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December 21, 2014


Other experts are beginning to abandon the idea that technology is assisting people, not replacing them, and that replaced people are enabled to be more productive in new kinds of jobs. They have joined me (not an expert) in simply not believing that this is the case given the evidence to the contrary and this trend of disbelief as measured by increasing numbers is clear. Thus recently, when the University of Chicago asked a panel of leading economists about automation, 76 percent agreed that it had not historically decreased employment, but when asked about the more recent past, they were less sure. Some 33 percent said technology was a central reason that median wages had been stagnant over the past decade, 20 percent said it was not and 29 percent were unsure.

I agree that technological advance is putting people out of work, but to date I think that “the central reasons for wage stagnation” are outsourcing and corporate greed (and their devastating effects on aggregate demand in our domestic marketplace). With accelerating technological advance (especially in AI), I may soon have to add it to not only “the central reasons for wage stagnation” but as a directly causative and not correlative factor in bringing about chronic and increasing human unemployment and under-employment and all the misery and potential chaos and perhaps civil commotion such a situation can bring with it. We need to prioritize and prepare for such eventualities since this is not something yet over the horizon where we can take our time to address. It is, as Summers noted above, in operation among us today. There is an unstated risk if the politicians do not attend to these pressing matters that people will take to the streets to attend to such matters themselves. We don’t need domestic turbulence on top of our other problems in literally having to change our economic mores and folkways in how we look at sharing the wealth created by robots and AI, a turbulent exercise in and of itself.

Per Miller, not even the people who spend their days making and studying new technology say they understand the economic and societal effects of the new digital revolution, and she is right. Who could know precisely what to do at this relatively early stage of the digital revolution and who is really studying the coming tsunami of societal, economic and political changes certain to show up (if they haven’t already) as the ever new uses of digital innovation are found which displace human labor? I hope there is such research, but I am not aware of any that is being conducted. It seems sensible to me that when you see a tsunami wave coming you seek higher ground away from the beachfront of profit-making and labor suppression. One is reminded of the story of how Nero fiddled while Rome burned. Have we learned nothing from history? So far we have had only high surf, but the “big one” is definitely en route. We need preparation and we need it now. Tsunamis don’t wait.

Professor Brynjolfsson: “We’re going to enter a world in which there’s more wealth and less need to work. That should be the good news. But if we just put it on autopilot, there’s no guarantee this will work out.” Others suggest a four-day week; still others think government should help those struggling to find work. Yet others opine that we must emphasize the role of education in new technologies and in the skills that remain uniquely human, like creativity and judgment.

I am not persuaded that any or a combination of the above remedies will solve the problem given the massive unemployment I can foresee. Perhaps new ideas and proposed solutions will come to the fore as we go deeper and deeper into this displacement of human labor scenario, such as involvement in the arts and organized programs of altruism that, so far, appear to be human only (though IBM’s WATSON, its computer system that beats humans at Jeopardy, is now being taught emotional intelligence). Our response to robot and AI takeover, among other things, would seem to depend upon just what areas are susceptible to such a coup.

One thing is for certain. As Larry Summers noted: “The answer is surely not to try to stop technical change, but the answer is not to just suppose that everything’s going to be O.K. because the magic of the market will assure that’s true.” He is right. The old mantra of “the magic of the market” and “get a job, go to work” and the old Protestant ethic of “no work, no eat” dicta as used by capitalists will necessarily become an artifact of history as we try to cope with this seismic shift in how the new economy is to be structured and how we can care for billions of people world-wide who are out of work with no prospects for a job. The old “magic of the market” was and is a fiction in any event, and to pretend that it will somehow provide the means to bridge the cataclysmic changes coming to our economy (and indeed the world) is a waste of time. The structures under which such reasoning came about are crumbling, and “the magic of the market” (to the extent that it may exist at all) is on its last legs. It is or will soon be “a buggy whip” in economic history.

So where are we? I’m not sure of just where we are on this spectrum of fundamental restructuring of our economy )(and perhaps our society and even political infrastructure) at this point, but I am certain that the tsunami of change is within view thanks to our digital revolution and the uncertain changes we will have to make to accommodate the now unknown but probably drastic  ways in which, for instance, we share wealth we have not worked for, come up with new ways to tax (since income tax will have a much narrower base etc.).

It already is and will be even more interesting in the future to see how we accommodate earth-quaking change in a world where the few work and the many do not, and we need to work on that out front as the tsunami comes into shore. Luddites attacked the messenger instead of the message, but we are, I hope, smarter than that. The problem is not the result of how innovation and discovery change our world but rather how we fairly and rationally change our world to accommodate the results of how such innovation and discovery has, is and will be changing our world of economic, societal and political institutions; of how to be flexible and equitable in how we effect such changes etc.

It is a daunting task but it can be done. Naysayers who predicted the end of civilization with invention of the steam engine, the textile loom and the horseless carriage were wrong, and those who now see the end in view resulting from some of the difficulties I have outlined here are mistaken as well. We will overcome, so to speak. Only the means and pace of our survival given this new wave of innovation and discovery remain up in the air, so let’s get to work on it. Change is certain; only our response to it is not.

It is even possible that our human culture could flower into a “Golden Age” if we fashion our institutions in such a way that articificially-created wealth is shared equitably by humans all over the world who will then be freed from labor to engage in other ways to make the human adventure a more enjoyable  experience for all in a total reversal of the Luddite fears of their day.  It’s doable, so let’s go!   GERALD   E

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