In 2017, another South Korean company, Hankook Mirae, publically debuted a gigantic thirteen-foot-tall robot soldier known as Method-2 that is eerily reminiscent of the ones in science fiction movies. According to the company, the massive robot can cross all kinds of terrain where human soldiers can’t venture without protection, such as the demilitarized zone along the border with North Korea.
I asked several engineers and manufacturers in South Korea whether there was any danger that the robots could be hacked or make mistakes that end up killing innocent people. Most replied that the danger is no greater than the dangers posed by machines operated directly by humans. A number of them cited the case of the Germanwings air disaster in 2015, in which the copilot, Andreas Lubitz, deliberately crashed his plane into the Alps, resulting in the death of 150 passengers. Couldn’t that tragedy have been averted, they asked me, by prohibiting humans from overriding computers in the navigation decision-making process?
FOR THE FIRST TIME, TECHNOLOGY IS GROWING FASTER THAN EMPLOYMENT
Techno-skeptics have serious doubts as to whether all these technological advances will actually result in a happier world. Instead, they’re predicting a huge increase in unemployment, arguing that the old axiom that technology always creates more jobs than it eliminates is no longer valid. While it was true in the past, it doesn’t hold up today, because—as stipulated by Moore’s law—technological advances are now happening so quickly that they aren’t leaving enough time for the new jobs to be created, they say.
Primitive humans took tens of thousands of years to spread technological advances such as fire and the wheel around the world. That allowed for the creation of new applications and new jobs for newly discovered technologies. But since then, the time frames of technological progress have shrunk drastically. In the eighteenth century, it took humanity 119 years before the sewing machine spread outside Europe, whereas in the twentieth century, it took only seven years for the Internet to spread from the United States across the globe. Today, in the twenty-first century, WhatsApp—the cell phone messaging program invented by two people in their twenties—had 700 million followers in just six years of existence. It took Christianity nineteen centuries to achieve that same number of followers.
Another example of today’s technological acceleration is the number of years it takes for technologies to reach 25 percent of Americans. While the United States began using electricity in the early nineteenth century, it took forty-six years before the service reached 25 percent of the population. When the telephone was invented, it took thirty-four years for it to be adopted by the same number of people. With radio, the figure went down to thirty-two years; with television, twenty-six years; with personal computers, fifteen years; with cell phones, twelve years; with the Internet, seven years; and with Facebook, just four years.
The people in the nineteenth century whose job it was to light gas streetlamps had several decades to change their jobs while the use of electric lighting was expanding. Today, salespeople, security guards, cashiers, and even surgeons are finding their jobs threatened by robots and algorithms almost overnight. They have much less time to reinvent themselves.
AT&T EMPLOYED 758,000 PEOPLE, GOOGLE EMPLOYS 55,000
According to the techno-pessimists, one of the driving forces behind growing technological unemployment is that many of the current advances are in the field of software, an industry that generates far fewer jobs than the manufacturing industries of the nineteenth and twentieth centuries. Many of the technological innovations of the twentieth century in the automotive, aeronautical, and computer industries resulted in producing a machine—like a car—that required a large amount of labor to be manufactured and that would have to be replaced every so often. Software, on the other hand, takes far fewer people to create, requires much less maintenance, and can be updated without being thrown away.
In the 1980s, 8.2 percent of U.S. jobs were created by new technology companies that were born during that same decade. In the 1990s, that percentage fell to 4.2, and in the 2000s it was down to 0.5 percent, according to some studies. It can be no coincidence, then, that some of the world’s largest technology companies have far fewer employees than manufacturing companies did a few decades ago. In 1964, when AT&T was the most valuable company in America, it employed 758,000 workers. Today, however, Alphabet—Google’s mother company, which at the time of this writing has the highest market value in the world—employs 75,000 people, less than 10 percent of the number of people who worked for AT&T in its heyday.
BLOCKBUSTER HAD 60,000 EMPLOYEES, NETFLIX HAS 5,400
There are plenty of examples of new technologies created by people in their twenties taking down massive corporations, though it is also true that many of these new technologies made the cost of products cheaper, leaving people with more disposable income with which to buy more things and therefore create jobs in other industries. Blockbuster, the video rental chain that employed 60,000 people in 2004, went bankrupt in 2013 after being wiped out by Netflix, a company that started with a mere 30 employees. Netflix started with DVD rentals delivered straight to your door, and later brought movies directly into our bedrooms with streaming videos and movies on demand. Their subscription service gives us the convenience of enjoying movies at home without having to go to a rental store and get them. But while Blockbuster had tens of thousands of employees, Netflix—which has 87 million subscribers in 190 countries and generates much more income than Blockbuster did—has a mere 5,400 full-time employees, though it does generate thousands of other indirect jobs through the television shows it produces.
