I watched CGP Grey’s “Humans Need Not Apply” again the other night and I was struck by how on-the-nose it was and, worryingly, remains. Haven’t seen it or just want to remind yourself of the anxiety? Here ya go:
The gist, for those of you who haven’t seen it and don’t want to, is that your job is going to be automated out of existence. Yes, yours, and that job is not going to be replaced by a new, better job because that would defeat the whole purpose of automation. The fail state of capitalism is here.
As an aside, I continue to find it amusing that this fail state was anticipated almost comically early in the cycle. Adam Smith published An Inquiry no the Nature and Causes of the Wealth of Nations in 1776. This book is, rightly or wrongly, regarded as the cornerstone of capitalism (it’s also the second-most cited book in the social sciences, behind only Marx’s Das Kapital, which is also amusing, but I double-digress). Anyway, the counter argument was made most strikingly in 1779 when Ned Ludd supposedly smashed two knitting frames and inspiring the Luddites to rage against the machines that were taking their jobs. Three whole year separated the events.
Where was I? Ah, yes, the jobs are going to be gone. People will be unemployable. In theory, this would leave us with a society where there is abundance for all, people would be free to pursue whatever interests them, and…oh, who am I kidding? I assume everyone (anyone?) reading this recognizes that this won’t happen.
Since 1973, increases in productivity (in the United States, at least) have not “trickled down” to the people doing the work. This is by design. The owner of a company invests in automation to cut their costs, and there’s no reason to expect them to share the gains from automation with their reduced workforce. In fact, on a macro scale, you would expect the opposite.
As an example, imagine the typing pool in movie 9 To 5. There are forty or so dedicated typists in the room in the film, and that was an accurate reflection of offices in that era. Now, there might be, at most, one person handling handling the administrative tasks that used to take an entire room of typists. So, your payroll is now 1/40th of what it was, right? Not so fast: You now have 40 people competing for that one job which is the sort of thing that drives wages even lower.
There are plenty of other examples but the point is that, under the current economic system, we are not moving in a direction that will prepare us for when the job loss due to automation hits reaches critical levels (assuming it hasn’t already). There simply isn’t enough need for human labor to provide a living wage for everyone. There are not going to be new jobs created to change that fact.
So what do we do? The bottom line is that sustenance based on work is no longer a viable model. Well, it could be made to work, but that’s a monstrous scenario and we’re not going to spend any time on it. Higher wages won’t fix it since you have to have a job to receive a wage. This is going to require a bigger change in our economic system than we’ve ever seen.
Is any country prepared? I don’t think so. Some are have made more progress than others. A robust social safety net is a start, but it’s only just that. It’s going to require a willingness to shackle capitalism and an openness to global frameworks.
Which is to say, the United States is almost uniquely positioned not to be able to react to this crisis. The social safety net is weak, there’s an almost religious adherence to the idea of capitalism, and “American exceptionalism” is going to mix poorly with globalism.
Or maybe it just isn’t fixable. I’m not an economist as you may have already gleaned from my facile explanation, so it may be there’s nothing that will rescue us from the worst-case scenarios. That’s not a comforting thought, but in some ways it’s better than the crash being avoidable had we only heeded a warning raised in 1779.