Wednesday, January 29, 2014

Our economic future...

Our economic future...  There's a big debate amongst economists these days about the long term effects of technology – especially automation – on the economy.  This topic arises often in discussions of income inequality and high unemployment (especially with respect to low employment ratios).  The debate boils down to this: when automation replaces human workers, what happens to those workers?

Many former formerly manual jobs have already been subsumed by automation.  Many, many industrial robots are at work in factories all over the world, though they are mostly invisible to people.  I've been surprised how many people have no idea these robots exist.  But lesser examples abound.  If you'd like to see an example, take a close look inside your local McDonald's restaurant someday.  Those coffee cups are filled automatically, including sugar and cream.  The fries are lifted out of the deep fat automatically, just at the perfect time.  In fact, a typical McDonald's has several dozen automated production machines – all replacing a formerly human job.

What has economists debating this now is that we're on the cusp of a lot more such automation, and it's going to start getting a lot more visible to people.  Jobs that people tend to think of as not possible to automate are, in fact, going to be automated.  Here's one example.  Some others that seem likely: truck drivers, mail delivery, and farming – all of which have simply enormous economic efficiencies to be gained, and all of which are in the development pipeline.  Not research pipeline, mind you – engineers are working on these products right now, to be delivered within a year or two.  Some of them, especially in farming, are actually being delivered right now – there's a good chance that the last apple you ate was picked by machine, for instance.

So what do the apple-pickers do after a machine takes over their job?  One camp argues that they will all be able to find jobs such as maintaining or building the robots, after sufficient training.  Another camp basically says they're screwed; once automation takes all the jobs that don't require creativity, there will be nothing left for them to do – and there either won't be enough creative jobs, or they won't be capable of doing them.

The first position sounds unreasonably optimistic to me.  If 100,000 postal workers are displaced by Googlebots, are they all going to find work oiling and polishing their robot overlords?  The economics of that wouldn't work at all, and experience with modern technology would lead one to conclude that the reliability will more resemble that of a 2014 Toyota than a 1935 Ford.  And would those postal workers get retrained to work in a creative field?  I don't know what your experience with postal workers has been, but on average the ones I've met would have a hard time creating a ham sandwich.  I can't see them building the next great iPhone app.

So I'm a bit pessimistic about this, in the sense that I don't see all these people finding satisfying, productive employment.  And that sounds like a big problem to me – because what's the alternative?  A huge welfare state supported by a creative minority and a robot majority?  That would be a very different kind of society than the one I grew up in.  How could all those people find fulfillment and happiness?  I associate those things with useful work, but clearly not everybody does.  Are we going to build a brave new world where the majority of people are content and happy to be living off the productive work of a creative majority?  How would such a society work?  And in particular, how would a representative democracy work, when the majority are the takers?

I don't have any real answers to these questions.  They're just topics for me to worry about.  Anybody have any good answers?


  1. Tom, technology has long-since displaced most jobs of the past, such as chariot drivers, (most) dishwashers, human calculators. Yet there are far more jobs today than in the past. Prosperity comes from savings (capital) and invention (technology) spread through commerce via free enterprise. In the end like a rising tide that lifts all ships, the prosperity and benefits of technology (robots in this case) benefit most, as long as the government doesn't meddle and force companies to use people instead of robots.

  2. No argument that technology has displaced many workers in the past; this is exactly the point that's usually raised in the economists debate. The rebuttal is that this time the nature of the technology is different, in the sense that potentially all non-creative jobs will be displaced, whereas previous technological displacements were much narrower in nature - and many non-creative jobs remained. Is it different this time? I certainly don't know, but it's something that worries me...