On January 24, 2012 Thomas L. Friedman writes an op-ed in The New York Times entitled “Average Is Over” in which he writes:
…the reason we have such stubbornly high unemployment and sagging middle-class incomes today is largely because of the big drop in demand because of the Great Recession, but it is also because of the quantum advances in both globalization and the information technology revolution, which are more rapidly than ever replacing labor with machines or foreign workers.
In the past, workers with average skills, doing an average job, could earn an average lifestyle. But, today, average is officially over. Being average just won’t earn you what it used to. It can’t when so many more employers have so much more access to so much more above average cheap foreign labor, cheap robotics, cheap software, cheap automation and cheap genius. Therefore, everyone needs to find their extra — their unique value contribution that makes them stand out in whatever is their field of employment. Average is over.
This op-ed is followed by “Average Is Over, Part II” in which Friedman writes:
A big mismatch exists today between how U.S. C.E.O.’s look at the world and how many American politicians and parents look at the world — and it may be preventing us from taking our education challenge as seriously as we must.
For many politicians, “outsourcing” is a four-letter word because it involves jobs leaving “here” and going “there.” But for many C.E.O.’s, outsourcing is over. In today’s seamlessly connected world, there is no “out” and no “in” anymore. There is only the “good,” “better” and “best” places to get work done, and if they don’t tap into the best, most cost-efficient venue wherever that is, their competition will.
For politicians, it’s all about “made in America,” but, for C.E.O.’s, it is increasingly about “made in the world” — a world where more and more products are now imagined everywhere, designed everywhere, manufactured everywhere in global supply chains and sold everywhere. American politicians are still citizens of our states and cities, while C.E.O.’s are increasingly citizens of the world, with mixed loyalties. For politicians, all their customers are here; for C.E.O.’s, 90 percent of their new customers are abroad. The credo of the politician today is: “Why are you not hiring more people here?” The credo of the C.E.O. today is: “You only hire someone — anywhere — if you absolutely have to,” if a smarter machine, robot or computer program is not available.
Yes, this is a simplification, but the trend is accurate. The trend is that for more and more jobs, average is over. Thanks to the merger of, and advances in, globalization and the information technology revolution, every boss now has cheaper, easier access to more above-average software, automation, robotics, cheap labor and cheap genius than ever before. So just doing a job in an average way will not return an average lifestyle any longer.
There is so much that Thomas Friedman gets right in these two op-ed pieces, especially about the value of advanced education and the tectonic shifts in the technologies of production that are destroying jobs or degrading jobs in America as companies seek greater efficiencies and productivity through the use of the non-human factor of production––productive capital–– or cheap, educated labor on a global scale.
But Friedman offers no solutions. Conventional solutions point to more welfare, open or concealed, in the form of essentially make-work jobs, but with higher pay. Such solution are on a collision course with the ever-more productive non-human factor of production––productive capital as embodied in the exponential development of human-level artificial intelligence, advanced automation and robotics. Superautomation and robotics is transforming the world of manufacturing as robots become lighter, more mobile, and more flexible with better sensing, perception, decision-making, and planning and control capabilities due to advanced digital computerization. Superautomation and robotics will dramatically improve productivity and provide skills and abilities previously unique to human workers. This will effectively increase the size of the labor work force beyond that provided by human workers, no matter what the level of education attained. Thus, if we do not address the impact of technology on poverty, then millions more Americans in the short term and long term will find themselves at the poverty or below poverty level, unable to be self-suffcient but dependent on “everything from Social Security to Medicare and on through the list.”
The transition to the non-human factor of production has been occurring for decades but is now experiencing exponential development––the result of tectonic shifts in the technologies of production. As costs for computer-controlled machines become less than the cost of human workers, and the skills and productivity of the machines exceed those of human workers, then robot worker numbers will rapidly increase and enable our society to build architectural wonders, revitalize and redevelop our cities and build new cities of wonder and amazement, and the support energy, transport, and communications systems. With advanced human-level artificial intelligence, computer-controlled machines will be able to learn new knowledge and skills by simply downloading software. This means that the years of training that apply to personal human development will no longer apply to the further sophistication and operation of the machines. The result will be that productivity will soar while the need and demand for human labor will further decline.
Unfortunately, in the long term unless the vast majority of people have a substantial and viable source of income other than wages and salaries, the impact of technological innovation and invention as embodied in human-level artificial intelligence, machines, superautomation, robotics, digital computerized operations, etc will be devastating. Companies are not the answer in the long term as for job creation, as their sole interest is profitability arrived through the most cost-efficient means whatever that is and venue wherever that is.
