On November 1, 2014, Jon Evans writes on Tech Crunch:
Most jobs suck. Yours probably doesn’t–after all, you’re a member of the highly educated, cutting-edge TechCrunch demographic–but most jobs, almost by definition, are done by people coerced by the fear of not having enough money into doing work they mostly don’t want to do. We should be ecstatic about the prospect of robots doing that work for us. Shouldn’t we?
And yet everyone accepts that such a notion is terrifying. The New Yorkerwrites:
“Are robots coming for our jobs? In fact, they began stealing our jobs a long time ago […] robots are already displacing, and will continue to displace, jobs that humans would like to keep […] robots or other machines with human-like skills have appeared in service industries, too.”
(They apparently also misleadingly quoted MIT professor Erik Brynjolfsson, which is a pretty shitty thing for any publication to do, let alone The New Yorker.)
That central thesis–that technology eating jobs is a bad thing–is widely held. Brad DeLongsays: “the average human will be highly productive in the robot world of the future but that does not mean that the typical human will be well-paid.” The Registerreports: “Stop ROBOT exploitation, cry striking Foxconn workers.” Yes, that’s right: even outsourced jobs are being automated!
Meanwhile, the New York Times is writes about “the great wage slowdown of the 21st century,” citing “(at least for many workers) technological change.”
Yes, people voiced similar concerns fifty years ago, and a hundred years ago, and they were wrong. Why is this time different? Because of the profound, colossal distinction between then and now, which can be summed up in two words: Moore’s Law. We’re fifty years into a period of unchecked exponential growth. The world has never changed so fast before. And even if Moore’s Law ends tomorrow, much of its effects are only beginning to ripple out from the tech sector into the rest of the economy.
But, again, why do we want these concerns about tech eating jobs to be wrong? If technology destroys a large number of bad jobs, by being more productive than people, and also creates a smaller number of good jobs, shouldn’t that still be an unadulterated win that increases both economic productivity and human happiness? Why is it such a disaster if the old bad jobs outnumber the new good ones?
The answer, of course, is that our economies and societies are not built for an Extremistanworld in which economic production is only very weakly linked to employment numbers. Think of WhatsApp’s 55 employees and $19 billion valuation, as an illustrative extreme. The Economist, in a special report on the prospect of technology destroying jobs faster than it creates them, describes this as: “Wealth without workers, workers without wealth.”
Meanwhile, “the share of employment in middle-wage jobs has declined, while employment in high- and low-wage jobs has increased,” according to the Centre for Economic Policy Research. One potential future is apparent: first the job market is polarized into the high end and the low end, and then robots eat much of the low end.
Consider, for instance, the effect of self-driving vehicles replacing the 3.5 million truck-driving jobs in America–but consider it carefully, after taking a step back from all of your usual socioeconomic assumptions. Consider that the tedious, dangerous drudgery of truck driving is a job that few actively enjoy.
Suppose self-driving trucks let us do all that work with 3 million fewer people, while creating 2 million better jobs with twice the salary elsewhere. How have we painted ourselves into a corner where that is somehow viewed as a bad thing? Why are we so scared of a future that boasts both greater economic production, and more people with the freedom to spend their time and effort however they desire? Shouldn’t a world with more output from fewer jobs (defined as “paying people to do things they don’t really want to do”) actually be extremely desirable?
Put another way: why would it still be important to maintain full employment in a world overflowing with machine-generated wealth available to everyone?
The answer, of course, is that it wouldn’t. But how do we imagine we’ll get to that world, if not via tech eating jobs?
Maybe the real problem isn’t that robots might replace truck drivers; it’s that virtually none of the resulting economic benefits will go to the newly unemployed drivers. Maybe the real question we should be asking is: “Why do new technologies so often serve the powerful first, and everyone else as an afterthought?“
A couple of weeks ago I went for a sobering walk along the edge of The Jungle, a huge homeless camp (pictured above) barely a mile from San Jose’s City Hall, in the heart of Silicon Valley, arguably the wealthiest region of the richest nation on Earth, as cited in this MIT Technology Review piece on technology and inequality, which goes on to say:
“The anger in Northern California and elsewhere in the United States springs from an increasingly obvious reality: the rich are getting richer while many other people are struggling. It’s hard not to wonder whether Silicon Valley, rather than just exemplifying this growing inequality, is actually contributing to it […] Simply put, as we getter better at automating routine tasks, the people who benefit most are those with the expertise and creativity to use these advances. And that drives income inequality: demand for highly skilled workers rises, while workers with less education and expertise fall behind […] Of course, a diagnosis is far from a cure, and a call to improve educational opportunities is far too facile—who could argue with that?”
Indeed. If I’m right about the future, technology will destroy bad old jobs faster than it creates good new ones — and this should be a good thing, a cause for celebration. Unfortunately it won’t be, because our governments move too slowly to keep up with technology. But upheaval and poverty caused by technological unemployment will be asymptom, not a problem, and it will be futile to try to address it with either Luddite idiocy or rote calls for more education.
