CityReads | A world without work

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A world without work: how AI will hit employment

Will there be enough work for everyone to do in the twenty-first century?

Daniel Susskind, 2020. A world without work: technology, automation, and how we should respond, Metropolitan Books.

Source:

https://us.macmillan.com/books/9781250173515

From mechanical looms to the combustion engine to the first computers, new technologies have always provoked panic about workers being replaced by machines. For centuries, such fears have been misplaced, and many economists maintain that they remain so today. But as Daniel Susskind demonstrates in his book, A world without work: technology, automation, and how we should respond, this time really is different. Breakthroughs in artificial intelligence mean that all kinds of jobs are increasingly at risk. Susskind argues that machines no longer need to think like us in order to outperform us, as was once widely believed. As a result, more and more tasks that used to be far beyond the capability of computers – from diagnosing illnesses to drafting legal contracts, from writing news reports to composing music – are coming within their reach.

Will there be enough work for everyone to do in the twenty-first century? This is one of the great questions of our time. In his book, Susskind argues that the answer is "no" and explain why the threat of "technological unemployment" is now real.

It was John Maynard Keynes, the great British economist, who popularized the term "technological unemployment", capturing in a pithy pairing of words the idea that new technologies might push people out of work.

Today is not the first time that automation anxiety has spread. In fact, ever since modern economic growth began, centuries ago, people have periodically suffered from bouts of intense panic about being replaced by machines. Yet those fears, time and again, have turned out to be misplaced. Despite a relentless flow of technological advances over the years, there has always been enough demand for the work of human beings to avoid the emergence of large pools of permanently displaced people.

If we think of the economy as a pie, the traditional challenge has been to make that pie large enough for everyone to live on. At the turn of the first century AD, most people lived around the poverty line. Roll forward one thousand years, and roughly the same would have been true. as late as 1800, the average person was no more materially prosperous than her equivalent back in 100,000 BC. But over the last few hundred years, economic growth has soared, and this growth was driven by technological progress. Economic pies around the world have become much bigger. Today, global GDP per capita is already about $10,720 a year.

Technological unemployment, in a strange way, will be a symptom of that success. In the twenty-first century, technological progress will solve one problem, the question of how to make the pie large enough for everyone to live on. But, as we have seen, it will replace it with three others: the problems of inequality, power, and purpose.

Why didn't technological progress lead to mass unemployment in the past?

Throughout history, there have always been two distinct forces at play: the substituting force, which harmed workers, but also the helpful complementing force, which did the opposite.

Complementing forces facilitate human workers through three effects: The Productivity Effect, The Bigger-Pie Effect and The Changing-Pie Effect.

The Productivity Effect: Perhaps the most obvious way that the complementing force helps human beings is that new technologies, even if they displace some workers, often make other workers more productive at their tasks. Through the productivity effect, then, technological progress complements human beings in a very direct way, increasing the demand for their efforts by making them better at the work that they do.

The Bigger-Pie Effect: Economic history also reveals a second, less direct way that the complementing force has helped human workers: if we think again of the economy as a pie, technological progress has made the pie far bigger. The UK, for instance, has seen its economy grow 113-fold from 1700 to 2000. And that is nothing compared to other countries that were less developed at the start of this period: over the same three hundred years, the Japanese economy grew 171-fold, the Brazilian 1,699-fold, the Australian 2,300-fold, the Canadian 8,132-fold, and the US economy a whopping 15,241-fold.

The Changing-Pie Effect: If we think again of the economy as a pie, new technologies have not only made the pie bigger, but changed the pie, too. Take the British economy, for example. Its output is now more than a hundred times what it was three centuries ago. But that output, and the way it is produced, has also completely transformed. Five hundred years ago, the economy was largely made up of farms; three hundred years ago, of factories; today, of offices

From the Industrial Revolution until today, workers who worried that machines would permanently replace them have largely been proven wrong. Up until now, in the battle between the harmful substituting force and the helpful complementing force, the latter has won out, and there has always been a large enough demand for the work that human beings do. We can call this the Age of Labor.

The Age of Labor can be defined as a time when successive waves of technological progress have broadly benefited rather than harmed workers. But although this progress has been good for workers in general, not all of them have always benefited. Nor have the benefits been consistent over time: technological progress has proven to be a fickle friend, with different groups of workers gaining more from it at different moments.

Economic history shows that as long as the complementing force is strong enough, it does not matter if machines can substitute for human beings at a wider range of tasks—there will still be demand for human work in other activities. We still live in an Age of Labor, as we have since the Industrial Revolution began.

Why the threat of "technological unemployment" is now real？

The future of work depends on two forces: a harmful substituting force and a helpful complementing one. Many tales have a hero and a villain fighting each other for dominance, but in our story, technology plays both roles at once, displacing workers while simultaneously raising the demand for their efforts elsewhere in the economy.

Over time, machines will gradually, but relentlessly, advance further into the realm of tasks performed by human beings. We can think of this general trend, where machines take on more and more tasks that were once performed by people, as "task encroachment." And the best way to see it in action is to look at the three main capabilities that human beings draw on in their work: manual, cognitive, and affective capabilities. Today, each of these is under increasing pressure.

