Author’s Note: This is the second installment of Understanding America’s Broken Economy. The first installment can be found here.
The Anti-Luddite Pledge. I have worked in technology for the past 31 years. In that time I have met tens of thousands of “technology people”. They are generally very mathematical, precise and quantitative in their approach to problem solving – with one huge exception – The Anti-Luddite Pledge. The Anti-Luddite Pledge holds that technology will always create more new opportunities for employment than it erases old opportunities for employment. I see no reason whatsoever to believe this to be true. In fact, I see several reasons to believe that idea is fundamentally wrong.
Obama’s pseudo-gaffe. On June 15, 2011 President Obama stated in an interview that ATM machines and airport kiosks were examples of technologies that took jobs away from people. You can view the video of his remarks here. Needless to say, the Anti-Luddite Pledge crowd came out in force to pillory the president for his remarks. The vast majority of the comments in the blogosphere were ODS (Obama Derangement Syndrome) chattering. However, there were some reasoned responses, such as the Economist’s take. But even the best retorts missed some key points. First, nobody seems to debate that airline kiosk technology replaces people. All the debate was about ATMs. Second, the Bureau of Labor Statistics data shows that the number of bank tellers in the United States is rising. So, Obama must be wrong. Not so quick. According to the BLS, in 1985 there were 485,000 bank tellers in the United States, in 2008 there were 600,500. In 23 years the number of bank tellers grew by 24%. Unfortunately for the Anti-Obama crowd, the US population grew by 27% over that same period. Moreover, the BLS predicts that the number of bank tellers will grow by a total of only 6.2% over the 10 years from 2008 to 2018. The US population is expected to increase by 10% over that same period. Even the jobs created in making and repairing ATMs can’t make up the difference – especially if the manufacture of ATMs is done in China.
Stabbed by the sharp end of an exponential curve. Please take a close look at the graphic I have embedded with this blog post. I intentionally used a “vanilla” curve without any labels on the axes. We can debate the shape of the curve that represents technology change. We can debate the shape of the curve that represents societal change. Can we really debate whether the curve of technology change will eventually “break through” the curve of society’s ability to absorb change? I don’t think so. In fact, I suspect that the two curves have already crossed and are diverging from one another at a growing rate.
Out of the mouths of fiends oft-times come gems.
“On the other hand it is possible that human control over the machines may be retained. In that case the average man may have control over certain private machines of his own, such as his car or his personal computer, but control over large systems of machines will be in the hands of a tiny elite – just as it is today, but with two differences. Due to improved techniques the elite will have greater control over the masses; and because human work will no longer be necessary the masses will be superfluous, a useless burden on the system. If the elite is ruthless they may simply decide to exterminate the mass of humanity. If they are humane they may use propaganda or other psychological or biological techniques to reduce the birth rate until the mass of humanity becomes extinct, leaving the world to the elite. Or, if the elite consists of soft-hearted liberals, they may decide to play the role of good shepherds to the rest of the human race. They will see to it that everyone’s physical needs are satisfied, that all children are raised under psychologically hygienic conditions, that everyone has a wholesome hobby to keep him busy, and that anyone who may become dissatisfied undergoes “treatment” to cure his “problem.” Of course, life will be so purposeless that people will have to be biologically or psychologically engineered either to remove their need for the power process or make them “sublimate” their drive for power into some harmless hobby. These engineered human beings may be happy in such a society, but they will most certainly not be free. They will have been reduced to the status of domestic animals.”
– Theodore Kaczynski (aka “The Unabomber”)
In summary: The problem is not technology. The problem is society’s ability to absorb the economic impact of technological change. There are two curves – technological change and the ability of society to absorb the impact of that change. I believe that the two curves are destined to cross. In fact, I theorize that they already have crossed.
Next up, globalization and economic upheaval.