The Rise Of The Robots

skidelskyWhat impact will automation – the so-called “rise of the robots” – have on wages and employment over the coming decades? Nowadays, this question crops up whenever unemployment rises.

In the early nineteenth century, David Ricardo considered the possibility that machines would replace labor; Karl Marx followed him. Around the same time, the Luddites smashed the textile machinery that they saw as taking their jobs.

Then the fear of machines died away. New jobs – at higher wages, in easier conditions, and for more people – were soon created and readily found. But that does not mean that the initial fear was wrong. On the contrary, it must be right in the very long run: sooner or later, we will run out of jobs.

For some countries, this long-run prospect might be uncomfortably close. So, what are people to do if machines can do all (or most of) their work?

Recently, automation in manufacturing has expanded even to areas where labor has been relatively cheap. In 2011, Chinese companies spent ¥8 billion ($1.3 billion) on industrial robots. Foxconn, which build iPads for Apple, hopes to have their first fully automated plant in operation sometime in the next 5-10 years.

Now the substitution of capital for labor is moving beyond manufacturing. The most mundane example is one you will see in every supermarket: checkout staff replaced by a single employee monitoring a bank of self-service machines. (Though perhaps this is not automation proper – the supermarket has just shifted some of the work of shopping onto the customer.)

For those who dread the threat that automation poses to low-skilled labor, a ready answer is to train people for better jobs. But technological progress is now eating up the better jobs, too. A wide range of jobs that we now think of as skilled, secure, and irreducibly human may be the next casualties of technological change.

As a recent article in the Financial Times points out, in two areas notoriously immune to productivity increases, education and health care, technology is already reducing the demand for skilled labor. Translation, data analysis, legal research – a whole range of high-skilled jobs may wither away. So, what will the new generation of workers be trained for?

Optimists airily assert that “many new types of job will be created.” They ask us to think of the lead drivers of multi-car road trains (once our electric cars join up “convoy-style”), big data analysts, or robot mechanics. That does not sound like too many new jobs to me.

Imagine a handful of technicians replacing a fleet of taxi drivers and truckers, a small cadre of human mechanics maintaining a full robot workforce, or a single data analyst and his software replacing a bank of quantitative researchers. What produces value in such an economy will no longer be wage labor.

We can see hints of that future now. Twitter, the social-media giant, is an employment minnow. It is valued at $9 billion, but employs just 400 people worldwide – about as many as a medium-size carpet factory in Kidderminster.

It is not true that automation has caused the rise of unemployment since 2008. What is noticeable, though, is that structural unemployment – the unemployment that remains even after economies have recovered – has been on an upward trend over the last 25 years. We are finding it increasingly difficult to keep unemployment down.

Indeed, the days when we in Britain thought it was normal to have an unemployment rate of 2% have long since passed. It was considered a great achievement of the last government that it brought unemployment down to 5% at the height of an unsustainable boom. And it only succeeded in doing so by subsidizing a lot of unnecessary jobs and useless training schemes.

No doubt some of the claims made for robots replacing human labor will prove as far-fetched now as they have in the past. But it is hard to resist the conclusion that “technological unemployment,” as John Maynard Keynes called it, will continue to rise, as more and more people become redundant.

The optimist may reply that the pessimist’s imagination is too weak to envisage the full range of wonderful new job possibilities that automation is opening up. But perhaps the optimist’s imagination is too weak to imagine a different trajectory – toward a world in which people enjoy the fruits of automation as leisure rather than as additional income.

During the Industrial Revolution, working hours increased by 20% as factories replaced feasting. With our post-machine standard of living, we can afford to shed some of the Puritan guilt that has, for centuries, kept our noses to the grindstone.

Today we find a great deal of work-sharing in poor countries. It is the accepted means of making a limited amount of available work go around. Economists call it “disguised unemployment.”

If escape from poverty is the goal, disguised unemployment is a bad thing. But if machines have already engineered the escape from poverty, then work-sharing is a sensible way of “spreading the work” that still has to be done by human labor.

If one machine can cut necessary human labor by half, why make half of the workforce redundant, rather than employing the same number for half the time? Why not take advantage of automation to reduce the average working week from 40 hours to 30, and then to 20, and then to ten, with each diminishing block of labor time counting as a full time job? This would be possible if the gains from automation were not mostly seized by the rich and powerful, but were distributed fairly instead.

Rather than try to repel the advance of the machine, which is all that the Luddites could imagine, we should prepare for a future of more leisure, which automation makes possible. But, to do that, we first need a revolution in social thinking.

© Project Syndicate

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  • Ian Young

    Hasn’t much been written about Europe’s falling birth rate and the inability to replenish the workforce?
    Thank goodness for robots.

  • Chris

    This would be wonderful if it could be made to work. However, attempts to replace the profit motive with state planning have rarely turned out well in the past. What would prevent a new bureaucratic ruling class developing out of the civil servants who regulate the work-sharing schemes, subject to no more effective democratic control than the plutocrats they replace?

