This is a bit outside what we usually do here on the blog, but my co-blogger Ted Kupper and I have finished a feature length script called Let Go. It’s an indie sci-fi movie in roughly the same genre as ‘Her’ or ‘Robot and Frank’. It deals with many of the same issues we talk about on this blog – technological unemployment, virtual reality, augmented reality, accelerating change, surveillance, etc. We’re very proud of the script but needless to say it’s not easy to get a movie like this made. So today we’ve decided to put the whole script online in order to get it in front of more people. If you’re the sort of person who reads scripts, we’re confident you’ll find it a good read. Please feel free to share. Find the script here.
This post represents my latest attempt to categorize the possible solutions to technological unemployment. It’s largely based on episode 14 of my Review the Future Podcast so for a more detailed treatment of this topic, you can listen here.
To begin, I’d like to talk about some of the defeaters to technological unemployment that could mean either (a) it won’t happen or (b) it won’t be a problem.
Lowered Cost of Living - The technological bounty produced by new technologies could be so great that high rates of unemployment may not be that big a deal. If current trends reverse, and advanced technologies begin to drive down the price of key goods like housing, health care, and education, then people might be able to live reasonably comfortable lives with very little income. The small income required could come from just a few odd jobs performed throughout the year, or alternately people might cluster in households where the income of those who are fortunate enough to still have work is shared and used to pay for everyone’s expenses. In addition, with high returns to capital and low costs to living, interest on even very small investments might allow for a reasonably comfortable life. And for those who still fall though the cracks, non-profits and charities might step in. Such philanthropic activities will be greatly empowered since the cost of doing good will be much cheaper than ever before.
Intelligence Augmentation – If people are losing jobs to smart machines then one solution is to make people smarter. The obvious first step is simply better education, enabled by technological advances such as online distribution, augmented reality , gamification, individualized learning environments, and so on. However, it may eventually become possible to actually enhance human intelligence, whether through drugs, genetics, or brain implants. As a result, people could become upgradeable in the way that machines are today, thus closing the competitive gap between the humans and machines.
New Demands and New Platforms – This outcome has two components. First, there may be a growing market for new kinds of goods that cannot be automated away or that directly monetize “humanness.” These include positional goods like status, time-limited goods like attention, and human-centric goods like shared experiences. Second, new peer-to-peer platforms might enable the monetization of these somewhat intangible goods in a way that allows the participation of significant portions of the population.
If the above defeaters do not happen (or do not happen soon enough) then technological unemployment may require solutions that are more governmental in nature. I have broken these solutions into four categories.
Technological Relinquishment - If technology is causing the problem, we could just give up certain technologies. In its most extreme form, relinquishment would mean banning certain technologies outright. However there are many softer forms of relinquishment, such as incentivizing businesses to hire human workers instead of using machines. While on the surface such policies might be seen as “pro-human” they can just as easily be viewed as “anti-technology.” The idea here would be to limit the spread of technology into areas where human jobs are being threatened.
Artificial Scarcity - A world of technological unemployment is also probably a world of abundance. This abundance has two dimensions: labor and goods. An abundance of human labor will exist because we will have more people willing to work then can find jobs. Thus, we could artificially constrain the supply of labor by limiting the amount of hours people can work. This could be done through shorter work days, shorter work weeks, or shorter careers (early retirement).
An abundance of goods will exist because of the ever increasing digitization of everything. Digital goods can be hard to monetize because of their near zero marginal cost to reproduce. Thus digital goods are vulnerable to both cheap imitations and piracy. Therefore one solution might be to constrain the supply of goods artificially through the use of intellectual property and digital rights management. We already do this today, but it might be theoretically possible to institute a revised version of this system that better compensates the growing numbers of amateurs producing valuable digital content.
Expanded Social Safety Nets - Another solution is to expand our social safety nets to guarantee the livelihood of the growing unemployed. There are many ways to implement such safety nets. Here’s a partial list of methods, ranging from the more decentralized to the more paternalistic.
- Unconditional Basic Income (just paying people for nothing)
- Conditional Money Transfers (that require means testing or participation in some sort of program)
- Vouchers (to be spent on only certain high priority needs)
- Direct Provisioning (just give people food, housing, health care, directly)
- Government Created Jobs (paying people to build infrastructure, do community service, read books, dig virtual ditches, etc)
The Second Machine Age is a book by Erik Brynjolfsson and Andrew McAfee that explores the impacts of new technologies on the economy. For those who are familiar with such topics, it’s not likely this book will teach you much you don’t already know. However, for the layperson, this book is an extremely well written and clear introduction to the economic pros and cons of our current digital revolution. Because of the skillful way it stitches everything together, Second Machine Age has a good chance of being one of the most important nonfiction books of 2014.
The Goal of this Blog Post
On the whole, we like The Second Machine Age. We think it tells a plausible story and for the most part we agree with its perspective. However, we have criticisms of one of the book’s later chapters, the one entitled “Long-Term Recommendations.” Thus the primary goal of this article is to articulate those criticisms. But first, for the sake of background, we will summarize some of the book’s main arguments.
A Quick Summary of Second Machine Age
According to Brynjolfsson and McAfee, exponential gains in computing, digitization of goods, and recombinant innovation are all driving rapid technological growth. Technology has begun to perform advanced mental tasks—like driving cars and understanding human speech—that were previously thought impossible. And in economic terms, these new technologies, according to the authors, are increasing both the ‘bounty’ and the ‘spread.’
Bounty is a blanket term for all of the productivity and quality of life gains provided by new technologies. Brynjolfsson and McAfee feel that the bounty of technology is growing tremendously, but, because of the limitations of our economic measures, we have a tendency to greatly underestimate the progress we are making.
Spread is a euphemism for inequality. According to the authors, technology is increasing spread because of (a) skill biased technical change, (b) capital’s increasing market share relative to labor, and (c) superstar economics. All three of these trends have some evidence backing them up, and the supposition that technology is the primary driver of these trends makes a great deal of sense.
The authors also suggest that technological unemployment—a phenomenon long thought of as impossible by mainstream economists—is in fact possible. They discuss three arguments for how technological unemployment could occur:
- In industries subject to inelastic demand, automation can lower the price of goods without creating any additional demand for those goods (and thus labor to make those goods). Over the long term, as human needs become relatively more satiated, this inelasticity could even apply to the economy as a whole. Such an outcome would directly undermine the luddite fallacy, which is the argument economists traditionally use to dismiss technological unemployment.
