Does this article make you flash back to high school and recall Vonnegut’s Player Piano?  So, facing the double threat of China and computers — what will we do all day long?   MIT’s David Autor says; “There is no reason to think that technology creates unemployment. Over the long run we find things for people to do. The harder question is, does changing technology always lead to better jobs? The answer is no.â€Â   Â
Paul Romer has demonstrated that teaching assistants can be replaced by computers. So, will professors be replaced by machines? The University of California is trying to lure professors who teach large intro classes to create online content.  If “star professors” create great “Yoda Holograms” then individual campuses could choose to offer fewer intro sections and have their students login and take the Superstar’s course.  Would this lower the demand for faculty or allow the faculty to teach more specialized classes?
Someone help me here. A few years back, the Onion had a front-page story about the replacement of the Congress of the United States by machines, which could turn out legislation much more cheaply and efficiently than the current version. Anyone remember more about the story?
The fallacy that technology and outsourcing would create better, higher paying jobs has been exposed. What it has done is accelerate the transfer of wealth to a fortunate and in some cases creative few. My long held contention is that if you have a job that is composed of tasks which can be broken into processes it can be automated. The radiologist who at one time was among the highest paid physicians since they could monopolize a local market now faces competition from radiologists from distant medical facilities including Asia, since a digital x-ray has the same clarity halfway around the world as it does in the next room. And now that we’ve digitized the x-ray, there is no reason a computer will not be able to read and diagnose the malady.
Conceivably the only jobs that are not at risk are those that require the laying on of hands, surgeons, nurses, electricians etc. Though those professions will also see down would pressure on income as additional workers select those professions. Plus a technological advancement could make a job superfluous.
Technology should create unemployment. It’s a good thing! The only question is one of how to distribute all the wonderful stuff that automation brings, and the answer is really, really, simple: equitably.
When we’re all unemployed yet lack no material resources - and that is where we should be heading - then some of us will smoke opium all day, and others will compose symphonies. In other words, we’ll have the best of all possible worlds.
Of course, if we allow some people to grab all of the wealth, instead of distributing it equitably, well, it won’t be such a nice world after all. But that’s up to us.
Why not some of each? In industry, automation reduces overall spending on labor, but shifts that spending towards better paid skilled programmers of automation. Automate delivery of content, and you’ll spend less overall on the labor that formerly delivered it, but those who can generate new content will be better paid.
The classic Baumol article on the macro implications of the fixed-labor input to some “performance” goods is, viewed in another light, an article on how many of us are to be servants. The Baumol Disease is caused by egalitarianism, not technological advance, per se.
Economists are unwarrantably fond of technology determining “marginal productivity” and, therefore, wages, and unaccountably allergic to acknowledging the bargaining that goes on.
The secular trends in the American economy, in which large gains in average productivity translate into stagnant real wages and increasing income volatility, are tied to BOTH changing technology and the growth of unopposed plutocratic power.
Changing technology (the huge, rapid gains in computing and communications, especially) have implications for
1.) labor productivity and
2.) bargaining leverage and
3.) capital investment and capital stock.
There’s a fashion among conservatives for “human capital” explanations, which focus blame on individuals for their misfortunes and distract from problems of bargaining power. Leaving that aside, for the moment, I wonder that more is not made of the capital stock implications and dynamics.
Labor productivity and income depend on access to productive capital: tools of the trade, so to speak. And, not just amorphous and intangible “human capital”, but also the existence of well-managed bureaucratic organizations and businesses, with managerial and technological resources necessary to making highly productive use of labor.
More capital = higher productivity = higher wages used to be part of our common economic intuition.
In the U.S. economy, the obsolescence of the tangible and intangible capital stock must be substracting huge chunks from the useful capital stock. And, corporate business investment rates are low, despite high profitability, particularly in the parasitic financial sector. And, public austerity means the public infrastructure investment is low, and the capital stock of public infrastructure is deteriorating rapidly.
I’d add that the nature of the computing/communication revolution is such, that, while the sunk cost portion of business investments may appear, in some cases, to be increasing — the investments made by an Intel in manufacturing plant roughly double with every four year cycle of new product and manufacturing design — the overall effect has been to greatly reduce the cost of necessary capital stock. Technological advance is tending, in the main, to drive down the capital investment necessary for labor to be hugely productive.
Getting a return on sunk cost investments requires Power — lots of market and/or political power. Otherwise, the “owners” of a sunk-cost investment get screwed in the bargain; it may be the rise of plutocratic power is partly related to this necessity of the situation.
Eb: Technology should create unemployment. It’s a good thing!
Yes it is. But getting society to adjust its ways to accommodate that fact is like trying to squeeze champagne from a stingy rock. As Eb also points out: if we allow some people to grab all of the wealth, instead of distributing it equitably, well, it won’t be such a nice world after all. That defines exactly where we are as a culture. And we have this unchewable fact to add to the nasty chaw: Most of our billionaires aren’t socially enlightened. For example the Waltons of Walmart fame. They are en toto worth 90 billion. They could give up a few billion and actually create a middle class out of the underclass that form their “associates” and still be fabulously, ludicrously rich. But they won’t. In fact any hint of their workers “unionizing” causes them to bring the boot down harder. So I see blood a-coming. There is only so much people will take. Our unenlightened billionaires will push past the breaking point and destroy their own oligarchy. That’s the way greed works. It won’t be curtailed by wisdom. It is in the end: a dumb and self-defeating original sin.
As further enforcement of this vision: Can any of your remember back in the recession of 1990, when Robert Reich said famously about the raging unemployment: Retraining for what?
And then along came the internet bubble, and the American middle class pumped billions of dollars into the stock market that was used to fund thousands of start ups and millions of new jobs…
Anybody see a new internet bubble drawing nigh to power up a new new economy? And increase employment dramatically? Anybody see a works program run by our government to employ people?
Pshaw. The powers that be are trying to step on the meager government jobs that do exist…
Sleeping Dog: if you have a job that is composed of tasks which can be broken into processes it can be automated.
This article in New Scientist is must read: Silicon supervisor gets the job done:
Gee willikers Mr. RichGuy…
More cheap piece labor creating more wealth in the hands of a few…
People working for chump change…
A boss that is silicon.
This movie cannot end well. For the unenlightened powerful or for the armed and powerless poor.
I see lots of blood ahead of us.
That’s the bad news.
The good news? The internet will allow people to know where the Waltons and the Kochs live.
So no one will be able to escape the upheavals.
That is as it should be…
The OP and comments remind me of a Wendell Berry book: “What are People For?” which, in part, is an interesting meditation on whether we control the economy, or is the tool controlling us?
“Automate delivery of content, and you’ll spend less overall on the labor that formerly delivered it, but those who can generate new content will be better paid.”
Brett Bellmore, meet Arianna Huffington.