reason

Paul Krugman Has Been Writing A Lot About The Ominous Threat Posed By Robots

Source: http://www.businessinsider.com/paul-krugman-articles-about-robots-2012-12

Paul Krugman

The focus of a few of Paul Krugman’s recent blog posts and his most recent New York Times column is robots and how they are fundamentally changing the U.S. labor market.

The upshot of Krugman’s argument is this: income inequality has been increasing for years in the United States, but one of the major drivers that no one talks about is the increasing use of robotics in manufacturing and other industries to do jobs traditionally done by human laborers.

One conclusion Krugman reaches is that even the highly-paid, highly-skilled workers who have dominated the share of income growth in the U.S. over the past several years will be increasingly affected going forward by the rise of the machines:

About the robots: there’s no question that in some high-profile industries, technology is displacing workers of all, or almost all, kinds. For example, one of the reasons some high-technology manufacturing has lately been moving back to the United States is that these days the most valuable piece of a computer, the motherboard, is basically made by robots, so cheap Asian labor is no longer a reason to produce them abroad.

In a recent book, “Race Against the Machine,” M.I.T.’s Erik Brynjolfsson and Andrew McAfee argue that similar stories are playing out in many fields, including services like translation and legal research. What’s striking about their examples is that many of the jobs being displaced are high-skill and high-wage; the downside of technology isn’t limited to menial workers.

Indeed, we’ve seen this taking shape even on Wall Street, where investment banks like UBS are laying off credit derivatives traders and replacing them with computers that trade off signals generated by internal algorithms.

That example reflects another of Krugman’s assertions: the robotics revolution may be a major driver of increasing income inequality.

Krugman writes in another post:

If this is the wave of the future, it makes nonsense of just about all the conventional wisdom on reducing inequality. Better education won’t do much to reduce inequality if the big rewards simply go to those with the most assets. Creating an “opportunity society”, or whatever it is the likes of Paul Ryan etc. are selling this week, won’t do much if the most important asset you can have in life is, well, lots of assets inherited from your parents. And so on.

I think our eyes have been averted from the capital/labor dimension of inequality, for several reasons. It didn’t seem crucial back in the 1990s, and not enough people (me included!) have looked up to notice that things have changed. It has echoes of old-fashioned Marxism — which shouldn’t be a reason to ignore facts, but too often is. And it has really uncomfortable implications.!

Finally, Krugman offers a few alternative explanations for the increasing shift of income distribution toward capital and away from labor that don’t feature robots so prominently. One is the idea that monopoly power – made more ubiquitous by growing business concentration in the United States which allows big producers to control prices more effectively – may be a bigger culprit.

Krugman thus concludes by writing that “the starting point is to realize that there’s something happening here, what it is ain’t exactly clear, but it’s potentially really important.”

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Thursday, November 8th, 2012 Uncategorized No Comments

Amazon Trashes The iPad Mini On Amazon.com (AMZN, AAPL)

Source: http://www.businessinsider.com/amazon-ipad-mini-comparison-on-amazoncom-2012-10

Amazon is using its heavily trafficked front page to trash the iPad mini.

As you can see below, Amazon does a head to head comparison with the Kindle Fire HD and the iPad mini. The Kindle Fire HD comes out on top.

A few things about this ad. Amazon says it can play HD movies. In his review of the Kindle Fire HD, David Pogue said, “Incidentally, despite the name ‘HD,’ the screen can’t actually show you movies in hi-def. It may have the requisite number of pixels, but most of them are dedicated to black letterbox bars; the screen is the wrong shape for movies. And you can’t enlarge the playback to fill the screen, as you can on an iPad.”

And Walt Mossberg in his review said, “The Fire HD isn’t as polished, fluid or versatile as the iPad.”

The reason for that is iOS, Apple’s mobile software which is vastly superior to Amazon’s tablet software.

The real question for people looking at buying a tablet is whether or not it’s worth paying an extra $130 for an iPad mini which has better software and a bigger library of apps. Also, we should get official reviews of the iPad mini this week, which will give us better independent comparisons.

amzn

 

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Monday, October 29th, 2012 news No Comments

Where Microsoft’s Profits Come From (MSFT)

Source: http://www.businessinsider.com/chart-of-the-day-microsoft-income-by-segment-2012-10

When Microsoft revealed its first ever computer, the Surface, CEO Steve Ballmer said, “Windows is the heart and soul of Microsoft from Windows PCs to Windows Servers to Windows Phones and Windows Azure.”

And while that’s certainly accurate, the Windows division was not the company’s heart and soul as far as profits go, last quarter. The company made twice as much money last quarter from the Business Division, which is home to Office. And Microsoft’s Server and Tools group had bigger profits than the Windows division.

The reason Windows profits were light is that Microsoft is in a transition from Windows 7 to Windows 8. Windows operating profit should pick back up once Windows 8 sales pick up this quarter into next year.

chart of the day, microsoft income by segment, oct 2012

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Tuesday, October 23rd, 2012 news No Comments

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