The real problem is far more fundamental. Our economy, as currently structured, insists that every household must have at least one member with either a job or independent wealth, and will continue to do so even as and when technology renders that demand inherently senseless. It’s a problem that will require far more sweeping solutions. Don’t blame tech for the symptoms; blame governments for their failure to address the cause.
What this article does not address is the “in your face” realization that the system is perpetuating concentrated ownership of wealth-creating, income-producing capital asset formation produced by technological invention and innovation, and, if not reformed, will continue to do so in the future, which will lead to ultimate resistance and upheaval on the part of the vast majority of citizens beat down to survival levels of subsistence.
No one should surprise, who is conscious and who has even causally observed the constant shift to non-human productive inputs in the manufacturing, distribution, and sales of products, as well as the delivery of services, that has been occurring during their lifetime. The first burst of this phenomena was the Industrial Revolution. But now we are in an age of technology sophistication that is permeating every sector of industry and our day-to-day lives.
There’s nothing new about machines replacing people, but the rate of replacement is exponential and the result is that productivity gains lead to more wealth for the OWNERS of the non-human factor of production, but for others who have always been dependent on jobs as their source of income, there has been a steady decline to poverty-level labor incomes.
What must be understood (which unfortunately is not understood by conventional economists) is that there are two independent factors of production––human or labor workers and non-human or physical productive capital––productive land, structures, machines, super-automation, robotics, digital computerized operations, etc.
Fundamentally, economic value is created through human and non-human contributions.
Also what needs to be understood is that human productivity has not advanced (our human abilities are limited by physical strength and brain power––and relatively constant), but that the productiveness of the non-human factor of production––productive capital––is the reason that private sector corporations, majority owned by the “1 percent,” are utilizing the non-human factor of production increasingly to create efficiencies and save labor costs. It is the function of technology to save labor from toil and to enable us to do things that otherwise is humanly impossible without non-human input. The critical question becomes who should own productive capital? The issue of OWNERSHIP is unbelievably overlooked by those in academia and politics, as well as by this author. Yet we live in a country founded upon private property rights.
Today, large streams of data, coupled with statistical analysis and sophisticated algorithms, are rapidly gaining importance in almost every field of science, politics, journalism, and much more. What does this mean for the future of work?
But what about China, the place where all the manufacturing jobs are supposedly going? True, China has added manufacturing jobs over the past 15 years. But now it is beginning its shift to super-robotic automation. Foxconn, which manufactures the iPhone and many other consumer electronics and is China’s largest private employer, has plans to install over a million manufacturing robots within three years. Thus, in reality off-shoring of manufacturing will eventually be replaced by human-intelligent super-robotic automation.
The pursuit for lower and lower cost production that relies on slave wage labor will eventually run out of places to chase. Eventually, “rich” countries, whose productive capital capability is owned by its citizens, will be forced to “re-shore” manufacturing capacity, and result in every-cheaper robotic manufacturing.
“The era we’re in is one in which the scope of tasks that can be automated is increasing rapidly, and in areas where we used to think those were our best skills, things that require thinking,” says David Autor, a labor economist at Massachusetts Institute of Technology.
Businesses are spending more on technology now because they spent so little during the recession. Yet total capital expenditures are still barely running ahead of replacement costs. “Most of the investment we’re seeing is simply replacing worn-out stuff,” says economist Paul Ashworth of Capital Economics.
Yet, while the problem is one that no one can no longer ignore, the solution also is one starring them in the face but they just can’t see the simplicity of it.
The fundamental challenge to be solved is how do we reinvent and redesign our economic institutions to keep pace with job destroying and devaluing technological innovation and invention so not all of the benefits of owning FUTURE productive capacity accrues to today’s wealthy 1 percent ownership class, and ownership is broadened so that EVERY American earns income through stock ownership dividends so they can afford to purchase the products and services produced by the economy.
None of this is new from a macro-economic viewpoint as productive capital is increasingly the source of the world’s economic growth. The role of physical productive capital is to do ever more of the work of producing more products and services, which produces income to its owners. Full employment is not an objective of businesses. Companies strive to keep labor input and other costs at a minimum. Private sector job creation in numbers that match the pool of people willing and able to work is constantly being eroded by physical productive capital’s ever increasing role. Over the past century there has been an ever-accelerating shift to productive capital––which reflects tectonic shifts in the technologies of production. The mixture of labor worker input and capital worker input has been rapidly changing at an exponential rate of increase for over 235 years in step with the Industrial Revolution (starting in 1776) and had even been changing long before that with man’s discovery of the first tools, but at a much slower rate. Up until the close of the nineteenth century, the United States remained a working democracy, with the production of products and services dependent on labor worker input. When the American Industrial Revolution began and subsequent technological advance amplified the productive power of non-human capital, plutocratic finance channeled its ownership into fewer and fewer hands, as we continue to witness today with government by the wealthy evidenced at all levels.
