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November 2, 2017


Following is my short response to a blog seeking comment on the crises likely to come with accelerating automation and how we are going to deal with them.

The blunt truth stripped of trade myths and political maneuvering is that automation destroys jobs (or at least jobs primarily those performed by humans). When Trump was running on “I’ll bring good-paying jobs back from China” I was trying to stem this obscuring of fact by citing time and again in my blogs a study which showed that 83% of the jobs he was talking about never left – that they were automated – and that the remaining 17% of the jobs that did “go to China” would, if returned, be of the repetitive sort subject to automation here upon their reappearance. I was trying to blunt his myth-making but to no avail as he narrowly prevailed in a swath of industrial states in our north who bought his blather and elected him.

I think transitions between jobs and a more robust safety net are essential in the perhaps near future if we are to avoid civil commotion and loss of social cohesion, but let’s be honest. Such attempts to meet the ravages of accelerating automation will need many more such initiatives as we redefine capitalism to include human welfare that will make past welfare schemes look medieval by contrast, as in, who owns the fruits of the new economy? Wall Street? How do we distribute the income and wealth resulting from automation? If the people have no wherewithal, what happens to aggregate demand in the marketplace? Can private enterprise survive social crises sure to come? Are “market economies” a thing of the past and, if so, how will a new marketplace assess risk, if any, in this brave new economic world? Will overproduction and underconsumption unless adjusted by government cause permanent deflation a la the Great Depression?

I can think of many more such questions, ones for which I have no answers at this time. I can only hope at this juncture that brilliant economists like Stiglitz and Piketty are giving some attention to the coming conundrum of how this mixture of automation and humans can work for humans. Right now I have only questions and no answers, but those smarter than I (and they are legion) may solve this oncoming riddle before its impact brings about human misery and social upheaval. I sure hope so.    GERALD       E

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