Robots will create your next job

Since the day someone invented a mechanical loom 400 years ago, pessimists have been claiming that technology will destroy jobs. The reality is far more complex. Technology destroys jobs while creating others that no one anticipated or imagined. In our time innovation is not so much eliminating jobs as changing the shape, duration, and rewards of a career. For many, though not all of us, this has been a very positive development.

The authors of “The Second Machine Age” have offered another explanation of how the process of innovation destroys older forms of employment and brings new, better jobs in its wake. From a review in the Washington Post:

The big winners in this new era will be consumers, who will be able to buy a wider range of higher-quality goods and services at lower prices. The other winners will be those who create and finance the new machines or figure out how best to use them to gain competitive advantage. Great wealth will be created in the process.

To illustrate the point, Brynjolfsson and McAfee cite the example of Instagram and Kodak. Instagram is a simple app that has allowed more than 130 million people to share some 16 billion photos. Within 15 months of its founding, Instagram was sold to Facebook — a company with 1 billion users — for $1 billion. It was only a few months later that Kodak, the Instagram of its day, declared bankruptcy. The authors use this little vignette to illustrate two points. The first is to point out that the market value of Facebook/Instagram is now several times the value of Eastman Kodak at its peak, creating, by their calculation, seven billionaires, each of whom has a net worth 10 times greater than George Eastman ever had. Such is the “bounty” of the second machine age.

But the evolution of photography also demonstrates how unevenly that bounty has been divided — what the authors somewhat inelegantly call the “spread.” Not only has it created a new class of super-rich entrepreneurs and investors, but it has done so with a company that employs only 4,600 workers. Compare that with Kodak, which at its peak employed 145,000 workers in mostly middle-class jobs.

And what do these brilliant minds suggest should be done at a political level to adapt our culture to the opportunities and demands of “the spread.” You may have heard this idea mentioned somewhere before:

To deal with what they see as the inevitable increase in income inequality, the MIT duo would turn to a negative income tax, with which the government would assure a minimum income to anyone who works — an old idea now gaining popularity on both the left and the right.

That’s why business-oriented minds on the right are talking about a new approach to the social safety net instead of endorsing the Cruzian notion of burning the whole thing down. The rapid acceleration of technology present us with opportunities which we could easily fumble if we fail to recognize the meaning of this change.

Chris Ladd is a Texan living in the Chicago area. He has been involved in grassroots Republican politics for most of his life. He was a Republican precinct committeeman in suburban Chicago until he resigned from the party and his position after the 2016 Republican Convention. He can be reached at gopliferchicago at gmail dot com.

Tagged with: , , ,
Posted in Economics, Welfare State
63 comments on “Robots will create your next job
  1. “‘A curse on machines! Every year their increasing power condemns to pauperism millions of workers, taking their jobs away from them, and with their jobs their wages, and with their wages their bread! A curse on machines!’

    “That is the cry rising from ignorant prejudice, and whose echo resounds in the newspapers.

    “But to curse machines is to curse the human mind!”
    – Frédéric Bastiat, 1850

    Apparently, there is nothing new under the sun.

    This idea of a universal income is, prima facie, ludicrous. As is the notion of “the spread.” In every generation since the invention of stock, successful entrepreneurs have become fabulously rich; it’s precisely the entrepreneurial risk/reward system that makes capitalism so successful. But it’s not just the successful entrepreneur who benefits. Wealth is not static; it is a created commodity, and one of its fundamental properties is that wealth diffuses. Entrepreneurs are the first generation winners, but the shareholders of enterprises gone public also win. As does everybody else when that newly created wealth disseminates throughout the economy.

    We should not be attacking the success of entrepreneurs through coerced redistribution; we should be encouraging it through lower taxation. We should not be discouraging participation in the market; we should be encouraging it. (Partial privatization of of Social Security would be a good start.)

    Always remember, forced redistribution never creates wealth, it only destroys wealth.

    • desperado says:

      Always remember, trickle down never does.

      • Really, desperado? I trust your quality of living and personal wealth are significantly higher than that of your paleolithic ancestors. Or your Bronze Age ancestors. Or your Iron Age ancestors. Or your industrial revolution ancestors. Or for that matter, your grandparents.

