The Technology Trap

by Carl Benedikt Frey

  11. A. de Tocqueville, 1840, Democracy in America, trans. H. Reeve (New York: Alfred A. Knopf), 2:237

  12. J. S. Hacker and P. Pierson, 2010, Winner-Take-All Politics: How Washington Made the Rich Richer–and Turned Its Back on the Middle Class (New York: Simon & Schuster), 77–78.

  13. Ibid.

  14. Quoted in Lindert, 2004, Growing Public, 64.

  15. On clientelism, see Fukuyama, 2014, Political Order and Political Decay, chapter 9.

  16. R. Oestreicher, 1988, “Urban Working-Class Political Behavior and Theories of American Electoral Politics, 1870–1940,” Journal of American History 74 (4): 1257–86.

  17. Lindert, 2004, Growing Public, 187.

  18. R. D. Putnam, 2016, Our Kids: The American Dream in Crisis (New York: Simon & Schuster), 7.

  19. R. J. Gordon, 2016, The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War (Princeton, NJ: Princeton University Press), 503.

  20. R. A. Dahl, 1961, Who Governs? Democracy and Power in an American City (New Haven, CT: Yale University Press), 1.

  21. N. McCarty, K. T. Poole, and H. Rosenthal, 2016, Polarized America: The Dance of Ideology and Unequal Riches (Cambridge, MA: MIT Press), 2.

  22. L. M. Bartels, 2016, Unequal Democracy: The Political Economy of the New Gilded Age (Princeton, NJ: Princeton University Press), 1.

  23. Organisation for Economic Co-operation and Development, “Social Expenditure—Aggregated Data,” accessed December 22, 2018, https://stats.oecd.org/Index.aspx?DataSetCode=SOCX_AGG.

  24. McCarty, Poole, and Rosenthal, 2016, Polarized America, 4.

  25. Ibid.

  26. Bartels, 2016, Unequal Democracy, 2.

  27. Ibid., 209.

  28. M. Geewax, 2005, “Minimum Wage Odyssey: A Yearlong View from Capitol Hill and a Small Ohio Town,” Trenton Times, November 27.

  29. Bartels, 2016, Unequal Democracy, chapter 7.

  30. G. Lordan and D. Neumark, 2018, “People versus Machines: The Impact of Minimum Wages on Automatable Jobs,” Labour Economics 52 (June): 40–53.

  31. A. J. Cherlin, 2013, Labor’s Love Lost: The Rise and Fall of the Working-Class Family in America (New York: Russell Sage Foundation), 93 and 143.

  32. R. D. Putnam, 2004, in Democracies in Flux: The Evolution of Social Capital in Contemporary Society, ed. R. D. Putnam (New York: Oxford University Press).

  33. H. S. Farber, D. Herbst, I. Kuziemko, and S. Naidu, 2018, “Unions and Inequality over the Twentieth Century: New Evidence from Survey Data (Working Paper 24587, National Bureau of Economic Research, Cambridge, MA).

  34. T. Piketty, 2018, “Brahmin Left vs. Merchant Right: Rising Inequality and the Changing Structure of Political Conflict,” (working paper, Paris School of Economics).

  35. On political polarization across geographic regions, see D. S. Massey, J. Rothwell, and T. Domina, 2009, “The Changing Bases of Segregation in the United States,” Annals of the American Academy of Political and Social Science 626 (1): 74–90.

  36. A. Goldstein, 2018, Janesville: An American Story (New York: Simon & Schuster), 26–27.

  37. Ibid.

  38. D. C. Mutz, 2018, “Status Threat, Not Economic Hardship, Explains the 2016 Presidential Vote,” Proceedings of the National Academy of Sciences 115 (19): 4338.

  39. M. Lamont, 2009, The Dignity of Working Men: Morality and the Boundaries of Race, Class, and Immigration (Cambridge, MA: Harvard University Press).

