In April this year, I saw this story, which few talked about:
LONDON, April 19 (Reuters)—Global debt has never been higher, the IMF said this week, urging countries to take advantage of current strong GDP growth rates and reduce it before economic and financial stability come under serious threat.
Certainly, some of the figures in the IMF’s latest fiscal report were eye-catching: debt at the end of 2016 was $164 trillion, or 225 percent of global GDP; almost half of the rise since 2007 has come from China alone; government debt-to-GDP in advanced economies has only ever been higher once in history, around the time of the Second World War.
China alone has accounted for 43 percent of the increase in global debt since 2007, or $21 trillion.
In the case of China, the growth in private-sector debt has been an increasing tail risk for investors. The fear is this bubble bursts and the fallout spreads to the rest of the world.
“There is no room for complacency,” the IMF warned.
China has added $21 TRILLION to its debt since the banking crash. It cannot afford growth to slow down or, God forbid, stop. But this also raises questions for us. China is one of the main “banks” we go to for loans. If that bank stops allowing us to borrow money for any reason, what happens to us? “The fear is this bubble bursts and the fallout spreads to the rest of the world.” Mutually assured economic destruction. The other sad and ironic point in the story is what the IMF told countries to do: reduce their debts and spending ASAP. Ironic, as it is the opposite of what the IMF told countries to do for the last ten years. Only now does it recognize the extreme danger of playing with this fire. It is sad because, as I indicated earlier, we haven’t cut our debt or our spending a single dime. “ ‘There is no room for complacency,’ the IMF warned.”
But let’s return to jobs and the politician who will tell you that he is going to take the jobs back from China. I think you can see why that may not be as easy as it sounds, but it is also a total fallacy. Our jobs are not going overseas, and in fact the jobs that may have gone overseas years ago are being lost in China.
Let’s look at why those jobs went overseas in the first place—they are chasing the cheapest labor.
To compete, industries can either innovate new, better means of production or simply seek less expensive ways to produce via existing methods. Textile production has hardly changed in over one hundred years, but all the textile jobs are in Asia or South America. We simply could not compete with a workforce that would accept conditions that the Chinese worker is willing to accept, and from government-run businesses in many cases. Frankly, I believe it is immoral for us to do business with nations that are using slave labor. I will pay more for my Christmas lights, thank you.
In 2010, there was a rash of suicides at the Apple factory in China called Foxconn. Foxconn is the largest employer in China and is a government-run facility. It is notorious for its living and working conditions. There are twelve-hour workdays, and employees must remain in the compound; they live in three-bedroom apartments that usually sleep thirty. The use of power-draining devices like “personal hair dryers” is not allowed. If employees make errors, they are forced to write an apology and read it in front of all of their coworkers. Foxconn charges you for the power and living quarters and so on, and, surprise, surprise, by the time you finish paying them, you have very little left of your paycheck. But you can always spend it at the third-floor company movie theater.
Currently, the average worker in China earns $6,500 per year. That’s after we adjust for price differences in China and the U.S.
So Apple and others are paying $3.25 an hour for the regular U.S. working year. The Chinese work longer hours for that amount—usually twelve-hour days. Wages for electronics assembly in the U.S. are currently around $14 per hour. Do you want that job?
This is where companies go if they want cheap but efficient labor, and still the iPhone will cost us about $800. Studies have shown that if they were made here, the average iPhone would cost well over $2,000.
So, the lowest-hanging fruit on the tree of political lies is this: The jobs will not come back, because we would not accept the conditions that we would have to work under; nor will the company want to bring the jobs back, as the cost of the iPhone would be so high that it would price itself out of the market entirely.
But here is the real reason why “I’m going to bring those jobs back” is a lie, and a dangerous lie.
In the spring of 2017, I read this story:
Perhaps no other country is more focused on shifting to automation and replacing human workers with machines than China, especially given that the output of industrial robots in the country rose by 30.4 percent in 2016. Earlier this year, a Chinese factory replaced 90 percent of its human workforce with automated machines, resulting in a 250 percent increase in productivity and an 80 percent drop in defects. Foxconn, an Apple supplier, also cut 60,000 jobs and replaced them with robots.
To that end, China’s five-year plan is targeting production of these robots to reach 100,000 by 2020. This means that as the world continues to achieve unprecedented levels of advancement in AI and robotics, it will likely cause the displacement of thousands of human workers in favor of automated efficiency. Already, 137 million workers across five Southeast Asian countries are in danger of being replaced by automation. (https://futurism.com/3-tiny-robots-help-cut-chinese-warehouse-labor-costs-by-half-kelsey/)
When the lowest-paid labor and SLAVES are being replaced by automation, you can guarantee that assembly-line-style jobs will never be returning to America, and every president and political leader knows this.
They have known it for years.
From Forbes: Some years back, President Obama asked Steve Jobs about all those Apple assembly jobs being done in those vast sheds in China. More specifically, he wanted to know whether those jobs would come back to the United States; was there some way they could be brought back, perhaps? And Steve Jobs’s response was simply that those jobs are never coming back. The Chinese are automating entire factories “with only a minimal number of workers assigned for production, logistics, testing, and inspection processes,” according to Jia Peng.
