In every era of technological advancement, there has been an accompanying chorus of doom and gloom. The advent of the printing press in the 15th century was met with fear of information overload and moral decay. Trithemius of Sponheim, a German Benedictine abbot and scholar, wrote in his work “In Praise of Scribes” (1492): “The word written on parchment will last a thousand years… The most you can expect a book of paper to survive is two hundred years. Yet there are many who think they can entrust their works to the flimsy leaves of paper.”
The industrial revolution of the 18th and 19th centuries sparked panic about machines replacing human labor. Ned Ludd, the mythical leader of the Luddite movement, is said to have inspired the following rallying cry: “Machines were, it may be said, the weapon employed by the capitalists to quell the revolt of specialized labor.”
The digital revolution at the end of the 20th century brought concerns about privacy and the death of personal interaction. Renowned author and critic Neil Postman wrote in his book “Technopoly: The Surrender of Culture to Technology” (1992): “The uncontrolled growth of technology destroys the vital sources of our humanity. It creates a culture without a moral foundation. It undermines certain mental processes and social relations that make human life worth living.”
Historically, apprehensions surrounding each technological leap have been revealed as somewhat myopic, as humanity has not only adapted to but also prospered amidst these transformations. This is not to dismiss the validity of these concerns or to suggest that they were entirely misguided. Rather, it underscores the resilience and adaptability of humans in the face of change, which, on balance, has led to a future that surpasses the past in many respects. This assertion can be substantiated by posing a simple yet profound question: Given your knowledge of past challenges such as disease without modern medicine, limited access to information, and labor-intensive lifestyles, would you choose to live in a bygone era or in the present day? The answer, for most, underscores the benefits that technological progress has brought despite initial fears and resistance.
Yet, in “ Rise of The Robots,” Martin Ford argues that the current era of artificial intelligence and automation is fundamentally different. He posits that this time, the fear is not only justified, but also perhaps underestimated.
Impact of Automation on Jobs and Economy
The information presented discusses the rise of automation and its potential impact on the job market and economy. It highlights a significant lack of job creation in the first decade of the twenty-first century and the subsequent increase in income inequality. The argument is made that machines are no longer mere tools for enhancing worker productivity; they are increasingly taking on the role of workers themselves, blurring the distinction between labor and capital.
The rapid advancement of technology, exemplified by the development of self-driving cars, is noted, along with the potential stress it may place on the economy and society. The traditional advice given to workers and students is questioned, as it may prove ineffective in light of these changes, potentially leading many individuals to struggle in finding stable employment despite their education and skills. This could have negative consequences for individuals, society, and the overall economy. Additionally, it is acknowledged that technology is not the sole driver of future developments, as it will interact with other challenges such as an aging population, climate change, and resource depletion.
Rapid innovation has the potential to alleviate environmental strain, but the assumptions surrounding this idea are uncertain. For instance, the introduction of motion-controlled video games revolutionized the gaming industry and prompted competitors to develop their own motion-detecting devices. Microsoft’s Kinect, using advanced machine vision technology, eliminated the need for a controller and allowed players to interact with the game console through gestures and movement. The Kinect’s affordability made sophisticated machine vision accessible to consumers. In the field of robotics, specialized machines like Industrial Perception’s robot and Rethink Robotics’ Baxter have emerged. Baxter, a lightweight humanoid robot, can be easily trained for various repetitive tasks in manufacturing and has the advantage of operating safely alongside humans.
The availability of standardized software and hardware building blocks, similar to the explosion of application software in personal computers and mobile devices, is expected to drive innovation in robotics for commercial, industrial, and consumer applications. The decreasing costs of hardware components will further contribute to the proliferation of robots. The textile industry in the United States experienced a decline in employment due to outsourcing, but automation technology has led to a resurgence in production, with efficient automation systems rivaling offshore workers in cost-effectiveness.
The introduction of labor-saving innovations in the manufacturing sector has a mixed impact on employment. While factories using robots may not create many manufacturing jobs directly, they drive increased employment in related areas like suppliers and transportation. Robots like Baxter can eliminate routine tasks while making US manufacturing more competitive with low-wage countries. Rising offshore labor costs, such as in China, also contribute to a trend of reshoring, with many companies considering bringing factories back to the United States. However, the overall impact on the job market is expected to be marginal, as manufacturing jobs currently account for less than 10 percent of total employment in the US. In developing countries like China, where manufacturing employment is more concentrated, advancing technology has already led to a significant loss of jobs.
Automation is likely to accelerate in China, with companies like Foxconn and Delta Electronics investing in robots for their factories. The artificially low cost of capital in China incentivizes investment in expensive automation, even when it may not make business sense. Designing flexible robots that can keep up with rapid product lifecycles is a challenge for the Chinese electronics industry. Automation strategies have also been implemented in other industries, such as the Kura sushi restaurant chain in Japan, where robots make sushi and conveyor belts replace waiters. Touch screen ordering systems are also being adopted by fast-food chains like McDonald’s.