Likewise, Kodak—the emblematic photography company that had been in existence for more than a century and employed 145,000 people in 1988—went bankrupt in 2012 for not innovating fast enough and failing to become a leader in digital photography. It was largely disrupted by Instagram, a start-up of just thirteen employees that popularized the sharing of photographs from one cell phone to another.
It’s no secret that new technology companies employ far fewer people than traditional manufacturing firms. According to the World Bank, the computing and telecommunications industries employ, on average, only 1 percent of workers in developed countries. Even in the United States, the country that produced Google, Amazon, and Facebook, tech jobs represent only 0.5 percent of total employment.
“THE FACTORIES OF THE FUTURE WILL HAVE TWO EMPLOYEES: A MAN AND A DOG”
One of the most vocal techno-pessimists is Martin Ford, a former Silicon Valley entrepreneur who wrote The Rise of Robots: Technology and the Threat of a Jobless Future. He is convinced that smart machines will kill many more jobs than they will create in the future. When I interviewed him, he assured me that he is not anti-tech, but that we must have economic and political responses in place before the coming wave of technological unemployment takes us by surprise. Ford has become a passionate spokesperson for establishing a universal basic income for everybody so that people can cope with the coming job disruption.
According to Ford, in the past, automation was a phenomenon that used to be concentrated in one industry at a time. This allowed workers displaced by technology in one field to move into another emerging industry. But our current situation is quite different because artificial intelligence can be utilized in every field of work, and automation is being incorporated simultaneously in virtually all industries. A robot that knows how to answer a phone, take dictation, transcribe, and translate a text will not only replace secretaries and translators but potentially every other job. That’s why virtually every industry that exists today will need fewer workers going forward, and why that transformation could happen much faster than many people expect, Ford told me.
“While innovations in robotics produce tangible machines that are often easily associated with particular jobs (a hamburger-making robot or a precision assembly robot, for example), progress in software automation will likely be far less
visible to the public; it will often take place deep within corporate walls, and it will have more holistic impacts on organizations and the people they employ,” Ford wrote.
As the algorithms become more and more intelligent, this process will accelerate. For example, it was once thought that most executives are irreplaceable because they are constantly making decisions and implementing them. But artificial intelligence is already learning to do exactly that. The education of intelligent machines takes place in two stages, Ford explains. First, an algorithm is created and fed with known data, and then it is asked to solve a similar problem. For example, the computer program that determines which emails land in our inbox and which are diverted into our junk folder was trained by the millions of emails that we respectively classified as either important or trash. And after having been fed with examples of both classes of emails, the algorithm begins to decide for itself which emails to send to which mailbox.
In much the same way, the company algorithms that read an executive’s emails are learning what kinds of decisions they make and why they do it, and—according to Ford—they’ll soon be able to replace a fair number of business managers. In 2013, Google filed a patent application for a computer program that can automatically generate personalized emails and hold conversations over social networks. In other words, this software can answer our emails for us. It can generate responses based on our history of posts and comments on Twitter and Facebook, and it can even match our writing style. “The predictions that can be extracted from data will increasingly be used to substitute for human qualities such as experience and judgment,” Ford writes, adding that this will result in fewer executives within corporations. “Whereas today there is a team of knowledge workers who collect information and present analysis to multiple levels of management, eventually there may be a single manager and a powerful algorithm.” A well-known joke in Silicon Valley puts it in a more dramatic way. According to it, the factories of the future will have two employees: a man and a dog. The man will be there to feed the dog, and the dog will be there to prevent the man from touching the machines.
FEWER WORKERS COULD MEAN FEWER CONSUMERS
When Ford gave me his pessimistic view of technological advances, I responded with a question that any techno-optimist would ask. Where is it written that replacing many routine and repetitive tasks with intelligent machines is something negative? According to virtually all economists, I argued, technology has helped the world economy grow and has lowered the cost of goods, making it possible for most of the population to live longer and better than our ancestors. Over the past few decades, technological innovations have coincided with a reduction—not an increase—of poverty around the world, I reminded him. According to data from the United Nations, in 2015, there were 836 million people across the planet living in extreme poverty, or on less than $1.25 a day, down from 1.9 billion in 1990.
I also reminded Ford that people are working less than before. In the agricultural age, our ancestors worked from sunrise to sunset in order to eat, and it wasn’t until the twentieth century that most countries settled on a forty-hour workweek. Now, some highly developed nations like the Netherlands are already implementing the twenty-nine-hour workweek. Why shouldn’t we expect this trend to continue into the future? I asked him. Why not look forward to a time when we could work fifteen or twenty hours a week and let technology continue reducing the price of all the products we need to enjoy that life?
