Friday, June 26, 2015

Against Techno-Optimism and the Future of Work

A photo of New York from 1900. Source.
Martin Wolf has written a great essay for Foreign Affairs basically arguing that “the techno-optimists are wrong.” Mr. Wolf is the widely-read and highly influential opinion writer for the Financial Times. I cited this article in a previous post.

Wolf makes two points. The first is that the lowest hanging fruits of innovation are harvested first, leading to ever more marginal gains from new technologies, something I’ve argued here for quite some time. This is what is meant by diminishing returns to technology. The big gains are made first, leading to increasingly more incremental steps. The big leaps can only be harvested once. Thus, growth naturally slows down, and waiting for a new techno-miracle is like waiting for Godot, preventing you from taking real action in the present. Furthermore, more of what our economy consists of - eds, meds, and services - is not subject to rapid advances in productivity:
Over the past two centuries, historic breakthroughs have been responsible for generating huge unmeasured value. The motor vehicle eliminated vast quantities of manure from urban streets. The refrigerator prevented food from becoming contaminated. Clean running water and vaccines delivered drastic declines in child mortality rates. The introduction of running water, gas and electric cookers, vacuums, and washing machines helped liberate women from domestic labor. The telephone removed obstacles to speedy contact with the police, fire brigades, and ambulance services. The discovery of electric light eliminated forced idleness. Central heating and air conditioning ended discomfort. The introduction of the railroad, the steam ship, the motor car, and the airplane annihilated distance.

The radio, the gramophone, and the television alone did far more to revolutionize home entertainment than the technologies of the past two decades have. Yet these were but a tiny fraction of the cornucopia of innovation that owed its origin to the so-called general-purpose technologies—industrialized chemistry, electricity, and the internal combustion engine—introduced by what is considered the Second Industrial Revolution, which occurred between the 1870s and the early twentieth century. The reason we are impressed by the relatively paltry innovations of our own time is that we take for granted the innovations of the past.

[…]

The technologies introduced in the late nineteenth century did more than cause three generations of relatively high productivity growth. They did more, too, than generate huge unmeasured economic and social value. They also brought with them unparalleled social and economic changes. An ancient Roman would have understood the way of life of the United States of 1840 fairly well. He would have found that of 1940 beyond his imagination.

Among the most important of these broader changes were urbanization and the huge jumps in life expectancy and standards of education. The United States was 75 percent rural in the 1870s. By the mid-twentieth century, it was 64 percent urban. Life expectancy rose twice as fast in the first half of the twentieth century as in the second half...The jump in high school graduation rates—from less than ten percent of young people in 1900 to roughly 80 percent by 1970—was a central driver of twentieth-century economic growth...All these changes were also, by their nature, one-offs. This is also true of the more recent shift of women entering the labor force. It has happened. It cannot be repeated.

The reason we are impressed by the relatively paltry innovations of our own time is that we take for granted the innovations of the past...The [breakthroughs of the nineteenth and early twentieth] were vastly broader, affecting energy; transportation; sanitation; food production, distribution, and processing; entertainment; and, not least, entire patterns of habitation...The only recent connections between homes and the outside world are satellite dishes and broadband. Neither is close to being as important as clean water, sewerage, gas, electricity, and the telephone. The great breakthroughs in health—clean water, sewerage, refrigeration, packaging, vaccinations, and antibiotics—are also all long established...
His second point is that the new "innovations" in telecommunications that have been so highly touted have not only not equaled the vast changes of the nineteenth/twentieth century or caused big leaps in productivity, but have actually contributed to falling living standards for many via outsourcing, automation, and so forth, creating a "winner take all" economy and enabling wealth concentration to an unprecedented degree:
The impact of the biomedical advances so far has been remarkably small, with pharmaceutical companies finding it increasingly difficult to register significant breakthroughs. So-called big data is clearly helping decision-making. But many of its products—ultra-high-speed trading, for example—are either socially and economically irrelevant or, quite possibly, harmful. Three-D printing is a niche activity—fun, but unlikely to revolutionize manufacturing. 
[T]he computer itself is more than half a century old,..Yet except for the upward blip between 1996 and 2004, we are still...seeing the information technology age “everywhere but in the productivity statistics.”...Yet perhaps paradoxically, recent technological progress might still have had some important effects on the economy, and particularly the distribution of income...The information age coincided with—and must, to some extent, have caused—adverse economic trends: the stagnation of median real incomes, rising inequality of labor income and of the distribution of income between labor and capital, and growing long-term unemployment....Information technology has turbocharged globalization by making it vastly easier to organize global supply chains, run 24-hour global financial markets, and spread technological know-how...Technology has also brought about the rise of winner-take-all markets, as superstars have come to bestride the globe. 
[…] 
It is also possible that the ultimate result might be a tiny minority of huge winners and a vast number of losers. But such an outcome would be a choice, not a destiny. Techno-feudalism is unnecessary. Above all, technology itself does not dictate the outcomes. Economic and political institutions do. If the ones we have do not give the results we want, we will need to change them.
Same as it Ever Was: Against Techno-Optimism (Martin Wolf, Foreign Affairs)

