Wednesday, November 26, 2003

Another rant. Semi-related to off-shoring, but more about the problems of automation. Full discussion is here on Alternative Money and Economics.

I'm answering Michael's optimism that there's no problem of people losing jobs to automation :

The same tired argument was made at the advent of the computer (which replaced so many human tasks) and made everyone more efficient. The dawn of the robot age is SO VERY EXICTING - I think about it every day...embrace it, and thrive...

This strikes me as simply "Things turned out OK last time, so bound to be OK this time, no?"

I prefer starting from some kind of model of the world. And then looking at the possible scenarios in the context of that model.

So let's look at it this way. The world contains a certain number of workers, each with :

* a certain set of skills,

* a capacity to learn more skills, and

* a rate at which he or she can aquire more skills.

(These capacities are partly determined by biology, partly by educational background, partly by culture of the community they live in, and partly by specific personal situation. eg. someone looking after an elderly relative has less time to study.)

Automation removes the necessity for some skills because the machines can take over that area of production.

Now, your assumption is that the workers will simply adapt. As their skill becomes redundant, new opportunities will appear, and the worker will learn the new skills, and move to the new sector.

Of course, we know that adaption isn't an instantaneous event. And that not every worker has the capacity to learn the more complex skill. Everyone talks about that the whole time.

But this is an example of a more general and more pernicious problem. As the required skill levels get more complex, the time the worker needs to invest in order to learn the new skill also increases. Meanwhile, as technical progress accelerates, skills are becoming redundant faster.

The general effect of this is that the worker is being loaded with an increasing burden : to invest more and more time up-front, learning more complex, but less permanent skills. And also, to accept the added risk of being *wrong*. That is, investing time learning a skill which turns out never to be much in demand.

The result is that the population of workers is dividing. Some manage to keep up and learn the new skills. Others fall down into lower-skilled, casualized, lower-paid jobs.

We may say that this second group are those who are directly *losing out* due to the technical progress. In the worst case, this group become part of the structurally unemployed and unemployable underclass.

And, this group of casualized, poorer, workers is growing.

*If* it keeps growing, at some point, we should expect a rupture. Because this group isn't going to be happy to starve. But also Marx was wrong, they aren't going to aquire class consciousness and start the revolution either. Instead they will fall outside the economy. They'll become criminal. They'll revert to some kind of feudal or gang structure with "strong" leaders and vicious hostility to outside groups.) And the surviving high paid, skilled workers, will be increasingly barracaded into "safe" communities.

In the worst case, one of these feudal gangs will become so powerful that they'll overcome the enclaves of the rich, and we'll fall into fascism.


Alternatively, you may be right. Maybe this *isn't* going to happen. But I'd like to a see a plausible scenario for avoiding it. Let's run through a couple, because I'd be interested in what evidence we have for them.

1) Increase of reskilling rate.

One scenario is that the workers increase their capacity to keep up with the increased rate of change in demand for skills. They become smarter and quicker learners.

This is the hope of "education" politicians like Tony Blair, who preach that better education in schools will equip people for this. However, education delivered by the state currently seems to be failing to deliver smarter workers. Illiteracy is up. Critical thinking is down. Teachers are bored and disillusioned. And kids are being held as sitting targets for marketers.

Radicals offer the alternative of breaking up and privatising the school system, but that will just lead to a smaller school system for an elite, and very little education at all for the rest. (If you don't believe this, come to the third world and *see* whether the market manages to produce a better education for the poor than the government does.)

2) Decrease in difficulty of new skills

A second scenario is that although the rate of change keeps increasing, the *difficulty* of each new skill will decreases. This will allow "slow-learner" workers to get back into the new sectors of the economy. Maybe we can invent fantastic user-interfaces for the new tasks that need to be done. This is kind of what happened when Ford created the production line, and deskilled the work of building cars.

Unfortunately the Ford case may be the historical exception. It came at the time when there were no computers, so people were often being used as cheap, semi-intelligent control systems for machines. Now the machines are perfectly capable of controlling themselves.

3) Human skills

In the third scenario the new areas of work opened up will be more "human", so the requisite skills will be "people skills".
These will actually be pretty easy for a human to pick up but unlikely to be automated away.


But this is the point of the robot article : that most human "service" jobs can also be replaced. Or, the part that can't, is often not valued very much. People are willing to forgo personal service in small shops for cheaper goods at larger, more impersonal warehouses. They forgo waiters and chefs for fast-food, and as you point out, will eventually be perfectly happy with robot cooked food.

For everyday purposes, shops and restaurants are likely to disappear. That's a very large sector and a lot of people to shift elsewhere.

4) Something miraculous.

Something we can't even imagine appears to soak up this spare labour.

This seems to be a strange kind of faith to have. It is just "something always turned up in the past, so it probably will again in the future". But it's not clear that it's true that things always turned up in the past. It isn't true of the Roman empire which collapsed because it ran out of new places to expand into. It hasn't been much true of Latin America, where what turns up tends to be varieties of fascism, or meltdowns like Argentina. It hasn't been true in the US or Europe where structural unemployment, casualization of labour and inner-city poverty have been steadily increasing for decades.

But maybe that's just the usual propaganda. So instead let's focus on these questions. Where are the *entrepreneurs* with
the ideas for labour-intensive sectors of the economy? Where are the VCs funding them? Where is the stock-market enthusiasm?
If we take share prices as roughly representing the market's predictions about the future, where are the "shares leapt at ServiceCorp on news that the company was hiring 2000 semi-skilled ex-checkout-operatives. ``We're snapping these people up early, said CEO Bob Smith. They'll take a bit of retraining, but wages will skyrocket once the boom gets going. And we think the loyalty we're buying is a good investment.'' type stories?

So I'm not just gainsaying. I'm open to argument. Convince me that things will be alright this time, as before.

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