David Barnhizer and Daniel Barnhizer
This post begins a set of what will be quite a few blog posts containing analyses and links to a variety of events occurring with great rapidity. A core purpose for a number of the posts is to provide specifics on the job losses that are already occurring, as well as predictions of the job categories that will be increasingly affected. We find that the various projections being made as generalities that conclude jobs will be eliminated in the many millions tend to leave people with either a sense of disbelief or a feeling of helplessness. We therefore want to at least attempt to make the picture of what is and will occur sufficiently concrete so we can begin talking about specific steps to deal with what we face.
The posts are intended to present ongoing developments and reports that suggest the amazing speed at which changes are occurring, technology advancing, and human jobs being lost or threatened on a significant scale. They also describe other extremely serious matters such as health care needs and costs, pension security, the demographics of aging societies that have been called the “Age Curse”, governmental revenue loss as tax paying workers shrink in number, along with the challenges posed by of out-of-control public, individual and corporate debt loads.
Such matters are included because the ability to fund critical needs and otherwise support governments, institutions, communities and individuals depend on the health of our economic systems and the revenues and opportunities they generate. That health also depends on the ability of nations to alter their methods of taxation given the reduction in labor-based tax revenues that will occur as the benefits of economic activity shift more from labor wages to capital. The adjustment will require new strategies of taxation and achieving that will be an extreme challenge. As is seen throughout the series of posts, and as developed at length in The Artificial Intelligence Contagion, those institutions, needs and capabilities are intimately related to the degree to which AI/robotics negatively impacts the economic, social and political health of the US and other nations.
In describing what is happening as “the greatest shift since the dawn of humankind” in his 2016 presentation to the World Economic Forum in Davos, Silicon Valley guru Vivek Wadhwa, a Distinguished Fellow & Adjunct Professor at Carnegie Mellon University’s School of Engineering at Silicon Valley as well as Distinguished Fellow at the Labor and Worklife Program at Harvard, warned about the nature and scale of what we are experiencing.
“We are only just commencing the greatest shift that society has seen since the dawn of humankind. And, as in all other manifest shifts – from the use of fire for shelter and for cooking to the rise of agriculture and the development of sailing vessels, internal-combustion engines, and computing – this one will arise from breathtaking advances in technology. This shift, though, is both broader and deeper, and is happening far more quickly than the previous tectonic shift.” [He added]: “The distant future is no longer distant. The pace of technological change is rapidly accelerating, and those changes are coming to you very soon, whether you like it or not.” https://www.weforum.org/agenda/2016/08/technology-could-be-the-best-or-worst-thing-that-happened-to-inequality/. “Technology could be the best or worst thing that happened to inequality”, Vivek Wadhwa, 8/11/16.
The Artificial Intelligence Contagion
Our recently published book, The Artificial Intelligence Contagion: Can Democracy Withstand the Imminent Transformation of Work, Wealth and the Social Order? (Clarity 2019), focuses on the ways AI/Robotics is affecting the human world of work, economics and social activity. This orientation includes concerns about wealth distribution and inequality, resource sufficiency, growing health care needs and chemical and digital addictions, homelessness, and financial uncertainty. Other core issues include invasions of privacy, the emergence of all-encompassing surveillance systems that expand governments’ power to monitor, propagandize and control their populations, and the weaponization of AI systems.
Among the many things that must be done is changing our existing tax strategies to take into account the increased transfer of economic returns from labor to capital. This poses an enormous methodological and political challenge. The difficulty involves understanding realistic methods for extracting essential funds from a transformed economic environment without undermining the health of that generative activity. Along with that are the political obstacles involved in tax reform. These relate to being able to achieve the level of political will required to gain support even if we are clear about what is needed.
At the core of the analysis in Contagion is our strong belief—shared by many and decried by others—that AI/robotics development and implementation is in the process of undermining human employment in unprecedented ways that short circuit expectations. Those others feel equally strongly that what we are experiencing is simply one more economic and technological cycle that will lead to a new and wonderful “advanced” world where everyone will be happy, nurtured, provided with all the necessities of life and cared for by a compassionate society.
As suggested above, we believe deeply that the evolving transformation based on AI/robotics is fundamentally different from the cyclical dynamics described by political economists such as Joseph Schumpeter in his description of a cycle of “Creative Destruction” and Nikolai Kondratiev in his concept of “Long Waves”. The most important reason for the difference is that AI breakthroughs are being created that will be capable of fulfilling the kinds of sophisticated tasks many assume would otherwise naturally represent the “brave new world” presented to us at the end of this ongoing technological cycle some call the Fourth Industrial Revolution.
