Thursday, December 11, 2014

A Glimpse Into The Future

          William H. Davidow and Michael S. Malone, writing at the Harvard Business Review, ask "What Happens to Society When Robots Replace Workers?"
The technologies of the past, by replacing human muscle, increased the value of human effort – and in the process drove rapid economic progress. Those of the future, by substituting for man’s senses and brain, will accelerate that process – but at the risk of creating millions of citizens who are simply unable to contribute economically, and with greater damage to an already declining middle class. 
* * * 
... we will soon be looking at hordes of citizens of zero economic value. Figuring out how to deal with the impacts of this development will be the greatest challenge facing free market economies in this century. 
* * * 
To be sure, technological progress has always displaced workers. But it also has created new opportunities for human employment, at an even a faster rate. This time, things may be very different – especially as the Internet of Things takes the human factor out of so many transactions and decisions. The “Second Economy” (the term used by economist Brian Arthur to describe the portion of the economy where computers transact business only with other computers) is upon us. It is, quite simply, the virtual economy, and one of its main byproducts is the replacement of workers with intelligent machines powered by sophisticated code. This booming Second Economy is brimming with optimistic entrepreneurs, and already spawning a new generation of billionaires. In fact, the booming Second Economy will probably drive much of the economic growth in the coming decades. 
And here is the even more sobering news: Arthur speculates that in a little more than ten years, 2025, this Second Economy may be as large as the original “first” economy was in 1995 – about $7.6 trillion. If the Second Economy does achieve that rate of growth, it will be replacing the work of approximately 100 million workers. To put that number in perspective, the current total employed civilian labor force today is 146 million. A sizeable fraction of those replaced jobs will be made up by new ones in the Second Economy. But not all of them. Left behind may be as many as 40 million citizens of no economic value in the U.S alone. The dislocations will be profound.
Lest you think that this will be limited to just lower class factory or service workers, one of the examples given had to do with AI systems that may replace certain types of doctors. I have read from other sources that unless you are involved in international trade or finance, you are on the losing end of the economic stick, whether you are store clerk or a professional.

          The authors don't have an answer, but they note that commonly proposed fixes, such as better training or a merit based socialism, won't work:
The simplistic policy answer is better training. But at this pace of change, improving the educational system will be perpetually too little and too late. Likewise, artificially boosting the minimum wage will only hasten the reckoning by subsidizing job replacement by intelligent machines. David Brooks has suggested that the government should aggressively build infrastructure, “reduce its generosity to people who are not working but increase its support for people who are,” consider moving to a progressive consumption tax, and “doubling down on human capital, from early education programs to community colleges and beyond.” But even if his program were effectively and aggressively implemented, it might keep up with a 40% rate of progress for only a little while. 
Meanwhile, Brooks’s solutions will lead only to bigger government and greater command and control. And it is difficult to imagine how such a sluggish government system could keep up with such a rapid rate of change when it can barely do so now.
           I would note that progressives/socialists have been working on their preferred solution for nearly a century, which is to reduce the "surplus" population via birth control and abortion--thus, Planned Parenthood--and even by the occasional use of death camps. To a certain extent this, along with other factors is working, as I have discussed via the articles on demographics--total world population will begin to drop by the end of the century, and most likely by mid-century.

          The other solution, not mentioned, would be to re-engineer humans; that is, integrate the machines into humans. Not to be too sarcastic, but there is little conceptual difference between someone having a mobile phone glued to their ear all day, and having one implanted; or replacing a bad hip joint or having breast implants with replacing or augmenting other body parts to improve physical or cognitive performance. However, while this will probably be the end result for the elites, it will probably not be an option for most of the world's people.

          The result, at least for several decades, will be an increasingly economically segregated society. Governments will try and keep ever larger non-working populations under control through a mixture of food subsidies and hand-outs, brainwashing through media, and more effective security apparatus. There will be riots, but the point won't necessarily be to stamp out the riots, but to contain them to impoverished zones. How successful they will be remains to be seen.

          The more interesting result will be at the international level, because the same segregation will occur between nations. Of course, nations don't riot--they go to war.

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