Are employment and work important? What is the biggest driver of job destruction? Why do we only talk about immigration and globalization? Would it not be great if we do not have to work that much? Why do we seem to want to work so much? Why do politicians not wan to talk about automation and artificial intelligence? Or worse, maybe do not have a clue? How to generate wealth and prosperity? And what about global peace?
* Disclaimer: I apologize for any language errors in advance. Do not hesitate to point to any errors. Some of the editing is crowd sourced, due to the limited numbers of hours in a day. More info at the end of the post.
** From the third chapter of the forthcoming book “The virtue of being confused“.
What is important?
Before we can start addressing problems, we must first recognize we have them or that they are ahead of us. This is where a roadblock often appears. Surely among the most important things should rank peace (including living without constant fear for war), and prosperity. To start with prosperity, for people to prosper being able to make a living is extremely important. In our societies we currently do that trough employment. If this is important to us, then we should look at what will be the biggest impact on employment going forward.
How is it possible that we almost did not hear anything about automation during the US and other elections or votes (Brexit, UK, Spain, The Netherlands, and maybe more but I did not follow other ones closely)? I think it is quite clear that automation has a big impact on employment. Jobs are a big topic, but politicians addressed it mostly in terms of globalization and immigration. This strikes me as quite absurd, because in the US and Europe around 50% of the jobs are vulnerable to automation in the next decades (unfortunately there is no map of the US available, but another study suggests that the risk there is higher, 38% percent in the next 15 years).
You will find more statistics at Statista
Globalization versus Artificial Intelligence
There is little doubt that globalization has negative impacts on employment in certain areas. But especially looking forward, automation, and now artificial intelligence will have a much bigger impact on employment. Almost weekly there is another breakthrough in machine learning. Computers teaching themselves how to play games like Go or Poker and then beating the best humans. What is very important to understand, that they are self-learning, so there is no extremely time consuming human programming required anymore. It does not take much of a stretch of the imagination to envision these machines taking over complex human labor. Currently lawyers and insurance experts are already replaced by artificial intelligence. And this is just the start, what about self-driving vehicles taking hold? Taxis drivers are already worried about Uber.
Why on earth are we not discussing this, especially in politics? I am afraid that the average voter is not interested in hearing about automation and job destruction. Or worse, most politicians do not have clue. In theory it is good news when robots and software programs take over much of the human work. Because then we can spend more time on meaningful or fun things. The future can be great if we start talking about what matters looking forward now, not backward.
if we do not start thinking and talking about how a society with highly a reduced need for human labor could look, we might end up in a dystopian situation. Because these technologies have the potential to very quickly increase inequality exponentially between people and countries . This is not science fiction, technology is developing very quickly. Just look at Amazon´s employeesless shops or a Japanese Insurance firm replacing workers with artificial intelligence. And this is just the start.
How to create wealth in the near future?
I think there will be two main items that will drive wealth which a society could influence: innovation and the production of renewable commodities (e.g. energy or agriculture). There are also other items such as logistics, mercantile trade (the middle man), or the extraction of non-renewable commodities. However, these are more tied to location, thus much less susceptible to influence.
Why innovation? It is likely that in the automation age most industries will be driven by innovation, such as manufacturing and even white-collar work. The most innovative societies will take over many of these areas.
The demand for agricultural products will keep increasing for the foreseeable future, due to global population growth and increasing living standards, Energy needs will also increase and especially the demand for renewable energy. These are key areas which, if anticipated timely, can secure wealth for societies even if the demand for human labor decreases.
Instantly copied non location bound tax avoidance
What is also underestimated and certainly not discussed enough, is the fact that software can be replicated instantly and is not location bound. Some people argue that we should tax robots to finance for example a universal basic income (a payout from the state to everyone to pay for basic needs). But what about software. Once we start automating office jobs on a large scale, who ensures the servers will be in your country? It is likely the services will be provided from the countries with the lowest tax rate. If we extrapolate this, it might cause a race between countries to have a close to zero percent tax rate. This is still quite speculative however, and will not happen overnight either.
The global tax system needs reform, partly because of technology. That has to be an internationally coordinated effort for it to work, something even more complex than the the Paris climate accord. In the meantime, it is probably most useful for countries to focus on creating industries that keep generating wealth no matter how much automation takes place.
