The Lesson of the Spoons

In a story beloved by economists it’s said that Milton Friedman was once visiting China when he was shocked to see that, instead of modern tractors and earth movers, thousands of workers were toiling away building a canal with shovels. He asked his host, a government bureaucrat, why more machines weren’t being used. The bureaucrat replied, “You don’t understand. This is a jobs program.” To which Milton responded, “Oh, I thought you were trying to build a canal. If it’s jobs you want, you should give these workers spoons, not shovels!”

A funny story but one I was reminded of by Greta van Susteren’s not so funny tweet.

Bear in mind that Van Susteren has 1.2 million followers and, according to Forbes, is the 94th most powerful woman in the world.

Of course, there is something odd about using advanced technology to do a job that could be done by millions of immigrants who would be quite happy for the work, but Van Susteren is also against immigration.

Is there anything to be said for banning automation in low-skilled work? Let’s be charitable and assume that there is a problem with not enough work for low-skill workers. It’s unlikely that the best way to address this problem is by banning improvements in productivity. Which sectors are to be artificially restrained and by how much? Should fast checkout workers be banned? Should we prevent customers from walking the aisles and filling their own shopping carts? Remember, self-selection of goods was also once an innovation. As Friedman pointed out, it’s all too easy to reduce productivity.

To the extent that low-skill workers can’t find work (i.e. ZMP workers) the appropriate policy is a wage subsidy as Nobelist Edmund Phelps has suggested (see also the MRU video and Oren Cass on wage subsidies). A wage subsidy is better targeted than the Luddite smashing of machines and because it doesn’t prevent productivity from growing it makes for greater wealth to support the subsidy.

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I don’t use self-checkout either - because it’s dogshit and invariably takes longer than the human cashier.

"because it’s dogshit and invariably takes longer than the human cashier."

Or it might be because you're too retarded to use it. ;-) *jk*

I know you're joking, but the self-checkouts are always a lesson in humility for me.

Me too, I always screw up and an employee has to come over and help me.

I can handle it, but they come over to help me anyway. Probably because I fit the same profile.

I use it whenever possible. It's easy to steal stuff...

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I love the self-checkout.

Just look at this chain of responses. More evidence that MR commenters come from the left-hand side of the IQ distribution. All that racism, politics 24/7, and derangement syndrome shrank your feeble brains.

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Me neither - because it seems to be designed to ensure I hurt my back.

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Am I the only one who doesn't struggle to operate a self-checkout?

No. They are easy to use.

The best advantage, no silly small talk with a clerk.

It’s like pumping your own gas, once you have it figured out waiting for service seems intolerable. I would never use a human cashier if I have the chance to use self service.

They are now very easy to use. I bought a new lawnmower using self-checkout. In and out of Home Depot on 7 minutes.

Easy for the average person. But hopelessly complicated for the MR commentariat. The same chattering nabobs that rail against Mexican or black IQ lack the intelligence to perform this basic task.

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I sometimes make small talk because I feel like it, but there's no obligation to do so. I can just not make eye contact and let this minimum wage worker preform menial labor while I read my email, or this blog. Doing it myself doesn't save time and indeed costs attention.

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No human interaction is a big plus, but my favorite is switching the language. Buy your groceries in Spanish and your building supplies in French.

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frankly, we are tired of falling for all these media hoaxes
gonna sign up for biology next week
https://www.youtube.com/watch?v=Tyr1Y8OqwiY

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It *never* makes sense to tweet about jobs lost to automation. Instead, one should dictate one's message to a human secretary, hire a team of humans to make handwritten copies of that message, and hire another team of humans to hand deliver those messages, preferably on foot, relaying the messages from one human walker to another. Think of all the jobs lost from van Susteren’s one tweet!

Thanks for your inane input BC -> BETA CUCK

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If you don't have a full cart of things, and if you're not buying alcohol or several items of produce that require looking up the codes, then self-checkout can be more efficient. Grabbing some milk and bread? Great, let's use self-checkout. But the cashiers are faster at produce than me, and it invariably adds a longish wait if you need the clerk to come check your ID for some beer, and if you have a full cart, there isn't room in the bagging area for everything and the scale goes crazy if you take bags off, so all those times I'm going to regular checkout.

Agree. Self checkout faster for a few items. Cashier faster for bigger set of items. Also: self checkout much nicer for items that could make one blush while waiting in the queue :-)

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After self checkouts were set up at my supermarket I asked the person overseeing their use how did the more frail elderly folks feel about it? She said a lot of them actually like it because it gives them a little bit of independence in their lives - something they can do for themselves.

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There's not anything at all odd about using automation to replace low-skill jobs that would be filled by immigrants. That's called having your cake (increased services) and eating it too (not diluting your national population and its culture).

The only groups I see trying to make a semi-serious attempt at not diluting their cultures are the Amish and similar groups. Everyone else -- Your children are aliens and your culture dies with you. All you can do is try to make sure the culture they end up with is better than yours.

No, most groups across the world are preserving + growing their own culture. China is ethno-nation state for the Han ethnic group and they ruthlessly oppress others, notably the Uighurs. India emphasizes their Hindu identity; they imprison non-Indian foreigners in camps and shoot to kill to discourage migrants from entering India from Bangladesh. Singapore is touted as a libertarian utopia with high rates of immigration, but it's ethnically selective immigration, and the leaders of Singapore, notably the deceased godfather of Singapore, Lee Kuan Yew, was very focused on emphasizing and developing their distinct ethnic + cultural + linguistic identity. Israel is an ethno nation state for the Jewish people: they resurrected the Hebrew language from the dead, they socially engineered higher Jewish birth rates, and they built a blood and soil nation state in the vision of Emma Lazarus, that welcomes the tired, poor, huddled masses, and the "wretched refuse" of the world, as long as they are Jewish. I know many children of Mexican immigrants in the US some of whom spend their lives focused on tribal interests, making sure their kids go to schools in the US that forbid English and celebrate Mexican identity. And of course, across Africa, and the Middle East and Russia, there is focus on tribal interest and identity. Of course, the very poor, don't have the luxury to care about identity, they are more concerned with basic survival.

