The Robotalisation - a theory of a new economic revolution
In the late 18th century our economy has changed, modern machines were rolled out, the division of labour was founded and the people started to work in big factories where they were specialised on different work steps. We called this process industrialization and it changed the way we worked and lived in many ways. Now, nearly 300 years later, we are facing a new revolution which sadly hasn’t got a name yet, so I fell so free to call it “robotalisation” temporary.
I want to introduce you to this post with a law of the famous computer scientist Gordon Moore which says that computer systems are doubling their performance every 18 months, so if we keep on doubling our computer performance at this rate we could theoretically be able to create humanoid artificial intelligence within the coming 30 - 50 years. That’s philosophically speaking - but it’s a fact that there are already dozens of wise folks in many universities and companies today who are doing research on artificial intelligence and new robotic technologies.
But what happens if the artificial intelligence of the machines is developed so far that it could replace the humans? A famous economist once called this situation a paradox and explained this way: if somebody in a cinema stands up he has an advantage because he sees better; but if everybody stands up everybody sees worse. So if one businessman replaces his workers by machines, he will surely have an advantage, but if everybody does it, everybody will have a disadvantage because the businessmen can’t sell their products anymore or rather the people don’t have the money to buy the products because they’re unemployed. The shear between the poor and the rich people would separate enormously and our economic system would not work anymore.
That would be the worst case. But as the old Chinese philosophy yin yang once told us that every shadow also has a sun, there is an enormous potential in this technology, a potential which could not just change our economy but could change the way we live on this earth and how we treat each other and our planet. Theoretically, we got the chance to create a world where everybody has access to all tangible values. A world without poverty, ecological destruction and wars. A world where people are free to decide what to do with their lives. But that’s just a dream, fact is that we have to find a new economic system, a system which is based on brain work and intellectual property.
Also we should not ignore this process because there are already thousands of industrial robots worldwide working in factories at the same assembly lines where the industrial revolution began 200 years ago and where humans worked 50 years ago. So in my opinion the robotalisation has already started by now. After the assembly line workers many jobs of the service sector will follow geriatric nurses, cashiers, charwoman… - all jobs which could possibly be replaced by robots within the next decades.
The positive aspects of a recession
As Joseph Schumpeter passionately argued in his 1942 book Capitalism, Socialism and Democracy, recessions are a necessary evil in capitalist societies. Well, there are some arguments, that back up this theory. Although the word recession strikes fear into the hearts of people, recessions heal the economy from unrealistic developments and creates opportunities for investors. In the long run it is just a periodic downturn in the economic cycle and for some good reasons it seams.
Effects on the economy
Recessions correct economic imbalances and helps the economy to get back to a healthy, realistic, and sustainable rate of growth. The “job” of a recession is to clean the “fat” out of the system, mop up excess, and pave the way for the next expansion. However, there are always bankrupts, but in a recession the weak companies get put out of business and the strong ones are forced to optimize their business models and come out with better products. This brings job losses which are freed up to be efficiently used somewhere else in a flexible market. Recessions also eliminate these sorts of unsustainable bubbles like the technology bubble in the late 90s or the actual housing crisis. Of course, it hurts to lose a good paid job and suffer from financial loss, but it is necessary for our economy to become healthy once again.
The Stock market drops
Stocks markets go down in recessions, but as stated in one of my previous articles, Search for opportunities in crises, there are great opportunities in stock market declines. During periods of mass panic on the market all stocks go down for a while, because people like to panic somehow, I don’t know why. The important thing is, both good and bad companies go down. This means, that you can get high quality companies at a low price and with good long-term perspectives. That’s the time to position yourself to profit from these companies and catch the opportunity while it is there.
In fact, I even know a few investment guys, who are really cheered up and looked forward to the upcoming recession because of new investment chances.
Personal finance
According to a report by CNN, I found on moneysocket.com, the average American owes $10,000 in credit card debt annually. If people will ever recognise this misbehaviour, it maybe will happen during a recession. Although, I don’t believe people are easy to change, I think if suffering from financial loss, unemployment and hard times, maybe they start to think about there personal finances and learn something from it.
As we know from the past, a recession lasts for about 10 months, so good times will be back. Nevertheless, they are necessary and you will experience a few recessions in your life, so better be prepared. The important thing is not to panic and learn from crises. In fact, recessions can make you better and more skilled after all, just like they do with our economy on a regular basis.
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