- If technological change is fast enough, it could outpace the speed at which workers are able to retrain and find new jobs, thereby turning short term frictional unemployment into long term structural unemployment.
- There is a floor on how low wages can go. If automation technology continues to drive wages down, those wages could cross a threshold below which the arrangement is not worth the employee’s time. Eventually the value of certain workers could fall so low that they are not worth hiring, even at zero price.
The book makes several short term policy recommendations. We will not list them all here, as they represent a suite of largely uncontroversial proposals designed to speed up innovation and growth. These proposals, if they were enacted, would conceivably help to get our economy working more efficiently and increase our ability to match workers to the jobs that still need doing. They would also grow the technological bounty that makes all of our lives better. It’s hard not to agree with most of these proposals.
However, if we accept the premise that “thinking” machines will encroach further and further into the domain of human skills, and that over the long term we are destined for not just rampant inequality but also wide scale technological unemployment, then all of the short term proposals provided by this book could actually accelerate unemployment. After all, more innovation means more and better machines, which ultimately could mean more displaced labor.
Long Term Recommendations
In this chapter, the authors address long-term concerns. In a near future where androids potentially substitute for most human labor, will the standard economics playbook still work?
Brynjolfsson and McAfee are clear about two major preferences:
- They do not want to slow or halt technological progress.
- They do not want to turn away from capitalism, by which they mean, “a decentralized economic system of production and exchange in which most of the means of production are in private hands (as opposed to belonging to the government), where most exchange is voluntary (no one can force you to sign a contract against your will), and where most goods have prices that vary based on relative supply and demand instead of being fixed by a central authority.”
We agree with these two premises. So far, so good.
Should we Adopt a Basic Income?
The authors go on to discuss an old idea: the basic income. This is a potential solution to the failure mode of capitalism known as technological unemployment. If an increasingly large number of people can longer find gainful employment, then the simplest solution might be to just pay everyone a basic income. This income would be given out to everyone in the country regardless of their circumstances. Thus it would be universal and unconditional. Such a basic income would ensure that everyone has a minimum standard of living. People would still be free to pursue additional income in the marketplace, and capitalism would proceed as usual.
Brynjolfsson and McAfee do a quick survey of all of the varied thinkers, both conservative and liberal, who have supported this idea in the past. Here’s a short list of people who favored a basic income:
Thomas Paine, Bertrand Russell, Martin Luther King Jr., James Tobin, Paul Samuelson, John Kenneth Galbraith, Milton Friedman, Friedrich Hayek, Richard Nixon
With such wide ranging endorsement for the idea of a basic income, one might expect Brynjolfsson and McAfee to jump on the bandwagon and endorse the idea themselves.
But, no! Basic income is apparently “not their first choice.” Why?
Because work, they argue, is fundamentally important to the mental wellbeing of people. If we adopted a basic income, people might not be adequately incentivized to work. And therefore people and society would suffer on some deep psychological level.
To support this idea, Brynjolfsson and McAfee field a series of arguments.
Argument One: A Quote From Voltaire
The french enlightenment philosopher Voltaire once said, “Work saves a man from three great evils: boredom, vice, and need.” Now, Voltaire was a pretty smart guy, but whether someone from the eighteenth century has anything helpful to say about today’s technological reality seems doubtful. But for the sake of argument, let’s go ahead and examine this quote.
First of all, we’re not sure what Voltaire meant by “work.” Work can mean a lot of things. Work, in the broadest sense, could mean activities you do to upkeep your life, such as cleaning your bathroom or going grocery shopping. It could also consist of amateur hobbies that you undertake for fun, such as writing overly long blog posts.
However, this is not the definition of work that Brynjolfsson and McAfee are implying. They are implying a much more narrow definition of work as ‘wage labor’—meaning work done to serve the needs of the marketplace. Wage labor is work you do, at least in part, to earn money, so that you can continue to survive and exist in this modern world.
So let’s rephrase the quote to: “Wage labor saves a man from three great evils: boredom, vice, and need.”
Already this should start to sound a little bankrupt. Wage labor saves a man from boredom? Sure, a good job can relieve boredom. But a bad job can be one of the single biggest causes of boredom in a person’s life. We don’t have any statistics on this, but anecdotally we happen to know a lot of people who don’t particularly enjoy their jobs. And boredom is one of the biggest complaints these people have. A quick survey of the popular culture surrounding work would seem to imply that this is not a unique sentiment. We have a feeling that you, the reader—if you try hard enough—can think of at least one person who gets bored at their job.
So what about ‘vice?’ What even constitutes vice in 2014? Things you do for pleasure that are bad for you? Honestly, the word vice seems a bit anachronistic in this day and age, but we can think of some candidates for vice that are actually encouraged by wage labor:
- Aimless web browsing and perusing of “trash” media to ease the boredom of being stuck in a cubicle
- Sitting in a chair all day not exercising and slowly harming your health
- Drinking copious amounts of soda and coffee in order to stay awake during the hours demanded by your job
- Cooking less and eating more junk food because wage labor takes up too much of your time
- Needing a drink the second you get home in order to unwind after a stressful day of wage labor
Third on Voltaire’s list is ‘need’. But if wage labor could take care of need, we wouldn’t be having this conversation in the first place, right? Since we are speculating about a future where automation makes most work obsolete, then it is clear that in such a future most people will not be able to find lucrative wage labor. So looking ahead, wage labor cannot necessarily save a man from need any more than it can save a man from boredom or vice.
Argument Two: Autonomy, Mastery, and Purpose
Brynjolfsson and McAfee attempt to use Daniel Pink’s book Drive to further their point. Drive discusses three key motivations—autonomy, mastery and purpose—that improve performance on creative tasks. However, the authors of Second Machine Age seem to imply that (1) these qualities are needed for psychological wellbeing and (2) these qualities can best be obtained from wage labor. This is a misapplication of Drive’s actual thesis.
The three motivations described—autonomy, mastery and purpose—are not fundamental qualities of wage labor. In fact, wage labor is historically very bad at providing them. Thus, Pink’s book explains how modern businesses can specially incorporate these techniques in order to try to get better results from their workers.
Such mind hacking aside, wage labor has no special claims to autonomy, mastery, and purpose. Wage labor removes autonomy by forcing people to focus their energies on what the market thinks is important, rather than on what they themselves think is important. Mastery can just as easily be found in education, games, and hobbies. And purpose can be found in religion, philosophy, community service, family, country, your favorite sports team, or really just about anywhere.