  40. Cherlin, 2013, Labor’s Love Lost, 53.

  41. A. E. Clark and A. J. Oswald, 1996, “Satisfaction and Comparison Income,” Journal of Public Economics 61 (3): 359–81; A. Ferrer-i-Carbonell, 2005, “Income and Well-Being: An Empirical Analysis of the Comparison Income Effect,” Journal of Public Economics 89 (5–6): 997–1019; E. F. Luttmer, 2005, “Neighbors as Negatives: Relative Earnings and Well-Being,” Quarterly Journal of Economics 120 (3): 963–1002.

  42. Cherlin, 2013, Labor’s Love Lost, 170.

  43. Ibid., 169 and 172.

  44. The evidence for the past four decades shows that immigrants are not responsible for the stagnating or declining wages among the unskilled. This is true both nationally and locally. On the contrary, there is evidence to suggest that immigration may have helped prevent an even further decline in the wages of non-college-educated workers. See G. Peri, 2018, “Did Immigration Contribute to Wage Stagnation of Unskilled Workers?,” Research in Economics 72 (2): 356–65. Studies have shown that immigration does not crowd out native workers but simply adds to employment, while boosting productivity. The effects on the wages of unskilled natives is close to zero. See G. Peri, 2012, “The Effect of Immigration on Productivity: Evidence from US States,” Review of Economics and Statistics 94 (1): 348–58.

  45. R. Chetty, N. Hendren, P. Kline, and E. Saez, 2014, “Where Is the Land of Opportunity? The Geography of Intergenerational Mobility in the United States,” Quarterly Journal of Economics 129 (4): 1553–623.

  46. Moderate Republican and Democratic legislators alike have been kicked out of Congress: in the period 2002–10, the combined fraction of moderates from both parties declined from 57 percent to 37 percent. See D. H. Autor, D. Dorn, G. Hanson, and K. Majlesi, 2016a, “Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure” (Working Paper 22637, National Bureau of Economic Research, Cambridge, MA).

  47. D. H. Autor, D. Dorn, G. Hanson, and K. Majlesi, 2016b, “A Note on the Effect of Rising Trade Exposure on the 2016 Presidential Election,” appendix to “Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure” (Working Paper 22637, National Bureau of Economic Research, Cambridge, MA).

  48. D. Rodrik, 2016, “Premature Deindustrialization,” Journal of Economic Growth 21 (1): 1–33; World Bank Group, 2016, World Development Report 2016: Digital Dividends (Washington, DC: World Bank Publications).

  49. On the effects of technological change being counterbalanced by subsidized credit, see R. G. Rajan, 2011, Fault Lines: How Hidden Fractures Still Threaten the World Economy (Princeton, NJ: Princeton University Press).

  50. K. K. Charles, E. Hurst, and M. J. Notowidigdo, 2016, “The Masking of the Decline in Manufacturing Employment by the Housing Bubble,” Journal of Economic Perspectives 30 (2): 179–200.

  51. Goldstein, 2018, Janesville, 290.

  52. T. Gibbons-Neff, 2017, “Feeling Forgotten by Obama, People in This Ohio Town Look to Trump with Cautious Hope,” Washington Post, January 22.

  53. Quoted in “Want to Understand Why Trump Has Rural America Feeling Hopeful? Listen to This Ohio Town,” 2017, Washington Post, May 11.

  54. Ibid.

  55. C. B. Frey, T. Berger, and C. Chen, 2018, “Political Machinery: Did Robots Swing the 2016 U.S. Presidential Election?,” Oxford Review of Economic Policy 34 (3): 418–42.

  56. T. Aidt, G. Leon, and M. Satchell, 2017, “The Social Dynamics of Riots: Evidence from the Captain Swing Riots, 1830–31” (Working paper, Cambridge University), 4.

  57. Ibid.

  58. D. Rodrik, 2017a, “Populism and the Economics of Globalization” (Working Paper 23559, National Bureau of Economic Research, Cambridge, MA), 21.

  59. D. Rodrik, 2017b, Straight Talk on Trade: Ideas for a Sane World Economy (Princeton, NJ: Princeton University Press), 116.

