How Technology Is Destroying Jobs

http://www.technologyreview.com/featuredstory/515926/how-technology-is-destroying-jobs

by anigbrowl • 13 years ago

44 56 13 years ago

fatman• 13 years ago

Whatever the merits of socialism vs. capitalism in the past, doesn't this sort of progress portend an eventual move toward the former? And is this necessarily a bad thing - when machines do more of the work, shouldn't humans be at leisure - or free to pursue formerly "frivolous" careers in arts, literature, sport, etc. while being supported by a strong social safety net?

dnautics2• 13 years ago

well, no, socialism is a system where a central authority decides the allocation of resources. The guiding philosophy is "From each according to his ability, to each according to his needs" - and what constitutes "ability" and what constitutes "need" become very important questions, and whoever gets to make those decisions wields incredible power.

Free-marketism, by contrast, exerts no moral judgement on the needs (or wants) of individuals nor who can provide by what ability, and lets the individuals work those parameters out in a decentralized fashion. If one wants to pursue "frivolous" careers, that's fine, so long as the needs that require the effort of other people (materiel, supply, whatever) can be met through free enterprise.

Capitalism is a different beast altogether, where "the accumulation of capital" is in and of itself considered a moral virtue.

cpursley2• 13 years ago

No. Mechanical farm equipment arguably replaced way more jobs than any modern technological movement. And just look at the human potential it unlocked.

anigbrowl3• 13 years ago

I'm not sure you read the article. What timescale are you making your assertions from, and what numbers are we talking about?

jsnk• 13 years ago

Have you read the article? The article actually says:

In 1900, 41 percent of Americans worked in agriculture; by 2000, it was only 2 percent.

potatolicious• 13 years ago

That's a very generous definition of "job creation". Don't get me wrong, I'm not lamenting mechanized agriculture, but there's no way the inventor of combine harvester can look at modern civilization and go "I created that".

dnautics2• 13 years ago

Indirectly. Would we be able to have artist communes without the combine harvester?

hcarvalhoalves• 13 years ago

I find it curious you don't consider mechanized farming as modern technology.

cpursley2• 13 years ago

I mean electronic hardware & software.

eeky2• 13 years ago

It doesn't destroy jobs, it obviates the ones it replaces (and sometimes creates new ones). Which is a good thing, right? It makes it so that no one has to do those jobs to receive the same productivity. Thus freeing up our time for either leisure or something else productive.

Also it should be noted that technology is a double edged sword and can also make things worse. An example: a big farming corporation decides to improve profits by using new chemicals to preserve their food longer. Of course this may seem like a productive decision on paper, but it could actually be unproductive to society as a whole if the chemical has subtle but negative side effects that take a bigger toll.

logical42• 13 years ago

I respectfully disagree. When you really think about it, the jobs which tend to become automated away are typically blue-collar, lower level jobs. Additionally, the jobs which tend to displace those older jobs are higher level, technical jobs. I personally believe that tech tends to widen income disparity as a result of this.

ctdonath2• 13 years ago

Doesn't help that many of those lower level jobs are being automated away in no small part thanks to altruistic legislation demanding they be paid more than their work is worth, raising the cost of labor to the point that the cost of automation is cheaper and more compatible with the value of the work. Pressures to innovate prompt innovation - go figure.

There's plenty I'd like to hire people to do, but can't afford to dole out "minimum wage" (much less a "living wage") and prolific benefits for - not because I'm cheap, but because I've only got limited funds to spend. Result is the unemployed have fewer options, and the self-altruistic compel others to support them.

Aqueous2• 13 years ago

Unfortunately a lack of jobs that people are being paid for also creates a wealth disparity. You can't buy food if you don't have a job

We need a stronger social safety net because there's just not going to be enough wealth-producing activity for humans to do that we will all be able to live on that alone.

If you're right we are headed towards a society where we are collectively resting on the backs of the robots who are there to do our most mundane chores. If the robots produce enough economic output then, assuming our society restructures itself to distribute that economic output proportionally, we should be able to arrange it so that we lift everyone out of poverty.

Or maybe the robots will decide they no longer need us and that will be that. It could go either way, really.

eeky2• 13 years ago

The problem you are talking about arises from the result of competition in the markets. If someone has a cheaper production because of better technology, then the market as a whole will use their business (as the buyer has the freedom to choose who they buy from). This is fair, consensual, and it makes sense to help society gain more value as a whole. Limiting this in any way (as many regulations unfortunately do) is a restriction of people's free choice and thus an aggressive and unethical act. But of course the negative part comes in when the person who used to work in that market has now lost their job and thus their income. Well that is like crying about the slow gazelle who got eaten by the cheetah. It's nature and unfortunately you can't artificially make everybody win, or nature would push back.

