Rise of the Robots: Technology and the Threat of a Jobless Future by Martin Ford
People who are interested in the future of technology tend to believe that its impact on jobs and the economy is, and will be, largely benign.
OK, people in ‘disrupted’ industries may suffer: those who work in factories or newspapers or as travel agents. But there’ll be exciting new jobs like Search Engine Optimisers instead. As long as technology oils the wheels of industry, economies will grow and everything will turn out fine.
It’s a convenient view because it means you can sit back and relax, whatever effect technology appears to be having. Amazon may boom while your local bookshop closes. But there are new jobs in Amazon’s ‘Fulfilment Centres’. Isn’t it just snobbery to think they’re not as good as jobs in bookshops?
The theory is getting harder to believe in the light of evidence marshalled by Martin Ford in The Rise of the Robots (2015). Ford has worked in the tech business for decades so he’s not some kind of Luddite – although his conclusions here could easily get him mistaken for that.
Ford forces together economics and technology, acknowledging the conventional wisdom about the replacement of old jobs with new, saying it was once true but ‘this time it’s different’.
Why? Well, it was only true, he says, during a particular era after the Second World War. Technology boosted productivity but wasn’t powerful enough to replace many blue collar jobs. During what Ford calls this “Goldilocks” period, the fruits of increased productivity were shared between business owners, workers and the growing middle class in developed countries.
Everything went well until 1973. But then, somehow, the link between increasing productivity and increasing compensation for workers was broken. Productivity per worker went on rising after 1973 but workers stopped getting better paid. Ford offers a convincing graph to prove it, with the productivity line an unbroken upward trajectory and the compensation line taking an unmistakeable new downward turn since 1973. A worker who earned $767 a week in 1973 would only earn $664 forty years later (with the 1973 figure adjusted to 2013 dollars).
So who is benefitting from those continuing gains in productivity? Predictably enough, it’s the filthy rich. Not only are they getting richer, but as time goes on, the inbalance is increasing: Ford quotes an American study that concluded that “an astonishing 95 percent of total income gains during the years 2009 to 2012 were hoovered up by the wealthiest 1 percent.”
All this could be just circumstantial evidence for blaming technology. Ford’s linking of the two depends on a couple of separate points: first, the richest technology companies today create huge wealth without needing substantial workforces. In real terms, General Motors at its height, in 1979, made 20 per cent less than Google did in 2012. But while Google employs just a few tens of thousand people, General Motors kept more than 800,000 in well-paid jobs. Today, says Ford, it seems unlikely that any profitable new business will be highly labour-intensive.
Second, after factory workers lost out, the much-heralded replacement of middle class jobs with technology is visibly under way. As a result, the spending power of the middle classes is being reduced, and, compounding the effect, the middle-classes may choose to save rather than spend, with a further negative impact on economies.
You need look no further than the IT industry, says Ford, to see what’s happening: where a few years ago there were armies of computer and network specialists servicing the complicated computer systems in every office, those jobs have already disappeared as systems are automated and more data is stored online.
For the users of those computers, the same fate is in store. There’s a Japanese project to write a program to pass the entrance exams into a top university, and thereafter, presumably, to be ready to take on the jobs of university graduates. Already lawyers’ jobs are starting to be automated, with law graduates turned into what seem like little more than pigeons pecking at levers in a 1950s learning experiment:
“Each lawyer sits in front of a monitor where a continuous stream of documents is displayed. Along with the document, there are two buttons: “Relevant” and “Not Relevant.” The law school graduates scan the document on the screen and click the proper button. A new document then appears. They may be expected to categorize up to eighty documents per hour.”
Whatever the particulars of when and how different kinds of jobs are replaced by machines, there’s no mistaking the direction of travel. It’s hard to dispute Ford’s conclusion that the result will be a shifting of wealth towards the owners of businesses, with less and less economic power in the hands of workers. He quotes a study that found that between 1995 and 2002, 22 million factory jobs were lost, but in the same period, manufacturing output actually rose by 30 per cent.
How can civil society survive such an onslaught? How can we avoid a sci-fi nightmare in which “the plutocracy would shut itself away in gated communities or in elite cities, perhaps guarded by autonomous military robots and drones”?
Well, there is way, says Ford. First, it means transferring the burden of taxation from income to capital. Second – and this is the hard one – it means creating a system of universal basic income, or a “citizen’s dividend” as he prefers to call it, in recognition of the fact that the rich have only been able to prosper thanks to the systems put in place by the societies in which they operate.
This isn’t such a radical view any more. Bill Gates, Warren Buffett and other philanthropists talk about “giving back to society” the wealth they’ve accumulated, and about the luck of their birth in providing the social structures and opportunities that they exploited.
But would a universal income create a nation of layabouts (the kind of life enjoyed by the fat, lazy deckchaired citizens in WALL-E)? Not necessarily, says Ford: the security it provided could be a stimulus to entrepreneurship, letting people take risks without risking everything.
There’s an urgency about Ford’s message, echoing the conventional of wisdom in tech circles that we tend to overestimate tech changes in the short term, but underestimate them in the long term. The time of overestimating may be coming to an end: it’s not as if variations on this kind of warning haven’t been heard for years. But Ford’s evidence and our own eyes point to a creeping up on us of really radical change. As he says, “the future may arrive long before we are ready.”
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