John
Maynard Keynes, wrote an article in 1930 titled - Economic
Possibilities for our Grandchildren where he takes “wings into the
future.” What can we reasonably expect the level of our economic
life to be a hundred years hence? His basic premise is that
productivity will continue to increase rendering more and more humans
jobless.
2030
is more than a decade away and John Maynard's forecast is amazingly
on target. Advances in automation, is affecting workers in developed
countries and the impact is undeniable.
“Nonemployed
- As robots grow smarter, American workers struggle to keep up”:
This
trend will continue to pick up pace and in the future we will see
more and more jobs being performed by robots. So what does the future
hold? Watch this video on humans need not apply:
And
the alarm it raised for the author of the following article:
Computers
are becoming smarter and the implications are described in this talk:
The
children of the 21st Century
will have bigger challenges in bringing up their children, than the
20th Century
generation. The world has changed so much since our parenting
experience. While the pace of change is accelerating society's
ability to keep pace with its impact is not.
Society
will have problems coping with the rate of change being brought about
by technological advances and innovation. The rate of change is
accelerating and every indication is that the effect on mankind will
be cataclysmic unless it is planned for.
The
following is a Sixty Minutes feature: Are robots hurting job growth?
Here
is an opinion piece on the same subject:
Kurzeweil,
who is considered by some to be the world's leading artificial
intelligence (AI) visionary, coined
the phrase, “Singularity” to describe the
moment in the future when humans and machines will supposedly
converge. He sees this happening by 2029 just fifteen years away.
Pundits
are conflicted about this trend as portrayed in these TED talks:
Listen
to the last 60 secs, of the opposing talk below, if you don't have
the time. The title is half misleading. Innovation is not dead.
Whether it will contribute to growth is the issue. Innovation will
make things better for some and hurt others.
Notice
the difference in age between the two speakers. Both agree on the
rising income gap and the impact of automation. Education will be
revolutionized by technology. This is not acknowledged by the second
speaker. It will become more accessible. But, will people take
advantage of it. What the US faces today and in the near future, the
developing world will experience, not too far in the future.
Innovation will continue, however currently, there is a diminishing
rate of uplifting return due to innovation. More people are being
rendered jobless due to automation. The first speaker acknowledges
the challenges, and has a Utopian response; the second predicts
society will be unable to cope and he challenges the current
generation to deliver innovation that have the same uplifting impact
as the past generations did.
The
companion article: “The
Forthcoming Leisure Age”,
is all about an age of abundance while recognizing that many people
will experience some hardships during this transition.
Jeremy
Rifkin has coined the phrase, “The Zero Marginal Cost Society,”
and written a book pointing out
that the rapid advances in technology is “speeding us to an era of
nearly free goods and services.”
He explains the impact on society in a talk he gave at the Churchill Club:
None
of these opinions delve into the massive socioeconomic-political
changes that need to take place to address this trend.
Growing
income inequality is a world wide phenomenon. For instance say one
person makes 5,000 a month and another makes 10,000. Both get a 5%
increase which takes their wages to 5,250 and 10,500 respectively.
The income gap of 5,000 becomes 5,250. The wages for an unskilled or
same skilled job is not going to keep pace with jobs that require
special skills. It doesn't take a new set of skills to perform
existing manual jobs like "load carrying", picking fruits
and vegetables, etc. Any wage increase is not because of
upgraded skills. It will be paying more for people doing the same
job, to keep pace with inflation. The solution to the rising
income gap is to reduce the cost to these people by way of subsidized
housing, food, healthcare and education. Just about all countries
provide these subsidies in some form or the other. The outlay for
these “hand outs” is going to increase and needs to be planned
for.
Developing
countries face the problem of lack of opportunity for their citizens
while developed countries are losing jobs to automation. Both are
faced with people willing to work but lack opportunities.
Furthermore, every country is faced with ‘Takers’ who are
unproductive people, be it due to unavailability of opportunity,
inability, age, or unwillingness to work.
With
increasing automation, more and more jobs will be eliminated, which
will increase the supply of workers and put a downward pressure on
wages. There will be more and more people who are unable, or
incapable and hence shut out from the "automated economy".
The
short term solution to this problem is for the "productive"
people the “Makers” to support the "unproductive"
people the “Takers”. This is being practiced in some form or the
other by every country.
Given
the current socioeconomic-political situation this solution is not
sustainable. We will be faced with a decreasing number of Makers that
will have to support an increasing number of Takers.
The
undeniable facts are:
Automation
and design for manufacturing will become localized, but it will
require fewer workers. The developing world will benefit and affected
by this trend.
In
the US the Middle Class that comprised mainly of Joe Plumber, Jack
Electricians and Bob the construction man is being decimated. Wages
are either stagnant or declining.
In
the Developing World the opposite holds true, the Middle Class is
growing and wages are improving for skilled, semi skilled and
workers. But this “dividend” may be short lived. The rate at
which technology is adopted by the Developing World is increasing as
well. The downside of not increasing productivity is increased costs
and reduced efficiency.
Barring a man or nature made catastrophe, we can see a new world
order with the “Forthcoming Age of Leisure,” as described in the article of the
same name.
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