In the west, places like the US and Europe, we see what Eric Kaufmann calls "asymmetrical multiculturalism", where the classic majority identites are expected to forfeit their identity, celebrating that would be taboo, and in some ways die off as a distinct culture, while other groups encouraged to celebrate, express, and develop their ethnic + cultural + linguistic + racial + ancestral identities as loudly as possible.

Predictably there is some backlash.

In China dad may have heard the tale of the Monkey God when a child as a part of an oral tradition. Today his child watches a movie about the Monkey God that's full of bad CGI on a hand held device. Your examples all seem to be countries undergoing rapid cultural change.

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China is not an ethno-state, you've already lost the argument right at the beginning. Singapore's immigration process is a points based system similar to what you find in Canada. But then again you probably think Montreal is an ethno-state too.

Are you seriously positing that China is not an ethno-state?

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Our culture, pre-Simson/Mazzoli, was the best in the world.

Almost the entire globe, except for the poorest sh*thole countries, adopted our:
1. Music, especially the music of our beautiful black people.
2. Our dress. Traditional garb is out, western is in. Blue jeans were invented in the US and the inability to manufacture them brought down the USSR.
3. Our language. English is the defacto international language. We stole it from GB.
4. Our movies, television,etc. Basically Hollywood. India has their own version Bollywood.
5. The smartest countries copy our national pastime - baseball. The Japanese are pretty smart. The Carribean is catching on.

We are just the best and we will crush multiculturalism. Multiethnic is good, but multicultural doesn't work.

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I'm not sure I really see anything contradictory about not wanting to use automation to replace automation and not wanting those jobs to go to a bajillion immigrants from Guatemala. This was not the strongest Alex T post I've ever read.

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Whenever there is talk of increasing the minimum wage there is talk of increasing or creating a wage subsidy. Tax the middle class but not the wealthy to pay for it.

How about a wealth tax to pay for the wage subsidy so that Tyson Foods , Koch Foods or WalMart will not have to raise wages.

Seems like you missed the point of this post.

Evidently you didn't read the links to the post or you would have understood the comment.

Sad.

And, Anonymous, please read the last paragraph of Alex's---really, really slowly--and, from that alone, you will understand my comment.

I understood your comment the first time; it displayed a certain brand of obtuseness that made me question whether you understood the OP.

You display a certain brand of, I don't know what, but you manage to step slowly backward out of the excrement you laid down for yourself. Anyone can read what you said. Next time read the articles and the post. It was YOU who did not understand.

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Amusingly, particularly in light of the fact that I would not follow a twitter link in the first place, it appears that the tweet from the 94th most powerful woman in the world' is not actually all that interesting.

Or she is not familiar with the Aldi/Lidl/DM Markt/etc model, where cashiers are also the people who stock the shelves - that is, the cash register may not have anyone at it for several minutes at a stretch. Or, if the lines are too long, all the people stocking shelves work at the register. Of course, in the Aldi/Lidl context, the store manager is also a stocker or at a cash register, so there may be a few differences between the German and American model.

Self-checkout would likely have zero role in such major retail chains, even if a place like Real (the company that took over all of Walmart's money losing store locations) is using such stations in at least a few stores. But then, as Walmart likely learned after losing an estimated billion dollars, German stores already know quite a bit about using their employees as cost effectively as possible. Which just might explain why they have such a minimal interest in self-checkout in the first place.

It's amazing how those stores work. The high cost of labor in Germany drove that innovation before self checkout was technically feasible.

I wish American stores required a coin to unlock carts like Aldi. It's magical how that cleans the lot of shopping carts. I guess Greta would be opposed b/c it might cost a cart retriever a job.

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I appreciate Aldi/Lidl's effective low cost business model. However, their checkout lines are the worst. Now I know why.

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"cash register may not have anyone at it for several minutes at a stretch"

You say that like its a good thing.

My time is more valuable than saving a nickel on something.

Excellent, one less person in line :)

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Interestingly, Trader Joe's actually adds more employees to asisst with the checkout process.

It is great that different stores will compete on different Margins. There is a mix that is preferred by some consumers rather than others.

What I hate is that people fool themselves into thinking that not using that register is better for the cashier's or somehow supports low-skilled wages.

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Self-checkout at the super market is an odd technology to complain about as displacing jobs. I view self-checkout as a convenience for shoppers who wish to purchase only a few items and don't want to wait in line behind shoppers with cartfulls of items. The supermarket likely prefers the regular checkout so the customers can interact with the smiling and friendly cashiers, who I know by name at the market where I regularly shop. Customer loyalty is built by human connection, not by a connection with a machine. But I will forego the human connection if I have but a few items to purchase; it's quick and easy, and I appreciate the convenience. Ms. Van Susteren's problem is that she doesn't seem to know people very well. [An aside, voicemail, email, texts, etc. have replaced much of human interaction in our business and personal lives. It hurts business for sure, and likely hurts friendships too. Like the self-checkout, these alternatives to human interaction are a convenience. But if you have more than a few items to purchase (talk about), human interaction is the better way to go. It builds human capital.]

Supermarkets win my loyalty with good products, good prices, convenient locations, and especially not making me waste time waiting in line to check out. Especially behind chatty cashiers and customers who know each other and just have to catch up while the checkout process proceeds at a glacial pace. It's extra fun when the customer pulls out a fist-full of coupons and then their checkbook. Or rather it used to be. Self-checkout stations have all but eliminated that experience -- a godsend. If the inventor of the self-checkout was here right now, I'd give him* a big hug.

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*Guessed it was a guy. I just checked and I was right -- thanks Howard! You did much more for the good of mankind with that invention than in your gig as an ER-doc given that your replacement in the ER was probably just as good but never would have invented the self-checkout station.

"chatty cashiers and customers who know each other and just have to catch up"

I thought I was the only one to notice that.

Hi and thanks is all the talk I want with a clerk.

This may depend on where you live, in particular whether it's in a large metro area. I knew someone who lived in Los Angeles for most of her life, as did her daughter. But when the daughter went to grad school at a small college town in the midwest, she underwent culture shock at the grocery store: the person in front of her was chatting and chatting with the cashier (I suspect that they were strangers not even acquaintances) while the former Angeleno fumed and fumed -- enough with the chitchat, let's get a move on! There's one of the differences between small town life and big city life right there.

