BALTIMORE – How about those techs!
As Chris Lowe reported in yesterday’s Market Insight column, the eight most valuable tech companies in the world – Facebook, Apple, Amazon, Netflix, Google parent Alphabet, Baidu, Alibaba, and Tencent – have added $1.7 trillion in market value this year.
That’s more than Canada’s entire economy. And it exceeds the worth of Germany’s biggest 30 companies put together.
Rise of the Machines
There are two major reactions to the future: Some people are excited… and some are alarmed.
Oil production began to recover last year. But the number of oil-rig workers did not.
New technology automated much of the work. Now, it takes only five roughnecks to do the work that 20 did just a couple of years ago.
Oil-rig workers were well paid. That’s why rig owners are so eager to replace them. The machines don’t sue you when they break their legs. They don’t smoke on the job. And they don’t spend Saturday and Sunday with their families.
But since the machines are taking the place of high-wage jobs, that leaves the formerly well-paid workers with nowhere to go but down market.
That helps explain, too, why the only real growth in the job market has occurred in the service sectors – where bartenders and car parkers earn low wages in low-skilled jobs. Humans are forced to take the jobs the robots don’t want.
And the number of robots in the workforce is expected to quadruple by 2025. By 2030, one estimate – widely circulated – is that half of all existing jobs will have disappeared.
Then, smarter than we are, the robots will help us in every aspect of our lives.
They’ll tell us when to brush our teeth and whom to vote for. They’ll correct our grammar, diagnose problems with our cars… and suggest remedies for itchy skin, too. They will take out the trash, make stew out of tree moss… and unlock the gates of paradise.
Nobel Prize-winning economist Daniel Kahneman was asked recently at the Council of Foreign Relations: What’s ahead? Will millions of people become “superfluous,” as Yuval Harari suggests, with nothing to do? Will these super-smart computers keep them as pets?
Big “social changes” are coming, says Kahneman:
This could be happening within the next few decades, and it’s going to change the world to, you know, an extent that we can’t imagine.
And you don’t need singularity [a state of virtually instantaneous progress driven by intelligent machines] for that. You need a set of advances that are localized. And we can see those happening… self-driving cars, you know, that’s just one example.
Blowing a Fuse
Here at the Diary, we’re neither worried nor wonderstruck.
First, all humans are superfluous. Always have been. We make work for ourselves; it isn’t given to us by the economy or the government.
Second, we suspect the promise of artificial intelligence is largely nonsense.
Machines can learn to do simple tasks, such as driving a truck. Yes, and you can get one to vacuum your carpet – big deal. And yes, they will be able to write dumb articles for lazy journalists… make smart calculations for engineers… and eliminate the need for most doctors.
But so what?
In the 19th century, machines took over the routine work. People fretted and whined when the automobile put the manure handlers out of work.
But the more machines were able to do, the more people wanted things that were “handmade.” The more they made physical work unnecessary, the more people wanted personal trainers. And now, the more robots do, the more humans will want what they can’t do.
In a world full of self-driving cars, we will be tortured to madness by the dream of taking control of the steering wheel ourselves.
And when we all have robot valets, who make sure our ties are always at ease with our jackets, we will find some combination of colors so vile and shocking that the machines will blow their fuses and refuse to work for us.
The world today does not lack computing power. Neither natural nor artificial. There are plenty of smart people around. More PhDs… more patents… more think tanks – more brain cells than ever before are applied to the pressing challenges of our day.
And more computers, too, working at processing speeds that would have knocked our socks off just 10 years ago.
The Apollo space program used a computer with the processing power of a single Nintendo NES game console from 1985.
The iPhone 6 (released in 2014; we’re now on the iPhone 8) has the same processing power as a Cray supercomputer from the 1980s.
And the total computing power available to mankind is now about a quadrillion times more than it was when Neil Armstrong walked on the moon.
And so what? Are we happier? Are we richer? Is the world a better place? And if such a huge increase in computing power has failed to improve our lives, what can we expect from more?
Too Much Intelligence
Our phones give us the time to within a tenth of a second, but people are still late.
Our computers correct our misspellings and verb tenses, but half of what we read is still senseless or trivial.
The fancy new New Holland tractor we bought for the ranch just a year ago broke down for no apparent reason, while our old Ford from 1972 is still going strong.
Is the music better than The Beach Boys in 1965 or Chopin’s Nocturne No. 8 from 1837?
Are the cops more level-headed than they were on The Andy Griffith Show?
Are the judges wiser… the girls prettier… or the politicians more honest than when Ike was in the White House?
The problem today… as it always has been… is not that we have too little intelligence. In fact, with so much additional computing brain power coming online… we may have too much. Our hearts can’t keep up.
Still, our advice is to relax. Let the robots take over. Be gracious. And dignified. Let them vacuum the carpet.
And kick them down the stairs when they aren’t looking.
MARKET INSIGHT: A Tech Darling Stumbles
By Chris Lowe, Editor at Large, Bonner & Partners
Yesterday, we showed you that the eight largest technology companies have been on a tear in 2017.
But that doesn’t mean all tech stocks are riding high…
Today’s chart tracks the year-to-date returns of stock in Elon Musk’s electric car company, Tesla.
As you can see, since its 2017 peak, set in September, Tesla is down 20%.
– Chris Lowe
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