Increased automation in the industry will lead to a domino effect, as major players strive to gain advantages and remain competitive. In the retail sector, automation and robotics will disrupt employment as brick-and-mortar stores seek to adapt. Manufacturing advancements in physical dexterity and visual recognition will enable retail automation, such as robots stocking shelves and improved self-service checkout systems. Cloud robotics will drive progress in building more capable robots, but concerns about security arise, particularly regarding hacking or cyber attacks on centralized machine intelligence systems. Agricultural robots are gaining traction, especially in countries with aging workforces or limited access to low-wage labor. The report “Ad Hoc Committee on the Triple Revolution” predicted the rise of automation, stating that it would lead to an economy where machines require minimal human cooperation for potentially unlimited output.
The potential consequences of automation include massive unemployment, soaring inequality, and a decline in consumer demand due to reduced purchasing power. The concept of an automated economy, as depicted in Kurt Vonnegut’s novel “Player Piano,” describes a society where machines do most of the work, leading to a sense of meaninglessness and a bleak future for the majority of the population. Automated trading algorithms have become dominant in stock market trades, contributing to the “flash crash” of 2010. Financialization, influenced by accelerating information technology, has both positive and cautionary aspects, with the potential for innovative uses that may not benefit society as a whole. The decline of labor unions has shifted the balance of power, impacting the negotiating power of workers and the distribution of productivity growth. Information technology remains the most influential force shaping the future, and as technology advances, more jobs, including nonroutine ones, may be susceptible to automation. The polarization of the job market, with low-wage jobs being replaced by robots and self-service technologies, and higher-skill occupations threatened by intelligent algorithms, is expected to expand.
A study conducted by the University of Oxford suggests that nearly half of total US employment could be vulnerable to automation within the next two decades. However, the potential transformative impact of technology on the job market and the need for fundamental changes to the economic system and social contract are often overlooked or relegated to the fringes of public discourse. While human behavior and market psychology aspects of the economy remain largely unchanged, the impact of advancing technology should not be underestimated. Technological progress has historically defied preconceived notions, such as the ability of human flight achieved through powered flight. Technology continues to advance in various fields, including energy, with new techniques and computing capabilities aiding oil exploration and extraction.
The exponential growth of computational power, driven by Moore’s Law and the microprocessor, has revolutionized the ability to perform computations and manipulate information. However, the replication and scalability of intelligence through machines and software pose challenges to the concept of comparative advantage and opportunity cost. The ability to clone workers and replicate knowledge and experience has the potential to redefine the relationship between humans and machines, making computers viable substitutes rather than mere productivity-enhancing tools. While the internet and the new information economy offer opportunities, they also tend to result in winner-take-all distributions of income. Digital markets often concentrate power in a few online distribution hubs, leading to the elimination of numerous jobs in industries like journalism and retail. The income from online activities follows an unequal distribution, with many jobs on the “long tail” offering minimal income. As digital technology transforms industries, primary sources of income are likely to disappear, potentially forcing people into informal economies reminiscent of third-world nations.
Young adults who are drawn to the freedom of the informal economy will soon realize its limitations when it comes to sustaining a home, raising a family, or planning for retirement. The erosion of the solid middle-class population is becoming evident, particularly in the United States. Techno-optimists, who tend to have succeeded in the new economy, view information technology as universally empowering. However, the reality is that the benefits of technology may not translate into a livable income for the average person. While mobile phones have improved living standards in developing countries, there is little evidence to suggest that individuals in developed countries can derive a significant income from their smartphones. Even skilled software developers struggle to generate substantial revenue from mobile apps due to the winner-take-all nature of the mobile ecosystem. The innovations in today’s information economy, though significant, do not compare to the groundbreaking work of pioneers like Alan Turing and John von Neumann. Incremental advances in technology now have the ability to leverage previous achievements. The introduction of 3D chips, which stack circuitry vertically in multiple layers, has been implemented by Samsung Electronics in the production of flash memory chips.
The promise of the digital economy is not as universally beneficial as it first appears. The allure of the informal economy, with its perceived freedom and flexibility, can quickly give way to the harsh realities of financial instability, particularly when it comes to long-term goals like home ownership and retirement. The dwindling middle class, especially in the United States, is a stark testament to this trend.
While technology has undoubtedly brought about significant advancements, the benefits are not evenly distributed. The digital divide persists, and the notion that anyone with a smartphone can achieve financial success is more myth than reality. Even those with advanced skills, such as software developers, face the harsh realities of a competitive, winner-takes-all market. And with recent advances in AI, it is far less likely that software developers can gain a competitive advantage anymore. We are already seeing the ramifications of this with the introduction of the newest versions of GPT and Google’s Bard. The promise of the digital age is immense, but without careful consideration and proactive measures, we risk creating a society marked by economic disparity and missed opportunities. And more than that, we are creating existential risks that cannot be corrected.