Argument Three: Work is Tied to Self-Worth
The authors cite the work of economist Andrew Oswald who found “that joblessness lasting six months or longer harms feelings of well-being and other measures of mental health about as much as the death of a spouse, and that little of this decline is due to the loss of income; instead, it arises from a loss of self-worth.”
We don’t doubt that a loss of self-worth is a major factor contributing to the unhappiness of the long-term unemployed. However, we believe this outcome is culturally and not psychologically determined. The cultural expectations in America are that you are supposed to get a wage labor job and earn your living every day, otherwise you are seen as a freeloader, a layabout, a good-for-nothing. Jobs are seen as the premiere source of personal identity, and the first question out of most people’s mouths when they meet someone new is “what do you do?” We don’t see why these cultural expectations can’t change and in fact, if the premise of technological unemployment is correct, then they will have to change.
Laziness and doing nothing may always be looked down upon. But there is a big difference between doing nothing and being unemployed. As has already been articulated, there are many productive ways to spend one’s time that have nothing to do with wage labor. If our society fails to recognize the value of these non-wage labor pursuits, then the problem lies with society.
Today unemployment may be higher than we like, but work is still abundant enough that such a cultural expectation can remain unchallenged. But if the future looks like the one implied by Second Machine Age—a future where more and more people will be unable to find wage labor—then long-term unemployment will need to become not just normalized, but accepted. By reaffirming the importance of wage labor, Brynjolfsson and McAfee are helping to perpetuate the same social force that already makes unemployed people feel depressed and worthless.
Argument Four: Without Work Everything Goes Wrong
The authors cite studies by sociologist William Julius Wilson and social research Charles Murray that suggest unemployed people have higher proclivities towards crime, less successful marriages, and other problems that go beyond just low income.
Unlike Drive, we have not personally looked at this research so we cannot speak directly to the experimental rigor of these studies. Isolating for the effect of joblessness in real world communities is extremely difficult and requires controlling for a wide variety of complicating factors. In the case of Murray’s work, the authors seem to acknowledge this concern directly when they write “the disappearance of work was not the only force driving [the two communities] apart —Murray himself focuses on other factors—but we believe it is a very important one.”
As long as wage labor is directly tied to income, how can we be sure that what these studies are actually measuring is not “incomelessness?” In order to sidestep this issue, we would maybe like to see a study of two groups—one that receives a comfortable income without working, and one that receives an equivalent amount of money, but must work for it. What differences would exist between these two groups? Would the non-working group become aimless and depressed? Or would they simply repurpose their free time towards other productive tasks?
Negative Income Tax
After all this discussion of the fundamental importance of wage labor, one might expect Brynjolfsson and McAfee to recommend the creation of a Works Progress Administration or some other mechanism for artificially creating jobs. Instead they just double back and return to the basic income idea, only by another name.
The authors support Milton Friedman’s idea of a negative income tax. They claim that a negative income tax better incentivizes work. However, this distinction between a basic income and a negative income tax does not actually exist. Both a basic income and a negative income tax have two key features in common: they set an income floor below which people cannot fall, and at the same time they allow people to increase their relative income through labor. Thus we see no basis for the notion that a negative income tax better incentivizes work.
After doing some light research into Milton Friedman’s original statements we realized one possible source of the confusion. In this video, Friedman articulates the argument that a negative income tax will do a better job of incentivizing work than a “gap-filling” version of the basic income. This is certainly true. A gap-filling basic income would probably be a bad idea and have the problem of disincentivizing labor below a certain threshold. However, to our knowledge, none of the modern day basic income proposals are built around this gap-filling principle, so Brynjolfsson and McAfee’s distinction seen in this light would be a bit of a straw man argument.
What are the Goals?
We should not forget that wage labor is not the goal in itself. The real goals of our economy ought to be (1) alleviate people’s suffering and (2) increase the bounty through innovation. Although there are challenges involved, a basic income would seem to be a promising way to address both of these goals.
A basic income puts a floor on poverty and does so in a way that is both much simpler than our current alphabet soup of social programs, and more encouraging of autonomy. Rather than providing people with prescribed social services, people could spend their basic income dollars on whatever they feel they need. A basic income decentralizes decision making and puts the power in the hands of individuals.
As a corollary, a basic income might help unlock innovation by bringing people up to the subsistence level and thereby ensuring that they have the opportunity to compete and innovate in the market economy. Moreover, the safety net of basic income might spur entrepreneurship by reducing the risk of starting a small business. Is it possible more people would attempt to start businesses if they knew they had a cushion of basic income to protect them in the event of failure? (And as we all know, most new businesses have a high chance of failure.)
Under a basic income, there is no doubt that some people would choose to forgo wage labor altogether and live at the poverty line. But is this such a bad thing? These people would be making a personal choice. And we imagine many such people would find interesting and productive ways of spending their time that might be culturally valuable, even if they do not carry a price in the marketplace. If a musician chooses to live off of a basic income and make music, he doesn’t make money in the economy, but we all still get to enjoy his music. If a free software programmer chooses to live off a basic income, he doesn’t make money in the economy, but we all still get to enjoy his free software. If a history enthusiast chooses to live off a basic income, he doesn’t make money in the economy, but we all still get to enjoy his Wikipedia articles. As Brynjolfsson and McAfee argue earlier in the book, the value generated by digital content is not always well measured or compensated by the marketplace, but that doesn’t mean such content doesn’t improve our lives.
However, we may be preaching to the choir since Brynjolfsson and McAfee, despite their protestations, do in fact support a basic income. They just prefer the particular version of basic income that goes by the name “negative income tax.”
Pause for Skepticism
Now, it is worth noting that the “end of work” scenario is not a foregone conclusion. Here are two potential defeaters to this outcome:
- Human capabilities are not necessarily fixed. One byproduct of future technologies might be a redefinition of what it is to be human. If we begin to “upgrade” humans, whether through genetics or brain-computer interfaces or some other means, many technological unemployment concerns could become irrelevant. Upgradeable humans could solve both the retraining problem (just download a new skill set to your brain, matrix-style) and the issue of inelastic demand (super-humans might develop brand new classes of needs).
