Martin Ford Asks: Will Automation Lead to Economic Collapse?

[dkf]

http://singularityhub.com/2009/12/15/martin-ford-asks-will-automation-lead-to-economic-collapse/

Will the future be filled with cool technologies and endless opportunities or will our own creations lead to eventual doom? I tend to think the former. Technology has seemingly endless ability to improve the health, freedom, and happiness of our lives. Even optimistic futurists like Ray Kurzweil and James Canton admit, however, that the road to advancing technology is fraught with dangers. Super viruses, artificial intelligences run amok, environmental calamity – science has its threats as well as its promises. Yet there could be one near term problem that even futurists tend to ignore – economic collapse. Martin Ford, a silicon valley computer engineer, entrepreneur, and blogger has written The Lights In The Tunnel, a book which explores the economic implications of a world which is becoming increasingly automated. Ford proposes that in the upcoming years robots and computer programs will edge human workers out of their jobs and that unless we take drastic actions this will reduce mass market purchasing power, destroy consumer confidence, and shut down the global economy. Ford has the reader envision these changes during a thought experiment where lights in a tunnel represent purchasing power in the mass market (hence the title). Even after discussing the book with the author, I’m not convinced that The Lights In The Tunnel is an accurate prediction of our future, but I wanted to spread the question: what does increased automation mean for our economy?

It’s hard to deny that robots and computers will eventually take over for humans in many industries. Already we’ve seen how robots like the Flexpicker and Adept Quattro excel at sorting and moving goods in a manufacturing environment. More humanoid creations, like Kawada’s Nextage or Honda’s ASIMO, could take on even more human-like tasks. And then there are the software programs. We’ve recently showcased how sports journalists and other news people could one day face serious competition from virtual writers and performers. Everywhere, automation is progressing and taking over more jobs. Even vending machines are starting to eliminate the needs for some human workers.

Is the Fallacy Itself a Fallacy?

Yet even as technology removes some jobs, it creates others. For every worker taken off the assembly line there’s another added to the maintenance team, or two who become consultants. We’ll never automate away all the jobs, will we? Depends on how advanced the machines become.
Back in the industrial revolution, a group of English textile workers protested the use of mechanized looms. These were the Luddites, who believed that jobs lost to machines would lead to economic ruin. Obviously they were wrong. From these protesters modern economists have derisively coined the Luddite Fallacy – the belief that labor saving technologies will increase unemployment. That fallacy is one of the key issues debated in The Lights In The Tunnel (here after TLITT).

[kentuck]

1. Only if no one buys what automation produces...

As long as there is a consumer market for products, the economy will continue to survive. If automation totally replaces labor and there is no money to buy anything with, then the economy could collapse. But then, how would people pay for their cars or their homes if everything was replaced by automation??

[dkf]

2. At the end of the piece he discusses ideas for different kinds of compensation

But the idea of no one having money to buy things leading to economic collapse is a major concern.

[kentuck]

6. Someone will have a lot of money and some will have none...

So I think the question that will arise in the future, as right now, is the unfair distribution of wealth. Perhaps we will have to return to the days where a family can live on one income, rather than two? If there is less to go around, then we will need to distribute it in a different way.

[Odin2005]

3. People should be working less for the same income because of automation.

Instead, because of the internal contradictions of Capitalism, it causes unemployment.

[kentuck]

10. We may go to the 20-hour work week instead of the 40-hour work week..

in order to provide jobs so people can survive. I think the author may have found the temporary solution:
<snip>
Ford doesn’t leave his readers with just another doomsday scenario, he does his best to find a solution. No, he doesn’t think we should (or perhaps even can) avoid automation. Instead, TLITT explores some pretty radical ways that we could put purchasing power back in the hands of the masses and create non-traditional jobs with economic incentives. He speaks of ‘recapturing wages’ by imposing capital/labor taxes on industries as they automate, and value added taxes to goods as they become cheaper. These taxes should not be large enough to discourage automation, but they could (Ford proposes) provide revenue for a new kind of job.

Ford’s ‘virtual jobs’ are incentivised programs that would reward people for pursuits such as education, civic service, journalism, and environmental responsibility. These jobs would be paid for by the state through the revenue gained through recaptured wages. Those who accomplished more in their virtual jobs would receive higher wages, thus providing the financial incentive that everyone needs to feel like they are really working. There would be some industries and some workers that exist outside of this new system, and plenty of space and encouragement (Ford says) for entrepreneurs, who would still have the most potential for monetary gain.