Some solutions include higher taxes to make an assured living wage. This is possible today but not if everyone keeps raising the standard of what a "living" wage is. If we could produce a guaranteed living wage, we could get rid of minimum wage and thus give people a ladder to compete in markets they otherwise wouldn't be able to get experience/train in. This would be because you could literally work for free, so the company could only see a benefit to hiring you (rather than being stymied by minimum wage).

The wealth disparity is normal, look at any statistical data like humans and you will see outliers. Thus you will see people with ideas that are a million times more productive than others. Don't worry, if someone else gains wealth and you didn't lose, it does indirectly benefit you. Don't be jealous bro.

anigbrowl3• 13 years ago

Well the problem in the US is that if you don't work, you don't necessarily enjoy more leisure because your purchasing power goes through the floor.

skore2• 13 years ago

Brynjolfsson and McAfee are not Luddites.

No, but you try to force that argument by calling your article "How Technology Is Destroying Jobs". I don't see any citation in the article doing the same. They just matter-of-factly state what is happening and it's the author of the article trying to somehow convert that into a Luddite case.

I find it fascinating how this kind of sentiment is often uttered by Americans. Other western countries have long accepted the fact that we should better put the rewards of technological progress into a social system that at least takes care of the people who cannot anymore contribute to the workforce. In the US, the delusion of full employment for everyone as part of the fight against evil socialism seems strong as ever. I suppose it works as a good scare.

true_religion• 13 years ago

One can think that technology destroys jobs, but still not be a Luddite because they support the change that technology brings.

An example would be people who are looking forward to the technological singularity which will make all work obsolete, and usher in a utopia.

skore2• 13 years ago

No, I think "destroy" carries a clearly negative connotation.

The people cited in the article talk about jobs becoming obsolete. The author talks about jobs being destroyed.

JDDunn9• 13 years ago

I wonder if these shifts disproportionately affect the less intelligent. By definition, half the population is below average. If the jobs being destroyed are low skill, and they are replaced with jobs in math/science/tech, people with learning disabilities may not be able to get a job at all in the future.

msandford2• 13 years ago

I can't help but wonder if the decoupling is a result of the money printing that Greenspan started around that same time (2000-2001ish) and that Bernanke has continued.

You're looking at replacing a $50k/year worker with a system that costs $1mm in NRE and negligible ongoing cost. If interest rates are at 8% you're a fool. With interest rates at 3% you're a genius.

http://research.stlouisfed.org/fred2/series/FEDFUNDS

adventured• 13 years ago

It's the result of the Fed's policies.

They kicked us into two massive recessions in a mere 10 years, two stock market crashes, and one giant real estate crash, destroying trillions in wealth through malinvestment. If the Fed severely distorts the economy - which it has been doing frequently (currently 'printing' 6% of the entire economy) - it leads Jane to appraise her financial surroundings incorrectly, inevitably leading to disaster.

Try figuring out a way to get minimum wage to keep up with even just 3% to 4% real annual inflation over 40 years. Impossible.

Try figuring out how to get Americans to make sound financial decisions with 3.x% mortgage rates. Impossible.

Try figuring out which stocks to buy, when everything is going up courtesy of easy money policies. When will the party stop? Only Bernanke & Co. know. It's not earnings growth driving the stock market, it's pure PE expansion.

Try keeping the savings rate up, when your dollar loses value every day that you attempt to hold onto it. So you spend it today when it has maximum purchasing power. Wait 10 years and it'll lose half of its purchasing power. The Fed spurs an anti-savings culture through inflation. Ever since Nixon unlocked the dollar from the gold standard, the savings rate has been in a death spiral, to the point where now America has an extreme negative savings rate when all debt is accounted for (and nearly everything priced in dollars has soared in price since 1971; from health care to education to commodities to stocks to housing, meanwhile the real standard of living is lower than it was 50 years ago).

At a time when America is creating more oil than nearly any other time in its history, oil prices are at $106+. See this USA today story from just a decade ago by comparison:

http://usatoday30.usatoday.com/money/industries/energy/2003-...

"Instability in oil producing nations like Iraq, Venezuela and Nigeria helped boost U.S. crude oil prices to an average of $31 a barrel in 2003, the highest yearly average in more than 20 years, energy experts said Wednesday."