- A wide range of intangible goods—such as attention, experiences, potential, belonging, and status—might remain scarce indefinitely and continue to drive a market for human labor, even after the androids have arrived. Although it’s hard to imagine a market in such goods replacing our current manufacturing and service economy, it must have been equally hard for pre-industrial people working on farms to imagine the economy of today. Thus we may simply be lacking imagination when it comes to envisioning the jobs of the future. (For a more detailed discussion of this topic see episode 10 of the Review the Future podcast.)
Despite these defeaters, we definitely think the technological unemployment scenario is worth thinking about. First of all, the issue of timing is paramount, and at present it seems like we have a good chance of automating away many jobs long before we figure out how to upgrade human minds or develop brand new uses for human labor. Second, it won’t take anything close to full unemployment to create problems for our system. Even a twenty percent unemployment rate, (or an equivalent drop in Labor Force Participation) for example, might be enough to trigger a consumer collapse or at least great suffering and social unrest among lower classes.
Wage labor is a means to an end, not an end in itself. While the Second Machine Age paints a clear picture of some of the potential problems facing our economy, it fails to fully take to heart this fundamental distinction.
Technology both destroys and creates jobs. But this truth does not eliminate the possibility of technological unemployment. As Andrew McAfee, author of Race Against the Machine, is fond of pointing out, “there is no economic law that says that technology, by definition, has to create as many or more jobs as it destroys.” But even if there was a 1:1 relationship between jobs destroyed and jobs created, we could still have an issue with technological unemployment.
Finding a new job takes time. In addition to the standard matchmaking process that must occur between workers and employers (applications, interviews), securing new work may require new skills (retraining) or a new location (relocating). The result is an inevitable delay between losing a job at point A and getting a job at point B.
When technology is changing rapidly, even short delays become increasingly significant. What happens if the average delay time between jobs exceeds the average time it takes for a job to be automated away? In short: you get technological unemployment.
A SYLLOGISM TO EXPLAIN THE PROBLEM IN THE ECONOMY
The impact of new technologies on the economy is a hot topic right now. Just a few years ago, the idea of machines replacing human labor was widely dismissed, but now a growing number of pundits and economists are expressing concerns about the impact of automation technologies and the possibility of technological unemployment.
People tend to approach this complex issue in different ways. It can be a difficult topic to think about, so for the purpose of discussion, I’d like to present a simple syllogism as a possible framework for understanding what is happening.
MAJOR PREMISE: Economic opportunities arise from the monetization of scarce commodities.
This is Economics 101. For a good to have a price on the market, it must be scarce. That is, the good must be in demand and exist in limited supply. If you have only one of these two elements, the good will not be worth anything.
For example, breathable air is in high demand but it does not exist in limited supply. Good luck putting air in a bag and trying to sell it. Conversely, your old dirty socks might exist in limited supply, but since no one demands them, they are probably unsellable.
The market rewards people who are able to take a scarce commodity—whether a physical good like a chair or a service like massage therapy—and monetize it. In this way, scarce commodities are the source of all economic opportunities.
MINOR PREMISE: Technological progress reduces the number of scarce commodities by creating abundance.
Technology is a tool that humans use to get more of what they want. So it shouldn’t be a surprise that over the years technological progress has made a wide variety of goods—from food to music—less scarce and more abundant.
Today in the economy, a few trends in particular are having a big impact:
- Goods are being digitized. Example. Mp3s have digitized music.
- Services are being automated. Example: Self driving cars will automate driving.
- Processes are being disintermediated (cutting out the middle man). Example: The web has made travel agencies unnecessary.
- Markets are being globalized, allowing superstars to crowd out competitors. Example: MOOCS might enable a few top-tier professors to lecture to world-sized classrooms.
All of which are part of the same bigger trend: technology is making all manner of goods and services—music, driving, travel planning, education—less scarce, more abundant, and therefore lower price in the marketplace.
It should be acknowledged that abundance in one area often gives rise to new scarcities in another. An abundance of fatty foods gives rise to a scarcity of healthy choices. An abundance of entertainment options gives rise to a scarcity of time to enjoy them all.
That being said, I still believe we are making progress towards a more abundant world. I think it would be wrong to suggest we are just treading water. Like a mathematical limit that approaches zero but never quite gets there, we are getting incrementally closer to the post-scarcity ideal with each passing year, even if such an ideal is fundamentally unreachable. The result is that progressively fewer scarce commodities exist as technology moves forward.
CONCLUSION: Therefore technological progress reduces economic opportunity.
I believe this is the simplest way to understand what is happening. Our technology and our market system, once comfortable collaborators, are increasingly on a collision course. This is because these two institutions have fundamentally opposing goals. The goal of the marketplace is to find and exploit scarcity. The goal of technology is to find and eliminate scarcity. The second goal undermines the first.
If true, this conclusion would partially explain both the unemployment and the inequality we see. Unemployment could arise from the fact that it is increasingly difficult to find a scarce resource to exploit. More and more people find themselves without a scarce service to offer or a scarce good to sell.
Inequality arises from the fact that the few remaining scarce resources are increasingly concentrated in the hands of the few. We can think of the economy as like a game of musical chairs where the chairs are scarce resources. As the chairs get removed, fewer and fewer people have a place to sit.
In the past it has been possible to find new chairs to replace those that have been taken away. It might still be possible to do so. But it increasingly feels like the game is being played faster and faster—that the chairs are being removed much quicker than we can replace them.
CATEGORIZING POSSIBLE SOLUTIONS
Actually developing a detailed solution for this problem is a complex policy question that I do not hope to answer in this article. However, I think the above framing makes it possible to categorize broad types of solutions.
SOLUTION ONE: Freeze Progress
If technological progress is undermining our market system, one option is to try to stop technological progress. This could take the form of government bans on automation technologies that displace human workers.
However, this hardly seems like a good choice. Aside from the fact that technological progress is generally desirable and gives us lots of nice things we want, such an initiative is probably infeasible given that it would require muzzling scientists and inventors the world over. In addition, without avenues for continued growth, the market might stagnate or collapse.
SOLUTION TWO: Artificial Scarcity
If we are running out of scarce commodities for ordinary people to exploit, then one response is to create new scarcity by artificial means.
Our society creates artificial scarcity all the time. We create artificial scarcity when we grant an author exclusive copyright over a book he’s written or an engineer exclusive patent on an invention he’s developed. We create artificial scarcity with licenses that make it illegal to practice law, drive a cab, or sell alcohol without permission from the government.