So, to paraphrase Ford’s solution in my own words: we should take money from automating industries to fund a state guided program that gives money to consumers in exchange for working at bettering themselves. Sounds like a decent plan. Never gonna happen.

========

But I think it could very possibly happen.

[Fumesucker]

4. There's an infinite number of possible futures..

Some of course are more likely than others.

Interesting that the website you link to has singularity in the title, the most significant feature of a singularity is that it's impossible to predict what's on the other side, beyond the event horizon so to speak.

[madrchsod]

8. WE...

http://en.wikipedia.org/wiki/We_(novel)

to....



http://en.wikipedia.org/wiki/Player_Piano_(novel)


and many others...

[jwirr]

5. That question is old. We were asking that back in the early 1950s. nt

[LongTomH]

7. Agreed! Norbert Wiener, one of the 'Fathers of Cybernetics' discussed this in 1950

His book: The Human Use of Human Beings discusses the ways that human beings and machines can cooperate.

However, the older wisdom that automation creates as many jobs as it displaces may not hold true as computers, robots and cybernetic devices in general get smarter. Futurists have been anticipating this for decades; I do recall people in the 1960s and 1970s writing about 'a workless world.'

[jwirr]

20. That is exactly the problem that they did not forsee.

[karnac]

9. id rather like to believe in a "Star Trek, the Next Generation" Future.

In that future, there is NO need to work to survive. Replicators and automation provides all our basic needs.

In a sense we are headed that way. In the developed world, roughly half don't work for various reasons. But we don't starve,and one if makes an effort through the bureaucratic morass, has a roof over their head.

As far as healthcare and quality of life, well that's a different story.

Of course, some will always feel a need to acquire wealth. others to help(doctors,teachers), others to create/invent/discover(engineers,artists,scientists)

We will need those few and should be encouraged.

[gulliver]

11. The economy and society are already thoroughly bionic.

Machines work for us and, increasingly, we work for them. They play with us, communicate with us, enable us to communicate with each other...like right now on DU. I think there is still an incredible amount of untapped demand for human economic objects (people). Look around at how untidy things are, how much things fall short on quality, and how dangerous and ugly they are in many, many cases. We just need the will to fix those things, and those things all need human action.

I'm not sure how much it pays to think too far ahead unless you are into speculative fiction (which I am). Like Keynes says, "in the long run we are all dead," although even that is getting more and more unclear.

[dkf]

13. Yes they do need human action, but can our unemployed provide what is needed?

This looks like a whole lot of programming and consultants to get businesses up to speed. High tech, not high school grads will be in demand.

[gulliver]

16. Yes

I think we need effort at all levels of education. Take energy conservation for example. We should be making all buildings in the United States as energy efficient as humanly possible. That needs construction work at all levels. Take education. We should be making education much more human-centered, individualized, and a richer experience. Instead of "how little can we get by with" we should be asking "how much would it take to optimize?" And then health care and so on.

It doesn't take much to see that we have lots of good uses for human labor and lots of labor to spare. What is needed is to get the system to connect the two. Otherwise, we are losing out on a lot of real wealth.

[johnd83]

12. I think the form of captilism that the right wing wants will fail because of automation

We have the opportunity to create a society where we can provide for everyone, however we will not be able to provide "work" for everyone the way we think of it now. The concept of everyone "earning their keep" doesn't really make sense when the necessities of like are created by machines run by a few operators. The sooner we realize this, the sooner we can restructure our economy to take advantage of the greater productivity of teh machines. Right now we just give all the extra wealth to the 1% because they "earned" it, whatever that means.

[kentuck]

14. K&R

interesting.

[SheilaT]

15. I had to look carefully at the date on that piece.

For you young'uns, this was being debated in a very lively way more than fifty years ago. Indeed, the promise was held out that, thanks to automation, by the beginning of the twenty-first century, most of us would be working a 20 hour work week.

When I tell young co-workers that, they are absolutely unbelieving.

[TheKentuckian]

17. It would be or close with better resource distribution and minus the societal push

for overworking at ever increasing efficiency with little to no expectation of wages to track with productivity and in fact, broad acceptance of stagnant or even decreasing wages for ever more in return.

[dkf]

19. That means we are slower at this than they visualized.

[MindPilot]

24. I recall when the big question was "what will we do with all our leisure time?"

Robots and computers would do all the work and the major problem to solve would be boredom. It's turned out to be quite the opposite; that robot which replaced a 40-hour-a-week worker needs three people to put in 50 hours a week to keep it running. Anyone who works in IT knows that automation doesn't destroy jobs, it just moves and multiplies them.

