With artificial intelligence, automation and other technological innovations changing the world, questions arise as to the future of employment. Will we end up with a world with too many people and not enough jobs, asks Ryan Avent’s book, The Wealth of Humans.
IT’S hard to conceive of a more fundamental topic than the future of work. Economists have grappled with it for centuries. Now slow growth, rising inequality and rapid technological change have raised a new, urgent question.
Will robots free us from boring labour, or will they leave many workers permanently redundant?
Ryan Avent’s The Wealth of Humans manages to be both optimistic about innovation and gloomy about its consequences.
This wide-ranging and highly readable book echoes famous tracts by tackling the biggest challenges facing the human race. The title is a nod to Adam Smith’s The Wealth of Nations — one of the founding texts of classical economics.
But it also hints at a darker future: a world with an abundance of workers who do not have enough to do.
Avent, an editor at the Economist, believes technology has permanently shifted the balance of power against mass employment. Sure, there are productive and well-paid jobs which cannot easily be done by computers or robots. But there are not enough to go around.
Meanwhile, tasks currently done by large numbers of people with relatively few skills — driving trucks, say, or checking groceries — are prime targets for automation.
“The future of work is either one in which employment grows while pay stagnates, or in which the work becomes more productive and employment stagnates,” Avent writes.
This is not a book about robotics, however. The author takes technological progress mostly for granted, offering few examples beyond self-driving cars and assembly lines almost devoid of humans.
Yet he comes up with clear and sometimes counterintuitive insights: for example, who had considered that most of the benefits of the Silicon Valley bubble of the late 1990s accrued not to entrepreneurs or software engineers but to owners of property in the Bay Area?
It doesn’t require a dystopian vision to see that labour in the West is already under pressure. Shifting manufacturing to lower-cost economies — particularly China — displaced some workers and drove down wages for the rest.
Meanwhile, technology gives companies extra leverage over employees. Licenced London taxi drivers spend up to two years memorising the city’s streets before picking up their first fare. Yet almost anyone with a driving licence and a smartphone can work for Uber, perhaps unwittingly hastening the day when they are replaced by an algorithm.
Amid the gloom, it’s worth remembering that predictions about work and productivity have often been wrong.
Thomas Malthus believed the world’s population would grow in line with its ability to produce food, leaving mankind permanently on the brink of starvation. Karl Marx forecast that the relentless exploitation of labour would lead the capitalist system to collapse. John Maynard Keynes foresaw a world so productive that people could meet their needs by working just 15 hours a week.
None of these scenarios came true.
Much thinking about the future of work is vulnerable to several fallacies. One is that jobs rendered obsolete by technological change are permanently destroyed.
The fact that shares on the stock exchange are now traded by computers rather than men in brightly-coloured jackets does not mean fewer people are employed in the equities business.
Another common mistake is the failure to recognise the creation of new categories of work.
Writing in 1930, Keynes could scarcely have conceived that people might one day make their living designing apps for smartphones or advising companies on their social media strategy.
That permits a measure of optimism, but it does not excuse complacency.
Broadly beneficial technological changes can still be hugely disruptive to large groups of workers. If a small handful of capitalists capture most of the benefits, inequality will rise. And the shifts can upend political systems.
Last century, the West suffered a Great Depression and fought two world wars before devising a way to control capitalism. Avent is at his most persuasive arguing that there was nothing inevitable about this process.
It’s far from clear that developed countries will cope with today’s challenges any better. The aftermath of the financial crisis has left many grappling with heavy debts and sluggish growth. That does not bode well for decisive thinking about the consequences of automation.
Conventional labour unions are ill-equipped to protect casual service workers.
Unpopular governments will find it hard to raise taxes to pay for better social safety nets, especially if large numbers of citizens are left permanently out of work.
Talk of a coordinated government push to invest in infrastructure has yet to be matched with action. Meanwhile, rabble-rousing politicians have found electoral success by advocating new barriers to trade and immigration.
The disconnect between the world’s capacity for innovation and the inability of political institutions to adapt is disheartening. Avent ends with an appeal to basic human decency. “We should be as generous as we can be,” he concludes.
It’s not much to go on. — Peter Thal Larsen, Reuters