  60. Ibid., 122.

  61. Ibid.

  62. Ibid., 260.

  63. Quoted in A. Oppenheimer, 2018, “Las Vegas Hotel Workers vs. Robots Is a Sign of Looming Labor Challenges,” Miami Herald, June 1.

  64. J. Gramlich, 2017, “Most Americans Would Favor Policies to Limit Job and Wage Losses Caused by Automation,” Pew Research Center, http://www.pewresearch.org/fact-tank/2017/10/09/most-americans-would-favor-policies-to-limit-job-and-wage-losses-caused-by-automation/.

  65. Acemoglu and Robinson, 2006, “Economic Backwardness in Political Perspective.”

  66. Ibid., 117.

  67. M. Berg, 1976, “The Machinery Question,” PhD diss., University of Oxfo
rd, 76.

  68. Quoted in W. Broad, 1984, “U.S. Factories Reach into the Future,” New York Times, March 13.

  69. Quoted in G. Allison, 2017, Destined for War: Can America and China Escape Thucydides’s Trap? (Boston: Houghton Mifflin Harcourt), chapter 1, Kindle.

  70. P. Druckerman, 2014, “The French Do Buy Books. Real Books,” New York Times, July 9.

  71. G. Rayner, 2017, “Jeremy Corbyn Plans to ‘Tax Robots’ Because Automation Is a ‘Threat’ to Workers,” Daily Telegraph, September 26.

  72. Y. Sung-won, 2017, “Korea Takes First Step to Introduce ‘Robot Tax,’ ” Korea Times, August 7.

  73. B. Merchant, 2018, “The Presidential Candidate Bent on Beating the Robot Apocalypse Will Give Two Americans a $1,000-per-month Basic Income,” Motherboard, April 19.

  74. Quoted in S. Cronwell, 2018, “Rust-Belt Democrats Praise Trump’s Threatened Metals Tariffs,” Reuters, March 2.

  75. D. Grossman, 2017, “Highly-Automated Austrian Steel Mill Only Needs 14 People,” Popular Mechanics, June 22, https://www.popularmechanics.com/technology/infrastructure/a27043/steel-mill-austria-automated/.

  76. M. Spence and S. Hlatshwayo, 2012, “The Evolving Structure of the American Economy and the Employment Challenge,” Comparative Economic Studies 54 (4): 703–38.

  77. Quoted in C. Cain Miller, 2017, “A Darker Theme in Obama’s Farewell: Automation Can Divide Us,” New York Times, January 12.

  78. R. Rector and R. Sheffield, 2011, “Air Conditioning, Cable TV, and an Xbox: What Is Poverty in the United States Today?” (Washington, DC: Heritage Foundation), 2.

  79. J. Mokyr, 2011, The Enlightened Economy: Britain and the Industrial Revolution, 1700–1850 (London: Penguin), chapter 1, Kindle.

  80. J. A. Schumpeter, [1942] 1976, Capitalism, Socialism and Democracy, 3d ed. (New York: Harper Torchbooks), 76.

  Part 5

  1. G. B. Baldwin, and G. P. Schultz, 1960, “The Effects of Automation on Industrial Relations,” in Impact of Automation: A Collection of 20 Articles about Technological Change, from the Monthly Labor Review (Washington, DC: Bureau of Labor Statistics), 51.

  Chapter 12

  1. E. Brynjolfsson and A. McAfee, 2017, Machine, Platform, Crowd: Harnessing Our Digital Future (New York: Norton), 71–73.

  2. C. E. Shannon, 1950, “Programming a Computer for Playing Chess,” Philosophical Magazine 41 (314): 256–75.

  3. C. Koch, 2016, “How the Computer Beat the Go Master,” Scientific American 27 (4): 20.

  4. F. Levy and R. J. Murnane, 2004, The New Division of Labor: How Computers Are Creating the Next Job Market (Princeton, NJ: Princeton University Press).

  5. E. Brynjolfsson and A. McAfee, 2014, The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies (New York: W. W. Norton), chapter 3, Kindle.