“That’s the outcome that I hope for,” Ford replied. “But ask yourself: suppose you are working a minimum-wage job in the United States and right now you might be struggling to even get full-time work and now we’re saying, Okay, in the future you’re gonna work fifteen hours a week. That sounds great, but how are you gonna survive? Something else has to happen, right? You’ll need to get paid a lot more. Technology is making some things cheaper, but the things that really matter, like housing, are not becoming cheaper. Some things are not driven so much by the efficiency of production; they’re driven by scarcity of land and so on.”
Ford went on to explain that computers, cell phones, and television sets are becoming cheaper thanks to ever-more-efficient production processes. Housing, on the other hand, depends on available square footage and other external factors. “It’s kind of hard to imagine that the cost of housing in the United States is gonna collapse and get really cheap all of a sudden because of technology,” he said, stressing that it was not entirely true that technological advances will help reduce the costs of everything and allow us to work less across the board.
The other serious problem will be that, with fewer people working—or at least working fewer hours, as they are replaced by smart machines—the global economy could potentially shrink. “In order for the economy to thrive, you gotta have consumers out there who are capable of buying what’s being produced. Companies can’t just sell into thin air, they need people to buy, and that’s ultimately what drives the whole economy. So, if we get into a situation where there might be lots of unemployment, or where wages are driven lower and lower because it’s hard to find jobs and people have to compete for those jobs, it means that people will have less to spend. The risk you face is that you get into a downward spiral where there are few people out there to buy things being produced and companies are competing and we get into a deflationary scenario,” Ford explained.
TECHNO-OPTIMISTS: IT’S ALL FOR THE BEST
Does technological unemployment really warrant such concerns? Techno-optimists have always dismissed the naysayers outright, arguing that the techno-pessimists have been sounding the alarm for centuries—warning that the latest technologies would eventually result in a jobless world—and that the techno-skeptics have been consistently wrong. During the Industrial Revolution in the late eighteenth and early nineteenth centuries, textile workers in the United Kingdom burned their sewing machines to protest the new automatic looms, which were beginning to replace human workers. A protest in Nottingham in 1811, now referred to as the Luddite rebellion, became a rallying cry against technological unemployment. But what happened? According to the optimists, it was the exact opposite of what the Luddites had feared: the new automatic looms greatly reduced the cost of clothing, which left people with more disposable income they could spend on other goods and services, generating greater employment and well-being for all.
Also contrary to the textile workers’ concerns is the fact that new technology created new jobs that did not exist before. Thanks to the new automatic looms, the huge increase in global clothing consumption created a demand for designers, textile engineers, machine operators, distributors, marketing managers, and many other jobs that either didn’t exist or weren’t previously necessary to the industry. According to a study by Boston University economist James Bessen, the number of textile workers actually quadrupled between 1830 and 1900, and the increase in jobs generated by other industries thanks to higher levels of disposable income was equally impressive.
KEYNES WAS WRONG ABOUT TECHNOLOGICAL UNEMPLOYMENT
As early as 1858, in Grundrisse: Foundations of the Critique of Political Economy, Karl Marx had written that “the means of labour passes through different metamorphoses, whose culmination is the machine.” A 1928 headline in The New York Times read, “March of the Machines Makes Idle Hands.” The world-renowned economist John Maynard Keynes had warned of technological unemployment in the 1930s when he predicted that the world would suffer from high industrial unemployment “due to our discovery of means of economising the use of labour outrunning the pace at which we can find new uses for labour.” And in the 1960s, President John F. Kennedy noted that computers and robots were spreading through offices and factories, and that one of the main challenges of the coming world would be “to maintain full employment at a time when automation, of course, is replacing men.” However, all these predictions proved to be wrong, because—according to the optimists—technology always ended up creating more
jobs than it eliminated.
THE PRINTING PRESS AND THE AUTOMOBILE CREATED MORE JOBS
The textile workers’ rebellion in the early nineteenth century reverberated through just about every other industry. In 1814, when workers at The Times of London learned that the paper was to be printed by an automated steam press invented by a German engineer named Friedrich Koenig, they went on strike. They went back to work only when the company assured them that—for the time being—they would not be losing their jobs.
But their fears proved to be unwarranted, at least in the nineteenth century. When these workers went on strike, the prototype of the new printing press—which was powered by steam generated by a coal-fired boiler—could print 1,100 pages an hour, which was five times the capacity of a manual press. A few years later, in 1820, the steam printer had been refined and could put out 2,000 pages an hour. By 1828, the capacity had doubled to 4,000.
A few decades later, with the invention and proliferation of the rotary press in the 1860s, printers were turning out more than 30,000 pages every hour. And by the 1890s, with the arrival of electricity and new Linotype machines and photomechanical processes that allowed for the publication of photographs, The New York Herald could produce 90,000 copies, complete with color illustrations. “This stream of innovation, combined with greater press freedom, drove the growth of a vibrant and fast-growing newspaper industry in the United States and Europe, creating millions of jobs in printing, journalism, and other related fields,” says a study by the McKinsey Global Institute.
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