"There is no force on earth more powerful than an idea whose time has come"
- Victor Hugo
Bots In the News:
Hopes for a year-end rally were spawned with the strong move in all the equity markets on Thursday, only to be dashed with no follow-through on the final trading day of 2022. The year proved to be the worst since the Great Recession of 2008 for all three domestic markets. The Dow fell the least with its 8.8% slide, the NASDAQ was worst, giving up almost 1/3 of its value and the S & P 500 was in the middle, turning in an 19.4% retreat. The Bot Index fell 23.8% for its worst year since 2008 as well.
The only movers during the week were centered in the lower priced stocks. The weakest performance was, again, experienced by NIO Inc., the Chinese EV maker. Even with an early Friday rally, the stock’s tally for the week was a negative 11.12%, placing the stock back into single digit territory. The other three notable movers for the week were all low-priced stocks: Accuray Inc. rose 5.56%, Oceaneering International increased 4.04% and Immersion Corp. fell 4.10%.
Labor and Technology Again:
In the American Economic Journal, Vol 15, No.1, Dr. Shmuel San of the Hebrew University of Jerusalem penned an article entitled Labor Supply and Directed Technical Change: Evidence from the Termination of the Bracero Program in 1964.
The article was interesting to us due to the coincidental appearance of another feature by our old friend Marian Tupy. In his latest issue of Human Progress, Marian quoted Dr. Stephen Davies from the Institute of Economic Affairs in London who recently wrote, “we tend to see history as just one political event after another, [though] it’s technology and ideas, not politics, that change our lives the most.” The science of technologies’ various portrayals vastly transcends the actions of politics. It was that recognition that makes the San article so timely and beguiling.
Dr. San used the political example of the closure of work visas of the Bracero Program which vastly reduced the supply of labor for U.S. farmers in 1964. His studies showed a negative labor-supply (due to politics) shock induced a sharp increase in innovation in technologies related to more affected crops. The effect was stronger for technology related to labor-intensive production tasks. Farm-value dynamics, however, indicated that, despite the positive technology reaction, the policy change was financially undesirable for farm owners. Farmers found, that to utilize the technological advancements spawned by the cessation of the Bracero Program, significant capital investments would be needed. The cheap labor available yearly, simply superseded the longer term productivity enhancement of the technological advancements.
The world of automation is constantly providing a step forward to assist the fortunes of mankind. Dr. San’s work certainly seems logical and has been duplicated many times as the immutable labor/technology relationship is on an ever-turning wheel.
Member: American Economic Association, Society of Professional Journalists, United States Press Association. Institute of Chartered Financial Analysts, Robotic Industries Association, Member IEEE.
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