In brief, Cowen is predicting a world where a tiny sliver of society (which he naively describes as "meritocratic" - ha!) lives like kings, while the majority of people (maybe 80-90 percent) eke out a precarious existence surviving in sprawling suburban shantytowns with minimal public services, surviving on beans (he even includes a helpful recipe) and anesthetized by cheap entertainment and video games. The model for this brave new world is Texas, where cheap land means housing cheap enough for even the barely employed minimum-wage drones that most of us will become to afford.
The common rejoinder - that this level of poverty and desperation across society will cause revolt is dismissed by Cowen as naive. First, inequality has already exploded with no real opposition (in fact, the notion of punishing the poor is actually used as a campaign tactic by Tea Party politicians). And second, the population will be aging, and aging populations don't revolt. As depressing as it sounds, I have to conclude that he may be right.
Anyway, a fuller review will have to wait. But automation is a key element in the story. Cowen gets praise from me for accurately describing the effects from automation on the labor force without falling into the two camps one too often sees - 1.) That robots will just do everything without us lifting a finger, like something out of The Jetsons, or 2.) Automation will create more jobs than it eliminates because they will grow the economy or create entirely new fields "we can't even imagine" or some such. No, the truth is that they will empower a small elite who will be extremely efficient and hoard opportunity to the greatest extent possible for themselves and their families. We will find that our demands are neither infinite or insatiable, there are only so many hours in a day, and so much storage space, etc., and these will be met by a minimum of the workforce.
Here's Kevin Drum on that last point:
I haven't read Tyler Cowen's Average Is Over, but I'm familiar with its basic thesis: smart machines are going to put lots of people out of work over the next few decades, and this is going to substantially increase income inequality. A small number of very smart people will do really well, while the broad middle class will end up with bleak, low-paying jobs—assuming they're lucky enough to have any jobs at all.Yes, Technology Is Going to Destroy the Middle Class (Mother Jones)
Obviously I agree, as readers of the May issue of Mother Jones know. And since I enjoy reading opposing arguments, I was curious to see what James Bessen had to say about this today over at The Switch. Unfortunately, the answer is: nothing much. "People have been predicting that technology will kill the middle class since Karl Marx," he says. "They have generally been wrong."
Well, yes, they have. Unfortunately, that's his entire argument. The Industrial Revolution didn't put everyone out of work, and neither did 80s-era technology like ATMs and accounting software. Therefore, 2030s-era technology won't either.
This is, literally, the worst possible case you can make for the continued relevance of the middle class. To say that "intelligent machines per se are not new," as Bessen does, wildly misrepresents both intelligence and machines. No machine built before about 2010 has had anything even remotely resembling true intelligence. Not spinning machines that stopped if a thread broke, and not ATMs or accounting programs. Even now, the smartest machines out there display only the barest glimmers of intelligence. We simply don't have either the software or the hardware to do it. The machines that people like Cowen and I are predicting for the 2030s just flatly have no analog to previous machines.
How do I know? Because this is exactly what's happened to my own profession. New software can't design buildings, of course, but it allows much smaller teams of higher-level people to put a building together, eliminating much of the entry-level work like drafting that's typically served as a foot in the door into the profession. Computers allow us to work more efficiently, so there is less need for people. At the same time, we cannot expect the construction industry to expand sufficiently to employ all the displaced people. Instead, they will go to ... what exactly?
Oh, and by the way, IBM's Watson is better at diagnosing cancer than human doctors (Wired UK). Also, the labor force participation rate is at its lowest level since 1978.
Finally, economist Brad DeLong has also been jumping on the automation speculation bandwagon:
Uncharted: May I, For One, Welcome Our New Robot Overlords? UNDER CONSTRUCTION
Trying Yet Again to Get a Proper Frame for Tomorrow's Uncharted "Robots" Conversation...
Rise of the Machines?: From the Inaugural "Uncharted"
Lance Knobel: So, Brad, one of your areas is economic history. I am curious: as we face this increasing automation, robotization, is this something that’s likely to be something we have seen before in economic history or is this time going to be different?
Brad DeLong: Well, it is always going to be different, because history does not repeat itself--although it does rhyme. The question is: how is it going to be different?
Looking back at all the major transformations in history before--as we have seen entire categories of things we do to add value to our society vanish--we always found new valued things for people to do. Technological unemployment has been a yearly thing, a decade thing, a generational thing perhaps--but never before more than a generational thing.
At times, the consequences of change have been horrible for the standard of living of the average guy. Jared Diamond has a nice line about how the invention of agriculture was the greatest mistake in the history of the human race. It allowed us to support 100 times more people on the planet than we could by hunting and gathering, yes. But the average life of an agriculturalist, staring at the hind end of an ox for eight hours a day--if they are lucky, and pulling the plough themselves if they are not--is not a very rewarding use of the incredibly flexible cognitive instrument that is the human brain.Yet that’s what most people wound up doing for most of the time between 5000 BC and 1700 or so.
Moreover, there is the fact that your average hunter-gatherer back in the Neolithic was 5’8" or so for adult males, and your average agricultural peasant in China or in Europe or even in America was 5’2". I don’t know about you, but if I fed my children a diet that would make them 5’2 at adulthood, Alameda County Child Protective Services would come and take my children away and I would never see them again.
The fear that this time may be very different arises because in the past the human brain has been a uniquely effective control and guidance mechanism for all kinds of things. The ear, eye, brain, hand, voice loop is something hitherto unmatched. Plus: the human smile and touch and glance is an extraordinarily effective social mobilization device for getting people to pull more or less in the same direction.
We are looking forward into the future in which people are going to find ways to make machines do huge amounts of tasks that have been reserved for the human ear-eye-brain-hand-voice loop in the past. I don’t know about your children, but I look at mine watching anime with the big googly eyes, and I wonder how long the human smile and glance is going to have its favored place as well...
Though I suppose one way to approach that question is to ask: Is the singularity in our future or in our past? And: Is it scary? Our lives are already so different from those of our hunter-gatherer environment of evolutionary adaptation. I am reminded of Isaac Asimiov's novels--The Caves of Steel and the Naked Sun--about his robot detective and his human partner, trying to deal with societies that had become so wired and so isolated that individual members could barely stand to be in the same room with each other, and found it completely gross and disturbing to actually have another human body within 10 feet of them.
These are books by a New Yorker of the 1950s, who feels that he is a bit too focused on technology and chemistry and atoms and so forth, and trying to write about this as metaphor. He is worried that that’s a place where we are heading. And he worries that he is already somewhat less human. On the other hand, I try to think back to what the lives of my ancestors 20,000 years ago were like--let alone the lives of my ancestors 80,000 years ago before the leap that was modern speech as we know it.
I think they probably spent a huge amount of time being hungry. I think they turned all of their processing power to trying to figure out the exact emotional state of everyone else of the 50 people they knew at any point in time. I think they were also trying to watch out for dangers, and for possible food sources. That is the natural life. And in some ways, we are still pretty close to it. Look at daytime TV. Look at the magazines in the checkout line at the supermarket. It’s pretty clear that at some fairly deep level we are still wired to focus on three and only three things:
- Possible dangers of violent death. especially as it affects children.
- Sources of food or perhaps of other valuable and especially rare. resources.
- Who is sleeping with whom--so you don’t get a black eye by making a bad mistake...
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