Thursday, October 21, 2010

Schizophrenia in the Intelligentsia

I find this bizarre. On the one hand you have the Economist magazine publishing an blog post worrying about automation taking over jobs and leaving people unemployed:
Now, it's quite possible that robotics may generate unemployment as the economy adjusts to the deployment of new technology. This is a common feature of economic history. New agricultural technologies displaced workers, many of which struggled, for a while at least, to find new work. Similarly, automation of manufacturing activity (including the use of robots) has pushed many workers out of the industry, some of which have had difficulty finding new work. But this unemployment goes away, as workers adjust and develop skills appropriate to sectors in which employment is rising.

But what if robots can do anything humans can do? Would there then be long-term technological unemployment? I'm sceptical. For one thing, labour-saving technology reduces demand for some workers but increases demand for others. If firms successfully deploy robotic labour, that will be good for robotics firms and the ancillary businesses that power them. It will likely give rise to complementary industries that are difficult to anticipate, but which would provide employment. And just as cheap robots would free labour resources for other uses, they'd also (since they're presumably providing some cost advantage) free financial resources that could then be directed to other industries. If a household can save lots of money by employing a robot to handle all its home health services at a fraction of the price of human labour, then it will have more money available to spend on other consumption goods.

But what if robots can do all of those other things, as well? What if they can design and build robots, and manage robotic firms, and run restaurants, and perform operas, and so on? What will be left for other humans to do?
On the other hand you have a blogger who posts:
French High School Students Rioting Over Increase in Pension Age

Police fired tear gas on hundreds of rioting high school students yesterday after they threw rocks and set fire to a car. The masked students were protesting the French governments plan to raise the minimum and maximum retirement ages to 62 and 67, a difference of two years from the current age limits.

Unrest at the high school a day earlier lead to the closing of the school, but students returned to continue their protests in what ended with a violent clash between the teens and authorities.
How strange. The "thought leaders are saying two diametrically different things:
  1. Be frightened because jobs will disappear as productivity enhancement by robots replace many positions held by humans with machines

  2. Be frightened because jobs must be lengthened by many years because the economy is in bad shape and the only solution is to have people work harder, longer, and for less until they drop dead in the traces.
Reality can't be at either of these extremes! The first implies we will all fabulously wealthy as machines deliver a cornucopia. The second implies that our ability to produce and feed ourselves is so degraded that we have no choice but to work longer and harder.

The doom-and-gloom crowd at both extremes are wrong! We will muddle through. The real world will be one in which machines do more wonderful things giving us more idle time. People will not have to work until they are 80 years old because of budget deficits and faltering governments. Those politicians who are pushing that line are coving up the fact that the ultra-rich have gotten fabulously wealthy by sucking up all the productivity gains of the last 20 to 30 years. If these were distributed among the whole population, retirement could come earlier, work weeks could shorten, the standard of life would increase, governments would have budget surpluses, and the economy would grow.

It is only when you let the top 0.1% pocket all the wealth that you discover that governments are broke, that people must be shackled to jobs watching the retirement date being pushed ever further into the future, and the level of poverty and homelessness grow and grow.

So how do you fix this problem? Tell the rich that they have to contribute to the economy. What does that mean? It means progressive taxation. Certainly back to the levels of Clinton. Maybe back to the levels of the 1970s, and if things truly are dire, then back to the levels of Eisenhower.

Instead of a public wringing of hands, with intellectuals moaning and weeping over the hopelessness of life, the times call for leaders with a vision who can call people to action and promote a positive agenda. Put simply: you need somebody to articulate a clear plan for how to get from here to there.

Technology and science are the promise of the future as they have been for a quarter of a millennia. Nobody I knows wants to go back and live the lifestyle of the 1750s. I'm not hearing 80% of the population stepping forward offering to die to get population levels down to what 1750s technology could sustain. I'm not hearing people wanting to give up indoor plumbing, centralized heating and air conditioning, modern transportation, food technology that gives us wonderfully fresh and tasty foods from around the world in and out of season. The solution is clear: we need leaders who can mobilize the resources of technology and science to deliver a better future.

The difference between today and 1941 is the difference between Donald Rumsfeld and FDR. Rumsfeld who had a year to prepare for the 2003 Iraq war met with troops over two years into the war and received their complaint about insufficient armour by saying "you have to fight the war with what you have". FDR didn't tell the American troops in 1942 that they had to fight with the pitifully outdated rifles, tanks, planes, and ships of the inter-war years. Nope. He shut down civilian production and geared up the massive industry of the US to produce weapons at a prodigious rate. That's the difference between a "fake" leader like Rumsfeld and a true leader like FDR. So where is today's FDR?

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