        The per capita wealth of the human species has increased continually since we first started bartering, and the pace has gone exponential since the invention of stock. Those we label ‘poor’ in this country enjoy a quality of life that would astound an Egyptian pharaoh. That’s all trickle down, desperado. All trickle down.

        The development of mankind’s cumulative wealth is not a zero sum game. Those fortunate few who have a talent for creating wealth inevitably improve the sum total of wealth for humanity, and that wealth inevitably disseminates (trickles down, out, across). This is because the wise deployment of capital begets more capital, ad infinitum. No reasonable person can objectively conclude otherwise.

        Policies that treat mankind’s cumulative wealth as if it were static, and therefore try to redistribute wealth by force in an egalitarian fashion, invariably act to the detriment of overall wealth creation. That’s why communism has failed so miserably everywhere it’s been tried, in case you were wondering.

        As long as I’m on a Bastiat kick, he certainly put it more eloquently than I:

        “Sometimes the law defends plunder and participates in it. Thus the beneficiaries are spared the shame and danger that their acts would otherwise involve… But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them and gives it to the other persons to whom it doesn’t belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime. Then abolish that law without delay – No legal plunder; this is the principle of justice, peace, order, stability, harmony and logic.”
        – Frédéric Bastiat, “The Law” (1850)

      • desperado says:

        Tracy, I realize you’re very impressed with yourself and your pontificating skills, but you know that’s not what I was referring to. Instead of going back to the time of Egyptian pharaohs, let’s look at a more recent time frame. Between the late 1930’s and the mid 1970’s there was a period of relative stability in wealth distribution in this country. That was all in a time of what you would call forced redistribution, when the top marginal rate exceeded 70 %. Then came the Reagan revolution and the advent of the supply side lie. Since the early 80’s the wealth of those at the top has soared while for the vast majority of the country it has stayed flat. Hence, trickle down doesn’t work. Unless you’re one of those at the top.

      • Owl of Bellaire says:

        Thorleifson would’ve been right there defending the prerogatives of the Egyptian pharaohs, and the conditions of the Egyptian peasants, as their respective and rightful dues.

    • John Galt says:

      There may be a dozen reasons to support low income taxes, but the promotion of entrepreneurship is a tenuous one. It’s also a bit beside the point – those wealthy because of their entrepreneurship is small – probably the 1% of the 1%. Neither I nor anyone else begrudges Sergey Brin, Mark Zuckerberg, or Elon Musk their billions. Their creations, their ideas, have transformed modern commerce and communications. They deserve their rewards (though I doubt any of them would be the worse off, or would have been less strongly driven, had the marginal tax rate been 40% instead of 35%). A huge number of very wealthy have far more tenuous claim to their wealth being the product of transformative contributions.

      CEO pay has kept through the roof in the last 30 years. Why? Because the job is 100 times harder than it used to be? Because they work 10 times harder than everyone else? A number of perverse incentives inflate their paychecks beyond their contribution to the company’s bottom line, and this is paid for from stockholders’ returns and the compensation of the people who actually produce the product the company sells. Hedge fund managers make unbelievable sums by producing fairly average returns. Lawyers make a lot of money producing more work for more lawyers who make a lot of money producing…

      It’s not unreasonable to consider how an economy might use the tax system to address income inequality, which is bad and getting worse, while incentivizing transformative advances.

    • Crogged says:

      Wealth isn’t created-money is printed and individuals make decisions to spend or not spend. We don’t live in a barter economy-we have money.

      http://www.slate.com/articles/business/the_dismal_science/1998/08/babysitting_the_economy.html

  2. geoff1968 says:

    Hey, wait a minute, I thought the introduction of these new technologies was supposed to a universal boon to mankind.

    Do any of you recall Thorstein Veblen?

    http://en.wikipedia.org/wiki/Thorstein_Veblen

    • Tuttabella says:

      I have thought seriously whether society would be better served if people like Fly and John Galt ruled the nation, instead of the usual, predictable batch of lawyers and business people. As scientists and purveyors of pure logic and reason, and total objectivity, all eyes look to them for answers in order to determine reality and set public policy, such as the question of when abortion is legally acceptable. I do struggle with the idea, though, that everything is so cut and dried, and the view that scientists have the final say in every matter, simply because it’s science. Like taking God’s place, or at least purporting to speak for the god of science. Is there no place for doubt, ambiguity, emotion, faith, and religion in the world? If science has the absolute, ultimate word, then what is the point of devoting our time and effort to anything else?

