Tech Will Allow a Family to Live Well on $3500 per Year

So far, I’ve talked about some of the downsides of the massive change from AI and path dependency:

I wrote about how being compensated for our data might be a way out. But what about some other potential good news?

“Competing Without Software Is Like Competing Without Electricity” – Naval Ravikant

As technology impacts every industry and becomes as ubiquitous as electricity, we will see the vast majority of industries behave like the computer and software industries do: getting better each year, while deflating in price.

As Sam Altman, the head of YCombinator puts it: Continue reading…

Should We Be Paid to Train the AI Algorithms?

If it’s free, you’re the product. If it’s extremely subsidized, you’re probably the product, too. Facebook is free. You’re the product. Google and Gmail are free. You’re the product. Mechanical Turk is cheap, you’re the product. Uber is cheap, you’re the product. Tesla self driving cars are add on features. You’re the product. Snapchat is free. You’re helping them build the best facial recognition database out there. They’re “paying” you with access to use their service.

Tesla needs a few billion miles of driving data to train its computer program to react to all situations. How does Tesla get this data? By tracking all car trips and adding it to the database. Once they have enough data, cars can react to nearly all situations. They’ve used massive amounts of each persons’ data to train the program.

All of the companies I listed above are using free or highly subsidized products to train their algorthims to further automate away humans. Is this bargain fair?  That everyone who uses free and subsidized services are contributing to training the AI? The AI that will later run that market and create massive benefits for the company that captured all of this data that people freely gave it? Continue reading…

The On Demand Economy Is At Best A Bandaid, Not a Solution

We know we’re going through massive change. And that things are moving faster than ever. Our politics are harming those who they claim to protect. One potential savior is the on demand economy. On demand economy proponents claim people will be Uber drivers, freelance writers, freelance attorneys, accountants, video editors, programmers. People won’t buy things, they’ll just lease them (and they’ll be happy). It’s true, some people will live like this and be happy. But the on demand economy is just a bandaid on a wound that requires an emergency room visit. And it might be worse. It might be like giving adrenelline to someone who’s already bleading out.

The labels “on demand economy” or “sharing economy” don’t accurately characterize these new business models and work arrangements. One of the new “jobs” rates airbnb accommodations based on cleanliness, if the photos are real etc. Their job is to make sure it doesn’t smell bad. They’re on demand airbnb smellers. While that’s a new job that maybe be needed, it’s not a job that will pay living wages and give people dignity.

We have similar problems in most other “sharing economy” companies. It’s like making people into code, shuttling them from place to place and only paying them when they can work. It’s many a business owners’ dream: pay workers only when they can work, don’t pay benefits and make workers compete against each other. Look at Amazon’s Mechanical Turk, where workers are paid pennies to complete mundane tasks and train the AI. Turkers are already protesting that they’re people, not algorithms. Contrast the sharing economy with Henry Ford’s dream of paying his workers so that they could afford his product. We’ve come a long way.

This competition structures incentives to create a massive race to the bottom. These companies make economic sense for the first people who use them, but don’t make sense for workers in the long term. Just look at Uber driver income in any new city. Uber pays big bonuses when they come into a new market where there are few drivers. Drivers earn $100k+ in places like Philly and LA. But as soon as more drivers get on the platform, wages go to as close to zero as possible as Uber lowers fares and ups its commission.

For on demand services like design, programming, creative writing etc, the developing world will always win these price wars. Just look at Upwork…there’s $2/hour video editors that do a great job. As Seth Godin put it, “we can’t out obedience the competition.” It’s a race to the bottom.

On demand economy websites will help some people go through the transition from stable jobs to our new AI enabled future, but competition that drives compensation, working conditions and best practices to the lowest common denominator will be the norm. Airbnb smellers are a new job, but not something that’s going to give satisfaction or a wage that supports a family in the near future.

Photo credit: synx508

It’s Harder & More Expensive to Start a Startup & Break Through

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Most people say entrepreneurship and startups are the best way for people to be useful in the age of AI and automation. If we have more entrepreneurs, they say, we can innovate our way out of our jobs crisis. Entrepreneurship is definitely the way forward for some people. But not most.

Conventional wisdom is that it’s never been easier, cheaper and faster to start a startup and break through. With advances in computing power, open source software, Amazon hosting, development frameworks and online communities, the thinking goes, it’s much cheaper, faster and easier to start a startup and break through.

I’m pretty convinced conventional wisdom is wrong. Continue reading…