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It's not clear to me that self checks reduce employment, as opposed to allowing stores to make more sales since they're less likely to lose the customer who walks in, sees long checkout lines, and turns around and leaves (that's been me on occasion). At Home Depot last weekend the contractor checkout by lumber was open (it almost always is), a regular checkout was open, and the self checks were. That's three cashiers, counting the one minding the self checks. I only rarely saw Home Depot with more than three checkouts only in the pre-self check days.

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rayward: "I like people, and as evidence, I interact with people when it's convenient for me. Van Susteren wants to interact with people more than I do; I think that means she doesn't like people."

This is incoherent even by his usual standards.

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Self Checkout isn't a machine taking someones job, it's the customer doing the job of the cashier for the company.
And instead of us paying the wages of the employees, we're paying to subsidise the increase in thefts which come as a result.
Very marginally more profit for the company, more free goods for bad actors, and negative returns for everyone else in society. Isn't automation great!

> Self Checkout isn't a machine taking someones job, it's the customer doing the job of the cashier for the company.
This.

Self checkout totally sucks. Only an idiot like Tabarrock would use this as an example of good automation.

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It was the next logical step. When I went to the grocery with my mother, the clerk unloaded the cart, knew and entered the prices of every item on a manual cash register, and bagged the groceries as s/he worked. Mom wrote a check.

Now I unload the cart, present my frequent-shopper card, bag the groceries in the cloth bags I have brought with me and use my credit card to pay on a machine that tells me how much to pay and affirms that my payment is legit. The cashier slides my items across a scanner and waits patiently while I finish my work.

I bought a 92-cent candy bar at a drugstore last week, and paid with one dollar and two cents -- I try to get rid of pennies and not to collect them. The cashier had to wait for the cash register to tell her how much change to give me.

I don't know if retail cashiers are paid more or less than when I was a child, but the job requires neither basic intelligence nor skill.

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Obviously, there would be no self-service checkout without the tech to enable it (barcode scanner, scale, credit-card reader, touch-screen for item lookups, weight-sensitive bagging carousel).

But most of this technology is also used in the conventional checkout.

Of course. But technology has reduced the need for skilled personnel all the same. Are you old enough to remember clerks who keyed in prices on the register at high speeds with one hand without looking? Customers could never compete with that. But they can pass items over a bar-code reader just about as well as a cashier.

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Yep, and that cost savings is passed on to me. If it takes me 2 minutes to unload my cart, swipe a few items, and bag my stuff, I think I can handle that for much cheaper prices.

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Alex - are you sure you're a libertarian? She's talking about her own individual choice, not restricting anyone else's choice.

One can be a libertarian and still express an opinion on another's choice. I'm not sure why that's so difficult. After all, he's not talking about restricting Greta's silly choice to stand in line.

Libertarians can rightly criticize consumption aimed at producing an economic or social effect, as a matter of efficacy (those carbon offsets won't do what you want them to!) and policy (your real goal seems to be to limit the choices of others).

But consider - Alex's colleague Tyler could cover his walls with very efficient and cheap machine made prints and textiles, but instead chooses to go to Mexico and buy handmade versions of these things. Which he freely admits he does at least in part to support the artisans whose livelihood depends on uneconomical, low tech and inefficient methods.

Seems to me a libertarian would see Greta and Tyler as doing the same thing - spending their own time and money to support their morally choices. Supporting a checker or an artist ought to indistinguishable to libertarians, as long it involves only free will and doesn't reduce the choices of others.

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Yeah, and it was very uncharitable to claim she is "anti-immigrantion."

She is against open borders, not immigrantion.

This is what the article linked to says...

"On her blog, Van Susteren said the U.S. should "seal" the border it shares with Mexico, offer some legal protections to illegal immigrants without making them citizens, and deport foreign visitors who overstay their visas. She also said current illegal immigrants who want citizenship would have to leave the country before they can apply for it."

This seems like a resonable position to have and it doesn't make someone "anti-immigration" to have it.

I've always though libertarians had a very odd position on the immigration politics of america. On on hand they claim the rule of law and being a nation of laws is important for cooperation. But they also have not problem picking and choosing those laws it wants to abide by (property rights should be honored to allow for bigoted preferences, but if someone wants to skirt the law to enter the country than those laws should be ignored).

Alex is a well-documented open-borders nutjob. And therefore, if you disagree with him, he will call you "anti-immigrant."

It's just what lefties do.

It is the lefties (usually white) who don''t live near the unskilled labor that floods in when you have lax enforcment of immigration laws. White people who argue for open borders almost never live in mixed neighboorhoods and only travel to them for the food. They get the benefits of being publicallly woke yet never pay any of the social costs.

Hmmmm... I always thought it was the opposite: support for immigration is higher in places with lots of immigrants (e.g., New York, California), and lower in places with very few (e.g., Idaho, Montana)...

It comes down to if you choose to see them, or if you have to see them. I was raised in a poor area and within 10 years it completely changed. It is not that illegals are dirty and uncivilized (although they did seem to be that way) but when the neighborhood becomes highly mixed, the community breaks down, and trash starts to pile up, riff raff starts to loiter, etc. The white liberals can choose to see them by either hiring them to clean or to go into one of their restaurants.

It is classic NIMBY.

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Alex is intellectually incoherent. He wants open borders and wage subsidies. Lesson of Puerto RicoIs thatIf you have open borders approximately everybody will move to the United States. So Alex wants to have weight subsidiesFor 1 billion people, conservatively.

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It's especially odd for an economist to look at a situation and see only the benefits, but ignore the costs. I'm OK with immigration, but it's not cheap to pay for the schooling and healthcare they consume, when their taxes will not come close to pay for it.

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This argument makes a lot of sense.

When will we improve productivity in the higher education sector by eliminating tenure?

When we don't care about independent scholarship and grade inflati... never mind.