      • John Galt says:

        Tutt, I’m not sure where this comment comes from, but I think you misunderstand science. It is not a set of answers, it is a process by which one finds answers. I don’t claim to be totally objective, nor a purveyor of pure logic, but I do think that most questions about the natural world and, further, about human interactions, are best answered through a logical and systematic analysis. Scientists will be the first to admit that the process is by no means “cut and dried” and the results not infallible, but there is no better way to understand the natural world.

        I do not believe in god – there is utterly nothing I have ever observed in life that even suggests to me that there is a supernatural influence active in the world. There is no “god of science”. I can tell you what I think the meaning of life is, but it won’t impress you and it doesn’t matter: science cannot deal in issues of meaning. I’m willing to leave issues of meaning to philosophers and theologists.

        I think all things, governance included, could do with a bit more honesty and rigor. I would not be a good politician for a hundred reasons, but I don’t think it is unreasonable for me to expect some basic level of consistency and decency. Alas, it does seem to be unlikely.

      • Tutta, as a guy who was a practicing geochemist for some years, I can’t help but find your mechanistic view of science curious. Jr. high and high school science concentrate on the scientific method as if it were a recipe that can be learned from a book. That’s an extremely simplistic treatment.

        When you begin to practice a science at the graduate level, you very quickly come to the realization that everything you were taught was an absolute fact is, in actuality, subject to uncertainty and incompleteness. This goes even for stuff that we take as absolute dogma, like Einstein’s Theory of General Relativity. At first this realization is disconcerting, and even depressing. But ultimately, it’s extremely liberating. The sphere of light that represents what we know is the smallest of glimmers in the vast field of darkness representing what we don’t know. In every field of scientific endeavor, there’s literally an infinity of work to be done.

        As for the scientific method itself, short shrift is given to the tiny spark of intuition that leads to a new hypothesis. And that tiny spark is *always* driven by the very things you celebrate, “doubt, ambiguity, emotion, faith.” The unsuccessful experiment is almost always more intriguing than the successful experiment. Scientists are passionate beasts; passion is never eliminated in science, nor should it be. A good scientist tames their wildest passions, and puts them to good use. Nothing in science is ever “cut and dried.”

        I find your disparaging view of “business people” equally disconcerting. It’s true that the immoral crony capitalist may attempt to manipulate the political system to their own ends. Such a person is, in my view, despicable. But remember this: the true businessman (or woman) cannot force you to buy anything. They can only achieve a profit by pleasing you, by providing things you need or desire. Doing so is a noble calling, and in the long run improves all of our lives immeasurably.

      • Tuttabella says:

        As for my view of science and scientists, I don’t have much experience in the sciences, but the fact the people look to them to answer some of the world’s greatest questions, because of its devotion to logic and reason, led me to believe that their conclusions, if not their research methods, are cut and dried, with little room for ambiguity.

        I am happy and touched to hear that in the sciences we can find passion, hope, doubt, innocence, and humility. I definitely detect that in the words of Fly, John Galt, and tthor.

    • Tuttabella says:

      John, my comment was in reply to Geoff1968’s mention of Thorstein Veblen, who called for a technocracy, and putting engineers in charge, among other things.

      I don’t have a problem with atheism. Good can still result from the efforts of good men and women, or at the vey least, an absence of evil, a neutrality of sorts in the world, from men and women just letting things be — nothing particularly good, but at least not particularly evil, either. I’m guessing that’s why you say I would not be “impressed” with what you believe is the meaning of life. It’s probably a very sterile view of things. Still, I’ll take “not impressed” over “appalled” any day.

      I will stick my neck out and say that even for atheists, especially those brought up to believe in God, there is probably something deep within that does believe in God. I think there is something in all of us that seeks out something godlike — in poetry, music, art, beauty, and words. Fly has said she understands how the beauty and miracle of science is something that would fit in with those who believe in a Creator.