It might be possible to greatly expand our current system of artificial scarcity and thereby create more economic opportunities for ordinary people. With regards to the musical chairs analogy mentioned above, you might view this as one way of creating more places for people to sit. Less favorably, you might look upon this solution as counterproductive: essentially encouraging people to put air in bags and charge each other to breathe.
One possible artificial scarcity scheme is to treat all data like property. Ordinarily, data is not scarce. Just as their is no limit to the number of times you can tell a joke, there is no limit to the number of times you can use a piece of data. However, in the future it might be possible to turn every idea, photo, or bit of text you generate into an artificially scarce commodity to be monetized. Enforcing such a system would require either a universal operating system or an overarching surveillance system to strictly monitor and regulate all instances of copying.
I view this solution as less extreme than solution one, but still counterproductive to technological progress. A growing body of evidence suggests that artificial scarcity in the form of intellectual property hinders rather than helps innovation. In addition, by creating artificial scarcity and erecting walls around various goods, we are working at cross purposes to what one might consider the primary goal of technology: to have more access to the things we want.
Still this is a solution which might gain some traction since it could be seen as one way to empower ordinary people. At the same time, elites might like this system because it would afford them numerous levers of control in the form of legal bureaucracy. However even with broad support, it is questionable whether a full-fledged artificial scarcity regime would actually be enforceable. History suggests that decentralized technologies are hard to contain. Our failed wars on drugs and piracy are prime examples.
SOLUTION THREE: New Platforms
There are some commodities that will always remain scarce. These include intangible goods such as authenticity, status, good will, and belonging. Is it possible to carve up these remaining scarce resources in such a way that we can continue to create economic opportunities for ordinary people?
For example, could we have an attention market that allows broad participation? Right now the attention market is dominated by a few advertising middle men like Google. Perhaps with further disintermediation, we could all become our own localized advertising platforms—the digital equivalent of wearing your friend’s band t-shirt and getting paid for it. Alternately the advertising giants might find it worth their while to start paying users for their continued attention/loyalty. These are just a couple (not very imaginative) ideas.
In addition, there are bound to be temporary pockets of human ability that cannot yet be duplicated by machines and are therefore still scarce. Although these pockets will shrink and vanish with time, if we can find and exploit them quickly enough via some sort of crowd-sourcing scheme we might be able to ease unemployment in the short term.
Effectively monetizing the remaining scarce resources may require the creation of new economic platforms, along the lines of current platforms like Kickstarter, Flattr, HumbleBundle, and Mechanical Turk, but on a much larger scale. We can think of these platforms as being like “apps” that run on top of the market “operating system.” They do not rely on artificial scarcity; instead they find novel ways to facilitate the exchange of existing scarce resources.
It remains to be seen, of course, whether it is possible to develop a platform or platforms that can actually come close to replacing more traditional forms of employment. I think there is great reason to be skeptical such an outcome is possible. However, we cannot entirely rule it out. This solution is highly desirable because it would cause the least disruption to our current system.
SOLUTION FOUR: Expanded Welfare
If ordinary people are being crowded out of the market, then one solution is to reduce our dependence on the market as a means of providing for people. We already have a variety of social safety nets that seek to accomplish exactly this goal. So we might extend these safety nets to ensure that people who are no longer economically viable still have access to food, housing, and essential services. This could get expensive, but advanced technologies might help make up the difference by lowering cost of living.
This solution would not require getting rid of the market entirely. Under such a scenario, the market could continue to do the important job of distributing those commodities which still remain scarce. However, over time fewer and fewer people might be active market participants. This could be a smooth transition or a disastrous one, depending on how things play out. To prevent market collapse and maintain the cycle of consumer spending we may need to ensure that people not only have money, but continue to routinely purchase products from the marketplace. Like shaking any addiction, weaning ourselves off the market could be a slow and painful process.
SOLUTION FIVE: Automation Socialism
We could decide that since the market is no longer working well with our technology, we ought to just get rid of the market system entirely. A central government body would then have to take over the distribution of resources. Ideally wealth would be shared equally amongst all people.
Obviously a socialist system would have many detractors. However, some of the traditional problems of socialism—lack of motivation on the part of workers, inefficiency of central planning—could perhaps be mitigated through aggressive use of new automation technologies. It would be incumbent upon the government to aggressively invest in the sorts of technological breakthroughs that would make a fully automated society feasible.
In a best case scenario, automation socialism could speed us on the way towards a utopian society. In a worst case scenario, automation socialism could lead to tyranny and stagnation.
The above solutions can be placed on a loose spectrum that runs from those which prioritize the market over technology (freeze progress) to those which prioritize technology over the market (automation socialism). My personal opinion is that the best path is somewhere in the middle, utilizing a combination of artificial scarcity, new platforms, and expanded welfare.
Specifically, I favor new platforms if they can be made to work. Barring that, I would vastly prefer to move in the direction of expanded welfare rather than artificial scarcity. My intuition is that scarce resources are best handled by markets, care of people is best left to governments, and abundance is best left unfettered by artificial scarcity.
What do you think?
Technological advancements increasingly allow us to conceive of a world without wage labor. But the fact remains: a lot of people are very attached to the idea of having a job. Many pundits who talk about these issues are aware of the possibilities of automation but still maintain that jobs are an important source of meaning and purpose in our lives.
Andrew McAfee, MIT economist and coauthor of Rage Against the Machine, is fond of quoting Voltaire: “Work spares us from three evils: boredom, vice, and need.” In a live hangout on Google+, McAfee’s partner Erik Brynjolfsson suggested that there is an important psychological value to people having work, which is why a universal basic income would be a bad idea.
People do need meaning in their lives, but nowhere is it written that people must get this meaning from wage labor. Our reverence for wage labor is culturally determined. In America especially, identity is very much tied to what one does for a living. But this is not how things have to be, and I think we ought to start changing this value system if we want people to feel happy and well adjusted in a future rife with automation.
Wage labor is a mechanism that forces you to work on what the short term market finds important, rather than what you yourself find important. This is perhaps the dominant form of coercion in our lives. Do your job or lose it. Lose your job and face poverty, debt, and loss of status.
I’m not saying all jobs are bad. But let’s not celebrate the glory of wage labor without also reminding ourselves of how terrible and soul crushing jobs can be. How many questionable or even terrible things have been done because someone was scared of losing their job? How many times have people uttered the common refrain “I’m just doing my job” in order to justify behavior entirely contrary to their conscience and character? Where is the dignity in that?