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As soon as we eliminate contracts between private parties, which is what tenure is. Or if you care about your state's public university, you should vote for someone in favor of eliminating tenure there.

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Discussed thoroughly by Moldbug in "Sam Altman is not a Blithering Idiot" (it's long, search for 'Solution D'). He starts off on Solution D with the same Friedman anecdote. Selected quotes:

While this is meant to illustrate the supposed idiocy of Solution D, it actually illustrates the design space. The purpose of Solution D is to lose as little money as possible, while maintaining the human quality of your assets and preventing them from degenerating into Hardcore Pawn customers, 10th St. zombies or other revolting parodies of the human condition. Digging ditches with appropriate hand tools is a simple and almost ennobling, in its own small way, form of manual labor which is ideally suited to the condition of most humans, delicate aristocrats perhaps excepted. (It is possible to construct makework for delicate aristocrats, but it takes more imagination.) Digging ditches with spoons is a degrading punishment [...]
In general, makework programs are restricted to strong governments. Ours is a large government, but by no means a strong one. FDR's was a strong one. When a strong government wants to "create jobs," it just hires people. If the product is useless and the work is just makework, it says so. ...
Oddly, makework, a superior solution by any standard, is a softer political target than good old Solution B welfare. Makework has to be defended by lies, whereas welfare is indefensible. The defenders of welfare are therefore forced into the brazen fortress of property - they and their clients must assert that they are entitled to these emoluments, which is of course the one thing they ain't. But, having established adverse possession, they make a pretty good go of retaining it.
Politically, the ideal way to apply Solution D is to make the actual work as separate as possible from the source of funding. This brings us back to AGDP and "growth." Politically, the best way to fund and operate makework is to make it indistinguishable from the rest of the economy.

He discusses tax-and-spend, borrow-and-spend, inflate-and-spend, and the

absolutely the best way to inflate AGDP [:] increase private-sector capitalization, generating a wealth effect. Moreover, there are two ways to do this, since there are two forms of capital asset: debt and equity. Debt is dangerous because it has to be paid back. More on this in a moment. So we have a second-best way to inflate AGDP, convincing the private sector to borrow more; and a first-best way, making the stock market and real estate go up.
The latter is solution D-1, the absolute bestest way (from a political perspective) to create jobs, and the mainstay of the Greenspan-Bernanke era of American prosperity. In short, our actual reality. The former is solution D-2, as practiced in the great nation of China.

Look up the original for Solution F.

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The original version of the spoon story, which I recall reading in The Reader's Digest 10 million years ago, was approximately:

"A union boss visits a construction site and berates the foreman: 'Why are you digging that trench with excavators? I have a dozen guys who need jobs and could do it with shovels!' The foreman says, 'So could two hundred guys with spoons.'"

The actual original:

William Aberhart, politician from Alberta, Canada, on in a September 13, 1935 speech to the Canadian Club in Toronto:

One of the school graduates came to me to pay his respects to the school; he told me he was in charge of helping on one of the Dominion air ports. I said to him, “I suppose you use modern machinery in your air ports?”
“No, sir.”
“Why?”
“Well,” he said, “if we used modern machinery in the establishment of air ports there would be very little need of men to help us to do it, for they would do it so rapidly and easily that there would be no need of man labour. We give them picks and shovels and put them out to do it in the old-fashioned way.”
I smiled and said to him: “It would probably be just as well to give them spoons and forks; it would take them still longer to do it.”
It seemed to me so ridiculous; we let modern machinery rust at the road side or air port and make those men bend their backs in order to give them the purchasing power to buy the necessities of life, and hardly that.

Well, in the US we implicitly or explicitly cut taxes so we did not need to pay for operating machinery, or steel mills that produce replacement and added machines, shrinking the number of airports providing scheduled air service, while over using a portion of the airports existing in 1980.

Air traffic has increased by orders of magnitude since 1980, but the number of commercial airports is smaller, even after a number of massively expensive pork barrel government projects have build replacements for a portion of old airports. Eg, Denver International.

Building more airports would put lots of construction equipment, plus steel mills to good use. But creating GDP growth costs too much and kills GDP growth and kills jobs.

The free market wants less GDP, fewer jobs.

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Seems like Milton Friedman is the Mark Twain of economics. He gets attributed for everything.

And rumours of his death are greatly exaggerated!

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Wage subsidies have always struck me as a no-brainer. Eliminate (most?) welfare and the minimum wage, then subsidize income on a smoothly sliding scale to ensure that all workers earn a living wage. What are the arguments against wage subsidies?

The reason progressives turned against the EITC is they now argue that it's corporate welfare. Offering EITC payments to Walmart workers is tantamount to subsidizing Walmart's low wages. The new goodness is that businesses that can't be profitable paying 'living wages' don't deserve to exist. Unspoken but implied -- people who aren't productive enough to earn a living wage should be on welfare or SSDI. Q: What about the disabled, the retired, or the inexperienced, not-yet-productive teen looking for a first job? A: Acceptable collateral damage.

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If you provide a wage subsidy and no minimum wage, employers will eat a lot of the benefit, because they will still hire based on the market price for labor, and then let the government pick up some of the tab. The market price for labor will go up a little bit, but not nearly as much as the size of the subsidy. Prices should go down because of subsidized labor, but this isn't targeted toward low-income people (which is the goal of the policy).

So, if you want a subsidy to ensure that everyone gets a living wage, you either have to make the subsidy really high, or couple it with rules about minimum wage, or both. This can easily be an anti-productivity measure akin to banning automation, since employers get (artificially) very cheap labor, and will use cheap, low-productivity workers to do everything rather than automate.

Wage subsidies may be better than existing welfare programs, but I don't think they are a no-brainer.

"So, if you want a subsidy to ensure that everyone gets a living wage"

But you *don't* want to do that. Many workers earning low wages are not from poor households or fully self-supporting. Some are retirees. Some are high-school or college students still living with (or dependent upon) their parents. Some are married to higher-earning spouses and work to have something to do. None of these low-wage workers would (or should) qualify for wage subsidies. And full-time Walmart workers without families to support would also not qualify. We're not trying to boost all wages to some predetermined, uniform 'living' wage level, we're trying to boost the incomes of low-income households.

