means the guys who scrap ships after they've been run aground.

Here's the thing: if stuff isn't moving the economy is bad. Rail traffic is down. Shipping is in the toilet (though part of this is due to an oversupply of capacity).

Probably the best remedy is to scrap a whole bunch of ships, and stop building more for a while, because this will bring shipping prices back to a point where shipping companies can make money. Problem is, this bankrupts the companies which build ships.

There really isn't a good answer, here.

It's similar to the Midas World conundrum. Who is going to buy the stuff pouring from robotic factories? Will we instead--as Fred Pohl suggested in Midas World--be required to consume as much as possible? Will the poor have an abundance of stuff while the rich have the luxury of not using anything?

We have not had this problem before in history. Even slaves need to be fed and housed and given time to rest, and periodically have to be replaced due to death or age; robots need none of that. A good industrial robot will do its job continuously for decades and still have some resale value when you decide to replace it. Its new owner may have to replace a few parts but will get more years of use out of it. So you can pay three guys $15 an hour (and give them rest and meal breaks) to tighten nuts on flange assemblies on your production line, or you can fit an industrial robot with a torque-limited air ratchet and program it to tighten those nuts to the exact same torque every time continuously, and over time you end up spending less (a lot less) on that than you do in wages, benefits, and other compensation for those three guys.

Robots are very, very good at doing repetitive tasks. Once their task is programmed, they do it the same way every time, they do not take breaks or sick days, they do not have children who get in trouble at school, they do not struggle with alcoholism.

As Vox Day says, "No conventional model can survive the near-complete replacement of labor with capital."

We're looking at an undiscovered country where the price of goods will come down to four factors: the cost of the physical plant required to make the product, the cost of the labor required to develop the product, the cost of the materials, and the cost to deliver that product to consumers.

In the case of something simple like an incandescent light bulb? Suspending a tungsten filament inside a glass globe (from which the air has been removed and replaced with argon) with electrical connections on the outside is a technically demanding process--try building one yourself!--yet because the process is almost entirely automated, we're able make them so cheaply that a profit can be made (albeit not a large one) on selling them in packs of four for $1. (How It's Made, light bulbs. If you watch that video, count the number of people you see. Are any of them doing anything to the light bulbs being made?) The cost of manufacturing light bulbs has been reduced to its bare minimum, not just through complete automation of the manufacturing process but also through amortization of the costs for the machinery required to make the bulbs, including maintenance.

But the incandescent light bulb is a mature technology; there are no further gains to be had by improving them. At least, none which are economically viable, or necessary.

When it comes to something like an iPhone or a television, it's a different story...or is it? The design of a conventional LCD television is pretty standardized now, and as is the case with all other electronic products it's now a race to the bottom for prices as more actors get into the market. It's the merging of the television with the Internet which is keeping prices higher; smart TVs cost more than a basic LCD display but that price premium is based almost entirely on perception of the value of the premium feature. The cost of implementing it is not nearly as much as the price difference would suggest.

A basic 32" LCD TV can be had for $100. This is a product which did not exist fifteen years ago. The 47" TV hanging on the wall in my old bedroom cost $500 on sale in 2010; now you can get a similar-sized TV for well under $400 at regular price. (Best Buy house brand, MSRP of $319 today. My TV is also Best Buy house brand. Apples to apples comparison, here.)

Eventually all products reach a stage where further improvements make them less efficient at their tasks. Some products on sale now are past that stage, because their manufacturers cannot compete on price and they must add features to stay in business. A relative handful of buyers use those features.

So what happens when products mature and cost almost nothing to manufacture? Well, there will always be new products (the iPhone was introduced nine years ago and is barely adolescent as a product) which will command a premium as long as they are new. The problem is, the number of people required to develop and produce a product, in the age of automation, is miniscule. You need a cadre of engineers and designers to design the thing, but once that's done--what? Push the big green button to start the factory, and the robots take care of the rest. You might need a couple of software guys to fix bugs in the software; you'll need some people to maintain the machines and recover from errors. But what you don't need is an army of low-educated workers soldering the chips and tightening the screws.

That light bulb assembly line shows you what machines can do. None of the processes require human involvement, and given the materials and energy, that assembly line will happily churn out light bulbs for pennies apiece until doomsday or something breaks, whichever comes first.

God willing, that's where manufacturing is heading. We're going to move to a different kind of economy, one we can't really imagine just yet.
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