This time is different
I am aware of the arguments that historically technology has not always destroyed jobs, but also created them. We will see if the historical trend holds or this time is different. I think it will be different, because historically we have been mostly dealing with physical labor and digitalization (PCs, internet, web shops etc.). Now we are dealing with self-learning intelligence with an extremely high rate of improvement for easy to copy software that can be located anywhere in the world.
It is very risky to stay complacent by assuming all will sort itself out. Most people who have looked at the upcoming automation wave, do agree we will see huge changes in the labor market very soon. Even if you think on the balance the number of jobs will not reduce, the education and retraining systems require dramatic upgrading. If we do not do that soon, we will be in for a very difficult adjustment period. In the first industrial revolution, it took many decades for society to absorb the shock. This time around we cannot afford that, because we might very well create great upheaval and suffering. The good news is this is still avoidable.
Why do we seem to want to work so much?
We need to look with an open mind to the future. I am not religious nor have I been raised religious. But I am from a strong protestant Calvinistic culture, that values virtues such as industriousness, thriftiness and personal responsibility. I have always worked a lot mostly with pleasure. For a long time, I thought this is The Way, many people with me. Consequently we have become extremely wealthy as societies. In recent decades, we have not started working significantly less. We spend a lot of the wealth on materialistically consuming more. But this cannot go on forever, do you really want to keep working as hard and then own three cars and multiple houses?
Why are we working five days per week anyway? As far as I know this is not a law of nature. Looking long-term however, we are working less and less. From slaves to free people. We do not have child labor anymore in the west. From six to five days et cetera. As technology will increase productivity even more, maybe we have to look at reducing as what we see as the work week. In this way, many people who want can still have jobs in the future. This is desirable, because for many a job helps to create a sense of purpose. I think this might be a better discussion to have before implementing a basic income. A basic income has a lot of merits, but risks too. A society where very few people have high paying jobs, and the rest gets by on a basic income from the state, does not seem to maximize well-being. A short work week is maybe not the most efficient, but with the enormous increases in productivity from technology we can afford it.
My estimate is there will still be a lot of unemployable people in the short-term. We have to start talking honestly and realistically about that and probably find a welfare solution. But looking to the future if we organize education well and start working less, probably most people can have jobs. In theory it ought to be great that we are working smarter and not harder, and become more productive.
If it costs jobs maybe we should stop the technology, or just blame immigrants.
The worst argument comes from people who who are against automation to protect jobs. For a start, someone somewhere is going to try to invent and use it, how can you compete with that? Once something is invented, it is practically impossible to uninvent. Lastly, if jobs were solely the objective we can get everybody to work tomorrow, by prohibiting mechanized agriculture or conveyor belts for example. I cannot think of any successful society that resisted these kinds of developments. Technology cannot be stopped or prevented, nor should we try, because it might also help to solve issues like climate change, diseases et cetera. But we can guide it somewhat, the sooner we start having a broad discussion about this, the better.
In my mind, this is even a relatively short-term discussion. What about the complete abomination of the need for human labor or super intelligent machine getting in the wrong hands? We cannot go into all of these scenarios in this section, and recently a fair amount has been published about artificial super intelligence.
But why are all these such a small topics in politics? Did extreme short-termism competently take over? Are we led by ignorant idiots? Are so many automation experts completely wrong? Or a combination of all of these? What I find most worrying, is that job destruction driven by automation, is now incorrectly attributed to globalization and immigration. One can point to difficulties with immigration and for sure there is a spectrum as to what is workable. But there is really no need to needlessly increase discrimination. Especially if what we are trying to solve is employment, which is mostly affected by automation, certainly looking forward. And sure, there are negative consequences of globalization, but we can address these without losing all the positive aspects, which are plentiful. For one global peace which will be addressed in part two.
* I apologize for any language errors on the website, I do this all by myself with no editorial help. Do not hesitate to point to any errors. I want to get the ideas out there and I am very bad at spotting language errors and I am certainly not a linguist. Accepting the risk of looking unprofessional, I decided to crowd source some of the editing to the readers. Thanks in advance. And, if you have any other ideas do not hesitate to let me know trough social media or the contact page. Many thanks for your interest in my work.
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