by Roger Bourke White Jr., copyright November 2014
Which is the biggest job killer for humans: automation or entitlement? This is an important question for the first half of the 21st century because automation is spreading rapidly, total computing power is rising exponentially, and entitlements are also growing fast and large in all the developed countries. All of these are going to affect how, and how fast, the world's economy grows over the next fifty years.
This thought was inspired by this 21 Nov 14 WSJ article, Automation Makes Us Dumb Human intelligence is withering as computers do more, but there’s a solution. by Nicholas Carr, in which Mr. Carr opines that automation is dumbing us down.
From the article, "Dazzled by our brilliant new machines, we’ve been rushing to hand them all sorts of sophisticated jobs that we used to do ourselves.
But our growing reliance on computer automation may be exacting a high price. Worrisome evidence suggests that our own intelligence is withering as we become more dependent on the artificial variety. Rather than lifting us up, smart software seems to be dumbing us down."
Is automation making us dumber? I don't think so. I would argue that this sentiment dates back to the beginning of the Industrial Revolution. The Luddites, master weavers who were violently resisting their replacement by mechanical looms in England back in the early 1800's, looked down upon the operators of those mechanical looms, seeing them as unskilled laborers.
What is true is that in Industrial Age times (all of them, including what we are living in today) the nature of what humans do that is considered productive changes constantly. As the tools available to do work change, the skills needed to take advantage of the tools change as well, and in constantly surprising ways. Example: Prior to the mass production of automobiles and trucks, no one foresaw that motor vehicle driving and repairing would replace horse driving and tending as the must-have skills for being in the delivery business. Are drivers dumber than teamsters? The teamsters losing their jobs certainly thought so!
The challenge is that it is really hard to forecast what will be hot skills in the future. Which technologies and tools turn out to be "killer apps" ten and twenty years in the future is always surprising, which means the skills that will be in high demand ten and twenty years in the future is always also surprising.
What won't be surprising is that many workers in the declining industries, and skilled with the tools that are becoming obsolete, will feel these upstart workers in these future booming industries are unskilled compared to them. Whether they adapt to the new wave or not, the older workers are in for painful, uncertain times compared to what they experienced during their boom times.
But, and this is the point, automation does not stop the boom, and it does not stop skilled jobs from being created in large numbers. The difference is: The new jobs will be built upon the using new kinds of tools which means new kinds of skills are needed.
Ours is a world of rapidly growing prosperity. This means that one of the challenges is deciding how to spend all this increasing wealth. One of the choices is to increase entitlement -- as in, the government giving money to deserving people.
The original purpose of entitlement -- its good intention -- was to provide a safety net for those in the community who were encountering unexpectedly hard times. But this is an intention that is fuzzy to define and hard to monitor, so entitlement has grown dramatically in scope as prosperity has grown.
The question I pose is: Does increasing entitlement increase employment? Does giving people a broader and broader safety net get us more jobs, growth and prosperity? Social justice types and neo-Keynesians argue that it does because people have time and dignity to retrain, and consumption is increased because they have more money to spend. I would argue otherwise.
First, let me say that I think entitlement is going to continue to grow. It is supported by strong instinctive thinking, and growing prosperity supports taking action based on more instinctive thinking because there are fewer limits imposed by harsh reality. An example of growing entitlement happening today, but not likely to continue for much longer, is Venezuela. For fifteen-some-odd years now the people of Venezuela, first under Hugo Chavez and now under Nicolas Maduro, have been aspiring to what I call the Total Entitlement State (TES). A lot of wealth has been handed out by the government in Venezuela. But, sadly, few jobs have been created by doing so, and little additional wealth has been created.
Venezuela is happening today. I think it is a bit early, just as England was a bit early in the post-WWII/pre-Thatcher era -- in neither of these cases was TES sustainable. But I think in twenty years, or so, the developed nations of the world will have sufficient automation that they can try this experiment successfully -- the developed world will be able to support TES indefinitely.
...But will the people of these nations really want to? Will TES produce the best world for these communities? One of the problems that all TES aspirants have faced is that job growth is slow. As a result they have all faced an enfranchisement crisis -- a lot of their citizens have been unemployed, unhappy, and quite vocal about that unhappiness.
This, I believe, is an inherent fault of the TES aspiration. One of the big challenges facing developed nations in the 2020-50's timeframe will be how to keep their citizens enfranchised as TES comes upon them. If people can't feel good about the work they are doing as an employee of some sort, what can they be doing instead that will provide "job satisfaction" and keep them enfranchised? Like predicting what the jobs of the future will be, predicting what the satisfying alternative to jobs will be is difficult. (although I have attempted to in this essay)
Proving enough jobs for the citizens of developed nations in the 2020-50's timeframe is going to be a big challenge. Because of the importance of enfranchisement, it will be a vitally important one as well.
I don't think this crisis will be caused by automation. I do think it will be caused by aspiring to create the Total Entitlement State.
--The End--