  6. Koch, 2016, “How the Computer Beat the Go Master,” 20.

  7. M. Fortunato et al. 2017, “Noisy Networks for Exploration,” preprint, submitted, https://arxiv.org/abs/1706.10295.

  8. Cisco, 2018, “Cisco Visual Networking Index: Forecast and Trends, 2017–2022,” (San Jose, CA: Cisco), https://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-index-vni/complete-white-paper-c11-481360.html.

  9. P. Lyman and H. R. Varian, 2003, “How Much Information?,” berkeley.edu/research/projects/how-much-info-2003.

  10. A. Tanner, 2007. “Google Seeks World of Instant Translations,” Reuters, March 27.

  11. Y. Wu et al., 2016, “Google’s Neural Machine Translation System: Bridging the Gap between Human and Machine Translation,” preprint, submitted October 8, https://arxiv.org/pdf/1609.08144.pdf.

  12. I. M. Cockburn, R. Henderson, and S. Stern, 2018, “The Impact of Artificial Intelligence on Innovation (Working Paper 24449, National Bureau of Economic Research, Cambridge, MA).

  13. E. Brynjolfsson, D. Rock, and C. Syverson, forthcoming, “Artificial Intelligence and the Modern Productivity Paradox: A Clash of Expectations and Statistics,” in The Economics of Artificial Intelligence: An Agenda, ed. Ajay K. Agrawal, Joshua Gans, and Avi Goldfarb (Chicago: University of Chicago Press), figure 1.

  14. “Germany Starts Facial Recognition Tests at Rail Station,” 2017, New York Post, December 17.

  15. N. Coudray et al., 2018, “Classification and Mutation Prediction from Non–Small Cell Lung Cancer Histopathology Images Using Deep Learning,” Nature Medicine 24 (10): 1559–1567.

  16. A. Esteva et al., 2017, “Dermatologist-Level Classification of Skin Cancer with Deep Neural Networks,” Nature 542 (7639): 115.

  17. W. Xiong et al., 2017, “The Microsoft 2017 Conversational Speech Recognition System,” Microsoft AI and Research Technical Report MSR-TR-2017-39, August, https://www.microsoft.com/en-us/research/wp-content/uploads/2017/08/ms_swbd17-2.pdf.

  18. M. Burns, 2018, “Clinc Is Building a Voice AI System to Replace Humans in Drive-Through Restaurants,” TechCrunch, https://techcrunch.com/video/clinc-is-building-a-voice-ai-system-to-replace-humans-in-drive-through-restaurants/.

  19. D. Gershgorn, 2018, “Google Is Building ‘Virtual Agents’ to Handle Call Centers’ Grunt Work,” Quartz, July 24, https://qz.com/1335348/google-is-building-virtual-agents-to-handle-call-centers-grunt-work/.

  20. Brynjolfsson, Rock, and Syverson, forthcoming, “Artificial Intelligence and the Modern Productivity Paradox.”

  21. See C. B. Frey and M. A. Osborne, 2017, “The Future of Employment: How Susceptible Are Jobs to Computerisation?,” Technological Forecasting and Social Change 114 (C): 254–80.

  22. B. Mathibela, M. A. Osborne, I. Posner, and P. Newman, 2012, “Can Priors Be Trusted? Learning to Anticipate Roadworks,” in IEEE Conference on Intelligent Transportation Systems, 927–32.

  23. B. Mathibela, P. Newman, and I. Posner, 2015, “Reading the Road: Road Marking Classification and Interpretation,” IEEE Transactions on Intelligent Transportation Systems 16 (4): 2080.

  24. See C. B. Frey and Osborne, 2017, “The Future of Employment.”

  25. Rio Tinto, 2017, “Rio Tinto to Expand Autonomous Fleet as Part of $5 Billion Productivity Drive,” December 18, http://www.riotinto.com/media/media-releases-237_23802.aspx.

  26. A. Agrawal, J. Gans, and A. Goldfarb, 2016, “The Simple Economics of Machine Intelligence,” Harvard Business Review, November 17, https://hbr.org/2016/11/the-simple-economics-of-machine-intelligence.

