Structural Unemployment Followup: Why I am not a Luddite

My structural unemployment post generated a surprising amount of interest, but I think my point got buried by my lead.  Here it is:
I don't really think we'll ever see massive structural unemployment.

I think that people who are really worried about this miss the key point that makes massive automation possible to begin with: it's much much cheaper than people.  If the means of production are hilariously cheap, the goods themselves are going to be hilariously cheap.  In a wholly automated world, the share of income necessary to ensure a decent standard of living is going to be itty-bitty-tiny.

Other things that keep me from going Luddite:

1. Entertainment:  Celebrity is a huge part of our entertainment industry, and you pretty much need a person in order to get that kind of cult following.  Even if robots can make better music, you can't sleep with them after a show.  Likewise, it's kind of hard to obsess over the day to day social lives of disembodied machine spirits.  Plus, even if we do hit the singularity, a machine intelligence is going to have a profoundly different experience from your typical meatbag, and I suspect that will show up as differences in our art and culture.  Also, just a side note, I have seen absolutely no evidence to discount the belief that human beings would gladly have 100% of their waking hours taken up with various forms of entertainment.  Filling that time could make a lot of jobs.
2. Self Enhancement:  I don't really think people are going to just ignore the possibility of making themselves a lot sweeter with technology.  Genetic engineering, biomedical augmentation, and all sorts of undreamed-of technical muckery are likely to show up in the not-so-distant future and make the smartest humans a lot smarter, the strongest humans a lot stronger &c.  This mostly speaks against Reid's points in the comments regarding machines getting strictly better than people.
3. Scarcity (all gone):  We normally call technological progress "productivity gain" for a reason - the average worker can produce quite a lot more.  In our hypothetical, we basically have infinite productivity (it takes, on average, zero people to make a product).  I think the technical term for this is a post-scarcity economy.  Read the references to hear (at length) about what people think of that.
4. Redistribution: As Demosthenes pointed out, and Jared Bernstein corroborates the wealthiest few people have taken the majority of recent productivity gains.  Right now we're still pretty tolerant of that, but I can imagine some serious Marx-style revolutions if the trend continues deep into double digit unemployment.

Internet Digest: the things that are interesting in my news feed

Rather than pretending to come up with original content today, I'll just link you to all the things I read and vaguely cared about this morning.

This post on unemployment and education level was interesting, but I wish it had a graduate degree line.  Might help inform some of our earlier discussions about the goodness/badness of grad school.

The Japanese regulate the darndest things.

Apparently Paul Krugman's is the right blog to read.

Here, we use Paul Krugman, a New York Times columnist, as an example to show how our PVS system works.

From a random sample of his columns and television appearances, we tallied 17 testable predictions. Krugman was awarded one point if he either predicted an event would happen and that event took place, or if he predicted an event not happening and that event ultimately did not take place. When Krugman made a prediction and the opposite outcome occurred, we subtracted one point from his total. Hedged predictions did not receive any points.

Of the 17 predictions, there were 15 instances where Krugman made a correct prediction and only one instance where he made an incorrect prediction. With the single hedged prediction included, Krugman’s final tally was +14. We took the final tally (14) and divided that by the total number of testable predictions made (17), which we then multiplied by ten. Krugman’s final score was 8.235#.

All in all the internet has given me a very validating morning.