I couldn’t really run a blog called Future Economy if I didn’t love talking about robots. Well, over the last several days, my RSS feed was like Shark Week for radical econ geeks.
Humans as Wasted Capital
First up, Frances Coppola with an interesting commentary on “The Wastefulness of Automation”. If it’s just dawning on you that the perpetual automation game is rigged against working people, you can go through some of the phases of grief with Coppola (though, to her credit, I think she doesn’t make it past “bargaining” here).
It starts out on an odd note for someone as highly schooled in economics as Coppola:
But what if capitalists DON’T want a large labour supply? What if automation means that what capitalists really want is a very small, highly skilled workforce to control the robots that do all the work? What if paying people enough to live on simply is not cost-effective compared to the running costs of robots?
First thing’s first. A large labor supply means lots of people willing and able to work. The more of them available, the cheaper they’ll sell their hours. Of course capitalists want a large labor supply — they get to pick and choose from that supply which ones can come off the 95% unemployment list.
But Coppola struck on the core conundrum — the contradiction hopefully keeping the worst-conceivable future off the table. Do capitalists want a large, active workforce?
If only a small number of people can afford to buy the products produced by all these robots, then unless there is a vibrant export market for those products – which requires the majority of people in other countries to be doing rather better than merely surviving on a basic subsistence income – producers have a real problem.
Okay, well, phew — capitalists will always need us workers. Problem averted, right?
Coppola notes the current trend of automation happening in middle-skilled office jobs, where labor is costly enough that automation is most attractive, while automating the lowest-skilled jobs is of lesser priority to the cost-cutting capitalist happy to pay slave wages for picking and skinning, maybe even lifting and sorting.
But we can’t lose sight of the reason “white collar” jobs pay more; it is because the people in the market for those jobs have comparative bargaining power. It is not because the jobs themselves are more valuable, or have a marginal advantage to the purchase of labor, compared to lower-paying jobs. They’re just more costly due to irrational market forces.
Therefore, such jobs are worth spending more to eliminate.
If the future is that the majority of people will do unskilled, insecure jobs for very low wages, then this amounts to a shocking waste of human capital. And if the more distant future is that even these jobs will eventually be automated, and working for a living will become the privilege of a few, then it is an even bigger waste.
Well, no. Under capitalism, human resources are only “wasted” if they could otherwise be put to better use. There has to be an opportunity cost to their disuse. In the dread scenario Coppola lays out, it’s not clear all this excess potential could do anything the capitalists would value. And since capitalists in the scenario have nearly all the demand power (not just an insanely disproportionate share, as now), who else would capitalism dictate has the prerogative to be valued? Who would a skilled worker be to argue that her talents and passion are being “wasted”?
In these conditions, a “waste of human capital” would be someone who could outwork a robot for wages amounting to less than the cost of the droid’s inputs but who, by some accident, doesn’t get put on the assembly line working shoulder-to-shoulder with X9-5R112. What a shame, the capitalist would think if he ever learned of the case. But someone who can make great art or engineer a way to feed the poor is of no value in this scenario if they can’t do it in a way that makes money for capitalists.
That skilled worker withering away in a tomato patch is only a “problem” if you’re unfortunate enough to possess morals that suggest human suffering is somehow wrong, per se. It is demonstrably not something markets can be bothered by.
Crucially, this isn’t some “Egads! There’s a flaw!” aberration of capitalism. This is one of the market’s more elegant features, if you set aside the hardship blah blah blah. It’s what you get when you put your faith in a system that values people precisely for their ability to (1) invest capital, (2) consume products, or (3) produce valuable goods and services at market rate. What else would you expect?
If you have no money and can’t compete with robots, according to capitalism you’re not a “waste of human capital”; you’re a waste of carbon and water. Coppola can’t seem to get over this shocking notion that capitalism has this built-in anti-sanity attribute:
A labour market that is skewed towards unskilled jobs when the workforce is more highly skilled and educated is malfunctioning. People who are in the wrong jobs are less productive than they should be: therefore, when most of the workforce is in the wrong job, we inevitably have an economy that is less productive than it should be.
No. What you’re actually seeing is that markets don’t care about your skills. And they’re not supposed to. That’s not their job! You either outwork a robot while matching its obedience and loyalty, all while asking for less… or you can go rot in a gutter. At best, you can go do something that’s not yet cost-effective to automate. Oh, and don’t forget, the capitalist gets to keep the robot’s wages; you’ll probably get all selfish and only give your wages back to him in exchange for some kind of commodity or service.
Now, the quote above about the labor market “malfunctioning” if it is “skewed towards unskilled jobs when the workforce is more highly skilled and educated” is true about an economy — if and only if you believe an economy’s mandate is to take care of human needs. But it is not true of a market, which has the mandate of moving products to sources of demand. You ask for an invisible hand, you don’t get to whine or call it a “malfunction” when it predictably turns into a fist and squashes you and everyone you love the way it’s been abusing so many for so long.