As automation advances, it’s not even clear if wage labor is economically efficient. Wage labor has a built in bias towards short term outcomes. If you are living at the low end of the wealth spectrum (as increasingly many of us are) the imperative of living expenses forces you to fulfill short term market niches to the exclusion of more long-term economic projects. What is the opportunity cost when smart, talented people take on taxing day jobs that preclude them from innovating or starting entirely new businesses?
The goal of gamification is to make a non-game task more engaging by introducing game-like elements. Gamification is still a new field but it has had some key successes, such as Foldit.
How could gamification contribute to technological unemployment? Well if you can make certain jobs fun and game-like enough, then people on the internet might do them for free. Or at least for far lower pay.
Imagine a company that is trying to keep costs low. First they might automate as many of their tasks as possible. Then they could take the few remaining tasks that still require human intelligence and gamify them. The company gets free or cheap labor, and people on the internet get to play a fun game. Everybody wins… except for the people who are now out of a job.
It remains to be seen whether gamification can be pushed this far, but I suspect it could. I imagine with the right designer you could turn almost any boring information task into a “game” that some people on the internet might obsess over and play for free.
Vernor Vinge is consistently one of the most interesting and conceptually dense futurists I’ve had an opportunity to listen to. While watching this excellent talk of his at Singularity University, my ears perked up at the mention of technological unemployment, the primary focus of this blog.
About halfway into the talk he broached the general issue of technological disruption:
“In the present era we all seem to be involved in the Red Queen’s race. Myself as a writer, I’m up against eBooks, and I’m up against all the piracy. I’m racing as fast I can, and if I hadn’t actually had some success in the past, it would be of course much, much worse for me to be in this steam turbine that’s called modern progress. When I talk about it happening to some other job category, I don’t feel quite so tragedy-struck about their plight. But we’re kind of all up against a situation of terribly disruptive new technologies.”
Soon afterward he addressed the topic of technological unemployment more directly:
“What comes after technological unemployment? There are certain things that humans are still very good at. And some of these crowd-sourcing [successes] tell us that those certain things that humans are still very good at are maybe much larger than we think in comparison to the machines, at least if the work is done in coordination with the machines. But what we’re really good at are isolated things. So you can imagine a civilization in which there are these bright little sparks of human level intuition and creativity and insight that are separated by vast stretches of algorithmically accessible problems. And there’s a lot of occupations and businesses, where the successful insight on the part of management is figuring out how to do all the stuff you can do without those expensive people, and then what remains are those bright little spots where you need to have the people.
So technological unemployment, I think, is a very real thing and, in the early twentieth century, the white collar and academic sorts could kind of say grandly, and with great objectivity, ‘Don’t worry about the buggy whips no longer being something that can be sold, there are other jobs that technology will create for you.’ I think their objectivity is cracking a little now that the tide of automation has risen to the point that more and more of their academic and white collar jobs are also under that sort of pressure…
Having a survival strategy for that sort of world is one that might get us automatically into a situation where, in the late teens, the average form of at least white collar work throughout the world is actually to be participating in social networks or group minds that allow enterprise to focus the humans on the things that the humans can really do and can do much better than any contemporary machine. I mentioned at the beginning of the talk that in past years I kind of turned up my nose at the human thing in the long run, because as I said ‘biology doesn’t have legs.’ However I think it’s true that at the present time, there’s no machine on earth that is of the intellectual caliber of a human being. Personally I think that we will get that and things that are much better. But the present situation is that we don’t have anything like that. On the other hand, we already have an installed base of seven billion human equivalent intelligences out there, and they’re self sustaining for the most part. That is really a remarkable resource, and this talk could be regarded as talking about how to make that resource all that it can be, for the benefit of humanity.“
Essentially Vinge is describing a theoretical crowdsourcing platform (or platforms) that could systematically harness human minds and direct them towards the tasks humans still do best. This is actually very consistent with the point of view expressed in Brynjolfsson and McAfee’s book Race Against the Machine, in which unemployed human beings are described as a large “slack resource,” one that hopefully some entrepreneur or platform designer will figure out how to put to efficient use. I do think this is a very credible possibility and I particularly like Vinge’s image of a few bright shining stars of human ability twinkling against the blackness of algorithmic space. True, over time, more and more of those stars might blink out, and new stars might become much harder to find, but it’s entirely possible that there are still enough stars out there to see us through the coming transitional period, and computer networks might have the potential to help us identify and exploit those stars.
Of course today we do not have anything like such a platform, though we might have potential precursors. Vinge’s examples from the talk, such as Wikipedia and Foldit, have been tremendous successes, but they do not compensate the people involved. Alternately many of Brynjolfsson and McAfee’s examples, such as eBay and Threadless, are merely retail marketplaces and don’t seem particularly future proof to me. Taskrabbit and Mechanical Turk seem a bit more promising, though neither works on the scale or level of efficiency that Vinge seems to be implying might be possible or necessary. It will be fascinating to see what entrepreneurs come up with over the next ten years.
During the Q&A section, Vinge was asked (by Federico Pistono, interestingly enough) to elaborate on technological unemployment and how we might transition to a post-scarcity economy. Vinge began by addressing issues with the term “post scarcity”:
“Let me start out with a small disagreement in terms of terminology. A “post scarcity” economy is certainly not a post singularity idea. I think that the reach of the mind will always exceed its grasp. Whatever is thinking will always be able to think of projects that are beyond what it can presently do. And that automatically gets you into a sort of scarcity situation. So sometimes when I read utopias, where everyone has everything they want and that’s the start-off assumption, that’s something I disagree with.”
While this is merely a semantic point, it is one I agree wholeheartedly with and tried to express in my own way in a recent blog post. As long as some mind somewhere wants something, then scarcity will probably exist. However, in Federico’s defense I believe that he was using post scarcity more in the sense of “post material scarcity”— as in a society where everyone’s basic needs are met and people have the ability to opt out of wage labor and the market economy if they so desire.