There are ONLY two options: either Own or be Owned. The “Owned” model is what our society practices today and is expressed as monopoly capitalism (concentrated ownership) or socialism (taxpayer-supported redistributed social benefits). The “Own” model or what I and others term the Just Third Way (see http://www.cesj.org/thirdway/thirdway-intro.htm) has yet to be implemented on the scale necessary to empower every man, woman, and child to acquire private, individual ownership stakes in the future income-producing productive capital assets of the “machine age”––facilitated by the future earnings of their investments in the companies developing and employing this unprecedented economic power.
Unfortunately, the disruptive nature of exponential growth in technology and its impact on productivity––tectonically shifting production of products and services from human workers to non-human means––is ignored by the economic establishment and our political leaders.
While the rate of technological progress is directly proportional to the number and quality of the people engaged in the fields of science and engineering, economic policy is the mechanism that fuels investment and development of technological innovation and invention. This is where education is critical to our future societal development.
We have the opportunity to free economic growth from the “enslavement” of human labor and from the financial mechanisms that are based on the slavery of past savings. Technological progress though is no longer dependent on the number and quality of human workers. This fact will become obvious eventually to anyone who can think and analyze. That fact is the reality that human labor will cease to be the primary source of wealth production in the future. As a result we can expect over the long term that unemployment and underemployment will remain high indefinitely. But the difference will be that people will drop out of the labor force voluntarily because they will be able to live off their dividend earnings via their ownership portfolios. This will create swelling demand for human workers who want to continue working. And with both dividend and wage and salary incomes for everyone there will be more customers to purchase the products and services produced, which in turn will create further dividends and earnings, which will create more customers, etc.
As for education, everyone will have the opportunity to personally developed their own exceptional innate abilities and unlock their creativity, but don’t count on education alone to be the ticket to income growth and affluence. A minority of people will benefit through advanced education economically, but the majority will essentially end up as educated unemployed.
But a prosperous society is achievable because fortunately, in the near term, we can begin to grow our way out of the swelling unemployment and underemployment by increasing our investment significantly as a ratio of Gross Domestic Product (GDP), while simultaneously broadening private, individual ownership of future income-producing productive capital investments, thus initiating the process of empowering every man, woman and child to build over time a viable capital estate and reap the income generated. The key operative is BROADEN OWNERSHIP. Such investment would, in the short term, generate millions of new “real” productive jobs. The result would not only be that the GDP would dramatically grow but tax revenues from the high rate of economic growth would enable us to balance the federal budget, fully fund Social Security, Medicare, and Medicaid, provide Universal Health Care, Universal University Education, lower tax rates, and maintain a strong military, all simultaneously. Over time as labor demand subsides, the individual affluence accumulated will enable a new Renaissance in creative thinking and endeavor that will further contribute to the society’s development.
Over time and within a few decades, our “machined-powered” growth economy would produce greater wealth, and widespread private, individual ownership would assure prosperity, opportunity, and affluence for every citizen. Broadened productive capital ownership would strengthen our democracy and individuals and families would be less or non-dependent on government welfare, whether disguised or not.
The question that requires an answer is now timely before us. It was first posed by binary economist Louis Kelso in the 1950s but has never been thoroughly discussed on the national stage. Nor has there been the proper education of our citizenry that addresses what economic justice is and what ownership is. Therefore, by ignoring such issues of economic justice and ownership, our leaders are ignoring the concentration of power through ownership of productive capital, with the result of denying the 99 percenters equal opportunity to become capital owners. The question, as posed by Kelso is: “how are all individuals to be adequately productive when a tiny minority (capital owners) produce a major share and the vast majority (labor workers), a minor share of total goods and service,” and thus, “how do we get from a world in which the most productive factor—physical capital—is owned by a handful of people, to a world where the same factor is owned by a majority—and ultimately 100 percent—of the consumers, while respecting all the constitutional rights of present capital owners?”
The path to prosperity, opportunity, and economic justice can be found in the writings about the Capital Homestead Act at http://www.cesj.org/homestead/index.htm. Also, please see my article “Democratic Capitalism And Binary Economics: Solutions For A Troubled Nation and Economy” at http://foreconomicjustice.com/11/economic-justice/ or follow me on Facebook at http://www.facebook.com/pages/For-Economic-Justice/347893098576250 and http://www.facebook.com/editorgary
http://www.nytimes.com/2012/01/25/opinion/friedman-average-is-over.html?ref=opinion
http://www.nytimes.com/2012/08/08/opinion/friedman-average-is-over-part-ii-.html?_r=2&ref=columnists