Presumably the wage subsidy would be limited to workers who are self supporting adults and under retirement age.

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Negative income tax schemes would help somewhat, but the big problem is that there are many people out there who are worse than useless at just about any job. The marginally sane, the irredeemably clumsy, the careless, the completely illiterate, and especially the antisocial- many of these are people you would pay to just stay away from your work. There is a natural experiment for this, in which foreign firms in Saudi Arabia are required to hire on a quota of Saudi citizens to get Saudi government contacts. The Saudi citizens are often lacking in education and work-ethic, so the companies just tell them to play video games in a room and ask them to not touch anything. It is not worth the time of the company's skilled workers to engage with the Saudi citizens and try to extract some shred of productivity from them.

Kind of makes you wonder what role these people have in society, or how they even evolved from hunter-gatherers and subsistence farmers in the first place, but then you remember that they are welcomed at the voting booth with open arms.

Most of the quality-control mechanisms of those times have been removed.

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Starvation enforces discipline. Or death. The more humane solutions are complex.

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Interesting. Is there some estimate of the working poor who could be productive at some price versus those you would pay to stay away from any place of business?

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As others have mentioned, the benefits can be skewed in favor of corporations

To me, the simple solution is to pair it with a UBI to counter any negative effects. Sometimes negative income taxes work like this as well.

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94th most powerful woman in the world?

It's all very scientific, I assure you.

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Context matters. Many years ago I recall a development anthropologist working in a rurak road-building project in which the idea was to boost the local economy by using more labor-intensive techniques. In order to do so she had to learn all the engineering aspects as it was beyond the Western engineers working with the main contractor.

In the context of this post, would a wage subsidy (going to non-community workers) have been better? Money for more petroleum imports? Money for transporting more heavy equipment?

As always there is a difference between and intelligent.

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I think referring to self-checkout lines as automation is facetious. Self checkout is the grocer offloading the work of checking out onto you customer. In other words, the customer literally does the cashier's job, so the tweet is far less dumb than you suggest. Evidently, they don't always save money either, since my local grocer removed them a few years back.

I'd be quite happy if checkout were automatic. But I will not use a self-checkout, as there is not sufficient compensation for my labor. The local Walmart seems intent to change that calculus though by permanently understaffing their cashiers in order to make their customers miserable and force more people through self checkout. Under these circumstances, my stance becomes less about efficiency and more about moral outrage. Needless to say, I avoid that store if I can help it, especially since it contains several additional features seemingly designed to make all within miserable.

I'd ask if you have considered that the money you save on lowered prices from Walmart paying less labor costs for "understaffed" cashiers is in fact your payment for checking yourself out but since no one compensated you to think it though I'm assuming you didn't.

Indeed I have considered that! The difference is, I enjoy thinking. I enjoy writing comments. I do not enjoy scanning groceries, and thus require more compensation.

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"as there is not sufficient compensation for my labor"

That's just a question of how you value your time. As Alex points out, an earlier generation would say you're doing the grocer's work by picking groceries off the shelf.

And an even earlier generation would say you're doing your cook's work by making your own dinner. Are you adequately compensated for your labor when you cook for yourself?

Cooking can be fun, scanning shit by yourself is not.
I question the assumption that self-checkouts are good automation and not just complete pieces of shit that never work and always require you to call a store employee anyway when the scanner inevitably fucks up.

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But I will not use a self-checkout, as there is not sufficient compensation for my labor.

How much compensation do you need to do self-checkout rather than standing in line doing nothing for the same, or maybe greater, amount of time?

I have strong distaste for self-checkout, but am also relatively poor. 5-10% off my groceries would probably do it. This is almost certainly not worth their while though.

If the lines are very long relative to self checkout, I can be coerced to self checkout, but then I am unlikely to use that store again.

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It depends how much stuff you have in your cart. Self-checkouts seem to be efficient when you only have a few items, and they can fit in 1-2 bags. If you're going to have 5 or more bags, it's probably better to use a regular lane.
I do notice that grocery stores have moved towards making the self-checks more "express lane" oriented. The people with full carts use the regular lanes and then can help put the bags back in the cart to speed things up. (And make sure the bread doesn't get crushed)

I totally agree, self checkout is great but not for large shopping trips.

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As you would expect, if you click through to Greta's article, you find out that she is against ILLEGAL immigration only.

And that makes Alex a useless dope.

Not to answer for Alex, but if you said something like "I support free speech, but only if it's carefully controlled by the government," it would be reasonable for him to reply that you don't really support free speech.

Most of us aren't absolutist libertarians, though, and instead recognize that there is a place for some level of law in an orderly society.

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Libertarians are not anarchists. They do recognize limitations on free speech for libel and 'yelling fire in a movie house'

No argument with either point... but to elaborate:

First, plenty of libertarians would prefer to leave speech unregulated, and use torts to address injuries that result from being trampled by false shouts of "fire." (An anarchist would reject this approach.)

Second, it is one thing to say "I support immigration but would deny entry to people who are sworn enemies of the United States" -- roughly equivalent to the crowded theatre situation -- and quite another to say "I support immigration but have no problem with the government writing 1000 pages of regulation to control it." (If you think I'm exaggerating, take a look at the State Department's Foreign Affairs Manual.)

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Wow, Ricardo is an idiot.

Let it be known that if you dare to draw a distinction between things legal and illegal -- for instance, shooting someone who is raping your wife versus some Bernie Bro mass-murdering Republicans trying to play softball -- Ricardo says that you are simply adhering to distinctions "carefully controlled by the government" and it would be "reasonable" to debate their equivalence.

Up your ass, boy.