Vinge then continues:
“On the other hand, there’s still the very valid point about what happens when large numbers of people cannot economically compete with what they do and that there is no alternative project on tap. I don’t call that post scarcity, but I do see it as a problem. Up until about six weeks ago I was kind of in a tailspin about this issue. But then I started preparing this talk, and it occurred to me that we still have a lot of mileage left, if you take advantage of the fact that we no longer have to have physical location involved in our work—and I mean that in a much stricter way than just telecommuting. At that point, the fact that there’s all these billions of human level intelligences out there is very powerful, and if you’re willing to work in that way, I think there is plenty of career left for any such person. That takes us a long way, and I think eventually I’m very much in favor of the [intelligence amplification] stuff. I think we will get into a situation where those people who prefer to work, in addition to having the social networking and group mind stuff, will have real group minds (that is where you have connections at the mind level) and intelligence amplification.
“Let me say a little bit more about real group minds. It’s scary in its own way because you come face to face with issues of identity and awareness. I’m gonna get mystical here for a minute. Imagine that the human soul is like processes not just on a single machine operating system, but on a network. In that case, depending on the bandwidth and depending on the size of the problem, the size of the mind that is working on it changes. In that sort of world, you’d have super intelligences for a few minutes and then they would decrease perhaps into isolated intelligences if there was some reason for working in that way. So there are some very strange things that are gonna happen in the latter era as we get into the singularity and I don’t claim to know what they are. What I just went through is some dreaming about how strange it could be. I think there is full employment in a situation like that, and our goal as present day group minds is to make sure full employment is entertaining to us.
“I think that especially if things work out in a mellow way that there will be significant number of people who choose to be consumers but not participants. And that the people who make things, and the automation that makes things will be plenty powerful enough to satisfy those consumer desires.”
Later, in response to another question, Vinge continues along these fairly optimistic lines:
“About five or six years ago I gave a talk at a corporate research center and I brought up the issue of the internet as a testbed for group enterprise involving large numbers of people and someone raised their hand and said, “The average person, do you really think they have either the motivation or the talent to be of use?” And I think I can give a somewhat better answer now than I did in that case. The short answer is: yes. And then caveats: I think it was Voltaire who said the average person just wants to cultivate their garden,’they’re interested in their friends and their family, and they don’t want someone to come and blow it all away. But that still is a human level intelligence. If it turns out that a group mind or social network sort of employment is still something that can pay them money, they may very well be willing to donate their human level intelligence to participating in social networks to solve problems and get money for it. Then also if you look at the demography—this is intuition now, off the top of my head—that I see in contributors to Wikipedia, I think that there is an enormous number of people—perhaps still a small minority compared to the total human population—that have intellectual interests of a certain sort and certain sorts of talents, and they really think it’s cool to work with that and get that out to where it can be used…
“This is very likely going to be the sustainable form of employment for the next fifteen or twenty years, and I think that gives them plenty of encouragement to do something that otherwise is very pleasurable to begin with. So I do think the human race as a whole has these segments that can happily participate in doing very clever things.”
Of course there are a lot of unresolved questions regarding Vinge’s vision. It’s not clear that the marketplace will actually compensate people who participate in these crowdsourcing/social networking/group mind schemes. As Vinge points out, people participate in these tasks for a variety of reasons, often because they enjoy it (Wikipedia), or because the designer of the platform has managed to make the task into a game (Foldit). Making sure people get compensated for the crowdsourcing work they do might require some sort of government mechanism. It is unclear at this point.
On the internet and in the media there has been growing discussion of technological unemployment. People are increasingly concerned that automation will displace more and more workers—that in fact there might be no turning back at this point. We may be reaching the end of work as we know it.
What happens if vast numbers of people can no longer make money by selling their labor? How should society respond? What follows is a list of possible responses to technological unemployment. This list may not be complete. If I have missed anything, or misrepresented anyone’s views please say so in the comments below. Also these responses are not meant to be mutually exclusive; many of them can overlap with each other quite nicely.
(1) THERE IS NO PROBLEM; TECHNOLOGICAL UNEMPLOYMENT IS A MYTH
There are many economists who still maintain that technological unemployment cannot happen, at least not on the large scale described above. The reasoning for this argument is called the luddite fallacy, which explains that although automation does displace workers, it simultaneously leads to lower prices. These lower prices in turn stimulate consumer demand and provide the basis for new industries, which in turn hire more workers. The luddite fallacy has more or less held true for two hundred years. The question is will it continue to hold true in the face of the computer revolution and accelerating technological progress? How can we be sure new jobs will arrive fast enough to offset the jobs lost?
(2) UNCONDITIONAL BASIC INCOME
This is a fairly straightforward solution. Since growing numbers of people won’t be able to earn money from their labor, it might make sense to just give everyone a guaranteed income whether or not they work. This would allow the market economy as we know it to continue, since putting money in people’s hands would prop up the cycle of consumer spending. Often this idea is characterized as socialist, and in some senses it is, but this characterization overlooks that the goal of a UBI is actually to save market capitalism. Moreover, with a guaranteed basic income many other socialist programs like social security, unemployment, and food stamps could be dismantled and replaced with this far more streamlined system. An obvious question is, where does the money come from? A variety of ideas have been suggested; Marshall Brain details several possibilities in his essay Robotic Freedom.
(3) OPT OUT OF CAPITALISM AND TAKE ADVANTAGE OF DECENTRALIZED TECHNOLOGIES
This is a more individual approach that does not rely on government intervention. By taking advantage of new decentralized technologies and living as cheaply as possible, people might be able to increasingly just opt out of capitalism and consumerism entirely. This approach is advocated by Federico Pistono in his book Robots Will Steal Your Job But That’s Okay and could be facilitated by forward thinking engineering projects such as Open Source Ecology, as well as upcoming advances in technologies like solar panels and 3D printers.
(4) RESOURCE BASED ECONOMY (OR AUTOMATION SOCIALISM?)
This is an alternate economic system advocated by The Venus Project “in which all goods and services are available without the use of money, credits, barter or any other system of debt or servitude. All resources become the common heritage of all of the inhabitants, not just a select few.” This arrangement is made possible by aggressive use of advanced technologies to create an abundance of resources and thereby negate the need for any sort of rationing. Although Jacques Fresco, the founder of the Venus Project, claims his system is distinct from socialism, it appears to me to be fairly consistent with an extreme version of what has been called “automation socialism.” I believe the socialist comparison is apt since RBE implies the end of both private property and wealth concentration. In any event, this system sounds idyllic in principle but naturally raises the question “How could we get from here to there?”