Global commodities are of course priced in dollars primarily. As the Fed debases the dollar, the input cost of goods soars.

The Fed's policies affect every single aspect of the US and global economy. Their policies are extreme by any US historical measure, and the consequences are guaranteed to be extreme accordingly.

dragonwriter• 13 years ago

It's the result of the Fed's policies. They kicked us into two massive recessions in a mere 10 years, two stock market crashes, and one giant real estate crash, destroying trillions in wealth through malinvestment.

I think there's a much better case to be made that Congress' fiscal policy (and financial industry deregulation ) did that than that the Fed's monetary policy did.

At a time when America is creating more oil than nearly any other time in its history, oil prices are at $106+.

Oil prices are driven by global supply and demand , not US production in isolation.

tedsanders2• 13 years ago

Your post is full of assertions, but empty of evidence. I disagree with almost every hyberbolic point you make:

-There is NOT consensus that the Fed's creation of money caused the last two crashes. In fact, market monetarists argue the last recession was exacerbated by how LITTLE the Fed did. http://www.themoneyillusion.com/?page_id=3443

-Inflation is not 3%-4%. It has been very low since 2008. http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1&year1=2008&ye...

-Stock market gains have not been due to pure PE expansion. This is demonstrably untrue. http://www.multpl.com/

-Inflation does not, by itself, hurt savings rates. A world with 1% inflation and 1% interest should be identical to a world with 2% inflation and 2% interest (this is not strictly true, but the simple toy model is a good thought experiment to see where your reasoning fails.)

-American oil production has almost NO impact on global prices. In fact, causation works the other way around. High oil prices make more American oil fields profitable, and drives production. (Even OPEC has very little market power. Saudi Arabia arguably has the most market power.)

-The Fed was more aggressive than the central banks of most countries in the last recession (compare to BoE or ECB or whoever). The USA has recovered better than most other countries with passive central banks. There's not consensus, but many economists believe there is a causal connection. Your theory does not fit these data.

tedsanders2• 13 years ago

Since 2008, money has been tight and inflation has been low. Yet the decoupling has continued. I think your implied hypothesis is very unlikely. However, I agree that interest rates play a large role in the decision of whether a company invests in capital.

snowwrestler• 13 years ago

Obviously technology creates more jobs than it destroys over time, because the nations who have developed the most technologies tend to have the lowest unemployment rates.

3minus1• 13 years ago

Technology in one country can most definitely affect employment rates in another. One example from history is when the Industrial Revolution in England destroyed a large textile cottage industry in India.

gz5• 13 years ago

This seems to be the flaw in the data cited:

"By 2011, a significant gap appears between the two lines, showing economic growth with no parallel increase in job creation"

It seems the data set is US jobs only. In our new flat world, how many jobs did US-based companies create in other countries that previously were created in the US?

Not sure the US middle class has been destroyed, more that it has moved to other countries.

willis77• 13 years ago

Obviously chemotherapy causes cancer, because all the people who have chemotherapy end up having cancer.

cgag• 13 years ago

I should hope so. Jobs aren't a goal. Jobs blow.

brimanning• 13 years ago

Kurt Vonnegut's Player Piano is a very interesting read on just this, albeit fictional and taken to the extreme, but it has some interesting insights.

fnordfnordfnord4• 13 years ago

Isn't that the idea? At least in one sense, technology must destroy jobs, or at least it should. In theory, it frees us from drudgery and allows us to go on to do more productive tasks. In practice it isn't always so easy to find employment those who are displaced by machinery.

berkay• 13 years ago

"allows us to go on to do more productive tasks" The idea only works as long as there are sufficient number of jobs in "more productive tasks". If jobs are destroyed but there is no place to deploy the resources gained by the productivity increase, then there is not much value, and there are many negative side effects.

tzs2• 13 years ago

That's true as long as people need jobs in order to have a decent life. Eventually, the productivity gains from technology should produce enough gain to allow for a guaranteed basic income [1] sufficient to allow displaced workers to effectively retire if they wish. You'll only need to find a job if you want more than the GBI can provide.

[1] http://en.wikipedia.org/wiki/Basic_income_guarantee

fear91• 13 years ago

Does it always has to be the same in all cases?

The results of technology advancement are various and complicated. It's not all white and black.

jrn• 13 years ago

No, there are unlimited amounts of jobs, technology frees people to do jobs that previously weren't done. Read Armen Alchian.

How Technology Is Destroying Jobs

Related Stories