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I'd view much of what is getting automated as semi-skilled work. If automation lowers prices, improves service (including elsewhere in the store) or quality, then its a good. Consider three stores:
My local Kroger: has installed a dozen self checkouts at the expense of the regular lines. the checkout machines often are balky and the scanners squirrelly, because there's one person to keep them clean (at a regular checkout line that's the clerks action between customers). They reduced staff, and now close one entrance at 6PM because they don't have staff in that area. So now all traffic is funneled through the same doors as exiting customers. The staff, being reduced, is hard to find for help. So we don't go to Kroger now really.
Home Depot: Installed scanners as well, but kept 3/4 of the former lines. Seems to have kept staffing, but moved those former staff off to the floor as well to help customers. this is a good, net improvement in services.
Fresh Market: no scanners. fast service, slight price difference. where I do my grocery shopping now.
the point is: just because you CAN automate something doesn't mean you MUST or SHOULD even if it replaces "low skill". Because even though those workers have low skills as others define it, they're often very good at this ONE THING....which is a good for others.

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Australia: Supermarkets are trying to cut back on the cash accepting automatic tellers and switch to ones that only operate on cards but frugal people keep resisting because once you swipe your card too many times the banks start hitting you with fees. Now you'd think this would be vulnerable to a bank defecting and offering to let people swipe for free but banks don't want sensible swipers as customers. They want the profligate ones because they can probably stick them will all sorts of fees.

>once you swipe your card too many times the banks start hitting you with fees.

That is insane, you should switch banks to one of the majority of banks that do not do that.

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When you have 1 billion people and kill worthless baby girls, you have to channel all that toxic masculinity so it’s not channeled into overthrowing you.

We were told the same thing by our guide when we saw them working on a road without modern machines - the workers are told they won’t have a job if they use machines.

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If there isn't enough work for low wage workers you REMOVE the minimum wage and wage subsidies! Oh my goodness.

Do your solution is to let people starve to death? OK, but you migh get some push back.

Wait...min wage cut = more jobs. People that didn't have jobs before get them. That's bad?

Nice sentiment wont turn an antelope into a predator. You can accept reality and make the most of it. Or not.

The issue is that the jobs do not pay enough to allow the employee to be self-supporting. And yes that is a problem, and a erioys form of inefficiency and instability (a rational market would accept as a minimal price the inherent cost of the supplier providing a good or sevice)

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In this instance the goods being purchased are not the only product aspect. So too is the interaction with another human being. For many individuals such as myself who no longer have gainful employment, often communication with cashiers is the only real contact with other human beings which takes places in the course of the day. The only way a full range of automation will remain beneficial for all concerned, is alongside a broad recognition of the forms of time based product which people value. Sometimes these values are greater than what physical products can provide. Automation needs to work alongside ordinary people to support what they have to offer to others, especially in terms of time based experience. Daron Acemoglu put it well in a recent post concerning automation when he wrote "The conceit is that we have little to learn from ordinary people and the adaptations they have developed within different social contexts."
https://www.project-syndicate.org/commentary/big-tech-high-modernist-disaster-by-daron-acemoglu-2019-08

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Point of note: ALDI does not have self-checkout lanes. The store is organized such that one must pass through a checkout lane in order to get to the exit. Doors will not open both ways - you have to go in the entry, go through the store and go through a checkout to get to the exit. Checkout lanes are blocked off when not in use. I assume this is intended to reduce theft, either at the self checkout or due to people walking out of the store through checkout lanes with goods. So it's possible that the self-checkouts don't actually save money compared to an organization scheme where the checkers are effectively guarding against theft.

At least that Aldis I have been to, you don't have to go through a checkout, just pass by one to get out if you don't buy anything
The space is wide enough between checkouts you can walk by anyone standing in line.

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> To the extent that low-skill workers can’t find work (i.e. ZMP workers) the appropriate policy is a wage subsidy

What am I missing? What good is a "wage subsidy" to people who "can't find work?"

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Greta Van Sustern's remark against automation is absurd. Tabarrok retort is right, but it's such an easy target.

In Tabarrok's telling, it's specifically immigrants who are eager for the checkout jobs. This seems like propaganda.

MR ran a more recent article saying that self-checkout make people feel comfortable stealing. This seems a stronger argument against the self-checkout lanes.

As a consumer, I'm really happy with curbside pickup and delivery options which have gotten much better in recent years. The one exception is produce: you can often get better quality of produce that you want by picking it yourself.

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If you want to increase retail employment perhaps you should buy lots of stuff and then return it.

Or at least "accidentally" knock a few jars of spaghetti sauce off the shelf to create clean-up work. Or at least leave them teetering on the edge.

Of course, if digging holes with shovels is good then filling them with shovels after they've been dug must be twice as good. Can't we all get rich by taking in one another's laundry?

Personally my fave is train them to be massage therapists. IMO, society could use a surplus of massage therapists.

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Automated checkers are sustainability in action. They increase the volume a store can handle thus creating more jobs in every other part of the store. This maximizes the use of all the materials used in creating the store and all the energy required to run it. It reduces land foot print as well, and it increases the population density of the area a store can serve.

Inefficient use of land, materials and labor always creates more jobs.

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Do people avoid self-service gas pumps too? Or are (mostly female) cashier jobs > (mostly male) station attendant jobs.

Once upon a time a lot of people did avoid self services pumps. My step-mother did until her dying day. Two states still can self srvice gas. However most places it can be very hard to find attended gas pumps these days so we don't have much choice.

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When Milton Friedman went to China their nominal per capita GDP was $184. They were lucky to have shovels.

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Might be an idea for MR to launch its own series of "graphic novels" to illustrate economics.

With this thread I'd see an issue dedicated to "EFFICIENCY MANIA!" An academic fiction, it could illustrate the career of efficiency prophet F. W. Taylor and show how human and humane his approaches to efficiency played out in the career of his earnest disciple R. S. McNamara. (In deference to a more exact science like physics, we could dub this account "the Standard Model".)

A non-standard, innovative account of modern supermarket check-outs might have maximized efficiency already (decades ago by now) by equipping display shelves with their own "swiping" mechanism so that items are scanned as soon as they're picked off the shelf (or else each cart comes with its own "scanning app" activated only when items land and remain in the cart).

--but because "efficiency" transmogrifies into "convenience" already, I suspect the hues and shades in the four-color printing of this graphic account will only bleed severely.

Zamyatin, anyone?

