"Robot Wranglers" help lost and confused automatons (creative destruction and how the economy just keeps creating new types of occupations & professions)

See Companies Brought in Robots. Now They Need Human ‘Robot Wranglers’: Lost and confused automatons create work for people. Bots wander off ‘like a child’ and irritate workers by following them or ‘trying to get under their desk.’ by Liz Young of The WSJ. Excerpts:

"Robots of various shapes, sizes and functions are now employed doing everything from autonomously ferrying goods around warehouses to delivering food on college campuses. About 21% of warehouses used some form of robotics in 2023, up from 15% in 2018, according to research firm Interact Analysis.

But far from replacing humans entirely, companies are finding automatons need a little hand-holding to learn how to function in the real world.

[Caroline] Rutenberg, a robot technician and trainer at Amazon, is among a new class of workers responsible for corralling and managing the robots, fixing minor maintenance issues and keeping tabs on their locations. The professionals say the machines they work with tend to perform their tasks with precision but often also a little naiveté."

"Scott Samples is known as the “robot wrangler” at an appliance-manufacturing plant run by Roper, a subsidiary of GE Appliances, in LaFayette, Ga. Samples is the person factory workers call when a robot wanders off its designated path."

"The 25 robots at Roper—which come in a variety of shapes, including one that Samples says looks like “putting wheels on a pumpkin”—work on tasks such as delivering parts and materials to the assembly line and moving finished products. They are programmed to follow a digital map of the facility and to use camera vision and light detection and ranging technology to stay on course. But occasionally they stray out of bounds, where they can no longer locate themselves on the digital map, shut down and wait for help."

"When Samples gets a call about a robot wandering off, he pulls up that particular bot on his computer and looks out of the cameras and sensors attached to the device to try to figure out where it is within the 1.4 million-square-foot facility. He then goes out, manually finds the robot and guides it back inside its boundaries."

"Jaci Story says the robots can have a mind of their own. The operations lead at San Francisco-based Starship Technologies works with a fleet of robots on the University of Tennessee campus, where the white boxes on wheels roll around delivering students items from burgers and fries to coffee. The robots are outfitted with speakers that announce deliveries and play music."

"Just like with humans, the robot minders say some of their charges are less capable workers than others. At times the devices have to go on performance improvement plans to address problem behaviors. 

Roper’s Samples said he currently has a robot with an undiagnosed issue that he and the team that handles engineering maintenance work can’t figure out. The device, named Apex 2, is calling for a part replacement, but even now that the part has been replaced, it still won’t run."

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Creative Destruction

See Creative Destruction by Richard Alm and W. Michael Cox. Excerpt:

"Joseph Schumpeter
(1883–1950) coined the seemingly paradoxical term “creative destruction,” and generations of economists have adopted it as a shorthand description of the free market’s messy way of delivering progress. In Capitalism, Socialism, and Democracy (1942), the Austrian economist wrote:

The opening up of new markets, foreign or domestic, and the organizational development from the craft shop to such concerns as U.S. Steel illustrate the same process of industrial mutation—if I may use that biological term—that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism. (p. 83)

Although Schumpeter devoted a mere six-page chapter to “The Process of Creative Destruction,” in which he described capitalism as “the perennial gale of creative destruction,” it has become the centerpiece for modern thinking on how economies evolve."

But also see this link which suggests that the idea goes back even before Schumpeter to other scholars: Creative Destruction in Economics: Nietzsche, Sombart, Schumpeter by Hugo Reinert and Erik S. Reinert.

"Abstract

This paper argues that the idea of ‘creative destruction’ enters the social sciences by way of Friedrich Nietzsche. The term itself is first used by German economist Werner Sombart, who openly acknowledges the influence of Nietzsche on his own economic theory. The roots of creative destruction are traced back to Indian philosophy, from where the idea entered the German literary and philosophical tradition. Understanding the origins and evolution of this key concept in evolutionary economics helps clarifying the contrasts between today’s standard mainstream economics and the Schumpeterian and evolutionary alternative."

What’s the Right Interest Rate for the Fed Anyway?

Standard models watched by economists at the Federal Reserve and elsewhere suggest that rates should now be lower

By Justin Lahart of The WSJ. Excerpt:

"So where should rates be? There has been a lot of focus recently on the long-term neutral rate—the just-right level of rates for when inflation is at the Fed’s 2% target, and the economy is growing at just the right pace to keep it there. When thinking about where rates ought to be, economists rely on a variety of models. Many of them are riffs on the Taylor rule, put forth by Stanford’s John Taylor in 1993. The complexity of these Taylor-style models varies, but in essence, they typically look at what inflation is doing versus where the central bank wants it, how fast the economy is growing versus an assumption of how fast it ought to grow without moving inflation off target, and spit out an answer.

The Federal Reserve Bank of Atlanta has set up a “Taylor Rule Utility” webpage that provides the outputs from three Taylor-style models, each of which shows that, under reasonable assumptions, the Fed’s target rate ought to have been lower in the fourth quarter, heading lower still this quarter. The Federal Reserve Bank of Cleveland does a similar exercise across seven models. Its most recent update, in December, showed that the median “right” level for rates as of the fourth quarter was 5.1%, falling to 4.8% in the current quarter and 3.9% by year-end."

I think the neutral rate is the rate that gives us just the right amount of total or aggregate demand (AD) to be at the full-employment unemployment rate or the natural rate of unemployment. Lower interest rates make it easier for people and businesses to borrow and spend.

One definition of the natural rate of unemployment is that it is the lowest rate of unemployment compatible with price stability (which the Fed defines as an annual inflation rate of 2% or less).

This graph shows that if we keep increasing AD (either by lowering interest rates, increasing the money supply or increasing government spending), Q (real GDP) will keep increasing which lowers the unemployment rate as firms need more workers. 

But the price level (CPI) will keep increasing more and more, meaning higher and higher inflation rates.

SRAS is short run aggregate supply. QF is the full-employment GDP (real GDP). When AD goes past AD2, we get significant price increases (for various reasons, we can't stay above QF for very long-see Fed Focuses on Inflation Sentiment).

Related posts:

Fed Focuses on Inflation Sentiment (Dec. 2021)

The Fed chairman says the relationship between inflation and unemployment is gone (2019)

Unemployment Isn’t What It Used to Be: The low rate doesn’t take account of low labor-force participation. Wages are a better indication of slack (2019)
 
The Phillips curve is alive and well (unless it's dead) (2019)

Is There A Neutral Interest Rate? If So, How Much Is it? (2018)

Is The Phillips Curve Dead In Japan? Maybe not (2018)

Is The Phillips Curve Not Holding Up Well Because The Service And Goods Sectors Are Behaving Differently? (2018)

Has the Fed Flattened the Phillips Curve? (2018)

Nobody knows what the natural rate of unemployment is today (2018)

More on the natural rate of unemployment (2018)

How Central Banks Differ In Their Methods Of Calculating Inflation (2018)

Fed Officials Disagree On Threat Of Inflation (from 2009)

Fed Chair Janet Yellen: "there remains considerable slack in the economy" (from 2014)

 

E-Commerce Might Help Solve the Mystery of Low Inflation (2018)

Fed officials disagree on how much inflation the current low unemployment rate might cause  (2018)

Fed Looks for Goldilocks Path as Jobless Rate Drops    (2018)

Is the Phillips curve affected by prices that are acyclical? (2019)

What is Full Employment?  (2020)

Jobs and Inflation: The Great Trade-Off, Demystified: The relationship between inflation and unemployment is real, but far from simple (2020)

Lower Inflation Likely Requires Higher Unemployment; How High Is the Question (2022)