(5) WEALTH REDISTRIBUTION ACCORDING TO AN INCENTIVE SYSTEM
This approach is advocated by Martin Ford in his book The Lights in the Tunnel. His approach overlaps heavily with the unconditional basic income idea in that his goal is the same: put money directly in people’s hands so they can spend it and keep the market economy going. The main difference is that instead of making the income unconditional, Ford advocates doling out money according to an incentive scheme that encourages behavior society desires. Among the hypothetical examples Ford mentions is paying people to read books.
(6) WORK TOGETHER WITH THE MACHINES
In their book Race Against the Machine, Andrew McAfee and Erik Brynjolfsson suggest that we should try racing with machines. In addition, seminal futurist Ray Kurzweil has repeatedly expressed his view that we are destined to “merge with machines.” How might this resolve the technological unemployment problem? Well, technological unemployment ultimately stems from the fact that automation advances much faster than people can learn new skills. So if we can find a way to directly upgrade human minds—such as through the use of brain-computer interfaces—then workers would be able to keep pace with technological change and readily adapt to new jobs and industries as quickly as they crop up. Moreover, super intelligent humans might develop new desires which would in turn stimulate new industries. Alternately humans might become enlightened and decide they no longer need a market economy. Either way the problem would be solved.
(7) SMALL SCALE POLICY ADJUSTMENTS DESIGNED TO ENCOURAGE EDUCATION AND FOSTER INNOVATION
A lot of more traditional pundits admit there is a potential problem with technological unemployment (or at least technological inequality) but seem uninterested in any of the more drastic solutions mentioned above. Instead they push for a series of common sense policy fixes, such as fixing education to better prepare people for STEM fields or reforming the patent system to mitigate drags on innovation. These policy tweaks are designed to make the economy function incrementally better in this new technological era.
(8) GET THROUGH THIS TRANSITIONAL PERIOD AS FAST AS POSSIBLE
One line of reasoning argues that technological unemployment can only ever be a temporary problem, since the day is approaching when we will literally print out all of our food and other necessities. Thus the problem only arises in the awkward transitional period: after we’ve automated large numbers of jobs, but before technology has lowered the cost of living to near zero. Therefore we should try to accelerate technological progress by whatever means necessary so that we can make the painful transition as short as possible—much like tearing off a bandaid.
(9) OPTIMISTIC LIBERTARIAN
This position argues that as long as government stays out of the way the transition will be relatively smooth and painless. Yes, there will be less jobs available, and certainly people’s incomes will suffer, but technology will simultaneously bring down the cost of living at a fast enough rate that people will survive just fine without the need for government invention or economic restructuring.
(10) ISSUES LIKE TECHNOLOGICAL UNEMPLOYMENT ARE DWARFED BY EXISTENTIAL RISK
It’s possible a technological unemployment crisis would simply be a pitstop on the way to a much more dangerous crisis involving artificial general intelligence. Once AGI arrives we will have much bigger issues to contend with, such as will the human race survive being displaced as the most intelligent beings on planet Earth? So while technological unemployment might be worth worrying about at the margins, really the bulk of our energy ought to be devoted to this more substantial threat on the horizon. This position is advocated by the Machine Intelligence Research Institute and others.
(Thanks to the Google+ Technological Unemployment community and commenter Yosarian2 for contributing to the ideas in this article.)
In this talk Erik Brynjolfsson clearly makes the case that productivity and employment are decoupling from each other. His presentation is a fantastic description of what is happening today and a fitting answer to the stagnationists.
That said, his solution at the end of this video amounts to little more than a clever turn of phrase: namely he suggests that we need to race with machines. In my detailed review of Erik’s book Race Against the Machine I criticized this idea:
The first suggestion the authors make can be summarized as “race with machines.” A human-machine combo has the potential to be much more powerful than either a human or machine alone. So therefore it’s not simply a question of machines replacing humans. It’s a question of how can humans and machines best work together.
I don’t disagree with this point on the surface. But I fail to see how it suggests a way out of our current predicament. The human-machine combo is a major cause of the superstar economics described earlier in the book. Strengthen the human-machine combo and the superstar effect will only get worse. In addition, if computers are encroaching further and further into the world of human skills, won’t the percentage of human in the human-machine partnership just keep shrinking? And at an exponential pace?
Moreover, as I’ve written about before on this site, the human-machine partnership can sometimes be less than the sum of its parts. Consider the example of airline pilots:
“In a draft report cited by the Associated Press in July, the agency stated that pilots sometimes “abdicate too much responsibility to automated systems.” Automation encumbers pilots with too much help, and at some point the babysitter becomes the baby, hindering the software rather than helping it. This is the problem of “de-skilling,” and it is an argument for either using humans alone, or machines alone, but not putting them together.”
At some point it may be possible to literally race with machines in the sense of actually merging man and machine together. But this has not been the current trend. What we have been seeing instead is people offloading cognitive tasks to independent machine algorithms. How many of us remember phone numbers anymore? Indeed memory has been one of the first cognitive tasks to get offloaded.
In order to race with machines I am convinced we need to actually enhance human intelligence directly. This is probably not impossible, but will require a much better understanding of the brain, and as a solution it will probably not arrive in time to stave off the massive decoupling that is affecting our economy.
Here is Eliezer Yudkowsky on the relative difficulty of agumenting humans versus developing standalone artificial intelligence:
“I originally gave the example of humans augmented with brain-computer interfaces, using their improved intelligence to build better brain-computer interfaces. A difficulty with this scenario is that there’s two parts to the system, the brain and the computer. If you want to improve the complete system, you can build interfaces with higher neural bandwidth to more powerful computers that do more cognitive work. But sooner or later you run into a bottleneck, which is the brain part of the brain-computer system. The core of your system has a serial speed of around a hundred operations per second. And worse, you can’t reprogram it. Evolution did not build human brains to be hacked. Even if on the hardware level we could read and modify each individual neuron, and add neurons, and speed up neurons, we’d still be in trouble because the brain’s software is a huge mess of undocumented spaghetti code. The human brain is not end-user-modifiable.
“So trying to use brain-computer interfaces to create smarter-than-human intelligence may be like trying to build a heavier-than-air flying machine by strapping jet engines onto a bird. I’m not saying it could never, ever be done. But we might need a smarter-than-human AI just to handle the job of upgrading humans, especially if we want the upgrading process to be safe, sane, healthy, and pleasant. Upgrading humans may take a much more advanced technology, and a much more advanced understanding of cognitive science, than starting over and building a mind from scratch.”