Graphic Novels? We already have Bryan Caplan racing to the bottom there....

https://marginalrevolution.com/marginalrevolution/2019/04/open-borders-the-science-and-ethics-of-immigration.html

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Self-checkouts push risk onto the consumer. If the trained checkout person makes a mistake, oh well.
If you make a mistake, they call the police on you for shoplifting. Wal-mart in particular is very aggressive about this and will try to ring you up for shoplifting if (for example) two items stick together and only one gets scanned.
Their incentive is to reduce cost: They short-staff their cashiers, hire “security” at minimum wage, and offload the enforcement to the local police.
My incentive is to avoid Wally World if at all possible, and to use actual cashiers at all times.

"If you make a mistake, they call the police on you for shoplifting. "

??? if you put two boxes of KD on the scale and scanned only one, the machine warns you almost instantly and won't continue until you correct the problem. How can you possibly unintentionally put stuff in the bag?

I guess you never had the weighing function of the self checkout glitch on you or give you a weird result. Normally it does complain, but like any screening device, it throws false negatives and false positives from time to time, like “unexpected item in bagging area” even when you scan correctly.

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A wage subsidy seems like the most 'natural', minimal intervention needed to deal with the ZMPWs. Is there scope for, let's not say a jobs program, but rather "stacking the deck". Basically, put up a blanket 10% or 15% tariff to bias production slightly toward domestic labor, dial back immigration (at all skill levels) to allow the labor market to find equilibrium at a higher, more historically normal labor share of GDP. I'd hope there'd also be scope for burying power lines, that seems labor intensive, but honestly I just want the power lines buried and am using this as cover.

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This post is what today considered the work of a "thinker", a "public intellectual". Take a deep breath everyone. At least Cohen has the virtue of being a hypocrite. Tabarrok is a plain mechanical fanatic. There's nothing but straw man here.

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"A wage subsidy is better targeted than the Luddite smashing of machines and because it doesn’t prevent productivity from growing it makes for greater wealth to support the subsidy."

This is certainly fine, when it happens. And now with 3.7 percent unemployment, things look pretty good. But this isn't to say that the wage subsidy has always been there, or quickly effective, especially in the case of regional downturns.

Don't be mad that it's hosted at HuffPo, but here is a nice animation of unemployment rate by county, 1990-2013.

Some secondary program or programs are needed to smooth things like that out.

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there is a problem with not enough work for low-skill workers.

Can you please stop using this euphemism? The issue isn't a lack of skills or a lack of education. At its root the issue is a lack of cognitive ability. 33 million of our fellow Americans have an IQ below 80.

plenty of people with IQ <=80 work. A few (television personalities, reality stars, and of course failsons) make a lot.

Even the Army cutoff is 85. And that’s for support roles and digging ditches.

Combat is closer to 100.

So we’re talking about people that can swing a mop and not much else below 80. This is dumbest 6.7% of the population. A large percentage of these are disabled and have comorbid cognitive disabilities. A cash register would be a terrifying complication to them. Operating heavy construction equipment isn’t even remotely possible.

For reference:

Honduras average IQ is 81.
El Salvador is 80.
Afghanistan is 84.
Han Chinese is 105.

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The right needs to be really careful about trashing the ordinary person as a part of long term growth and progress, the left has already been doing this a long long long time. Danger ahead.

All I can think of, from the left, is higher minimum wage. Stronger unions? This trashes people?

The left loves unions but hates the kind of people that actually belong to unions.

When you *say* that, doesn't it raise just a touch of cognitive dissonance?

They want to help the ones they "hate?"

I agree; searching for intellectual consistency on the left is a fool's errand.

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No, they want to help the cronies who run the organizations full of people they hate.

Assuming evil motives, as your first, last, and middle answer, doesn't seem super strong to me.

But then it has been a mainstay argument for a certain pessimistic type that there are no altruists in this world, and every single one is virtue signalling (at best apparently, or scamming the rubes at worst).

What did they say about the grinch? A heart two sizes too small?

Probably closer to what they say about forty-year-old liberals.

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No, over the course of my lifetime it became more and more difficult to retain challenging and meaningful work, as this became assigned to people with college degrees. I had only three years college. I also had little luck offering piano lessons to school students afterward. Many on the left have become comfortable about people with no college degree being left out of society.

I'd think that "many on the left" wouild be all about the community jobs programs. In fact that was their go-to in the Great Recession, and the right chided them at trying to find "shovel ready" work for average people.

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'course the other question is who even are the conservatives these days?

"John Bolton promises Britain will be ‘front of the trade queue’ after Brexit"

Trade terms given out like candy to political allies?

Cultural allies, or more precisely the mother of this nation, from whom we received the vast majority of our cultural and legal tradition and from which the founding stock of this nation and still many millions of Americans today can call their ancestral homeland. Bit besides that, why shouldn't we leverage the purchasing power of our economy for political ends?

It's a funny time to reject free market capitalism, that's all.

And that's what I'm asking. If the Republicans are *picking winners* in business and trade, who even is conservative anymore?

Trump is a populist, there are populists in his administration, news at 11.

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The Republicans have not been conservative for some time. As to who is, I would point to some of the people who get dismissed by our cultural overlords as white whateverists.

There might be a few levels to this self-own that you missed.

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Anonymous is arguing that trading felt with the UK is anti-free trade. He's one of the trolls who regularly tries to derail discussion here with nonsense of this sort.

I'm a free marketeer. I believe you should buy your felt wherever you like.

I just don't know why John Bolton would be involved.

That's just because you're an idiot.

Poor Milton Freedman, rolling in his grave.

You are "free to choose," but the state must choose first who is "front of the trade queue."

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Economists like to say that one should not take a small practical step to achieve a goal; rather one should always focus on a comprehensive solution, no matter how impractical. So if you want service workers to be better off, don’t patronize their services.
Endorse the ideas of Nobelist Edmund Phelps instead. Or if you want to reduce CO2 emissions, don’t take a baby step like avoiding transatlantic air travel. Instead, persuade the world to fall back in love with nuclear power.

"Economists like to say that one should not take a small practical step to achieve a goal." And the name of this blog is?

Thank you Ricardo! A million times. Thank you!!

The comments on today’s posts had saddened me but you have shown there is hope.