But even if this somehow turns out to be a cyclical phenomenon in the sense defined by Schumpeter or Kondratiev, the harsh reality is that it would be a matter of forty or fifty years before the system regains a healthy equilibrium. During that period the US and other nations would be experiencing turmoil, violence, political breakdowns and suffering on a scale that would tear societies apart. So whether we are talking about a long term cycle or the permanent displacement of massive numbers of human workers we are in the process of creating a tragic and fundamentally disruptive world with which we are ill-equipped to cope.
All Kinds of Jobs Are Threatened
Key analysts whose work focuses on job creation, economics and trends, have echoed Vivek Wadhwa’s concerns. Their analysis includes the important fact that many of the jobs lost to automation will be in what we think of as unique or protected categories. An excerpt from the Abstract of “Toward understanding the impact of artificial intelligence on labor” include the following warning. “Unlike previous technologies, examples of AI have applications in a variety of highly educated, well-paid, and predominantly urban industries, including medicine, finance, and information technology.” The researchers explain:
“Rapid advances in artificial intelligence (AI) and automation technologies have the potential to significantly disrupt labor markets. While AI and automation can augment the productivity of some workers, they can replace the work done by others and will likely transform almost all occupations at least to some degree. Rising automation is happening in a period of growing economic inequality, raising fears of mass technological unemployment and a renewed call for policy efforts to address the consequences of technological change. … Unlike previous technologies, examples of AI have applications in a variety of highly educated, well-paid, and predominantly urban industries, including medicine, finance, and information technology.” https://www.pnas.org/content/116/14/6531. “Toward understanding the impact of artificial intelligence on labor”, Morgan R. Frank, David Autor, James E. Bessen, Erik Brynjolfsson, Manuel Cebrian, David J. Deming, Maryann Feldman, Matthew Groh, José Lobo, Esteban Moro, Dashun Wang, Hyejin Youn, and Iyad Rahwan. PNAS April 2, 2019 116 (14) 6531-6539; first published March 25, 2019 https://doi.org/10.1073/pnas.1900949116. Edited by Jose A. Scheinkman, Columbia University.
An economics scholar at Dartmouth summed it up as a situation where: “Whether you like it or not what the global economy is delivering is that the productivity growth that has been realized has been earned by a small fraction of highly skilled people and returns to capital.” While that “small fraction” of our workforce benefits to extraordinary degrees and the owners of capital even more, many others are being left out of the benefits of the economic developments and wealth creation produced by the AI/robotics phenomenon.
Howard Schneider echoes this perspective in his observation that:
“Employment growth at the largest U.S. companies has lagged far behind increases in revenue and operating profit since the start of the century, as firms reaped the benefits of globalization, technology, and other ways to operate more productively, according to a Reuters analysis of corporate data. From 2001 to 2013, inflation-adjusted revenue at 100 of the largest publicly traded companies grew 71 percent and inflation-adjusted operating profit rose 150 percent.” http://www.reuters.com/article/us-usa-economy-employment-insight-idUSKBN0GB0NF20140811. Howard Schneider, “For largest U.S. companies, jobs growth has lagged profits, revenues”, Business News, 8/11/14.
We Must Preserve and Create Jobs for People
Our commitment must be to the preservation and development of human jobs. We firmly believe that nothing is more critical to protecting the health and well-being of people in modern societies than preserving, defending, developing and offering improved access to work for as many people as possible. This includes the conviction that we have to change the view that, in terms of generating and sustaining work and ensuring the health of our society, the only standard to which we should adhere is reflected in the economic mantras of “productivity” and “efficiency”.
Standards fixed too narrowly on a single element of economic return for investors cannot be allowed to be the sole or controlling virtue dictating our policy and actions. Innovation, economic growth, inventiveness, entrepreneurial and creative activity are critical human attributes. But from the perspective of healthy and sustainable communities they not only exist to create an environment that allows individuals to develop their talents, but because the society within which these abilities operate creates the rules and structures that allow such activity. This is done both to unleash human creativity and energy and with the purpose of advancing the overall quality and sustainability of the society itself. They are interacting and complementary elements in our social dynamic. In that context, what we have too often ignored is the fact that economic “productivity” and “efficiency” are tools, not ends in themselves. In the AI/robotics dimension we are well on the way to a destructive misuse and extreme over-emphasis of those tools.