Furthermore, machines can increasingly perform various tasks without trying to replicate the particular capabilities that human beings happen to use for them. What's different this time around is a new type of artificial intelligence that challenges the assumption that humans will always be better than machines at some jobs. In the past, humans programmed robots to mimic human behavior, and so robots could most easily do routine, repeatable tasks that were easily explained. That's meant automation has mostly impacted middle-skill jobs, while unpredictable ones, like building houses or diagnosing diseases, have been relatively unaffected. But now, Susskind argues, people working at the frontiers of artificial intelligence are teaching machines to draw on vast amounts of processing power and data to solve problems in ways humans couldn't. Thus an IBM system beat Garry Kasparov in chess not by copying his strategy, but by drawing on a database of 330 million moves in a second, and picking which ones had the highest likelihood of beating him. Future machines like this one will open up peaks in capability well beyond the reach of even the most competent human beings alive today.

There are two kinds of technological unemployment: frictional and structural.

In the situation of frictional technological unemployment, there is still work to be done by human beings: the problem is that not all workers are able to reach out and take it up.

Yes, many tasks are likely to remain beyond the capabilities of machines, and technological progress will tend to raise the demand for human beings to do them. However, this in-demand work is likely to be agonizingly out of the grasp of many people who want it as well. "Frictions" in the labor market prevent workers from moving freely into whatever jobs might be available.

In the coming decade, this is likely to happen to other types of workers as well. Like those displaced manufacturing workers, they, too, will become trapped in particular corners of the labor market, unable to take up available work elsewhere. There are three distinct reasons for that, three different types of friction at work: a mismatch of skills, a mismatch of identity, and a mismatch of place.

We can think of this kind of scenario, in which there are actually too few jobs to go around, as "structural" technological unemployment. Over time, task encroachment is likely not just to strengthen the substituting force, but to wear down the complementing force as well.

In the past, the complementing force raised the demand for displaced workers in three ways: through the productivity effect, the bigger-pie effect, and the changing-pie effect. Together, they ensured there was always enough work for people to do. But in the future, as machines continue their relentless advance, each of these effects is likely to be drained of its strength.

As task encroachment continues, though, it becomes more and more likely that changes in demand for goods will not turn out to be a boost in demand for the work of human beings, but of machines. In 1964, the most valuable company in the United States was AT&T, which had 758,611 employees. But in 2018 it was Apple, with only 132,000 employees; in 2019 it was overtaken by Microsoft, with 131,000. Or take a new industry like social media, populated by companies that are worth a great deal but employ comparatively few people. YouTube had only sixty-five employees when it was bought by Google for $1.65 billion in 2006; Instagram had just thirteen employees when it was bought by Facebook for $1 billion in 2012; and WhatsApp had fifty-five employees when it was bought by Facebook for $19 billion in 2014. Research shows that in 2010, new industries that were created in the twenty-first century accounted for just 0.5 percent of all US employment

A world with less work

We can now begin to see how the Age of Labor is likely to end. As time goes on, machines continue to become more capable, taking on tasks that once fell to human beings. The harmful substituting force displaces workers in the familiar way. For a time, the helpful complementing force continues to raise the demand for those displaced workers elsewhere. But as task encroachment goes on, and more and more tasks fall to machines, that helpful force is weakened as well. Human beings find themselves complemented in an ever-shrinking set of tasks. And there is no reason to think the demand for those particular tasks will be large enough to keep everyone employed.

The world of work comes to an end not with a bang, but a withering—a withering in the demand for the work of human beings, as the substituting force gradually overruns the complementing force and the balance between the two no longer tips in favor of human beings.

In the short run, our challenge will be avoiding frictional technological unemployment: in all likelihood, there will be enough work for human beings to do for a while yet, and the main risk is that some people will not be able to take it up. But in the longer run, we have to take seriously the threat of structural technological unemployment, where there is simply not enough demand for the work of human beings.

Machines will not do everything in the future, but they will do more. And as they slowly, but relentlessly, take on more and more tasks, human beings will be forced to retreat to an ever-shrinking set of activities.

It is indeed entirely plausible that some tasks will remain for us: those that prove impossible to automate, others that are possible but unprofitable to automate, and still others that are both possible and profitable to automate but remain restricted to human beings due to regulatory or cultural barriers that societies build around them. There are also tasks that might remain out of reach because we value the very fact that they are done by human beings, not a machine.

In the next hundred years, technological progress will make us more prosperous than ever before. Yet that progress will also carry us toward a world with less work for human beings. The economic problem that haunted our ancestors, that of making the economic pie large enough for everyone to live on, will fade away, and three new problems will emerge to take its place. First, the problem of inequality, of working out how to share this economic prosperity with everyone in society. Second, the problem of political power, of determining who gets to control the technologies responsible for this prosperity and on what terms. And third, the problem of meaning, of figuring out how to use this prosperity not just to live without work but to live well.

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