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I took a walk early as it will be scorching hot later.

I spoke to a neighbor who had just helped the guys doing foundation prep next door when the track fell off their backhoe. He nodded in that direction and across the way at the 3-story house a-building.

Neighborhood bids fair to become a sub-enclave for the wealthy, we were thinking of moving but best to hold for now: our main chance to make some mostly-unearned dough.

"Those guys work so hard."

Indeed they do, I replied.

"There's plenty of work for those that want it," he said. He did not need to elaborate; the undercurrent of such remarks here is always the teeming hordes living under the overpasses, along the roads among the trees, in the greenbelt.

As I walked home, I tried out other responses: Might not be that easy for a gringo or black guy to break into an all-Hispanic work crew. Might be we've grown too soft from having turned this work over to others, at least in parts of the country. Might be that the American guys who could do this work are out making good money working on wells in the Permian.

Then I came home and read about a lady who disappeared after giving her newborn to her cousin, who then disappeared; and then the authorities declared the baby kidnapped, and then the baby was returned because perhaps the cousin thought the better of dealing with it. Meanwhile the mother and father of the child have both themselves disappeared after creating what I can only think of as a government baby.

Then I read a story about a baby who overdosed on the heroin her "caregiver" left lying around.

And then I read this, about further subsidizing "low-skill workers who can't find work."

That's hilarious - making them dig with spoons! - when clearly all you want them to do is procreate.

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The more unproductive the worker, the smaller the shovel. Give me the toothpick.

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Perhaps what the Chinese were doing in the name of generating jobs is not efficient but then eventually this country grew to become an economic powerhouse of which even the U.S is scared. Maybe they knew what they what they were doing?

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I like cheaper prices so I use self checkout, eat at fast casual restaurants, pump my own gas, and use drive through car washes. .

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ZMP workers? How the heck can you really get ZMP workers?

On a practical level, you can always use another bag carrier. On a higher level , I'd quite like to have my own personal herald to carry my personal standard about announce my arrival in declamatory style. Or even just liking every single social media post I ever make.

Economists have no imagination.

The existence of ZMP workers is needed to strawman certain arguments with the goal of policy working against said strawmen. It also justifies the positions of certain people/groups because they obviously aren't like these ZMP people. It's the intellectual class's equivalent of welfare queens.

Funny thing is, Australia avoided having a recession during the Global Financial Crisis and for some reason these ZMP workers didn't appear. However, at the time, the US seemed to be full of them. It's funny how they appear where companies want to lay off a lot of workers.

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"To the extent that low-skill workers can’t find work (i.e. ZMP workers) the appropriate policy is a wage subsidy as..."

How is this different than digging ditches with spoons???

Any job that does not pay the cost of working does not need to be done because the demand curve does not call for allocating workers to do those jobs.

Workers have fixed plus variable costs, which can and have been forced down. If living in your parents basement, eating their food, going to work requires an income greater than the variable cost of buying a car, plus insuring it, then paying for fuels, etc. Plus the parents will start taxing the income to fund their welfare system of housing and food.

If the mmarket wage, ie demand for labor is so low the wage income will not cover the cost of the car to get to the job, the market is saying "this person is best allocated to playing video games in his parents basement".

Alex argues the government should distorts the market because he's offended that the market has allocated a young adult, perhaps a former econ student of his, to playing video games in his parent's basement.

The wage subsidy is simply making business NOT AUTOMATE because the government will subsidize a worker using spoons instead of a backhoe.

Buying capital assets incurs big risks, while using Alex's govermment subsidies, the business simply uses pure variable cost labor which can be dumped back on full government welfare if demand goes down, which debt service, taxes on automation capital is fixed and constant.

Of course, businesses always blame government when they have too few customers getting lots of cash put in their pockers every two weeks.

Businesses always seem to expect someone else to put lots of money in a bigger pool of customers, never seeing themselves as the agent of "wealth redistribution" that drives consumer spending growth. Having been taught since Milton Friedman, that government should ensure a minimum consumer spending level with a negative income tax, or other wage subsidies.

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I think we need to question the assumption that it's our job to find low-skilled workers work. This presumes that they are incapable of doing so themselves, and establishes perverse incentives for them to not find work for themselves.

The reality is that low-skilled workers are remarkably adaptable, as history shows. There's always something that someone needs done, and is willing to pay someone else to do rather than do it themselves. We call it the "gig economy" now, but the idea isn't new; it was a common way of life in the Middle Ages. The thing about low-skilled work is that it doesn't require a long time to learn, and therefore one can more readily switch jobs. Ask any high school class what their summer jobs over the past few years were and you'll get a variety of answers--because it's so easy to switch. Contrast that with, say, a master carpenter, who is pretty much locked into carpentry unless he's willing to make a huge investment in education.

Give these people some credit for being thinking beings, and they'll likely act like thinking beings (see Dirty Jobs--the entire run--for ample evidence of this). Low-skilled workers will find new jobs that require few skills, or will acquire skills.

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It's a good thing she's the 94th most powerful. If she were in the 93rd or 95th spot matters would be so very different.

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"Should we prevent customers from walking the aisles and filling their own shopping carts?"

Well, I can't pump my own gas in Oregon.

Look upstream. The cucks of MR can't even bag their own groceries.

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I won't use self-checkouts for a different reason. Those machines nearly always insist on micromanaging where you place objects, and will stop responding when those orders aren't obeyed. And I'm tall, so telling me to put heavy items in a bagging area 18 inches from the floor -- well, it's not going to happen.

I have yet to hear of any chain's management even acknowledging the existence of problems like this, much less trying to do anything about them.

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The book about the US rowing team in the 1936 Olympics, "The Boys in the Boat", notes as an aside that Hitler decreed his Olympic Stadium would be constructed by hand as much as possible, even when machinery could do the job quicker and easier. For the same reason cited in the "Spoons" story.

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At my local grocery store, the self checkout stands have a line the length of the human checkout lines. Since clerks are more skilled at scanning and coding vegetables than shoppers, they are faster over all.

I'd like the Amazot go style self checkout better. But even though I live in Seattle, those stores aren't on my way, so I still haven't been.

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