“For more than a century, the conventional economic wisdom has been that new technologies boost productivity, lower the costs of production, and increase the supply of cheap goods, which, in turn, stimulates purchasing power, expands markets, and generates more jobs,” Mr. Rifkin began. But the new information technology, he wrote, “is now leading to unprecedented levels of technological unemployment, a precipitous decline in consumer purchasing power, and the spectre of a worldwide depression of incalculable magnitude and duration. … In the years ahead, new, more sophisticated software technologies are going to bring civilization ever closer to a near-workerless world.”
It didn’t work out that way: The years that followed saw an unprecedented employment boom created by those very technologies. In 2000, I went to Washington to ask Mr. Rifkin how it felt to be so wrong. His answer, in a nutshell: Just wait.
Next week, right on time, will see the publication of Rise of the Robots: Technology and the Threat of a Jobless Future, by the Silicon Valley software guru Martin Ford. It doesn’t mention Mr. Rifkin, but it argues that new, even smarter technology is now impinging on the medical and educational work forces.
Our era “will be defined by a fundamental shift in the relationship between workers and machines,” Mr. Ford writes. “That shift will ultimately challenge one of our most basic assumptions about technology: That machines are tools that increase the productivity of workers. Instead, machines themselves are turning into workers, and the line between the capability of labour and capital is blurring as never before.” As a result, he concludes in a déjà vu-inducing passage, “the virtuous feedback loop between productivity, rising wages and increasing consumer spending will collapse.”
We have been predicting this for a long time. As Mr. Ford notes, in 1949 Norbert Wiener, who gave us the word “cybernetics,” warned that computerization of the workplace would lead to “an industrial revolution of unmitigated cruelty” driven by technology with the capacity of “reducing the economic value of the routine factory employee to a point at which he is not worth hiring at any price.”
In 1974, a committee of prominent figures including chemist Linus Pauling and economist Gunnar Myrdal concluded that “cybernation” would create an economic climate in which “potentially unlimited output can be achieved by systems of machines which will require little co-operation from human beings” and throw the Western world into “unprecedented economic and social disorder.”
Those cyberunemployment scares, from the Industrial Revolution onward, all have given way to employment booms and better living standards created by the technologies we feared. Mr. Ford says it will be different this time: Big Data and super-fast processors mean even jobs requiring advanced degrees can be done by machines now.
He quotes Alexandros Vardakostas, the founder of Momentum Machines, whose automatons assemble and grill gourmet burgers to order without human intervention: “Our device isn’t meant to make employees more efficient. It’s meant to completely obviate them.”
Is this dark prophecy at last coming true? That’s the wrong question to ask. What we’ve learned about mechanization, over the past 300 years, is that it exists in a relationship with human labour. When labour (at any skill level) becomes scarce, people start investing in technological capital – and vice versa. Migration waves, as California has seen in recent decades, cause agriculture to reduce its use of technology and use more human workers. Conversely, when disease or falling birth rates make workers hard to find, we look to more machines – that’s how the Industrial Revolution happened. It’s also what’s happening now, in better-off Western countries: Aging and shrinking demographics mean there’s no reserve army of labour, so research is being poured into technology.
The question is whether the shrinking work forces and the rising robots will reach a virtuous balance, so there will be the right number of better jobs for the smaller working-age population – and thus paycheques to buy ever-cheaper burgers made by robots. Otherwise, as seven decades of techno-doom prophets have pointed out, countries would have to start handing money to consumers just to keep the machines running.
THE FUTURE OF WORK: Can computers replace recruiters?