People invented tools to reduce toil, enable otherwise impossible production, create new highly automated industries, and significantly change the way in which products and services are produced from labor intensive to capital intensive––the core function of technological invention. Binary economist Louis Kelso attributed most changes in the productive capacity of the world since the beginning of the Industrial Revolution to technological improvements in our capital assets, and a relatively diminishing proportion to human labor. Capital, in Kelso’s terms, does not “enhance” labor productivity (labor’s ability to produce economic goods). In fact, the opposite is true. It makes many forms of labor unnecessary. Because of this undeniable fact, Kelso asserted that, “free-market forces no longer establish the ‘value’ of labor. Instead, the price of labor is artificially elevated by government through minimum wage legislation, overtime laws, and collective bargaining legislation or by government employment and government subsidization of private employment solely to increase consumer income.”
Furthermore, according to Kelso, productive capital is increasingly the source of the world’s economic growth and, therefore, should become the source of added property ownership incomes for all. Kelso postulated that if both labor and capital are interdependent factors of production, and if capital’s proportionate contributions are increasing relative to that of labor, then equality of opportunity and economic justice demands that the right to property (and access to the means of acquiring and possessing property) must in justice be extended to all. Yet, sadly, the American people and its leaders still pretend to believe that labor is becoming more productive.
A National Right To Capital Ownership Bill that restores the American dream should be advocated by the progressive movement, which addresses the reality of Americans facing job opportunity deterioration and devaluation due to tectonic shifts in the technologies of production.
There is a solution, which will result in double-digit economic growth and simultaneously broaden private, individual ownership so that EVERY American’s income significantly grows, providing the means to support themselves and their families with an affluent lifestyle. The Just Third Way Master Plan for America’s future is published at http://foreconomicjustice.org/?p=5797.
The solution is obvious but our leaders, academia, conventional economist and the media are oblivious to the necessity to broaden ownership in the new capital formation of the future simultaneously with the growth of the economy, which then becomes self-propelled as increasingly more Americans accumulate ownership shares and earn a new source of dividend income derived from their capital ownership in the “machines” that are replacing them or devaluing their labor value.
The solution will require the reform of the Federal Reserve Bank to create new owners of future productive capital investment in businesses simultaneously with the growth of the economy. The solution to broadening private, individual ownership of America’s future capital wealth requires that the Federal Reserve stop monetizing unproductive debt, including bailouts of banks “too big to fail” and Wall Street derivatives speculators, and begin creating an asset-backed currency that could enable every man, woman and child to establish a Capital Homestead Account or “CHA” (a super-IRA or asset tax-shelter for citizens) at their local bank to acquire a growing dividend-bearing stock portfolio to supplement their incomes from work and all other sources of income. Policies need to insert American citizens into the low or no-interest investment money loop to enable non- and undercapitalized Americans, including the working class and poor, to build wealth and become “customers with money.” The proposed Capital Homestead Act would produce this result.
Support the Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm
See the article “The Absent Conversation: Who Should Own America?” published by The Huffington Post at http://www.huffingtonpost.com/gary-reber/who-should-own-america_b_2040592.html and by OpEd News at http://www.opednews.com/articles/THE-Absent-Conversation–by-Gary-Reber-130429-498.html
Also see “The Path To Eradicating Poverty In America” at http://www.huffingtonpost.com/gary-reber/the-path-to-eradicating-p_b_3017072.html and “The Path To Sustainable Economic Growth” at http://www.huffingtonpost.com/gary-reber/sustainable-economic-growth_b_3141721.html. And also “Second Income Plan” at http://www.huffingtonpost.com/gary-reber/second-income-plan_b_3625319.html
Also see the article entitled “The Solution To America’s Economic Decline” at http://www.nationofchange.org/solution-america-s-economic-decline-1367588690 and “Education Is Critical To Our Future Societal Development” at http://www.nationofchange.org/education-critical-our-future-societal-development-1373556479. And also “Achieving The Green Economy” at http://www.nationofchange.org/achieving-green-economy-1373980790. Also see it complete with the footnotes at http://foreconomicjustice.org/?p=9082.
Also see “Financing Economic Growth With ‘FUTURE SAVINGS’: Solutions To Protect America From Economic Decline” at NationOfChange.org http://www.nationofchange.org/financing-future-economic-growth-future-savings-solutions-protect-america-economic-decline-137450624 and “The Income Solution To Slow Private Sector Job Growth” at http://www.nationofchange.org/income-solution-slow-private-sector-job-growth-1378041490.
http://techcrunch.com/2014/11/01/why-is-it-bad-for-tech-to-eat-jobs/?ncid=tcdaily