      As for the matter of “scientists” (as opposed to science itself) having such an important role in determining public policy, in the case of abortion — most of us know the basic birds and bees, and we’ve come up with our own conclusions/opinions of when life begins — at fertilization, or upon embedding in the uterine lining, or upon the first heartbeat, or when the brain begins developing, or when the fetus stops looking like a blob and begins to look remotely human — and when it’s ok or not ok for abortion to performed. The actual decision of when abortion is legally acceptable in the US was also based on a set of opinions, albeit the informed opinions of experts, but opinions nonetheless. These very human scientists were asked to draw a line somewhere during the fetal stage of development, and a consensus was eventually reached on where to set that line. I struggle with the concept that their opinions are more valuable than the opinions of the rest of us. We can be just as thoughtful, fair, and concerned for the common good as the experts.

      I have no desire to participate in politics, either. I have a general dislike for being around people. It could never work.

      • CaptSternn says:

        Same here about being around people, I could never run for office. Not only that, but the media and everybody else wants to dig through a person’s life history if they do run for office. I would not want my privacy invaded in such a way.

      • John Galt says:

        Yes, I’m a bit of a misanthrope myself.

        Most scientists are atheists or agnostics. There’s a spectrum though – a somewhat dated survey of members of the National Academies of Science suggested that something like 60-70% of physicists and mathematicians did not believe in god, while 95% of biologists did not. Physicists spend a lot of time wondering about origins and how intricately the universe fits together. Biologists also wonder about origins, but are confronted daily with just how messy life is. By that I mean that evolution has made some pretty stark compromises that are inelegant but work and, as we delve deeper, the complex structures at which we marvel are products of simpler things put together in ways that sometimes seem strange.

        Personally, I don’t see any need for the supernatural in this, but I don’t think that science and religion are necessarily incompatible if we leave to religion the ultimate origin question (why is the universe here) and let science get to the question of how it works. The evangelical fundamentalism that seems increasingly common, though, is just nonsense with no basis in the real world. Even if someone believes in god, then he/she/it created us with brains capable of figuring stuff out and we are far better for it. The willful stubborn ignorance on display routinely just mystifies me.

        I’m not going to jump into the abortion argument, except to point out that conception is the starting point for most pro-life people, and it is an easy and clear dividing line. It does not appear to be when nature considers life to begin, since a huge number (half, probably) of conceptions are terminated naturally even before implantation. Beyond that, I would support policies that are informed by science, practical considerations, even some philosophy, coupled with a deep sense of respect for the only sentient being affected by the issue: the pregnant woman.

      • CaptSternn says:

        The way I see science is somebody finding a clock and working to figure out how it works and what purpose it serves. But why would that require or even promote the idea that it wasn’t created or built by somebody else? Science is a means to attempt to understand the Creation. The proof of Creation is the fact that the universe, and us, exists.

        Just my two cents on that.

      • John Galt says:

        This is perhaps a semantic thing, but Creation implies a Creator, which has some pretty specific connotations. Science attempts to understand the universe as it is. It cannot address why it is here and there are technical limits to how far back we can go in studying it. But I don’t think the right response to that is to invent an exceptional being to provide an answer. Humans have been invoking the concept of god to answer mysteries of nature since the dawn of time. It turns out that has never been the right answer. I’ll leave it to you to decide whether it’s the right answer for the origin of the universe.

    • Tuttabella says:

      tthor, I was not denigrating business people, only suggesting governing from a different perspective.

  3. Tuttabella says:

    “A minimum income to anyone who works.” – Works at what, if jobs are disappearing? With such rapid technological change leading to fewer jobs, and adding to that the guaranteed minimum income for those without jobs, eventually you will have 2 separate groups — the work and the work-nots. Instead of throwing just enough money at them to keep them out of sight and in their place, just enough to ease your guilty conscience, why not go all out and give them enough to truly improve their lot, teach them what they need to know in order to compete in today’s world and perhaps even overtake you in terms of success? Kind of like affirmative action, but class-based. Perhaps it’s actually the super-rich who are unwilling to tolerate being usurped by “those people.” It’s easy to be magnanimous when there is no real threat to your position.

  4. bubbabobcat says:

    Damn forgot about the multiple URL approval.

    Here it is with links separately:

    Not that you actually deserve any response Danny Downer.

    http://pediatrics.aappublications.org/content/129/1/e224.full.pdf

    • bubbabobcat says:

      Sorry, reposted in wrong thread and it looks like Chris already approved my multiple link thread.