They are now looking at “the dark line,” where it is possible to save on the expense of lighting, as the machines don’t need it and there are no humans in the process who do. Even in China, where labor is cheap, Foxconn is beginning to use robots to replace human workers. In the U.S., a new factory would undoubtedly be highly automated, limiting potential employment. Building iPhones in the U.S. might sound nice, and it makes for good political rhetoric, but it’s not a silver bullet to create jobs.
And that’s the thing: We are simply never, ever again in the course of human history going to use rich-world labor to do this sort of assembly work. If the Chinese labor rate of three bucks an hour and the machines are winning, then that’s really the only choice there is.
So, a few times now, I have said that bringing jobs back is a lie, but what is more, I have said it is a dangerous lie. Here is why.
What we are seeing now is only the very early stage of what is to come. We are at the very beginning of something that will transform our world—the way we work, communicate, shop, educate, and even live and die—in ways that we cannot even begin to imagine. The world my parents were born in looked very much like the world they died in. Yes, there were cars, but they were different; they didn’t have TV when they were young, and the addition of cell phones, smartphones, and the Internet changed things dramatically, but people still got up every morning, made a cup of coffee, and set out to work. I have four children; the eldest was born in 1988. The world she will die in will look nothing like the world she was born in. In fact, assuming I live to my seventies or eighties, the world will be completely unrecognizable from the world I was born into.
LET’S DO THE TIME WARP AGAIN
Think of all of the progress from 1900 to the year 2000. From a time when most towns did not have streetlights and electricity. The phone wa
s still a novelty, the assembly line was almost twenty years away, radio had not yet arrived, there was no such thing as a “flying machine,” only two hotels in New York City offered flush toilets, and the record had not yet been invented; in fact, the vinyl LP was almost fifty years into the future.
By the end of the century, we had supersonic air travel; stealth planes were now over twenty years old, and radar was sixty. Where most had cooked their food on open flames in 1900, the microwave was now in every home, even in the poorest, as was the invention that changed the world—the refrigerator. Which went hand in hand with air-conditioning. Television was just beginning to go online. Phones had become portable and wireless, then cellular and headed toward smart. TVs were still in big square boxes, but they were now 1080i. We couldn’t imagine them getting bigger, or more clear. Space travel was old hat by the year 2000, and we already had a spacecraft that was about to leave our solar system.
Think for a moment about how much changed in a hundred years.
Now try to grasp this:
“We won’t experience 100 years of progress in the 21st century—it will be more like 20,000 years of progress (at today’s rate),” wrote Ray Kurzweil in 2001. Just think about how much things have changed in the past ten years—wireless Internet, smartphones, Facebook, and Twitter—and then try to imagine how vastly different things will be in 2021, or even 2100.
Ray believes that by 2030, technology will be changing so fast that we will have a hundred years of change EVERY DAY. The rate of technological growth will be so great that you will not be able to keep up with even the biggest changes.
What happens when our already volatile society is blindly thrust into a world that never allows people to catch their breath?
It is going to be an exciting time to be alive, but also terrifying. Because humans do not like change. They like routine and consistency. But our near future has none of that in store, and we must be our best selves to survive not only as a person but as a people, as a nation, and, in the end, perhaps as humans.
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Take This Job and Shove It
Let’s begin closest to home. Jobs.
To illustrate just how differently we need to think, we must come to the understanding that while currently, in Washington, in media centers, and on Main Street, we are all trying to figure out ways to lower the unemployment number, others are not. To get that number as close to zero—meaning “full employment”—as possible has been the goal of every society for centuries. After all, “Idle hands are the devil’s workshop,” the saying goes.
In fact, it is common to hear “experts” talk about how a main driver behind instability and violence in the Middle East is the high unemployment rate of those under thirty. In some areas it can be as high as 60 percent. For perspective, the Great Depression had an unemployment rate of 30 percent at its worst, and it almost broke us.
Who in their right mind would be plotting against a stable and secure world? While we are all devising ways to create more jobs and political figures promise they can create even more, in Silicon Valley, they are doing the exact opposite. But it is not nefarious. They are currently trying to figure out how to get the unemployment rate to 100 percent.
A world where no one has a job. While the full effect of this is still perhaps as far in the future as September 11, 2001, is in the past, the impact is already being felt today.
Carbon Robotics founder and CEO Rosanna Myers predicts a future where robots will revolutionize work in the twenty-first century the way the combine harvester revolutionized farming in the nineteenth century. Ninety percent of all tasks that could be automated are currently done by hand. While this is true, it is an entry-level understanding of what is coming.
In a story most will not have even seen, she said: “Yes, talking about jobs and job loss is political, but it’s a conversation that should be had.”
But who in the mainstream is even having this conversation? After all, “Hillary did this” (Outrage!) and “Trump did that” (Outrage!).
“This is a really special time for robots and for people. When we get there, just like with the combine harvester, we will not look back.”
I believe this is true, and why it is imperative that all of us look forward now, because once we arrive, it will be too late.
