AI, Robotics, and the Future of Jobs by John Mauldin, Mauldin Economics
This past week several reports came across my desk highlighting both the good news and the bad news about the future of automation and robotics. There are those who think that automation and robotics are going to be a massive destroyer of jobs and others who think that in general humans respond to shifts in employment opportunities by creating new opportunities.
As I’ve noted more than once, in the 1970s (as it seemed that our jobs were disappearing, never to return), the correct answer to the question, “Where will the jobs come from?” was “I don’t know, but they will.” That was more a faith-based statement than a fact-based one, but whole new categories of jobs did in fact get created in the ’80s and ’90s.
However, a new Wall Street Journal poll finds that three out of four Americans think the next generation will be worse off than this generation.
Barack Obama’s former chief economist Larry Summers began this chant of “secular stagnation.” It’s a pessimistic message, and it’s now being echoed by Federal Reserve Vice-Chair Stanley Fischer. He agrees with Summers that slow growth in “labor supply, capital investment, and productivity” is the new normal that’s “holding down growth.” Summers also believes that negative real interest rates aren’t negative enough. If Fischer and Fed chair Janet Yellen agree, central bank policy rates will never normalize in our lifetime. (National Review Online)
As the above-cited article asserts (and I agree), the term secular stagnation is a cover-up for the failure of Keynesian policies which, as my friends Larry Kudlow and Stephen Moore note, began in the Bush years and were doubled down on by the current administration.
Kareem Abdul-Jabbar, who is pursuing a career as a social commentator after dominating the NBA boards for so many years, tells us that Ferguson (which is on all the news channels all the time) is not just about systemic racism; it’s about class warfare and how America’s poor are held back.
Jared Dillian over at the Daily Dirtnap notes that the militarization of the nation’s police forces has been an issue for a number of people for a long time. Exactly why does some small community in Connecticut need grenade launchers? Seriously? But he does make a point about the news cycle and trading:
The key here is the press. Journalism is such a powerful force, a force for good or bad (often bad), but if you look at Radley Balko, here was a journalist who had a pet issue (which really made him a polemicist) and he kept writing about this issue over and over again, but nobody really cared. He had a small, but loyal following. Now he has a very large following, because this issue just blew up on national TV, and now everyone is interested in it, like, why does my police department have a tank? And so on. So it went from being a non-issue to a big issue – overnight.
So this is what happens: now that it is at the forefront of the consciousness of the press, any time they hear about an incident like this, they will report on it. And it will seem like police militarization is everywhere. Before it seemed like it was nowhere. The only difference is that now, people will be reporting on it! It’s not like this wasn’t an issue before Ferguson. It was a huge issue before Ferguson. But now, everyone is talking about it. People are interested in hearing about it. And journalists will report on things that people like to hear about.
But here is the great part. Our friend Radley Balko, the expert on police militarization, the guy who has studied it his whole adult life, wrote a book on it, is the leading authority, does he get to be the leading voice on police militarization? No. There are plenty of other opportunists around who just latch on to whatever is the new new thing and position themselves as the expert on it. I guess what I am trying to say is that the guy who is short the whole way up and is finally right at the top is actually worse off than the guy who is just right at the top. Think about the financial crisis. The cemeteries are full of the bodies of money managers who were smart and early and short all the way up. It really is about being in the right place at the right time.” (The Daily Dirtnap)
I think having a national conversation about the militarization of police is probably a good thing. We all support the police, but more than a few of us are becoming a little uncomfortable with the number of SWAT teams in our communities. A little balance here and there might be a useful thing.
But to bring us back to robotics and automation, Kareem and others do point out that the social fabric of this country (and of the entire developed world) is more fragile than we would like it to be. And while the country had 50-70+ years to adapt to increasing automation on farms from the 1870s onward, and survived that transition, the radical restructuring of what we think of as work that is going to happen in the next 20 years is going to be far more difficult. Especially when everything is on the news.
The report that is today’s OTB is from Pew Research and Elon University and runs to 67 pages. I have excerpted about six of those pages, which highlight some of the key takeaways from thought leaders among the 1,896 experts the authors consulted with, some of whom think robotics will be a huge plus and others who are deeply concerned about our social future.. (You can find the whole study at http://www.pewinternet.org/2014/08/06/future-of-jobs/ plus links in the first few pages of the report to other fascinating subjects on the future. Wonks take note.)
The vast majority of respondents to the 2014 Future of the Internet canvassing anticipate that robotics and artificial intelligence will permeate wide segments of daily life by 2025, with huge implications for a range of industries such as health care, transport and logistics, customer service, and home maintenance. But even as they are largely consistent in their predictions for the evolution of technology itself, they are deeply divided on how advances in AI and robotics will impact the economic and employment picture over the next decade.
The countries that are winners in the coming technological revolution will be those that help their citizens organize themselves to take advantage of the new technologies. Countries that try to “protect” jobs or certain groups will find themselves falling behind. This report highlights some of the areas where not just the US but other countries are failing. Especially in education, where we still use an 18th-century education model developed to produce factory workers for the British industrialists, putting students into rows and columns and expecting them to learn facts that will somehow help them cope with a technological revolution.
Finally, I note that our views on the future impact of