      To quote Emily Litela,

  5. Owl of Bellaire says:

    Yep; here comes (if you don’t believe it’s here already) a world where there aren’t enough jobs available for all the people who might want them. So you can accept the existence of a seething underclass, and bring to bear all the repressive (and, ultimately, futile) infrastructure of a totalitarian state to keep order and protect the gated communities of the wealthy few, or you can offer the poor a minimum standard of living which gives them the freedom either to live without bothering everybody else, or to put in the cumulative learning and/or work necessary to develop the next great novel, smartphone app, furniture design, etc.

    A Third-World repressive oligarchy versus a democratic-socialist state which encourages creativity among the poor? The choice seems obvious. The problem is that modern Republicans all too often claim that “obvious choice” is the first option.

  6. bubbabobcat says:

    And maybe that constant fear stress (imagined or otherwise) explains the lack of rationality, reasoning, logic, understanding of basic facts of the wingnuts. Your constant state of fear of your own shadow and everything around you renders you totally senseless.

    http://opinionator.blogs.nytimes.com/2013/07/27/status-and-stress/

    Buzzy, Cappy, And Danny Downer just need a huuuuuuuug.

    http://www.nytimes.com/2012/01/08/opinion/sunday/kristof-a-poverty-solution-that-starts-with-a-hug.html

  7. CaptSternn says:

    More of this minimum income thing? We already have it. It pays people to not work, often better than paying them to work. Obamacare is only increasing that problem. But hey, from each according his ability, to each according his need, right?

    I do miss the old cameras. My parents bought a Minolta 35mm when I was a kid. A few years later I was on the Yearbook Staff as a photographer with one other guy. We developed our own film in a darkroom and burned the images on the photographic paper, watching the images form in the chemical baths. Mom has a lot of photo albums and more loose pictures in boxes. That won’t be the case in the future. It will all be digital, and eventually lost due to deletion, crashes or decay of the media.

    • texan5142 says:

      Yep! I like the old cameras too! Was in photography in 79 high school, fun stuff.

      • way2gosassy says:

        I love old cars and buildings too. We have restored a 26 model A coupe and a 1951 Chevy panel van, good stuff. We are also moving to Tennessee into a nearly 100 year old home. Well maintained and mostly all original. The woodwork is just beautiful ( if you can see past 40 layers of paint!). I can hardly wait to start stripping.

      • Tuttabella says:

        Sassy, you can’t wait to start “stripping?” What’s the temperature there? 🙂

    • DanMan says:

      I have a buddy that recently retired from a hospital research facility in the Medical Center. They had to document the results of their work with film. Digital photography was not accepted as evidence for a lot of his work because of the ability to manipulate the images. That was 2-3 years ago.

      A couple of months ago I bought a bid set of drawers and cabinets for my garage from a neighbor that was moving away. In it were all these oddballs objects I had never seen. Turns out it was photo development tools.

      • bubbabobcat says:

        I enjoyed darkroom photography work and I still have not found a digital camera that matches the optical quality of my Minolta SLR, but you know what?

        I enjoy the heck out of not paying an arm and a leg for buying, developing and printing whole rolls of pictures just to see which ones are worthy. Also I get to take as may pictures as I want without extra cost to bracket, etc. to I get it exactly as I want it.

        You takes the bads with the goods. And I like progress. Except when you destroy historical landmarks for McMansions. That is NOT progress. For civilizations at least.

      • DanMan says:

        hey bubba! we found common ground! I like fixing up old stuff. My house is almost 60 years old and from the front looks totally original. I have retrofitted so much energy efficiency and insulation that it is dirt cheap to maintain.

        One of my favorite things to do is bring back dead cars I find unique. I’ve done several including imports. Just sold two of them. Most of the ones I have done were given to me. I don’t think I’ve ever paid more than $300 to obtain one and every single one of them was driven away.

      • bubbabobcat says:

        Maybe there’s hope in the world of politics after all Dan. As long as we stay away from politics. 😉

        I so want to buy and finish renovating this house.

        http://www.chron.com/homes/article/Notorious-Houston-property-for-sale-5242003.php

      • DanMan says:

        That house got snapped up. Very cool. I love those old places in Riverside and MacGregor Park and went and looked over there before we bought this place. We were way too white. It was about 6 years ago and all of the “This is my home!” and “We won’t leave!” signs were in the yards across the street from every house that was for sale.

