December12011

Getting serious about Siri…

In his introduction to “Steve Jobs” Walter Isaacson writes: 

… a creative entrepreneur whose passion for perfection and ferocious drive revolutionized six industries: personal computers, animated movies, music, phones, tablet computing, and digital publishing. You might even add a seventh, retail stores, which Jobs did not quite revolutionize but did reimagine.

This is lacking. But do not blame Mr. Isaacson. He is a biographer, not a futurist. In my life there have been two massive technological revolutions. And both revolutions have enriched my life nearly as much as FDR’s social policies. Computers and the Internet are the two main movers of the past 40 years.  They subsume everything else. And yes Steve Jobs was sitting barefoot and in the lotus position at the barycenter of both these tectonic shifts.

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But another revolution is fast upon us. And to draw the full arc of Mr. Jobs’s life, future biographers will have to include Apple’s purchase of Siri as his most epic entrepreneurial moment. The world now has a moving AI benchmark that forces into being a veritable Roman arena of new markets. Siri thus marks many beginnings, and one massive painful end.

Regarding the pain, consider what Siri — personal AI and robotics— means for Capitalism. There is a ongoing economic debate over this question: Is our current massive unemployment structural or cyclical? The answer here is yes. That is to say it is both. And it is fundamental structural unemployment that is dooming Ayn Rand’s pure Capitalism. More and more white collar jobs will go to AI. We already have AI software that does a better job of diagnosing human diseases than human doctors. How long until I have an app for self-diagnosis in my pocket and a hundred other manifestations of AI engines to do my bidding? How long until AI robots take over most transportation jobs ? 

And that’s the thing that makes this revolution different. Siri and her AI robotic ilk destroy more jobs than they create. That is their purpose. They do physical and mental work more efficiently that humans. And that’s a good thing. Truly smart machines are here. We are on the cusp. Steve Jobs always recruited A-players by saying “let’s put a dent in the universe”. And thanks to Jobs’s last meaningful business moment, the world pirouettes to an entirely new center of gravity. 

AI and robots means more unemployment and thus a further concentration of wealth. But Capitalism functions best when it has global markets. Global markets demand a smearing out of wealth to the many. The math is simple, mass production = mass consumption. This means one clear thing: Next to global warming, the largest human problem right now is to figure out how to get stipends into the hands of the massively unemployed so that they can buy the stuff capitalism wants to produce.

But in fact Capitalism is showing signs of its failure to understand this fundamental right now. It is creaking, faltering, swooning. Here is Robert Reich in a recent Sunday NYT op-ed putting his finger on its stumbling pulse:

The 5 percent of Americans with the highest incomes now account for 37 percent of all consumer purchases, according to the latest research from Moody’s Analytics. That should come as no surprise. Our society has become more and more unequal.

When so much income goes to the top, the middle class doesn’t have enough purchasing power to keep the economy going without sinking ever more deeply into debt — which, as we’ve seen, ends badly. An economy so dependent on the spending of a few is also prone to great booms and busts. The rich splurge and speculate when their savings are doing well. But when the values of their assets tumble, they pull back. That can lead to wild gyrations. Sound familiar?

Mr. Reich argues that contemporary Capitalism suffers from a long-term structural disease of unemployment. And that its illness is accelerating beyond the will of its oligarchs and their purchased politicians to cure it. Again here is Mr. Reich showing us that all this began 40 years ago with the advent of the first computers:

Starting in the late 1970s, the middle class began to weaken. Although productivity continued to grow and the economy continued to expand, wages began flattening in the 1970s because new technologies — container ships, satellite communications, eventually computers and the Internet — started to undermine any American job that could be automated or done more cheaply abroad. The same technologies bestowed ever larger rewards on people who could use them to innovate and solve problems. Some were product entrepreneurs; a growing number were financial entrepreneurs. The pay of graduates of prestigious colleges and M.B.A. programs — the “talent” who reached the pinnacles of power in executive suites and on Wall Street — soared.

If this current situation is non-sustainable without the advent of AI and robotics, what is it with them? The condensation of wealth in the hands of few is in fact Capitalism’s Achilles’ heel. If our oligarchs were smart, they might figure out to distribute the wealth like the Saudi’s recently did to quell the grumblings of their Arab Spring. Perhaps our oligarchs could be more puritanically shrewd about it to satisfy the political right. For example maybe the could figure out a way to pay people to watch TV or to take care of relatives with Alzheimer’s. But one thing is beyond certain: Our oligarchs are far from wise.

In fact the oligarchy’s greed outpaces their wisdom like IBM’s Watson outpaces you at Jeopardy. Instead of looking to find a way to do “living stipends” our oligarchs and their politicial stooges are actually looking to diminish Social Security and Medicare(!). That is suicidal. It is hard to wrap one’s head around a policy of plunging more people into poverty. By itself, growing the ranks of the poor is antipodean to empire. It is in fact anti-empire; and so stunningly dumb, one is forced to imagine a devilish bastardization of greed and cruelty to explain the behavior of America’s Executive class.

Thus I suspect the future will have to be bloody. Going forward I expect a lot more pepper-spraying of ordinary citizens. The oligarchs control all three branches of government, the media, the army, and the police. This does not predispose them to the sensibilities of accommodation. They have power and the wealth to rule, but not the wisdom to rule well. And History has never suffered the collision of those kinds of collusions with grace…

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