Related to that last point: A World Without Work - a lengthy article on the jobless future in The Atlantic. It's a good roundup of a lot of the articles I've featured and written here over the years.The author uses Youngstown, Ohio as an example of what happens when work disappears (apparently not caused by spontaneous mass outbreaks of laziness):
Youngstown was transformed not only by an economic disruption but also by a psychological and cultural breakdown. Depression, spousal abuse, and suicide all became much more prevalent; the caseload of the area’s mental-health center tripled within a decade. The city built four prisons in the mid-1990s—a rare growth industry. One of the few downtown construction projects of that period was a museum dedicated to the defunct steel industry.
As for the idea that an economy's ability to create new jobs is unlimited (belied by the fact that every country requires work visas for employment):
After 300 years of breathtaking innovation, people aren’t massively unemployed or indentured by machines. But to suggest how this could change, some economists have pointed to the defunct career of the second-most-important species in U.S. economic history: the horse...Humans can do much more than trot, carry, and pull. But the skills required in most offices hardly elicit our full range of intelligence. Most jobs are still boring, repetitive, and easily learned. The most-common occupations in the United States are retail salesperson, cashier, food and beverage server, and office clerk. Together, these four jobs employ 15.4 million people—nearly 10 percent of the labor force, or more workers than there are in Texas and Massachusetts combined. Each is highly susceptible to automation, according to the Oxford study.

Technology creates some jobs too, but the creative half of creative destruction is easily overstated. Nine out of 10 workers today are in occupations that existed 100 years ago, and just 5 percent of the jobs generated between 1993 and 2013 came from “high tech” sectors like computing, software, and telecommunications. Our newest industries tend to be the most labor-efficient: they just don’t require many people. It is for precisely this reason that the economic historian Robert Skidelsky, comparing the exponential growth in computing power with the less-than-exponential growth in job complexity, has said, “Sooner or later, we will run out of jobs.”
He describes three possible futures: Consumption, Communal Creativity, and Contingency:
1. Consumtion - the paradox of leisure: American society has “an irrational belief in work for work’s sake,” says Benjamin Hunnicutt, another post-workist and a historian at the University of Iowa, even though most jobs aren’t so uplifting. A 2014 Gallup report of worker satisfaction found that as many as 70 percent of Americans don’t feel engaged by their current job. Hunnicutt told me that if a cashier’s work were a video game—grab an item, find the bar code, scan it, slide the item onward, and repeat—critics of video games might call it mindless. But when it’s a job, politicians praise its intrinsic dignity. “Purpose, meaning, identity, fulfillment, creativity, autonomy—all these things that positive psychology has shown us to be necessary for well-being are absent in the average job,” he said.
2 Communal Creativity - the artisan's revenge: You don’t need any particular fondness for plasma cutters to see the beauty of an economy where tens of millions of people make things they enjoy making—whether physical or digital, in buildings or in online communities—and receive feedback and appreciation for their work. The Internet and the cheap availability of artistic tools have already empowered millions of people to produce culture from their living rooms. People upload more than 400,000 hours of YouTube videos and 350 million new Facebook photos every day. The demise of the formal economy could free many would-be artists, writers, and craftspeople to dedicate their time to creative interests—to live as cultural producers. Such activities offer virtues that many organizational psychologists consider central to satisfaction at work: independence, the chance to develop mastery, and a sense of purpose.
3. Contingency - you're on your own: Russo sees Youngstown as the leading edge of a larger trend toward the development of what he calls the “precariat”—a working class that swings from task to task in order to make ends meet and suffers a loss of labor rights, bargaining rights, and job security. In Youngstown, many of these workers have by now made their peace with insecurity and poverty by building an identity, and some measure of pride, around contingency. The faith they lost in institutions—the corporations that have abandoned the city, the police who have failed to keep them safe—has not returned. But Russo and Woodroofe both told me they put stock in their own independence. And so a place that once defined itself single-mindedly by the steel its residents made has gradually learned to embrace the valorization of well-rounded resourcefulness.

