Work In The Age Of Automation: The Brilliant Future Of The Techno-Optimists

Michael Dean
Work In The Age Of Automation: The Brilliant Future Of The Techno-Optimists

Have we reached a new era in which economic growth is no longer linked to human labour? Will we soon see breakthroughs in IT, robotics and artificial intelligence that wipe out entire job sectors?

A landmark 2013 study conducted by economist Carl Benedikt Frey and machine learning expert Michael A. Osborne, both of Oxford University, examined 702 occupations and found 47 percent of total US employment is at “high risk” of being lost to automation. Some believe this to be a conservative estimate.

Massachusetts Institute of Technology professors Erik Brynjolfsson and Andrew McAfee, predict the Second Machine Age will soon unleash a wave of innovation and increased productivity that will “astonish us, delight us, and work for us.”

Others, like economists Robert Gordon and Tyler Cowen, along with Martin Wolf, chief financial commentator for the Financial Times, have a more cautious view – believing the impact of today’s emerging technologies to be vastly overestimated.

Before the tipping point

Whether you’re a “techno-optimist” or a skeptic, both groups provide a wealth of data showing a fundamental change in our economy.

The 2000s were the first time in recorded US history where fewer people were working at the end of the decade than at the beginning. Andrew McAfee explained, “when you graph the number of potential employees versus the number of jobs in the country, you see the gap gets bigger and bigger over time, and then, during the Great Recession, it opened up in a huge way.”

This trend is allied with a falling share of economic output paid out in wages since the beginning of the ‘80s. After a limited recovery in the ‘90s, the trend continues downward from 2000 onwards, picking up speed as recession hits. It’s now the lowest since records began.

Derek Thompson, senior editor at the Atlantic, suggests that what we’re seeing is how “technology could exert a slow but continual downward pressure on the value and availability of work – that is, on wages and on the share of prime-age workers with full-time jobs.”

Erik Brynjolfsson points out that despite this decline in labour, US productivity grew by 2.4 percent in 2001-2010. We are essentially making more, with fewer people involved.

The great uncoupling of labour and productivity

The view that technological progress might reduce human employment has previously been dismissed as the “lump of labour fallacy”.

The argument goes that productivity increases driven by technology reduces costs, and cheaper goods increase demand, which in turn requires more labour for that demand to be met. There is no static “lump of labour” as the amount of work to be done can always increase.

“However comforting this argument may be,” explain Brynjolfsson and McAfee, it is incorrect, “because technology can sever the link between infinite desires and full employment.”

Previous precedents are wrong because of the nature of today’s technological progress, when “just in the past couple years, we’ve seen digital tools display skills and abilities that they never, ever had before.”

The new machine age

We’re already seeing huge benefits from the Second Machine Age, emphasise Brynjolfsson and McAfee. However, these gains are not registered by traditional economic measurements “because the new machine age is more about knowledge creation than just physical production. It’s mind not matter, brain not brawn, ideas not things.”

Many of the Internet’s most valuable services like Wikipedia, Google and Skype are not accurately reflected in GDP statistics. In fact, those statistics may be missing 300 billion dollars per year in free goods and services on the Internet.

Take the music industry for example: by contribution to GDP it’s halved in from 10 years ago, but people listen to more music today than ever.

What gives Brynjolfsson and McAfee such cause for optimism are the three characteristics of the new machine age:

Digital goods can be replicated at minimal cost and delivered almost instantaneously. Digitisation also enables us to measure the world in ways we never could before – and that which can now be measured can be improved. Exponential growth in computing power means that today’s Playstation is more powerful than a military supercomputer of 1996. And finally, these new technologies are combinatorial and create the building blocks for new innovations.

These characteristics are behind the amazing technological breakthroughs like driverless cars and far more dexterous factory robots, but as Andrew McAfee is keen to repeat, “we ain’t seen nothing, yet.”

Who’s racing against the robots and who’s with them?

What fate will befall us? The machine once described in a NASA report as “the lowest-cost, 150-pound, nonlinear, all-purpose computer system which can be produced by unskilled labour.”

While nineteenth century manufacturing technologies largely substituted for skilled labour and the Computer Revolution of the twentieth century caused a hollowing-out of middle-income jobs, Frey and Osborne’s study expects the new machine age will lessen the trend of labour market polarisation.

Instead, low-income jobs including “most workers in transportation and logistics occupations, together with the bulk of office and administrative support workers, and labour in production occupations” are at high risk of computerisation, as, surprisingly, are a “substantial share” of service industry jobs – a sector of the economy that has provided most of US job growth in previous decades.

“We’re going to transition into an economy that is very productive but that just doesn’t need a lot of human workers, and managing that transition is going to be the greatest challenge that our society faces,” explains McAfee.

He and Brynjolfsson suggest that we learn to race with machines, rather than against them – focusing on our creative skills that most people believe to be out of reach of computers for considerable time. This will create a “labour-light” in which the human ability to formulate goals and how to achieve them will augment the work of machines.

A key characteristic of Brynjolfsson and McAfee’s writing is the tentative optimism with which they prophesies an era of abundance and prosperity. That’s if, and only if, we act to shape our future on a personal, organisational and public policy level.

In the next in this series I’ll examine the opposing arguments, from those who paint a less rosey picture.

References and bibliography:

Brynjolfsson, Erik – TED: The key to growth? Race with the machines (2013)
Brynjolfsson, Erik & McAfee, Andrew – The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies (2013)
Brynjolfsson, Erik & McAfee, Andrew – Race Against the Machines (2012)
Cowen, Tyler – The Great Stagnation: How America Ate All the Low-Hanging Fruit, Got Sick, and Will (Eventually) Feel Better (2011)
Frey, Carl Benedikt & Osborne, Michael A. – The Future of Employment: How Susceptible Are Jobs To Computerisation? (2013)
Gordon, Robert – TED: The Death of Innovation, the End of Growth (2013)
Keen, Andrew – The Internet Is Not the Answer (2015)
McAfee, Andrew – TEDx: Are droids taking our jobs? (2012)
Piketty, Thomas – Capital in the Twenty-First Century (2013)
Thompson, Derek – A World Without Work (2015)

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