        I still drive through there when I have something to do at UH and I don’t see those signs anymore so maybe that’s calmed down.

        My dad told me the whole story of that area many years ago. Very unique history. I bet that old house in the picture has a name attached to it we would recognize.

      • Texan5142 says:

        Nice bubba! Wonder if there are hidden passage ways and such in a house like that.

      • CaptSternn says:

        “One of my favorite things to do is bring back dead cars …”

        *sigh* I have an ’89 Trans Am GTA 5 speed I want back on the road. I miss my old toy. But there are better things to spend money on right now.

      • Texan5142 says:

        We are not so different, you and I.

      • Tuttabella says:

        I collect vintage electronics — phones, radios, TVs, turntables, and especially TYPEWRITERS. Just ask Cap. Oh, how I miss my Olivetti typewriter avatar !

      • CaptSternn says:

        No doubt, Tutt. You have found some great treasures in old typewriters and phones. We need to work on getting your avatar back in operation.

      • DanMan says:

        I have an old red ebonite desk phone with the four prong cloth wire cord. It still works and has the dial that the kids who see it for the first time think is the craziest thing. The funny thing is there impatience when I show them how to dial it. It sits in a drawer in my entertainment wall so I can open it like Alfred when it rings.

        I also have about 700 or more albums from the 50s to sometime in the 80s.

      • Tuttabella says:

        By the way, I don’t just collect vintage electronics, I actually use them. I also enjoy adapting old technology to new, with the help of cables from Radio Shack. I have an old turntable from the ’60s connected to some modern Bose speakers. About 10 years ago I used to hook up a VHS player and WebTV to an antique console TV from the ’50s and watch movies and surf the web on the old TV, setting it to Channel 3 and using the remote control.

    • John Galt says:

      Almost all our scientific needs for old-fashioned film are gone. We just decided not to replace an old developer and go entirely digital. Data manipulation is a (minor) issue, but there are technological solutions (software) to detect altered images.

  8. DanMan says:

    “…a new approach to the social safety net instead of endorsing the Cruzian notion of burning the whole thing down…”

    The as yet to ever work notion of communism vs The Cruzian notion of following the constitution

    Trying to control human nature vs maximizing human nature

    rainbows vs reality

    lies vs facts

    Venezuela!!

    • DanMan says:

      from the link…

      “You can’t do serious economics unless you are willing to be playful.”

      Yeah, we’re getting played alright. On the bright side, all that time you used to spend eating can now be devoted to starving. Yea!

      • Crogged says:

        I don’t understand your comment(s)? For one thing William Grieder is clearly someone you would label a ‘liberal’-yet another liberal dismisses his nearly 500 page tome in just a few paragraph(s), without attacking business or technology. So you like Mr. Krugman’s conclusion, but don’t want to address the argument because, well, liberal, you know?

      • DanMan says:

        After he challenged for the second time to stick with him I walked away, I’m not real big on fiction but will cop to the Bourne series and that kind of stuff on tape/CD when I travel.

      • Crogged says:

        It makes sense you don’t read past a staple.

      • DanMan says:

        I learned a long time ago to ignore Krugman. He’s been around so long its possible to find him arguing against himself with no acknowledgment of his opposite takes.

      • CaptSternn says:

        Krugman? Really?

        “Who is this Sean from Florida? He takes everything that [the] Professor [says] and shreds it, piece by piece. He shouldn’t be allowed to post his comments on this blog since he seems to be winning all the debates. We progressives need to stick together and embellish our talking points without someone from the outside pointing out fallacies in our ideology.”

        http://www.americanthinker.com/2010/08/paul_krugman_gives_up_1.html

    • Crogged says:

      I forgot, why read the source when there’s somebody else to tell you what he said. Krugman? Why read him when I have anonymous comments from a newspaper blog site!

  9. bubbabobcat says:

    Minimum income – akin to Maslow’s hierarchy of need. Once basic needs are met, you are free to bloom, innovate, entrepreneur to your heart’s content.

    Cue the wingnut glass is 99% empty, rants of “welfare for all”, “those lazy others” will ruin it for us “good people”, etc., etc., etc., histrionics.

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