This is not the promise of a flying car. What is happening now may in the end be the most important and significant events and conversations in the history of ALL MANKIND. It is not hyperbole to make the claim that what man does in the next twenty years could have ramifications not just on a global but on a universal scale. Elon Musk is not devising ways to get off Earth for fun or money. He knows the potential of what we are doing and believes man must be off this planet by 2025. Unfortunately, if what he believes comes to be, Mars may not be far enough away to escape.
I hope you will begin to grasp by the end of this chapter that what is being designed right now is real—it will affect all of us and all of our jobs as soon as tomorrow, and the decisions we make right now may in the end mean the very survival of the species. It is almost upon us, and most of us don’t even know anything is happening. While many will dismiss this as crazy or conspiratorial sci-fi, I urge you, as always, to do your own homework. Do not rely on me or anyone else. Do not look to fringe science but rather to the actual science and the greatest minds alive today on earth. I am confident in sharing the smaller and larger picture with you in this book, as the small picture WILL happen, and as far as my concerns about the longer view, I am in the company of men like Musk, Gates, and Hawking. The other POV comes from another man I respect and admire, Ray Kurzweil. Generally, the opposing arguments that you will find will be based on timing and whether mankind survives or not.
Let’s return to the micro. Bain Capital believes that we are looking at a PERMANENT unemployment rate of 28 percent by 2030. That is the crisis of the Great Depression, at a time when the government will be broke and beyond the ability to provide a safety net. But it will also be at a time when personal debt will be at another all-time high, school loans still decades away from being paid off, and millions upon millions of workers unable to be retrained. There also will be no “work projects,” as the idea is to eliminate jobs.
What then? How do we react? What do we do? How does the neighbor react? Most men die just a few years after retirement, as it is our jobs that give too many of us meaning and a sense of value, of contribution. Who will step to the plate to lead the world, and what will they promise us?
Imagine this “utopian” world, where most do not have to work and are free from disease (predictions of the eradication of ALL DISEASE by 2030 are optimistic but may not be far off) and hunger. Just a fraction of this “new world” can be more glorious than any one of us can currently imagine. But for now, let’s assume we want this world and it is as great as promised.
We need to get there first. It is not the long term that I am worried about alone, it is the next ten to twenty years. Without real inspirational leadership, focused education, personal compassion, and a complete 180 on the idea that “What we do is who we are,” we will tear each other apart and the future will be grim, as the tech that is now within our reach will make man’s most colorful dreams come true or will dwarf man’s most vivid nightmares, as the Chinese are now discovering.
This is a far more pressing problem than any global-warming scenario, as it will tip the scales of instability in every modern country on earth. It changes the fabric of our society, self-worth, and concepts of how we live our lives. It is already beginning to happen, and most of us remain unaware, imprisoned in our own self-imposed ignorance and bliss.
The elites are discussing this. But most of them are not in Washington. They are the tech elites, people who I believe already are getting such a taint on them, due to privacy breaches, social media addiction, and even wealth disparity, that they will make the perfect target for the politician that most voters will be looking for, because while tech
may change overnight, people generally remain the same. They will want to know “who has done this to them” and “who is going to be punished.”
It will be Silicon Valley. The four wealthiest companies in the world are Apple, Google, Microsoft, and Amazon, collectively worth about $3 trillion, more than the top thirty manufacturing companies combined. Unless, I fear, they begin to deeply partner with the governments of the world for their own survival and protection.
If they were as smart as they claim to be, they would right now be working on programs and conferences that hit every sector of society to begin a dialogue with people on what the “world of tomorrow” looks like and include the average person in the dialogue.
If these things are just inflicted, forced, or quickly pushed upon us, people will push back. We cannot put this genie back in the bottle, nor would we want to. But we do need to all be involved in the discussion on how we make our society work. It will be hard to get past old-think, the framework the capitalist or socialist system has built for us, as new tech will tear much of that down. On the macro scale, what is coming could be freedom beyond man’s understanding. The free market will decide what is made and consumed without the oppression of the workers. But if no one has a job, how do we pay for things? Well, the idea is that if automation is coupled with AI/AGI and eventually ASI, the supply chain should be so efficient that all people will be able to fulfill their needs for a very small fraction of the cost today.
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We’re in the Money
This is why you are hearing so much talk about UBI, Universal Basic Income, or BMI, Basic Minimum Income.
When I first heard this, I was almost apoplectic. “Another socialist program.” I couldn’t figure out how this had come around again. For some it may be a Marxist dream whose time has come, but after doing a deep dive on tech and the “world of tomorrow,” I think it is something that we must discuss. While I still believe this is not the answer, as it flies in the face of the theory of incentives and value creation at the center of the human ego, we must begin to search for one. We mustn’t “hope” for the pink ponies and happy rainbows and accept the reality of 30 percent permanent unemployment and the massive job losses that we will see beginning in 2020. We must begin to look at all options, if for no other reason than to stave off revolution and riots. I believe everything needs to be on the table—with the exception of the rights of man. The Bill of Rights must always be maintained in our forward vision. If we lose the sovereignty of the individual, it will be a very short and quick journey to the world of George Orwell.