  27. “A More Realistic Route to Autonomous Driving,” 2018, Economist, August 2, https://www.economist.com/business/2018/08/02/a-more-realistic-route-to-autonomous-driving.

  28. “Tractor Crushes Boy to Death,” 1931, New York Times, October 12.

  29. J. R. Treat et al., 1979, Tri-Level Study of the Causes of Traffic Accidents: Final Report, vol. 2: Special Analyses (Bloomington, IN: Institute for Research in Public Safety). See also V. Wadhwa, 2017, The Driver in the Driverless Car: How Our Technology Choices Will Create the Future (San Francisco: Berrett-Koehler).

  30. World Health Organization, 2015, “Road Traffic Deaths,” http://www.who.int/gho/road_safety/mortality/en.

  31. J. McCurry, 2018, “Driverless Taxi Debuts in Tokyo in ‘World First’ Trial ahead of Olympics,” Guardian, August 28.

  32. Quoted in F. Levy, 2018, “Computers and Populism: Artificial Intelligence, Jobs, and Politics in the Near Term,” Oxford Review of Economic Policy 34 (3): 405.

  33. Quoted in T. B. Lee, 2016, “This Expert Thinks Robots Aren’t Going to Destroy Many Jobs. And That’s a Problem,” Vox, https://www.vox.com/a/new-economy-future/robert-gordon-interview.

  34. Other approaches to the automation of such tasks center on 3-D printing. Roboticists at Nanyang Technological University in Singapore imagine that a robotic swarm of 3-D printers could be used in construction. While this might seem like a distant prospect, engineers have actually managed to create a single-piece concrete structure, using two mobile robots operating concurrently. See X. Zhang et al., 2018, “Large-Scale 3D Printing by a Team of Mobile Robots,” Auto
mation in Construction 95 (November): 98–106.

  35. C. B. Frey and Osborne, 2017, “The Future of Employment,” 261.

  36. M. Mandel and B. Swanson, 2017, “The Coming Productivity Boom—Transforming the Physical Economy with Information” (Washington, DC: Technology CEO Council), 14.

  37. H. Shaban, 2018, “Amazon Is Issued Patent for Delivery Drones That Can React to Screaming Voices, Flailing Arms,” Washington Post, March 22.

  38. D. Paquette, 2018, “He’s One of the Only Humans at Work—and He Loves It,” Washington Post, September 10.

  39. Ibid.

  40. M. Ryan, C. Metz, and M. Taylor, 2018, “How Robot Hands Are Evolving to Do What Ours Can,” New York Times, July 30.

  41. Ibid.

  42. Ibid.

  43. Quoted in M. Klein, 2007, The Genesis of Industrial America, 1870–1920 (Cambridge: Cambridge University Press), 78.

  44. Quoted in D. J. Millet, 1972, “Town Development in Southwest Louisiana, 1865–1900,” Louisiana History 13 (2): 144.

  45. “Music over the Wires,” 1890, New York Times, October 9.

  46. E. Clague, 1960, “Adjustments to the Introduction of Office Automation,” Bureau of Labor Statistics Bulletin, no. 1276, 2.

  47. H. Simon, [1960] 1985, “The Corporation: Will It Be Managed by Machines?,” in Management and the Corporation, ed. M. L. Anshen and G. L. Bach (New York: McGraw-Hill), 17–55.

  48. T. Malthus, [1798] 2013, An Essay on the Principle of Population, Digireads. com, Kindle, 179.

  49. C. B. Frey and Osborne, 2017, “The Future of Employment,” 262.

  50. The O*NET database contains hundreds of standardized and occupation-specific descriptors for occupations covering the U.S. economy. For a list of occupations involving “originality,” see O*NET OnLine, 2018, “Find Occupations: Abilities—Originality,” https://www.onetonline.org/find/descriptor/result/1.A.1.b.2.

  51. C. B. Frey and Osborne, 2017, “The Future of Employment,” 262.

  52. These descriptions stem from large-scale surveys of the American workforce, in which workers are asked how often they engage in various tasks. Their responses form part of O*NET OnLine database.