Jobs and the Artificial Intelligence Debate

One of the best parts of writing the Afternoon Edition each day is that I get to explore all kinds of interesting topics.

Two of those recent topics continue to be all over the news, and they are the issues of robots and automation, and artificial intelligence and the "Singularity."

These topics do materially affect markets, although their effect may not be as acute as, say, a monthly employment report.

And speaking of which, we got a new monthly employment report this morning, as February saw 235,000 new non-farm payroll jobs created.

That’s good economic news; however, I wonder how many more jobs would have been created if there weren’t as many advancements in the field of automation.

Perhaps the number would be the same. Or, maybe there are more jobs created on balance in fields such as automation, computers, robotics, etc.

That issue is up for debate and economic study … as it’s definitely an issue that will influence the economy and the markets in the years to come.

Maybe that’s why AI is such a fascinating topic. Especially lately, when there is always something new to discover.

This week, I read another story on the AI front in the Wall Street Journal that caught my attention. This one had the eye-catching headline, "How Artificial Intelligence Will Change Everything."

The article was basically a Q-and-A with the WSJ and two leading AI experts: Andrew Ng, chief scientist at Chinese internet giant Baidu Inc. (BIDU), and Neil Jacobstein, chair of the artificial intelligence and robotics department at Silicon Valley think tank Singularity University.

Ng thinks that AI is creating a lot of new opportunities, and that:

Just as about 100 years ago, electrification changed every single major industry, I think we’re in the phase where AI will change pretty much every major industry.

The Baidu scientist also made the following ominous prediction on the jobs and automation front:

Things may change in the future, but one rule of thumb today is that almost anything that a typical person can do with less than one second of mental thought we can either now or in the very near future automate with AI.

Jacobstein went on to amplify that answer, saying:

I think people are going to be surprised at how fast machine learning is going to displace routine jobs … We’re talking about a transition that’s going to occur over the next 10 to 15 years that is really significant.

I remain skeptical about a transition that takes place that quickly.

However, as rapid as change has been with computers, the internet, smart devices and the Internet of Things, we simply must be aware of the disruptive potential of this kind of technology in our lives — and in the economy.


Jacobstein did wrap up the interview with a very encouraging prediction on the AI front, saying:

The good news is that AI and robotics are going to generate massive amounts of new wealth. Our responsibility is to make sure that in addition to having our companies be successful, people who get displaced have a reasonable quality of life … But the real question is, "What’s the ratio of jobs destroyed to new jobs?" I think at least in the short term, that could be an unfavorable ratio.

An unfavorable ratio isn’t something we like in society, but it is something we’ll likely be forced to grapple with in the years and decades to come.

Fortunately, that transition will also offer up plenty of investable opportunities for us to profit from.


What’s your take on AI and jobs? Do you think progress here will mean greater wealth, or the likelihood of an "unfavorable ratio" persisting? I’d love to know what you think about this, or any of the recent issues we’ve covered in the Afternoon Edition. And, letting me know is easy. All you have to do is leave me a comment on our website or send me an e-mail.


Stocks rose after another solid jobs report. Today’s government data showed that the economy added 235,000 jobs in February, largely in education, healthcare, mining and manufacturing. Wages rose 6 cents to $26.09, and gained 2.8% year-over-year. The Dow gained 0.2% but remains about 100 points below 21,000.

• 1.2-billion-barrel oil reserve found in Alaska: Spain’s Repsol and Denver’s Armstrong Energy made the discovery that could result in daily production of 120,000 barrels starting in the year 2021. Repsol noted that this is the largest onshore discovery in the U.S. in three decades.

• For the week, oil fell almost 9% as traders digested the glut of news that U.S. stockpiles rose more than expected. Meanwhile, JR Crooks’ subscribers had the opportunity to go for two rounds of gains — +77.8% and +101% — on their short-oil bets. See how you can get in on the action here.

• Big week ahead: First, we had the 10-year anniversary of the financial crisis. Then the bull market’s 8th birthday. Next up is a possible 25-basis-point Fed rate hike on Wednesday. But then on Thursday, March 16, the debt ceiling is set to be reinstated. It was suspended in 2014, and that suspension was extended twice. Will we see the new administration extend it again? (CBO)

• Expect some software updates soon: WikiLeaks founder Julian Assange said he would give tech companies access to the tools the CIA uses to hack phones, computers, TVs, tablets and more, so they can address holes in their cybersecurity.

• Space tubers: NASA and the International Potato Center in Peru have a "Potatoes on Mars" project. Scientists recently said they were successful in growing potatoes in extreme "Mars-like conditions." Next up: experimenting to see which potato varieties would grow best there. (If you don’t plan to farm on Mars during its minus-200-degree winters someday, we have better ideas for out-of-this-world escapes.)

Good luck and happy investing,

Brad Hoppmann
Uncommon Wisdom Daily

Your thoughts on “Jobs and the Artificial Intelligence Debate”

  1. Dear Mr. Hoppmann,

    As usual, innovation is being rapidly foisted upon mankind before all of the possible harmful, and potentially irreversible, ramifications are thoroughly considered! What are the people who will be rendered unemployed by AI and automation in general supposed to do? How will those people be able to provide for their families? How will those people be able to be useful and productive? What will those people do with all that idle time? Those who seem to think that automation, especially artificial intelligence, is the greatest thing since sliced bread apparently have not seriously thought about, or just do not care about, how much these new technologies will turn this world upside down. It is not an exaggeration when I say that we would be facing a fundamental and unprecedented transformation of human society, one that neither governments, the business community nor the innovators of these new technologies know how to wisely and effectively deal with! We still have not effectively dealt with the issue of cybersecurity. These new technologies are being used to do tremendous harm to people the world over, and for what? For the almighty dollar; so people can do things a little bit faster; so people do not have to get up and turn on the lights; so people do not have to do much of anything anymore! Those who truly benefit the most from this 21st century technology are those in positions of power(government and business interests), those who innovate this stuff and market it to the public and those who have the means to invest in this technology. As usual, those who have the power to make decisions that have the potential to negatively impact peoples lives are not taking the time to learn some very important lessons from history before they rush headlong to roll out some new “game-changing” technology.