[SheilaT]

26. You've hit on the big, and largely

unexamined issue. The workplace changes. Jobs come into existence, and disappear as technology or the culture changes. Things are never stable for very long.

More than forty years ago I was a telephone operator. This was back in the days of Ma Bell. At that time, someone had estimated that if the telephone system had not gone to direct dial, that is if ALL calls had to go through an operator as they did until some time in the 1930's, by the mid-1960's it would have taken essentially every single adult woman in the country to run the phone system.

Remember when it was said that as individuals acquired personal computers we were all going to have to learn how to program them? Instead, commercial software was developed.

Someone used to manufacture the hooks that women used to button their button-up shoes. No one wears shoes like that anymore. And so on.

I am not arguing in favor of the Incredible Shrinking Wages. It is beyond greed and avarice that corporations have not shared their gains with the workers they still have. I do believe that the entire OWS movement is going to make profound changes in the economic system. But even in the best system, the one with the most equitable division of resources and profits, change will still occur, and some jobs will go away forever, even without being sent overseas.

I'm reminded a little of the young person who majors in anthropology in college and then can't quite understand whey there are no jobs in his major. I constantly tell young people to go ahead and major in what they love, but never forget that at the end they're going to need to earn a living.

[jpgray]

18. The Luddite fallacy has its opposite

Namely that labor-saving technologies will result in less labor or more leisure.

For this you can even ignore technologies - labor-saving social innovations can play the same role. Imagine labor in the fifties - largely male heads of household. Mother stays home. For society to function, it is necessary that a single paycheck provide a decent standard of living for a family, not in ideal but relative terms - decent compared to one's neighbors.

Now think of labor today, wherein the potential workforce has been doubled due to our moves toward gender equality. As two paychecks are more and more common in each household, to have decent quality of life compared to one's neighbors one must have two paychecks for one's household. We do not move from one person per household working nine hours to two persons each working four and a half. Because more can be given, more will be demanded by employers and more will be offered by those seeking to attain a "respectable" quality of life. It is acceptable to make a decent living on a single paycheck impossible for an average family by the standard of its neighborhood, since now two people can work.

Think of how much business was done to societal satisfaction without any ready access to instant communication over just the past three hundred years. Yet a Blackberry does not mean you spend four hours working when in the past you spent nine, because standards increase. What was satisfactory business before is satisfactory no longer. The labor saved results in higher standards of productivity from employers rather than shorter hours; it results higher expectations of decent life from employees rather than widespread comfort and satisfaction.

[AntiFascist]

21. Automation is a double-edged sword....

on the one hand it opens the door for the 1% not to have to depend on the 99%, and possibly to attempt to disengage. In order to do this they would need full control over their own security, including high-tech military. This is where they ultimately would encounter problems.

On the other hand, it also opens the door to automation serving the needs of everyone at a reduced cost. No more need for Chinese slave labor or a trade imbalance.

[unblock]

22. the problem is that less work is incompatible with a work-based distribution of resources

right now, everyone (outside of the top 1%) works for the overwhelming majority of whatever resources they get (the top 1% lets their money do the working). that's fine and dandy as long as there's plenty of work to go around.

should advancing technology (or anything else, for that matter) lead to a great decline in the need for work, then a great many people will be unable to find work to justify the resources they need.

under the current system, there would be widespread misery, but eventually a shift would be needed to somehow provide more resources to those not working. call it socialism or safety net or whatever, but unregulated capitalism can't be justified under such circumstances. you can't just let sit back and let people die.

[Warren DeMontague]

23. they're coming, whether you like it or not

some robot apocalypses are more appealing than others.

[Fool Count]

25. The only fallacy here is the assumption that capitalism will

continue to be the economic system and all those robots (and the goods they create) will still belong to the 1%.
Under this assumption then, obviously, the remaining 99% will become completely unnecessary and will inevitably
die off if left to the mercy of the "free market". The issue is immediately removed by transitioning from capitalism
to socialism where means of production (robots) belong to society as a whole and all products can be distributed
according to human needs. In such a society high automation and productivity is unequivocally good, resulting in
decreasing work time for everyone. Expanding leisure time (something currently enjoyed only by the 1%) will become
universal, as well as pursuit of personal fulfillment and enlightenment. That's just a basic Marxist view. I am surprised
that even "optimistic futurists", capable of imagining all kinds of weird stuff from nanorobots to physical immortality,
find such a simple concept as public ownership of means of production too utopian to contemplate.