Robots don’t eliminate jobs; markets do.
Coppola’s revelations continue:
Looking ahead, the only way in which such extensive outright subsidy of wages can be sustained in the longer term is through heavy taxation of profits and wealth – which rather undermines the purpose of forcing down labour costs, from capitalists’ point of view.
Exactly. The capitalists’ only choice would be to pay people just to buy stuff. As neat as that might be for a dystopian novel setting, there’s a flaw in the concept: it would be way more sensible for them to pay robots to buy stuff. Why bother with consumer markets when you can program demand? (Everywhere you look, those damn robots…)
Anyway, we know this isn’t a practical scenario. So Coppola tries to bring us back to reality:
It seems to me that providing people with a reasonable income while they find or create for themselves the right job (not just any job), or to enable them to do creative and/or socially useful things that are currently unpaid, or to study and develop new skills, might be a good investment for the future, improving the productivity of human capital which over the longer term benefits the economy.
This is certainly the right general attitude to have about the future. But then you have to stop using the term “human capital”. As long as humans are capital, their “productivity” will be measured by the value of their output in the market. Only sounds about two-thirds insane… until you remember: robots. And then continuing to advocate markets sounds three-thirds insane.
You also have to rethink what it means to serve an economy. If the mandate of the economy is to produce goods and services for anything with demand power, there’s no way that “benefiting the economy” means “benefiting society”.
How They’ll Do it to Us
Martin Ford of EconoFuture blog is on a similar tip, but he’s been thinking hard about this issue for a very long time, and is probably the leading harbinger of the very real possibility that hyper-automation will create structural unemployment, with predictable shock waves throughout economies. Ford’s latest contribution is a primer on just how contemporary automation may encroach more permanently on the workforce.
Of course, people have cried wolf about technological developments throughout the modern era, yet from prior periods of egg-cracking disruption, omelets have usually emerged. So what’s different now?
Well, what if innovations started targeting more and more costly lines of work, as Ms. Coppola noted above? What if they started doing creative work? What if they start innovating, even upgrading themselves? Would that be fundamentally different from the steam engine? (Yes. Yes it would.)
Ford notes that the trend of automation is to replace routine functions carried out by workers. We see this everywhere. Workers welcome it when it means making their job a little easier — sometimes to their own peril down the line. Now innovators are seeking to automate more complex forms of routines.
Our definition of what constitutes a “routine” job is by no means static. At one time, the jobs at risk from automation were largely confined to the assembly line. … Machine learning … is in essence a way to use statistical analysis of historical data to transform seemingly non-routine tasks into routine operations that can be computerized. As progress continues, it seems certain that more and more jobs and tasks will move from the “non-routine” column to the “routine” column, and as a result, an ever-increasing share of work will become susceptible to automation.
So what are the implications for you and me?
Rather than simply acquiring new skills and moving to another routine job, workers will have to instead migrate to an occupation that is genuinely non-routine and therefore protected from automation—and they may have to do this rapidly and repeatedly in order to remain ahead of the advancing frontier.
Okay, but my job can’t be automated, you say… Well,
Lawyers and paralegals have been displaced by e-discovery software that can rapidly determine which electronic documents are relevant to court cases. More routine forms of journalism—such as basic sports and business writing—have been successfully automated.
If you’re starting to wonder if anybody is safe from the rise of the robots…
Not Brain Surgery, Right?
I imagine if I were a brain surgeon, I’d have trouble believing I could be replaced by a machine, even as I bragged about the jaw-dropping technological innovations being made in my field.
So I’m going to excuse the limits of Dr. Garnette Sutherland’s inability to see the writing on the wall as he regales us with stories of new and near-future technologies that are revolutionizing neurosurgery.
My favorite line is this:
What robots lack is the human brain’s executive capacity. Given that comprehending – and reacting appropriately to – the immense number of variables that can arise during surgery would require enormous computing power, surgical robots aim to integrate human experience and decision-making ability with mechanized accuracy.
Yeah, good luck with that, Doc. Neurosurgery will be a prime target for automation. Of course computers have an executive capacity; try playing one in Backgammon, Chess, or Texas Hold’em. If in the middle of a surgery, a not-yet-programmed decision needs to get made, the on-call surgeon will be able to cover several robot surgeries at once. Maybe several hundred. From across the Internet.
And talk about high-cost routines! Before the good doctor knows it, robots will be explaining how the human brain utterly lacks the capacity to aggregate the compound experiences of multiple units (in real time, no less!), and how its error rate is N times that of robots, and how it can only perform one surgery at a time, and how it needs to sleep and play golf, and go to conferences, and… you get the point.