  2. One reason why the electorate revolted and is revolting in Europe is due to the reduction of the need for higher cost Western labor. Although the U.S isn’t as much in your face as is Europe, the threat of big business drive towards lowering labor costs will continue, even if the President scraps all of obamacare. The President’s biases are starting to show. Although he got Softbank and other Asian tech giants to invest here, he hasn’t really addressed (yet) the structural problems in our education system, which create zombies who can only hold temper tantrums about how evil white men are.

    This is a much tougher problem than cutting regulations that gut small businesses. The sheer size and power of the education bureaucracy makes the so-called Deep State look like lego blocks. I am not suggesting that the deep state isn’t a problem; but that education is MORE of one. We existed with a shadow government for almost 100 years. Why is it only now a problem? Perhaps because the real problem, which masks itself as a “deep state problem” is that Marxists have grabbed control of the education bureaucracy, so now we have a whole generation of Marxists who are unable to think for themselves.

    Unless we can reverse this trend and create a generation of young people who are creative and can think outside the box, the use of automation will continue to make labor redundant. and create more unrest. The President’s plan to bring blue collar jobs back will not reverse the decline of good paying jobs. He has to go into the ring and take on the education bureaucracy and be willing to send it through the shredder at ALL levels and replace it with a parent-centric system which encourages free thought and does not automatically drug bored students. i.e instead of splintering the CIA as JFK wanted, the President must be willing to do that to the education bureaucracy starting with the DoE!

  3. I believe AI and Robotics will eliminate many routine jobs and professions. The affected positions will go the way of the buggy whip and horse and carriage. Jobs and professions I believe that will be eliminate or change dramatically in a very short period of time are tax preparation services, insurance sales, financial planning services, and stock brokerage positions. AI and robotics can do those jobs faster, while looking a more options in order to maximize the benefit to the customers.

  4. I wonder about all the jobs replaced by AI and robots. Many of these people replaced won’t have a good job and will not be able to provide for their families. It may be wonderful for those able to continue working, but the 98% of society or even 60% of society, who are replaced are going to find it tough.

    I lived i Kenya, east Africa, for a number of years. Kenya did not import or develop a lot of energy saving devices, so they could employ more people. Like cement trucks, they mixed concrete on the job site, with a cement mixer that was hand feed, so they could employ more workers. They painted strips on the roads by hand to hire more workers. And even at that they had a high unemployment rate. It may be inefficent, but so is unemployment.

  5. I don’t believe we have that much to worry about, at least for the moment anyway. The amount of Human activities that AI will replace will be limited for a long time, possibly forever. Sure we will have machines that can perform very basic tasks, those which involve “simple decision” oriented tasks, such as asking you if you would prefer a room with a room with a view of the ocean or one with a view of the gold course. The latter of course possibly replacing the booking agent at a hotel. However, the machine that replaced the booking agent, will require many people to firstly design it, then build it, then program it, then deliver and install it, and then repair it when required. Not only that, but the manufacturer will require supplies which will create jobs for the manufacturer of those supplies (printed circuit boards, simple wires, microchips, etc). The creation of those booking machines will create more jobs than it replaces. If we always took the “Let stop the advancement” approach, we would still be travelling in horse & buggies. We would have prevented the development of the “Motor Car”, based on the mistaken theory that it would replace the jobs of the buggy maker, the horse breeder, the wheel maker, etc. However, how many people are now employed in the motor manufacturing industry, certainly millions more than than there were buggy makers, and that doesn’t even include distributors, the car insurance industry, Formula 1, etc. Also, in terms of advanced Human functions, we do not need to worry, AI will never replace us in these areas, i.e. the arts, music, understanding, creativity, and most of all building human relationships. A.I. will not cause us problems, unless we try to use it to replace the higher human functions. But surely we won’t even try that, for if we did it would only show our complete lack of understanding of what and who we humans are.

  6. I go on about this sort of thing all the time. You can’t just look at AI as if it is one thing, it is or will be everything. The new electric cars are really computers on wheels and more so when they all drive themselves. Big oil is resource based but solar is information based. Solar and battery storage is going to totally disrupt the oil industry. Wind and solar are going to kill coal in about 7 years. A few years ago gasoline was nearly $5 a gal then plunged when there was an oil glut of just 2 million barrels a day. Electric cars are going to reach that level by about 2022 and will get horribly worse very fast for the oil industry. $10 a barrel will then be the new normal, about the cost to get it out of the ground. The automobile industry will be nearly wiped out because electric cars don’t wear out. Tesla has a “forever” warranty on theirs. Charging them will be free to nearly free for most people, especially older retired people who will have time to look around for free charging stations. Think about the “stranded assets” of the oil, coal and nuclear industries and the automobile industry for all the internal combustion engine infrastructure like transmissions, driveshafts, conventional batteries, starters, alternators, the list goes on and on and on. It boggles my mind the push for these new oil pipelines when you consider that most of them won’t be able to operate long enough to pay for themselves, let alone make a return on investment. Mark my words, by 2020 millions of electric vehicles will be coming on the market and they will serve one more function that most haven’t considered. They will be storage devices for the home, able to store all that “off peak” power in the grid, almost eliminating “peaker” power plants.

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