    • http://www.pogge.ca Purple Library Guy

      Not sure the author advocates any such thing.
      Personally I’d agree that hierarchy of bureaucrats and hierarchy of plutocrats are both in the end about control from above, and both in the end lead to those above grabbing all the goodies both material and in terms of scope for initiative, freedom, autonomy and whatnot. I tend to argue for control from below as much as possible.
      But this article isn’t about any of that stuff, it’s just saying that if there’s only enough work for 40-hour workweeks for half the people, and that much work will allow production of enough goods for all, it makes more sense to cut the work week to 20 hours and have everyone employed but with plenty of spare time than to have unemployment levels of 50%. This seems like a pretty obvious proposition, to the point where you could do a proof of it in formal logic if you add one or two near universally agreed premises. Doesn’t require any class analysis or repudiation of profit motives or anything like that.

  • http://www.pogge.ca Purple Library Guy

    Absolutely agreed. I’ve been saying this for some time.

  • http://jprevauger.over-blog.com Revauger

    This is what we tried to do in France. We call it the 35 hour week. High hourly productivity + a shorter working week. Does not seem to be sufficient to reduce unemployment, since deflationary policies weigh heavily upon European demand.

  • Anthony Sperryn

    Isn’t it time we expunged the words “Lump of labour fallacy” from the economics textbooks?

    In the long-term, there may be jobs for all, but will we ever “have it so good” again, and, if so, for which ones of us and in what way?

    There are many aspects to the dire jobs scenario in Europe, but markets and systems can develop self-correcting mechanisms, one of which is falling birthrates amongst those who don’t see they are going to have it good again, or even good.

  • nnko

    Robotization is obviously inevitable part of development, which may or may not lead to impoverishment of the majority of members of a society. How to avoid social and economic collapse in such condition?

    Imagine a country of five million people, in which one million work in the industry or in the 10,000 manufacturing companies. If this production is 100 percent robotized, factory owners would theoretically be able to significantly increase their profits compared to the situation when they have to pay workers. But then who will buy their products?

    In the second scenario, we assume that the owners of the robotized factories are their former workers. If in each of them, for example, owner are 100 former workers, we will avoid the mass of a million people potentially unemployed. They would then be able to buy goods from other robotic factories, making them not only to maintain life, but also to cover their own needs.

    Perhaps there are possible more different scenarios, but the future has to be optimistic, or will not happened. Workers are today replacement for the robots, the people in these industries often just substitute robots, and there is not way to happines.

  • tom

    We can talk not only about robotics but also about applications of artificial intelligence (as applied to legal industry, knowledge mining / representation and inference, modal reasoning (that mixes the classical logic with the more human notions of beliefs, probabilistic thinking and legal reasoning), social mechanism design, design and maintenance of business processes and so on) – all this is changing the landscape of economy. Robotics and automation is heading even for laboratories where they are replacing humans no only on doing the mundane tasks of conducting experiments, but they also is of help for the design and planning of experiments.

    Peronsally I am working in IT and I am following the trends in computer science and robotics and I really wonder how politicians and especially the left-wing movements are detached from the recent technological developments. We are living in times when many dreams can become reality yet the leading figures simply don’t see the opportunities. And when we are talking about drawbacks of our times we don’t see problems beyond unemployemnt – e.g. how much development is hampered by the intellectual property law – when companies should defend its IP and not to share them with the general society (just one example – service robotics usually requires large knowledge bases – ontologies of the real worl objects and activies, these bases are built using expert knowledge, media mining and so on, but only rarely they are shared with another companies or community projects – why government can finance and own such projects?)

    I would like to suggest – maybe we should start to think big. Maybe this is not about “technological unemploymen” – maybe this is the change towards new social-economic formation that Marx has predicted?

    When sometimes I am reading the left-wing peer-reviewed journals like Science & Society, Cambridge Journal of Economics, Rethinking Marxism, Jouranl of Radical Political Economy or journals by the Association of Social Economy – I wonder – why there is almost nothing about the developments of automation and knowledge economy that has happened in the recend one or two decades? There is no quantitative estimationes whether or not the lost jobs are permanent. There is no estimations the recent crisis in the terms how the technology is shifted the landscape. And when someone is talking about socialism there is no connection with reality – what is needed to move to socialisms, how far we are from it, what will be events that would signal that the change of social economic formation is going to be inevitable and hence some management of the social movements is necessary.Nothing can be found about this. Only patch-like solutions as suggested by this article.

    But its good that SJE has noticed the trend, at least.

    I strongly urge the SJE, the Party of European Socialists and the European Left Party to take these trend in account and update their policy accordingly. And when some leftists are speaking that we should avoid technological progress, that we shold be happy with frozen growth, then two arguments move against them:
    1) still the biggest part of the world is living in poverty and Europe has it poors as well;
    2) all this already has happened in ancient time – Greece before Christ already had the knowledge to build steam engine (in fact, at least had already been built for one temple) but it still decided to keep slave labour.

    We can achieve better than that!