Among Youngstown’s precariat, one can see a third possible future, where millions of people struggle for years to build a sense of purpose in the absence of formal jobs, and where entrepreneurship emerges out of necessity. But while it lacks the comforts of the consumption economy or the cultural richness of Lawrence Katz’s artisanal future, it is more complex than an outright dystopia. “There are young people working part-time in the new economy who feel independent, whose work and personal relationships are contingent, and say they like it like this—to have short hours so they have time to focus on their passions,” Russo said.
He sees a new role for government, but it's hard to square that with the complete and total capture of the government by wealthy interests and the drive initiated by the wealthy to shrink the state. In the  end, it's hard to reach a conclusion:
When I think about the role that work plays in people’s self-esteem—particularly in America—the prospect of a no-work future seems hopeless. There is no universal basic income that can prevent the civic ruin of a country built on a handful of workers permanently subsidizing the idleness of tens of millions of people. But a future of less work still holds a glint of hope, because the necessity of salaried jobs now prevents so many from seeking immersive activities that they enjoy.
 Ironically, of the three 'C's', one is conspicuously absent - Collapse - things fall apart.

New York 1900. Source ibid.

7 comments:

  1. I guess suicide is the only option....

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    1. Hey, you've got a smartphone so quit yer bitchin'! (actually I have no idea whether you have a smartphone or not)

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  2. This is a somewhat misleading and corrosive claim: "...a country built on a handful of workers permanently subsidizing the idleness of tens of millions of people."

    Rather, it is a handful of those most useful to the extraction mechanism who will increasingly reap the lion's share of benefits from that extraction. "Work" does not support the human race, extraction does.

    "Production" = extraction
    GDP = a measure of waste

    As the article otherwise does appear to claim, there are diminishing returns on almost all "work".

    There never *were* real returns on most work, it's just that we have not had the common sense nor the means to measure the vast cost of counter-productive work—work which consumes far more resources than it generates (i.e., most jobs). If I "work" in marketing or journalism or education or health care or tourism or the legal system or IT, etc., etc., etc., I'm not 'subsidizing' a damn thing.

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  3. Speaking for the US here, a sudden drop in prosperity with little hope for the future in a heavily armed ideological fractured nation suggests another "C" civil war which could end up in collapse or something else.

    Also even if you do manage to avoid mass hunger and war, you still run smack dab into another problem, reproduction. Permanent sub-replacement fertility for every nation as we seem to have now is an end game.

    And yes one I suppose could bring in more immigrants, the general nature of things is such that excluding religious types, no one capable of sustaining an industrial civilization will have children in poverty.

    I'd argue the US now essentially unable to fix its infrastructure has already entered the collapse spiral and as such will simply not end up a high tech society in a few decades,

    Even our most important cities (NYC, LA, DC) ar unable to keep the infrastructure up to date and have seceded them to invaders , We may not even get the usual high tech Byzantium/Panem scenario

    A few areas, maybe a Mormon enclave governed by strong custom or a few quasi socialist cities may hold out but on the whole, we may never get the high tech work-less future.

    We'll still get unemployment of course but it will the same kind the rest of the 3rd world gets from low rule of law, hollow states and lack of development

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    1. I think you may be too optimistic. Mass poverty of the type you’re describing might lead to political realignment. That could lead to a more oppressive reaction. But even in hinterlands like where I live, most people (whites especially) still have jobs, even if they hate them. They are more likely to continue to accept the demonization of the poor.

      Most people don’t care about cops rousting the tent cities of shooting the homeless because they aren’t homeless and they’ve got a roof over their head. But if that included massive amounts of people (as in the Great Depression), demonizing the poor and blaming them doesn’t work, because so many people are poor or know someone who is. Instead it becomes a “first they came for…” scenario.

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    2. I think you may be too optimistic. Mass poverty of the type you’re describing might lead to political realignment. That could lead to a more oppressive reaction. But even in hinterlands like where I live, most people (whites especially) still have jobs, even if they hate them. They are more likely to continue to accept the demonization of the poor.

      Most people don’t care about cops rousting the tent cities of shooting the homeless because they aren’t homeless and they’ve got a roof over their head. But if that included massive amounts of people (as in the Great Depression), demonizing the poor and blaming them doesn’t work, because so many people are poor or know someone who is. Instead it becomes a “first they came for…” scenario.

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  4. Most of this discussed by Keynes - a must read for thinking about above issues. http://www.econ.yale.edu/smith/econ116a/keynes1.pdf

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