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Musings Report #13 3-28-15 The Tsunami of Efficiencies and Job Losses Triggered by Self-Driving Vehicles
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For those who are new to the Musings reports: they are basically a glimpse into my notebook,the unfiltered swamp where I organize future themes, sort through the dozens of stories and links submitted by readers, refine my own research and start connecting dots which appear later in the blog or in my books. As always, I hope the Musings spark new appraisals and insights. Thank you for supporting the site and for inviting me into your circle of correspondents.
The Tsunami of Efficiencies and Job Losses Triggered by Self-Driving Vehicles
Long-time correspondent G.F.B. recently recounted some of the economy-changing consequences of self-driving vehicles (a.k.a. driverless cars) becoming commonplace.
Most people are aware this technology is rapidly becoming mainstream, but few expected it to advance so quickly. The key of course is the low cost of the necessary components: cameras, sensors, memory and software. All of these components are falling in cost from already-low levels.
The cost of servo-motors cannot decline quite as dramatically, but given the cost of a new auto/truck is close to $30,000, adding a few motors and links is not going to add much percentage-wise to the vehicles' total cost.
This technology is easily scalable. Once the software controls are field-tested, the costs of producing the technology will drop once it has been embedded in the industry's robotic assembly lines.
Most people who have read about self-driving vehicles are aware that taxi drivers will be a doomed profession once the technology becomes ubiquitous. But G.F.B. reeled off a number of other job categories that will no longer be in demand:
1. since accidents basically disappear once all vehicles are self-driving, there will be no need for auto insurance or auto-body shops, because fender-benders will be a thing of the past. The opportunities for insurance fraud will also vanish along with insurance.
I would anticipate that the only accidents that do occur will resut from "vintage vehicles" still driven by humans. These may be eventually be banned or limited as a health hazard to everyone else on the road. Drivers may have to install "over-ride" auto-controls that take over once the human driver makes an error.
2. Uber and other peer-to-peer human-driven taxi services will also vanish.
3. Since accidents will vanish, and vehicles will maintain safe distances on the roadways and only park in legal zones, there will be no need for traffic enforcement by police, highway patrols, etc., nor any need for meter maids. All these jobs will lose their reason to exist.
4. Once accidents decline to near-zero (akin to deaths from air travel per passenger mile), the costs resulting from 30,000 annual vehicular deaths diminish to near-zero, as do the costs of treating 100,000+ accident victims for trauma annually. The cost savings (and jobs lost) will be immense.
I will add a fourth job-and-profit destroying result:
4. Privately owned (and horrendously costly) vehicles that sit in the garage or parking lot 95% of the time will no longer be needed, as the number of vehicles needed to personally transport people will plummet. a Relatively small number of vehicles that operate efficiently (50+% of the time on the road instead of 5% or less) can replace tens of millions of inefficient and wasteful-of-resources privately owned vehicles.
5. Elderly people who are no longer safe drivers need not sacrifice their mobility when they give up driving.
6. The absurdly high rates of accidents and fatalities resulting from teenage drivers will vanish--driving will no longer be a skill that has any value, other than a hobby relegated to special tracks, much like moto-cross and racing today.
Self-driving vehicles offer a quantum leap in safety and efficient deployment of resources. That they will also destroy entire industries and job categories for which there is no replacement. That is the problem that I address in my next book.
Summary of the Blog This Past Week
Complacency Reigns Supreme--Nothing Can Possibly Go Wrong, Right? 3/28/15
Will Cash Always Be Trash, Or Will It One Day Be King? 3/27/15
What Will End the 34-Year US Treasury Bond Bull Market? 3/26/15
The Tried-and-True Blueprint for Raising Taxes 3/25/15
Orwell and Kafka Do America: How the Government Steals Your Money--"Legally," Of Course 3/24/15
Who Left the Crash Window Open? 3/23/15
Best Thing That Happened To Me This Week
I saw pianist Yuja Wang perform Shostakovich's Piano Concerto #1 (San Francisco Symphony). She clearly enjoys performing and is playful, despite her global reputation for artistry and technical skill. Rather than bang out a power chord in the trumpet solo, she stood up, turned around and plopped her "piku" (Manadarin for derriere) on the keys. I doubt any of us had ever seen that particular bit of virtuosity....
Market Musings: More on Complacency and Risk
Here is a chart of the put-call ratio for equities: CPCE. This ratio has spike up to levels that indicate a bottom is in--despite the fact that the S&P 500 has barely registered a decline.
The CPCE at this level typically triggers a "buy the dip." But as I discuss in the blog entry for 3/28/15, measures of volatility have barely budged, suggesting extreme complacency. So which is right--the CPCE or the VXX/VIX?
The market will provide the answer: if there is a rally but it stalls below previous highs, that will be negative longer term. If the Monday morning rally fizzles, that willbe negative short-term.
Here is a chart of the US dollar, which finally staged a long-awaited reversal/retrace. It is slowly setting up a base here for another leg higher, but the MACD indicator needs to bottom and then cross bullishly before any buy signal can be issued.
From Left Field
Speaking a Second Language May Change How You See the World (via Lew G.) -- does my smattering of Japanese and French count?
Skills in Flux (via Joel M.)
Karl Popper observed that there are clock problems and cloud problems. Clock problems can be divided into parts, but cloud problems are indivisible emergent systems. A culture problem is a cloud, so is a personality, an era and a social environment.
Since it is easier to think deductively, most people try to turn cloud problems into clock problems, but a few people are able to look at a complex situation, grasp the gist and clarify it by naming what is going on.
History Suggests OPEC's Days Could Be Numbered: Could lower oil prices be the end of OPEC? (via Joel M.)
The Place Where China Began Its One-Child Policy Is Dying -- and jobs are dying faster than people, in China as in everywhere else...
David Graeber on the Utopia of Rules: Why Deregulation is Actually Expanding Bureaucracy
BIKE CAMPERS ARE GIVING NOMADS A NEW WAY TO TRAVEL -- now just find some safe routes to bike on...
Smutty meets sacred: Funeral strippers make a comeback in China -- not as irreverent as it may sound at first blush...
News from Japan: Robot Dogs Are Getting Funerals (via G.F.B.) -- the future of pets? No kitty litter necessary...
The goal of the Norwegian penal system is to get inmates out of it -- depends on the crime and the criminal, but some good ideas for some classes of prisoners...
The Shut-In Economy: In the new world of on-demand everything, you’re either pampered, isolated royalty — or you’re a 21st century servant. -- the New Feudal Economy....
Don't believe the hype, the 'sharing economy' masks a failing economy -- not failing, just resurgently Feudal...
After the Kodak Moment (via G.F.B.) (5:30 min video on the demise of Kodak and the effects on its home city.
Some cities are still more unequal than others -- SF top 5% earns $423K/household -- now I feel really poor...
This San Francisco home 'in a deteriorative state' just sold for $1.2 million -- bubble will never pop, right?
"But what is happiness except the simple harmony between a man and the life he leads?" Albert Camus
Thanks for reading--
charles |
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