Will Robots Take Your Job?

The “Luddite fallacy” is the idea that increasing productivity leads to long-term job loss. The original Luddites (named after Ned Ludd who allegedly smashed two stocking frames in 1779) rebelled against the mechanisation of production in the early days of the Industrial revolution, destroying spinning frames and other new machines that threatened their employment. Since new and better jobs came after, the fallacy is that jobs are permanently lost rather than replaced.

This was always the case, the hunters and gatherers lost their outcome to farmers at the dawn of agriculture. More recently, qualified industrial jobs have been replaced by robots, low-qualified white-collar jobs (secretaries, ticket clerks, switch-board operators) by computers. Some would argue that technology also gives rise to new forms of low-paying employment: call centres or outsourced production like mobile phone assembly to low-wage countries.

It should also be pointed out that while technology is often regarded as the driver of change, the truth is more complex: hunter/gatherers may have wanted to settle down and lead a less dangerous life, the tech was a consequence of this wish. Transnational corporations have strong incentives to cut costs, automated production is an answer to this demand just as much as the driver of change, etc. Techno-centrism is a poor model for understanding development.

Next up is services and government: self-driving cars might put taxi-drivers out of a job, travel agents are self-service online resources, digital health care applications could decrease demand for nurses, hospital administrators and even doctors. Long-tail user-driven type micro-services like Uber (limousines) and Zipcar (rent out your car when you don’t use it) challenge established businesses without providing new jobs. The list goes on and on, new sectors added.

The upside is cost-efficiency, the down-side is jobs lost. History tells us new and better jobs will come. But what if this is a paradigm shift? There has surely been no shortage of techno-enthusiasts proclaiming that the digital revolution has created a brand new world where old rules don’t apply. If this is true for everything from diplomacy, start-up funding, media and travel, why should jobs be any different? This is the reverse-Luddite argument: if what tech pundits tell you is true, the Luddite logic may not be a fallacy after all.

Arch techno-optimist Kevin Kelly wrote about this in a Wired front-page story “Better than Human: Why Robots Will – and Must – Take Our Jobs” where he argues that all jobs without exception will be replaced by robots and the new jobs will be better. This is the logical extension of the cycle from previous changes, but can it really go on forever? I can only wish Kelly had looked into the mirror and asked if this would also be true of his own job. Will opinion-formers, writers, evangelists, culture-critics also be robots in the future? Or is the domain of culture, art, emotion, critique and opinion of an exclusive human nature? You might buy a used car from a robot, but would you like a robot to perform your wedding ceremony?

Cue William Baumol, American economist, who in the Sixties studies productivity increase and found that some human endeavours do not follow the same logic. Baumol’s example: a string quartet cannot increase its productivity by playing a Beethoven string quartet faster or with fewer musicians. If productivity increases in other fields, performing arts and similar activities become increasingly expensive by comparison. This phenomenon is known as Baumol’s cost disease and it seems to apply to many sectors besides the arts: education, geriatric care, services like hair dressers and much, much more.

Recently, 21st Century issues like jobless growth and re-distribution of wealth to a smaller percentage of the population, has been discussed in relation with technology more and more. One of last year’s most influential books on the topic was Jaron Lanier’s Who Owns the Future, in which he argues that cloud services tend to profit on work done by people without sharing the profits (machine translation is Lanier’s flagship case, where algorithms build on existing translations done by humans). In Lanier’s view, this will be the end of the Western middle class and in its fall, it will bring down democracy and civilisation as we know it. Rather a dire price to pay for free search and e-mail.

This week’s The Economist discusses the same issue. Not being as pessimistic as Lanier, it suggests new jobs will come eventually but governments should prepare for the shift sooner rather than later by investing in education and re-distributing wealth to those who have the lowest incomes (yes, that is The Economist, not necessarily known as a bastion of anti-capitalist sentiment). Recent news suggest that tech giants Apple, Adobe, Google, Intel and others conspired to keep salaries down. Similarly, Amazon has been criticised for its poor working conditions and rock bottom wages. Not to mention the re-occurring tax avoidance accusations against these companies. Great for shareholders, not so great for society as a whole.

I once asked the head of the tax committee in the Swedish parliament if automation, robots and algorithmisation is a problem for the tax system – which is based largely on labour and consumption taxes while taxes on capital are low (this is true for most democratic countries). He replied that replacing labour with capital (=machines) does not necessarily decrease the tax revenue, but it does increase tax planning. Case closed.

It may be that increased productivity leads to new and better jobs, rather than rising unemployment, but that is true for manufacturing and unqualified services. Jobs involving creativity and human relations don’t follow the same logic. Self-expression is at the top of the Pavlovian pyramid – if machines can help us spend more time on such activities that’s great, but let’s keep it within the system of employment, economy and growth, rather than giving away the proceeds to them who Jaron Lanier calls “the lords of the clouds”.

Per Strömbäck
Editor Netopia